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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 June 29, 2003

Commission file number: 0-26518

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


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

3097 E. Warm Springs Rd. Suite 100, Las Vegas, NV 89120
(Address of principal executive offices) (Zip Code)

(702) 940 — 2000
(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 [ ]

Indicate by check mark whether the Registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act. YES [ ] NO [x]

As of June 29, 2003, the aggregate market value of Registrant’s Common Stock held by non-affiliates was not determinable. Shares outstanding of each of the registrant’s classes of common stock as of August 1, 2003


Class	Outstanding as of August 1, 2003

Common stock, $.01 par value		5,508,082

TABLE OF CONTENTS


PART I FINANCIAL INFORMATION
	Item 1 Condensed Consolidated Financial Statements
		Unaudited Condensed Consolidated Balance Sheets
		Unaudited Condensed Consolidated Statements of Operations
		Unaudited Condensed Consolidated Statements of Cash Flows
Item 2 Management’s Discussion and Analysis of Financial Condition and Results of Operations
	Item 3 Quantitative and Qualitative Disclosures About Market Risk
	Item 4 Controls and Procedures
PART II OTHER INFORMATION
SIGNATURES
CERTIFICATIONS
EXHIBIT 32.1
EXHIBIT 32.2

FITZGERALDS GAMING CORPORATION

FORM 10-Q

INDEX


Part I	Financial Information
	Item 1	Condensed Consolidated Financial Statements
		Unaudited Condensed Consolidated Balance Sheets as of June 29, 2003 and December 31, 2002	4
		Unaudited Condensed Consolidated Statements of Operations for the Quarters and Two Quarters Ended June 29, 2003 and June 30, 2002	6
		Unaudited Condensed Consolidated Statements of Cash Flows for the Two Quarters Ended June 29, 2003 and June 30, 2002	7
		Unaudited Notes to Condensed Consolidated Financial Statements	8
	Item 2	Management’s Discussion and Analysis of Financial Condition and Results of Operations	14
	Item 3	Quantitative and Qualitative Disclosures About Market Risk	24
	Item 4	Controls and Procedures	24
Part II	Other Information		25
	Signatures		30

PART I

FINANCIAL INFORMATION

Item 1
Condensed Consolidated Financial Statements

FITZGERALDS GAMING CORPORATION (Debtor-In-Possession)
Unaudited Condensed Consolidated Balance Sheets
June 29, 2003 and December 31, 2002


ASSETS				2003		2002

CURRENT ASSETS:
	Cash and cash equivalents			$	13,004,395	$	14,525,248
	Accounts receivable, net of allowance for doubtful accounts of $28,887 and $24,412 as of June 29, 2003 and December 31, 2002, respectively				493,205		357,196
	Inventories				339,428		464,550
	Prepaid expenses:
		Gaming taxes			801,112		697,191
		Other			383,156		756,614
			Total current assets		15,021,296		16,800,799

PROPERTY AND EQUIPMENT, net					61,389		70,139

OTHER ASSETS:
	Net assets held for sale				12,490,263		12,490,263
	Restricted cash				4,423,595		4,399,464
	Other assets				1,943,100		1,705,445

			Total other assets		18,856,958		18,595,172

TOTAL				$	33,939,643	$	35,466,110

(continued)


See Notes to Unaudited Condensed Consolidated Financial Statements		Page 4 of 33

FITZGERALDS GAMING CORPORATION (Debtor-In-Possession)
Unaudited Condensed Consolidated Balance Sheets (continued)
June 29, 2003 and December 31, 2002


LIABILITIES AND STOCKHOLDERS' DEFICIENCY				2003			2002

LIABILITIES NOT SUBJECT TO COMPROMISE CURRENT LIABILITIES:
	Current portion of long-term debt			$	127,962		$	121,946
	Accounts payable				1,540,901			1,220,203
	Accrued and other:
		Payroll and related			1,384,851			1,334,562
		Progressive jackpots			78,592			72,138
		Outstanding chips and tokens			136,969			72,421
		Other			577,799			689,619

			Total current liabilities		3,847,074			3,510,889
LONG-TERM DEBT, net of current portion					2,108,119			2,173,642

			Total liabilities not subject to compromise		5,955,193			5,684,531
LIABILITIES SUBJECT TO COMPROMISE					92,660,331			91,989,338

			Total liabilities		98,615,524			97,673,869

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 $40,651,175 and $36,345,989 recorded at liquidation preference, net of unamortized offering costs and discount of $3,271,608 and $3,793,419, respectively				57,379,567			52,552,570

STOCKHOLDERS’ DEFICIENCY:
	Common stock, $.01 par value; 29,200,000 shares authorized; 5,508,082 shares issued and outstanding				55,080			55,080
	Additional paid-in capital				23,675,511			23,675,511
	Accumulated deficit				(145,786,043	)		(138,490,920	)

			Total stockholders’ deficiency		(122,055,452	)		(114,760,329	)

TOTAL				$	33,939,639		$	35,466,110


See Notes to Unaudited Condensed Consolidated Financial Statements		Page 5 of 33

FITZGERALDS GAMING CORPORATION (Debtor-In-Possession)
Unaudited Condensed Consolidated Statements of Operations
For the Quarters and Two Quarters Ended June 29, 2003 and June 30, 2002


			Quarters Ended						Two Quarters Ended

			2003			2002			2003			2002

OPERATING REVENUES:
	Casino		$	8,425,223		$	8,228,332		$	14,973,973		$	15,143,509
	Food and beverage			1,564,211			1,511,516			2,925,438			2,841,723
	Rooms			1,359,433			1,350,642			2,353,718			2,367,476
	Other			182,390			190,705			331,272			397,058

		Total		11,531,257			11,281,195			20,584,401			20,749,766
	Less promotional allowances			1,539,073			1,517,445			2,804,962			2,711,844

		Net		9,992,184			9,763,750			17,779,439			18,037,922

OPERATING COSTS AND EXPENSES:
	Casino			4,288,882			3,954,050			7,947,716			7,752,593
	Food and beverage			1,048,471			1,077,057			1,947,699			1,971,797
	Rooms			454,700			423,636			817,025			848,856
	Other operating expense			94,702			85,747			179,195			172,975
	Selling, general and administrative			4,076,968			4,246,382			7,923,169			8,580,701
	Depreciation and amortization			4,340			9,150			8,750			17,615
	Reorganization items			142,973			365,486			900,960			1,060,598

		Total		10,111,036			10,161,508			19,724,514			20,405,135

LOSS FROM OPERATIONS				(118,852	)		(397,758	)		(1,945,075	)		(2,367,213	)
OTHER INCOME (EXPENSE):
	Interest income			14,156			24,185			18,071			42,884
	Interest expense (contractual interest for			(269,913	)		(322,781	)		(541,122	)		(652,418	)
		the quarter and two quarters ended June 29, 2003 was $5,636,036 and $11,272,072, respectively and for the quarter and two quarters ended June 30, 2002 was $4,993,057 and $10,820,373, respectively)
		Other expense		—			(13,345	)		—			(13,952	)

NET LOSS				(374,609	)		(709,699	)		(2,468,126	)		(2,990,699	)
PREFERRED STOCK DIVIDENDS AND ACCRETION OF DISCOUNT				(2,457,915	)		(2,121,362	)		(4,826,997	)		(4,166,048	)

NET LOSS APPLICABLE TO COMMON STOCKHOLDERS			$	(2,832,524	)	$	(2,831,061	)	$	(7,295,123	)	$	(7,156,747	)

LOSS PER COMMON SHARE - BASIC AND DILUTED			$	(0.51	)	$	(0.51	)	$	(1.32	)	$	(1.30	)

