FITZGERALDS GAMING CORP, 10-Q, 1999-11-12

FITZGERALDS GAMING CORP
10-Q, 1999-11-12
MISCELLANEOUS AMUSEMENT & RECREATION

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<PAGE> 1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549

FORM 10-Q

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

For the quarterly period ended October 3, 1999

Commission file number: 0-26518

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

NEVADA 88-0329170
(State or other jurisdiction (IRS Employer
of incorporation Identification Number)
or organization)

301 FREMONT STREET, LAS VEGAS NV 89101
(Address of principal executive offices) (Zip Code)

(702) 388-2400
(Registrant's telephone number, including area code)

Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period than the Registrant was
required to file such reports) and (2) has been subject to such filing
requirements for the past 90 days. YES [X] NO [ ]

Shares outstanding of each of the registrant's classes of
common stock as of November 10, 1999

Class Outstanding as of November 10, 1999
----- -----------------------------------
<S> <C>
Common stock, $.01 par value 5,508,082
</TABLE>

<PAGE> 2

FITZGERALDS GAMING CORPORATION

FORM 10-Q

TABLE OF CONTENTS
<TABLE>
<S> <C>
PART I FINANCIAL INFORMATION
Item 1 CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

Condensed Consolidated Balance Sheets as of October 3, 1999 and
December 31, 1998 4

Condensed Consolidated Statements of Operations for the Quarters and
Three Quarters Ended October 3, 1999 and September 27, 1998 6

Condensed Consolidated Statements of Cash Flows for the Three
Quarters Ended October 3, 1999 and September 27, 1998 7

Notes to Condensed Consolidated Financial Statements 8

Item 2 Management's Discussion and Analysis of Financial Condition and
Results of Operations 13

Item 3 Quantitative and Qualitative Disclosures About Market Risk 27

PART II OTHER INFORMATION 28

SIGNATURES 31
</TABLE>

<PAGE> 3

PART I

FINANCIAL INFORMATION

ITEM 1

CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

<PAGE> 4

<TABLE>
<CAPTION>
FITZGERALDS GAMING CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)
OCTOBER 3, 1999 AND DECEMBER 31, 1998
- --------------------------------------------------------------------------------------------------
ASSETS OCT. 3, 1999 DEC. 31, 1998
----------------- ----------------
<S> <C> <C>
CURRENT ASSETS:
Cash and cash equivalents $ 22,108,957 $ 13,038,589
Restricted cash - 537,179
Accounts receivable, net of allowance for doubtful
accounts of $368,884 and $345,340 1,058,147 1,437,095
Advances to affiliated companies - 3,154
Inventories 1,214,482 1,375,443
Prepaid expenses:
Gaming taxes 1,625,620 1,209,825
Other 2,839,790 2,487,170
------------- ------------
Total current assets 28,846,996 20,088,455
------------- ------------
PROPERTY AND EQUIPMENT, net 153,046,747 159,714,663
------------- ------------

OTHER ASSETS:
Estimated realizable value of assets held for sale - 4,122,842
Restricted cash 1,744,000 1,459,000
Restricted investment 200,000 200,000
Debt offering costs, net 7,273,155 8,319,745
Line of credit costs, net 413,912 408,051
Goodwill, net 13,418,965 13,681,296
Other assets 1,588,133 1,046,155
------------- ------------
Total other assets 24,638,165 29,237,089
------------- ------------
MINORITY INTEREST 177,846 157,257
------------- ------------
TOTAL $ 206,709,754 $209,197,464
============= ============
</TABLE>

(continued)

See Notes to Condensed Consolidated Financial Statements Page 4 of 31

<PAGE> 5

<TABLE>
<CAPTION>
FITZGERALDS GAMING CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED) (CONTINUED)
OCTOBER 3, 1999 AND DECEMBER 31, 1998
- ----- -------------------------------------------------------------------------------------------------
LIABILITIES AND STOCKHOLDERS' DEFICIENCY OCT. 3, 1999 DEC. 31, 1998
------------ -------------
<S> <C> <C>
CURRENT LIABILITIES:

Current portion of long-term debt $ 204,164,447 $ 4,634,747
Current portion of notes payable - related parties -- 304,637
Accounts payable 3,484,980 8,139,479
Accrued and other:
Payroll and related 4,125,592 5,010,169
Progressive jackpots 1,384,001 1,311,074
Outstanding chips and tokens 523,997 728,254
Interest 20,922,357 1,131,466
Other 7,683,585 6,632,472
------------- -------------
Total current liabilities 242,288,959 27,892,298

LONG-TERM DEBT, net of current portion 1,046,094 208,204,024
------------- -------------
Total liabilities 243,335,053 236,096,322
------------- -------------

CUMULATIVE REDEEMABLE PREFERRED STOCK,
$.01 par value; $25 stated value; 800,000 shares
authorized, issued and outstanding; liquidation
preference $20,000,000 stated value plus accrued
dividends of $14,915,450 and $11,264,632 recorded
at liquidation preference, net of unamortized
offering costs and discount of $6,420,963
and $6,863,461, respectively 28,494,484 24,401,171
------------- -------------

STOCKHOLDERS' DEFICIENCY:

Common stock, $.01 par value; 29,200,000 shares
authorized; 5,508,082 shares issued and outstanding 55,080 40,128
Additional paid-in capital 23,954,216 23,649,582
Accumulated deficit (89,129,079) (74,989,739)
------------- -------------
Total stockholders' deficiency (65,119,783) (51,300,029)
------------- -------------
TOTAL $ 206,709,754 $ 209,197,464
============= =============
</TABLE>

See Notes to Condensed Consolidated Financial Statements Page 5 of 31

<PAGE> 6

<TABLE>
<CAPTION>
FITZGERALDS GAMING CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
FOR THE QUARTERS AND THREE QUARTERS ENDED OCTOBER 3, 1999 AND SEPTEMBER 27, 1998
- --------------------------------------------------------------------------------------------------------------------------
QUARTERS ENDED THREE QUARTERS ENDED
------------------------------- ----------------------------------
Oct. 3, Sept. 27, Oct. 3, Sept. 27,
1999 1998 1999 1998
-------------- ------------- -------------- --------------
<S> <C> <C> <C> <C>
OPERATING REVENUES:
Casino $ 44,203,167 $ 42,396,425 $ 132,640,237 $ 121,575,693
Food and beverage 6,327,437 6,441,054 18,931,555 18,616,266
Rooms 5,529,703 5,529,700 16,560,459 15,799,994
Other 903,414 1,338,972 2,614,870 13,612,654
------------ ------------ ------------- -------------
Total 56,963,721 55,706,151 170,747,121 169,604,607
Less promotional allowances 4,820,133 4,816,276 14,311,305 13,569,104
------------ ------------ ------------- -------------
Net 52,143,588 50,889,875 156,435,816 156,035,503
------------ ------------ ------------- -------------
OPERATING COSTS AND EXPENSES:
Casino 20,379,610 20,359,314 63,514,744 57,444,870
Food and beverage 4,636,103 4,534,614 12,386,348 13,030,976
Rooms 3,200,872 2,937,327 9,627,763 8,933,597
Other operating expense 493,337 524,950 1,645,469 1,568,190
Selling, general and administrative 16,691,757 15,035,578 47,290,530 44,987,099
Depreciation and amortization 3,531,674 3,388,553 10,568,421 10,151,299
Write-down of assets and lease settlement -- -- 34,061 332,144
------------ ------------ ------------- -------------
Total 48,933,353 46,780,336 145,067,336 136,448,175
------------ ------------ ------------- -------------
INCOME FROM OPERATIONS 3,210,235 4,109,539 11,368,480 19,587,328

OTHER INCOME (EXPENSE):
Interest income 149,874 144,899 318,351 363,156
Interest income - stockholders 47,390 4 42,114 4
Interest expense (7,433,527) (6,773,710) (21,678,042) (20,380,072)
Interest expense - stockholders -- (4,742) -- (14,064)
Other expense (4,760) (602,513) (96,930) (1,942,889)
------------ ------------ ------------- -------------
NET LOSS (4,030,788) (3,126,523) (10,046,027) (2,386,537)

PREFERRED STOCK DIVIDENDS (1,414,965) (1,211,201) (4,093,313) (3,513,155)
------------ ------------ ------------- -------------

NET LOSS APPLICABLE TO COMMON
STOCKHOLDERS $ (5,445,753) $ (4,337,724) $ (14,139,340) $ (5,899,692)
============ ============ ============= =============
LOSS PER COMMON SHARE - BASIC $ (1.36) $ (1.08) $ (3.50) $ (1.47)
============ ============ ============= =============
WEIGHTED AVERAGE COMMON SHARES
OUTSTANDING BASIC 4,078,571 4,012,846 4,034,516 4,012,846
============ ============ ============= =============
</TABLE>

See Notes to Condensed Consolidated Financial Statements Page 6 of 31

<PAGE> 7

<TABLE>
<CAPTION>
FITZGERALDS GAMING CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
FOR THE THREE QUARTERS ENDED OCTOBER 3, 1999 AND SEPTEMBER 27, 1998
- ---------------------------------------------------------------------------------------------------
OCT. 3, 1999 SEPT. 27, 1998
------------ --------------
<S> <C> <C>
NET CASH PROVIDED BY OPERATING ACTIVITIES $ 18,531,642 $ 17,188,272
------------ ------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Proceeds from sale of assets 2,457,605 497,125
Acquisition of property and equipment (3,098,296) (5,235,252)
Decrease in restricted cash 252,179 193,987
Other -- (603,616)
------------ ------------
Net cash used in investing activities (388,512) (5,147,756)
------------ ------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from issuance of common stock 14,952 --
Payment of debt offering costs (97,335) (832,137)
Payment of line of credit costs (121,478) --
Repayment of long-term debt (5,848,451) (6,242,899)
Repayment of line of credit debt (3,000,000) --
Dividends to minority stockholders (20,450) (1,827,881)
------------ ------------
Net cash used in financing activities (9,072,762) (8,902,917)
------------ ------------
NET INCREASE IN CASH AND CASH EQUIVALENTS 9,070,368 3,137,599

CASH AND EQUIVALENTS, BEGINNING OF PERIOD 13,038,589 14,809,617
------------ ------------
CASH AND CASH EQUIVALENTS, END OF PERIOD $ 22,108,957 $ 17,947,216
============ ============
CASH PAID FOR INTEREST $ 515,677 $ 12,286,407
============ ============

SUMMARY OF NON-CASH INVESTING AND FINANCING ACTIVITIES:

Property and equipment acquired through issuance of debt $ 541,629 $ 2,560,301
Accretion of discount on preferred stock 442,498 362,233
Accrual of preferred stock dividends 3,650,818 3,150,922
Accrual of debt offering costs -- 431,750
Capital contribution through cancellation of debt 304,637 --
</TABLE>

See Notes to Condensed Consolidated Financial Statements Page 7 of 31

<PAGE> 8

FITZGERALDS GAMING CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

1. Basis of Presentation

The accompanying condensed consolidated financial statements of
Fitzgeralds Gaming Corporation (the "Company") as of October 3, 1999 and for the
quarters and three quarters ended October 3, 1999 and September 27, 1998 have
been prepared by the Company, without audit, pursuant to the rules and
regulations of the Securities and Exchange Commission. Accordingly, certain
information and footnote disclosures normally included in financial statements
prepared in accordance with generally accepted accounting principles ("GAAP")
have been condensed or omitted.

In the opinion of management, all adjustments, consisting only of normal
recurring adjustments, necessary for a fair presentation of the interim
condensed consolidated financial statements have been included. These condensed
consolidated financial statements should be read in conjunction with the
consolidated financial statements and notes thereto included in the Company's
Annual Report on Form 10-K for the year ended December 31, 1998. The results of
operations for the quarter and three quarters ended October 3, 1999 are not
necessarily indicative of the results to be expected for the year ending
December 31, 1999.

The Company utilizes a "4-4-5" (weeks) financial reporting period which
maintains a December 31 year end. This method of reporting results in 13 weeks
in each quarterly accounting period. The first and fourth accounting periods
will have a fluctuating number of days resulting from the maintenance of a
December 31 year end, whereas the second and third accounting periods will have
the same number of days each year.

Certain amounts in the 1998 consolidated financial statements have been
reclassified to conform to the 1999 method of presentation.

2. Recently Adopted Accounting Standards

On January 1, 1999, the Company adopted Statement of Position ("SOP")
98-5, Reporting on the Costs of Start-up Activities. SOP 98-5 requires that all
non-governmental entities expense costs of start-up activities (commonly
referred to as pre-opening costs in the gaming industry) as those costs are
incurred. The adoption of SOP 98-5 had no material impact on the Company's
financial condition or results of operations.

3. Recently Issued Accounting Standards

On June 30, 1998, the FASB issued SFAS No. 133, Accounting for
Derivative Instruments and Hedging Activities. This statement establishes
accounting and reporting standards for derivative instruments and hedging
activities and is effective for the Company's

Page 8 of 31

<PAGE> 9

fiscal year ending December 31, 2001. Management believes that adoption of this
statement will not have a material impact on the Company's financial condition
or results of operations.

4. Long-Term Debt

In December 1997, the Company issued $205.0 million 12 1/4% Senior
Secured Notes due 2004 (the "Senior Secured Notes"). Of the $202.6 million net
proceeds, the Company used $123.0 million to retire its 13% Senior Secured Notes
due 2002 with Contingent Interest; $5.4 million to retire its 13% Priority
Secured Notes due 1998; $39.7 million to retire the 13% First Mortgage Notes due
2000 of 101 Main Street Limited Liability Company ("101 Main"); and
approximately $20.1 million to retire other secured indebtedness. Of the
remaining proceeds, $8.7 million was used for expenses of the offering and $5.7
million was applied to accrued interest totaling approximately $10.6 million at
December 31, 1997.

In October 1998, the Company established the $15.0 million credit
facility (the "Credit Facility") with a lending institution, of which up to $5.0
million was permitted to be used for capital projects at Fitzgeralds Black Hawk
and up to $10.0 million of which was permitted to be used for general corporate
purposes. The Credit Facility is secured by a lien on substantially all of the
assets of the Company, which lien is senior to the lien securing the Senior
Secured Notes.

On May 13, 1999, the Company's Board of Directors determined that,
pending a restructuring of its indebtedness, it would not be in the best
interest of the Company to make the regularly scheduled interest payments on its
Senior Secured Notes and as of the date hereof has not paid the regularly
scheduled interest payment of $12.5 million on the Senior Secured Notes which
was due and payable on June 15, 1999. Accordingly, an Event of Default under the
Indenture pursuant to which the Senior Secured Notes were issued has occurred
and is continuing. The Company has reflected the Senior Secured Notes as a
current liability, although no action has been taken by either the Indenture
Trustee or holders of at least 25% of the Senior Secured Notes to accelerate the
Senior Secured Notes and declare the unpaid principal and interest to be due and
payable. Failure to make the scheduled payment on June 15, 1999, resulted in an
increase in the interest rate of 1% to 13 1/4%, effective June 16, 1999.

A default on the Senior Secured Notes constitutes a default under the
Credit Facility and, although the Company believes the lending institution under
the Credit Facility will continue to have adequate security for the Company's
obligations thereunder, there can be no assurance that the lending institution
will continue to make additional advances. The Company has repaid substantially
all amounts borrowed under the Credit Facility.

