CROWN CASINO CORP, POS AM, 1995-12-28

CROWN CASINO CORP
POS AM, 1995-12-28
MISCELLANEOUS AMUSEMENT & RECREATION

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<PAGE> 1

As filed with the Securities and Exchange Commission on December 28, 1995

Registration No. 33-79484

SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

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

POST-EFFECTIVE

AMENDMENT NO. 8

FORM S-1

REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933

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

CROWN CASINO CORPORATION

(Exact name of registrant as specified in its charter)

<TABLE>
<S> <C> <C>
TEXAS 7999 63-0851141
(State or other jurisdiction of (Primary Standard Industrial (IRS Employer
incorporation or organization) Classification Code Number) Identification Number)
</TABLE>

2415 WEST NORTHWEST HIGHWAY, SUITE 103
DALLAS, TEXAS 75220
(214) 352-7561
(Address, including zip code, and telephone
number, including area code, of registrant's
principal executive offices)

EDWARD R. MCMURPHY
PRESIDENT AND CHIEF EXECUTIVE OFFICER
CROWN CASINO CORPORATION
2415 WEST NORTHWEST HIGHWAY, SUITE 103
DALLAS, TEXAS 75220
(214) 352-7561
(Name, address, including zip code, and telephone
number, including area code, of agent for service)

Copies to:
HELEN T. FERRARO, ESQ.
SMITH, GAMBRELL & RUSSELL
SUITE 1800
3343 PEACHTREE ROAD, N.E.
ATLANTA, GA 30326
(404) 264-2620

APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC:
As soon as practicable after the effective date of this Registration Statement.

If any of the securities being registered on this Form are to be
offered on a delayed or continuous basis pursuant to Rule 415 under the
Securities Act of 1933, check the following box. [x]

If this Form is filed to register additional securities for an
offering pursuant to Rule 462(b) under the Securities Act, please check
the following box and list the Securities Act registration statement number of
the earlier effective registration statement for the same offering. [ ]

If this Form is a post-effective amendment filed pursuant to Rule
462(c) under the Securities Act, check the following box and list the
Securities Act registration statement number of the earlier effective
registration statement for the same offering. [ ]

If delivery of the prospectus is expected to be made pursuant to Rule
434, please check the following box. [ ]

THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE
OR DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT
SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A),
MAY DETERMINE.

<PAGE> 2

CROWN CASINO CORPORATION

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

CROSS REFERENCE SHEET
(PURSUANT TO ITEM 501(b) OF REGULATION S-K)

<TABLE>
<CAPTION>
FORM S-1 ITEM NUMBER CAPTION OR LOCATION IN PROSPECTUS
-------------------- ---------------------------------
<S> <C> <C>
1. Forepart of the Registration Statement and
Outside Front Cover Page of Prospectus . . . . . . . . Cover Page of Registration Statement; Cross Reference
Sheet; Outside Cover

2. Inside Front and Outside Back Cover Pages
of Prospectus . . . . . . . . . . . . . . . . . . . . Inside Front Cover Page; Outside Back Cover Page

3. Summary Information, Risk Factors and
Ratio of Earnings to Fixed Charges . . . . . . . . . . Prospectus Summary; The Company; Risk Factors

4. Use of Proceeds . . . . . . . . . . . . . . . . . . . . . Use of Proceeds

5. Determination of Offering Price . . . . . . . . . . . . . Plan of Distribution

6. Dilution . . . . . . . . . . . . . . . . . . . . . . . . *

7. Selling Security Holders . . . . . . . . . . . . . . . . Selling Shareholders

8. Plan of Distribution . . . . . . . . . . . . . . . . . . Cover Page; Plan of Distribution

9. Description of Securities to be Registered . . . . . . . Dividend Policy; Description of Capital Stock

10. Interests of Named Experts and Counsel . . . . . . . . . *

11. Information with Respect to the Registrant . . . . . . . Prospectus Summary; Risk Factors; The Company; Dividend Policy;
Market Price of and Dividends on Common Stock; Selected
Financial Information; Management's Discussion and
Analysis of Financial Condition and Results of Operations;
Business; Management; Executive Compensation; Certain
Transactions; Change in Independent Auditors; Security
Ownership of Certain Beneficial Owners and Management;
Selling Shareholders; Description of Capital Stock;
Financial Statements

12. Disclosure of Commission Position on
Indemnification for Securities Act Liabilities . . . . *
</TABLE>

__________________

* Not applicable.
<PAGE> 3

PROSPECTUS
MAXIMUM OF 10,121,869 SHARES

CROWN CASINO CORPORATION

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

COMMON STOCK

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

Of the 10,121,869 shares of Common Stock (the "Common Stock") of Crown
Casino Corporation (the "Company") being offered hereby, 2,000,000 shares are
being sold by the Company and 6,937,623 shares are being sold by certain
holders of Common Stock. In addition, 1,184,246 shares of Common Stock
underlying outstanding common stock purchase warrants are being offered for
sale to the public by the holders of such warrants upon the exercise thereof.
Such warrants are exercisable at prices ranging from $3.00 per share to $12.00
per share. Unless the context otherwise requires, the holders of Common Stock
or outstanding warrants selling shares hereunder are hereinafter collectively
referred to as the "Selling Shareholders." The Company will not receive any
proceeds from the sale of Common Stock by the Selling Shareholders. The
2,000,000 shares being sold by the Company are being marketed on a best efforts
basis by certain directors and executive officers of the Company, who will not
receive any commissions or other remuneration in connection with such
activities. See "Plan of Distribution." There is no minimum purchase
requirement and there are no escrow arrangements with respect to such shares.
The offering of such shares by the Company will expire November 8, 1996, unless
earlier terminated in the sole discretion of the Company. The Company's
Articles of Incorporation contain certain restrictions on ownership of the
Common Stock. See "Risk Factors - Restrictions on Holders of Company Common
Stock Contained in Articles of Incorporation."

The Company's Common Stock is traded in the over-the-counter market
under the Nasdaq symbol "DICE." On December 26, 1995, the closing price for
the Common Stock, as reported on the Nasdaq system, was $2.00 per share. As of
the date hereof, the Company has sold a total of 915,000 shares of Common Stock
in this offering, 320,000 shares at a price of $5.00 per share, 170,000 shares
at a price of $3.50 per share, and 425,000 shares at a price of $4.00 per
share. The offering price of the remaining 1,085,000 shares of Common Stock
being sold by the Company hereby will be $3.50 per share.

SEE "RISK FACTORS" ON PAGE 6 FOR CERTAIN INFORMATION THAT SHOULD BE
CONSIDERED BY PROSPECTIVE PURCHASERS OF THE COMMON STOCK OFFERED HEREBY.
______________

THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.

<TABLE>
<CAPTION>
=============================================================================================================
Underwriting Proceeds to Proceeds
Price to Discounts and Selling to
Public Commissions Shareholders Company(1)
<S> <C> <C> <C> <C>
- -------------------------------------------------------------------------------------------------------------
Offering by Selling Shareholders:(2) See Text Below See Text Below See Text Below
Offering Price Per Share . . . . . . . $0
Offering Price Per Share of Common See Text Below See Text Below See Text Below
Stock Underlying Warrants . . . . $0
- -------------------------------------------------------------------------------------------------------------
Offering by Company:
Offering Price Per Share . . . . . . $3.50 $0 $0 $3.50

Total Minimum . . . . . . . . $0 $0 $0 $0

Total Maximum . . . . . . . . $3.50 $0 $0 $7,692,500

=============================================================================================================
</TABLE>

(1) Before deducting expenses payable by the Company, which are estimated to
be $230,000. Amounts shown reflect the sale by the Company of 320,000
shares at a price of $5.00 per share, 170,000 shares at a price of $3.50
per share, 425,000 shares at a price of $4.00 per share, and assume the
sale of the remaining 1,085,000 shares at a price of $3.50 per share.
(2) The Selling Shareholders have advised the Company that they propose to
offer for sale and to sell the Common Stock from time to time until
November 8, 1996, through brokers in the over-the-counter market, in
private transactions, and otherwise, at market prices then prevailing or
obtainable. Accordingly, sales prices and proceeds to the Selling
Shareholders will depend upon price fluctuations and the manner of sale.
If the Common Stock is sold through brokers, the Selling Shareholders will
pay brokerage commissions and other charges (which compensation as to a
particular broker-dealer may be in excess of customary commissions).
Except for the payment of such brokerage commissions and charges and the
legal fees, if any, of the Selling Shareholders, the Company will bear all
expenses in connection with registering the shares offered hereby. Such
expenses are estimated to total approximately $230,000. See "Plan of
Distribution."

This Prospectus also relates to such additional securities as may be
issued to the Selling Shareholders because of future stock dividends, stock
distributions, stock splits or similar capital readjustments.

The date of this Prospectus is December ____, 1995
<PAGE> 4

AVAILABLE INFORMATION

The Company is subject to certain informational requirements of the
Securities Exchange Act of 1934 (the "1934 Act") and, in accordance therewith,
files reports and other information with the Securities and Exchange Commission
(the "Commission"). Reports, proxy statements and other information filed by
the Company can be inspected and copied at the Public Reference Section of the
Commission at Room 1024, Judiciary Plaza, 450 Fifth Street, N.W., Washington,
D.C. 20549, and at the regional offices of the Commission located at 75 Park
Place, 14th Floor, New York, New York 10007 and 500 West Madison Street, Suite
1400, Chicago, Illinois 60661. Copies of all or any portion of the
Registration Statement may be obtained from the Public Reference Section of the
Commission, upon payment of prescribed fees. In addition, such reports, proxy
statements and other information concerning the Company may be inspected at the
offices of the National Association of Securities Dealers, Inc., 1735 K Street,
N.W., Washington, D.C. 20006-1506.

The Company has filed with the Commission a Registration Statement on
Form S-1 (the "Registration Statement") under the Securities Act with respect
to the Common Stock offered hereby. This Prospectus, which is part of the
Registration Statement, does not contain all the information set forth in the
Registration Statement and the exhibits and schedules thereto, certain items of
which are omitted in accordance with the rules and regulations of the
Commission. Statements contained herein concerning the provisions of documents
are necessarily summaries of such documents, and each such statement is
qualified in its entirety by reference to the copy of the applicable document
filed with the Commission as an exhibit to the Registration Statement.

-2-
<PAGE> 5

PROSPECTUS SUMMARY

The following summary is qualified in its entirety by and should be
read in conjunction with the more detailed information and the financial
statements and notes thereto appearing elsewhere in this Prospectus.

Crown Casino Corporation, formerly Skylink America Incorporated, and
subsidiaries ("Crown" or the "Company") owns a 50% interest in St. Charles
Gaming Company, Inc. ("SCGC"), which owns and operates a riverboat gaming
casino located in Calcasieu Parish, Louisiana that opened on July 29, 1995, and
owns an 18.6 acre tract of land in the gaming district of Las Vegas, Nevada
which is being held for possible development of a hotel and casino. The
Company is also actively pursuing other gaming opportunities in these and other
jurisdictions.

From its inception in 1983 to February 1994, the Company had been
engaged in various facets of the cable programming business including (i)
providing Free-To-Guest ("FTG") and Pay-Per-View ("PPV") programming services
and equipment to the lodging and hospital industries, (ii) designing, producing
and selling PPV equipment, (iii) constructing and operating Satellite Master
Antenna Television and Community Antenna Television systems, and (iv) the
buying and selling of cable properties and assets.

During the fiscal year ended April 30, 1992, management concluded that
the hotel/motel FTG programming business had become increasingly competitive
from a profit margin standpoint and that programming in the hotel industry was
at or near saturation. Based on its conclusion that the value of the FTG
business had peaked, in late fiscal 1992 the Company sold the majority of its
FTG programming business which accounted for approximately 85% of the Company's
total revenues during fiscal 1992. In June 1993, the Company made the decision
to enter the gaming industry and, based upon that decision, the Company sold
its remaining cable assets in November 1993 and February 1994.

On June 25, 1993, Crown entered the gaming industry with the purchase
of SCGC for $500,000 cash and 1.6 million shares of Crown common stock. SCGC
had been formed in January 1993 in order to apply to the Louisiana Riverboat
Gaming Commission ("Gaming Commission") to operate a riverboat gaming casino to
be based in St. Charles Parish, Louisiana, near New Orleans. On June 18, 1993,
SCGC received preliminary approval of its application from the Gaming
Commission and in July 1993 filed its application with the Louisiana Riverboat
Gaming Enforcement Division of the Office of State Police (the "Enforcement
Division") for a license to operate a riverboat gaming casino. On March 29,
1994, SCGC received one of only fifteen authorized riverboat gaming licenses,
subject to certain conditions, issued in the State of Louisiana.

In January 1995, SCGC made the strategic decision to relocate the site
for its planned Louisiana casino from St. Charles Parish to Calcasieu Parish in
the southwest part of the state near the Texas border. See "Business--Gaming
Development." In March 1995, the Company entered into an agreement with
Louisiana Riverboat Gaming Partnership ("LRGP") to form a joint venture to
develop the Calcasieu Parish project. LRGP, a joint venture owned 50% by
Casino America, Inc. ("Casino America") and 50% by Louisiana Downs, Inc., an
Edward J. DeBartolo company, currently owns the Isle of Capri(SM) dockside
riverboat casino located on the Red River in Bossier City, Louisiana. On June
9, 1995, the Company sold 50% of the outstanding common stock of SCGC for (i) a
five-year $20 million note (the "LRGP Note"), (ii) $1 million cash, and (iii) a
warrant (which may only be exercised by converting a portion of the LRGP Note)
to purchase 416,667 shares of Casino America common stock at $12 per share. In
July 1995, SCGC's riverboat casino opened for business in Calcasieu Parish as
an Isle of Capri(SM) themed property. Certain conditions remain to be
satisfied before a permanent riverboat gaming license will be issued by the
Enforcement Division, although the casino may conduct business prior to receipt
of such permanent license. See "Business--Gaming Development."

-3-
<PAGE> 6

SCGC's site in Calcasieu Parish consists of a 10.5 acre tract and an
adjacent 5.5 acre tract (collectively, the "Site") on the west bank of the
Calcasieu River bordering Lake Charles to the east and approximately 1/8 mile
south of Interstate 10. The Site is approximately 28 miles east of the Texas
border, which makes the casino the closest riverboat gaming establishment to
Houston, Texas. The Company believes a majority of the casino's patrons come
from Texas, due in part to the current absence of legalized casino gaming in
Texas. SCGC has entered into lease agreements with respect to the Site for an
initial term of five (5) years with renewal options for an additional
thirty-five (35) years.

The Calcasieu Parish casino's gaming operations are being managed by
Casino America. Casino America has been a developer, owner and operator of
dockside riverboat and dockside floating pavilion casinos and related
facilities since 1992. Casino America currently owns and operates floating
pavilion casinos in Biloxi and Vicksburg, Mississippi, and operates the
dockside riverboat casino in Bossier City, Louisiana owned by LRGP.

On December 13, 1993 the Company acquired 100% of the outstanding
common stock of Gaming Entertainment Management Services, Inc. ("GEMS"), a
Nevada corporation, which was organized in September 1992 for the purpose of
developing a hotel and casino project in Las Vegas, Nevada known as the Desert
Winds Hotel and Casino (the "Desert Winds"). GEMS via contract had the right
to purchase an 18.6 acre parcel of land for $10 million in the gaming district
of Las Vegas. The option was exercised and the land was purchased on June 8,
1994. GEMS has no operations other than the potential development of the
Desert Winds project. In connection with this transaction, the Company issued
885,000 shares of its common stock and assumed approximately $585,000 of
liabilities. The Desert Winds site has received zoning approval for the
construction of a 12-story, 400 room hotel and casino. The Company is
currently pursuing potential opportunities to joint venture the development of
the Desert Winds project, although no agreement has been reached with any
person in this regard. See "Business - Future Expansion."

In July 1995, the Company entered into a definitive asset purchase
agreement to acquire the Bourbon Street Hotel and Casino (the "Bourbon Street
Casino") located in Las Vegas, Nevada for a purchase price of $10 million. The
Bourbon Street Casino has approximately 430 slot machines and 15 table games
over its 15,000 square feet of gaming space, 166 hotel rooms, including 16
suites. In November 1995, the Company determined not to proceed with the
acquisition of the Bourbon Street Casino due to (i) the possibility of more
attractive investment opportunities, (ii) the lack of attractive financing, and
(iii) declining margins at the property. In connection with this decision, in
November 1995 the Company wrote off a $500,000 nonrefundable deposit and
approximately $127,000 of other costs related to the proposed acquisition. See
"Business - Gaming Development."

Casino America has been pursuing opportunities to potentially
acquire a second riverboat casino which would be operated from SCGC's existing
site in Calcasieu Parish, although no agreement has been reached with any third
party respecting such an acquisition and any such acquisition would require
various state and local regulatory approvals, including the approval of the
Gaming Commission and the Enforcement Division. See "Business - Future
Expansion."

-4-
<PAGE> 7

The Company's business strategy is to expand its gaming operations
through acquisition and development in new and existing gaming jurisdictions.

-5-
<PAGE> 8

SUMMARY FINANCIAL INFORMATION
(In thousands, except per share data)

<TABLE>
<CAPTION>
UNAUDITED
Six Months Ended
Years Ended April 30, October 31,
---------------------------------------------------------------- --------------------------
1995 1994 1993 1992 1991 1995 1994
---- ---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C> <C>
INCOME STATEMENT DATA:

Revenues from:
Continuing operations $ -- $ -- $ -- $ -- $ -- $ -- $ --
Discontinued operations -- 604 1,347 11,618 13,602 -- --

Income (loss) from:
Continuing operations $(20,325) $ (2,052) $ (263) $ (380) $ (581) $ 10,017(5) $ (4,546)
Discontinued operations (177) (145) 2,701(1) (614) -- --
-------------------------------------------------------------- --------------------------
$(20,325) $ (2,229) $ (408) $ 2,321 $ (1,195) $ 10,017 $ (4,546)
============================================================== ==========================

Income (loss) per share from:
Continuing operations $ (2.01) $ (.34) $ (.07) $ (.10) $ (.16) $ .82 $ (.48)
--- ----
Discontinued operations (.03) (.04) .73 (.16) -- --
-------------------------------------------------------------- --------------------------
$ (2.01) $ (.37) $ (.11) $ .63 $ (.32) $ .82 $ (.48)
============================================================== ==========================
</TABLE>

<TABLE>
<CAPTION>
Balance at
Balance at April 30, October 31,
------------------------------------------------------------- --------------
1995 1994 1993 1992 1991 1995
---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C>
BALANCE SHEET DATA:

Total assets(2) $ 54,507 $ 30,974 $ 4,388 $ 5,477 $ 2,148 $ 39,610

Working capital (30,981)(3) 2,607 1,167 991 1,270 1,048

Long-term obligations 2,271 2,330 -- -- 6,009(4) 3

Stockholders' equity 17,930 23,837 3,711 4,196 1,875 28,119

Shares outstanding 11,678 8,999 3,524 3,689 3,697 11,725

</TABLE>
____________________

(1) Includes a gain on the sale of certain cable assets of $5.7 million
before income taxes.
(2) Assets related to discontinued operations are shown net of related
liabilities.
(3) Includes debt and capital lease obligations of $29,388.
(4) Long-term obligation amounts pertain to discontinued operations.
(5) Includes a gain on the sale of 50% of SCGC of $13.4 million after
income taxes.

-6-
<PAGE> 9

THE COMPANY

The Company was incorporated under the laws of Alabama in 1983. In
1989, the Company reincorporated in Texas and in 1993, the Company entered the
gaming business and changed its name to Crown Casino Corporation. The
Company's executive offices are located at 2415 West Northwest Highway, Suite
103, Dallas, Texas 75220 and its telephone number is 214-352-7561.

RISK FACTORS

In addition to the other information contained in this Prospectus,
prospective investors should consider carefully the following information
relating to the Company and the Common Stock before making an investment in the
Common Stock offered hereby.

NEW VENTURE RISKS; LACK OF OPERATING HISTORY

The SCGC Louisiana casino project is a new development. The Company's
operations are subject to all of the many risks inherent in the establishment
of a new business enterprise, including operating problems with the riverboat
and the land-based support facility, as well as the ability of the Company to
market a new venture in a new gaming jurisdiction. The Company has never been
involved in constructing land based support facilities or operating riverboat
casinos. While the Company has engaged Casino America to manage the Company's
Louisiana casino operations, and the Company believes that Casino America
personnel do possess extensive casino management experience, such personnel
have only limited experience in managing riverboat casinos. There can be no
assurance that the Company will be able to operate and manage the Louisiana
casino on a profitable basis.

In addition, the land based support facility for SCGC's Calcasieu
Parish project is not yet completed. The Company estimates that as of December
1, 1995 approximately $15 million will be spent to complete the permanent
terminal facility and retire project-related payables. In addition, SCGC plans
to construct a 300-room hotel at an estimated cost of $15 million. The Company
expects that the additional capital necessary to complete this project will
come from LRGP or a financing source arranged by LRGP, as well as cash flows
from the Calcasieu Parish project. However, LRGP has no contractual
obligation to provide such capital and no assurance can be given that LRGP
will provide the capital necessary to complete the planned improvements.

DEPENDENCE ON KEY PERSONNEL

Management of the Company has no prior operating experience in
riverboat gaming. Therefore, the success of the Company is largely dependent
upon the efforts and skills of certain executive officers, key employees and
Casino America, the loss of services of any of whom could materially adversely
affect the Company. The Company's business will require managers with gaming
industry experience and skilled employees. A shortage of skilled labor exists
in the gaming industry, which may make it more difficult and expensive to
attract and retain qualified employees. While the Company believes that it
will be able to attract and retain qualified employees, no assurance can be
given that such employees will be available to the Company.

COMPETITION

The casino gaming industry is highly fragmented and characterized by
intense competition among a large number of participants, including riverboat,
dockside and land-based casinos, video lottery terminals, Indian gaming, and
other forms of legalized gaming in the United States. The Company will

-7-
<PAGE> 10
be competing with other larger, more established gaming companies, some of
which have far greater financial resources than the Company. The Calcasieu
Parish casino is the third riverboat casino operating in the Lake Charles area.
In addition, a land-based Indian-owned casino opened in January 1995 in Kinder,
Louisiana approximately 39 miles from the site of the Calcasieu Parish project.
Furthermore, a nationally recognized gaming company has announced plans to
develop a riverboat casino project in the Lake Charles area. The Company
believes that competition in the gaming industry, particularly the riverboat
and dockside gaming industry, is based on the quality and location of gaming
facilities, the effectiveness of marketing efforts, and customer service and
satisfaction. Although management of the Company believes that the location of
the Calcasieu Parish riverboat casino will allow it to effectively compete with
other casinos in the area, the Company expects competition in the casino gaming
industry to be intense as more casinos are opened and new entrants into the
gaming industry become operational.

FINANCING RISK

In June 1994, SCGC completed a private placement of a $28,000,000
Senior Secured Increasing Rate Note (the "Senior Note") to an institutional
investor (the "Lender"). SCGC repaid $6.5 million of the Senior Note in
October 1994. The balance of the Senior Note was repaid in August 1995 from
the issuance of $38.4 million of Senior Secured Increasing Rate Notes (the "New
Notes") issued jointly by SCGC and LRGP to the same Lender. The New Notes
become due on July 27, 1996, but may be extended for two additional six-month
periods under certain circumstances. Also, the New Notes contain a variety of
business, operating and financial covenants, including maintaining minimum cash
flow and fixed charge coverage. Events of default occurred in September 1995
due to the failure to meet certain financial covenants governing the New Notes.
SCGC and LRGP are presently negotiating with the Lender to obtain a waiver
of such defaults, but no waiver has yet been executed by the Lender. No
assurance can be given that a satisfactory waiver will be forthcoming. During
the pendency of an event of default, the Lender is entitled to accelerate the
maturity of the New Notes and to foreclose on the collateral securing the New
Notes. The Company believes (i) the collective cash flow of LRGP and SCGC is
more than sufficient to support the level of debt that the New Notes represent,
and (ii) the Lender is well collateralized. Accordingly, while no assurance
can be given, the Company does not expect that the Lender will accelerate the
maturity of the New Notes and seek to foreclose on the collateral. Neither the
Company nor any of its consolidated subsidiaries are guarantors of the New
Notes. See "Management's Discussion and Analysis of Financial Condition and
Results of Operations -Liquidity and Capital Resources."

In the event SCGC and LRGP are unable to finance the retirement of the
New Notes or are unable to secure third party financing sufficient to retire
the New Notes, they will either seek an extension of the maturity date of such
New Notes or the Company will seek third party financing on their behalf.
There can be no assurance that they will be able to secure either such
extension or such third party financing.

In addition, the land-based support facility for the SCGC Calcasieu
Parish casino project is not yet completed. The Company estimates that as of
December 1, 1995 an additional $15 million will be spent to complete the
permanent terminal facility and retire project-related payables. In addition,
SCGC plans to construct a 300 room hotel at an estimated cost of $15 million.
The Company expects that the additional capital necessary to complete this
project will come from LRGP or a financing source arranged by LRGP, as well as
cash flows from the Calcasieu Parish project. However, LRGP has no
contractual obligation to provide such capital and no assurance can be given
that LRGP will provide the capital necessary to complete the planned
improvements.

-8-
<PAGE> 11

SUBSTANTIAL LEVERAGE AND RELATED DEBT SERVICE

In connection with the issuance of the New Notes and other equipment
capital lease related debt incurred in connection with the establishment and
operation of the Calcasieu Parish casino, SCGC and LRGP have substantial annual
fixed debt service obligations. The ability of SCGC and LRGP to meet debt
service requirements will depend on the ability (i) to generate sufficient cash
flows from operations and/or (ii) to refinance the New Notes when they become
due. Management of the Company believes that SCGC's and LRGP's cash flows from
operations will be sufficient to make the required interest payments on the
debt outstanding at such time. However, these operations are subject to
significant business, economic, regulatory and competitive uncertainties and
contingencies, many of which are beyond the control of SCGC and LRGP. As a
result, there can be no assurance that operations will generate sufficient cash
flows to meet their debt service requirements.

LICENSING RISK

SCGC has received a certificate of final approval from the Gaming
Commission and a license with certain conditions from the Enforcement Division.
The conditions to the license include the operation of the riverboat under an
approved plan of security and internal controls for a period of six months,
exercising due diligence in the development of its planned hotel in Calcasieu
Parish, and obtaining the Enforcement Division's prior written approval for any
modification to its plans for such hotel, including the abandonment of any
portion of the project. Upon satisfaction of the conditions to the license, a
permanent license will be issued by the Enforcement Division. No assurance can
be given that these conditions will be met or that such final license or
approvals will be obtained.

In addition, there are numerous statutes and regulations in the State
of Nevada governing gaming, and the Nevada regulatory authorities also have
broad discretionary powers in connection with the licensing process. There can
be no assurance that the Company will obtain the necessary permits and licenses
in order to develop a casino in Nevada, should the Company wish to do so.

There are numerous other requirements specified in both the Nevada and
Louisiana gaming statutes and relevant regulations governing the ownership and
control of gaming operations, and the state regulatory agencies have broad
discretionary authority to take action necessary to protect the public
interests, including suspension or revocation of a license or disqualification
of persons associated with the gaming operations who are found to be
unsuitable. SCGC has expended significant sums of money in the development of
the Calcasieu Parish casino, prior to having obtained all final requisite
licenses, permits and approvals. The failure to obtain any such license,
permit or approval, as well as any withdrawal, suspension, revocation,
restriction or failure to renew such license, permit or approval, would have a
material adverse impact on the Company.

REGULATION OF LOAN TRANSACTIONS

Under the Louisiana Riverboat Economic Development and Gaming Control
Act (the "Louisiana Riverboat Act"), and applicable regulations issued
thereunder, the Enforcement Division is empowered to regulate the adequacy and
business terms of the financing of a licensee. The Enforcement Division is
empowered under the regulations to order any loan transaction which it finds
unacceptable for any reason rescinded. Within 30 days of any loan transaction
involving a licensee, the licensee must file a statement with the Enforcement
Division disclosing the names and addresses of all parties to the transaction
and the terms of the transaction. If, after whatever investigation the
Enforcement Division deems appropriate, the Enforcement Division finds that the
transaction is contrary or inimical to the public health, safety, morals, and
good order and general welfare of the people of Louisiana, or would reflect, or
tend to reflect, discredit upon the State of Louisiana, or the gaming industry,
the Enforcement

-9-
<PAGE> 12

Division may order the transaction rescinded within such time and upon such
terms and conditions as it may deem appropriate. The Enforcement Division has
reviewed and approved the issuance of the New Notes.

Similarly, the Nevada Gaming Commission has the authority to approve
the holder of any debt securities of a gaming company conducting gaming
operations in the state, and in connection therewith, if the Company issues
debt in order to complete an acquisition or development of a casino, such
debt issuance would likely require the approval of the Nevada Gaming
Commission. No assurance can be given that such approval would be obtained.

NEW GAMING JURISDICTION

Louisiana is a new gaming market, with the first riverboat gaming
activities commencing in November 1993 on Lake Ponchartrain. Through November
30, 1995, there were twelve riverboat casinos operating in Louisiana; however,
two riverboat casinos previously operating near New Orleans were placed in
bankruptcy in the summer of 1995, and other riverboat casinos operating in
Louisiana have reported disappointing results of operations. The success of
gaming in a market which has never supported gaming operations cannot be
guaranteed or accurately predicted. The number of patrons of a riverboat
casino in a new gaming jurisdiction like Louisiana and the propensity of these
patrons to wager cannot be predicted with any degree of certainty and there can
be no assurance that SCGC will be able to operate the Calcasieu Parish casino
in a profitable manner.

REGULATORY UNCERTAINTY IN LOUISIANA

The gaming industry in the State of Louisiana has recently received
national media attention in part due to the commencement by federal authorities
of an investigation of certain members of the Louisiana legislature and their
association with gaming interests. There are also reports that a significant
percentage of Louisiana residents are opposed to gaming in the State.
Depending upon the results of the investigation and other political
developments, it is possible that the State of Louisiana may pass new gaming
statutes and regulations which could have an adverse impact upon gaming
generally in the State of Louisiana. The Company cannot predict how any such
new or different statutes or regulations would impact SCGC's operations in the
State of Louisiana.

The Louisiana Riverboat Act permits the issuance of up to fifteen
licenses to conduct gaming activities on a riverboat, of which no more than six
may be issued for the operation of gaming activities on riverboats in any one
parish. The Enforcement Division has awarded fifteen licenses, including one
to the Company. In addition, Louisiana law also permits the operation of a
single land-based facility in New Orleans. There are also Indian gaming
casinos currently in operation in the state which are not subject to Louisiana
gaming laws.

The initial license necessary for conducting gaming activities on the
Louisiana casino is for a five-year term and, thereafter, is renewable for
one-year terms. No assurance can be given that the Enforcement Division will
renew such license. No assurance can be given that the State of Louisiana will
not repeal or amend existing legislation or enact legislation which may have a
material adverse effect on the Company, including legislation that may (i)
increase the number of riverboat gaming licenses which can be granted, (ii)
authorize dockside gaming, (iii) permit more than one land-based casino, (iv)
increase the statutory gaming fees and/or taxes, or (v) limit or prohibit
gaming activities in the State of Louisiana.

The Enforcement Division has broad discretion to deny, condition,
restrict, revoke or suspend gaming licenses, including the license received by
the Company, and impose fines and other penalties for violation of the
Louisiana Riverboat Act and/or the relevant rules and regulations. Penalties
may include

-10-
<PAGE> 13

revocation or suspension of licenses or permits. In such event, the ability of
SCGC or the Company to successfully pursue a claim against the State of
Louisiana, the Enforcement Division and/or the Gaming Commission involves the
interpretation of state and federal law, including constitutional law, as to
which the law is unclear. In addition, the Louisiana statute makes it clear
that all risk of non-licensing is on the applicant, and each applicant is
required to sign a comprehensive release of all present and future claims
concerning matters of licensing and regulatory oversight against the
Enforcement Division and the State of Louisiana. Accordingly, no prediction
can be made regarding SCGC's or the Company's ability to successfully pursue
such a claim if such a claim were to arise.

TAXATION

The Company believes that the availability of significant additional
revenue through taxation is one of the primary reasons that Louisiana and other
jurisdictions have legalized gaming. The Company's gaming operations are, and
any future gaming operations are likely to be, subject to significant taxes and
fees in addition to normal federal and state corporate income taxes, and such
taxes and fees are subject to increase at any time. Any material increase in
these taxes or fees would adversely affect the Company.

MARITIME CONSIDERATIONS

Under the provisions of Title 46 of the U.S. Code, the design,
construction and operation of the Calcasieu Parish riverboat casino are subject
to regulation and approval by the U.S. Coast Guard. SCGC's riverboat vessel
has received a Certificate of Inspection. The Calcasieu Parish riverboat
casino will be subject to periodic inspections by the Coast Guard and every
five years the riverboat must be dry docked for hull and other inspections,
which will result in a loss of service that can have an adverse effect on the
Company. Loss of the Certificate of Inspection would preclude the use of the
riverboat as a floating casino.

All shipboard employees of SCGC employed on U.S. Coast Guard regulated
vessels, including those not involved with the actual operation of the vessel,
such as dealers, cocktail hostesses and security personnel, may be subject to
the Jones Act, which, among other things, exempts those employees from state
limits on workers' compensation awards. The Company believes that SCGC has
adequate insurance to cover employee claims.

Operating on the Calcasieu River will expose the riverboat casino to
marine hazards such as unpredictable river currents, potentially severe weather
conditions and exposure to maritime traffic. SCGC has obtained maritime
insurance coverage; however, the occurrence of a catastrophic loss in excess of
such coverage could have a material adverse effect on the Company.

REGULATION BY GAMING AUTHORITIES

Typically, gaming authorities, including those in Louisiana and Nevada,
have discretionary authority to, and in certain circumstances must, require a
direct or indirect holder of Common Stock to file an application to be
investigated and to be found suitable as an owner or landlord of a gaming
establishment. Such application may be required regardless of the
circumstances under which ownership is obtained. The gaming laws and
regulations of other jurisdictions in which the Company may seek or obtain
licenses may also contain restrictions on the ability of a person or group to
acquire or hold such securities or may require regulatory approval. In
addition, the federal Merchant Marine Act of 1936 and the federal Shipping Act
of 1916 and applicable regulations thereunder contain provisions designed to
prevent persons who are not citizens of the United States, as defined therein,
from holding in the aggregate more than 25% of the outstanding shares of common
stock of the entities subject to such regulation. In addition, Louisiana and
Nevada gaming regulators have the statutory right to investigate

-11-
<PAGE> 14

and approve any holder of 5% or more of the outstanding Common Stock of the
Company. The regulator must determine that such persons are deemed suitable to
hold such stock and may require such holders to make filings and submit to
regulatory proceedings in order to be qualified. Any holder of Common Stock
required to apply for a finding of suitability must pay all investigative fees
and costs of the gaming authorities in connection with such an investigation.
Such restrictions could adversely affect the marketability of the Company's
Common Stock.

In both Louisiana and Nevada, if the gaming authority finds that an
individual owner or holder of a security of a corporate licensee or of a
holding or an intermediary company or any person or persons with an economic
interest in a licensee, or a director, partner, officer or manager is not
qualified under applicable law or regulation and if, as a result, the licensee
is no longer qualified to continue as a licensee, the gaming authority may
suspend or revoke the license or permit. The gaming authority may also issue,
under penalty, a revocation of license, a condition of disqualification naming
the person or persons and declaring that such person or persons may not receive
dividends or interest on securities of the corporation, exercise directly, or
through a trustee or nominee, a right conferred by securities of the
corporation, receive remuneration from the licensee, receive any economic
benefit from the licensee, continue an ownership or economic interest in a
licensee or remain as a manager, officer, director or partner of a licensee.

ENVIRONMENTAL REGULATION

The Company and SCGC are subject to a variety of federal, state and
local governmental regulations relating to the use, storage, discharge,
emission and disposal of hazardous material. While the Company and SCGC
believe that they are presently in material compliance with all environmental
laws, failure to comply with such laws could result in the imposition of severe
penalties or restrictions on operations by government agencies or courts of law
which could adversely affect operations. Neither the Company nor SCGC
maintains environmental impairment liability insurance to cover such events.

RESTRICTIONS ON HOLDERS OF COMPANY STOCK CONTAINED IN ARTICLES OF INCORPORATION

The Articles of Incorporation of the Company provide that any
shareholder of the Company who is found to be unsuitable by any gaming
regulatory authority with jurisdiction over the Company's operations, may, in
the discretion of the Board of Directors, be required to divest the shares of
Company stock owned by such person within forty-five (45) days from the date on
which the Company notifies the disqualified holder of the regulatory
authority's determination of unsuitability, or the Company will have the right
to purchase such stock at a price equal to the fair market value as defined in
the Articles of Incorporation less twenty-five percent (25%).

In addition, the Articles of Incorporation require that the Company
maintain compliance under the federal Merchant Marine Act of 1936 and the
federal Shipping Act of 1916, as amended, restricting the amount of shares of
Company Common Stock which may be held by non-U.S. citizens. The Company may
require foreign persons to divest their shares of Company Common Stock in
accordance with the provisions of the Articles of Incorporation in the event
that the Company determines that it is in violation of either of these Acts.
See "Description of Capital Stock."