WEIGHTED AVERAGE COMMON SHARES OUTSTANDING				5,508,082			5,508,082			5,508,082			5,508,082


See Notes to Unaudited Condensed Consolidated Financial Statements		Page 6 of 33

FITZGERALDS GAMING CORPORATION (Debtor-In-Possession)
Unaudited Condensed Consolidated Statements of Cash Flows
For the Two Quarters Ended June 29, 2003 and June 30, 2002


		2003			2002

NET CASH USED IN OPERATING ACTIVITIES		$	(1,461,346	)	$	(2,280,871	)

CASH FLOWS FROM INVESTING ACTIVITIES:
	Acquisition of property and equipment		—			(75,320	)

CASH FLOWS FROM FINANCING ACTIVITIES:
	Repayment of long-term debt		(59,507	)		(144,029	)

NET DECREASE IN CASH AND CASH EQUIVALENTS			(1,520,853	)		(2,500,220	)
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD			14,525,248			25,609,012

CASH AND CASH EQUIVALENTS, END OF PERIOD		$	13,004,395		$	23,108,792

CASH PAID FOR INTEREST		$	113,739		$	118,596

SUMMARY OF NON-CASH INVESTING AND FINANCING ACTIVITIES:
Property and equipment acquired through issuance of debt		$	—		$	147,269
Accretion of discount on preferred stock			521,811			450,358
Accrual of preferred stock dividends			4,305,186			3,715,690


See Notes to Unaudited Condensed Consolidated Financial Statements		Page 7 of 33

Fitzgeralds Gaming Corporation (Debtor-In-Possession)

Notes to Unaudited Condensed Consolidated Financial Statements

1.		BASIS OF PRESENTATION

		The accompanying condensed consolidated financial statements of Fitzgeralds Gaming Corporation (the “Company”) (Debtor-In-Possession) as of June 29, 2003 and for the quarters ended June 29, 2003 and June 30, 2002 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 accounting principles generally accepted in the United States of America 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, 2002. The results of operations for the two quarters ended June 29, 2003 are not necessarily indicative of the results to be expected for the year ending December 31, 2003.

		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 periods will have the same number of days each year.

		Certain amounts in the 2002 condensed consolidated financial statements have been reclassified to conform to the 2003 method of presentation.

2.		PETITION FOR RELIEF UNDER CHAPTER 11

		*General*

		On December 5, 2000, the Company commenced cases under Chapter 11 of the Bankruptcy Code (collectively, the “Bankruptcy Cases”) in the United States Bankruptcy Court for the Northern District of Nevada (the “Bankruptcy Court”). The Bankruptcy Cases are jointly administered and coordinated under Case No. BK-N-00-33467 GWZ. The Bankruptcy Cases were commenced in accordance with an Agreement Regarding Pre-Negotiated Restructuring, dated as of December 1, 2000 (the “Restructuring Agreement”) with the holders (the “Consenting Noteholders”) of a majority in interest of the Company’s 12.25% Senior Secured Notes (the “Notes”) issued under an indenture dated December 30, 1997 (the “Indenture”). The Restructuring Agreement contemplates an expeditious and orderly sale of all of the Company’s operating assets and properties as going concerns. Substantially all of the Notes

Page 8 of 33

		held by the Consenting Noteholders are now held by Contrarian Capital Advisors L.L.C (“Contrarian”), one of the Consenting Noteholders, and its affiliates.

		The Restructuring Agreement provided a vehicle for liquidating the assets of the Company in the Bankruptcy Court through Chapter 11 of the Bankruptcy Code. Upon execution of the Restructuring Agreement and before commencement of the Bankruptcy Cases, the Company distributed $13.0 million in Excess Cash (as that term is defined in the Restructuring Agreement) to the trustee under the Indenture (the “Indenture Trustee”) to be applied to unpaid and accrued Indenture Trustee’s fees and expenses incurred and as partial payment of accrued and unpaid interest and principal as provided in the Indenture.

		Pursuant to the Restructuring Agreement and an order entered by the Bankruptcy Court, the Company was required to distribute unrestricted cash (which includes cash in net assets held for sale) in excess of $24.8 million to holders of its Notes within 45 days after the end of each quarter. In May, August and November 2001, the Company distributed $1.8 million, $7.7 million and $7.2 million, respectively, in Excess Cash to the Indenture Trustee to be applied to accrued and unpaid interest and principal as provided in the Indenture. In December 2001, the Company sold substantially all of the assets and related liabilities of its Fitzgeralds Las Vegas, Fitzgeralds Mississippi and Fitzgeralds Black Hawk properties to Majestic Investors Holdings, LLC (“Majestic”). At that time, approximately $133.3 million was distributed to the Indenture Trustee from the proceeds of the sale. The Company and the Informal Committee subsequently established a new threshold for cash reserves of $16.5 million, which was approved by the Bankruptcy Court on November 27, 2002 and effective November 1, 2002. Pursuant to that order, the Company distributed $6.2 million to the Indenture Trustee to be applied to accrued and unpaid interest and principal. As part of the Restructuring Agreement, the Consenting Noteholders and Indenture Trustee agreed to forbear from exercising certain of their rights otherwise allowable under the Notes and the Indenture.

		As of the commencement of the Bankruptcy Cases, the parties to the Restructuring Agreement each concluded that the fair market value of the Company’s real and personal property given as collateral for the Notes was less than the total outstanding principal and interest due under the Notes, and that the fair market value of the real and personal property not securing the Notes was less than the amount of the unsecured deficiency claim of the holders of the Notes. As a result, it was not expected then and is still not expected that any distribution will be made to holders of the existing capital stock of the Company. The Restructuring Agreement requires that as part of the liquidation process, all of the existing common stock and preferred stock of the Company is to be canceled and extinguished without payment therefor.

		In accordance with the Restructuring Agreement, an auction sale was to be scheduled for no later than June 15, 2001 in the Bankruptcy Court with respect to those operating assets and properties not sold pursuant to negotiated sales agreements such as the purchase agreement with Majestic. With the consent of the Consenting Noteholders, the auction sale was not conducted and the Company and the Consenting Noteholders executed an amendment to the

Page 9 of 33

		Restructuring Agreement, which was approved by the Bankruptcy Court on November 27, 2002 and effective November 1, 2002, (the “Amended and Restated Restructuring Agreement”). The Amended and Restated Restructuring Agreement provided for the Company to attempt to conduct the auction sale of the one remaining operating property, Fitzgeralds Reno as soon as possible.

		Under the terms of the Amended and Restated Restructuring Agreement, upon the closing of each sale of the Company’s assets, the net proceeds of the collateral for the Notes, less certain reserves for management incentives and other liabilities, were required to be distributed to the Indenture Trustee for the benefit of and distribution to the holders of the Notes in accordance with the Indenture. All of the Company’s assets remaining after such sales, including any notes received as part of the consideration for the sales of the Company’s assets and payment of remaining liabilities of the Company, were to have been transferred to a liquidating trust created for the benefit of the holders of the Notes and others under a plan of reorganization to be consistent with the terms of the Amended and Restated Restructuring Agreement.

		On December 2, 2002, the Bankruptcy Court issued an Order approving the adequacy of the disclosures in the Company’s Disclosure Statement and setting deadlines for balloting and opposing confirmation of the Company’s Plan of Reorganization (the “Initial Plan”). The confirmation hearing on the Initial Plan was set for March 6, 2003 but was continued to April 21, 2003. A significant number of Consenting Noteholders, including several Consenting Noteholders managed by Contrarian, voted to reject the Initial Plan. The Company believes that these votes were in violation of the obligations of the Consenting Noteholders to vote in favor of the Initial Plan and declared the Consenting Noteholders in breach of the Amended and Restated Restructuring Agreement and filed with the Bankruptcy Court a motion seeking to disallow the votes. The motion to disallow the votes was set for hearing before the Bankruptcy Court on March 6, 2003.

