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Taken from American Casino Enterprises 1996 Annual
Report
Letter To Shareholders

To Our Shareholders:
Fiscal 1996 was a year of continued favorable financial results and
positive developments for American Casino Enterprises, Inc.
Fiscal 1996 Financial Results
Revenues for Fiscal 1996 were relatively unchanged at $9.6 million
compared with $9.7 million in the previous year. After a non-recurring
charge of $500,000 resulting from the National Indian Gaming Commission
civil fine, net income equaled $3.8 million or $0.23 per share, versus
$4.8 million or $0.33 per share in Fiscal 1995. Other items affecting net
income were: research, development and legal fees stemming from the pursuit
of new business opportunities, and increased payroll and related general
and administrative costs. Shareholders' equity increased to$13.3 million
at Fiscal year-end, up from $9.5 million in the prior year. The Company's
current ratio at Fiscal year-end 1996 is 38 to 1. At July 31, 1996 the
Company had no long-term debt.
Other 1996 Highlights
On February 1, 1996 the Company settled its regulatory matter with
the National Indian Gaming Commission.
The Company took a major step toward broadening its business activities
with the formation of a joint venture with the Table Mountain Tribe that
will assist in the development and operation of a casino for the United
Auburn Indian Community, near Sacramento, California. The Company also
formed a new majority-owned subsidiary which will seek to acquire new ventures
in the gaming and leisure industry.
Progress in the latter part of the year suggests that the California
Tribes' legal dispute over the scope of Indian gaming may soon be resolved,
removing uncertainties that have long clouded Native American Gaming in
California.
In October 1996, the Company purchased a 162-acre parcel of undeveloped
land in Las Vegas, Nevada for investment purposes.
Consistent with our positive view of developments for the Company and
our commitment to maximizing shareholder value, we have increased our efforts
to gain the attention of the investing public. We are currently expanding
our communications and presentation programs to acquaint both institutions
and individual investors with the company.
We continue to pursue new gaming ventures, and we are exploring diversification
opportunities within the leisure industry.
In this annual report we have presented a question
and answer interview for your better understanding of the important
issues and opportunities that the Company faces. We are pleased with the
Company's growth and have heightened expectations for its future. We sincerely
appreciate your continued confidence and support.
Sincerely,

Ronald J. Tassinari
President and Chief Executive Officer