UNCERTAINTY WITH RESPECT TO LAS VEGAS PROJECT

The Company acquired all of the outstanding shares of capital stock of
GEMS in December 1993 in exchange for an aggregate of 885,000 shares of Company
Common Stock and the assumption of approximately $585,000 of liabilities. In
June 1994, the Company exercised its option to purchase 18.6 acres of real
property in Las Vegas for the development of a hotel and casino. This project
is in the

-12-
<PAGE> 15
earliest stages of development, and there can be no assurance that the project
will be completed, or if completed, that the project will be operated
profitably. See "Business - Future Expansion."

MAINTENANCE OF EFFECTIVE PROSPECTUS

Selling Shareholders may effect sales of shares of Common Stock only
pursuant to an effective Registration Statement and Prospectus. The Company
has undertaken to maintain the effectiveness of this Prospectus for a period of
two years from November 8, 1994. In the event of the lapse of effectiveness of
this Prospectus, Selling Shareholders would be restricted from selling their
shares in the open market.

CONTEMPORANEOUS OFFERING BY COMPANY AND SELLING SHAREHOLDERS

The offering of shares by the Company will be conducted
contemporaneously with the offering of shares by the Selling Shareholders. Due
to the relatively small size of the Company and the fact that the Company's
Common Stock is relatively thinly traded, either the Company or a Selling
Shareholder may be unable to effect sales if the other party is offering to
sell shares simultaneously.

SALES OF THE COMPANY'S SECURITIES IN THE EVENT OF APPLICATION OF PENNY STOCK
RULES

Although the Company's Common Stock is not presently subject to the
so-called "penny stock" rules promulgated by the Securities and Exchange
Commission, in the event that the Company's Common Stock no longer qualifies
for exclusion from the definition of "penny stock" under applicable
regulations, the Company's Common Stock would become subject to such rules,
which impose additional sales practice requirements on broker dealers who sell
such securities to persons other than established customers and accredited
investors (generally, institutions with assets in excess of $5,000,000 or
individuals with net worths in excess of $1,000,000 or annual incomes exceeding
$200,000 or $300,000 jointly with their spouses). For transactions covered by
the penny stock rules, a broker dealer must make a special suitability
determination for the purchaser and receive the purchaser's written agreement
to the transaction prior to the sale. Consequently, such rules may affect the
ability of broker dealers to sell the Company's publicly traded securities and
also could affect the ability of purchasers in this offering to sell the Common
Stock in the secondary market should such rules become applicable in the
future.

DIVIDEND POLICY

The Company currently anticipates that all of its earnings will be
retained for development of the Company's business, and does not anticipate
paying any cash dividends in the foreseeable future. Future cash dividends, if
any, will be at the discretion of the Company's Board of Directors and will
depend upon, among other things, the Company's future earnings, operations,
capital requirements and surplus, general financial condition, and contractual
restrictions that may exist, and such other factors as the Board of Directors
may deem relevant.

USE OF PROCEEDS

The Company will not receive any of the proceeds from the sale of the
Common Stock by the Selling Shareholders.

As of the date hereof, the Company has sold a total of 915,000 shares
of Common Stock in this offering, 320,000 shares at a price of $5.00 per share,
170,000 shares at a price of $3.50 per share, and 425,000 shares at a price of
$4.00 per share. The remaining 1,085,000 shares are offered hereby at a

-13-
<PAGE> 16

price of $3.50 per share. The net proceeds to the Company from the sale of
the 2,000,000 shares offered by the Company hereby (after deducting estimated
offering expenses) are estimated to be approximately $7.5 million. Of the
approximate $3.5 million in net proceeds raised by the Company through the date
of this Prospectus, the Company has utilized the proceeds for development of
SCGC's Calcasieu Parish riverboat casino and for general corporate purposes.
The Company intends to utilize the remaining net proceeds for the acquisition
and/or development of other casino projects, with any remainder to be added to
working capital to be used for general corporate purposes, including the
payment of general administrative expenses and corporate overhead. Although the
Company is continually seeking to identify attractive acquisition or joint
venture gaming opportunities, at the present time the Company has no definitive
gaming acquisition or joint venture plans that the Company deems to be probable
of occurrence. The Company has no agreement or understanding with any party
with respect to any acquisition or new casino development. See "Management's
Discussion and Analysis of Financial Condition and Results of Operations -
Liquidity and Capital Resources."

MARKET PRICE OF AND DIVIDENDS ON COMMON STOCK

The Company's Common Stock is authorized for quotation on the Nasdaq
Small Cap Market system under the Nasdaq symbol "DICE." The following table
sets forth, by fiscal quarter, the high and low bid prices reported by Nasdaq
for the Company's Common Stock for the periods indicated. The bid quotation
information presented represents prices between dealers and does not include
retail mark-ups, mark-downs, or other fees or commissions and may not represent
actual transactions.

<TABLE>
<CAPTION>
Bid Prices
-------------------------------

High Low
-------- -------
<S> <C> <C>
Fiscal Year 1996
First Quarter $6-5/16 $4-3/4
Second Quarter 5-5/8 2-7/8

Fiscal Year 1995
First Quarter $7-1/2 $5-5/8
Second Quarter 8-3/8 4-1/8
Third Quarter 7 2-7/8
Fourth Quarter 5-3/4 3-1/4

Fiscal Year 1994
First Quarter $7-3/4 $ 1/2
Second Quarter 8 4-3/8
Third Quarter 7-1/2 5
Fourth Quarter 11 6-5/8
</TABLE>

The closing price reported by Nasdaq for the Common Stock on December
26, 1995 was $2.00. On that date, there were approximately 1,875 shareholders
of record. This number excludes individual shareholders holding stock under
nominee security position listings.

Since its inception, the Company has paid no dividends on its Common
Stock. The Company currently intends to follow a policy of retaining earnings
to finance future growth. Payment of dividends in the future will be
determined by the Company's Board of Directors and will depend upon, among
other things, the Company's future earnings, operations, capital requirements
and surplus, general financial condition, and contractual restrictions that may
exist, and such other factors as the Board of Directors may deem relevant.

-14-
<PAGE> 17

SELECTED FINANCIAL INFORMATION

The selected financial data presented below as of April 30, 1995, 1994,
1993, 1992 and 1991 and for each of the five years in the period ended April
30, 1995, have been derived from audited consolidated financial statements of
the Company. The information presented for the six months ended October 31,
1995 and 1994 is derived from the unaudited financial statements of the
Company. The unaudited financial statements include all adjustments,
consisting only of normal recurring adjustments, which the Company considers
necessary for a fair presentation of the financial position and the results of
operations for these periods. Operations for the six months ended October
31, 1995 are not necessarily indicative of the results that may be expected for
the entire year ending April 30, 1996. The selected financial information
should be read in conjunction with "Management's Discussion and Analysis of
Financial Condition and Results of Operations," and the Consolidated Financial
Statements of the Company and the Notes thereto included elsewhere in this
Prospectus.

SUMMARY FINANCIAL INFORMATION
(In thousands, except per share data)

<TABLE>
<CAPTION>
UNAUDITED
Six Months Ended
Years Ended April 30, October 31,
-------------------------------------------------------------- --------------------
1995 1994 1993 1992 1991 1995 1994
---- ---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C> <C>
INCOME STATEMENT DATA:

Revenues from:
Continuing operations $ -- $ -- $ -- $ -- $ -- $ -- $ --
Discontinued operations -- 604 1,347 11,618 13,602 -- --
Income (loss) from:
Continuing operations $(20,325) $ (2,052) $ (263) $ (380) $ (581) $10,017(5) $ (4,546)

Discontinued operations (177) (145) 2,701(1) (614) -- --
-------------------------------------------------------------- --------------------
$(20,325) $ (2,229) $ (408) $ 2,321 $ (1,195) $10,017 $ (4,546)
============================================================== ====================

Income (loss) per share
from:
Continuing operations $ (2.01) $ (.34) $ (.07) $ (.10) $ (.16) $ .82 $ (.48)
Discontinued operations (.03) (.04) .73 (.16) -- --
-------------------------------------------------------------- --------------------
$ (2.01) $ (.37) $ (.11) $ .63 $ (.32) $ .82 $ (.48)
============================================================== ====================
</TABLE>

<TABLE>
<CAPTION>
Balance at
Balance at April 30, October 31,
---------------------------------------------------------------- -----------
1995 1994 1993 1992 1991 1995
---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C>
BALANCE SHEET DATA:

Total assets(2) $ 54,507 $ 30,974 $ 4,388 $ 5,477 $ 2,148 $ 39,610

Working capital (30,981)(3) 2,607 1,167 991 1,270 1,048

Long-term obligations 2,271 2,330 -- -- 6,009(4) 3

Stockholders' equity 17,930 23,837 3,711 4,196 1,875 28,119

Shares outstanding 11,678 8,999 3,524 3,689 3,697 11,725

</TABLE>
____________________

-15-
<PAGE> 18

MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following should be read in conjunction with the Company's
consolidated financial statements appearing elsewhere herein.

OVERVIEW

The Company owns a 50% interest in St. Charles Gaming Company, Inc.
("SCGC") which owns and operates a riverboat gaming casino in Calcasieu Parish,
Louisiana, that opened on July 29, 1995, and owns an 18.6 acre tract of land in
the gaming district of Las Vegas, Nevada which is being held for possible
development of a hotel and casino. The Company is also actively pursuing other
gaming opportunities in these and other jurisdictions. Prior to March 1994,
the Company had been engaged in various facets of the cable and related
programming businesses. As a result of the Company's entry into the gaming
industry in June 1993 with the acquisition of SCGC, the Company made the
decision to discontinue operations in the cable programming industry and focus
all its efforts on gaming. During fiscal 1994, the Company sold all its
remaining cable related assets and operations.

In June 1993, the Company completed the acquisition of 100% of the
outstanding common stock of SCGC, a Louisiana corporation, which had received
preliminary approval from the Louisiana Riverboat Gaming Commission to
construct and operate a riverboat casino to be based in St. Charles Parish,
Louisiana. In March 1994, SCGC received a license with certain conditions from
the Louisiana Riverboat Gaming Enforcement Division of the Office of State
Police. In January 1995, SCGC made the strategic decision to relocate the site
for its planned Louisiana riverboat casino from St. Charles Parish to Calcasieu
Parish in the southwest part of the state near the Texas border. In March
1995, the Company entered into an agreement with Louisiana Riverboat Gaming
Partnership ("LRGP") to form a joint venture to develop the Calcasieu Parish
project. LRGP, a joint venture owned 50% by Casino America, Inc. ("Casino
America") and 50% by Louisiana Downs, Inc., owns the Isle of Capri(SM) dockside
riverboat casino in Bossier City, Louisiana. Pursuant to the joint venture
agreement, on June 9, 1995 the Company sold 50% of the outstanding common stock
of SCGC for (i) a five-year $20 million note (the "LRGP Note"), (ii) $1 million
cash, and (iii) a warrant (which may only be exercised by converting a portion
of the LRGP Note) to purchase 416,667 shares of Casino America common stock at
$12 per share. In July 1995, SCGC's riverboat casino opened for business in
Calcasieu Parish, Louisiana as an Isle of Capri(SM) themed property.

In December 1993, the Company acquired 100% of the outstanding common
stock of Gaming Entertainment Management Services, Inc. ("GEMS") which was
organized for the purpose of developing a hotel and casino in Las Vegas, Nevada
known as the Desert Winds Hotel and Casino (the "Desert Winds"). GEMS' primary
asset was its option to purchase an 18.6 acre tract of land in the gaming
district of Las Vegas. In June 1994, the option was exercised and the land was
purchased. The Company may develop such property by itself or on a joint
venture basis.

In July 1995, the Company entered into a definitive stock purchase
agreement to acquire the Bourbon Street Hotel and Casino (the "Bourbon Street
Casino") located in Las Vegas, Nevada for a purchase price of $10 million. The
Bourbon Street Casino has reported annual revenues of approximately $12
million. However, the Company has determined not to proceed with the
acquisition of the Bourbon Street Casino due to (i) the possibility of more
attractive investment opportunities, (ii) the lack of attractive financing, and
(iii) declining margins at the property. As a result of this decision, in
November 1995 the Company wrote off a $500,000

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<PAGE> 19
nonrefundable deposit and approximately $127,000 of other costs related to the
proposed acquisition. See "Business - Gaming Development."

RESULTS OF OPERATIONS

As a result of the Company's sale of 50% of SCGC on June 9, 1995, from
and after such date SCGC's operating results are no longer consolidated with
the Company, but rather are accounted for on the equity method. Accordingly,
operating results for the first quarter of the current and prior fiscal year
are not entirely comparable.

As a result of the Company's decision to exit the cable industry, all
revenues, costs and expenses directly related to cable operations have been
reclassified to discontinued operations. The Company's discontinued operating
results for fiscal 1994 and 1993 are not readily comparable to one another.
Fiscal 1994 discontinued operations reflect the loss on the sale of the
Company's remaining cable assets and only nine months of cable operations
whereas fiscal 1993 discontinued operations did not have any cable asset sales
and had a full twelve months of cable operations. The following discussion
focuses on results from continuing operations.

SIX MONTHS ENDED OCTOBER 31, 1995 COMPARED TO SIX MONTHS ENDED OCTOBER 31,
1994

Gaming pre-opening and development costs for the six months ended
October 31, 1995 decreased $2,733,622 compared to the same period in the prior
fiscal year. The decrease was attributable to the Company no longer
consolidating SCGC's operating results from and after June 9, 1995. General
and administrative expenses for the six months ended October 31, 1995
increased $297,661 compared to the same period in the prior fiscal year. The
increase was primarily attributable to increased compensation, partially as a
result of additional staff at the corporate level, and consulting expense.
Interest expense for the six months ended October 31, 1995 decreased
$2,077,253 compared to the same period in the prior fiscal year. The decrease
was the result of the Company no longer consolidating the operating results of
SCGC from and after June 9, 1995, as SCGC was formerly responsible for
substantially all of the Company's consolidated interest expense. Interest
income for the six months ended October 31, 1995 increased $926,258 compared
to the same period in the prior fiscal year. The increase was the result of
interest being recognized in the current fiscal period on the $20 million LRGP
Note at the rate of 11.5% per annum, whereas in the prior fiscal period
interest income on a portion of the proceeds from the issuance of the $28
million Senior Note was being held in escrow and earning interest at the rate
of 3% to 4% in a money market fund.

FISCAL YEAR 1995 COMPARED TO FISCAL YEAR 1994

General and administrative expenses for fiscal 1995 increased $583,006
compared to fiscal 1994. The increase was primarily attributable to increased
professional fees, personnel and travel costs associated with the development
of the Company's Louisiana riverboat casino project. Gaming pre-opening and
development costs for fiscal 1995 increased $7,208,553 compared to fiscal 1994.
The increase was the result of greater personnel, advertising, legal,
consulting and training costs incurred in connection with the anticipated
opening of the Louisiana riverboat casino, and development efforts outside of
Louisiana which began in fiscal 1995. In addition, fiscal 1995 reflects
development activities for a full year, whereas in fiscal 1994, the Company was
only in the early stages of developing its Louisiana riverboat casino project.

-17-
<PAGE> 20
In January 1995, SCGC made the decision to abandon its site in St.
Charles Parish, Louisiana in favor of a new and more attractive site in
Calcasieu Parish, Louisiana. As a result of this decision, the Company
recorded a charge of approximately $3.1 million, which represents the write-off
of previously capitalized costs specific to the St. Charles Parish site. Also,
in March 1995, in connection with the stock purchase agreement with LRGP, SCGC
paid $4 million to buy out its casino management agreement and entered into a
new management agreement with Casino America.

Interest expense amounted to $6,826,538 in fiscal 1995, principally
attributable to the issuance of the Senior Note in June 1994, with no
comparable amount in the prior fiscal year period. Included in fiscal 1995
interest expense is $3,376,392 of amortization of debt issuance costs and the
discount from the issuance of the Senior Note.

FISCAL YEAR 1994 COMPARED TO FISCAL YEAR 1993

General and administrative expenses for fiscal 1994 increased $814,309
compared to fiscal 1993. The increase was primarily attributable to increased
professional fees, personnel and travel costs associated with the development
of the Company's riverboat casino in St. Charles Parish, Louisiana and an
increase in bad debt expense. In addition, the Company incurred nearly $1
million of gaming pre-opening expenses during fiscal 1994 in connection with
the development of the Calcasieu Parish riverboat casino with no comparable
amount in fiscal 1993.

Interest expense for fiscal 1994 increased $574,434 over fiscal 1993
due to the write-off of approximately $321,760 of deferred financing costs and
the sale of certain notes receivable at an aggregate discount of $245,085. The
deferred financing costs write-off occurred as a result of the Company's
decision to abandon a prior financing commitment in favor of a more attractive
financing which closed in June 1994. Interest income for fiscal 1994 declined
$57,816 from fiscal 1993 as a result of the sale of certain notes receivable
during fiscal 1994 that were generating interest income prior to their sale.

LIQUIDITY AND CAPITAL RESOURCES

During fiscal 1995, pursuant to a private placement and public equity
offering, the Company raised approximately $7.4 million, net of transaction
costs, through the sale of 1,701,700 shares of its common stock. As of
December 1, 1995, the Company had sold 915,000 shares in this offering
resulting in gross proceeds of $3,895,000 and had an additional 1,085,000
shares of common stock available for sale pursuant to its registration
statement.

The Company

The Calcasieu Parish riverboat casino opened for business on July 29,
1995. In the near term, revenues generated by the casino are not expected to
have an impact on the Company, as cash flows generated will be used to service
the debt obligations of SCGC and LRGP (see "SCGC" below). The Company has no
capital expenditure commitments with respect to the Calcasieu Parish project.
The impact of the riverboat casino on the Company's financial condition in the
long term cannot be predicted with any certainty, and will depend upon the
profitability of the casino's operations.

Management of the Company is evaluating the design, scope and capital
requirements of its proposed hotel and casino project which is to be built on
the Company's 18.6 acre tract of land in Las Vegas. Management is considering
a variety of scenarios with respect to the operation and ownership of the
proposed hotel and casino, including a potential joint venture relationship,
but currently has no

-18-
<PAGE> 21
definitive development plan in place. In connection with the joint venture
agreement with LRGP, the Company granted LRGP a right of first refusal to
develop such project with the Company in the event the Company chooses to
develop such project on a joint venture basis.

As a source of liquidity, the Company receives interest monthly on the
LRGP Note, provided no event of default has occurred and is continuing on the
New Notes issued by SCGC and LRGP to the Lender (see "SCGC" below). Also, in
November 1995, the Company issued a $1 million ten year note to a bank which
bears interest at the bank's prime rate plus 1 1/2%, and is secured by certain
equipment. The proceeds are to be used for general corporate purposes.

SCGC

Since the Company and LRGP entered into the joint venture agreement in
March 1995, LRGP and its affiliate, Casino America, have been providing capital
to develop the Calcasieu Parish project which opened in July 1995. As of
December 1, 1995, the Company anticipates an additional $15 million will be
spent to complete the permanent terminal facility and retire project-related
payables. In addition, SCGC plans to construct a 300 room hotel at an
estimated cost of $15 million. The Company expects that the additional capital
necessary to complete the Calcasieu Parish project will come from LRGP or a
financing source arranged by LRGP, and cash flows from operating the Calcasieu
Parish project. However, LRGP has no contractual obligation to provide such
capital and no assurance can be given that LRGP, or another financing source,
will provide the capital necessary to complete the planned improvements.

In June 1994, SCGC completed a private placement of a $28,000,000
Senior Secured Increasing Rate Note (the "Senior Note") to an institutional
investor. SCGC repaid $6.5 million of the Senior Note in October 1994. The
balance of the Senior Note was repaid in August 1995 from a portion of the
proceeds from the issuance of $38.4 million of Senior Secured Increasing Rate
Notes (the "New Notes") issued jointly by SCGC and LRGP (collectively, the
"Issuers") to the same institutional investor. The New Notes initially become
due on July 27, 1996, but can be extended up to an additional twelve months at
the option of the Issuers provided no event of default has occurred and is
continuing, carry a 12% coupon increasing 25 basis points each quarter until
maturity, and provide for contingent interest beginning in May 1996 equal to
7.5% of the Issuers' consolidated cash flow, as defined. The New Notes are
collateralized by substantially all the assets of the Issuers and the agreement
governing the New Notes contains covenants relating to certain business,
operational and financial matters including limitations on (i) incurring
additional debt, (ii) paying dividends, (iii) merging or consolidating with
others, (iv) changes in control, (v) capital expenditures, (vi) investments and
joint ventures, (vii) the sale of assets, and financial covenants pertaining to
(a) minimum cash flow, (b) minimum fixed charge ratio, (c) maximum leverage
ratio, and (d) minimum net worth. Events of default occurred in September
1995 due to the failure to meet certain of the financial covenants. SCGC and
LRGP are presently negotiating with the Lender to obtain a waiver of such
defaults, but no waiver has yet been executed by the Lender. No assurance can
be given that a satisfactory waiver will be forthcoming. During the pendency
of an event of default, the Lender is entitled to accelerate the maturity of
the New Notes and to foreclose on the collateral securing the New Notes. The
Company believes (i) the collective cash flow of LRGP and SCGC is more than
sufficient to support the level of debt that the New Notes represent, and (ii)
the Lender is well collateralized. Accordingly, while no assurance can be
given, the Company does not expect that the Lender will accelerate the maturity
of the New Notes and seek to foreclose on the collateral.

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<PAGE> 22
in the event of foreclosure on the New Notes, it is anticipated that the
collectibility of the LRGP Note would be jeopardized.

SEASONALITY

The Company anticipates that gaming revenues will be higher during
warmer weather (typically from early spring through late fall) than during the
colder winter months.

EFFECTS OF INFLATION

Although management of the Company cannot accurately determine the
precise effect of inflation on the Company's operations, it does not believe
inflation has had a material effect on the Company's financial position or
results of operations.

BUSINESS

GENERAL

Prior to March 1994, the Company had been engaged in various facets of
the cable programming business including (i) providing Free-To- Guest ("FTG")
and Pay-Per-View ("PPV") programming services and equipment to the lodging and
hospital industries, (ii) designing, producing and selling PPV equipment, (iii)
constructing and operating Satellite Master Antenna Television and Community
Antenna Television systems, and (iv) the buying and selling of cable properties
and assets.

HISTORY

Since its inception in 1983, the Company has been engaged in various
facets of the cable and related programming businesses. During the fiscal year
ended April 30, 1992, it became apparent to management of the Company that the
hotel/motel FTG programming business had become increasingly competitive from a
profit margin standpoint and that programming in the hotel industry was at or
near saturation, and it was management's opinion that the value of the FTG
business had peaked. Taking into account these and other factors, in late
fiscal 1992, the Company sold the majority of its FTG programming business
which accounted for approximately 85% of the Company's cable revenues during
fiscal 1992. During the next fiscal year, the Company reviewed the status of
its remaining cable operations, namely PPV and franchised cable, and began
exploring new business opportunities. In early fiscal 1994, the Company began
focusing its attention on opportunities in the gaming industry. In June 1993,
the Company made the decision to enter the gaming business through the
acquisition of SCGC. Based upon that decision, the Company sold its remaining
cable assets in November 1993 and February 1994. The dispositions of the FTG,
PPV and other cable assets in fiscal 1992 and 1994 did not require stockholder
approval under the laws of the State of Texas and therefore no vote of
stockholders was taken. Such assets were sold to third parties unaffiliated
with the Company.

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<PAGE> 23

GAMING DEVELOPMENT

In January 1995, SCGC made the strategic decision to relocate the site
for its planned Louisiana riverboat casino from St. Charles Parish to Calcasieu
Parish in the southwest part of the state near the Texas border, because the
Company believed that the Lake Charles market was a much more attractive market
than New Orleans and the Company encountered opposition to its plans from the
local governing body of St. Charles Parish. In March 1995, the Company
entered into an agreement with Louisiana Riverboat Gaming Partnership ("LRGP")
to form a joint venture to develop the Calcasieu Parish project. LRGP, a joint
venture owned 50% by Casino America, Inc. ("Casino America") and 50% by
Louisiana Downs, Inc., an Edward J. DeBartolo company, owns the Isle of
Capri(SM) dockside riverboat casino in Bossier City, Louisiana. On June 9,
1995, the Company sold 50% of the outstanding common stock of SCGC for (i) a
five-year $20 million note (the "LRGP Note"), (ii) $1 million cash, and (iii) a
warrant (which may only be exercised by converting a portion of the LRGP Note)
to purchase 416,667 shares of Casino America common stock at $12 per share. In
July 1995, SCGC's riverboat casino opened for business in Calcasieu Parish as
an Isle of Capri(SM) themed property.

SCGC's site in Calcasieu Parish consists of a 10.5 acre tract and an
adjacent 5.5 acre tract (collectively, the "Site") on the west bank of the
Calcasieu River bordering Lake Charles to the east and approximately 1/8 mile
south of Interstate 10. The Site is approximately 28 miles east of the Texas
border which makes the casino the closest riverboat gaming establishment to
Houston, Texas. The Company believes a majority of the casino's patrons will
come from Texas due, in part, to the current absence of legalized gaming in
that state. SCGC has entered into lease agreements with respect to the Site
for an initial term of five years with renewal options for an additional
thirty-five years.

SCGC's gaming operations are being managed by Casino America. Casino
America owns and operates casinos in Biloxi and Vicksburg, Mississippi, and
operates the dockside riverboat casino in Bossier City, Louisiana owned by
LRGP.

On December 13, 1993, the Company acquired 100% of the outstanding
common stock of Gaming Entertainment Management Services, Inc. ("GEMS"), a
Nevada corporation, which was organized in September 1992 for the purpose of
developing a hotel and casino project in Las Vegas, Nevada known as the Desert
Winds Hotel and Casino (the "Desert Winds"). GEMS via contract had the right
to purchase an 18.6 acre tract of land for $10 million in the gaming district
of Las Vegas. The option was exercised and the land was purchased on June 8,
1994. GEMS has no operations other than its development of the Desert Winds
project. In connection with this transaction, the Company issued 885,000
shares of its common stock and assumed approximately $585,000 of liabilities.
The Desert Winds site has received zoning approval for the construction of a
twelve story, 400 room hotel and casino. The Company is currently pursuing
potential opportunities to joint venture the development of the project,
although no agreement has been reached with any person in this regard.

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<PAGE> 24

In July 1995, the Company entered into a definitive asset purchase
agreement to acquire the Bourbon Street Hotel and Casino (the "Bourbon Street
Casino") located in Las Vegas, Nevada for a purchase price of $10 million. The
Bourbon Street Casino has approximately 430 slot machines and 15 table games
over its 15,000 square feet of gaming space, 166 hotel rooms, including 16
suites, and has reported annual revenues of approximately $12 million. In
November 1995, the Company determined not to proceed with the acquisition of
the Bourbon Street Casino due to (i) the possibility of more attractive
investment opportunities, (ii) the lack of attractive financing, and (iii)
declining margins at the property. The Company had intended to finance a
portion of the purchase price by exercising the Casino America warrant by
converting part of the LRGP Note into Casino America stock, then selling such
Casino America stock. The recent decline in the market price of Casino America
stock has made this alternative unfeasible. As a result of this decision, in
November 1995 the Company wrote off a $500,000 nonrefundable deposit and
approximately $127,000 of other costs related to the proposed acquisition.

In recent months, the Company had been pursuing potential opportunities
to acquire a second riverboat casino which would be operated from SCGC's
existing site in Calcasieu Parish, but the Company at the present time has
ceased these efforts. However, Casino America, an affiliate of LRGP, is
negotiating to purchase the Grand Palais riverboat out of bankruptcy
proceedings, although no definitive agreement has been reached with any party
respecting such an acquisition. Such an acquisition would require various
state and local regulatory approvals, including the approval of the Gaming
Commission and the Enforcement Division. The purchase of a second riverboat to
be operated at SCGC's existing site would also require the consent of the
Company as a shareholder of SCGC, which may result in the Company obtaining
part ownership in such casino. In connection with its prior efforts to obtain
a second riverboat, the Company applied to the Gaming Commission for a
certificate of preliminary approval, which certificate had been previously
issued by the Gaming Commission to a third party and was subsequently
surrendered back to the state due to a decision by such third party to abandon
the project. Thirteen other applicants also applied for the certificate of
preliminary approval. However, on or about December 21, 1995, the Company
notified the Gaming Commission that it was withdrawing its application for the
certificate of preliminary approval. This decision was based on the Company's
belief that it would be more likely that Casino America would be successful in
acquiring the Grand Palais riverboat out of bankruptcy and moving it to SCGC's
site in Calcasieu Parish, than it would be for the Company to obtain a
certificate of preliminary approval from the Gaming Commission. The Company
did not file an application with the Enforcement Division.

The Company's business strategy is to expand its gaming operations
through acquisition and development in new and existing gaming jurisdictions.

The LRGP Joint Venture Agreement. On March 2, 1995, the Company
entered into an agreement with LRGP to form a joint venture to develop the
Company's Louisiana casino project (the "Agreement"). Pursuant to the
Agreement, on June 9, 1995, the Company sold 50% of the outstanding common
stock of SCGC to LRGP for (i) the $20 million LRGP Note, (ii) $1 million cash,
and (iii) a warrant to purchase up to 416,667 shares of Casino America common
stock at an exercise price of $12.00 per share (which is exercisable at any
time but may only be exercised by converting a portion of the LRGP Note).

The LRGP Note bears interest at 11.5% per annum, payable monthly, and
is collateralized by LRGP's 50% interest in SCGC. Principal is payable in
seventeen equal quarterly installments beginning in June 1996. If the
distributions from SCGC to LRGP during any quarter are less than the principal
installment due for such quarter, LRGP will only be obligated to pay the amount
of such distribution and any deficiency will be deferred to the next
installment due under the LRGP Note. All principal and interest not previously
paid will be due and payable in June 2000. Also, during any period of default
under the New Notes issued by LRGP and SCGC, the Company will not receive
interest payments on the LRGP Note, and in the event of foreclosure on the New
Notes, it is anticipated that the collectibility of the LRGP Note would be
jeopardized. The New Notes are currently in default. See

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<PAGE> 25
"Management's Discussion and Analysis of Financial Condition and Results of
Operations - Liquidity and Capital Resources."

In addition, pursuant to the Agreement, LRGP will lend funds or will
provide a financing source for SCGC to provide for the development of the
Calcasieu Parish project in amounts to be agreed upon between LRGP and the
Company. The maximum amount of all loans funded or guaranteed by LRGP will not
exceed $45 million, unless agreed to by the parties. In August 1995, SCGC and
LRGP jointly issued $38.4 million of senior secured increasing rate notes, the
proceeds of which were used to retire all of SCGC's senior debt ($21.9 million)
and certain LRGP obligations ($8.4 million). The balance of the proceeds were
used in the development of the Calcasieu Parish project. See "Management's
Discussion and Analysis of Financial Condition and Results of Operations -
Liquidity and Capital Resources."

Since the Company and LRGP entered into the joint venture agreement in
March 1995, LRGP and its affiliate, Casino America, have been providing capital
to develop the Calcasieu Parish project which opened in July 1995. As of
December 1, 1995, the Company anticipates an additional $15 million will be
spent to complete the permanent terminal facility and retire project-related
payables. In addition, SCGC plans to construct a 300 room hotel at an
estimated cost of $15 million. The Company expects that the additional capital
necessary to complete the Calcasieu Parish project will come from LRGP or a
financing source arranged by LRGP, and cash flows from operating the Calcasieu
Parish project. However, LRGP has no contractual obligation to provide such
capital and no assurance can be given that LRGP will provide the capital
necessary to complete the planned improvements. The Company is not obligated
to pay any debts or expenses of SCGC or to make any future capital
contributions to SCGC.

In connection with the Agreement, SCGC bought out its prior casino
management agreement and entered into a new casino management agreement with
Casino America. The Casino America management agreement has a term of 99 years
and provides for a management fee of (i) 2% of "Revenues," as defined in the
agreement (generally net gaming revenues less gaming and admission taxes plus
all other operating revenues), plus (ii) 10% of "Net Operating Income," as
defined in the agreement, provided however, the total management fee shall not
exceed 4% of "Revenues." In the event the LRGP Note goes into default and the
Company reacquires LRGP's 50% interest in SCGC, SCGC will have the right to
terminate the Casino America management agreement.

The Company and LRGP also entered into a shareholders' agreement
respecting their joint ownership of SCGC, which governs the ownership rights by
the Company and LRGP to the stock of SCGC. Except as expressly permitted by
the shareholders' agreement, neither the Company nor LRGP may sell, assign, or
otherwise transfer or encumber any part of the SCGC stock owned by either of
them without the written consent of the other. The shareholders' agreement
provides, among other things, that if, after January 1, 1996, either the
Company or LRGP desires to sell its interest in SCGC through a stock sale, such
shareholder must first offer to sell its interest in SCGC to the other
shareholder under the terms and conditions provided in the agreement. In
addition, if at any time after January 1, 1996, the Company or LRGP receives an
offer from an unrelated third party to purchase all or substantially all of
SCGC's assets for adequate consideration as set forth in the shareholders'
agreement, then the shareholder of SCGC receiving such offer shall give notice
of the offer to the other shareholder and in the event that such shareholder
desires to reject the offer, then the rejecting shareholder must purchase all
of the shares of SCGC stock owned by the shareholder who desires to accept the
offer, at a price equal to the amount that the accepting shareholder would have
received had the offer been accepted by the rejecting shareholder.

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<PAGE> 26

In addition to the foregoing, the Company granted LRGP a right of first
refusal to jointly develop its 18.6 acre tract of land in the gaming district
of Las Vegas in the event the Company chooses to develop such project on a
joint venture basis.

CALCASIEU PARISH CASINO FACILITIES

The Calcasieu Parish casino (the "Casino") is a four deck riverboat
measuring approximately 292 feet in length by 74 feet in width. The Casino
offers approximately 48,000 square feet of floor space including 26,000 square
feet which is used for active gaming operations. The Casino contains
approximately 871 slot machines, all of which are equipped with IGT's
computerized player tracking system ("The Smart System"), which allows the
Casino to build a data base of its customers' playing habits, and 43 table
games (including black jack, craps, Caribbean stud and roulette) on three
levels for a total of approximately 1,175 gaming positions. The fourth level
of the riverboat contains approximately 9,000 square feet of entertainment
space. The Casino has a U.S. Coast Guard capacity of 2,000 passengers
(excluding crew) and has been designed to create a comfortable and spacious
atmosphere.

The Casino's land based support facilities currently consist of a
15,000 square foot temporary facility and a 1,400-space parking garage.
Construction of the permanent land-based pavilion, which when combined with the
temporary facility will encompass 90,000 square feet of space, is ongoing. The
permanent land-based pavilion, which is expected to be completed in March
1996, will contain a variety of non-gaming amenities such as restaurants, bars
and lounges, an entertainment area, a gift shop and a boarding area, as well as
administrative offices. After completion of the permanent facility, SCGC plans
to begin construction of a 300-plus room hotel.

CALCASIEU PARISH SITE

The Calcasieu Parish site (the "Site") consists of a 10.5 acre tract
and an adjacent 5.5 acre tract on the west bank of the Calcasieu River
bordering Lake Charles to the east and approximately 1/8 mile south of
Interstate 10. The Site, located in the Greater Lake Charles area, is
approximately 28 miles east of the Texas border, which makes it the closest
riverboat gaming establishment to Houston, Texas.

In March and July 1995, SCGC entered into agreements to lease the two
parcels of land that comprise the Site. The leases have an initial term of
five years with seven five-year renewal options. During the initial term, the
leases require annual rental payments of $850,000 in years one through four,
and $1,000,000 in year five, payable monthly. During the first renewal term,
the rent will be increased annually by the greater of (i) 5%, or (ii) the
percentage increase in the average consumer price index for Calcasieu Parish,
Louisiana for the previous twelve month period. During the second through
seventh renewal terms, the lessor and SCGC will attempt to set the rent equal
to 100% of the rent paid by other riverboat gaming operators in Louisiana and
Mississippi for comparable property usages, or if no agreement can be made,
then the parties will appoint real estate appraisers to set the rent for such
renewal term. However, in no event shall the annual rent be less than $1.6
million during the fourth and all subsequent renewal terms. In addition, SCGC
will pay all real estate taxes, except for taxes due on the unimproved value of
the property. The Company has guaranteed the obligations of SCGC under these
leases.

CALCASIEU PARISH RIVERBOAT OPERATIONS

The Casino, which opened on July 29, 1995, makes up to eight cruises
every 24 hours (weather and river conditions permitting) at three-hour
intervals beginning at 8:45 a.m. with the latest cruise at 5:45 a.m. While on
board passengers are offered a variety of slot machines, craps, black

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<PAGE> 27

jack, roulette, Caribbean stud and any other gaming opportunity for which there
is a perceived market demand. Pursuant to Louisiana law, the Casino can remain
at the dock during periods of adverse weather at the discretion of the
riverboat captain and gaming can continue.

The Casino's gaming operations are being managed by Casino America
pursuant to a casino management agreement which was executed simultaneously
with the Agreement. SCGC had previously contracted with Century Casinos, Inc.
to manage the Casino's gaming operations. As a result of the Agreement,
however, SCGC and Century Casinos, Inc. terminated their agreement pursuant to
which SCGC paid a termination fee of $4 million.

