ALPHA HOSPITALITY CORP, S-3, 1997-11-07

ALPHA HOSPITALITY CORP
S-3, 1997-11-07
MISCELLANEOUS AMUSEMENT & RECREATION

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As filed with the Securities and Exchange Commission on November 7, 1997
File No. 33-64236

SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM S-3
REGISTRATION STATEMENT
Under
THE SECURITIES ACT OF 1933

Alpha Hospitality Corporation
(Exact name of Registrant as specified in its charter)

Delaware 13-3714474
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)

12 East 49th Street
New York, New York 10017
(212) 750-3500
(Address, including zip code, and telephone number,
including area code, of Registrant's
principal executive offices)

James A. Cutler, Chief Financial Officer
Alpha Hospitality Corporation
12 East 49th Street 10017
(212) 750-3500
(Name, address, including zip code, and telephone number,
including area code, of agent for service)

Copies to:

Craig S. Libson, Esq.
Parker Duryee Rosoff & Haft
529 Fifth Avenue
New York, New York 10017
(212) 599-0500

Approximate date of proposed sale to the public: From time to time
after the effective date of this Registration Statement.

If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. [ ]

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, other than securities offered only in connection with
dividend or interest reinvestment plans, 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. [ ]

<PAGE>

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

CALCULATION OF REGISTRATION FEE

<S> <C> <C> <C> <C> <C>
Title of Each Class Proposed Maximum Proposed Maximum
of Securities to be Amount to be Offering Price Aggregate Amount of
Registered Registered Per Share(1) Offering Price(1) Registration Fee

Common Stock, 21,000 $4.00 $84,000 $25.46
$0.01 par value

</TABLE>

(1) Estimated solely for the purpose of calculating the registration fee
pursuant to Rule 457(c) based upon the average of the high and low
sales prices of the Common Stock on The Nasdaq SmallCap Market on
November 3, 1997.

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>

21,000 Shares
ALPHA HOSPITALITY CORPORATION
Common Stock

The 21,000 shares of common stock, par value $.01 per share (the
"Common Stock"), to which this Prospectus relates (the "Shares") are being
offered, from time to time, on behalf of and for the account of a certain
stockholder (the "Selling Stockholder") of Alpha Hospitality Corporation (the
"Company") as identified herein under "Selling Stockholder." The Shares are
comprised of 21,000 shares which have been issued to the Selling Stockholder.
The distribution of the Shares by the Selling Stockholder, or by pledgees,
donees, distributees, transferees or other successors in interest, may be
affected from time to time by underwriters who may be selected by the Selling
Stockholder and/or broker-dealers, in one or more transactions (which may
involve crosses and block transactions) on The Nasdaq SmallCap Market or other
over-the-counter markets or, in special offerings, or secondary distributions
pursuant to and in accordance with rules of such over-the-counter markets, in
negotiated transactions or otherwise, at market prices prevailing at the time of
sale, at prices related to such prevailing market prices or at negotiated
prices. In connection with the distributions of the Shares or otherwise, the
Selling Stockholder may enter into hedging or option transactions with
broker-dealers and may sell Shares short and deliver the Shares to close out
such short positions. The Company has agreed to indemnify the Selling
Stockholder, underwriters who may be selected by the Selling Stockholder and
certain other persons against certain liabilities, including liabilities under
the Securities Act of 1933, as amended (the "Securities Act"). See "Selling
Stockholder" and "Plan of Distribution."

These securities involve a high degree of risk. See "Risk Factors"
commencing on page 13.

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.

The Company has agreed to pay all expenses of registration in
connection with this offering but will not receive any of the proceeds from the
sale of the Shares being offered hereby. All brokerage commissions and other
similar expenses incurred by the Selling Stockholder will be borne by such
Selling Stockholder. The aggregate proceeds to the Selling Stockholder from the
sale of the Shares will be the purchase price of the Shares sold, less the
aggregate brokerage commissions and underwriters' discounts, if any, and other
expenses of issuance and distribution not borne by the Company.

The Common Stock being offered hereby by the Selling Stockholder has
not been registered for sale under the securities laws of any state or
jurisdiction as of the date of this Prospectus. Brokers or dealers effecting
transactions in the Common Stock should confirm the registration thereof under
the securities law of the state in which such transactions occur, or the
existence of any exemption from registration.

The Common Stock is listed for trading on The Nasdaq SmallCap Market.
On November 5, 1997, the closing bid price of the Common Stock as reported by
The Nasdaq SmallCap Market was $3 15/16 per share.

The date of this Prospectus is _________,1997.

<PAGE>

TABLE OF CONTENTS

Page

AVAILABLE INFORMATION..................................................3

INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE........................3

THE COMPANY............................................................4

RISK FACTORS..........................................................13

USE OF PROCEEDS.......................................................19

PLAN OF DISTRIBUTION..................................................20

LEGAL MATTERS.........................................................21

EXPERTS .............................................................21

SIGNATURES............................................................24

<PAGE>

No dealer, salesperson or other person has been authorized to give any
information or to make any representations not contained in this Prospectus or
incorporated by reference to this Prospectus, and, if given or made, such
information or representations must not be relied upon as having been authorized
by the Company or by the Selling Stockholder. This Prospectus does not
constitute an offer to sell, or a solicitation of an offer to buy, the
securities offered hereby in any jurisdiction to any person to whom it is
unlawful to make such offer or solicitation in such jurisdiction. The delivery
of this Prospectus at any time does not imply that the information contained
herein is correct as of any time subsequent to its date.

AVAILABLE INFORMATION

The Company is subject to the informational requirements of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"). In accordance
therewith, the Company 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 facilities maintained by the Commission at Room 1024, 450 Fifth
Street, N.W., Washington, D.C. 20549 and at the Regional Offices of the
Commission at 7 World Trade Center, New York, New York 10048 and Northwestern
Atrium Center, 500 West Madison Street, Chicago, Illinois 60621. Copies of such
material may be obtained from the Public Reference Section of the Commission at
prescribed rates by writing to the Commission at 450 Fifth Street, N.W.,
Washington, D.C. 20549 or from the Commission's web site at http://www.sec.gov.
The Common Stock is traded on The Nasdaq SmallCap Market and reports and other
information concerning the Company may be inspected and copied at The Nasdaq
Stock Market, Inc. at 1735 K Street, N.W., Washington, DC 20006.

The Company has filed with the Commission a Registration Statement on
Form S-3 under the Securities Act with respect to the Common Stock offered
hereby. This Prospectus does not contain all the information set forth in the
Registration Statement, certain parts of which are omitted in accordance with
the rules and regulations of the Commission. For further information, reference
is made to the Registration Statement, copies of which can be obtained from the
Public Reference Section of the Commission at Room 1024, 450 Fifth Street, N.W.,
Washington, D.C. 20549, upon payment of the fees prescribed by the Commission.

INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE

Incorporated herein by reference are the following documents filed by
the Company with the Commission (File No. 0-24640) under the Exchange Act:

(a) The Company's Annual Report on Form 10K and Form 10-K/A for
its fiscal year ended December 31, 1996;

(b) The Company's Quarterly Report on Form 10-Q for its fiscal
quarters ended March 31, 1997, and June 30, 1997; and

(d) The Company's Report on Form 8-K dated March 12, 1997.

All documents filed by the Company with the Commission pursuant to
Sections 13, 14 and 15(d) of the Exchange Act subsequent hereto, but prior to
the termination of this offering, shall be deemed to be incorporated herein by
reference and to be a part hereof from their respective dates of filing. Any
statement contained herein or in a document incorporated or deemed to be
incorporated by reference herein shall be deemed to be modified or superseded
for purposes of this Prospectus to the extent that a statement which also is or
is deemed to be incorporated by reference herein modifies or supersedes such
statement. Any statement so modified or superseded shall not be deemed, except
as so modified or superseded, to constitute a part of this Prospectus.

<PAGE>

The Company will provide without charge to each person, including any
beneficial owners, to whom a copy of this Prospectus is delivered, upon the
written and oral request of any such person, a copy of any or all of the
documents referred to above which have been incorporated into this Prospectus by
reference (other than the exhibits to such documents). Requests for such copies
should be directed to James A. Cutler, Chief Financial Officer, 12 East 49th
Street, New York, New York 10017; telephone number (212) 750-3500.

THE COMPANY

General

Alpha Hospitality Corporation (the "Company"), through its six
subsidiaries, is engaged in (i) the ownership and operation of a gaming vessel,
the Bayou Caddy's Jubilee Casino (the "Jubilee Casino"), located in Greenville,
Mississippi, which is operated by the Company's subsidiary Alpha Gulf Coast,
Inc. ("Alpha Gulf"), and (ii) the pursuit of gaming licenses for additional
casinos in various states (which is accomplished through the Company's
subsidiaries Alpha Missouri, Inc. ("Alpha Missouri"), Alpha Monticello, Inc.
("Alpha Monticello"), Alpha Rising Sun, Inc. ("Alpha Rising Sun"), Jubilation
Lakeshore, Inc. ("Jubilation Lakeshore") and Alpha St. Regis, Inc. ("Alpha St.
Regis"). The principal executive offices of the Company are located at 12 East
49th Street, New York, New York 10017, and its telephone number is (212) 750-
3500.

