Edgar Filing: NEVADA GOLD & CASINOS INC

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

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

For the fiscal period ended July 29, 2007

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.)

3040 Post Oak Blvd.
Suite 675
Houston, Texas		77056
(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 12,930,130 as of August 23, 2007.

TABLE OF CONTENTS

		Page

	PART I. FINANCIAL INFORMATION

Item 1.	Consolidated Financial Statements
	Consolidated Balance Sheets - July 29, 2007 (unaudited) and April 29, 2007	2
	Consolidated Statements of Operations - Three Month Periods ended July 29, 2007 (unaudited) and July 30, 2006 (unaudited)	3
	Consolidated Statements of Cash Flows - Three Month Periods ended July 29, 2007 (unaudited) and July 30, 2006 (unaudited)	4
	Notes to Consolidated Financial Statements	5
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	17
Item 3.	Quantitative and Qualitative Disclosures about Market Risk	19
Item 4.	Controls and Procedures	19

	PART II. OTHER INFORMATION

Item 1.	Legal Proceedings	20
Item 1A.	Risk Factors	21
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	21
Item 3.	Defaults Upon Senior Securities	21
Item 4.	Submission of Matters to a Vote of Security Holders	21
Item 5.	Other Information	21
Item 6.	Exhibits	22

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.

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Part I. Financial Information

Item 1. Consolidated Financial Statements

Nevada Gold & Casinos, Inc.

Consolidated Balance Sheets

	July 29,			April 29,
	2007			2007
	(unaudited)

ASSETS
Current assets:
Cash and cash equivalents	$	953,948		$	2,803,560
Restricted Cash		—			1,050,000
Accounts receivable		92,108			397,145
Accounts receivable - affiliates		60,006			124,685
Prepaid expenses		654,269			474,933
Notes receivable - current portion		1,100,000			—
Notes receivable - development projects, current portion		—			1,357,904
Other current assets		50,243			55,055
Total current assets		2,910,574			6,263,282

Investments in unconsolidated affiliates		27,949,330			35,201,419
Investments in unconsolidated affiliates held for sale		407,793			400,489
Investments in development projects		390,202			323,202
Investments in development projects held for sale		3,918,744			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		19,370,641			18,012,737
Goodwill		5,462,918			5,462,918
Property and equipment, net of accumulated depreciation of $1,483,150 and $1,281,191 at July 29, 2007 and April 29, 2007, respectively		1,967,477			2,063,026
Other assets		5,492,300			4,868,442
Total assets	$	72,491,045		$	80,031,346

LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable and accrued liabilities	$	1,391,746		$	1,540,781
Accrued interest payable		—			21,211
Other accrued liabilities		83,093			378,937
Guaranty liabilities		—			4,610,000
Long-term debt, current maturities		830,632			2,066,518
Total current liabilities		2,305,471			8,617,447

Long-term debt, net of current maturities		52,869,073			55,021,031
Deferred income		82,167			8,591
Other liabilities		803,247			742,991
Total liabilities		56,059,958			64,390,060

Commitments and contingencies		—			—

Stockholders' equity:
Common stock, $0.12 par value per share; 25,000,000 shares authorized; 13,935,330 shares issued and 12,939,130 shares outstanding at July 29, 2007 and April 29, 2007, respectively		1,672,240			1,672,240
Additional paid-in capital		18,729,763			18,484,448
Retained earnings		6,236,574			5,694,088
Treasury stock, 996,200 shares at July 29, 2007 and April 29, 2007, respectively, at cost		(10,216,950	)		(10,216,950	)
Accumulated other comprehensive income		9,460			7,460
Total stockholders' equity		16,431,087			15,641,286
Total liabilities and stockholders' equity	$	72,491,045		$	80,031,346

The accompanying notes are an integral part of these consolidated financial statements.

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Nevada Gold & Casinos, Inc.

Consolidated Statements of Operations

(unaudited)