Since 1992, Casino America has been a developer, owner and operator of
dockside riverboat and floating pavilion casinos and related facilities.
Casino America currently owns and operates floating pavilion casinos in Biloxi
and Vicksburg, Mississippi, and operates the dockside riverboat casino in
Bossier City, Louisiana owned by LRGP. Casino America is generally
responsible, subject to the direction and approval of an executive management
committee, for the construction, development and operation of the Casino and
land-based facilities. Casino America is generally expected to, among other
things, (i) create the design and specifications of the land-based facilities,
(ii) assist in the supervision of construction activities, (iii) assist in the
purchasing of equipment for the land-based facility, (iv) prepare operating
budgets, (v) develop and implement operating policies, marketing strategies and
credit systems, (vi) hire and train personnel, (vii) coordinate advertising and
public relations, (viii) assist in obtaining necessary licenses and permits,
and (ix) provide other services incidental to the completion of the
development.

With respect to operations, Casino America is generally expected to,
among other things, (i) employ, pay, and supervise all employees of the Casino,
(ii) purchase or provide for all necessary supplies and provisions, (iii)
maintain, repair and operate the Casino in a first class and professional
manner, (iv) ensure compliance with all statutes, ordinances, laws, rules and
regulations of applicable governing bodies, (v) arrange for utilities,
telephone service, security and trash removal, (vi) supervise concessionaires,
(vii) establish and maintain accounting systems and internal controls, (viii)
hire, book, and retain entertainment, and (ix) provide additional services
necessary for the successful operation of the Casino.

CALCASIEU PARISH MARKET

Calcasieu Parish has a population of approximately 172,000, including
approximately 160,000 in the Greater Lake Charles area. The following table
reflects the estimated population within various distances from the Casino:
<TABLE>
<CAPTION>
Distance from Estimated
Casino Population
(in miles) (in millions)
---------- -------------
<S> <C>
50 .5
100 1.5
150 6.4
200 9.9
</TABLE>

Lake Charles is an active community with a cultural heritage and
community resources, including a symphony orchestra, ballet and numerous art
galleries and museums. The area is also host to seasonal festivals and special
events which highlight Cajun food and music, historic crafts and water sports.
Lake Charles hosts the annual "Contraband Days," which is the second largest
festival in Louisiana after New Orleans' Mardi Gras Festival. Contraband Days
spans a period of two weeks and attracts approximately

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<PAGE> 28

200,000 visitors to the area. In addition, Lake Charles has a civic center
which offers a 2,000 seat theater and a 50,000 square foot exhibition hall
which is used for conventions, sporting events and entertainment. Lake Charles
is well known for its outdoor recreational activities including hunting,
boating and fishing.

U.S. Interstate 10 connects Lake Charles to Texas cities to the west,
including Orange (35 miles), Beaumont (58 miles), Port Arthur (59 miles),
Galveston (135 miles), and Houston (140 miles), and the Louisiana cities of
Baton Rouge (123 miles), and New Orleans (207 miles) to the east. The Company
believes a majority of its patrons will come from Texas, particularly from the
Greater Houston area, due in large part to the current absence of legalized
casino gaming in Texas.

LAS VEGAS MARKET

According to the Las Vegas Convention and Visitors Association (the
"LVCVA"), the number of visitors to Las Vegas has increased at a steady and
significant rate for the last ten years from 12.8 million in 1984 to 28.2
million visitors in 1994, a compound annual rate of increase of 8.2%.
Aggregate expenditures by visitors increased at an estimated compound annual
rate of 11.8% from $6.3 billion in 1984 to an estimated $19.2 billion in
1994. The number of hotel and motel rooms increased by approximately 44.2%
from 61,394 in 1988 to 88,560 in 1994. Despite this significant increase in
hotel and motel rooms the Las Vegas hotel occupancy rate exceeded 85% in each
year from 1988 to 1994. Las Vegas hotel occupancy rates are among the highest
of any major market in the United States.

The expansion of gaming in the United States has been accompanied by an
increasing acceptance of gaming as a form of entertainment. As a result of the
increased popularity and public acceptance of gaming, Las Vegas has sought to
increase its popularity as a vacation resort. An increasing number of
destination resorts are developing non-gaming entertainment to complement their
gaming in order to draw visitors to Las Vegas. The Company believes that large
theme resorts will serve to increase the popularity of Las Vegas as a vacation
and convention destination. The MGM Grand Hotel and Theme Park opened in
December 1993 with 5,000 hotel rooms, a multi-themed casino, and a large scale
amusement and entertainment facility. Shortly before the MGM opening, the
Luxor's 2,600-room project along with Treasure Island's 2,900-room complex
adjacent to the Mirage opened. By the end of 1997, it is anticipated that at
least another 8,500 hotel rooms will be opened in Las Vegas. In addition,
Clark County, in which Las Vegas is located, has had one of the fastest growing
populations in the United States, increasing at a compound annual rate of 5.9%
from 1984 to 1994.

The Company believes that the growth in the Las Vegas market has been
enhanced as a result of dedicated programs by the LVCVA and major Las Vegas
hotels to promote Las Vegas as a major convention site, the increased capacity
of McCarran International Airport ("McCarran") and the introduction of large
multi-themed destination resorts in Las Vegas. In 1984, approximately one
million people attended conventions in Las Vegas and spent approximately $800
million. In 1994, the number of convention attendees had increased to more
than 2.6 million, and the amount spent by convention attendees increased to
approximately $3.0 billion. Currently, Las Vegas is the fourth largest
convention market in the country.

During the past five years, the facilities of McCarran have been
expanded to accommodate the increasing number of airlines and passengers it
services. The number of passengers traveling through McCarran increased from
10.1 million in 1984 to 26.9 million in 1994, a compound annual rate of
increase of 10.3%. A $200 million expansion project was recently completed,
allowing for the accommodation of up to 30 million travelers annually.
Long-term expansion plans for McCarran provide for additional runways, three
new satellite concourses, 65 additional gates and other facilities which would
allow McCarran to handle up to 60 million visitors annually.

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<PAGE> 29

SALES AND MARKETING

Calcasieu Parish. SCGC's marketing strategy is to attract customers to
the Casino by designing and implementing marketing strategies and promotions
that emphasize the Isle of Capri's(SM) Caribbean theme and promote repeat
visitation and customer loyalty. For example, SCGC offers Island Gold Players
Club membership for its slot machine patrons and "V.I.P." services to higher
wagering and repeat gaming patrons. The Island Gold Players Club is a
promotional activity in which members accumulate points that can be exchanged
for benefits, such as casino cash tokens, prizes and complimentary services.
In addition, Club members receive tournament priority and monthly newsletters.
It is anticipated that (to the extent permitted by law) Club membership cards
will be usable on an interchangeable basis at other Isle of Capri(SM) casino
properties. Further, SCGC uses the Island Gold Players Club to track patron
slot play and develop a customer database, which SCGC utilizes in its marketing
programs.

The Isle of Capri(SM) theme and the Island Gold Players Club membership
are used at Casino America's floating pavilion casinos in Biloxi and Vicksburg,
Mississippi and at LRGP's riverboat casino in Bossier City, Louisiana.

To encourage group sales, SCGC emphasizes bus programs, corporate and
hotel sales programs and golf package programs with area hotels and golf
courses. SCGC also places a significant emphasis on attracting local residents
and seeks to maintain a strong local identity by being a leader in staging and
supporting special events. SCGC further enhances its casino's appeal to local
patrons by offering liberal rules on its table games and by encouraging
enrollment in the Island Gold Players Club.

SCGC uses radio, outdoor and print media to promote its services and to
achieve greater name recognition. To further enhance the Isle of Capri(SM)
casino tropical theme, SCGC utilizes Jeffrey Holder, a well known actor and
television personality popularly known as the "Uncola(R) Man,"(1) as a celebrity
spokesperson for certain of the Isle of Capri(SM) television and print media
advertisements.

INDUSTRY AND COMPETITION

The gaming industry nationwide is undergoing dramatic transformation.
The legalization of gaming on Indian reservations has influenced the spread of
gaming throughout the U.S. An active area of expansion is riverboat gaming
which presently is permitted in Illinois, Indiana, Missouri, Iowa, Louisiana
and Mississippi. In addition, ballots and referenda related to some form of
legalized gaming are being considered in several other states. Given the
success and generally positive reception to date, management believes that
gaming is likely to continue to expand.

The Company believes that the expansion into emerging markets of
gaming, including riverboat and dockside gaming, state sponsored video
lotteries, small stakes casino gaming and gaming on Indian land, reflects the
increasing popularity and acceptability of gaming activities in the United
States. The primary reason for the growth in the legalization of riverboat and
dockside gaming is attributable to a need by states to increase tax revenues
and create jobs without increasing general taxation. Secondly, riverboat and
dockside gaming is apparently more palatable to the general public than
traditional land-based casinos because riverboat casinos are by their nature
restricted to waterways and therefore remove some of the public's concern of
having a casino operating in their neighborhood. Lastly, as public

____________________

(1) The Uncola(R) trademark is owned by Dr. Pepper/Seven-Up
Companies, Inc.

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<PAGE> 30

officials see their citizens travel across borders to neighboring states that
have approved gaming, there is competitive pressure to pass gaming legislation
and retain the related tax revenues.

Riverboat gaming operations can differ from traditional land based
casinos in that they can charge for admission, sometimes require reservations,
and can restrict entry and departure to a period of fixed duration. Even when
the vessels remain at the dock during inclement weather, boarding times may be
restricted. The casino floor, however, does not need to be cleared between
gaming sessions. Riverboats, unlike land based facilities, are also regulated
by the U.S. Coast Guard, whose regulations affect boat design, on-board
facilities, equipment and personnel.

The casino gaming industry is highly fragmented and characterized by a
high degree of competition among a large number of participants, including
riverboat, dockside and land-based casinos, video lottery terminals, Indian
gaming, and other forms of legalized gaming in the United States. The Company
will be competing with larger, more established gaming companies, many of which
have far greater financial resources than the Company. The Company believes
that competition in the gaming industry, particularly the riverboat and
dockside gaming industry, is based on the quality and location of gaming
facilities, the effectiveness of marketing efforts, and customer service and
satisfaction. Although management of the Company believes that the location of
the Calcasieu Parish Casino will allow the Company to effectively compete with
other casinos in the geographic area surrounding it, the Company expects
competition in the casino gaming industry to be intense as more casinos are
opened and new entrants into the gaming industry become operational.

Calcasieu Parish. Louisiana state law currently limits the number of
riverboat gaming licenses that may be granted to fifteen, plus a single
land-based facility in New Orleans. There are also Indian gaming casinos
operating in the state, which are not subject to Louisiana gaming laws. The
Company believes Louisiana's self imposed limitation on the number of licenses
that may be granted may create a favorable operating environment for the
holders of such licenses.

The primary market area for the Calcasieu Parish Casino includes the
Houston, Texas metropolitan area, other population centers west of the Casino
such as Beaumont, Galveston, Orange and Port Arthur, Texas, and population
centers east of the Casino such as Lafayette and Baton Rouge, Louisiana. SCGC
expects that more than half of its patrons will come from Texas, with a
significant portion coming from metropolitan Houston. Although casino gaming
is not currently permitted in Texas, the Texas legislature has considered
various proposals to authorize casino gaming. Gaming cannot commence in Texas
until the legislature adopts appropriate legislation (which may require an
amendment to the Texas Constitution and an affirmative vote of the people) and
operators complete the licensing and construction process. If casinos commence
operations in Texas in or near SCGC's primary market area, they would adversely
affect the Calcasieu Parish Casino.

The Calcasieu Parish Casino is the third riverboat gaming facility to
enter the Lake Charles, Louisiana market. Two riverboats, containing an
aggregate of approximately 55,000 square feet of casino floor space, currently
operate from a single location in the City of Lake Charles approximately three
miles from the site of SCGC's Casino. In addition, a land-based, Indian-owned
casino opened in January 1995 in Kinder, Louisiana, approximately 39 miles from
the site of the Casino. Mirage, Inc., a nationally recognized gaming company,
had previously announced plans to develop a riverboat casino project in the
Lake Charles area. However, public information available indicates that Mirage
is trying to acquire the riverboat casino and license of Capital Gaming, Inc.,
which is in bankruptcy. It has been reported in the media that such riverboat
would be moved to Shreveport, assuming all necessary regulatory approvals are
obtained. It is unknown whether or not Mirage will pursue its plan to develop
a riverboat casino project in the Lake Charles area. As a new entrant into the
Lake Charles market, the Casino faces the additional challenge of competing for
established customers of its competitors. Management believes that the Casino
has several competitive advantages in the Lake Charles gaming market. The
Casino, with its location at the western end of the Lake Charles gaming market,
will be the first gaming facility reached by patrons arriving from the west,
including Texas. The Company intends to capitalize on its superior location by
maximizing the visibility of the Casino with a 120-foot-high tower. Moreover,
management

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believes that free on-site covered parking facilities further enhance the
competitive advantages of the Casino.

LOUISIANA GAMING REGULATION

In July 1991, the Louisiana legislature adopted legislation permitting
certain types of gaming activity on the Mississippi, Red, Calcasieu, Mermentau,
Ouachita or Atchafalaya rivers, in the Mississippi River Gulf Outlet, Bayou
Bienvenue, Lake Ponchartrain, Lake Maurepas, Lake Charles and the Intracoastal
Waterway. In 1995, this legislation was expanded to include the Toledo Bend
Reservoir north of the Toledo Bend Dam.

The legislation granted authority to supervise gaming activities to the
Gaming Commission and the Enforcement Division. The Gaming Commission is
authorized to hear and determine all appeals relative to the granting,
suspension, revocation, and renewal of all licenses, permits and applications.
In addition, the Gaming Commission must establish regulations concerning
authorized routes and duration of excursions, minimum levels of insurance,
construction of riverboats and periodic inspections. The Enforcement Division
is authorized to investigate applicants and issue licenses, investigate
violations of the statute and conduct reviews of gaming activities.

In issuing a license, the Enforcement Division must find that the
applicant is a person of good character, honesty and integrity, and the
applicant is a person whose prior activities, criminal record, if any,
reputation, habits and associations do not pose a threat to the public interest
of the State of Louisiana or to the effective regulation and control of gaming,
or create or enhance the dangers of unsuitable, unfair or illegal practices,
methods, and activities in the conduct of gaming or the carrying on of business
and financial arrangements in connection therewith. The Enforcement Division
will not grant a license unless it finds that: (i) the applicant is capable of
conducting gaming operations, which means that the applicant can demonstrate
the capability, either through training, education, business experience, or a
combination of the above to operate a gaming casino; (ii) the proposed
financing of the riverboat and the gaming operations is adequate for the nature
of the proposed operation and from a source suitable and acceptable to the
Enforcement Division; (iii) the applicant demonstrates a proven ability to
operate a vessel of comparable size, capacity and complexity to a riverboat so
as to ensure the safety of its passengers; (iv) the applicant submits a
detailed plan of design of the riverboat in its application for a license; (v)
the applicant designates the docking facilities to be used by the riverboat;
(vi) the applicant shows adequate financial ability to construct and maintain a
riverboat; and (vii) the applicant has a good faith plan to recruit, train, and
upgrade minorities in all employment classifications.

The Enforcement Division is empowered to issue up to fifteen licenses
to conduct gaming activities on a riverboat of new construction in accordance
with applicable law. However, no more than six licenses may be granted to
riverboats operating from any one parish.

The Louisiana gaming law specifies certain restrictions and conditions
relating to riverboat gaming operations, including but not limited to the
following: (i) gaming is not permitted while a riverboat is docked, unless the
vessel is docked for less than 45 minutes between excursions, or unless
dangerous weather or water conditions exist; (ii) each round trip riverboat
cruise may not be less than three nor more than eight hours in duration
(inclusive of the 45 minutes between excursions), subject to specified
exceptions; (iii) agents of the Enforcement Division are permitted on board at
any time during gaming operations; (iv) gaming devices, equipment, and supplies
may only be purchased or leased from permitted suppliers; (v) gaming may only
take place in the designated gaming area while the riverboat is upon a
designated river or waterway; (vi) gaming equipment may not be possessed,
maintained, or exhibited by

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any person on a riverboat except in the specifically designated gaming area, or
a secure area used for inspection, repair, or storage of such equipment; (vii)
wagers may be received only from a person present on a licensed riverboat;
(viii) persons under 21 are not permitted in designated gaming areas; (ix)
except for slot machine play, wagers may be made only with tokens, chips, or
electronic cards purchased from the licensee aboard a riverboat; (x) licensees
may only use docking facilities and routes for which they are licensed and may
only board and discharge passengers at the riverboat's licensed berth; (xi)
licensees must have adequate protection and indemnity insurance; (xii)
licensees must have all necessary federal and state licenses, certificates, and
other regulatory approvals prior to operating a riverboat; and (xiii) gaming
may only be conducted in accordance with the terms of the license and the rules
and regulations adopted by the Enforcement Division.

Louisiana law permits 24-hour unlimited stakes gaming on newly
constructed riverboats which conduct cruises, does not have loss or bet
limitations, but restricts the percentage of space on a riverboat that may be
utilized for gaming to the lesser of (a) 60% of the total square footage of the
passenger access area, or (b) 30,000 square feet. A total of fifteen riverboat
gaming licenses are authorized to be granted, with a maximum of six riverboat
gaming licenses in any one parish. Louisiana law also allows a single,
land-based casino in the City of New Orleans. The legal age for gaming in
Louisiana is 21.

The license fee to conduct gaming activities on a riverboat is (i)
$50,000 per riverboat for the first year of operation and $100,000 per year per
riverboat thereafter plus (ii) 3 1/2% of the net gaming proceeds. In addition,
an annual franchise fee of 15% of the net gaming proceeds is charged to conduct
operations on Louisiana waterways. The local governing authority (city or
parish) is permitted to assess the riverboat operation up to $2.50 per person
as an admissions tax. In addition, Calcasieu Parish has a statutory 50c. per
head admissions tax applicable to riverboat gaming operations, the proceeds of
which are used to support education.

The transfer of a license or permit or an interest in a license or
permit is prohibited. The sale, assignment, transfer, pledge, or disposition
of securities which represent 5% or more of the total outstanding shares issued
by a corporation that holds a license is subject to Enforcement Division
approval. A security issued by a corporation that holds a license must
generally disclose these restrictions.

The conditions to SCGC's permanent riverboat casino license include the
operation of the riverboat under an approved plan of security and internal
controls for a period of six months, exercising due diligence in the
development of its planned hotel in Calcasieu Parish, and obtaining of the
Enforcement Division's prior written approval to any modification to its plans
for such hotel, including the abandonment of any portion of the project. Upon
satisfaction of the conditions to the license, a permanent license will be
issued by the Enforcement Division.

The Company believes that SCGC is in material compliance with all
applicable gaming regulations.

NEVADA GAMING REGULATION

The Company is not currently seeking a Nevada gaming license. However,
should the Company finalize development plans for the Desert Winds project or
otherwise acquire casino operations in Nevada, it will apply for such a license
and will be subject to the following regulations.

The ownership and operation of casino gaming facilities in Nevada are
subject to: (i) the Nevada Gaming Control Act and the regulations promulgated
thereunder (collectively, the "Nevada Act"); and (ii) various local ordinances
and regulations. Gaming operations in Nevada are subject to the licensing

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<PAGE> 33

and regulatory control of the Nevada Gaming Commission ("Nevada Commission"),
the Nevada State Gaming Control Board ("Nevada Board") and various other county
and city regulatory agencies, including the City of Las Vegas, collectively
referred to as the "Nevada Gaming Authorities."

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

The Company, upon application for a Nevada gaming license, will be
required to be registered with the Nevada Commission as a publicly traded
corporation (a "Registered Corporation") and to be found suitable to own the
stock of any entity which owns or operates a casino. A casino is generally
licensed by the Nevada Gaming Authorities as a corporate licensee ( a
"Corporate Licensee") under the terms of the Nevada Act.

As a Registered Corporation, the Company will be required periodically
to submit detailed financial and operating reports to the Nevada Commission and
furnish any other information which the Nevada Commission may require. No
person may become a stockholder of, or receive, any percentage of profits from
a Corporate Licensee without first obtaining licenses and approvals from the
Nevada Gaming Authorities.

The Nevada Gaming Authorities may investigate any individual who has a
material relationship to, or material involvement with, the Company or the
Corporate Licensee in order to determine whether such individual is suitable or
should be licensed as a business associate of the Corporate Licensee.
Officers, directors and certain key employees of the Corporate Licensee will be
required to file applications with the Nevada Gaming Authorities and may be
required to be licensed or found suitable by the Nevada Gaming Authorities.
Officers, directors and key employees of the Company who are actively and
directly involved in the activities of the Corporate Licensee may be required
to be licensed or found suitable by the Nevada Gaming Authorities. The Nevada
Gaming Authorities may deny an application for licensing, and both require
submission of detailed personal and financial information followed by a
thorough investigation. The applicant for licensing or a finding of
suitability must pay all the costs of the investigation. Changes in licensed
positions must be reported to the Nevada Gaming Authorities and in addition to
their authority to deny an application for a finding of suitability or
licensure, the Nevada Gaming Authorities have jurisdiction to disapprove a
change in a corporate position.

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

The Company and the Corporate Licensee will be required to submit
detailed financial and operating reports to the Nevada Commission.
Substantially all material loans, liens, sales of securities

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and similar financing transactions by the Corporate Licensee will be required
to be reported to or approved by the Nevada Commission.

If it were determined that the Nevada Act was violated by the Corporate
Licensee, the licenses it holds could be limited, conditioned, suspended or
revoked, subject to compliance with certain statutory and regulatory
procedures. In addition, the Company, the Corporate Licensee and the persons
involved could be subject to substantial fines for each separate violation of
the Nevada Act at the discretion of the Nevada Commission. Limitation,
conditioning or suspension of the licenses of the Corporate Licensee could (and
revocation of any license of the Corporate Licensee would) materially adversely
affect the Company.

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

The Nevada Act requires any person who acquires more than 5% of a
Registered Corporation's voting securities to report the acquisition to the
Nevada Commission. The Nevada Act requires that beneficial owners of more than
10% of a Registered Corporation's voting securities apply to the Nevada
Commission for a finding of suitability within thirty days after the Chairman
of the Nevada Board mails the written notice requiring such filing. Under
certain circumstances, an "institutional investor," as defined in the Nevada
Act, which acquires more than 10%, but not more than 15%, of a Registered
Corporation's voting securities may apply to the Nevada Commission for a waiver
of such finding of suitability if such institutional investor holds the voting
securities for investment purposes only. An institutional investor shall not
be deemed to hold voting securities for investment purposes unless the voting
securities were acquired and are held in the ordinary course of business as an
institutional investor and not for the purpose of causing, directly or
indirectly, the election of a majority of the members of the board of directors
of the Registered Corporation, any change in the Registered Corporation's
corporate charter, bylaws, management, policies or operations, or any of its
gaming affiliates, or any other action which the Nevada Commission finds to be
inconsistent with holding the Registered Corporation's voting securities for
investment purposes only. Activities which are not deemed to be inconsistent
with holding voting securities for investment purposes only include: (i) voting
on all matters voted on by stockholders; (ii) making financial and the other
inquiries of management of the type normally made by securities analysts for
informational purposes and not to cause a change in its management, policies or
operations; and (iii) such other activities as the Nevada Commission may
determine to the consistent with such investment intent. If the beneficial
holder of voting securities who must be found suitable is a corporation,
partnership or trust, it must submit detailed business and financial
information including a list of beneficial owners. The applicant is required
to pay all costs of investigation.

Any person who fails or refuses to apply for a finding of suitability
or a license within thirty days after being ordered to do so by the Nevada
Commission or the Chairman of the Nevada Board, may be found unsuitable. The
same restrictions apply to a record owner if the record owner, after request,
fails to identify the beneficial owner. Any stockholder found unsuitable and
who holds, directly or indirectly, any beneficial ownership of the voting
securities of the Company beyond such period of time as may be prescribed by
the Nevada Commission may be guilty of a criminal offense. The Company will be
subject to disciplinary action if, after it receives a notice that a person is
unsuitable to be a stockholder or to have any other relationship with it, it
(i) pays that person any dividend or interest upon voting securities of the
Company, (ii) allows that person to exercise, directly or indirectly, any
voting right conferred through

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securities held by that person, (iii) pays remunerations in any form to that
person for services rendered or otherwise, or (iv) fails to pursue all lawful
efforts to require such unsuitable person to relinquish his voting securities
including, if necessary, the immediate purchase of said voting securities for
cash at fair market value.

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

The Company will be required to maintain a current stock ledger in
Nevada which may be examined by the Nevada Gaming Authorities at any time. If
any securities are held in trust by an agent or by a nominee, the record holder
may be required to disclose the identity of the beneficial owner to the Nevada
Gaming Authorities. A failure to make such disclosure may be grounds for
finding the record holder unsuitable. The Company will also be required to
render maximum assistance in determining the identity of the beneficial owner.
The Company will also be required to disclose to the Nevada Commission, upon
its request, the identities of any of their security holders. The Nevada
Commission has the power to require the stock certificates of the Company to
bear a legend indicating that the securities are subject to the Nevada Act.

After becoming a Registered Corporation, the Company may not make a
public offering of its securities without the prior approval of the Nevada
Commission if the securities or proceeds therefrom are intended to be used to
construct, acquire or finance gaming facilities in Nevada, or to retire or
extend obligations incurred for such purposes.

The regulations of the Nevada Board and the Nevada Commission also
provide that any entity which is not an "affiliated company," as such term is
defined in the Nevada Act, or which is not otherwise subject to the provisions
of the Nevada Act or such regulations, such as the Company, which plans to make
a public offering of securities intending to use such securities, or the
proceeds from the sale thereof for the construction or operation of gaming
facilities in Nevada, or to retire or extend obligations incurred for such
purposes, may apply to the Nevada Commission for prior approval of such
offering. The Nevada Commission may find an applicant unsuitable to be a
holding company if it did not submit such an application.

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

The Nevada legislature has declared that some corporate acquisitions
opposed by management, repurchases of voting securities and corporate defense
tactics affecting Nevada corporate gaming licensees, and Registered
Corporations that are affiliated with those operations, may be injurious to
stable

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<PAGE> 36

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

License fees and taxes, computed in various ways depending on the type
of gaming or activity involved, are payable to the State of Nevada and to the
counties and cities in which the Nevada licensee's respective operations are
conducted. Depending upon the particular fee or tax involved, these fees and
taxes are payable either monthly, quarterly or annually and are based upon
either: (i) a percentage of the gross revenues received; (ii) the number of
gaming devices operated; or (iii) the number of table games operated. A casino
entertainment tax is also paid by casino operations where entertainment is
furnished in connection with the selling of food or refreshments. Nevada
licensees that hold a license to manufacture or distribute gaming devices also
pay certain fees and taxes to the State of Nevada.

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

NON-GAMING REGULATIONS

The Company is subject to certain federal, state and local safety and
health laws, regulations and ordinances that apply to non-gaming businesses
generally, such as the Clean Air Act, Clean Water Act, Occupational Safety and
Health Act, Resource Conservation Recovery Act, and the Comprehensive
Environmental Response, Compensation and Liability Act. The Company has not
made, and does not anticipate making, material expenditures with respect to
such environmental laws and regulations. However, the coverage and attendant
compliance costs associated with such laws, regulations and ordinances may
result in future additional costs to the Company's operations.

The federal Merchant Marine Act of 1936 and the federal Shipping Act of
1916 and applicable regulations thereunder contain provisions designed to
prevent persons who are not citizens of the United States from holding in the
aggregate more than 25% of the outstanding shares of common stock of entities
subject to such regulation.

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All navigable vessels must comply with U.S. Coast Guard requirements as
to boat design, on-board facilities, equipment, personnel (including
requirements that each vessel be operated by a minimum complement of personnel)
and safety. Each vessel must hold a Certificate of Inspection from the Coast
Guard. The Coast Guard requirements establish design standards, set limits on
the operation of the vessels and require individual licensing of certain
personnel involved with the operation of the vessel. The Calcasieu Parish
Casino is subject to periodic inspections by the Coast Guard and every five
years the Casino must be dry docked for hull and other inspections, which will
result in a loss of service that can have an adverse effect on the Company.
Failure to hold a Certificate of Inspection would preclude the use of the
riverboat as a floating casino.

All shipboard employees of SCGC, even those not involved in the actual
operation of the vessel, such as dealers, cocktail hostesses and security
personnel, may be subject to the Jones Act which, among other things, exempts
those employees from state limits on workers' compensation awards.

Continuing construction activities on the Site require the approval of
a variety of regulatory agencies including those associated with sewage, fire
and building safety, food service and sanitation and other construction and
development related matters.

FUTURE EXPANSION

In December 1993, Crown acquired all of the outstanding stock of GEMS,
which had an option to purchase an 18.6 acre tract of land for $10 million in
the gaming district of Las Vegas located across the street from the Gold Coast
Hotel and Casino. GEMS exercised the option and purchased the land on June 8,
1994. The land has received zoning approval for the construction of a
12-story, 400-room hotel and casino known as the Desert Winds Hotel and Casino.
In connection with the joint venture agreement with LRGP, the Company granted
LRGP a right of first refusal to jointly develop its Desert Winds project in
the event the Company chooses to develop such project on a joint venture basis.
GEMS has no other operations other than the development of the Desert Winds
project. The Company is currently pursuing potential opportunities to joint
venture the development of the Desert Winds project, although no agreement has
been reached with any person in this regard.

In July 1995, the Company entered into a definitive asset purchase
agreement to acquire the Bourbon Street Casino in Las Vegas, Nevada for a
purchase price of $10 million, of which $500,000 was paid by the Company as a
deposit. The Bourbon Street Casino has approximately 430 slot machines and 15
table games over its 15,000 square feet of gaming space, 166 hotel rooms,
including 16 suites, and has reported annual revenues of approximately $12
million. In November 1995, the Company determined not to proceed with the
acquisition of the Bourbon Street Casino due to (i) the possibility of more
attractive investment opportunities, (ii) the lack of attractive financing, and
(iii) declining margins at the property. The Company had intended to finance a
portion of the purchase price by exercising the Casino America warrant by
converting part of the LRGP Note into Casino America stock, then selling such
Casino America stock. The recent decline in the market price of Casino America
stock has made this alternative unfeasible. As a result of this decision, in
November 1995 the Company wrote off a $500,000 deposit and approximately
$127,000 of other costs related to the proposed acquisition.

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EMPLOYEES

At December 1, 1995 the Company employed 11 persons full time. None
of the Company's employees is covered by a collective bargaining agreement and
the Company believes that its employee relations are satisfactory. SCGC
currently employs approximately 960 persons full time.

PROPERTIES

The Company currently maintains its executive offices in approximately
3,000 square feet of leased office space in Dallas, Texas. In July 1995, the
Company executed a lease for approximately 6,000 square feet of office space at
a different location in the Dallas area. The lease has a five-year term with
two three-year renewal options. During the initial term, annual rent
(excluding insurance, taxes and common area maintenance charges) ranges from
$65,450 in year one to $77,350 in year five.

On July 8, 1994, SCGC purchased its Calcasieu Parish Casino. The
Casino consists of four decks and an aggregate of 48,000 square feet of floor
space, including 26,000 square feet to be used for active gaming operations.

In March and July 1995, SCGC entered into agreements to lease the two
parcels of land that compromise the 16-acre Calcasieu Parish site. The leases
have an initial term of five years with seven five-year renewal options.
During the initial term, the leases require annual rental payments of $850,000
(excluding property taxes) in years one through four, and $1,000,000 in year
five, payable monthly.

The Company owns 6.5 acres of land adjacent to the Mississippi River
levee in St. Charles Parish, Louisiana that it had planned to use in connection
with its former riverboat casino site in St. Charles Parish. The Company is
currently seeking to sell such property.

The Company, through its GEMS subsidiary, exercised an option to
purchase an 18.6 acre tract of land in the gaming district of Las Vegas, Nevada
on June 8, 1994, for $10 million. The land has received zoning approval for
the construction of a 12-story, 400-room hotel and casino.

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ENVIRONMENTAL MATTERS

The Company's operations do not qualify it as a hazardous waste
generator and the Company believes it is in compliance with all applicable laws
and regulations governing the discharge of hazardous waste into the
environment.

PENDING LITIGATION

Other than as set forth below, there are no pending legal proceedings
to which the Company is a party or of which any of its properties are subject
that the Company believes have the potential to have a material adverse effect
on the Company. There are no material proceedings known to the Company being
contemplated by any governmental authority. There are no material proceedings
known to the Company, pending or contemplated, in which any director, officer
or affiliate or any principal security holder of the Company or any associate
of any of the foregoing, is a party or has an interest, adverse to the Company.

On September 21, 1994, an action was filed against the Company and SCGC
in the 24th Judicial District Court for the Parish of Jefferson, Louisiana by
Avondale Industries, Inc. ("Avondale"). In this action, Avondale alleges that
the Company was contractually obligated to Avondale for the construction of
SCGC's riverboat vessel based upon a letter of intent (allegedly reaffirming a
previous agreement entered into between Avondale and SCGC). Avondale alleges
that the Company breached a duty to negotiate in good faith toward the
execution of a definitive Vessel Construction Contract. Alternatively,
Avondale alleges that a separate, oral contract for the construction of the
vessel existed and that the Company committed unspecified unfair trade
practices and misrepresentation. Avondale seeks unspecified damages including
"all lost profits and lost overhead" and attorneys fees. Avondale has verbally
stated its lost profits and lost overhead amount to approximately $2.5 million.
While no assurance can be given as to the ultimate outcome of this litigation,
management believes that this litigation will not have a material adverse
effect on the financial position of the Company. The Company intends to
vigorously contest liability in this matter.

In October 1995, an action was filed against the Company, Casino
America, Louisiana Downs, Inc. and W.S. Bellows Construction Co. (the
"Defendants") in the U.S. District Court for the Western District of Louisiana,
Lake Charles Division, by Marvin D. Vincent and the National Black Chamber of
Commerce, Inc. (the "Plaintiffs"). In this action the Plaintiffs allege that
the Defendants have desecrated the alleged grave sites of their ancestors
during the course of construction of the Calcasieu Parish land-based
facilities. The Plaintiffs are seeking damages of $2 million per Defendant,
plus $10 million in punitive damages, costs and attorneys' fees. While no
assurance can be given as to the ultimate outcome of this litigation,
management believes that the allegations made in the lawsuit are without merit
and that this litigation will not have a material adverse effect on the
financial position or results of operations of the Company.

-37-
<PAGE> 40

MANAGEMENT

EXECUTIVE OFFICERS AND DIRECTORS

The following table sets forth certain information regarding the
executive officers and directors of the Company:

<TABLE>
<CAPTION>
NAME AGE POSITION WITH THE COMPANY
---- --- -------------------------
<S> <C> <C>
Edward R. McMurphy . . . . . . . . . . 45 Chairman of the Board, President and

Chief Executive Officer

Tilman J. Falgout, III . . . . . . . . 46 Executive Vice President, General
Counsel and Director
Mark D. Slusser . . . . . . . . . . . . 38 Vice President Finance, Chief
Financial Officer and Secretary

Edward J. Preuss, Jr. . . . . . . . . . 63 Vice President Project Development

Leslie M. Clavir . . . . . . . . . . . 54 Vice President Gaming

John David Simmons . . . . . . . . . . 59 Director

David J. Douglas . . . . . . . . . . . 31 Director

Gerald L. Adams . . . . . . . . . . . . 60 Director

Gerard M. Jacobs . . . . . . . . . . . 40 Director

Robert J. Kehl . . . . . . . . . . . . 61 Director

- ----------------------------
</TABLE>

EDWARD R. MCMURPHY has served as President of the Company since July
1984 and as Chief Executive Officer since January 1988. He has been a director
of the Company since its inception in April 1983. Prior to and during his
involvement with the Company, Mr. McMurphy served as President of Marion
Properties, Inc., a real estate investment and development company from 1979 to
1986.

TILMAN J. FALGOUT, III has served as Executive Vice President and
General Counsel of the Company since March 1995 and as a director of the
Company since September 1992. From 1978 through June 1995, Mr. Falgout was a
partner in the law firm of Stumpf & Falgout, Houston, Texas.

MARK D. SLUSSER has served as Chief Financial Officer of the Company
since October 1989 and as Secretary since April 1990. From 1981 until joining
the Company, Mr. Slusser was employed by Ernst & Young LLP, where he held
various positions in the Audit Department including Senior Manager. Mr.
Slusser is a Certified Public Accountant.

EDWARD J. PREUSS, JR. has served as Vice President Project Development
since April 1994. He was self employed as a general business consultant for 11
years prior to joining the Company. Prior to his self-employment, Mr. Preuss
worked at Marion Corporation as Vice President of Corporate Communications from
1976 to 1983.

-38-
<PAGE> 41

LESLIE M. CLAVIR has served as Vice President Gaming of the Company
since March 1995. From December 1993 to February 1995, Mr. Clavir was employed
by Century Casinos, Inc. as General Manager of SCGC's Louisiana riverboat
casino. From 1991 to November 1993, Mr. Clavir served as Director of Casino
Operations for the Hotel San Remo in Las Vegas, Nevada. From 1986 to 1991, Mr.
Clavir owned and operated three bar and restaurant properties. From 1982 to
1986, Mr. Clavir was General Manager of the Pioneer Inn Hotel and Casino in
Reno, Nevada. From 1977 to 1982, Mr. Clavir was employed by the Boyd Group
where he held various casino operational and management positions.