From September 1993 through December 1996, the Company, through its
former subsidiary, Alpha Hotel Management Company, Inc. (Alpha Hotel), provided
management services to hotels and motels owned by third-parties. Additionally,
from December 1995 to July 16, 1996, the Company, through its subsidiary
Jubilation Lakeshore, formerly known as the Cotton Club of Greenville Inc. (the
"Cotton Club"), operated a second gaming vessel, the Jubilation Casino.

The Company was incorporated in Delaware on March 19, 1993; Alpha Gulf
was incorporated in Delaware on May 4, 1993; Jubilation Lakeshore was
incorporated in Mississippi on December 8, 1992; Alpha Missouri was incorporated
in Delaware on March 17, 1995; Alpha Monticello was incorporated in Delaware on
May 30, 1996; Alpha Rising Sun was incorporated in Delaware on August 6, 1993;
Alpha St. Regis was incorporated in Delaware on June 24, 1994; and Alpha Hotel
was incorporated in Delaware on March 19, 1993. The Company's principal
executive offices are located at 12 East 49th Street, New York, New York, 10017
and its telephone number is 212-750-3500.

Casino Operations

Current Operations

The Company currently operates the Jubilee Casino in Greenville,
Mississippi. In addition, from December 1995 through July 16, 1996, the Company
operated a casino located in Lakeshore, Mississippi. Although management is
satisfied with the results of operation of the Jubilee Casino, the Jubilation
Casino (located in Lakeshore,Mississippi) continued to operate at a deficit. As
a result, in July 1996,management began to implement its plans to close the
Jubilation Casino during August 1996. On July 16, 1996, operation of the
Jubilation Casino was suspended in compliance with a directive of the
Mississippi Gaming Commission (the "Mississippi Commission") which asserted that
the working capital of the Jubilation Casino was not sufficient. The Mississippi
Commission required that the Jubilation Casino's working capital be increased.
This working capital requirement was reviewed by Jubilation Lakeshore in light
of its previously announced plan to close the Jubilation Casino during August
1996 and the costs which would be incurred to reopen the Jubilation Casino.
Based on this review, Jubilation Lakeshore decided not to reopen the Jubilation
Casino. See "The Jubilation Casino."

The Jubilation Casino. Upon the acquisition of the Cotton Club casino,
this casino was renamed the Jubilation Casino and relocated from Greenville to
Lakeshore, Mississippi, where it reopened on December 21, 1995. Management
believed that the smaller Jubilation Casino could adequately service the
existing Lakeshore market with substantially reduced cost of operations.
However, based upon the Jubilation Casino's limited capacity, remote location
and the increasing casino development in the Biloxi and Gulfport markets (which
have proven more attractive to casino patrons),

<PAGE>

the Jubilation Casino was unable to overcome operating deficits. As a result, in
July 1996 management began to implement its plans to close the Jubilation Casino
during August 1996. On July 16, 1996, operation of the Jubilation Casino was
suspended in compliance with a directive of the Mississippi Commission which
asserted that the working capital of the Jubilation Casino was not sufficient.
The Mississippi Commission required that the Jubilation Casino's working capital
be increased. This working capital requirement was reviewed by Jubilation
Lakeshore in light of its previously announced plan to close the Jubilation
Casino during August 1996 and the costs which would be incurred to reopen the
Jubilation Casino. Based on this review, Jubilation Lakeshore decided not to
reopen the Jubilation Casino.

In connection with the plan to close the Jubilation Casino, management
believes it has taken all appropriate action required by federal law with
respect to providing notice of such closing to its employees. In connection with
the closing of the Jubilation Casino, management updated its assessment of the
realizability of the leasehold improvements and related assets of the Jubilation
Casino. Since this would have resulted in an impairment loss of approximately
$14,507,000 and stockholders' equity below the requirements for continued
listing of the Company's securities on NASDAQ, the Company accepted proposals by
Bryanston Group Inc. ("Bryanston") and BP to convert approximately $19,165,000
and $1,222,000, respectively, of debt to 693,905 and 44,258 shares of Series B
Preferred Stock.

The Jubilee Casino. The Jubilee Casino, located in Greenville,
Mississippi, is owned and operated by the Company's wholly-owned subsidiary
Alpha Gulf. On May 14, 1993, pursuant to an asset purchase agreement among Alpha
Gulf, B.C. of Mississippi, Inc. ("B.C.") (formerly known as Bayou Caddy, Inc.),
and certain shareholders of B.C., the Company acquired B.C.'s leasehold
interests under certain lease agreements and certain other assets incidental to
the development and ownership of the Jubilee Casino. The Company proceeded with
this acquisition because it gave the Company the opportunity to enter the casino
business in Lakeshore, Mississippi, the original site of the Jubilee Casino.
Moreover, B.C. had already initiated the process of obtaining requisite
approvals for casino operation in Lakeshore, thereby expediting the Company's
ability to conduct casino operations in Mississippi.

The Company initiated the Jubilee Casino's gaming operations on January
12, 1994, subsequent to its construction on a marine vessel in 1993, which
construction received the requisite approvals from the U.S. Army Corps of
Engineers and the Mississippi Department of Natural Resources. Prior to the
initiation of the Jubilee Casino's gaming operations, the Company applied for
and received the required license renewals and approvals from the Mississippi
Commission. See "Government Regulation - Licensing Mississippi."

Following the Cotton Club Acquisition, the Company transferred the
Jubilee Casino from Lakeshore to Greenville. The Jubilee Casino reopened in
Greenville on November 17, 1995. The movement of the Jubilee Casino to
Greenville increased the capacity at Greenville and brought an upscale facility
to the Greenville market. Management believed that the relocation of the Jubilee
Casino to Greenville was an appropriate action designed to increase the return
on the Company's gaming assets in Mississippi.

The Jubilee Casino has 844 slot machines and 29 table games. In
addition to its gaming activities, the Jubilee Casino includes a 175 seat
buffet, a 350 seat showroom, a 98 seat restaurant and parking to accommodate 950
customer vehicles. In January 1996, the Company completed renovation of its
leased restaurant facility at Greenville in order to give customers a dining
alternative, offering fine dining in an elegant setting. Management believes
that the Jubilee Casino, which offers an attractive casino environment and
significant casino capacity, will continue to at least capture its fair market
share of the Greenville gaming market.

Future Operation - Alpha Gulf

In April 1997, Alpha Gulf received approval from the Mississippi Commission
for its infrastructure investment requirement to build and operate a hotel on
property adjacent to its Greenville casino location. Alpha Greenville Hotel,
Inc., a newly formed, wholly-owned subsidiary of the Company, entered into a
long term lease with the Board of Mississippi Levee Commissioners to lease
property including historical landmark buildings for the development of a
forty-one key single room and suite hotel. Management believes that this hotel
will add a new dimension to the Company's casino patron experience and will be
an added amenity to the Company's player development program. The total cost of
this project in $3.2 million. Although the permanent source of financing for
this project has not been identified at this time, Alpha Greenville Hotel has
received interim financing from Bryanston to begin construction.

Development Activities

New York. In March 1994, the Company entered into a joint venture
agreement relating to the operation and development of a gaming facility located
on the reservation of the St. Regis Mohawk Tribe of Hogansburg, New York (the
"Tribe"). The Company does not intend to proceed with the project at Hogansburg,
New York since the Company and the Tribe are exploring a more suitable
arrangement relating to the development of a casino in Sullivan County, New
York, as discussed below.

5
<PAGE>
On January 19, 1996, the Company, through its subsidiary, Alpha St.
Regis, entered into a memorandum of understanding with Catskill Development,
L.L.C. ("Catskill") regarding the development and management of a casino to be
built adjacent to the Monticello Raceway in Sullivan County, New York. This
memorandum of understanding was assigned to Alpha Monticello. The development
and management of this casino will be undertaken by Mohawk Management L.L.C., a
company of which the Company's subsidiary Alpha Monticello owns 50%. Alpha
Monticello will be responsible for the day-to-day operations of the casino. It
is intended that the casino will be owned by the Tribe and will be located on
land to be placed in trust for the benefit of the Tribe. The Monticello Raceway
is located 90 miles from New York City. The projected casino would be the
closest casino to the metropolitan New York City area.

The casino project is subject to approval by the U.S. Department of
the Interior and its Bureau of Indian Affairs, the National Indian Gaming
Commission and the Governor of the State of New York. It is contemplated that
the Company will be required to contribute an amount preliminarily estimated at
$250,000 toward the design, architectural and other costs of developing plans
for the casino. Under the memorandum of understanding, Catskill and the Company
commit to enter into a definitive agreement on the terms established in the
memorandum. Bryanston is a 25% member of Catskill.

Catskill purchased the 225 acre Monticello Raceway in June 1996.
Catskill plans to continue Monticello's racing program and to explore other
development at the site in addition to the St. Regis Mohawk Casino.

On August 2, 1996, Mohawk Management L.L.C. executed an agreement with the
Tribe for the management of the proposed casino. The Tribe has submitted the
agreement to the National Indian Gaming Commission for its approval.

There can be no assurance that the project will receive all requisite
approvals.

