UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

x
Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the fiscal period ended January 27, 2008

o
Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the transition period from_______________________ to ___________________________

Commission file number 1-15517




Nevada Gold & Casinos, Inc.
(Name of issuer in its charter)

Nevada
 
88-0142032
(State or other jurisdiction of Incorporation or organization)
 
(IRS Employer Identification No.)

50 Briar Hollow Lane
    
Suite 500W
    
Houston, Texas
  
77027
(Address of principal executive offices)
  
(Zip Code)

Issuer’s telephone number:
(713) 621-2245

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 any shorter period that the registrant was required to file the reports), and (2) has been subject to those filing requirements for the past 90 days. x Yes  o No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer. See definition of “accelerated filer and large accelerated filer” in Rule 12b-2 of the Exchange Act (Check one):

Large accelerated filer o
Accelerated filer x
Non-accelerated filer o
 
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).   
 
o Yes   x No
 
The number of common shares outstanding was 12,939,130 as of February 29, 2008.


TABLE OF CONTENTS


 
   
Page
 
 
 
 
  PART I. FINANCIAL INFORMATION
 
 
 
 
Item 1.
 
Financial Statements
 
 
 
Consolidated Balance Sheets - January 27, 2008 (unaudited) and April 29, 2007
2
 
 
Consolidated Statements of Operations - Three and Nine Month Periods ended January 27, 2008 (unaudited) and January 28, 2007 (unaudited)
3
 
 
Consolidated Statements of Cash Flows - Nine Month Periods ended January 27, 2008 (unaudited) and January 28, 2007 (unaudited)
4
 
 
Notes to Consolidated Financial Statements
5
 
Management’s Discussion and Analysis of Financial Condition and Results of Operations
21
 
Quantitative and Qualitative Disclosures about Market Risk
24
 
Controls and Procedures
24
     
 
 PART II. OTHER INFORMATION
   
 
 
Item 1.
 
Legal Proceedings
24
Item 1A.
  
Risk Factors
26
Item 2.
 
Unregistered Sales of Equity Securities and Use of Proceeds
26
Item 3.
 
Defaults Upon Senior Securities
26
Item 4.
 
Submission of Matters to a Vote of Security Holders
26
 
Other Information
26
Item 6.
 
Exhibits
26
   
Signatures
29

 
FORWARD-LOOKING STATEMENTS

Factors that May Affect Future Results

(Cautionary Statements Under the Private Securities Litigation Reform Act of 1995)

Certain information included in this Form 10-Q and other materials filed or to be filed by the Company with the Securities and Exchange Commission (as well as information included in oral statements or other written statements made or to be made by the Company or its representatives) contains or may contain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These statements can be identified by the fact that they do not relate strictly to historical or current facts. Statements that include the words “may,” “could,” “should,” “would,” “believe,” “expect,” “anticipate,” “estimate,” “intend,” “plan,” or other words or expressions of similar meaning, may identify forward-looking statements. We have based these forward-looking statements on our current expectations about future events. Forward-looking statements include statements that reflect management’s beliefs, plans, objectives, goals, expectations, anticipations, intentions with respect to the financial condition, results of operations, future performance and the business of the Company, including statements relating to our business strategy and our current and future development plans. These statements may also involve other factors which are detailed in the “Risk Factors” and other sections of the Company’s Annual Report on Form 10-K for the year ended April 29, 2007 and other filings with the Securities and Exchange Commission.

Although we believe that the assumptions underlying these forward-looking statements are reasonable, any or all of the forward-looking statements in this report and in any other public statements that are made may prove to be incorrect. This may occur as a result of inaccurate assumptions or as a consequence of known or unknown risks and uncertainties. Many factors discussed in this report will be important in determining the Company’s future performance. Consequently, actual results may differ materially from those that might be anticipated from forward-looking statements. In light of these and other uncertainties, you should not regard the inclusion of a forward-looking statement in this report or other public communications that we might make as a representation by us that our plans and objectives will be achieved, and you should not place undue reliance on such forward-looking statements.

We undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. Any further disclosures made on related subjects in the Company’s subsequent reports filed with the Securities and Exchange Commission should be consulted.

- 1 -
 
Part I. Financial Information

Item 1. Consolidated Financial Statements

Nevada Gold & Casinos, Inc.
Consolidated Balance Sheets 
 
 
  
January 27, 
  
April 29, 
  
   
2008 
  
 2007
  
   
(unaudited) 
       
             
ASSETS      
Current assets:
              
Cash and cash equivalents
  
$
9,324,075
  
$
2,803,560
  
Restricted cash
    
13,014,000
   
1,050,000
  
Accounts receivable
    
379,220
    
397,145
  
Accounts receivable - affiliates
    
60,006
    
124,685
  
Prepaid expenses
    
516,447
    
474,933
  
Prepaid interest
    
91,183
   
--
  
Notes receivable, current portion
    
1,100,000
   
--
  
Notes receivable - development projects, current portion
    
--
    
1,357,904
  
Other current assets
    
54,606
    
55,055
  
Total current assets
    
24,539,537
    
6,263,282
  
               
Investments in unconsolidated affiliates
    
4,670,120
    
35,201,419
  
Investments in unconsolidated affiliates held for sale
    
--
    
400,489
  
Investments in development projects
    
2,508,625
    
323,202
  
Investments in development projects held for sale
    
3,437,932
    
3,914,765
  
Notes receivable
    
1,100,000
    
--
  
Notes receivable - affiliates
    
3,521,066
    
3,521,066
  
Notes receivable - development projects, net of current portion
    
17,868,104
    
18,012,737
  
Goodwill
    
5,462,918
    
5,462,918
 
Property and equipment, net of accumulated depreciation of $1,741,354 and $1,281,191 at January 27, 2008 and April 29, 2007, respectively
    
1,505,966
    
2,063,026
  
Deferred tax assets
    
16,957
    
--
  
Other assets
    
5,075,855
    
4,868,442
  
Total assets
  
$
69,707,080
  
$
80,031,346
  
               
LIABILITIES AND STOCKHOLDERS’ EQUITY         
Current liabilities:
              
Accounts payable and accrued liabilities
  
$
1,822,868
  
$
1,540,781
  
Accrued interest payable
    
--
    
21,211
  
Other accrued liabilities
    
289,641
   
378,937
 
Guaranty liabilities
    
--
    
4,610,000
 
Taxes payable
    
8,219,234
   
--
  
Long-term debt, current maturities
    
7,802
    
2,066,518
  
Total current liabilities
    
10,339,545
    
8,617,447
  
               
Long-term debt, net of current maturities
    
15,565,125
    
55,021,031
  
Deferred income
    
--
    
8,591
  
Other liabilities
    
671,292
    
742,991
  
Total liabilities
    
26,575,962
    
64,390,060
  
               
Commitments and contingencies
    
--
    
--
  
               
Stockholders' equity:
              
Common stock, $0.12 par value per share; 50,000,000 shares authorized; 13,935,330 shares issued and 12,939,130 outstanding at January 27, 2008 and April 29, 2007, respectively
    
1,672,240
    
1,672,240
 
Additional paid-in capital
    
19,079,296
    
18,484,448
 
Retained earnings
    
32,587,072
    
5,694,088
 
Treasury stock, 996,200 shares at January 27, 2008 and April 29, 2007, at cost
    
(10,216,950
)
  
(10,216,950
)
Accumulated other comprehensive income
    
9,460
    
7,460
 
Total stockholders' equity
    
43,131,118
    
15,641,286
  
Total liabilities and stockholders' equity
  
$
69,707,080
  
$
80,031,346
  
  
The accompanying notes are an integral part of these consolidated financial statements.
 
- 2 -
 
Nevada Gold & Casinos, Inc.
Consolidated Statements of Operations
(unaudited) 

 
  
 Three Months Ended  
  
 Nine Months Ended  
  
 
  
 January 27,
  
 January 28,
  
 January 27,
  
January 28,
  
 
  
 2008
  
 2007
  
 2008
  
2007
  
Revenues:
    
 
    
 
    
 
    
 
  
Casino
  
$
1,446,103
  
$
1,417,141
  
$
5,141,177
 
$
4,608,249
 
Food and beverage
    
271,979
    
246,647
    
1,100,990
   
1,000,966
 
Other
    
18,258
    
32,111
    
87,564
   
102,510
 
Management fee
    
--
   
27,056
    
40,174
   
124,200
 
Credit enhancement fee
    
--
   
2,304,796
    
--
   
6,458,342
 
Gross revenues
    
1,736,340
    
4,027,751
    
6,369,905
   
12,294,267
 
Less promotional allowances
    
(324,061
)
  
(263,949
)
  
(1,113,602
)
  
(944,491
)
Net revenues
    
1,412,279
    
3,763,802
    
5,256,303
   
11,349,776
 
 
    
 
    
 
    
 
    
 
  
Expenses:
   
 
    
 
    
 
    
 
  
Casino
    
492,417
    
428,364
    
1,452,603
   
1,238,340
 
Food and beverage
    
124,636
    
118,335
    
529,999
   
599,306
 
Marketing and administrative
    
708,357
    
753,523
    
2,208,425
   
2,348,391
 
Facility
    
92,671
    
74,740
    
276,292
   
246,251
 
Corporate expense
    
1,259,687
    
1,581,033
    
4,009,416
   
4,868,959
 
Legal expense
    
156,814
    
270,388
    
595,875
   
1,223,604
 
Depreciation and amortization
    
175,059
   
276,183
   
579,439
   
812,685
 
Impairment of unconsolidated affiliate
    
--
   
--
   
100,000
   
--
 
Impairment of note receivable and related interest
    
2,361,702
   
--
   
2,361,702
   
--
 
Write-off of notes receivable related to Native American gaming projects
    
--
   
--
   
--
   
3,171,958
 
Write-off of project development cost
    
--
   
15,000
   
--
   
388,100
 
Other
    
15,574
   
22,301
   
39,897
   
74,710
 
Total operating expenses
    
5,386,917
   
3,539,867
   
12,153,648
   
14,972,304
 
Operating income (loss)
    
(3,974,638
)
  
223,935
   
(6,897,345
)
  
(3,622,528
)
Non-operating income (expenses):
    
 
    
 
    
 
    
 
  
Earnings (loss) from unconsolidated affiliates
    
917,947
   
(1,411,615
)
  
4,061,415
   
(3,812,476
)
Gain on sale of unconsolidated affiliate
    
39,208,732
   
--
   
40,505,155
   
--
 
Gain on sale of marketable securities
    
--
   
11,849
   
--
   
48,646
 
Gain (loss) on sale of assets
    
(15,207
)
  
--
   
3,779
   
--
 
Gain on settlement of development project
    
--
   
249,894
   
14,500
   
249,894
 
Interest expense, net
    
(979,947
)
  
(948,707
)
  
(2,554,356
)
  
(2,720,960
)
Minority interest
    
--
   
(460,092
)
  
--
   
(1,286,831
)
Income (loss) before income tax (expense) benefit
    
35,156,887
   
(2,334,736
)
  
35,133,148
   
(11,144,255
)
Income tax (expense) benefit
    
 
    
 
    
 
    
 
  
Current
    
(8,219,205
)
  
--
   
(8,257,121
)
  
--
 
Deferred
    
16,957
   
845,320
   
16,957
   
4,045,646
 
Total income tax expense
    
(8,202,248
)
  
845,320
   
(8,240,164
)
  
4,045,646
 
 
    
 
    
 
    
 
    
 
  
Net income (loss)
  
$
26,954,639
 
$
(1,489,416
)
$
26,892,984
 
$
(7,098,609
)
 
    
 
    
 
    
 
    
 
  
Per share information:
    
 
    
 
    
 
    
 
  
Net income (loss) per common share - basic
  
$
2.08
 
$
(0.12
)
$
2.08
 
$
(0.55
)
Net income (loss) per common share - diluted
  
$
2.08
 
$
(0.12
)
$
2.08
 
$
(0.55
)
 
    
 
    
 
    
 
    
 
  
Basic weighted average number of common shares outstanding
    
12,939,130
    
12,937,427
    
12,939,130
    
12,937,004
  
Diluted weighted average number of common shares outstanding
    
12,939,130
    
12,937,427
    
12,946,398
    
12,937,004
  
 
The accompanying notes are an integral part of these consolidated financial statements.
 
- 3 -
 
Nevada Gold & Casinos, Inc.
Consolidated Statements of Cash Flows
(unaudited)

   
Nine Months Ended   
  
   
January 27, 
  
January 28, 
 
   
2008 
  
2007 
  
Cash flows from operating activities:
              
Net income (loss)
  
$
26,892,984
 
$
(7,098,609
)
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:
              
Depreciation
    
579,439
   
575,945
 
Amortization of capitalized development costs
    
--
   
236,740
 
Gain and abandonment of assets
    
3,779
   
--
 
Write-off of notes receivable
    
--
   
3,171,958
 
Write-off of development costs
    
--
   
388,100
 
Impairment of notes receivable
    
1,502,537
   
--
 
Impairment of interest receivable
    
859,165
   
--
 
Impairment of unconsolidated affiliate
    
100,000
   
--
 
Gain on settlement of development project
    
(14,500
)
  
(249,894
)
Gain on sale of marketable securities
    
--
   
(48,646
)
Stock-based compensation
    
395,261
   
293,210
 
Amortization of deferred loan issuance costs
    
641,488
   
449,611
 
Minority interest
    
--
   
1,286,831
 
Distributions from unconsolidated affiliates
    
2,555,000
   
1,648,000
 
(Earnings) loss from unconsolidated affiliates
    
(4,061,415
)
  
3,812,476
 
Gain on sale of unconsolidatd affiliates
    
(40,505,155
)
  
--
 
Deferred income tax benefit
    
(16,957
)
  
(4,045,646
)
Excess tax benefits from stock-based compensation
    
--
   
(3,637
)
Changes in operating assets and liabilities:
              
Receivables and other assets
    
(1,792,667
)
  
(1,813,047
)
Accounts payable and accrued liabilities
    
(401,921
)
  
180,979
 
Income tax payable
    
8,219,234
   
(170,348
)
Net cash used in operating activities
    
(5,043,728
)
  
(1,385,977
)
Cash flows from investing activities:
              
Capitalized development costs
    
(2,170,923
)
  
(432,563
)
Advances on development projects held for sale
    
(3,979
)
  
--
 
Purchase of property and equipment
    
(158,564
)
  
(237,397
)
Net proceeds from sale of property and equipment
    
7,000
   
--
 
Net proceeds from sale of marketable securities
    
--
   
190,164
 
Net proceeds from termination of development contract
    
--
   
2,200,000
 
Advances on notes receivable
   
--
   
(219,609
)
Advances on notes receivable - affiliates
    
--
   
(1,600,000
)
Collections of notes receivable
    
--
   
500,000
 
Collections of notes receivable - affiliates
    
--
   
316,033
 
Proceeds from the sale of unconsolidated affiliates
    
66,810,073
   
--
 
Proceeds from the sale of development projects
    
784,258
   
--
 
Investment in certificate of deposit
    
(14,000
)
  
--
 
Investment in restricted cash
    
(11,950,000
)
  
(1,050,000
)
Net cash provided by (used in) investing activities
    
53,303,865
   
(333,372
)
Cash flows from financing activities:
              
Repayment on term loans
    
(46,014,622
)
  
(2,279,180
)
Borrowings on credit facilities
    
2,500,000
   
3,000,000
 
Proceeds from note payable
    
2,000,000
   
--
 
Deferred loan issuance costs
    
(225,000
)
  
(90,000
)
Acquisition of treasury stock
    
--
   
(435,281
)
Cash proceeds from exercise of stock options
    
--
   
22,000
 
Excess tax benefits from stock-based compensation
    
--
   
3,637
 
Cash distribution to minority interest owners
    
--
   
(1,319,304
)
               
Net cash used in financing activities
    
(41,739,622
)
  
(1,098,128
)
               
Net increase (decrease) in cash and cash equivalents
    
6,520,515
   
(2,817,477
)
Cash and cash equivalents at beginning of period
    
2,803,560
    
4,296,154
  
Cash and cash equivalents at end of period
  
$
9,324,075
  
$
1,478,677
  
               
Supplemental cash flow information:
              
Cash paid for interest
  
$
3,498,078
  
$
3,987,029
  
               
Income tax payments
  
$
37,916
  
$
--
  
               
Non-cash financing activities:
              
Restricted common stock issued for services
  
$
--
  
$
97,750
  
Note receivable converted into equity investment in American Racing
  
$
--
  
$
1,400,000
  
Indemnification of guaranty liability
  
$
4,610,000
  
$
--
  
Issuance of stock options in settlement of severance obligation
  
$
199,587
  
$
--
  
Issuance of note receivable to purchasers of unconsolidated affiliate
  
$
2,200,000
  
$
--
  
Reversal of deferred interest
  
$
239,532
  
$
--
  
Unrealized gain on marketable securities
  
$
2,000
  
$
--
  
 
The accompanying notes are an integral part of these consolidated financial statements.
 