5. Earnings Per Share

During the three quarters ended October 3, 1999 and September 27, 1998,
there were no outstanding convertible securities that would result in dilutive
potential common shares and, as such, diluted earnings per share are not
applicable. As of September 27, 1998, the Company had outstanding warrants
("Warrants") to purchase 1,971,835 shares of the Company's Common Stock at $0.01
per share. On September 29, 1999, the Company issued 1,495,236 shares of

Page 9 of 31

<PAGE> 10

Common Stock pursuant to the exercise of such Warrants. Warrants for the
purchase of the 476,599 additional shares of Common Stock expired on December
19, 1998. The Company issued the Common Stock to exercising Warrant holders in
reliance on the exemption from registration requirements contained in Section
4(2) of the Securities Act of 1933 on the basis that there was no public
offering of the Common Stock underlying the Warrants. Options to purchase
544,261 and 570,524 shares of Common Stock at prices ranging from $1.00 to $1.10
per share were outstanding at October 3, 1999 and September 27, 1998,
respectively. Such options are not included in the computation of diluted
earnings per share for the quarters and three quarters ended October 3, 1999 and
September 27, 1998; in addition, the Warrants are not included in the
computation of diluted earnings per share for the quarter and three quarters
ended September 27, 1998, because to do so would have been antidilutive.

6. Segment Information

In 1998, the Company adopted SFAS No. 131, Disclosures about Segments of
an Enterprise and Related Information. SFAS No. 131 establishes standards for
reporting information about operating segments, geographic areas and major
customers in the annual financial statements and requires reporting of selected
information about operating segments in interim financial reports. The adoption
of SFAS No. 131 had no effect on the Company's consolidated financial position
or consolidated results of operations.

The accounting policies of each business segment are the same as those
described in the summary of significant accounting policies in the Company's
Annual Report on Form 10-K for the year ended December 31, 1998. There are
minimal inter-segment sales. The Company continues to evaluate its business
segment performance based on EBITDA. The Company has not changed its basis of
segmentation from the year ended December 31, 1998.

Page 10 of 31

<PAGE> 11

<TABLE>
<CAPTION>
For the Quarters Ended
-------------------------------
Oct. 3, 1999 Sept. 27, 1998
------------- --------------
(in thousands)
<S> <C> <C>
Net operating revenues:
Fitzgeralds Las Vegas $ 12,393 $ 11,711
Fitzgeralds Tunica 18,911 18,206
Fitzgeralds Reno 11,297 11,261
Fitzgeralds Black Hawk 9,543 9,383
Other -- 267
-------- --------
Total Properties 52,144 50,828
Nevada Club -- 62
-------- --------
Total $ 52,144 $ 50,890
======== ========
Income (loss) from operations:
Fitzgeralds Las Vegas $ (812) $ (875)
Fitzgeralds Tunica 1,398 1,200
Fitzgeralds Reno 1,439 1,517
Fitzgeralds Black Hawk 2,289 2,149
Other (1,092) 66
-------- --------
Total Properties 3,222 4,057
Nevada Club (12) 53
-------- --------
Total $ 3,210 $ 4,110
======== ========
</TABLE>

Reconciliation of total business segment operating income to consolidated
net loss:

<TABLE>
<CAPTION>
For the Quarters Ended
------------------------------
Oct. 3, 1999 Sept. 27, 1998
------------ --------------
(in thousands)
<S> <C> <C>
Total segment operating income: $ 4,314 $ 3,991
Nevada Club (12) 53
Other (2,089) (813)
Eliminations 3,605 4,015
Interest income 150 145
Interest income - shareholder and intercompany 7,948 8,171
Interest expense (7,434) (6,774)
Interest expense - shareholder and intercompany (7,883) (8,158)
Other expense (2,630) (3,757)
--------- ---------
Net loss $ (4,031) $ (3,127)
========= =========
</TABLE>

Page 11 of 31
<PAGE> 12

<TABLE>
<CAPTION>
For the Three Quarters Ended
-------------------------------
Oct. 3, 1999 Sept. 27, 1998
------------- --------------
(in thousands)
<S> <C> <C>
Net operating revenues:
Fitzgeralds Las Vegas $ 39,765 $ 36,991
Fitzgeralds Tunica 57,305 50,564
Fitzgeralds Reno 31,559 30,211
Fitzgeralds Black Hawk 27,807 27,297
Other -- 10,911
--------- ---------
Total Properties 156,436 155,974
Nevada Club -- 62
--------- ---------
Total $ 156,436 $ 156,036
========= =========
Income (loss) from operations:
Fitzgeralds Las Vegas $ (208) $ (666)
Fitzgeralds Tunica 5,283 1,696
Fitzgeralds Reno 2,774 2,373
Fitzgeralds Black Hawk 5,918 7,057
Other (2,318) 9,841
--------- ---------
Total Properties 11,449 20,301
Nevada Club (46) (613)
Harolds Club (34) (101)
--------- ---------
Total $ 11,369 $ 19,587
========= =========
</TABLE>

Reconciliation of total business segment operating income to consolidated
net loss:

<TABLE>
<CAPTION>
For the Three Quarters Ended
-------------------------------
Oct. 3, 1999 Sept. 27, 1998
------------ --------------
(in thousands)
<S> <C> <C>
Total segment operating income: $ 13,767 $ 10,460
Nevada Club (46) (613)
Harolds Club (34) (101)
Other (5,343) (6,843)
Eliminations 9,824 5,777
Interest income 318 363
Interest income - shareholder and intercompany 24,105 23,581
Interest expense (21,679) (20,380)
Interest expense - shareholder and intercompany (24,009) (23,542)
Other expense (6,949) (4,775)
-------- --------
Net loss $(10,046) $ (2,387)
======== ========
</TABLE>

Page 12 of 31
<PAGE> 13

ITEM 2

MANAGEMENT'S DISCUSSION AND ANALYSIS OF

FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The Private Securities Litigation Reform Act of 1995 provides a "safe
harbor" for forward-looking statements. The following discussion should be read
in conjunction with, and is qualified in its entirety by, the Condensed
Consolidated Financial Statements and the Notes thereto included in this report.
The following discussion and other material in this report on Form 10-Q contain
certain forward-looking statements. The forward-looking statements are
necessarily based upon a number of estimates and assumptions that, while
considered reasonable, are inherently subject to significant business, economic
and competitive uncertainties and contingencies, many of which are beyond the
control of the Company, and upon assumptions with respect to future business
decisions which are subject to change. Risks to which the Company is subject
include, but are not necessarily limited to, its efforts to restructure its
indebtedness and capital structure, competition, high level of indebtedness, the
need for additional financing, development and construction risks, market
fluctuations, gaming, liquor and other regulatory matters, taxation, the
availability and retention of key management, environmental matters and other
factors discussed in the Company's other filings with the Securities and
Exchange Commission. Accordingly, actual results could differ materially from
those contemplated by such forward-looking statements.

GENERAL

Fitzgeralds Gaming Corporation (the "Company") is a diversified
multi-jurisdictional gaming holding company that owns and operates four
Fitzgeralds-brand casino-hotels, located in downtown Las Vegas, Nevada
("Fitzgeralds Las Vegas"), Reno, Nevada ("Fitzgeralds Reno"), Tunica,
Mississippi ("Fitzgeralds Tunica"), and Black Hawk, Colorado ("Fitzgeralds Black
Hawk"). The Company markets its properties primarily to middle-market customers,
emphasizing its Fitzgeralds brand and its "Fitzgeralds Irish Luck" theme.

The Company currently conducts substantially all of its business through
wholly-owned subsidiaries; Fitzgeralds Reno, Inc. ("FRI"); Fitzgeralds South,
Inc. ("FSI"); and Fitzgeralds Incorporated ("FI"). FRI directly owns and
operates Fitzgeralds Reno; FSI owns and operates Fitzgeralds Las Vegas and
Fitzgeralds Tunica through wholly-owned subsidiaries; and FI owns and operates
Fitzgeralds Black Hawk through wholly-owned subsidiaries, including 101 Main
Street Limited Liability Company ("101 Main").

In December 1997, the Company issued $205.0 million of its Senior
Secured Notes secured by a lien on substantially all of the assets of the
Company. In October 1998, the Company established a $15.0 million Credit
Facility with a lending institution, of which $5.0 million was permitted to be
used for capital projects at Fitzgeralds Black Hawk. The Credit

Page 13 of 31
<PAGE> 14

Facility is secured by a lien on substantially all of the assets of the Company,
which lien is senior to the lien securing the Senior Secured Notes.

On May 13, 1999, the Company's Board of Directors determined that,
pending a restructuring of its indebtedness, it would not be in the best
interest of the Company to make the regularly scheduled interest payments on its
Senior Secured Notes and as of the date hereof has not paid the regularly
scheduled interest payment of $12.5 million on the Senior Secured Notes which
was due and payable on June 15, 1999. Accordingly, an Event of Default under the
Indenture pursuant to which the Senior Secured Notes were issued has occurred
and is continuing. No action has been taken by either the Indenture Trustee or
holders of at least 25% of the Senior Secured Notes to accelerate the Senior
Secured Notes and declare the unpaid principal and interest to be due and
payable.

The Company is aware that an informal committee (the "Committee"),
representing holders of a majority in interest of the Senior Secured Notes, has
been formed and that the Committee has retained both a financial adviser and
legal counsel, certain costs of which are being borne by the Company. The
Company has initiated and is continuing discussions with representatives of the
Committee concerning a restructuring of the Company's indebtedness.

Unless the context otherwise requires, the "Company" refers to
Fitzgeralds Gaming Corporation and its subsidiaries. The Company was
incorporated in Nevada in 1994 to serve as a holding company. The executive
office of the Company is located at 301 Fremont Street, Las Vegas, Nevada 89101;
telephone (702) 388-2400; facsimile (702) 382-5562.

In the narrative discussion below, the "Cumulative 1999 Period" is
defined as the three quarters ended October 3, 1999 and the "Cumulative 1998
Period" is defined as the three quarters ended September 27, 1998, resulting in
the Cumulative 1999 Period having an additional six days of operating results
compared to the Cumulative 1998 Period. The "1999 Q3 Period" is defined as the
quarter ended October 3, 1999, and the "1998 Q3 Period" is defined as the
quarter ended September 27, 1998. Financial performance is focused on the
principal ongoing operating properties of the Company, which include Fitzgeralds
Las Vegas, Fitzgeralds Tunica, Fitzgeralds Reno and Fitzgeralds Black Hawk,
collectively referred to as (the "Properties"). In June 1998, Fitzgeralds
Arizona Management, Inc. ("FAMI"), a subsidiary 85% owned by the Company,
entered into a termination agreement with the Yavapai-Apache Indian Nation,
wherein the parties mutually agreed to terminate the exclusive agreement (the
"Management Agreement") for FAMI to manage the Cliff Castle Casino ("Cliff
Castle"), a gaming facility in Camp Verde, Arizona. The 1998 results for the
Properties include payments for the settlement agreement with the Turning Stone
Casino ("Turning Stone") and fees earned from the Cliff Castle Management
Agreement. Unless the context otherwise indicates, the discussion below excludes
Nevada Club, which was closed in December 1997 in anticipation of its sale which
occurred on June 18, 1999, and in management's opinion, is not material to the
ongoing operations of the Company. Corporate expense of $0.25 million for each
of the three quarters represented is allocated to each of the four Properties as
an operating expense. The remainder of the unallocated corporate expense is
included in Other Operations of the Properties. See footnote 2 of the Statement
of Operations Data.

Page 14 of 31
<PAGE> 15

THREE QUARTERS ENDED OCTOBER 3, 1999 COMPARISON TO THREE QUARTERS ENDED
SEPTEMBER 27, 1998

The table below sets forth Net Operating Revenues, Income (Loss) from
Operations, EBITDA, Adjusted EBITDA and other financial data for the Cumulative
1999 Period and the Cumulative 1998 Period. EBITDA from the Properties
(excluding fees from the Cliff Castle Management Agreement and the settlement
agreement with Turning Stone for the Cumulative 1998 Period and the unallocated
corporate expenses for both Cumulative 1999 and 1998 Periods), improved in the
Cumulative 1999 Period to $24.3 million from $20.4 million for the Cumulative
1998 Period. EBITDA for the Properties decreased to $22.0 million for the
Cumulative 1999 Period from $30.4 million for the Cumulative 1998 Period
primarily due to the Cliff Castle Management Agreement which provided $9.8
million in revenue and the settlement agreement with Turning Stone, which
provided $1.1 million, in revenue in the Cumulative 1998 Period. In addition,
the Company incurred $1.6 million of professional fees and expenses in
conjunction with the ongoing development and negotiation of the Company's
restructuring plan in the Cumulative 1999 Period. Such expenses include
professional fees and expenses paid by the Company for the financial and legal
advisors to the Committee. Adjusted EBITDA, which the Company uses as a
reasonable measure of its ability to generate cash from operating activities and
as a means to compare the Company's performance with that of its competitors
increased $0.2 million to $23.6 million for the Cumulative 1999 Period from
$23.4 million for the Cumulative 1998 Period (which $23.4 million does not
include $7.0 million of the $8.0 million received as payment for the termination
of the Cliff Castle Management Agreement). For a definition of EBITDA and
Adjusted EBITDA, see footnotes 3 and 5 of the Statement of Operations Data.

Page 15 of 31
<PAGE> 16

<TABLE>
<CAPTION>
FOR THE THREE QUARTERS ENDED
-------------------------------
STATEMENT OF OPERATIONS DATA OCT. 3, 1999 SEPT. 27, 1998
------------ --------------
(IN THOUSANDS)
<S> <C> <C>
Net Operating Revenues:
Fitzgeralds Las Vegas $ 39,765 $ 36,991
Fitzgeralds Tunica 57,305 50,564
Fitzgeralds Reno 31,559 30,211
Fitzgeralds Black Hawk 27,807 27,297
Other(1) -- 10,911
--------- ---------
Total $ 156,436 $ 155,974
Nevada Club -- 62
--------- ---------
Total $ 156,436 $ 156,036
========= =========
Income (Loss) from Operations:
Fitzgeralds Las Vegas $ (208) $ (666)
Fitzgeralds Tunica 5,283 1,696
Fitzgeralds Reno 2,774 2,373
Fitzgeralds Black Hawk 5,918 7,057
Other(2) (2,318) 9,841
--------- ---------
Total Properties 11,449 20,301
Nevada Club (46) (613)
Harolds Club (34) (101)
--------- ---------
Total $ 11,369 $ 19,587
========= =========
OTHER DATA
EBITDA(3):
Fitzgeralds Las Vegas(4) $ 2,551 $ 1,743
Fitzgeralds Tunica 9,911 6,124
Fitzgeralds Reno 4,602 4,165
Fitzgeralds Black Hawk 7,241 8,371
Other(2) (2,288) 10,046
--------- ---------
Total Properties 22,017 30,449
Nevada Club (46) (609)
Harolds Club (34) (101)
--------- ---------
Total EBITDA 21,937 29,739
Adjustments to EBITDA(5) 1,711 (6,290)
--------- ---------
Adjusted EBITDA $ 23,648 $ 23,449
========= =========

Net Cash Provided by (Used in)(6):
Operating Activities $ 19,084 $ 17,188
Investing Activities (392) (5,148)
Financing Activities (8,765) (8,903)
Depreciation and Amortization 10,568 10,151
Capital Expenditures 3,640 5,235
Earnings to Fixed Charges(7): -- --
</TABLE>

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

(1) Includes (i) fees from the Cliff Castle Management Agreement and the Turning
Stone settlement agreement for the Cumulative 1998 Period and (ii)
non-recurring revenue of $8.0 million received in connection with the
termination of the Cliff Castle Management Agreement for the Cumulative 1998
Period.