	Three Months Ended
	July 29,			July 30,
	2007			2006
Revenues:
Casino	$	1,893,241		$	1,446,143
Food and beverage		412,195			375,733
Credit enhancement and management fees		40,174			1,946,086
Other		34,251			30,458
Gross revenues		2,379,861			3,798,420
Less promotional allowances		(399,484	)		(306,761	)
Net revenues		1,980,377			3,491,659
Operating expenses:
Casino		483,444			352,150
Food and beverage		194,883			232,593
Marketing and administrative		701,170			732,401
Facility		93,986			68,783
Corporate expense		1,250,304			1,775,638
Legal expense		121,257			805,870
Depreciation and amortization		202,413			262,152
Impairment of unconsolidated affiliate		100,000			—
Other		6,016			22,597
Total operating expenses		3,153,473			4,252,184
Operating loss		(1,173,096	)		(760,525	)
Non-operating income (expenses):
Earnings (loss) from unconsolidated affiliates		1,189,889			(815,556	)
Gain on sale of unconsolidated affiliate		1,296,423			—
Gain on settlement of development project		14,500			—
Interest expense, net		(747,314	)		(862,107	)
Minority interest		—			(387,984	)
Income (loss) before income tax (expense) benefit		580,402			(2,826,172	)
Income tax (expense) benefit		(37,916	)		991,109
Net income (loss)	$	542,486		$	(1,835,063	)

Per share information:
Net income (loss) per common share - basic	$	0.04		$	(0.14	)
Net income (loss) per common share - diluted	$	0.04		$	(0.14	)

Basic weighted average number of shares outstanding		12,939,130			12,937,331
Diluted weighted average number of shares outstanding		12,939,130			12,937,331

The accompanying notes are an integral part of these consolidated financial statements.

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Nevada Gold & Casinos, Inc.

Consolidated Statements of Cash Flows

(unaudited)

	Three Months Ended
	July 29,			July 30,
	2007			2006
Cash flows from operating activities:
Net income (loss)	$	542,486		$	(1,835,063	)
Adjustments to reconcile net income (loss) to net cash used in operating activities:
Depreciation		202,413			189,158
Amortization of capitalized development costs		—			72,994
Impairment of equity investment		100,000			—
Stock-based compensation		45,728			107,377
Amortization of deferred loan issuance costs		167,370			144,870
Minority interest		—			387,984
Distributions from unconsolidated affiliates		960,000			767,000
(Earnings) loss from unconsolidated affiliates		(1,189,889	)		815,556
Gain on sale of unconsolidated affiliate		(1,296,423	)		—
Deferred income tax benefit		—			(993,066	)
Changes in operating assets and liabilities:
Receivables and other assets		(718,013	)		(545,978	)
Accounts payable and accrued liabilities		(132,670	)		221,498
Net cash used in operating activities		(1,318,998)			(667,670	)
Cash flows from investing activities:
Capitalized development costs		(67,000	)		(118,471	)
Advances on development projects held for sale		(3,979	)		—
Purchase of property and equipment		(106,864	)		(90,618	)
Advances on notes receivable		—			(819,609	)
Advances on notes receivable - affiliates		—			(200,000	)
Proceeds from the sale of an unconsolidated affiliate		2,210,073			—
Maturity of (investment in) restricted cash		1,050,000			(1,050,000	)
Net cash provided by (used in) investing activities		3,082,230			(2,278,698	)
Cash flows from financing activities:
Repayment on term loans		(1,237,844	)		(823,013	)
(Repayments) borrowings on credit facilities, net		(2,150,000	)		3,000,000
Deferred loan issuance costs		(225,000	)		(90,000	)
Acquisition of treasury stock		—			(363,093	)
Cash proceeds from exercise of stock options		—			2,475
Excess tax benefits from stock-based compensation		—			1,957
Cash distribution to minority interest owners		—			(368,816	)
Net cash provided by (used in) financing activities		(3,612,844	)		1,359,510

Net decrease in cash and cash equivalents		(1,849,612	)		(1,586,858	)
Cash and cash equivalents at beginning of period		2,803,560			4,296,154
Cash and cash equivalents at end of period	$	953,948		$	2,709,296

Supplemental cash flow information:
Cash paid for interest	$	1,200,616		$	1,541,973
Income tax payments	$	37,916		$	—

Non-cash investing and financing activities:
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		$	—
Unrealized gain on marketable securities	$	2,000		$	—

The accompanying notes are an integral part of these consolidated financial statements.

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Nevada Gold & Casinos, Inc.

Notes to Consolidated Financial Statements

Note 1. Basis of Presentation

The interim financial information included herein is unaudited. However, the accompanying consolidated 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 July 29, 2007 and April 30, 2007, Consolidated Statements of Operations for the three month periods ended July 29, 2007 and July 30, 2006, and Consolidated Statements of Cash Flows for the three months ended July 29, 2007 and July 30, 2006. 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 months ended July 29, 2007 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 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. Periodically, this system necessitates a 53-week year. The quarterly periods presented herein ended on July 29, 2007 and July 30, 2006, respectively.