- 4 -
Nevada Gold & Casinos, Inc.

Notes to Consolidated Financial Statements

Note 1.   Basis of Presentation
 
Accounting Policies

The interim financial information included herein is unaudited. However, the accompanying financial statements include all adjustments of a normal recurring nature which, in the opinion of management, are necessary to present fairly our Consolidated Balance Sheets at January 27, 2008 and April 29, 2007, Consolidated Statements of Operations for the three and nine month periods ended January 27, 2008 and January 28, 2007, and Consolidated Statements of Cash Flows for the nine months ended January 27, 2008 and January 28, 2007. Although we believe the disclosures in these financial statements are adequate to make the interim information presented not misleading, certain information relating to our organization and footnote disclosures normally included in financial statements prepared in accordance with U.S. generally accepted accounting principles have been condensed or omitted in this Form 10-Q pursuant to Securities and Exchange Commission rules and regulations. These financial statements should be read in conjunction with the audited consolidated financial statements for the year ended April 29, 2007 and the notes thereto included in our Annual Report on Form 10-K. The results of operations for the three and nine months ended January 27, 2008 are not necessarily indicative of the results expected for the full year.

The preparation of financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period and disclosure of contingent liabilities. On an ongoing basis, we evaluate our estimates, including those related to bad debts, investments, intangible assets and goodwill, property, plant and equipment, income taxes, insurance, employment benefits, stock based compensation and contingent liabilities. We base our estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results could differ from those estimates.

Certain reclassifications have been made to conform prior year financial information to the current period presentation. Those reclassifications did not impact working capital, total assets, total liabilities, net income or stockholders’ equity.

Fiscal Year-End
 
The Company’s fiscal year ends on the last Sunday in April. This fiscal year creates more comparability of the Company’s quarterly operations, by generally having an equal number of weeks (13) and weekend days (26) in each fiscal quarter. Fiscal year 2008 commenced on April 30, 2007 and ends on April 27, 2008. The quarterly periods herein ended on January 27, 2008 and January 28, 2007, respectively.

Note 2.   Accounting Policies
 
Revenue Recognition 

In accordance with gaming industry practice, we recognize casino revenues as the net win from gaming activities, which is the difference between gaming wins and losses. Casino revenues are net of accruals for anticipated payouts of progressive slot jackpots which are recorded as a progressive slot jackpot liability. Revenues from food, beverage, entertainment, and the gift shop are recognized at the time the related service or sale is performed or made.

The retail value of food and beverage and other services furnished to guests without charge is included in gross revenue and deducted as promotional allowances. We record the redemption of coupons and points for cash as a reduction of revenue. These amounts are included in promotional allowances in the accompanying consolidated statements of operations. The estimated cost of providing such complimentary services that is included in casino expense in the accompanying consolidated statements of operations is as follows:


   
Three Months Ended   
  
Nine Months Ended   
  
   
January 27, 2008 
  
January 28, 2007 
  
January 27, 2008 
  
January 28, 2007 
  
Food and beverage
  
$
177,162
 
$
166,343
 
$
485,625
 
$
448,041
 
Other
    
3,793
   
1,448
   
7,605
   
10,681
 
Total cost of complimentary services
  
$
180,955
 
$
167,791
 
$
493,230
 
$
458,722
 
 
Recently Issued Accounting Pronouncements
 
In September 2006. the FASB issued SFAS No. 157. “Fair Value Measurements” (“SFAS No. 157”). SFAS No. 157 defines fair value, establishes a framework for measuring fair value under Generally Accepted Accounting Principles and requires enhanced disclosures about fair value measurements. It does not require any new fair value measurements. SFAS No. 157 is effective for financial statements issued for fiscal years beginning after November 15, 2007 and interim periods within those fiscal years. The Company does not expect a material impact from SFAS No. 157 on its consolidated financial statements.
 
In February 2007,the FASB issued SFAS No. 159, “The Fair Value Option for Financial Assets and Financial Liabilities” (“SFAS No. 159”), which permits entities to choose to measure many financial instruments and certain other items at fair value. The objective is to improve financial reporting by providing entities with the opportunity to mitigate volatility in reported earnings caused by measuring related assets and liabilities differently without having to apply complex hedge accounting provisions. SFAS No. 159 applies to all entities and is effective for fiscal years, beginning after November 15, 2007. The Company does not expect a material impact from SFAS No. 159 on its consolidated financial statements.
 
- 5 -
 
In December 2007, the FASB issued SFAS No. 141 (revised 2007), “Business Combinations” (“SFAS No. 141(R)”). SFAS No. 141(R) establishes principles and requirements to recognize the assets acquired and liabilities assumed in an acquisition transaction and determines what information to disclose to investors regarding the business combination. SFAS No. 141(R) is effective for business combinations for which the acquisition date is on or after the beginning of the first annual period beginning after December 15, 2008.
 
In December 2007. the FASB issued SFAS No. 160,“Noncontrolling Interests in Consolidated Financial Statements - an amendment of ARB No. 51”(“SFAS No. 160”). SFAS No. 160 establishes accounting and reporting standards with respect to the disclosure of a noncontrolling ownership interest in the statement of financial position within equity, the presentation of the share of consolidated net income attributable to the parent and noncontrolling interest on the consolidated statement of income, the accounting treatment of changes in a parent’s ownership interest while the parent retains a controlling interest and the accounting for the deconsolidation of a subsidiary. SFAS No. 160 is effective for fiscal years, and interim periods within those fiscal years, beginning on or after December 15, 2008. The Company currently has no noncontrolling ownership interests in consolidated subsidiaries and does not expect a material impact from SFAS No. 160 on its consolidated financial statements.
 
Implementation of New Accounting Policies

On April 30, 2007, we adopted FASB Interpretation No. 48, “Accounting for Uncertainty in Income Taxes - an interpretation of FASB Statement No. 109” (FIN 48”). FIN 48 prescribes a measurement process for recording in the financial statements uncertain tax provisions taken or expected to be taken in a tax return. Additionally, FIN 48 provides guidance regarding uncertain positions relating to derecognition, classification, interest and penalties, accounting in interim periods, disclosure and transition. We classify interest and penalties associated with income taxes as interest expense. At January 27, 2008, we had no material uncertain tax positions and the tax years 2004 through 2006 remained open to review by federal and various state tax jurisdictions.
 
Note 3. Restricted Cash

During the three months ended January 27, 2008, as a result of our sale of the Isle of Capri-Black Hawk, L.L.C. (see Note 4) we agreed with our senior lender to segregate $13,000,000 into a Project Fund to be used for future acquisitions. In addition, we purchased a $14,000 certificate of deposit as collateral for an equivalent letter of credit we issued to our landlord related to our office lease. The letter of credit and the certificate of deposit mature on March 31, 2008.

During the three months ended July 30, 2006, we pledged a $1,050,000 Certificate of Deposit to secure a $1 million operating line of credit for American Racing and Entertainment, LLC (“American Racing”). These funds were returned to us during the three months ended July 29, 2007 as part of our sale of our interest in American Racing when the underlying pledge obligation was released.

Note 4.   Investments in Unconsolidated Affiliates and Investments in Development Projects

We hold investments in various unconsolidated affiliates which are accounted for using the equity method of accounting. Our principal equity method investees are gaming facilities. Additionally, we have one equity method investee engaged in land development and one equity investee engaged in the operation of a restaurant franchise. As of January 27, 2008, we have no undistributed earnings from our unconsolidated affiliates. Our net ownership interest, investments in and earnings from our unconsolidated affiliates are as follows:

   
Net Ownership  
            
Equity in Earnings (Loss)   
  
Equity in Earnings (Loss)   
  
   
Interest  
  
Investment  
  
Three Months Ended   
  
Nine Months Ended   
  
   
January 27,
  
April 29, 
  
January 27, 
  
April, 29 
  
January 27, 
  
January 28, 
  
January 27, 
  
January 28, 
  
Unconsolidated affiliates:
  
2008 
  
2007 
  
2008 
  
2007 
  
2008 
   2007   
2008 
  
2007 
  
   
(Percent)   
                                
Isle of Capri - Black Hawk, L.L.C. (1)
   
--
    
43
  
$
--
  
$
22,306,025
  
$
917,737
  
$
561,180
  
$
4,860,613
  
$
2,179,153
  
Route 66 Casinos, L.L.C. (2)
    
51
    
51
    
4,509,183
    
4,509,183
    
--
    
--
    
--
    
--
  
American Racing and Entertainment, LLC (3)
   
--
    
23
    
--
    
8,215,042
   
--
    
(2,076,991
)
  
(840,368
)
  
(6,127,627
)
Buena Vista Development Company, LLC (4)
    
40
    
35
    
160,937
    
171,169
   
(4,027
)
  
(2,550
)
  
(10,231
)
  
(3,248
)
Sunrise Land and Mineral Corporation (5)
   
--
    
50
    
--
    
400,489
   
4,237
   
106,746
   
51,401
   
139,246
 
Restaurant Connections International, Inc. (6)
    
34
    
34
    
--
    
--
    
--
   
--
    
--
   
--
  
Total investments in unconsolidated affiliates
              
$
4,670,120
  
$
35,601,908
                          
Total earnings (loss) from unconsolidated affiliates
                          
$
917,947
 
$
(1,411,615
)
$
4,061,415
 
$
(3,812,476
)
 
(1)
  
Separate financial statements for this entity are included herein. On January 27, 2008, we sold our ownership interest to our partner for $64.6 million cash. Equity in earnings recorded for the nine months ended January 27, 2008 includes the period of April 30, 2007 through January 27, 2008.
(2)
  
Equity method of accounting is utilized despite our ownership interest being greater than 50%. Effective with Route 66 Casinos’ calendar quarter ended September 30, 2005, we discontinued the recording of any estimated earnings due to the sale and the termination of the equipment leases. See Note 14.
(3)
  
Represents our equity investment in a racing and gaming development project. On June 14, 2007 we sold our membership interest to two of our partners. Equity in loss recorded for the nine months ended January 27, 2008 includes the period of April 1, 2007 through June 14, 2007.
(4)
  
This is an investment in a gaming development project. On May 5, 2007, our ownership interest increased to 40%.
(5)
  
Represents our equity investment in a real estate investment and development project. This asset was held for sale and was presented accordingly on the balance sheet as of April 29, 2007. On January 8, 2008, we sold our ownership interest to our partners in exchange for forgiveness of approximately $284,000 of debt we owed to Sunrise Land and Mineral Corporation. Equity in earnings recorded for the nine months ended January 27, 2008 includes the period of April 30, 2007 through January 8, 2008.
(6)
  
Investment in RCI was reduced to zero in fiscal year 2000. This asset is held for sale as of January 27, 2008.

- 6 -
 
We also hold investments in various development projects that we consolidate. Our net ownership interest and capitalized development costs in development projects are as follows:
   
Net Ownership   
  
Capitalized Development Costs   
  
   
Interest   
  
Investment   
  
   
January 27, 
  
April 29, 
  
January 27, 
  
April 29, 
  
Development Projects:
  
2008 
  
2007 
  
2008 
  
2007 
  
   
(Percent)   
            
                       
Gold Mountain Development, L.L.C. (1)
    
100
    
100
  
$
3,437,932
 
$
3,433,953
 
Goldfield Resources, Inc. (2)
    
--
    
100
    
-
   
480,812
 
Nevada Gold Vicksburg, LLC (3)
    
100
    
--
    
2,100,679
   
-
 
Other (4)
    
 
          
407,946
   
323,202
 
Total investments– development projects
              
$
5,946,557
 
$
4,237,967
 
 
(1)
  
Acquisition and development costs incurred for approximately 270 acres of real property in the vicinity of Black Hawk, Colorado. This asset is held for sale and has been presented accordingly on the balance sheet as of OctoberJanuary 287, 20078 and April 29, 2007.
(2)
  
Acquisition cost incurred for 9,000 acres of mining claims in fiscal year 1999. We sold this asset on October 18, 2007.
(3)
 
Deposit and acquisition costs related to acquisition of Horizon Casino/Hotel in Vicksburg, Mississippi.
(4)
  
Development cost incurred for other development projects.
 
- 7 -
 
Isle of Capri - Black Hawk, L.L.C.