Missouri. In February 1995, the City of Louisiana, Missouri,
designated the Company as the exclusive designee to enter into negotiations with
the city to develop a riverboat gaming facility at the city's Mississippi River
shoreline. The City of Louisiana is currently competing with other cities in
Missouri for the next gaming license to be granted in the state. In the event
that the state gaming authorities select Louisiana, Missouri as the locality to
receive the next gaming license to be granted, the Company, as the city's
exclusive designee, would be the recipient of such license. Consequently, the
Company's wholly-owned subsidiary Alpha Missouri entered into a lease agreement
with the City of Louisiana relating to certain city-owned riverfront property
required for the project. Except for certain preliminary payments to the city,
the Company's obligation under the lease are conditioned on the grant a gaming
license by the Missouri gaming authorities.

Alpha Missouri has applications pending for site approval and a gaming
license with respect to thdevelopment of a riverboat gaming facility in
Louisiana, Missouri. Although existing law in Missouri does not restrict the
number of licenses the Missouri Gaming Commission may issue, the Commission has
effectively placed a moratorium on any new licenses in the Louisiana market. The
Company believes that such restriction will remain in place until a market
assessment of the existing approved license can be made.

The City of Louisiana is located approximately 60 miles north of
metropolitan St. Louis and 70 miles from Springfield, Illinois, that state's
capital.

The Company anticipates that it will provide a gaming vessel with a
capacity of approximately 750 gaming positions. The project cost is presently
expected to be approximately $30 million.

Hotel Operations

As of December 31, 1996, to reduce the Company's debts to Bryanston,
the Company sold 100% of the stock of its subsidiary, Alpha Hotel Management
Company, Inc., to Bryanston Group, Inc. for consideration of $3,000,000.

Marketing

The Company concentrates its sales, marketing and promotional
activities for the Jubilee Casino in its principal target market of a 50 mile
radius around the casino. The target markets are reached through a combination
of billboard, radio, television and newspaper advertising, and direct mail.
Also, casino brochures are placed in tourist information areas, local and
regional hotels, restaurants and bars.

The Company has developed an in-house mailing list in excess of 130,000
casino customers. These customers are made up of table game players and "Slot
Club" members. Table game customers are identified through the casino's
marketing representative and their play is monitored by the casino's marketing
representatives and their play is monitored to evaluate whether the customer
warrant complimentary services provided by the casino. The award of
complimentary services is consistent with standard industry practices and is
based upon a customer's duration of play and average amount wagered. The "Slot
Club" is an ongoing promotion where members are issued cards and accumulate
points based on the amount of their play. Such points are redeemable for food,
beverages or merchandise. Tournaments for blackjack, craps and poker are held,
along with other special events and promotions.

The Company seeks to maintain and upgrade its gaming vessel so that it
is competitive in the industry. With the closing of the Jubilation Casino the
Company has discontinued its marketing activities relating to the Jubilation
Casino. See "Casino Operations - Current Operations."

Government Regulation

General

The Company's ownership and operation of its properties are subject to
regulation by federal, state and local governmental and regulatory authorities,
including regulation relating to environmental protection. While the Company has
not been the subject of any complaints or other formal or informal proceedings
alleging any violations of government regulations, no assurance can be given
that the Company is, or in the future will be, able to comply with, or continue
to comply with current or future governmental regulations in every jurisdiction
in which it conducts or will conduct its business operations without substantial
cost or interruption of its operations, or that any present or future federal,
state or local regulations may not restrict the Company's present and possible
future activities. In the event that the Company is unable to comply with any
such requirements, the Company could be subject to sanctions, which could have a
materially adverse effect upon the Company's business. See "Government
Regulation - General," and "Casino Operations - Current Operations."
7
<PAGE>
Licensing

The gaming industry is highly regulated by each of the states in which
gaming is legal. The regulations vary on a state by state basis, but generally
require the operator, each owner of a substantial interest (usually 5% or more)
in the operator, members of the Board of Directors, each officer and all key
personnel found suitable, and be approved, by the applicable governing body. The
failure of any present, or future, person required to be approved to be, and
remain qualified to hold a license could result in the loss of license.

Mississippi

General. The ownership and operation of casino facilities in
Mississippi are subject to extensive state and local regulation, primarily the
licensing and regulatory control of the Mississippi Commission and the
Mississippi State Tax Commission (collectively, the "Mississippi Authorities").

The laws, regulations and supervisory procedures of Mississippi and the
Mississippi Commission seek to: (i) prevent unsavory or unsuitable persons from
having any direct or indirect involvement with gaming at any time or in any
capacity; (ii) establish and maintain responsible accounting practices and
procedures; (iii) maintain effective control over the financial practices of
licensees, including establishing minimum procedures for internal fiscal affairs
and safeguarding of assets and revenues, providing reliable record keeping and
making periodic reports to the Mississippi Authorities; (iv) prevent cheating
and fraudulent practices; (v) provide a source of state and local revenues
through taxation and licensing fees; and (vi) ensure that gaming licensees, to
the extent practicable, employ Mississippi residents. The regulations are
subject to amendment and to extensive interpretation by the Mississippi
Commission in view of their recent adoption. Changes in Mississippi law or
regulations may limit or otherwise materially affect the types of gaming that
may be conducted and could have an adverse effect on the Company and the
Company's Mississippi gaming operations.

The Mississippi Act provides for legalized dockside gaming at the
discretion of the 14 counties that either border the Mississippi Gulf Coast or
the Mississippi River, but only if the voters in such counties have not voted to
prohibit gaming in that county. As of January 1, 1996, dockside gaming was
permissible in 9 of the 14 eligible counties in the state and gaming operations
had commenced in Adams, Hancock, Harrison, Tunica, Washington and Warren
counties. The law permits unlimited stakes gaming on permanently moored vessels
on a 24-hour basis and does not restrict the percentage of space that may be
utilized for gaming. There are no limitations on the number of gaming licenses
that may be issued in Mississippi.

Registration and Licensing. The Company, a registered publicly-traded
holding company under the Mississippi Act, is required periodically to submit
detailed financial and operating reports to the Mississippi Authorities and to
furnish any other information that the Mississippi Authorities may require. The
Company and any subsidiary of the Company that operates a casino in Mississippi
(a "Gaming Subsidiary"), is subject to the licensing and regulatory control of
the Mississippi Commission. If the Company is unable to continue to satisfy the
registration requirements of the Mississippi Act, the Company and its Gaming
Subsidiaries cannot own or operate gaming facilities in Mississippi. Each Gaming
Subsidiary must obtain gaming licenses from the Mississippi Commission to
operate casinos in Mississippi. A gaming license is issued by the Mississippi
Commission subject to certain conditions, including continued compliance with
all applicable state laws and regulations and physical inspection of casinos
prior to opening.

Gaming licenses are not transferable, are initially issued for a
two-year period and are subject to periodic renewal. No person may receive any
percentage of profits from a gaming subsidiary of a holding company without
first obtaining licenses and approvals from the Mississippi Commission.

Licensing of Officers, Directors and Employees. Officers, directors and
certain key employees of the Company and its gaming subsidiaries must be found
suitable or be licensed by the Mississippi Commission, and employees associated
with gaming must obtain work permits that are subject to immediate suspension
under certain circumstances. In addition, any person having a material
relationship or involvement with the Company may be required to be found
suitable or be licensed, in which case those persons must pay the costs and fees
associated with such investigation.

8
<PAGE>

The Mississippi Commission may deny an application for a license for any
cause that it deems reasonable. Changes in licensed positions must be reported
to the Mississippi Commission. In addition to its authority to deny an
application for a license, the Mississippi Commission has jurisdiction to
disapprove a change in corporate officers. The Mississippi Commission has the
power to require any gaming subsidiary and the Company to suspend or dismiss
officers, directors and other key employees or sever relationships with other
persons who refuse to file appropriate applications or whom the authorities find
unsuitable to act in such capacities.

Investigation of Holders of Securities and Others. Mississippi law
requires any person who acquires beneficial ownership of more than 5% of the
Common Stock to report the acquisition to the Mississippi Commission, and such
person may be required to be found suitable. Also, any person who becomes a
beneficial owner of more than 10% of the Common Stock, as reported in filings
under the Exchange Act, must apply for a finding of suitability by the
Mississippi Commission and must pay the costs and fees that the Mississippi
Commission incurs in conducting the investigation. The Mississippi Commission
has generally exercised its discretion to require a finding of suitability of
any beneficial owner of more than 5% of a company's stock. If a stockholder 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. Representatives of the Mississippi Commission have indicated that
institutional investors may only be required to file summary information in lieu
of a suitability finding.

Any person who fails or refuses to apply for a finding of suitability
or a license within 30 days after being ordered to do so by the Mississippi
Commission may be found unsuitable. Any person found unsuitable and who holds,
directly or indirectly, any beneficial ownership of the securities of the
Company beyond such time as the Mississippi Commission prescribes, may be guilty
of a misdemeanor. The Company is subject to disciplinary action if, after
receiving notice that a person is unsuitable to be a stockholder or to have any
other relationship with the Company or its gaming subsidiaries, the Company: (i)
pays the unsuitable person any dividend or other distribution upon the voting
securities of the Company; (ii) recognizes the exercise, directly or indirectly,
of any voting rights conferred by securities held by the unsuitable person;
(iii) pays the unsuitable person any remuneration in any form for services
rendered or otherwise, except in certain limited and specific circumstances; or
(iv) fails to pursue all lawful efforts to require the unsuitable person to
divest himself of the securities, including, if necessary, the immediate
purchase of the securities for cash at a fair market value.