JOHN DAVID SIMMONS has served as a director of the Company since August
1986. Since 1970, he has been President of Condomart, Inc., a marketing
consulting firm specializing in real estate marketing. Mr. Simmons is also
currently employed by Simmons & Associates, Inc., a real estate development
company, and Management Resources Company, a management consulting firm.

DAVID J. DOUGLAS has served as managing director of Triple S Capital
Corporation (investment banking firm) since February 1993. From July 1989
through January 1993, Mr. Douglas served as Vice President of Hatchett Capital
Group, Inc. (investment banking firm). From 1986 through 1988, Mr. Douglas was
employed by Paine Webber Incorporated, where he was promoted to Associate in
1988. Mr. Douglas has served as a director of the Company since September
1992.

GERALD L. ADAMS has been an entrepreneur for the past 30 years,
starting, developing and operating a number of businesses primarily related to
the shipping, trucking, and more recently, real estate industries. Mr. Adams
currently owns and operates several companies, including TriRiver Dock, Inc.
(stevedoring), Illinois Marine Towing, Inc. (marine towing), Barge Terminal
Trucking, Inc. (trucking) and Adams Enterprises, Inc. (trucking and crane
services). Mr. Adams has served as a director of the Company since October
1993.

GERARD M. JACOBS has been the owner and President of Environmental
Waste Funding Corporation, a company specializing in landfill development and
finance, since 1991. From 1988 to 1991, Mr. Jacobs specialized in landfill
development and finance as a sole proprietor. Mr. Jacobs is also a director
and a substantial stockholder of Casper & Associates, Inc., an engineering firm
specializing in fiber optic communications. From 1983 to 1988, Mr. Jacobs
developed resource recovery, landfill and hydroelectric projects for the
investment banking firm of Russell, Rea & Zappala, Inc., Pittsburgh,
Pennsylvania. From 1978 to 1983, Mr. Jacobs practiced securities, corporate
and banking law with the law firms of Reed, Smith, Shaw & McClay and Manion,
Alder & Cohen, P.C., Pittsburgh, Pennsylvania. Mr. Jacobs has been a director
of the Company since September 1994.

ROBERT J. KEHL has been an entrepreneur for the past 35 years,
starting, developing and operating businesses primarily in the riverboat
construction, gaming, riverboat touring and restaurant industries. Since 1993,
Mr. Kehl has served as president of Kehl River Boats, Inc., a riverboat
construction firm in Houma, Louisiana. Mr. Kehl, through companies owned or
controlled by him, has built several riverboat vessels, many of which have been
sold for use as riverboat gaming vessels. In April 1991, Mr. Kehl's family
owned DuBuque Casino Belle, Inc. became the first riverboat gaming operation in
the nation. Mr. Kehl currently has interests in several companies involved in
gaming and riverboat construction or operation. Mr. Kehl has been a director
of the Company since September 1994.

The Board of Directors has established Compensation and Stock Option
and Audit Committees. The Compensation and Stock Option Committee, which is
comprised of Messrs. Douglas, Simmons and Adams, is responsible for
recommending compensation levels for the Company's executive officers and is
authorized to consider and make grants of options pursuant to the Company's
1986 Incentive Stock Option Plan and 1991 Non-Qualified Stock Option Plan and
to administer such plans. The Audit

-39-
<PAGE> 42

Committee, which is comprised of Messrs. Douglas, Jacobs and Kehl, is
responsible for recommending independent auditors and reviewing with the
independent auditors the scope and results of the audit engagement.

The individuals serving on the Board of Directors will continue to
serve until reelected or replaced at the next annual meeting of stockholders of
the Company, or until their earlier resignation or removal. All executive
officers of the Company serve at the discretion of the Board of Directors.

EXECUTIVE COMPENSATION

The following table sets forth the compensation paid or accrued by the
Company to or on behalf of the Company's Chief Executive Officer and any other
executive officer whose salary and bonus, if any, exceeded $100,000 during the
years ended April 30, 1995, 1994 and 1993:

SUMMARY COMPENSATION TABLE

<TABLE>
<CAPTION>
Annual Compensation
---------------------------------------------
Long-Term
Compensation
------------
Name and Fiscal Other Annual Stock Options/
Principal Position Year Salary Bonus Compensation SARs
------------------ ---- ------ ----- ------------ --------------
<S> <C> <C> <C> <C> <C>
Edward R. McMurphy 1995 $162,500 $ 70,000 -- 250,000 (1)
President and 1994 156,410 100,000 -- 275,000
Chief Executive 1993 125,000 123,427 -- --
Officer
</TABLE>
____________________
(1) Represents a regrant of an option previously granted in fiscal 1994.

EMPLOYMENT AGREEMENT

Effective January 1, 1988, the Company entered into a five-year
employment agreement with Edward R. McMurphy. The employment agreement was
amended in February 1991 to extend the term of employment for five years from
January 1, 1991, terminating on December 31, 1995. The amendment provides for
an annual base salary of at least $125,000, and awarded incentive stock options
to Mr. McMurphy covering 30,000 shares at an exercise price of $0.65625, which
options vested at the rate of 10,000 shares per year commencing on January 1,
1993, and have a term of ten years expiring on February 25, 2001.

In the event of Mr. McMurphy's death or disability during the term of
employment, Mr. McMurphy or his designated beneficiary or estate will be paid
an amount equal to the annual base salary as then in effect on the date of Mr.
McMurphy's death or disability, as the case may be. The Company may, upon 30
days' written notice, terminate his employment "without cause" upon the
condition that he shall be entitled, during the balance of the term of
employment, to the annual base salary which would otherwise be payable to him
had he remained in the employ of the Company.

STOCK OPTION PLAN

The following table provides certain information concerning individual
grants of stock options under the Company's Incentive Stock Option Plan made
during the fiscal year ended April 30, 1995, to the executive officer named in
the Summary Compensation Table:

-40-
<PAGE> 43

OPTION GRANTS IN LAST FISCAL YEAR

<TABLE>
<CAPTION>
Potential Realizable
Value at Assumed
Annual Rates of Stock
Price Appreciation
for
Individual Grants Option Term (1)
- -----------------------------------------------------------------------------------------------------------
% of Total
Number of Options
Securities Granted to
Underlying Employees
Options in Exercise Expiration
Name Granted Fiscal Year Price Date 5% 10%
--------------------- --------- ----------- --------- ---------- -------- ----------
<S> <C> <C> <C> <C> <C> <C>
Edward R. McMurphy 250,000(2) 53.8% $3.3125 1/19/05 $520,803 $1,319,818
</TABLE>

__________________________________

(1) The dollar amounts under these columns represent the potential
realizable value of each option assuming that the market price of the
common stock appreciates in value from the date of grant at the 5% and
10% annual rates prescribed by regulation and therefore are not
intended to forecast possible future appreciation, if any, of the price
of the common stock.

(2) Of this amount, 50,000 shares became exercisable on April 19, 1995,
and the balance will become exercisable in increments of 50,000 shares
per year commencing on April 19, 1996.

The following table provides certain information concerning each
exercise of stock options under the Company's Incentive Stock Option Plan
during the fiscal year ended April 30, 1995, by the executive officer named in
the Summary Compensation Table and the fiscal year end value of unexercised
options held by such person under the Company's Stock Option Plan:

AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR-END OPTION VALUES

<TABLE>
<CAPTION>
Number of Value of
Unexercised Unexercised
Options at Fiscal Options at Fiscal
Year-End Year-End
Shares Acquired Value Exercisable/ Exercisable/
Name on Exercise Realized Unexercisable Unexercisable(1)
---- ----------- -------- ------------- -------------
<S> <C> <C> <C> <C>
Edward R. McMurphy 20,000 $87,000 217,143/200,000 $754,208/$306,250
- --------------------
</TABLE>

(1) The market value of the Company's common stock at April 28, 1995 was
$4.84375 per share, and all options held by the above officer were
in-the-money. The actual value, if any, an executive may realize will
depend upon the amount by which the market price of the Company's
common stock exceeds the exercise price when the options are exercised.

DIRECTOR COMPENSATION

Effective May 1, 1995, non-employee directors of the Company receive a
$20,000 annual retainer, $1,500 per board meeting attended in person, and $500
per committee meeting attended in person. Directors who are also employees of
the Company do not receive separate compensation for their services as a
director. In February 1991, the Board of Directors adopted the Company's 1991
Non-Qualified Stock Option Plan ("Non-Qualified Plan"), which was approved by
the Company's stockholders in September 1991, pursuant to which options to
purchase shares of the Company's common stock may be

-41-
<PAGE> 44

granted to directors, officers and key employees of the Company, including
non-employee directors. On the last business day of February in each year,
each then non-employee director of the Company is automatically granted an
option to purchase 2,500 shares of common stock at an exercise price equal to
the fair market value of such stock on the date of grant. Options granted
under the Plan are exercisable for a period of up to ten years. In the event
that a director ceases to be a director of the Company for any reason, options
granted to the director will expire upon the earlier to occur of (1) the tenth
anniversary of the date of grant of the option or (2) ninety days following the
date on which such director ceased to be a director.

COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION

Gerald L. Adams, who became a director of the Company in October 1993,
served during the last fiscal year on the Company's Compensation and Stock
Option Committee. In June 1993, the Company entered the gaming industry with
the purchase of all of the outstanding capital stock of SCGC for $500,000 in
cash and 1.6 million shares of Company Common Stock. Mr. Adams was the
principal stockholder and executive officer of SCGC, and received $500,000 plus
750,000 shares of Company Common Stock (after transferring 450,000 shares to
certain third parties to terminate a management contract) in connection with
this transaction.

CERTAIN TRANSACTIONS

During fiscal 1995, Tilman J. Falgout, III, presently Executive Vice
President and General Counsel and director of the Company, was a partner in the
law firm of Stumpf & Falgout, Houston, Texas, which receives fees from the
Company for legal services rendered on its behalf. During fiscal 1995, such
firm earned fees totaling approximately $259,000 for services rendered to the
Company. During fiscal 1994, such firm earned fees totaling $217,674 for
services rendered to the Company.

On May 20, 1993, the Company entered into an agreement with 10 Westpark
Corporation, a corporation controlled by Mr. Falgout, pursuant to which the
Company agreed to issue 400,000 shares of its common stock to 10 Westpark
Corporation should 10 Westpark introduce the Company to a corporation or other
entity which would allow the Company to enter the gaming business. The payment
would be in the nature of a finder's fee, and as of the date of the agreement,
the value of the contract to 10 Westpark Corporation was $287,500 (based upon
the average of the closing bid and asked prices of the common stock on May 20,
1993). The Company closed the acquisition of St. Charles Gaming Company, Inc.
in June 1993 and issued the 400,000 shares of common stock to 10 Westpark
Corporation in July 1993. Mr. Falgout holds the shares in 10 Westpark
Corporation for the benefit of himself and his brothers and sisters.

In October 1993, the Company entered into a purchase agreement with
Kehl River Boats, Inc. ("KRB") to purchase a riverboat to house its casino
facility. Robert J. Kehl, a director of the Company, is president and a
significant stockholder of KRB. The agreement with KRB provides for a purchase
price, which has been paid in full, comprised of (i) 1,056,667 shares of Crown
common stock, (ii) $9.57 million in cash payments, and (iii) a warrant to
purchase 100,000 shares of the Company's common stock exercisable at $6.06125
per share.

In connection with the Company's private placement of Common Stock from
June 1993 to May 1994, Gerard M. Jacobs, a director of the Company, acted as a
finder. In consideration of Mr. Jacobs' services in such capacity, the Company
paid Mr. Jacobs an aggregate of $116,971 in cash and issued to Mr. Jacobs
warrants to purchase 77,981 shares of the Company's common stock, at an average
exercise price of $7.50 per share.

-42-
<PAGE> 45

In June 1994, the Company and Mr. Jacobs entered into a Teaming
Agreement, agreeing to work together to obtain a license to conduct gaming
operations in the State of Illinois. Any such venture will be owned 50% by the
Company and 50% by a group of Illinois residents, the names and respective
interests of which will be specified by Mr. Jacobs. The agreement provides
that Mr. Jacobs will receive a fee, payable in warrants to purchase common
stock of the Company, in consideration for his services in assisting the
Company in obtaining such a license. Upon the execution of the agreement, the
Company issued to Mr. Jacobs a warrant to purchase 50,000 shares of common
stock of the Company exercisable at $7.25 per share. Upon the occurrence of
certain future events, including the issuance of an Illinois gaming license,
the agreement provides for the issuance of warrants to purchase up to an
additional 200,000 shares of Crown common stock.

Management believes that all of the foregoing transactions were, and
all future transactions between the Company and its officers, directors,
principal shareholders or affiliates of such persons will be, on terms no less
favorable to the Company than could have been obtained from unaffiliated
parties.

CHANGE IN INDEPENDENT AUDITORS

On October 26, 1993, Ernst & Young LLP, the independent auditors for
the Company, resigned. Ernst & Young LLP advised the Company that a primary
reason for their resignation was the Company's change in its business from
cable programming to the gaming industry. Ernst & Young LLP advised the
Company that the local Dallas office did not have sufficient expertise in this
area and that substantial additional educational requirements would have to be
met in order for the local office to continue the engagement.

Ernst & Young LLP's report on the financial statements of the Company
for the fiscal year ended April 30, 1993 did not contain an adverse opinion or
a disclaimer of opinion, and was not qualified or modified as to uncertainty,
audit scope or accounting principles.

During the fiscal year ended April 30, 1993 and the subsequent interim
period preceding the resignation of Ernst & Young LLP, there were no
disagreements with Ernst & Young LLP on any matter of accounting principles or
practices, financial statement disclosure, or auditing scope or procedure. No
event listed in Paragraphs (A) through (D) of Item 304 a(1)(v) of Regulation
S-K occurred within the fiscal year ended April 30, 1993 and the subsequent
interim period preceding the resignation of Ernst & Young LLP.

Ernst & Young LLP provided the Company with a letter indicating its
agreement with the foregoing statements made by the Company.

On April 28, 1994, the Company engaged Coopers & Lybrand L.L.P. as its
independent auditors. During the fiscal year ended April 30, 1993 and the
subsequent interim period prior to engaging Coopers & Lybrand L.L.P., the
Company did not consult with Coopers & Lybrand L.L.P. regarding either the
application of accounting principles to a specified transaction, either
completed or proposed, or the type of audit opinion that might be rendered on
the Company's financial statements. There were no disagreements with or a
reportable event related to the engagement of the Company's prior independent
accountants.

-43-
<PAGE> 46

SECURITY OWNERSHIP OF CERTAIN
BENEFICIAL OWNERS AND MANAGEMENT

The following table sets forth certain information as of December 1,
1995, with respect to ownership of the outstanding common stock by (i) all
persons known to the Company to own beneficially more than five percent (5%) of
the outstanding common stock of the Company (whose address is shown), (ii) each
director of the Company, and (iii) all directors and executive officers as a
group. Unless otherwise indicated, each person possesses sole voting and
investment power with respect to the shares owned by him.

<TABLE>
<CAPTION>
Number of Shares Percent
Name Beneficially Owned of Class
- ------------------------------------- ------------------ --------
<S> <C> <C>
Robert J. Kehl 1,059,167(1) 8.9%
Third Street
Ice Harbor
Dubuque, Iowa 52004

Edward R. McMurphy 700,476(2)

5.9%
2415 West Northwest Hwy.
Suite 103
Dallas, Texas 75220

Gerald L. Adams 555,000(3) 4.7%

Tilman J. Falgout, III 474,000(4) 4.0%

Gerard M. Jacobs 319,681(5)

2.7%

John David Simmons 39,650(6) *

David J. Douglas 32,500(7) *

All Directors and Executive 3,242,017(8)
Officers as a Group (10 persons) 26.2%

- -------------------------
</TABLE>

*Less than 1%.

(1) Includes 956,667 shares and 100,000 shares subject to a presently
exercisable stock purchase warrant, all issued in the name of Kehl River
Boats, Inc., of which Mr. Kehl is president and a principal shareholder.
Also includes 2,500 shares subject to a non-qualified stock option.

(2) Includes 217,143 shares subject to presently exercisable incentive stock
options.

(3) Includes 5,000 shares subject to non-qualified stock options.

(4) Includes 32,500 shares subject to non-qualified stock options, 25,000
shares subject to presently exercisable incentive stock options, and
400,000 shares held in a corporation controlled by Mr. Falgout.

-44-
<PAGE> 47

(5) Includes 2,300 shares held by a corporation controlled by Mr. Jacobs,
110,000 shares owned by Mr. Jacobs' spouse, 127,981 shares subject to
outstanding stock purchase warrants, and 2,500 shares subject to a
non-qualified stock option.

(6) Includes 37,500 shares subject to non-qualified stock options.

(7) Includes 32,500 shares subject to non-qualified stock options.

(8) Includes an aggregate of 642,624 shares subject to stock options and/or
warrants held by certain of the Company's directors and executive
officers, or corporations of which they are significant shareholders,
402,300 shares held in corporations controlled by certain directors,
956,667 shares issued in the name of Kehl River Boats, Inc. of which a
director is president and a principal shareholder, and 110,000 shares
owned by the spouse of a director.

-45-
<PAGE> 48

SELLING SHAREHOLDERS

The following table sets forth certain information as of September 30,
1994 (before the commencement of this offering), with respect to ownership of
the outstanding Common Stock by each of the Selling Shareholders. Unless
otherwise indicated, each person possesses sole voting and investment power
with respect to the shares owned by him. This table assumes that all shares
offered by the Selling Shareholders are sold in this offering. Unless
otherwise indicated, no Selling Shareholder has any position, office or other
material relationship with the Company.

<TABLE>
<CAPTION>
Before the Offering as of (9/30/94) After the Offering
----------------------------------- Shares to ----------------------------------
Number of Shares Percent be sold in Number of Shares Percent
Name of Beneficial Owner Beneficially Owned of Class Offering Beneficially Owned of Class
- ------------------------ ------------------ -------- -------- ------------------ --------
<S> <C> <C> <C> <C> <C>
SELLING SHAREHOLDERS WHO ARE
DIRECTORS OF THE COMPANY:

Gerald L. Adams 752,500 (1) 7.0% 750,000 2,500 *
1225 East 9th Street
Lockport, Illinois 60441

Robert J. Kehl 1,156,667 (2) 10.6% 1,156,667 0 *
3rd Street
Ice Harbor
DuBuque, Iowa 52004

Tilman J. Falgout, III 462,500 (3) 4.3% 400,000 62,500 *

Gerard M. Jacobs 337,181 (4) 3.1% 303,981 33,200 *

OTHER SELLING SHAREHOLDERS:

Private Placement for Cash:
---------------------------

6420 Wilshire Associates 10,000 * 10,000 0 0

Myron L. Ace 10,000 * 10,000 0 0

Acorn Corrugated Box Co. 10,000 * 10,000 0 0

Vincent A. Albanese 9,700 * 9,700 0 0

Richard J. Albenesius 5,000 * 5,000 0 0

Frank & Sharon Alesia 10,700 * 10,700 0 0

Paul Almond 5,000 * 5,000 0 0

Robert Amonie, M.D. 10,000 * 10,000 0 0

Donald A. Ballarini 10,000 * 10,000 0 0

Chengyuan Bao and Liang Yan Xue 5,000 * 5,000 0 0

Fred B. Barbara 50,000 * 50,000 0 0

Bank of the West TTEE 5,000 * 5,000 0 0

Marvin Barhorst 3,000 * 3,000 0 0
</TABLE>

-46-
<PAGE> 49

<TABLE>
<S> <C> <C> <C> <C> <C>
Michael M. & Joan L. Bearden 5,000 * 5,000 0 0

Vincent & Kathleen Bell 9,500 * 9,500 0 0

Floyd M. Berg 8,000 * 8,000 0 0

Neal M. Bidwell 10,000 * 10,000 0 0

BJRC High Yield Partners 15,000 * 15,000 0 0

Richard Bloom 1,000 * 1,000 0 0

George & Rose Bonomo 100,000 * 100,000 0 0

Paul Bratney 3,000 * 3,000 0 0

Wayne J. Breau 2,500 * 2,500 0 0

Brent-Air Pharmacy 10,000 * 10,000 0 0

Brompton Partners L.P. 12,000 * 12,000 0 0

Harry Joe Brown, Jr. 10,000 * 10,000 0 0

Albert Bruno 80,000 * 80,000 0 0

Corrine Bruno 20,000 * 20,000 0 0

William Burrough 5,000 * 5,000 0 0

Dr. Allen Bursk 10,000 * 10,000 0 0

Vincent Cainkar 2,000 * 2,000 0 0

James W. Cameron, Jr. 50,000 * 50,000 0 0

Philip A. Carpenter 18,000 * 18,000 0 0

Richard Carpenter TTEE for
Karen Carpenter Testamentary Trust 15,000 * 15,000 0 0

Richard Carpenter by WF Wolfen 15,000 * 15,000 0 0

Bruno and Maryann Caruso 5,000 * 5,000 0 0

David P. Cutler 8,333 * 8,333 0 0

Neil & Sharon Dabney 20,000 * 20,000 0 0

John G. & Margery M. Davies 10,000 * 10,000 0 0

Wilda & David Davis 3,000 * 3,000 0 0

Richard Dawson/Nancy Dhonau 10,000 * 10,000 0 0

William and Jolan Deeley 4,000 * 4,000 0 0

D/R Asset Mgmnt. Inc. FAO 40,000 * 40,000 0 0

Delaware Charter GTEE & Trust 20,000 * 20,000 0 0
</TABLE>

-47-
<PAGE> 50

<TABLE>
<S> <C> <C> <C> <C> <C>
Randee C. Devlin 10,000 * 10,000 0 0

Arthur T. Donaldson 10,000 * 10,000 0 0

Jack Dorman 10,000 * 10,000 0 0

James F. Dorsey 10,000 * 10,000 0 0

Double Bliss Corp. 8,750 * 8,750 0 0

I. Steven Edelson 7,870 * 7,870 0 0

E. Lee Elliott & Anthony L. Rick 10,000 * 10,000 0 0

Jorge A. Escalante 370,000 3.4% 370,000 0 0

Eshman Living Trust 5,000 * 5,000 0 0

Hong Fan 5,000 * 5,000 0 0

Lynn Feldkamp 3,000 * 3,000 0 0

Jerry Fields 10,000 * 10,000 0 0

Keith A. Finger 5,000 * 5,000 0 0

Diane Finkel 1,000 * 1,000 0 0

Donald H. Foster 204,000 1.9% 204,000 0 0

Philip Freedberg 5,000 * 5,000 0 0

Jack E. Freedman 10,000 * 10,000 0 0

Leonard H. Friedlander 5,000 * 5,000 0 0

Calude T.H. Friedman 5,000 * 5,000 0 0

GC & H Partners 10,000 * 10,000 0 0

Galbrook Corp. 8,750 * 8,750 0 0

Theodore Lynch Getty Gaston 5,000 * 5,000 0 0

Gerald Ginsberg DDS PC, MPP 17,500 * 17,500 0 0

Morris Glesby 5,000 * 5,000 0 0

Sandra Post Goggin 5,000 * 5,000 0 0

Terrence J. Goggin 13,334 * 13,334 0 0

Ralph Goldman 9,300 * 9,300 0 0

Richard A. Gralitzer 10,000 * 10,000 0 0

Greenstreet Partners 50,000 * 50,000 0 0

John Gregory 2,000 * 2,000 0 0

David Gross 8,000 * 8,000 0 0
</TABLE>

-48-
<PAGE> 51

<TABLE>
<S> <C> <C> <C> <C> <C>
Ronald B. Gross, MP Plan 17,500 * 17,500 0 0

Susan Harris Family Trust 10,000 * 10,000 0 0

Hermarl Holdings Inc. 27,500 * 27,500 0 0

Warren Hoffman IRA 10,000 * 10,000 0 0

William F. & Prudence Hopkins 20,000 * 20,000 0 0

Edwin J. Hull 8,333 * 8,333 0 0

The Insight Fund L.P. 10,000 * 10,000 0 0

Irell & Manella Profit Sharing Plan 5,000 * 5,000 0 0

George Izeluk 10,000 * 10,000 0 0

JMG Capital Partners 15,000 * 15,000 0 0

Gerard M. Jacobs 66,000 * 66,000 0 0

Thomas Haskins Jacobs 10,000 * 10,000 0 0

William R. Jenkins 115,000 1.1% 115,000 0 0

William L. Jiler 7,500 * 7,500 0 0

J. Stuart Johnson 20,000 * 20,000 0 0

J. Steven Johnson 5,000 * 5,000 0 0

Warren Johnson 10,000 * 10,000 0 0

Alvan Kamis 10,000 * 10,000 0 0

George Karabatsos 10,000 * 10,000 0 0

Harold Katz 5,000 * 5,000 0 0

M. Gordon Keiser 5,000 * 5,000 0 0

Frank E. Kerdyk 10,000 * 10,000 0 0

Paul Kestenbaum 5,000 * 5,000 0 0

Leslie King Living Trust 5,000 * 5,000 0 0

Thomas V. King 4,000 * 4,000 0 0

Harlan Kleiman & Lorraine Reiner 10,000 * 10,000 0 0

Nicholas P. Klokochar 10,000 * 10,000 0 0

Jacqueline Knapp 5,000 * 5,000 0 0

Joel and Judy Knapp Family Trust 10,000 * 10,000 0 0

Juliette Knapp 5,000 * 5,000 0 0
</TABLE>

-49-
<PAGE> 52

<TABLE>
<S> <C> <C> <C> <C> <C>
Otis C. Knighton 50,000 * 50,000 0 0

Ron Kool 5,000 * 5,000 0 0

Krasnow Family Trust 5,000 * 5,000 0 0

Fred Kyle 2,000 * 2,000 0 0

Steven Landgarten 3,000 * 3,000 0 0

Robert Lassoff 10,000 * 10,000 0 0

The Morris Leviloff Trust 10,000 * 10,000 0 0

Daniel J. Lynch 5,000 * 5,000 0 0

John P. & Michelle Lynch 10,000 * 10,000 0 0

Mandel Properties 2,500 * 2,500 0 0

Vincent P. Mazzeo 5,000 * 5,000 0 0

Timothy S. McAnarney 926 * 926 0 0

Jay R. McCollum 20,000 * 20,000 0 0

Heather M. McKay 10,000 * 10,000 0 0

Ellen Meyer 20,000 * 20,000 0 0

Donald F. Moorehead 50,000 * 50,000 0 0

George O. Moorehead 10,000 * 10,000 0 0

Clifford J. Moquist 5,000 * 5,000 0 0

The Max Negri Trust 10,000 * 10,000 0 0

The Negri Foundation 20,000 * 20,000 0 0

George Novogroder 22,500 * 22,500 0 0

J. M. Oksiuta 10,000 * 10,000 0 0

Irawan Onggara 22,000 * 22,000 0 0

Morris Ostin by WF Wolfen 15,000 * 15,000 0 0

William and Rosemary Pacella 50,000 * 50,000 0 0

Joseph J. Paris 5,000 * 5,000 0 0

Michael Park 10,000 * 10,000 0 0

David Pearce 15,000 * 15,000 0 0

Frank Pierce 5,000 * 5,000 0 0

PN Service Inc. MPP 10,000 * 10,000 0 0
</TABLE>

-50-
<PAGE> 53

<TABLE>
<S> <C> <C> <C> <C> <C>
Brian D. Porter 200,000 1.9% 200,000 0 0

John T. Porter 100,000 * 100,000 0 0

Reidsville Investments 10,000 * 10,000 0 0

Michael A. Reinsdorf 7,870 * 7,870 0 0

Stephen & Jodie Reiss 5,000 * 5,000 0 0

Judy L. Resnick 20,000 * 20,000 0 0

Grace A. Roberti-Jacobs 110,000 1.0% 110,000 0 0

Edward Robertson 5,000 * 5,000 0 0

Stanley and Marilyn Ross Trust 20,000 * 20,000 0 0

David Rost 5,000 * 5,000 0 0

Ellis Rubenstein 5,000 * 5,000 0 0

Harold Rubenstein 10,000 * 10,000 0 0

Edward A. Rucker 5,000 * 5,000 0 0

Joseph G. Salinger 2,000 * 2,000 0 0

The Saritzky Trust 2,000 * 2,000 0 0

Daniel Scelfo 5,000 * 5,000 0 0

Ronald A. Schachar 25,000 * 25,000 0 0

Darryl Schall 10,000 * 10,000 0 0

Charles Schellhorn 10,000 * 10,000 0 0

Rolf Schuermann 7,000 * 7,000 0 0

Thomas Seeley 5,000 * 5,000 0 0

Lorri Seguax 5,000 * 5,000 0 0

Abdul R. Shakir 10,000 * 10,000 0 0

Gary & Madelyn Silman Trust 10,000 * 10,000 0 0

Edward I. Silver 13,890 * 13,890 0 0

Lee Norman Sion 20,000 * 20,000 0 0

Samuel K. Skinner 20,000 * 20,000 0 0

Sloane Overseas Fund Ltd. 8,000 * 8,000 0 0

Andrew D. Smith 5,000 * 5,000 0 0

Robert G. Solomon 30,000 * 30,000 0 0

South Florida Clothing Exchange 5,000 * 5,000 0 0

A.J. Spiegal 5,000 * 5,000 0 0
</TABLE>

-51-
<PAGE> 54

<TABLE>
<S> <C> <C> <C> <C> <C>
Susan Spivak, Trustee FBO 10,000 * 10,000 0 0

Matthew J. Stahl 10,000 * 10,000 0 0

Robert E. Stanell 10,000 * 10,000 0 0

Jerome Steinbaum 10,000 * 10,000 0 0

Neil Strauss 10,000 * 10,000 0 0

David A. Swanson 2,000 * 2,000 0 0

Wayne A. Taylor 10,000 * 10,000 0 0

Julian W. Timmons 12,000 * 12,000 0 0

Transtor, Inc. 30,000 * 30,000 0 0

Ian Wallace 10,000 * 10,000 0 0

Edward Wilkins 35,000 * 35,000 0 0

Delmar F. Williams 5,000 * 5,000 0 0

Daniel A. Wiltz 9,000 * 9,000 0 0

Paul Junger Witt Family Trust 10,000 * 10,000 0 0

Herbert Wolas 10,000 * 10,000 0 0

Richard Wolfen 5,000 * 5,000 0 0

Werner F. Wolfen 15,000 * 15,000 0 0

Jules Yanofsky 10,000 * 10,000 0 0

Kangling Zheng 11,000 * 11,000 0 0

Walter Zifkin 10,000 * 10,000 0 0

Acquisition of St. Charles Gaming Company, Inc.:
------------------------------------------------
<S> <C> <C> <C> <C> <C>
10 Westpark Corporation 400,000 3.7% 400,000 0 0

Gerald L. Adams 752,500 (1) 7.0% 750,000 2,500 *

E.P.I.M., Inc. 22,500 * 22,500 0 0

Clarence & Leina May Fogg 84,200 * 84,200 0 0

G.C.E.S., Inc. 22,500 * 22,500 0 0

Louisiana Education, Inc. 22,500 * 22,500 0 0

Barry W. Miller 67,500 * 67,500 0 0

Robert S. Miller 10,000 * 10,000 0 0

Acquisition of Gaming Entertainment Management Services, Inc.:
--------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Sol Adler 24,091 * 24,091 0 0
</TABLE>

-52-
<PAGE> 55

<TABLE>
<S> <C> <C> <C> <C> <C>
Ray Alizadeh 467 * 467 0 0

Michael G. Bailey 101,710 * 101,710 0 0

Bailey Saetveit & Co. PSP 14,394 * 14,394 0 0

Edward F. Calus 26,768 * 26,768 0 0

David E. Clement 701 * 701 0 0

Nancy Opie Clement 701 * 701 0 0

Thomas A. Clement 467 * 467 0 0

CPMSI 24,243 * 24,243 0 0

Linda K. Corporon 3,460 * 3,460 0 0

W.E. Diederich 2,146 * 2,146 0 0

Timothy M. Dougall 29,465 * 29,465 0 0

William M. Dougall 29,465 * 29,465 0 0

Charles Golding, Jr. 294,646 2.7% 294,646 0 0

Dennis Goodman 25,884 * 25,884 0 0

Geoffrey H. Gray 82,677 * 82,677 0 0

Letitia Gray 4,293 * 4,293 0 0

Gordon A. Haines 126 * 126 0 0

John J. Halsey 1,869 * 1,869 0 0

Larry J. Hannappel 2,146 * 2,146 0 0

Judith B. Herm 2,525 * 2,525 0 0

Dennis L. Jacob 63 * 63 0 0

Richard Johnson 126 * 126 0 0

Erik R. Kelly 934 * 934 0 0

Thomas M. & Danielle L. Lamirato 934 * 934 0 0

Charles B. Lawton, M.D. 2,146 * 2,146 0 0

James N. Menzel 126 * 126 0 0

John McLaughlin 15,152 * 15,152 0 0

Roy B. Moran 35,000 * 35,000 0 0

Khaled H. Murib 467 * 467 0 0

Brian Parsons 1,742 * 1,742 0 0

Sally H. Parson Trust 6,970 * 6,970 0 0
</TABLE>

-53-
<PAGE> 56

<TABLE>
<S> <C> <C> <C> <C> <C>
Barbara L. Rutt 10,101 * 10,101 0 0

William R. Saetveit 73,700 * 73,700 0 0

William K. & Ann J. Speaker 126 * 126 0 0

Arlin & Karen Shepard 126 * 126 0 0

Mike P. Slouka 126 * 126 0 0

Norman Slotnick 13,056 * 13,056 0 0

Robert B. & Cindy A. Speaker 4,167 * 4,167 0 0

Lloyd O. Thompson 2,146 * 2,146 0 0

Trynd, Inc. 4,154 * 4,154 0 0

Margaret J. Van Hook 2,146 * 2,146 0 0

WDT Associates, Inc. 11,786 * 11,786 0 0

Tom Ward & Kathleen Stumpp 27,399 * 27,399 0 0

Jerry & Audrey Williams 63 * 63 0 0

For Sale Upon Exercise of Outstanding Warrants(5):
- -------------------------------------------------
<S> <C> <C> <C> <C> <C>
Crown Warrant Partners I 23,529 * 23,529 0 0

Crown Warrant Partners II 120,000 1.2% 120,000 0 0

Richard Bloom 48,867 * 48,867 0 0

Don Farris 54,022 * 54,022 0 0

Daniel Goggin 38,990 * 38,990 0 0

The Hubbard Company, Inc. 77,981 * 77,981 0 0

Gerard M. Jacobs(6) 127,981 1.2% 127,981 0 0

Kehl River Boats, Inc. 100,000 * 100,000 0 0

Nomura Holding America, Inc. 508,414 4.5% 508,414 0 0

OKGBD & Co. 80,440 * 80,440 0 0

Jason Reese 402 * 402 0 0

Allen Stern 3,620 * 3,620 0 0

Consideration for Property or Services:
- --------------------------------------
<S> <C> <C> <C> <C> <C>
Calcasieu Development Corporation(7) 200,000 1.8% 200,000 0 0

Robert J. D'Hemecourt(8) 100,000 * 100,000 0 0

Kehl River Boats, Inc.(9) 1,056,667 9.8% 1,056,667 0 0
</TABLE>

-54-
<PAGE> 57

______________________________

* Less than 1%.

(1) Includes 2,500 shares subject to non-qualified stock options.

(2) Includes 1,056,667 shares and 100,000 shares subject to a presently
exercisable stock purchase warrant, all issued in the name of Kehl River
Boats, Inc., of which Mr. Kehl is president and a significant
shareholder. See "Certain Transactions."

(3) Includes 30,000 shares subject to non-qualified stock options and
400,000 shares held in a corporation controlled by Mr. Falgout.

(4) Includes 2,300 shares held by a corporation controlled by Mr. Jacobs,
127,981 shares subject to presently exercisable stock purchase warrants
and 110,000 shares held by Mr. Jacobs' wife, with respect to which Mr.
Jacobs disclaims beneficial ownership.

(5) The shares set forth below are all subject to outstanding warrants to
purchase Common Stock, unless otherwise noted. Such shares are offered
for sale to the public by the holders of such warrants upon exercise
thereof. For purposes of calculating the percentages in the table
below, all such shares are assumed to be presently outstanding.

(6) Shares represented by warrants to purchase 77,981 shares and 50,000
shares.

(7) The Company and Calcasieu Development Corporation ("CDC") previously
entered into a letter agreement regarding the potential use of certain
land controlled by CDC in the City of Lake Charles that the Company was
considering to use for its riverboat casino site. In consideration for
the mutual release and termination of such agreement, and CDC's
cooperation in effecting SCGC's development of its site in Calcasieu
Parish, the Company issued 200,000 shares of Crown Common Stock to CDC.

(8) Mr. D'Hemecourt is a Louisiana-based consultant to the Company.
Pursuant to a consulting agreement between SCGC and Mr. D'Hemecourt, the
Company issued Mr. D'Hemecourt 100,000 shares of Crown Common Stock as
partial consideration for Mr. D'Hemecourt's services.

(9) In October 1993, the Company entered into a purchase agreement with Kehl
River Boats, Inc. ("KRB") to purchase a riverboat already under
construction. The agreement with KRB provides for a purchase price,
which has been paid in full, comprised of (i) 1,056,667 shares of Crown
Common Stock, (ii) $9.57 million in cash payments, and (iii) a warrant
to purchase 100,000 shares of Crown Common Stock. Robert J. Kehl,
president and a significant shareholder of KRB, is a director of the
Company.