Note 2. Critical 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 was as follows:

	Three Months Ended
	July 29,		July 30,
	2007		2006
Food and beverage	$	161,380	$	129,803
Other		1,316		5,203
Total cost of complimentary services	$	162,696	$	135,006

Implementation of New Accounting Standards

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 positions taken or expected to be taken in a tax return. Additionally, FIN 48 provides guidance regarding uncertain tax 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 July 29, 2007, we had no material uncertain tax positions and the tax years 2003 through 2006 remained open to review by federal and various state tax jurisdictions.

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Note 3. Restricted Cash

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 July 29, 2007, the amount of consolidated retained earnings which represent undistributed earnings from our unconsolidated affiliates is approximately $26 million. Our net ownership interest, investments in and earnings from our unconsolidated affiliates are as follows:

	Net Ownership								Equity in Earnings (Loss)
	Interest				Investment				Three Months Ended
	July 29,		April 29,		July 29,		April 29,		July 29,			July 30,
Unconsolidated affiliates:	2007		2007		2007		2007		2007			2006
	(Percent)
Isle of Capri - Black Hawk, L.L.C. (1)		43		43	$	23,274,084	$	22,306,025	$	1,928,059		$	1,071,044
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		(840,367	)		(1,914,719	)
Buena Vista Development Company, LLC (4)		40		35		166,063		171,169		(5,106	)		1,869
Sunrise Land and Mineral Corporation (5)		50		50		407,793		400,489		107,303			26,250
Restaurant Connections International, Inc. (6)		34		34		—		—		—			—
Total investments in unconsolidated affiliates					$	28,357,123	$	35,601,908

Total earnings (loss) from unconsolidated affiliates									$	1,189,889		$	(815,556	)

(1)	Separate financial statements for this entity are included herein.

(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 to two of our partners. Equity in loss recorded for the three months ended July 29, 2007 includes the period from April 1, 2007 through June 14, 2007.

(4)	This is an investment in a gaming development project. At May 5, 2007, our ownership interest increased to 40%.

(5)	Represents our equity investment in a real estate investment and development project. This asset is held for sale and has been presented accordingly on the balance sheet as of July 29, 2007.

(6)	Investment in RCI was reduced to zero in fiscal year 2000. This asset is held for sale as of July 29, 2007.

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
	July 29,		April 29,		July 29,		April 29,
	2007		2007		2007		2007
	(Percent)
Development Projects:
Gold Mountain Development, L.L.C. (1)		100		100	$	3,437,932	$	3,433,953
Goldfield Resources, Inc. (2)		100		100		480,812		480,812
Other (3)						390,202		323,202
Total investments- development projects					$	4,308,946	$	4,237,967

(1)	Acquisition and development costs incurred for 240 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 July 29, 2007.

(2)	Acquisition cost incurred for 9,000 acres of mining claims in fiscal year 1999. This asset is held for sale and has been presented accordingly on the balance sheet as of July 29, 2007.

(3)	Development cost incurred for other development projects.

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Isle of Capri - Black Hawk, L.L.C.

As of July 29, 2007, Isle of Capri-Black Hawk L.L.C. (“IC-BH”) owned and operated two casinos in the state of Colorado. Isle of Capri Casinos Inc. (“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. We are a 43% non-operating owner of IC-BH and Isle is the 57% operating owner. The separate IC-BH consolidated balance sheets as of July 29, 2007 and April 29, 2007 and consolidated statements of income for the three months ended July 29, 2007 and July 30, 2006 are as follows:

Isle of Capri-Black Hawk, L.L.C.

Consolidated Balance Sheets

(unaudited)

	July 29,		April 29,
	2007		2007
	(in thousands)
Assets
Current assets:
Cash and cash equivalents	$	15,177	$	14,829
Accounts receivable - trade, net		421		493
Accounts receivable - member		—		53
Deferred income taxes		317		295
Inventories		1,184		1,160
Note receivable - member		338		1,273
Prepaid expenses and other		4,414		680
Total current assets		21,851		18,783

Property and equipment, net		231,631		232,771
Deferred financing costs, net of accumulated amortization		1,825		1,312
Deferred income taxes asset		8,319		6,035
Goodwill and other intangible assets		26,865		26,865
Prepaid deposits and other		641		858
Total assets	$	291,132	$	286,624

Liabilities and members' equity
Current liabilities:
Current maturities of long-term debt	$	2,033	$	2,033
Accounts payable - trade		2,413		2,023
Accounts payable - related		3,737		3,153
Accrued liabilities:
Interest		1,956		1,721
Payroll and related expenses		4,131		4,285
Property, gaming and other taxes		4,161		4,240
Progressive jackpot and slot club awards		2,426		2,437
Other		383		735
Total current liabilities		21,240		20,627

Long-term liabilities:
Long-term debt, less current maturities		201,390		201,865
Deferred income tax liability		2,284		—
Other long-term liabilities		973		923
Total long-term liabilities		204,647		202,788
Total liabilities		225,887		223,415
Members’ equity		65,245		63,209
Total liabilities and members' equity	$	291,132	$	286,624

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Isle of Capri-Black Hawk, L.L.C.