As of January 27, 2008, Isle of Capri - Black Hawk, L.L.C. (“IC-BH”) owned and operated two casinos in the state of Colorado. On January 27, 2008, we sold our membership interest to our partner, Isle of Capri, Inc. (“Isle”). Isle operates the casinos pursuant to a management agreement with IC-BH for a management fee based upon a percentage of the revenues and operating profits of the casinos. The separate IC-BH consolidated balance sheets as of January 27, 2008 and April 29, 2007 and consolidated statements of income for the three and nine months ended January 27, 2008 and January 28, 2007 are as follows:

Isle of Capri-Black Hawk, L.L.C.
Consolidated Balance Sheets
(unaudited)

   
January 27, 
  
April 29, 
  
   
2008 
  
2007 
  
   
(in thousands)  
  
Assets
  
 
       
Current assets:
              
Cash and cash equivalents
  
$
13,691
  
$
14,829
  
Accounts receivable – trade, net
    
358
   
493
 
Accounts receivable - member
    
41
   
53
 
Deferred income taxes
    
317
   
295
 
Inventories
    
1,234
   
1,160
 
Note receivable - member
    
-
   
1,273
 
Prepaid expenses and other
    
1,796
    
680
 
Total current assets
    
17,437
    
18,783
  
               
Property and equipment, net
    
227,558
    
232,771
  
Deferred financing costs, net of accumulated amortization
    
1,615
    
1,312
  
Deferred income tax assets
    
8,319
    
6,035
  
Goodwill and other intangible assets
    
26,865
    
26,865
  
Prepaid deposits and other
    
337
    
858
 
Total assets
  
$
282,131
  
$
286,624
  
               
Liabilities and members' equity
              
Current liabilities:
              
Current maturities of long-term debt
  
$
2,037
  
$
2,033
  
Accounts payable – trade
    
1,663
    
2,023
  
Accounts payable - related
    
10,027
    
3,153
  
Accrued liabilities:
              
Interest
    
1,162
    
1,721
  
Payroll and related expenses
    
3,819
    
4,285
  
Property, gaming and other taxes
    
4,942
    
4,240
  
Progressive jackpot and slot club awards
    
2,034
    
2,437
  
Other
    
407
    
735
  
Total current liabilities
    
26,091
    
20,627
  
               
Long-term liabilities:
              
Long-term debt, less current maturities
    
183,970
    
201,865
  
Deferred income tax liability
    
2,284
    
-
 
Other long-term liabilities
    
1,071
    
923
  
Total long-term liabilities
    
187,325
    
202,788
  
Total liabilities
    
213,416
    
223,415
  
               
Commitments and contingencies
    
-
   
-
 
               
Members’ equity
    
68,715
    
63,209
 
Total liabilities and members' equity
  
$
282,131
  
$
286,624
  
 
- 8 -
 
Isle of Capri-Black Hawk, L.L.C.
Consolidated Statements of Income
(unaudited)

   
Three Months Ended   
  
Nine Months Ended   
  
   
January 27, 
  
January 28,  
  
January 27, 
  
January 28,  
  
   
2008 
  
2007 
  
2008 
  
2007 
  
   
(in thousands)
  
Revenues
  
 
                 
Casino
  
$
36,293
 
$
38,052
 
$
120,453
 
$
123,909
 
Rooms
    
2,174
   
1,900
   
7,349
   
7,584
 
Food, beverage and other
    
4,255
   
4,345
   
13,339
   
14,236
 
Gross revenues
    
42,722
   
44,297
   
141,141
   
145,729
 
Less promotional allowances
    
(9,197
)
  
(9,510
)
  
(29,090
)
  
(31,825
)
Net revenues
    
33,525
   
34,787
   
112,051
   
113,904
 
                           
Operating expenses
                          
Casino
    
5,190
   
5,657
   
15,964
   
18,752
 
Gaming taxes
    
7,090
   
7,286
   
23,336
   
23,997
 
Rooms
    
393
   
527
   
1,448
   
1,545
 
Food, beverage and other
    
701
   
542
   
2,350
   
2,660
 
Facilities
    
1,954
   
1,834
   
5,514
   
5,982
 
Marketing and administrative
    
7,660
   
8,979
   
24,917
   
29,765
 
Management fees
    
1,596
   
1,584
   
5,307
   
5,118
 
Depreciation and amortization
    
3,997
   
3,976
   
11,965
   
11,921
 
Total operating expenses
    
28,581
   
30,385
   
90,801
   
99,740
 
                           
Operating income
    
4,944
   
4,402
   
21,250
   
14,164
 
Interest expense, net
    
(3,474
)
  
(3,675
)
  
(10,918
)
  
(11,118
)
Income before income taxes
    
1,470
   
727
   
10,332
   
3,046
 
Income tax benefit
    
611
   
663
   
988
   
2,107
 
Net income
  
$
2,081
 
$
1,390
 
$
11,320
 
$
5,153
 
 
American Racing and Entertainment, L.L.C.

Summarized financial information for the period from April 1, 2007 to June 14, 2007 and the nine months ended December 31, 2006, respectively, for American Racing and Entertainment, LLC is presented below:

   
For the Periods Ended,
  
   
June 14,
2007
  
December 31, 2006
  
   
(in thousands)
  
Gross revenue
  
$
18,497
  
$
36,199
  
Total expenses
    
21,852
    
52,201
  
Minority interest
    
(213
)
  
(355
)
Net loss
  
$
(3,142
)
$
(15,647
)

On June 14, 2007, we sold our 22.8% membership interest in American Racing and Entertainment, L.L.C. (“American Racing”) to our partners, Southern Tier Acquisition II, LLC (“Southern Tier”) and Oneida Entertainment, LLC (“Oneida”). The Company will receive three payments totaling $4.3 million for its membership interest: $2.1 million cash was received upon closing, $1.1 million will be received in June 2008 and $1.1 million in June 2009. The transaction also included the July 12, 2007 release of a certificate of deposit of approximately $1.1 million pledged by us on behalf of American Racing. In connection with the sale, we have terminated our Management Agreements with Tioga Downs and Vernon Downs and received approximately $110,000 in management fees due at that time. Based on the terms of the transaction, we were indemnified by the purchasers in connection with the guarantee of approximately $11 million of debt or any other obligations of American Racing. In addition, under a separate arrangement, we are indemnified by the principal of Southern Tier from any liabilities incurred from our guarantee of American Racing’s debt. Our percentage of the financial results of American Racing’s continued to be reflected as part of equity in earnings of unconsolidated subsidiaries through June 14, 2007. 
 
- 9 -
 
Note 5.   Notes Receivable

Notes Receivable

Southern Tier Acquisition II, LLC

On June 14, 2007, we sold our membership interest of American Racing to two of our former partners, Southern Tier and Oneida. At January 27, 2008, we had a note receivable of $1,100,000 from Southern Tier. The note bears interest of 5% per annum. Principal payments of $550,000 are due on June 14, 2008 and June 14, 2009. Unpaid interest is payable in full on June 14, 2009.

Oneida Entertainment, LLC

On June 14, 2007, we sold our membership interest of American Racing to two of our former partners, Southern Tier and Oneida. At January 27, 2008, we had a note receivable of $1,100,000 from Oneida. The note bears interest of 5% per annum. Principal payments of $550,000 are due on June 14, 2008 and June 14, 2009. Unpaid interest is payable in full on June 14, 2009.

Notes Receivable - Affiliates

Clay County Holdings, Inc.

At January 27, 2008, we had a note receivable of $1,741,621 from Clay County Holdings, Inc. ("CCH"). The note bears interest at 12% per annum. The note was modified effective April 30, 2006 to provide for a maturity date of April 30, 2009. As part of the modification, no principal or interest payments were due until July 31, 2007, at which time principal payments of $150,000, plus accrued interest, were due on a quarterly basis, with additional payments due at the time any payments are received by CCH on a note receivable it holds from Restaurant Connections International (“RCI”). The note is additionally secured by a pledge of the net equity of common stock of the Company owned by CCH. The stock is subject to margin calls. At the time of the extension of credit to CCH, CCH was the largest shareholder of the Company, beneficially owning approximately 16% of our outstanding stock and the President of CCH is the son-in-law of H. Thomas Winn who resigned as Chairman of the Company effective July 6, 2007. We believe that CCH currently holds less than 5% of the Company’s stock.

CCH failed to make the principal payments, plus interest due on July 31, 2007 in the amount of $521,037. The Company has sent CCH a Notice of Default and initiated legal proceedings to collect the entire amount owed. Under the terms of the note, CCH had until September 10, 2007 to cure the Default at which time the entire principal amount plus accrued interest became due at the option of the Company. On September 11, 2007, the Company sent CCH a Notice of Default and acceleration of the entire amount due on the note plus accrued interest. RCI is currently for sale. We have classified this receivable as long-term until a binding agreement to sell RCI has been executed.

Service Interactive, Inc.

At January 27, 2008, we had a note receivable of $1,779,445 from Service Interactive, Inc. ("SI"). The note bears interest of 12% per annum. The note was modified effective April 30, 2006 to provide for a maturity date of April 30, 2009. As part of the modification, no principal or interest payments were due until July 31, 2007, at which time principal payments of $150,000, plus accrued interest, were due on a quarterly basis, with additional payments due at the time any payments are received by CCH on a note receivable it holds from Restaurant Connections International. The note is additionally secured by a pledge of the net equity of common stock of the Company owned by CCH. The stock is subject to margin calls. We believe that CCH currently holds less than 5% of the Company’s stock. At the time of the extension of credit by us to SI, SI was a related party because we had the option to acquire common stock of SI and our former director was involved in SI.

SI failed to make the principal payments, plus interest due on July 31, 2007 in the amount of $527,924. The Company has sent SI a Notice of Default and initiated legal proceedings to collect the entire amount owed. Under the terms of the note, SI had until September 10, 2007 to cure the Default at which time the entire principal amount plus accrued interest became due at the option of the Company. On September 11, 2007, the Company sent CCH a Notice of Default and acceleration of the entire amount due on the note plus accrued interest. RCI is currently for sale. We have classified this receivable as long-term until a binding agreement to sell RCI has been executed.

Notes Receivable - Development Projects

At January 27, 2008, we had notes receivable of $17.9 million related to the development of gaming/entertainment projects. Included in these notes, through our wholly-owned subsidiary, Nevada Gold BVR, L.L.C., we own a 40% interest in Buena Vista Development and have a $14.8 million note receivable from Buena Vista Development. This note bears interest at a rate of prime plus 1%.
 
- 10 -
 
In addition, $1.7 million is represented by notes receivable from Big City Capital, LLC, a third party. The notes bear interest at a rate of 10% and are payable on or before ten years from the date of the notes, with earlier repayment required out of cash flow from operation of such gaming/entertainment project. A portion of the notes receivable are guaranteed by an individual independent of us. Beginning the quarter ended July 29, 2007, we decided to record the interest on this note as deferred interest on our balance sheet, rather than interest income, until such time we can confirm our ability to collect additional interest. As of January 27, 2008, we determined that our ability to collect $859,000 of accrued interest and $1.5 million of the original $3.2 million notes receivable has been impaired. As a result we wrote down the notes receivable to $1.7 million and wrote off the accrued interest receivable.

In addition to these two notes we also made loans to the La Jolla Band Indian (“the La Jolla Band”) tribe which has an outstanding balance of $1.4 million at January 27, 2008. This note bears an interest rate of 8.5% per annum with a maturity date based on the earlier of August 9, 2007 or the receipt of permanent project financing. The La Jolla Band failed to pay the note plus interest due on August 9, 2007. We are currently in negotiations to settle the amount of principal and accrued interest totaling $1,614,000, with the La Jolla Band. As of January 27, 2008, we have classified this as a non-current asset until settlement terms are finalized which may include design, development and pre-opening fees.

The repayment of these loans and accrued interest will be largely dependent upon the ability to obtain financing at each development project and/or the performance of each development project.

Note 6.   Long-Term Debt  

Our long-term financing obligations are as follows:

   
January 27, 
  
April 29, 
  
   
2008 
  
2007 
  
             
$55.0 million Revolving Credit Facility, 8.5% interest, maturing June 2010
  
$
15,550,000
 
$
55,000,000
 
$5.9 million Note Payable, LIBOR plus 450 basis points interest, quarterly payment equal to distribution from IC-BH until it is paid in full
    
-
   
1,272,672
 
$2.0 million Note Payable, LIBOR plus 425 basis points interest, monthly principal payments of $100,000 with final payment due in January 2008
    
-
   
786,484
 
Automobile Loan, 7.5% interest, amortizing for 60 months with final payment due in October 2010
    
22,927
   
28,393
 
Total
    
15,572,927
   
57,087,549
 
Less: current maturities
    
(7,802
)
  
(2,066,518
)
Total long-term financing obligations
  
$
15,565,125
 
$
55,021,031
 

The Revolving Credit Facility is secured by substantially all of our assets. In addition, we granted to the lender certain pledges and security interests in and to all of our interests in the equity securities of our subsidiaries. Amounts borrowed under the Credit Facility are guaranteed on a joint and several basis by certain of our wholly owned subsidiaries, Black Hawk Gold, Ltd., Gold River, LLC and Nevada Gold BVR. Such guarantees are full and unconditional. The subsidiary guarantors also granted certain pledges and security interests in certain of their assets. On November 13, 2007, we entered into an agreement with our lender to repay $38,800,000 of the Revolving Credit from the proceeds received from our sale of IC-BH, extend the maturity date of the Credit Facility to June 30, 2010, establish a $13 million Project Fund from proceeds received from our sale of the IC-BH, and negotiate other amendments to the Credit Facility. Accordingly, from proceeds received from the sale of IC-BH, the Company repaid $38.8 million of the Revolving Credit Facility on January 25, 2008. Our ability to reborrow these funds is subject to approval by the lender and our ability to provide acceptable collateral.

On May 24, 2007, we announced that we entered into a commitment letter agreement for a term loan facility in the maximum amount of $15 million (the “Loan Facility”). The Loan Facility has been terminated as a result of establishment of the Project Fund. No funds were drawn as of the date of termination. We paid $225,000 of fees to the lender upon execution of this agreement which was being amortized on a straight line basis to interest expense over the term of the agreement. As a result of terminating the Loan Facility we expensed the unamortized balance of $165,000 during the three month period ended January 27, 2008.

Note 7.   Stock-Based Compensation

Adoption of SFAS 123(R)

At January 27, 2008, the Company had a share-based compensation plan, which is described below.  Prior to May 1, 2006, we accounted for the plan under the recognition and measurement provisions of Accounting Principals Board ("APB") Opinion No. 25, Accounting for Stock Issued to Employees ("APB No. 25"), and related interpretations, as permitted by SFAS No. 123, Accounting for Stock-Based Compensation ("SFAS No. 123"). No share-based employee compensation cost related to stock options was recognized in our Consolidated Statements of Operations prior to May 1, 2006, as all options granted under the plan had an exercise price equal to or more than the market value of the underlying common stock on the date of grant.
    
- 11 -
 
Effective May 1, 2006, we adopted the fair value recognition provisions of SFAS No. 123 (revised 2004), Share-Based Payment ("SFAS No. 123(R)"), using the modified prospective transition method. Under this transition method, share-based compensation cost recognized during the three and nine months ended January 27, 2008 includes: (a) compensation cost for all share-based payments granted prior to, but not yet vested as of May 1, 2006, based on the grant date fair value estimated in accordance with the original provisions of SFAS No. 123 and (b) compensation cost for all share-based payments granted subsequent to May 1, 2006, based on the grant date fair value estimated using the Black-Scholes option pricing model. We recognize compensation expense for stock option awards and time-based restricted stock awards on a straight-line basis over the requisite service period of the award (or to an employee's eligible retirement date, if earlier). Performance-based restricted stock awards are recognized as compensation expense based on the fair value of our common stock on the date of grant, the number of shares ultimately expected to vest and the vesting period. For the three and nine months ended January 27, 2008, we granted 240,000 and 860,000 stock options, respectively, and 40,000 and 68,500 previously issued stock options vested during the three and nine months period ended January 27, 2008, respectively. Total share-based compensation expense included in our Consolidated Statements of Operations for the three and nine months ended January 27, 2008 and January 28, 2007 are presented in the following table:
 
   
Three Months Ended  
  
Nine Months Ended   
  
   
January 27, 2008
  
January 28, 2007 
  
January 27, 2008 
  
January 28, 2007 
  
                      
Stock options
  
$
170,225
  
$
46,631
 
$
395,261
 
$
195,460
 
Less: Related tax benefit
    
-
   
(17,007
)
  
-
   
(71,286
)
Total share-based compensation expense, net of tax
  
$
170,225
  
$
29,624
 
$
395,261
 
$
124,174
 

As a result of adopting SFAS No. 123(R) on May 1, 2006, our income before income taxes and net income were lower by $170,225 and $395,261, for the three and nine months ended January 27, 2008, respectively, and our loss before income tax benefits and net loss were higher by $29,624 and $124,174, for the three and nine months ended January 28, 2007, respectively, than if we had continued to account for share-based compensation under APB No. 25.
 
Prior to the adoption of SFAS No. 123(R), we presented all tax benefits from the exercise of stock options as operating cash flows in the Consolidated Statements of Cash Flows. SFAS No. 123(R) requires that cash flows resulting from the benefits of tax deductions in excess of recognized compensation cost be classified as financing cash flows. Only benefits that resulted in cash savings are recorded.
 
