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<SEC-DOCUMENT>0000907242-04-000004.txt : 20040312
<SEC-HEADER>0000907242-04-000004.hdr.sgml : 20040312
<ACCEPTANCE-DATETIME>20040312131529
ACCESSION NUMBER:		0000907242-04-000004
CONFORMED SUBMISSION TYPE:	10-K
PUBLIC DOCUMENT COUNT:		3
CONFORMED PERIOD OF REPORT:	20031231
FILED AS OF DATE:		20040312

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			MONARCH CASINO & RESORT INC
		CENTRAL INDEX KEY:			0000907242
		STANDARD INDUSTRIAL CLASSIFICATION:	SERVICES-MISCELLANEOUS AMUSEMENT & RECREATION [7990]
		IRS NUMBER:				880300760
		STATE OF INCORPORATION:			NV
		FISCAL YEAR END:			1231

	FILING VALUES:
		FORM TYPE:		10-K
		SEC ACT:		1934 Act
		SEC FILE NUMBER:	000-22088
		FILM NUMBER:		04665320

	BUSINESS ADDRESS:	
		STREET 1:		1175 W MOANA LANE
		STREET 2:		STE 200
		CITY:			RENO
		STATE:			NV
		ZIP:			89509
		BUSINESS PHONE:		7758253355

	MAIL ADDRESS:	
		STREET 1:		1175 W MOANA LANE
		STREET 2:		STE 200
		CITY:			RENO
		STATE:			NV
		ZIP:			89509
</SEC-HEADER>
<DOCUMENT>
<TYPE>10-K
<SEQUENCE>1
<FILENAME>anrep03e.txt
<TEXT>

                                United States
                      SECURITIES AND EXCHANGE COMMISSION
                            WASHINGTON, D.C. 20549

                                  Form 10-K

(MARK ONE)

[X]  ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
     EXCHANGE ACT OF 1934 FOR THE FISCAL YEAR ENDED DECEMBER 31, 2003

                                      or

[ ]  TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
     EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM ______TO______

                         Commission File No. 0-22088

                        MONARCH CASINO & RESORT, INC.
            (Exact name of registrant as specified in its charter)
                          -------------------------

                NEVADA                                88-0300760
     (State or other jurisdiction                  (I.R.S. Employer
   of incorporation or organization)              Identification No.)

     1175 W. MOANA LANE, SUITE 200
             RENO, NEVADA                               89509
        (Address of principal                         (Zip code)
          executive offices)

     Registrant's telephone number, including area code:  (775) 825-3355
                          -------------------------

         SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT:

                                                Name of each exchange
         Title of each class                     on which registered
         -------------------                     -------------------
                 None                                    None

         SECURITIES REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT:

                        COMMON STOCK, $0.01 PAR VALUE
                              (Title of Class)

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

     Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to
the best of the registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K. [ ]
     Indicate by check mark whether the Registrant is an accelerated filer (as
defined by rule 12b-2 of the Act).  YES [ ]  NO [X]


     The aggregate market value of voting and non-voting common equity held by
nonaffiliates as of June 30, 2003, based on the closing price as reported on
The Nasdaq Stock Market(SM) of $9.25 per share, was approximately $39,271,745.


     As of March 8, 2004, Registrant had 9,343,661 shares of Common Stock
outstanding.


     DOCUMENTS INCORPORATED BY REFERENCE. None.

     Portions of the Proxy Statement for Registrant's 2004 Annual Meeting of
Stockholders, which Proxy Statement shall be filed with the Commission not
later than 120 days after the end of the fiscal year covered by this report,
are incorporated by reference into Part III.

     STATEMENTS IN THIS ANNUAL REPORT ON FORM 10-K WHICH EXPRESS THE "BELIEF",
"ANTICIPATION", "INTENTION", "EXPECTATION", OR "SCHEDULES" AS WELL AS OTHER
STATEMENTS WHICH ARE NOT HISTORICAL FACT, AND STATEMENTS AS TO BUSINESS
OPPORTUNITIES, MARKET CONDITIONS, COST ESTIMATIONS AND OPERATING PERFORMANCE
INSOFAR AS THEY MAY APPLY PROSPECTIVELY, ARE FORWARD-LOOKING STATEMENTS WITHIN
THE MEANING OF SECTION 27A OF THE SECURITIES ACT OF 1933 AND SECTION 21E OF
THE SECURITIES EXCHANGE ACT OF 1934 AND INVOLVE RISKS AND UNCERTAINTIES THAT
COULD CAUSE ACTUAL RESULTS TO DIFFER MATERIALLY FROM THOSE PROJECTED.






























                                   -2-
                                    PART I

ITEM 1. BUSINESS

     Monarch Casino & Resort, Inc. (the "Company" or "we"), through its wholly-
owned subsidiary, Golden Road Motor Inn, Inc. ("Golden Road"), owns and
operates the tropically-themed Atlantis Casino Resort, a hotel/casino facility
in Reno, Nevada (the "Atlantis").  Unless otherwise indicated, "Monarch" or the
"Company" refers to Monarch Casino & Resort, Inc. and its Golden Road
subsidiary.  Monarch was incorporated in 1993 under Nevada law for the purpose
of acquiring all of the stock of Golden Road.  The principal asset of Monarch
is the stock of Golden Road, which holds all of the assets of the Atlantis.
Our principal executive offices are located at 1175 West Moana Lane, Suite 200,
Reno, Nevada 89509, telephone (775) 825-3355.


AVAILABLE INFORMATION

     Our website address is www.monarchcasino.com.  We make available free of
charge on or through our Internet website our annual report on Form 10-K,
quarterly reports on Form 10-Q, current reports on Form 8-K, and amendments to
those reports filed or furnished pursuant to Section 13(a) or 15(d) of the
Securities Exchange Act of 1934, as amended, as soon as reasonably practicable
after we electronically file such material with, or furnish it to, the
Securities and Exchange Commission.


THE ATLANTIS CASINO RESORT

     Through our Golden Road subsidiary, we own and operate the tropically-
themed Atlantis Casino Resort, which is located approximately three miles south
of downtown in the generally more affluent and rapidly growing south area of
Reno, Nevada.  The Atlantis features approximately 51,000 square feet of casino
space interspersed with waterfalls, giant artificial palm trees, thatched-roof
huts, and other tropical decor; a hotel and a motor lodge with 980 guest rooms;
nine food outlets; an enclosed pool with waterfall; an outdoor pool; a health
spa; two retail outlets offering clothing and traditional gift shop
merchandise; a full service salon for men and women; an 8,000 square-foot
family entertainment center; and approximately 25,000 square feet of banquet,
convention and meeting room space.

     The Reno-Sparks Convention Center is located across the street from the
Atlantis, the only hotel-casino within easy walking distance.  The Reno-Sparks
Convention Center underwent a $105 million expansion and renovation completed
in late July 2002 that increased its exhibition, meeting room, ballroom, and
lobby space by more than 50%, from approximately 380,000 to approximately
600,000 square feet.


ATLANTIS CASINO

     The Atlantis casino offers approximately 1,450 slot and video poker
machines; 37 table games, including blackjack, craps, roulette and others; a
sports book (which is operated by an unaffiliated party pursuant to a lease
arrangement with us); Keno; and a poker room.



                                 -3-
     The following table summarizes the components of our casino revenues for
the periods shown:

                                         Years ended December 31,
                                        --------------------------
                                         2003      2002      2001
                                        ------    ------    ------
Slot & video poker.....................  78.2%     74.8%     77.3%
Table games............................  18.8%     22.5%     19.8%
Keno, poker room and sports book rent..   3.0%      2.7%      2.9%

     The Atlantis offers what we believe are higher than average payout rates
on slot machines relative to other northern Nevada casinos and has adopted
liberal rules for its blackjack games, including the use of single decks of
cards at many tables and allowing players to "double down" on the first two
cards.  We seek to attract high-end players through high quality amenities and
services and by extension of gaming credit after a careful credit history
evaluation.


HOTEL AND MOTOR LODGE

     The Atlantis includes three contiguous high-rise hotel towers with 831
rooms and suites, and a low-rise motor lodge with another 149 rooms, for a
total of 980 guest rooms.  The first of the three hotel towers, which was
completed in April 1991, contains 160 rooms and suites in 13 stories, and
underwent a $2.8 million complete interior renovation completed early in the
third quarter of 2002.  The second hotel tower was completed in September 1994
and contains 283 rooms and suites in 19 stories and is undergoing an estimated
$3.9 million complete interior renovation that was commenced in November 2003
with an expected April 2004 completion date.  The third tower was completed in
June 1999 and contains 388 rooms and suites in 28 stories.  The rooms on the
top seven floors in the newest tower are nearly 20% larger than the standard
guest rooms and offer private elevator access, upscale accommodations, and a
private concierge service.

     The Atlantis hotel rooms feature upbeat, colorful interior decorations and
furnishings consistent with the Atlantis' tropical theme, as well as nine-foot
ceilings (most standard hotel rooms have eight-foot ceilings), which create an
open and spacious feel.  The newest hotel tower features a four-story waterfall
with an adjacent swimming pool in a climate controlled, five-story glass
enclosure, which shares an outdoor third floor pool deck with an outdoor
swimming pool and whirlpool.  A full service salon (the "Salon at Atlantis")
overlooks the swimming pool area and offers hair, nails, skincare and body
treatment services for men and women.  A health spa is located adjacent to the
swimming areas.  The hotel also features glass elevators rising the full 19 and
28 stories, respectively, of the two taller hotel towers, providing panoramic
views of the Reno area and the Sierra Nevadas, a mountain range separating
Nevada from California.

     The 149-room motor lodge is a two-story structure located adjacent to the
hotel.  The motor lodge rooms, which are also decorated and furnished in a
manner consistent with the Atlantis' tropical theme, are smaller than the tower
hotel rooms and have standard eight-foot ceilings.  We believe the motor lodge
rooms appeal to value conscious travelers who still want to enjoy the
experience and amenities of a first-class hotel-casino resort.


                                 -4-
     The average occupancy rate and average daily room rate at the Atlantis for
the following periods were:

                                         Years ended December 31,
                                        --------------------------
                                         2003      2002      2001
                                        ------    ------    ------
Occupancy rate.........................  92.3%     92.9%     91.1%
Average daily room rate................ $57.82    $55.29    $53.48

     We continually monitor and adjust hotel room rates based upon demand and
other competitive factors.  Our Average Daily Room Rate ("ADR") has also been
impacted by rooms sold at discounted rates to select wholesale operators for
tour and travel packages.


RESTAURANTS AND DINING

     The Atlantis has seven restaurants, one snack bar, and one gourmet coffee
bar, as described below.

     - The 640-seat Toucan Charlie's Buffet & Grill, which offers a wide
       variety of standard hot food selections, salads and seafood; specialty
       substations featuring made-to-order items, such as Mongolian barbecue,
       fresh Southwest and Asian specialties, and meats roasted in wood-fired
       rotisserie ovens; and two salad stations
           - The 135-seat, aquatic-themed Atlantis Seafood Steakhouse gourmet
             restaurant
     - The 218-seat, upscale MonteVigna Italian Ristorante, featuring a
       centrally located wine cellar and seasonal outdoor terrace
     - The Oyster Bar restaurant in the Sky Terrace offering fresh seafood,
       soups and bisques made to order
     - The new Sushi Bar, also in the Sky Terrace, offering a variety of fresh
       raw and cooked sushi specialties, including all-you-can-eat lunch and
       dinner menus.  Combined, the Oyster Bar and Sushi Bar can accommodate
       up to 120 guests
     - The 178-seat 24-hour Purple Parrot coffee shop
     - The 104-seat Cafe Alfresco restaurant serving pizzas prepared in a
       wood-fired, brick oven
     - A gourmet coffee bar, offering specialty coffee drinks and pastries and
       desserts made fresh daily in the Atlantis bakery
     - A snack bar and soda fountain serving ice cream and arcade-style
       refreshments


THE SKY TERRACE

     The Sky Terrace is a unique structure with a diamond-shaped, blue glass
body suspended approximately 55 feet above street level and spanning 160 feet
across South Virginia Street.  The Sky Terrace connects the Atlantis with
additional parking on a 16-acre site owned by us across South Virginia Street
from the Atlantis.  The structure rests at each end on two 100-foot tall
Grecian columns with no intermediate support pillars.  The tropically-themed
interior of the Sky Terrace contains the Oyster Bar, a video poker bar, banks
of slot machines, a lounge area with oversized leather sofas and chairs and,
since May 2003, a sushi bar.  The Sushi Bar replaced the coffee and pastry bar
that was previously located adjacent to the lounge area.

                                 -5-
     Operations at the Atlantis are conducted 24 hours a day, every day of the
year.  The Atlantis' business is moderately seasonal in nature, with higher
revenues during the summer months and lower revenues during the winter months.


ATLANTIS IMPROVEMENTS

     We have continuously invested in upgrading the Atlantis.  Our capital
expenditures at the Atlantis were $8.4 million in 2003, $6.5 million in 2002,
and $4.5 million in 2001.  A summary of capital expenditures for the last three
years is as follows (in millions):

<TABLE>
<CAPTION>
                                                       2003        2002        2001
                                                     --------    --------    --------
<C>                                                  <C>         <C>         <C>
Cash acquisitions of property and equipment...        $8.0        $4.8        $3.3
Property and equipment acquired through
 trade payables...............................          -          0.1          -
Financed purchases of property and equipment..         0.4         1.6         1.2
                                                     --------    --------    --------
Total capital expenditures....................        $8.4        $6.5        $4.5
</TABLE>

     During 2003, capital expenditures consisted primarily of the construction
and opening of the new Sushi Bar and Salon at Atlantis, renovations to the
second hotel tower, and continued acquisitions of and upgrades to gaming
equipment.  During 2002, capital expenditures consisted primarily of
renovations to the first hotel tower, renovations and upgrade to the hotel
front desk and VIP services area, a total renovation of the Cafe Alfresco, and
continued acquisitions of and upgrades to gaming equipment.  In 2001, capital
expenditures were primarily for the renovation of hotel room suites in the
third tower and acquisition and upgrades of slot machines, computer information
systems and furniture, fixtures and equipment.

     In 2004, we are planning construction of a new driveway that will be
shared between the Atlantis and the adjacent Sierra Marketplace Shopping
Center (the "Shopping Center") that is owned and controlled by affiliates of
our controlling stockholders.  A new traffic signal will be erected at mid-
block on South Virginia Street, serving the new driveway.  As part of this
project, we will lease a 37,368 square-foot corner section of the Shopping
Center for a minimum lease term of 15 years at a monthly rent of $25,000,
subject to increase every 60 months based on the Consumer Price Index.  We
will also use part of the common area of the Shopping Center and will pay our
proportional share of the common area expense of the Shopping Center. We have
the option to renew the lease for 3 five-year terms, and at the end of the
extension period, we have the option to purchase the leased section of the
Shopping Center at a price to be determined based on a MAI Appraisal.  The
leased space will be used by us for pedestrian and vehicle access to the
Atlantis, and we will have use of a portion of the parking spaces at the
Shopping Center.  We are responsible for two thirds of the construction costs
of the project, up to a maximum of $1.2 million.  We anticipate this project
will be completed in Summer of 2004 (see Part III - ITEM 13. CERTAIN
RELATIONSHIPS AND RELATED TRANSACTIONS incorporated herein by reference to the
Company's Proxy Statement to be filed with the Securities and Exchange
Commission in connection with the Annual Meeting of Stockholders to be held on
May 26, 2004).


                                   -6-
     We remain committed to implementing renovations and upgrades and will
consider all capital expenditure projects proposed by our executive officers
and key employees.


EXPANSION POTENTIAL

     Our expansion potential is twofold.  First, we could expand our existing
casino, which the City of Reno has approved, thereby giving us more room to add
500 more slot machines.  The City of Reno has also approved the expansion of
the hotel by 520 rooms as well as the construction of a parking garage with
1,831 spaces.  Second, we could expand by developing the 16-acre parcel that we
own across the street from the Atlantis.  This site is connected to the
Atlantis by the Sky Terrace and is currently used for parking and special
events related to the Atlantis.  Our 16-acre parcel meets all current Reno
zoning requirements in the event we decide to build another resort casino or
entertainment facility.  We currently have no plans for the expansion or
development of either site, but we constantly monitor industry demands and
prudent development opportunities for our property.

     In 2003, we entered into an option agreement with an affiliate of our
controlling stockholders to purchase property in South Reno for development of
a new hotel casino.  Commencement of any development of the property will
require completion of property due diligence and receipt of numerous
approvals, including master plan changes and zone changes, neither of which can
be assured.  Through the current property owner, we have filed an application
with the City of Reno for master plan change and zone change for 13 acres of
the property.


MARKETING STRATEGY

     Our revenues and operating income are principally dependent on the level
of gaming activity at the Atlantis casino.  Our predominant marketing goal is
to utilize all of the Atlantis facilities to generate additional casino play.
Our secondary goal is to maximize revenues from our hotel, restaurants,
cocktail lounges, convention and meeting rooms and other amenities.

     Our marketing efforts are directed toward three broad consumer groups:
Reno area residents, leisure travelers, and conventioneers.  We believe the
Atlantis' location outside the downtown area, near the airport and across the
street from the Reno-Sparks Convention Center makes the facility appealing to
all three groups.

     RENO AREA RESIDENTS. The Atlantis' proximity to rapidly growing, generally
more affluent, south Reno residential areas provides a significant source of
middle to upper-middle income gaming customers.  We market to Reno area
residents (referred to from time to time as "Locals") on the basis of the
Atlantis location and accessibility, convenient surface parking, gaming values,
ambiance, friendly efficient service, and quality and relative value of its
food and beverage offerings, entertainment, and promotions.

     We believe local gaming customers prefer slot and video poker machines to
table games, and prefer video poker machines to reel-spinning (or
electronically simulated reel-spinning) slot machines.  Accordingly, the
Atlantis provides a diverse selection of video poker machines.  Moreover, we
believe that Reno area residents seek out and frequent casinos with higher

                                   -7-
payout rates on slot and video poker machines and more liberal rules on table
games relative to other northern Nevada casinos.  We believe the Atlantis
offers higher than average payout rates on slot machines, and we have adopted
liberal rules for its blackjack games, including the use of single decks of
cards at many tables and allowing players to "double down" on the first two
cards.  We have also implemented "Club Paradise," a frequent player club, to
encourage Locals' repeat play at our casino.

     LEISURE TRAVELERS. Reno is a popular gaming and vacation destination that
enjoys direct freeway access to nearly all major northern California population
centers and non-stop air service from most large cities in the western United
States, as well as many midwest and southern population centers such as
Chicago, Minneapolis and Dallas.  The principal segments of Reno's leisure
traveler market are independent travelers, package tour and travel customers,
and high-end players.  We attempt to maximize our gaming revenues and hotel
occupancy through a balanced marketing approach that addresses each market
segment.

     Independent travelers make reservations directly with hotels of their
choice or through independent travel agents.  We believe this market segment is
largely comprised of individuals who drive and, to a lesser extent, fly to Reno
from a specific region, primarily northern California and the Pacific
Northwest.  We strive to attract the middle to upper-middle income strata of
this consumer segment through advertising and direct marketing in select
regions.  This segment represents a significant portion of the Atlantis'
customers, especially those visiting on weekends.

     The package tour and travel segment consists of visitors who utilize
travel packages offered by wholesale operators.  We market to this segment
through relationships with select wholesalers, primarily to generate customer
visits and supplement mid-week occupancy.

     We welcome direct on-line reservations on the Atlantis' website
(http://www.atlantiscasino.com).  We are also featured on major package tour
and travel websites.

     We market to high-end players selectively through direct sales.  We
utilize complimentary rooms, food and beverage, special events and the
extension of gaming credit to attract high-end players.

     CONVENTIONEERS. Convention business, like package tour and travel,
generates mid-week customer visits and supplements occupancy during low-demand
periods.  Conventioneers also typically pay higher average room rates than non-
conventioneers.  We selectively seek convention and meeting groups that we
believe will materially enhance the Atlantis' occupancy and daily room rates,
as well as those we believe will be more likely to gamble.  As the only hotel-
casino within easy walking distance of the Reno-Sparks Convention Center, the
Atlantis is, in our view, uniquely positioned to capitalize on this expanding
segment.  We believe the $105 million expansion and remodeling of the Reno-
Sparks Convention Center, completed in late July 2002, has created and we
expect will continue to create additional customer traffic for the Atlantis
from a market segment that is presently underserved in the Reno area.

     We market to all customer segments, including conventioneers, on the basis
of the location, quality and ambiance of the Atlantis facility, gaming values,
friendly efficient service, and the quality and relative value of its rooms,
food and beverage offerings, entertainment, and promotions.

                                   -8-
     Our frequent player club, "Club Paradise," allows our customers to be
eligible to receive rewards and privileges based on the amount of their play,
while allowing us to track their play through a computerized system.  We use
this information to determine appropriate levels of complimentary awards, and
in our direct marketing efforts.  We believe that Club Paradise significantly
enhances our ability to build customer loyalty and generate repeat customer
visits.


COMPETITION

     Competition in the Reno area gaming market is intense.  Based on
information obtained from the December 31, 2003 Gaming Revenue Report published
by the Nevada State Gaming Control Board, there are approximately 11 casinos in
the Reno area which generate more than $12.0 million each in annual gaming
revenues.

     We believe that the Atlantis' competition for Locals comes primarily from
other large-scale casinos located outside of downtown Reno that offer amenities
that appeal to middle to upper-middle income customers, and secondarily with
those casinos located in downtown Reno that offer similar
amenities.  We compete for Locals primarily on the basis of the desirability of
our location, the quality and ambiance of the Atlantis facility, friendly
efficient service, the quality and relative value of its food and beverage
offerings, entertainment offerings, promotions, and gaming values.  We believe
the Atlantis' proximity to residential areas in south Reno and its abundant
surface parking afford it an advantage over the casinos located in downtown
Reno in attracting Locals.

     We believe that the Atlantis' primary competition for leisure travelers
comes from other large-scale casinos, including those located in downtown Reno
and those located away from downtown Reno, that offer amenities that appeal to
middle to upper-middle income customers.  We compete for leisure travelers on
the basis of the desirability of our location, the quality and ambiance of the
Atlantis facility, friendly efficient service, the quality and relative value
of its rooms and food and beverage offerings, entertainment offerings,
promotions, and gaming values.  We believe that our location away from downtown
Reno is appealing to many customers who prefer to avoid the more congested
downtown area; however, the Atlantis' location is a disadvantage in that it
does not afford us the ability to generate walk-in traffic (except with respect
to persons attending events at the Convention Center), which is a significant
source of customers for some casinos located in downtown Reno.

     We believe that the Atlantis' primary competition for conventioneers comes
from other large-scale hotel casinos in the Reno area that actively target the
convention market segment, and secondarily from other cities on the U.S. West
Coast with large convention facilities and substantial hotel capacity,
including Las Vegas.  We compete for conventioneers based on the desirability
of our location, the quality and ambiance of the Atlantis facility, meeting and
banquet rooms designed to appeal to conventions and groups, friendly efficient
service, and the quality and relative value of its rooms and food and beverage
offerings.  We believe that the Atlantis' proximity to the Convention Center
affords it a distinct competitive advantage in attracting conventioneers.




                                   -9-
     The Atlantis also competes for gaming customers with hotel casino
operations located in other parts of Nevada, especially Las Vegas and Lake
Tahoe, and with hotel casinos, Indian casinos, and riverboat casinos located
elsewhere throughout the United States and the world.  We believe that the
Atlantis also competes to a lesser extent with state-sponsored lotteries, off-
track wagering, card parlors, and other forms of legalized gaming, particularly
in northern California and the Pacific Northwest.

     The constitutional amendment approved by California voters allowing the
expansion of Indian gaming in the form of casinos in California has had an
impact on casino revenues in Nevada in general, and many analysts have
predicted the impact will be more significant on the Reno-Lake Tahoe market.
The extent of this impact is difficult to predict, but we believe that the
impact on us has been mitigated to an extent due to the Atlantis' emphasis on
Reno area residents as a significant base of its business and the future
potential of convention business due to its proximity to the renovated and
expanded Reno-Sparks Convention Center.  Other Reno area casinos may intensify
their marketing efforts to Reno area residents if they suffer business losses
due to increased pressure from California Indian casinos which may impact our
customer base and, consequently, revenues.  However, we believe our numerous
amenities such as a wide array of restaurants, a video arcade, banquet
facilities and surface parking are a key factor in our ability to attract
Locals which competitor facilities will not easily be able to match without
major capital expenditures.

     Certain experienced Nevada gaming operators have agreements to build and
manage Indian casino facilities near Sacramento, one of Reno's key feeder
markets.  One major facility near Sacramento has been operating since June 2003
and has been very successful, adversely impacting many hotel casinos in Reno.
Once these facilities receive all the required permits and are built, they
could provide an alternative to Reno area casinos, especially during certain
winter periods when auto travel through the Sierra Nevadas is hampered.

     We believe that the legalization of unlimited land-based casino gaming in
or near any major metropolitan area in the Atlantis' key marketing areas, such
as San Francisco or Sacramento, could have a material adverse impact on our
business.


REGULATION AND LICENSING

     The ownership and operation of casino gaming facilities in Nevada are
subject to the Nevada Gaming Control Act and the regulations promulgated
thereunder, referred to as the Nevada Act, and various local regulations.  Our
gaming operations are subject to the licensing and regulatory control of the
Nevada Gaming Commission, the Nevada State Gaming Control Board, and the Reno
City Council, referred to as the Nevada Gaming Authorities.

     The laws, regulations and supervisory procedures of the Nevada Gaming
Authorities are based upon declarations of public policy that are concerned
with, among other things:

     - the prevention of unsavory or unsuitable persons from having a direct
       or indirect involvement with gaming at any time or in any capacity;
     - the establishment and maintenance of responsible accounting practices
       and procedures;

                                   -10-
     - the maintenance of effective controls over the financial practices of
       licensees, including the establishment of minimum procedures for
       internal fiscal affairs and the safeguarding of assets and revenues,
       providing reliable record keeping and requiring the filing of periodic
       reports with the Nevada Gaming Authorities;
     - the prevention of cheating and fraudulent practices; and
     - providing a source of state and local revenues through taxation and
       licensing fees.

     Changes in such laws, regulations and procedures could have an adverse
effect on our gaming operations.

     Golden Road, our subsidiary which operates the Atlantis, is required to be
licensed by the Nevada Gaming Authorities.  The gaming license requires the
periodic payment of fees and taxes and is not transferable.  We are registered
by the Nevada Gaming Commission as a publicly traded corporation, or Registered
Corporation.  As such, we are required periodically to submit detailed
financial and operating reports to the Nevada Gaming Commission and furnish any
other information that the Nevada Gaming Commission may require.  No person may
become a stockholder of, or receive any percentage of profits from, Golden Road
without first obtaining licenses and approvals from the Nevada Gaming
Authorities.  Golden Road and we have obtained from the Nevada Gaming
Authorities the various registrations, approvals, permits and licenses required
in order to engage in gaming activities in Nevada.

     The Nevada Gaming Authorities may investigate any individual who has a
material relationship to, or material involvement with, Golden Road or us in
order to determine whether that individual is suitable or should be licensed as
a business associate of a gaming licensee.  Officers, directors and key
employees of Golden Road must file applications with the Nevada Gaming
Authorities and may be required to be licensed or found suitable by the Nevada
Gaming Authorities.  Our officers, directors and key employees who are actively
and directly involved in gaming activities of Golden Road may be required to be
licensed or found suitable by the Nevada Gaming Authorities.  The Nevada Gaming
Authorities may deny an application for licensing for any cause that they deem
reasonable.  A finding of suitability is comparable to licensing, and both
require submission of detailed personal and financial information followed by a
thorough investigation.  Applicants for licensing or a finding of suitability
must pay all costs of the investigation.  Changes in licensed positions must be
reported to the Nevada Gaming Authorities.  In addition to their authority to
deny an application for a finding of suitability or licensure, the Nevada
Gaming Authorities also have jurisdiction to disapprove a change in a corporate
position.

     If the Nevada Gaming Authorities were to find an officer, director or key
employee unsuitable for licensing or unsuitable to continue having a
relationship with Golden Road or us, the companies involved would have to sever
all relationships with that person.  In addition, the Nevada Gaming Commission
may require us to terminate the employment of any person who refuses to file
appropriate applications.  Determinations of suitability or of questions
pertaining to licensing are not subject to judicial review in Nevada.

     We are required to submit detailed financial and operating reports to the
Nevada Gaming Commission.  Substantially all material loans, leases, sales of
securities and similar financing transactions by us must be reported to, or
approved by, the Nevada Gaming Commission.

                                   -11-
     If it were determined that we violated the Nevada Act, our gaming licenses
and registrations with the Nevada Gaming Commission could be limited,
conditioned, suspended or revoked, subject to compliance with certain statutory
and regulatory procedures.  In addition, we and the persons involved could be
subject to substantial fines for each separate violation of the Nevada Act at
the discretion of the Nevada Commission.  Further, the Nevada Gaming Commission
could appoint a supervisor to operate our gaming properties and, under certain
circumstances, earnings generated during the supervisor's appointment (except
for the reasonable rental value of our gaming properties) could be forfeited to
the State of Nevada.  The limitation, conditioning or suspension of any gaming
license or the appointment of a supervisor could (and revocation of any gaming
license would) materially adversely affect our gaming operations.

     Any beneficial holder of our voting securities, regardless of the number
of shares owned, may be required to file an application, be investigated, and
have his suitability as a beneficial holder of our voting securities determined
if the Nevada Gaming Commission has reason to believe that such ownership would
otherwise be inconsistent with the declared policies of the State of Nevada.
The applicant must pay all costs of investigation incurred by the Nevada Gaming
Authorities in conducting any such investigation.

     The Nevada Gaming Act requires any person who acquires more than 5% of our
voting securities to report the acquisition to the Nevada Gaming Commission.
The Nevada Act requires that beneficial owners of more than 10% of our voting
securities apply to the Nevada Gaming Commission for a finding of suitability
within 30 days after the Chairman of the Nevada Gaming Control Board mails the
written notice requiring such filing.  Under certain circumstances, an
"institutional investor," as defined in the Nevada Act, which acquires more
than 10%, but not more than 15%, of our voting securities may apply to the
Nevada Gaming Commission for a waiver of such finding of suitability if the
institutional investor holds the voting securities for investment purposes
only.  An institutional investor is not deemed to hold voting securities for
investment purposes unless they were acquired and are held in the ordinary
course of business as an institutional investor and not for the purpose of
causing, directly or indirectly, the election of a majority of the members of
our board of directors, any change in our corporate charter, bylaws,
management, policies or operations, or any of our gaming affiliates, or any
other action that the Nevada Gaming Commission finds to be inconsistent with
holding our voting securities for investment purposes only.  Activities that
are not deemed to be inconsistent with holding voting securities for investment
purposes only include:

     - voting on all matters voted on by stockholders;
     - making financial and other inquiries of management of the type
       normally made by securities analysts for informational purposes and
       not to cause a change in its management, policies or operations; and
     - such other activities as the Nevada Gaming Commission may determine to
       be consistent with such investment intent.

     If the beneficial holder of voting securities who must be found suitable
is a corporation, partnership or trust, it must submit detailed business and
financial information including a list of beneficial owners.  The applicant is
required to pay all costs of investigation.




                                   -12-
     Any person who fails or refuses to apply for a finding of suitability or a
license within 30 days after being ordered to do so by the Nevada Gaming
Commission or the Chairman of the Nevada State Gaming Control Board, may be
found unsuitable.  The same restrictions apply to a record owner if the record
owner, after request, fails to identify the beneficial owner.  Any stockholder
found unsuitable and who holds, directly or indirectly, any beneficial
ownership of the common stock of a Registered Corporation beyond such period of
time as may be prescribed by the Nevada Gaming Commission may be guilty of a
criminal offense.  We are subject to disciplinary action if, after we receive
notice that a person is unsuitable to be a stockholder or to have any other
relationship with us, we:

     - pay that person any dividend or interest upon voting securities,
     - allow that person to exercise, directly or indirectly, any voting
       right conferred through securities held by that person,
     - pay remuneration in any form to that person for services rendered or
       otherwise, or
     - fail to pursue all lawful efforts to require such unsuitable person to
       relinquish his voting securities for cash at fair market value.

     The Nevada Gaming Commission may, in its discretion, require the holder of
any debt security of a Registered Corporation to file applications, be
investigated and be found suitable to own the debt security of a Registered
Corporation.  If the Nevada Gaming Commission determines that a person is
unsuitable to own such security, then pursuant to the Nevada Act, the
Registered Corporation can be sanctioned, including the loss of its approvals
if, without the prior approval of the Nevada Gaming Commission, it:

     - pays to the unsuitable person any dividend, interest, or any
       distribution;
     - recognizes any voting right by such unsuitable person in connection
       with such securities;
     - pays the unsuitable person remuneration in any form; or
     - makes any payment to the unsuitable person by way of principal,
       redemption, conversion, exchange, liquidation or similar transaction.

     We are required to maintain a current stock ledger in Nevada and the
Nevada Gaming Authorities may examine the ledger at any time.  If any
securities are held in trust by an agent or a nominee, the record holder may be
required to disclose the identity of the beneficial owner to the Nevada Gaming
Authorities.  A failure to make such disclosure may be grounds for finding the
record holder unsuitable.  We are also required to render maximum assistance in
determining the identity of the beneficial owner.  The Nevada Gaming Commission
has the power to require our stock certificates to bear a legend indicating
that the securities are subject to the Nevada Act.

     We may not make a public offering of our securities without the prior
approval of the Nevada Gaming Commission if the securities or proceeds
therefrom are intended to be used to construct, acquire or finance gaming
facilities in Nevada, or to retire or extend obligations incurred for purposes
of constructing, acquiring or financing gaming facilities.  Any approval, if
granted, does not constitute a finding, recommendation or approval by the
Nevada Gaming Commission or the Nevada Gaming Control Board as to the accuracy
or adequacy of the prospectus or the investment merits of the securities
offered.  Any representation to the contrary is unlawful.



                                   -13-
     Changes in our control through merger, consolidation, stock or asset
acquisitions, management or consulting agreements, or any act or conduct by a
person whereby that person obtains control (including foreclosure on the
pledged shares), may not occur without the prior approval of the Nevada Gaming
Commission.  Entities seeking to acquire control of a Registered Corporation
must satisfy the Nevada State Gaming Control Board and Nevada Gaming Commission
in a variety of stringent standards prior to assuming control of such
Registered Corporation.  The Nevada Gaming Commission may also require
controlling stockholders, officers, directors and other persons having a
material relationship or involvement with the entity proposing to acquire
control, to be investigated and licensed as part of the approval process
relating to the transaction.

     The Nevada legislature has declared that some corporate acquisitions
opposed by management, repurchases of voting securities and corporate defense
tactics affecting Nevada gaming licensees, and Registered Corporations that are
affiliated with those operations, may be injurious to stable and productive
corporate gaming.  The Nevada Gaming Commission has established a regulatory
scheme to ameliorate the potentially adverse effects of these business
practices upon Nevada's gaming industry and to further Nevada's policy to:

     - assure the financial stability of corporate gaming operators and their
       affiliates;
     - preserve the beneficial aspects of conducting business in the
       corporate form; and
     - promote a neutral environment for the orderly governance of corporate
       affairs.

     We are, in certain circumstances, required to receive approval from the
Nevada Gaming Commission before we can make exceptional repurchases of voting
securities above their current market price and before we can consummate a
corporate acquisition opposed by management.  The Nevada Act also requires
prior approval of a plan of recapitalization proposed by our board of directors
in response to a tender offer made directly to a Registered Corporation's
stockholders for the purposes of acquiring control of the Registered
Corporation.