The Company may be required to disclose to the Mississippi Commission
upon request the identities of the holders of any debt securities. In addition,
the Mississippi Commission under the Mississippi Act may, in its discretion, (i)
require disclosure of holders of debt securities of corporations registered with
the Mississippi Commission, (ii) investigate such holders, and (iii) require
such holders to be found suitable to own such debt securities. Although the
Mississippi Commission generally does not require the individual holders of
obligations such as notes to be investigated and found suitable, the Mississippi
Commission retains the discretion to do so for any reason, including but not
limited to a default, or where the holder of the debt instrument exercises a
material influence over the gaming operations of the entity in question. Any
holder of debt securities required to apply for a finding of suitability must
pay all investigative fees and costs of the Mississippi Commission in connection
with such an investigation.

Required Records. The Company must maintain a current stock ledger in
Mississippi that the Mississippi Commission may examine at any time. If any
securities of the Company 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 Mississippi Commission. A failure to make such disclosure may be grounds
for finding the record holder unsuitable. The Company must also render maximum
assistance in determining the identity of the beneficial owner.

The Mississippi Act requires that the certificates representing
securities of a publicly-traded corporation (as defined in the Mississippi Act)
bear a legend to the general effect that such securities are subject to the
Mississippi Act and the regulations of the Mississippi Commission. The
Mississippi Commission has the power to impose additional restrictions on the
holders of the Company's securities at any time.

9
<PAGE>

Approval of Corporate Matters and Foreign Gaming Operations.
Substantially all loans, leases, sales of securities and similar financing
transactions by a gaming subsidiary must be reported to or approved by the
Mississippi Commission. Changes in control of the Company through merger,
consolidation, acquisition of assets, management or consulting agreements or any
form of takeover cannot occur without the prior approval of the Mississippi
Commission.

The Mississippi legislature has declared that some corporate
acquisitions opposed by management, repurchases of voting securities and other
takeover defense tactics that affect corporate gaming licensees in Mississippi
and corporations whose stock is publicly-traded that are affiliated with those
licensees, may be injurious to stable and productive corporate gaming. The
Mississippi Commission has established a regulatory scheme to ameliorate the
potentially adverse effects of these business practices upon Mississippi's
gaming industry and to further Mississippi's policy to: (i) assure the financial
stability of corporate gaming operators and their affiliates; (ii) preserve the
beneficial aspects of conducting business in the corporate form; and (iii)
promote a neutral environment for the orderly governance of corporate affairs.
Approvals are, in certain circumstances, required from the Mississippi
Commission before the Company may make exceptional repurchases of voting
securities above the current market price of its Common Stock (commonly called
"greenmail") or before a corporate acquisition opposed by management may be
consummated. Mississippi's gaming regulations will also require prior approval
by the Mississippi Commission if the Company adopts a plan of recapitalization
proposed by its Board of Directors opposing a tender offer made directly to the
stockholder for the purpose of acquiring control of the Company.

Neither the Company nor any subsidiary may engage in gaming activities
in Mississippi while also conducting gaming operations outside of Mississippi
without approval of the Mississippi Commission. The Mississippi Commission may
require determinations that, among other things, there are means for the
Mississippi Authorities to have access to information concerning the
out-of-state gaming operations of the Company and its affiliates.

Sanctions. If the Mississippi Commission were to decide that a gaming
subsidiary had violated a gaming law or regulation, the Mississippi Commission
could limit, condition, suspend or revoke the license of the gaming subsidiary.
In addition, the gaming subsidiary, the Company and the persons involved could
be subject to substantial fines for each separate violation. Because of such
violation, the Mississippi Commission could appoint a supervisor to operate the
casino facilities, and, under certain circumstances, earnings generated during
the supervisor's appointment (except the reasonable rental value of the casino
facilities) could be forfeited to the State of Mississippi. Limitations,
conditioning or suspension of any gaming license or the appointment of a
supervisor could (and revocation of any gaming license would) materially
adversely affect the Company's and the gaming subsidiary's gaming operations.

On July 16, 1996, operation of the Jubilation Casino was suspended in
compliance with a directive of the Mississippi Commission which raised certain
issues with regard to the operation of the Jubilation Casino and asserted that
the working capital available to the Jubilation Casino was not sufficient. The
Mississippi Commission required that the Jubilation Casino's working capital be
increased. This working capital requirement was reviewed by Jubilation Lakeshore
in light of its previously announced plan to close the Jubilation Casino during
August 1996 and the costs which would be incurred to reopen the Jubilation
Casino. Based on this review, Jubilation Lakeshore decided not to reopen the
Jubilation Casino. The Company does not believe that the issues raised by the
Mississippi Commission regarding the operation of the Jubilation Casino will
adversely affect the license to operate the Jubilee Casino since the Jubilee
Casino is operating in compliance with applicable regulations, including
regulations relating to issues raised by the Mississippi Commission regarding
the operation of the Jubilation Casino. There can be no assurance, however, that
the issues raised by the Mississippi Commission will not adversely affect the
license, or the renewal of the license, to operate the Jubilee Casino, or any
future licenses for which applications may be submitted in Mississippi.

Fees and Taxes. License fees and taxes, computed in various ways
depending on the type of gaming involved, are payable to the State of
Mississippi and to the counties and cities in which a gaming subsidiary's
operations will be conducted. Depending upon the particular fee or tax involved,
these fees and taxes are payable either monthly, quarterly or annually and are
based upon (i) a percentage of the gross gaming revenues received by the casino
operation, (ii) the number of slot machines operated by the casino or (iii) the
number of tables games operated by the casino. The license

10
<PAGE>

fee payable to the State of Mississippi based upon "gaming receipts" (generally
defined as gross receipts less payouts to customers as winnings) and equals 4%
of gaming receipts of $50,000 or less per month, 6% of gaming receipts over
$50,000 and less than $134,000 per month, and 8% of gaming receipts over $
34,000. The foregoing license fees are allowed as a credit against the Company's
Mississippi income tax liability for the year paid.

Missouri and New York

Missouri law and the Federal Indian Gaming Law (as it relates to the
Company's proposed operation in New York), each provide for a comprehensive,
detailed scheme for the control of gaming operations in the state and the
issuance of licenses for gaming, both to gaming facilities and to persons
involved in certain gaming related activities. With respect to the Company's
compact with the Tribe relating to the proposed casino to be built in Sullivan
County, New York, the State of New York has provided for regulation of Indian
gaming casinos through the New York State Racing and Wagering Board. Each of the
supervising governmental agencies is authorized to promulgate rules and
regulations applicable to the administration of gaming related laws.

In connection with its proposed operations in Missouri, the Company has
commenced the application and approval process with the Missouri Gaming
Commission. The Company does not anticipate receiving a final determination with
respect to its license application within the next twelve months. In connection
with its proposed operations in New York, the required documentation has been
filed with the National Indian Gaming Commission.

Competition

There are currently 19 casinos located on the Mississippi River. In the
Greenville market, the Company's Jubilee Casino competes with the Las Vegas
Casino and the Lighthouse Point Casino, which opened in November 1996. The
opening of the Lighthouse Point Casino resulted in a decrease in the gaming
revenues of the Jubilee Casino which is expected to be corrected as the
marketing programs of the new Lighthouse Point Casino help to increase the total
Greenville market. Since the opening of the new casino, the Jubilee Casino's
fair share of the market, based on the number of player positions in the market,
has improved. The Company believes that the Jubilee Casino is well-positioned to
compete successfully with the two other casinos in the Greenville market.
Approximately 60 miles south of Jubilee Casino is Vicksburg. Vicksburg has four
casinos: the Isle of Capri, Harrahs Vicksburg, Ameristar, and Rainbow Casino.
Approximately 110 miles south of Jubilee Casino is Natchez with the Lady Luck
Natchez Casino. Approximately 90 miles north of the Jubilee Casino is Coahoma
County with the Lady Luck Coahoma Casino. Tunica County is approximately 180
miles north of the Jubilee Casino and has ten casinos - Harrahs (2 casinos),
Sams Town, Fitzgeralds, Sheraton, Hollywood Casino, Circus Circus, Horseshoe
Casino, Grand Casino and Ballys. Since casinos within a 60 or 180 mile radius of
the Jubilee Casino are not considered by the Company to be within its
competitive market, the Company does not deem the casinos in Vicksburg, Coahoma
County, or Tunica County to be among its competitors.

The Company has remained competitive in the markets affecting the
Jubilee Casino by keeping its gaming vessel well-maintained and by offering
superior accommodations, entertainment programs and special events. In addition,
the Company's advertising and marketing efforts have focused on maintaining the
Company's presence in its market.

Although the Jubilee Casino has remained competitive, the Jubilation
Casino, located on the Mississippi Gulf Coast, was unable to compete
satisfactory with the major casino developments in the Biloxi and Gulfport
markets. This resulted in management's decision to close the Jubilation Casino
during August 1996. See "Casino Operations - Current Operations - The Jubilation
Casino."