Information about our share-based plans

Our 1999 Stock Option Plan, as amended (the “Stock Option Plan”), is discretionary and provides for the granting of awards, including options for the purchase of our common stock and for the issuance of stock appreciation rights, restricted and/or unrestricted common stock and performance stock awards to our directors, officers, employees and independent contractors. The number of shares of common stock reserved for issuance under the Stock Option Plan is 3,250,000 shares, and at January 27, 2008, no shares were available for grant. The plan is administered by the Compensation Committee (the “Committee”) of the Board of Directors. The Committee has discretion under the plan regarding the vesting and service requirements, exercise price and other conditions, in all cases subject to certain limits, including:
 
•
The incentive stock option plan allowed for the issuance of up to 3.25 million stock options
 
•
For stock options, the exercise price of the award must equal the fair market value of the stock on the date of grant, and the maximum term of such an award is ten years
 
To date, the Committee has only awarded stock options under the plan. Our practice has been to issue new shares upon the exercise of stock options. Stock option rights granted prior to fiscal year 2006 under the plan generally have 5-year terms and are fully vested and exercisable immediately. Subsequent option rights granted generally have 3, 5 or 10 year terms and are exercisable in three or five equal annual installments, with some option grants providing for immediate vesting for a portion of the grant.
 
- 12 -
 
A summary of activity under the Company’s share-based payment plans for the nine months ended January 27, 2008 is presented below:
            
Weighted
       
        
Weighted
  
Average
  
Aggregate
  
        
Average
  
Remaining
  
Intrinsic
  
   
Shares
  
Exercise
  
Contractual
  
Value
  
   
(000’s)
  
Price
  
Term
  
($000’s)
  
Outstanding at April 29, 2007
    
880,000
 
$
8.50
              
Granted
   
860,000
   
1.61
             
Exercised
   
-
   
-
             
Forfeited or expired
   
(70,000
)
  
7.58
             
                           
Outstanding at January 27, 2008
    
1,670,000
 
$
4.99
    
3.6
 
$
-
 
                           
Exercisable at January 27, 2008
    
940,000
 
$
7.05
    
2.7
 
$
-
 
 
The total intrinsic value of stock exercised during the nine month periods ended January 27, 2008 and January 28, 2007 was $0 and $16,287, respectively. As of January 27, 2008, there was a total of $497,625 of unamortized compensation related to stock based awards, which cost is expected to be recognized over a weighted-average period of 1.6 years.

Compensation cost for stock options was based on the fair value of each award, measured by applying the Black-Scholes model on the date of grant, using the following weighted-average:

   
Nine Months Ended 
  
   
January 27, 2008 
  
        
Expected volatility
   
82.7
%
Expected term
   
2.5
 
Expected dividend yield
   
-
 
Risk-free interest rate
   
3.75
%
Forfeiture rate
   
-
 

 
Expected volatility is based on historical volatility of the Company’s stock. The expected term considers the contractual term of the option as well as historical exercise and forfeiture behavior. The risk-free interest rate is based on the rates in effect on the grant date for U.S. Treasury instruments with maturities matching the relevant expected term of the award.

Restricted Stock Grants

The Company did not issue any restricted common stock during the nine months ended January 27, 2008. During the nine months ended January 28, 2007, we issued 10,000 shares and 5,000 shares of our restricted common stock on July 14, 2006 and September 13, 2006, respectively, to a financial consulting firm for their consulting services. The 15,000 shares of restricted stock were recognized as a consulting expense based on the fair value of our common stock on the dates of issuance. The total expenses recorded were $97,750.

Note 8. Stockholders’ Equity

Stock Repurchase

We did not repurchase any shares of common stock during the nine months ended January 27, 2008. During the nine months ended January 28, 2007, we repurchased 54,200 shares of common stock at a total cost of $435,281.

- 13 -
 
Note 9. Comprehensive Income

Comprehensive income (loss) consisted of the following:

   
Three Months Ended   
  
Nine Months Ended   
  
   
January 27, 2008 
  
January 28, 2007 
  
January 27, 2008 
  
January 28, 2007 
  
Net income (loss)
  
$
26,954,639
 
$
(1,489,416
)
$
26,892,984
 
$
(7,098,609
)
Other comprehensive income (loss)
                          
Unrealized gain (loss) on securities available for sale, net of tax
    
--
   
(7,674
)
  
2,000
    
3,017
 
Comprehensive income (loss)
  
$
26,954,639
 
$
(1,497,090
)
$
26,894,984
 
$
(7,095,592
)
 
Note 10.   Computation of Earnings Per Share

For the three and nine month periods ended January 27, 2008 the potential dilutive common shares issuable under options were 1,670,000 and 1,662,732, respectively, and were not included in the calculation of diluted earnings per share as they were anti-dilutive. For the three and nine month periods ended January 28, 2007, potential dilutive common shares issuable under options was 1,167,800 for both periods, respectively, and were not included in the calculation of diluted earnings per share as they were anti-dilutive.

On January 23, 2008, 240,000 of the Company’s stock options were granted of which 80,000 immediately vested. At January 27, 2008, due to the current market value of the Company’s common stock, the Company had zero and 7,268 weighted average common stock equivalents for the three and nine months ended January 27, 2008, respectively, that were deemed to be dilutive. For the three and nine months ended January 28, 2007, due to the Company incurring a net loss, basic and diluted weighted average common shares outstanding are the same.

Note 11.   Segment Reporting  

We operate in two major business segments (i) gaming and (ii) non-core. The gaming segment for the three month period ended January 27, 2008 consists of Colorado Grande Casino, IC-BH, Route 66 Casinos and Buena Vista Development. For the nine month period ended January 27, 2008, the gaming segment also included American Racing through June 14, 2007. The gaming segment for the three and nine month periods ended January 28, 2007 consists of Colorado Grande Casino, IC-BH, DCC, Route 66 Casinos, American Racing and Buena Vista Development.

Summarized financial information for our reportable segments is shown in the following table. The “non-core” column includes corporate-related items, results of insignificant operations, and segment profit (loss) and income and expenses not allocated to reportable segments.

- 14 -

   
As of and for the Three Months Ended January 27, 2008     
  
   
Gaming 
  
Non-Core 
  
Totals 
  
                     
Net revenue
  
$
1,412,279
  
$
--
 
$
1,412,279
 
Segment income before income taxes
    
35,153,102
   
3,785
   
35,156,887
 
Segment assets
    
37,790,295
    
3,749,503
   
41,539,798
 
Equity investment:
                    
Route 66 Casinos, L.L.C.
    
4,509,183
    
--
   
4,509,183
 
Buena Vista Development Company, L.L.C
    
160,937
    
--
   
160,937
 
Depreciation and amortization
    
173,172
    
1,887
   
175,059
 
Additions to property and equipment
    
39,050
    
--
   
39,050
 
Interest expense, net
    
979,947
   
--
   
979,947
 
Income tax expense
    
8,201,365
    
883
    
8,202,248
 
Earnings from Isle of Capri-Black Hawk, L.L.C.
    
917,737
    
--
   
917,737
 
Loss from Buena Vista Development Company, L.L.C.
    
(4,027
)
  
--
   
(4,027
)
Earnings from Sunrise Land and Mineral Corporation
    
--
    
4,237
   
4,237
 
 
   
As of and for the Three Months Ended January 28, 2007     
  
   
Gaming 
  
Non-Core 
  
Totals 
  
                  
Net revenue
  
$
3,746,900
  
$
16,902
 
$
3,763,802
 
Segment loss before income tax benefit
    
(2,303,071
)
  
(31,665
)
  
(2,334,736
)
Segment assets
    
68,844,728
    
5,304,777
   
74,149,505
 
Equity investment:
                    
Isle of Capri-Black Hawk, L.L.C.
    
21,677,518
    
--
   
21,677,518
 
Route 66 Casinos, L.L.C.
    
4,509,183
    
--
   
4,509,183
 
American Racing and Entertainment, L.L.C.
    
9,362,879
    
--
   
9,362,879
 
Buena Vista Development Company, L.L.C
    
173,505
    
--
   
173,505
 
Sunrise Land and Mineral Corporation
    
--
    
518,186
   
518,186
 
Depreciation and amortization
    
273,899
    
2,284
   
276,183
 
Additions to property and equipment
    
16,111
    
--
   
16,111
 
Interest expense, net
    
948,707
   
--
   
948,707
 
Income tax benefit
    
833,855
    
11,465
   
845,320
 
Earnings from Isle of Capri-Black Hawk, L.L.C.
    
561,180
    
--
   
561,180
 
Loss from Buena Vista Development Company, L.L.C.
    
(2,550
)
  
--
   
(2,550
)
Loss from American Racing and Entertainment, L.L.C.
    
(2,076,991
)
  
--
   
(2,076,991
)
Earnings from Sunrise Land and Mineral Corporation
    
--
    
106,746
   
106,746
 
 
- 15 -

   
As of and for the Nine Months Ended January 27, 2008     
  
   
Gaming 
  
Non-Core 
  
Totals 
  
                  
Net revenue
  
$
5,222,498
  
$
33,805
 
$
5,256,303
 
Segment income before income taxes
    
35,092,454
   
40,694
   
35,133,148
 
Segment assets
    
37,790,295
    
3,749,503
   
41,539,798
 
Equity investment:
                    
Route 66 Casinos, L.L.C.
    
4,509,183
    
--
   
4,509,183
 
Buena Vista Development Company, L.L.C
    
160,937
    
--
   
160,937
 
Depreciation and amortization
    
572,972
    
6,467
   
579,439
 
Additions to property and equipment
    
158,564
    
--
   
158,564
 
Interest expense, net
    
2,554,356
   
--
   
2,554,356
 
Income tax expense
    
8,230,620
    
9,544
   
8,240,164
 
Earnings from Isle of Capri-Black Hawk, L.L.C.
    
4,860,613
    
--
   
4,860,613
 
Loss from Buena Vista Development Company, L.L.C.
    
(10,231
)
  
--
   
(10,231
)
Loss from American Racing and Entertainment, L.L.C.
    
(840,368
)
  
--
   
(840,368
)
Earnings from Sunrise Land and Mineral Corporation
    
--
    
51,401
   
51,401
 
                     
 
   
As of and for the Nine Months Ended January 28, 2007     
  
   
Gaming 
  
Non-Core 
  
Totals 
  
                  
Net revenue
  
$
11,299,068
  
$
50,708
 
$
11,349,776
 
Segment loss before income tax benefit
    
(10,661,816
)
  
(482,439
)
  
(11,144,255
)
Segment assets
    
68,844,728
    
5,304,777
   
74,149,505
 
Equity investment:
                    
Isle of Capri-Black Hawk, L.L.C.
    
21,677,518
    
--
   
21,677,518
 
Route 66 Casinos, L.L.C.
    
4,509,183
    
--
   
4,509,183
 
American Racing and Entertainment, L.L.C.
    
9,362,879
    
--
   
9,362,879
 
Buena Vista Development Company, L.L.C
    
173,505
    
--
   
173,505
 
Sunrise Land and Mineral Corporation
    
--
    
518,186
   
518,186
 
Depreciation and amortization
    
805,988
    
6,697
   
812,685
 
Additions to property and equipment
    
237,397
    
--
   
237,397
 
Interest expense, net
    
2,720,960
   
--
   
2,720,960
 
Income tax benefit
    
3,870,508
    
175,138
   
4,045,646
 
Earnings from Isle of Capri-Black Hawk, L.L.C.
    
2,179,153
    
--
   
2,179,153
 
Loss from Buena Vista Development Company, L.L.C.
    
(3,248
)
  
--
   
(3,248
)
Loss from American Racing and Entertainment, L.L.C.
    
(6,127,627
)
  
--
   
(6,127,627
)
Earnings from Sunrise Land and Mineral Corporation
    
--
    
139,246
   
139,246
 
 
Reconciliation of reportable segment assets to our consolidated totals is as follows:
 
   
January 27, 
            
   
2008 
            
                  
Total assets for reportable segments
  
$
41,539,798
              
Cash and restricted cash not allocated to segments
    
22,338,075
              
Notes receivable not allocated to segments
    
5,721,066
              
Other assets not allocated to segments
    
91,184
             
Total assets
  
$
69,690,123
              
 
- 16 -

Note 12. Other Assets and Other Liabilities

Other assets consist of the following at January 27, 2008 and April 29, 2007, respectively:

 
  
January 27, 2008
  
April 29, 2007
  
 
  
 
  
 
  
Accrued interest receivable
  
$
4,781,282
  
$
4,157,381
  
Deferred loan issue cost, net
    
294,573
    
711,061
  
Other assets
  
$
5,075,855
  
$
4,868,442
  

 
Deferred interest income is recorded as unearned and totals $0 and $9,000, respectively. Deferred interest will be recognized as interest income when it is determined that such interest will be collectible.

Note 13.   Commitments and Contingencies  

We rent office space in Houston, Texas, under a non-cancelable operating lease which expires on March 31, 2009. The monthly rent expense is approximately $7,200 per month. As of November 15, 2007 we terminated our previous lease arrangement at no cost to us. The monthly rent expense under our previous lease arrangement was approximately $28,000 per month.

Also, we lease (through our wholly-owned subsidiary, Colorado Grande Enterprises, Inc.) a portion of a building in Cripple Creek, Colorado, and an adjacent parking lot, for use in connection with the Colorado Grande Casino facilities. We lease this property at an annual rent of the greater of $144,000 or 5% of Colorado Grande-Cripple Creek’s adjusted gross gaming revenues, as defined, with an annual cap of $400,000. This lease is for an initial term of sixteen years with an option to renew for fifteen years with the final option period concluding January 31, 2021. On July 7, 2005, we exercised the option to extend the lease to January 2021.

We continue to pursue additional development opportunities that may require, individually and in the aggregate, significant commitments of capital, extensions of credit, up-front payments to third parties and guarantees by the Company of third-party debt.

The La Jolla Development Agreement requires us to use commercially reasonable efforts to assist the La Jolla Band in obtaining one or more sources of financing for its casino project. Currently, it appears that third-party financing will be available for this project. However, there can be no assurance that third-party financing will be available for this project.

As of January 27, 2008, we have guaranteed approximately $11 million of debt for American Racing. On June 14, 2007, we sold our entire membership interest in American Racing to our partners, Southern Tier and Oneida. Based on the terms of the Purchase and Sale Agreement we are indemnified by the purchasers should there be an obligation by us to honor the guarantee of debt or any other obligations of American Racing. In addition, under a separate arrangement, we are indemnified by the principal of Southern Tier from any liabilities incurred from our guarantee of American Racing’s debt. In the event of nonperformance by American Racing, under the terms of the obligation, our maximum potential future payment under the guarantee will be equal to half of the loan amount owed by American Racing. As of January 27, 2008, our maximum potential future payment under this guarantee was approximately $11 million.

We indemnified our officers and directors for certain events or occurrences while the director or officer is or was serving at our request in such capacity. The maximum potential amount of future payments we could be required to make under these indemnification obligations is unlimited; however, we have a Directors and Officers Liability Insurance policy that limits our exposure and enables us to recover a portion of any future amounts paid, provided that such insurance policy provides coverage.

Note 14. Legal Proceedings

Route 66 Casinos

1. On September 27, 2002, we filed a claim for arbitration, seeking damages, specific performance and other relief against American Heritage, Inc. (d/b/a The Gillmann Group), the other member in Route 66 Casinos, LLC. Route 66 Casinos was jointly formed by us and The Gillman Group to assist the Pueblo of Laguna in the development and financing of gaming facilities on land located 11 miles west of Albuquerque, New Mexico. We and The Gillmann Group entered into several contracts arising from The Gillmann Group’s agreement to assist in the development and equipping of the Route 66 Casino. One such agreement, the Amended and Restated Operating Agreement of Route 66 Casinos, LLC, governed the relationship of the parties relating to the Route 66 Casinos gaming operation. Pursuant to this agreement, we were to receive 51% of the net revenue received by Route 66 Casinos from the gaming operation. We also loaned The Gillmann Group the amount of $250,000, which has been repaid to us.
 