     Licensee fees and taxes, computed in various ways depending on the type of
gaming or activity involved, are payable to the State of Nevada and to the
counties and cities in which the Nevada licensee's respective operations are
conducted.  Depending upon the particular fee or tax involved, these fees and
taxes are payable either monthly, quarterly or annually and are based upon
either:

     - a percentage of the gross revenues received;
     - the number of gaming devices operated; or
     - the number of table games operated.

     A casino entertainment tax is also paid by casino operations where
entertainment is furnished in connection with the selling of food or
refreshments.  Nevada licensees that hold a license as an operator of a slot
route, a manufacturer or a distributor also pay certain fees and taxes to the
State of Nevada.




                                   -14-
     Any person who is licensed, required to be licensed, registered, required
to be registered, or is under common control with such persons, referred to as
Licensees, and who is or proposes to become involved in a gaming venture
outside of Nevada is required to deposit with the Nevada State Gaming Control
Board, and thereafter maintain, a revolving fund in the amount of $10,000 to
pay the expenses of investigation by the Nevada State Gaming Control Board of
their participation in foreign gaming.  The revolving fund is subject to
increase or decrease in the discretion of the Nevada Gaming Commission.
Thereafter, Licensees are required to comply with certain reporting
requirements imposed by the Nevada Act.  Licensees are also subject to
disciplinary action by the Nevada Gaming Commission if they knowingly violate
any laws of the foreign jurisdiction pertaining to the foreign gaming
operation, fail to conduct the foreign gaming operation in accordance with the
standards of honesty and integrity required of Nevada gaming operations, engage
in activities that are harmful to the State of Nevada or its ability to collect
gaming taxes and fees, or employ a person in the foreign operation who has been
denied a license or finding of suitability in Nevada on the ground of personal
unsuitability.


EMPLOYEES

     As of March 8, 2004, we had approximately 1,792 employees.  None of our
employees are covered by collective bargaining agreements.  We believe that our
relationship with our employees is good.


ITEM 2. PROPERTIES

     Our properties consist of:

     (a)     The approximately 13-acre site in Reno, Nevada on which the
Atlantis is situated, including the hotel towers, casino, restaurant facilities
and surrounding parking is, in part or in whole, held subject to a trust deed
encumbrance in favor of financial institutions totaling approximately $46.4
million as of March 8, 2004.

     (b)     An approximately 16-acre site adjacent to the Atlantis and
connected to the Atlantis by the Sky Terrace, which includes approximately 11
acres of paved parking used for customer, employee and valet parking.  The
remainder of the site is undeveloped.  This site is compliant with all casino
zoning requirements and is suitable and available for future expansion of the
Atlantis facilities, parking, or complimentary resort casino and/or
entertainment amenities.  We have not determined the ultimate use of this site.
These 16 acres are also held subject to the trust deed encumbrance described in
ITEM 2 (a) above.

     (c)     A 37,368 square-foot section of the shopping center next door to
the Atlantis to be used for a new driveway entrance.

ITEM 3. LEGAL PROCEEDINGS

     On April 26, 1994, and May 10, 1994, complaints in purported class action
lawsuits (William Poulos v. Caesars World, Inc. et al., Case No.
94-478-Civ-Orl-22, and William H. Ahern v. Caesars World, Inc. et al., Case
No. 94-532-Civ-Orl-22, respectively) were filed in the United States
District Court for the Middle District of Florida (the "Florida Complaints")

                                   -15-
and were subsequently transferred to the United States District Court for
the District of Nevada, Southern Division (the "Nevada District Court").  On
September 26, 1995, a complaint in a purported class action lawsuit (Larry
Schrier v. Caesars World, Inc. et al., Case No. 95-923-LDG (RJJ)) was filed
in Nevada District Court (along with the Florida Complaints, the
"Complaints").  The Complaints allege that manufacturers, distributors and
casino operators of video poker and electronic slot machines, including the
Company, have engaged in a course of conduct intended to induce persons to
play such games based on a false belief concerning how the gaming machines
operate, as well as the extent to which there is an opportunity to win on a
given play.  The Complaints charge Defendants with violations of the
Racketeer Influenced and Corrupt Organizations Act, as well as claims of
common law fraud, unjust enrichment and negligent misrepresentation, and
seek damages in excess of $1 billion without any substantiation of that
amount.  The Nevada District Court consolidated the actions (and one other
action styled William Poulos v. American Family Cruise Line, NV et al., Case
No. CV -S-95-936-LDG (RLH), in which the Company is not a named defendant).
The Plaintiffs moved to certify two classes of plaintiffs, essentially
encompassing all persons in the U.S. who have played one or more of the
defendants' video poker or electronic slot machines in the prior ten years.
That motion was opposed by the defendants and subsequently, the court ruled in
favor of the defendants and denied the class certification motion.  The
plaintiffs have appealed from that ruling.  The appeal has been fully briefed,
an oral hearing took place on January 15, 2004 and the parties are awaiting the
response of the Ninth Circuit Court of Appeals.  Management believes that
denial of class certification will be upheld upon appeal, and further that the
substantive allegations in the Complaints are without merit.  Management
intends to defend vigorously against the allegations.

     We commenced certain litigation in April 2003 against the City of Reno and
other interested parties petitioning the Second Judicial District Court of
Nevada to (i) review the City of Reno's decision to enter into an agreement for
the acquisition and relocation of the Old Reno Casino in downtown Reno, (ii)
condemn the real property occupied by the Old Reno Casino, (iii) declare the
agreement null and void and (iv) preclude the City of Reno from condemning the
real property. The litigation has been settled by all parties.  In February
2004, the parties entered into a settlement agreement, and the District Court
dismissed the case in February 2004.  The terms of the confidential settlement
agreement included a restriction from relocating the former Old Reno Casino
gaming license within an identified geographic area near the Atlantis Casino
Resort in Reno.

     We are party to other claims that arise in the normal course of business.
Management believes that the outcomes of such claims will not have a material
adverse impact on our financial condition or results of operations.


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

     There were no matters submitted to a vote of our security holders during
the fourth quarter of 2003.







                                   -16-
                                   PART II

ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND
ISSUER PURCHASES OF EQUITY SECURITIES

     (a)     Our common stock trades on The Nasdaq Stock Market(SM) under the
symbol MCRI.  The following table sets forth the high and low bid prices of our
common stock, as reported by The Nasdaq Stock Market(SM), during the periods
indicated.

                                    2003              2002
                              ----------------   ----------------
                               High      Low      High    Low
                              -------  -------   -------  -------
     First quarter........... $13.450  $ 7.710   $11.700  $ 7.400
     Second quarter.......... $ 9.540  $ 7.490   $15.610  $ 9.000
     Third quarter........... $11.310  $ 8.900   $14.780  $10.360
     Fourth quarter.......... $11.530  $ 9.380   $14.430  $12.010

     As of March 8, 2004, there were approximately 102 holders of record of our
common stock, and approximately 788 beneficial stockholders.

     We have never paid dividends.  We presently intend to retain earnings and
use free cash to finance our operating activities, for maintenance capital
expenditures and to reduce debt.  We do not anticipate declaring cash dividends
in the foreseeable future.  Our bank loan agreement also contains provisions
that require the achievement of certain financial ratios before we can pay or
declare dividends to our stockholders.  See Item 8, "FINANCIAL STATEMENTS,
Notes to Consolidated Financial Statements, Note 5."

     Securities Authorized for Issuance Under Equity Compensation Plans.  See
Part III, Item 12 - Security Ownership of Certain Beneficial Owners and
Management.

     (b)     Not applicable.

     (c)     On March 10, 2003, we announced a plan to repurchase up to 250,000
shares, or 2.6%, of our common stock in open market transactions.  The
repurchases may be made from time to time depending on market conditions and
availability of funds.  The repurchases are to be made with our cash (see our
Current Report filed on Form 8-K dated March 10, 2003).  During 2003, we
purchased 180,000 shares of our common stock pursuant to this stock repurchase
program.  Our bank loan agreement requires achievement of certain financial
ratios before we can repurchase our common stock.














                                   -17-
ITEM 6. SELECTED FINANCIAL DATA

<TABLE>
<CAPTION>
                                                       Years ended December 31,
                                         ----------------------------------------------------
(In thousands except per share amounts)     2003      2002       2001       2000       1999
- ---------------------------------------------------------------------------------------------
<S>                                       <C>        <C>        <C>        <C>        <C>
OPERATING RESULTS
Casino revenues                           $74,956    $70,773    $64,908    $59,373    $48,345
Other revenues                             59,741     57,641     54,461     51,713     43,227
                                          -------    -------    -------    -------    -------
Gross revenues                            134,697    128,414    119,369    111,086     91,572
Promotional allowances                    (18,746)   (17,376)   (14,853)   (14,170)   (12,707)
                                          -------    -------    -------    -------    -------
Net revenues                              115,951    111,038    104,516     96,916     78,866
Income from operations                     17,209<F1> 17,196<F2> 14,132<F3>  9,550<F4>  3,798<F5>
Income (loss) before income
  tax                                      14,572     13,033      6,888      1,386       (945)
Net income (loss)                         $ 9,606    $ 8,603    $ 4,602    $   960    $  (585)
                                          =======    =======    ========   =======    =======
- ----------------------------------------------------------------------------------------------
INCOME (LOSS) PER SHARE OF COMMON STOCK
Net income (loss)
     Basic                                $  1.02    $  0.91    $  0.49    $  0.10    $ (0.06)
     Diluted                              $  1.02    $  0.90    $  0.49    $  0.10    $ (0.06)
Weighted average number of common shares
  and potential common shares outstanding
     Basic                                  9,379      9,458      9,436      9,436      9,436
     Diluted                                9,412      9,521      9,480      9,477      9,436
- ----------------------------------------------------------------------------------------------
OTHER DATA
Depreciation and amortization             $10,797    $10,320    $10,085    $10,101    $ 7,738
Interest expense, net                     $ 2,638    $ 3,934    $ 7,243    $ 8,165    $ 4,742
Capital expenditures <F6>                 $ 8,406    $ 6,534    $ 4,488    $ 3,866    $46,132
- ----------------------------------------------------------------------------------------------
BALANCE SHEET DATA
Total assets                             $115,877   $117,480   $121,064   $126,391   $131,654
Current maturities of long-term debt     $  6,060   $  8,279   $  8,106   $  7,538   $  7,334
Long-term debt, less current maturities  $ 41,125   $ 52,000   $ 64,237   $ 73,481   $ 82,236
Stockholders' equity <F7>                $ 48,723   $ 40,301   $ 31,430   $ 26,829   $ 25,869

<FN>
<F1> 2003 includes a $133 thousand gain on disposal of fixed assets.
<F2> 2002 includes a $35 thousand gain on disposal of fixed assets.
<F3> 2001 includes a $25 thousand gain on disposal of fixed assets.
<F4> 2000 includes a $139 thousand gain on disposal of fixed assets.
<F5> 1999 includes a $184 thousand loss on disposal of fixed assets.
<F6> Includes amounts financed with debt or capitalized lease obligations.
<F7> We paid no dividends during the five year period ended December 31, 2003.
</FN>
</TABLE>















                                   -18-
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
        AND RESULTS OF OPERATIONS

     Monarch Casino & Resort, Inc., through its wholly-owned subsidiary, Golden
Road Motor Inn, Inc. ("Golden Road"), owns and operates the tropically-themed
Atlantis Casino Resort, a hotel/casino facility in Reno, Nevada (the
"Atlantis"). Monarch was incorporated in 1993 under Nevada law for the purpose
of acquiring all of the stock of Golden Road.  The principal asset of Monarch
is the stock of Golden Road, which holds all of the assets of the Atlantis.

     Our sole operating asset, the Atlantis, is a hotel/casino resort located
in Reno, Nevada.  Our business strategy is to maximize the Atlantis' revenues,
operating income and cash flow primarily through our casino, our food and
beverage operations, our hotel operations and other revenue sources.  We derive
our revenues by appealing to middle to upper-middle income Reno residents,
emphasizing slot machine play in our casino.  We capitalize on the Atlantis'
location, offer service, value and an appealing theme to our guests, focus on
repeat customers, and utilize hands-on management of operations, costs and
efficiencies.

     Unless otherwise indicated, "Monarch," "Company," "we," "our" and "us"
refer to Monarch Casino & Resort, Inc. and its Golden Road subsidiary.


OPERATING RESULTS SUMMARY

     During 2003, we exceeded the following  previously reported results:
casino revenues, hotel revenues, net revenues, net income and earnings per
share.

<TABLE>
<CAPTION>

                                                                           Percentage
                                                                      Increase / (Decrease)
                                                                      ---------------------
                                           2003     2002     2001     03 vs 02     02 vs 01
                                          ------   ------   ------   ----------   ----------
<C>                                       <C>      <C>      <C>      <C>          <C>
(In millions, except earnings per share)

Casino revenues.........................  $ 75.0   $ 70.8   $ 64.9      5.9%         9.0%
Food and beverage revenues..............    34.5     33.6     32.0      2.5%         5.3%
Hotel revenues..........................    21.2     20.3     19.0      4.6%         6.7%
Other revenues..........................     4.0      3.7      3.5      8.5%         6.1%

Net revenues............................   116.0    111.0    104.5      4.4%         6.2%
Income from operations..................    17.2     17.2     14.1      0.1%        21.7%

Net income..............................     9.6      8.6      4.6     11.7%        87.0%

Earnings per share - diluted............    1.02     0.90     0.49     13.3%        83.7%

Operating margin........................   14.8%    15.5%    13.5%     (0.7) pts     2.0 pts
</TABLE>


     Net revenues in 2003 increased 4.4% over 2002 due to increases in all our
revenue segments including casino, food and beverage, hotel and other revenues,
which increased 5.9%, 2.5%, 4.6% and 8.5%, respectively, over 2002.



                                   -19-
We attribute our improved results to our experienced management team, the
superb location of the Atlantis in the more affluent and growing south part of
Reno, the quality of our product that drives repeat business, our focus on
marketing primarily to Reno-area residents, and our steadily declining interest
expense resulting from lower prevailing interest rates and overall reductions
in our outstanding debt.

     In 2003, our income from operations remained relatively flat over 2002,
while our net income and earnings per diluted share increased 11.7% and 13.3%,
respectively.

     Some significant items that affected our 2003 results are listed below.
These items are discussed in greater detail elsewhere in our discussion of
operating results and in the Liquidity and Capital Resources section.

     - Selling, general and administrative ("SG&A") expenses in 2003 increased
       7.3% over 2002 and included costs related to the recently settled
       litigation against the City of Reno and other third parties (see Part I
       - Item 3. Legal Proceedings).

     - An increased gaming tax imposed by the State of Nevada took effect on
       August 1, 2003, and added costs that we did not incur in 2002.

     - Total operating expenses for 2003 increased 5.2% over 2002 while net
       revenues increased only 4.4% over the same period; the stronger
       increase in operating expenses was mainly due to increased SG&A and
       caused income from operations to remain relatively unchanged in 2003 as
       compared to 2002.

     - Interest and stockholder guarantee fee expenses decreased 33.0%
       compared to 2002 due to lower prevailing interest rates combined with
       continuously decreasing outstanding debt.

CAPITAL SPENDING AND DEVELOPMENT

     We seek to continuously upgrade and maintain the Atlantis in order to
present a fresh product to our guests and to maintain high quality standards.

     Capital expenditures at the Atlantis totaled approximately $8.4 million,
$6.5 million, and $4.5 million in 2003, 2002, and 2001, respectively.  Capital
expenditures in 2003 consisted primarily of the May opening of the Sushi Bar,
the construction and November opening of the Salon at Atlantis, November
commencement of the second hotel tower room upgrades and renovation, the
acquisition of a new player tracking and slot accounting system to be installed
commencing January 2004, continued slot machine conversion to the ticket-in,
ticket-out coinless slot system, and continued acquisition of and upgrades to
gaming equipment.  In 2002, capital expenditures consisted primarily of
renovations to Atlantis' first hotel tower, renovations and upgrades to the
hotel front desk and VIP services area, a total renovation of the Cafe
Alfresco, and continued acquisitions of and upgrades to gaming equipment. In
2001, capital expenditures consisted primarily of renovations of hotel room
suites in the Atlantis' third tower, continued acquisitions of and upgrades to
slot machines, computer information system equipment and various other
furniture, fixtures and equipment to upgrade existing facilities.

     In 2004, we are planning construction of a new driveway that will be
shared between the Atlantis and the adjacent Sierra Marketplace Shopping Center
that is owned and controlled by affiliates of our controlling

                                   -20-
stockholders (the "Shopping Center").  A new traffic signal will be erected at
mid-block on South Virginia Street, serving the new driveway.  As part of this
project, we have leased a 37,368 square-foot corner section of the Shopping
Center for a minimum lease term of 15 years at a monthly rent of $25,000,
subject to increase every 60 months based on the Consumer Price Index.  We are
also to use part of the common area of the Shopping Center and will pay our
proportional share of the common area expense of the Shopping Center. We have
the option to renew the lease for 3 five-year terms, and at the end of the
extension period, we have the option to purchase the leased section of the
Shopping Center at a price to be determined based on a MAI Appraisal.  The
leased space will be used by us for pedestrian and vehicle access to the
Atlantis, and we will have use of a portion of the parking spaces at the
Shopping Center.  We are responsible for two thirds of the construction costs
of the project, up to a maximum of $1.2 million.  We anticipate this project to
be completed in Summer of 2004 (see Part III - ITEM 13. CERTAIN RELATIONSHIPS
AND RELATED TRANSACTIONS incorporated herein by reference to the Company's
Proxy Statement to be filed with the Securities and Exchange Commission in
connection with the Annual Meeting of Stockholders to be held on May 26, 2004).

     Future cash needed to finance capital spending is expected to be made
available from operating cash flow, the Credit Facility (see Item 8, "FINANCIAL
STATEMENTS, Notes to Consolidated Financial Statements, Note 5.") and, if
necessary, additional borrowings.

STATEMENT ON FORWARD-LOOKING INFORMATION

     Certain information included herein contains statements that may be
considered forward-looking statements within the meaning of Section 27A of the
Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934,
such as statements relating to anticipated expenses, capital spending and
financing sources.  Such forward-looking information involves important risks
and uncertainties that could significantly affect anticipated results in the
future and, accordingly, such results may differ from those expressed in any
forward-looking statements made herein.  These risks and uncertainties include,
but are not limited to, those relating to competitive industry conditions,
expansion of Indian casinos in California, Reno-area tourism conditions,
dependence on existing management, leverage and debt service (including
sensitivity to fluctuations in interest rates), the regulation of the gaming
industry (including actions affecting licensing), completion of capital
expenditure projects, outcome of litigation, domestic or global economic
conditions including those affected by the events of September 11, 2001 and the
ongoing conflict in Iraq, and changes in federal or state tax laws or the
administration of such laws.

CRITICAL ACCOUNTING POLICIES AND ESTIMATES

     We prepare our consolidated financial statements in conformity with
principles generally accepted in the United States.  Certain of our policies,
including the estimated lives assigned to our assets, the determination of bad
debt, self insurance reserves, credit risk, and the calculation of income tax
liabilities, require that we apply significant judgment in defining the
appropriate assumptions for calculating financial estimates.  By their nature,
these judgments are subject to an inherent degree of uncertainty.  Our
judgments are based on historical experience, terms of existing contracts,
observations of trends in the industry, information provided by customers and
information available from other outside sources, as appropriate.  There can be
no assurance that actual results will not differ from our estimates.  To

                                   -21-
provide an understanding of the methodologies applied, our significant
accounting policies are discussed where appropriate in this discussion and
analysis and in the Notes to Consolidated Financial Statements.

     The consolidated financial statements include the accounts of Monarch and
Golden Road.  Intercompany balances and transactions are eliminated.

Self-insurance Reserves

     The Company reviews self-insurance reserves at least quarterly. The amount
of reserve is determined by reviewing the actual expenditures for the previous
twelve-month period and reviewing reports prepared by the third party plan
administrator for any significant unpaid claims.  The reserve is accrued at an
amount that approximates amounts needed to pay both reported and unreported
claims as of the balance sheet date, which management believes are adequate.

Inventories

     Inventories, consisting primarily of food, beverages, and retail
merchandise, are stated at the lower of cost or market.  Cost is determined on
a first-in, first-out basis.

Advertising Costs

     All advertising costs are expensed as incurred.

Property and Equipment

     Property and equipment are stated at cost, less accumulated depreciation
and amortization.  Since inception, property and equipment have been
depreciated principally on a straight line basis over the estimated service
lives as follows:

     Land improvements ........... 15-40 years
     Buildings ................... 30-40 years
     Building improvements ....... 15-40 years
     Furniture ...................  5-10 years
     Equipment ...................  5-20 years

     Expenditures for maintenance and repairs are expensed as incurred;
expenditures for renewals and improvements are generally capitalized.

     We periodically evaluate our fixed and other long-term assets for
impairment to ensure that they are appropriately valued.

Casino Revenues

     Casino revenues represent the net win from gaming activity, which is the
difference between wins and losses.  Additionally, net win is reduced by a
provision for anticipated payouts on slot participation fees, progressive
jackpots and any pre-arranged marker discounts.

Promotional Allowances

     The retail value of hotel, food and beverage services provided to
customers without charge is included in gross revenue and deducted as
promotional allowances.



                                   -22-
Income Taxes

     Income taxes are recorded in accordance with the liability method
specified by Statement of Financial Accounting Standards ("SFAS") No. 109
"Accounting for Income Taxes."  Under the asset and liability approach for
financial accounting and reporting for income taxes, the following basic
principles are applied in accounting for income taxes at the date of the
financial statements: (a) a current liability or asset is recognized for the
estimated taxes payable or refundable on taxes for the current year; (b) a
deferred income tax liability or asset is recognized for the estimated future
tax effects attributable to temporary differences and carryforwards; (c) the
measurement of current and deferred tax liabilities and assets is based on the
provisions of the enacted tax law; the effects of future changes in tax laws or
rates are not anticipated; and (d) the measurement of deferred income taxes is
reduced, if necessary, by the amount of any tax benefits that, based upon
available evidence, are not expected to be realized.

Concentrations of Credit Risk

     Financial instruments which potentially subject us to concentrations of
credit risk consist principally of bank deposits and trade receivables.  We
maintain our cash in bank deposit accounts which, at times, may exceed
federally insured limits.  We have not experienced any losses in such accounts.
Concentrations of credit risk with respect to trade receivables are limited due
to the large number of customers comprising our customer base.  We believe we
are not exposed to any significant credit risk on cash and accounts receivable.

Stockholder Guarantee Fees

     All of our bank debt was personally guaranteed by our three largest
stockholders since December 29, 1997. Effective January 1, 2001, until February
20, 2004, we compensated the guarantors at the rate of 2% per annum of the
quarterly average outstanding bank debt amount.  For the twelve months ended
December 31, 2003, and 2002, we recorded interest expense in the amounts of
approximately $1.0 million and $1.3 million, respectively, for these guarantee
fees.  The individuals who guaranteed our bank debt were not required to
guarantee the New Credit Facility (as defined below).  Therefore, we will no
longer incur such guarantee fee expenses.

DISCUSSION OF RESULTS OF OPERATIONS

2003 Compared with 2002

     For the year ended December 31, 2003, we earned net income of $9.6
million, or $1.02 per diluted share, on net revenues of $116.0 million,
compared to a net income of $8.6 million, or $0.90 per diluted share, on net
revenues of $111.0 million for the year ended December 31, 2002.  Our net
revenues for 2003 are the highest in our Company's history. Our income from
operations totaled $17.2 million for 2003, relatively unchanged when compared
to $17.2 million for 2002. Net income for the year 2003 constitutes a record
high for our Company. Interest and stockholder guarantee fee expenses declined
33.0% from 2002, and was a major factor in the increase in net income. We
believe the Atlantis continued to benefit in 2003 from the rapid growth
occurring in the residential and commercial areas south of the Atlantis in
Reno, and from the increasing popularity of the Atlantis with visitors to the
Reno area.

                                   -23-
     Casino revenues totaled $75.0 million in 2003, up 5.9% from $70.8 million
in 2002, driven by increases in slot, Keno and poker game win.  Revenue from
slot and video poker machines ("slot machines") increased approximately 10.7%
in 2003 compared to 2002. We believe that increased slot machine play was due
to more effective marketing and continued upgrade of facilities and equipment
in 2003 and 2002.  Despite an approximate 6.5% increase in table game drop,
table game win decreased approximately 11.3% in 2003 compared to 2002 due to
higher than normal winnings by our guests during 2003.  Keno and poker room
revenues combined increased approximately 16.7% in 2003 over 2002. Keno write
increased approximately 4.7% in 2003 compared to 2002 while poker revenue
increased approximately 19.9% compared to 2002 due to more effective marketing.
Casino operating expenses were 39.1% of casino revenues in 2003, unchanged when
compared to 2002.

     Food and beverage revenues increased 2.5% to $34.5 million in 2003 from
$33.6 million in 2002, primarily due to a 0.8% increase in average revenue per
cover combined with a 3.1% increase in the number of covers served.  Food and
beverage operating expenses decreased to 51.3% of food and beverage revenues in
2003 compared to 52.3% in 2002, due to increased revenue per cover and more
efficient operations which were partially offset by a slight increase in cost
of sales.

     Hotel revenues totaled $21.2 million in 2003, an increase of 4.6% from
$20.3 million in 2002. The increase reflects an increase in average daily
occupied room rate partially offset by a slight decrease in occupancy rate
during the twelve month period of 2003 compared to the same period in 2002.
Year 2003 revenues also include a $3.00 per occupied room energy surcharge that
was also assessed during 2002.  The Atlantis' average daily room rate
("ADR") was $57.82 in 2003, compared to $55.29 in 2002.  The average occupancy
rate at the Atlantis was 92.3% in 2003 compared to 92.9% in 2002.  Hotel
operating expenses increased slightly to 32.9% of hotel revenues in 2003,
compared to 32.2% in 2002.  This increase in operating expenses as a percentage
of hotel revenues resulted primarily from increased employee healthcare costs.

     Promotional allowances increased to $18.7 million, or 13.9% of gross
revenues, in 2003 compared to $17.4 million, or 13.5% of gross revenues, in
2002.  The increase is attributable to expanded efforts to increase revenues.

     Other revenues increased approximately 8.5% in 2003 to $4.0 million from
$3.7 million in 2002, reflecting an increase in sales from both retail gift
shops and a slight increase in revenue from the entertainment fun center.
Other expenses were approximately 31.7% of other revenues in 2003, an
improvement from 34.0% in 2002, primarily due to continued operating
efficiencies of operating the two gift shops and the entertainment fun center.

     Selling, general and administrative ("SG&A") expenses totaled $32.7
million, or 28.2% of net revenues, in 2003 compared to $30.4 million, or 27.4%
of net revenues, in 2002.  The increase in these expenses as a percentage of
revenues reflects increased energy costs, increased marketing and promotional
costs and increased employee healthcare costs. Selling, general and
administrative expenses for 2003 also included costs incurred as a result of
the recently settled litigation against the City of Reno and other third
parties (see Part I - Item 3. "Legal Proceedings").  These litigation costs
were not incurred in 2002.



                                   -24-
     Depreciation and amortization expense was $10.8 million in 2003, an
increase of 4.6% from $10.3 million in 2002.

     Interest and stockholder guarantee fee expenses for 2003 totaled
approximately $2.6 million, down 33.0% from $3.9 million in 2002, due to
reduced interest rates and lower debt outstanding. Guarantee fees paid to our
three principal stockholders totaled approximately $1.0 million in 2003 and
$1.3 million in 2002.  The individuals who guaranteed the Company's Original
Credit Facility (defined in "The Credit Facility" below) did not provide such
guarantees for the New Credit Facility (also defined in "The Credit Facility"
below) and, therefore, the Company will no longer be required to pay such fees
in the future.  At December 31, 2003, all of our interest-bearing debt was
related to a reducing revolving credit facility with floating interest rates
tied to a base rate approximately equal to the prime rate or LIBOR (at our
option) plus a margin which fluctuates according to our ratio of funded debt to
Earnings Before Interest, Taxes, Depreciation and Amortization ("EBITDA")(See
Item 8, "FINANCIAL STATEMENTS, Notes to Consolidated Financial Statements, Note
5.").  An increase in interest rates could have a material effect on our
financial results.

2002 Compared with 2001

     For the year ended December 31, 2002, we earned net income of $8.6
million, or $0.90 per share, on net revenues of $111.0 million, compared to a
net income of $4.6 million, or $0.49 per share, on net revenues of $104.5
million for the year ended December 31, 2001.  Our net revenues for 2002
constitute record highs for any of our prior comparable twelve month periods.
Our income from operations totaled $17.2 million for 2002 compared to $14.1
million for 2001. Net income for the year 2002 constitute record highs for any
of our prior comparable twelve month periods, due to more efficient operations
and reduced interest expense. Forty seven percent of our increase in net
revenue flowed to operating income. This combined with a 45.7% reduction in
interest expense over 2001 were major factors in the increase in net income. We
believe the Atlantis continued to benefit in 2002 from the rapid growth
occurring in the residential and industrial communities south of the Atlantis
in Reno, and from the increasing popularity of the Atlantis with visitors to
the Reno area.

     Casino revenues totaled $70.8 million in 2002, up 9.0% from $64.9 million
in 2001, driven by increases in slot, table games, Keno and poker game win.
Revenue from slot and video poker machines ("slot machines") increased
approximately 5.6% in 2002 compared to 2001 due to increased play as a result
of more effective marketing and continued upgrade of facilities and equipment
in 2001 and 2002.  Table game win increased approximately 23.5% in 2002
compared to 2001 due to an approximate 5.9% increase in table game drop and a
higher win percentage in year 2002 compared to year 2001.  Keno and poker room
revenues combined increased approximately 1.3% in 2002 over 2001 primarily due
to an approximate 1.6% increase in poker revenue. Keno write increased
approximately 6.4% in 2002 compared to 2001 due to more effective marketing.
Casino operating expenses were 39.1% of casino revenues in 2002, compared to
40.1% in 2001.  The decrease was due to continued efficiency of operations and
a higher table game win percentage in year 2002.






                                   -25-
     Food and beverage revenues increased in 2002, up 5.3% to $33.6 million
from $32.0 million in 2001, primarily due to a 3.9% increase in average revenue
per cover combined with a 2.1% increase in the number of covers served.  Food
and beverage operating expenses decreased to 52.3% of food and beverage
revenues in 2002 compared to 56.9% in 2001, due to increased revenue per cover,
lower cost of sales and more efficient operations.

     Hotel revenues totaled $20.3 million in 2002, an increase of 6.7% from
$19.0 million in 2001. The increase reflects an increase in average daily
occupied room rate along with an increase in occupancy rate during the twelve
month period of 2002 compared to the same period in 2001. Year 2002 revenues
also include a $3.00 per occupied room energy surcharge that was also assessed
during the period April 2001 through December 2001.  The Atlantis' average
daily room rate ("ADR") was $55.29 in 2002, compared to $53.48 in 2001.  The
average occupancy rate at the Atlantis was 92.9% in 2002 compared to 91.1% in
2001.  Hotel operating expenses decreased to 32.2% of hotel revenues in 2002,
compared to 37.5% in 2001.  This decrease in operating expenses as a percentage
of hotel revenues resulted from a higher ADR, a decrease in bad debt expense
and more efficient operations.

     Promotional allowances increased to $17.4 million, or 13.5% of gross
revenues, in 2002 compared to $14.9 million, or 12.4% of gross revenues, in
2001.  The increase is attributable to expanded efforts to increase revenues.

     Other revenues increased approximately 6.1% in 2002 to $3.7 million from
$3.5 million in 2001, reflecting an increase in sales from the entertainment
fun center and the logo gift shop.  Other expenses were approximately 34.0% of
other revenues in 2002, a decrease from 37.4% in 2001, primarily due to
continued operating efficiencies of operating the two gift shops and the
entertainment fun center.

     Selling, general and administrative ("SG&A") expenses totaled $30.4
million, or 27.4% of net revenues, in 2002 compared to $27.7 million, or 26.5%
of net revenues, in 2001.  The increase in these expenses as a percentage of
revenues reflects increased energy costs and increased marketing and
promotional costs.

     Depreciation and amortization expense was $10.3 million in 2002, up
slightly when compared to $10.1 million in 2001.

     Interest expense for 2002 totaled $3.9 million, down 45.7% from $7.2
million in 2001, due to reduced interest rates and lower debt outstanding.
Interest expense for 2002 and 2001 included guarantee fees paid to our three
principal stockholders. These guarantee expenses totaled approximately $1.3
million in 2002 compared to $1.5 million in 2001. At December 31, 2002, all of
our interest-bearing debt was related to a reducing revolving credit facility
with floating interest rates tied to a base rate approximately equal to the
prime rate or LIBOR (at our option) plus a margin which fluctuates according
to our ratio of funded debt to Earnings Before Interest, Taxes, Depreciation
and Amortization ("EBITDA")(See Item 8, "FINANCIAL STATEMENTS, Notes to
Consolidated Financial Statements, Note 5.").  An increase in interest rates
could have a material effect on our financial results.

     In 2002, we also incurred approximately $228 thousand in non-recurring
expenses associated with a secondary stock offering by certain principal
stockholders.  These expenses included legal, accounting, printing and road
show charges.


                                   -26-
LIQUIDITY AND CAPITAL RESOURCES

     We have historically funded our daily hotel and casino activities with net
cash provided by operating activities.  For the years 2003, 2002, and 2001, net
cash provided by operating activities totaled $22.4 million, $20.0 million, and
$14.7 million, respectively.  During each of the three years, net cash provided
by operating activities was sufficient to fund our day-to-day operating
expenses.

     Net cash used in investing activities, which consisted of acquisitions of
property and equipment, totaled $7.8 million, $4.9 million, and $3.2 million in
2003, 2002, and 2001, respectively.  Total capital expenditures, including
amounts financed, were $8.4 million, $6.5 million, and $4.5 million in 2003,
2002, and 2001, respectively.

     Net cash used in financing activities totaled $14.8 million in 2003, with
the funds being used primarily to reduce long-term debt.  Net cash used in
financing activities totaled $13.5 million in 2002 and $9.9 million in 2001.

COMMITMENTS AND CONTINGENCIES

     Our contractual cash obligations as of December 31, 2003, after giving
effect to the execution of the New Credit Facility (as defined below), over the
next five years are as follows:

<TABLE>
<CAPTION>
                                             Payments Due by Period
                              --------------------------------------------------
<S>                           <C>          <C>          <C>          <C>
Contractual Cash                           Less than       1 to 3       4 to 5
Obligations                      Total       1 year        years        years
                              --------------------------------------------------
Long-Term Debt                $47,184,591  $ 6,059,591  $19,500,000  $21,625,000
Operating Leases(1)             3,476,892    1,546,261    1,190,631      740,000
Purchase Obligations(2)         4,700,000    4,700,000           -            -
                              -----------  -----------  -----------  -----------
Total Contractual Cash
Obligations                   $53,361,483  $12,305,852  $20,690,631  $22,365,000

(1) Operating leases include an up-to $1.2 million one-time construction cost in 2004 representing
our portion of the new driveway, and approximately $370,000 per year in lease and common expense
payments to the shopping center adjacent to the Atlantis (see Capital Spending and Development).

(2) Our open purchase order commitments total approximately $4.7 million.  Of the total purchase
order commitments, approximately $1.7 million are cancelable by the Company upon providing a 30-
day notice.
</TABLE>

     On March 10, 2003, we announced a plan to repurchase up to 250,000 shares,
or 2.6%, of our common stock in open market transactions.  The repurchases may
be made from time to time depending on market conditions and availability of
funds.  The repurchases are to be made with our cash (see our Current Report
filed on Form 8-K dated March 10, 2003).  During 2003, we purchased 180,000
shares of our common stock pursuant to this stock repurchase program.  The New
Credit Facility (as defined below) requires achievement of certain financial
ratios before we can repurchase our common stock.