Seasonal Fluctuations

The Results of the casinos' operations have been seasonal, with the
greatest activity occurring during the fair weather months of May through
September. Consequently, the Company's operating results during the calendar
quarters ending in December and March are not as profitable as those quarters
ending in June and September, and losses

11
<PAGE>

result from time to time. The seasonal nature of the casinos' operations
increases the risk that natural disasters or the loss of the casinos for any
other reason during May through September period would have a material adverse
effect on the Company's financial condition and results of operations.

Personnel

In connection with its casino operations, as of June 30, 1997, the
Company employed approximately 571 employees, of which 510 are full-time
employees. Management considers its employment relations to be satisfactory. In
connection with the closing of the Jubilation Casino and pursuant to the Workers
Adjustment and Retraining Notification Act, the Company provided the 320
employees of the Jubilation Casino with notice of its plans to close the
Jubilation Casino within 60 days of the anticipated closing date, as required
under the act. Therefore, management believes it has taken all appropriate
action required by federal law with respect to providing notice of the closing
of the Jubilation Casino to the employees of the Jubilation Casino.

Properties

The Company maintains its executive office at leased premises located
at 12 East 49th Street, New York, New York, 10017. This lease expires December
31, 2004.
<TABLE>
<CAPTION>

Casino Operations

Location Principle Use Approximate Area Owned/Leased Expires
- - - -------- ------------- ---------------- ------------ -------
Hancock County Sign location, 3 acres Lease 4/30/03 with option
Waveland, MS warehousing and to purchase
parking
Hancock County Accounting 1 acre Leased 6/30/98 with option
Waveland, MS office to extend 3 five
year terms and right
of first refusal to
purchase
Washington Customer 2 acres Owned --
County parking
Greenville, MS
Washington Mooring site of 1,000 waterfront feet Leased 12/29/97 with
County casino vessel option to extend 3
Greenville, MS five year terms
Washington Accounting 10,000 square feet Leased 12/1/98 with option
County offices and to extend two years
Greenville, MS warehouse

</TABLE>

Legal Proceedings

In January 1996, the Company was named as a defendant in an action
brought in the Circuit Court of Hinds County, Mississippi (Amos vs Alpha Gulf
Coast, Inc.; Batiste vs Alpha Gulf Coast, Inc.; Dycre vs Alpha Gulf Coast, Inc.;
Johnston vs Alpha Gulf Coast, Inc.; Rainey vs Alpha Gulf Coast, Inc.). Based on
the theory of "liquor liability"

12
<PAGE>

for the service of alcohol to a customer, Plaintiffs alleged that on January 16,
1995, a vehicle operated by Mr. Amos collided with a vehicle negligently
operated by Mr. Rainey, an individual that was served alcoholic beverages by the
Company. Plaintiffs alleged that they suffered personal injuries and seek
compensatory damages aggregating $17.1 million and punitive damages aggregating
$37.5 million. The ultimate outcome of this litigation cannot presently be
determined as this case is presently in the early phases of discovery.
Accordingly, no provision for liability to the Company that may result upon
adjudication has been made in the accompanying consolidated financial
statements. The Company believes that the risk referred to in this paragraph is
adequately covered by insurance.

In September 1996, the Company and Alpha Gulf were named as defendants
in an action brought in the Circuit Court of Hancock County, Mississippi
(Durward Dunn, Inc. vs. Alpha Hospitality Corporation; Durward Dunn, Inc. vs.
Alpha Gulf Coast, Inc.) for alleged failure to make payments pursuant to a
construction contract. Plaintiff seeks actual and compensatory damages of
approximately $1,200,000. The consolidated financial statements include a
provision for the liability of $928,000 for this contract at December 31, 1996.
The ultimate outcome of this litigation cannot presently be determined as this
case is presently in the early phases of discovery. Accordingly, no provision
for liability to the Company, except as mentioned above, that may result upon
adjudication has been made in the accompanying consolidated financial
statements.

In December 1996, the Company, Jubilation Lakeshore and Alpha Gulf were
named as defendants in an action brought in the United States District Court for
the Southern District of New York (Bally Gaming, Inc. v. Alpha Hospitality
Corp., Jubilation Lakeshore, Inc. and Alpha Gulf Coast, Inc.) for allegedly
engaging in conduct which would impair the collateral held as security for
certain financial obligations. Such conduct includes the failure to pay certain
monetary obligations unrelated to the obligations secured by the collateral.
Plaintiffs seek specific performance of particular actions defendants believe
are necessary to protect the collateral that secures the financial obligations,
unspecified damages and attorney's fees, among other things. The Company
believes the action is without merit and plans to move to dismiss this action.
On November 3, 1997, the court granted the Company's motion to dismiss the
complaint for failure to state a claim. The Court, however, allowed Bally
Gaming, Inc. one week in which to amend its complaint.

RISK FACTORS

An investment in the securities offered hereby involves a high degree
of risk. Prospective investors should consider carefully the following risks and
speculative factors, among other things, in making a decision concerning the
purchase of securities offered hereby:

1. History of Losses; Explanatory Paragraph in Independent Auditor's Report.

Since its inception, the Company has suffered significant losses from
operations. The Company had net losses of approximately $22,815,000 in the
fiscal year ended December 31, 1996, $17,993,000 in the fiscal year ended
December 31, 1995, and $9,901,000 in the fiscal year ended December 31, 1994. As
of December 31, 1996 the Company had an accumulated deficit of approximately
$55,414,000. As a result of the material uncertainties relating to the Company's
ability to continue as a going concern and fund its operation, the Company's
independent auditors have included an explanatory paragraph in their report on
the Company's consolidated financial statements addressing such uncertainties.

2. Closing of the Jubilation Casino; Possible Inability to Meet Obligations to
Creditors.

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<PAGE>

Mississippi Commission required that the Jubilation Casinos working capital
be increased. The working capital requirement was reviewed by Jubilation
Lakeshore in light of its previously announced plan to close the Jubilation
Casino during August 1996 and the costs which would be incurred to reopen the
Jubilation Casino. Based on this review, Jubilation Lakeshore decided not to
reopen the Jubilation Casino. The Company has had preliminary discussions with
secured creditors of the Jubilation with regard to the liquidation of its
secured obligations. There can be no assurance that the Jubilation is able to
repay its obligations to its creditors. In the event that the Jubilation is
unable to repay its obligations to its creditors, the Jubilation may file a
voluntary petition under the Bankruptcy Code, or creditors may initiate
proceedings against the Jubilation thereby forcing the Jubilation into
bankruptcy. In either event, creditors may assert claims against the Company
seeking satisfaction of the Jubilation's debts. While the Company is not liable
for the Jubilation's debts, there can be no assurance that creditors of the
Jubilation will not assert claims against the Company, or that the Company will
be able to successfully defend against any such claims. See "Casino Operations--
The Jubilation Casino."

3. Government Regulation.

General

The Company's ownership and operation of its properties are subject to
regulation by federal, state and local governmental and regulatory authorities,
including regulation relating to environmental protection. While the Company has
not been the subject of any complaints or other formal or informal proceedings
alleging any violations of government regulations, no assurance can be given
that the Company is, or in the future will be, able to comply with, or continue
to comply with current or future governmental regulations in every jurisdiction
in which it conducts or will conduct its business operations without substantial
cost or interruption of its operations, or that any present or future federal,
state or local regulations may not restrict the Company's present and possible
future activities. In the event that the Company is unable to comply with any
such requirements, the Company could be subject to sanctions, which could have a
materially adverse effect upon the Company's business. See "Government
Regulation -- General," and "Casino Operations -- Current Operations."

Licensing: Loss of Gaming License

The failure of any present, or future, person required to be approved
to be, and remain qualified to hold a license could result in the loss of
license. In almost all instances, the governing body has broad discretion in
granting, renewing and revoking licenses. The loss or suspension of any license
would have a material adverse effect on the Company. The requirement that the
governmental body approve substantial shareholders, directors, officers and key
personnel could discourage, delay or prevent a change in control of the Company.

The operations of the Jubilee Casino and the Jubilation Casino are
regulated by the Mississippi Commission. In October 1995, the Company's original
licenses to operate the Jubilee Casino and the Jubilation Casino were renewed
until October 1997. In October 1997, the Company received renewal of the Jubilee
Casino license through October 1999 conditioned by the opening of its Greenville
casino by no later than February 26, 1998. Each Mississippi gaming license has a
term of two years and is subject to renewal. In July 1996, the Company began to
implement its plans to close the Jubilation Casino during August 1996. On July
16, 1996, operation of the Jubilation Casino was suspended in compliance with a
directive of the Mississippi Commission which raised certain issues with regard
to the operation of the Jubilation Casino and asserted that the working capital
available to the Jubilation Casino was not sufficient. On July 17, 1996,
representatives of Jubilation Lakeshore met with the Mississippi Commission. As
a result of that meeting, the non-working capital issues raised by the
Mississippi Commission have been resolved to the Mississippi Commission's
satisfaction. However, the Mississippi Commission required that the Jubilation
Casino's working capital be increased. This working capital requirement was
reviewed by
14
<PAGE>

Jubilation Lakeshore in light of its previously announced plan to close the
Jubilation Casino during August 1996 and the costs which would be incurred to
reopen the Jubilation Casino. Based on the review, Jubilation Lakeshore decided
not to reopen the Jubilation Casino. The Company's license to operate the
Jubilation Casino was withdrawn. The Company does not believe that the issues
raised by the Mississippi Commission regarding the operation of the Jubilation
Casino will adversely affect the license to operate the Jubilee Casino since the
Jubilee Casino is operating in compliance with applicable regulations, including
regulations relating to issues raised by the Mississippi Commission regarding
the operation of the Jubilation Casino. There can be no assurance, however, that
the issues raised by the Mississippi Commission will not adversely affect the
license, or the renewal of the license, to operate the Jubilee Casino, or any
future licenses for which applications maybe submitted in Mississippi or
elsewhere. In the event the Mississippi Commission were to revoke or fail to
renew the Company's license to operate the Jubilee Casino, the Company's
operations and financial condition would be materially adversely affected.