Consolidated Statements of Income

(unaudited)

	Three Months Ended
	July 29,			July 30,
	2007			2006
	(in thousands)
Revenues
Casino	$	42,206		$	42,455
Rooms		2,496			2,766
Food, beverage and other		4,463			5,185
Gross revenues		49,165			50,406
Less promotional allowances		(9,946	)		(10,791	)
Net revenues		39,219			39,615

Operating expenses
Casino		5,455			5,573
Gaming taxes		8,162			8,301
Rooms		553			508
Food, beverage and other		842			1,830
Facilities		1,832			2,068
Marketing and administrative		8,475			10,180
Management fees		1,853			1,745
Depreciation and amortization		3,971			3,921
Total operating expenses		31,143			34,126

Operating income		8,076			5,489
Interest expense, net		(3,676	)		(3,670	)
Other income		—			—
Income before income taxes		4,400			1,819
Income tax benefit		82			672
Net income	$	4,482		$	2,491

American Racing and Entertainment, L.L.C.

Summarized financial information for the period from April 1, 2007 to June 14, 2007 and the three months ended June 30, 2006, respectively, for American Racing and Entertainment, LLC is presented below:

	For the Periods Ended
	June 14, 2007			June 30, 2006
Gross Revenue	$	18,497,243		$	704,216
Total Expenses		21,852,185			5,622,753
Minority Interest		(212,625	)		(131,739	)
Net loss	$	(3,142,317	)	$	(4,786,798	)

On June 14, 2007, we sold our 22.8% membership interest in American Racing and Entertainment (“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. In addition, we were indemnified by the purchasers in connection with the guarantee of approximately $11 million of debt or any other obligations of American Racing. Our percentage of the financial results of American Racing is reflected as part of equity in earnings of unconsolidated subsidiaries through June 14, 2007.

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 July 29, 2007, 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.

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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 July 29, 2007, 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 July 29, 2007, 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 are due until July 31, 2007, at which time principal payments of $150,000, plus accrued interest, are 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 but remains a member of our Board of Directors.

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. Under the terms of the note, CCH has until September 10, 2007 to cure the Default or the entire principal amount plus accrued interest shall become due at the option of the Company. 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 July 29, 2007, 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 are due until July 31, 2007, at which time principal payments of $150,000, plus accrued interest, are 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 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 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. Under the terms of the note, SI has until September 10, 2007 to cure the Default or the entire principal amount plus accrued interest shall become due at the option of the Company. 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 July 29, 2007, we had notes receivable of $19.4 million related to the development of gaming/entertainment projects. 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%.

In addition, $3.2 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 April 30, 2007, we have 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.

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 July 29, 2007. 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 $1,573,300, with the La Jolla Band. As of July 29, 2007, we have classified this note as a non-current asset until settlement terms are finalized which may include amended repayment terms as well as other amounts such as 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.

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Note 6. Long-Term Debt

Our long-term financing obligations are as follows:

	July 29,			April 29,
	2007			2007

$55.0 million Revolving Credit Facility, 8.5% interest, maturing	$	52,850,000		$	55,000,000
September 2008
$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		336,632			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		486,484			786,484
Automobile Loan, 7.5% interest, amortizing for 60 months with
final payment due in October 2010		26,589			28,393
Total		53,699,705			57,087,549
Less: current maturities		(830,632	)		(2,066,518	)
Total long-term financing obligations	$	52,869,073		$	55,021,031

The Revolving Credit Facility is secured by our interest in IC-BH and substantially all of our other 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 May 24, 2007, we entered into a commitment letter agreement for a term loan facility in the maximum amount of $15 million (“The Loan Facility”). The commitment letter will terminate on the second anniversary of the issuance and any amounts drawn shall be payable in full three years from the date such funds are drawn. The Loan Facility is structured as an acquisition line that can only be drawn for a to-be-determined acquisition or acquisitions acceptable to the Company and the lender, based on standard legal and financial due diligence and will be guaranteed on a senior secured basis by all the Company’s affiliates that are not borrowers under the Loan Facility. No funds have been drawn as of July 29, 2007. We paid $225,000 of fees to the lender upon execution of this agreement which is being amortized on a straight line basis to interest expense over the term of the agreement.