     We commenced certain litigation in April 2003 against the City of Reno and
other interested parties petitioning the Second Judicial District Court of
Nevada to (i) review the City of Reno's decision to enter into an agreement for
the acquisition and relocation of the Old Reno Casino in downtown Reno,

                                   -27-
(ii) condemn the real property occupied by the Old Reno Casino, (iii) declare
the agreement null and void and (iv) preclude the City of Reno from condemning
the real property. This litigation has been settled by all parties.  In
February 2004, the parties entered into a settlement agreement, and the
District Court dismissed the case in February 2004.  The terms of the
confidential settlement agreement included a restriction from relocating the
former Old Reno Casino gaming license within an identified geographic area near
the Atlantis Casino Resort in Reno.

     We believe that our existing cash balances, cash flow from operations,
equipment financing, and refinancing sources for our debt obligations will
provide us with sufficient resources to fund our operations, meet our debt
obligations, and fulfill our capital expenditure requirements; however, our
operations are subject to financial, economic, competitive, regulatory, and
other factors, many of which are beyond our control.  If we are unable to
generate sufficient cash flow, we could be required to adopt one or more
alternatives, such as reducing, delaying or eliminating planned capital
expenditures, selling assets, restructuring debt or obtaining additional equity
capital.

THE CREDIT FACILITY  Until February 20, 2004, we had a reducing revolving term
loan credit facility with a consortium of banks that originally was in the
amount of $80 million but that had been reduced to $46 million at payoff (the
"Original Credit Facility").

     On February 20, 2004, the Original Credit Facility was refinanced (the
"New Credit Facility") for $50 million, which includes a $46 million payoff for
the unpaid balance of the Original Credit Facility.  The amount of the New
Credit Facility may be increased by up to $30 million on a one-time basis and
if requested by us before the second anniversary of the closing date, as
defined.  At our option, borrowings under the New Credit Facility will accrue
interest at a rate designated by the agent bank at its base rate (the "Base
Rate") or at the London Interbank Offered Rate ("LIBOR") for one, two, three or
six month periods.  The rate of interest paid by us will include a margin added
to either the Base Rate or to LIBOR that is tied to our ratio of funded debt to
EBITDA (the "Leverage Ratio").  Depending on our Leverage Ratio, this margin
can vary between 0.25 percent and 1.25 percent above the Base Rate, and between
1.50 percent and 2.50 percent above LIBOR (under the Original Credit Facility,
this margin varied between 0.00 percent and 2.00 percent above the
Base Rate, and between 1.50 percent and 3.50 percent above LIBOR).  At December
31, 2003, the applicable margin was the Base Rate plus 0.0%, and the applicable
LIBOR margin was LIBOR plus 1.5%. At December 31, 2003, the Base Rate was 4.00%
and the LIBOR rate was 1.12%. At December 31, 2003, the Company had $1.0
million in Base Rate loans outstanding and had one LIBOR loan outstanding
totaling $46.0 million, for a total obligation of $47.0 million.

     We may utilize proceeds from the New Credit Facility for working capital
needs and general corporate purposes relating to the Atlantis and for ongoing
capital expenditure requirements at the Atlantis.

      The New Credit Facility is secured by liens on substantially all of the
real and personal property of the Atlantis, and is guaranteed by Monarch. The
Original Credit Facility was guaranteed individually by certain executives of
the Company.  These individuals were not required to provide any personal
guarantees for the New Credit Facility and, therefore, we will no longer incur
guarantee fee expenses.


                                   -28-
     The New Credit Facility contains covenants customary and typical for a
facility of this nature, including, but not limited to, covenants requiring the
preservation and maintenance of our assets and covenants restricting our
ability to merge, transfer ownership of Monarch, incur additional
indebtedness, encumber assets, and make certain investments.  The New Credit
Facility also contains covenants requiring us to maintain certain financial
ratios, and provisions restricting transfers between Monarch and its
affiliates.  The New Credit Facility also contains provisions requiring the
achievement of certain financial ratios before we can repurchase our common
stock. We do not consider the covenants to restrict our operations.

     The maturity date of the New Credit Facility is February 23, 2009.
Beginning June 30, 2004, the maximum principal available under the Credit
Facility will be reduced by an aggregate of $30.875 million in equal increments
of $1.625 million per quarter with the remaining balance due at the maturity
date.  We may prepay borrowings under the New Credit Facility without penalty
(subject to certain charges applicable to the prepayment of LIBOR borrowings
prior to the end of the applicable interest period).  Amounts prepaid under the
New Credit Facility may be reborrowed so long as the total borrowings
outstanding do not exceed the maximum principal available.  We may also
permanently reduce the maximum principal available under the New Credit
Facility at any time so long as the amount of such reduction is at least $500
thousand and a multiple of $50 thousand.

     We paid various fees and other loan costs upon the closing of the
refinancing of the New Credit Facility that will be amortized over the term of
the New Credit Facility using the straight-line method.

     Annual maturities of long-term debt, after giving effect to the execution
of the New Credit Facility, as of December 31, 2003, are as follows:

<TABLE>
<CAPTION>

     <S>                                 <C>
     Year ending December 31,
         2004 .........................  $  6,059,591
         2005 .........................     6,500,000
         2006 .........................     6,500,000
         2007 .........................     6,500,000
         2008 .........................     6,500,000
         Thereafter ...................    15,125,000
                                         ------------
                                         $ 47,184,591
                                         ============
</TABLE>

     STOCKHOLDER GUARANTEE FEES. From December 29, 1997 until February 20,
2004, all of our bank debt was personally guaranteed by our three largest
stockholders. Effective January 1, 2001 and until February 20, 2004, we
compensated the guarantors at the rate of 2% per annum of the quarterly average
outstanding bank debt.  For the twelve months ended December 31, 2003, and
2002, we recorded interest expense in the amounts of approximately $1.0 million
and $1.3 million, respectively, for these guarantee fees.  The individuals who
guaranteed our bank debt were not required to guarantee the New Credit
Facility, and, as a result, we will no longer incur these expenses.

     SHORT-TERM DEBT.  At December 31, 2003, we had approximately $185,000
outstanding in slot purchase contracts outstanding.  These contracts have
original terms of 12 months or less and do not bear any interest.

                                   -29-
STATEMENT ON FORWARD LOOKING INFORMATION

     Certain information included herein contains statements that may be
considered forward-looking, such as statements relating to projections of
future results of operations or financial condition, expectations for our
casino, and expectations of the continued availability of capital resources.
Any forward-looking statement made by us necessarily is based upon a number of
estimates and assumptions that, while considered reasonable by us, is
inherently subject to significant business, economic and competitive
uncertainties and contingencies, many of which are beyond our control, and are
subject to change.  Actual results of our operations may vary materially from
any forward-looking statement made by us or on our behalf.  Forward-looking
statements should not be regarded as representation by us or any other person
that the forward-looking statements will be achieved.  Undue reliance should
not be placed on any forward-looking statements.  Some of the contingencies and
uncertainties to which any forward-looking statement contained herein is
subject include, but are not limited to, the following:

EFFECTS OF CURRENT ECONOMIC AND POLITICAL CONDITIONS

     The terrorist attacks that took place in the United States on September
11, 2001, were unprecedented events that created economic and business
uncertainties, especially for the travel and tourism industry.  The potential
for future terrorist attacks, the national and international responses, and
other acts of war or hostility, including the ongoing conflict in Iraq, have
created economic and political uncertainties that could materially adversely
affect our business, results of operations, and financial condition in ways we
cannot predict.

OUR BUSINESS MAY BE ADVERSELY IMPACTED IF THE RENO ECONOMY DECLINES.

     We heavily market to and rely upon business from Reno area residents.  In
recent years, Reno has enjoyed robust business growth and has attracted a
number of technology, product distribution and marketing companies.  These
businesses have created jobs and helped fuel residential development, including
the southwest Reno metropolitan area near the Atlantis.  Should there be
negative changes in the business and job conditions in Reno, our locals
business, which is the most substantial part of our overall business, could be
adversely impacted.

OUR BUSINESS MAY BE ADVERSELY IMPACTED BY WEAKENED ECONOMIC CONDITIONS IN
NORTHERN CALIFORNIA AND THE PACIFIC NORTHWEST

     Because California and the Pacific Northwest are significant markets for
our leisure traveler and conventioneer customers, our business may be adversely
impacted in the event of weakened economic conditions in those geographical
markets.

FAILURE OF THE RENO-SPARKS CONVENTION CENTER TO BOOK AND ATTRACT CONVENTION
BUSINESS COULD ADVERSELY IMPACT OUR BUSINESS

     The Atlantis is the closest hotel-casino to the Reno-Sparks Convention
Center, which completed a $105 million expansion and renovation in late July
2002.  If the expanded Reno-Sparks Convention Center does not succeed in
booking the anticipated level of conventions, our future results of operations
could be adversely impacted.



                                   -30-
OUR BUSINESS MAY BE ADVERSELY IMPACTED BY EXPANDED NATIVE AMERICAN GAMING
OPERATIONS IN CALIFORNIA AND THE PACIFIC NORTHWEST

     Our largest source of leisure traveler customers is California and the
Pacific Northwest, including a large number who drive to Reno from the San
Francisco and Sacramento metropolitan areas.  Since a California constitutional
amendment passed in 1999, development has commenced on several large-scale
Native American-owned casino facilities in that state, some of which are
located close to our key markets.  Our business may be adversely impacted if
the California casinos attract patrons who would otherwise travel to Reno.
This risk may be greater during winter months when interstate highways may be
subject to weather-related travel restrictions.

THE GAMING INDUSTRY IS HIGHLY COMPETITIVE AND INCREASED COMPETITION COULD HAVE
A MATERIAL ADVERSE EFFECT ON OUR FUTURE OPERATIONS

     The gaming industry is highly competitive.  As competitive pressures from
California Native American casinos increase, other Reno area casinos may
intensify their targeting of the Reno area resident market, which is one of our
key markets.  Increased competitive pressures in the local market could
adversely impact our ability to continue to attract local residents to the
Atlantis, or require us to use more expensive and therefore less profitable
promotions to compete more efficiently.

     In addition, Native American gaming facilities in California and other
jurisdictions in some instances operate under regulatory requirements less
stringent than those imposed on Nevada licensed casinos, which could afford
them a competitive advantage in our markets.  Moreover, increases in the
popularity of, and competition from, Internet and other account wagering
gaming services, which allow their customers to wager on a wide variety of
sporting events and play Las Vegas-style casino games from home, could have a
material adverse effect on our business, financial condition, operating results
and prospects.

ADVERSE WINTER WEATHER CONDITIONS IN THE SIERRA NEVADAS AND RENO-LAKE TAHOE
AREA COULD HAVE A MATERIAL ADVERSE EFFECT ON OUR RESULTS OF OPERATIONS AND
FINANCIAL CONDITION

     Adverse winter weather conditions, particularly snowfall, can deter our
customers from traveling or make it difficult for them to frequent the
Atlantis.  Adverse winter weather would most significantly affect our drive-in
customers from northern California and the Pacific Northwest.  If the Reno area
itself were to experience prolonged adverse winter weather conditions, our
results of operations and financial condition could also be materially
adversely affected.

OUR RESULTS OF OPERATIONS MAY BE ADVERSELY AFFECTED BY HIGH-END PLAYERS'
WINNINGS

     Although high-end players are not the major focus of our marketing
efforts, we have selectively targeted them since opening our newest tower in
1999.  Should one or more of these high-end players win large sums in our
casino or should a material amount of credit extended to such players not be
repaid, our results of operations could be adversely impacted.




                                   -31-
THE FARAHI FAMILY OWNS A MAJORITY OF OUR COMMON STOCK AND CONTROLS OUR AFFAIRS

     Messrs. John, Bob and Ben Farahi, our Chief Executive Officer, President,
and Chief Financial Officer, respectively, as well as the Co-Chairmen of our
Board of Directors, own approximately 47.6% of our outstanding common stock as
of March 8, 2004.  Their sister, Jila Shabanian (nee Farahi), through her
trust, owns approximately 6.6%. Accordingly, the Farahi family has the ability
to control our operations and affairs, including the election of the entire
Board of Directors and, except as otherwise provided by law, other matters
submitted to a vote of the stockholders, including a merger, consolidation or
sale of the assets of Monarch.

A CHANGE IN CONTROL COULD RESULT IN THE ACCELERATION OF OUR DEBT OBLIGATIONS

     Certain changes in control could result in the acceleration of the
repayment of our bank debt.  This acceleration could be triggered in the event
the Farahi family sells enough of their stock to result in another stockholder
acquiring more than 50% of our shares or upon their deaths if their respective
heirs must sell a substantial number of our shares to obtain funds to pay
estate tax liabilities.  We cannot assure you that we would be able to repay
indebtedness whose maturity is accelerated as a result of such a change in
control, and such an inability would materially adversely affect our financial
condition.

IF WE LOSE OUR KEY PERSONNEL, OUR BUSINESS COULD BE MATERIALLY ADVERSELY
AFFECTED

     We depend on the continued performances of John Farahi, Bob Farahi and Ben
Farahi, our Chief Executive Officer, our President, and our Chief Financial
Officer, respectively, and their management team.  If we lose the services of
the Farahi brothers, or our other senior Atlantis management
personnel, and cannot replace such persons in a timely manner, our business
could be materially adversely affected.

OUR BUSINESS IS SUBJECT TO RESTRICTIONS AND LIMITATIONS IMPOSED BY GAMING
REGULATORY AUTHORITIES THAT COULD ADVERSELY AFFECT US

     The ownership and operation of casino gaming facilities are subject to
extensive state and local regulation.  The State of Nevada and the applicable
local authorities require various licenses, registrations, permits and
approvals to be held by us and our subsidiary.  The Nevada Gaming Commission
may, among other things, limit, condition, suspend, revoke or decline to renew
a license or approval to own the stock of our Nevada subsidiary for any cause
deemed reasonable by such licensing authority.  If we violate gaming laws or
regulations, substantial fines could be levied against us, our subsidiary and
the persons involved, and we could be forced to forfeit a portion of our
assets.  The suspension, revocation or non-renewal of any of our licenses or
the levy on us of substantial fines or forfeiture of assets would have a
material adverse effect on our business, financial condition and results of
operations.

     To date, we have obtained all governmental licenses, findings of
suitability, registrations, permits and approvals necessary for the operation
of our current gaming activities.  However, gaming licenses and related
approvals are deemed to be privileges under Nevada law.  We cannot assure you
that our existing licenses, permits and approvals will be maintained or
extended.

                                   -32-
IF THE STATE OF NEVADA OR THE CITY OF RENO INCREASES GAMING TAXES AND FEES, OUR
RESULTS OF OPERATIONS COULD BE ADVERSELY AFFECTED

     State and local authorities raise a significant amount of revenue through
taxes and fees on gaming activities.  From time to time, legislators and
officials have proposed changes in tax laws, or in the administration of such
laws, affecting the gaming industry.  In addition, worsening economic
conditions could intensify the efforts of state and local governments to raise
revenues through increases in gaming taxes.  If the State of Nevada or the City
of Reno were to increase gaming taxes and fees, our results of operations could
be adversely affected.

     A significant portion of our revenues and operating income are generated
from patrons who are residents of northern California.  A change in general
economic conditions or the extent and nature of casino gaming in California,
Washington or Oregon could adversely affect our operating results.  On
September 10, 1999, California lawmakers approved a constitutional amendment
that would give Indian tribes the right to offer slot machines and a range of
house-banked card games.  On March 7, 2000, California voters approved the
constitutional amendment.  Several Native American casinos have opened in
Northern California since passage of the constitutional amendment.  A large
Native American casino facility in one of our primary feeder markets in the
Sacramento area opened for business in June of 2003.  There potentially could
be other new Native American casinos opening in the Northern California market,
as well as other markets that we currently serve, that could have an impact on
our financial position and results of operations.

     Other states are also considering legislation enabling the development and
operation of casinos or casino-like operations.

RECENTLY ISSUED ACCOUNTING STANDARDS

     In January 2003, the FASB issued interpretation No. 46 ("FIN 46"),
"Consolidation of Variable Interest Entities."  The objective of FIN 46 is to
improve the financial reporting by companies involved with variable interest
entities.  FIN 46 changes certain consolidation requirements by requiring a
variable interest entity to be consolidated by a company that is subject to a
majority of the risk of loss from the variable interest entity's activities or
entitled to receive a majority of the entity's residual returns or both. The
Company has determined that all variable interest entities it holds at
December 31, 2003 do not require consolidation under the provisions of FIN 46
as the Company is not subject to a majority of the risk of loss or entitled to
receive a majority of the variable interest entity's residual returns.

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

     Market risk is the risk of loss arising from adverse changes in market
risks and prices, such as interest rates, foreign currency exchange rates and
commodity prices.  We do not have any cash or cash equivalents as of December
31, 2003 that are subject to market risks.

     We have substantial variable interest rate debt in the amount of
approximately $47.0 million as of December 31, 2003, and $59.5 million as of
December 31, 2002, which is subject to market risks.

     A one percent increase in interest rates would have resulted in an
increase in interest expense of approximately $524 thousand in 2003 and $644
thousand in 2002.

                                   -33-
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA


                        REPORT OF INDEPENDENT AUDITORS

To the Stockholders and Board of Directors of Monarch Casino & Resort, Inc.:

We have audited the accompanying consolidated balance sheet of Monarch Casino &
Resort, Inc. and Subsidiary (the "Company") as of December 31, 2003, and the
related consolidated statements of income, stockholders' equity and cash flows
for the year then ended. Our audit also included the financial statement
schedule in the Index at Item 15(a)(2). These financial statements and schedule
are the responsibility of the Company's management.  Our responsibility is to
express an opinion on these financial statements and schedule based on our
audit.

We conducted our audit in accordance with auditing standards generally accepted
in the United States.  Those standards require that we plan and perform the
audit to obtain reasonable assurance about whether the financial statements are
free of material misstatement.  An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements.
An audit also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audit provides a reasonable basis
for our opinion.

In our opinion, the financial statements referred to above present fairly, in
all material respects, the consolidated financial position of the Company as of
December 31, 2003 and the consolidated results of its operations and its cash
flows for the year then ended, in conformity with accounting principles
generally accepted in the United States. Also, in our opinion, such financial
statement schedule, when considered in relation to the basic consolidated
financial statements taken as a whole, presents fairly in all material respects
the information set forth therein.


                                                     /s/ Ernst & Young LLP

Las Vegas, Nevada
February 13, 2004, except for Note 5, as to which the date is February 20, 2004

















                                   -34-
                         INDEPENDENT AUDITORS' REPORT

To the Stockholders and Board of Directors of Monarch Casino & Resort, Inc.:

We have audited the accompanying consolidated balance sheet of Monarch Casino &
Resort, Inc, and Subsidiary (the "Company") as of December 31, 2002, and the
related consolidated statements of income, stockholders' equity and cash flows
for the years ended December 31, 2002 and 2001. Our audits also included the
consolidated financial statement schedule in the Index at Item 15(a)(2). These
financial statements and financial statement schedule are the responsibility of
the Company's management.  Our responsibility is to express an opinion on these
financial statements and financial statement schedule based on our audits.

We conducted our audits in accordance with auditing standards generally
accepted in the United States of America.  Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement.  An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements.  An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as
evaluating the overall financial statement presentation. We believe that our
audits provide a reasonable basis for our opinion.

In our opinion, such consolidated financial statements present fairly, in all
material respects, the financial position of the Company as of December 31,
2002 and 2001, and the results of its operations and its cash flows for the
years ended December 31, 2002 and 2001, in conformity with accounting
principles generally accepted in the United States of America. Also, in our
opinion, such consolidated financial statement schedule, when considered in
relation to the basic consolidated financial statements taken as a whole,
presents fairly in all material respects the information set forth therein.


/s/ Deloitte & Touche LLP

Reno, Nevada
February 18, 2003




















                                   -35-
                 MONARCH CASINO & RESORT, INC. AND SUBSIDIARY
                      CONSOLIDATED STATEMENTS OF INCOME
<TABLE>
<CAPTION>
                                                  Years ended December 31,
                                         -------------------------------------------
                                             2003           2002            2001
                                         ------------   ------------    ------------
<S>                                      <C>            <C>             <C>
Revenues
  Casino................................ $ 74,955,744   $ 70,772,939   $ 64,907,920
  Food and beverage.....................   34,498,613     33,646,938     31,960,713
  Hotel.................................   21,236,808     20,303,439     19,022,188
  Other.................................    4,005,426      3,690,180      3,478,171
                                         ------------   ------------    ------------
     Gross revenues.....................  134,696,591    128,413,496    119,368,992
  Less promotional allowances...........  (18,746,078)   (17,375,926)   (14,853,399)
                                         ------------   ------------    ------------
     Net revenues.......................  115,950,513    111,037,570    104,515,593
                                         ------------   ------------    ------------
Operating expenses
  Casino................................   29,321,060     27,690,033     26,036,133
  Food and beverage.....................   17,701,143     17,591,945     18,171,412
  Hotel.................................    6,991,581      6,543,610      7,133,937
  Other.................................    1,270,624      1,254,179      1,300,419
  Selling, general and administrative...   32,659,258     30,441,900     27,656,572
  Depreciation and amortization.........   10,797,494     10,320,403     10,085,331
                                         ------------   ------------    ------------
     Total operating expenses...........   98,741,160     93,842,070     90,383,804
                                         ------------   ------------    ------------
     Income from operations.............   17,209,353     17,195,500     14,131,789
                                         ------------   ------------    ------------
Other expense
  Interest expense, net.................   (1,607,840)    (2,633,917)    (5,742,985)
  Stockholder guarantee fee expense.....   (1,030,010)    (1,300,446)    (1,500,345)
  Stock transaction expense.............           -        (228,020)            -
                                         ------------   ------------    ------------
     Total other expense................   (2,637,850)    (4,162,383)    (7,243,330)
                                         ------------   ------------    ------------
     Income before income taxes.........   14,571,503     13,033,117      6,888,459
Provision for income taxes..............    4,965,580      4,429,771      2,286,695
                                         ------------   ------------    ------------
     Net income ........................ $  9,605,923   $  8,603,346   $  4,601,764
                                         ============   ============    ============

EARNINGS PER SHARE OF COMMON STOCK
Net income
     Basic..............................    $    1.02      $    0.91      $    0.49
     Diluted............................    $    1.02      $    0.90      $    0.49
  Weighted average number of
   common shares and potential
   common shares outstanding
     Basic..............................    9,379,446      9,457,669      9,436,275
     Diluted............................    9,412,459      9,521,353      9,479,830
</TABLE>

The accompanying Notes to Consolidated Financial Statements are an integral
part of these statements.










                                   -36-
                MONARCH CASINO & RESORT, INC. AND SUBSIDIARY
                         CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
                                                        December 31,
                                               ----------------------------
                                                   2003            2002
                                               ------------    ------------
<S>                                            <C>             <C>
ASSETS
Current assets
  Cash........................................ $  9,711,310    $  9,961,484
  Receivables, net............................    2,818,727       2,724,726
  Federal income tax refund receivable........      756,698         176,321
  Inventories.................................    1,245,967         993,260
  Prepaid expenses............................    2,234,773       1,961,763
  Deferred income taxes.......................      542,457         492,457
                                               ------------    ------------
     Total current assets.....................   17,309,932      16,310,011
                                               ------------    ------------
Property and equipment
  Land........................................   10,339,530      10,339,530
  Land improvements...........................    3,226,913       3,191,371
  Buildings...................................   78,955,538      78,955,538
  Building improvements.......................    6,304,642       6,262,903
  Furniture and equipment.....................   63,230,354      58,086,570
                                               ------------    ------------
                                                162,056,977     156,835,912
  Less accumulated
   depreciation and amortization..............  (63,618,047)    (55,985,653)
                                               ------------    ------------
     Net property and equipment...............   98,438 930     100,850,259

Other assets, net.............................      128,263         319,817
                                               ------------    ------------
                                               $115,877,125    $117,480,087
                                               ============    ============
</TABLE>

The accompanying Notes to Consolidated Financial Statements are an integral
part of these statements.
























                                   -37-
                MONARCH CASINO & RESORT, INC. AND SUBSIDIARY
                         CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
                                                        December 31,
                                               ----------------------------
                                                   2003            2002
                                               ------------    ------------
<S>                                            <C>             <C>
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
  Current maturities of long-term debt........ $  6,059,591    $  8,279,095
  Accounts payable............................    8,407,887       6,227,124
  Accrued expenses............................    6,707,257       6,146,440
                                               ------------    ------------
     Total current liabilities................   21,174,735      20,652,659

Long-term debt, less current maturities.......   41,125,000      52,000,000
Deferred income taxes.........................    4,854,587       4,526,744

Commitments and contingencies

Stockholders' equity
  Preferred stock, $.01 par value, 10,000,000
   shares authorized; none issued.............           -               -
  Common stock, $.01 par value, 30,000,000
   shares authorized; 9,536,275 issued;
   9,340,328 outstanding at 12/31/03;
   9,474,830 outstanding at 12/31/02..........       95,363          95,363
  Additional paid-in capital..................   17,432,635     17, 381,517
  Treasury stock, 195,947 shares at 12/31/03
  61,445 shares at 12/31/02, at cost..........   (1,437,614)       (202,692)
  Retained earnings...........................   32,632,419      23,026,496
                                               ------------    ------------
     Total stockholders' equity...............   48,722,803      40,300,684
                                               ------------    ------------
                                               $115,877,125    $117,480,087
                                               ============    ============
</TABLE>

The accompanying Notes to Consolidated Financial Statements are an integral
part of these statements.























                                   -38-
                MONARCH CASINO & RESORT, INC. AND SUBSIDIARY
               CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
<TABLE>
<CAPTION>
                               Common Stock
                           --------------------  Additional
                             Shares               Paid-in     Retained    Treasury
                           Outstanding  Amount    Capital     Earnings      Stock       Total
                           ----------- -------- ------------ ----------- ----------- ------------
<S>                        <C>         <C>      <C>          <C>         <C>         <C>
Balance, January 1, 2001     9,436,275 $ 95,363  $17,241,788 $ 9,821,386 $  (329,875) $26,828,662
  Net income                        -        -            -    4,601,764          -     4,601,764
                           ----------- -------- ------------ ----------- ----------- ------------
Balance, December 31, 2001   9,436,275   95,363   17,241,788  14,423,150    (329,875)  31,430,426
  Exercise of stock options     38,555       -       139,729          -      127,183      266,912
  Net income                        -        -            -    8,603,346          -     8,603,346
                           ----------- -------- ------------ ----------- ----------- ------------
Balance, December 31, 2002   9,474,830   95,363   17,381,517  23,026,496    (202,692)  40,300,684
  Exercise of stock options     45,498       -        51,118          -      192,478      243,596
  Stock repurchase            (180,000)      -            -           -   (1,427,400)
(1,427,400)
  Net income                        -        -            -    9,605,923          -     9,605,923
                           ----------- -------- ------------ ----------- ----------- ------------
Balance, December 31, 2003   9,340,328 $ 95,363  $17,432,635 $32,632,419 $(1,437,614) $48,722,803
                           =========== ======== ============ =========== =========== ============
</TABLE>

The accompanying Notes to Consolidated Financial Statements are an integral
part of these statements.


































                                   -39-
                MONARCH CASINO & RESORT, INC. AND SUBSIDIARY
                    CONSOLIDATED STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
                                                         Years ended December 31,
                                                ------------------------------------------
                                                    2003           2002           2001
                                                ------------   ------------   ------------
<S>                                             <C>            <C>            <C>
Cash flows from operating activities:
  Net income .................................. $  9,605,923   $  8,603,346   $  4,601,764
  Adjustments to reconcile net income to
   net cash provided by operating activities:
    Depreciation and amortization..............   10,797,494     10,320,403     10,085,331
    Amortization of deferred loan costs........      179,427        179,425        179,426
    Provision for bad debts....................      742,407        634,934      1,239,368
    Gain on disposal of assets.................     (133,301)       (34,647)       (24,848)
    Deferred income taxes......................      277,842        189,516      1,306,714
  Changes in assets and liabilities
    Receivables, net...........................   (1,416,785)       279,057     (1,434,382)
    Inventories................................     (252,708)       (17,118)       123,144
    Prepaid expenses...........................     (273,009)      (502,959)       395,065
    Other assets...............................       10,684        (16,113)         8,766
    Accounts payable...........................    2,180,763       (221,963)    (1,785,132)
    Accrued expenses...........................      682,322        584,387         11,962
                                                ------------   ------------   ------------
     Net cash provided by
      operating activities.....................   22,401,059     19,998,268     14,707,178
                                                ------------   ------------   ------------
Cash flows from investing activities:
  Proceeds from sale of assets.................      154,869         48,979         59,117
  Acquisition of property and equipment........   (7,996,678)    (4,802,525)    (3,383,643)
  Changes in accounts payable construction.....           -        (147,481)       112,831
                                                ------------   ------------   ------------
     Net cash used in investing activities.....   (7,841,809)    (4,901,027)    (3,211,695)
                                                ------------   ------------   ------------
Cash flows from financing activities:
  Proceeds from exercise of stock options......      122,092        126,116             -
  Proceeds from long-term borrowings...........    1,000,000        500,000      1,500,000
  Principal payments on long-term debt.........  (14,504,116)   (14,147,616)   (11,393,738)
  Purchase of Monarch common stock.............   (1,427,400)            -              -
                                                ------------   ------------   ------------
     Net cash used in financing activities.....  (14,809,424)   (13,521,500)    (9,893,738)
                                                ------------   ------------   ------------

     Net (decrease) increase in cash...........     (250,174)     1,575,741      1,601,745

Cash at beginning of year......................    9,961,484      8,385,743      6,783,998
                                                ------------   ------------   ------------
Cash at end of year............................ $  9,711,310   $  9,961,484   $  8,385,743
                                                ============   ============   ============

Supplemental disclosure of
 cash flow information:
  Cash paid for interest....................... $  2,421,094   $  3,927,016   $  7,799,686
  Cash paid for income taxes................... $  5,146,612   $  4,105,760   $  1,750,000

Supplemental schedule of non-cash
 investing and financing activities:
  The Company financed the purchase of property
   and equipment in the following amounts...... $    409,612   $  1,583,868   $  1,217,901
</TABLE>

The accompanying Notes to Consolidated Financial Statements are an integral
part of these statements.




                                   -40-
                MONARCH CASINO & RESORT, INC. AND SUBSIDIARY
                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1.  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation

     Monarch Casino & Resort, Inc. ("Monarch"), a Nevada corporation, was
incorporated in 1993.  Monarch's wholly-owned subsidiary, Golden Road Motor
Inn, Inc. ("Golden Road"), operates the Atlantis Casino Resort (the
"Atlantis"), a hotel/casino facility in Reno, Nevada.  Unless stated otherwise,
the "Company" refers collectively to Monarch and its Golden Road subsidiary.

     The consolidated financial statements include the accounts of Monarch and
Golden Road.  Intercompany balances and transactions are eliminated.

Use of Estimates

     In preparing these financial statements in conformity with accounting
principles generally accepted in the United States, management is required to
make estimates and assumptions that affect the reported amounts of assets and
liabilities and the disclosure of contingent assets and liabilities at the date
of the financial statements and revenues and expenses during the year.  Actual
results could differ from those estimates.

Reclassifications

     Certain amounts in the 2002 and 2001 consolidated financial statements
have been reclassified to conform with the 2003 presentation.  These
reclassifications had no effect on the previously reported net income.

Self-insurance Reserves

     The Company reviews self-insurance reserves at least quarterly. The amount
of reserve is determined by reviewing the actual expenditures for the previous
twelve-month period and reviewing reports prepared by the third party plan
administrator for any significant unpaid claims.  The reserve is accrued at an
amount that approximates amounts needed to pay both reported and unreported
claims as of the balance sheet date, which management believes are adequate.

Capitalized Interest

     The Company capitalizes interest costs associated with debt incurred in
connection with major construction projects.  When no debt is specifically
identified as being incurred in connection with a construction project, the
Company capitalizes interest on amounts expended on the project at the
Company's average cost of borrowed money.  Interest capitalization is ceased
when the project is substantially complete.  The Company did not record
capitalized interest during the years ended December 31, 2003, 2002, and 2001.







                                   -41-
Related Party Transactions

     During 2002, the Company incurred one-time expenses of approximately
$228,000 for legal, accounting, printing and road show costs associated with a
secondary stock offering by principal stockholders.

Stockholder Guarantee Fees

     All of the Company's bank debt was personally guaranteed by the Company's
three largest stockholders since December 29, 1997. Effective January 1, 2001,
until February 20, 2004, the Company compensated the guarantors at the rate of
2% per annum of the quarterly average outstanding bank debt amount.  For the
twelve months ended December 31, 2003, and 2002, the Company recorded interest
expense in the amounts of approximately $1.0 million and $1.3 million,
respectively, for these guarantee fees.  The individuals who guaranteed our
bank debt were not required to guarantee the New Credit Facility (as defined in
NOTE 5. - LONG-TERM DEBT).  Therefore, the Company will no longer incur such
guarantee fee expenses.

Inventories

     Inventories, consisting primarily of food, beverages, and retail
merchandise, are stated at the lower of cost or market.  Cost is determined on
a first-in, first-out basis.

Property and Equipment

     Property and equipment are stated at cost, less accumulated depreciation
and amortization.  Since inception, property and equipment have been
depreciated principally on a straight line basis over the estimated service
lives as follows:

     Land improvements ........... 15-40 years
     Buildings ................... 30-40 years
     Building improvements ....... 15-40 years
     Furniture ...................  5-10 years
     Equipment ...................  5-20 years

     In accordance with SFAS No. 144, "Accounting for the Impairment and
Disposal of Long-Lived Assets," the Company evaluates the carrying value of its
long-lived assets for impairment at least annually or whenever events or
changes in circumstances indicate that the carrying value of the assets may not
be recoverable from related future undiscounted cash flows.  Indicators which
could trigger an impairment review include legal and regulatory factors, market
conditions and operational performance.  Any resulting impairment loss,
measured as the difference between the carrying amount and the fair value of
the assets, could have a material adverse impact on the Company's financial
condition and results of operations.

Casino Revenues

     Casino revenues represent the net win from gaming activity, which is the
difference between wins and losses.  Additionally, net win is reduced by a
provision for anticipated payouts on slot participation fees, progressive
jackpots and any pre-arranged marker discounts.



                                   -42-
Promotional Allowances

     The retail value of hotel, food and beverage services provided to
customers without charge is included in gross revenue and deducted as
promotional allowances.  The estimated departmental costs of providing such
promotional allowances are included in casino costs and expenses as follows:

<TABLE>
<CAPTION>
                                       Years ended December 31,
                               ---------------------------------------
                                   2003          2002          2001
                               -----------   -----------   -----------
     <S>                       <C>           <C>           <C>
     Food and beverage.......  $ 9,744,346   $ 8,810,054   $ 8,151,675
     Hotel...................    1,766,016     1,648,735     1,298,431
     Other...................      269,246       197,906       154,451
                               -----------   -----------   -----------
                               $11,779,608   $10,656,695   $ 9,604,557
                               ===========   ===========   ===========
</TABLE>

Advertising Costs

     All advertising costs are expensed as incurred.  Advertising expense,
which is included in selling, general & administrative expense, was $3,249,065,
$3,240,402, and $3,137,197 for 2003, 2002, and 2001, respectively.

Income Taxes

     Income taxes are recorded in accordance with the liability method
specified by Statement of Financial Accounting Standards ("SFAS") No. 109
"Accounting for Income Taxes."  Under the asset and liability approach for
financial accounting and reporting for income taxes, the following basic
principles are applied in accounting for income taxes at the date of the
financial statements: (a) a current liability or asset is recognized for the
estimated taxes payable or refundable on taxes for the current year; (b) a
deferred income tax liability or asset is recognized for the estimated future
tax effects attributable to temporary differences and carryforwards; (c) the
measurement of current and deferred tax liabilities and assets is based on the
provisions of the enacted tax law; the effects of future changes in tax laws or
rates are not anticipated; and (d) the measurement of deferred income taxes is
reduced, if necessary, by the amount of any tax benefits that, based upon
available evidence, are not expected to be realized.