The Company recently withdrew its application in Colorado since the
Company does not intend to proceed with the acquisition for which such license
was required.

The Company applied for a gaming license in Missouri in the early part of
1995. At present the Company cannot predict when a final determination will be
made regarding its license application in Missouri since the Missouri gaming
authority (the "Missouri Commission") makes such determination at its discretion
and is not required to do so within a fixed period of time. However, based upon
discussions with the Missouri Commission, the Company does not anticipate
receiving a final determination with respect to its license application within
the next six months. The failure of the license to be granted could have a
material adverse effect on the Company's expansion plans. See "Casino Operations
- - - -- Development Activities."

4. Defaults in Outstanding Indebtedness; Loan Covenants and Security Interest.

The Company has incurred substantial indebtedness in connection with
its operations and the acquisition of its casino properties; a substantial
portion of this indebtedness in presently held by Bryantston, an affiliate of
the Company. Substantially all of the Company's assets utilized in connection
with its casino operations are pledged as security for these loans. The various
loan documents contain covenants and restrictions which may limit or interfere
with, the operation of the Company's business.

At June 30, 1997, the Company was in default of non-payment for (i) its
mortgage notes payable aggregating approximately $11,456,000 for non-payment,
(ii) the equipment notes relating to the Jubilation Casino aggregating
approximately $8,269,000 for the breach of several loan covenants, and (iii) a
loan payable to Bryanston of approximately $1,876,000 for non-payment. The
Company received a waiver of the defaults of the loan payable and the $7,800,000
mortgage note payable to Bryanston through December 31, 1997.

In the event of a violation by the Company of any of the loan
covenants, or upon the occurrence of any other events of default set forth in
the loan documents, the lenders could exercise rights of foreclosure under the
agreements, which would have a materially adverse effect on the Company's
financial condition.

While no default or acceleration has been declared by any of the
lenders, no assurance can be given that a default will not be declared in the
future. Declaration of a default would allow the lender whose indebtedness was
in default to foreclose on any collateral for the loan and have a material
adverse effect on the Company's business and operations.

5. Intense Industry Competition; Mississippi Gaming Operations

The Company believes that its major market area is approximately 150
miles around the Jubilee Casino, based upon analysis of customer records
completed by marketing and operational

15
<PAGE>

employees at the site. Within the market area of the Jubilee Casino there are
presently 7 other casinos in operation and one additional casino in the planning
stage. The Company is unaware of any progress on the planning of this additional
casino. Two of the existing casinos are immediately adjacent to the Company's
casino. Substantially all of these competitors have significantly greater
financial, and other, resources than the Company and more experience in the
gaming industry. It is likely that the intense competition in the Company's
market area may limit the profitability of its operations, or even render them
unprofitable.

In addition, the Company experienced declining revenues during the year
ended December 31, 1995 with respect to the operation of the Jubilation Casino.
In management's opinion, the decline was due to the remote location of the
Jubilation Casino and the increasing casino development in the Biloxi and
Gulfport markets, which have proven more attractive to casino patrons. Due to
the current level of competition and the anticipated increase in the competition
around the Jubilation Casino, in July 1996, management began to implement its
plans to close the Jubilation Casino during August 1996. Thereafter, on July 16,
1996 the Jubilation Casino was closed at the direction of the Mississippi
Commission. In view of the condition required to reopen and the earlier decision
to close the Jubilation Casino, the Company determined not to reopen the
Jubilation Casino. See"Casino Operations."

6. Possible Insufficiency of Liability Insurance.

The Company maintains and intends to continue to maintain general liability
insurance in amounts which management believes will be sufficient to cover
casualty risks associated with the operation of its business, including fire
property damage, personal injury, liquor liability, etc. At present, the Company
is a defendant in one proceeding based upon the theory of "liquor liability" for
the service of alcohol to a customer. The Company believes that its exposure in
this proceeding is adequately covered by the levels of insurance currently
maintained. There can be no assurance, however, that such insurance will be
adequate to cover unanticipated liabilities. See "Legal Proceedings."

7. Taxation of Gaming Operations.

The Company believes that the prospect of significant additional
revenue through taxation is one of the primary reasons why jurisdictions
legalize gaming. As a result, gaming operators are typically 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 results of
operations of the Company. Presently, the Company pays approximately 12% of
gaming revenues in taxes and fees in Mississippi.

8. Seasonal Fluctuations.

The results of the casinos' operations have been seasonal, with the
greatest activity occurring during the months of May through September.
Consequently, the Company's operating results during the calendar quarters
ending in December and March are not as profitable as those quarters ending in
June and September, and losses result from time to time. The seasonal nature of
the casinos' operations increases the risk that natural disasters or the loss of
the casinos for any other reason during the May through September period would
have a material adverse effect on the Company's financial condition and results
of operations.

9. Conflicts of Interest.

Mrs. Beatrice Tollman, the spouse of Mr. Stanley S. Tollman, the Chairman
of the Board, President and Chief Executive Officer of the Company, is one of
the principal owners of Bryanston. Certain conflicts of interest may arise with
regard to the negotiation of agreements and business opportunities between the
Company and Bryanston. Furthermore, Stanley S. Tollman is one of the principal
owners of the Tollman-Hundley Hotel Group (the "T-H Hotel Group"), the
constituent companies of which own or manage hotel properties containing an
aggregate of 5,593 rooms and which may be in direct competition with hotels that
receive Management Services from the Company. While

16
<PAGE>

Stanley S. Tollman and the T-H Hotel Group have entered into agreements with the
Company pursuant to which each has agreed that any opportunity to provide
Management Services to hotel properties owned by third-parties will be offered
first to the Company for a period of five years commencing September 1, 1993 and
the Company has established a policy that any agreements between the Company and
Bryanston or the T-H Hotel Group must be approved by a majority of disinterested
members of the Company's Board of Directors, there can be no assurance that
conflicts of interest will not arise among such parties and the Company.

10. Dependence upon Key Personnel; Absence of Full-Time Management.

The success of the Company is largely dependent upon the personal efforts
of Mr. Stanley S. Tollman, its President and Chief Executive Officer. The
Company does not maintain and does not intend to obtain a key employee life
insurance policy on the life of Mr. Stanley S. Tollman. Although Mr. Stanley S.
Tollman is only required to devote approximately 20% of his business time to the
operations of the Company, the loss of the services of Mr. Stanley S. Tollman
would have a material adverse effect on the prospects of the Company. In
addition, although the casino operations are managed by full-time personnel, the
Company and its hotel management operations are managed by individuals who also
work for Bryanston." See "Management" and "Certain Transactions -- Bryanston."

11. No Assurance of Public Market for Securities.

Although the Company's Common Stock is quoted on NASDAQ and listed on
the Boston Stock Exchange, there can be no assurance that the Company will be
able to maintain such quotation or listing, or that, if maintained, a
significant public market will be sustained. For continued listing on NASDAQ, a
company, among other things, must have at least $2,000,000 in net tangible
assets, and the listed security must have a minimum bid price of $1.00 per
share. The Boston Stock Exchange's maintenance criteria require the Company to
have total assets of at least $1,000,000 and total stockholders' equity of at
least $500,000. At June 30, 1997 (unaudited), the Company had stockholders'
equity of approximately $1,005,000 and assets of $41,002,000. The Company has
continued to operate at a loss through the date of this Prospectus.

In the event the Common Stock were delisted from NASDAQ, trading, if
any, would be conducted on the Boston Stock Exchange and in the over-the-counter
market on the NASD's electronic bulletin board, in what are commonly referred to
as the "pink sheets." As a result, an investor may find it more difficult to
dispose of, or to obtain accurate quotations as to the price of, the Company's
securities. In addition, the Common Stock would be subject to Rules 15g1-15g6
promulgated under the Securities Exchange Act of 1934 (the "Exchange Act") that
impose additional sales practice requirements on broker-dealers who sell such
securities to persons other than established customers and accredited investors
(generally, a person with assets in excess of $1,000,000 or annual income
exceeding $200,000 or $300,000 together with his or her spouse). For
transactions covered by these rules, the broker-dealer must make a special
suitability determination for the purchaser and have received the purchaser's
written consent to the transaction prior to sale. Consequently, these rules may
affect the ability of broker-dealers to sell the Company's securities and may
affect the ability of purchasers in the Offering to sell their securities in the
secondary market.

The Commission has also adopted regulations that define a "penny stock"
to be any equity security that has a market price (as defined) of less than
$5.00 per share or an exercise price of less than $5.00 per share, subject to
certain exception. For any transaction involving a penny stock, unless exempt,
the regulations require the delivery, prior to the transaction, of a disclosure
schedule prepared by the Commission relating to the penny stock market. The
broker-dealer must also disclose the commissions payable to both the
broker-dealer and the registered representative, current quotations for the
securities and, if the broker-dealer is the sole market-maker, the broker-dealer
must disclose this fact and the broker-dealer's presumed control over the
market. Finally, monthly statements must be sent disclosing recent price
information for the penny stock held in the account and information on the
limited market in penny stocks.