Note 7. Stock-Based Compensation

Adoption of SFAS 123(R)

At July 29, 2007, 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.

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 in the three months ended July 29, 2007 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 months ended July 29, 2007, we granted 200,000 stock options. Total share-based compensation expense included in our Consolidated Statements of Operations for the three months ended July 29, 2007 and July 30, 2006 is presented in the following table:

	Three Months Ended
	July 29, 2007		July 30, 2006

Stock options	$	45,728	$	33,627
Less: Related tax benefit		-		12,264
Total share-based compensation expense, net of tax	$	45,728	$	21,363

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As a result of adopting SFAS No. 123(R) on May 1, 2006, our income before taxes and net income were lower by $45,728 for the three months ended July 29, 2007 and our loss before income tax benefits and net loss were higher by $33,627 and $21,363, respectively, for the three months ended July 30, 2006, than if we had continued to account for share-based compensation under APB No. 25. Net income (loss) per basic and diluted common share are not affected for the three months ended July 29, 2007 and July 30, 2006, than if we had not adopted SFAS No. 123(R).

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.

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 July 29, 2007, 656,099 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.

A summary of activity under the Company’s share-based payment plans for the three months ended July 29, 2007 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		200,000		2.01
Exercised		-		-
Forfeited or expired		-		-

Outstanding at July 29, 2007		1,080,000	$	7.30		3.5	$	-

Exercisable at July 29, 2007		721,500	$	8.87		2.2	$	-

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The total intrinsic value of stock exercised during the three month periods ended July 29, 2007 and July 30, 2006 was $0 and $6,075, respectively. As of July 29, 2007, there was a total of $313,283 of unamortized compensation related to stock, which cost is expected to be recognized over a weighted-average period of 1.8 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:

	Three Months Ended
	July 29, 2007			July 30, 2006

Expected volatility		71.4	%		63.0	%
Expected term		2.5			2.5
Expected dividend yield		-			-
Risk-free interest rate		4.50	%		4.50
Forfeiture rate		-			-

Expected volatility is based on historical volatility on 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. The fair value of the options granted during the three months ended July 29, 2007 was $199,587. These options were granted to a former officer as stipulated by his termination agreement and settled a portion of a severance obligation originally recorded as an accrued liability at April 29, 2007.

Restricted Stock Grants

The Company did not issue any restricted common stock during the three months ended July 29, 2007. During the three months ended July 30, 2006, we issued 10,000 shares of our restricted common stock to a financial consulting firm for their consulting services. The 10,000 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 $73,750.

Note 8. Stockholders’ Equity

Stock Repurchase

The Company did not repurchase any common stock during the three months ended July 29, 2007. During the three months ended July 30, 2006, we repurchased 40,800 shares of common stock at a total cost of $363,093.

Note 9. Comprehensive Income

Comprehensive income (loss) consisted of the following:

	Three Months Ended
	July 29,		July 30,
	2007		2006
Net income (loss)	$	542,486	$	(1,835,063	)
Other comprehensive income
Unrealized gain on securities available for sale		2,000		16,803
Comprehensive income (loss)	$	544,486	$	(1,818,260	)

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Note 10. Computation of Earnings Per Share

The following is presented as a reconciliation of the numerators and denominators of basic and diluted earnings per share computations, in accordance with SFAS No. 128:

	Three Months Ended
	July 29,		July 30,
	2007		2006
Numerator:
Basic and diluted:
Net income (loss) available to common
stockholders	$	542,486	$	(1,835,063	)

Denominator:
Basic and diluted weighted average number of
common shares outstanding		12,939,130		12,937,331

Earnings (loss) per share basic and diluted:
Net income (loss) per common
share	$	0.04	$	(0.14	)

At July 29, 2007, due to the current market value of the Company’s common stock, the Company had no common stock equivalents that were deemed to be dilutive thus the basic and diluted weighted average number of common shares outstanding are the same. At July 30, 2006, due to the Company incurring a net loss, basic and diluted weighted average number of common shares outstanding are the same.

For the three month periods ended July 29, 2007 and July 30, 2006, potential dilutive common shares issuable under options of 1,080,000 and 1,120,900, respectively, were not included in the calculation of diluted earnings per share as they were anti-dilutive.

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Note 11. Segment Reporting

We operate in two major business segments (i) gaming and (ii) other. The gaming segment for the period ended July 29, 2007 consists of Colorado Grande Casino, IC-BH, Route 66 Casinos, American Racing and Buena Vista Development. For the period ended July 30, 2006, the gaming segment also includes Dry Creek Casino, L.L.C.