Stock Based Compensation

     The Company maintains three stock option plans, which are described more
fully in Note 7. The Company accounts for these plans under the recognition and
measurement principles of Accounting Principles Board Opinion No. 25,
"Accounting for Stock Issued to Employees" ("APB No. 25") and related
interpretations in accounting for its plans. No stock-based compensation costs
are reflected in net income, as all options granted under those plans had an
exercise price equal to the market value of the underlying common stock on the
date of the grant.  If the Company had elected to recognize compensation cost
on the fair market value at the grant dates for awards under the stock option
plans, consistent with the method prescribed by Statement of Financial
Accounting Standards ("SFAS No. 123"), "Accounting for Stock-Based



                                   -43-
Compensation," (and as amended by SFAS No. 148, "Accounting for Stock-Based
Compensation - Transition and Disclosure," which the Company adopted for the
fiscal year ended December 31, 2002), net income and income per share would
have been changed to the pro forma amounts indicated below:

<TABLE>
<CAPTION>
                                                Years ended December 31,
                                       --------------------------------------
                                          2003          2002          2001
                                       ----------    ----------    ----------
<C>                                    <C>           <C>           <C>
Net income, as reported                $9,605,923    $8,603,346    $4,601,764
Stock based employee compensation
  expensed determined under the fair
  value based method for all awards,
  net of related tax effects              (39,923)     (135,359)     (117,961)
                                       ----------    ----------    ----------
Pro forma net income                   $9,566,000    $8,467,987    $4,483,803
                                       ==========    ==========    ==========
Basic earnings per share
  As reported                          $     1.02    $     0.91    $     0.49
  Pro forma                            $     1.02    $     0.90    $     0.48

Diluted earnings per share
  As reported                          $     1.02    $     0.90    $     0.49
  Pro forma                            $     1.02    $     0.89    $     0.47
</TABLE>

Earnings Per Share

     The Company reports "basic" earnings per share and "diluted" earnings per
share in accordance with the provisions of Statement of Financial Accounting
Standards ("SFAS") No. 128, "Earnings Per Share."  Basic earnings per share is
computed by dividing reported net earnings by the weighted-average number of
common shares outstanding during the period.  Diluted earnings per share
reflects the additional dilution for all potentially dilutive securities such
as stock options.

     The following is a reconciliation of the number of shares (denominator)
used in the basic and diluted earnings per share computations (shares in
thousands):

<TABLE>
<CAPTION>
                                               Years ended December 31,
                                ------------------------------------------------------
                                       2003               2002               2001
                                ----------------   ----------------   ----------------
                                       Per Share          Per Share          Per Share
                                Shares   Amount    Shares   Amount    Shares   Amount
                                ------ ---------   ------ ---------   ------ ---------
<S>                             <C>    <C>         <C>    <C>         <C>    <C>
Net income
     Basic.....................  9,379   $ 1.02     9,458   $ 0.91     9,436   $ 0.49
     Effect of dilutive
       stock options...........     33       -         63    (0.01)       44       -
                                ------  --------   ------   -------   ------   -------
     Diluted...................  9,412   $ 1.02     9,521   $ 0.90     9,480   $ 0.49
                                ======  ========   ======   =======   ======   =======
</TABLE>

     The following options were not included in the computation of diluted
earnings per share because the options' exercise price was greater than the
average market price of the common shares and their inclusion would be
antidilutive:

                                   -44-
<TABLE>
<CAPTION>
                                           2003          2002           2001
                                       ------------   ------------   -----------
     <S>                               <C>            <C>            <C>
     Options to purchase shares of
       common stock (in thousands)....       19           14              3
     Exercise prices.................. $10.90-14.37   $11.99-14.37      $5.94
     Expiration dates (mo./yr.).......  6/07-11/13     6/07-8/12         9/03

</TABLE>

Fair Value of Financial Instruments

     The following disclosure of the estimated fair value of financial
instruments is made in accordance with the requirements of SFAS No. 107
"Disclosures About Fair Value of Financial Instruments."  The estimated fair
value of the Company's financial instruments has been determined by the
Company, using available market information and valuation methodologies.
However, considerable judgment is required to develop the estimates of fair
value; thus, the estimates provided herein are not necessarily indicative of
the amounts that the Company could realize in a current market exchange.

     The carrying amounts of cash, receivables, accounts payable and accrued
expenses approximate fair value because of the short-term nature of these
instruments.

     The fair value of long-term debt approximates fair value based on the
current borrowing rates offered to the Company for debt of the same remaining
maturities.

Concentrations of Credit Risk

     Financial instruments which potentially subject the Company to
concentrations of credit risk consist principally of bank deposits and trade
receivables.  The Company maintains its cash in bank deposit accounts which, at
times, may exceed federally insured limits.  The Company has not experienced
any losses in such accounts.  Concentrations of credit risk with respect to
trade receivables are limited due to the large number of customers comprising
the Company's customer base.  The Company believes it is not exposed to any
significant credit risk on cash and accounts receivable.

Certain Risks and Uncertainties

     A significant portion of the Company's revenues and operating income are
generated from patrons who are residents of northern California.  A change in
general economic conditions or the extent and nature of casino gaming in
California, Washington or Oregon could adversely affect the Company's operating
results.  On September 10, 1999, California lawmakers approved a constitutional
amendment that gave Indian tribes the right to offer slot machines and a range
of house-banked card games.  On March 7, 2000, California voters approved the
constitutional amendment.  Several Native American casinos have opened in
Northern California since passage of the constitutional amendment.  A large
Native American casino facility opened in one of our primary feeder markets in
the Sacramento area in June of 2003. There potentially could be other new
Native American casinos opening in the Northern California market, as well as
other markets the Company currently serves, that could have an impact on the
Company's financial position and results of operations.

                                   -45-
     The Company also relies on non-conventioneer visitors partially comprised
of individuals flying into the Reno area.  The tragic events of September 11,
2001 combined with the ongoing conflict with Iraq and the threat of further
terrorist attacks could have an adverse effect on the Company's revenues from
this segment as consumers may need time to restore their confidence in air and
other leisure travel.  The terrorist attacks that took place in the United
States on September 11, 2001 were unprecedented events that created economic
and business uncertainties, especially for the travel and tourism industry.
The potential for future terrorist attacks, the national and international
responses, and other acts of war or hostility including the ongoing war with
Iraq, have created economic and political uncertainties that could materially
adversely affect our business, results of operations, and financial condition
in ways we cannot predict.


IMPACT OF RECENTLY ISSUED ACCOUNTING STANDARDS

     In January 2003, the FASB issued interpretation No. 46 ("FIN 46"),
"Consolidation of Variable Interest Entities."  The objective of FIN 46 is to
improve the financial reporting by companies involved with variable interest
entities.  FIN 46 changes certain consolidation requirements by requiring a
variable interest entity to be consolidated by a company that is subject to a
majority of the risk of loss from the variable interest entity's activities or
entitled to receive a majority of the entity's residual returns or both. The
Company has determined that all variable interest entities it holds at
December 31, 2003 do not require consolidation under the provisions of FIN 46
as the Company is not subject to a majority of the risk of loss or entitled to
receive a majority of the variable interest entity's residual returns.






























                                   -46-
NOTE 2.  ACCOUNTS RECEIVABLE

     Accounts receivable consist of the following:

<TABLE>
<CAPTION>
                                          December 31,
                                   -------------------------
                                       2003          2002
                                   -----------   -----------
     <S>                           <C>           <C>
     Casino....................... $ 2,964,684   $ 2,741,776
     Hotel........................     655,100       675,171
     Other........................     229,561       195,744
                                   -----------   -----------
                                     3,849,345     3,612,691
     Less allowance for
       doubtful accounts..........  (1,030,618)     (887,965)
                                   -----------   -----------
                                   $ 2,818,727   $ 2,724,726
                                   ===========   ===========
</TABLE>

     The Company recorded bad debt expense of $742,407, $634,934, and
$1,239,368, in 2003, 2002, and 2001, respectively.

NOTE 3.  ACCRUED EXPENSES

     Accrued expenses consist of the following:

<TABLE>
<CAPTION>
                                               December 31,
                                        -------------------------
                                            2003          2002
                                        -----------   -----------
     <S>                                <C>           <C
     Accrued salaries, wages
       and related benefits............ $ 3,459,596   $ 2,934,892
     Progressive slot machine
       and other gaming accruals.......   1,341,454     1,577,273
     Accrued gaming taxes..............     310,691       276,826
     Accrued interest..................     139,431       102,103
     Other accrued liabilities.........   1,456,085     1,255,346
                                        -----------   -----------
                                        $ 6,707,257   $ 6,146,440
                                        ===========   ===========
</TABLE>

NOTE 4.  LEASE COMMITMENTS

     The Company leases certain furniture and equipment.  The leases generally
provide for the lessee to pay taxes, maintenance, insurance, and certain other
operating costs of the leased property.  The leases on most of the properties
contain renewal provisions.

     In 2004, the Company is planning construction of a new driveway that will
be shared between the Atlantis and the adjacent Sierra Marketplace Shopping
Center that is owned and controlled by affiliates of the Company's controlling
stockholders (the "Shopping Center").  A new traffic signal will be erected at
mid-block on South Virginia Street, serving the new driveway.  As part of this
project, the Company has leased a 37,368 square-foot corner section of the
Shopping Center for a minimum lease term of 15 years at a monthly rent of
$25,000, subject to increase every 60 months based on the Consumer Price Index.
The Company is also to use part of the common area of the Shopping

                                   -47-
Center and will pay its proportional share of the common area expense of the
Shopping Center. The Company has the option to renew the lease for 3 five-year
terms, and at the end of the extension period, the Company has the option to
purchase the leased section of the Shopping Center at a price to be determined
based on a MAI Appraisal.  The leased space will be used by the Company for
pedestrian and vehicle access to the Atlantis, and the Company will have use of
a portion of the parking spaces at the Shopping Center.  The Company is
responsible for two thirds of the construction costs of the project, up to a
maximum of $1.2 million.  The Company anticipates this project to be completed
in Summer of 2004 (see Part III - ITEM 13. CERTAIN RELATIONSHIPS AND RELATED
TRANSACTIONS incorporated herein by reference to the Company's Proxy Statement
to be filed with the Securities and Exchange Commission in connection with the
Annual Meeting of Stockholders to be held on May 26, 2004).

     Following is a summary of future minimum payments under operating leases
that have initial or remaining noncancelable lease terms in excess of one year
at December 31, 2003:

<TABLE>
<CAPTION>
                                                Operating
                                                 Leases
                                              -------------
     <S>                                      <C>
     Year ending December 31,
         2004 ..............................   $1,546,261
         2005 ..............................      450,631
         2006 ..............................      370,000
         2007 ..............................      370,000
         2008 ..............................      370,000
         Thereafter ........................    3,885,000
                                              -------------
     Total minimum lease payments ..........   $6,991,892
                                              =============

</TABLE>

     All of the Company's capital lease obligations were paid as of December
31, 2003 and 2002.

     Assets purchased through capital leases are included in Furniture and
Equipment as follows:

<TABLE>
<CAPTION>
                                               December 31,
                                        -------------------------
                                            2003          2002
                                        -----------   -----------
     <S>                                <C>           <C>
     Furniture and equipment ..........   $ 221,061     $ 221,061
     Accumulated amortization .........    (154,018)     (110,013)
                                        -----------   -----------
                                          $  67,043     $ 110,048
                                        ===========   ===========
</TABLE>

     Rental expense for operating leases amounted to $185,304, $176,065, and
$184,656, in 2003, 2002, and 2001, respectively, as reported in selling,
general and administrative expenses in the statement of income.




                                   -48-
NOTE 5.  LONG-TERM DEBT

     Long-term debt consists of the following:

<TABLE>
<CAPTION>
                                                                             December 31,
                                                                     ---------------------------
                                                                          2003           2002
                                                                     -------------  ------------
     <S>                                                             <C>            <C>
     Amounts outstanding under bank reducing revolving
      credit facility(the "Original Credit Facility"),
      collateralized by substantially all property and
      equipment of Golden Road and guaranteed by Monarch and
      its three largest stockholders, with floating interest
      rates tied to a base rate approximately equal to the prime
      rate or LIBOR (at the Company's option) plus a margin which
      fluctuates according to the Company's ratio of funded debt
      to Earnings Before Interest, Taxes, Depreciation and
      Amortization ("EBITDA"). The weighted average interest rate
      was approximately 2.62% at December 31, 2003, and 2.92% at
      December 31, 2002.  Prior to the refinancing of the Original
      Credit Facility (see below), the loan was to mature in June
      2004, with all unpaid interest and principal due and payable
      at that time.................................................. $ 47,000,000    $59,500,000
     Slot purchase contracts, collateralized by equipment.
      Contracts are non-interest bearing and all mature within
      twelve months.................................................      184,591        779,095
                                                                     ------------    -----------
                                                                     $ 47,184,591    $60,279,095
     Less current maturities........................................   (6,059,591)    (8,279,095)
                                                                     ------------    -----------
                                                                     $ 41,125,000    $52,000,000
                                                                     ============    ===========
</TABLE>

     THE CREDIT FACILITY.

     On February 20, 2004, the Original Credit Facility was refinanced (the
"New Credit Facility") for $50 million, which includes a $46 million payoff for
the unpaid balance of the Original Credit Facility.  The amount of the New
Credit Facility may be increased by up to $30 million on a one-time basis and
if requested by the Company before the second anniversary of the closing date,
as defined.  At the Company's option, borrowings under the New Credit Facility
will accrue interest at a rate designated by the agent bank at its base rate
(the "Base Rate") or at the London Interbank Offered Rate ("LIBOR") for one,
two, three or six month periods.  The rate of interest paid by the Company will
include a margin added to either the Base Rate or to LIBOR that is tied to the
Company's ratio of funded debt to EBITDA (the "Leverage Ratio").  Depending on
the Company's Leverage Ratio, this margin can vary between 0.25 percent and
1.25 percent above the Base Rate, and between 1.50 percent and 2.50 percent
above LIBOR (under the Original Credit Facility, this margin varied between
0.00 percent and 2.00 percent above the Base Rate, and between 1.50 percent and
3.50 percent above LIBOR).  At December 31, 2003, the applicable margin was the
Base Rate plus 0.0%, and the applicable LIBOR margin was LIBOR plus 1.5%. At
December 31, 2003, the Base Rate was 4.00% and the LIBOR rate was 1.12%.  At
December 31, 2003, the Company had $1.0 million in Base Rate loans outstanding
and had one LIBOR loan outstanding totaling $46.0 million, for a total
obligation of $47.0 million.




                                   -49-
     The Company may utilize proceeds from the New Credit Facility for working
capital needs and general corporate purposes relating to the Atlantis and for
ongoing capital expenditure requirements at the Atlantis.

      The New Credit Facility is secured by liens on substantially all of the
real and personal property of the Atlantis, and is guaranteed by Monarch. The
Original Credit Facility was guaranteed individually by certain executives of
the Company.  These individuals were not required to provide any personal
guarantees for the New Credit Facility and, therefore, the Company will no
longer incur guarantee fee expenses.

     The New Credit Facility contains covenants customary and typical for a
facility of this nature, including, but not limited to, covenants requiring the
preservation and maintenance of the Company's assets and covenants restricting
the Company's ability to merge, transfer ownership of Monarch, incur additional
indebtedness, encumber assets, and make certain investments.  The New Credit
Facility also contains covenants requiring the Company to maintain certain
financial ratios, and provisions restricting transfers between Monarch and its
constituents.  The New Credit Facility also contains provisions requiring the
achievement of certain financial ratios before the Company can repurchase its
common stock.  Management does not consider the covenants to restrict the
Company's operations.

     The maturity date of the New Credit Facility is February 23, 2009.
Beginning June 30, 2004, the maximum principal available under the Credit
Facility is reduced by an aggregate of $30.875 million in equal increments of
$1.625 million per quarter with the remaining balance due at the maturity date.
The Company may prepay borrowings under the New Credit Facility without penalty
(subject to certain charges applicable to the prepayment of LIBOR borrowings
prior to the end of the applicable interest period).  Amounts prepaid under the
New Credit Facility may be reborrowed so long as the total borrowings
outstanding do not exceed the maximum principal available.  The Company may
also permanently reduce the maximum principal available under the New Credit
Facility at any time so long as the amount of such reduction is at least $500
thousand and a multiple of $50 thousand.

     The Company paid various fees and other loan costs upon the closing of the
refinancing of the New Credit Facility that will be amortized over the term of
the New Credit Facility using the straight-line method.

     Annual maturities of long-term debt as of December 31, 2003, after giving
effect to the execution of the New Credit Facility, are as follows:

<TABLE>
<CAPTION>

     <S>                                 <C>
     Year ending December 31,
         2004 .........................  $  6,059,591
         2005 .........................     6,500,000
         2006 .........................     6,500,000
         2007 .........................     6,500,000
         2008 .........................     6,500,000
         Thereafter ...................    15,125,000
                                         ------------
                                         $ 47,184,591
                                         ============
</TABLE>



                                   -50-
NOTE 6.  INCOME TAX

     Income tax provision consists of the following:

<TABLE>
<CAPTION>
                                                    Years ended December 31,
                                            ---------------------------------------
                                                2003          2002          2001
                                            -----------   -----------   -----------
     <S>                                    <C>           <C>           <C>
     Current provision..................... $ 4,687,667   $ 4,240,255   $ 1,904,759
     Deferred provision....................     277,913       189,516       381,936
                                            -----------   -----------   -----------
                                            $ 4,965,580   $ 4,429,771   $ 2,286,695
                                            ===========   ===========   ===========
</TABLE>

     The difference between the Company's provision for federal income taxes as
presented in the accompanying Consolidated Statements of Income, and the
provision for income taxes computed at the statutory rate is comprised of the
items shown in the following table as a percentage of pre-tax earnings.

<TABLE>
<CAPTION>
                                                    Years ended December 31,
                                            ---------------------------------------
                                                2003          2002          2001
                                            -----------   -----------   -----------
     <S>                                    <C>           <C>           <C>
     Income tax at the statutory rate......    35.0%         34.0%         34.0%
     Non-deductible expenses...............     0.2%          1.2%          0.5%
     Tax credits...........................    (1.1)%        (1.2)%        (1.3)%
                                            -----------   -----------   -----------
                                               34.1%         34.0%         33.2%
                                            ===========   ===========   ===========
</TABLE>

     The components of the deferred income tax assets and liabilities at
December 31, 2003 and 2002, as presented in the Consolidated Balance Sheets,
are as follows:

<TABLE>
<CAPTION>
                                                 2003          2002
                                             -----------    -----------
     <S>                                     <C>            <C>
     CURRENT ASSETS
       Compensation and benefits............ $   344,500    $   261,720
       Bad debt reserves....................     185,700        301,908
       Accrued gaming liabilities...........      96,600         89,525
       Accrued other liabilities............     (84,343)      (160,696)
                                             -----------    -----------
         Deferred income tax asset           $   542,457    $   492,457
                                             ===========    ===========

     NONCURRENT LIABILITIES
       Impairment of assets................. $   (72,260)   $   (70,196)
       Depreciation.........................  (4,467,841)    (4,179,005)
       Land basis...........................    (285,706)      (277,543)
       Other................................     (28,780)            -
                                             -----------    -----------
         Deferred income tax liability       $(4,854,587)   $(4,526,744)
                                             ===========    ===========
</TABLE>



                                   -51-
NOTE 7.  BENEFIT PLANS

     Savings Plan - Effective November 1, 1995, the Company adopted a savings
plan, which qualifies under Section 401(k) of the Internal Revenue Code.  Under
the plan, participating employees may defer up to 15% of their pre-tax
compensation, but not more than statutory limits.  The Company contributes
twenty five cents for each dollar contributed by a participant, with a maximum
contribution of 4% of a participant's compensation.  The Company's matching
contributions were approximately $45,370, $32,678, and $31,916 in 2003, 2002,
and 2001, respectively.

     Stock Option Plans - The Company maintains three stock option plans,
consisting of the Directors' Stock Option Plan, the Executive Long-term
Incentive Plan, and the Employee Stock Option Plan (the "Plans"), which
collectively provide for the granting of options to purchase up to 775,000
common shares.  The exercise price of stock options granted under the plans is
established by the respective plan committees, but the exercise price may not
be less than the market price of the Company's common stock on the date the
option is granted.  Options expire five to ten years from the grant date. The
Plans were amended by majority stockholder approval at the Company's 2003
Annual Meeting of Stockholders on June 12, 2003. The amendment per majority
approval extended the terms of the existing stock compensation plans,
increased the amount of option shares authorized for issue under the existing
stock compensation plans, extended the life of stock options granted under the
existing Directors' Stock Option Plan and permitted the Directors' Plan
Committee to extend the term of any existing option grants under the
Directors' Stock Option Plan, and revised the description of employees
eligible to receive options and the conditions that determine the purchase
price of stock options under the existing Executive Long-Term Incentive Stock
Option Plan.  By their amended terms, the Plans will expire in June, 2013.

     The Company has adopted the disclosure-only provisions of SFAS No. 123, as
amended by SFAS No. 148, but applies APB No. 25 and related interpretations
in accounting for its plans. No stock-based compensation costs are reflected
in net income, as all options granted under those plans had an exercise price
equal to the market value of the underlying common stock on the date of the
grant.

     The fair value of the Company's stock options, as presented in Note 1, was
estimated as of the grant date using the Black-Scholes option pricing model
with the following weighted average assumptions for 2003, 2002, and 2001:
dividend yield of 0.0% for all periods; expected volatility of 41.9%, 58.7%,
and 70.4%, respectively; a weighted average risk free interest rate of 2.80%,
3.83%, and 4.36%, respectively; and expected holding periods ranging from three
to nine years.













                                   -52-
     Presented below is a summary of the status of the Company's stock options
and the related transactions.


<TABLE>
<CAPTION>
                                                     Weighted Average
                                           Shares     Exercise Price
                                          --------   ----------------
     <S>                                  <C>        <C>
     Outstanding at December 31, 2000....  153,550          $3.19
      Granted............................   28,200           5.14
      Exercised..........................       -              -
      Forfeited/expired..................  (21,850)         (4.95)
                                          --------   ----------------
     Outstanding at December 31, 2001....  159,900           3.38
      Granted............................   34,150          10.52
      Exercised..........................  (38,555)         (3.27)
      Forfeited/expired..................  (11,666)         (4.88)
                                          --------   ----------------
     Outstanding at December 31, 2002....  143,829           4.99
      Granted............................   24,150           8.51
      Exercised..........................  (45,498)         (2.69)
      Forfeited/expired..................  (10,000)        (11.93)
                                          --------   ----------------
     Outstanding at December 31, 2003....  112,481          $6.07
                                          ========   ================

     Weighted average fair value of
      options granted during 2003.........  $ 8.51
                                          ========
                             2002.........  $10.52
                                          ========
                             2001.........  $ 5.14
                                          ========


</TABLE>

<TABLE>
<CAPTION>
                                        Stock Options                Stock Options
                                         Outstanding                  Exercisable
                                   -------------------------   -------------------------
                                   Weighted
                                   Average       Weighted                     Weighted
                                   Contractual   Average                      Average
        Range of                   Life (in      Exercise                     Exercise
     Exercise Prices    Shares     years)        Price           Shares       Price
     ----------------  ---------   -----------   -----------   ----------     ----------
     <S>               <C>         <C>           <C>           <C>            <C>
     $2.88 to $4.81      45,414         3.2        $ 3.01          24,416        $ 3.12
     $5.06 to $7.79      47,917         6.7        $ 6.34          22,917        $ 6.40
     $10.90 to $14.37    19,150         6.4        $12.66           9,150        $14.37
                       ---------                                ---------
          Total         112,481                                    56,483
                       =========                                =========
</TABLE>










                                   -53-
NOTE 8.  COMMITMENTS AND CONTINGENCIES

     Self Insurance - The Company is self-insured for health care claims for
eligible active employees.  Benefit plan administrators assist the Company in
determining its liability for self-insured claims, and such claims are not
discounted.  The Company is also self-insured for workman's compensation.  Both
plans limit the Company's maximum liability under stop-loss agreements with
insurance companies.  The maximum liability for health care claims under the
stop-loss agreement is $75,000 per claim.  The maximum liability for workman's
compensation under the stop-loss agreement is $300,000 per claim.

     On March 10, 2003, we announced a plan to repurchase up to 250,000 shares,
or 2.6%, of our common stock in open market transactions.  The repurchases may
be made from time to time depending on market conditions and availability of
funds.  The repurchases are to be made with our cash.  During 2003, we
purchased 180,000 shares of our common stock pursuant to this stock repurchase
program.

     The Company commenced certain litigation in April 2003 against the City of
Reno and other interested parties petitioning the Second Judicial District
Court of Nevada to (i) review the City of Reno's decision to enter into an
agreement for the acquisition and relocation of the Old Reno Casino in downtown
Reno, (ii) condemn the real property occupied by the Old Reno Casino, (iii)
declare the agreement null and void and (iv) preclude the City of Reno from
condemning the real property.  In February 2004, the parties entered into a
settlement agreement, and the District Court dismissed the case in February
2004.  The terms of the confidential settlement agreement included a
restriction from relocating the former Old Reno Casino gaming license within an
identified geographic area near the Company's Atlantis Casino Resort in Reno.
The outcome of this litigation did not have a material impact on the financial
statements of the Company.

     The Company is a defendant in various pending legal proceedings.  In the
opinion of management, all pending claims in such litigation will not, in the
aggregate, have a material adverse effect on the Company's financial position
or results of operations.

     In 2003, the Company entered into an option agreement with an affiliate of
its controlling stockholders to purchase property in South Reno for development
of a new hotel casino.  Commencement of any development of the property will
require completion of property due diligence and receipt of numerous approvals,
including master plan changes and zone changes, neither of which can be
assured.  Through the current property owner, the Company has filed an
application with the City of Reno for master plan change and zone change for 13
acres of the property.

     In 2004, we are planning construction of a new driveway that will be
shared between the Atlantis and the adjacent Sierra Marketplace Shopping Center
that is owned and controlled by affiliates of our controlling stockholders (the
"Shopping Center").  A new traffic signal will be erected at mid-block on South
Virginia Street, serving the new driveway.  As part of this project, we have
leased a 37,368 square-foot corner section of the Shopping Center for a minimum
lease term of 15 years at a monthly rent of $25,000, subject to increase every
60 months based on the Consumer Price Index.  We are also to use part of the
common area of the Shopping Center and will pay our proportional share of the
common area expense of the Shopping Center. We have the option to renew the
lease for 3 five-year terms, and at the end of the

                                   -54-
extension period, we have the option to purchase the leased section of the
Shopping Center at a price to be determined based on a MAI Appraisal.  The
leased space will be used by us for pedestrian and vehicle access to the
Atlantis, and we will have use of a portion of the parking spaces at the
Shopping Center.  We are responsible for two thirds of the construction costs
of the project, up to a maximum of $1.2 million.  We anticipate this project to
be completed in Summer of 2004 (see Part III - ITEM 13. CERTAIN RELATIONSHIPS
AND RELATED TRANSACTIONS incorporated herein by reference to the Company's
Proxy Statement to be filed with the Securities and Exchange Commission in
connection with the Annual Meeting of Stockholders to be held on May 26, 2004).


NOTE 9.  SELECTED QUARTERLY FINANCIAL DATA (UNAUDITED)

<TABLE>
<CAPTION>
                                                            2003
                            ---------------------------------------------------------------------
                             1st Quarter   2nd Quarter   3rd Quarter   4th Quarter      Total
                            ------------- ------------- ------------- ------------- -------------
<S>                         <C>           <C>           <C>           <C>           <C>
Net revenues .............  $ 27,164,928  $ 29,075,070  $ 31,446,693  $ 28,263,822  $115,950,513
Operating expenses .......  $ 23,649,979  $ 24,863,622  $ 25,260,680  $ 24,966,879  $ 98,741,160
Income from operations ...  $  3,514,949  $  4,211,448  $  6,186,013  $  3,296,943  $ 17,209,353
Net income ...............  $  1,837,927  $  2,331,109  $  3,665,814  $  1,771,073  $  9,605,923
Income per share of
  common stock
    Basic ................        $ 0.19        $ 0.25        $ 0.39        $ 0.19        $ 1.02
    Diluted ..............        $ 0.19        $ 0.25        $ 0.39        $ 0.19        $ 1.02
</TABLE>

<TABLE>
<CAPTION>
                                                            2002
                            ---------------------------------------------------------------------
                             1st Quarter   2nd Quarter   3rd Quarter   4th Quarter      Total
                            ------------- ------------- ------------- ------------- -------------
<S>                         <C>           <C>           <C>           <C>           <C>
Net revenues .............  $ 25,796,201  $ 27,628,872  $ 30,651,581  $ 26,960,916  $111,037,570
Operating expenses .......  $ 22,289,803  $ 22,850,271  $ 24,435,648  $ 24,266,348  $ 93,842,070
Income from operations ...  $  3,506,398  $  4,778,601  $  6,215,933  $  2,694,568  $ 17,195,500
Net income ...............  $  1,585,084  $  2,252,166  $  3,467,460  $  1,298,636  $  8,603,346
Income per share of
  common stock
    Basic ................        $ 0.17        $ 0.24        $ 0.37        $ 0.14        $ 0.91
    Diluted ..............        $ 0.17        $ 0.24        $ 0.36        $ 0.14        $ 0.90
</TABLE>


ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
        ACCOUNTING AND FINANCIAL DISCLOSURE

     None.

ITEM 9A. CONTROLS AND PROCEDURES

     We maintain disclosure controls and procedures that are designed to ensure
that information required to be disclosed in our Exchange Act reports is
recorded, processed, summarized and reported within the time periods specified
in the SEC's rules and forms, and that such information is accumulated and
communicated to our management, including our Chief Executive Officer and Chief
Financial Officer, as appropriate, to allow for timely

                                   -55-
decisions regarding required disclosure.  In designing and evaluating the
disclosure controls and procedures, management recognizes that any controls and
procedures, no matter how well designed and operated, can provide only
reasonable assurance of achieving the desired control objectives, and
management is required to apply its judgment in evaluating the cost-benefit
relationship of possible controls and procedures.

     As of the end of the period covered by this report (the "Evaluation
Date"), we carried out an evaluation, under the supervision and with the
participation of our management, including our Chief Executive Officer and our
Chief Financial Officer, of the effectiveness of the design and operation of
our disclosure controls and procedures.  Based on the foregoing, our Chief
Executive Officer and Chief Financial Officer concluded that, as of the
Evaluation Date, our disclosure controls and procedures were effective at the
reasonable assurance level.

     There has been no change in our internal controls over financial reporting
during the year ended December 31, 2003 that has materially affected, or is
reasonably likely to materially affect, our internal control over financial
reports.

                                   PART III

ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

     This information is incorporated by reference to the Company's Proxy
Statement to be filed with the Commission in connection with the Annual Meeting
of Stockholders to be held on May 26, 2004.

ITEM 11. EXECUTIVE COMPENSATION

     This information is incorporated by reference to the Company's Proxy
Statement to be filed with the Commission in connection with the Annual Meeting
of Stockholders to be held on May 26, 2004.

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

Equity Compensation Plan Information.

<TABLE>
<CAPTION>

Plan Category            Number of securities   Weighted-average       Number of securities
                         to be issued upon      exercise price of      remaining available
                         exercise of            outstanding options,   for future issuance
                         outstanding options,   warrants and rights    under equity
                         warrants and rights                           compensation plans
                                                                       (excluding securities
                                                                       reflected in column (a))
                         (a)                    (b)                    (c)
- ---------------------    --------------------   --------------------   ------------------------
<C>                      <C>                    <C>                    <C>
Equity compensation
plans approved by
security holders <F1>          112,481                  $6.07                 662,519

Equity compensation
plans not approved                  -                      -                       -
by security holders
                         --------------------   --------------------   ------------------------
Total                          112,481                  $6.07                 662,519

                                   -56-
<F1> Includes the 1993 Directors' Stock Option Plan, 1993 Employee Stock Option Plan and 1993
Executive Long-Term Incentive Plan, as amended.
</TABLE>

     Additional information is incorporated by reference to the Company's Proxy
Statement to be filed with the Commission in connection with the Annual Meeting
of Stockholders to be held on May 26, 2004.

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

     This information is incorporated by reference to the Company's Proxy
Statement to be filed with the Commission in connection with the Annual Meeting
of Stockholders to be held on May 26, 2004.

ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES

     This information is incorporated by reference to the Company's Proxy
Statement to be filed with the Commission in connection with the Annual Meeting
of Stockholders to be held on May 26, 2004.


                                   PART IV

ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K

     (a)  1. Financial Statements

             Included in Part II of this report:

             Report of Independent Auditors - Ernst & Young LLP

             Independent Auditors' Report - Deloitte & Touche LLP

             Consolidated Statements of Income for the years ended
             December 31, 2003, 2002, and 2001.

             Consolidated Balance Sheets at December 31, 2003, and 2002.

             Consolidated Statements of Stockholders' Equity for the years
             ended December 31, 2003, 2002, and 2001.

             Consolidated Statements of Cash Flows for the years ended
             December 31, 2003, 2002, and 2001.

             Notes to Consolidated Financial Statements.













                                   -57-
          2. Financial Statements Schedules

                       VALUATION AND QUALIFYING ACCOUNTS

<TABLE>
<CAPTION>
                                Balance at   Charged to                             Balance
                                beginning    costs and                              at end
Year ended December 31,         of year      expenses     Deductions<F1> Other      of year
- -----------------------         ----------   ----------   ----------     -----     ----------
<C>                             <C>          <C>          <C>            <C>       <C>
2001
Allowance for doubtful
  accounts...................    1,314,258    1,239,368   (1,628,543)       -         925,083
2002
Allowance for doubtful
  accounts...................      925,083      634,934     (672,052)       -         887,965
2003
Allowance for doubtful
  accounts...................      887,965      742,407     (599,754)       -       1,030,618
</TABLE>

<F1> The Company reviews receivables monthly and accordingly adjusts the
allowance for doubtful accounts monthly.  The Company records actual
uncollectible write-offs annually.  The amount charged to Costs and Expenses
reflects the bad debt expense recorded in the consolidated statement of income,
while the amount recorded for Deductions reflects the adjustment to actual
allowance for doubtful accounts reserve at the end of the period.

     (b)     Reports on Form 8-K

     On March 8, 2004, we filed a Current Report on Form 8-K reporting the
payoff of the Original Credit Facility and the signing of the New Credit
Facility.

     On February 20, 2004, we filed a Current Report on Form 8-K reporting that
we had issued a press release announcing the results for the fiscal quarter and
fiscal year ended December 31, 2003.

     On February 6, 2004, we filed a Current Report on Form 8-K reporting that
we had issued a press release announcing the settlement of our lawsuit against
the City of Reno and other interested parties we had commenced in April of
2003.

     On October 31, 2003, we filed a Current Report on Form 8-K reporting that
we had issued a press release announcing results for the quarter ended
September 30, 2003.

     On October 8, 2003, we filed a Current Report on Form 8-K reporting a
change in our certifying accountant.  Our Audit Committee elected not to engage
Deloitte & Touche LLP as our independent public accountants for the current
year's audit, and engaged Ernst & Young LLP as our new independent accountants
as of October 1, 2003.

     (c)     Exhibits

     Number Exhibit Description
     ------ -------------------

      3.01  Articles of Incorporation of Monarch Casino & Resort, Inc., filed
            June 11, 1993 are incorporated herein by reference from the
            Company's Form S-1 registration statement (SEC File 33-64556),
            Part II, Item 16, Exhibit 3.01.

                                   -58-
      3.02  Bylaws of Monarch Casino & Resort, Inc., adopted June 14, 1993
            are incorporated herein by reference from the Company's Form S-1
            registration statement (SEC File 33-64556), Part II, Item 16,
            Exhibit 3.02.