17
<PAGE>

While many NASDAQ-listed securities are covered by the definition of
penny stock, transactions in a NASDAQ-listed security are exempt from all but
the sole market-maker provision for (i) issuers who have $2,000,000 in tangible
assets ($5,000,000 if the issuer has not been in continuous operation for three
years), (ii) transactions in which the customer is an institutional accredited
investor, or (iii) transactions that are not recommended by the broker-dealer.
In addition, transactions in a NASDAQ security directly with a NASDAQ
market-maker for such security are subject only to the sole market-maker
disclosure, and the disclosure with respect to commissions to be paid to the
broker-dealer and the registered representative.

Finally, all NASDAQ securities would be exempt from the
recently-adopted regulations regarding penny stocks if NASDAQ raised its
requirements for continued listing so that any issuer with less than $2,000,000
in net tangible assets or stockholders' equity would be subject to delisting.
These criteria are more stringent than the current NASDAQ maintenance
requirements.

12. Shares Eligible for Future Sale May Adversely Affect the Market.

The Company has 25,000,000 shares of Common Stock authorized, of which
14,049,000 are issued and outstanding. In addition, 409,000 shares may be issued
upon the exercise of outstanding and currently exercisable options.

Of the 14,049,000 shares of Common Stock currently issued and
outstanding, 4,654,443 shares of Common Stock are "restricted securities," as
that term is defined under Rule 144 promulgated under the Securities Act, in
that such shares were issued and sold by the Company in transactions not
involving a public offering and are, as of November 5, 1995, eligible for sale
under Rule 144. In general, under Rule 144 as currently in effect, subject to
the satisfaction of certain other conditions, a person, including an affiliate
of the Company, after at least two years have elapsed from the sale by the
Company or any affiliate of the restricted securities, can (along with any
person with whom such individual is required to aggregate sales) sell, within
any three-month period, a number of shares of restricted securities that does
not exceed the greater of 1% of the total number of outstanding shares of the
same class, or, if the Common Stock is quoted on NASDAQ or a national securities
exchange, the average weekly trading volume during the four calendar weeks
preceding the sale. A person who has not been an affiliate of the Company for at
least three months, after at least three years have elapsed from the sale by the
Company or an affiliate of the restricted securities, is entitled to sell such
restricted shares under Rule 144 without regard to any of the limitations
described above. The 4,654,443 shares are eligible for sale pursuant to Rule 144
by affiliates of the Company who are restricted as to the number of securities
they can sell during any three-month period. Possible or actual sales of such
Common Stock by stockholders of the Company under Rule 144 may have a depressive
effect upon the price of the Common Stock, and could also render difficult the
sales of Common Stock by investors. See "Description of Securities."

13. Possible Adverse Effect of Issuance of Preferred Stock.

The Company's Certificate of Incorporation authorizes the issuance of
1,000,000 shares, par value $.01 per share, of "blank check" preferred stock
(the "Preferred Stock") with such designations, rights and preferences as maybe
determined from time to time by the Board of Directors. The Company has
outstanding 738,163 shares of Series B Preferred Stock which is convertible into
Common Stock and still has 261,837 shares of Preferred Stock available for
issuance. Accordingly, the Board of Directors is empowered, without stockholder
approval, to issue the remaining Preferred Stock, or any Preferred Stock which
becomes authorized but unissued after conversion into Common Stock, with
dividend, liquidation, conversion, voting or other rights that could adversely
affect the voting power or other rights of the holders of the Common Stock. The
Preferred Stock could be utilized under certain circumstances, as a method of
discouraging, delaying or preventing a change in control of the Company. There
can be no assurance that additional shares of Preferred Stock of the Company
will not be issued at some time in the future.

14. Other Possible Adverse Effects of Preferred Stock

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<PAGE>

The Company has 738,163 shares of Series B Preferred Stock outstanding.
These shares were issued to Bryanston and BP Group, Ltd. ("BP"), a corporation
wholly-owned by Ms. Patricia Cohen, a director of the Company in connection with
the conversion of indebtedness owed by the Company to them. Each share of
outstanding Series B Preferred Stock (i) entitles the holder to one vote; (ii)
has a liquidation value of $29 per share; (iii) has a cash dividend rate of 10%
of liquidation value, payable quarterly, which increases to 13% of liquidation
value if the cash dividend is not paid within 30 days of the end of each fiscal
year and in such event is payable in Common Stock valued at the then market
price, and (iv) is convertible into eight shares of Common Stock. There are
presently three debt instruments which prohibit the payment of cash dividends.
Therefore, the Company, until payment in full of such indebtedness, will be
required to pay a 13% Series B Preferred Stock dividend in Common Stock.

The conversion of Series B Preferred Stock into Common Stock and/or the
issuance of Common Stock in payment of the Series B Preferred Stock dividend,
may dilute the value of the outstanding shares of Common Stock, may adversely
affect the Company's ability to obtain equity capital, and, if such Common Stock
was sold in the public market, when permitted by law, may adversely affect the
market price of the Common Stock.

USE OF PROCEEDS

The Shares of Common Stock being offered hereby are for the account of the
Selling Stockholder. Accordingly, the Company will not receive any of the
proceeds from the sale of the Shares by the Selling Stockholder. See "Selling
Stockholder."

SELLING STOCKHOLDER

The following table sets forth certain information with respect to
Selling Stockholder. The number of Shares that may actually be sold by the
Selling Stockholder will be determined by the Selling Stockholder, and may
depend upon a number of factors, including, among other things, the market price
of the Common Stock. The table below sets forth information as of October 3,
1997, concerning the beneficial ownership of Common Stock of the Selling
Stockholder. All information concerning beneficial ownership has been furnished
by the Selling Stockholder.
<TABLE>
<CAPTION>

<S> <C> <C> <C> <C> <C>
Shares of Common Shares of Common Shares of Common
Stock Owned Stock Offered Stock Owned
Before Offering In the Offering After Offering
Name of Stockholder Number Percent(1) Number Number Percent
- - - ------------------- ------ ------- ------ ------ -------
Kroll & Tract LLP 21,000 less than 1% 21,000 (1) (1)

</TABLE>

(1) Because the Selling Stockholder may sell all, some or none of the
Shares that he holds, and because the offering contemplated by this
Prospectus is not now a "firm commitment" underwritten offering, no
estimate can be given as to the number of Shares that will be held by
the Selling Stockholder upon or prior to termination of this offering.
See "Plan of Distribution."

The Selling Stockholder identified above may have sold, transferred or
otherwise disposed of all or a portion of their Shares since the date on which
they provided the information regarding their Common Stock in transactions
exempt from the registration requirements of the Securities Act. Additional
information concerning the above listed Selling Stockholder may be set forth
from time to time in prospectus supplements to this Prospectus. See "Plan of
Distribution."

The Selling Stockholder formerly acted as legal counsel to the Company
with respect to certain matters, and was issued the Shares in satisfaction of
the fees due to the Selling Stockholder. Pursuant to certain agreements between

19
<PAGE>

the Company and the Selling Stockholder, the Company has agreed to file the
Registration Statement to which this Prospectus forms a part for the purpose of
registering the potential resale of the Shares.

Except as specifically set forth herein, the Selling Stockholder has,
and within the past three years has had, no position, office or other material
relationship with the Company or any of its predecessors or affiliates.

PLAN OF DISTRIBUTION

Sales of the Shares may be made from time to time by the Selling
Stockholder, or, subject to applicable law, by pledgees, donees, distributees,
transferees or other successors in interest. Such sales may be made on The
Nasdaq SmallCap Market, in another over-the-counter market, on a national
securities exchange (any of which may involve crosses and block transactions),
in privately negotiated transactions or otherwise or in a combination of such
transactions at prices and at terms then prevailing or at prices related to the
then current market price, or at privately negotiated prices. In addition, any
Shares covered by this Prospectus which qualify for sale pursuant to Section
4(1) of the Securities Act or Rule 144 promulgated thereunder may be sold under
such provisions rather than pursuant to this Prospectus. Without limiting the
generality of the foregoing, the Shares may be sold in one or more of the
following types of transactions: (a) a block trade in which the broker-dealer so
engaged will attempt to sell the Shares as agent but may position and resell a
portion of the block as principal to facilitate the transaction; (b) purchases
by a broker or dealer as principal and resale by such broker or dealer for its
account pursuant to this Prospectus; (c) ordinary brokerage transactions and
transactions in which the broker solicits purchasers; and (d) face-to-face
transactions between sellers and purchasers without a broker-dealer. In
effecting sales, brokers or dealers engaged by the Selling Stockholder may
arrange for other brokers or dealers to participate in the resales.