-55-
<PAGE> 58

DESCRIPTION OF CAPITAL STOCK

COMMON STOCK

The Company is authorized to issue up to 50,000,000 shares of Common
Stock. As of December 1, 1995, 11,725,559 shares of Common Stock are issued
and outstanding. Holders of shares of Common Stock are entitled to elect all
of the members of the Board of Directors of the Company, and such holders are
entitled to vote as a class on all matters required or permitted to be
submitted to the shareholders of the Company. Subject to such preferential
rights as the Board of Directors may grant in connection with future issuances
of Preferred Stock, holders of shares of Common Stock are entitled to receive
such dividends as the Board of Directors may declare in its discretion out of
funds legally available therefor. Holders of shares of Common Stock are
entitled to share ratably in any distribution made to holders of Common Stock
in the event of a liquidation, dissolution or winding up of the Company after
payment of liabilities and any liquidation preference on any shares of
Preferred Stock then outstanding. Holders of shares of Common Stock have no
cumulative voting or preemptive rights, nor do they have any conversion,
preemptive or other rights to subscribe for additional shares or other
securities. There are no redemption or sinking fund provisions with respect to
such shares. All outstanding shares of Common Stock are fully paid and
nonassessable.

PREFERRED STOCK

The Board of Directors of the Company is authorized, without further
action of the shareholders of the Company, to issue up to 1,000,000 shares of
Preferred Stock in one or more series and to fix the number of shares
constituting any such series and the rights and preferences thereof, including
dividend rates, terms of redemption (including sinking fund provisions),
redemption price or prices, voting rights, conversion rights and liquidation
preferences of the shares constituting such series. The issuance of Preferred
Stock by the Board of Directors could adversely affect the rights of holders of
Common Stock. For example, an issuance of Preferred Stock could result in a
class of securities outstanding with preferences over the Common Stock with
respect to dividends and liquidations, and that could (upon conversion or
otherwise) enjoy all of the rights appurtenant to Common Stock.

The Company has no present plans to issue any shares of the Preferred
Stock.

REGISTRATION RIGHTS RELATED TO CERTAIN WARRANTS

On January 5, 1994, in partial consideration for its services as
placement agent in connection with a proposed private placement of Company debt
securities which was never consummated, the Company granted Dabney/Resnick,
Inc. a warrant to purchase 80,440 shares of the Company's Common Stock.
Pursuant to a separate Registration Rights Agreement, Dabney/Resnick, Inc. has
the right to require the Company on one occasion to register the shares
underlying such warrant under the federal Securities Act of 1933 (the
"Securities Act").

On January 5, 1994, the Company issued a warrant to purchase 80,440
shares of its Common Stock to Sun Life Insurance Company of America, Inc. ("Sun
Life") as a commitment fee in connection with services rendered to the Company
by Sun Life relating to a proposed private placement of debt securities which
was never consummated. In June 1994, the Company issued a warrant to purchase
508,414 shares of its Common Stock to Nomura Holding America Inc. ("Nomura") in
connection with Nomura's purchase from SCGC of a $28,000,000 Senior Secured
Increasing Rate Note. Pursuant to separate Registration Rights Agreements, the
above holders each have the right to require the Company on one occasion to
register the shares underlying such warrants under the Securities Act.

-56-
<PAGE> 59

In March and April 1994, the Company issued warrants to purchase an
aggregate of 314,952 shares of Common Stock to four persons in consideration of
services rendered by them in connection with the Company's private placement of
Common Stock.

Pursuant to the contract for the purchase of SCGC's riverboat executed
in October 1993, the Company granted to Kehl River Boats, Inc. a warrant to
purchase 100,000 shares of Common Stock, which was issued in July 1994. In
June 1994, the Company undertook to grant to Gerard M. Jacobs, a director of
the Company, a warrant to purchase 50,000 shares of Common Stock in
consideration of services on the Company's behalf in connection with the
Company's efforts to obtain a gaming license in the State of Illinois. This
warrant was issued in October 1994.

The Company is required to give notice to each of the above holders of
any proposed registration by the Company of shares of Common Stock pursuant to
a registration statement to be filed under the Securities Act and to permit
them, subject to certain restrictions, to register and sell shares of Common
Stock pursuant to such registration statement.

In addition, the Company has granted a warrant to purchase 50,000
shares of Common Stock to one individual in consideration of such individual's
introducing the Company to the investment banking community for assistance in
the Company's debt private placement. The warrant holder does not have
registration rights with respect to such warrant.

CERTAIN PROVISIONS OF ARTICLES OF INCORPORATION AND BYLAWS

Divestiture. The Articles of Incorporation of the Company empower the
Board of Directors to require the divestiture of shares of any person who
beneficially owns, directly or indirectly, shares of any class of capital stock
of the Company who is found by a gaming regulatory authority to be unsuitable
to hold the Company's stock.

In addition, the Articles of Incorporation provide that the Company
must be in compliance with the federal Merchant Marine Act of 1936, as amended,
and the federal Shipping Act of 1916, as amended. The Board of Directors is
given the power to divest any shareholder who has rendered the Company in
non-compliance with these Acts of a sufficient number of shares to bring the
Company into compliance with the Acts.

The procedure for divestiture requires the shareholder within 45 days
of notice from the Company of violation of either provision to sell, transfer
or dispose of his shares in the Company. Following the 45 day period, the
Company shall, for a period of 60 days, have the right, but not the obligation,
to purchase all or any part of such shares of stock from the disqualified
shareholder at a price per share equal to the fair market value of such stock,
less 25%.

Indemnification. The Bylaws provide that directors and officers of
the Company will be indemnified by the Company to the fullest extent authorized
by Texas law, as it now exists or may in the future be amended, against all
expenses and liabilities reasonably incurred in connection with service for or
on behalf of the Company.

Limitation of Liability. In addition, the Articles of Incorporation
provide that a director shall not be personally liable to the Company or its
shareholders for monetary damages for an act or omission in the director's
capacity as a director, except that such provision shall not eliminate or limit
the liability of a director for (a) a breach of the director's duty of loyalty
to the Company or its shareholders; (b) an act or omission not in good faith
that constitutes a breach of duty of the director to the Company or an act or
omission that involves intentional misconduct or a knowing violation of the
law; (c) a transaction

-57-
<PAGE> 60

from which the director received an improper benefit, whether or not the
benefit resulted from an action taken within the scope of the director's
office; or (d) an act or omission for which the liability of a director is
expressly provided by an applicable statute. In appropriate circumstances,
equitable remedies or non-monetary relief, such as an injunction, will remain
available to a shareholder seeking redress from a violation of fiduciary duty.
In addition, the provision applies only to claims against a director arising
out of his or her role as a director and not in any other capacity (such as an
officer or employee of the Company).

Anti-Takeover Provisions of Articles of Incorporation. The Company's
Articles of Incorporation authorize the Board of Directors to issue up to
1,000,000 shares of Preferred Stock from time to time in one or more designated
series or classes. The Board of Directors, without approval of the
shareholders, is authorized to establish the voting, dividend, redemption,
conversion, liquidation and other provisions of a particular series or class of
Preferred Stock. The issuance of Preferred Stock could, among other things,
adversely affect the voting power or other rights of the holders of Common
Stock and, under certain circumstances, make it more difficult for a third
party to acquire, or discourage a third party from acquiring, control of the
Company. The Board of Directors has no present intention to issue any series
or class of Preferred Stock.

TRANSFER AGENT AND REGISTRAR

Securities Transfer Corporation acts as the Transfer Agent and Registrar for
the Common Stock.

PLAN OF DISTRIBUTION

Of the 8,121,869 shares of Common Stock being offered hereby for the
benefit of the Selling Shareholders, 3,316,756 shares were originally issued by
the Company in a private placement to "accredited investors" pursuant to
Regulation D promulgated by the Securities and Exchange Commission, which was
completed in May 1994; 1,056,667 shares were issued to KRB in connection with
the purchase of the riverboat; 300,000 shares were issued in consideration of
certain agreements or services performed on behalf of the Company or for other
non-cash consideration; 2,264,200 shares represent shares of Common Stock
issued in connection with the acquisitions of SCGC and GEMS; and 1,184,246
shares underlie warrants to purchase Common Stock of the Company. The Company
has agreed to register the shares for resale by the Selling Shareholders. The
Company will not receive any of the proceeds from the sale of such shares by
the Selling Shareholders.

The Selling Shareholders have advised the Company that they propose to
offer for sale and to sell Common Stock from time to time beginning November 8,
1994 and for the next twenty-four months thereafter through brokers in the
over-the-counter market, in private transactions, or otherwise, at market
prices prevailing at the time of sale or at prices and terms then obtainable,
in block transactions, negotiated transactions, or otherwise. Accordingly,
sales prices and proceeds to the Selling Shareholders will depend upon market
price fluctuations and the manner of sale.

If the shares are sold through brokers, the Selling Shareholders will
pay brokerage commissions and other charges, including any transfer taxes
(which compensation as to a particular broker-dealer might be in excess of
customary commissions). The Selling Shareholders will also pay the fees and
expenses of any counsel retained by them in connection with this offering.
Except for the payment of such legal fees and expenses, brokerage commissions
and charges, the Company will bear all expenses in connection with registering
the shares offered hereby, which registration expenses are estimated to total
approximately $230,000.

-58-
<PAGE> 61
The 2,000,000 shares of Common Stock offered by the Company hereby are
to be offered and sold on behalf of the Company on a best- efforts basis by
certain directors and executive officers of the Company, who will not receive
any commissions or other remuneration in connection with such activities. As
of the date hereof, the Company has sold a total of 915,000 shares of Common
Stock in this offering, 320,000 shares at a price of $5.00 per share, 170,000
shares at a price of $3.50 per share, and 425,000 shares at a price of $4.00
per share. The remaining 1,085,000 shares are being offered by the Company at
a price of $3.50 per share. There is no minimum purchase requirement with
respect to such shares and there are no escrow arrangements. The offering of
such shares by the Company will expire on November 8, 1996, unless earlier
terminated in the sole discretion of the Company.

The offering by the Company is being made without the services of an
underwriter and the Company has employed no brokers, dealers, or salespersons
in connection with the sale of the Common Stock. However, the Company may in
its sole discretion pay a sales concession not to exceed ten percent (10%) of
the per share sales price to various brokers, dealers or other salespersons for
sales made by them. No other distribution expenses are expected to be incurred
in connection with the offering.

The Company reserves the unqualified right to terminate the offering
of shares on behalf of the Company at any time during its pendency for any
reason whatsoever.

REPORTS TO STOCKHOLDERS

The Company furnishes stockholders with annual reports containing
financial statements audited by an independent public accounting firm and
makes available copies of quarterly reports containing unaudited financial
statements for each of the first three fiscal quarters of the year.

LEGAL MATTERS

The validity of the shares of Common Stock offered hereby will be
passed upon for the Company by Smith, Gambrell & Russell, Atlanta, Georgia.

EXPERTS

The consolidated balance sheets of Crown Casino Corporation as of
April 30, 1995 and 1994 and the related consolidated statements of operations,
stockholders' equity, and cash flows for each of the two years in the period
ended April 30, 1995, included in this Prospectus and Registration Statement,
have been included herein in reliance on the report of Coopers & Lybrand
L.L.P., independent accountants, given on the authority of that firm as experts
in accounting and auditing.

The consolidated statements of operations, stockholders' equity, and
cash flows of Crown Casino Corporation, formerly Skylink America Incorporated,
and subsidiaries for the year ended April 30, 1993, appearing in this
Prospectus and Registration Statement have been audited by Ernst & Young LLP,
independent auditors, as set forth in their report appearing elsewhere herein
and in the Registration Statement, and is included in reliance upon such report
given upon the authority of such firm as experts in accounting and auditing.

The balance sheets of St. Charles Gaming Company, Inc. (a Development
Stage Enterprise) as of April 30, 1995 and 1994 and the related statements of
operations, stockholders' equity and cash flows for the year ended April 30,
1995 and the period from June 25, 1993 (acquisition date) to April 30, 1994,
included in this Prospectus and Registration Statement, have been included
herein in reliance on the report of Coopers & Lybrand L.L.P., independent
accountants, given on the authority of that firm as experts in accounting and
auditing.

-59-
<PAGE> 62

CROWN CASINO CORPORATION AND SUBSIDIARIES
INDEX TO FINANCIAL STATEMENTS

<TABLE>
<CAPTION>
Page
Number
------
<S> <C>
FINANCIAL STATEMENTS OF CROWN CASINO CORPORATION,
FORMERLY SKYLINK AMERICA INCORPORATED:

Audited Financial Statements:

Reports of Independent Auditors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F-3
Consolidated Balance Sheets as of April 30, 1994 and 1995 . . . . . . . . . . . . . . . . . . . . . . F-5
Consolidated Statements of Operations for the fiscal years ended April 30, 1993,
1994, and 1995 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F-7
Consolidated Statements of Cash Flows for the fiscal years ended April 30, 1993, 1994,
and 1995 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F-8
Consolidated Statements of Stockholders' Equity for the fiscal years ended April 30, 1993,
1994, and 1995 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F-9
Notes to Consolidated Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F-11

Unaudited Financial Statements:

Consolidated Balance Sheets as of October 31, 1995 (unaudited) and April 30, 1995 (audited) . . . . F-23
Consolidated Statements of Operations for the six months ended October 31, 1994 and 1995 . . . . . F-24
Consolidated Statements of Cash Flows for the six months ended October 31, 1994 and 1995 . . . . . F-25
Notes to Consolidated Financial Statements (unaudited) . . . . . . . . . . . . . . . . . . . . . . . F-26

Proforma Financial Information:

Proforma Condensed Consolidated Statements of Operations . . . . . . . . . . . . . . . . . . . . . . F-30
Notes to Pro Forma Condensed Consolidated Financial Statements . . . . . . . . . . . . . . . . . . . F-33

FINANCIAL STATEMENTS OF ST. CHARLES GAMING COMPANY, INC.
(A DEVELOPMENT STAGE ENTERPRISE):

Audited Financial Statements:

Report of Independent Accountants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F-35
Balance Sheets as of April 30, 1994 and 1995 . . . . . . . . . . . . . . . . . . . . . . . . . . . . F-36
Statements of Operations for the periods from June 25, 1993 (acquisition date)
to April 30, 1994 and 1995, and the fiscal year ended April 30, 1995 . . . . . . . . . . . . . . F-38
Statements of Cash Flows for the periods from June 25, 1993 (acquisition date)
to April 30, 1994 and 1995, and the fiscal year ended April 30, 1995 . . . . . . . . . . . . . . F-39
Statements of Stockholders' Equity (Deficit) for the period from June 25, 1993 (acquisition date)
to April 30, 1994, and the fiscal year ended April 30, 1995 . . . . . . . . . . . . . . . . . . F-41
Notes to Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F-42
</TABLE>

F-1
<PAGE> 63

Unaudited Financial Statements:

<TABLE>
<S> <C>
Balance Sheet as of October 31, 1995 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F-48
Statements of Operations for the six months ended October 31, 1994 and 1995 . . . . . . . . . . . . F-49
Statements of Cash Flows for the six months ended October 31, 1994 and 1995 . . . . . . . . . . . . F-50
Notes to Financial Statements (unaudited) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F-51
</TABLE>

F-2
<PAGE> 64

REPORT OF INDEPENDENT AUDITORS
CROWN CASINO CORPORATION

REPORT OF INDEPENDENT ACCOUNTANTS
STOCKHOLDERS AND BOARD OF DIRECTORS
CROWN CASINO CORPORATION

We have audited the accompanying consolidated balance sheets of Crown
Casino Corporation and subsidiaries as of April 30, 1995 and 1994, and the
related consolidated statements of operations, stockholders' equity, and cash
flows for each of the two years in the period ended April 30, 1995. These
financial statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.

We conducted our audits in accordance with 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 Crown Casino Corporation and subsidiaries as of April 30, 1995 and 1994, and
the consolidated results of their operations and their cash flows for each of
the two years in the period ended April 30, 1995 in conformity with generally
accepted accounting principles.

Dallas, Texas Coopers & Lybrand L.L.P.

August 7, 1995

F-3
<PAGE> 65

REPORT OF INDEPENDENT AUDITORS
STOCKHOLDERS AND BOARD OF DIRECTORS
CROWN CASINO CORPORATION (FORMERLY SKYLINK AMERICA INCORPORATED)

We have audited the accompanying consolidated statements of operations,
stockholders' equity, and cash flows of Crown Casino Corporation (formerly
Skylink America Incorporated) and subsidiaries for the year ended April 30,
1993. These financial statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on these financial
statements based on our audit.

We conducted our audit 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 audit provides a reasonable basis
for our opinion.

In our opinion, the consolidated financial statements referred to above
present fairly, in all material respects, the consolidated results of
operations and cash flows of Crown Casino Corporation (formerly Skylink America
Incorporated) and subsidiaries for the year ended April 30, 1993, in conformity
with generally accepted accounting principles.

Dallas, Texas Ernst & Young LLP

June 11, 1993

F-4
<PAGE> 66

CONSOLIDATED BALANCE SHEET CROWN CASINO CORPORATION
<TABLE>
<CAPTION>

APRIL 30, 1995 1994
--------- ---- ----
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents $ 1,692,440 $ 1,778,939

Receivables, net 1,041,243
Prepaid expenses 931,935 155,082
----------- -----------
Total current assets 2,624,375 2,975,264
----------- -----------
Property and equipment:
Land deposit and site costs 1,286,223

Construction in progress 1,565,739

Furniture, fixtures and equipment 8,887,241 1,842,118

Riverboat and barges 15,256,140 9,329,024
----------- -----------

Land held for development 16,608,555

42,317,675 12,457,365
Less accumulated depreciation (223,055) (75,007)
----------- -----------

42,094,620 12,382,358
----------- -----------
Other assets:
Non-compete agreement, net 316,674 416,670

Debt issuance costs, net 345,963

Land purchase option 6,075,000

License costs 9,125,000 9,125,000
----------- -----------

9,787,637 15,616,670
----------- -----------
$54,506,632 $30,974,292
=========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:
Accounts payable $999,611 $215,334

Accrued liabilities 1,038,587 152,809

Advances from LRGP 2,179,083

Capital lease obligations 2,876,632

Notes payable 26,511,603
----------- -----------
Total current liabilities 33,605,516 368,143
----------- -----------

Capital lease obligations, less current portion 2,271,477

Deferred income taxes 500,000 4,440,000

Common stock pending issuance 200,000 1,500,000
</TABLE>

F-5
<PAGE> 67

<TABLE>
<S> <C> <C>
Common stock subject to redemption 829,500
Commitments and contingencies
Stockholders' equity:
Preferred stock, par value $.01 per share, 1,000,000 shares
authorized; none issued or outstanding

Common stock, par value $.01 per share, 50,000,000 shares authorized;
11,678,459 issued and outstanding (9,686,319 issued and 8,998,925 116,785 96,863
outstanding in 1994)
Additional paid-in capital 41,859,407 28,049,381
Accumulated deficit (24,046,553) (3,721,708)
Treasury stock, at cost (587,887)
----------- -----------
Total stockholders' equity 17,929,639 23,836,649
----------- -----------

$54,506,632 $30,974,292
=========== ===========
</TABLE>

See accompanying notes to consolidated financial statements.

F-6
<PAGE> 68

CONSOLIDATED STATEMENTS OF OPERATIONS CROWN CASINO CORPORATION

<TABLE>
<CAPTION>
Years Ended April 30, 1995 1994 1993
--------------------- ---- ---- ----
<S> <C> <C> <C>
Revenues $ -- $ -- $ --

Costs and expenses:
General and administrative 2,008,319 1,425,313 611,004

Gaming pre-opening and development 8,189,802 981,249

Buy-out of management contract 4,000,000

St. Charles Parish site abandonment 3,131,359

Depreciation and amortization 248,044 370,885 36,591
------------ ----------- ---------

17,577,524 2,777,447 647,595
------------ ----------- ---------

Net interest (income) expense:
Interest expense 6,826,538 578,320 3,886

Interest income (176,889) (197,447) (255,263)
------------ ----------- ---------

6,649,649 380,873 (251,377)
------------ ----------- ---------
Loss from continuing operations before income taxe (24,227,173) (3,158,320) (396,218)
Benefit for income taxes (3,902,328) (1,105,933) (133,104)
------------ ----------- ---------

Loss from continuing operations (20,324,845) (2,052,387) (263,114)
------------ ----------- ---------
Discontinued operations, net of taxes:
Income (loss) from discontinued operations 2,949 (144,953)
Loss on disposition of discontinued operations (179,755)
------------ ----------- ---------

(176,806) (144,953)
------------ ----------- ---------
Net loss $(20,324,845) $(2,229,193) $(408,067)
============ =========== =========
Loss per share:
From continuing operations $ (2.01) $ (.34) $ (.07)

From discontinued operations (.03) (.04)
------------ ----------- ---------

$ (2.01) $ (.37) $ (.11)
============ =========== =========

Weighted average common and common equivalent shares outstanding
outstanding 10,103,993 5,988,963 3,611,547
------------ ----------- ---------
</TABLE>

See accompanying notes to consolidated financial statements.

F-7
<PAGE> 69

CONSOLIDATED STATEMENTS OF CASH FLOWS CROWN CASINO CORPORATION

<TABLE>
<CAPTION>
YEARS ENDED APRIL 30, 1995 1994 1993
---- ---- ----
<S> <C> <C> <C>
Operating activities:
Loss from continuing operations $(20,324,845) $(2,052,387) $(263,114)

Adjustments to reconcile net loss
to net cash usedby operating activities:

Depreciation and amortization 248,044 370,885 36,591
Amortization of debt issuance costs/discount 3,376,392
Write-down of assets 3,131,359 421,760

Discount on notes sold 245,086

Deferred income taxes (3,940,000) (1,147,500) (115,000)

Equity securities issued for services 1,562,500
Changes in assets and liabilities, net of
acquisitions:
Receivables, net 592,447 344,534 764,777

Prepaid expenses (902,259) (113,082)

Accounts payable and accrued liabilities 1,611,415 96,673 (245,229)
Income taxes payable (242,850)

Net effect of discontinued operations 322,357 (338,805)
------------ ----------- ---------
Net cash used by operating activities (14,644,947) (1,511,674) (403,630)
------------ ----------- ---------
Investing activities:
Purchases of assets (18,897,910) (7,452,047) (6,578)

Sale of assets 1,331,374 2,700

Acquisitions, net (869,519)

Net effect of discontinued operations 869,623 (24,060)
------------ ----------- ---------

Net cash used by investing activities (18,897,910) (6,120,569) (27,938)
------------ ----------- ---------
Financing activities:
Issuance of common stock 7,403,490 13,298,463

Purchase of common stock (55,000) (2,208,000) (77,100)

Issuance of debt and warrants 32,700,000 700,000

Debt issuance costs (1,633,407)

Advances from LRGP 2,179,083
Payments of debt and capital lease obligations (7,137,808) (2,500,000)
Net effect of discontinued operations (17,667)
------------ ----------- ---------
Net cash provided (used) by financing activities 33,456,358 9,290,463 (94,767)
------------ ----------- ---------
Increase (decrease) in cash and cash equivalents (86,499) 1,658,220 (526,335)
Cash and cash equivalents at: Beginning of year 1,778,939 120,719 647,054
------------ ----------- ---------

End of year $ 1,692,440 $ 1,778,939 $ 120,719
============ =========== =========
</TABLE>
See accompanying notes to consolidated financial statements.

F-8
<PAGE> 70

CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY CROWN CASINO CORPORATION

<TABLE>
<CAPTION>
FOR THE THREE YEARS COMMON STOCK TREASURY STOCK
IN THE PERIOD ENDED APRIL 30, 1995 SHARES AMOUNT SHARES AMOUNT
---------------------------------- ------ ------ ------ ------
<S> <C> <C> <C> <C>
Balance at April 30, 1992 4,211,230 $ 42,112 522,729 $(510,787)

Purchase of common stock 164,665 (77,100)

Net loss
---------- -------- -------- ---------
Balance at April 30, 1993 4,211,230 42,112 687,394 (587,887)

Issuance of common stock 5,608,389 56,084

Issuance of warrants Purchase of common stock (220,800) (2,208)

Stock options exercised 87,500 875

Tax benefit of stock options Net loss
---------- -------- -------- ---------
Balance at April 30, 1994 9,686,319 96,863 687,394 (587,887)

Issuance of common stock 2,650,034 26,501

Issuance of warrants Purchase of common stock 10,000 (55,000)

Stock options exercised 39,500 395

Cancellation of treasury stock (697,394) (6,974) (697,394) 642,887

Net loss
---------- -------- -------- ---------
Balance at April 30, 1995 11,678,459 $116,785 -- $ --
========== ======== ======== =========
</TABLE>

See accompanying notes to consolidated financial statements.

F-9
<PAGE> 71

<TABLE>
<CAPTION>
RETAINED
ADDITIONAL EARNINGS TOTAL
PAID-IN (ACCUMULATED STOCKHOLDERS'
CAPITAL DEFICIT) EQUITY
------- -------- ------
<S> <C> <C> <C>
Balance at April 30, 1992 $ 4,313,708 $ 350,752 $ 4,195,785
Purchase of common stock (77,100)
Net loss (408,067) (408,067)
----------- ------------ -----------

Balance at April 30, 1993 4,313,708 (57,315) 3,710,618
Issuance of common stock 23,347,585 23,403,669
Issuance of warrants 951,664 951,664
Purchase of common stock (770,592) (1,435,200) (2,208,000)
Stock options exercised 67,016 67,891

Tax benefit of stock options 140,000 140,000
Net loss (2,229,193) (2,229,193)
----------- ------------ -----------
Balance at April 30, 1994 28,049,381 (3,721,708) 23,836,649
----------- ------------ -----------
Issuance of common stock 12,418,442 12,444,943
Issuance of warrants 1,989,845 1,989,845

Purchase of common stock (55,000)
Stock options exercised 37,652 38,047
Cancellation of treasury stock (635,913)
Net loss (20,324,845) (20,324,845)
----------- ------------ -----------
Balance at April 30, 1995 $41,859,407 $(24,046,553) $17,929,639
=========== ============= ===========
</TABLE>

F-10
<PAGE> 72

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS CROWN CASINO CORPORATION

A -- HISTORY AND DESCRIPTION OF BUSINESS

Crown Casino Corporation, formerly Skylink America Incorporated, and
subsidiaries (the "Company") owns a 50% interest in a riverboat gaming casino
located in Calcasieu Parish, Louisiana that opened in July 1995, owns an 18.6
acre tract of land in the gaming district of Las Vegas, Nevada which is being
held for development of a hotel and casino, and in July 1995 entered into a
definitive purchase agreement to acquire the Bourbon Street Hotel and Casino
(the "Bourbon Street Casino") located in Las Vegas, Nevada. The Company is also
actively pursuing other gaming opportunities in these and other jurisdictions.

Prior to March 1994, the Company had been engaged in various facets of the
cable programming business.

B -- SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Principles of Consolidation

The consolidated financial statements include the accounts of Crown Casino
Corporation and all of its wholly-owned subsidiaries. All significant
intercompany accounts and transactions have been eliminated.

Cash and Cash Equivalents

The Company considers cash and all highly liquid investments with an
original maturity of three months or less to be cash equivalents.

Casino Pre-opening and Development Costs

All casino pre-opening and development costs are expensed as incurred.
Pre-opening and development costs consist principally of personnel costs,
advertising, insurance, travel, consulting and professional fees.

Property and Equipment

Property and equipment are stated at cost. Expenditures for additions,
renewals and improvements are capitalized. Interest costs during construction
of facilities are capitalized. Costs of repairs and maintenance are expensed as
incurred. Depreciation will be charged on gaming related equipment and
facilities beginning in July 1995 (commencement of operations). Depreciation is
computed using the straight-line method over the following estimated useful
lives:

Furniture, fixtures and equipment 5 to 10 years
Riverboat and barges 15 years

Non-Compete Agreement

In connection with the acquisition of St. Charles Gaming Company, Inc.
("SCGC"), the seller agreed not to compete with the Company within the
Louisiana market for a period of five years. The costs allocated to such
agreement are being amortized over a five year period using the straight-line
method. At April 30, 1995 accumulated amortization amounted to $183,326.

Debt Issuance Costs

In connection with the issuance of the Senior Note and amendments to the
agreement governing the Senior Note, the Company incurred debt issuance costs
of approximately $2.5 million. These costs are being amortized over the term of
the Senior Note using the effective interest method.

F-11
<PAGE> 73

License Costs

License costs principally represent the excess purchase price of acquiring
SCGC over the net identifiable tangible assets (see Note D). These costs will
be amortized beginning in July 1995 (commencement of operations) over the
remaining license term using the straight-line method. The Louisiana license
was issued on March 29, 1994 and has a five year initial term, which is subject
to renewal.

Income Taxes

Deferred tax assets and liabilities are recognized for the future tax
consequences attributable to differences between the financial statement
carrying amounts of existing assets and liabilities and their respective tax
bases. Deferred tax assets and liabilities are measured using enacted tax rates
expected to apply to taxable income in the years in which those temporary
differences are expected to be recovered or settled.

Treasury Stock

During fiscal 1995 the Company formally canceled all of its shares held in
treasury. The amount credited to additional paid-in capital upon the original
issuance of such shares was estimated to be equal to or greater than the
Company's cost of reacquiring such shares. Accordingly, the carrying value in
excess of the par value of such shares was charged to additional paid-in
capital upon such cancellation.

Loss Per Share

Loss per share has been calculated using the weighted average number of
shares outstanding.

Reclassifications

Certain prior year amounts in the accompanying financial statements have
been reclassified to conform to the fiscal 1995 presentation. Amounts
associated with cable activities have been reclassified to discontinued
operations.

C -- SALE OF 50% OF LOUISIANA PROJECT

On June 9, 1995 pursuant to a definitive Stock Purchase Agreement ("Stock
Purchase Agreement") the Company sold a 50% interest in SCGC to Louisiana
Riverboat Gaming Partnership ("LRGP"), a joint venture owned 50% by Casino
America, Inc. ("Casino America") and 50% by Louisiana Downs, Inc. LRGP owns the
Isle of Capri(SM) dockside riverboat casino in Bossier City, Louisiana. The
purchase price consists of (i) a five-year $20 million note (the "LRGP Note"),
(ii) $1 million cash, and (iii) a warrant (which may only be exercised by
converting a portion of the LRGP Note) to purchase 416,667 shares of Casino
America common stock at $12 per share.

In June 1995, as a result of the sale of a 50% interest in SCGC, the
Company recorded a gain before income taxes of approximately $22 million.
However, the majority of the gain has been deferred until such time as its
realization is reasonably assured. Realization of such deferred gain is
dependent on the collection of the LRGP Note, which is principally dependent on
SCGC's future operating profits. Prior to maturity, the principal payments on
the LRGP Note are limited to the amount of distributions received by LRGP from
SCGC's operations, and principal payments on the LRGP Note are not guaranteed
by LRGP.

F-12
<PAGE> 74

Also, pursuant to the Stock Purchase Agreement, LRGP will lend funds, or
will provide a financing source for SCGC, to provide for the development of the
Calcasieu Parish project and the payment of interest on SCGC's senior debt, in
amounts to be agreed upon between LRGP and the Company. The maximum amount of
all loans funded or guaranteed by LRGP will not exceed $45 million, unless
agreed to by the parties. At April 30, 1995 Casino America and LRGP had loaned
or advanced SCGC a total of approximately $6.9 million. In August 1995 SCGC and
LRGP jointly issued $38.4 million of senior secured increasing rate notes whose
proceeds were used to retire all of SCGC's senior debt ($21.9 million) and
certain LRGP obligations ($8.4 million). The balance of the proceeds will be
used in the development of the Calcasieu Parish project (see Note G).

In connection with the Stock Purchase Agreement, SCGC bought out its prior
casino management agreement for $4 million and entered into a new casino
management agreement with Casino America. The Casino America management
agreement has a term of 99 years and provides for a management fee of (i) 2% of
"Revenues," as defined in the agreement (generally net gaming revenues less
gaming and admission taxes plus all other operating revenues), plus (ii) 10% of
"Net Operating Income," as defined in the agreement, provided however, the
total management fee shall not exceed 4% of "Revenues." In the event the LRGP
Note goes in default and the Company reacquires LRGP's 50% interest in SCGC,
SCGC will have the right to terminate the Casino America management agreement.

At April 30, 1995 SCGC had assets, liabilities and shareholder's deficit of
approximately $35 million, $38 million and $3 million, respectively. SCGC's
condensed results of operations for the year ended April 30, 1995 and the
period from June 25, 1993 (date of acquisition) through April 30, 1994 were as
follows (in thousands):
<TABLE>
<CAPTION>
1995 1994
---- ----
<S> <C> <C>
Revenue $ -- $ --
Costs and expenses 21,730 1,516
Benefit for income taxes (2,828) (573)
-------- ------

Net loss $(18,902) $(943)
-------- -----
</TABLE>

D -- ACQUISITIONS

In June 1993 the Company acquired 100% of the outstanding common stock of
SCGC, a Louisiana corporation which was organized in January 1993 for the
purpose of developing a riverboat casino project in St. Charles Parish,
Louisiana. The Company paid $500,000 and issued 1.2 million shares of
restricted common stock to the seller in exchange for all of the issued and
outstanding common stock of SCGC and for the seller's agreement not to compete
with the Company. In addition, in connection with the transaction, the Company
issued 400,000 shares of restricted common stock as a finder's fee to a company
which has a principal shareholder who is a director of the Company.

In December 1993 the Company acquired 100% of the outstanding common stock
of Gaming Entertainment Management Services, Inc. ("GEMS"), a Nevada
corporation which was organized in September 1992 for the purpose of developing
a hotel and casino project in Las Vegas, Nevada known as the Desert Winds Hotel
and Casino. GEMS' primary asset was its option to purchase an 18.6 acre tract
of land in the gaming district of Las Vegas located on the southeast corner of
the intersection of Flamingo and Arville. The option was exercised and the land
was purchased in June 1994. GEMS has no operations other than its development
of the Desert Winds project. In connection with the transaction the Company
issued 850,000 shares of restricted common stock to the shareholders of GEMS
and issued 35,000 shares of restricted common stock to an unrelated company as
a finder's fee. Prior to the acquisition, the Company loaned GEMS $500,000
which was assumed in the purchase.

F-13
<PAGE> 75

The acquisitions have been accounted for using the purchase method of
accounting. The purchase price and purchase price allocations are as follows
(in thousands):

<TABLE>
<CAPTION>
SCGC GEMS
---- ----
<S> <C> <C>
Purchase price:
Cash $ 500

Stock issued 5,600 $ 3,982

Other transaction costs 50 20

Liabilities assumed 25 585
------ -------
$6,175 $ 4,587
====== =======
Purchase price allocation:
Cash $50 $ 80

Non-compete agreement 500

Land purchase option 6,075

License costs 9,025

Deferred income taxes (3,400) (1,568)
------ -------
$6,175 $ 4,587
====== =======
</TABLE>

The shares issued were valued based upon the trading price of the Company's
stock on the earlier of the date when all material contingencies to the
acquisition were removed or upon closing, discounted to reflect the restricted
nature of the securities. The Company recorded a deferred tax liability to
reflect the difference in basis of the acquired assets and liabilities for
income tax and financial reporting purposes. The activities of SCGC and GEMS
have been included in the Company's results of operations from their respective
dates of acquisition. Pro forma results of operations have not been presented
for the fiscal year ended April 30, 1994 as such results are not materially
different from the actual results of operations for such period.

In July 1995, the Company entered into a definitive asset purchase
agreement to acquire the Bourbon Street Hotel and Casino located in Las Vegas,
Nevada for $10 million (see Note P).

E -- LICENSING

In March 1994 SCGC received a license with certain conditions from the
Louisiana Riverboat Gaming Enforcement Division (the "Enforcement Division").
The license has an initial term of five years and is thereafter subject to
renewal.

In connection with the proposed acquisition of the Bourbon Street Hotel and
Casino, the Company intends to apply for a Nevada gaming license.

F -- LAND HELD FOR DEVELOPMENT

In connection with the acquisition of GEMS (see Note D) the Company
acquired an option to purchase an 18.6 acre tract of land in the gaming
district of Las Vegas, Nevada located on the southeast corner of the
intersection of Flamingo and Arville. In June 1994 the Company exercised its
option and closed the purchase of the Las Vegas land. Upon such purchase
amounts previously capitalized as land purchase option costs were reclassified
to land held for development. In February 1994 the Las Vegas land under option
was appraised for approximately $20.3 million.

F-14
<PAGE> 76

G -- DEBT

At April 30, 1995 SCGC had the following debt:

Senior Note, net of discount of $118,397
Notes payable to Casino America $21,811,603
4,700,000
-----------
$26,511,603
===========

In June 1994 SCGC issued a $28 million Senior Secured Increasing Rate Note
(the "Senior Note") to an institutional investor. The Senior Note was initially
due on June 3, 1995, but was subsequently extended to August 31, 1995 and
carried a 12% coupon increasing 67 basis points each quarter up to a maximum
interest rate of 14%. The Senior Note was issued with a five year warrant to
purchase 508,414 shares of the Company's common stock at an original exercise
price of $6.00 per share, which was adjusted to $3.00 per share in December
1994 pursuant to an amendment to the warrant. The proceeds from the private
placement were allocated between the Senior Note ($26.7 million) and the
warrant ($1.3 million) based upon the relative fair value of each of the
securities at the time of issuance. The resulting original issue discount has
been amortized over the life of the Senior Note using the effective interest
method.