      3.03  Articles of Incorporation of Golden Road Motor Inn, Inc. filed
            March 6, 1973; Certificate Amending Articles of Incorporation of
            Golden Road Motor Inn, Inc. filed August 29, 1973; and
            Certificate of Amendment of Articles of Incorporation filed April
            5, 1984 are incorporated herein by reference from the Company's
            Form S-1 registration statement (SEC File 33-64556), Part II,
            Item 16, Exhibit 3.03.

      3.04  Bylaws of Golden Road Motor Inn, Inc., adopted March 9, 1973
            are incorporated herein by reference from the Company's Form S-1
            registration statement (SEC File 33-64556), Part II, Item 16,
            Exhibit 3.04.

      3.05  Amendment to Bylaws of Monarch Casino & Resort, Inc. adopted
            January 24, 1995 is filed as an exhibit to this Form 10-K.

      4.01  Specimen Common Stock Certificate for the Common Stock of Monarch
            Casino & Resort, Inc. is incorporated herein by reference from
            the Company's Form S-1 registration statement (SEC File 33-
            64556), Part II, Item 16, Exhibit 4.01.

      4.02  Amended and Restated Monarch Casino & Resort, Inc. 1993 Directors'
            Stock Option Plan is incorporated herein by reference to the
            Company's Form 10-K report (SEC File 0-022088) for the fiscal year
            ended December 31,1998, Item 14(c), Exhibit 4.02.

      4.03  Amended and Restated Monarch Casino & Resort, Inc. 1993 Executive
            Long Term Incentive Plan is incorporated herein by reference to
            the Company's Form 10-K report (SEC File 0-22088) for the fiscal
            year ended December 31, 1997, Item 14(c), Exhibit 4.03.

      4.04  Amended and Restated Monarch Casino & Resort, Inc. 1993 Employee
            Stock Option Plan is incorporated herein by reference to the
            Company's Form 10-K report (SEC File 0-22088) for the fiscal year
            ended December 31, 1997, Item 14(c), Exhibit 4.04.

     10.01  Construction and Reducing Revolving Credit Agreement, dated as of
            December 29, 1997, among Golden Road Motor Inn, Inc. as Borrower,
            Monarch Casino & Resort, Inc., John Farahi, Bahram Farahi, and
            Behrouz Farahi as guarantors, the Lenders as defined therein, and
            Wells Fargo Bank as administrative and collateral Agent for the
            Lenders and Swingline Lender is incorporated herein by reference
            to the Company's Form 8-K report (SEC File 0-22088) dated January
            14, 1998, Exhibit 10.01.

     10.02  First Amendment to Construction and Reducing Revolving Credit
            Agreement, dated as of January 9, 1998, among Golden Road Motor
            Inn, Inc. as Borrower, Monarch Casino & Resort, Inc., John Farahi,
            Bahram Farahi, and Behrouz Farahi as guarantors, the Lenders as
            defined therein, and Wells Fargo Bank as administrative and
            collateral Agent for the Lenders, Swingline Lender and L/C Issuer
            is incorporated herein by reference to the Company's Form 10-K

                                   -59-
            report (SEC File 0-22088) for the fiscal year ended December 31,
            1997, Item 14(c), Exhibit 10.02.

     10.03  Second Amendment to Construction and Reducing Revolving Credit
            Agreement, dated as of June 12, 1998, among Golden Road Motor Inn,
            Inc. as Borrower, Monarch Casino & Resort, Inc., John Farahi,
            Bahram Farahi, and Behrouz Farahi as guarantors, the Lenders as
            defined therein, and Wells Fargo Bank as administrative and
            collateral Agent for the Lenders, Swingline Lender and L/C Issuer
            is incorporated herein by reference to the Company's Form 10-Q
            report (SEC File 0-22088) for the fiscal quarter ended June 30,
            1998, Item 6(a), Exhibit 10.01.

     10.04  Term Loan Agreement, entered as of the 23rd day of July, 1998, by
            and among Golden Road Motor Inn, Inc., as Borrower, Monarch Casino
            & Resort, Inc., John Farahi, Bahram Farahi and Behrouz Farahi as
            guarantors, and U.S. Bank National Association as Term Lender is
            incorporated herein by reference to the Company's Form 10-Q report
            (SEC File 0-22088) for fiscal quarter ended September 30, 1998,
            Item 6(a), Exhibit 10.01.

     10.05  Schedule to Master Loan Agreement, dated as of December 16, 1998;
            Master Loan Agreement, dated as of October 3, 1998; and
            Guaranties, dated as of September 9, 1998, by and among Golden
            Road Motor Inn, Inc., as Borrower, Monarch Casino & Resort, Inc.,
            John Farahi, Bahram Farahi and Behrouz Farahi as guarantors, and
            U.S. Bank Leasing and Financial as Lender is incorporated herein
            by reference to the Company's Form 10-K report (SEC File 0-22088)
            for the fiscal year ended December 31, 1998, Item 14(c), Exhibit
            10.05.

     10.06  Nonstandardized 401(k) Plan Adoption Agreement between Monarch
            Casino & Resort, Inc. and Smith Barney Shearson dated November 7,
            1995 is incorporated herein by reference to the Company's Form
            10-K report (SEC File 0-22088) for the fiscal year ended December
            31, 1995, Item 14(a)(3), Exhibit 10.21.

     10.07  Recordkeeping Service Agreement between Monarch Casino & Resort,
            Inc. and Travelers Recordkeeping dated June 29, 1995 is
            incorporated herein by reference to the Company's Form 10-K
            report (SEC File 0-22088) for the fiscal year ended December 31,
            1995, Item 14(a)(3), Exhibit 10.22.

     10.08  Trademark Agreement between Golden Road Motor Inn, Inc. and
            Atlantis Lodge, Inc., dated February 3, 1996 is incorporated
            herein by reference to the Company's Form 10-K report (SEC File
            0-22088) for the fiscal year ended December 31, 1995, Item
            14(a)(3), Exhibit 10.23.

     10.09  Business Loan Agreement between Golden Road Motor Inn, Inc. and
            Colonial Bank, dated November 17, 1999; Promissory Note by Golden
            Road Motor Inn, Inc. in favor of Colonial Bank, dated November 17,
            1999; Commercial Guaranty issued by John Farahi in favor of
            Colonial Bank, dated November 17, 1999; Commercial Guaranty issued
            by Bahram Farahi in favor of Colonial Bank, dated November 17,
            1999; and Commercial Guaranty issued by Ben Farahi, dated
            November 17, 1999 is incorporated herein by reference to the

                                   -60-
            Company's Form 10-K report (SEC File 0-22088) for the fiscal year
            ended December 31, 1999, Item 14(c), Exhibit 10.14.

     10.10  Schedule to Master Loan Agreement, dated as of April 1, 1999;
            Master Loan Agreement, dated as of October 3, 1998; and
            Guaranties, dated as of September 9, 1998, by and among Golden
            Road Motor Inn, Inc., as Borrower, Monarch Casino & Resort, Inc.,
            John Farahi, Bahram Farahi and Behrouz Farahi as guarantors, and
            U.S. Bank Leasing and Financial as Lender is incorporated herein
            by reference to the Company's Form 10-K report (SEC File 0-22088)
            for the fiscal year ended December 31, 1999, Item 14(c),
            Exhibit 10.15.

     10.11  Schedule to Master Loan Agreement, dated as of April 19, 1999;
            Master Loan Agreement, dated as of October 3, 1998; and
            Guaranties, dated as of September 9, 1998, by and among Golden
            Road Motor Inn, Inc., as Borrower, Monarch Casino & Resort, Inc.,
            John Farahi, Bahram Farahi and Behrouz Farahi as guarantors, and
            U.S. Bank Leasing and Financial as Lender is incorporated herein
            by reference to the Company's Form 10-K report (SEC File 0-22088)
            for the fiscal year ended December 31, 1999, Item 14(c),
            Exhibit 10.16.

     10.12  Schedule to Master Loan Agreement, dated as of May 5, 1999;
            Master Loan Agreement, dated as of October 3, 1998; and
            Guaranties, dated as of September 9, 1998, by and among Golden
            Road Motor Inn, Inc., as Borrower, Monarch Casino & Resort, Inc.,
            John Farahi, Bahram Farahi and Behrouz Farahi as guarantors, and
            U.S. Bank Leasing and Financial as Lender is incorporated herein
            by reference to the Company's Form 10-K report (SEC File 0-22088)
            for the fiscal year ended December 31, 1999, Item 14(c),
            Exhibit 10.17.

     10.13  Schedule to Master Loan Agreement, dated as of May 24, 1999;
            Master Loan Agreement, dated as of October 3, 1998; and
            Guaranties, dated as of September 9, 1998, by and among Golden
            Road Motor Inn, Inc., as Borrower, Monarch Casino & Resort, Inc.,
            John Farahi, Bahram Farahi and Behrouz Farahi as guarantors, and
            U.S. Bank Leasing and Financial as Lender is incorporated herein
            by reference to the Company's Form 10-K report (SEC File 0-22088)
            for the fiscal year ended December 31, 1999, Item 14(c),
            Exhibit 10.18.

     10.14  Schedule to Master Loan Agreement, dated as of June 23, 1999;
            Master Loan Agreement, dated as of October 3, 1998; and
            Guaranties, dated as of September 9, 1998, by and among Golden
            Road Motor Inn, Inc., as Borrower, Monarch Casino & Resort, Inc.,
            John Farahi, Bahram Farahi and Behrouz Farahi as guarantors, and
            U.S. Bank Leasing and Financial as Lender is incorporated herein
            by reference to the Company's Form 10-K report (SEC File 0-22088)
            for the fiscal year ended December 31, 1999, Item 14(c),
            Exhibit 10.19.

     10.15  Agreement dated November 3, 1999 between Golden Road Motor Inn,
            Inc. and First Security Leasing Company of Nevada is incorporated
            herein by reference to the Company's Form 10-Q report (SEC File
            0-22088) for the fiscal quarter ended September 30, 2000, Item
            6(a), Exhibit 10.01.

                                   -61-
     10.16  Agreement dated November 3, 1999 between Golden Road Motor Inn,
            Inc. and First Security Leasing Company of Nevada is incorporated
            herein by reference to the Company's Form 10-Q report (SEC File
            0-22088) for the fiscal quarter ended September 30, 2000, Item
            6(a), Exhibit 10.02.

     10.17  Credit Agreement, dated as of February 20, 2004, among Golden Road
            Motor Inn, Inc. as Borrower, Monarch Casino & Resort, Inc., as
            Guarantor, the Lenders as defined therein, and Wells Fargo Bank as
            administrative and collateral Agent for the Lenders and Swingline
            Lender is incorporated herein by reference to the Company's Form
            8-K report (SEC File 0-22088) dated March 8, 2004, Exhibit 99.1.

     10.18  Lease Agreement and Option to Purchase dated as of January 29,
            2004, between Golden Road Motor Inn, Inc. as Lessee and Biggest
            Little Investments, L.P. as Lessor is filed herewith.

     10.19  Purchase Option Agreement dated as of September 15, 2003 between
            South Hills Investment Company as Seller and Monarch Casino and
            Resort, Inc. as Buyer is filed herewith.

     21.01  Amended and Restated List of Subsidiaries of Monarch Casino &
            Resort, Inc. is incorporated herein by reference to the Company's
            Form 10-K report (SEC File 0-22088) for the fiscal year ended
            December 31, 1999, Item 14(c), Exhibit 21.01.

     23.1   Consent of Ernst & Young LLP

     23.2   Consent of Deloitte & Touche LLP

     31.1   Certification pursuant to Section 302 of the Sarbanes-Oxley Act of
            2002

     31.2   Certification pursuant to Section 302 of the Sarbanes-Oxley Act of
            2002

     32.1   Certification pursuant to 18 U.S.C. Section 1350, as adopted
            pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 is filed
            as an exhibit to this Form 10-K.

     32.2   Certification pursuant to 18 U.S.C. Section 1350, as adopted
            pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 is filed
            as an exhibit to this Form 10-K.















                                   -62-
                                  SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange
Act of 1934, the registrant has duly caused this report to be signed on its
behalf by the undersigned, thereunto duly authorized.

                                       MONARCH CASINO & RESORT, INC.
                                               (Registrant)

<TABLE>
<S>                                    <C>
Date: March 11, 2004                   By: /s/ BEN FARAHI
                                       ------------------------------------
                                       Ben Farahi, Co-Chairman of the Board,
                                       Secretary, Treasurer and Chief
                                       Financial Officer (Principal Financial
                                       Officer and Duly Authorized Officer)
</TABLE>

Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
registrant and in the capacities and on the dates indicated.

<TABLE>
<CAPTION>
     Signature          Title                                   Date
     ------------------ -----------------------------------     ----
     <S>                <C>                                     <C>
     /S/ JOHN FARAHI    Co-Chairman of the Board of Directors,  March 11, 2004
     ------------------ Chief Executive Officer (Principal
     John Farahi        Executive Officer) and Director

     /S/ BOB FARAHI     Co-Chairman of the Board of Directors,  March 11, 2004
     ------------------ President, and Director
     Bob Farahi

     /S/ BEN FARAHI     Co-Chairman of the Board of Directors,  March 11, 2004
     ------------------ Secretary, Treasurer, Chief Financial
     Ben Farahi         Officer (Principal Financial Officer
                        and Principal Accounting Officer) and
                        Director

     /S/ CRAIG. F.
         SULLIVAN       Director                                March 11, 2004
     ------------------
     Craig F. Sullivan

     /S/ RONALD R.
         ZIDECK         Director                                March 11, 2004
     ------------------
     Ronald R. Zideck

     /S/ CHARLES W.
         SCHARER        Director                                March 11, 2004
     ------------------
     Charles W. Scharer
</TABLE>

                                   -63-
                                                                   EXIBIT 31.1

CERTIFICATIONS PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Ben Farahi, Chief Financial Officer of Monarch Casino & Resort, Inc.,
certify that:

1. I have reviewed this annual report on Form 10-K of Monarch Casino & Resort,
   Inc., a Nevada Corporation;

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

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

4. The registrant's other certifying officer and I are responsible for
   establishing and maintaining disclosure controls and procedures (as
   defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant
   and have:
     a) designed such disclosure controls and procedures, or caused such
        disclosure controls and procedures to be designed under our
        supervision, to ensure that material information relating to the
        registrant, including its consolidated subsidiaries, is made
        known to us by others within those entities, particularly during
        the period in which this report is being prepared;
     b) evaluated the effectiveness of the registrant's disclosure controls
        and procedures and presented in this report our conclusions about the
        effectiveness of the disclosure controls and procedures, as of the
        end of the period covered by this report based on such evaluation; and
     c) disclosed in this report any change in the registrant's internal
        control over financial reporting that occurred during the registrant's
        fourth fiscal quarter that has materially affected, or is reasonably
        likely to materially affect, the registrant's internal control over
        financial reporting; and

5. The registrant's other certifying officer and I have disclosed, based on
   our most recent evaluation of internal control and reporting, to the
   registrant's auditors and the audit committee of registrant's board of
   directors (or persons performing the equivalent functions):

     a) all significant deficiencies and material weaknesses in the design or
        operation of internal control over financial reporting which are
        reasonably likely to adversely affect the registrant's ability to
        record, process, summarize and report financial information; and
     b) any fraud, whether or not material, that involves management or other
        employees who have a significant role in the registrant's internal
        control over financial reporting.

Date: March 11, 2004

By: /s/ Ben Farahi
    ---------------
        Ben Farahi
        Chief Financial Officer, Secretary and Treasurer


                                   -64-
                                                                  EXHIBIT 31.2

I, John Farahi, Chief Executive Officer of Monarch Casino & Resort, Inc.,
certify that:

1. I have reviewed this annual report on Form 10-K of Monarch Casino & Resort,
   Inc., a Nevada Corporation;

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

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

4. The registrant's other certifying officer and I are responsible for
   establishing and maintaining disclosure controls and procedures (as
   defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant
   and have:
     a) designed such disclosure controls and procedures, or caused such
        disclosure controls and procedures to be designed under our
        supervision, to ensure that material information relating to the
        registrant, including its consolidated subsidiaries, is made
        known to us by others within those entities, particularly during
        the period in which this report is being prepared;
     b) evaluated the effectiveness of the registrant's disclosure controls
        and procedures and presented in this report our conclusions about the
        effectiveness of the disclosure controls and procedures, as of the
        end of the period covered by this report based on such evaluation; and
     c) disclosed in this report any change in the registrant's internal
        control over financial reporting that occurred during the registrant's
        fourth fiscal quarter that has materially affected, or is reasonably
        likely to materially affect, the registrant's internal control over
        financial reporting; and

5. The registrant's other certifying officer and I have disclosed, based on
   our most recent evaluation of internal control and reporting, to the
   registrant's auditors and the audit committee of registrant's board of
   directors (or persons performing the equivalent functions):

     a) all significant deficiencies and material weaknesses in the design or
        operation of internal control over financial reporting which are
        reasonably likely to adversely affect the registrant's ability to
        record, process, summarize and report financial information; and
     b) any fraud, whether or not material, that involves management or other
        employees who have a significant role in the registrant's internal
        control over financial reporting.


Date: March 11, 2004

By: /s/ John Farahi
    ---------------
        John Farahi
        Chief Executive Officer



                                   -65-
                                EXHIBIT INDEX

<TABLE>
<CAPTION>

  Exhibit                                                                          Page
  Number    Description                                                            Number
- ----------- ------------------------------------------------------------------     --------
<S>         <C>                                                                    <C>

      3.01  Articles of Incorporation of Monarch Casino & Resort, Inc., filed
            June 11, 1993 are incorporated herein by reference from the
            Company's Form S-1 registration statement (SEC File 33-64556),
            Part II, Item 16, Exhibit 3.01.

      3.02  Bylaws of Monarch Casino & Resort, Inc., adopted June 14, 1993
            are incorporated herein by reference from the Company's Form S-1
            registration statement (SEC File 33-64556), Part II, Item 16,
            Exhibit 3.02.

      3.03  Articles of Incorporation of Golden Road Motor Inn, Inc. filed
            March 6, 1973; Certificate Amending Articles of Incorporation of
            Golden Road Motor Inn, Inc. filed August 29, 1973; and
            Certificate of Amendment of Articles of Incorporation filed April
            5, 1984 are incorporated herein by reference from the Company's
            Form S-1 registration statement (SEC File 33-64556), Part II,
            Item 16, Exhibit 3.03.

      3.04  Bylaws of Golden Road Motor Inn, Inc., adopted March 9, 1973 are
            incorporated herein by reference from the Company's Form S-1
            registration statement (SEC File 33-64556), Part II, Item 16,
            Exhibit 3.04.

      3.05  Amendment to Bylaws of Monarch Casino & Resort, Inc. adopted
            January 24, 1995 is filed as an exhibit to this Form 10-K.

      4.01  Specimen Common Stock Certificate for the Common Stock of Monarch
            Casino & Resort, Inc. is incorporated herein by reference from
            the Company's Form S-1 registration statement (SEC File 33-
            64556), Part II, Item 16, Exhibit 4.01.

      4.02  Amended and Restated Monarch Casino & Resort, Inc. 1993 Directors'
            Stock Option Plan is incorporated herein by reference to the
            Company's Form 10-K report (SEC File 0-022088) for the fiscal year
            ended December 31,1998, Item 14(c), Exhibit 4.02.

      4.03  Amended and Restated Monarch Casino & Resort, Inc. 1993 Executive
            Long Term Incentive Plan is incorporated herein by reference to
            the Company's Form 10-K report (SEC File 0-22088) for the fiscal
            year ended December 31, 1997, Item 14(c), Exhibit 4.03.

      4.04  Amended and Restated Monarch Casino & Resort, Inc. 1993 Employee
            Stock Option Plan is incorporated herein by reference to the
            Company's Form 10-K report (SEC File 0-22088) for the fiscal year
            ended December 31, 1997, Item 14(c), Exhibit 4.04.

     10.01  Construction and Reducing Revolving Credit Agreement, dated as of
            December 29, 1997, among Golden Road Motor Inn, Inc. as Borrower,
            Monarch Casino & Resort, Inc., John Farahi, Bahram Farahi, and
            Behrouz Farahi as guarantors, the Lenders as defined therein, and
            Wells Fargo Bank as administrative and collateral Agent for the
            Lenders and Swingline Lender is incorporated herein by reference
            to the Company's Form 8-K report (SEC File 0-22088) dated January
            14, 1998, Exhibit 10.01.

     10.02  First Amendment to Construction and Reducing Revolving Credit
            Agreement, dated as of January 9, 1998, among Golden Road Motor
            Inn, Inc. as Borrower, Monarch Casino & Resort, Inc., John Farahi,
            Bahram Farahi, and Behrouz Farahi as guarantors, the Lenders as
            defined therein, and Wells Fargo Bank as administrative and
            collateral Agent for the Lenders, Swingline Lender and L/C Issuer
            is incorporated herein by reference to the Company's Form 10-K
            report (SEC File 0-22088) for the fiscal year ended December 31,
            1997, Item 14(c), Exhibit 10.02.

                                   -66-
     10.03  Second Amendment to Construction and Reducing Revolving Credit
            Agreement, dated as of June 12, 1998, among Golden Road Motor Inn,
            Inc. as Borrower, Monarch Casino & Resort, Inc., John Farahi,
            Bahram Farahi, and Behrouz Farahi as guarantors, the Lenders as
            defined therein, and Wells Fargo Bank as administrative and
            collateral Agent for the Lenders, Swingline Lender and L/C Issuer
            is incorporated herein by reference to the Company's Form 10-Q
            report (SEC File 0-22088) for the fiscal quarter ended June 30,
            1998, Item 6(a), Exhibit 10.01.

     10.04  Term Loan Agreement, entered into as of the 23rd day of July,
            1998, by and among Golden Road Motor Inn, Inc., as Borrower,
            Monarch Casino & Resort, Inc., John Farahi, Bahram Farahi and
            Behrouz Farahi as guarantors, and U.S. Bank National Association
            as Term Lender is incorporated herein by reference to the
            Company's Form 10-Q report (SEC File 0-22088) for the fiscal
            quarter ended September 30, 1998, Item 6(a), Exhibit 10.01.

     10.05  Schedule to Master Loan Agreement, dated as of December 16, 1998;
            Master Loan Agreement, dated as of October 3, 1998; and
            Guaranties, dated as of September 9, 1998, by and among Golden
            Road Motor Inn, Inc., as Borrower, Monarch Casino & Resort, Inc.,
            John Farahi, Bahram Farahi and Behrouz Farahi as guarantors, and
            U.S. Bank Leasing and Financial as Lender is incorporated herein
            by reference to the Company's Form 10-K report (SEC File 0-22088)
            for the fiscal year ended December 31, 1998, Item 14(c), Exhibit
            10.05.

     10.06  Nonstandardized 401(k) Plan Adoption Agreement between Monarch
            Casino & Resort, Inc. and Smith Barney Shearson dated November 7,
            1995 is incorporated herein by reference to the Company's Form
            10-K report (SEC File 0-22088) for the fiscal year ended December
            31, 1995, Item 14(a)(3), Exhibit 10.21.

     10.07  Recordkeeping Service Agreement between Monarch Casino & Resort,
            Inc. and Travelers Recordkeeping dated June 29, 1995 is
            incorporated herein by reference to the Company's Form 10-K
            report (SEC File 0-22088) for the fiscal year ended December 31,
            1995, Item 14(a)(3), Exhibit 10.22.

     10.08  Trademark Agreement between Golden Road Motor Inn, Inc. and
            Atlantis Lodge, Inc., dated February 3, 1996 is incorporated
            herein by reference to the Company's Form 10-K report (SEC File
            0-22088) for the fiscal year ended December 31, 1995, Item
            14(a)(3), Exhibit 10.23.

     10.09  Business Loan Agreement between Golden Road Motor Inn, Inc. and
            Colonial Bank, dated November 17, 1999; Promissory Note by Golden
            Road Motor Inn, Inc. in favor of Colonial Bank, dated November 17,
            1999; Commercial Guaranty issued by John Farahi in favor of
            Colonial Bank, dated November 17, 1999; Commercial Guaranty issued
            by Bahram Farahi in favor of Colonial Bank, dated November 17,
            1999; and Commercial Guaranty issued by Ben Farahi, dated
            November 17, 1999 is incorporated herein by reference to the
            Company's Form 10-K report (SEC File 0-22088) for the fiscal year
            ended December 31, 1999, Item 14(c), Exhibit 10.14.

     10.10  Schedule to Master Loan Agreement, dated as of April 1, 1999;
            Master Loan Agreement, dated as of October 3, 1998; and
            Guaranties, dated as of September 9, 1998, by and among Golden
            Road Motor Inn, Inc., as Borrower, Monarch Casino & Resort, Inc.,
            John Farahi, Bahram Farahi and Behrouz Farahi as guarantors, and
            U.S. Bank Leasing and Financial as Lender is incorporated herein
            by reference to the Company's Form 10-K report (SEC File 0-22088)
            for the fiscal year ended December 31, 1999, Item 14(c),
            Exhibit 10.15.






                                   -67-
     10.11  Schedule to Master Loan Agreement, dated as of April 19, 1999;
            Master Loan Agreement, dated as of October 3, 1998; and
            Guaranties, dated as of September 9, 1998, by and among Golden
            Road Motor Inn, Inc., as Borrower, Monarch Casino & Resort, Inc.,
            John Farahi, Bahram Farahi and Behrouz Farahi as guarantors, and
            U.S. Bank Leasing and Financial as Lender is incorporated herein
            by reference to the Company's Form 10-K report (SEC File 0-22088)
            for the fiscal year ended December 31, 1999, Item 14(c),
            Exhibit 10.16.

     10.12  Schedule to Master Loan Agreement, dated as of May 5, 1999;
            Master Loan Agreement, dated as of October 3, 1998; and
            Guaranties, dated as of September 9, 1998, by and among Golden
            Road Motor Inn, Inc., as Borrower, Monarch Casino & Resort, Inc.,
            John Farahi, Bahram Farahi and Behrouz Farahi as guarantors, and
            U.S. Bank Leasing and Financial as Lender is incorporated herein
            by reference to the Company's Form 10-K report (SEC File 0-22088)
            for the fiscal year ended December 31, 1999, Item 14(c),
            Exhibit 10.17.

     10.13  Schedule to Master Loan Agreement, dated as of May 24, 1999;
            Master Loan Agreement, dated as of October 3, 1998; and
            Guaranties, dated as of September 9, 1998, by and among Golden
            Road Motor Inn, Inc., as Borrower, Monarch Casino & Resort, Inc.,
            John Farahi, Bahram Farahi and Behrouz Farahi as guarantors, and
            U.S. Bank Leasing and Financial as Lender is incorporated herein
            by reference to the Company's Form 10-K report (SEC File 0-22088)
            for the fiscal year ended December 31, 1999, Item 14(c),
            Exhibit 10.18.

     10.14  Schedule to Master Loan Agreement, dated as of June 23, 1999;
            Master Loan Agreement, dated as of October 3, 1998; and
            Guaranties, dated as of September 9, 1998, by and among Golden
            Road Motor Inn, Inc., as Borrower, Monarch Casino & Resort, Inc.,
            John Farahi, Bahram Farahi and Behrouz Farahi as guarantors, and
            U.S. Bank Leasing and Financial as Lender is incorporated herein
            by reference to the Company's Form 10-K report (SEC File 0-22088)
            for the fiscal year ended December 31, 1999, Item 14(c),
            Exhibit 10.19.

     10.15  Agreement dated November 3, 1999 between Golden Road Motor Inn,
            Inc. and First Security Leasing Company of Nevada is incorporated
            herein by reference to the Company's Form 10-Q report (SEC File
            0-22088) for the fiscal quarter ended September 30, 2000, Item
            6(a), Exhibit 10.01.

     10.16  Agreement dated November 3, 1999 between Golden Road Motor Inn,
            Inc. and First Security Leasing Company of Nevada is incorporated
            herein by reference to the Company's Form 10-Q report (SEC File
            0-22088) for the fiscal quarter ended September 30, 2000, Item
            6(a), Exhibit 10.02.

     10.17  Credit Agreement, dated as of February 20, 2004, among Golden Road
            Motor Inn, Inc. as Borrower, Monarch Casino & Resort, Inc., as
            Guarantor, the Lenders as defined therein, and Wells Fargo Bank as
            administrative and collateral Agent for the Lenders and Swingline
            Lender is incorporated herein by reference to the Company's Form
            8-K report (SEC File 0-22088) dated March 8, 2004, Exhibit 99.1.

      10.18  Lease Agreement and Option to Purchase dated as of January 29,
            2004, between Golden Road Motor Inn, Inc. as Lessee and Biggest
            Little Investments, L.P. as Lessor is filed herewith.

     10.19  Purchase Option Agreement dated as of September 15, 2003 between
            South Hills Investment Company as Seller and Monarch Casino and
            Resort, Inc. as Buyer is filed herewith.

     21.01  Amended and Restated List of Subsidiaries of Monarch Casino &
            Resort, Inc. is incorporated herein by reference to the Company's
            Form 10-K report (SEC File 0-22088) for the fiscal year ended
            December 31, 1999, Item 14(c), Exhibit 21.01.

                                   -68-
     23.1   Consent of Ernst & Young LLP

     23.2   Consent of Deloitte & Touche LLP

     31.1   Certification pursuant to Section 302 of the Sarbanes-Oxley Act of
            2002

     31.2   Certification pursuant to Section 302 of the Sarbanes-Oxley Act of
            2002

     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

</TABLE>












































                                   -69-

EXHIBIT 23.1








                       CONSENT OF INDEPENDENT AUDITORS

We consent to the incorporation by reference in the Registration Statement Nos.
333-85412, 333-85418 and 333-85420 pertaining to the Employees Savings Plans of
Monarch Casino & Resort, Inc. of our report dated February 13, 2004, except for
Note 5, as to which the date is February 20, 2004, with respect to the
Consolidated Financial Statements and schedules of Monarch Casino & Resort,
Inc. included in the 2003 Annual Report on Form 10-K for the year ended
December 31, 2003.



                                                         /s/ Ernst & Young LLP

Las Vegas, Nevada
February 13, 2004, except for Note 5, as to which the date is February 20, 2004































                                   -70-




EXHIBIT 23.2








INDEPENDENT AUDITORS' CONSENT

     We consent to the incorporation by reference in Registration Statement
Nos. 333-85412, 333-85418 and 333-85420 of Monarch Casino & Resort, Inc., on
Form S-8 of our report dated February 18, 2003, appearing in this Annual
Report on Form 10-K of Monarch Casino & Resort, Inc., for the year ended
December 31, 2003.


/s/ Deloitte & Touche LLP

Reno, Nevada
March 8, 2004
































                                   -71-
EXHIBIT 32.1

                       CERTIFICATION PURSUANT TO
                        18 U.S.C. SECTION 1350,
                         AS ADOPTED PURSUANT TO
             SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002


     In connection with the Annual Report on Form 10-K of Monarch Casino &
Resort, Inc., (the "Company") for the year ended December 31, 2003 as filed
with the Securities and Exchange Commission on the date hereof (the "Report"),
I, John Farahi, Chief Executive Officer of the Company, certify, pursuant to
and for purposes of 18 U.S.C. Section 1350, as adopted pursuant to Section 906
of the Sarbanes-Oxley Act of 2002, that:

         1. The Report fully complies with the requirements of section
            13(a) or 15(d) of the Securities Exchange Act of 1934; and

         2. The information contained in the Report fairly presents, in
            all material respects, the financial condition of the
            Company as of the dates indicated and result of operations
            of the Company for the periods indicated.




                                    /S/ JOHN FARAHI
                                    ---------------
                                        John Farahi
                                        Chief Executive Officer

                                        March 11, 2004


























                                   -72-
EXHIBIT 32.2

                        18 U.S.C. SECTION 1350,
                         AS ADOPTED PURSUANT TO
              SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002


In connection with the Annual Report on Form 10-K of Monarch Casino & Resort,
Inc., (the "Company") for the year ended December 31, 2003 as filed with the
Securities and Exchange Commission on the date hereof (the "Report"), I, Ben
Farahi, Chief Financial Officer, Secretary and Treasurer of the Company,
certify, pursuant to and for purposes of 18 U.S.C. Section 1350, as adopted
pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

      1. The Report fully complies with the requirements of section
         13(a) or 15(d) of the Securities Exchange Act of 1934; and

      2. The information contained in the Report fairly presents, in
         all material respects, the financial condition of the Company
         as of the dates indicated and result of operations of the
         Company for the periods indicated.




                                    /S/ BEN FARAHI
                                    --------------
                                        BEN FARAHI
                                        Chief Financial Officer, Secretary and
                                        Treasurer

                                        March 11, 2004


























                                   -73-

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-1
<SEQUENCE>3
<FILENAME>leaseage.txt
<TEXT>

                                                                EXHIBIT 10.18

                    LEASE AGREEMENT AND OPTION TO PURCHASE

     THIS LEASE AGREEMENT AND OPTION TO PURCHASE is made and entered into this
29th day of January, 2004, between Biggest Little Investments, L.P., a Delaware
limited partnership, hereinafter referred to as "LESSOR," and Golden Road Motor
Inn, Inc., a Nevada corporation, hereinafter referred to "LESSEE."

                                   ARTICLE 1
                                GRANT AND TERM

     1.1 AGREEMENT TO LEASE.  LESSOR hereby leases the hereinafter described
real property to LESSEE, and LESSEE hereby leases said real property from
LESSOR for the term and according to the terms, covenants, agreements,
representations and conditions set forth herein.

     1.2 PROPERTY.  The subject property is all that certain property described
in Exhibit "A" attached hereto and located in the City of Reno, County of
Washoe, State of Nevada, hereinafter referred to as the "Property", including
the improvements to be constructed by LESSOR.  The Property is part of a
Shopping Center to be known as The Village, and formerly known as the Sierra
Marketplace Shopping Center (hereinafter "Shopping Center".)  LESSOR represents
that this Lease is subject only to the easements and encumbrances of record
against the Property as shown in the Title Report (described below).

     1.3 TERM.  The term ("Term") of this Lease shall be fifteen (15) years
commencing on the Commencement Date (defined below) and expiring at 5:00 p.m.
on the last day of the Term, unless sooner terminated under any provisions
hereof.  The Term of this Lease and the LESSEE'S obligation to pay rent, as
provided in Section 1.4 below, shall commence (hereinafter "Commencement Date")
on the first to occur of the following events:

        A. Following completion of the Improvements (defined below), the date
on which the Property is approved for use by the appropriate governmental
agency.

        B. The date on which the LESSEE shall open the Property for pedestrian
and vehicle traffic to the public.

     In the event that the Commencement Date does not occur on the first day of
the month, then the Term shall commence on the first day of the month next
succeeding the Commencement Date, provided LESSEE shall pay Minimum Monthly
Rent and Additional Rent as provided in Article 2 below, for the fractional
month from the Commencement Date through the first day of the next succeeding
month on a per diem basis, calculated on the basis of a thirty (30)-day month,
in advance.  All Lease expirations, renewal dates, notices of options to renew,
and any other provision relating to the commencement of the Term of this Lease
shall be determined by reference to (i) the Commencement Date where same occurs
of the first day of the month, or (ii) on the first day of the next succeeding
month where the Commencement Date does not occur on the first day of the month.

     1.4 OPTIONS TO EXTEND LEASE PERIOD.  LESSOR hereby grants to LESSEE three
(3) successive options to renew the Term of this Lease for additional five (5)
year terms each.  The first renewal option is granted at the expiration of this
original Lease Term, provided LESSEE is not in default

                                     -1-
under this Lease.  The two (2) additional options to extend and renew this
Lease for successive five (5) year terms each, are exercisable in the event
LESSEE properly exercised the prior option and provided LESSEE is not in
default under this Lease at the time thereof.  Said renewal terms shall be
collectively referred to herein as "Renewal Terms" and individually referred to
as "Renewal Term."  Each option to renew this Lease shall be exercised by
LESSEE giving written notice thereof to LESSOR at least ninety (90) days prior
to expiration of the original term or the Renewal Terms of this Lease, but not
before 180 days prior to said expiration.  All of the terms and provisions of
this Lease shall continue in full force and effect and shall apply in all
respects to all Renewal Terms and all references in this Lease to Term shall
hereinafter include the Renewal Terms.  During each Renewal Term, the Minimum
Monthly Rent shall be adjusted upward and increased as provided in Section 2.1
hereof.