		Prior to the hearing on March 6, 2003, the Company and Contrarian agreed to Amendment No. 1 to the Amended and Restated Restructuring Agreement (the “Current Restructuring Agreement”) to provide, among other matters, (i) that Fitzgeralds Reno would not be sold, but would be retained by the Company; (ii) for an amendment to the Initial Plan (in the form of a Second Amended Plan of Reorganization (the “New Plan”)) to permit the conversion of the indebtedness due the holders of the Notes into 100% of the equity of the successor to the Company and (iii) payment of all allowed unsecured claims of less than $25,000 in full and a 20% payment for all allowed unsecured claims in excess of $25,000. Under the New Plan holders of notes may elect to receive a cash distribution of 3% of the principal amount of their notes in lieu of converting their indebtedness into equity of the successor to the company. The Current Restructuring Agreement, the New Plan and the amended Supplemental Disclosure Statement to accompany Debtor’s Amended Plan of Reorganization (the “Disclosure Statement”) were filed with the Bankruptcy Court on March 20, 2003. At a Bankruptcy Court hearing on April 21, 2003, the Bankruptcy Court confirmed the New Plan. The Bankruptcy Court issued an Order on May 5, 2003 confirming the New Plan, which is to become effective no later than 120 days from May 5, 2003. The Noteholders are seeking a District Court appointed supervisor to operate Fitzgeralds Reno pending the Noteholders obtaining a gaming license to

Page 10 of 33

		operate the property. The effective date of the New Plan is anticipated to be the week commencing August 25, 2003.

		In light of the regulatory approvals needed to accomplish the liquidations, and recognizing the need to retain senior management in order to insure continuity and compliance with all gaming regulations and licensing requirements in the Company’s operations during the process, the Restructuring Agreement required implementation of a senior management incentive and retention program. After obtaining Bankruptcy Court approval in December 2000, this program was adopted by the Company in order to retain Philip D. Griffith, Michael E. McPherson, Max L. Page and Paul H. Manske, (the “Senior Management”) each an officer, director and/or senior executive of the Company, as key executives and to compensate them for their continued employment with the Company during the process.

		For further information concerning the Current Restructuring Agreement, the New Plan and the Disclosure Statement, please refer to our Current Report on Form 8-K dated April 8, 2003.

		*Reorganization Items*

		For the quarter and the two quarters ended June 29, 2003 and June 30, 2002, the Company incurred the following expenses subsequent to the filing of the Bankruptcy Cases:


		Quarter Ended						Two Quarters Ended

		2003			2002			2003			2002

Reorganization items:
	Post-petition professional fees	$	170,632		$	435,849		$	634,580		$	873,099
	U. S. trustee fees		22,500			52,667			32,500			83,917
	Loss on sale of assets		—			—			—			290,703
	Other		—			—			313,926			—
	Interest earned on accumulated cash resulting from the bankruptcy proceedings		(50,159	)		(123,030	)		(80,046	)		(187,121	)

		$	142,973		$	365,486		$	900,960		$	1,060,598

		*Liabilities Subject to Compromise*

		At June 29, 2003 and December 31, 2002 liabilities subject to compromise consisted of the following:


		2003			2002

Liabilities subject to compromise:
	Notes	$	93,505,934		$	93,505,934
	Discount on the Notes		(212,984	)		(288,154	)
	Debt offering costs on the Notes		(997,935	)		(1,350,147	)
	Unsecured creditors		365,316			121,705

		$	92,660,331		$	91,989,338

Page 11 of 33

3.		Recently Issued Accounting Standards

		In April 2002, the Financial Accounting Standards Board (“FASB”) issued Statement of Financial Accounting Standards No. 145 (“SFAS 145”), Rescission of FASB Statements No. 4, 44, and 64, Amendment of FASB Statement No. 13, and Technical Corrections. The most significant provisions of this statement relate to the rescission of Statement No. 4, Reporting Gains and Losses from Extinguishment of Debt and it also amends other existing authoritative pronouncements to make various technical corrections, clarify meanings, or describe their applicability under changed conditions. Under this new statement, any gain or loss on extinguishment of debt that was classified as an extraordinary item in prior periods that does not meet certain defined criteria must be reclassified. The provisions of this Statement, related to the rescission of Statement 4, should be applied in fiscal years beginning after May 15, 2002. Generally, SFAS 145 is effective for the Company’s fiscal year 2003. Adoption of this statement did not have a material impact on the Company’s financial condition or results of operation.

		In June 2002, the Financial Accounting Standards Board (“FASB”) issued Statement of Financial Accounting Standards No. 146 (“SFAS 146”), Accounting for Costs Associated with Exit or Disposal Activities. This statement address financial accounting and reporting for costs associated with exit or disposal activities and supercedes EITF No. 94-3 Liability Recognition for Certain Employee Termination Benefits and Other Costs to Exit an Activity (including Certain Costs Incurred in a Restructuring). The statement requires that a liability for a cost associated with an exit or disposal activity is recognized when the liability is incurred. A fundamental conclusion reached by the FASB in SFAS 146 is that an entity’s commitment to a plan, by itself, does not create a present obligation to others that meets the definition of a liability. This statement also establishes that fair value is the objective for initial measurement of the liability. The provisions of this statement are effective for exit or disposal activities that are initiated after December 31, 2002 with early application encouraged. Adoption of this statement did not have a material impact on the Company’s financial condition or results of operation.

		In November 2002, the Financial Accounting Standards Board (“FASB”) issued FASB Interpretation No 45 (“FIN 45”), Guarantor’s Accounting and Disclosure Requirements for Guarantees, including indirect Guarantees of Indebtedness of Others. FIN 45 expands the information disclosures required by guarantors for obligations under certain types of guarantees. It also requires initial recognition at fair value of a liability for such guarantees. The initial recognition and initial measurement provisions of this Interpretation are applicable on a prospective basis to guarantees issued or modified after December 31, 2002, irrespective of the guarantor’s fiscal year-end. The disclosure requirements in this Interpretation are effective for financial statements of interim or annual periods ending after December 15, 2002. Adoption of this statement did not have a material impact on the Company’s financial condition or results of operation.

Page 12 of 33

4.		NET ASSETS HELD FOR SALE

		As of June 29, 2003 and December 31, 2002 assets included in net assets held for sale of $12.5 million consisted mainly of property and equipment transferable upon the sale of Fitzgerald Reno.