In August 1995 the Senior Note was paid off from the proceeds of $38.4
million of Senior Secured Increasing Rate Notes (the "New Notes"), issued
jointly by SCGC and LRGP. The New Notes initially become due in August 1996,
but can be extended up to an additional twelve months at the option of the
issuers, and carry a 12% coupon increasing 25 basis points each quarter until
maturity, and provide for contingent interest beginning in June 1996 equal to
7.5% of SCGC's and LRGP's consolidated cash flow, as defined. The New Notes are
collaterlized by substantially all the assets of SCGC and LRGP and contain
covenants relating to certain business, operational and financial matters
including limitations on (i) incurring additional debt, (ii) paying dividends,
(iii) merging or consolidating with others, (iv) changes in control, (v)
capital expenditures, (vi) investments and joint ventures, and (vii) the sale
of assets. The New Notes are not guaranteed by the Company or any of its
subsidiaries.

In March 1995, pursuant to the Stock Purchase Agreement, SCGC issued
promissory notes aggregating $4.7 million to Casino America (the "Casino
America Notes"). The Casino America Notes bear interest at 11.5% per annum and
are due three business days after the New Notes are paid in full. The Casino
America Notes are not guaranteed by the Company or any of its subsidiaries.

H -- SALES AND ISSUANCES OF COMMON STOCK

During fiscal 1994 the Company conducted a private placement offering under
Regulation D of the Securities Act of 1933 ("Securities Act") whereby the
Company sold 2,690,056 shares of its common stock to accredited investors which
resulted in gross proceeds of approximately $14.0 million. In connection with
such private placement, the Company paid cash finder's fees of approximately
$770,000. In May 1994 the Company sold an additional 636,700 shares of its
common stock in the private placement offering which resulted in gross proceeds
of approximately $3.7 million.

In connection with the purchase of SCGC's riverboat the Company issued
433,333 shares of its common stock during fiscal 1994 to Kehl River Boats, Inc.
("KRB"). During fiscal 1995, after KRB was found suitable by the Louisiana
gaming regulatory authorities, the Company issued KRB the remaining 623,334
shares of its common stock due under the vessel purchase agreement (see Note
L).

During fiscal 1995 the Company filed a registration statement with the
Securities and Exchange Commission, which became effective in November 1994, to
register a total of 10,121,869 shares of its common stock. The registration
statement includes (i) 6,937,623 shares on behalf of certain selling
shareholders, (ii) 1,184,246 shares representing the underlying shares of
outstanding common stock purchase warrants, and (iii) 2,000,000 shares on
behalf of the Company. Through April 30, 1995 the Company had sold 915,000 of
the 2,000,000 shares included in the registration statement resulting in net
proceeds of $3,545,500. In addition, during fiscal 1995 the Company (i) sold
150,000 shares of its common stock to foreign investors under the provisions of
Regulation S under the Securities Act resulting in net

F-15
<PAGE> 77

proceeds of $461,406, and (ii) issued a total of 325,000 shares of its common
stock for services rendered and the termination of a certain letter agreement
pertaining to a proposed casino site in Lake Charles, Louisiana that was
ultimately not pursued.

I -- STOCK OPTIONS AND WARRANTS

Options

The Company has two stock option plans, the 1986 Incentive Stock Option
Plan ("1986 Plan") for employees covering 1,250,000 shares of common stock and
the 1991 Non-Qualified Stock Option Plan ("1991 Plan") for directors and key
employees covering 250,000 shares of common stock. Under the 1991 Plan each
non-employee director is entitled to an automatic annual grant to purchase
2,500 shares of common stock.

Under the terms of the Plans, the purchase price of the shares will not be
less than the fair market value of such shares on the date of grant. Options
granted under the Plans expire in the years 1998 through 2005 and generally are
exercisable on the date of grant, with the exception of options to purchase
325,000 shares which become exercisable from 1996 through 1999. At April 30,
1995, there were 223,575 and 135,000 shares of common stock available for grant
in the 1986 Plan and 1991 Plan, respectively.

The following is an aggregate summary of the 1986 Plan and 1991 Plan
activity since April 30, 1992:

<TABLE>
<CAPTION>
NUMBER OPTION PROCEEDS
OF PRICE ON
SHARES PER SHARE EXERCISE
------ --------- --------
<S> <C> <C> <C>
Outstanding at April 30, 1992 268,143 $.63 to $.72 $174,313
Granted 7,500 $.41 3,047
Canceled (38,500) $.63 to $.72 (24,547)
-------- ----------
Outstanding at April 30, 1993 237,143 $.41 to $.72 152,813
Granted 507,500 $1.41 to $7.38 2,903,125
Exercised (77,500) $.63 to $1.41 (62,891)
-------- ----------
Outstanding at April 30, 1994 667,143 $.41 to $7.38 2,993,047
Granted 480,000 $3.31 to $4.03 1,671,094
Exercised (39,500) $.41 to $1.41 (38,047)
Canceled (310,000) $7.31 (2,266,875)
-------- ----------
Outstanding at April 30, 1995 797,643 $.41 to $7.31 $2,359,219
======== ==========
</TABLE>

Warrants

During fiscal 1994 and 1995 the Company issued common stock purchase
warrants to a variety of parties in connection with (i) the issuance of debt
(558,414 underlying shares), (ii) finder's fees for private placements of
common stock (314,952 underlying shares), (iii) a commitment fee for the
issuance of a commitment letter (160,880 underlying shares), (iv) the purchase
of its riverboat (100,000 underlying shares), and (v) a certain joint venture
agreement (50,000 underlying shares). The warrants issued were valued based
upon a composite of commonly accepted warrant valuation models.

F-16
<PAGE> 78

The following is an aggregate summary of warrant activity since April 30,
1993:

<TABLE>
<CAPTION>
NUMBER OF
UNDERLYING EXERCISE PRICE PROCEEDS
SHARES PER SHARE ON EXERCISE
------ --------- -----------
<S> <C> <C> <C>
Outstanding at April 30, 1993 -- $ --

Issued 475,832 $6.00 to $12.00 3,327,420
--------- --------------- ----------
Outstanding at April 30, 1994 475,832 $6.00 to $12.00 3,327,420

Issued 708,414 $3.00 to $ 7.25 2,793,992
--------- --------------- ----------
Outstanding at April 30, 1995 1,184,246 $3.00 to $12.00 $6,121,412
--------- --------------- ----------
</TABLE>

All of the warrants became exercisable upon their issuance. The warrants
expire between 1997 and 1999, contain certain anti-dilution provisions and
provide the holders with certain registration rights relative to the underlying
shares.

J -- INCOME TAXES

The provision (benefit) for income taxes from continuing operations was as
follows for the three fiscal years in the period ended April 30, 1995:

<TABLE>
<CAPTION>
FISCAL FISCAL FISCAL
1995 1994 1993
---- ---- ----
<S> <C> <C> <C>
Provision (benefit) for income taxes:
Current $ 37,672 $ (43,359) $ 125,626

Deferred (3,940,000) (1,062,574) (258,730)
----------- ----------- ---------
$(3,902,328) $(1,105,933) $(133,104)
=========== =========== =========
</TABLE>

The provision (benefit) for income taxes from continuing operations is
different from the amount computed by applying the statutory federal income tax
rate to loss from continuing operations before income taxes for the following
reasons:

<TABLE>
<CAPTION>
FISCAL FISCAL FISCAL
1995 1994 1993
---- ---- ----
<S> <C> <C> <C>

Federal statutory rate (34)% (34)% (34)%

State income tax, net of federal benefit (5) (3)

Valuation allowance 23

Other 2
--- --- ---
(16)% (35)% (34)%
==== === ===
</TABLE>

Deferred income taxes reflect the net tax effects of temporary differences
between the carrying amounts of assets and liabilities for financial reporting
purposes and the amounts used for income tax purposes. Significant components
of the Company's deferred tax liabilities and assets were as follows:

F-17
<PAGE> 79

<TABLE>
<CAPTION>
APRIL 30, . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1995 1994
--------- ---- ----
<S> <C> <C>
Deferred tax liabilities:
License costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 3,442,030 $3,442,030

Land held for development . . . . . . . . . . . . . . . . . . . . . . . 1,792,255 1,792,255

Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19,975 165,475
---------- ----------
Total deferred tax liabilities . . . . . . . . . . . . . . . . . . . 5,254,260 5,399,760
---------- ----------
Deferred tax assets:
Pre-opening expenses . . . . . . . . . . . . . . . . . . . . . . . . . 6,471,000 692,530

Net operating loss carryforward . . . . . . . . . . . . . . . . . . . . 3,589,150 195,600

Barge reserve . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 269,000

Bad debt expense . . . . . . . . . . . . . . . . . . . . . . . . . . . 47,525 68,000

Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9,779 3,630

Total deferred tax assets . . . . . . . . . . . . . . . . . . . . . 10,386,454 959,760
----------- ----------
Valuation allowance . . . . . . . . . . . . . . . . . . . . . . . . (5,632,194)
-----------

Net deferred tax liability . . . . . . . . . . . . . . . . . . . . . $ 500,000 $4,440,000
=========== ==========
</TABLE>

The Company recorded a valuation allowance for the year ended April 30,
1995 to reduce the carrying value of deferred tax assets. The valuation
allowance relates to management's estimate of the realization of such deferred
tax assets. At April 30, 1995 the Company had a net operating loss carryforward
for tax purposes of approximately $9,477,000 which expires in 2009 and 2010.

K -- LEASES

In March and July 1995, SCGC entered into agreements to lease the two
parcels of land that comprise the Calcasieu Parish riverboat casino site. The
leases have an initial term of five years with seven five year renewal options.
During the initial term, the leases require annual aggregate rental payments of
$850,000 in years one through four, and $1,000,000 in year five, payable
monthly. During the first renewal term, the rent will be increased annually by
the greater of (i) 5%, or (ii) the percentage increase in the average consumer
price index for Calcasieu Parish, Louisiana for the previous twelve month
period. During the second through seventh renewal terms, the lessor and SCGC
will attempt to set the rent equal to 100% of the rent paid by other riverboat
gaming operators in Louisiana and Mississippi for comparable property usages,
or if no agreement can be made, then the parties will appoint real estate
appraisers to set the rent for such renewal term. However, in no event shall
the annual rent be less than $1.6 million during the fourth and all subsequent
renewal terms. In addition, SCGC will pay all real estate taxes, except for
taxes due on the unimproved value of the property. The Company has guaranteed
the obligations of SCGC under these leases.

In addition to the Calcasieu Parish site leases, the Company has also
entered into various operating leases for equipment and office facilities. The
aggregate rentals due under such leases were not significant at April 30, 1995.

Rent expense for all operating leases during the last three fiscal years
was as follows:

F-18
<PAGE> 80

<TABLE>
<CAPTION>
FISCAL FISCAL FISCAL
1995 1994 1993
---- ---- ----
<S> <C> <C> <C>
Continuing operations $93,888 $39,483 $35,970

Discontinued operations 23,727 46,105
------- ------- -------

$93,888 $63,210 $82,075
======= ======= =======
</TABLE>

The Company has also entered into various capital leases for equipment. As
of April 30, 1995 future minimum lease payments under capital leases were as
follows:

<TABLE>
<CAPTION>
FISCAL YEAR AMOUNT
----------- ------
<S> <C>
1996 $ 3,294,610
1997 2,234,605
1998 84,420
1999 79,476
2000 6,622
-----------
Total minimum lease payments 5,699,733
Less amount representing interest (551,624)
-----------
Present value of future minimum lease payments 5,148,109

Less current portion (2,876,632)
-----------
Capital lease obligations, less current portion $ 2,271,477
===========
</TABLE>

L -- COMMITMENTS AND CONTINGENCIES

Common Stock Pending Issuance

In February, 1995 the Company made a commitment to issue 50,000 shares of
its common stock (representing $200,000) to a consultant upon commencement of
SCGC's riverboat gaming operations in Calcasieu Parish, Louisiana. In July 1995
such operations commenced and subsequently the shares due were issued.

At April 30, 1994 the Company was committed to issue 333,334 shares of its
common stock (representing $1,500,000) to KRB, the Company's riverboat
contractor, upon KRB being found suitable as a 5% or greater shareholder of the
Company by the Louisiana gaming regulatory authorities. In December 1994, KRB
was found suitable and the Company issued the total shares then due (623,334)
to KRB.

Common Stock Subject to Redemption

At April 30, 1994 the Company was required to make recission offers to
certain investors covering 151,000 shares of its common stock (representing
$829,500) to satisfy securities laws in certain states in which the Company
conducted a private placement offering of its securities. The recission offers
expired at various times through September 1994, at which time the respective
amounts included in common stock subject to redemption were reclassified to
additional paid-in capital.

Litigation

F-19
<PAGE> 81

alleges that the Company breached a duty to negotiate in good faith toward the
execution of a definitive vessel construction contract. Alternatively,
Avondale alleges that a separate oral contract for the construction of the
vessel existed and that the Company committed unspecified unfair trade
practices and made certain misrepresentations. Avondale seeks unspecified
damages including "all lost profits and lost overhead" and attorneys fees. The
Company intends to vigorously contest liability in this matter.

Commitments to Calcasieu Parish

In January 1995, SCGC made a commitment to Calcasieu Parish to provide
certain payments to the Parish above and beyond the statutory admissions tax.
SCGC committed to a $1 million initial payment, which was paid upon the opening
of the casino, and a $1 million annual payment for as long as the casino is
operating at its site in the Parish, but in no event less than six years. In
June 1995 SCGC and the Parish entered into a definitive development agreement
whereby, in consideration for the payments to be made by SCGC to the Parish,
the Parish is required to cooperate with and provide assistance to SCGC in
obtaining and maintaining necessary permits and approvals to operate its
riverboat gaming casino.

Teaming Agreement

In June 1994 the Company entered into a teaming agreement with a group of
individuals for the purpose of pursuing a gaming license in the State of
Illinois. The agreement requires the Company to issue warrants to purchase up
to 250,000 shares of the Company's common stock, and to make certain payments
in cash upon the occurrence of specified events, including the issuance of a
gaming license.

M -- RELATED PARTY TRANSACTIONS

During fiscal 1994, in connection with the acquisition of SCGC (see Note
D), the Company issued 400,000 shares of restricted common stock as a finder's
fee to a company whose principal shareholder is a director of the Company. In
March 1995, this director became an executive officer of the Company.

The Company incurred legal fees of approximately $259,000 and $218,000
during fiscal 1995 and 1994, respectively, from a law firm of which a director
of the Company was a partner. In March 1995, this director became an executive
officer of the Company.

During fiscal 1994 the Company paid $24,000 for investment banking services
to a company of which an outside director of the Company is an officer.

During fiscal 1994 the Company borrowed an aggregate of $700,000 on a
short-term basis from an individual who was a major beneficial shareholder of
the Company at the time of such loan.

During fiscal 1995 the Company entered into a teaming agreement (see Note
L) with an individual who subsequently became a director of the Company.
Pursuant to such agreement, the Company issued warrants to purchase 50,000
shares of the Company's common stock.

N -- DISCONTINUED OPERATIONS

In July 1993 the Company made the decision to focus all its efforts in the
gaming industry and discontinue operating in the cable programming industry. As
a result, during fiscal 1994 the Company sold all its remaining cable assets
for total consideration of $1,125,000.

The loss on disposal of the Company's cable operations was as follows:

F-20
<PAGE> 82

<TABLE>
<CAPTION>
LOSS
BEFORE INCOME
INCOME TAX
TAXES BENEFIT NET LOSS
----- -------- ---------
<S> <C> <C> <C>
Loss on disposal of cable operations $(239,925) $(81,575) $(158,350)

Operating loss from July 1993 to February 1994 (disposal date) (32,432) (11,027) (21,405)
--------- -------- ---------
$(272,357) $(92,602) $(179,755)
========== ========= ==========
</TABLE>

The identifiable revenues and expenses from cable operations have been
reclassified on the accompanying statements of operations from their historical
classification to separately identify them as the net results of discontinued
operations. Discontinued operations include allocations of general and
administrative expenses that were determined to be directly related to such
operations. The condensed statements of operations for discontinued operations
for fiscal years 1994 and 1993 were as follows:

<TABLE>
<CAPTION>
FISCAL 1994
-----------
MAY-JUNE JULY-APRIL
(PRE-MEASURE- (POST-MEASURE- FISCAL
MENT DATE) MENT DATE) 1993
---------- ---------- ----
<S> <C> <C> <C>
Revenues $192,313 412,050 $1,346,912

Costs and expenses 187,845 444,482 1,615,248

Loss on disposal of cable operations 239,925
-------- --------- ----------

Income (loss) before income taxes 4,468 (272,357) (268,336)

Provision (benefit) for income taxes 1,519 (92,602) (123,383)
-------- --------- ----------
Net income (loss) $ 2,949 $(179,755) $ (144,953)
======== ========= ==========
</TABLE>

O -- SUPPLEMENTAL CASH FLOW INFORMATION

Supplemental cash flow disclosures are as follows for the three fiscal
years in the period ended April 30, 1995:

<TABLE>
<CAPTION>
FISCAL FISCAL FISCAL
1995 1994 1993
---- ---- ----
<S> <C> <C>
Continuing operations:
Common stock issued in acquisitions $9,582,500

Common stock issued for equipment $1,450,000 550,000

Common stock issued for services and other 1,300,000
Equipment acquired under capital leases 5,778,767
Equipment acquired with debt 5,000,000

Note payable converted to common stock 3,000,000

Note payable exchanged for land 471,465
Retirement of debt with property 200,000

Warrants issued for equipment and services 337,500 951,664
</TABLE>

F-21
<PAGE> 83

<TABLE>
<S> <C> <C> <C>
Interest paid, net of amount capitalized 6,132,059 11,474 $ 3,886

Income taxes paid, net of refunds (124,328) (141,359) 226,351

Discontinued operations:
Cable assets sold for note receivable 250,000
</TABLE>

P -- SUBSEQUENT EVENTS

On June 9, 1995 the Company sold a 50% interest in SCGC to LRGP for
approximately $22 million total consideration (see Note C).

On July 14, 1995 the Company entered into a definitive asset purchase
agreement to acquire the Bourbon Street Casino located in Las Vegas, Nevada for
a purchase price of $10 million. The Bourbon Street Casino has approximately
430 slot machines and 15 table games over its 15,000 square feet of gaming
space, 166 hotel rooms, including 16 suites, and has reported annual revenues
of approximately $12 million. Closing is expected to occur by October 1995.

On July 29, 1995 SCGC's riverboat casino commenced gaming operations in
Calcasieu Parish, Louisiana.

On August 7, 1995 SCGC and LRGP jointly issued $38.4 million of senior
secured increasing rate notes and paid off SCGC's Senior Note (see Note G).

F-22
<PAGE> 84

CONSOLIDATED BALANCE SHEETS Crown Casino Corporation
<TABLE>
<CAPTION>
October 31, 1995 April 30,
(Unaudited) 1995
---------------- ------------
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents $ 335,673 $ 1,692,440
Receivables 264,784
Prepaid expenses and other 905,587 931,935
------------ ------------
Total current assets 1,506,044 2,624,375
------------ ------------

Property and equipment:
Construction in progress 1,565,739
Furniture, fixtures and equipment 1,580,621 8,887,241
Riverboat and barges 15,256,140
Land held for development 16,660,555 16,608,555
------------ ------------
18,241,176 42,317,675
Less accumulated depreciation (137,191) (223,055)
------------ ------------
18,103,985 42,094,620
------------ ------------

Other assets:
Note receivable 20,000,000
Non-compete agreement, net 316,674
Debt issuance costs, net 345,963
License costs 9,125,000
------------ ------------
20,000,000 9,787,637
------------ ------------

$ 39,610,029 $ 54,506,632
============ ============

LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 134,010 $ 999,611
Accrued liabilities 318,336 1,038,587
Advances from LRGP 2,179,083
Capital lease obligations 5,879 2,876,632
Notes payable 26,511,603
------------ ------------
Total current liabilities 458,225 33,605,516
------------ ------------

Capital lease obligations, less current portion 3,281 2,271,477
Deferred income taxes 8,554,800 500,000
Common stock pending issuance 200,000
Investment in SCGC 2,474,583
Commitments and contingencies

Stockholders' equity:
Preferred stock, par value $.01 per share, 1,000,000 shares
authorized; none issued or outstanding
Common stock, par value $.01 per share, 50,000,000 shares authorized
11,725,559 issued and outstanding (11,678,459 at April 30, 1995) 117,256 116,785
Additional paid-in capital 42,031,214 41,859,407
Accumulated deficit (14,029,330) (24,046,553)
------------ ------------
Total stockholders' equity
28,119,140 17,929,639
------------ ------------

$ 39,610,029 $ 54,506,632
============ ============
</TABLE>

See accompanying notes to consolidated financial statements.

F-23

<PAGE> 85

CONSOLIDATED STATEMENTS OF OPERATIONS Crown Casino Corporation
(Unaudited)

<TABLE>
<CAPTION>
Six Months Ended
October 31,
1995 1994
---------- ----------
<S> <C> <C>
Revenues $ - $ -

Costs and expenses:
General and administrative 1,238,029 940,368
Gaming pre-opening and development 662,787 3,396,409
Depreciation and amortization 72,553 123,464
----------- -----------
1,973,369 4,460,241
----------- -----------

Other income (expense):
Interest expense (965,793) (3,043,046)
Interest income 1,084,298 158,040
Equity in loss of SCGC (1,585,753)
Gain on sale of 50% of SCGC 21,512,640
----------- -----------
20,045,392 (2,885,006)
----------- -----------

Income (loss) before income taxes 18,072,023 (7,345,247)

Provision (benefit) for income taxes 8,054,800 (2,798,850)
----------- -----------

Net income (loss) $10,017,223 $(4,546,397)
=========== ===========

Income (loss) per share $ .82 $ (.48)
=========== ===========

Weighted average common and common
equivalent shares outstanding 12,263,377 9,556,435
=========== ===========
</TABLE>

See accompanying notes to consolidated financial statements.

F-24

<PAGE> 86

CONSOLIDATED STATEMENTS OF CASH FLOWS
Crown Casino Corporation
(Unaudited)

<TABLE>
<CAPTION>
Six Months Ended
October 31,
1995 1994
-------------- ------------
<S> <C> <C>
Operating activities:
Net income (loss) $ 10,017,223 $ (4,546,397)
Adjustments to reconcile net income (loss)
to net cash used by operating activities:
Depreciation and amortization 72,553 123,464
Amortization of debt issuance costs/discount 389,360 1,412,740
Warrant issued for services 62,500
Deferred income taxes 8,054,800 (2,798,850)
Equity in loss of SCGC 1,585,753
Gain on sale of 50% of SCGC (21,512,640)
Changes in assets and liabilities, net of disposition:
Receivables, net (364,784) 356,723
Prepaid expenses and other (801,474) (1,338,379)
Accounts payable and accrued liabilities (195,840) 1,367,180
-------------- ------------

Net cash used by operating activities (2,755,049) (5,361,019)
-------------- ------------

Investing activities:
Purchases of property and equipment (4,160,168) (16,884,850)
Sale of 50% of SCGC 1,000,000
-------------- ------------

Net cash used by investing activities (3,160,168) (16,884,850)
-------------- ------------

Financing activities:
Issuance of common stock 23,215 3,366,584
Purchases of common stock (50,937) (55,000)
Issuance of debt and warrants 28,000,000
Debt issuance costs (1,475,099)
Advances from LRGP 4,627,897
Payments of debt and capital lease obligations (41,725) (7,057,953)
-------------- ------------

Net cash provided by financing activities 4,558,450 22,778,532
-------------- ------------

Increase (decrease) in cash and cash equivalents (1,356,767) 532,663
Cash and cash equivalents at: Beginning of period 1,692,440 1,778,939
-------------- ------------

End of period $ 335,673 $ 2,311,602
============== ============
</TABLE>

See accompanying notes to consolidated financial statements.

F-25

<PAGE> 87

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
CROWN CASINO CORPORATION
(UNAUDITED)
FOR THE SIX MONTHS ENDED OCTOBER 31, 1995

NOTE A - BASIS OF PRESENTATION

Crown Casino Corporation and subsidiaries ("Crown" or the "Company") owns (i) a
50% interest in St. Charles Gaming Company, Inc. ("SCGC") which owns and
operates a riverboat gaming casino located in Calcasieu Parish, Louisiana that
opened on July 29, 1995, and (ii) an 18.6 acre tract of land in the gaming
district of Las Vegas, Nevada which is being held for possible development of a
hotel and casino. The Company is also actively pursuing other gaming
opportunities in these and other jurisdictions.

The accompanying unaudited consolidated financial statements have been prepared
in accordance with generally accepted accounting principles for interim
financial information and with the instructions to Form 10-Q and Article 10 of
Regulation S-X. Accordingly, they do not include all of the information and
footnotes required by generally accepted accounting principles for complete
financial statements. In the opinion of management, all adjustments
(consisting of normal recurring accruals) considered necessary for a fair
presentation have been included. Operating results for the six month period
ended October 31, 1995 are not necessarily indicative of the results that may
be expected for the year ended April 30, 1996. For further information, refer
to the consolidated financial statements and footnotes thereto included in the
Company's annual report on Form 10-K for the year ended April 30, 1995.

NOTE B - SALE OF 50% OF SCGC

On June 9, 1995 pursuant to a definitive Stock Purchase Agreement ("Stock
Purchase Agreement") the Company sold a 50% interest in SCGC to Louisiana
Riverboat Gaming Partnership ("LRGP"), a joint venture owned 50% by Casino
America, Inc. ("Casino America") and 50% by Louisiana Downs, Inc. LRGP owns
the Isle of Capri(SM) dockside riverboat casino in Bossier City, Louisiana.
The purchase price consisted of (i) a five-year $20 million note (the "LRGP
Note"), (ii) $1 million cash, and (iii) a warrant (which may only be exercised
by converting a portion of the LRGP Note) to purchase 416,667 shares of Casino
America common stock at $12 per share.

The LRGP Note bears interest at 11.5% per annum, payable monthly, and is
secured by LRGP's 50% interest in SCGC. Principal is payable in seventeen
equal quarterly installments beginning in June 1996. If the distributions from
SCGC to LRGP during any quarter are less than the principal installment due for
such quarter, LRGP will only be obligated to pay the amount of such
distribution and any deficiency will be deferred to the next installment due
under the LRGP Note. All principal and interest not previously paid will be
due and payable in June 2000. At October 31, 1995 the entire LRGP Note is
classified as non-current since LRGP is not permitted to make principal
payments on said note until the New Notes issued jointly by LRGP and SCGC are
retired (see Note C). The New Notes initially become due in July 1996, but may
be extended up to twelve additional months at the option of the issuers
providing no event of default has occurred and is continuing. Also, during any
period an event of default has occurred and is continuing under the New Notes
issued by LRGP and SCGC, the Company is not entitled to receive interest
payments on the LRGP Note, and in the event of foreclosure on the New Notes, it
is anticipated that the collectibility of the LRGP Note would be jeopardized.

Also, pursuant to the Stock Purchase Agreement, LRGP will lend funds, or will
provide a financing source for SCGC, to provide for the development of the
Calcasieu Parish project in amounts to be agreed upon between LRGP and the
Company. The maximum amount of all loans funded or guaranteed by LRGP will not
exceed $45 million, unless agreed to by the parties. In August 1995 SCGC and
LRGP jointly issued $38.4 million of senior secured increasing rate notes the
proceeds of which were used to retire all of SCGC's senior debt ($21.9 million)
and certain LRGP obligations ($8.4 million). The balance of the proceeds have
been used in the development of the Calcasieu Parish project (see Note C).

In connection with the Stock Purchase Agreement, SCGC bought out its prior
casino management agreement and entered into a new casino management agreement
with Casino America. The Casino America management agreement has a term of 99
years and provides for a management fee of (i) 2% of "Revenues," as defined in
the agreement (generally net gaming revenues less gaming and admission taxes
plus all other operating revenues) plus (ii) 10% of "Net Operating Income," as
defined in the agreement, provided however, the total management fee shall not
exceed 4% of "Revenues." In the event the LRGP Note goes into default and the
Company reacquires LRGP's 50% interest in SCGC, SCGC will have the right to
terminate the Casino America management agreement.

F-26

<PAGE> 88

In addition to the foregoing, the Company granted LRGP a right of first refusal
to jointly develop its 18.6 acre tract of land in the gaming district of Las
Vegas in the event the Company chooses to develop such project on a joint
venture basis.

The Company has included 100% of SCGC's operating results in its consolidated
results of operations through June 8, 1995. From and after June 9, 1995 (the
date of sale of 50% of SCGC), the Company has accounted for its investment in
SCGC on the equity method, and accordingly has included its proportionate share
of SCGC's operating results in its consolidated results of operations.

The gain on the sale of 50% of SCGC was recognized in the first quarter of
fiscal 1996 as (i) the transaction occurred in such quarter, and (ii)
collection of the LRGP Note was determined to be reasonably assured.

The Company's gain on the sale of 50% of SCGC is calculated as follows (in
thousands):

<TABLE>
<S> <C> <C>
Consideration for sale of a 50% interest in SCGC $ 21,000

Crown's negative basis in SCGC stock sold:
Deficit in SCGC 1,778
Percentage sold 50%
-----
889
Transaction and other costs (376)
---------

Gain on sale of 50% of SCGC $ 21,513
=========
</TABLE>

At October 31, 1995 the Company's investment in SCGC is calculated as follows
(in thousands):

<TABLE>
<S> <C>
Remaining negative basis in SCGC on June 9, 1995 after sale of 50% $ (889)
Crown's portion of SCGC's loss from June 9, 1995 to October 31, 1995 (1,586)
---------

Crown's investment in SCGC $ (2,475)
=========
</TABLE>

Since the Company anticipates SCGC will have future income (operations
commenced on July 29, 1995), its investment in SCGC is carried below zero and
is shown as a liability at October 31, 1995.

SCGC's summarized unaudited operating results for the six month periods ended
October 31, 1995 and 1994 are as follows (in thousands):

<TABLE>
<CAPTION>
Six Months Ended
October 31,
1995 1994
-------- --------
<S> <C> <C>
Revenues:
Casino $ 17,008 $ --
Food, beverage and other 1,159
-------- --------
18,167 --
-------- --------

Costs and expenses:
Casino 13,277
Food, beverage and other 433
Gaming taxes 4,072
Gaming pre-opening and development 3,785 3,042
Depreciation and amortization 1,029 55
Interest expense 2,397 3,029
-------- --------
24,993 6,126
-------- --------

Loss before income taxes (6,826) (6,126)
Benefit for income taxes (2,137) (2,385)
-------- --------

Net loss $ (4,689) $ (3,741)
======== ========
</TABLE>

F-27

<PAGE> 89

NOTE C - SCGC DEBT

In June 1994 SCGC completed a private placement of a $28 million Senior Secured
Increasing Rate Note (the "Senior Note") to an institutional investor. The
Senior Note was initially due on June 3, 1995, but was subsequently extended to
August 31, 1995 and carried a 12% coupon increasing 67 basis points each
quarter up to a maximum interest rate of 14%. SCGC repaid $6.5 million of the
Senior Note in October 1994. The balance of the Senior Note was repaid in
August 1995 from a portion of the proceeds from the issuance of $38.4 million
of Senior Secured Increasing Rate Notes (the "New Notes") issued jointly by
SCGC and LRGP (collectively, the "Issuers") to the same institutional investor
(the "Lender"). The New Notes initially become due on July 27, 1996, but can
be extended up to an additional twelve months at the option of the Issuers
provided no event of default has occurred and is continuing, carry a 12% coupon
increasing 25 basis points each quarter until maturity, and provide for
contingent interest beginning in May 1996 equal to 7.5% of the Issuers'
consolidated cash flow, as defined. The New Notes are collateralized by
substantially all the assets of the Issuers and the agreement governing the New
Notes contains covenants relating to certain business, operational and
financial matters including limitations on (i) incurring additional debt, (ii)
paying dividends, (iii) merging or consolidating with others, (iv) changes in
control, (v) capital expenditures, (vi) investments and joint ventures, and
(vii) the sale of assets, and financial covenants pertaining to (a) minimum
cash flow, (b) minimum fixed charge ratio, (c) maximum leverage ratio, and (d)
minimum net worth. Events of default occurred in September 1995 due to the
failure to meet certain of the financial covenants. SCGC and LRGP are
presently negotiating with the Lender to obtain a waiver of such defaults, but
no waiver has yet been executed by the Lender. No assurance can be given that
a satisfactory waiver will be forthcoming. During the pendency of an event of
default, the Lender is entitled to accelerate the maturity of the New Notes and
to foreclose on the collateral securing the New Notes. The Company believes
(i) the collective cash flow of LRGP and SCGC is more than sufficient to
support the level of debt that the New Notes represent, and (ii) the Lender is
well collateralized. Accordingly, while no assurance can be given, the Company
does not expect that the Lender will accelerate the maturity of the New Notes
and seek to foreclose on the collateral.

The New Notes are not guaranteed by the Company or any of its consolidated
subsidiaries. However, during any period an event of default has occurred and
is continuing under the New Notes, the Company is not entitled to receive
interest payments on the $20 million LRGP Note, and in the event of foreclosure
on the New Notes, it is anticipated that the collectibility of the LRGP Note
would be jeopardized.

NOTE D - LAND HELD FOR DEVELOPMENT

In connection with the acquisition of Gaming Entertainment Management Services,
Inc. in December 1993, the Company acquired an option to purchase an 18.6 acre
tract of land in the gaming district of Las Vegas, Nevada located on the
southeast corner of the intersection of Flamingo and Arville. In June 1994 the
Company exercised its option and closed the purchase of the Las Vegas land. In
February 1994 the Las Vegas land under option was appraised for approximately
$20.3 million.

NOTE E - ABANDONMENT OF BOURBON STREET ACQUISITION

In July 1995 the Company entered into a definitive asset purchase agreement to
acquire the Bourbon Street Hotel and Casino (the "Bourbon Street Casino")
located in Las Vegas, Nevada for a purchase price of $10 million. The Bourbon
Street Casino has reported annual revenues of approximately $12 million.

In November 1995 the Company determined not to proceed with the acquisition of
the Bourbon Street Casino due to (i) the possibility of more attractive
investment opportunities (including potentially acquiring a second riverboat
casino which would be operated from SCGC's existing site in Calcasieu Parish),
(ii) the lack of attractive financing, and (iii) declining margins at the
property. In connection with this decision, in November 1995 the Company
wrote-off a $500,000 non-refundable deposit and approximately $127,000 of other
costs related to the proposed acquisition.

NOTE F - CONTINGENCIES

F-28

<PAGE> 90

obligated to Avondale for the construction of SCGC's riverboat vessel based upon
a letter of intent (allegedly reaffirming a previous agreement entered into
between Avondale and SCGC). Avondale alleges that the Company breached a duty
to negotiate in good faith toward the execution of a definitive vessel
construction contract. Alternatively, Avondale alleges that a separate oral
contract for the construction of the vessel existed and that the Company
committed unspecified unfair trade practices and made certain
misrepresentations. Avondale seeks unspecified damages including "all lost
profits and lost overhead" and attorneys fees. Avondale has verbally stated its
lost profits and lost overhead amount to approximately $2.5 million. While no
assurance can be given as to the ultimate outcome of this litigation, management
believes that this litigation will not have a material adverse effect on the
financial position of the Company. The Company intends to vigorously contest
liability in this matter.

In October 1995, an action was filed against the Company, Casino America,
Louisiana Downs, Inc. and W.S. Bellows Construction Co. (the "Defendants") in
the U.S. District Court for the Western District of Louisiana, Lake Charles
Division, by Marvin D. Vincent and the National Black Chamber of Commerce, Inc.
(the "Plaintiffs"). In this action the Plaintiffs allege that the Defendants
have desecrated the alleged grave sites of their ancestors during the course of
construction of the Calcasieu Parish land-based facilities. The Plaintiffs are
seeking damages of $2 million per Defendant, plus $10 million in punitive
damages, costs and attorneys' fees. While no assurance can be given as to the
ultimate outcome of this litigation, management believes that the allegations
made in the lawsuit are without merit and that this litigation will not have a
material adverse effect on the financial position or results of operations of
the Company.

NOTE G - SUPPLEMENTAL CASH FLOW INFORMATION

Supplemental cash flow disclosures are as follows for the six months ended
October 31, 1995 and 1994:

<TABLE>
<CAPTION>
Six Months Ended
October 31,
1995 1994
------ ------
<S> <C> <C>
Note received for sale of 50% of SCGC stock $20,000,000
Equipment acquired under capital leases $5,435,638
Property acquired in exchange for note receivable 471,465
Warrants issued for property and services 337,500
Interest paid, net of amount capitalized 1,045,538 1,065,652
</TABLE>

F-29

<PAGE> 91

CROWN CASINO CORPORATION
PRO-FORMA CONSOLIDATED STATEMENTS OF OPERATIONS

SALE OF 50% OF SCGC

On June 9, 1995 pursuant to a definitive stock purchase agreement Crown Casino
Corporation ("Crown" or the "Company") sold a 50% interest in St. Charles
Gaming Company, Inc. ("SCGC") to Louisiana Riverboat Gaming Partnership
("LRGP"), a joint venture owned 50% by Casino America, Inc. ("Casino America")
and 50% by Louisiana Downs, Inc. LRGP owns the Isle of Capri(SM) dockside
riverboat casino in Bossier City, Louisiana. The purchase price consisted of
(i) a five-year $20 million note (the "LRGP Note"), (ii) $1 million cash, and
(iii) a warrant (which may only be exercised by converting a portion of the
LRGP Note) to purchase 416,667 shares of Casino America common stock at $12 per
share. The LRGP Note bears interest at 11.5% per annum, payable monthly, and
is secured by LRGP's 50% interest in SCGC. On July 29, 1995 SCGC's riverboat
casino commenced gaming operations in Calcasieu Parish, Louisiana.