     1.5 LESSOR'S FAILURE TO COMPLETE IMPROVEMENTS.  In the event the traffic
control signal on South Virginia Street at the access point to the Property and
the other build-to-suit improvements to be constructed by LESSOR pursuant to
Article 3 below, are not completed on or before December 31, 2004, this Lease
may be terminated by LESSEE upon not less than ten (10) days prior written
notice to LESSOR.

     1.6 LEASEHOLD POLICY OF TITLE INSURANCE.  LESSOR has delivered to LESSEE a
preliminary title report prepared by Western Title Company, Inc. (Order No.:
00138583) dated as of December 15, 2003 (the "Title Report").  LESSOR
represents that the Title Report is for the Shopping Center. Within 45 days
after the mutual execution and delivery of this Lease, LESSEE, in LESSEE'S sole
discretion and at its sole expense, may cause a title company to issue a
leasehold policy of title insurance for the Property (hereinafter "Leasehold
Title Policy"), insuring that LESSEE is leasing the Property subject only to
such exceptions acceptable to LESSEE and the standard printed exceptions
included within a Leasehold Title Policy.  In the event that LESSEE is unable
to have a Leasehold Title Policy issued which is acceptable to LESSEE within
the 45 day period stated herein, this Lease may be terminated by LESSEE upon
not less than ten (10) days prior written notice to LESSOR.  In the event that
a Leasehold Title Policy is not issued within said 45 day period and LESSEE
does not provide notice of Lease termination to LESSOR within ten (10) days
thereafter, LESSEE shall be deemed to have accepted this Lease subject to only
those exceptions contained in the Title Report and this Lease shall continue in
full force and effect in accordance with its terms.

                                   ARTICLE 2
                            RENT AND OTHER CHARGES

     2.1 RENT.  As and for rent for the Property, LESSEE shall pay LESSOR
monthly rent as follows:

        A. MINIMUM MONTHLY RENT.  The Minimum Monthly Rent shall be $25,000.00
per month for the first sixty (60) months, which shall be increased every sixty
(60) months on the day and the month on which the Commencement Date occurs in
each consecutive sixty (60) month period following the Commencement Date
(hereinafter "Anniversary Date"), as provided in Section 2.1(B) below.

     B. ADJUSTMENTS TO MINIMUM MONTHLY RENT.  The Minimum Monthly Rent is
subject to increase on the first day of the sixty-first (61) calendar month
following the month during which the Commencement Date occurs and on each

                                     -2-
Anniversary Date thereafter for the duration of the Term.  The base for
computing the increase (hereinafter "Beginning Index") is the All Urban
Consumers Index, U.S. Cities Average, All Items category published by the
United States Department of Labor, Bureau of Labor Statistics (hereinafter
"Index"), which is in effect for the month in which the Commencement Date
occurs.  The Index published and in effect the three (3) months preceding each
Anniversary Date (hereinafter "Comparison Index") is used in determining the
amount of the increase from one sixty (60) month period to the next.  Beginning
on the first Anniversary Date, and thereafter on each subsequent Anniversary
Date, the Minimum Monthly rent as indicated in Section 2.1(A) will be increased
by multiplying the Minimum Monthly Rent in effect during the preceding sixty
(60) month period by a fraction, the numerator being the Comparison Index and
the denominator being the Beginning Index.  In no event, however, will the
amount of Minimum Monthly Rent for one sixty (60) month period be less than the
Minimum Monthly Rent for the preceding sixty (60) month period.  Further the
cost of living adjustment will be applied to the Minimum Monthly Rent amount
only.

          i. If, in the future, the Index shall be changed then the Index shall
be converted in accordance with the conversion factor published by the United
Stated Department of Labor, Bureau of Labor Statistics.  In the event the Index
is discontinued or revised during the Term hereof, such other governmental
index or computation with which it is replaced shall be used in order to obtain
substantially the same result that would be obtained if the Index had not been
discontinued or revised.

          ii. No later than five (5) days after each Anniversary Date, LESSOR
will give LESSEE written notice of the adjusted Minimum Monthly Rent payable
for the next succeeding five (5) year period; provided, however, failure of
LESSOR to give such notice shall not be construed as a waiver of any increase
in the Minimum Monthly Rent.

        C. PAYMENT OF RENT.  Rent shall be payable in advance and shall be due
and payable on the first (1st) day of each month, commencing on the
Commencement Date, as provided in Section 2.1 (B) above.  Rent shall be paid to
LESSOR at the address provided herein for service of notice, unless otherwise
directed in writing by the LESSOR.

     2.2 ADDITIONAL RENT.  All charges payable by LESSEE hereunder, other than
Minimum Monthly Rent, are collectively referred to as "Additional Rent."
Unless this Lease provides otherwise, all Additional Rent shall be paid with
the next monthly installment of Minimum Monthly Rent.  The term "Rent" shall
mean Minimum Monthly Rent and Additional Rent.

     2.3 REAL PROPERTY TAXES.

        A. PAYMENT OF TAXES.  LESSEE agrees to pay LESSEE'S pro rata share of
all Real Property Taxes, as hereinafter defined, which may be levied or
assessed by any lawful authority against the land on which buildings are
located and improvements thereon in the Shopping Center.  LESSEE shall pay its
share of such Real Property Taxes upon receipt of a statement from LESSOR
delineating LESSEE'S share of same, which share shall be paid within ten (10)
days after receipt of LESSOR'S statement.  LESSEE hereby agrees for purposes of
this Lease that LESSEE'S proportionate share of such Real Property Taxes is
7.28%.  All Real Property Taxes for the year in which this Lease commences
shall be apportioned and adjusted.


                                     -3-
        B. DEFINITION OF "REAL PROPERTY TAXES".  "Real Property Taxes" means:
(i) any fee, license fee, license tax, business license fee, commercial rental
tax, levy, charge, assessment, penalty or tax (other than inheritance or estate
taxes) imposed by any authority having the direct or indirect power to tax,
including any city, county, state or federal government, or any school,
agriculture, lighting, drainage or other improvement district thereof, as
against any legal or equitable interest of LESSOR in the Property; (ii) any tax
on the LESSOR'S right to receive, or the receipt of, rent or income from the
Property or against LESSOR S business of leasing the Property; (iii) any tax or
charge for fire protection, streets, sidewalks, road maintenance, refuse or
other services provided to the Property by any governmental agency; (iv) any
tax imposed upon this transaction or based upon a reassessment of the Property
due to a change in ownership or transfer of all or part of LESSOR'S interest in
the Property; and (v) any charge or fee replacing any tax previously included
within the definition of Real Property Taxes.  "Real Property Taxes" shall not,
however, include LESSOR'S federal or state income, franchise, inheritance,
estate taxes or any real property transfer taxes.

     2.4 PERSONAL PROPERTY TAXES.

        A. LESSEE shall pay prior to delinquency all taxes charged against the
trade fixtures, furnishings, equipment or any other personal property belonging
to LESSEE.  LESSEE shall use its best efforts to have such personal property
taxed separately from the Property.

        B. If any such taxes on LESSEE'S personal property are levied against
LESSOR or LESSOR'S property, or if the assessed value of the Property is
increased by the inclusion therein of a value placed upon such personal
property or trade fixtures of LESSEE, then LESSOR, after written notice to
LESSEE, shall have the right to pay the taxes based upon such increased
assessments, regardless of the validity thereof, but only under proper protest
if requested by LESSEE in writing.  If LESSOR shall do so, then LESSEE shall,
upon demand, repay to LESSOR the taxes levied against LESSOR, or the proportion
of such taxes resulting from such increase in the assessment.  In any such
event, however, LESSEE, at LESSEE'S sole cost and expense, shall have the
right, in the name of LESSOR and with LESSOR'S full cooperation, to bring suit
in any court of competent jurisdiction to recover the amount of any such taxes
so paid under protest; any amount so recovered to belong to LESSEE.

        C. If any of LESSEE'S personal property is taxed with the Property,
LESSEE shall pay LESSOR the taxes for the personal property within fifteen (15)
days after LESSEE receives a written statement from LESSOR for such personal
property taxes.

     2.5 UTILITIES.  LESSEE shall pay, directly to the appropriate supplier,
the cost of all natural gas, heat, light, power, sewer service, telephone,
water, refuse disposal and other utilities and services supplied to the
Property, unless LESSOR elects to include the cost of any or all of such
utilities and services as a Shopping Center Operating Cost as defined in
Section 2.8.  LESSEE shall pay such charges within ten (10) days of
notification of the amount by the LESSOR.  LESSOR reserves the right to install
and maintain, at LESSOR'S sole expense, separate meters for any public utility
servicing the Property for which a separate meter is not presently installed.
LESSEE may also elect, at LESSEE's sole expense, to


                                     -4-
install and maintain separate meters for any public utility servicing the
Property for which a separate meter is not presently installed.

     2.6 COST OF MAINTAINING PROPERTY. LESSOR shall maintain and repair the
Property in a good, clean and presentable condition and state of repair as
provided in Section 4.6 below, and LESSEE shall pay to LESSOR, as Additional
Rent, sixty six and 66/100 percent (66.66%) of the cost of maintaining and
repairing the Property, with LESSOR to pay the remaining thirty three and
34/100 percent (33.34%) of the cost of maintaining and repairing the Property;
provided that the cost of maintaining the Property under this section shall not
include costs or expenses which are an Operating Cost as defined in Section 2.8
below.

     2.7 LESSEE'S PRO RATA SHARE OF OPERATING COST.  LESSEE will also pay to
LESSOR, as further Additional Rent, a proportionate share of the Shopping
Center's Operating Cost (hereinafter defined).  LESSOR and LESSEE hereby agree
for purposes of this Lease that LESSEE'S proportionate share ("Proportionate
Share") of such Shopping Center's Operating Costs is 7.28%.  Notwithstanding
the foregoing, if during the Lease Term LESSOR permits any tenant or parcel
owner in the Shopping Center to perform any item of Shopping Center Operating
Cost for its sole benefit and at its sole expense in lieu of LESSOR'S
performance thereof (which Shopping Center Operating Cost item is typically
provided by LESSOR to all tenants of the Shopping Center and the cost of which
would be included in Shopping Center Operating Cost pursuant to Section 2.7),
then LESSOR shall have the right, but not the obligation to equitably allocate
the Shopping Center Operating Cost of such specific Shopping Center Operating
Cost item so that only those tenants in the Shopping Center that directly or
indirectly benefit from such Shopping Center Operating Cost item shall pay such
Shopping Center Operating Cost (such tenants shall be hereinafter referred to
as "Cost Pool Tenants.").  In the event of a change in the square footage of
the Shopping Center, LESSEE's Proportionate Share of the Operating Cost shall
be recalculated on the basis of 16,961 square feet (which LESSOR and LESSEE
agree represents the square footage of the building demolished by LESSOR as
part of the build-to-suit improvements required under Article 3 hereof) to the
square footage of the entire Shopping Center.

     2.8 OPERATING COST DEFINED.  For the purpose of this Article 2, the term
"Operating Cost" means the total cost and expense incurred in connection with
the operation, repair, management, maintenance and replacement (provided,
however, if the benefit or useful life of any such repair or replacement
extends beyond the Lease Term, the useful life of such repair or replacement
shall be prorated over the remaining portion of the Lease Term, and LESSEE
shall be liable only for that portion of the cost which is applicable to the
Lease Term) of all Common Areas within the Shopping Center including, without
limitation, general maintenance and repair of all improvements; expenses
incurred by LESSOR under Section 4.6(A) hereof; gardening and landscaping;
snow, water and ice removal and control; security services; liability, property
damage and all other insurance carried by LESSOR under Section 6.2 with types
of coverage and in amounts determined by LESSOR; repairs; asphalt repairs,
resurfacing and striping; painting of improvements; servicing of common grease
interceptors; holiday decorations; snow and ice removal; utilities serving the
improvements and Common Areas; sanitary control; pest control; signage
operation, repair and replacement costs; removal of trash, rubbish, garbage and
other refuse; reasonable reserves for replacements and repairs; a property
management fee consistent with prevailing rates charged in the industry (not to
exceed five percent (5%) of gross Shopping Center

                                     -5-
rents); bookkeeping; advertising and promotional fees; Real Property Taxes; all
personal property taxes assessed for any reason on the personal property used
in connection with the Shopping Center; costs of equipment and machinery used
to maintain or operate the Common Areas and any depreciation of the cost
thereof (including financing); and the cost of personnel to implement such
services, to direct parking, and to police the Common Areas.

     Notwithstanding the foregoing, in no event shall the following items be
included as an Operating Cost: items for which the responsibility of repairing
or maintaining or replacement is the direct responsibility of a particular
tenant under their respective lease with LESSOR, amounts reimbursed by
insurance proceeds, or warranties; utilities or other expenses paid directly by
tenants to suppliers; ground rents; payments on any mortgage, or deed-of-trust;
leasing commissions; the cost of negotiating or enforcing leases of other
tenants; fines, penalties, and late fees or similar costs incurred by LESSOR;
depreciation;  costs of or arising from LESSOR'S charitable or political
contributions; costs, including but not limited to attorneys' fees associated
with the operation of the business of the partnership or entity that
constitutes LESSOR as the same are distinguished from the costs of operation of
the Shopping Center, including partnership accounting and legal matters, costs
of defending any lawsuits with any mortgagee, costs of selling, syndicating,
financing, mortgaging or hypothecating any of LESSOR'S interest in the Shopping
Center or any part thereof, costs of any disputes between LESSOR and its
employees, disputes of LESSOR with Shopping Center management or personnel, or
outside fees paid in connection with disputes with other tenants; costs
incurred in removing and storing the property of former tenants or occupants of
the Shopping Center; lease "takeover" expenses, including, but not limited to,
the expenses incurred by LESSOR with respect to space located in another
building of the Shopping Center of any kind or nature in connection with the
leasing of space in the Shopping Center; costs incurred in connection with the
original construction of the Shopping Center, or; any costs, fees, dues,
contributions or similar expenses for industry associations or similar
organizations.

     2.9 COLLECTION OF THE OPERATING COST.  LESSOR shall have the right to
collect LESSEE'S Proportionate Share (as defined in Section 2.7) of Operating
Cost and all other Additional Rent provided for under this Article 2 including,
without limitation, insurance premiums and Real Property Taxes, on a monthly
basis.  Such amounts shall be based on LESSOR'S reasonable estimate of the
costs, charges or premiums next due, and shall be paid by LESSEE as Additional
Rent upon the basis and at the times described herein.  LESSOR shall provide to
LESSEE a yearly expense estimate statement (hereinafter "Estimate Statement")
which shall set forth LESSOR'S reasonable estimate of the total amount due from
Tenant for the current or next ensuing Lease Year for Lessee's Proportionate
Share of the Operating Cost.  LESSEE shall pay to LESSOR with each installment
of Minimum Monthly Rent an amount equal to one-twelfth (1/12th) of the
estimated amount due from LESSEE as set forth in the Estimate Statement.  At
any time during any Lease Year, LESSOR may provide a new Estimate Statement to
Tenant indicating any additional amount due from LESSEE and LESSEE agrees to
pay such amount to LESSOR within fifteen (15) days after notification of the
amount of the deficiency.  LESSEE'S failure to pay such deficiency to LESSOR
within such fifteen (15)-day period shall constitute a breach of this Lease and
entitle LESSOR to any and all remedies available under this Lease and
applicable law.  Such estimated payments shall be paid to LESSOR with no
obligation to pay the LESSEE interest thereon.  Should LESSEE dispute any
amount billed to LESSEE as Lessee's Proportionate Share of the Operating Cost,
LESSEE may withhold the disputed portion of the

                                     -6-
billing, and timely pay the undisputed portion.  Upon notice of dispute, LESSOR
will expediently provide the information necessary to establish the legitimacy
of the disputed amount.  Upon resolution, should it be determined that any
portion of the withheld amount was due to LESSOR, LESSEE shall immediately pay
to LESSOR said amount, together with interest at the rate of nine percent (9%)
per annum, from the date on which the payment was originally due.  Within a
reasonable period of time after the end of each Lease Year hereunder, LESSOR
shall give to LESSEE a year-end statement (hereinafter "Annual Statement")
which shall indicate all of Lessee's Proportionate Share of the Operating Cost
and other amounts due from LESSEE hereunder for the previous Lease Year, and
the amounts paid by LESSEE relating thereto.  If the amount paid by LESSEE is
less than the amount owed by LESSEE, LESSEE agrees to pay such deficiency to
LESSOR within fifteen (15) days after receipt of the Annual Statement.  If the
amount paid by LESSEE for the prior Lease Year exceeds the amount required to
be paid by LESSEE, such overage shall be credited to amounts due from LESSEE
for the next Lease Year.  If LESSEE defaults under this Lease, LESSOR may apply
any funds in the impound account to any obligation then due under this Lease
without waiving any other remedy available under the Lease or applicable law.

     2.10 LESSEE'S RIGHT TO AUDIT OPERATING COSTS. LESSEE and its agents will
have the right to examine LESSOR'S books and records relating to the Operating
Cost, at LESSOR'S office, and after providing at least fifteen (15) days prior
written notice to LESSOR, according to this section so long as (a) there is no
breach of or event of default under the Lease at the time that the LESSEE
examines LESSOR'S books and records; (b) LESSEE has fully and promptly paid its
Rent, including Lessee's Proportionate Share of the Operating Cost; (c) LESSEE,
its agents and contractors agree that they will not divulge the contents of
LESSOR'S books and records, or the result of their examination; (d) LESSEE, its
agents and contractors agree that they will give LESSOR, at no cost, a copy of
their draft and final reports of their examination of LESSOR'S books and
records; (e) LESSEE requests the examination of LESSOR'S books and records
within one (1) year after receipt of the statement of the Operating Cost with
regard to which LESSEE wishes to examine LESSOR'S books and records; (f) LESSEE
has not examined LESSORS'S books and records within the twelve (12) months
preceding LESSEE'S request; and (g) LESSEE shall not have the right to examine
any books or records that contain trade secrets (i.e. leases of other tenants,
rent rolls, etc.).  If LESSEE'S examination reveals that it has overpaid
Lessee's Proportionate Share of the Operating Cost, then the overpayment credit
will be applied to the next accruing Rent under the Lease.  If LESSEE'S audit
indicates that it has overpaid Lessee's Proportionate Share of the Operating
Cost by more than five percent (5%), in addition to the rent credit provided in
this Section, LESSEE shall be entitled to a credit against the next accruing
Rent for the reasonable costs of the audit.  Otherwise, the expense of LESSEE'S
audit shall be borne by LESSEE.  LESSEE will not have the right to terminate
the Lease on account of an overpayment. If LESSEE'S examination reveals that it
has underpaid Lessee's Proportionate Share of the Operating Cost, then the
underpayment amount will be paid along with the next accruing Rent under the
Lease.

     2.11 INTEREST ON PAST DUE OBLIGATIONS.  Any amount owed by LESSEE to
LESSOR which is not paid when due shall bear interest from the due date of such
amount at the lower of (i) ten percent (10%) per annum, or (ii) the maximum
legal interest rate permitted by law.  However, interest shall not be payable
on late charges to be paid by LESSEE under this Lease.  The payment of interest
on such amounts shall not excuse or cure any default by LESSEE under this
Lease.
                                     -7-

                                   ARTICLE 3
                          BUILD-TO-SUIT IMPROVEMENTS

     3.1 IMPROVEMENTS TO THE PROPERTY.  LESSOR will cause the existing building
located nearest the southwest corner of the Property (most recently leased by
Wynan's Furniture) to be demolished and will cause to be constructed
improvements on and adjacent to the Property consisting of a traffic control
signal on South Virginia Street at the access point to the Property, paved
driveways for ingress and egress to adjacent property owned by LESSEE and the
remainder of LESSOR'S Shopping Center, parking areas, pedestrian walkways and
landscaping, consistent with the Preliminary Plans and Specifications which are
attached hereto as (Exhibit "B") and by this reference made a part hereof
(hereinafter "Improvements").  The Improvements  shall conform to the
Preliminary Plans and Specifications (Exhibit "B"), unless modification is
necessary to comply with local building codes or other requirements of local
municipal authorities.

        A. LESSEE and LESSOR have approved and agreed upon Preliminary Plans
and Specifications and Preliminary Cost Estimates for the Improvements to the
Property.

        B. As soon as received from the contractor or designer, LESSOR shall
deliver to LESSEE copies of the Final Plans and Specifications and Working
Drawings (based upon the approved Preliminary Plans and Specifications and
Preliminary Cost Estimates) covering the construction of the driveway and other
Improvements that are a part of the Property.  LESSOR shall obtain approval of
the Final Plans and Specifications and Working Drawings from all appropriate
governmental agencies, and after they have been approved a copy of them shall
be initialed and dated by the parties.  LESSOR shall exercise due diligence in
attempting to obtain such approval.

        C. LESSOR shall construct the Improvements in accordance with the Final
Plans and Specifications and Working Drawings.  LESSOR agrees to secure all
necessary permits for the construction.  LESSOR agrees that such construction
shall be completed in a good workman-like manner; that materials and
workmanship will be of such quality as is usual and customary in the Washoe
County, Nevada, area; that such construction shall be free of mechanic's liens;
that such construction shall comply with applicable building and safety codes
and comport with the Final Plans and Specifications as set forth above.

        D. LESSEE shall pay sixty six and 66/100 percent (66.66%) of all
construction costs for said Improvements, or a maximum of $1,200,000.00,
whichever amount is lower.  LESSOR agrees to be responsible for all remaining
costs of constructing said Improvements.  LESSEE shall pay its share of the
construction costs in progress installments based on billings supported by
invoices or the terms of construction contracts.

        E. Within 15 days after LESSOR notifies LESSEE that the Improvements
have been substantially completed and are available for inspection by Lessee,
whether or not LESSEE is then in possession of the Property, LESSEE shall
deliver to LESSOR a list of items that LESSEE deems it necessary under the
Final Plans and Specifications and Working Drawings that LESSOR completes or
corrects in order for the Property to be acceptable to LESSEE.  LESSOR shall
immediately commence to complete or correct such items, except for items that
LESSOR disputes as not being within the scope of the Improvements.  If LESSEE
does not deliver the list to LESSOR within the 15 day period, LESSEE shall be

                                     -8-
deemed to have approved the Property and approved construction of the
Improvements as completed.

        F. LESSEE'S taking possession of the Property and acceptance of the
Property shall not constitute a waiver of any claim under Section 3.1(E) or a
waiver of any warranty or of any defect in regard to workmanship or material of
the Improvements ("Construction Defect").  LESSEE shall have the period of time
contained within LESSOR'S warranty from the contractor within which to notify
LESSOR of any Construction Defect covered by said warranty.  In the event of a
Construction Defect, it is LESSOR's duty to fully enforce all legal remedies to
achieve cure.

                                   ARTICLE 4
                                USE OF PROPERTY

     4.1 SIGNAGE.  LESSEE shall pay for all signs and maintenance and removal
of said signs located or constructed on the Property.  All sign design, color,
layout, graphics, location and size shall first be submitted to LESSOR for
approval prior to fabrication.  All signs shall be constructed and installed by
contractors qualified to fabricate and install commercial signs.  No signs
shall be installed until after LESSOR has approved the construction drawings
and specifications of the signs, including all connections.  LESSOR agrees to
apply for any necessary permits or zoning changes for signs to be located or
erected on the Property, at LESSEE's expense.  LESSEE shall maintain all signs
in a neat and attractive condition.

     4.2 USE OF PROPERTY.

        A. The Property shall be used by LESSEE solely for the purpose of
pedestrian and vehicle ingress and egress to the resort and casino located on
the adjacent real property and uses reasonably related or incidental thereto
and for landscaping features.  LESSEE shall not use, or permit to be used, any
portion of the Property for any purpose other than those stated above.

        B. LESSOR shall maintain the Property in a clean and sanitary condition
and shall comply with all laws, health and policy requirements with respect to
the Property and appurtenances and agrees to hold LESSEE harmless from all
fines, penalties and costs for violations, or noncompliances by LESSOR of said
laws, requirements, or regulations, and from all liability arising out of any
such violations or noncompliance, unless said liability results from the
conduct of LESSEE.

        C.  LESSEE shall not permit upon the Property any unlawful acts, or any
condition, act or thing constituting a nuisance, nor do or permit any act which
shall annoy, harass, disturb or imperil others; and shall abide by all laws,
ordinances and regulations of the City of Reno, County of Washoe, the State of
Nevada, and the United States of America, including without limitation, the
Americans with Disabilities Act, 42 U.S.C. 12101-12213 (and any rules and
regulations, restrictions, guidelines, requirements or publications promulgated
or published pursuant thereto, collectively referred to as the "ADA") and
LESSEE agrees to hold LESSOR harmless from all fines, penalties and costs for
violations, or noncompliances by LESSEE, of said laws, requirements, or
regulations, and from all liability arising out of any such violations or
noncompliance.

        D. LESSEE shall not use the Property for any purpose deemed hazardous
by any insurance company carrying insurance thereof.

                                     -9-
     4.3 HAZARDOUS MATERIALS.

        A. INDEMNITY BY LESSEE.  LESSEE shall not cause or permit any Hazardous
Material (as hereinafter defined) to be brought upon, kept, or used in or about
the Property by LESSEE, its agents, employees, contractors or invitees.  If (i)
LESSEE breaches the obligations stated in the preceding sentence, (ii) the
presence of Hazardous Material on the Property or on or in the soil or ground
water under or adjacent to the Property caused or permitted by LESSEE, its
agents, employees, contractors or invitees results in contamination of the
Property or such soil or ground water, (iii) contamination of the Property or
such soil or ground water by Hazardous Material otherwise occurs for which
LESSEE is legally liable to LESSOR for damage resulting therefrom, or (iv)
contamination occurs elsewhere in connection with the transportation by LESSEE
of Hazardous Material to or from the Property, then LESSEE shall indemnify,
protect, defend and hold LESSOR harmless from any and all claims, judgment,
damages, penalties, fines, costs, expenses, liabilities or losses (including,
without limitation, sums paid in settlement of claims, attorneys' fees,
consultant fees and expert fees) which arise during or after the term of this
Lease as a result of such contamination.  The foregoing obligation of LESSEE to
indemnify, protect, defend and hold LESSOR harmless includes, without
limitation, costs incurred in connection with any investigation of site
conditions or any cleanup, remedial, removal, restoration or other response
work required by any federal, state, or local governmental agency or political
subdivision because of Hazardous Material present as a result of any action or
inaction on the part of LESSEE, its agents, employees, contractors or invitees
in any improvements constituting the Property or the soil or ground water on,
under or adjacent to the Property or elsewhere in connection with the
transportation by LESSEE of Hazardous Material to or from the Property.
Without limiting the foregoing, if the presence of any Hazardous Material on or
in the Property or the soil or ground water under or adjacent to the Property
caused or permitted by LESSEE, or its agents, employees, contractors or
invitees, results in any contamination of the Property, LESSEE shall promptly
take all actions at its sole expense as are necessary to return the Property or
such soil or ground water to the condition existing prior to the introduction
of any such Hazardous Material to the Property or to such soil or ground water.

        B. INDEMNITY BY LESSOR.  LESSOR shall not cause or permit any Hazardous
Material (as hereinafter defined) to be brought upon, kept, or used in or about
the Property by LESSOR, its agents, employees, contractors or invitees.  As to
any contamination of the Property by Hazardous Material which exists as of the
Lease Commencement Date hereof or if (i) LESSOR breaches the obligations stated
in the preceding sentence, (ii) the presence of Hazardous Material on the
Property or on or in the soil or ground water under or adjacent to the Property
caused or permitted by LESSOR, its agents, employees, contractors or invitees
results in contamination of the Property or such soil or ground water, (iii)
contamination of the Property or such soil or ground water by Hazardous
Material otherwise occurs for which LESSOR is legally liable to LESSEE for
damage resulting therefrom, or (iv) contamination occurs elsewhere in
connection with the transportation by LESSOR of Hazardous Material; then LESSOR
shall indemnify, protect, defend and hold LESSEE harmless from any and all
claims, judgment, damages, penalties, fines, costs, expenses, liabilities or
losses (including, without limitation, sums paid in settlement of claims,
attorneys' fees, consultant fees and expert fees) which arise during or after
the term of this Lease as a result of such contamination.  The foregoing
obligation of LESSOR to

                                     -10-
indemnify, protect, defend and hold LESSEE harmless includes, without
limitation, costs incurred in connection with any investigation of site
conditions or any cleanup, remedial, removal, restoration or other response
work required by any federal, state or local governmental agency or political
subdivision because of Hazardous Material present as a result of any action or
inaction on the part of LESSOR, its agents, employees, contractors or invitees
in any improvements constituting the Property or the soil or ground water on,
under or adjacent to the Property or elsewhere in connection with the
transportation by LESSOR of Hazardous Material.  Without limiting the
foregoing, if the presence of any Hazardous Material on or in the Property or
the soil or ground water under or adjacent to the Property caused or permitted
by LESSOR, or its agents, employees, contractors or invitees results in any
contamination of the Property, LESSOR shall promptly take all actions at its
sole expense as are necessary to return the Property or such soil or ground
water to the condition existing prior to the introduction of any such Hazardous
Material to the Property or to such soil or ground water.

        C. HAZARDOUS MATERIAL DEFINED.  As used herein, the term "Hazardous
Material" means any hazardous or toxic substance, chemical, toxicant,
pollutant, contaminant, material or waste which is or becomes regulated by any
local governmental authority, the State of Nevada or the United States
Government for the protection of health or the environment. The term "Hazardous
Material" includes, without limitation, any material or substance that is (i)
defined as a "hazardous waste" under NRS 459.400 et seq. (Disposal of Hazardous
Waste) or NRS 459.700 et seq. (Transportation of Hazardous Waste); (ii)
petroleum; (iii) asbestos; (iv) designated as a "hazardous substance" pursuant
to Section 311 of the Water Pollution Control Act (33 U.S.C. 1321), (v) defined
as a "hazardous waste" pursuant to Section 1004 of the Resource Conservation
and Recovery Act, 42 U.S.C. 6901 et seq. (42 U.S.C. 6903), (vi) defined as a
"hazardous substance" pursuant to Section 101 of the Comprehensive
Environmental Response, Compensation and Liability Act, 42 U.S.C. 9601 et seq.
(42 U.S.C. 6901), (vii) defined as a "regulated substance" pursuant to
Subchapter IX, Solid Waste Disposal Act (Regulation of Underground Storage
Tanks), 42 U.S.C. 6991 et seq., (viii) defined as a "hazardous chemical
substance or mixture" or "imminently hazardous chemical substance or mixture"
within the meaning of the Toxic Substances Control Act, 15 U.S.C. 2601 et seq.,
(ix) defined as a "hazardous air pollutant" within the meaning of the Federal
Clean Air Act, 42 U.S.C. 7400 et seq., (x) defined as a "toxic pollutant" or
"oil or hazardous substance" within the meaning of the Federal Water Pollution
Control Act, 33 U.S.C. 1250 et seq., (xi) defined as a "contaminant" within the
meaning of the Safe Drinking Water Act, 42 U.S.C. 300i, or (xii) defined as a
"chemical known to the state to cause cancer or reproductive toxicity."

     4.4 NO PARTNERSHIP.  This Lease shall in no way be deemed to be or
considered evidence that a partnership or joint venture exists between LESSOR
and LESSEE.

     4.5 COMPLIANCE WITH GOVERNMENT REGULATIONS AND REQUIREMENTS.  LESSOR shall
make any and all such improvements, alterations, repairs or do any other act to
or upon the Property as shall be required by any applicable statute, law,
ordinance or regulation, including, but not limited to those relating to
environmental quality or hazardous waste, by any competent governmental
authority.  The cost of any and all such improvements, alterations, repairs or
other acts shall be borne by LESSEE and LESSOR as provided in Section 2.6
above, except as otherwise provided in this Lease.


                                     -11-
     4.6 CONDITION OF PROPERTY; ALTERATIONS, REPAIRS AND MAINTENANCE.

        A. LESSOR shall maintain and repair the Property in a good, clean and
presentable condition.  Except for such items as are included in Section 2.8,
the cost of any and all such maintenance and repairs shall be borne by LESSEE
and LESSOR as provided in Section 2.6 above.  LESSOR'S obligation to maintain
and repair the Property shall include the following:

          i. The routine and ordinary maintenance of the landscaping,
irrigation system and grounds, including weed control and cleaning; and

          ii. The routine and ordinary maintenance of the parking lot,
driveways and pedestrian walkways, including snow removal.

          iii. Any major repair or replacement of the parking lot, driveways
and pedestrian walkways.

        B. LESSEE shall not make any alterations or improvements to or upon the
Property without LESSOR'S prior written consent thereto, which consent shall
not be unreasonably withheld, provided that LESSEE may, from time to time, make
minor alterations to the Improvements with LESSOR'S consent.  All alterations
and improvements shall be accomplished in a good workmanlike manner and in
strict compliance with all county and state ordinances, requirements and
regulations pertaining thereto.

        C. LESSEE agrees to pay when due all sums of money for any labor,
services, materials or supplies, furnished to or for LESSEE on or about the
Property.  LESSEE shall not allow or permit the filing or placement of any
materialman, mechanics or other liens upon the Property.  In the event that
such a lien is filed, LESSEE will cause such lien to be fully discharged and
released.  In the event LESSEE desires to contest any lien, LESSEE must post a
bond sufficient to discharge the lien.  LESSEE agrees to indemnify LESSOR
against all liability, loss, damage, costs or expenses, including attorney's
fees, on account of claims, or liens for laborers or materialmen or others who
performed work or supplied materials or supplies to LESSEE.  At least ten (10)
days before undertaking any alteration, improvement or construction permitted
by this section, LESSEE will notify LESSOR so that LESSOR may record a notice
of nonresponsibility with the County Recorder of Washoe County.

        D. Upon the completion of any alterations or improvements, such
alterations and improvements to the Property shall become or remain a part of
the Property.  Furnishings, equipment and trade fixtures of LESSEE, which are
not part of any building thereon, remain the LESSEE'S property and are excepted
from this clause and provision.

        E. LESSEE shall return the Property to LESSOR at the expiration or
earlier termination of this Lease in good and sanitary order, condition and
repair, free of rubble and debris, broom clean, reasonable wear and tear
excepted.  All damage to the Property caused by the removal of such trade
fixtures and other personal property that LESSEE is permitted to remove under
the terms of this Lease and/or such restoration shall be repaired by LESSEE at
its sole cost and expense prior to termination.





                                     -12-
     4.7 QUIET ENJOYMENT AND LANDLORD'S RIGHT OF ENTRY.

        A. QUIET ENJOYMENT.  If and so long as LESSEE shall pay the Rents
specified herein and observe and perform all covenants, agreements and
obligations required by it to be observed and performed hereunder, LESSEE shall
peaceably and quietly hold and enjoy the Property for the Term without
hindrance or interruption by LESSOR or any other person or persons lawfully or
equitably claiming by, through, or under LESSOR, subject, nevertheless, to the
terms and conditions of this Lease and the mortgages and other matters to which
this Lease is subordinate.  LESSOR expressly reserves the right as to the
Shopping Center at any time to do, or permit to be done, any or all of the
following; add or remove buildings or structures; change the number and
location of buildings and structures; change building dimensions; change the
number of floors in any of the buildings or structures; enclose any mall; add
to, alter or remove partially or wholly any structure or structures used to
enclose any plaza area; change the identity and type of stores and tenancies
and the dimensions thereof; change the name of the Shopping Center in which the
Property is located; change the address or designation of the Property; provide
subterranean and multiple level parking decks; convert common areas into
leaseable areas; change the means of access to and egress from the Shopping
Center, except for the access driveway at the new traffic control signal on
South Virginia Street which LESSOR shall not change or alter without LESSEE's
prior written consent; and expand or reduce the size of the Shopping Center;
provided, however, that no such changes shall deny or materially interfere with
the reasonable visibility of, ingress to, or egress from the Property and that
no heavy industrial use will be permitted by LESSOR within the Shopping Center,
including, but not limited to, truck and heavy equipment repair facilities.