5.		LONG TERM DEBT

		The Notes bear interest at a fixed annual rate of 12.25% payable on June 15 and December 15 of each year, commencing June 15, 1998. The Notes stated maturity date is on December 15, 2004. The Company has not paid the regularly scheduled interest payments of $12.5 million that were due and payable June 15, 1999. Under the Note Indenture, an Event of Default occurred on July 15, 1999, and continued until the Company filed the Bankruptcy Cases. Failure to make the scheduled interest payment on June 15, 1999 resulted in a 1.0% increase in the interest rate to 13.25%, effective June 16, 1999 until the Company filed the Bankruptcy Cases. Upon execution of the Restructuring Agreement and before commencement of the Bankruptcy Cases, the Company distributed $13.0 million in Excess Cash (as that term is defined in the Restructuring Agreement) to the Indenture Trustee to be applied to unpaid and accrued Indenture Trustee’s fees and expenses incurred and as partial payment of accrued and unpaid interest as provided in the Indenture. Pursuant to the Restructuring Agreement and an order entered by the Bankruptcy Court, the Company was required to distribute unrestricted cash (which includes cash in net assets held for sale) in excess of $24.8 million to holders of its Notes within 45 days after the end of each quarter. In May, August and November 2001, the Company distributed $1.8 million, $7.7 million and $7.2 million, respectively, in Excess Cash to the Indenture Trustee to be applied to accrued and unpaid interest and principal as provided in the Indenture. On December 6, 2001, approximately $133.3 million was distributed to the Indenture Trustee from the proceeds of the sale to Majestic. The Company and the Informal Committee subsequently established a new threshold for cash reserves of $16.5 million, which was approved by the Bankruptcy Court on November 27, 2002 and effective November 1, 2002. Upon obtaining approval from the Bankruptcy Court for the new threshold of $16.5 million, the Company distributed $6.2 million to the Indenture Trustee to be applied to accrued and unpaid interest and principal.

		The Company and Contrarian agreed to the Current Restructuring Agreement to provide, among other matters, (i) that Fitzgeralds Reno would not be sold, but would be retained by the Company; (ii) for an amendment to the Initial Plan (in the form of a Second Amended Plan of Reorganization (the “New Plan”)) to permit the conversion of the indebtedness due the holders of the Notes into 100% of the equity of the successor to the Company and (iii) payment of all allowed unsecured claims of less than $25,000 in full and a 20% payment for all allowed unsecured claims in excess of $25,000. Under the New Plan holders of notes may elect to receive a cash distribution of 3% of the principal amount of their notes in lieu of converting their indebtedness into equity of the successor to the company.

Page 13 of 33

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 Quarterly 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, consummation of the Restructuring Agreement and the Purchase Agreement, the uncertainties of the Bankruptcy Cases, 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 gaming holding company that until December 2001 owned and operated four Fitzgeralds-brand casino-hotels, in downtown Las Vegas, Nevada (“Fitzgeralds Las Vegas”), Reno, Nevada (“Fitzgeralds Reno”), Tunica, Mississippi (“Fitzgeralds Tunica”), and Black Hawk, Colorado (“Fitzgeralds Black Hawk”). In December 2001, the Company sold substantially all of the assets and related liabilities of its Fitzgeralds Las Vegas, Fitzgeralds Tunica and Fitzgeralds Black Hawk properties to Majestic and currently has only one operating property – Fitzgeralds Reno.

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 the residual assets and liabilities of Fitzgeralds Las Vegas (“FLVI”) and Fitzgeralds Tunica (“FMI”) through wholly owned subsidiaries; and FI owns the residual assets and liabilities of Fitzgeralds Black Hawk through wholly-owned subsidiaries, including 101 Main Street Limited Liability Company.

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

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company. The executive office of the Company is located at 3097 E. Warms Springs Rd. Suite 100, Las Vegas, Nevada 89120; telephone (702) 940-2000; facsimile (702) 940-2207.

In the narrative discussion below, the “2003 Q2 Period” is defined as the quarter ended June 29, 2003 and the “2002 Q2 Period” is defined as the quarter ended June 30, 2002. The “Cumulative 2003 Period” is defined as the two quarters ended June 29, 2003 and the “Cumulative 2002 Period” is defined as the two quarters ended June 30, 2002. Fitzgeralds Gaming Corporation, Fitzgeralds Reno and the residual assets and liabilities of the operations sold to Majestic, are collectively referred to as (the “Properties”). Operating results for the Cumulative 2003 and 2002 Periods reflect the ongoing operating results of the Properties. In the Cumulative 2003 and 2002 Periods the Company did not allocate any corporate expense to Fitzgeralds Reno, however Fitzgeralds Reno incurred $0.2 million of net expense for services previously provided by the Company. Such expenses are included in selling, general and administrative expenses at Fitzgeralds Reno. Corporate expense is included in the selling, general and administrative expenses of the Properties and is reflected in other operations below. See Note 1 of Statement of Operations Data.

Quarter Ended June 29, 2003 Comparison to Quarter Ended June 30, 2002

The table below sets forth, Net Operating Revenues and Income (loss) from Operations for the 2003 Q2 Period and the 2002 Q2 Period.


			For the Quarters Ended

Statement of Operations Data			2003			2002

			(in thousands)
Net Operating Revenues:
	Fitzgeralds Reno		$	9,972		$	9,749
	Other			20			15

		Total	$	9,992		$	9,764

Income (Loss) from Operations:
	Fitzgeralds Las Vegas		$	(73	)	$	(86	)
	Fitzgeralds Tunica			(155	)		(131	)
	Fitzgeralds Reno			811			904
	Fitzgeralds Black Hawk			(11	)		(15	)
	Other (1)			(691	)		(1,067	)

		Total Properties		(119	)		(395	)
	Nevada Club			—			(3	)

		Total	$	(119	)	$	(398	)

(1)

Both the 2003 and 2002 Q2 Periods include corporate expenses and post-petition professional fees and expenses, net of interest income included in reorganization items.

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Operating Revenues

Total revenues for the Properties (Fitzgeralds Reno represents over 99.0% of total revenues and net operating revenues) were $11.5 million and net operating revenues were $10.0 million for the 2003 Q2 Period, representing an increase of 2.2% and 2.3%, respectively, over total revenues of $11.3 million and net operating revenues of $9.8 million for the 2002 Q2 Period.

The Company’s business can be separated into four operating departments: casino, food and beverage, rooms and other. Casino revenues for Fitzgeralds Reno represented 73.1% and 72.9% of total revenues for the Operating Properties for the 2003 and 2002 Q2 Periods, respectively. Casino revenues for Fitzgeralds Reno (of which approximately 78.7% and 76.5% were derived from slot machine revenues for the 2003 and 2002 Q2 Periods, respectively) increased 2.4% to $8.4 million for the 2003 Q2 Period from $8.2 million for the 2002 Q2 Period.

Room revenues for Fitzgeralds Reno (11.8% and 12.0% of total revenues for the operating Properties for the 2003 and 2002 Q2 Periods, respectively) increased 0.7% for the 2003 Q2 Period. Fitzgeralds Reno room revenues increased due to an increase in the average daily rate of 3.3%. The average occupancy rate remained the same at 87.6% for the 2003 and 2002 Q2 Periods.

Food and beverage revenues for Fitzgeralds Reno (13.6% and 13.4% of total revenues for the Operating Properties for the 2003 and 2002 Q2 Periods, respectively) increased 3.5% to $1.6 million for the 2003 Q2 Period from $1.5 million for the 2002 Q2 Period.

Promotional allowances for Fitzgeralds Reno remained approximately the same at $1.5 million for both the 2003 and 2002 Q2 Periods.

Operating Costs and Expenses

Total operating costs and expenses for the Properties decreased 0.5% to $10.1 million for the 2003 Q2 Period from $10.2 million for the 2002 Q2 Period primarily as a result of a 34.3% decrease in corporate administrative expenses to $0.7 million for the 2003 Q2 Period from $1.1 million for the 2002 Q2 Period. Total operating expenses for Fitzgeralds Reno increased 3.6% to $9.2 million for the 2003 Q2 Period from $8.8 million for the 2002 Q2 Period.