PRO-FORMA STATEMENTS OF OPERATIONS

The following pro-forma consolidated statements of operations of Crown for the
six months ended October 31, 1995 and for the year ended April 30, 1995 gives
effect to the sale of 50% of Crown's interest in SCGC as if such transaction
had occurred at the beginning of the respective periods. The pro-forma
information is based on the historical financial statements of Crown and SCGC
giving effect to the transaction described above and the adjustments described
in the accompanying notes to pro-forma consolidated statements of operations
and may not be indicative of the results that actually would have occurred had
the transaction taken place on the dates indicated or the results which may be
obtained in the future.

A pro-forma consolidated balance sheet is not presented since the sale of 50%
of SCGC has already been reflected in Crown's historical consolidated balance
sheet at October 31, 1995.

F-30

<PAGE> 92

CROWN CASINO CORPORATION
PRO-FORMA CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE YEAR ENDED APRIL 30, 1995
UNAUDITED
(IN THOUSANDS, EXCEPT PER SHARE DATA)

<TABLE>
<CAPTION>
Historical
Crown
Year Ended Deconsolidate Pro-Forma
April 30, 1995 SCGC Adjustments Consolidated
-------------- ------------- ----------- ------------
<S> <C> <C> <C> <C>
Revenues: $ - $ -

Costs and expenses:
General and administrative 2,008 2,008
Gaming pre-opening and development 8,190 $ (7,677) 513
Site abandonment and contract buy-out 7,131 (7,131)
Depreciation and amortization 248 (111) 137
--------- --------- --------- ---------
17,577 14,919 2,658
--------- --------- --------- ---------
Other income (expense):
Interest expense (6,827) 6,810 (17)
Interest income 177 $ 2,300 (a) 2,477
Equity in loss of SCGC (9,451)(b) (9,451)
Gain on sale of 50% of SCGC 25,513 (c) 21,513
--------- --------- --------- ---------
(6,650) 6,810 14,362 14,522
--------- --------- --------- ---------
Income (loss) before taxes (24,227) 21,729 14,362 11,864

Provision (benefit) for income taxes (3,902) 2,827 9,049 (d) 7,974
--------- --------- --------- ---------

Net income (loss) $ (20,325) $ 18,902 $ 5,313 $ 3,890
========= ========= ========= =========

Income (loss) per share $ (2.01) $ .37
========= =========

Weighted average common and common
equivalent shares outstanding 10,104 10,576
========= =========
</TABLE>

See accompanying Notes to Pro-Forma Consolidated Statements of Operations.

F-31

<PAGE> 93

CROWN CASINO CORPORATION
PRO-FORMA CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE SIX MONTHS ENDED OCTOBER 31, 1995
UNAUDITED
(IN THOUSANDS, EXCEPT PER SHARE DATA)

<TABLE>
<CAPTION>
Historical
Crown
Six Months
Ended Deconsolidate Pro-Forma
October 31, 1995 SCGC Adjustments Consolidated
---------------- ------------- ----------- ------------
<S> <C> <C> <C> <C>
Revenues: $ - $ -

Costs and expenses:
General and administrative 1,238 1,238
Gaming pre-opening and development 663 $ (536) 127
Depreciation and amortization 72 (16) 56
--------- -------- -----------
1,973 (552) 1,421
--------- -------- -----------

Other income (expense):
Interest expense (966) 965 (1)
Interest income 1,084 95 (e) 1,179
Equity in loss of SCGC (1,586) (759)(f) (2,345)
Gain on sale of 50% of SCGC 21,513 21,513
--------- -------- ----- -----------
20,045 965 (664) 20,346
--------- -------- ----- -----------

Income (loss) before taxes 18,072 1,517 (664) 18,925

Provision (benefit) for income taxes 8,055 (36) (g) 8,019
--------- -------- ----- -----------
Net income (loss) $ 10,017 $ 1,517 $(628) $ 10,906
========= ======== ===== ===========

Income (loss) per share $ .82 $ .89
========= ===========

Weighted average comon and common
equivalent shares outstanding 12,263 12,263
========= ===========
</TABLE>

See accompanying Notes to Pro-Forma Consolidated Statements of Operations.

F-32

<PAGE> 94

CROWN CASINO CORPORATION
NOTES TO PRO-FORMA CONSOLIDATED STATEMENTS OF OPERATIONS
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)

The sale of a 50% interest in SCGC by Crown causes Crown's remaining 50%
interest in SCGC to be accounted for under the equity method of accounting as
opposed to consolidating such results. Accordingly, all revenues and expenses
of SCGC have been removed from Crown's historical consolidated financial
statements. For balance sheet purposes, Crown's remaining 50% interest in SCGC
is reflected in the "Investment in SCGC" account. Similarly, Crown's 50%
interest in the operations of SCGC have been reflected in the "Equity in loss
of SCGC" account in the accompanying Pro-Forma Statements of Operations.

TWELVE MONTH PERIOD

a - To record twelve months of interest income at a rate of 11.5% per annum on
the $20,000 LRGP Note received in the sale of the 50% interest in SCGC.

b - To record Crown's proportionate share of the equity in net loss of SCGC for
the twelve month period.

c - To record Crown's sale of a 50% interest in SCGC presumed to have occurred
at the beginning of the period.

d - To record the impact of income taxes on the adjustments described above
based upon a 38% effective income tax rate.

SIX MONTH PERIOD

e - To record interest income at a rate of 11.5% per annum on the $20,000 LRGP
Note received in the sale of the 50% interest in SCGC from the beginning of
the period to the point when interest on such LRGP Note has been included
in the historical financial statements.

f - To record Crown's proportionate share of the equity in net loss of SCGC
from the beginning of the period to June 8, 1995.

g - To record the impact of income taxes on the adjustments described above
based upon a 38% effective income tax rate.

F-33

<PAGE> 95

ST. CHARLES GAMING COMPANY, INC.
(A DEVELOPMENT STAGE ENTERPRISE)

FINANCIAL STATEMENTS

WITH REPORT OF INDEPENDENT AUDITORS

FOR THE YEAR ENDED APRIL 30, 1995 AND THE PERIODS

FROM JUNE 25, 1993 (ACQUISITION DATE) TO APRIL 30, 1994 AND 1995

F-34

<PAGE> 96

REPORT OF INDEPENDENT ACCOUNTANTS

TO THE STOCKHOLDERS
ST. CHARLES GAMING COMPANY, INC.:

We have audited the accompanying balance sheets of St. Charles Gaming Company,
Inc. (A Development Stage Enterprise) as of April 30, 1995 and 1994, and the
related statements of operations, stockholder's equity, and cash flows for the
year ended April 30, 1995 and the period from June 25, 1993 (acquisition date)
to April 30, 1994. These financial statements are the responsibility of the
Company's management. Our responsibility is to express an opinion on these
financial statements based on our audits.

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of St. Charles Gaming Company,
Inc. as of April 30, 1995 and 1994, and the results of its operations and its
cash flows for the year ended April 30, 1995 and the period from June 25, 1993
(acquisition date) to April 30, 1994, in conformity with generally accepted
accounting principles.

As discussed in Note D to these financial statements, in August 1995 the
Company and Louisiana Riverboat Gaming Partnership jointly issued $38.4 million
of Senior Secured Increasing Rate Notes. The Company believes it has failed to
meet certain financial covenants of the agreement governing the notes. The
Company and Louisiana Riverboat Gaming Partnership are conducting discussions
with the holder of the notes regarding modification of the related borrowing
agreements or obtaining waivers in order for the Company to maintain compliance
in the future. The ultimate outcome of these discussions cannot be presently
determined. Accordingly, no modifications have been made to the accompanying
financial statements regarding the possible effects of this uncertainty.

DALLAS, TEXAS COOPERS & LYBRAND L.L.P.

AUGUST 7, 1995, EXCEPT AS TO THE THIRD PARAGRAPH
OF NOTE D FOR WHICH THE DATE IS SEPTEMBER 21, 1995

F-35

<PAGE> 97

ST. CHARLES GAMING COMPANY, INC.
(A DEVELOPMENT STAGE ENTERPRISE)
BALANCE SHEETS

Assets
<TABLE>
<CAPTION>
April 30,
1995 1994
------ --------
<S> <C> <C>
Current assets:
Cash and cash equivalents $ 9,522 $ 23,027

Prepaid expenses 769,527 55,962
----------- -----------
Total current assets 779,049 78,989
----------- -----------

Property and equipment:
Land deposit and site costs 1,261,273

Construction in progress 1,539,627
Furniture, fixtures and equipment 7,618,268 606,571

Riverboat and barges 15,256,140 9,329,024
----------- -----------

24,414,035 11,196,868
Less accumulated depreciation (14,563) (3,234)
---------- -----------

24,399,472 11,193,634
----------- -----------
Other assets:
Debt issuance costs, net 345,963

Non-compete agreement, net 316,674 416,670

License costs 9,125,000 9,125,000
----------- -----------

9,787,637 9,541,670
----------- -----------
$34,966,158 $20,814,293
=========== ===========
Liabilities and Stockholder's Equity (Deficit)
Current liabilities:
Accounts payable $ 738,861

Accrued liabilities 768,834 $ 25,754

Advances from LRGP 2,079,083
</TABLE>

F-36

<PAGE> 98

<TABLE>
<S> <C> <C>
Advances from Crown 3,076,887 9,304,590

Capital lease obligations 2,871,104

Notes payable 26,511,603
------------

Total current liabilities 36,046,372 9,330,344
------------ -----------

Capital lease obligations, less current portion 2,265,641

Deferred income taxes 2,827,483

Commitments and contingencies

Stockholder's equity:
Common stock, no par value, 100,000 shares

authorized, issued and outstanding 5,600,000 5,600,000

Additional paid-in capital 10,900,000 4,000,000

Deficit accumulated during the development stage (19,845,855) (943,534)
------------ -----------

Total stockholder's equity (deficit) (3,345,855) 8,656,466
------------ -----------
$ 34,966,158 $20,814,293
============ ===========
</TABLE>

See accompanying notes to financial statements.

F-37

<PAGE> 99

ST. CHARLES GAMING COMPANY, INC.
(A DEVELOPMENT STAGE ENTERPRISE)
STATEMENTS OF OPERATIONS

<TABLE>
<CAPTION>
JUNE 25,1993 JUNE 25,1993
(ACQUISITION DATE) (ACQUISITION DATE)
TO YEAR ENDED TO
APRIL 30, 1995 APRIL 30, 1995 APRIL 30, 1995
-------------- -------------- --------------
<S> <C> <C> <C>
Revenues $ - $ - $ -
Costs and expenses:
Gaming pre-opening and development 8,858,313 7,676,762 1,181,551

Buy out of management contract 4,000,000 4,000,000

St. Charles Parish site abandonment 3,131,359 3,131,359

Depreciation and amortization 445,655 111,326 334,329

Interest expense 6,810,528 6,810,357 171
------------- ------------- -------------
23,245,855 21,729,804 1,516,051
------------- ------------- -------------

Loss before income taxes (23,245,855) (21,729,804) (1,516,051)

Benefit for income taxes (3,400,000) (2,827,483) (572,517)
------------- ------------- -------------
Net loss $ (19,845,855) $ (18,902,321) $ (943,534)
============= ============= =============
</TABLE>

See accompanying notes to financial statements.

F-38

<PAGE> 100

ST. CHARLES GAMING COMPANY, INC.
(A DEVELOPMENT STAGE ENTERPRISE)
STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>
JUNE 25, 1993 (ACQUISITION DATE)
TO YEAR ENDED TO
APRIL 30, 1995 APRIL 30, 1995 APRIL 30, 1994
-------------- -------------- ---------------
<S> <C> <C> <C> <C>
Operating activities:
Net loss $ (19,845,855) $ (18,902,321) $ (943,534)

Adjustments to reconcile net loss to
net cash used
by operating activities:
Depreciation and amortization 447,890 111,326 336,564

Amortization of debt issuance 3,376,392 3,376,392
costs/discount

Write-down of assets 3,131,359 3,131,359

Deferred income taxes (3,400,000) (2,827,483) (572,517)

Changes in assets and liabilities:
Prepaid expenses (894,933) (838,971) (55,962)

Accounts payable and accrued 1,366,905 1,416,151 (49,246)
liabilities ------------- ------------- ----------

Net cash used by operating (15,818,242) (14,533,547) (1,284,695)
------------- ------------- ----------

Investing activities:

Purchase of property and equipment (19,991,932) (8,795,064) (11,196,868)

Purchase of other assets (350,000) (350,000)
------------- ------------- ----------

Net cash used by investing (20,341,932) (8,795,064) (11,546,868)
activities ------------- ------------- ----------

Financing activities:
Capital contributions from Crown 7,022,655 3,522,655 3,500,000

Advances from (payments to) Crown 3,076,887 (6,227,703) 9,304,590

Advances from LRGP 2,079,083 2,079,083

Issuance of debt 32,700,000 32,700,000

Debt issuance costs (1,633,407) (1,633,407)

Payments of debt and capital lease (7,125,522) (7,125,522)
------------- ------------- ----------

Net cash provided by financing 36,119,696 23,315,106 12,804,590
activities ------------- ------------- ----------

</TABLE>

F-39

<PAGE> 101

<TABLE>
<S> <C> <C> <C>
Decrease in cash and cash equivalents (40,478) (13,505) (26,973)

Cash and cash equivalents at:
Beginning of period 50,000 23,027 50,000
-------- -------- --------
End of period $ 9,522 $ 9,522 $ 23,027
======== ======== ========
</TABLE>

See accompanying notes to financial statements.

F-40

<PAGE> 102

ST. CHARLES GAMING COMPANY, INC.
(A DEVELOPMENT STAGE ENTERPRISE)
STATEMENT OF STOCKHOLDER'S EQUITY (DEFICIT)
FOR THE PERIOD FROM JUNE 25, 1993 (ACQUISITION
DATE) TO APRIL 30, 1994 AND
THE YEAR ENDED APRIL 30, 1995

<TABLE>
<CAPTION>
ADDITIONAL STOCKHOLDER'S
COMMON PAID-IN ACCUMULATED EQUITY
STOCK CAPITAL DEFICIT (DEFICIT)
----- ------- ------- ---------
<S> <C> <C> <C> <C>
Balance at June 25,
1993 (before acquisition) $ 339,051 $ (60,061) $ 278,990
Acquisition
adjustments 5,260,949 $ 500,000 60,061 5,821,010
--------- ----------- ------------ ------------
Balance at June 25,
1993 (after acquisition) 5,600,000 500,000 6,100,000
Capital contribution 3,500,000 3,500,000

Net loss $ (943,534) (943,534)
--------- ----------- ------------ ------------
Balance at April 30,
1994 5,600,000 4,000,000 (943,534) 8,656,466

Capital contribution 6,900,000 6,900,000

Net loss (18,902,321) (18,902,321)
---------- ----------- ------------ ------------
Balance at April 30,
1995 $5,600,000 $10,900,000 $(19,845,855) $ (3,345,855)
========== =========== ============ ============
</TABLE>

See accompanying notes to financial statements.

F-41

<PAGE> 103

ST. CHARLES GAMING COMPANY, INC.
(A DEVELOPMENT STAGE ENTERPRISE)
NOTES TO FINANCIAL STATEMENTS

A -- ORGANIZATION AND DESCRIPTION OF BUSINESS

St. Charles Gaming Company, Inc., a Louisiana corporation, (the "Company") was
incorporated on January 18, 1993 for the purpose of operating a riverboat
gaming casino to be based in St. Charles Parish, Louisiana (near New Orleans).
In January 1995, the Company changed its riverboat berthing site from St.
Charles Parish to Calcasieu Parish, Louisiana (near Lake Charles). In July 1995
the Company commenced riverboat gaming operations.

Effective June 25, 1993, the Company was acquired by Crown Casino Corporation
("Crown"). Crown completed its acquisition of the Company at a price which
exceeded the book value of the net assets of the Company at the acquisition
date and accounted for the transaction using the purchase method of accounting.
Accordingly, Crown allocated the excess purchase price to the identifiable
assets acquired and liabilities assumed. This allocation established a new
basis for the Company's assets and liabilities which is reflected in the
accompanying financial statements. The principal result of the creation of a
new basis was an increase in license costs ($9,025,000), the recording of a
related deferred tax liability ($3,400,000), the addition of a non-compete
agreement ($500,000), and an increase in common stock and additional paid-
in-capital ($5,260,949 and $500,000, respectively). The amounts recorded as
common stock were attributed to the value of the Crown shares issued in the
transaction, while the amount recorded as additional paid-in-capital was
related to cash paid for the non-compete agreement. The Company has adopted the
fiscal year of Crown which ends on April 30.

Effective June 9, 1995, Crown sold a 50% interest in the Company to Louisiana
Riverboat Gaming Partnership ("LRGP"), a joint venture owned 50% by Casino
America, Inc. ("Casino America") and 50% by Louisiana Downs, Inc. LRGP owns the
Isle of Capri dockside riverboat casino in Bossier City, Louisiana.

As the Company's planned principal operations had not yet commenced as of April
30, 1995, the Company is reporting as a development stage enterprise. Since
inception, the Company's activities have focused on the pursuit of a riverboat
gaming license and other regulatory approvals, the raising of capital, the
construction of the riverboat casino and land based facilities, and the
development of the project in general. The Company has received substantial
financial support from Crown, LRGP and Casino America.

B -- SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

CASH AND CASH EQUIVALENTS
The Company considers cash and all highly liquid investments with an original
maturity of three months or less to be cash equivalents.

CASINO PRE-OPENING AND DEVELOPMENT COSTS
All casino pre-opening and development costs are expensed as incurred.
Pre-opening and development costs consist principally of personnel costs,
advertising, insurance, travel, consulting and professional fees.

PROPERTY AND EQUIPMENT
Property and equipment are stated at cost. Expenditures for additions, renewals
and improvements are capitalized. Interest costs during construction of
facilities are capitalized. Costs of repairs and maintenance are expensed as
incurred. Depreciation will be charged on gaming related equipment and
facilities beginning in July 1995 (commencement of gaming operations).
Depreciation is computed using the straight-line method over the following
estimated useful lives.

<TABLE>
<S> <C>
Furniture, fixtures and equipment 5 to 10 years

Riverboat and barges 15 years
</TABLE>

F-42

<PAGE> 104

NON-COMPETE AGREEMENT
In connection with the acquisition of the Company by Crown, the Company's
former owner agreed not to compete with the Company in the Louisiana market for
a period of five years. The non-compete agreement is stated at the cost
allocated by Crown to the agreement, net of accumulated amortization of
$183,326 and $83,330 as of April 30, 1995 and 1994, respectively. Amortization
is recorded using the straight-line method over a period of five years.

DEBT ISSUANCE COSTS
In connection with the issuance of the Senior Note and amendments to the
agreement governing the Senior Note, the Company incurred debt issuance costs
of $2,569,717. These costs have been amortized over the term of the Senior Note
using the effective interest method.

LICENSE COSTS
License costs principally represent the excess purchase price Crown paid in
acquiring the Company's net identifiable tangible assets. These costs will be
amortized beginning in July 1995 (commencement of operations) over the
remaining license term using the straight-line method. The Louisiana license
was issued on March 29, 1994 and has a five year initial term, which is subject
to renewal.

INCOME TAXES
The Company is included in Crown's consolidated federal income tax return. The
provision for income taxes in the accompanying financial statements is computed
on a separate return basis.

C -- LICENSING

The Company has received a certificate of final approval from the Louisiana
Riverboat Gaming Commission ("Gaming Commission") and a license with certain
conditions from the Louisiana Riverboat Gaming Enforcement Division of the
Office of State Police (the "Enforcement Division"). The conditions to the
license include (i) the Enforcement Division's approval of the operation of the
riverboat under an approved plan of security and internal controls for a period
of six months, (ii) the exercise of due diligence in the development of its
planned hotel in Calcasieu Parish and (iii) obtaining the Enforcement
Division's prior written approval to any modifications to its plans for such
hotel, including the abandonment of any portion of the project. Upon
satisfaction of the conditions to the license, a permanent license will be
issued by the Enforcement Division.

D -- DEBT

At April 30, 1995, the Company had the following debt:

<TABLE>
<S> <C>
Senior Note, net of unamortized discount of $118,397 $21,811,603
Notes payable to Casino America 4,700,000
-----------
$26,511,603
===========
</TABLE>

In June 1994, the Company issued a $28 million Senior Secured Increasing Rate
Note (the "Senior Note") to an institutional investor. The Senior Note was
initially due on June 3, 1995, but was subsequently extended to August 31, 1995
and carried a 12% coupon increasing 67 basis points each quarter up to a
maximum interest rate of 14%. The Senior Note was issued with a warrant to
purchase 508,414 shares of Crown's common stock. The proceeds from the private
placement were allocated between the Senior Note ($26.7 million) and the
warrant ($1.3 million) based upon the relative fair value of each of the
securities at the time of issuance. The amount allocated to the warrant has
been recorded as an increase in the advances from Crown account. The resulting
original issue discount has been amortized over the life of the Senior Note
using the effective interest method.

On August 7, 1995, SCGC and LRGP (collectively, the "Issuers") jointly issued
$38.4 million of Senior Secured Increasing Rate Notes (the "New Notes"), the
proceeds of which were used to retire the Senior Note ($21.9 million) and
certain LRGP obligations ($8.4 million). The balance of the proceeds will be
used in the development of the Calcasieu Parish project. The New Notes
initially become due on July

F-43

<PAGE> 105

27, 1996, but can be extended up to an additional twelve months at the option
of the Issuers provided no event of default has occurred and is continuing,
carry a 12% coupon increasing 25 basis points each quarter until maturity, and
provide for contingent interest beginning in May 1996 equal to 7.5% of the
Issuers' consolidated cash flow, as defined. The New Notes are collateralized
by substantially all the assets of the Issuers and contain covenants relating
to certain business, operational and financial matters including limitations on
(i) incurring additional debt, (ii) paying dividends, (iii) merging or
consolidating with others, (iv) changes in control, (v) capital expenditures,
(vi) investments and joint ventures, and (vii) the sale of assets, and
financial covenants pertaining to (a) minimum cash flow, (b) minimum fixed
charge ratio, (c) maximum leverage ratio, and (d) minimum net worth. Management
of the Company anticipates that the Company will fail to meet certain financial
covenants of the agreement governing the New Notes which, if not amended or
waived, would result in an event of default. The Issuers are currently having
discussions with the holder of the New Notes regarding the anticipated event of
default. While no assurance can be given that a satisfactory waiver or
amendment will be forthcoming, management of the Company expects the Issuers
will obtain such waiver or amendment to cure the anticipated event of default.

In March 1995, the Company issued promissory notes aggregating $4.7 million to
Casino America (the "Casino America Notes"). The Casino America Notes bear
interest at 11.5% per annum and are due three business days after the New Notes
are paid in full.

In May 1995, the Company issued a promissory note to LRGP equal to the lesser
of (i) $15 million, or (ii) the aggregate unpaid principal amount of advances
made by LRGP to the Company. The note bears interest at the same rate of
interest LRGP is charged on certain bank indebtedness, and is due three
business days after the New Notes are paid in full. The proceeds from the
issuance of the note has been used to develop the Calcasieu Parish project.

In addition, LRGP has made certain advances to the Company. Interest accrues on
such advances at the rate of 11.5% per annum. There is no stated maturity date
of such advances. The proceeds from the advances have been used to develop the
Calcasieu Parish project.

E -- INCOME TAXES

The components of the Company's income tax benefit for the year ended April 30,
1995 and the period from June 25, 1993 (acquisition date) to April 30, 1994 are
as follows:

<TABLE>
<CAPTION>
1995 1994
---- ----
<S> <C> <C>
Current $(2,827,483) $(572,517)
----------- ----------
Deferred $(2,827,483) $(572,517)
=========== =========
</TABLE>

The benefit for income taxes is different from the amount computed by applying
the statutory income tax rate to loss before income taxes for the year ended
April 30, 1995 and the period from June 25, 1993 (acquisition date) to April
30, 1994 for the following reasons:

<TABLE>
<CAPTION>
1995 1994
---- ----
<S> <C> <C>
Federal statutory rate (34)% (34)%

Valuation allowance 26
State income tax, net of federal benefit (5) (3)

Other (1)
--- ---

(13)% (38)%
=== ===
</TABLE>
Deferred income taxes reflect the net tax effects of temporary differences
between the carrying amounts of assets and liabilities for financial reporting
purposes and the amounts used for income tax purposes. Significant components
of the Company's deferred tax liabilities and assets were as follows:

F-44

<PAGE> 106

<TABLE>
<CAPTION>
APRIL 30, APRIL 30,
1995 1994
---- ----
<S> <C> <C>
Deferred tax liabilities:
License costs $ 3,442,030 $3,442,030

Other 1,807 1,752
----------- ----------

Total deferred tax liabilities 3,443,837 3,443,782
----------- ----------

Deferred tax assets:
Pre-opening expenses 6,149,2555 488,412

Net operating loss carryforward 2,719,000 127,887

Other 272,571
----------- ----------

Total deferred tax assets 9,140,826 616,299

Less valuation allowance 5,696,989 --
----------- ----------

Net deferred tax liability $ - $2,827,483
=========== ==========
</TABLE>

At April 30, 1995 the Company recorded a valuation allowance equal to the
excess of deferred tax assets over deferred tax liabilities because the
realization of such excess deferred tax assets was not reasonably assured. At
April 30, 1995 the Company had a net operating loss carryforward for federal
income tax purposes of approximately $2,836,000 which expires in 2009 and 2010.

F -- LEASES

In March and July 1995, the Company entered into agreements to lease the two
parcels of land that comprise the Calcasieu Parish riverboat casino site. The
leases have an initial term of five years with seven five year renewal options.
During the initial term, the leases require annual aggregate rental payments of
$850,000 in years one through four, and $1,000,000 in year five, payable
monthly. During the first renewal term, the rent will be increased annually by
the greater of (i) 5%, or (ii) the percentage increase in the average consumer
price index for Calcasieu Parish, Louisiana for the previous twelve month
period. During the second through seventh renewal terms, the lessor and the
Company will attempt to set the rent equal to 100% of the rent paid by other
riverboat gaming operators in Louisiana and Mississippi for comparable property
usages, or if no agreement can be made, then the parties will appoint real
estate appraisers to set the rent for such renewal term. However, in no event
shall the annual rent be less than $1.6 million during the fourth and all
subsequent renewal terms. In addition, the Company will pay all real estate
taxes, except for taxes due on the unimproved value of the property.

In addition to the Calcasieu Parish site leases, the Company has entered into
various operating leases for equipment and office facilities. The aggregate
rentals due under such leases were not significant at April 30, 1995. Rent
expense for the year ended April 30, 1995 and the period from June 25, 1993
(acquisition date) to April 30, 1994 was $61,539 and $15,483, respectively.

The Company has also entered into various capital leases for equipment. As of
April 30, 1995 future minimum lease payments under capital leases were as
follows:

<TABLE>
<CAPTION>
FISCAL YEAR AMOUNT
----------- ------
<S> <C>
1996 $3,287,194

1997 2,227,807

1998 84,420
</TABLE>

F-45

<PAGE> 107

<TABLE>
<S> <C>
1999 79,476

2000 6,623
-----------
Total minimum lease payments 5,685,520

Less amount representing interest (548,775)
-----------

Present value of future minimum lease payments 5,136,745

Less current portion (2,871,104)
-----------
Capital lease obligations, less current portion $ 2,265,641
===========
</TABLE>

G -- COMMITMENTS AND CONTINGENCIES

COMMITMENTS TO CALCASIEU PARISH

In January 1995, the Company made a commitment to Calcasieu Parish to provide
certain payments to the Parish above and beyond the statutory admissions tax.
The Company committed to a $1 million initial payment, which was paid upon the
opening of the casino, and a $1 million annual payment for as long as the
casino is operating at its site in the Parish, but in no event less than six
years. In June 1995 the Company and the Parish entered into a definitive
development agreement whereby, in consideration for the payments to be made by
the Company to the Parish, the Parish is required to cooperate with and provide
assistance to the Company in obtaining and maintaining necessary permits and
approvals to operate its riverboat gaming casino.

LITIGATION

On September 21, 1994, an action was filed against Crown and the Company in the
24th Judicial District Court for the Parish of Jefferson, Louisiana by Avondale
Industries, Inc. ("Avondale"). In this action, Avondale alleges that the
Company was contractually obligated to Avondale for the construction of the
Company's riverboat vessel based upon a letter of intent (allegedly reaffirming
a previous agreement entered into between Avondale and the Company). Avondale
alleges that the Company breached a duty to negotiate in good faith toward the
execution of a definitive vessel construction contract. Alternatively, Avondale
alleges that a separate, oral contract for the construction of the vessel
existed and that the Company committed unspecified unfair trade practices and
made certain misrepresentations. Avondale seeks unspecified damages including
"all lost profits and lost overhead" and attorneys fees. The Company intends to
vigorously contest liability in this matter.

H -- SITE CHANGE AND BUY OUT OF MANAGEMENT CONTRACT

In January 1995, the Company made the decision to abandon its site in St.
Charles Parish, Louisiana in favor of a new site in Calcasieu Parish,
Louisiana. As a result of this decision the Company recorded a charge of
approximately $3.1 million which represents the write-off of previously
capitalized costs specific to the St. Charles Parish site.

In March 1995, in connection with Crown's pending sale of a 50% interest in the
Company's common stock to LRGP, the Company bought out its existing casino
management agreement for $4 million and entered into a new management agreement
with Casino America. The Casino America management agreement has a term of 99
years and provides for a management fee of (i) 2% of "Revenues", as defined in
the agreement (generally net gaming revenues less gaming and admission taxes
plus all other operating revenues), plus (ii) 10% of "Net Operating Income", as
defined in the agreement, provided however, the total management fee shall not
exceed 4% of "Revenues."

I -- RELATED PARTY TRANSACTIONS

The Company had net advances from Crown of $3,076,887 and $9,304,590 as of
April 30, 1995 and 1994, respectively. The Crown advances are noninterest
bearing. Advances from Crown have been used to fund the construction of the
riverboat and support pre-opening and development activities. Included in net
advances at April 30, 1995 is $1,500,000 relating to Crown common stock issued

F-46

<PAGE> 108

as payment for expenses of the Company. In June 1995, in connection with
Crown's sale of a 50% interest in the Company's common stock to LRGP, Crown
contributed the balance in its advance account to the Company.

Advances from LRGP bear interest at 11.5% per annum and are due three business
days after the New Notes are paid in full.

The Company incurred legal costs of $269,771 and $122,289 for the year ended
April 30, 1995 and the period from June 25, 1993 (acquisition date) to April
30, 1994, respectively, from a law firm of which a director of the Company is a
partner. In March 1995, this director became an executive officer of Crown.

J -- SUPPLEMENTAL CASH FLOW INFORMATION

Supplemental cash flow disclosures for the year ended April 30, 1995 and the
period from June 25, 1993 (acquisition date) to April 30, 1994 are as follows:

<TABLE>
<CAPTION>
1995 1994
------ ----
<S> <C> <C>
Equipment acquired under capital leases $5,762,267

Interest paid, net of amount capitalized 6,115,878 $171

Non-cash capital contributions 3,377,345
</TABLE>

K -- SUBSEQUENT EVENTS

On June 9, 1995 Crown sold a 50% interest in the Company's common stock to LRGP
for approximately $22 million total consideration.

On July 29, 1995 the Company's riverboat casino commenced gaming operations in
Calcasieu Parish, Louisiana.

On August 7, 1995 SCGC and LRGP jointly issued $38.4 million of senior secured
increasing rate notes and retired the Company's Senior Note (see Note D).

F-47

<PAGE> 109

ST. CHARLES GAMING COMPANY, INC.
BALANCE SHEET
OCTOBER 31, 1995
(UNAUDITED)

<TABLE>
Assets
<S> <C>
Current assets:
Cash and cash equivalents $ 2,687,058
Receivables 280,416
Prepaid expenses 708,211
Inventories 108,300
Deferred tax asset 2,137,521
----------------
5,921,506
----------------
Total current assets

Property and equipment:
Land and improvements 2,801,184
Furniture, fixtures and equipment 10,535,776
Leasehold improvements 16,258,977
Riverboat and barges 18,600,271
Construction in progress 13,400,925
----------------
Less accumulated depreciation (926,927)
----------------
60,670,206
----------------
Other assets:
Debt issuance costs, net 542,833
Non-compete agreement, net 266,676
License costs, net 9,058,464
----------------
9,867,973
----------------
$ 76,459,685
================

Liabilities and Stockholders' Deficit
Current liabilities:
Accounts payable $ 6,237,426
Accrued liabilities 3,495,247
Capital lease obligations 3,069,559
Notes payable to related parties 36,055,805
Note payable 30,000,000
----------------
Total current liabilities 78,858,037
----------------
Capital lease obligations, less current portion 2,550,816
Commitments and contingency

Stockholders' deficit:
Common stock, no par value, 100,000 shares
authorized, issued and outstanding 5,600,000
Additional paid-in capital 13,985,388
Accumulated deficit (24,534,556)
----------------
Total stockholders' deficit (4,949,168)
----------------
$ 76,459,685
================
</TABLE>

See accompanying notes to unaudited financial statements.

F-48

<PAGE> 110

ST. CHARLES GAMING COMPANY, INC.
STATEMENTS OF OPERATIONS
(UNAUDITED)

<TABLE>
<Cation>
Six months ended October 31,
1995 1994
----------- ------------
<S> <C> <C>
Revenues:
Casino $17,007,743 $ -
Food, beverage and other 1,159,596
----------- -----------
18,167,339 -
----------- -----------
Costs and expenses:
Casino 13,277,306
Food, beverage and other 433,218
Gaming taxes 4,071,421
Gaming pre-opening and development 3,785,380 3,042,440
Depreciation and amortization 1,028,897 54,927
Interest expense 2,397,339 3,028,670
----------- -----------
24,993,561 6,126,037
----------- -----------

Loss before income taxes (6,826,222) (6,126,037)

Benefit for income taxes (2,137,521) (2,385,500)
----------- -----------

Net loss $(4,688,701) $(3,740,537)
=========== ===========

</TABLE>

See accompanying notes to unaudited financial statements

F-49

<PAGE> 111

ST. CHARLES GAMING COMPANY, INC.
STATEMENTS OF CASH FLOWS
(UNAUDITED)

<TABLE>
<CAPTION>
Six months ended October 31,
1995 1994
--------- ----------
<S> <C> <C>
Operating activities:
Net loss $ (4,688,701) $ (3,740,537)
Adjustments to reconcile net loss to net
cash used by operating activities:
Depreciation and amortization 1,028,896 54,927
Deferred income tax benefit (2,137,521) (2,385,500)
Amortization of debt issuance costs/discount 673,124 1,412,740
Changes in assets and liabilities:
Receivables (280,416)
Inventories (108,300)
Prepaid expenses 61,316 (572,418)
Accounts payable and accrued liabilities 8,224,978 985,519
------------ ------------

Net cash provided (used) by operating activities 2,773,376 (4,245,269)
------------ ------------

Investing activates:
Purchases of property and equipment (36,413,137) (6,861,215)
------------ ------------

Net cash used by investing activities (36,413,137) (6,861,215)
------------ ------------

Financing activities:
Advances from (repayments to) Crown 8,501 (8,130,710)
Issuance of debt 59,276,722 28,000,000
Debt issuance costs (751,597) (1,600,099)
Payments of debt (21,930,000) (6,500,000)
Payments of capital lease obligations (286,329) (548,140)
------------ ------------

Net cash provided by financing activities 36,317,297 11,221,051
------------ ------------

Increase in cash and cash equivalents 2,677,536 114,051
Cash and cash equivalents at: Beginning of period 9,522 23,027
------------ ------------

End of Period $ 2,687,058 $ 137,594
============ ============

</TABLE>

See accompanying notes to unaudited

F-50

<PAGE> 112

ST. CHARLES GAMING COMPANY, INC.
NOTES TO UNAUDITED FINANCIAL STATEMENTS
OCTOBER 31, 1995

A - ORGANIZATION AND DESCRIPTION OF BUSINESS

St. Charles Gaming Company, Inc., a Louisiana corporation, (the "Company") was
incorporated on January 18, 1993 for the purpose of operating a riverboat
gaming casino to be based in St. Charles Parish, Louisiana (near New Orleans).
In January 1995, the Company changed its riverboat berthing site from St.
Charles Parish to Calcasieu Parish, Louisiana (near Lake Charles). On July 29,
1995 the Company commenced riverboat gaming operations.

Effective June 9, 1995, Crown sold a 50% interest in the Company to Louisiana
Riverboat Gaming Partnership ("LRGP"), a joint venture owned 50% by Casino
America, Inc. ("Casino America") and 50% by Louisiana Downs, Inc. LRGP owns
the Isle of Capri(SM) dockside riverboat casino in Bossier City, Louisiana.