(2) Includes (i) fees from the Cliff Castle Management Agreement and the Turning
Stone settlement agreement for the Cumulative 1998 Period; (ii)
non-recurring revenue of $8.0 million received in connection with the
termination of the Cliff

Page 16 of 31

<PAGE> 17

Castle Management Agreement for the Cumulative 1998 Period, net of corporate
expenses not allocated to the Properties and expenses of FI; and (iii)
corporate expenses not allocated to the Properties for the Cumulative 1999
Period.

(3) EBITDA, or "earnings before interest, taxes on income, depreciation and
amortization", is a supplemental financial measurement used by the Company
in the evaluation of its gaming business and by many gaming industry
analysts. EBITDA is calculated by adding depreciation and amortization
expense to income from operations. At any property, EBITDA is calculated
after the allocation of corporate costs. However, EBITDA should only be read
in conjunction with all of the Company's financial data summarized above and
its financial statements prepared in accordance with GAAP appearing
elsewhere herein, and should not be construed as an alternative either to
income from operations (as determined in accordance with GAAP) as an
indication of the Company's operating performance or to cash flows from
operating activities (as determined in accordance with GAAP) as a measure of
liquidity. This presentation of EBITDA may not be comparable to similarly
titled measures reported by other companies.

(4) At the end of 1998, the Company recorded an impairment loss related to its
17.65% ownership interest in the Fremont Street Experience Limited Liability
Company ("FSE"). Commencing in 1999, the Company began reporting
disbursements to FSE as a marketing expense. In 1998, the Company reported
such disbursements as equity in an unconsolidated affiliate. Thus, amounts
relating to the investment in FSE for 1998 have been reclassified to conform
to the 1999 method of presentation.

(5) Adjustments to EBITDA include (i) exclusion of EBITDA for Nevada Club and
Harolds Club for both periods presented; (ii) exclusion of 7.0 million of
the $8.0 million received in connection with the termination of the Cliff
Castle Management Agreement for the Cumulative 1998 Period; and (iii)
exclusion of $1.6 million of professional fees and expenses incurred in
conjunction with the ongoing development and negotiation of the Company's
restructuring plan for the Cumulative 1999 Period.

(6) Includes financial results of Nevada Club and Harolds Club for both periods.

(7) For the Ratio of Earnings to Fixed Charges, earnings are defined as earnings
before income taxes, interest on indebtedness, imputed interest on capital
lease obligations and the portion of rent expense deemed to represent
interest. Fixed charges consist of interest on indebtedness, imputed
interest on capital lease obligations and the portion of rent expense deemed
to represent interest. Earnings were insufficient to cover fixed charges by
$10.0 million and $3.4 million for the Cumulative 1999 and 1998 Periods,
respectively.

OPERATING REVENUES

Total revenues for the Properties were $170.7 million and net operating
revenues were $156.4 million for the Cumulative 1999 Period, representing
increases of 0.7% and 0.3%, respectively, as compared to total revenues of
$169.6 million and net operating revenues of $156.0 million for the Cumulative
1998 Period. Excluding the Cliff Castle Management Agreement, which provided
$9.8 million in revenue and the settlement agreement with Turning Stone, which
provided $1.1 million, in revenue in the Cumulative 1998 Period, results in a
7.8% increase in net operating revenues. This increase was primarily due to new
marketing strategies, an effective guest development program and continued
improvement of the slot product.

The Company's business can be separated into four operating departments:
casino, food and beverage, rooms and other. Casino revenues for the Properties
represented 77.7% and 71.7% of total revenues for the Properties for the
Cumulative 1999 and 1998 Periods, respectively. Casino revenues for the
Properties (of which approximately 84.1% and 82.3% were derived from slot
machine revenues for the Cumulative 1999 and 1998 Periods, respectively)
increased 9.1% to $132.6 million for the Cumulative 1999 Period from the $121.6
million recorded for the Cumulative 1998 Period. At Fitzgeralds Tunica,
Fitzgeralds Las Vegas and Fitzgeralds Reno, casino revenues increased 14.5%,
9.7% and 6.0%, respectively, primarily due to the reasons stated above as well
as to the opening of the connector road in Tunica and improved weather
conditions over the mountains to Reno during the first two quarters of 1999.
Fitzgeralds Black

Page 17 of 31
<PAGE> 18

Hawk casino revenues were negatively impacted by the opening of the Lodge and
the Isle of Capri in 1998 as revenue growth increased only 2.3% for the
Cumulative 1999 Period.

Room revenues for the Properties (at 9.7% and 9.3% of total revenues for
the Properties for the Cumulative 1999 and 1998 Periods, respectively) increased
4.8% from the Cumulative 1998 Period. Room revenues increased 9.6% at
Fitzgeralds Las Vegas due to a combination of a higher average occupancy rate,
which increased to 93.8% for the Cumulative 1999 Period from 89.1% for the
Cumulative 1998 Period, and a higher average daily rate which increased 7.2% for
the Cumulative 1999 Period. At Fitzgeralds Tunica, room revenues increased 3.7%
as the average daily rate increase of 1.1% was offset by a decrease in the
average occupancy rate to 93.7% for the Cumulative 1999 period from 96.0% for
the Cumulative 1998 Period. Fitzgeralds Reno room revenues remained virtually
the same.

Food and beverage revenues for the Properties (at 11.1% and 11.0% of
total revenues for the Properties for the Cumulative 1999 and 1998 Periods,
respectively) increased approximately $0.3 million or 1.7% for the Cumulative
1999 Period. Fitzgeralds Reno and Fitzgeralds Tunica experienced revenue
increases of 8.5% and 7.7%, respectively, as a result of increases in casino
revenues in these two properties. Food and beverage revenues at Fitzgeralds Las
Vegas and Fitzgeralds Black Hawk decreased approximately 4.9% and 7.0%,
respectively. The decrease in Fitzgeralds Las Vegas is due to changes in the
utilization of food product as a marketing strategy to generate traffic volumes.
The decrease in Fitzgeralds Black Hawk is due to increased gaming competition in
the Black Hawk market.

Other revenues for the Properties decreased $10.9 million primarily as a
result of the termination of the Cliff Castle Management Agreement and the
settlement agreement with Turning Stone in 1998.

Promotional allowances for the Properties increased $0.7 million or 5.5%
for the Cumulative 1999 Period primarily as a result of increased casino
volumes, as well as increased levels of competition.

OPERATING COSTS AND EXPENSES

Total operating costs and expenses for the Properties increased 6.8% to
$145.0 million for the Cumulative 1999 Period from $135.8 million for the
Cumulative 1998 Period primarily due to increases in promotional expenses and
personnel expenses.

Casino expenses for the Properties were $63.5 million for the Cumulative
1999 Period, a 10.9% increase from $57.3 million for the Cumulative 1998 Period,
primarily due to increases in promotional expenses incurred by the casino
departments at all four of the properties. Food and beverage expenses for the
Properties decreased 4.9% to $12.4 million for the Cumulative 1999 Period from
$13.0 million for the Cumulative 1998 Period. The decrease in food and beverage
expenses is due to improved cost controls at all the Properties, with
Fitzgeralds Las Vegas achieving the largest improvement as expenses decreased
8.8% for the Cumulative 1999 Period. Room expenses for the Properties increased
7.8% to $9.6 million for the Cumulative 1999 Period

Page 18 of 31
<PAGE> 19

from $8.9 million for the Cumulative 1998 Period. At Fitzgeralds Tunica,
Fitzgeralds Reno and Fitzgeralds Las Vegas, room expenses increased by 12.4%,
6.6% and 4.7%, respectively, primarily due to increases in personnel expenses.
Selling, general and administrative expenses for the Properties increased $2.5
million to $47.2 million for the Cumulative 1999 Period, which includes $1.6
million of professional fees and expenses incurred in conjunction with the
ongoing development and negotiation of the Company's restructuring plan. Such
expenses include professional fees and expenses paid by the Company for the
financial and legal advisors to the Committee.

Personnel expenses for the Properties increased 6.1% to $60.5 million
for the Cumulative 1999 Period from $57.0 million for the Cumulative 1998
Period. The increase is due to continued competitive pressures in the Tunica and
the Black Hawk markets as personnel expenses at Fitzgeralds Tunica and
Fitzgeralds Black Hawk increased 11.3% and 9.8%, respectively, from the
Cumulative 1998 Period.

Marketing expenses for the Properties, which include advertising,
promotional material, FSE disbursements, and special events increased 1.6% for
the Cumulative 1999 Period. There were more intensive marketing efforts at
Fitzgeralds Black Hawk and Fitzgeralds Las Vegas as marketing expenses increased
40.2% and 15.4% for the Cumulative 1999 Period, respectively, while Fitzgeralds
Tunica and Fitzgeralds Reno marketing expenses decreased 12.8% and 3.5%,
respectively.

Depreciation and amortization expenses for the Properties increased 4.2%
to $10.6 million for the Cumulative 1999 Period from $10.1 million for the
Cumulative 1998 Period.

INCOME FROM OPERATIONS

Income from operations for the Properties decreased 43.5% to $11.4
million for the Cumulative 1999 Period from $20.2 million for the Cumulative
1998 Period. The decrease is primarily due to termination of the Cliff Castle
Management Agreement, which provided total revenue of $9.8 million and the
settlement agreement with Turning Stone which provided $1.1 million in revenue
in the Cumulative 1998 Period.

NET INTEREST EXPENSE

Interest expense for the Properties (net of interest income) increased
7.9% to $21.3 million for the Cumulative 1999 Period from $19.8 million for the
Cumulative 1998 Period, primarily due to increased debt as a result of the
purchase of additional slot machines in the latter part of 1998. As of October
3, 1999, the Company had accrued for, but as of the date hereof has not paid,
the regularly scheduled interest payment of $12.5 million on the Senior Secured
Notes which was due and payable on June 15, 1999. Failure to make the scheduled
payment on June 15, 1999, resulted in an increase in the interest rate of 1% to
13 1/4% effective June 16, 1999.

Page 19 of 31

<PAGE> 20

NET LOSS

Net loss for the Properties increased $8.1 million to $9.9 million in
the Cumulative 1999 Period from $1.8 million for the Cumulative 1998 Period for
the reasons stated above.

QUARTER ENDED OCTOBER 3, 1999 COMPARISON TO QUARTER ENDED SEPTEMBER 27, 1998

During the 1999 Q3 Period, the Company experienced a 2.6% increase in
net revenue compared with the 1998 Q3 Period. In order to preserve market share
in each of its four existing markets, the Company continues to modify its
strategies regarding promotional and complimentary expenses in order to meet the
competitive challenges it faces in each of the four markets in which it
competes.

The table below sets forth Net Operating Revenues, Income (Loss) from
Operations, EBITDA, Adjusted EBITDA and other financial data for the 1999 Q3
Period and the 1998 Q3 Period. EBITDA from the Properties (excluding the
settlement agreement with Turning Stone for the 1998 Q3 Period and the
unallocated corporate expenses for both 1999 and 1998 Q3 Periods), improved in
the 1999 Q3 Period to $7.8 million from $7.4 million for the 1998 Q3 Period.
EBITDA for the Properties decreased to $6.8 million for the 1999 Q3 Period from
$7.4 million for the 1998 Q3 Period primarily as a result of $1.0 million of
professional fees and expenses incurred in conjunction with the ongoing
development and negotiation of the Company's restructuring plan in the 1999 Q3
Period. Adjusted EBITDA, which the Company uses as a reasonable measure of its
ability to generate cash from operating activities and as a means to compare the
Company's performance with that of its competitors, decreased to $7.7 million
for the 1999 Q3 Period from $8.5 million for the 1998 Q3 Period (which $8.5
million includes $1.0 million of the $8.0 million received as payment for the
termination of the Cliff Castle Management Agreement). For a definition of
EBITDA and Adjusted EBITDA, see footnotes 3 and 5 of the Statement of Operations
Data.

Page 20 of 31

<PAGE> 21

<TABLE>
<CAPTION>
FOR THE QUARTERS ENDED
-----------------------------------
STATEMENT OF OPERATIONS DATA OCT. 3, 1999 SEPT. 27, 1998
---------------- ----------------
(IN THOUSANDS)
<S> <C> <C>
Net Operating Revenues:
Fitzgeralds Las Vegas $ 12,393 $ 11,711
Fitzgeralds Tunica 18,911 18,206
Fitzgeralds Reno 11,297 11,261
Fitzgeralds Black Hawk 9,543 9,383
Other(1) -- 267
-------- --------
Total $ 52,144 $ 50,828
Nevada Club -- 62
-------- --------
Total $ 52,144 $ 50,890
======== ========
Income (Loss) from Operations:
Fitzgeralds Las Vegas $ (812) $ (875)
Fitzgeralds Tunica 1,398 1,200
Fitzgeralds Reno 1,439 1,517
Fitzgeralds Black Hawk 2,289 2,149
Other(2) (1,092) 66
-------- --------
Total Properties 3,222 4,057
Nevada Club (12) 53
-------- --------
Total $ 3,210 $ 4,110
======== ========
OTHER DATA
EBITDA(3):
Fitzgeralds Las Vegas(4) $ 123 $ (38)
Fitzgeralds Tunica 2,944 2,684
Fitzgeralds Reno 2,043 2,121
Fitzgeralds Black Hawk 2,724 2,606
Other(2) (1,081) 73
-------- --------
Total Properties 6,753 7,446
Nevada Club (12) 53
-------- --------
Total EBITDA 6,741 7,499
Adjustments to EBITDA(5) 977 952
-------- --------
Adjusted EBITDA $ 7,718 $ 8,451
======== ========
</TABLE>

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

(1) Includes (i) fees from the Turning Stone settlement agreement for the 1998
Q3 Period

(2) Includes (i) fees from the Turning Stone settlement agreement for the 1998
Q3 Period; and (ii) corporate expenses not allocated to the Properties for
the 1999 Q3 Period.

(4) At the end of 1998, the Company recorded an impairment loss related to its
17.65% ownership interest in the FSE. Commencing in 1999, the Company began
reporting disbursements to FSE as a marketing expense. In 1998, the Company

Page 21 of 31

<PAGE> 22

reported such disbursements as equity in an unconsolidated affiliate. Thus,
amounts relating to the investment in FSE for 1998 have been reclassified to
conform to the 1999 method of presentation.

(5) Adjustments to EBITDA include (i) exclusion of EBITDA for Nevada Club and
Harolds Club for both periods presented; (ii) inclusion of $1.0 million of
the $8.0 million received in connection with the termination of the Cliff
Castle Management Agreement for the 1998 Q3 Period; and (iii) exclusion of
$1.0 million of professional fees and expenses incurred in conjunction with
the ongoing development and negotiation of the Company's restructuring plan
for the 1999 Q3 Period.