Casino expenses for the Properties were $4.3 million for the 2003 Q2 Period, a 8.5% increase from $4.0 million for the 2002 Q2 Period due primarily to increases in payroll and benefit costs, as well as increased costs associated with operating non-owned slot devices. Food and beverage expenses for the Properties decreased 2.7% to $1.0 million for the 2003 Q2 Period from $1.1 million for the 2002 Q2 Period. Room expenses for the Properties increased 7.3% to $0.5 million for the 2003 Q2 Period from $0.4 million for the 2002 Q2 Period. Selling, general and administrative expenses for the Properties decreased 3.9% to $4.1 million for the 2003 Q2 Period from $4.2 million for the 2002 Q2 Period. Such decreases in selling, general and administrative

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expenses result primarily from a reduction in corporate administrative expenses. Professional fees and expenses incurred in conjunction with the ongoing development, negotiation and implementation of the Company’s restructuring were $0.1 million for the 2003 Q2 Period and $0.4 million for the 2002 Q2 Periods, respectively. Such expenses also include professional fees and expenses paid by the Company for the financial and legal advisors to the informal committee (the “Committee”) representing holders of a majority in interest of the Notes, the Indenture Trustee, and the U.S. Trustee in connection with the Bankruptcy Cases.

Personnel expenses for the Properties increased 4.8% to approximately $4.6 million for the 2003 Q2 Period from approximately $4.4 million for the 2002 Q2 Period. Such expenses are included in the operating departmental expense to which they relate on the consolidated statement of operations.

Marketing expenses for the Properties, which include advertising, promotional material, special events and the operations of the Fitzgeralds player-tracking card, decreased 4.2% for the 2003 Q2 Period. Such expenses are included in selling, general and administrative expenses on the consolidated statements of operations.

Loss from Operations

Loss from operations for the Company was $0.1 million for the 2003 Q2 Period compared to $0.4 million for the 2002 Q2 Period. Income from operations for Fitzgeralds Reno decreased to $0.8 million for the 2003 Q2 Period from $0.9 million for the 2002 Q2 Period.

Net Interest Expense

Interest expense for the Company (net of interest income), remained approximately the same at $0.3 million for the 2003 and 2002 Q2 Periods. Section 506(b) of the Bankruptcy Code permits the allowance of interest on an allowed secured claim secured by property, the value of which is greater than the amount of the claim. Inasmuch as the parties to the Restructuring Agreement have concluded that the fair market value of the collateral securing the Notes is less than the outstanding principal of the Notes, concurrently with the filing of the Bankruptcy Cases on December 5, 2000 the Company ceased accruing interest on the Notes.

Net Loss

Net loss for the Company was $0.4 million in the 2003 Q2 Period compared to $0.7 million in the 2002 Q2 Period.

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Two Quarters Ended June 29, 2003 Comparison to Two Quarters Ended June 30, 2002


			For the Two Quarters Ended

Statement of Operations Data			2003		2002

			(in thousands)
Net Operating Revenues:
	Fitzgeralds Reno		$	17,759	$	18,014
	Other			20		24

		Total	$	17,779	$	18,038


			For the Two Quarters Ended

			2003			2002

			(in thousands)
Income (Loss) from Operations:
	Fitzgeralds Las Vegas		$	(375	)	$	(295	)
	Fitzgeralds Tunica			(175	)		(148	)
	Fitzgeralds Reno			393			681
	Fitzgeralds Black Hawk			(65	)		(385	)
	Other (1)			(1,723	)		(2,205	)

		Total Properties		(1,945	)		(2,352	)
	Nevada Club			—			(15	)
Net Cash Provided by (Used in) (2):
	Operating Activities		$	(1,461	)	$	(2,281	)
	Investing Activities			—			(75	)
	Financing Activities			(60	)		(144	)
Depreciation and Amortization				9			18
Capital Expenditures				—			(222	)
Earnings to Fixed Charges (3):				—			—

(1)		Both the Cumulative 2003 and 2002 Periods include corporate expenses and post-petition professional fees and expenses, net of interest income included in reorganization items.

(2)		Includes financial results of Nevada Club for the Cumulative 2002 Period.

(3)		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 $2.4 million and $3.0 million for the Cumulative 2003 and 2002 Periods, respectively.

Operating Revenues

Total revenues for the Properties (Fitzgeralds Reno represents over 99.0% of total revenues and net operating revenues) were $20.6 million and net revenues were $17.8 million for the Cumulative 2003 Period, representing decreases of 0.8% and 1.4%, respectively, over total revenues of $20.8 million and net revenues of $18.0 million for the Cumulative 2002 Period.

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The decrease is due to adverse economic conditions in its target market, Indian gaming in California and the Pacific Northwest as well as a reduction in travel earlier in the year, due to the war in Iraq.

The Company’s business can be separated into four operating departments: casino, food and beverage, rooms and other. Casino revenues for the Fitzgeralds Reno represented 72.7% and 73.0% of total revenues for the Properties for the Cumulative 2003 and 2002 Periods, respectively. Casino revenues for the Fitzgeralds Reno (of which approximately 78.0% and 75.1% were derived from slot machine revenues for the Cumulative 2003 and 2002 Periods, respectively) decreased 1.1% to $15.0 million for the Cumulative 2003 Period from $15.1 million for the Cumulative 2002 Period.

Room revenues for Fitzgeralds Reno (11.4% of total revenues for the Properties for both the Cumulative 2003 and 2002 Periods, respectively) decreased 0.6% due to a 0.7% decrease in the average daily rate and a decrease in the average occupancy rate to 83.5% for the Cumulative 2003 Period from 84.1% for the Cumulative 2002 Period.

Food and beverage revenues for Fitzgeralds Reno (14.2% and 13.7% of total revenues for the Properties for the Cumulative 2003 and 2002 Periods, respectively) increased 2.9% to $2.9 million for the Cumulative 2003 Period from $2.8 million for the Cumulative 2002 Period.

Promotional allowances for the Fitzgeralds Reno increased 3.4% to $2.8 million for the Cumulative 2003 Period from $2.7 million for the Cumulative 2002 Period.

Costs and Expenses

Total operating costs and expenses for the Properties decreased 3.3% to $19.7 million for the Cumulative 2003 Period from $20.4 million for the Cumulative 2002 Period primarily as a result of a 21.8% decrease in corporate administrative expenses to $1.7 million for the Cumulative 2003 Period from $2.2 million for the Cumulative 2002 Period. Total operating expenses for Fitzgeralds Reno remained the same at $17.4 million for both the Cumulative 2002 and 2003 Periods.

Casino expenses for the Properties were $7.9 million for the Cumulative 2003 Period, a 2.5% increase from $7.8 million for the Cumulative 2002 Period. Food and beverage expenses for the Properties decreased 1.2% to $1.9 million for the Cumulative 2003 Period from $2.0 million for the Cumulative 2002 Period. Room expenses for the Properties remained approximately the same at $0.8 million for both the Cumulative 2003 and 2002 Periods. Selling, general and administrative expenses for the Properties decreased 7.5% to $7.9 million for the Cumulative 2003 Period from $8.6 million for the Cumulative 2002 Period. Such decreases result primarily from a reduction in corporate administrative expenses, as well as a reduction in costs relating to the residual liabilities of the properties sold to Majestic. Professional fees and expenses incurred in conjunction with the ongoing development, negotiation and implementation of the Company’s restructuring were $0.9 million and $1.1 million for the Cumulative 2003 and 2002 Periods, respectively. Such expenses also include professional fees and expenses paid by the Company

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for the financial and legal advisors to the Committee and the Indenture Trustee, and administrative expenses paid to the U.S. Trustee in connection with the Bankruptcy Cases.

Personnel expenses for the Properties increased 1.5% to approximately $8.6 million for the Cumulative 2003 Period from approximately $8.5 million for the Cumulative 2002 Period. Such expenses are included in the operating departmental expense to which they relate on the consolidated statements of operations.