- 17 -
 
We initiated arbitration proceedings pursuant to the Route 66 Casinos Operating Agreement; however, The Gillmann Group and Mr. Gillmann refused to participate on the basis that they believed the operating agreement was invalid. We then filed a lawsuit in state district court on October 3, 2002, in Harris County, Texas (Nevada Gold & Casinos, Inc. v. American Heritage, Inc., et al. (No. 2002-51378)) (the “Texas Litigation”), initially seeking to recover payment pursuant to the promissory note. We amended our claims to include breach of contract, breach of fiduciary duty, fraud and other claims related to The Gillmann Group’s repudiation of the Route 66 Casinos Operating Agreement.

The Gillmann Group then filed a lawsuit in state district court on October 4, 2002, in Clark County, Nevada (American Heritage, Inc., et al. v. Nevada Gold & Casinos, Inc., et al. (No. A457315)). In its lawsuit, The Gillmann Group sought judicial dissolution of Route 66 Casinos, LLC and sought a declaratory judgment that the operating agreement was void based upon fraudulent misrepresentation. We immediately moved to compel arbitration, which was denied by the Nevada district court. We appealed this ruling to the Nevada Supreme Court, and the related lawsuit in Texas was stayed pending the outcome of the Nevada appeal. On April 28, 2005, the Nevada Supreme Court ruled that the dispute was not subject to arbitration. In response, the Texas court lifted the stay of proceedings.

On April 13, 2006, following a trial on the merits, the jury returned its verdict in the Texas Litigation. The jury found that (1) Nevada Gold and American Heritage intended to be bound by the Amended and Restated Operating Agreement (the “Contract”); (2) American Heritage breached the Contract; (3) the breach by American Heritage was not excused; (4) Nevada Gold did not fraudulently induce American Heritage to enter into the Contract; (5) American Heritage returned to Nevada Gold everything of value that American Heritage received from Nevada Gold under the Contract; (6) Nevada Gold suffered damages of approximately $8.3 million as a result of the breach by American Heritage; and (7) Fred Gillmann, who is the President and sole shareholder of American Heritage, is personally responsible for the conduct of American Heritage.

Following the jury’s verdict, Nevada Gold and the Defendants filed competing motions for the entry of judgment by the Court. On October 25, 2006, the Court entered judgment. The Court found American Heritage liable to Nevada Gold for $9,165,079 (reflecting the jury’s verdict, plus prejudgment interest), but held that Nevada Gold take nothing from Fred Gillmann. American Heritage appealed the judgment against it to the Court of Appeals for the First District, Houston, Texas, and Nevada Gold appealed the judgment that Nevada Gold take nothing from Fred Gillmann personally notwithstanding the jury’s verdict. The Court of Appeals issued its ruling on February 7, 2008. The Court ruled that Nevada Gold is not entitled to prejudgment interest pursuant to Nevada law, which governed the Contract, but otherwise sustained the District Court’s judgment. American Heritage subsequently filed a motion for rehearing by the Court of Appeals.

2. On July 23, 2007, the Company filed a lawsuit in the 189th Judicial District Court of Harris County, Texas, against American Heritage and Frederick C. Gillmann. In this case, which is related to the Texas Litigation described above, the Company is pursuing claims against the defendants pursuant to the Texas Uniform Fraudulent Transfers Act for alleged fraudulent transfers that the Company alleges the defendants made in order to make American Heritage judgment proof and to deprive the Company of the ability to enforce the judgment it obtained in the case described above. American Heritage filed a general denial in response to the lawsuit. Gillmann filed a Special Appearance challenging the Texas Court’s authority to exercise personal jurisdiction over him. While the Court was considering Gillmann’s jurisdictional challenge, we filed a similar fraudulent transfer lawsuit against Gillmann in Nevada, where Gillmann claims his residence. The Texas Court subsequently rejected Gillmann’s jurisdictional challenge.

We believe there is substantial evidence to support the fraudulent transfer allegations against American Heritage and Gillmann and we intend to vigorously pursue this matter although it is not possible to render an opinion concerning the likely outcome at this time.

Rinaldo Corporation

On October 18, 2004, Rinaldo Corporation filed an action captioned Rinaldo Corporation vs. Nevada Gold & Casinos, Inc., Sierra Research and Consulting, LLC, Sheila L. Torkelson, Michael R. Derry (d/b/a Waste Not Tribal Services), and Does 1 Through 100, against us in the Superior Court of the State of California (No. S-1500-CV 253969 AEW). According to the Complaint, Rinaldo Corporation (“Rinaldo”) and the Timbisha Shoshone Tribe of the Western Shoshone Nation entered into a Development Contract and Personal Property Lease on or about November 2, 2002, which obligates Rinaldo to (a) finance and provide technical assistance to the tribe in acquiring suitable real property and causing such land to be taken into trust by the United States; (b) design, construct and otherwise develop at its own expense the structure and related equipment to be used as the gaming facility; and (c) advance certain operating funds to the tribe while the gaming facility is being developed, constructed and brought into operation. In the Complaint, Rinaldo claims that we and the other named defendants wrongfully interfered with the agreement between Rinaldo and the tribe. Rinaldo alleges tortious interference with contract and prospective economic advantage, unfair competition and conspiracy, and seeks more than $50 million in damages and unspecified punitive damages. Rinaldo also seeks a preliminary and permanent injunction barring us and the other defendants from engaging in further acts of alleged interference. On October 29, 2004, Rinaldo filed its First Amended Complaint. We demurred to Rinaldo’s First Amended Complaint, and, at a hearing on January 5, 2005, the Court orally sustained our demurrer with respect to one cause of action (with leave for Rinaldo to amend), and denied it with respect to the others. After Rinaldo amended, we answered, generally denying Rinaldo’s allegations. Meanwhile, defendants Torkelson and Derry filed separate demurrers, asserting that they were protected by the doctrine of sovereign immunity. On May 11, 2005, the trial court sustained their demurrer, giving Rinaldo leave to amend. In response, Rinaldo filed a Third Amended Complaint on June 1, 2005, to which Torkelson and Derry demurred again. On August 4, 2005, the court sustained their demurrer without leave to amend, dismissing them in their personal capacities from the case. Subsequently, Rinaldo voluntarily dismissed Torkelson and Derry in their business capacities, leaving Nevada Gold as the only remaining defendant.
 
- 18 -
 
In November 2005, Nevada Gold moved for summary judgment against Rinaldo, and the Court ruled on that motion on February 21, 2006. The Court dismissed all of Rinaldo’s claims for tortious interference with a contract, holding that the development contract on which Rinaldo had based those claims was invalid as a matter of law. The Court also dismissed Rinaldo’s claim for damages under the California unfair competition statute. After the ruling, only Rinaldo’s claims for tortious interference with prospective economic relations, civil conspiracy, and injunctive relief under the unfair competition statute remained if these claims are pursued any further by Rinaldo.

We subsequently moved for summary judgment seeking to dispose of Rinaldo’s remaining claims, and the Court granted our motion. The Court’s ruling disposed of the entire case in our favor. Rinaldo appealed the dismissal of its case. On February 15, 2008, the California Court of Appeal issued its ruling. The Court ruled in our favor and sustained the trial court’s judgment dismissing Rinaldo’s case.

We believe the claims against us to be without merit and we intend to vigorously and appropriately defend the claims asserted in this matter if they are pursued further by Rinaldo.

Note 15. Divestiture of IC-BH Condensed Pro-forma financial information

On January 27, 2008 we sold our interest in IC-BH to ISLE. The results of the sale have been included in our financial statements as of and for the three months and nine months ended January 27, 2008. Reflected below are condensed pro-forma statements of operations for the Company, for the three and nine month periods ended January 27, 2008 and January 28, 2007, as if the sale had occurred as of the beginning of each respective fiscal year:

   
For the Three Months Ended January 27, 2008
  
       
Pro-forma
      
   
As Reported
  
Adjustments
  
Pro-forma
  
Net revenues
  
$
1,412,279
  
$
--
  
$
1,412,279
  
Total operating expenses
    
5,386,917
   
--
   
5,386,917
 
Non-operating income (expense)
    
39,131,525
    
(40,194,100
)
  
(1,062,575
)
Income tax (expense) benefit
    
(8,202,248
)
  
8,202,248
    
--
  
Net income (loss)
  
$
26,954,639
  
$
(31,991,852
)
$
(5,037,213
)
                     
Per share information:
                    
Net income (loss) per common share-basic
  
$
2.08
  
$
(2.47
)
$
(0.39
)
Net income (loss) per common share-diluted
  
$
2.08
  
$
(2.47
)
$
(0.39
)
 
   
For the Nine Months Ended January 27, 2008
  
       
Pro-forma
      
   
As Reported
  
Adjustments
  
Pro-forma
  
Net revenues
  
$
5,256,303
  
$
--
  
$
5,256,303
  
Total operating expenses
    
12,153,648
   
--
   
12,153,648
 
Non-operating income (expense)
    
42,030,493
    
(44,136,976
)
  
(2,106,483
)
Income tax (expense) benefit
    
(8,240,164
)
  
8,240,164
    
--
  
Net income (loss)
  
$
26,892,984
  
$
(35,896,812
)
$
(9,003,828
)
                     
Per share information:
                    
Net income (loss) per common share-basic
  
$
2.08
  
$
(2.77
)
$
(0.69
)
Net income (loss) per common share-diluted
  
$
2.08
  
$
(2.77
)
$
(0.69
)
 
- 19 -
 
   
For the Three Months Ended January 28, 2007
  
       
Pro-forma
      
   
As Reported
  
Adjustments
  
Pro-forma
  
Net revenues
  
$
3,763,802
  
$
--
  
$
3,763,802
  
Total operating expenses
    
3,539,867
   
--
   
3,539,867
 
Non-operating expense
    
(2,558,671
)
  
(561,180
)
  
(3,119,851
)
Income tax benefit
    
845,320
   
202,025
    
1,047,345
  
Net loss
  
$
(1,489,416
)
$
(359,155
)
$
(1,848,571
)
                     
Per share information:
                    
Net loss per common share-basic
  
$
(0.12
)
$
(0.03
)
$
(0.15
)
Net loss per common share-diluted
  
$
(0.12
)
$
(0.03
)
$
(0.15
)
 
   
For the Nine Months Ended January 28, 2007
  
       
Pro-forma
      
   
As Reported
  
Adjustments
  
Pro-forma
  
Net revenues
  
$
11,349,776
  
$
--
  
$
11,349,776
  
Total operating expenses
    
14,972,304
   
--
   
14,972,304
 
Non-operating expense
    
(7,521,727
)
  
(2,179,153
)
  
(9,700,880
)
Income tax benefit
    
4,045,646
   
784,495
    
4,830,141
  
Net loss
  
$
(7,098,609
)
$
(1,394,658
)
$
(8,493,267
)
                     
Per share information:
                    
Net loss per common share-basic
  
$
(0.55
)
$
(0.11
)
$
(0.66
)
Net loss per common share-diluted
  
$
(0.55
)
$
(0.11
)
$
(0.66
)

Note 16. Income Taxes

We have adopted Statement of Financial Accounting Standards (“SFAS”) No. 109, “Accounting for Income Taxes.” Under SFAS No. 109, deferred tax assets and liabilities are determined based on the difference between the financial statement and tax basis of all assets and liabilities, measured by using the enacted statutory tax rates.

SFAS No. 109 also provides for the recording of a deferred tax asset for net operating loss carryforwards (“NOLs”). Due to the gain on sale of unconsolidated affiliates recorded during the three months ended January 27, 2008, we reversed the $4.5 million deferred tax asset valuation allowance recorded as of April 29, 2007 which reduced the overall tax expense by approximately the same amount, resulting in an effective tax rate of 23.3% and 23.5% for the three and nine months ended January 27, 2008, respectively. As of January 27, 2008, we have no NOLs but we have recorded a net $17,000 deferred tax asset.
 
- 20 -
Item 2.   Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following discussion and analysis (“MD&A”) should be read in conjunction with our Consolidated Financial Statements and Notes thereto included in Item 1 of this Quarterly Report and with Management’s Discussion and Analysis of Financial Condition and Results of Operations contained in our Annual Report for the year ended April 29, 2007 filed on Form 10-K with the Securities and Exchange Commission.

Critical Accounting Policies

Our discussion and analysis of our financial condition and results of operations is based upon our consolidated financial statements. We prepare these financial statements in conformity with U.S. generally accepted accounting principles. As such, we are required to make certain estimates, judgments and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the periods presented. We base our estimates on historical experience and on various other assumptions that we believe are reasonable under the circumstances, the results of which form the basis for making judgments. On an on-going basis, we evaluate our estimates; however, actual results may differ from these estimates under different assumptions or conditions. There have been no material changes or developments in our evaluation of the accounting estimates and the underlying assumptions or methodologies that we believe to be Critical Accounting Policies and Estimates as disclosed in our Annual Report for the year ended April 29, 2007 filed on Form 10-K with the Securities and Exchange Commission.

Executive Overview

We were formed in 1977 and since 1994, have primarily been a gaming company involved in financing, developing, owning and operating commercial gaming projects and financing and developing Native American owned gaming projects. Our gaming facility operations are located in the United States of America (“U.S.”), specifically in the state of Colorado. Historically, we have relied upon our equity investment in IC-BH for the majority of our earnings and cash flow. On January 27, 2008 we sold our membership interest in IC-BH. On April 25, 2005, we acquired the Colorado Grande Casino from IC-BH. In addition, we previously owned a 40% interest in American Racing, which developed racing facilities which offer harness racing and video lottery terminals to its gaming customers in upstate New York. Our interest decreased to 22.8% due to our lack of liquidity to meet certain cash call commitments. On June 14, 2007, we sold our membership interest in American Racing. Our business strategy will continue to focus on gaming projects but with a greater emphasis on owning and operating gaming establishments. On November 13, 2007, we announced that we reached an agreement to acquire the Horizon Casino Hotel in Vicksburg, Mississippi. We anticipate the transaction will be completed during the first fiscal quarter of fiscal year 2009. We continue to look for good acquisition opportunities. If we are successful, our future revenues, costs and profitability may be expected to increase. Our net revenues were $1.4 million and $5.3 million for the three and nine month periods ended January 27, 2008 as compared to $3.8 million and $11.3 million for the three and nine month periods ended January 28, 2007, respectively.

When compared to the three month period ended January 28, 2007, the three month period ended January 27, 2008 was impacted by the following items:
 
- Elimination of our equity in the loss from our interest in American Racing in fiscal 2008 compared to the same period in fiscal 2007 due to sale of American Racing as of June 14, 2007.
 
- Elimination of credit enhancement fees from the River Rock Casino, and related minority interest, due to a cash buyout of the contract during January 2007.
 
- Improved earnings from IC-BH and the Colorado Grande Casino.
 
- Reduced corporate overhead and interest expenses.
 
- Gain on sale of our membership interest in the IC-BH on January 27, 2008.
 
- Impairment of of notes receivable and accrued interest related to a development project during the three month period ended January 27, 2008.
 
- Accrual of income tax expense during the three month period ended January 27, 2008 compared to a tax benefit recorded during the three month period ended January 28, 2007 related to the gain recorded on the sale of IC-BH.
 
COMPARISON OF THE THREE MONTHS ENDED JANUARY 27, 2008 AND JANUARY 28, 2007

Net revenues. Net revenues decreased 62.5%, or $2,352,000, for the three month period ended January 27, 2008 compared to the three period ended January 28, 2007. During the three month period ended January 27, 2008, credit enhancement fees previously received from the River Rock Casino are no longer earned by the Company resulting in a reduction of $2,305,000. Net revenues from the Colorado Grande decreased 1.4% or $20,000 for the three month period ended January 27, 2008 compared to the three month period ended January 28, 2007. Also, in the three month period ended January 28, 2007, we accrued $27,000 of management fees from American Racing which are no longer accrued due to its sale in June 2007.