OPERATING REVENUES

Total revenues for the Properties were $57.0 million and net operating
revenues were $52.1 million for the 1999 Q3 Period, representing increases of
2.4% and 2.6%, respectively, over total revenues of $55.6 million and net
operating revenues of $50.8 million for the 1998 Q3 Period.

The Company's business can be separated into four operating departments:
casino, food and beverage, rooms and other. Casino revenues for the Properties
represented 77.6% and 76.1% of total revenues for the Properties for the 1999
and 1998 Q3 Periods, respectively. Casino revenues for the Properties (of which
approximately 84.8% and 83.4% were derived from slot machine revenues for the
1999 and 1998 Q3 Periods, respectively) increased 4.3% to $44.2 million for the
1999 Q3 Period from the $42.4 million recorded for the 1998 Q3 Period. Casino
revenues increased primarily due to improved results from marketing strategies,
an effective guest development program and continued improvement of the slot
product. Casino revenues increased 8.3%, 4.8%, 2.0% and 1.8% at Fitzgeralds Las
Vegas, Fitzgeralds Tunica, Fitzgeralds Black Hawk, and Fitzgeralds Reno,
respectively.

Room revenues for the Properties (at 9.7% and 9.9% of total revenues for
the Properties for the 1999 and 1998 Q3 Periods, respectively) remained
virtually the same from the 1998 Q3 Period. Room revenues increased 7.7% at
Fitzgeralds Las Vegas due to a combination of higher average occupancy rate,
which increased to 91.8% for the 1999 Q3 Period from 85.6% for the 1998 Q3
Period, and an increase of 1.6% in the average daily rate for the 1999 Q3
Period. At Fitzgeralds Tunica, room revenues decreased 5.8% as the average
occupancy rate decreased to 95.0% for the 1999 Q3 Period from 96.6% for the 1998
Q3 Period, and the average daily rate decreased 4.3% for the 1999 Q3 Period.
Fitzgeralds Reno room revenue remained virtually unchanged as the average
occupancy rate increased to 95.1% for the 1999 Q3 Period and the average daily
rate decreased 2.5% for the 1999 Q3 Period.

Food and beverage revenues for the Properties (at 11.1% and 11.6% of
total revenues for the Properties for the 1999 and 1998 Q3 Periods,
respectively) decreased approximately $0.1 million or 1.8% for the 1999 Q3
Period. Fitzgeralds Reno experienced a revenue increase of 7.0%, while food and
beverage revenues at Fitzgeralds Black Hawk, Fitzgeralds Las Vegas and
Fitzgeralds Tunica decreased 5.8%, 5.4% and 3.1%, respectively. The decrease in
Fitzgeralds Black Hawk is due to increased gaming competition in the Black Hawk
market, while the decrease in Fitzgeralds Las Vegas is due to changes in the
utilization of food product as a marketing strategy to generate traffic volumes.

Page 22 of 31

<PAGE> 23

Other revenues for the Properties decreased $0.4 million primarily as a
result of the settlement agreement with Turning Stone in 1998.

Promotional allowances for the Properties remained approximately the
same from the 1998 Q3 Period.

OPERATING COSTS AND EXPENSES

Total operating costs and expenses for the Properties increased 4.6% to
$48.9 million for the 1999 Q3 Period from $46.8 million for the 1998 Q3 Period.

Casino expenses for the Properties increased 0.1% to $20.4 million for
the 1999 Q3 Period. Food and beverage expenses for the Properties increased 2.2%
to $4.6 million for the 1999 Q3 Period from $4.5 million for the 1998 Q3 Period.
Room expenses for the Properties increased 9.0% to $3.2 million for the 1999 Q3
Period. Room expense increased, 16.4%, 9.7% and 3.5%, respectively, at
Fitzgeralds Tunica, Fitzgeralds Las Vegas and Fitzgeralds Reno, primarily due to
increases in personnel expenses. Selling, general and administrative expenses
for the Properties increased $0.8 million to $16.7 million for the 1999 Q3
Period, which includes $1.0 million of professional fees and expenses incurred
in conjunction with the ongoing development and negotiation of the Company's
restructuring plan. Such expenses include professional fees and expenses paid by
the Company for the financial and legal advisors to the Committee.

Personnel expenses for the Properties increased 3.6% to approximately
$20.2 million for the 1999 Q3 Period from $19.5 million for the 1998 Q3 Period.
The increase is due to continued competitive pressures in the Tunica and the
Black Hawk markets as personnel expenses at Fitzgeralds Tunica and Fitzgeralds
Black Hawk increased 8.5% and 5.1%, respectively, from the 1998 Q3 Period, while
Fitzgeralds Las Vegas and Fitzgeralds Reno remained approximately the same.

Marketing expenses for the Properties, which include advertising,
promotional material, FSE disbursements, and special events increased 1.6% for
the 1999 Q3 Period. More intensive marketing efforts were undertaken in response
to increasing competitive pressures at Fitzgeralds Black Hawk and Fitzgeralds
Las Vegas, as marketing expenses increased 30.4% and 12.5%, respectively, for
the 1999 Q3 Period. The increases were partially offset by a 12.5% decrease at
Fitzgeralds Tunica, with Fitzgeralds Reno remaining unchanged.

Depreciation and amortization expenses of the Properties increased 4.2%
to $3.5 million for the 1999 Q3 Period.

INCOME FROM OPERATIONS

Income from operations for the Properties decreased $0.9 million to $3.2
million for the 1999 Q3 Period from $4.1 million for the 1998 Q3 Period
primarily as a result of $1.0 million of

Page 23 of 31

<PAGE> 24

professional fees and expenses incurred in conjunction with the ongoing
development and negotiation of the Company's restructuring plan in the 1999 Q3
Period.

NET INTEREST EXPENSE

Interest expense for the Properties (net of interest income) increased
10.1% to $7.2 million for the 1999 Q3 Period. As of October 3, 1999, the Company
had accrued for, but as of the date hereof has not paid, the regularly scheduled
interest payment of $12.5 million on the Senior Secured Notes which was due and
payable on June 15, 1999. Failure to make the scheduled payment on June 15,
1999, resulted in an increase in the interest rate of 1% to 13 1/4%, effective
June 16, 1999.

NET LOSS

Net loss for the Properties increased $0.9 million to $4.0 million in
the 1999 Q3 Period from $3.1 million for the 1998 Q3 Period for the reasons
stated above.

LIQUIDITY AND CAPITAL RESOURCES

At October 3, 1999, the Company had unrestricted cash of $22.1 million,
compared to $13.0 million at December 31, 1998 and $17.9 million at September
27, 1998. The Company's sources of liquidity and cash flows during the
Cumulative 1999 Period were operations of $18.5 million and proceeds from sale
of assets of $2.5 million. Uses of liquidity during the Cumulative 1999 Period
included acquisition of property and equipment of $3.1 million, repayment of
long-term debt of $5.8 million and repayment of the line of credit of $3.0
million.

Net cash used in investing activities was $0.4 million and $5.1 million
for the Cumulative 1999 and 1998 Periods, respectively. Net cash used in
financing activities was $9.1 million and $8.9 million for the Cumulative 1999
and 1998 Periods, respectively.

The Company's principal sources of capital will consist of cash from
operations, the Credit Facility and vendor or third party financing of gaming
and other equipment. In October 1998, the Company established the $15.0 million
Credit Facility with a lending institution, of which up to $5.0 million was
permitted to be used for capital projects at Fitzgeralds Black Hawk and up to
$10.0 million of which was permitted to be used for general corporate purposes.
The Credit Facility is secured by a lien on substantially all of the Company's
assets, which lien is senior to the lien securing the Senior Secured Notes. The
Company believes that it has adequate sources of liquidity to meet its normal
operating requirements. However, its relatively high degree of leverage has
prevented it from making the level of capital expenditures required to maintain
and enhance the competitive position of its properties. Management and the Board
of Directors do not see any way to resolve this problem without restructuring
the Company's indebtedness. Therefore, on May 13, 1999, the Company's Board of
Directors determined that, pending a restructuring of its indebtedness, it would
not be in the best interest of the Company to make the regularly scheduled
interest payments on its Senior Secured Notes and as of the date hereof has not
paid the regularly scheduled interest payment of $12.5 million on the Senior

Page 24 of 31

<PAGE> 25

Secured Notes which was due and payable on June 15, 1999. Accordingly, an Event
of Default under the Indenture pursuant to which the Senior Secured Notes were
issued occurred on July 15, 1999, and is continuing. No action has been taken by
either the Indenture Trustee or holders of at least 25% of the Senior Secured
Notes to accelerate the Senior Secured Notes and declare the unpaid principal
and interest to be due and payable. In the event the Senior Secured Notes are
accelerated, the Company would not have the resources available to repay such
indebtedness. The Company does not currently anticipate that it will make the
regularly scheduled interest payment on the Senior Secured Notes, which will be
due and payable on December 15, 1999. The Company has initiated and is
continuing discussions with representatives of the Committee concerning a
restructuring of the Company's indebtedness.

By terminating the interest payments on the Senior Secured Notes until
such time as a restructuring plan has been negotiated and implemented, the
Company believes that its liquidity and capital resources will be sufficient to
maintain all of its normal operations at current levels during the restructuring
period and does not anticipate any adverse impact on its operations, customers
or employees. However, costs incurred and to be incurred in connection with any
restructuring have been and will continue to be substantial and, in any event,
there can be no assurance that the Company will be able to successfully
restructure its indebtedness or that its liquidity and capital resources will be
sufficient to maintain its normal operations during the restructuring period.

EBITDA AND ADJUSTED EBITDA

The Company's earnings before interest, income taxes, depreciation and
amortization ("EBITDA") was $22.0 million for the Cumulative 1999 Period and
$29.7 million for the Cumulative 1998 Period. EBITDA is calculated by adding
depreciation and amortization expenses to income from operations. The Company's
Adjusted EBITDA was $23.6 million for the Cumulative 1999 Period and $23.4
million for the Cumulative 1998 Period (which $23.4 million does not include
$7.0 million of the $8.0 million received in connection with the termination of
the Cliff Castle Management Agreement). Adjusted EBITDA is determined based on
the adjustments described in Note 5 to "Statement of Operations Data." EBITDA
and Adjusted EBITDA should only be read in conjunction with all of the Company's
financial data summarized above and its financial statements prepared in
accordance with GAAP appearing elsewhere herein, and should not be construed as
an alternative either to income from operations (as determined in accordance
with GAAP) as an indication of the Company's operating performance or to cash
flows from operating activities (as determined in accordance with GAAP) as a
measure of liquidity. This presentation of EBITDA and Adjusted EBITDA may not be
comparable to similarly titled measures reported by other companies.

Page 25 of 31

<PAGE> 26

RATIO OF EARNINGS TO FIXED CHARGES

The ratio of earnings to fixed charges measures the extent by which
earnings, as defined, exceed certain fixed charges. Earnings are defined as
earnings before income taxes, interest on indebtedness, imputed interest on
capital lease obligations and the portion of rent expense deemed to represent
interest. Fixed charges consist of interest on indebtedness, imputed interest on
capital lease obligations and the portion of rent expense deemed to represent
interest. Earnings were insufficient to cover fixed charges by $10.0 million and
$3.4 million for the Cumulative 1999 and 1998 Periods, respectively.

BUSINESS SEASONALITY AND SEVERE WEATHER

The gaming operations of the Company in certain locations may be
seasonal and, depending on the location and other circumstances, the effects of
such seasonality could be significant. At Fitzgeralds Las Vegas, business levels
are generally weaker from Thanksgiving through the middle of January (except
during the week between Christmas and New Year's) and throughout the summer, and
generally stronger from mid-January through Easter and from mid-September
through Thanksgiving. At each of the three other Fitzgeralds-brand properties,
business levels are typically weaker from Thanksgiving through the end of the
winter and typically stronger from mid-June to mid-November.

The Company's results are also affected by inclement weather in relevant
markets. The Fitzgeralds Black Hawk site, located in the Rocky Mountains of
Colorado, and the Fitzgeralds Reno site, located in the foothills of the Sierra
Nevada mountains in Nevada, are subject to snow and icy road conditions during
the winter months. Any such severe weather conditions may discourage potential
customers from visiting the Company's facilities.

COMPUTERIZED OPERATIONS AND THE YEAR 2000

During recent years, there has been significant global awareness raised
regarding the potential disruption to business operations worldwide resulting
from the inability of current technology to process properly the change from the
year 1999 to 2000. The Year 2000 issue is the result of computer programs being
written using two digits rather than four to define the applicable year. Any of
the Company's computer programs that have time-sensitive software may recognize
a date using "00" as the year 1900 rather than the year 2000. This could result
in a system failure or miscalculations causing disruptions of operations,
including, among other things, a temporary inability to process transactions,
send invoices, or engage in similar normal business activities.

In 1997, the Company initiated an investigation to identify and ensure
that all significant applications will be Year 2000 compliant. The Company is
conducting its investigation and is in the process of obtaining assurances from
its vendors that timely updates will be made available to ensure Year 2000
compliance. However, there can be no guarantee that the systems of other
companies on which the Company's systems rely will be timely converted, or that
a failure to

Page 26 of 31

<PAGE> 27

convert by another company, or a conversion that is incompatible with the
Company's systems, would not have a material adverse effect on the Company.

The Company will utilize both internal and external resources to test,
program and/or replace applications to ensure that they are Year 2000 compliant.
Completion of this project is anticipated by December 15, 1999. The costs
associated with the Year 2000 project are expected to be approximately $0.9
million; however, the Company has not finalized its investigation. The Company
has incurred approximately 82% of such costs through the Cumulative 1999 Period
and anticipates that the remaining portion of the estimated cost will be
incurred through December 15, 1999. Approximately $0.7 million of the cost is
expected to be capitalized with the remaining amount expensed as incurred. Such
costs are expected to be funded through operating cash flows as well as vendor
and third party financing. Costs of hardware and software required to be
purchased as a result of the Year 2000 issue will be capitalized in accordance
with normal policy. Personnel and all other costs related to the project will be
expensed as incurred. The conversion of most purchased applications will be
completed under the terms of maintenance agreement which provide for the
conversion of such applications at no additional cost. All equipment and other
operating systems are currently being evaluated to determine if Year 2000 issues
have an effect on their ability to perform their respective functions. The
Company has not established a comprehensive contingency plan at this time,
although its primary alternative is to operate manual systems. The Company
depends upon external parties, including customers, suppliers, business
partners, gas and electric system operators, government agencies and financial
institutions to reliably deliver their products and services. The Company
believes that its most reasonable likely worst case scenario is dependent on the
extent to which any of these parties experience Year 2000 problems in their
systems. Should any of these critical vendors fail, the impact of any such
failure could become a significant challenge to the Company's ability to meet
the demands of its customers. As the Company pursues its implementation of its
Year 2000 compliance plan, it will continue to evaluate the need for contingency
plans for those areas which might be at risk for being Year 2000 compliant.

Based on its investigation to date, the Company does not believe that it
will experience any significant adverse effects or material unbudgeted costs
associated with the Year 2000 project; however, the Company cannot provide any
assurance in this regard and any such cause or effect could materially and
adversely affect the Company.