Marketing expenses for the Properties, which include advertising, promotional material, special events and the operations of the Fitzgeralds player-tracking card, decreased $0.08 million or 3.9% for the Cumulative 2003 Period. Such expenses are included in selling, general and administrative expenses on the consolidated statements of operations.

Loss from Operations

As a result of the forgoing, loss from operations for the Properties was $1.9 million for the Cumulative 2003 Period compared to $2.4 million for the Cumulative 2002 Period. Income from operations for Fitzgeralds Reno decreased 42.3% to $0.4 million for the Cumulative 2003 Period from $0.7 million for the Cumulative 2002 Period.

Net Interest Expense

Interest expense for the Properties (net of interest income), decreased 11.2% to $0.5 million for the Cumulative 2003 Period from $0.7 million for the Cumulative 2002 Period. Section 506(b) of the Bankruptcy Code permits the allowance of interest on an allowed secured claim secured by property, the value of which is greater than the amount of the claim. Inasmuch as the parties to the Restructuring Agreement have concluded that the fair market value of the collateral securing the Notes is less than the outstanding principal of the Notes, concurrently with the filing of the Bankruptcy Cases on December 5, 2000 the Company ceased accruing interest on the Notes.

Net Loss

Net loss for the Properties decreased $0.5 million to $2.5 million in the Cumulative 2003 Period compared to a net income of $3.0 million in the Cumulative 2002 Period.

Liquidity and Capital Resources

At June 29, 2003, the Company had unrestricted cash of $13.0 million, compared to $14.5 million at December 31, 2002. The Company’s net cash used in operating activities was $1.5 million and $2.3 million during the Cumulative 2003 and 2002 Periods, respectively. Net cash used in investing activities was $0.08 million for the Cumulative 2002 Period, while the Company did not use any cash for investing activities during the Cumulative 2003 Period. Net cash used in financing activities was $0.06 million and $0.1 million for the Cumulative 2003 and 2002 Periods, respectively.

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The Company’s principal sources of capital have historically consisted of cash from operations and vendor or third party financing of gaming and other equipment. However, its relatively high degree of leverage had 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 did not see any way to resolve this problem without restructuring the Company’s indebtedness. An Event of Default under the Indenture pursuant to which the Notes were issued occurred on July 15, 1999.

The Restructuring Agreement provided a vehicle for liquidating the assets of the Company in the Bankruptcy Court through Chapter 11 of the Bankruptcy Code. Upon execution of the Restructuring Agreement and before commencement of the Bankruptcy Cases, the Company distributed $13.0 million in Excess Cash (as that term is defined in the Restructuring Agreement) to the trustee under the Indenture (the “Indenture Trustee”) to be applied to unpaid and accrued Indenture Trustee’s fees and expenses incurred and as partial payment of accrued and unpaid interest and principal as provided in the Indenture. On December 5, 2000, the Company commenced the Bankruptcy Cases. For further information concerning the Bankruptcy Cases and related matters, see Note 2 to the Notes to Unaudited Condensed Consolidated Financial Statements.

Pursuant to the Restructuring Agreement and an order entered by the Bankruptcy Court, the Company was required to distribute unrestricted cash (which includes cash in net assets held for sale) in excess of $24.8 million to holders of its Notes within 45 days after the end of each quarter until the closing of the sale to Majestic. In May, August and November 2001, the Company distributed $1.8 million, $7.7 million and $7.2 million, respectively, in Excess Cash to the Indenture Trustee to be applied to accrued and unpaid interest and principal as provided in the Indenture. The Company and the Informal Committee subsequently established a new threshold for cash reserves of $16.5 million, which was approved by the Bankruptcy Court on November 27, 2002 and effective November 1, 2002. Pursuant to that order, the Company distributed $6.2 million to the Indenture Trustee to be applied to accrued and unpaid interest and principal. As part of the Restructuring Agreement, the Consenting Noteholders and Indenture Trustee agreed to forbear from exercising certain of their rights otherwise allowable under the Notes and the Indenture.

By suspending the interest payments on the Notes other than the Post-petition Distributions and sales proceeds of collateral for the Notes, the Company believes that its liquidity and capital resources will be sufficient to maintain normal operations at Fitzgeralds Reno at current levels during the pendency of the Bankruptcy Cases and does not anticipate any adverse impact on operations, customers or employees at Fitzgeralds Reno. However, costs incurred and to be incurred in connection with the Bankruptcy Cases have been and will continue to be substantial and, in any event, there can be no assurance that liquidity and capital resources will be sufficient to maintain normal operations at Fitzgeralds Reno during the pendency of the Bankruptcy Cases.

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Other

Holiday Inn - Upon notification by Majestic of its intent to not enter into a new franchise agreement with Holiday Inn Franchising, Inc. (“Inn”), the Company filed a motion with the Bankruptcy Court on October 26, 2001 to remove its pre-petition franchise and other agreements with Inns from the list of agreements to be assumed and assigned to Majestic. On October 26, 2001, the Bankruptcy Court granted the motion. On or about July 9, 2002, the Bankruptcy Court entered an order granting the Company’s motion for an order authorizing the rejection of the franchise agreement. Inn disagreed with the rejection and subsequently filed an unsecured claim in Bankruptcy Court based upon the liquidated damage provision of the franchise agreement for $1.8 million. With the approval of the Bankruptcy Court, the Company has entered into an agreement with Inn to pay approximately $0.3 million in settlement of its claim with Inn, representing approximately 20% of its allowed unsecured claim as provided for in the New Plan. Such amounts are reflected as a liability on the balance sheet at June 29, 2003.

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 $2.4 million and $3.0 million for the Cumulative 2003 and 2002 Periods, respectively.

Business Seasonality and Severe Weather

The gaming operations of the Company are seasonal and could be significant. At Fitzgeralds Reno business levels are typically weaker from Thanksgiving through the end of the winter and typically stronger from mid-June to mid-November. In addition, because of its proximity to a mountainous region, Reno is subject to severe weather, particularly during the winter months, that can and often does have an adverse impact on business.

Recently Issued Accounting Standards

In April 2002, the Financial Accounting Standards Board (“FASB”) issued Statement of Financial Accounting Standards No. 145 (“SFAS 145”), Rescission of FASB Statements No. 4, 44, and 64, Amendment of FASB Statement No. 13, and Technical Corrections. The most significant provisions of this statement relate to the rescission of Statement No. 4, Reporting Gains and Losses from Extinguishment of Debt and it also amends other existing authoritative pronouncements to make various technical corrections, clarify meanings, or describe their applicability under changed conditions. Under this new statement, any gain or loss on extinguishment of debt that was classified as an extraordinary item in prior periods that does not

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meet certain defined criteria must be reclassified. The provisions of this Statement, related to the rescission of Statement 4, should be applied in fiscal years beginning after May 15, 2002. Generally, SFAS 145 is effective for the Company’s fiscal year 2003. Adoption of this statement did not have a material impact on the Company’s financial condition or results of operation.

In June 2002, the Financial Accounting Standards Board (“FASB”) issued Statement of Financial Accounting Standards No. 146 (“SFAS 146”), Accounting for Costs Associated with Exit or Disposal Activities. This statement address financial accounting and reporting for costs associated with exit or disposal activities and supercedes EITF No. 94-3 Liability Recognition for Certain Employee Termination Benefits and Other Costs to Exit an Activity (including Certain Costs Incurred in a Restructuring). The statement requires that a liability for a cost associated with an exit or disposal activity is recognized when the liability is incurred. A fundamental conclusion reached by the FASB in SFAS 146 is that an entity’s commitment to a plan, by itself, does not create a present obligation to others that meets the definition of a liability. This statement also establishes that fair value is the objective for initial measurement of the liability. The provisions of this statement are effective for exit or disposal activities that are initiated after December 31, 2002 with early application encouraged. Adoption of this statement did not have a material impact on the Company’s financial condition or results of operation.