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

	As of and for the Three Months Ended
	July 29, 2007
	Gaming			Other		Totals
Net revenue	$	1,963,475		$	16,902	$	1,980,377
Segment income		529,087			51,315		580,402
Segment assets		60,703,804			5,112,227		65,816,031
Equity investment:
Isle of Capri-Black Hawk, L.L.C.		23,274,084			—		23,274,084
Route 66 Casinos, L.L.C.		4,509,183			—		4,509,183
Buena Vista Development Company, L.L.C		166,063			—		166,063
Sunrise Land and Mineral Corporation		—			407,793		407,793
Depreciation and amortization		200,116			2,297		202,413
Addition to property and equipment		106,864			—		106,864
Interest expense, net		747,314			—		747,314
Income tax expense		34,564			3,352		37,916
Earnings from Isle of Capri-Black Hawk, L.L.C.		1,928,059			—		1,928,059
Loss from Buena Vista Development Company, L.L.C.		(5,106	)		—		(5,106	)
Loss from American Racing and Entertainment, L.L.C.		(840,367	)		—		(840,367	)
Earnings from Sunrise Land and Mineral Corporation		—			107,303		107,303

	As of and for the Three Months Ended
	July 30, 2006
	Gaming			Other			Totals

Net revenue	$	3,474,756		$	16,903		$	3,491,659
Segment loss		(2,664,360	)		(161,812	)		(2,826,172	)
Segment assets		77,470,927			5,596,101			83,067,028
Equity investment:
Isle of Capri-Black Hawk, L.L.C.		21,450,410			—			21,450,410
Route 66 Casinos, L.L.C.		4,509,183			—			4,509,183
American Racing and Entertainment, L.L.C.		12,175,787			—			12,175,787
Buena Vista Development Company, L.L.C		178,622			—			178,622
Sunrise Land and Mineral Corporation		—			405,190			405,190
Depreciation and amortization		260,003			2,149			262,152
Addition to property and equipment		90,618			—			90,618
Interest expense, net		862,107			—			862,107
Income tax benefit		934,364			56,745			991,109
Earnings from Isle of Capri-Black Hawk, L.L.C.		1,071,044			—			1,071,044
Earnings from Buena Vista Development Company, L.L.C.		1,869			—			1,869
Loss from American Racing and Entertainment, L.L.C.		(1,914,719	)		—			(1,914,719	)
Earnings from Sunrise Land and Mineral Corporation		—			26,250			26,250

Reconciliation of reportable segment assets to our consolidated totals is as follows:

	July 29,
	2007
Total assets for reportable segments	$	65,816,031
Cash not allocated to segments		953,948
Notes receivable not allocated to segments		5,721,066
Total assets	$	72,491,045

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Note 12. Other Assets

Other assets consist of the following at July 29, 2007 and April 29, 2007, respectively:

	July 29, 2007		April 29, 2007

Accrued interest receivable	$	4,723,610	$	4,157,381
Deferred loan issue cost, net		768,690		711,061
Other assets	$	5,492,300	$	4,868,442

Note 13. Commitments and Contingencies

We rent office space in Houston, Texas, under a non-cancelable operating lease which expires on February 29, 2012. 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. At July 29, 2007, we have outstanding commitments to extend credit related to development opportunities in the aggregate amount of $142,096.

We may guarantee all or part of the debt incurred by Indian tribes, with which we have entered into contracts, to fund development of casinos on the Indian lands. 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 the end of July 29, 2007, 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 honer the guarantee of debt or any other obligations of American Racing. 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 July 29, 2007, 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 Gillmann 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.

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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 has appealed the judgment against it to the Court of Appeals for the First District, Houston, Texas (the “Appeals Court”) and Nevada Gold has appealed the Court’s judgment to the Appeals Court that Nevada Gold take nothing from Fred Gillmann personally notwithstanding the jury’s verdict.

2. On July 23, 2007, the Company filed a lawsuit in the State District Court, Harris County Texas, 189^th Judicial District against American Heritage and Frederick C. Gillmann (Nevada Gold & Casinos, Inc. vs. American Heritage, Inc. 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. The Company is in the process of serving its original petition on the defendants.

We believe there is substantial evidence to support the allegations in the compliant 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.

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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 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.

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 has appealed the dismissal of its case and the parties are actively engaged in the appellate process. We believe the claims against us to be without merit and we intend to vigorously and appropriately defend the claims asserted in this matter.