ITEM 3

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

The fair market value of the Company's fixed debt obligations, which
includes the Senior Secured Notes as well as other obligations, has not
materially changed from $119.6 million at December 31, 1998. It is uncertain at
this time what the impact of the Company's attempted restructuring of its Senior
Secured Notes will have on the fair market value of the portion of the fixed
debt which includes the Senior Secured Notes. See Part I, Item 2. Management's
Discussion and Analysis of Financial Condition and Results of
Operations-Liquidity and Capital Resources.

Page 27 of 31

<PAGE> 28

PART II

OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS.

HAROLDS CLUB

On June 18, 1999, Harrah's Entertainment, Inc. closed on the purchase of
Harolds Club and the Nevada Club. Concurrent with the closing and pursuant to
the terms of certain settlement and lease termination agreements, each of the
lawsuits filed against Fitzgeralds Reno arising out of its contingent
obligations for certain Harolds Club land lease obligations was dismissed with
prejudice and, with respect to the lawsuits wherein judgment had been recorded,
satisfactions of judgment have been entered.

RENO TRANSPORTATION RAIL ACCESS CORRIDOR (ReTRAC) PROJECT

In October 1998, the Reno City Council approved a special assessment
district to finance a portion of the costs to lower the railroad tracks that run
through downtown Reno, Nevada (the "ReTRAC Project"). Preliminary plans for the
ReTRAC Project provide for the construction of a temporary rail bypass that will
be used to divert rail traffic around the main railroad during construction. The
City estimates that a period of approximately two and one half years will be
required to complete the ReTRAC Project. The southern boundary of the bypass
will extend out into the middle of Commercial Row, the street adjacent to the
Fitzgeralds Reno hotel entrance, valet parking area and hotel loading zone.

On November 30, 1998, the Company filed a lawsuit against the City of
Reno to challenge the method by which the special assessment to be levied
against the Company was determined. Based on preliminary plans prepared by the
City of Reno, Fitzgeralds Reno would expect to lose several parking spaces, the
current valet parking area, an outdoor billboard structure advertising available
rooms and a building used to house administrative offices, and be required to
relocate the hotel entrance currently on Commercial Row. The City of Reno has
also subsequently indicated that the ReTRAC Project might require the demolition
of the Fitzgeralds Reno Rainbow Skyway. Implementation of the ReTRAC Project as
currently proposed would cause the Company to suffer significant and permanent
loss in business revenue and income; certain operating efficiencies from
demolished or impaired physical structures; and a portion of its existing
customer base as a result of the construction and operation of the proposed rail
bypass. The City of Reno filed an answer to the Company's lawsuit on January 19,
1999. On or about June 1, 1999, George Karadanis and Robert Maloff d/b/a
Sundowner Hotel and Casino (the "Sundowner") filed a Motion for Leave to
Intervene as plantiffs in the Company's lawsuit against the City of Reno. The
Sundowner is situated in the same special assessment district at issue in the
lawsuit. Notwithstanding the Company's opposition to the Motion for Leave to
Intervene, on July 21, 1999, the court entered an Order granting said motion.
The Sundowner filed its Complaint in Intervention on July 27, 1999. The case is
expected to proceed in the nature of a judicial review of the Reno City
Council's administrative record relating to the

Page 28 of 31

<PAGE> 29

creation of the ReTRAC Project special assessment district. It is anticipated
that a decision on the merits of the Company's claims will be decided subsequent
to the filing of opening and reply briefs; however, oral arguments may be
requested, in which case a hearing will be held. A hearing date has not yet been
set.

The Company has received no assurance as to whether or when the City of
Reno will negotiate mitigation measures and whether such measures could or would
fully compensate the Company for the fair market value of its property and
anticipated operating losses.

The Company is a party to various lawsuits relating to routine matters
incidental to its business. The Company does not believe that the outcome of
such litigation, individually or in the aggregate, will have any material
adverse effect on its financial condition.

ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS.

Not Applicable

ITEM 3. DEFAULTS UPON SENIOR SECURITIES.

(a) As previously reported in its Report on Form 8-K filed July 22,
1999, the Company is in default on its $205.0 million Senior Secured Notes. That
default resulted in a cross default under the Company's $15.0 million Credit
Facility. See also Note 4 of Notes to Condensed Consolidated Financial
Statements and Management's Discussion and Analysis of Financial Condition and
Results of Operations contained elsewhere in this Report on Form 10-Q. As of the
date of this Form 10-Q, the total arrearage on the Senior Secured Notes was
$12.5 million.

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

Not Applicable

ITEM 5. OTHER INFORMATION.

On July 22, 1999, the Company filed a Report on Form 8-K, Item 5,
concerning a default on its Senior Secured Notes. The Form 8-K included
information regarding the Company's initial proposal to the holders of its
Senior Secured Notes, a summary of the Company's proposal for substantial
additional capital expenditures at its Black Hawk and Tunica properties, summary
EBITDA (excluding restructuring costs, which may be substantial) projections for
both a base case and the Company's proposed capital expenditure case, and a
discussion of certain risks and uncertainties attendant thereto. In addition to
the normal business and other risks associated with any forward-looking
information and substantial capital expenditure program, there are substantial
additional risks in this situation due to the virtual certainty of the necessity
for a proceeding under the federal bankruptcy law and for regulatory proceedings
under the gaming laws of Nevada, Mississippi and Colorado. Bankruptcy court
approval may well require the consent of claimants and other constituencies in
addition to the holders of the Senior Secured Notes and obtaining such consents
may be difficult, if not impossible, and time-consuming. The

Page 29 of 31
<PAGE> 30

requirements for approval by the various gaming regulatory authorities may also
be time-consuming and licensure or other gaming regulatory approval of
individual security holders may be required depending on the nature of any plan
that is ultimately approved. In assessing possible outcome of the Company's
proposed restructuring, these and all of the other factors more fully elaborated
in the Form 8-K should be given careful consideration.

ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.

<TABLE>
<CAPTION>
(a) Exhibits
<S> <C>
3.1(ii): By-Laws, as amended, of Fitzgeralds Gaming Corporation.

10.1: Employment Agreement dated July 5, 1999, between Fitzgeralds
Gaming Corporation and Michael E. McPherson.

10.2: Employment Agreement dated September 1, 1999, between
Fitzgeralds Gaming Corporation and Paul H. Manske.

10.3: Employment Agreement dated September 1, 1999, between
Fitzgeralds Gaming Corporation and Max L. Page.

27(c): Financial Data Schedule

(b) Reports on Form 8-K
Report on Form 8-K, Item 5, filed on October 14, 1999
</TABLE>

Page 30 of 31

<PAGE> 31

SIGNATURES

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

Dated: November 10, 1999

FITZGERALDS GAMING CORPORATION

/s/ Michael E. McPherson
Michael E. McPherson
Executive Vice President and
Chief Financial Officer
(Duly Authorized Officer, Principal
Financial Officer and Principal
Accounting Officer)

Page 31 of 31

<PAGE> 1
EXHIBIT 3.1(ii)

BY-LAWS
OF
FITZGERALDS GAMING CORPORATION
(AS OF NOVEMBER 1, 1999)

ARTICLE I
OFFICES

A. Principal Office. The principal office of the corporation shall be in
the City of Las Vegas, County of Clark, State of Nevada pursuant to the Articles
of Incorporation of Fitzgeralds Gaming Corporation (the "Corporation").

B. Other Offices. The Corporation may also have offices at such other
places as the Board of Directors may from time to time determine or the business
of the Corporation may require.

ARTICLE II
STOCKHOLDERS

A. Location. All annual meetings of the stockholders may be held within
or without the State of Nevada. Special meetings of the stockholders may be held
at such place as shall be stated in the notice of the meeting, or in a duly
executed waiver of notice thereof.

B. Annual Meetings. An annual meeting of the stockholders, commencing
with the year 1995, shall be held on any day which is not a legal holiday, in
the month of May in each year at a time specified by the Board of Directors,
when they shall elect by a majority vote a Board of Directors, and transact such
other business as may properly be brought before the meeting.

C. Special Meetings. Special meetings of the stockholders for any
purpose or purposes, unless otherwise prescribed by statute or by the Articles
of Incorporation, may be called by the Chairman of the Board or the President,
and shall be called by the Chairman of the Board, the President or Secretary at
the request in writing of stockholders owning a majority in amount of the entire
stock of the Corporation issued and outstanding, and entitled to vote. Such
request shall state the purpose or purposes of the proposed meeting.

D. Notice of Meetings. Written notice of the annual meeting and of all
special meetings of the stockholders, signed by the President or a
Vice-President, or the Secretary or an Assistant Secretary, stating the purpose
or purposes for which the meeting is called and the time when and the place
where it is to be held shall either be delivered personally or shall be mailed
to the stockholders of record entitled to vote thereat not less than ten (10)
nor more than sixty (60) days prior to the meeting, and if mailed it shall be
directed to any stockholder at his address as it appears on the records of the
Corporation.

Page 1 of 10
<PAGE> 2

E. Action by Consent. Any action required or permitted to be taken at
any meeting of the stockholders may be taken without a meeting if a written
consent of such action is signed by all of the stockholders and such written
consent is filed with the Minutes of the Corporation.

F. Scope of Special Meetings. Business transacted at all special
meetings shall be confined to the objects stated in the call.

G. Quorum. The holders of a majority of the stock issued and
outstanding, entitled to vote thereat, present in person or represented by
proxy, shall be requisite and shall constitute a quorum at all meetings of the
stockholders for the transaction of business except as otherwise provided by
statute, by the Articles of Incorporation or by these By-Laws. If, however, such
quorum shall not be present or represented by proxy at any meeting of the
stockholders, the stockholders entitled to vote thereat, present in person or
represented by proxy, shall have power to adjourn the meeting from time to time,
without notice other than announcement at the meeting, until a quorum shall be
present or represented, at which time any business may be transacted which might
have been transacted at the meeting as originally notified.

H. Voting Requirements. When a quorum is present or represented at any
meeting, the vote of the holders of a majority of the stock having voting power
present in person or represented by proxy shall decide any questions brought
before such meeting, unless the question is one upon which, by express provision
of the statutes or of the Articles of Incorporation or of these By-Laws, a
different vote is required in which case such express provision shall govern and
control the decision of such question.

I. Right to Vote. At each meeting of the stockholders, every stockholder
having the right to vote shall be entitled to vote in person, or by proxy
appointed by an instrument in writing subscribed by such stockholder or by his
duly authorized attorney, and filed with the minutes of such meeting. Each
stockholder shall have one (1) vote for each share of stock having voting power,
registered in his name on the books of the Corporation on the date of closing
the books of the Corporation against transfers of stock or on the record date
fixed for the determination of stockholders entitled to vote at such meeting or,
if the books be not closed or a record date fixed, then on the date of such
meeting.

ARTICLE III
DIRECTORS

A. Number and Term. Members of the governing Board shall be known as
"Directors". The number of Directors which shall constitute the whole Board
shall be not less than three (3) nor more than nine (9), except that in cases
where all the shares of the Corporation are owned beneficially and of record by
either one or two shareholders, the number may be less than three (3) but not
less than the number of shareholders. The number of Directors may from time to
time be increased or decreased within the limits herein prescribed by Resolution
approved by the affirmative vote of two-thirds of the then members of the Board
of Directors, or otherwise by amending this section of the By-Laws and the
Articles of Incorporation. Directors shall be elected at the annual meeting of
the stockholders, and each Director shall be elected to serve until his
successor shall be elected and shall qualify. Directors need not be
stockholders.

Page 2 of 10
<PAGE> 3

B. Location of Meetings. The Directors may hold their meetings inside or
outside Nevada at such places as they may from time to time determine.

C. Vacancies. Vacancies in the Board of Directors may be filled by a
vote of the majority of the remaining Directors, though less than a quorum, and
each Director so elected shall hold office for the unexpired term in respect to
which such vacancy occurred or until the next annual election of Directors.

D. Scope of authority. The property and business of the Corporation
shall be managed by its Board of Directors which may exercise all such powers of
the Corporation and do all such lawful acts and things as are not by statute or
by the Articles of Incorporation or by these By-Laws directed or required to be
exercised or done by the stockholders.

E. First Meeting. The first meeting of each newly elected Board of
Directors shall be held at such time and place either within or without the
State of Nevada, as shall be fixed by the vote of the stockholders at the annual
meeting and no notice of such meeting shall be necessary to the newly elected
Directors in order to legally constitute the meeting, provided a quorum shall be
present, or they may meet at such place and time as shall be fixed by the
consent in writing of all Directors.

F. Regular Meeting. Regular meetings of the Board of Directors may be
held without notice at such time and place either within or without the State of
Nevada as shall from time to time be determined by the Board of Directors.

G. Special Meeting. Special meetings of the Board of Directors may be
called by the Chairman of the Board or the President on three (3) days notice to
each Director, either personally, or by mail or facsimile transmission or by
telegram. Special meetings shall be called by the Chairman of the Board, the
President or Secretary in like manner and on like notice on the written request
of any three (3) Directors.

H. Meeting by Telephone or Similar Communications. The Board of
Directors may participate in meetings by means of conference telephone or
similar communications equipment by means of which all Directors participating
in the meeting can hear each other, and participation in such meeting shall
constitute presence in person by such Directors at such meetings.

I. Action by Consent. Any action required or permitted to be taken at
any meeting of the Board of Directors or committee thereof may be taken without
a meeting if a written consent of such action is signed by all members of the
Board of Directors and such written consent is filed with the minutes of the
Corporation.

J. Quorum and Voting Requirements. A majority of the Directors at a
meeting duly assembled shall be necessary and sufficient to constitute a quorum
for the transaction of business, and the act of all of the Directors present at
any meeting at which a quorum is present shall be the act of the Board of
Directors, except as may be otherwise specifically provided by statute or by the
Articles of Incorporation or by these By-Laws. Any action of a majority,

Page 3 of 10
<PAGE> 4

although not at a regularly called meeting, and the record thereof, if assented
to in writing by all of the other members of the Board of Directors, shall be as
valid and effective in all respects as if passed by the Board of Directors in a
regular meeting.

K. Committees of Directors. The Board of Directors may, by resolution or
resolutions passed by a majority of the whole Board of Directors, designate one
or more committees, each committee to consist of two or more of the Directors of
the Corporation, which, to the extent provided in said resolution or
resolutions, shall have and may exercise the powers of the Board of Directors in
the management of the business and affairs of the Corporation, and may have
power to authorize the seal of the Corporation to be affixed to all papers which
may require it. Such committee or committees shall have such name or names as
may be determined from time to time by resolution adopted by the Board of
Directors.

L. Reports of Committees. The committees of the Board of Directors shall
keep regular minutes of their proceedings and report the same to the Board of
Directors when required.

M. Compensation of Directors. Without regard to personal interest, the
Board of Directors may, by resolution, establish the compensation of Directors
for services in any capacity.

N. Removal of Director. Any Director may be removed from office by the
vote or written consent of stockholders representing not less than eighty
percent (80%) of the issued and outstanding capital stock having voting power,
and his successor may be elected at the same meeting. No Director shall be
removed from office except upon the vote or written consent of stockholders
owning sufficient shares to have prevented his election to office in the first
instance.