In November 2002, the Financial Accounting Standards Board (“FASB”) issued FASB Interpretation No 45 (“FIN 45”), Guarantor’s Accounting and Disclosure Requirements for Guarantees, including indirect Guarantees of Indebtedness of Others. FIN 45 expands the information disclosures required by guarantors for obligations under certain types of guarantees. It also requires initial recognition at fair value of a liability for such guarantees. The initial recognition and initial measurement provisions of this Interpretation are applicable on a prospective basis to guarantees issued or modified after December 31, 2002, irrespective of the guarantor’s fiscal year-end. The disclosure requirements in this Interpretation are effective for financial statements of interim or annual periods ending after December 15, 2002. Adoption of this statement did not have a material impact on the Company’s financial condition or results of operation.

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Item 3

Quantitative and Qualitative Disclosures About Market Risk

Due to the Company’s bankruptcy filing, subsequent sale of a substantial portion of its assets, interim payments on the aggregate balance of accrued interest and principal on the Notes, as well as delays encountered in selling the Company’s remaining operating casino, the Company believes it is no longer possible to accurately determine the fair market value of its fixed debt obligations at June 29, 2003. The majority of the Company’s fixed debt obligations are comprised of the Company’s Notes. See Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations -Liquidity and Capital Resources.

Item 4

Controls and Procedures

Within 90 days prior to the date of this Quarterly Report on Form 10-Q, we have evaluated the effectiveness of the design and operation of our disclosure controls and procedures as defined under Rule 13a-14 and Rule 15d-14 of the Securities Exchange Act of 1934, as amended. This evaluation was done under the supervision and with the participation of management, including our Chief Executive Officer (“CEO”) and Chief Financial Officer (“CFO”).

Our management, including the CEO and CFO, does not expect that our disclosure controls and procedures will necessarily prevent all errors. Such controls and procedures, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that their objectives are met. However, based upon our evaluation, we have concluded that, subject to the limitations noted above, our disclosure controls and procedures are effective to ensure that material information relating to the Company is made known to management, including the CEO and CFO, particularly during the period when our periodic reports are being prepared. Furthermore, there were not any significant changes in the Company’s internal controls or in other factors that could significantly affect these controls subsequent to the date of their evaluation.

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PART II
OTHER INFORMATION

Item 1. Legal Proceedings.

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”). 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 of Reno (the “City”) estimates that a period of more than three 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 where Fitzgeralds Reno hotel entrance, valet parking area and hotel loading zone are situated.

Based on plans prepared by the City, Fitzgeralds Reno would expect to lose permanently approximately 3,802 square feet of land and temporarily 22,979 square feet of land through eminent domain, several parking spaces, the current valet parking area, an outdoor billboard structure advertising available rooms and a building used to house administrative offices, and may be required to relocate the hotel entrance currently on Commercial Row. The City has also indicated that the ReTRAC Project might require the demolition of the Fitzgeralds Reno Rainbow Skyway if underpinning during construction of the ReTRAC Project cannot preserve the structure. Implementation of the ReTRAC Project under these circumstances would cause the Company to suffer significant and permanent loss in business revenue and income; certain 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.

On November 30, 1998, the Company filed a lawsuit against the City to challenge the method by which the special assessment to be levied against the Company was determined. The City of Reno filed an answer to the Company’s lawsuit on January 19, 1999. Subsequent thereto, George Karadanis and Robert Maloff d/b/a Sundowner Hotel and Casino (the “Sundowner”) were permitted by court order to file a Complaint in Intervention. Notwithstanding that intervention, on December 22, 1999, the court granted the City of Reno’s Motion for Summary Judgment against the Sundowner which motion was joined in by the Company. After hearing oral arguments and considering the parties’ briefs, the Court concluded that there was insufficient evidence before the Reno City Council to support a finding that the ReTRAC Project confers a special benefit on Fitzgeralds Reno as is required by statute before a special assessment may be imposed. The Court remanded the matter to the Reno City Council and directed the council to conduct a new hearing to consider evidence as to whether Fitzgeralds Reno would receive a special benefit from the proposed project.

On June 20, 2001, the Reno City Council commenced a public hearing in compliance with the remand order of the Court. That public hearing was recessed and continued to November 29, 2001. After resuming the hearing on November 29, 2001, the Reno City Council again recessed and continued the proceedings to January 4, 2002, at which time the hearing was completed and

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the matter was submitted for decision of the Reno City Council. On February 19, 2002, the Reno City Council voted on the matter. By a 4-3 decision, the Reno City Council concluded that the ReTRAC Project would confer a special benefit on Fitzgeralds Reno. On a 5-2 decision, however, the Reno City Council determined that the value of the special benefit in light of the evidence presented was $1.00.

On February 27, 2001, the Reno City Council voted to continue the process of determining the actual cost of construction of the ReTRAC Project, which the City has estimated to be recently $282 million. On May 24, 2001, Fitzgeralds Reno commenced an action, CV-N-01-0329-PMP-RAM, in the United States District Court for the District of Nevada, against the Federal Highway Administration (“FHWA”), the Nevada Department of Transportation (“NDOT”), and the City (collectively, the “Defendants”) for violations of the National Environmental Policy Act (“NEPA”), codified at 42 U.S.C. §§ 4321-4327. The claims against all Defendants allege a violation of 42 U.S.C. § 4332 (Violation of NEPA: Failure to Consider Reasonable Alternatives & Failure to Consider and Provide Adequate Mitigation Measures). Specifically, Fitzgeralds Reno asserts the Defendants failed to consider the Partial Cover and Cut Tunnel Alternative and the use of the Feather River Route on a temporary basis, and failed to include a plan for mitigating the adverse environmental impacts, including construction disruption, loss of facilities, noise and vibration impacts, that will be caused by the ReTRAC Project and incurred by Fitzgeralds Reno and others.

On or about June 12, 2001, NDOT filed a motion to dismiss the Company’s NEPA complaint based on a claim of sovereign immunity and the Company moved to amend its complaint to substitute as a defendant the Director of NDOT, Thomas E. Stephens, for the Defendant NDOT, in lieu of considering NDOT’s Eleventh Amendment immunity claim. This unopposed motion was granted by the Court on August 17, 2001, and the Company filed its amended complaint on August 23, 2001. Defendant FHWA filed its answer to the Complaint on September 6, 2001 and Defendant Stephens filed his answer on October 3, 2001. The City filed a motion to dismiss the amended complaint so far as it named the City as defendant on September 6, 2001. On February 15, 2002, the United States District Court held a hearing to consider the City’s motion to dismiss. At the hearing, the Defendant FHWA and the Defendant NDOT joined the City’s motion to dismiss. The City’s motion to dismiss was fully argued and submitted to the Court for a ruling. On March 11, 2002, the Court issued an order dismissing all of the Company’s claims against the City. The Court ruled the ReTRAC Project must comply with NEPA but the specific federal aid statute under which the City is receiving funding for the ReTRAC Project does not explicitly require the local government body to consent to suit under NEPA. Accordingly, the Court found the City was not a proper party in the case. The Court, however, denied the motions to dismiss by FHWA and NDOT stating the Company is entitled to proceed on the claims against those agencies for a violation of NEPA. The remaining parties – Fitzgeralds Reno, FHWA and NDOT – filed cross motions for summary judgment on December 23, 2002. These parties’ oppositions to the respective cross motions for summary judgment were filed on February 18, 2003. The cross motions for summary judgment was orally argued on February 26, 2003. On March 6, 2003, Judge Pro entered an order and judgment dismissing Fitzgeralds Reno’s claim against the FHWA and NDOT on the grounds the claims raised did not satisfy the applicable “arbitrary and capricious” standard under NEPA and only alleged “generalized and speculative environmental

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harms.” On May 2, 2003, the Company filed an appeal of the Court’s decision and judgement. The Company has decided to dismiss the appeal with prejudice.