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 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 VLTs to its gaming customers in upstate New York. Our interest decreased to 22.8% due to 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. If we are successful, our future revenues, costs and profitability can be expected to increase. Our net revenues were $2.0 million and $3.5 million for the three month periods ended July 29, 2007 and July 30, 2006, respectively.

When compared to the three month period ended July 30, 2006, the three month period ended July 29, 2007 was impacted by the following items:

- Reduced equity in the loss from our interest in American Racing in fiscal 2008 compared to the same period in fiscal 2007 mainly due to one of the two facilities was in a preopening phase during the 2007 period and the other facility was only operational for horse racing for the final three weeks of the period.

- Improved earnings from IC-BH and the Colorado Grande Casino.

- Reduced corporate, legal and interest expenses.

COMPARISON OF THE THREE MONTHS ENDED JULY 29, 2007 AND JULY 30, 2006

Net revenues. Net revenues decreased 43.3%, or $1,511,000, for the three month period ended July 29, 2007 compared to the period ended July 30, 2006. In the three month period ended July 29, 2007, credit enhancement fees previously received from the River Rock Casino are no longer earned by the Company resulting in a reduction of $1,906,000. Net revenues from the Colorado Grande increased 25.5% or $395,000 of which promotional allowance increased 30.2%, or $92,700, for the three month period ended July 29, 2007 compared to the period ended July 30, 2006.

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Total operating expenses. Total operating expenses decreased 25.8% or $1.1 million, for the three month period ended July 29, 2007 compared to July 30, 2006. Of the decrease, $684,600 is the result of lower legal costs related to litigation. We also experienced $525,300 of lower corporate expense due to our initiatives to reduce staffing and expenses related to non-core business.

Earnings from unconsolidated affiliates. Earnings from unconsolidated affiliates increased 245.9%, or $2.0 million, for the three month period ended July 29, 2007 compared to the three month period ended July 30, 2006. Earnings of IC-BH increased 80.0% or $857,000. IC-BH’s net revenues decreased 1%, or $396,000 for the three month period ended July 29, 2007 compared to the three month period ended July 30, 2006. This decrease was primarily due to a decrease in food and beverage revenues. However, the decrease was offset by a $3.0 million decrease in operating expenses. Equity in earnings of Sunrise increased $81,000 from $26,250 to $107,300 for the three month period ended July 29, 2007 compared to the three months ended July 30, 2006, respectively. During the three month period ended July 29, 2007, we recorded equity in loss of American Racing of $840,400 compared to $1.9 million for the three months ended July 30, 2006. The decrease is primarily attributable to our sale of our membership interest in American Racing as of June 14, 2007 and during the three months ended July 30, 2006, the Tioga Downs and Vernon Downs projects incurred pre-opening expenses.

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 14.6%, or $189,000, for the three month period ended July 29, 2007 compared to the three month period ended July 30, 2006. The decrease is primarily due to a lower weighted average debt balance. Interest income decreased 8.9%, or $51,800, for the three month period ended July 29, 2007 compared to the three month period ended July 30, 2006. 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 loan issue cost was $167,400 and $144,900 for the three month periods ended July 29, 2007 and July 30, 2006, respectively.

Net income (loss). Net income (loss) was $542,500 and ($1.8) million for the three month periods ended July 29, 2007 and July 30, 2006, respectively. The increase of $2.4 million is primarily related to the $857,000 increase in earning from IC-BH and the $1.1 million reduction of operating expenses. The effective tax rate for the three month periods ended July 29, 2007 and July 30, 2006 was 6.5% and 35.1%, respectively. The decrease in the effective tax rate is due to a 100% allowance being established at April 29, 2007 for our deferred tax assets and recording of alternative minimum taxes in the current period.

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 three month periods ended July 29, 2007 and July 30, 2006:

	Three Months Ended
	July 29,			July 30,
	2007			2006
Net cash provided by (used in):
Operating activities	$	(1,318,998	)	$	(667,670	)
Investing activities		3,082,230			(2,278,698	)
Financing activities		(3,612,844	)		1,359,510

Operating activities. Net cash used in operating activities during the three month period ended July 29, 2007 increased to $1.3 million compared to net cash used of $668,000 during the three month period ended July 30, 2006. The $651,000 decrease in cash flow is mainly due to a reduction of payables and liabilities. During the three month period ended July 29, 2007, we received $960,000 in distributions from IC-BH. We applied the distributions from IC-BH to repay a portion of the $5.9 million note payable to IC-BH related to our purchase of the Colorado Grande Casino.