In connection with distributions of the Shares or otherwise, the
Selling Stockholder may enter into hedging transactions with broker-dealers. In
connection with such transactions, broker-dealers may engage in short sales of
the Shares registered hereunder in the course of hedging the positions they
assume with the Selling Stockholder. The Selling Stockholder may also sell
Shares short and deliver the Shares to close out such short positions. The
Selling Stockholder may also enter into option or other transactions with
broker-dealers which require the delivery to the broker-dealer of the Shares
registered hereunder, which the broker-dealer may resell pursuant to this
Prospectus. The Selling Stockholder may also pledge the Shares registered
hereunder to a broker or dealer and upon a default, the broker or dealer may
effect sales of the pledged Shares pursuant to this Prospectus.

Brokers, dealers or agents may receive compensation in the form of
commissions, discounts or concessions from Selling Stockholder in amounts to be
negotiated in connection with the sale. Such brokers or dealers and any other
participating brokers or dealers may be deemed to be "underwriters" within the
meaning of the Securities Act in connection with such sales and any such
commission, discount or concession may be deemed to be underwriting discounts or
commissions under the Securities Act.

Information as to whether underwriters who may be selected by the
Selling Stockholder, or any other broker-dealer, is acting as principal or agent
for the Selling Stockholder, the compensation to be received by underwriters who
may be selected by the Selling Stockholder, or any broker-dealer, acting as
principal or agent for the Selling Stockholder and the compensation to be
received by other broker-dealers, in the event the compensation of such other
broker-dealers is in excess of usual and customary commissions, will, to the
extent required, be set forth in a supplement to this Prospectus (the
"Prospectus Supplement"). Any dealer or broker participating in any distribution
of the Shares may be required to deliver a copy of this Prospectus, including
the Prospectus Supplement, if any, to any person who purchases any of the Shares
from or through such dealer or broker.

The Company has advised the Selling Stockholder that during such time
as they may be engaged in a distribution of the Shares included herein they are
required to comply with Regulation M promulgated under the Exchange Act. In
general, Regulation M precludes the Selling Shareholders, any affiliated
purchasers and any broker-dealer or other person who participates in such
distribution from bidding for or purchasing, or attempting to

20
<PAGE>

induce any person to bid for or purchase any security which is the subject of
the distribution until the entire distribution is complete. A "distribution" is
defined in the rules as an offering of securities that is distinguished from
ordinary trading activities and depends on the "magnitude of the offering and
the presence of special selling efforts and selling methods." Regulation M also
prohibits any bids or purchases made in order to stabilize the price of a
security in connection with the distribution of that security.

It is anticipated that the Selling Stockholder will offer all of the
Shares for sale. Further, because it is possible that a significant number of
Shares could be sold at the same time hereunder, such sales, or the possibility
thereof, may have a depressive effect on the market price of the Company's
Common Stock.

LEGAL MATTERS

Certain legal matters in connection with the securities being offered
hereby will be passed upon for the Company by Parker Duryee Rosoff & Haft, New
York, New York 10017.

EXPERTS

The consolidated financial statements of Alpha Hospitality Corporation
and subsidiaries included in the Company's annual report on Form 10-K for the
year ended December 31, 1996 incorporated herein by reference have been audited
by Rothstein, Kass & Company, P.C., independent auditors, as indicated in their
report with respect thereto, and are incorporated herein by reference in
reliance upon the report of said firm given upon their authority as experts in
accounting and auditing.

21
<PAGE>

PART II

INFORMATION NOT REQUIRED IN PROSPECTUS

Item 14. Other Expenses of Issuance and Distribution.

The following table sets forth the Company's estimates of the expenses
to be incurred by it in connection with the Common Stock being offered hereby:

SEC Registration Fee.......................................... $25.46
Legal fees and expenses.......................................$10,000*
========
$10,025.46

*Estimated

Item 15. Indemnification of Directors and Officers.

The Delaware General Corporation Law permits Delaware corporations to
eliminate or limit the personal liability of a director to the corporation for
monetary damages arising from certain breaches of fiduciary duties as a
director. The Company's Certificate of Incorporation includes such a provision
eliminating the personal liability of directors to the Company and its
stockholders for monetary damages for breach of fiduciary duty as a director,
except (i) any breach of a director's duty of loyalty to the Company or its
stockholders; (ii) for acts or omissions not in good faith or which involve
intentional misconduct or a knowing violation of law; (iii) for any transaction
from which the director derived an improper personal benefit; or (iv) for
unlawful payments of dividends or unlawful stock repurchases or redemptions as
provided in Section 174 of the Delaware General Corporation Law. Directors are
also not insulated from liability for claims arising under the federal
securities laws. The foregoing provisions of the Company's Certificate of
Incorporation may reduce the likelihood of derivative litigation against
directors for breaches of their fiduciary duties, even though such an action, if
successful, might otherwise have benefitted the Company and its stockholders.

The Company's Certificate of Incorporation also provides that the
Company shall indemnify its directors, officers and agents to the fullest extent
permitted by the Delaware General Corporation Law. The Company does not have
directors' and officers' liability insurance but may secure such insurance in
the future. Furthermore, the Company may enter into indemnity agreements with
its directors and officers for the indemnification of and advancing of expenses
to such persons to the fullest extent permitted by law.

Item 16. Exhibits and Financial Statement Schedules.

Exhibit
Number Description of Exhibit

5.01* -- Opinion of Parker Duryee Rosoff & Haft 23.01 -- Consent of
Rothstein, Kass & Company, P.C.
23.02 -- Consent of Parker Duryee Rosoff & Haft (included in Exhibit 5.01
hereof)
24.01 -- Power of attorney (included in the signature page of Part II of
this Registration Statement
- - - --------------------------------------------------------------------------------
*To be filed by amendment.

22
<PAGE>

Item 17. Undertakings.

The undersigned Company hereby undertakes:

(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this Registration Statement to include any
material information with respect to the plan of distribution not previously
disclosed in the Registration Statement or any material change to such
information in the Registration Statement.

(2) That, for the purpose of determining any liability under the
Securities Act of 1933, as amended (the "Securities Act"), 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.

(4) That, for purposes of determining any liability under the
Securities Act, each filing of the Company's annual report pursuant to Section
13(a) or 15(d) of the Securities Exchange Act of 1934, as amended, that is
incorporated by reference in the Registration Statement, shall be deemed to be a
new registration statement relating to the securities offered herein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.

Insofar as indemnification for liabilities arising under the Securities
Act may be permitted to directors, officers, and controlling persons of the
Company pursuant to Item 15 of Part II of the Registration Statement, or
otherwise, the Company has been advised that in the opinion of the Securities
and Exchange Commission such indemnification is against public policy as
expressed in the Securities Act and is, therefore, unenforceable. In the event
that a claim for indemnification against such liabilities (other than the
payment by the Company of expenses incurred or paid by a director, officer or
controlling person of the Company 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 Company 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 Securities
Act and will be governed by the final adjudication of such issue.

23
<PAGE>

SIGNATURES

In accordance with the requirements of the Securities Act of 1933, the
registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements of filing on Form S-3 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of New York, State of New York, on November 7, 1997.

Alpha Hospitality Corporation

By: Stanley S. Tollman
Stanley S. Tollman, Chief Executive Officer

KNOW ALL MEN BY THESE PRESENTS, that each person whose signature
appears below constitutes and appoints Sanford Freedman and James A. Cutler, and
each of them, with full power to act without the other, his true and lawful
attorney-in-fact and agent, with full power of substitution and resubstitution
for him and in his name, place and stead, in any and all capacities to sign any
and all amendments (including post-effective amendments) to this Registration
Statement, and to file the same, with all exhibits thereto, and the documents in
connection therewith, with the Securities and Exchange Commission, granting unto
said attorneys-in-fact and agents, and each of them, full power and authority to
do and perform each and every act and thing requisite or necessary to be done in
and about the premises, as fully to all intents and purposes as he might or
could do in person, hereby ratifying and confirming all that said
attorneys-in-fact and agents or any of them, or their or his substitute or
substitutes, may lawfully do or cause to be done by virtue hereof.

In accordance with the requirements of the Securities Act of 1933, this
Registration Statement was signed by the following persons in the capacities and
on the dates stated.

Signature Title Date

/s/Stanley S. Tollman Chairman of the Board and November 7, 1997
- - - ---------------------
Stanley S. Tollman Chief Executive Officer

/s/ Sanford Freedman Vice President, Secretary and Director November 7, 1997
- - - ---------------------
Sanford Freedman

/s/ James A. Cutler Vice President - Operations, Secretary November 7, 1997
- - - ---------------------
James A. Cutler and Director

/s/ Brett G. Tollman Director and Vice President November 7, 1997
- - - ---------------------
Brett G. Tollman

/s/ Thomas W. Aro Director November 7, 1997
- - - -------------------
Thomas W. Aro

/s/ Director November _, 1997
- - - ---------------------
Patricia Cohen

/s/ Director November _, 1997
- - - ---------------------
Matthew B. Walker

24
<PAGE>
EXHIBIT 5.01

25
<PAGE>

EXHIBIT 23.01

CONSENT OF INDEPENDENT AUDITORS

We hereby consent to the incorporation by reference in this
Registration Statement on Form S-3 of our report dated February 14, 1997
included in the annual report on Form 10-K of the Alpha Hospitality Corporation
for the years ended December 31, 1996 and 1995 and to the reference to our firm
under the caption "Experts" in the prospectus.

/s/Rothstein, Kass & Company, P.C.
Rothstein, Kass & Company, P.C.

New York, New York
November 7, 1997