The City completed its construction cost analysis in July 2002. Construction contracts for the ReTRAC Project were awarded by the City Council on July 16, 2002. Preliminary construction activities have commenced and on February 25, 2003, the City Council adopted a resolution of intent to commence in the future eminent domain proceedings against the Company to acquire from Fitzgeralds Reno fee title to approximately 3,802 square feet of land and a 4,524 square foot administrative office building owned and used by the Company, as well as temporary easements for approximately 22,979 square feet of land to facilitate construction of the ReTRAC Project. The Company also is discussing with the City certain federal government benefits for the relocation and displacement of businesses in connection with the ReTRAC Project.

On July 24, 2003, the City commenced the eminent domain proceedings with the filing of a verified complaint. Additionally, the City joined the Company as a defendant a second condemnation proceedings that seeks to acquire certain property and property interests in the parking garage facility owned by the Company on leased land adjacent to the Fitzgeralds Reno casino and hotel. The Company must file an answer to the complaint within thirty days of service. The City also filed motions for immediate occupancy of the property and property interests sought to be condemned and for a priority trial setting. The Company must respond to the motions by August 11, 2003, and these motions are scheduled to be heard by the state district court on August 28, 2003.

Other Litigation

The Company is a party to various lawsuits relating to routine matters incidental to its business. Except as noted below, 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.

Reliance - From April 1, 1998 through September 30, 1999, the Company’s general liability insurance and worker’s compensation insurance carrier was Reliance Insurance Company (“Reliance”). On May 29, 2001, a Pennsylvania court placed Reliance under the control of the Pennsylvania Insurance Department for rehabilitation. Thereafter, on October 3, 2001, the Reliance Insurance Company was declared insolvent and placed under an order of liquidation by the Pennsylvania Commonwealth Court at the request of the Pennsylvania Insurance Department. The Pennsylvania Insurance Department is now referring claims incurred in Mississippi, Nevada and Colorado from April 1, 1998 through September 30, 1999 to the Mississippi Insurance Guaranty Association, the Nevada Insurance Guaranty Association and the Colorado Insurance Guaranty Association, respectively. Each state’s Guaranty Insurance Association will investigate the claims incurred in their jurisdictions to determine if any of these claims are eligible for any insurance coverage under the respective Insurance Guaranty Association. The Company has not incurred any material amounts for liability claims or workers compensation claims that would be subject to reimbursement by Reliance. However, the statute of limitation has not expired for filing claims and it is unclear at this time what the insurance coverage would be from Reliance, if any, in the event that a future claim is filed that would be large enough to result in an insurance reimbursement from Reliance or any state Insurance Guaranty Association, or if there is

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insurance coverage for an existing claim that is currently under the threshold level for reimbursement, but increases in the future to an amount eligible for reimbursement. The reimbursement threshold per claim is $25,000 and $100,000 for liability claims and worker compensation claims, respectively. At the present time, the Company is unable to determine what effect this action may have on liability and worker’s compensation claims which arose during the coverage period for which Reliance was the Company’s insurance carrier or whether any limitations on coverage would have a material adverse effect on the Company’s financial condition. In any event, any allowed unsecured claim ultimately assessed against the Company would be subject to the provisions for payment of allowed unsecured claims provided for in the New Plan.

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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 and elsewhere in this Quarterly Report on Form 10-Q, the Company is in default on its $205.0 million Senior Secured Notes.

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

Not Applicable

Item 5. Other Information.

The Company files monthly operating statements with the Bankruptcy Court. These filings are available for public inspection at the office of the clerk of the Bankruptcy Court at 300 Booth Street, Reno, Nevada 89509 or on the internet at www.nvb.uscourts.gov.

Item 6. Exhibits and Reports on Form 8-K.

(a) Exhibits

(b) Reports on Form 8-K

None

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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: August 8, 2003

FITZGERALDS GAMING CORPORATION
(DEBTOR-IN-POSSESSION)

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

CERTIFICATIONS

I, Philip D. Griffith, certify that:

1)		I have reviewed this quarterly report on Form 10-Q of Fitzgeralds Gaming Corporation (the “Registrant”)

2)		Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to sate a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this quarterly report.

3)		Based on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly present in all material respects the financial condition, results of operations and cash flows of the Registrant as of, and for, the periods presented in the report.

4)		The Registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for the Registrant and we have:

Page 30 of 33

	a)		designed such disclosure controls and procedures to ensure that material information relating to the Registrant, including its consolidated subsidiaries is made known to us by others within those entities, particularly during the period in which this quarterly report is being prepared;

	b)		evaluated the effectiveness of the Registrant’s disclosure controls and procedures as of a date within 90 days prior to the filing date of this quarterly report (the “Evaluation Date”); and

	c)		presented in this quarterly report, our conclusions about the effectiveness of the disclosure controls and procedures based on our evaluation as of the Evaluation Date;

The Registrant’s other certifying officer and I have disclosed, based on our most recent evaluation, to the Registrant’s auditors and to the audit committee and the audit committee of Registrant’s board of directors (or persons performing the equivalent function):

	a)		all significant deficiencies in the design or operation of internal controls which could adversely affect the Registrant’s ability to record, process, summarize and report financial data and have identified for the Registrant’s auditors any material weaknesses in internal controls; and

	b)		any fraud, whether or not material, that involves management or other employees who have a significant role in the Registrant’s internal controls; and

The Registrant’s other certifying officer and I have indicated in this quarterly report whether or not there were significant changes in internal controls or in other factors that could significantly affect internal controls subsequent to the date of our most recent evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses


Dated: August 8, 2003		*/s/ Philip D. Griffith*
		Philip D. Griffith President and Chief Executive Officer

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CERTIFICATIONS

I, Michael E. McPherson, certify that:

1)		I have reviewed this quarterly report on Form 10-Q of Fitzgeralds Gaming Corporation (the “Registrant”)

2)		Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to sate a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this quarterly report.

3)		Based on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly present in all material respects the financial condition, results of operations and cash flows of the Registrant as of, and for, the periods presented in the report.

4)		The Registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for the Registrant and we have:

	a)		designed such disclosure controls and procedures to ensure that material information relating to the Registrant, including its consolidated subsidiaries is made known to us by others within those entities, particularly during the period in which this quarterly report is being prepared;

	b)		evaluated the effectiveness of the Registrant’s disclosure controls and procedures as of a date within 90 days prior to the filing date of this quarterly report (the “Evaluation Date”); and

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presented in this quarterly report, our conclusions about the effectiveness of the disclosure controls and procedures based on our evaluation as of the Evaluation Date;

	a)		all significant deficiencies in the design or operation of internal controls which could adversely affect the Registrant’s ability to record, process, summarize and report financial data and have identified for the Registrant’s auditors any material weaknesses in internal controls; and

	b)		any fraud, whether or not material, that involves management or other employees who have a significant role in the Registrant’s internal controls; and


Dated: August 8, 2003		*/s/ Michael E. McPherson*
		Michael E. McPherson Executive Vice President and Chief Financial Officer

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Certification furnished pursuant to 18 U.S.C Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

Certification furnished pursuant to 18 U.S.C Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

FITZGERALDS GAMING CORP 10-Q