Investing activities. Net cash provided by investing activities during the three month period ended July 29, 2007 increased to $3.1 million compared to net cash used of $2.3 million for the three month period ended July 30, 2006. The increase was primarily due to the receipt of $2.2 million from the sale of American Racing and the maturity of a $1.1 million certificate of deposit held as collateral for a operating line of credit for American Racing during the three months ended July 29, 2007, compared to advancing funds on notes receivables of $1.0 million during the three months ended July 30, 2006.

Financing activities. Net cash used in financing activities during the three month period ended July 29, 2007 increased to $3.6 million compared to net cash provided by $1.4 million for the three month period ended July 30, 2006. In the three month period ended July 29, 2007, we repaid $2.2 million of our $55.0 million credit facility and $1.2 million of term loans compared to the three month period ended July 30, 2006 when we borrowed $3.0 million from our $55.0 million credit facility and repaid $823,000 on our term loans. During the three months ended July 30, 2006, we repurchased 40,800 shares of our common stock in the open market at a total purchase price of $363,000, and we distributed $369,000 to the minority interest owners of Dry Creek Casino, LLC.

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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 July 29, 2007, outstanding indebtedness under our revolving credit facility was $52.9 million with total indebtedness of $53.7 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 we are now using our quarterly distributions from IC-BH for the repayment of interest and principal due on this note which will continue until it is repaid in full. At July 29, 2007, the balance of the note payable to IC-BH was $336,600 which we expect will be paid in full in the second quarter of fiscal year 2008. Due to the Company having net operating tax losses, upon repayment of the note payable to IC-BH the quarterly tax distributions will be available to pay operating expenses and service a portion of our debt. Furthermore, we are in discussions with our current lender of our revolving credit facility and other prospective financial institutions to renew or refinance our $55.0 million credit facility.

At July 29, 2007, we have a $15.0 million acquisition line of credit available to us to be used should we elect to pursue the acquisition of another gaming operation.

On July 29, 2007, we had cash and cash equivalents of $954,000.

We currently expect funds generated from our operating activities, together with existing cash and cash equivalents, expected loan repayments from our notes receivable, and funds available under our Credit Facility will be adequate to fund our ongoing operating and debt service requirements.

Off-Balance Sheet Arrangements

As of July 29, 2007, 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. 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 July 29, 2007, our maximum potential future payment under this guarantee was approximately $11 million.

In addition, we have certain off-balance sheet arrangements that may affect our financial condition, liquidity and results of operations, including a guarantee of $16,000 of indebtedness of an affiliate and we have outstanding commitments to extend credit related to development opportunities in the aggregate amount of $142,096.

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 risk.

Our credit facilities are primarily fixed interest rate instruments and an interest rate change 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.

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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 controls and procedures were effective as of July 29, 2007.

There have not been any changes in our control over financial reporting during the three months ended July 29, 2007 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

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Rinaldo Corporation

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, as amended.

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.

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Item 6. Exhibits

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

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)

3.2		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)

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)

10.14		Resignation Agreement by and between Nevada Gold & Casinos, Inc., and Christopher C. Domijan, dated as of September 6, 2005 (filed previously as Exhibit 10.14 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).

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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).

10.22		Employment Agreement dated December 7, 2005, by and between Alan J. Greenstein and Nevada Gold & Casinos, Inc. (filed previously as Exhibit 10.22 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).

10.24		Unconditional and Continuing Guaranty Agreement dated May 1, 2006, by Jeffrey Gural and Nevada Gold & Casinos, Inc., to and for the benefit of All Capital, LLC (previously filed as Exhibit 10.24 to Form 8-K filed May 5, 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).

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.

* Filed herewith.

** Portions of these exhibits have been omitted pursuant to a request for confidential treatment.

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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: September 5, 2007

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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)

3.2		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)

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)

10.14		Resignation Agreement by and between Nevada Gold & Casinos, Inc., and Christopher C. Domijan, dated as of September 6, 2005 (filed previously as Exhibit 10.14 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).

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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).

10.22		Employment Agreement dated December 7, 2005, by and between Alan J. Greenstein and Nevada Gold & Casinos, Inc. (filed previously as Exhibit 10.22 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).

10.24		Unconditional and Continuing Guaranty Agreement dated May 1, 2006, by Jeffrey Gural and Nevada Gold & Casinos, Inc., to and for the benefit of All Capital, LLC (previously filed as Exhibit 10.24 to Form 8-K filed May 5, 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).

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.

* Filed herewith.

** Portions of these exhibits have been omitted pursuant to a request for confidential treatment.

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