Total operating expenses. Total operating expenses increased 52.2% or $1.8 million, for the three month period ended January 27, 2008 compared to the three month period ended January 28, 2007. The increase is primarily the result of $2.4 million impairment of notes receivable and accrued interest related to a development project during the three months ended January 28, 2007. The remaining difference is primarily due to lower corporate, legal and depreciation expenses which were reduced by $536,000 or 25.2% in the three months ended January 27, 2008 compared to the three months ended January 28, 2007.
 
Earnings (loss) from unconsolidated affiliates. Earnings (loss) from unconsolidated affiliates increased 165%, or $2.3 million, for the three month period ended January 27, 2008 compared to the three month period ended January 28, 2007. Earnings of IC-BH increased 63.5% or $357,000. IC-BH’s net revenues decreased $1.3 million for the three month period ended January 27, 2008 compared to the three month period ended January 28, 2007. This decrease was primarily due to a decrease of casino revenues. However, the decrease in net revenues was offset by a 5.9%, or $1.8 million decrease in operating expenses. We sold our interest in American Racing on June 14, 2007 but during the three month period ended January 28, 2007, we recorded equity in losses of American Racing of $2.1 million which was primarily attributable to preopening expenses related to the Vernon Downs projects.
- 21 -
 
Interest expense, net. Interest expense, net, consists of a net balance of interest expense and amortization of loan issue cost, offset by interest income from our various notes receivable. Interest expense decreased 15.6%, or $213,000, for the three month period ended January 27, 2008 compared to the three month period ended January 28, 2007. The decrease is primarily due to a lower weighted average debt balance. Interest income decreased 16.4%, or $94,000, for the three month period ended January 27, 2008 compared to the three month period ended January 28, 2007. The decrease is primarily due to our decision to defer interest income related to one note receivable offset by a higher weighted average note receivable balance. Amortization of deferred loan cost was $303,000 and $152,000 for the three month periods ended January 27, 2008 and January 28, 2007, respectively. The increase is due to the write-off of $165,000 of unamortized deferred loan costs due to the termination of our $15 million acquisition line once we established our $13 million Project Fund.

Net income (loss). Net income (loss) was $27.0 million and $(1.5) million for the three month periods ended January 27, 2008 and January 28, 2007, respectively. The improvement of $28.5 million is primarily related to the $39.2 million gain on sale of unconsolidated affiliates offset by the $9.0 million increase in income tax expense and the elimination of credit enhancement fees of $2.3 million. The effective tax rate of 23.3% is due to reestablishing $4.4 million of a deferred tax asset which was fully reserved at April 29, 2007.

COMPARISON OF THE NINE MONTHS ENDED JANUARY 27, 2008 AND JANUARY 28, 2007

Net revenues. Net revenues decreased 53.7%, or $6.1 million, for the nine month period ended January 27, 2008 compared to the nine month period ended January 28, 2007. In the nine month period ended January 27, 2008, credit enhancement fees previously received from the River Rock Casino are no longer earned by the Company due to settlement of this contract during January 2007, resulting in a reduction of net revenues of $6.5 million. Net revenues from the Colorado Grande increased 9.4% or $449,000 for the nine month period ended January 27, 2008 compared to the nine month period ended January 28, 2007. Also, in the nine month period ended January 27, 2008, we accrued $40,000 of management fees from American Racing compared to $124,000 for the nine month period ended January 28, 2007. The decrease in management fees is due to the sale of American Racing in June 2007.

Total operating expenses. Total operating expenses decreased 18.8% or $2.8 million, for the nine month period ended January 27, 2008 compared to the nine month period ended January 28, 2007. During the nine months ended January 27, 2008, operating expenses excluding write-offs decreased $1.8 million due to our initiatives to reduce staffing and expenses related to non-core business. During the nine months ended January 27, 2008, we recorded a $2.4 million impairment of notes receivable and accrued interest related to a development project. During the nine months ended January 28, 2007, we recorded a $3.6 million write-off of notes receivable and project development cost related to Native American gaming projects which we are no longer pursuing.

Earnings (loss) from unconsolidated affiliates. Earnings (loss) from unconsolidated affiliates increased 207%, or $7.9 million, for the nine month period ended January 27, 2008 compared to the nine month period ended January 28, 2007. Earnings of IC-BH increased 123% or $2.7 million. IC-BH’s net revenues decreased $1.9 million for the nine month period ended January 27, 2008 compared to the nine month period ended January 28, 2007. This decrease was primarily due to a decrease of casino revenues. However, the decrease in net revenues was offset by a $8.9 million decrease in operating expenses. During the nine month period ended January 27, 2008, we recorded equity in losses of American Racing of $0.8 million as compared to $6.1 million during the nine month period ended January 28, 2007 primarily due to our sale of American Racing as of June 14, 2007.

Interest expense, net. Interest expense, net consists of a net balance of interest expense and amortization of loan issue cost, offset by interest income. Interest expense decreased 15.0%, or $604,000 for the nine month period ended January 27, 2008 compared to the nine month period ended January 28, 2007. The decrease is primarily due to a lower weighted average debt balance. Interest income decreased 13.8%, or $241,000, for the nine month period ended January 27, 2008 compared to the nine month period ended January 28, 2007. The decrease is primarily due to our decision to defer interest income related to one note receivable offset by a higher weighted average note receivable balance. Amortization of deferred loan costs was $641,000 and $450,000 for the nine month periods ended January 27, 2008 and January 28, 2007, respectively. The increase is due to the write-off of $165,000 of unamortized deferred loan costs due to the termination of our $15 million acquisition line once we established our $13 million Project Fund.

Net income (loss). Net income (loss) was $26.9 million and $(7.1) million for the nine month periods ended January 27, 2008 and January 28, 2007, respectively. The improvement of $34.0 million is primarily related to the $40.5 million gain on sale of unconsolidated affiliates, the $5.3 million reduced loss from American Racing, offset by the elimination of $5.2 million of net credit enhancement and management fees, the $2.4 million impairment of notes receivable and accrued interest during the nine months ended Janauary 27, 2008 compared to the $3.6 million of write-off of notes receivable and project development costs during the nine months ended January 28, 2007, increased tax expense of $12.3 million during the nine months ended January 27, 2008, all offset by $2.7 million improved earnings from IC-BH and $1.8 million of reduced corporate and other operating expenses. The effective tax rate of 23.5% is due to reestablishing $4.4 million of a deferred tax asset which was fully reserved at April 29, 2007.
 
- 22 -
 
Liquidity and Capital Resources

Historical Cash Flows

The following table sets forth our consolidated net cash provided by (used in) operating, investing and financing activities for the nine month periods ended January 27, 2008 and January 28, 2007:

   
Nine Months Ended   
  
   
January 27, 
  
January 28, 
  
   
2008 
  
2007 
  
Net cash provided by (used in):
              
Operating activities
  
$
(5,043,728
)
$
(1,385,977
)
Investing activities
    
53,303,865
   
(333,372
)
Financing activities
    
(41,739,622
)
  
(1,098,128
)
 
Operating activities. Net cash used in operating activities during the nine month period ended January 27, 2008 increased to $(5.0) million compared to $(1.4) million during the nine month period ended January 28, 2007. The $3.6 million increase in cash used is mainly due to the elimination of credit enhancement fees received from River Rock Casino during the nine months ended January 28, 2007 and the increase in income taxes during the nine months ended January 27, 2008, offset by the gain on sale of unconsolidated affiliates. During the nine months ended January 27, 2008, we fully repaid the balance on the $5.9 million note by applying $1.3 million of the $2.6 million of distributed funds received from IC-BH while retaining $1.3 million.

Investing activities. Net cash provided by (used in) investing activities during the nine month period ended January 27, 2008 increased by $53.6 million compared to the nine month period ended January 28, 2007. The increase was primarily due to $66.8 million received from the sale of unconsolidated affiliates offset by the establishment of a $13 million Project Fund to be used for future acquisitions.
 
Financing activities. Net cash used in financing activities during the nine month period ended January 27, 2008 increased $40.6 million compared to the nine month period ended January 28, 2007. In the nine month period ended January 27, 2008, we repaid $46.0 million on our $55.0 million credit facility and other term loans compared to $2.3 million in the nine month period ended January 28, 2007. We received $4.5 million on our credit facility and a note payable during the nine months ended January 27, 2008 compared to $3.0 million during the nine months ended January 28, 2007.

Future Sources and Uses of Cash

We expect that our future liquidity and capital requirements will be affected by:

- disposition of non-gaming related assets;
- debt service requirements;
- capital requirements related to future acquisitions;
- obtaining funds via long-term subordinated debt instruments; and
- working capital requirements.

At January 27, 2008, outstanding indebtedness under our revolving credit facility was $15.55 million with total indebtedness of $15.6 million. Historically, tax distributions from IC-BH, distributions from Dry Creek Casino, LLC of our portion of the credit enhancement fees from River Rock Casino and loan repayments from affiliates have been sufficient to satisfy our current debt obligations and working capital needs. However, on April 25, 2005 we executed a three year $5.9 million promissory note payable to IC-BH in connection with the purchase of the Colorado Grande Casino, and were using our quarterly distributions from IC-BH for the repayment of interest and principal due on this note until September 2007 at which time the note was fully repaid. Based on the Company anticipating net operating tax losses in 2008, the one remaining quarterly tax distribution from IC-BH will be available to pay operating expenses and service a portion of our debt. Furthermore, on November 13, 2007 we restructured our revolving credit facility with our current lender to extend the maturity date until June 30, 2010. Our ability to borrow additional funds under the credit facility is subject to approval from the lender and our ability to provide acceptable collateral.

On January 27, 2008, we had cash and cash equivalents of $9,324,000.

We currently expect funds generated from our operating activities, together with existing cash and cash equivalents, sale of non-core assets, and expected loan repayments from our notes receivable will be adequate to fund our ongoing operating and debt service requirements.

Off-Balance Sheet Arrangements

As of January 27, 2008, we have guaranteed approximately $11 million of mortgage debt of a subsidiary of American Racing. The debt matures on March 31, 2008. On June 14, 2007 we sold our membership interest in American Racing and related entities and were indemnified by the purchasers in connection with the guarantee and, under a separate arrangement, we are indemnified by the principal of Southern Tier from any liabilities incurred from such guarantee. In the event of nonperformance by American Racing, under the terms of the obligation, our maximum potential future payment under the guarantee will be equal to half of the loan amount owed by American Racing. As of January 27, 2008, our maximum potential future payment under this guarantee was approximately $11 million.
 
- 23 -
 
Item 3.   Quantitative and Qualitative Disclosures about Market Risk

Market risk is the risk of loss arising from adverse changes in market rates and prices, including interest rates, foreign currency exchange rates, credit risk, commodity price and equity prices. Our primary exposure to market risk is credit risk concentrations. We do not believe we are subject to material interest rate risk.

Our credit facilities are primarily fixed interest rate instruments and an interest rate change due to changes in market conditions would have limited impact on our operations.

Item 4.   Controls and Procedures  

Disclosure Controls and Procedures. We maintain disclosure controls and procedures that are designed to provide reasonable assurance that information required to be disclosed by us in the reports that we file or submit to the Securities and Exchange Commission under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), is recorded, processed, summarized and reported within the time periods specified by the Commission’s rules and forms, and that information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure.
 
In accordance with Exchange Act Rules 13a-15 and 15d-15, we carried out an evaluation, under the supervision and with the participation of management, including our Chief Executive Officer and Chief Financial Officer, of the effectiveness of our disclosure controls and procedures as of the end of the period covered by this report. As a result of our evaluation, we concluded that our internal control over financial reporting was effective as of January 27, 2008. There have not been any changes in our control over financial reporting during the three months ended January 27, 2008 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Part II. Other Information

Item 1.   Legal Proceedings

Route 66 Casinos

1. On September 27, 2002, we filed a claim for arbitration, seeking damages, specific performance and other relief against American Heritage, Inc. (d/b/a The Gillmann Group), the other member in Route 66 Casinos, LLC. Route 66 Casinos was jointly formed by us and The Gillman Group to assist the Pueblo of Laguna in the development and financing of gaming facilities on land located 11 miles west of Albuquerque, New Mexico. We and The Gillmann Group entered into several contracts arising from The Gillmann Group’s agreement to assist in the development and equipping of the Route 66 Casino. One such agreement, the Amended and Restated Operating Agreement of Route 66 Casinos, LLC, governed the relationship of the parties relating to the Route 66 Casinos gaming operation. Pursuant to this agreement, we were to receive 51% of the net revenue received by Route 66 Casinos from the gaming operation. We also loaned The Gillmann Group the amount of $250,000, which has been repaid to us.

We initiated arbitration proceedings pursuant to the Route 66 Casinos Operating Agreement; however, The Gillmann Group and Mr. Gillmann refused to participate on the basis that they believed the operating agreement was invalid. We then filed a lawsuit in state district court on October 3, 2002, in Harris County, Texas (Nevada Gold & Casinos, Inc. v. American Heritage, Inc., et al. (No. 2002-51378)) (the “Texas Litigation”), initially seeking to recover payment pursuant to the promissory note. We amended our claims to include breach of contract, breach of fiduciary duty, fraud and other claims related to The Gillmann Group’s repudiation of the Route 66 Casinos Operating Agreement.

The Gillmann Group then filed a lawsuit in state district court on October 4, 2002, in Clark County, Nevada (American Heritage, Inc., et al. v. Nevada Gold & Casinos, Inc., et al. (No. A457315)). In its lawsuit, The Gillmann Group sought judicial dissolution of Route 66 Casinos, LLC and sought a declaratory judgment that the operating agreement was void based upon fraudulent misrepresentation. We immediately moved to compel arbitration, which was denied by the Nevada district court. We appealed this ruling to the Nevada Supreme Court, and the related lawsuit in Texas was stayed pending the outcome of the Nevada appeal. On April 28, 2005, the Nevada Supreme Court ruled that the dispute was not subject to arbitration. In response, the Texas court lifted the stay of proceedings.

On April 13, 2006, following a trial on the merits, the jury returned its verdict in the Texas Litigation. The jury found that (1) Nevada Gold and American Heritage intended to be bound by the Amended and Restated Operating Agreement (the “Contract”); (2) American Heritage breached the Contract; (3) the breach by American Heritage was not excused; (4) Nevada Gold did not fraudulently induce American Heritage to enter into the Contract; (5) American Heritage returned to Nevada Gold everything of value that American Heritage received from Nevada Gold under the Contract; (6) Nevada Gold suffered damages of approximately $8.3 million as a result of the breach by American Heritage; and (7) Fred Gillmann, who is the President and sole shareholder of American Heritage, is personally responsible for the conduct of American Heritage.
 
- 24 -
 
Following the jury’s verdict, Nevada Gold and the Defendants filed competing motions for the entry of judgment by the Court. On October 25, 2006, the Court entered judgment. The Court found American Heritage liable to Nevada Gold for $9,165,079 (reflecting the jury’s verdict, plus prejudgment interest), but held that Nevada Gold take nothing from Fred Gillmann. American Heritage appealed the judgment against it to the Court of Appeals for the First District, Houston, Texas, and Nevada Gold appealed the judgment that Nevada Gold take nothing from Fred Gillmann personally notwithstanding the jury’s verdict. The Court of Appeals issued its ruling on February 7, 2008. The Court ruled that Nevada Gold is not entitled to prejudgment interest pursuant to Nevada law, which governed the Contract, but otherwise sustained the District Court’s judgment. American Heritage subsequently filed a motion for rehearing by the Court of Appeals.