        B. RIGHT OF ENTRY.  LESSOR, or LESSOR'S agents or representatives may
enter and be present upon the Property at any time for purposes of discharging
LESSOR's obligations hereunder to maintain and repair the Property.

     4.8 INDEMNITY.

        A. LESSEE, as a material part of the consideration to be tendered to
LESSOR, shall indemnify, defend, protect and hold harmless LESSOR against all
actions, claims, demands, damages, liabilities, losses, penalties, or expenses
of any kind which may be brought or imposed upon LESSOR or which LESSOR may pay
or incur by reason of injury to person or property or business, from whatever
cause, all or in any way connected with the acts and omissions of LESSEE, and
LESSEE'S use of the Property or breach of any provision of this Lease,
including without limitation any liability or injury to the person or property
or business of LESSEE, its agents, officers, employees or invitees.  LESSEE
agrees to indemnify, defend and protect LESSOR, and hold it harmless from any
and all liability, loss, cost or obligation on account of, or arising out of,
any such injury or loss however occurring, including breach of the provisions
of this Lease and the negligence of the parties hereto.  Nothing contained
herein shall obligate LESSEE to indemnify LESSOR against its own sole or gross
negligence or willful acts, for which LESSOR shall indemnify LESSEE.

        B. LESSOR, as a material part of the consideration to be tendered to
LESSEE, shall indemnify, defend, protect and hold harmless LESSEE against all
actions, claims, demands, damages, liabilities, losses, penalties, or expenses
of any kind which may be brought or imposed upon LESSEE or which

                                     -13-
LESSEE may pay or incur by reason of injury to person or property or business,
all or in any way connected with the acts and omissions of LESSOR, and the
condition of the Property or the Improvements thereon or the condition of the
Shopping Center, including without limitation any liability or injury to the
person or property or business of LESSOR, its agents, officers, employees or
invitees.  LESSOR agrees to indemnify, defend and protect LESSEE and hold it
harmless from any and all liability, loss, cost or obligation on account of, or
arising out of, any such injury or loss however occurring, including breach of
the provisions of this Lease and the negligence of the parties hereto.  Nothing
contained herein shall obligate LESSOR to indemnify LESSEE against its own sole
or gross negligence or willful acts, for which LESSEE shall indemnify LESSOR.

     4.9 RULES AND REGULATIONS.
        A. LESSEE agrees as follows:
          i. The plumbing facilities shall not be used for any other purpose
than that for which they are constructed, and no foreign substance of any kind
shall be thrown therein, and the expense of any breakage, stoppage, or damage
resulting from a violation of this provision shall be borne by LESSEE, who
shall, or whose employees, agents or invitees shall have caused it.

          ii. LESSEE shall not burn any trash or garbage of any kind in or
about the Property or the Shopping Center.

          iii. All public entrances and exits to the Property shall be kept
unobstructed and open to the public at all times.

          iv. LESSEE shall not cause or permit any obnoxious or foul odors that
disturb the public or other tenants.  Should such odors be evident, LESSEE
shall be required to take immediate steps to remedy the same upon written
notice from LESSOR.

        B.   LESSOR reserves the right from time to time to amend or supplement
the foregoing rules and regulations, and to adopt and promulgate additional
rules and regulations applicable to the Property and Shopping Center.
Reasonable notice of such rules and regulations and amendments and supplements
thereto, if any, shall be given to the LESSEE.

        C.   LESSEE agrees to comply with all such rules and regulations upon
reasonable notice to LESSEE from LESSOR.

        D.   In the event any violation of any of the above rules and
regulations continues after five (5) days following notice to the LESSEE of
such violation, beginning on such fifth day LESSEE shall, in addition to any
and all other remedies of LESSOR provided in this Lease for default by LESSEE,
pay as liquidated damages, the sum of Two Hundred Fifty Dollars ($250.00) per
day  for each violation for each day any such violation continues.  The parties
hereto agree that the aforementioned sum is a reasonable amount as liquidated
damages, the actual damage caused by such conduct being extremely difficult to
measure.








                                     -14-
                                   ARTICLE 5
                  PARKING AND COMMON USE AREAS AND FACILITIES

     5.1 CONTROL OF COMMON AREAS BY LESSOR.  "Common Areas" means all areas,
space, equipment and special services provided by LESSOR (excluding the
Property) for the common or joint use and benefit of the occupants of the
Shopping Center, their employees, agents, servants, customers and other
invitees, including, without limitation, parking areas, access roads,
driveways, retaining walls, landscaped areas, truck service-ways or tunnels,
loading docks, pedestrian malls, courts, stairs, ramps and sidewalks, comfort
and first aid stations, and parcel pick-up stations.  All Common Areas shall at
all times be subject to the exclusive control and management of LESSOR, and
LESSOR shall have the right from time to time to establish, modify and enforce
reasonable rules and regulations with respect to the Common Areas.  LESSOR
shall have the right to construct, maintain and operate lighting facilities on
all Common Areas and improvements; to police the same; from time to time to
change the area, level, location and arrangement of parking areas and other
facilities hereinabove referred to; to restrict parking by tenants, their
officers, agents and employees to employee parking areas; to enforce parking
charges only to the extent required by governmental or quasi-governmental
entities (by operation of meters or otherwise), with appropriate provisions for
free parking ticket validating by tenants; to close all or any portion of the
Common Areas or facilities to such extent as may, in the opinion of LESSOR'S
counsel, be legally sufficient to prevent a dedication thereof or the accrual
of any rights to any person or the public therein; to close temporarily all or
any portion of the parking areas or facilities: to discourage non-customer
parking: and to do and perform such other acts in and to said areas and
improvements as, in the use of good business judgment, the LESSOR shall
determine to be advisable with a view to the improvement of the convenience and
use thereof by tenants, their officers, agents, employees and customers.
LESSOR will operate and maintain the Common Areas in such manner as LESSOR, in
its sole discretion, shall determine from time to time.  Without limiting the
scope of such discretion, LESSOR shall have the full right and authority to
employ all personnel necessary for the proper operation and maintenance of the
Common Areas and facilities.

     5.2 USE OF COMMON AREAS.  The use and occupation by LESSEE of the Property
shall include the use of the Common Areas in common with others entitled to the
use thereof, subject however to the terms and conditions of this Lease and to
reasonable rules and regulations for the use thereof as prescribed from time to
time by LESSOR.  Notwithstanding any other provision of this Lease, LESSOR and
LESSEE agree that LESSEE shall have the right to use approximately 7.28% of the
parking areas within the Common Areas, which such parking areas shall be
designated by mutual agreement, for vehicle parking for the invitees, customers
and guests of the resort and casino operated by LESSEE, its successors, assigns
or affiliates on the adjacent real property.

                                   ARTICLE 6
                                   INSURANCE

     6.1 LIABILITY INSURANCE.  During the Lease Term, LESSEE shall maintain a
policy of commercial general liability insurance, insuring LESSEE against
liability resulting out of the ownership, use, occupancy or maintenance of the
Property, the sidewalks in front of the Property, and the business operated by
LESSEE and any subtenants of LESSEE on the Property.  The initial amount of
such insurance shall be at least TWO Million Dollars

                                     -15-
($2,000,000.00) combined single limit bodily injury, property damage and
personal injury, and shall be subject to periodic increase based upon
inflation, increased liability awards, recommendations of professional
insurance advisers, and other relevant factors.  However, the amount of such
insurance shall not limit LESSEE's liability nor relieve LESSEE of any
obligation hereunder.  The policy shall name LESSOR as an additional insured.
In addition LESSEE, at LESSEE'S expense, shall carry adequate workers'
compensation insurance coverage and provide written evidence thereof to LESSOR.
LESSEE shall pay all premiums for the general liability insurance policy
covering the Property prior to delinquency.

     6.2 HAZARD AND RENTAL INCOME INSURANCE.  During the Lease Term, LESSOR
shall maintain policies of insurance covering loss of or damage to the Shopping
Center improvements, including the Improvements to the Property, in the amount
of its full replacement cost, excluding LESSEE'S trade fixtures and personal
property.  Such polices shall provide protection against all perils included
within the classification of fire, extended coverage, vandalism, malicious
mischief, and may include endorsements or coverage for special extended perils
(special form), sprinkler leakage, inflation guard, and any other perils
(including flood and earthquake), which Landlord deems necessary.  LESSEE
shall, at LESSEE'S expense, maintain such primary or additional insurance on
its fixtures, equipment and personal property as LESSEE deems necessary to
protect its interest.  During the Lease Term, LESSOR shall also maintain as an
Operating Cost a rental income insurance policy, with loss payable to LESSOR in
an amount equal to one year's Minimum Monthly Rent (as adjusted periodically),
plus estimated Real Property Taxes and insurance premiums.  Tenant shall not do
or permit to be done anything which invalidates any such insurance policies.
If said insurance policies cover improvements or real property other than the
Shopping Center, LESSOR shall also deliver to LESSEE a statement of the amount
of the premiums applicable to the Property showing, in reasonable detail, how
such amount was computed.  If the Lease Term expires before the expiration of
the insurance policy period, LESSEE'S liability for insurance premiums shall be
prorated on an annual basis.  LESSEE shall be liable for its pro rata share of
the payment of any deductible amount under LESSOR'S insurance policies as an
item of Operating Cost.

     6.3 INCREASE IN FIRE INSURANCE PREMIUM.  LESSEE agrees that it will not
keep, use, manufacture, assemble, sell or offer for sale in or upon the
Property any article which may be prohibited by the standard form of fire
insurance policy.  LESSEE agrees to pay any increase in premiums for fire and
extended coverage insurance that may be charged during the Term of this Lease
on the amount of such insurance which may be carried by LESSOR on the Property,
resulting from the acts or omission of the LESSEE, its agents, servants or
employees, or the use or occupancy of the Property by the LESSEE or from the
type of materials or products stored, manufactured, assembled or sold by LESSEE
in the Property, whether or not LESSOR has consented to the same.  In
determining whether increased premiums are the result of LESSEE'S use of the
Property, a schedule, issued by the organization making the insurance rate on
the property, showing the various components of such rate, shall be conclusive
evidence of the several items and charges which make up the fire insurance rate
on the Property.

     6.4 WAIVER OF SUBROGATION.  LESSOR and LESSEE each hereby waive any and
all rights of recovery against the other or against the officers, employees,
agents and representatives of the other, on account of loss or damage
occasioned to such waiving party or its property or the property of others

                                     -16-
under its control, to the extent that such loss or damage is insured against
under any fire and extended coverage insurance policy which either may have in
force at the time of such loss or damage.  LESSOR and LESSEE shall, upon the
policies of insurance required under this Lease, give notice to the insurance
carrier or carriers that the foregoing mutual waiver of subrogation is
contained in this Lease.

                                   ARTICLE 7
                              OPTION TO PURCHASE
     7.1 PURCHASE OPTION.  LESSOR hereby grants to LESSEE an option to purchase
(hereinafter "Purchase Option") the Property subject to the restrictions set
forth in Section 7.6(C)(i), together with the Easements described in Section
7.6(e)(ii), (collectively, the "Property Interests") at the expiration of the
third and final five (5) year Renewal Term of this Lease Agreement as provided
in Section 1.4, as specifically provided in this Article.

     7.2 EXERCISE OF PURCHASE OPTION.  LESSEE may exercise the Purchase Option
by delivering written notice (hereinafter "Exercise Notice") to LESSOR at least
one hundred and twenty (120 ) days prior to the expiration date of the third
and final Renewal Term of this Lease as provided in Section 1.4, but not before
one hundred and eighty (180) days prior to expiration of said third Renewal
Term of this Lease.  LESSEE may only exercise the Purchase Option in the event
that LESSEE has properly exercised all three (3) options to extend and renew
the Lease as provided in Section 1.4 and is not in default under this Lease at
the time thereof.  In the event LESSOR sells, transfers or assigns its interest
in the Shopping Center or its interest is acquired by any beneficiary of a deed
of trust or purchaser at a foreclosure sale during the Term of this Lease and
prior to LESSEE'S exercise of the Purchase Option as otherwise provided herein,
at LESSEE'S election the Purchase Option will accelerate and LESSEE may
exercise the Purchase Option by delivering written notice to the buyer,
transferee, assignee or other successor to LESSOR's interest in the Shopping
Center within ninety (90) days of LESSEE receiving notice of the sale,
transfer, assignment or other acquisition of LESSOR's interest in the Shopping
Center.  In the event that LESSEE elects to accelerate the Purchase Option as
provided herein as the result of a sale, transfer, assignment or other
acquisition of LESSOR'S interest in the Property, the Purchase Price for the
Property Interests, as defined and determined in Section 7.5 below, shall be
adjusted and increased by the amount which represents the unamortized value of
the building demolished by LESSOR as part of the build-to-suit improvements
required under Article 3 hereof as set forth on Schedule 1 attached hereto as
of the date of the Closing of the purchase of the Property Interests. The value
of said demolished building shall be amortized in equal annual prorata amounts
over thirty (30) years commencing on the Commencement Date.  In the event
LESSOR sells, transfers or assigns its interest in the Shopping Center or its
interest is acquired by any beneficiary of a deed of trust or purchaser at a
foreclosure sale during the Term of this Lease and LESSEE does not elect for
the Purchase Option to accelerate, this Lease and the Purchase Option will
continue in full force and effect in accordance with their terms.  In the event
the Purchase Option is not accelerated and is exercised by LESSEE during the
third and final Renewal term of the Lease, at which time the value of the
demolished building will have been fully amortized as provided herein, no
adjustment will be made on account of said demolished building.  The date on
which the Exercise Notice is delivered to LESSOR or the person or entity
entitled thereto hereunder shall be the "Exercise Date."

                                     -17-
     7.3 FAILURE TO EXERCISE.  In the event LESSEE shall fail to exercise the
Purchase Option as provided herein, this Purchase Option shall terminate, and
except as otherwise provided hereunder, the parties shall have no further
rights or obligations in relation to this Purchase Option.  Upon termination of
the Lease, LESSEE shall have no obligation to restore the Property to its
condition prior to the build-to-suit improvements made pursuant to Article 3
hereof.

     7.4 EXERCISE IRREVOCABLE.  Unless LESSEE delivers to LESSOR a written
rescission notice on or before the expiration of 10 business days after the
final determination of the Purchase Price pursuant to the procedure set forth
in Section 7.5, the exercise of the Purchase Option shall be irrevocable and,
after exercise of the Purchase Option and expiration of such 10 business day
period, LESSEE shall be obligated to purchase the Property on the terms
provided herein, subject to satisfaction of all closing conditions.

      7.5 PURCHASE PRICE.  The total purchase price for the Property Interests
shall be payable in cash at Closing (as hereinafter defined.)  The purchase
price shall be determined following LESSEE's exercise of the Purchase Option.
The purchase price of the Property Interests (hereinafter "Purchase Price")
shall be determined by using the valuation procedure (hereinafter "Valuation
Procedure") set forth in this Section 7.5.  Within five (5) business days of
the Exercise Date, LESSEE's independent Committee of the Board of Directors (or
if LESSEE is a subsidiary of Monarch Casino & Resort, Inc., Monarch's committee
of independent Board of Directors will perform the duties required by this
paragraph) shall order a Member Appraisal Institute (hereinafter "M.A.I.")
appraisal of the Property Interests to be conveyed (hereinafter "Valuation.")
Within five (5) business days of the Exercise Date, LESSOR shall commence the
preparation of a separate Valuation of the Property Interests.  If each
Valuation is within ten percent (10%) of the other, the average of the two (2)
Valuations shall be determined and said average will be the Purchase Price.  If
the Valuations differ by more than ten (10) percent, the two (2) M.A.I.
appraisers shall select a third (3rd) M.A.I. appraiser so as to produce a third
(3rd) Valuation of the Property Interests.  From the total of three (3)
Valuations, the two (2) closest Valuations shall be averaged and said average
shall be the Purchase Price.  Any signage located on the Property which was
installed at LESSEE's expense shall not be included or considered in
determining the Valuation of the Property Interests for purposes of
establishing the Purchase Price under this Section.  The Purchase Price as
determined under this Section, in addition, shall be adjusted and decreased by
the amount which LESSEE can demonstrate that it paid for improvements, except
signage, to the Property during the five (5) year period immediately preceding
the Exercise Date.

     7.6 CLOSING.

        A. DATE AND PLACE.  The Closing of the sale of the Property Interests
by LESSOR to LESSEE (the "Closing") shall occur not later than one hundred and
twenty (120) days after the Exercise Date.

        B. ESCROW AGENT.  LESSEE shall elect and identify the Escrow Agent to
be utilized for the Closing.

        C. SELLER'S OBLIGATIONS AT CLOSING.  At the Closing, LESSOR shall
deliver, or cause to be delivered, to LESSEE, the following:



                                     -18-
          i. Grant Bargain and Sale Deed.  LESSOR shall execute and deliver to
Escrow Agent for recording a Grant, Bargain and Sale Deed in form and content
acceptable to LESSEE and LESSOR, fully executed and acknowledged by LESSOR,
conveying fee simple title to the Property to LESSEE, excluding water rights,
free and clear of any and all liens or encumbrances.  LESSOR and LESSEE agree
that said Grant, Bargain and Sale Deed shall contain a restriction that no
buildings or habitable structures shall be constructed or erected on the
Property and that the Property shall be used exclusively for landscaping
features and related improvements, driveways and pedestrian walkways for
ingress, egress and regress to and from the adjacent public streets, traffic
signal and the adjacent parcel to the south of the Property.  The Property as
conveyed by LESSOR to LESSEE by said Grant Bargain and Sale Deed shall be a
separate legal parcel, which separate legal parcel shall be created by LESSOR
at LESSOR'S sole cost and expense.

          ii. Easement. LESSOR shall execute and deliver to Escrow Agent for
recording a Deed or other instrument, in form and content acceptable to LESSEE
and LESSOR, fully executed and acknowledged by LESSOR, conveying and granting
to LESSEE, for the benefit of LESSEE and its tenants, employees, agents,
customers, and invitees, and for the benefit of the Property being purchased by
and conveyed to LESSEE, a non-exclusive easement appurtenant to said Property,
for the purposes of ingress, egress and regress by pedestrians and vehicular
traffic to and from any portion of the Shopping Center and the adjacent public
streets, over and across the Common Areas of the Shopping Center, as such are
constituted from time to time (LESSOR to ensure that said Common Areas remain
adequate to continue to afford LESSEE ingress and egress over and across the
Shopping Center), and for LESSEE'S use of the Common Areas of the Shopping
Center in common with others entitled to the use thereof, subject to the
reasonable rules and regulations for the use thereof as prescribed from time to
time by LESSOR, which easement shall include the right to use approximately
7.28% of the parking areas within the Common Areas for vehicle parking as
provided in Section 5.2.  This easement shall obligate LESSEE to continue to
pay LESSOR Lessee's Proportionate Share of the Shopping Center's Operating
Costs provided in Sections 2.7, 2.8, 2.9 and 2.10 hereof, the terms of which
shall be included within said easement.  This easement to be granted by LESSOR
to LESSEE shall run with the land and shall be binding upon each and all of the
owners of any part of the Shopping Center and Property and upon all persons
claiming under them.

          iii. Owner's Title Policy.  LESSOR shall cause the Escrow Agent to
issue and deliver to LESSEE an ALTA Standard coverage owner's policy of title
insurance ("Owner's Title Policy") in the amount of the Purchase Price,
insuring that LESSEE is owner of the Property Interests (including the non-
exclusive easement burdening the Shopping Center as described in Section
7.6(C)(ii) above) subject only to exceptions approved by LESSEE at the
commencement of the Lease as provided in Section 1.6, reasonable easements for
the development and improvement of the Shopping Center, non-delinquent taxes
and assessments and the standard printed exceptions included within such an
Owner's Title Policy.

          iv. Other Instruments.  LESSOR shall execute and deliver such other
documents as are customarily executed in the State of Nevada in connection with
the conveyance of real property, including all required closing statements,
releases, affidavits, evidences of authority to execute the documents, and any
other instruments that may be reasonably required by the Escrow Agent.


                                     -19-
          v. Possession.  LESSOR shall deliver possession of the Property to
LESSEE at Closing.

          vi. Failure of Closing Conditions.  In the event LESSOR fails to
perform or satisfy any of its obligations at Closing on or before Closing,
LESSEE shall at any time thereafter have the right to terminate its exercise of
the Purchase Option and withdraw from this purchase transaction, by written
notice to LESSOR.  Any such election by LESSEE to terminate the Purchase Option
shall release LESSEE from all obligations under this Purchase Option, but shall
not release LESSOR from liability for breach of this Lease, if any.

        D. LESSEE'S OBLIGATIONS AT CLOSING.

          i. Payment of the Purchase Price.  At the Closing, LESSEE shall pay
the Purchase Price in cash (or by Certified Check, Cashier's Check, wire
transfer of funds into a local bank account indicated by LESSOR, all of which
shall constitute "cash" for purposes of this Option), subject to any
adjustments for prorations or other credits provided for in the Purchase
Option.

          ii. Easement.  LESSEE shall execute and deliver to Escrow Agent for
recording a Deed or other instrument, in form and content acceptable to LESSOR
and LESSEE, fully executed and acknowledged by LESSEE, conveying and granting
to LESSOR, for the benefit of LESSOR and its tenants, employees, agents,
customers, and invitees and the customers, employees, agents and invitees of
such tenants, and for the benefit of the Shopping Center, a non-exclusive
easement appurtenant to said Shopping Center, for the purposes of ingress,
egress and regress of pedestrians and vehicular traffic to and from the
adjacent public streets, over and across the Property, as such is constituted
from time to time; provided that the Property will remain adequate to continue
to afford LESSOR ingress and egress over and across the Property.   This
easement to be granted by LESSEE to LESSOR shall run with the land and shall be
binding upon each and all of the owners of any part of the Property and
Shopping Center and upon all persons claiming under them.

          iii. Other Instruments.  LESSEE shall execute and deliver such other
documents as are customarily executed in the State of Nevada in connection with
the conveyance of real property, including all required closing statements,
releases, affidavits, evidences of authority to execute the documents, and any
other instruments that may be reasonably required by the Escrow Agent.

        E. PRORATIONS.  All real estate taxes and interest on assessments
relating to the Property for the year of the Closing shall be prorated as of
the date of Closing between LESSOR and LESSEE.  LESSEE shall take title to the
Property subject to any outstanding unpaid assessments.  If the amount of taxes
for that year are not known at the time of Closing, the prorations shall be
based on an estimate of the taxes for the year of Closing, and when the tax
information becomes available, LESSOR of LESSEE may request reimbursement from
the other party for any excess amount charged to that party at the Closing.
Likewise, any other amounts normally prorated between sellers and purchasers,
if any, shall be prorated between LESSOR and LESSEE as of the date of Closing.

        F. CLOSING COSTS.  LESSOR and LESSEE each agree to pay the following
costs at Closing:

                                     -20-
          i. Paid by LESSOR.  LESSOR agrees to pay the cost of preparing the
Grant, Bargain and Sale Deed; the premium for the Owner's Title Policy; the
real property transfer taxes or documentation taxes; the cost of preparing and
recording any releases and other documents necessary to convey the Property
Interests  in accordance with this Option; one-half (1/2) of any escrow or
closing fees charged by the Escrow Agent; LESSOR'S attorney's fees and any
other similar closing costs customarily paid by a seller of real property.

          ii. Paid by LESSEE.  LESSEE agrees to pay the recording fee for the
Grant, Bargain and Sale Deed; one-half (1/2) of any escrow or closing fees
charged by the Escrow Agent; LESSEE'S attorney's fees and any other similar
closing costs customarily paid by a purchaser of real property.

                                   ARTICLE 8
                    ASSIGNMENT OR SUBLETTING AND PLEDGING.

     8.1 LESSORS CONSENT REQUIRED.

        A. LESSEE may not assign, transfer or convey any of its rights or
liabilities under this Lease, to any third person or entity, without the prior
written consent of LESSOR, which consent shall not be unreasonably withheld.

        B. LESSEE may not, under any circumstances, sublet or underlet the
Property, or any part thereof, without the prior consent of LESSOR.

        C. LESSEE shall reimburse LESSOR as additional rent for LESSOR'S
reasonable costs and attorneys' fees incurred in conjunction with the
processing and documentation of any proposed assignment or subletting of the
Property, whether or not consent is granted.

        D. LESSEE may, however, pledge, hypothecate or otherwise apply its
interests in this Lease Agreement as collateral for loans, which shall not
constitute a transfer or assignment subject to the provisions of this Article.

        E. Notwithstanding Sections 8.1(A) and 8.1(B) or any other provision of
this Lease to the contrary, Lessee may assign, transfer or sublease
(collectively, a "Transfer") all or any part of its rights and obligations
under the Lease or in the Property to an Affiliate of Lessee without Lessor's
consent; provided, however, that Lessee shall not be released from liability
under this Lease in connection with a Transfer except as otherwise provided in
Subsection F below. An "Affiliate of Lessee" means any person or entity
directly or indirectly controlling, controlled by or under common control with,
Lessee. For purposes of this definition, the terms "controlling," "controlled
by" and "under common control with" shall mean the possession, whether direct
or indirect, of the power to direct or cause the direction of the management
and policies of a person or entity, whether through the ownership or control of
voting securities, by contract or otherwise, or the power to elect at least
fifty percent (50%) of the directors, managers, members or persons exercising
similar authority with respect to such persons or entities.

        F. If LESSOR consents and LESSEE transfers or assigns its interest in
the Property and Lease Agreement, LESSEE shall remain firstly liable for the
performance of this Lease and all of the terms and provisions hereof except

                                     -21-
in conjunction with LESSEE's transfer of its resort and casino located on real
property adjacent to the Property as provided herein below.  In no event shall
any such assignment or subletting relieve LESSEE from its full obligation to
perform each, every and all of the provisions of this Lease Agreement, except
that a transfer or assignment of LESSEE's interest in the Property and Lease
Agreement which is in conjunction with a sale or transfer of LESSEE's resort
and casino located on real property adjacent to the Property, shall relieve,
release and discharge LESSEE from liability and obligations under this Lease
from and after the effective date of the transfer or assignment.

                                   ARTICLE 9
                              DEFAULTS: REMEDIES

     9.1 COVENANTS AND CONDITIONS.  LESSEE'S performance of each of LESSEE'S
obligations under this Lease is a condition as well as a covenant.  LESSEE's
right to continue in possession of the Property is conditioned upon full
performance of all such conditions.  Time is of the essence in the performance
of all covenants and conditions.

     9.2 DEFAULTS.  LESSEE shall be in material default under this Lease:

        A. If LESSEE abandons or vacates the Property;

        B. If LESSEE fails to pay Rent or any other charge required to be paid
by LESSEE, within 15 days of when due;

        C. If LESSEE fails to perform any of LESSEE'S nonmonetary obligations
under this Lease for a period of thirty (30) days after written notice from
LESSOR; provided that if more time is required to complete such performance,
LESSEE shall not be in default if LESSEE commences such performance within the
thirty (30)-day period and thereafter diligently pursues its completion.
However, LESSOR shall not be required to give such notice if LESSEE'S failure
to perform constitutes a non-curable breach of this Lease.  The notice required
by this Section is intended to satisfy any and all notice requirements imposed
by law on LESSOR prior to the commencement of an unlawful detainer action and
is not in addition to any such requirement;

     9.3 DEFAULT BY LESSOR.  LESSOR shall not be in default unless LESSOR fails
to perform obligations required of LESSOR within a reasonable time, but in no
event later than thirty (30) days after written notice by LESSEE to LESSOR and
to the holder of any first mortgage or deed of trust covering the Property
whose name and address shall have theretofore been furnished to LESSEE in
writing, specifying wherein LESSOR has failed to perform such obligation;
provided, however, that if the nature of LESSOR'S obligation is such that more
than thirty (30) days are required for performance, then LESSOR shall not be in
default if LESSOR commences performance within such thirty (30)-day period and
thereafter diligently prosecutes the same to completion.  In the event LESSOR
fails to perform an obligation required of it hereunder in the time periods
allowed under this Section and following notice from LESSEE, LESSEE may, but
shall not be obligated to, perform any obligation of LESSOR under this Lease.
LESSEE shall be entitled to a credit against the next accruing rent for all
reasonable costs and expenses paid or incurred by LESSEE in performing LESSOR's
obligations as provided in this Section, including without limitation,
reasonable attorneys' fees incurred.



                                     -22-
     9.4 REMEDIES.  On the occurrence of any default by LESSEE hereunder,
LESSOR  may, at any time thereafter, with or without notice or demand and
without limiting LESSOR in the exercise of any right or remedy which LESSOR may
have:

        A. Terminate LESSEE'S right to possession of the Property by any lawful
means, in which case this Lease shall terminate and LESSEE shall immediately
surrender possession of the Property to LESSOR.  In such event LESSOR shall
have the immediate right to re-enter the Property and remove all persons and
property and such property may be removed and stored in a public warehouse or
elsewhere at the cost of, and for the account of LESSEE, all without service of
notice or resort to legal process and without being deemed guilty of trespass,
or becoming liable for any loss or damage which may be occasioned thereby; and
LESSOR shall be entitled to recover from LESSEE all damages incurred by LESSOR
by reason of LESSEE'S default, including (i) the worth at the time of the award
of all Minimum Monthly Rent, Additional Rent and other charges which were
earned or were payable at the time of the termination; (ii) the worth at the
time of the award of the amount by which the unpaid Minimum Monthly Rent,
Additional Rent and other charges which would have been earned or were payable
after termination until the time of the award exceeds the amount of such rental
loss that LESSEE proves could have been reasonably avoided; (iii) the worth at
the time of the award of the amount by which the unpaid Minimum Monthly Rent,
Additional Rent and other charges which would have been payable for the balance
of the Term after the time of award exceeds the amount of such rental loss that
Tenant proves could have been reasonably avoided; and (iv) any other amount
necessary to compensate LESSOR for all the detriment proximately caused by
LESSEE'S failure to perform its obligations under this Lease or which in the
ordinary course of things would be likely to  result therefrom whether provided
by this Lease or allowed by applicable law, including, but not limited to, any
costs or expenses incurred by LESSOR in maintaining or preserving the Property
after such default, the cost of recovering possession of the Property, expenses
of reletting, including necessary renovation or alteration of the Property,
LESSOR'S reasonable attorneys' fees, and any real estate commissions or other
such fees paid or payable.  As used in subparts (i) and (ii) above, the "worth
at the time of the award" is computed by allowing interest on unpaid amounts at
the rate of nine percent (9%) per annum, or such lesser amount as may then be
the maximum lawful rate.  As used in subparts (i) and (ii) above, the "worth at
the time of the award" is computed by discounting such amount at the discount
rate of the Federal Reserve Bank of San Francisco at the time of the award,
plus one percent (1%).  If LESSEE shall have abandoned the Property, LESSOR
shall have the option of (i) retaking possession of the Property and recovering
from LESSEE the amount specified in this Section 9.4(a), or (ii) proceeding
under Section 9.4(b);

        B. Maintain LESSEE'S right to possession, in which case this Lease
shall continue in effect whether or not LESSEE shall have abandoned the
Property.  In such event, LESSOR shall be entitled to enforce all of LESSOR'S
rights and remedies under this Lease, including the right to recover the Rent
as it becomes due hereunder.  LESSEE acknowledges that LESSOR may continue the
Lease in effect after LESSEE'S breach and abandonment and recover Rent as it
becomes due;

        C. Pursue any other remedy now or hereafter available to LESSOR under
the laws or judicial decisions of the state in which the Property is located.



                                     -23-
     9.5 THE RIGHT TO RELET THE PREMISES.  Should LESSOR elect to re-enter, as
herein provided, or should it take possession pursuant to legal proceedings or
pursuant to any notice provided for by law, it may either terminate this Lease
or it may from time to time without terminating this Lease, make such
alterations and repairs as may be necessary in order to relet the Property, and
relet the Property or any part thereof for such term or terms (which may be for
a term extending beyond the Term of this Lease) and at such rent or rents and
upon such other terms and conditions as LESSOR in its sole discretion may deem
advisable; upon each such reletting, all rent received by the LESSOR from such
reletting shall be applied, first, to the repayment of any indebtedness other
than rent due hereunder from LESSEE to LESSOR; second, to the payment of any
costs and expenses of such reletting, including brokerage fees and attorneys'
fees and of costs of such alterations and repairs; third, to the payment of
rent due and unpaid hereunder, and the residue, if any, shall be held by LESSOR
and applied in payment of future rent as the same may become due and payable
hereunder.  If such rentals received from such reletting during any month are
less than that to be paid during that month by LESSEE hereunder, LESSEE shall
pay any such deficiency to LESSOR.  Such deficiency shall be calculated and
paid monthly.  No such re-entry or taking possession of said Property by LESSOR
shall be construed as an election on its part to terminate this Lease unless a
written notice of such intention be given to LESSEE or unless the termination
thereof be decreed by a court of competent jurisdiction.

     9.6 LANDLORD'S RIGHT TO CURE.  LESSOR may, but shall not be obligated to,
cure any default by LESSEE after complying with the notice provisions herein
set forth, and whenever LESSOR elects, all costs and expenses paid or incurred
by LESSOR in curing such default,  including without  limitation  reasonable
attorneys' fees, shall be so much Additional Rent due on demand with interest
as provided in Article 2.

     9.7 CUMULATIVE REMEDIES.  LESSOR'S exercise of any right or remedy shall
not prevent it from exercising any other right or remedy.

     9.8 LATE CHARGES.  LESSEE hereby acknowledges that late payment by LESSEE
to LESSOR of Rent and other sums due hereunder will cause LESSOR to incur costs
not contemplated by this Lease, the exact amount of which will be extremely
difficult and costly to ascertain.  Such costs include, but are not limited to,
processing, administrative and accounting charges, and late charges which may
be imposed on LESSOR by the terms of any mortgage or trust deed covering the
Property.  Accordingly, if any installment of Rent or any other sum due from
LESSEE shall not be received by LESSOR or LESSOR'S designee within fifteen (15)
days after such amount shall be due, LESSEE shall pay to LESSOR a late charge
equal to ten percent (10%) of such overdue amount.  The parties hereby agree
that such late charge represents a fair and reasonable estimate of the costs
LESSOR will incur as a consequence of late payment by LESSEE.  Acceptance of
such late charge by LESSOR shall in no event constitute a waiver of LESSEE'S
default with respect to such overdue amount, nor prevent LESSOR from exercising
any of the other rights and remedies granted hereunder.

                                   ARTICLE 10
                         DAMAGE TO PROPERTY; CONDEMNATION.

     10.1 DAMAGE TO THE PROPERTY. In the event that the Property or Shopping
Center is totally or partially damaged or destroyed by fire or other casualty
or occurrence, LESSOR shall cause the damage to the Property to be repaired

                                     -24-
and restored to the same condition as it was in immediately before such damage
or destruction.  If (a) such damage results from a cause not insured,  or (b)
the cost of repair or restoration exceeds the amount of insurance proceeds
received by LESSOR and available for restoration of the Property, and LESSEE
elects for the Property to be repaired or restored, LESSOR shall repair and
restore the Property and LESSEE shall pay sixty six and 66/100 percent and
(66.66%) of difference between the amount of insurance proceeds and the costs
of repair and restoration and LESSOR shall pay the remaining repair costs not
covered by insurance.  LESSOR shall cause the Property to be rebuilt and
restored with all due diligence and, during any periods of reconstruction,
LESSOR shall use its best efforts and take all reasonable steps to provide
reasonable temporary access for vehicular and pedestrian ingress and egress to
LESSEE's adjacent parcel from South Virginia Street.  During the time that the
repair or restoration is being completed, LESSEE'S Rent shall be abated for any
portion of the Property which cannot be used by LESSEE.  In the event that the
repair and restoration cannot be completed to LESSEE's satisfaction, then
LESSEE may elect to terminate the Lease by giving written notice to the LESSOR.
If the time restoration exceeds six months, LESSEE may at its option terminate
the Lease.