ARTICLE IV
OFFICERS

A. Selection and Office. The officers of the Corporation shall be chosen
by the Directors and shall consist of a President, a Vice President, a
Secretary, and a Treasurer. Any two (2) offices, except the offices of the
President and Vice President, may be held by the same person.

B. Annual Selection. The Board of Directors, at its first meeting after
each annual meeting of stockholders, shall choose a President from its members,
and shall choose a Vice President, a Secretary, and a Treasurer, none of whom
need to be a member of the Board of Directors.

C. Additional Officers. The Board of Directors may appoint a Chairman of
the Board of Directors, Executive Vice Presidents, additional Vice Presidents,
Assistant Secretaries, Assistant Treasurers, and such other officers and agents
as it shall deem necessary, who shall hold their offices for such terms and
shall exercise such powers and perform such duties as shall be determined from
time to time by the Board of Directors.

Page 4 of 10
<PAGE> 5

D. Term of Office. The officers of the Corporation shall hold office
until their successors are chosen and qualify in their stead. Any officer
elected or appointed by the Board of Directors may be removed at any time by the
Board of Directors by the affirmative vote of a majority of the whole Board of
Directors. If the office of any officer becomes vacant for any reason, the
vacancy shall be filled by the Board of Directors.

E. The Chairman of the Board of Directors. The Chairman of the Board of
Directors shall preside at all meetings of the Board of Directors, discharge all
duties incumbent upon the presiding officer, and perform such other duties as
the Board of Directors may prescribe. The Chairman of the Board of Directors
shall have the power and authority to execute bonds, mortgages and other
contracts requiring a seal, under the seal of the Corporation, except where
required or permitted by law to be otherwise signed and executed, and except
where the signing and execution thereof shall be expressly delegated by the
Board of Directors to some other officer or agent of the Corporation.

F. The President. The President shall be the chief executive officer of
the Corporation, except where expressly delegated by the Board of Directors to
the Chairman of the Board. He shall preside at all meetings of the stockholders
and Directors, shall be ex officio a member of all standing committees, shall
have general and active management of the business of the Corporation and shall
see that all orders and resolutions of the Board of Directors are carried into
effect.

The President shall execute bonds, mortgages and other contracts
requiring a seal, under the seal of the Corporation, except where required or
permitted by law to be otherwise signed and executed, and except where the
signing and execution thereof shall be expressly delegated by the Board of
Directors to some other officer or agent of the Corporation.

G. The Vice President. The Executive Vice President, or if none be
elected or appointed, the Vice President shall, in the absence or disability of
the President, perform the duties and exercise the powers of the President, and
shall perform the duties and exercise the powers of the President, and shall
perform such other duties as the Board of Directors shall prescribe.

H. The Secretary. The Secretary shall attend all sessions of the Board
of Directors and all meetings of the stockholders and record all votes and the
minutes of all proceedings in a book to be kept for that purpose, and shall
perform like duties for the standing committees when required. The Secretary
shall give, or cause to be given, notice of all meetings of stockholders and
special meetings of the Board of Directors, and shall perform such other duties
as may be prescribed by the Board of Directors or President, under whose
supervision he shall be. The Secretary shall keep in safe custody the seal of
the Corporation, and when authorized by the Board of Directors, affix the same
to any instrument requiring the seal, and when so affixed, it shall be attested
by the Secretary's signature or by the signature of the Treasurer or an
Assistant Secretary.

Page 5 of 10
<PAGE> 6

I. The Treasurer. The Treasurer shall have the custody of the corporate
funds and securities and shall keep full and accurate accounts of receipts and
disbursements in books belonging to the Corporation and shall deposit all monies
and other valuable effects in the name and to the credit of the Corporation in
such depositories as may be designated by the Board of Directors.

The Treasurer shall disburse the funds of the Corporation as may be
ordered by the Board of Directors, taking the proper vouchers for such
disbursements, and shall render to the President and Directors, at the regular
meetings of the Board of Directors, or whenever they may require it, an account
of all the Treasurer's transactions and the financial condition of the
Corporation.

J. Bonds. If required by the Board of Directors, the Treasurer shall
give the Corporation a bond in such sum, and with such surety or sureties as
shall be satisfactory to the Board of Directors, for the faithful performance of
the duties of the Treasurer's office, and for the restoration to the
Corporation, in case of the Treasurer's death, resignation, retirement or
removal from office, of all books, papers, vouchers, money and other property of
whatever kind in the Treasurer's possession or under his control belonging to
the Corporation.

ARTICLE V
CERTIFICATES OF STOCK

A. Form. Certificates of stock of the Corporation shall be in such form
not inconsistent with the Articles of Incorporation as shall be approved by the
Board of Directors, shall be issued under the seal of the Corporation and shall
be numbered and shall be entered in the books of the Corporation as they are
issued. They shall exhibit the holder's name and the number of shares owned by
him and shall be signed by the President or Vice President and the Secretary or
an Assistant Secretary or the Treasurer or an Assistant Treasurer. If any stock
certificate is countersigned or otherwise authenticated by a transfer clerk or
transfer agent and a registrar, a facsimile of the signatures of the said
officers may be printed or lithographed upon such certificates. Such
certificates of stock shall set forth the designations, preferences and
relative, participating, optional, or other special rights of the various
classes of stock or series thereof and the qualifications, limitations or
restrictions of such rights.

B. Dividends. Dividends upon the capital stock of the Corporation,
subject to the provisions of the Articles of Incorporation, if any relate
thereto, may be declared by the Board of Directors at any regular or special
meeting pursuant to law. Dividends may be paid in cash, in property, or in
shares of the capital stock of the Corporation, subject to the provisions of the
Articles of Incorporation.

C. Reserve Fund. Before the payment of any dividend or distribution of
profits, there may be set aside out of the funds of the Corporation available
for dividends such sum or sums as the Directors from time to time, in their
absolute discretion, think proper as a reserve fund to meet contingencies, or
for equalizing dividends, or for such other purpose as the Directors shall think
conducive to the interests of the Corporation, and the Directors may modify or
abolish any such reserve in the manner in which it was created.

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D. Stock Ledger. The original or duplicate stock ledger or a statement
setting out the name and address of the custodian thereof shall be kept at the
principal office of the Corporation in Nevada.

E. Registered Stockholders. The Corporation shall be entitled to treat
the holder of record of any share or shares of stock as the holder-in-fact
thereof and, accordingly, shall not be bound to recognize any equitable or other
claim to or interest in such share or shares on the part of any other person,
whether or not it shall have express or other notice thereof, except as
expressly provided by the laws of Nevada.

F. Closing of Transfer of Books. The Directors may prescribe a period
not exceeding forty (40) days prior to any meeting of the stockholders or prior
to the day appointed for the payment of dividends during which no transfer of
stock on the books of the Corporation may be made, or may fix a day not more
than forty (40) days prior to the holding of any such meeting or the date of the
payment of any such dividend as the day as of which stockholders entitled to
notice of and to vote at such meeting and entitled to receive payment of such
dividend shall be determined; and only stockholders of record on such day shall
be entitled to notice or to vote at such meeting or to receive payment of such
dividend.

G. Transfers of Stock. Upon surrender to the Corporation or the transfer
agent of the Corporation, of a certificate of stock duly endorsed or accompanied
by proper evidence of succession, assignment or authority to transfer, it shall
be the duty of the Corporation to cancel the older certificate, issue a new
certificate to the person entitled thereto, and record the transaction upon its
books.

H. Lost Certificates. The Board of Directors may direct a new
certificate or certificates of stock to be issued in place of any certificate or
certificates theretofore issued by the Corporation alleged to have been lost or
destroyed, upon the making of stock to be lost or destroyed. When authorizing
such issue of a new certificate or certificates, the Board of Directors may, in
its discretion, as a condition precedent to the issuance thereof, require the
owner of such lost or destroyed certificate or certificates, or his legal
representative, to advertise the same in such manner as it shall require and/or
give the Corporation a bond in such sum as it may direct as indemnity against
any claim that may be made against the Corporation with respect to the
certificate alleged to have been lost or destroyed.

ARTICLE VI
GENERAL PROVISIONS

A. Negotiable Instruments. All checks or demands for money and notes of
the Corporation shall be signed by such Directors, officers or employees as the
Board of Directors may from time to time designate.

B. Fiscal Year. The fiscal year shall commence January 1 of each year
and shall close on December 31 each year.

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<PAGE> 8

C. Seal. The corporate seal shall have inscribed thereon the name of the
Corporation, the date of incorporation, and the words "Corporate Seal, Nevada".

ARTICLE VII
NOTICES

A. Notices. Whenever under the provision of the statutes or of the
Articles of Incorporation or these By-Laws, notice is required to be given to
any Director or stockholder, it shall not be construed to mean personal notice,
but such notice may be given in writing, by mail, addressed to such Director or
stockholder at such address as appears on the books of the Corporation, and such
notice shall be deemed to be given at the time when the same shall be thus
mailed.

B. Objections and Consents. Whenever all parties entitled to vote at any
meeting, whether of Directors or stockholders, or filed with the Secretary, or
by presence at such meeting and oral consent entered in the minutes, or by
taking part in the deliberations at such meeting without objection, the actions
taken at such meeting shall be as valid as taken at a meeting regularly called
and noticed, and at such meeting any business may be transacted which is not
excepted from the written consent or to the consideration of which no objection
for want of notice is made at the time, and if any meeting be irregular for want
of notice or such consent, provided a quorum was present at such meeting, the
proceedings of such meeting may be ratified and approved and rendered valid and
the irregularity or defect therein waived by a writing signed by all parties
having the right to vote thereat. Such consent or approval, if given by
stockholders, may be by proxy or attorney, but all such proxies and
powers-of-attorney must be in writing.

C. Waiver of Notice. Whenever any notice whatsoever is required to be
given under the provisions of the statute, of the Articles of Incorporation or
of these By-Laws, a waiver thereof in writing signed by the persons entitled to
said notice either before or after the time stated therein, shall be deemed
equivalent thereto.

ARTICLE VIII
INDEMNITY AND LIABILITY

A. Liability. To the fullest extent that Chapter 78 of the Nevada
Revised Statutes, or as hereafter amended, permits elimination or limitation of
the liability of Directors and officers, no Director or officer shall be
personally liable for monetary damages as such for any action taken, or any
failure to take any action, as a director or officer. Amendment or repeal of
this Section A of Article VIII which has the effect of increasing director or
officer liability shall operate prospectively only, and shall not affect any
action taken, or any failure to act, prior to its adoption.

B. Indemnification.

1. Scope. Except as prohibited by Chapter 78 of the Nevada Revised
Statutes, every Director and officer of the Corporation shall be entitled as a
matter of right to be indemnified by the Corporation against reasonable expense
and any liability paid or incurred by

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<PAGE> 9

such person in connection with any actual or threatened claim, action, suit or
proceeding, civil, criminal, administrative, investigative or other, whether
brought by or in the right of the Corporation or otherwise, in which he or she
may be involved, as a party or otherwise, by reason of such person being or
having been a director or officer of the Corporation or by reason of the fact
that such person is or was serving at the request of the Corporation as a
director, officer, employee, fiduciary or other representative of the
Corporation or another Corporation, partnership, joint venture, trust, employee
benefit plan or other entity (such claim, action, suit or proceeding hereinafter
being referred to as an "action"); provided, however, that no such right of
indemnification shall exist with respect to an action brought by a Director or
officer against the Corporation other than in a suit for indemnification as
provided hereunder. Such indemnification shall include the right to have
expenses incurred by such person in connection with an action paid in advance by
the Corporation prior to final disposition of such action, subject to such
conditions as may be prescribed by law. As used herein, "expense" shall include,
among other things, fees and expenses of counsel selected by such person, and
"liability" shall include amounts of judgments, excise taxes, fines and
penalties, and amounts paid in settlement.

2. Every person who, with the approval of the Board of Directors of
this Corporation, issues or grants a personal guaranty of indebtedness of this
Corporation, or any subsidiary of this Corporation, shall be entitled, as a
matter of right, to be indemnified and made whole by this Corporation against
any and all loss, damage, liability or expense paid or incurred by such person
as the result of any payment or performance under and pursuant to the terms and
conditions of such guaranty, or arising out of any suit, action or other
proceeding seeking to enforce the terms and conditions of any such guaranty
against such guarantor, whether or not proceedings to collect such indebtedness
have been commenced against the beneficiary of such guaranty.

3. Insurance; Other Funding. The Corporation may purchase and
maintain insurance to protect itself and any person eligible to be indemnified
hereunder against any liability or expense asserted or incurred by such person
in connection with any action, whether or not the Corporation would have the
power to indemnify such person against such liability or expense by law or under
the provisions of this Section B. The Corporation may make other financial
arrangements, which may include, among other things, a trust fund, program of
self-insurance, grant of a security interest or other lien on any assets of the
Corporation, or establishment of a letter of credit, guaranty or surety (as set
forth in Chapter 28 of the 1987 Statutes of Nevada), to ensure the payment of
such sums as may become necessary to effect indemnification as provided herein.

C. Non-Exclusive; Nature and Extent of Rights. The right of
indemnification provided for herein (i) shall not be deemed exclusive of any
other rights, whether now existing or hereafter created, to which those seeking
indemnification hereunder may be entitled under any agreement, by-law or article
provision, vote of stockholders or Directors or otherwise, (ii) shall be deemed
to create contractual rights in favor of persons entitled to indemnification
hereunder, (iii) shall continue as to a person who has ceased to have the status
pursuant to which such person was entitled or was designated as entitled to
indemnification hereunder and shall inure to the benefit of the heirs and legal
representatives of persons entitled to indemnification hereunder and (iv) shall
be applicable to actions, suits or proceedings commenced after the adoption of
this

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<PAGE> 10
Article, whether arising from acts or omissions occurring before or after the
adoption hereof. The right of indemnification provided for herein may not be
amended, modified or repealed so as to limit in any way the indemnification
provided for herein with respect to any acts of omissions occurring prior to the
adoption of any such amendment or repeal.

ARTICLE IX
AMENDMENTS

These By-Laws may be altered or amended at any regular meeting of the
stockholders or at any special meeting of the stockholders at which a quorum is
present or represented, if the notice of such meeting, by the affirmative vote
of a majority of the stock issued and outstanding and entitled to vote at such
meeting and present and represented thereat, or by the affirmative vote of a
majority of the Board of Directors or at any special meeting of the Board of
Directors if notice of the proposed alteration or amendment be contained in the
notice of such special meeting.

I, the undersigned, being the Secretary of Fitzgeralds Gaming
Corporation do hereby certify the foregoing to be the By-Laws of the Corporation
as of November 1, 1999.

/s/ MICHAEL E. McPHERSON
-----------------------------
Michael E. McPherson
Secretary

Page 10 of 10

<PAGE> 1

EXHIBIT 10.1

EMPLOYMENT AGREEMENT

This Employment Agreement (the "Agreement") is entered into as of July
5, 1999 between Fitzgeralds Gaming Corporation, a Nevada corporation (the
"Company") and Michael E. McPherson, an individual ("Executive").