2. On July 23, 2007, the Company filed a lawsuit in the 189th Judicial District Court of Harris County, Texas, against American Heritage and Frederick C. Gillmann. In this case, which is related to the Texas Litigation described above, the Company is pursuing claims against the defendants pursuant to the Texas Uniform Fraudulent Transfers Act for alleged fraudulent transfers that the Company alleges the defendants made in order to make American Heritage judgment proof and to deprive the Company of the ability to enforce the judgment it obtained in the case described above. American Heritage filed a general denial in response to the lawsuit. Gillmann filed a Special Appearance challenging the Texas Court’s authority to exercise personal jurisdiction over him. While the Court was considering Gillmann’s jurisdictional challenge, we filed a similar fraudulent transfer lawsuit against Gillmann in Nevada, where Gillmann claims his residence. The Texas Court subsequently rejected Gillmann’s jurisdictional challenge.

We believe there is substantial evidence to support the fraudulent transfer allegations against American Heritage and Gillmann and we intend to vigorously pursue this matter although it is not possible to render an opinion concerning the likely outcome at this time.

Rinaldo Corporation

On October 18, 2004, Rinaldo Corporation filed an action captioned Rinaldo Corporation vs. Nevada Gold & Casinos, Inc., Sierra Research and Consulting, LLC, Sheila L. Torkelson, Michael R. Derry (d/b/a Waste Not Tribal Services), and Does 1 Through 100, against us in the Superior Court of the State of California (No. S-1500-CV 253969 AEW). According to the Complaint, Rinaldo Corporation (“Rinaldo”) and the Timbisha Shoshone Tribe of the Western Shoshone Nation entered into a Development Contract and Personal Property Lease on or about November 2, 2002, which obligates Rinaldo to (a) finance and provide technical assistance to the tribe in acquiring suitable real property and causing such land to be taken into trust by the United States; (b) design, construct and otherwise develop at its own expense the structure and related equipment to be used as the gaming facility; and (c) advance certain operating funds to the tribe while the gaming facility is being developed, constructed and brought into operation. In the Complaint, Rinaldo claims that we and the other named defendants wrongfully interfered with the agreement between Rinaldo and the tribe. Rinaldo alleges tortious interference with contract and prospective economic advantage, unfair competition and conspiracy, and seeks more than $50 million in damages and unspecified punitive damages. Rinaldo also seeks a preliminary and permanent injunction barring us and the other defendants from engaging in further acts of alleged interference. On October 29, 2004, Rinaldo filed its First Amended Complaint. We demurred to Rinaldo’s First Amended Complaint, and, at a hearing on January 5, 2005, the Court orally sustained our demurrer with respect to one cause of action (with leave for Rinaldo to amend), and denied it with respect to the others. After Rinaldo amended, we answered, generally denying Rinaldo’s allegations. Meanwhile, defendants Torkelson and Derry filed separate demurrers, asserting that they were protected by the doctrine of sovereign immunity. On May 11, 2005, the trial court sustained their demurrer, giving Rinaldo leave to amend. In response, Rinaldo filed a Third Amended Complaint on June 1, 2005, to which Torkelson and Derry demurred again. On August 4, 2005, the court sustained their demurrer without leave to amend, dismissing them in their personal capacities from the case. Subsequently, Rinaldo voluntarily dismissed Torkelson and Derry in their business capacities, leaving Nevada Gold as the only remaining defendant.

In November 2005, Nevada Gold moved for summary judgment against Rinaldo, and the Court ruled on that motion on February 21, 2006. The Court dismissed all of Rinaldo’s claims for tortious interference with a contract, holding that the development contract on which Rinaldo had based those claims was invalid as a matter of law. The Court also dismissed Rinaldo’s claim for damages under the California unfair competition statute. After the ruling, only Rinaldo’s claims for tortious interference with prospective economic relations, civil conspiracy, and injunctive relief under the unfair competition statute remained if these claims are pursued any further by Rinaldo.

We subsequently moved for summary judgment seeking to dispose of Rinaldo’s remaining claims, and the Court granted our motion. The Court’s ruling disposed of the entire case in our favor. Rinaldo appealed the dismissal of its case. On February 15, 2008, the California Court of Appeal issued its ruling. The Court ruled in our favor and sustained the trial court’s judgment dismissing Rinaldo’s case.

We believe the claims against us to be without merit and we intend to vigorously and appropriately defend the claims asserted in this matter if they are pursued further by Rinaldo.

- 25 -
 
Item 1A. Risk Factors

There have been no material changes in our risk factors as previously disclosed in our Annual Report on Form 10-K for the fiscal year ended April 29, 2007.

Item 2.   Unregistered Sales of Equity Securities and Use of Proceeds

None

Item 3.   Defaults Upon Senior Securities

None

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

None

Item 5.   Other Information

None

Item 6.   Exhibits

The following exhibits are to be filed as part of this report: 

INDEX TO EXHIBITS

Exhibit No.
 
Document
2.1
 
Stock Purchase Agreement dated as of April 25, 2005 among Isle of Capri Black Hawk, L.L.C., IC Holdings Colorado, Inc., Colorado Grande Enterprise, Inc., and CGC Holdings, L.L.C.(filed previously as Exhibit 2.1 of to the Company’s Form 8-K, filed April 29, 2005)
 
 
 
3.1A
 
Amended and Restated Articles of Incorporation of Nevada Gold & Casinos, Inc. (filed previously as Exhibit A to the company's definitive proxy statement filed on Schedule 14A on July 30, 2001)
 
 
 
3.1B
 
Certificate of Amendment to the Articles of Incorporation of Nevada Gold & Casinos, Inc. (filed previously as Exhibit 4.2 to Form S-8 filed October 11, 2002.
 
 
 
3.1C
 
Certificate of Amendment to the Articles of Incorporation of Nevada Gold & Casinos, Inc. (filed previously as Exhibit 3.3 to Form 10-Q filed November 9, 2004)
     
3.1D
  
Certificate of Amendment to the Articles of Incorporation of Nevada Gold & Casinos, Inc. (filed previously as Exhibit 3.1 to Form 8-K filed October 17, 2007)
 
 
 
3.2
 
Amended and Restated Bylaws of Nevada Gold & Casinos, Inc. (filed previously as Exhibit 3.2 to the Company’s From 10-QSB filed August 14, 2002)
     
3.3
  
Amended and Restated Bylaws of Nevada Gold & Casinos, Inc., effective July 24, 2007 (filed previously as Exhibit 3.2 to the Company’s From 8-K filed July 27, 2007)
 
 
 
4.1
 
Common Stock Certificate of Nevada Gold & Casinos, Inc. (filed previously as Exhibit 4.1 to the company’s Form S-8/A, file no. 333-79867)
 
 
 
4.5
 
Second Amended and Restated Nevada Gold & Casinos, Inc. 1999 Stock Option Plan (filed previously as Exhibit 4.6 to the company’s Form S-8, file no. 333-126027)
 
- 26 -
 
10.1
 
Second Amended and Restated Operating Agreement of Isle of Capri Blackhawk L.L.C. (filed previously as Exhibit 10.1 to Form 10-K filed July 14, 2004)
 
 
 
10.2
 
First Amended and Restated Members Agreement dated April 22, 2003 by and between Casino America of Colorado, Inc., Casino America, Inc., Blackhawk Gold, Ltd., and Nevada Gold & Casinos, Inc. (filed previously as Exhibit 10.2 to Form 10-K filed July 14, 2004)
 
 
 
10.3
 
License Agreement dated July 29, 1997 by and between Casino America, Inc. and Isle of Capri Black Hawk L.L.C. (filed previously as Exhibit 10.5 to the company’s Form 10-QSB, filed November 14, 1997)
 
 
 
10.4
 
Form of Indemnification Agreement between Nevada Gold & Casinos, Inc. and each officer and director (filed previously as Exhibit 10.5 to the company’s form 10-QSB, filed February 14, 2002)
 
 
 
10.5
 
Second Amended and Restated Nevada Gold & Casinos, Inc. 1999 Stock Option Plan (filed previously as Exhibit 4.6 to Form S-8, file no. 333-126027)
 
 
 
10.9
 
Investment Agreement dated April 21, 2005 by and among Casino Development & Management Company, LLC, Thomas C. Wilmot, Buena Vista Development Company, LLC and Nevada Gold BVR, L.L.C
 
 
 
10.10
 
Amended and Restated Operating Agreement dated April 21, 2005, by and between Casino Development & Management Company, LLC and Nevada Gold BVR, L.L.C.
 
 
 
10.11
 
Promissory Note dated May 4, 2005, in the amount of $14,810,200 executed by Buena Vista Development Company, LC as maker and payable to Nevada Gold BVR, L.L.C.
 
 
 
10.13
 
Employment Agreement by and between Nevada Gold & Casinos, Inc., and Jon A. Arnesen, dated as of August 31, 2005 (filed previously as Exhibit 10.13 to the Company's Form 10-Q/A, filed December 16, 2005)
     
10.15
 
Amended and Restated Credit Facility dated January 19, 2006 (portions of this exhibit have been omitted and filed separately with the Securities and Exchange Commission pursuant to a request for confidential treatment in accordance with Rule 24b-2 under the Exchange Act) (filed previously as Exhibit 10.15 to the Company's Form 8-K, filed January 25, 2006)
 
 
 
10.16 (**)
 
Form of Guarantee of Credit Facility among Nevada Gold and Casinos, Inc.; each of Black Hawk Gold, LTD, Gold River, LLC, Nevada Gold BVR, LLC, and Nevada Gold NY, Inc., and the Lender signing as a party thereto (portions of this exhibit have been omitted and filed separately with the Securities and Exchange Commission pursuant to a request for confidential treatment in accordance with Rule 24b-2 under the Exchange Act) (filed previously as Exhibit 10.16 to Form 10-Q filed March 3, 2006)
 
 
 
10.17 (**)
 
January 2006 Security Agreement dated January 19, 2006, by and between Nevada Gold & Casinos, Inc. , its wholly-owned subsidiary, Black Hawk Gold, Ltd., and the Lender listed as a party thereto (portions of this exhibit have been omitted and filed separately with the Securities and Exchange Commission pursuant to a request for confidential treatment in accordance with Rule 24b-2 under the Exchange Act) (filed previously as Exhibit 10.17 to Form 10-Q filed March 3, 2006)
 
 
 
10.18 (**)
 
Commercial Pledge Agreement dated January 19, 2006, among Nevada Gold & Casinos, Inc., Black Hawk Gold, LTD, and the Lender listed as a party thereto (portions of this exhibit have been omitted and filed separately with the Securities and Exchange Commission pursuant to a request for confidential treatment in accordance with Rule 24b-2 under the Exchange Act) (filed previously as Exhibit 10.18 to Form 10-Q filed March 3, 2006).
 
 
 
10.19 (**)
 
Commercial Pledge Agreement dated January 19, 2006, among Nevada Gold & Casinos, Inc., Nevada Gold BVR, and the Lender listed as a party thereto (portions of this exhibit have been omitted and filed separately with the Securities and Exchange Commission pursuant to a request for confidential treatment in accordance with Rule 24b-2 under the Exchange Act) (filed previously as Exhibit 10.19 to Form 10-Q filed March 3, 2006).

10.20 (**)
 
Commercial Pledge Agreement dated January 19, 2006 among Nevada Gold & Casinos, Inc., Gold River, LLC, and the Lender listed as a party thereto (portions of this exhibit have been omitted and filed separately with the Securities and Exchange Commission pursuant to a request for confidential treatment in accordance with Rule 24b-2 under the Exchange Act) (filed previously as Exhibit 10.20 to Form 10-Q filed March 3, 2006).  
 
 
 
10.21 (**)
 
Commercial Pledge Agreement dated January 19, 2006, among Nevada Gold & Casinos, Inc., Nevada Gold NY, Inc., and the Lender listed as a party thereto (portions of this exhibit have been omitted and filed separately with the Securities and Exchange Commission pursuant to a request for confidential treatment in accordance with Rule 24b-2 under the Exchange Act) (filed previously as Exhibit 10.21 to Form 10-Q filed March 3, 2006).
 
- 27 -
 
10.23
 
Amended and Restated Operating Agreement of American Racing and Entertainment, L.L.C. dated effective as of March 1 2006, by and between Nevada Gold NY, Inc., Track Power, Inc. and Southern Tier Acquisition II LLC (filed previously as Exhibit 10.23 to Form 10-Q filed March 3, 2006).
 
 
 
10.25
 
Unconditional and Continuing Guaranty Agreement dated May 1, 2006, by Jeffrey Gural and Nevada Gold & Casinos, Inc., to and for the benefit of Vestin Mortgage, Inc. (previously filed as Exhibit 10.25 to Form 8-K filed May 5, 2006).
 
10.27 (+)
 
Employment Agreement dated November 27, 2006 by and between Robert B. Sturges and Nevada Gold & Casinos, Inc. (filed previously as Exhibit 10.27 to Form 10-Q filed December 15, 2006)
 
 
 
10.27A (+)
 
Amendment to the Employment Agreement dated August 30, 2007 by and between Robert B. Sturges and Nevada Gold & Casinos, Inc. (filed previously as Exhibit 99.1 to Form 8-K filed August 31, 2007)
 
 
 
10.27B (+)
 
Amendment to the Employment Agreement dated October 30, 2007 by and between Robert B. Sturges and Nevada Gold & Casinos, Inc. (filed previously as Exhibit 99.1 to Form 8-K filed October 30, 2007)
 
 
 
10.27C (+)
 
SeSecond Amendment to the Employment Agreement dated January 23, 2008 by and between Robert B. Sturges and Nevada Gold & Casinos, Inc. (filed previously as Exhibit 10.1 to Form 8-K filed January 24, 2008)
 
 
 
10.28 (+)
 
Employment Agreement dated October 24, 2006 by and between James J. Kohn and Nevada Gold & Casinos, Inc. (filed previously as Exhibit 10.28 to Form 10-Q filed March 9, 2007)
 
 
 
10.29 (+)
 
Employment Agreement dated , December 29, 2006 by and between Ernest E. East and Nevada Gold & Casinos, Inc. (filed previously as Exhibit 10.28 to Form 10-Q filed March 9, 2007)
 
10.30 (+)
 
Separation Agreement and Release between Nevada Gold & Casinos, Inc. and H. Thomas Winn (filed previously as Exhibit 10.1 to Form 8-K filed July 9, 2007)
 
 
 
10.31
 
Mutual Release between River Rock Entertainment Authority and Dry Creek Casino, LLC (filed previously as Exhibit 10.1 to Form 8-K filed March 5, 2007)

10.33
 
Purchase and Sale Agreement among Nevada Gold & Casinos, Inc. Nevada Gold NY, Inc., Southern Tier Acquisition, LLC and Oneida Entertainment LLC (filed previously as Exhibit 10.1 to Form 8-K filed June 21, 2007)
 
 
 
10.34
 
Amendment to the Amended and Restated Credit Facility dated January 19, 2006 among Nevada Gold & Casinos, Inc., Black Hawk Gold, Ltd. and Louise H. Rogers dated July 30, 2007 (filed previously as Exhibit 10.1 to Form 8-K filed July 30, 2007)
 
 
 
10.35
 
Amendment to the Amended and Restated Credit Facility dated January 19, 2006 between Nevada Gold & Casinos, Inc. and Louise H. Rogers dated October 12, 2007 (filed previously as Exhibit 10.1 to Form 8-K filed October 15, 2007)
 
 
 
10.35A
 
Amendment to the Amended and Restated Credit Facility dated January 19, 2006 between Nevada Gold & Casinos, Inc. and Louise H. Rogers dated December 20, 2007 (filed previously as Exhibit 10.1 to Form 8-K filed December 21, 2007)
 
 
 
10.36
 
Agreement Regarding Use of Proceeds of IC-BH Sale and Regarding Remaining Amount Due Under the Amended and Restated Credit Facility among Nevada Gold & Casinos, Inc., Black Hawk Gold, Ltd. and Louise H. Rogers dated November 13, 2007 (filed previously as Exhibit 10.1 to Form 8-K filed November 13, 2007)
 
 
 
10.37
 
Amendment to the January 2006 Security Agreement among Nevada Gold & Casinos, Inc., Black Hawk Gold, Ltd. and Louise H. Rogers dated November 13, 2007 (filed previously as Exhibit 10.2 to Form 8-K filed November 13, 2007)
 
 
 
10.38
 
Agreement Regarding Use of Proceeds from RCI/CCH Notes Receivable between Nevada Gold & Casinos, Inc. and Louise H. Rogers dated November 13, 2007 (filed previously as Exhibit 10.3 to Form 8-K filed November 13, 2007)
 
 
 
10.39
 
Promissory Note issued by Nevada Gold & Casinos, Inc. to Louise H. Rogers dated November 13, 2007 (filed previously as Exhibit 10.4 to Form 8-K filed November 13, 2007)
 
- 28 -
 
10.40
 
Unit Purchase Agreement among Nevada Gold & Casinos, Inc., Black Hawk Gold, Ltd., Casino America of Colorado, Inc. and Isle of Capri Casinos, Inc. dated November 13, 2007 (filed previously as Exhibit 10.5 to Form 8-K filed November 13, 2007)
 
 
 
10.41
 
Agreement of Sale between Columbia Properties Vicksburg, LLC and Nevada Gold Vicksburg, LLC dated November 13, 2007 (filed previously as Exhibit 10.6 to Form 8-K filed November 13, 2007)
 
 
 
31.1(*)
 
Chief Executive Officer Certification Pursuant to Section 13a-14 of the Securities Exchange Act.
 