Since inception, the Company's activities have focused on the pursuit of a
riverboat gaming license and other regulatory approvals, the raising of
capital, the construction of the riverboat casino and land based facilities,
and the development of the project in general. The Company has received
substantial financial support from Crown, LRGP and Casino America.

The accompanying unaudited financial statements have been prepared in
accordance with generally accepted accounting principles for interim financial
information. Accordingly, they do not include all of the information and
footnotes required by generally accepted accounting principles for complete
financial statements. In the opinion of management, all adjustments,
consisting of normal recurring accruals, considered necessary for a fair
presentation have been included. Operating results for the period ended
October 31, 1995 are not necessarily indicative of the results that may be
expected for the year ended April 30, 1996. For further information, refer to
St. Charles Gaming Company, Inc.'s financial statements and footnotes for the
year ended April 30, 1995.

B - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

CASH AND CASH EQUIVALENTS
The Company considers cash and all highly liquid investments with an original
maturity of three months or less to be cash equivalents.

PROPERTY AND EQUIPMENT
Property and equipment are stated at cost. Expenditures for additions,
renewals and improvements are capitalized. Interest costs during construction
of facilities are capitalized. Costs of repairs and maintenance are expensed
as incurred. Depreciation has been charged on gaming related equipment and
facilities beginning in July 1995 (commencement of gaming operations).
Depreciation and amortization are computed using the straight-line method over
the following estimated useful lives.

F-51

<PAGE> 113

Furniture, fixtures and equipment 5 to 10 years
Riverboat and barges 25 years
Leasehold improvements 25 years

NON-COMPETE AGREEMENT
In connection with the acquisition of the Company by Crown, the Company's
former owner agreed not to compete with the Company in the Louisiana market for
a period of five years. The non-compete agreement is stated at the cost
allocated by Crown to the agreement, net of accumulated amortization of
$233,324 at October 31, 1995. Amortization is recorded using the straight-line
method over a period of five years.

DEBT ISSUANCE COSTS
In connection with the issuance of the New Notes, the Company incurred debt
issuance costs of $751,597. These costs are being amortized over the term of
the New Notes using the effective interest method.

LICENSE COSTS
License costs principally represent the excess purchase price Crown paid in
acquiring the Company's net identifiable tangible assets. These costs are being
amortized beginning in July 1995 (commencement of operations) over the
estimated useful life of the license including expected renewals (25 years).
The Louisiana license was issued on March 29, 1994 and has a five year initial
term, which is subject to renewal thereafter.

INCOME TAXES
For periods after June 8, 1995 the Company will file its own federal income tax
return. For periods prior to June 9, 1995 the Company's results are included
in Crown's consolidated federal income tax return. The provisions for income
taxes in the accompanying financial statements is computed on a separate return
basis. Deferred tax assets and liabilities are recognized for the future tax
consequences attributable to differences between the financial statement
carrying amounts of existing assets and liabilities and their respective tax
bases. Deferred tax assets and liabilities are measured using enacted tax
rates expected to apply to taxable income in the years in which those temporary
differences are expected to be recovered or settled.

C - DEBT

At October 31, 1995, the Company had the following debt:

<TABLE>
<S> <C>
New Notes $30,000,000
Notes payable to Casino America 4,700,000
Notes payable to LRGP 31,355,805
-----------

$66,055,805
===========
</TABLE>

On August 7, 1995, the Company and LRGP (collectively, the "Issuers") jointly
issued $38.4 million of Senior Secured Increasing Rate Notes (the "New Notes")
to the same institutional investor (the "Lender"), the proceeds of which were
used to retire the Senior Note ($21.9 million) and certain LRGP obligations
($8.4 million). The balance of the proceeds were used in the development of
the Calcasieu Parish project. The New Notes initially become due on July 27,
1996, but can be extended up to an additional twelve months at the option of
the Issuers provided no event of default has occurred and is continuing, carry
a 12% coupon increasing 25 basis points each quarter until maturity, and
provide for contingent interest beginning in May 1996 equal to 7.5% of the
Issuers' consolidated cash flow, as defined. The New Notes are collateralized
by substantially all the assets of the Issuers and contain covenants relating
to certain business, operational and financial matters including limitations on
(i) incurring additional debt, (ii) paying dividends, (iii) merging or
consolidating with others, (iv) changes in control, (v) capital expenditures,
(vi) investments and joint ventures, (vii) the sale of assets, and financial
covenants pertaining to (a) minimum cash flow, (b) minimum fixed charge ratio,
(c)

F-52

<PAGE> 114

maximum leverage ratio, and (d) minimum net worth. Events of default occurred
in September 1995 due to the failure to meet certain of the financial
covenants. SCGC and LRGP are presently negotiating with the Lender to obtain a
waiver of such defaults, but no waiver has yet been executed by the Lender. No
assurance can be given that a satisfactory waiver will be forthcoming. During
the pendency of an event of default, the Lender is entitled to accelerate the
maturity of the New Notes and to foreclose on the collateral securing the New
Notes. The Company believes (i) the collective cash flow of LRGP and SCGC is
more than sufficient to support the level of debt that the New Notes represent,
and (ii) the Lender is well collateralized. Accordingly, while no assurance
can be given, the Company does not expect that the Lender will accelerate the
maturity of the New Notes and seek to foreclose on the collateral.

In May 1995, the Company issued a promissory note to LRGP equal to the lesser
of (i) $15 million, or (ii) the aggregate unpaid principal amount of advances
made by LRGP to the Company. The note bears interest at the same rate of
interest LRGP is charged on certain bank indebtedness (prime plus 1%), and is
due three business days after the New Notes are paid in full. The proceeds
from the issuance of the note have been used to develop the Calcasieu Parish
project.

In October 1995, the Company issued a second promissory note to LRGP equal to
the lesser of (i) $25 million, or (ii) the aggregate unpaid principal amount of
advances made by LRGP to the Company. The note bears interest at 11.5% per
annum and is due in equal quarterly payments beginning three months after the
Company retires the New Notes. However, to the extent that the Company does
not have sufficient cash available for the payment of principal or interest,
the Company is only obligated to make such payments to the extent of available
cash. All principal and interest not previously paid will be due and payable
on November 1, 2000, or earlier if the New Notes are not paid at maturity. The
proceeds from the issuance of the note have been used to develop the Calcasieu
Parish project.

D - DEFERRED TAX ASSET

Effective June 9, 1995 (date of Crown's sale of 50% of the Company to LRGP),
the Company began recording a deferred tax asset to reflect the tax benefit of
net operating losses incurred from such date forward. The Company has
evaluated the realization of net operating loss carryforwards in light of
initial operating results and future projections, and has determined that the
realization of a deferred tax benefit from a portion of such net operating
losses is reasonably assured.

E - COMMITMENTS AND CONTINGENCY

LITIGATION
On September 21, 1994, an action was filed against Crown and the Company in the
24th Judicial District Court for the Parish of Jefferson, Louisiana by Avondale
Industries, Inc. ("Avondale"). In this action, Avondale alleges that Crown was
contractually obligated to Avondale for the construction of the Company's
riverboat vessel based upon a letter of intent (allegedly reaffirming a
previous agreement entered into between Avondale and the Company). Avondale
alleges that the Company breached a duty to negotiate in good faith toward the
execution of a definitive vessel construction contract. Alternatively,
Avondale alleges that a separate oral contract for the construction of the
vessel existed and that Crown and the Company committed unspecified unfair
trade practices and made certain misrepresentations. Avondale seeks
unspecified damages including "all lost profits and lost overhead" and
attorneys fees. Avondale has verbally stated its lost profits and lost
overhead amount to approximately $2.5 million. While no assurance can be given
as to the ultimate outcome of this litigation, management believes that this
litigation will not have a material adverse effect on the financial position or
the results of operations of the Company. Crown and the Company intend to
vigorously contest liability in this matter.

F-53

<PAGE> 115

CONSTRUCTION
At October 31, 1995 the Company was committed under various contracts relating
to construction of its land-based facilities and certain road improvements.
The total amount of non-cancelable commitments as of October 31, 1995 was
approximately $2-3 million.

F - SUPPLEMENTAL CASH FLOW INFORMATION

Supplemental cash flow disclosures for the six months ended October 31, 1995
and 1994 are as follows:

<TABLE>
<CAPTION>
1995 1994
---------- -----------
<S> <C> <C>
Equipment acquired under capital leases $ 769,959 $ 5,419,138

Interest paid, net of amount capitalized 143,627 1,064,652

Non-cash capital contributions/advances 3,085,388 2,871,035
</TABLE>

F-54

<PAGE> 116

================================================ ========================================

NO DEALER, SALES REPRESENTATIVE OR OTHER PERSON
HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR
TO MAKE ANY REPRESENTATIONS IN CONNECTION WITH 10,121,869 SHARES
THIS OFFERING OTHER THAN THOSE CONTAINED IN
THIS PROSPECTUS, AND, IF GIVEN OR MADE, SUCH
INFORMATION OR REPRESENTATIONS MUST NOT BE CROWN CASINO
RELIED UPON AS HAVING BEEN AUTHORIZED BY THE CORPORATION
COMPANY OR ANY UNDERWRITER. NEITHER THE
DELIVERY OF THIS PROSPECTUS NOR ANY SALE MADE COMMON STOCK
HEREUNDER SHALL, UNDER ANY CIRCUMSTANCES,
CREATE ANY IMPLICATION THAT THERE HAS BEEN NO
CHANGE IN THE AFFAIRS OF THE COMPANY SINCE THE
DATE HEREOF OR THAT THE INFORMATION CONTAINED
HEREIN IS CORRECT AS OF ANY TIME SUBSEQUENT TO ________________
THE DATE HEREOF. THIS PROSPECTUS DOES NOT
CONSTITUTE AN OFFER TO SELL, OR SOLICITATION OF PROSPECTUS
AN OFFER TO BUY, ANY SECURITIES OTHER THAN THE ________________
REGISTERED SECURITIES TO WHICH IT RELATES OR AN
OFFER TO, OR A SOLICITATION OF, ANY PERSON IN
ANY CIRCUMSTANCES IN WHICH SUCH AN OFFER OR
SOLICITATION IS UNLAWFUL.

__________

TABLE OF CONTENTS
Page
----
Available Information . . . . . . . . . . 2 December ____, 1995

Prospectus Summary . . . . . . . . . . . 3
The Company . . . . . . . . . . . . . . . 7
Risk Factors . . . . . . . . . . . . . . 7
Dividend Policy . . . . . . . . . . . . . 13
Use of Proceeds . . . . . . . . . . . . . 13
Market Price of and Dividends on
Common Stock . . . . . . . . . . . . . 14
Selected Financial Information . . . . . 15
Management's Discussion and Analysis
of Financial Condition and
Results of Operations . . . . . . . . 16
Business . . . . . . . . . . . . . . . . 20
Management . . . . . . . . . . . . . . . 38
Executive Compensation . . . . . . . . . 40
Certain Transactions . . . . . . . . . . 42
Change in Independent Auditors . . . . . 43
Security Ownership of Certain Beneficial
Owners and Management. . . . . . . . . 44
Selling Shareholders . . . . . . . . . . 46
Description of Capital Stock . . . . . . 56
Plan of Distribution . . . . . . . . . . 58
Legal Matters . . . . . . . . . . . . . . 59
Experts . . . . . . . . . . . . . . . . . 59
Financial Statements . . . . . . . . . . F-1

----------

================================================ ========================================
</TABLE>

<PAGE> 117

PART II
INFORMATION NOT REQUIRED IN PROSPECTUS

ITEM 13. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.

The following table sets forth all expenses expected to be incurred in
connection with the issuance and distribution of the securities being
registered. All fees shall be paid by the Registrant. All of the amounts
shown are estimated except for the registration fees of the Securities and
Exchange Commission:

<TABLE>
<S> <C>
SEC Registration Fee . . . . . . . . . . . . . . . . . . . . . . . . . $ 22,978

Blue Sky Fees and Expenses . . . . . . . . . . . . . . . . . . . . . . $ 15,000

Printing and Engraving Expenses . . . . . . . . . . . . . . . . . . . $ 20,000

Legal Fees and Expenses . . . . . . . . . . . . . . . . . . . . . . . $110,000
---------
Accounting Fees and Expenses . . . . . . . . . . . . . . . . . . . . . $ 45,000
---------
Miscellaneous . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 17,022
---------

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 230,000
=========
</TABLE>

ITEM 14. INDEMNIFICATION OF DIRECTORS AND OFFICERS.

The Company's Articles of Incorporation provide that a director shall
not be personally liable to the Company or its shareholders for monetary
damages for an act or omission in the director's capacity as a director, except
that such provision shall not eliminate or limit the liability of a director
for (a) a breach of the director's duty of loyalty to the Company or its
shareholders; (b) an act or omission not in good faith that constitutes a
breach of duty of the director to the Company or an act or omission that
involves intentional misconduct or a knowing violation of the law; (c) a
transaction from which the director received an improper benefit, whether or
not the benefit resulted from an action taken within the scope of the
director's office; or (d) an act or omission for which the liability of a
director is expressly provided by an applicable statute.

The Company's Articles of Incorporation also provide that if applicable
law is amended to authorize corporate action further eliminating or limiting
the liability of directors, then the liability of each director of the
Corporation shall be eliminated or limited to the fullest extent permitted by
applicable law, as amended.

Article XI of the Company's Bylaws provides that the Company shall
indemnify a director or officer who has been successful in the defense of any
proceeding to which he was a party or in defense of any claim, issue or matter
therein because he is or was a director or officer of the Company, against
reasonable expenses incurred by him in connection with such defense.

The Company's Bylaws also provide that the Company may indemnify or
obligate itself to indemnify an individual who was, is or is threatened to be
made a named defendant or respondent in a proceeding because he is or was a
director or officer against liability incurred in the proceeding if (a) acting
in his official capacity as a director or officer of the Company, he acted in a
manner he believed in good faith to be in the best interests of the Company,
(b) in all other cases, his conduct was at least not opposed to the Company's
best interests, and (c) in the case of any criminal proceeding, he had no
reasonable cause to believe his conduct was unlawful. The Company may not
indemnify a director or officer (a) in connection with a proceeding by or in
the right of the Company in which the director or officer was adjudged liable
to the corporation, or (b) in connection with any other proceeding in which he
was adjudged liable on the basis that personal benefit was improperly received
by him, whether or not the benefit resulted from an action taken in the
person's official capacity.

II-1
<PAGE> 118

ITEM 15. RECENT SALES OF UNREGISTERED SECURITIES.

Since November 30, 1992, the Company has not issued any securities
which are not registered pursuant to the federal Securities Act of 1933, except
the following:

On June 25, 1993, the Company acquired all of the issued and
outstanding common stock of St. Charles Gaming Company, Inc. in exchange for
1,200,000 shares of the Company's Common Stock being issued to the one
shareholder of St. Charles Gaming Company, Inc.

In July 1993, the Company issued 400,000 shares of Common Stock to 10
Westpark Corporation as a finder's fee for introducing the Company to St.
Charles Gaming Company, Inc.

In October 1993 and in April 1994, the Company issued an aggregate of
433,333 shares of Common Stock, and in July 1994 issued a warrant to purchase
100,000 shares of Common Stock to Kehl River Boats, Inc., all in partial
payment of the purchase price of the Casino pursuant to an agreement for such
purchase entered into in October 1993, as amended. In December 1994, upon
obtaining certain regulatory approvals, the Company issued an additional
623,334 shares of Common Stock for the balance of the purchase price.

On December 13, 1993, the Company acquired all of the issued and
outstanding common stock of Gaming Entertainment Management Services, Inc.
("GEMS") in exchange for 885,000 shares of the Company's Common Stock being
issued to the 44 shareholders of GEMS and one corporation as a finder's fee.

On January 5, 1994, in partial consideration for its services as
placement agent in connection with a proposed private placement of debt
securities which was never consummated, the Company granted Dabney/Resnick,
Inc. a warrant to purchase 80,440 shares of the Company's Common Stock. In
connection with introducing the Company to Dabney/Resnick, Inc., the Company
undertook to grant to one individual a warrant to purchase 50,000 shares of
Common Stock, which warrant was issued in October 1994.

On May 26, 1994, the Company concluded a private placement of 3,316,756
shares of its Common Stock to an aggregate of 182 accredited investors for an
aggregate purchase price of approximately $17.7 million. On March 18, 1994,
the Company issued a warrant to purchase 120,000 shares of its Common Stock to
Dabney/Resnick, Inc. and in April 1994, the Company issued warrants to purchase
an aggregate of 194,952 shares of Crown Common Stock to two individuals and one
corporation, all in consideration of their services as finders of purchasers of
Common Stock in the private placement.

In June 1994, the Company undertook to grant to one individual a
warrant to purchase 50,000 shares of Common Stock in consideration of services
to the Company in connection with the Company's efforts to obtain a gaming
license in the State of Illinois. Such warrant was issued in October 1994.

In connection with the sale by SCGC of a one-year note to an
institutional investor in June 1994, the Company issued to such investor a
warrant to purchase 508,414 shares of the Company's Common Stock.

II-2
<PAGE> 119

In March 1995, the Company issued 200,000 shares of Crown Common Stock
to Calcasieu Development Corporation ("CDC") in consideration for the mutual
release and termination of a previous agreement relating to certain land in the
city of Lake Charles, and CDC's cooperation in effecting SCGC's development of
its site in Calcasieu Parish.

In March and July 1995, the Company issued an aggregate of 100,000
shares of Crown Common Stock as partial consideration for consulting services
rendered by a single individual.

In February and March 1995, the Company completed the sale of 150,000
shares of Common Stock to certain foreign investors under the provisions of
Regulation S under the Securities Act.

In April 1995, the Company issued an aggregate of 75,000 shares of its
Common Stock to three individuals in connection with consulting services
performed by such individuals on behalf of the Company.

Except as otherwise noted, all issuances of securities described above
were made in reliance on the exemption from registration provided by Section
4(2) of the Securities Act of 1933 and/or Rules 505 and/or 506 of Regulation D
promulgated thereunder, as transactions by an issuer not involving a public
offering. The Company believes that all of the securities were acquired by the
recipients thereof for investment for their own accounts and with no view
toward the resale or distribution thereof. With respect to issuances made in
reliance only upon Section 4(2) of the Securities Act, each of the recipients
of such securities had a preexisting business relationship with the Company or
its principals, the offers and sales were made without any public solicitation
and the certificates bear restrictive legends. No underwriter was involved in
such transactions. In late 1993 and early 1994, the Company agreed to file a
registration statement covering the shares of certain purchasers in the private
placements, and was obligated to file such registration statement no later than
May 31, 1994. The Company therefore has filed this Registration Statement
covering all shares issued in the private placements. In each instance, the
offers and sales were made without any public solicitation, the certificates
bear restrictive legends and appropriate stop transfer instructions have been
or will be given to the transfer agent. No underwriter was involved in the
transactions.

ITEM 16. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.

The exhibits listed below are filed with or incorporated by reference
into this Registration Statement.
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION OF EXHIBITS
------ -----------------------
<S> <C>
2.1 Stock Purchase Agreement dated November 1, 1993 by and among Crown Casino Corporation ("Crown")
and Charles Golding Jr., Michael Bailey, William M. Dougal, Timothy M. Dougal, William Saetveit
and WDT Associates, Inc. (the "Principal Shareholders"). (11)

2.1.1 Form of Stock Purchase Agreement between Crown and certain other Gaming Entertainment
Management Services, Inc. ("GEMS") selling shareholders. (11)

2.1.2 First Amendment to Stock Purchase Agreement dated December 13, 1993 by and between Crown and
the Principal Shareholders. (11)

2.2 Amended Stock Purchase Agreement dated June 9, 1995 between Crown and Louisiana Riverboat
Gaming Partnership. (14)
</TABLE>

II-3
<PAGE> 120

<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION OF EXHIBITS
------ -----------------------
<S> <C>
2.3 Asset Purchase Agreement dated July 11, 1995 by and between Crown and SLT Realty Limited
Partnership and Hotel Investors Corporation of Nevada, Inc. (14)

3.1 Articles of Incorporation of Skylink America Incorporated (formerly SKAI, Inc.). (4)

3.1.1 Articles of Merger of Skylink America Incorporated and SKAI, Inc. filed with the Secretary of
State of the State of Alabama on September 29, 1989. (4)

3.1.2 Articles of Merger of Skylink America Incorporated and SKAI, Inc. filed with the Secretary of
State of the State of Texas on October 10, 1989. (4)

3.1.3 Articles of Amendment filed with the Secretary of State of the State of Texas on October 7,
1993. (12)

3.1.4 Articles of Amendment filed with the Secretary of State of the State of Texas on October 5,
1994. (12)

3.2 By-Laws dated August 24, 1989. (5)

4.1 Specimen stock certificate. (13)

4.2 Form of Registration Rights Agreement dated January 5, 1994 by and between Crown and Dabney-
Resnick, Inc. (12)

4.2.1 Form of Stock Purchase Warrant dated January 5, 1994 allowing Dabney-Resnick, Inc. to purchase
shares of common stock of Crown. (12)

4.3 Form of Registration Rights Agreement dated January 5, 1994 by and between Crown and Sun Life
Insurance Company of America, Inc. (12)

4.3.1 Form of Stock Purchase Warrant dated January 5, 1994 allowing Sun Life Insurance Company of
America, Inc. to purchase shares of common stock of Crown. (12)

4.4.1 Stock Purchase Warrant dated June 3, 1994, allowing Nomura Holding America, Inc. ("Nomura") to
purchase shares of Common Stock of Crown. (13)

4.4.2 Amendment to Stock Purchase Warrant dated as of December 3, 1994. (12)

4.5 Form of Stock Purchase Warrant dated as of April 15, 1994 allowing the following parties to
purchase shares of Common Stock of Crown: Daniel G. Goggin (38,990 shares), Gerard M. Jacobs
(77,981 shares), and The Hubbard Company, Inc. (77,981 shares). (13)

4.6 Form of Stock Purchase Warrant dated March 18, 1994 granting Dabney-Resnick, Inc. the right to
purchase 120,000 shares of Common Stock of Crown. (12)

4.7 Common Stock Purchase Warrant dated July 8, 1994 granting Kehl River Boats, Inc. the right to
purchase 100,000 shares of Common Stock of Crown. (12)

4.8 Common Stock Purchase Warrant dated October 6, 1994 granting Don Farris the right to purchase
50,000 shares of Common Stock of Crown. (12)

4.9 Common Stock Purchase Warrant dated June 2, 1994 granting Gerard M. Jacobs the right to
purchase 50,000 shares of Common Stock of Crown. (12)

4.10.1 Note Purchase Agreement dated as of July 20, 1995, by and among LRGP, SCGC, Nomura and First
National Bank of Commerce, as agent for Nomura ("First NBC"). (15)
</TABLE>

II-4
<PAGE> 121
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION OF EXHIBITS
------ -----------------------
<S> <C>
4.10.2 $38,400,000 Senior Secured Increasing Rate Note due July 27, 1996, issued by LRGP and SCGC to
Nomura. (15)

4.10.3 Pledge Agreement dated as of July 20, 1995 made by Crown in favor of First NBC. (15)

4.10.4 Crown Subordination Agreement dated as of July 20, 1995, among Crown, LRGP, Nomura and First
NBC. (15)

4.10.5 Security Agreement dated as of July 20, 1995, made by SCGC and LRGP in favor of First NBC. (15)

5.1 Opinion of Smith, Gambrell & Russell. (12)

10.1 Skylink America Incorporated 1986 Incentive Stock Option Plan. (2)

10.1.1 Amendment to Incentive Stock Option Plan adopted September 27, 1990. (6)

10.2 Lease Agreement dated April 2, 1991 between the Registrant and FDIC as Manager of the FSLIC
Resolution Fund as Receiver for First Gibraltar. (6)

10.3 Employment Agreement dated as of January 1, 1988 between Registrant and Edward R. McMurphy. (3)

10.3.1 Amendment to Employment Agreement dated February 25, 1991 between Registrant and Edward R.
McMurphy. (7)

10.4 Severance Agreement dated March 26, 1992 between the Registrant and Mark D. Slusser. (8)

10.5 Skylink America Incorporated 1991 Non-Qualified Stock Option Plan. (8)

10.6 Form of Indemnification Agreement between the Registrant and Edward R. McMurphy, Mark D.
Slusser, T.J. Falgout, III, David J. Douglas, J. David Simmons and Michael B. Cloud. (9)

10.7 LRGP $20,000,000 Promissory Note dated June 9, 1995 in favor of Crown. (14)

10.8 Shareholders Agreement dated June 9, 1995 by and between LRGP and Crown. (14)

10.9 Management Agreement dated March 2, 1995 by and between SCGC and Riverboat Services, Inc. (14)

10.10 Lease Agreement dated May 20, 1994 by and between IGT-North America and SCGC. (13)

10.10.1 Modification of Lease Agreement dated December 23, 1994 between IGT-North America and SCGC.
(12)

10.11 Teaming Agreement dated June 2, 1994 between Crown and Gerard M. Jacobs. (12)

10.12 Stock Option Agreement dated December 28, 1993 between the Company and Paul J. Murray, III and
Ray A. Davezak (as shareholders of Murzac, Inc.). (12)

10.12.1 First Amendment to Stock Option Agreement dated January 4, 1994. (12)

10.13 Compromise Agreement dated January 27, 1995 among Crown, SCGC and Century Casinos Management,
Inc. (12)
</TABLE>

II-5
<PAGE> 122

<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION OF EXHIBITS
------ -----------------------
<S> <C>
10.14 Development Agreement dated June 9, 1995 by and between SCGC and Calcasieu Parish Police Jury.
(14)

10.14.1 First Amendment to Development Agreement dated July 25, 1995 by and between SCGC and Calcasieu
Parish Police Jury. (14)

10.15 Lease (South Tract) dated March 24, 1995 by and among Port Resources, Inc. and CRU,. Inc.
(collectively, "Landlord"), SCGC and Crown. (14)

10.15.1 Amendment to Lease (South Tract) dated May 3, 1995 by and among Landlord, SCGC, Crown and LRGP.
(14)

10.15.2 Second Amendment to Lease (South Tract) dated May 16, 1995 by and among Landlord, SCGC, Crown
and LRGP. (14)

10.16 Lease (North Tract) dated July 17, 1995 by and among Landlord, SCGC and Crown. (15)

10.16.1 Amendment to Lease (North Tract) dated July 17, 1995 by and among Landlord, SCGC, Crown and
LRGP. (15)

10.16.2 Second Amendment to Lease (North Tract) dated July 25, 1995 by and among Landlord, SCGC, Crown
and LRGP. (15)

16.1 Letter from Ernst & Young LLP, the Company's former independent auditor, regarding the
Company's statements in its current report concerning the resignation of Ernst & Young LLP as
the Company's independent auditor. (12)

21.1 Subsidiaries of the Registrant. (1)

23.1 Consent of Ernst & Young LLP. (1)

23.2 Consent of Coopers & Lybrand L.L.P. (1)

23.3 Consent of Smith, Gambrell & Russell (contained in their opinion filed as Exhibit 5.1). (12)

24.1 Powers of Attorney (included on the original Signature Page to this Registration Statement).
(12)

24.2 Power of Attorney of Robert J. Kehl. (12)

24.3 Power of Attorney of Gerard M. Jacobs. (12)
</TABLE>
______________________

(1) Filed herewith.

(2) Previously filed as an Exhibit to the Registrant's Registration
Statement on Form 10, as amended (No. 0-14939) and incorporated herein
by reference.

(3) Previously filed as an Exhibit to the Registrant's Annual Report on Form
10-K for the year ended April 30, 1988 and incorporated herein by
reference.

(4) Previously filed as an Exhibit to the Registrant's Quarterly Report on
Form 10-Q for the quarter ended October 31, 1989 and incorporated herein
by reference.

II-6
<PAGE> 123

(5) Previously filed as an Exhibit to the Registrant's Annual Report on Form
10-K for the year ended April 30, 1990 and incorporated herein by
reference.

(6) Previously filed as an Exhibit to the Registrant's Annual Report on Form
10-K for the year ended April 30, 1991 and incorporated herein by
reference.

(7) Previously filed as an Exhibit to the Registrant's Quarterly Report on
Form 10-Q for the quarter ended July 31, 1991 and incorporated herein by
reference.

(8) Previously filed as an Exhibit to the Registrant's Annual Report on Form
10-K for the year ended April 30, 1992 and incorporated herein by
reference.

(9) Previously filed as an Exhibit to the Registrant's Quarterly Report on
Form 10-Q for the quarter ended July 31, 1993 and incorporated herein by
reference.

(10) Previously filed as an Exhibit to the Registrant's Current Report on
Form 8-K dated October 26, 1993 and incorporated herein by reference.

(11) Previously filed as an Exhibit to the Registrant's Current Report on
Form 8-K dated December 13, 1993 and incorporated herein by reference.

(12) Previously filed as an Exhibit to the Registrant's Registration
Statement on Form S-1, as amended, initially filed with the Securities
and Exchange Commission on May 31, 1994 (No. 33-79484) and incorporated
herein by reference.

(13) Previously filed as an Exhibit to the Registrant's Annual Report on Form
10-K for the year ended April 30, 1994 and incorporated herein by
reference.

(14) Previously filed as an Exhibit to the Registrant's Annual Report on Form
10-K for the year ended April 30, 1995 and incorporated herein by
reference.

(15) Previously filed as an Exhibit to the Registrant's Quarterly Report on
Form 10-Q for the quarter ended July 31, 1995 and incorporated herein by
reference.

(d) The financial statements and schedule filed as a part of this
Registration Statement are as follows:

1. Financial Statements. See Index to Financial Statements on page
F-1 of the Prospectus included in this Registration Statement.

2. Financial Statement Schedule

Schedule II - Valuation and Qualifying Accounts

ITEM 17. UNDERTAKINGS.

(a) The undersigned Registrant hereby undertakes:

(1) To file, during any period in which offers or sales are
being made, a post-effective amendment to this
Registration Statement:

(i) to include any prospectus required by section 10(a)(3)
of the Securities Act of 1933;

II-7
<PAGE> 124
(ii) to reflect in the prospectus any facts or events arising
after the effective date of the Registration Statement
(or the most recent post-effective amendment thereof)
which, individually or in the aggregate, represent a
fundamental change in the information set forth in the
Registration Statement. Notwithstanding the foregoing,
any increase or decrease in volume of securities offered
(if the total dollar value of securities offered would
not exceed that which was registered) and any deviation
from the low or high end of the estimated maximum
offering range may be reflected in the form of
prospectus filed with the Commission pursuant to Rule
424(b) if, in the aggregate, the changes in volume and
price represent no more than a 20% change in the maximum
aggregate offering price set forth in the "Calculation
of Registration Fee" table in the effective registration
statement;

(iii) to include any material information with respect to the
plan of distribution not previously disclosed in the
Registration Statement or any material changes to such
information in the Registration Statement.

(2) That, for the purpose of determining any liability under
the Securities Act of 1933, each such post-effective
amendment shall be deemed to be a new Registration
Statement relating to the securities offered therein,
and the offering of such securities at that time shall
be deemed to be the initial bona fide offering thereof.

(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which
remain unsold at the termination of the offering.

(b) Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and controlling
persons of the Registrant pursuant to the provisions referred to in Item 15, or
otherwise, the Registrant has been advised that in the opinion of the
Securities and Exchange Commission such indemnification is against public
policy as expressed in that Act and is, therefore, unenforceable. In the event
that a claim for indemnification against such liabilities (other than the
payment by the Registrant of expenses incurred or paid by a director, officer
or controlling person of the Registrant in the successful defense of any
action, suit or proceeding) is asserted by such director, officer or
controlling person in connection with the securities being registered, the
Registrant will, unless in the opinion of its counsel the matter has been
settled by controlling precedent, submit to a court of appropriate jurisdiction
the question whether such indemnification by it is against public policy as
expressed in the Act and will be governed by the final adjudication of such
issue.

1. For purposes of determining any liability under the Securities
Act of 1933, the information omitted from the form of Prospectus
filed as part of this Registration Statement in reliance upon
Rule 430A and contained in a form of Prospectus filed by the
Registrant pursuant to Rule 424(b)(1) or (4) or 497(h) under the
Securities Act of 1933 shall be deemed to be part of this
Registration Statement as of the time it was declared effective.

2. For the purpose of determining any liability under the
Securities Act of 1933, each post-effective amendment that
contains a form of Prospectus shall be deemed to be a new
Registration Statement relating to the securities offered
therein, and the offering of such securities at that time shall
be deemed to be the initial bona fide offering thereof.

II-8
<PAGE> 125

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, the
Registrant has duly caused this Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of Dallas,
Texas on December 27, 1995.

CROWN CASINO CORPORATION

<TABLE>
<S> <C>
By: *
--------------------------------------------------
Edward R. McMurphy
President and Chief Executive Officer
(principal executive officer)

By: /s/ Mark D. Slusser
--------------------------------------------------
Mark D. Slusser
Vice President Finance and Chief Financial Officer
(principal accounting officer)
</TABLE>

Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.

<TABLE>
<CAPTION>
Title Date
Signature ----- ----
<S> --------- <C> <C>
* Chairman of the Board, Chief Executive December 27, 1995
------------------------- Officer and President
Edward R. McMurphy

* Director December 27, 1995
-------------------------
Tilman J. Falgout, III

* Director December 27, 1995
-------------------------
David J. Douglas

* Director December 27, 1995
-------------------------
John David Simmons

* Director December 27, 1995
-------------------------
Gerald L. Adams

* Director December 27, 1995
-------------------------
Gerard M. Jacobs

* Director December 27, 1995
-------------------------
Robert J. Kehl

* By /s/ Mark D. Slusser
--------------------
Mark D. Slusser as Attorney-
in-Fact pursuant to Powers of
Attorney filed as part of this
Registration Statement
</TABLE>

II-9
<PAGE> 126

Crown Casino Corporation
(Formerly Skylink America Incorporated)
Schedule II - Valuation and Qualifying Accounts

<TABLE>
<CAPTION>
Balance at Charged to Balance at
Beginning of Costs and Charged to Deductions End of
Description Period Expenses Other Accounts Describe(1) Period
- -------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Year ended April 30, 1995:
Allowance for doubtful
accounts $200,000 $ 60,629 $139,371

Year ended April 30, 1994:
Allowance for doubtful
accounts $ 38,500 $218,510 $ 57,010 $200,000

Year ended April 30, 1993:
Allowance for doubtful
accounts $ 86,308 $ 16,374 $ 64,182 $ 38,500
</TABLE>

(1) Uncollectible accounts written off, net of recoveries.

II-10
<PAGE> 127

Exhibit Index

<TABLE>
<CAPTION>
Exhibit Sequential
Number Description of Exhibits Page No.
------ --------------------------------------------------------- -----------
<S> <C>
21.1 Subsidiaries of the Registrant

23.1 Consent of Ernst & Young LLP

23.2 Consents of Coopers & Lybrand L.L.P.

</TABLE>

<PAGE> 1

EXHIBIT 21.1

SUBSIDIARIES OF THE REGISTRANT

Calcasieu Gaming Corporation, L.L.C., a Louisiana corporation

Crown-Calcasieu Investment No. 1, Inc., a Louisiana corporation

Crown Calcasieu Investment No. 2, Inc., a Louisiana corporation

Crown Casino Nevada, Inc., a Nevada corporation

Crown Delaware Investments Corp., a Delaware corporation

Gaming Entertainment Management Services, Inc., a Nevada corporation

St. Charles Gaming Company, Inc. (50%), a Louisiana corporation

<PAGE> 1

EXHIBIT 23.1

CONSENT OF INDEPENDENT AUDITORS

We consent to the reference to our firm under the caption "Experts" and
elsewhere herein and to the use of our report dated June 11, 1993, in Post
Effective Amendment No. 7 to the Registration Statement (Form S-1, No.
33-79484) and the related Prospectus of Crown Casino Corporation (formerly
Skylink America Incorporated) for the registration of 10,121,869 shares of its
common stock.

Our audits also included the financial statement schedules of Crown Casino
Corporation (formerly Skylink America Incorporated) listed in Item 16(d) of
this Registration Statement. These schedules are the responsibility of the
Company's management. Our responsibility is to express an opinion based on our
audits. In our opinion, the financial statement schedules referred to above,
when considered in relation to the basic financial statements taken as a whole,
present fairly in all material respects the information set forth therein.

/s/Ernst & Young LLP

ERNST & YOUNG LLP

Dallas, Texas
December 12, 1995

<PAGE> 1

EXHIBIT 23.2

Consent of Independent Accountants

We consent to the inclusion in this registration statement on Form S-1 (File
No. 33-79484) of our reports dated August 7, 1995, on our audits of the
consolidated financial statements and financial statement schedule of Crown
Casino Corporation and subsidiaries. We also consent to the reference to our
firm under the caption "Experts."

/s/ Coopers & Lybrand L.L.P.

Dallas, Texas
December 12, 1995

<PAGE> 2

Consent of Independent Accountants

We consent to the inclusion in this registration statement on Form S-1 (File
No. 33-79484) of our report, which includes an explanatory paragraph relating
to the Company's anticipated violation of certain financial covenants related
to its Senior Notes, dated August 7, 1995, except as to the third paragraph of
Note D for which the date is September 21, 1995, on our audits of the financial
statements of St. Charles Gaming Company. We also consent to the reference to
our firm under the caption "Experts."

/s/ Coopers & Lybrand L.L.P.

Dallas, Texas
December 12, 1995