PRELIMINARY STATEMENTS

The Company is in the business of owning and operating casino hotel
resorts (the "Company Business"). Executive is currently employed by the Company
as Senior Vice President and Chief Financial Officer of the Company.

The Company desires to retain the services of Executive, and Executive
desires to be so retained, on the terms and conditions herein contained.

AGREEMENT

In consideration of the various covenants and agreements hereinafter set
forth, the parties hereto agree as follows:

1. Term of Employment. The Company hereby employs Executive and
Executive accepts such employment commencing on the date of this Agreement (the
"Commencement Date") and terminating on the third anniversary of the
Commencement Date, unless sooner terminated as hereinafter provided; provided,
however, that the term of this Agreement may be extended for successive one (1)
year terms upon the mutual agreement of the parties hereto.

2. Services to be Rendered.

2.1. Duties. Executive shall be employed to serve in the
capacity of Executive Vice President and Chief Financial Officer of the Company,
with the duties and powers customarily associated with such position. Executive
shall also perform such other duties pertaining to the Company business as the
President of the Company may from time to time direct, provided such duties are
consistent with the role of Executive Vice President and Chief Financial Officer
of an entity of similar size and nature. Executive hereby consents to serve as
an officer and/or director of the Company or any subsidiary or any company,
partnership or entity which, directly or indirectly, controls, is controlled by
or is under common control with the Company (an "affiliate") without any
additional salary or compensation except as expressly set forth in this
Agreement, if so requested by the Board, provided that any such appointment will
not materially increase the scope of Executive's duties in effect as of the date
of this Agreement.

2.2. Exclusive Services. Executive shall at all times
faithfully, industriously and to the best of his ability, experience and talents
perform to the satisfaction of the President all of the duties that may be
assigned to him hereunder and shall devote such time to the performance of these
duties as may be necessary therefor. Executive shall be available to perform the
duties assigned to him pursuant to this Agreement; provided, however, that
Executive may devote time to charitable or civic activities or his personal
investments, to the extent that the same do not materially interfere with his
time and attention to the affairs of the Company.

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3. Compensation and Benefits. The Company shall pay the compensation and
benefits expressly set forth in this Agreement to Executive during the term of
this Agreement and Executive shall accept such compensation and benefits as
payment in full for all services rendered by Executive to or for the benefit of
the Company.

3.1. Base Salary. Beginning on July 5, 1999, Executive shall be
entitled to a base salary (the "Base Salary") of $250,000 per annum. The Base
Salary shall increase by a minimum of five percent (5%) on the fifth day of July
of each year during the term of this Agreement. The exact increase in the Base
Salary shall be recommended by the President and approved by the compensation
committee, if any, appointed by the Board. The Base Salary shall accrue in equal
monthly installments in arrears and shall be payable in accordance with the
payroll practices of the Company in effect from time to time.

3.2. Discretionary Bonus. In addition to the Base Salary,
Executive shall be entitled to such bonus compensation as Executive may be
awarded, from time to time, by the Board or by a compensation committee, if any,
appointed by the Board.

3.3. Term and Group Life Insurance. The Company shall pay all
premiums due and payable with respect to a $500,000 term life insurance policy
and a $100,000 group life insurance policy, in each case for the benefit of
Executive or his designees.

3.4. Expenses. The Company shall reimburse Executive for
reasonable out-of-pocket expenses incurred in connection with the Company
Business and the performance of his duties pursuant to this Agreement, subject
to such policies as the President may from time to time establish.

3.5 State Income Taxes. In the event that travel incurred in the
rendering of services by the Executive should result in the Executive incurring
a state income tax liability, the Company agrees to reimburse the Executive for
such state income tax liability, including penalties and interest and for the
cost of preparing such state income tax returns. The Company's responsibility
for the aforementioned state tax liability will not be extinguished with the
termination of the Employee Agreement.

3.6. Vacation. Executive shall be entitled to paid vacation to
be taken at a time or times which will not materially interfere with his duties
as set forth in this Agreement. Unused vacation shall be paid to the Executive
upon the termination of this Agreement.

3.7. Benefits. Executive shall be entitled to participate in the
Company's hospitalization, Executive Medical, group health and disability
benefit plans and all pension plans, profit-sharing plans, savings plans,
deferred compensation plans, stock option plans, health and accident plans and
other benefits and plans as the Company provides to its senior executives to the
extent such plans are established by the Company and to the extent that
Executive is eligible to participate in such plans.

3.8. Withholding and Other Deductions. All compensation payable
to Executive hereunder shall be subject to such deductions as the Company is
from time to time required to make

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pursuant to law, governmental regulation or order.

3.9. Retention and Severance Program. Notwithstanding anything
contained in this Agreement to the contrary, Executive shall be entitled to all
benefits contained in the Company's Retention and Severance Program at such time
as such Retention and Severance Program is adopted by the Board. In the event of
any inconsistency between this Agreement and the Retention and Severance
Program, the document containing the terms and conditions which are more
favorable to Executive with respect to the issue in question, in Executive's
sole discretion, shall supersede and control.

4. Representations and Warranties of Executive. Executive represents and
warrants to the Company that (i) Executive is under no contractual or other
restriction or obligation which is inconsistent with the execution of this
Agreement, the performance of his duties hereunder, or the other rights of the
Company hereunder and (ii) Executive is under no physical or mental disability
that would hinder the performance of his duties under this Agreement.

5. Certain Covenants.

5.1. Noncompetition. From and after the Commencement Date and
until the expiration or earlier termination of this Agreement (such period, the
"Restricted Period"), Executive shall not have any ownership interest (of record
or beneficial) in, or have any interest as an employee, salesman, consultant,
officer or director in, or otherwise aid or assist in any manner, any firm,
corporation, partnership, proprietorship or other business that engages in a
business in direct competition with the Company, in any county, city or part
thereof in which the Company or any affiliate of the Company owns, operates, or
manages a facility or establishment engaged in the Company Business at any time
during the term of this Agreement; provided, however, that Executive may own,
directly or indirectly, solely as an investment, securities of any entity which
are traded on any national securities exchange if Executive (i) is not a
controlling person of, or a member of a group which controls, such entity; or
(ii) does not, directly or indirectly, own one percent (1%) or more of any class
of securities of any such entity. The determination as to whether Executive has
violated this Section 5.1 shall be made in good faith by the Board.

5.2. Trade Secrets. During the term of this Agreement and
thereafter, Executive shall hold in a fiduciary capacity for the benefit of the
Company or its affiliates, and their respective businesses, all secret or
confidential information of the Company which shall not be public knowledge.

5.3. Rights and Remedies Upon Breach. If Executive breaches or
threatens to commit a breach of any of the provisions of this Section 5 (the
"Restrictive Covenants"), the Company shall have the right and remedy to have
the Restrictive Covenants specifically enforced by any court having equity
jurisdiction, all without the need to post a bond or any other security or to
prove any amount of actual damage or that money damages would not provide an
adequate remedy, it being acknowledged and agreed that any such breach or
threatened breach will cause irreparable injury to the Company and that money
damages will not provide adequate remedy to the Company.

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5.4. Severability of Covenants/Blue Penciling. If any court
determines that any of the Restrictive Covenants, or any part thereof; is
invalid or unenforceable, the remainder of the Restrictive Covenants shall not
thereby be affected and shall be given full effect, without regard to the
invalid portions. If any court determines that any of the Restrictive Covenants,
or any part thereof; are unenforceable because of the duration of such provision
or the area covered thereby, such court shall have the power to reduce the
duration or area of such provision and, in its reduced form, such provision
shall then be enforceable and shall be enforced. Executive hereby waives any and
all right to attack the validity of the Restrictive Covenants on the grounds of
the breadth of their geographic scope or the length of their term.

5.5. Enforceability in Jurisdictions. The Company and Executive
intend to and do hereby confer jurisdiction to enforce the Restrictive Covenants
upon the courts of any jurisdiction within the geographical scope of such
covenants. If the courts of any one or more of such jurisdictions hold the
Restrictive Covenants wholly unenforceable by reason of the breadth of such
scope or otherwise, it is the intention of the Company and Executive that such
determination not bar or in any way affect the right of the Company to the
relief provided above in the courts of any other jurisdiction within the
geographical scope of such covenants, as to breaches of such covenants in such
other respective jurisdictions, such covenants as they relate to each
jurisdiction being, for this purpose, severable into diverse and independent
covenants.

6. Proprietary Rights.

6.1. Disclosure of Executive's Knowledge. Executive shall make
available to the Company at no cost to the Company all knowledge possessed by
him relating to any methods, developments, inventions and/or improvements,
whether patented, patentable or unpatentable, which concern in any way the
Company Business, whether acquired by Executive before or during the term of
employment, provided that nothing herein shall be construed as requiring any
disclosure where any such method, development, invention and/or improvement is
lawfully protected from disclosure as a trade secret of any third party or by
any other lawful bar to such disclosure.

6.2. Ownership of Patent Rights, Copyrights, and Trade Secrets.
To the fullest extent permitted by Nevada law, Executive shall assign, and does
hereby assign, to the Company all of Executive's right, title and interest in
and to all inventions, improvements, developments, trade secrets, discoveries,
computer software, tradenames and trademarks conceived, improved, developed,
discovered or written by Executive, alone or in collaboration with others,
during the term of this Agreement which relate in any manner to the Company
Business, whether or not the same shall be conceived, improved, developed,
discovered or written during customary working hours on the Company's premises.
During the term of this Agreement, Executive shall promptly and fully disclose
to the Company all matters within the scope of this Section 6.2, and shall, upon
request of the Company, execute, acknowledge, deliver and file any and all
documents necessary or useful to vest in the Company all of Executive's right,
title and interest in and to all such matters. All expenses incurred in
connection with the execution, acknowledgment, delivery and filing of any papers
or documents within the scope of this Section 6.2 shall be borne by the Company.
All matters within the scope of this Section 6.2 shall constitute trade secrets
of the Company subject to the provisions of Section 5.2 of this Agreement, until
such matters cease to be trade secrets by operation of law.

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7. Termination.

7.1. Death or Total Disability of Executive. If Executive dies
or becomes totally disabled during the term of this Agreement, Executive's
employment hereunder shall automatically terminate; provided, however, that in
the event of Executive's death or total disability, Executive shall be entitled
to receive the Base Salary which would have otherwise been paid to him, but for
the death or total disability for a period of the lesser of six (6) months or
(ii) the remainder of the term of this Agreement. For these purposes, Executive
shall be deemed totally disabled if Executive has, in fact, not fully discharged
Executive's duties hereunder for a period of one hundred eighty (180) days due
to a physical or mental incapacitation.

7.2. Termination for Good Cause. Executive's employment
hereunder may be terminated by the Company for "good cause." The term "good
cause" is defined as any one or more of the following occurrences:

(a) Executive's conviction by, or entry of a plea of
guilty or nolo contendere in, a court of competent and final jurisdiction for
any crime involving moral turpitude or would constitute a felony in the
jurisdiction involved;

(b) Executive's conviction of the commission of an act
of fraud, whether prior to or subsequent to the date hereof upon the Company;

(c) Executive's continuing repeated willful failure or
refusal to perform Executive's duties as required by this Agreement;

(d) the failure of Executive to obtain and maintain any
requisite license, permit or approval based on suitability from any state,
county, or other governmental authority having jurisdiction over the gaming
operations of the Company (the "Gaming Authorities") which would preclude
Executive from carrying out his duties as set forth in this Agreement;

(e) Executive's breach of any other provision of this
Agreement, provided that termination of Executive's employment pursuant to
Section 7.2(c) or this Section 7.2(f) shall not constitute valid termination for
good cause unless Executive shall have first received written notice from the
Board stating with specificity the nature of such breach and affording Executive
fifteen (15) days to correct the breach alleged; provided, however, that if such
breach cannot be cured within such fifteen (15) day period, Executive shall be
afforded a reasonable time period thereafter to cure such breach provided that
Executive commences the cure of such breach within the fifteen (15) day period
and diligently proceeds to cure such breach to completion.

7.3. Resignation of Executive. The Company shall have the right
to terminate this Agreement and Executive's employment hereunder due to the
voluntary resignation of Executive, provided that Executive shall deliver no
less than sixty (60) days prior written notice of such resignation to the Board,
which notice may be waived by the Board.

7.4. Severance Compensation. Upon the occurrence of any of the
events referred to in Sections 7.2 or 7.3 above, Executive (or Executive's heirs
or representatives) shall be entitled to receive only such portion (if any) of
the Base Salary as may theretofore have accrued but be

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unpaid on the date on which the termination shall take effect.

7.5. Return of the Company's Property. If this Agreement is
terminated, the Company shall have the right, at its option, to require
Executive to vacate his offices prior to the effective date of termination and
to cease all activities on the Company's behalf. Upon the termination of his
employment in any manner, Executive shall immediately surrender to the Company
all lists, books and records of, or in connection with, the Company Business,
and all other property belonging to the Company, it being distinctly understood
that all such lists, books and records, and other documents, are the property of
the Company.

8. Arbitration. Any claim or controversy arising out of or relating to
this Agreement shall be settled by arbitration in Las Vegas, Nevada, in
accordance with the Commercial Arbitration Rules of the American Arbitration
Association, and judgment on the award rendered by the arbitrators may be
entered in any court having jurisdiction. There shall be three (3) arbitrators,
one to be chosen directly by each party at will, and the third arbitrator to be
selected by the two (2) arbitrators so chosen. Each party shall pay the fees of
the arbitrator it selects and of its own attorneys, the expenses of its
witnesses and all other expenses connected with presenting its case. Other costs
of the arbitration, including the cost of any record or transcripts of the
arbitration, administrative fees, the fee of the third arbitrator, and all other
fees and costs, shall be borne equally by the parties.

9. General Relationship. Executive shall be considered an employee of
the Company within the meaning of all federal, state and local laws and
regulations including, but not limited to, laws and regulations governing
unemployment insurance, workers' compensation, industrial accident, labor and
taxes.

10. Miscellaneous.

10.1. Modification, Prior Claims. This Agreement sets forth the
entire understanding of the parties with respect to the subject matter hereof,
supersedes all existing agreements including, without limitation, prior
employment agreements, between them concerning such subject matter, and may be
modified only by a written instrument duly executed by each party.

10.2. Assignment. The rights of the Company under this Agreement
may, without the consent of Executive, be assigned by the Company, in its sole
and unfettered discretion, (i) to any person, firm, corporation or other
business entity which at any time, whether by purchase, merger or otherwise,
directly or indirectly, acquires all or substantially all of the assets or
business of the Company, and (ii) to any subsidiary or affiliate of the Company.

10.3. Survival. The covenants, agreements, representations and
warranties contained in or made pursuant to this Agreement shall survive
Executive's termination of employment with the Company and/or its affiliates.

10.4. Third Party Beneficiaries. This Agreement does not create,
and shall not be construed as creating, any rights enforceable by any person not
a party to this Agreement.

10.5. Waiver. The failure of either party hereto at any time to
enforce performance

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by the other party of any provision of this Agreement shall in no way affect
such party's rights thereafter to enforce the same, nor shall the waiver by
either party of any breach of any provision hereof be deemed to be a waiver by
such party of any other breach of the same or any other provision hereof.