 
 
31.2(*)
 
Chief Financial Officer Certification Pursuant to Section 13a-14 of the Securities Exchange Act.
 
 
 
32.1(*)
 
Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
 
 
 
32.2(*)
 
Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
 
+
Management contract or compensatory plan, or arrangement.
*
Filed herewith.
**
Portions of these exhibits have been omitted pursuant to a request for confidential treatment.
 
 
SIGNATURES

In accordance with Section 13 or 15(d) of the Exchange Act, the Registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

Nevada Gold & Casinos, Inc.
 
 
By: /s/ James J. Kohn
James J. Kohn, Chief Financial Officer
 
Date: March 7, 2008
 
- 29 -
 
INDEX TO EXHIBITS

Exhibit
No.
 
Document
2.1
 
Stock Purchase Agreement dated as of April 25, 2005 among Isle of Capri Black Hawk, L.L.C., IC Holdings Colorado, Inc., Colorado Grande Enterprise, Inc., and CGC Holdings, L.L.C.(filed previously as Exhibit 2.1 of to the Company’s Form 8-K, filed April 29, 2005)
 
 
 
3.1A
 
Amended and Restated Articles of Incorporation of Nevada Gold & Casinos, Inc. (filed previously as Exhibit A to the company's definitive proxy statement filed on Schedule 14A on July 30, 2001)
 
 
 
3.1B
 
Certificate of Amendment to the Articles of Incorporation of Nevada Gold & Casinos, Inc. (filed previously as Exhibit 4.2 to Form S-8 filed October 11, 2002.
 
 
 
3.1C
 
Certificate of Amendment to the Articles of Incorporation of Nevada Gold & Casinos, Inc. (filed previously as Exhibit 3.3 to Form 10-Q filed November 9, 2004)
     
3.1D
  
Certificate of Amendment to the Articles of Incorporation of Nevada Gold & Casinos, Inc. (filed previously as Exhibit 3.1 to Form 8-K filed October 17, 2007)
 
 
 
3.2
 
Amended and Restated Bylaws of Nevada Gold & Casinos, Inc. (filed previously as Exhibit 3.2 to the Company’s From 10-QSB filed August 14, 2002)
     
3.3
  
Amended and Restated Bylaws of Nevada Gold & Casinos, Inc., effective July 24, 2007 (filed previously as Exhibit 3.2 to the Company’s From 8-K filed July 27, 2007)
 
 
 
4.1
 
Common Stock Certificate of Nevada Gold & Casinos, Inc. (filed previously as Exhibit 4.1 to the company’s Form S-8/A, file no. 333-79867)
 
 
 
4.5
 
Second Amended and Restated Nevada Gold & Casinos, Inc. 1999 Stock Option Plan (filed previously as Exhibit 4.6 to the company’s Form S-8, file no. 333-126027)
 
10.1
 
Second Amended and Restated Operating Agreement of Isle of Capri Blackhawk L.L.C. (filed previously as Exhibit 10.1 to Form 10-K filed July 14, 2004)
 
 
 
10.2
 
First Amended and Restated Members Agreement dated April 22, 2003 by and between Casino America of Colorado, Inc., Casino America, Inc., Blackhawk Gold, Ltd., and Nevada Gold & Casinos, Inc. (filed previously as Exhibit 10.2 to Form 10-K filed July 14, 2004)
 
 
 
10.3
 
License Agreement dated July 29, 1997 by and between Casino America, Inc. and Isle of Capri Black Hawk L.L.C. (filed previously as Exhibit 10.5 to the company’s Form 10-QSB, filed November 14, 1997)
 
 
 
10.4
 
Form of Indemnification Agreement between Nevada Gold & Casinos, Inc. and each officer and director (filed previously as Exhibit 10.5 to the company’s form 10-QSB, filed February 14, 2002)
 
 
 
10.5
 
Second Amended and Restated Nevada Gold & Casinos, Inc. 1999 Stock Option Plan (filed previously as Exhibit 4.6 to Form S-8, file no. 333-126027)
 
 
 
10.9
 
Investment Agreement dated April 21, 2005 by and among Casino Development & Management Company, LLC, Thomas C. Wilmot, Buena Vista Development Company, LLC and Nevada Gold BVR, L.L.C
 
 
 
10.10
 
Amended and Restated Operating Agreement dated April 21, 2005, by and between Casino Development & Management Company, LLC and Nevada Gold BVR, L.L.C.
 
 
 
10.11
 
Promissory Note dated May 4, 2005, in the amount of $14,810,200 executed by Buena Vista Development Company, LC as maker and payable to Nevada Gold BVR, L.L.C.
 
 
 
10.13
 
Employment Agreement by and between Nevada Gold & Casinos, Inc., and Jon A. Arnesen, dated as of August 31, 2005 (filed previously as Exhibit 10.13 to the Company's Form 10-Q/A, filed December 16, 2005)
 
 
10.15
 
Amended and Restated Credit Facility dated January 19, 2006 (portions of this exhibit have been omitted and filed separately with the Securities and Exchange Commission pursuant to a request for confidential treatment in accordance with Rule 24b-2 under the Exchange Act) (filed previously as Exhibit 10.15 to the Company's Form 8-K, filed January 25, 2006)
 
 
 
10.16 (**)
 
Form of Guarantee of Credit Facility among Nevada Gold and Casinos, Inc.; each of Black Hawk Gold, LTD, Gold River, LLC, Nevada Gold BVR, LLC, and Nevada Gold NY, Inc., and the Lender signing as a party thereto (portions of this exhibit have been omitted and filed separately with the Securities and Exchange Commission pursuant to a request for confidential treatment in accordance with Rule 24b-2 under the Exchange Act) (filed previously as Exhibit 10.16 to Form 10-Q filed March 3, 2006)
 
 
 
10.17 (**)
 
January 2006 Security Agreement dated January 19, 2006, by and between Nevada Gold & Casinos, Inc. , its wholly-owned subsidiary, Black Hawk Gold, Ltd., and the Lender listed as a party thereto (portions of this exhibit have been omitted and filed separately with the Securities and Exchange Commission pursuant to a request for confidential treatment in accordance with Rule 24b-2 under the Exchange Act) (filed previously as Exhibit 10.17 to Form 10-Q filed March 3, 2006)
 
 
 
10.18 (**)
 
Commercial Pledge Agreement dated January 19, 2006, among Nevada Gold & Casinos, Inc., Black Hawk Gold, LTD, and the Lender listed as a party thereto (portions of this exhibit have been omitted and filed separately with the Securities and Exchange Commission pursuant to a request for confidential treatment in accordance with Rule 24b-2 under the Exchange Act) (filed previously as Exhibit 10.18 to Form 10-Q filed March 3, 2006).
 
 
 
10.19 (**)
 
Commercial Pledge Agreement dated January 19, 2006, among Nevada Gold & Casinos, Inc., Nevada Gold BVR, and the Lender listed as a party thereto (portions of this exhibit have been omitted and filed separately with the Securities and Exchange Commission pursuant to a request for confidential treatment in accordance with Rule 24b-2 under the Exchange Act) (filed previously as Exhibit 10.19 to Form 10-Q filed March 3, 2006).

10.20 (**)
 
Commercial Pledge Agreement dated January 19, 2006 among Nevada Gold & Casinos, Inc., Gold River, LLC, and the Lender listed as a party thereto (portions of this exhibit have been omitted and filed separately with the Securities and Exchange Commission pursuant to a request for confidential treatment in accordance with Rule 24b-2 under the Exchange Act) (filed previously as Exhibit 10.20 to Form 10-Q filed March 3, 2006).  
 
 
 
10.21 (**)
 
Commercial Pledge Agreement dated January 19, 2006, among Nevada Gold & Casinos, Inc., Nevada Gold NY, Inc., and the Lender listed as a party thereto (portions of this exhibit have been omitted and filed separately with the Securities and Exchange Commission pursuant to a request for confidential treatment in accordance with Rule 24b-2 under the Exchange Act) (filed previously as Exhibit 10.21 to Form 10-Q filed March 3, 2006).
 
10.23
 
Amended and Restated Operating Agreement of American Racing and Entertainment, L.L.C. dated effective as of March 1 2006, by and between Nevada Gold NY, Inc., Track Power, Inc. and Southern Tier Acquisition II LLC (filed previously as Exhibit 10.23 to Form 10-Q filed March 3, 2006).
 
 
 
10.25
 
Unconditional and Continuing Guaranty Agreement dated May 1, 2006, by Jeffrey Gural and Nevada Gold & Casinos, Inc., to and for the benefit of Vestin Mortgage, Inc. (previously filed as Exhibit 10.25 to Form 8-K filed May 5, 2006).
 
10.27 (+)
 
Employment Agreement dated November 27, 2006 by and between Robert B. Sturges and Nevada Gold & Casinos, Inc. (filed previously as Exhibit 10.27 to Form 10-Q filed December 15, 2006)
 
 
 
10.27A (+)
 
Amendment to the Employment Agreement dated August 30, 2007 by and between Robert B. Sturges and Nevada Gold & Casinos, Inc. (filed previously as Exhibit 99.1 to Form 8-K filed August 31, 2007)
 
 
 
10.27B (+)
 
Amendment to the Employment Agreement dated October 30, 2007 by and between Robert B. Sturges and Nevada Gold & Casinos, Inc. (filed previously as Exhibit 99.1 to Form 8-K filed October 30, 2007)
 
 
 
10.27C (+)
 
SeSecond Amendment to the Employment Agreement dated January 23, 2008 by and between Robert B. Sturges and Nevada Gold & Casinos, Inc. (filed previously as Exhibit 10.1 to Form 8-K filed January 24, 2008)
 
 
 
10.28 (+)
 
Employment Agreement dated October 24, 2006 by and between James J. Kohn and Nevada Gold & Casinos, Inc. (filed previously as Exhibit 10.28 to Form 10-Q filed March 9, 2007)
 
 
 
10.29 (+)
 
Employment Agreement dated , December 29, 2006 by and between Ernest E. East and Nevada Gold & Casinos, Inc. (filed previously as Exhibit 10.28 to Form 10-Q filed March 9, 2007)
 
 
10.30 (+)
 
Separation Agreement and Release between Nevada Gold & Casinos, Inc. and H. Thomas Winn (filed previously as Exhibit 10.1 to Form 8-K filed July 9, 2007)
 
 
 
10.31
 
Mutual Release between River Rock Entertainment Authority and Dry Creek Casino, LLC (filed previously as Exhibit 10.1 to Form 8-K filed March 5, 2007)

10.33
 
Purchase and Sale Agreement among Nevada Gold & Casinos, Inc. Nevada Gold NY, Inc., Southern Tier Acquisition, LLC and Oneida Entertainment LLC (filed previously as Exhibit 10.1 to Form 8-K filed June 21, 2007)
 
 
 
10.34
 
Amendment to the Amended and Restated Credit Facility dated January 19, 2006 among Nevada Gold & Casinos, Inc., Black Hawk Gold, Ltd. and Louise H. Rogers dated July 30, 2007 (filed previously as Exhibit 10.1 to Form 8-K filed July 30, 2007)
 
 
 
10.35
 
Amendment to the Amended and Restated Credit Facility dated January 19, 2006 between Nevada Gold & Casinos, Inc. and Louise H. Rogers dated October 12, 2007 (filed previously as Exhibit 10.1 to Form 8-K filed October 15, 2007)
 
 
 
10.35A
 
Amendment to the Amended and Restated Credit Facility dated January 19, 2006 between Nevada Gold & Casinos, Inc. and Louise H. Rogers dated December 20, 2007 (filed previously as Exhibit 10.1 to Form 8-K filed December 21, 2007)
 
 
 
10.36
 
Agreement Regarding Use of Proceeds of IC-BH Sale and Regarding Remaining Amount Due Under the Amended and Restated Credit Facility among Nevada Gold & Casinos, Inc., Black Hawk Gold, Ltd. and Louise H. Rogers dated November 13, 2007 (filed previously as Exhibit 10.1 to Form 8-K filed November 13, 2007)
 
 
 
10.37
 
Amendment to the January 2006 Security Agreement among Nevada Gold & Casinos, Inc., Black Hawk Gold, Ltd. and Louise H. Rogers dated November 13, 2007 (filed previously as Exhibit 10.2 to Form 8-K filed November 13, 2007)
 
 
 
10.38
 
Agreement Regarding Use of Proceeds from RCI/CCH Notes Receivable between Nevada Gold & Casinos, Inc. and Louise H. Rogers dated November 13, 2007 (filed previously as Exhibit 10.3 to Form 8-K filed November 13, 2007)
 
 
 
10.39
 
Promissory Note issued by Nevada Gold & Casinos, Inc. to Louise H. Rogers dated November 13, 2007 (filed previously as Exhibit 10.4 to Form 8-K filed November 13, 2007)
 
10.40
 
Unit Purchase Agreement among Nevada Gold & Casinos, Inc., Black Hawk Gold, Ltd., Casino America of Colorado, Inc. and Isle of Capri Casinos, Inc. dated November 13, 2007 (filed previously as Exhibit 10.5 to Form 8-K filed November 13, 2007)
 
 
 
10.41
 
Agreement of Sale between Columbia Properties Vicksburg, LLC and Nevada Gold Vicksburg, LLC dated November 13, 2007 (filed previously as Exhibit 10.6 to Form 8-K filed November 13, 2007)
 
 
 
31.1(*)
 
Chief Executive Officer Certification Pursuant to Section 13a-14 of the Securities Exchange Act.
 
 
 
31.2(*)
 
Chief Financial Officer Certification Pursuant to Section 13a-14 of the Securities Exchange Act.
 
 
 
32.1(*)
 
Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
 
 
 
32.2(*)
 
Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
 
+
Management contract or compensatory plan, or arrangement.
*
Filed herewith.
**
Portions of these exhibits have been omitted pursuant to a request for confidential treatment.