10.6. Hiring At Will. Any continuance of Executive's employment
by the Company after the term of this Agreement shall be deemed a hiring at will
(unless such continuance is the subject of a new written agreement) and shall be
subject to termination with or without cause by either party upon delivery of
notice thereof.

10.7. Section Headings. The headings of the several Sections in
this Agreement are inserted solely for the convenience of the parties and are
not a part of and are not intended to govern, limit or aid in the construction
of any term or provision hereof.

10.8. Notices. All notices, requests and other communications
hereunder shall be in writing and shall be delivered by courier or other means
of personal service (including by means of a nationally recognized courier
service or professional messenger service), or sent by telex or telecopy or
mailed first class, postage prepaid. by certified mail, return receipt
requested, in all cases, addressed to:

Company: Fitzgeralds Gaming Corporation
301 Fremont Street
Las Vegas, Nevada 89101
Attn: Chairman, Compensation Committee

of Board of Directors

With a copy to: Fitzgeralds Gaming Corporation
301 Fremont Street
Las Vegas, Nevada 89101
Attn: General Counsel

Executive: Michael E. McPherson
245 Meadow Brook Drive
Reno, Nevada 89509

All notices, requests and other communications shall be deemed given on the date
of actual receipt or delivery as evidenced by written receipt, acknowledgment or
other evidence of actual receipt or delivery to the address. In case of service
by telecopy, a copy of such notice shall be personally delivered or sent by
registered or certified mail, in the manner set forth above, within three (3)
business days thereafter. Any party hereto may from time to time by notice in
writing served as set forth above designate a different address or a different
or additional person to which all such notices or communications thereafter are
to be given.

10.9. Severability. All Sections, clauses and covenants
contained in this Agreement are severable, and in the event any of them shall be
held to be invalid by any court, this

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Agreement shall be interpreted as if such invalid Sections, clauses or covenants
were not contained herein.

10.10. Governing Law and Venue. This Agreement is to be governed
by and construed in accordance with the laws of the State of Nevada applicable
to contracts made and to be performed wholly within such State, and without
regard to the conflicts of laws principles thereof. Subject to Section 8 of this
Agreement, any suit brought hereon shall be brought in the state or federal
courts sitting in Clark County, Nevada, the parties hereto hereby waiving any
claim or defense that such forum is not convenient or proper. Each party hereby
agrees that any such court shall have in personam jurisdiction over it and
consents to service of process in any manner authorized by Nevada law.

10.11. Non-transferability of Interest. None of the rights of
Executive to receive any form of compensation payable pursuant to this Agreement
shall be assignable or transferable except through a testamentary disposition or
by the laws of descent and distribution upon the death of Executive. Any
attempted assignment, transfer, conveyance, or other disposition (other than as
aforesaid) of any interest in the rights of Executive to receive any form of
compensation to be made by the Company pursuant to this Agreement shall be void.

10.12. Attorneys' Fees. Subject to the provisions of Section 8
of this Agreement with respect to arbitration, if any legal action, arbitration
or other proceeding is brought for the enforcement of this Agreement, or because
of any alleged dispute, breach, default or misrepresentation in connection with
this Agreement, the successful or prevailing party shall be entitled to recover
reasonable attorneys' fees and other costs it incurred in that action or
proceeding, in addition to any other relief to which it may be entitled.

10.13. Gender. Where the context so requires, the use of the
masculine gender shall include the feminine and/or neuter genders and the
singular shall include the plural, and vice versa, and the word "person" shall
include any corporation, firm, partnership or other form of association.

10.14. Counterparts. This Agreement may be executed in one or
more counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same Agreement.

10.15. Construction. The language in all parts of this Agreement
shall in all cases be construed simply, according to its fair meaning, and not
strictly for or against any of the parties hereto. Without limitation, there
shall be no presumption against any party on the ground that such party was
responsible for drafting this Agreement or any part thereof.

10.16. Approval of the Gaming Authorities. Notwithstanding
anything contained in this Agreement, this Agreement and the terms and
conditions contained herein shall be contingent upon receipt of all requisite
approvals, if any, of the applicable Gaming Authorities.

10.17. Board Action. Any Board action referenced in this
Agreement shall be performed only with the affirmative vote of a majority of the
disinterested members of the Board.

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

COMPANY: EMPLOYEE:

Fitzgeralds Gaming Corporation,
a Nevada corporation

By: /s/ PHILIP D. GRIFFITH /s/ MICHAEL E. MCPHERSON
-------------------------------- -----------------------------------
Name: Philip D. Griffith Michael E. McPherson
Title: Chairman, President & CEO

<PAGE> 1

EXHIBIT 10.2

EMPLOYMENT AGREEMENT

This Employment Agreement (the "Agreement") is entered into as of
September 1, 1999 between Fitzgeralds Gaming Corporation, a Nevada corporation
(the "Company") and Paul H. Manske, an individual ("Executive").

PRELIMINARY STATEMENTS

The Company is in the business of owning and operating casino hotel
resorts (the "Company Business"). Executive is currently employed by the Company
as Senior Vice President of Marketing of the Company.

The Company desires to retain the services of Executive, and Executive
desires to be so retained, on the terms and conditions herein contained.

AGREEMENT

In consideration of the various covenants and agreements hereinafter set
forth, the parties hereto agree as follows:

2. Services to be Rendered.

2.1. Duties. Executive shall be employed to serve in the
capacity of Executive Vice President of Marketing of the Company, with the
duties and powers customarily associated with such position. Executive shall
also perform such other duties pertaining to the Company business as the
President of the Company may from time to time direct, provided such duties are
consistent with the role of Executive Vice President of Marketing of an entity
of similar size and nature. Executive hereby consents to serve as an officer
and/or director of the Company or any subsidiary or any company, partnership or
entity which, directly or indirectly, controls, is controlled by or is under
common control with the Company (an "affiliate") without any additional salary
or compensation except as expressly set forth in this Agreement, if so requested
by the Board, provided that any such appointment will not materially increase
the scope of Executive's duties in effect as of the date of this Agreement.

1
<PAGE> 2

3.1. Base Salary. Beginning on September 1, 1999, Executive
shall be entitled to a base salary (the "Base Salary") of $275,000 per annum
(the amount of the superseded contract) which shall be adjusted to $250,000 per
annum effective January 1, 2000. The Base Salary shall increase by a minimum of
five percent (5%) on the first day of September of each year during the term of
this Agreement. The exact increase in the Base Salary shall be recommended by
the President and approved by the compensation committee, if any, appointed by
the Board. The Base Salary shall accrue in equal monthly installments in arrears
and shall be payable in accordance with the payroll practices of the Company in
effect from time to time.

3.8. Withholding and Other Deductions. All compensation payable
to Executive

2
<PAGE> 3
hereunder shall be subject to such deductions as the Company is from time to
time required to make pursuant to law, governmental regulation or order.

5. Certain Covenants.

3
<PAGE> 4

6. Proprietary Rights.

4
<PAGE> 5

7. Termination.

7.2. Termination for Good Cause. Executive's employment
hereunder may be terminated by the Company for "good cause." The term "good
cause" is defined as any one or more of the following occurrences:

(b) Executive's conviction of the commission of an act
of fraud, whether prior to or subsequent to the date hereof upon the Company;

(c) Executive's continuing repeated willful failure or
refusal to perform Executive's duties as required by this Agreement;

5
<PAGE> 6

unpaid on the date on which the termination shall take effect.

10. Miscellaneous.

10.4. Third Party Beneficiaries. This Agreement does not create,
and shall not be construed as creating, any rights enforceable by any person not
a party to this Agreement.

10.5. Waiver. The failure of either party hereto at any time to
enforce performance

6
<PAGE> 7

Company: Fitzgeralds Gaming Corporation
301 Fremont Street
Las Vegas, Nevada 89101
Attn: Chairman, Compensation Committee
of Board of Directors

With a copy to: Fitzgeralds Gaming Corporation
301 Fremont Street
Las Vegas, Nevada 89101
Attn: General Counsel

Executive: Paul H. Manske
c/o Fitzgeralds Gaming Corporation
300 E. 2nd Street, 15th Floor
Reno, Nevada 89501

10.9. Severability. All Sections, clauses and covenants
contained in this

7
<PAGE> 8
Agreement are severable, and in the event any of them shall be held to be
invalid by any court, this Agreement shall be interpreted as if such invalid
Sections, clauses or covenants were not contained herein.

10.14. Counterparts. This Agreement may be executed in one or
more counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same Agreement.

10.17. Board Action. Any Board action referenced in this
Agreement shall be performed only with the affirmative vote of a majority of the
disinterested members of the Board.

8
<PAGE> 9

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

COMPANY:

Fitzgeralds Gaming Corporation, EMPLOYEE:
a Nevada corporation

By: /s/ PHILIP D. GRIFFITH Name: /s/ PAUL H. MANSKE
-------------------------------- ------------------------------
Name: Philip D. Griffith Paul H. Manske
Title: Chairman, President & CEO

<PAGE> 1

EXHIBIT 10.3

EMPLOYMENT AGREEMENT

This Employment Agreement (the "Agreement") is entered into as of
September 1, 1999 between Fitzgeralds Gaming Corporation, a Nevada corporation
(the "Company") and Max L. Page, an individual ("Executive").

PRELIMINARY STATEMENTS

The Company is in the business of owning and operating casino hotel
resorts (the "Company Business"). Executive is currently employed by the Company
as Executive Vice President and General Manager of Fitzgeralds Reno, Inc. and
Director of the Company.

The Company desires to retain the services of Executive, and Executive
desires to be so retained, on the terms and conditions herein contained.

AGREEMENT

In consideration of the various covenants and agreements hereinafter set
forth, the parties hereto agree as follows:

2. Services to be Rendered.

2.1. Duties. Executive shall be employed to serve in the
capacity of Executive Vice President and General Manager of Fitzgeralds Reno,
Inc. and Director of the Company, with the duties and powers customarily
associated with such position. Executive shall also perform such other duties
pertaining to the Company business as the President of the Company may from time
to time direct, provided such duties are consistent with the role of Executive
Vice President and General Manager and Director of an entity of similar size and
nature. Executive hereby consents to serve as an officer and/or director of the
Company or any subsidiary or any company, partnership or entity which, directly
or indirectly, controls, is controlled by or is under common control with the
Company (an "affiliate") without any additional salary or compensation except as
expressly set forth in this Agreement, if so requested by the Board, provided
that any such appointment will not materially increase the scope of Executive's
duties in effect as of the date of this Agreement.

1
<PAGE> 2

3.1. Base Salary. Beginning on September 1, 1999, Executive
shall be entitled to a base salary (the "Base Salary") of $250,000 per annum.
The Base Salary shall increase by a minimum of five percent (5%) on the first
day of September of each year during the term of this Agreement. The exact
increase in the Base Salary shall be recommended by the President and approved
by the compensation committee, if any, appointed by the Board. The Base Salary
shall accrue in equal monthly installments in arrears and shall be payable in
accordance with the payroll practices of the Company in effect from time to
time.

3.8. Withholding and Other Deductions. All compensation payable
to Executive hereunder shall be subject to such deductions as the Company is
from time to time required to make

2
<PAGE> 3

pursuant to law, governmental regulation or order.

5. Certain Covenants.

5.1. Noncompetition. From and after the Commencement Date and
until the expiration or earlier termination of this Agreement (such period, the
"Restricted Period"), Executive shall not have any ownership interest (of record
or beneficial) in, or have any interest as an employee, salesman, consultant,
officer or director in, or otherwise aid or assist in any manner, any firm,
corporation, partnership, proprietorship or other business that engages in a
business in direct competition with the Company, in any county, city or part
thereof in which the Company or any affiliate of the Company owns, operates, or
manages a facility or establishment engaged in the Company Business at any time
during the term of this Agreement; provided, however, that Executive may own,
directly or indirectly, solely as an investment, securities of any entity which
are traded on any national securities exchange if Executive (i) is not a
controlling person of, or a member of a group which controls, such entity; or
(ii) does not, directly or indirectly, own one percent (1%) or more of any class
of securities of any such entity. Additionally, Executive may serve as Director
of NevStar Gaming Corporation as previously approved, which operates the
Mesquite Star Casino in Mesquite, Nevada, until such time as they might enter
into competition as defined above in greater Las Vegas. The determination as to
whether Executive has violated this Section 5.1 shall be made in good faith by
the Board.

3
<PAGE> 4

irreparable injury to the Company and that money damages will not provide
adequate remedy to the Company.

6. Proprietary Rights.

4
<PAGE> 5

matters within the scope of this Section 6.2 shall constitute trade secrets of
the Company subject to the provisions of Section 5.2 of this Agreement, until
such matters cease to be trade secrets by operation of law.

7. Termination.

7.2. Termination for Good Cause. Executive's employment
hereunder may be terminated by the Company for "good cause." The term "good
cause" is defined as any one or more of the following occurrences:

(b) Executive's conviction of the commission of an act
of fraud, whether prior to or subsequent to the date hereof upon the Company;

(c) Executive's continuing repeated willful failure or
refusal to perform Executive's duties as required by this Agreement;

5
<PAGE> 6

10. Miscellaneous.

6
<PAGE> 7

10.4. Third Party Beneficiaries. This Agreement does not create,
and shall not be construed as creating, any rights enforceable by any person not
a party to this Agreement.

10.5. Waiver. The failure of either party hereto at any time to
enforce performance by the other party of any provision of this Agreement shall
in no way affect such party's rights thereafter to enforce the same, nor shall
the waiver by either party of any breach of any provision hereof be deemed to be
a waiver by such party of any other breach of the same or any other provision
hereof.

Company: Fitzgeralds Gaming Corporation
301 Fremont Street
Las Vegas, Nevada 89101
Attn: Chairman, Compensation Committee
of Board of Directors

With a copy to: Fitzgeralds Gaming Corporation
301 Fremont Street
Las Vegas, Nevada 89101
Attn: General Counsel

Executive: Max L. Page
Fitzgeralds Reno, Inc.
255 North Virginia Street
Reno, Nevada 89501

7
<PAGE> 8

forth above designate a different address or a different or additional person to
which all such notices or communications thereafter are to be given.

10.9. Severability. All Sections, clauses and covenants
contained in this Agreement are severable, and in the event any of them shall be
held to be invalid by any court, this Agreement shall be interpreted as if such
invalid Sections, clauses or covenants were not contained herein.

10.14. Counterparts. This Agreement may be executed in one or
more counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same Agreement.

10.16. Approval of the Gaming Authorities. Notwithstanding
anything contained in this Agreement, this Agreement and the terms and
conditions contained herein shall be contingent

8
<PAGE> 9

upon receipt of all requisite approvals, if any, of the applicable Gaming
Authorities.

10.17. Board Action. Any Board action referenced in this
Agreement shall be performed only with the affirmative vote of a majority of the
disinterested members of the Board.

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

COMPANY: EMPLOYEE:

Fitzgeralds Gaming Corporation,
a Nevada corporation

By: /s/ PHILIP D. GRIFFITH /s/ MAX L. PAGE
-------------------------------- -----------------------------------
Name: Philip D. Griffith Max L. Page
Title: Chairman, President & CEO

<ARTICLE> 5

<S> <C>
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<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-START> JAN-01-1999
<PERIOD-END> OCT-03-1999
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<RECEIVABLES> 1,427,031
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28,494,484
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