     10.2 CONDEMNATION OF PROPERTY.  If any part or the whole of the Property
shall be acquired or condemned by eminent domain for any public or quasi-public
use or purpose, and in the event that such partial taking or condemnation shall
render the Property not reasonably suitable for the uses of LESSEE, then LESSOR
shall use its best efforts and take all reasonable steps to make other property
within the Shopping Center available for LESSEE to lease for vehicular and
pedestrian ingress and egress to LESSEE's adjacent parcel.  In the event of a
partial taking or condemnation which is not extensive enough to render the
Property unsuitable for the uses of LESSEE, then LESSOR shall with all due
diligence restore the Property to a condition comparable to its condition at
the time of such condemnation less the portion lost in the taking, and this
Lease shall continue in full force and effect.  During the time that the
restoration is being completed or in the event that a portion of the land
constituting the Property is removed by the partial condemnation, LESSEE'S rent
shall be abated for any portion of the Property which cannot be used by LESSEE.
In the event that substitute property restoration of the Property cannot be
completed to LESSEE's satisfaction, then LESSEE may elect to terminate the
Lease by giving written notice to the LESSOR.

     10.3 DISTRIBUTION OF CONDEMNATION AWARD.  Any condemnation award or
payment shall be distributed in the following order:  (a) first, to any ground
lessor, mortgagee or beneficiary under a deed of trust encumbering the
Property, the amount of its interest in the Property; (b) second, to LESSEE,
only the amount of any award specifically designated for loss of or damage to
LESSEE'S rights and interests in the Property and the LESSEE hereby assigns any
other rights which the LESSOR may have now or in the future to any other award
to the LESSOR; and (c) third, to LESSOR, the remainder of such award, whether
as compensation for reduction in the value of the leasehold, the taking of the
fee, or otherwise.  LESSEE shall have the right to pursue its claim against the
condemning authority for any damages which it suffers in connection with any
eminent domain proceeding.






                                     -25-
                                   ARTICLE 11
         ESTOPPEL CERTIFICATES, SUBORDINATION AND MORTGAGEE PROTECTION

     11.1 ESTOPPEL CERTIFICATES.  Within ten (10) days of request therefor by
LESSOR, LESSEE shall execute a written certificate, in the form presented by
LESSOR, acknowledging and certifying to matters requested by LESSOR, including
without limitation, the following; (a) that LESSEE is in full and complete
possession of  the Property, such possession having been delivered by LESSOR or
its predecessor and accepted by LESSEE; (b) that any improvements required to
be furnished by LESSOR by the terms of this Lease have been completed in all
respects to the satisfaction of LESSEE; (c) that this Lease is in full force
and effect and has not been amended, modified, supplemented, or superseded
except as specifically noted; (d) that there is no existing default on the part
of LESSOR in the performance of any covenant, agreement or condition contained
in the Lease to be performed by LESSOR; (e) that the LESSEE does not have any
actual or pending claim against the LESSOR; (f) that no Rents or other charges
have been prepaid by LESSEE; and (g) that the addressee of said certificate may
rely on the representations therein made; and certifying as to the dates of
commencement and termination of the Term, the date on which Rents commenced to
accrue under this Lease, and the date through which Rents and other charges
hereunder have been paid.  Commencement and termination dates of this Lease,
that it is in full force and effect, has not been modified (or if it has,
stating such modifications) and providing any other pertinent information as
LESSOR or their agent might reasonably request.  Failure to comply with this
Article shall be a material breach of this Lease by LESSEE giving LESSOR all
rights and remedies under Article 10 hereof, as well as a right to damages
caused by the loss of a loan or sale which may result from such failure by
LESSEE.

     11.2 FINANCIAL STATEMENTS.  If LESSOR desires to finance or refinance the
Shopping Center, the Property, or any part thereof, LESSEE hereby agrees,
within ten (10) days of request therefor by LESSOR, to deliver to any lender
designated by LESSOR such financial statements of LESSEE, its guarantors and
its parent company, if any, as may be reasonably required by such party.  Such
statements shall include the past three (3) years' financial statements of
LESSEE. All such financial statements shall be received by LESSOR in confidence
and shall be used only for the purposes herein set forth.

     11.3 ATTORNMENT.  LESSEE shall, in the event any proceedings are brought
for the foreclosure of, or in the event of exercise of the power of sale under
any mortgage or deed of trust made by LESSOR covering the Property, attorn to
the purchaser upon any such foreclosure or sale and recognize such purchaser as
the LESSOR under this Lease.

     11.4 SUBORDINATION/SUPERIORITY.  The rights and interests of LESSEE under
this Lease shall be subject and subordinate to any mortgage, trust deed or deed
of trust that is or may hereafter by placed upon the Shopping Center, or any
part thereof containing the Property and to any and all advances to be made
thereunder and to the interest thereon  and  all  renewals,  amendments,
modifications,  replacements  and  extensions  thereof,  if  the mortgagee or
trustee or secured party named in such mortgage or trust deed or deed of trust
shall elect to subject and subordinate the rights and interests of LESSEE under
this Lease to the lien of its mortgage,  trust deed or deed of trust and shall
agree by an instrument in form satisfactory to LESSEE and which recognizes the
priority of LESSEE's Purchase Option in writing to recognize this Lease in the
event of foreclosure, if and so long as LESSEE is not in default hereunder.
Any mortgagee or trustee of the Shopping Center or

                                     -26-
any part thereof containing the Property may elect to give certain rights and
interests of LESSEE under this Lease priority over the lien of its mortgage,
trust deed, or deed of trust.  In the event of either such election and upon
notification by such mortgagee or trustee to that effect to LESSEE, the rights
and interests of LESSEE under this Lease shall be deemed to be subordinate to
or have priority over, as the case may be, the lien of said mortgage or deed of
trust whether this Lease is dated prior to or subsequent to the date of said
mortgage or deed of trust.  LESSEE shall, within ten (10) days following the
request of LESSOR or such secured party, execute and deliver whatever
instruments may be required for such purposes.  Failure to do so shall
constitute an event of default and a material breach of this Lease.

     11.5 MORTGAGEE PROTECTION.  LESSEE agrees to give any mortgagee or trustee
of a deed of trust (hereinafter "mortgagee") of the Shopping Center, by
registered or certified mail, a copy of any notice of default served upon the
LESSOR by LESSEE, provided that prior to such notice LESSEE has been notified
in writing (by way of service on LESSEE of a copy of an Assignment of Rents and
Leases, or otherwise) of the address of such mortgagee.   LESSEE further agrees
that if LESSOR shall have failed to cure such default within thirty (30) days
after such notice to LESSOR (or if such default cannot be cured or corrected
within that time, then such additional time as may be necessary if LESSOR has
commenced within such thirty days and is diligently pursuing the remedies or
steps  necessary  to  cure  or  correct  such  default),  then  the mortgagee
shall have an additional thirty (30) days within which to cure or correct such
default (or if such default cannot be cured or corrected within that time, then
such additional time as may be necessary if such mortgagee has  commenced
within such thirty days and is diligently pursuing the remedies or steps
necessary to cure or correct such default, including without limitation
commencement of foreclosure proceedings if necessary to effect such a cure).
Until the time allowed as aforesaid for the mortgagee to cure such default has
expired without cure, LESSEE shall have no right to, and shall not, terminate
this Lease on account of LESSOR'S default.  This provision inures to the
express benefit of LESSOR

                                   ARTICLE 12
                            SURRENDER AND HOLDOVER

     12.1 SURRENDER OF PROPERTY AT TERMINATION OF LEASE.  LESSEE shall, upon
the termination of this Lease, after the last day of the Term or any extension
thereof or upon any earlier termination of such Term, surrender and yield up to
LESSOR the Property and all improvements thereto in the condition in which it
was required to be kept under this Lease, and the LESSOR and LESSEE will have
no further obligations under this Lease, except the LESSEE'S obligation to pay
Rent for the period prior to the termination of this Lease and the LESSOR's and
LESSEE'S obligations on termination of this Lease for an event of default as
set forth herein.  LESSOR shall upon the termination of this Lease, reconcile
the Additional Rents paid by LESSEE for Real Property Taxes under Section 2.3,
Utilities under Section 2.5, and the cost of maintaining the Property under
section 2.6, with the actual taxes paid and costs of Utilities and maintenance
incurred and shall make any refunds owing to LESSEE.  Such reconciliation and
refund for Additional Rents shall not include Operating Costs, which shall be
reconciled as provided in Section 2.9.

     12.2 HOLDING OVER.  Any holding over after expiration hereof, with the
consent of LESSOR, shall be construed as a month-to-month tenancy in accordance
with the terms hereof, as applicable.

                                     -27-
                                   ARTICLE 13
                           MISCELLANEOUS PROVISIONS

      13.1 WAIVER.  Any forbearance, failure or delay by LESSOR or LESSEE in
exercising any right, power or remedy hereunder shall not be deemed a waiver of
that right, power or remedy or any other right, power or remedy LESSOR or
LESSEE may have.

     13.2 TIME OF ESSENCE.  Time is of the essence to this Lease Agreement.

     13.3 ATTORNEYS' FEES.  If either party shall institute any action or
proceeding relating to the provisions of this Lease, or any default or breach
hereunder, then and in that event, the prevailing party shall be entitled to
reasonable expenses and attorneys' fees and disbursements incurred therein.

     13.4 CORPORATE AUTHORITY.  As LESSEE is a corporation, the individual
executing this Lease on behalf of said corporation shall represent and warrant
that he or she is duly authorized to execute and deliver this Lease on behalf
of said corporation in accordance with a duly adopted resolution of the Board
of Directors of said corporation or in accordance with the Bylaws of said
corporation, and that this Lease is binding upon said corporation in accordance
with its terms.  Further, LESSEE shall, within thirty (30) days after LESSOR'S
request, deliver to LESSOR a certified copy of a resolution of the Board of
Directors of said corporation authorizing or ratifying the execution of this
Lease.

     13.5 SUCCESSORS AND ASSIGNS.  The terms, conditions and covenants of this
Lease shall be binding upon and shall inure to the benefit of each of the
parties hereto, its successors or assigns and shall run with the land; subject,
however, to the provisions hereinabove relating to assignment, conveying,
subletting and pledging this Lease or the Property.

     13.6 REAL ESTATE BROKERS.  LESSOR and LESSEE each represent and warrant to
the other party that it has not authorized or employed, or acted by implication
to authorize or employ, any real estate broker or salesman to act for it in
connection with this Lease.  LESSOR and LESSEE shall each indemnify, defend and
hold the other party harmless from and against any and all claims by any real
estate broker or salesman whom the indemnifying party authorized or employed,
or acted by implication to authorize or employ, to act for the indemnifying
party in connection with this Lease.

     13.7 SERVICE OF NOTICE.  Except as otherwise provided herein, every
notice, approval, consent or other communication authorized or required by this
Lease shall be in writing and shall be deemed given forty-eight (48) hours
after deposit in the United States mail, postage prepaid, certified mail,
return receipt requested, and addressed to:

     LESSOR:       Biggest Little Investments, L.P.
                   c/o Maxum LLC
                   1175 West Moana Lane Suite 200
                   Reno, NV  89509

     LESSEE:       Golden Road Motor Inn, Inc.
                   Atlantis Casino and Resort
                   3800 S. Virginia Street
                   Reno, NV  89503
                   Attn: Chief Executive Officer

                                     -28-
     13.8 ENTIRE AGREEMENT AND MISCELLANEOUS PROVISIONS.

        A. The captions appearing in this Lease are inserted only as a matter
of convenience and in no way define, limit, construe or describe the scope or
intent of such paragraphs of the Lease or in any way affect the Lease.

        B. This Lease supersedes any and all other agreements, either oral or
in writing, between the parties hereto with respect to the lease and occupancy
of the Property and contains all of the covenants, agreements and other
obligations between the said parties in respect to the lease or occupancy of
the Property.

        C. No waiver, alterations or modifications of this Lease or any
agreements in connection herewith shall be valid, unless in writing duly
executed by all parties.

        D. This Lease is the result of negotiations between the parties and has
been agreed to by both LESSOR and LESSEE after prolonged negotiations and shall
not be construed against the party responsible for having it reduced to
writing.

        E. This Lease is to be governed by and construed in accordance with the
laws of the State of Nevada as exist from time to time.

        F. If any term, covenant, condition or provision of this Lease or the
application thereof to any person or circumstance shall, at any time, or to any
extent, be invalid or unenforceable, the remainder of the Lease or the
application of such term or provision to persons or circumstances other than
those as to which it is held invalid or unenforceable, shall not be affected
thereby, and each term, covenant, condition and provision of the Lease shall be
valid and enforceable to the fullest extent permitted by law.

        G. As a material inducement to LESSEE to enter this Lease, and in
consideration of the payment of Rent during the first 5 years of the Term,
LESSOR covenants that for a period of 5 years from the Commencement Date, no
non-restricted gaming operations (the "Restriction") may by conducted within
the Shopping Center by anyone other than LESSEE. At LESSEE's option prior to
the expiration of said 5 year period, LESSEE may purchase from LESSOR an
extension (the "Extended Restriction") of the prohibition on the conduct of
non-restricted gaming operations within the Shopping Center by anyone other
than LESSEE. The purchase price for the Extended Restriction shall be
determined by an independent appraisal of the value of the Extended Restriction
in the manner set forth for determination of the Purchase Price for the
Property Interests set forth in Section 7.5 above.

        H. LESSEE may record against the Property and Shopping Center a
memorandum to be executed by LESSOR and LESSEE providing notice of: (i) the
existence of this Lease Agreement, (ii) LESSEE's rights to use the Common Areas
of the Shopping Center as provided in Section 5.2 hereof, (iii) LESSEE's
Purchase Option as provided in Article 7 hereof, and (iv) the Restriction and
the Extended Restriction as provided in Section 13.8 hereof.







                                     -29-
LESSOR:                                  LESSEE:

BIGGEST LITTLE INVESTMENTS, L.P.         GOLDEN ROAD MOTOR INN, INC.,
a Delaware limited partnership           a Nevada Corporation.

By:/s/Ben Farahi                         By:/s/ Bob Farahi
   -------------                            --------------
      Ben Farahi                                Bob Farahi

Its:Managing Member of                   Its: President
    the General Partner


Dated: 01/29/04                          Dated: 01/29/04












































                                     -30-
STATE OF NEVADA  )
                 ) ss:
COUNTY OF WASHOE )

     On this 29th day of January, 2004, before me a Notary Public, personally
appeared Ben Farahi who acknowledged to me that he/she executed the foregoing
instrument on behalf of Biggest Little Investments, L.P.

                                           By: /s/ELIZABETH E. FRANKS
                                               ----------------------
                                                  Elizabeth E. Franks
                                                  NOTARY PUBLIC



STATE OF NEVADA   )
                  ) ss:
COUNTY OF WASHOE  )

     On this 29th day of January, 2004, before me a Notary Public, personally
appeared Bahram Farahi who acknowledged to me that he/she executed the
foregoing instrument on behalf of Golden Road Motor Inn, Inc.



                                           By: /s/ ELIZABETH E. FRANKS
                                               -----------------------
                                                   Elizabeth E. Franks
                                                   NOTARY PUBLIC





























                                     -31-

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-2
<SEQUENCE>4
<FILENAME>purchope.txt
<TEXT>
                                                                EXHIBIT 10.19

                          PURCHASE OPTION AGREEMENT

     THIS IS A PURCHASE OPTION AGREEMENT ("Agreement") dated September 15,
2003, between South Hills Investment Company, a Nevada general partnership
(herein called "SELLER"), and Monarch Casino & Resort, Inc., a Nevada
corporation or its nominee (herein called "BUYER").

     1. OPTION.  In consideration of Forty Five Thousand Dollars ($45,000.00)
("Option Consideration") received by SELLER, payable as provided in Article 7.3
and other good and valuable consideration, the receipt of which is
acknowledged, SELLER hereby grants to BUYER the option ("Option") to purchase
approximately thirteen (13) acres of real property located on South Virginia
Street, in Reno, County of Washoe, State of Nevada, said land described on
Exhibit A attached hereto and made a part hereof, with the exact legal
description to be determined by survey; together with all easements, rights and
appurtenances thereto, all buildings and improvements now located thereon, and
all of SELLER's right, title and interest in all public ways adjoining the same
(herein, with the land, collectively "Premises").

     2. PRICE.  The purchase price shall be determined at the time the Option
is exercised.  The purchase price of the Premises ("Purchase Price") shall be
determined using the valuation procedure ("Valuation Procedure") set forth in
this Article 2.  Within five (5) business days of the Exercise Date (as defined
in Section 4), the BUYER's independent Committee of the Board of Directors (or,
if BUYER is a subsidiary of Monarch Casino & Resort, Inc., Monarch's committee
of independent Board of Directors will perform the duties required by this
paragraph) shall order a Member Appraisal Institute ("M.A.I.") appraisal of the
Premises (a "Valuation").  Within five (5) business days of the Exercise Date,
SELLER shall commence the preparation of a separate Valuation of the Premises.
If each Valuation is within ten percent (10%) of the other, the average of the
two (2) Valuations shall be determined and said average will be the Purchase
Price.  If the Valuations differ by more than ten percent (10%), the two (2)
M.A.I. appraisers shall select a third (3rd) M.A.I. appraiser so as to produce
a third (3rd) Valuation of the Premises.  From the total of three (3)
Valuations, the two (2) closest Valuations shall be averaged and said average
shall be the Purchase Price.  In the event that transferable water rights are
appurtenant and transferable with the Premises, up to one (1) acre foot per
acre of water rights will be valued as part of the Premises and with no
increase in the Purchase Price, shall be transferred to BUYER along with the
Premises.  If the Premises have appurtenant and transferable water rights in
excess of one (1) acre foot per acre of water rights ("Excess Water Rights"),
the value of such Excess Water Rights shall be calculated at its fair market
value and may, if elected by BUYER, be purchased at fair market value, or if
not purchased by BUYER, such Excess Water Rights will be retained by SELLER.
In no event can the Purchase Price of the Premises be less than Eight Dollars
($8.00) per square foot or more than Twelve Dollars ($12.00) per square foot.
If the Valuation is determined to be less than Eight Dollars ($8.00) per square
foot, BUYER will pay Eight Dollars ($8.00) per square foot.  If the Valuation
is determined to be greater than Twelve Dollars ($12.00) per square foot, BUYER
shall pay Twelve Dollars ($12.00) per square foot.  BUYER is in no manner
obligated to purchase the Premises.  The Premises shall be appraised in the
Valuation Procedure as is, including the existing commercial zoning, but the
Valuation Procedure shall discount and not consider the valuation effect of any
of the approvals, master plan or zone changes to be sought by the parties after
the date of this Agreement.

                                     -1-
     3. PERIOD.  BUYER may exercise the Option by giving SELLER notice at any
time from the date hereof through September 15, 2004 ("Primary Period"). BUYER
may extend the period during which the Option is exercisable for an additional
period through September 15, 2005 ("Extension Period") by giving SELLER notice
prior to the end of the Primary Period and paying SELLER the additional
consideration of Sixty Thousand Dollars ($60,000.00).

     4. ESCROW.  First American Title Company of Nevada shall be the designated
title company and will act as the escrow agent ("Escrow Agent") for completion
of the purchase.  The date on which BUYER gives notice exercising the Option is
the exercise date ("Exercise Date").  Within thirty (30) days after the
Exercise Date SELLER shall deliver to Escrow Agent a recordable grant, bargain,
sale deed in the form of Exhibit B hereto which will convey the Premises to
BUYER or BUYER's nominee in fee simple, free of all tenancies, liens,
encumbrances, restrictions and defects of title except current property taxes
not in default, and those exceptions which, in BUYER's sole opinion, are deemed
acceptable in accordance with the provisions of Article 8.  On or before the
date of closing, BUYER shall deposit with Escrow Agent the Purchase Price, less
all consideration paid for the Option and for any extension thereof.  In the
event the Valuation Procedure has not been completed, the closing date shall be
extended to a date five (5) business days after the Purchase Price is finally
established under Article 2 above.

     5. AREA B OPTION.  Inclusive in the consideration already provided in
Article 1 received by SELLER, SELLER hereby grants to BUYER the option to
purchase the property marked as area B ("Area B") on the map attached hereto as
Exhibit B, which Area B is not currently part of the Premises (hereinafter, the
"Area B Option").  The purchase price for Area B ("Area B Purchase Price")
shall follow the same Valuation Procedure as detailed in Article 2.  The
Valuation Procedure of Area B Purchase Price shall be calculated by determining
the discrete fair market value of Area B and will not be averaged with the
determined value of the Premises.  As a condition precedent to exercise of the
Area B Option, BUYER must exercise the Option (as detailed in Article 1).
BUYER may only exercise the Area B Option by giving SELLER notice
simultaneously with exercise of the Option.

     6 .RIGHT OF FIRST REFUSAL.  For a period of eight (8) years after the
closing of the exercise of the Option, and if the Option B is not exercised,
should SELLER receive, a "bona fide proposal" (as defined below) (hereinafter,
the "Area B Proposal") to (i) purchase all or part of Area B; (ii) lease all or
part of Area B; (iii) develop Area B, or  (iv) do any combination of the
foregoing, then the following procedure must be followed:  SELLER shall send
BUYER a true, correct and complete copy of the Area B Proposal to BUYER and
notify BUYER, if it is fact SELLER's good faith intention to accept, of
SELLER's intention to accept the same (collectively, the "First Refusal
Notice").  BUYER shall have the right within fifteen (15) days after BUYER's
receipt of the First Refusal Notice (the "First Refusal Period") to accept the
terms of the proposal set forth in the First Refusal Notice in writing and
within the same time as set forth in the Area B Proposal, to complete the
transaction set forth in the Area B Proposal in BUYER's own name (including any
nominee of BUYER), for the same consideration set forth in the Area B Proposal
and on the same terms specified in the Area B Proposal. Notwithstanding the
previous sentence, BUYER'S right to exercise the right of first refusal is
conditioned on its exercise of the Option.  If BUYER shall not so elect within
said fifteen (15) days, SELLER may complete the Area B Proposal with the party
submitting the Area B Proposal (but not to a third party) provided the Area B
Proposal is completed on the terms and

                                     -2-
conditions and for the price set forth in the Area B Proposal.  Notwithstanding
anything to the contrary contained herein, this Right of First Refusal shall in
no way restrict SELLER's right, power or authority to mortgage Area B until the
First Refusal Notice is given.  If the BUYER believes that the Area B Proposal
is not a "bonafide proposal", then BUYER shall give written notice of the same,
including a detailed explanation of the reason supporting such position.
Within five (5) business days of the delivery by BUYER to SELLER of the notice,
the parties shall meet and attempt to resolve the dispute.  If no resolution
can be reached, the parties agree to submit the matter to private, binding
arbitration to be conducted by a mutually acceptable Reno-area arbitrator who
shall act on an expedited basis, with both parties agreeing to be bound by the
arbitrator's decision.  As used herein, "bona fide proposal" means that the
proposal must be submitted with adequate detail to clearly identify the
proponent, must be on terms and conditions that at the time of the proposal are
similar to terms that would otherwise be obtained from a reasonable third
party, and set forth in sufficient detail to allow BUYER to evaluate the terms
and conditions.

     7. SPECIAL PROVISIONS.

        7.1 Survey/Site Assessment.  For a period commencing with the date of
this Agreement and ending sixty (60) days thereafter (the "Due Diligence
Period"), BUYER, its agents and contractors, shall have the right to enter upon
the Premises and Area B for the purpose of conducting a topographical survey
and a site assessment of the Premises and Area B. The site assessment may
include, but not be limited to, subsurface soil and water tests, as well as the
testing of any underground storage tanks and related equipment upon the
Premises and Area B.  BUYER, its agents or contractors, shall also have the
right to make inquiries of governmental agencies concerning potentially
hazardous substances on the Premises and on Area B.  By the end of the Due
Diligence Period, if, in BUYER's sole opinion, any survey, governmental
inquiry, or site assessment reveals conditions that are unsatisfactory to
BUYER, BUYER may withdraw from this transaction in accordance with the
provisions of Article 11 hereof.  In the event of such withdrawal, no costs
incurred under this Article shall be reimbursed to either party.  BUYER waives
any right to demand performance of SELLER to cure any matters within this
paragraph at or prior to Closing; the transaction described in this Agreement
is a "as is" sale.

     If either SELLER or BUYER shall enter the Premises and Area B while owned
by the other to perform assessments or corrective action pursuant to this
Article 7.1, such entering party, for itself, its employees, agents and
contractors, shall assume all risks involved in entering upon the Premises and
Area B for the performance of such activities and shall indemnify and hold the
other harmless from and against all loss or expense by reason of any liability
due to bodily injury, death of persons or damage to property sustained by any
party arising out of or caused by the negligence of such entering party, its
employees, agents or contractors, in the exercise of any of such entering
party's rights under this Article 7.1.  Notwithstanding the foregoing, SELLER
must notify BUYER of known conditions that are dangerous or hazardous.

        7.2 Zoning/Permits/Licenses.  Upon execution of this Agreement, BUYER
may apply to the appropriate governing bodies for zoning, permits and licenses
required to authorize the use, construction and operation of the Premises as a
hotel casino in accordance with BUYER's plans and specifications.  SELLER
agrees to execute all instruments and documents reasonably necessary to enable
BUYER to secure such authorizations.

                                     -3-
        7.3 Payment of Option Consideration.  Three (3) days after the
expiration of the Due Diligence Period, if BUYER elects to proceed, then BUYER
shall pay to SELLER the Option Consideration, and the Option Consideration
shall then be non-refundable, except in the event of default by SELLER.

     8. CONDITION OF TITLE.  Not later than ten (10) days after the date of
this Agreement, SELLER shall obtain a preliminary title report with extended
coverage ("Title Commitment") on the Premises and Area B in the amount of the
Purchase Price from First American Title Company of Nevada ("Title Company").
If the Title Commitment reveals any title exceptions, encumbrances or
conditions which are unacceptable to BUYER, BUYER shall give notice thereof to
SELLER not later than thirty (30) days from the date of this Agreement, and
SELLER shall have thirty (30) days after receipt of such notice in which (a) to
cure same to BUYER's satisfaction and furnish a later report showing the defect
cured or removed, or (b) if such exceptions, encumbrances or conditions can be
cured solely by payment of additional title insurance premiums, to arrange for
satisfaction of same out of SELLER's proceeds at closing.  In the event SELLER
is unable or unwilling to cure the unacceptable exceptions, encumbrances or
conditions within the aforesaid period, BUYER may withdraw from this
transaction in accordance with the provisions of Article 11 hereof.  If, at
closing, SELLER is unable to deliver title to the Premises in the same
condition as accepted by BUYER in accordance with the terms hereof, then BUYER
shall elect as its sole remedy for such failure either (a) to waive such
defects and accept title to the Premises and Area B "as is" or (b) to withdraw
from this transaction in accordance with the provisions of Article 11 hereof
and receive a full refund of the Option consideration paid under Article 1.
BUYER may unilaterally extend the date for closing sixty (60) days to afford
SELLER additional time within which to cure the unacceptable exceptions,
encumbrances or conditions (without prejudice to BUYER's rights under any other
provision of this Agreement).

     9. CONDEMNATION.  In the event SELLER or BUYER becomes aware that the
Premises or Area B or any part thereof are or will become the subject of a
condemnation proceeding, whether for public or quasi-public use, such party
shall immediately give notice to the other and Escrow Agent of such proceeding.
The date of receipt of such notice shall be referred to as the "Condemnation
Notice Date." If condemnation proceedings have been instituted or threatened
whereby the Premises or Area B or any part thereof are or will become the
subject of a condemnation proceeding, BUYER shall have the right, at its option
and exercisable by delivery of written notice to SELLER within 30 days of the
Condemnation Notice Date: (a) to proceed with the Closing under the same time
requirements as set forth below, but without a reduction in the Purchase Price
on account of such condemnation proceeding, in accordance with the terms and
conditions of this Agreement, in which event BUYER shall have the right to
negotiate with the condemning authority for the condemnation award and to
receive the benefits thereof (and SELLER shall assign and transfer to BUYER all
of SELLER's rights, title and interest in and to any such condemnation award
that has been made, or will be made, as a result of such condemnation
proceedings, or (b) to withdraw from this transaction in accordance with the
provisions of Article 11 hereof.

     10 .CLOSING.  Closing will occur on or before sixty (60) days after the
Exercise Date (as defined in Article 4), on a date and at a time and place
designated by BUYER.



                                     -4-
        (a) At closing, SELLER, at its sole cost and expense, will deliver the
following to BUYER:

          (1). A Grant, Bargain, Sale Deed in form and substance reasonably
satisfactory to BUYER, fully executed and acknowledged by SELLER, conveying the
Premises and, if applicable, Area B, to BUYER, subject only to the encumbrances
accepted by BUYER pursuant to Article 8 hereof.  At BUYER's election, the
description used in the deed shall conform to the previously mentioned survey
of the Premises and, if applicable, Area B.

          (2) An owner's ALTA title policy in the Title Company's Extended
Coverage form insuring BUYER for the full Purchase Price, that title to the
Premises and, if applicable, Area B, is vested in fee simple, subject only to
the printed exceptions in such Extended Coverage form, to those exceptions
which BUYER agrees to accept in accordance with the provisions of Article 8
hereof, and to current property taxes not in default.

          (3) Certificate meeting the requirements of 26 U.S.C. Section 1445-
Non-Foreign Affidavit, executed and sworn to by SELLER.

          (4) Such other instruments as are customarily executed to effectuate
the conveyance of property similar to the Premises and, if applicable, Area B,
with the effect that, after closing, BUYER will have succeeded to all of the
rights, title, and interests of SELLER related to the Premises and, if
applicable, Area B, and SELLER will no longer have any rights, title, or
interests in and to the Premises and, if applicable, Area B.

          (5) Possession of the Premises and, if applicable, Area B, free and
clear of all tenancies of every kind and parties in possession, with all parts
of the Premises and, if applicable, Area B, in substantially the same condition
as on the date of this Agreement, except as provided herein.  SELLER shall bear
all risks of loss or damage to the Premises and, if applicable, Area B,
occurring prior to closing.

        (b) At closing, BUYER will deliver a check to SELLER in the amount of
the Purchase Price of the Premises and, if applicable, Area B, plus any sums
chargeable to BUYER under this Agreement, less (i) the Option Consideration
(including any money paid to extend the Option) paid by BUYER, (ii) any sums
chargeable to SELLER under this Agreement, and (iii) the amount of any liens
and encumbrances subject to which BUYER elects to accept title.

        (c) SELLER shall pay one half of the escrow charges, the CLTA title
insurance premiums, one half of any recording fees, all of the documentary
taxes imposed on the deed, and all of the real estate transfer taxes or fees.
BUYER shall pay one half of the escrow charges, the difference in cost between
the CLTA and the ALTA title insurance premiums and one half of the recording
fees.  Ad valorem and simiar taxes and assessments, as well as items of
revenue, relating to the Premises, and if applicable, Area B shall be prorated
between SELLER and BUYER as of the date of closing.  If the actual amounts to
be prorated are not known at closing, the prorations shall be computed on the
basis of the best evidence then available; when actual figures are available a
cash settlement shall be made between SELLER and BUYER.  All installments of
assessments due before that date of closing and all installments of assessments
which have been imposed but shall not become due until after closing shall be
considered due at closing and a lien on the


                                     -5-
Premises and, if applicable, Area B shall be prorated and deferred to a later
date, paid by SELLER at closing.  The provisions of this Article 10(c) shall
survive the closing.

     11. WITHDRAWAL.  BUYER may withdraw from this agreement and elect not to
exercise the Option or the Area B Option at any time.  BUYER's only liability
for such withdrawal shall be an indemnification and hold harmless to SELLER for
any damage done to the Premises or Area B in conjunction with BUYER's due
diligence work under Article 7.1 hereof.  If BUYER's decision to withdraw is
due to a breach of SELLER's representations, warranties or covenants hereunder,
BUYER may seek the remedies of specific performance or other remedies it may
have in equity or law.

     12. REPRESENTATIONS AND WARRANTIES OF SELLER.  SELLER hereby makes the
following representations and warranties to BUYER, as of the date hereof and
the closing date, which representations and warranties shall survive closing
hereunder:

        (a) As of the date hereof, SELLER shall have good and marketable fee
simple title to the Premises and, if applicable, Area B free and clear of all
mortgages, encumbrances, pledges, liens and charges of every kind, nature or
description.

        (b) SELLER is a Nevada general partnership duly organized and validly
existing under the laws of the State of Nevada and has all necessary power,
right, authority and capacity to enter into and perform this Agreement in
accordance with its terms.

        (c) This Agreement has been duly executed by SELLER and constitutes the
legal, valid, binding and enforceable obligation of SELLER.

        (d) SELLER has no knowledge of any facts, rights, interest or claims
affecting title to the Premises or Area B which are not shown by the public
records.

        (e) SELLER is not a "foreign person" as that term is defined in Section
1445(f)(3) of the Code and applicable regulations.

        (f) To the best of SELLER's knowledge, there are no contracts or
agreements with any public, quasi-public or private party affecting or with
respect to the Premises or Area B (except for this Agreement), which are not
shown by the public records.

        (g) To the best of SELLER's knowledge, there are no assessments or
levies on or with respect to the Premises or Area B other than those disclosed
in the preliminary title report, and to SELLER's knowledge, none have been
proposed.

        (h) SELLER has not (i) made a general assignment for the benefit of
creditors, (ii) filed any involuntary petition in bankruptcy or suffered the
filing of any involuntary petition by SELLER's creditors, (iii) suffered
appointment of a receiver to take possession of all or substantially all of
SELLER's assets; (iv) suffered the attachment or other judicial seizure of all,
or substantially all, of SELLER's assets, (v) admitted in writing its inability
to pay its debts as they come due, or (vi) made an offer of settlement,
extension or composition to its creditors generally.


                                     -6-
        (i) SELLER has no knowledge of any hazardous materials, toxic wastes,
pollutants or contaminants that have been produced, stored, disposed of or
discharged on the Premises or Area B, as the case may be, or any portion
thereof, into any water body on the Premises or Area B, as the case may be, or
into any ground water supplies under the Premises or Area B, as the case may
be.

        (j) To the best of SELLER's knowledge, SELLER has disclosed to BUYER
all assessments, studies, sampling results, evaluations and other reports
commissioned by or for SELLER or within SELLER's possession or control relating
to the environmental condition of the Premises and Area B.

        (k) SELLER has no knowledge of any parties that may be in possession of
all or any portion of the Premises or Area B, as the case may be, as lessees,
tenants at sufferance or trespassers.

        (l) SELLER has no knowledge of any existing fact or condition that
would result in the termination of access to and from the Premises or Area B,
as the case may be, or the cessation of utilities necessary for the operation
of a hotel casino.

        (m) SELLER has no knowledge, nor has received any formal notice, of any
pending condemnation or similar proceeding or assessment by any governmental
authority that will affect the Premises or Area B, as the case may be, or any
part thereof.

        (n) SELLER has no knowledge of non-compliance with all applicable laws,
ordinances, regulations, statutes, rules and restrictions relating to the
Premises or Area B, as the case may be, or any part thereof.

        (o) SELLER has no knowledge of any litigation, pending or threatened,
that could affect, encumber or burden the Premises or Area B, as the case may
be.

        (p) Excluding work initiated by BUYER, all work, labor, services and
materials furnished prior to the closing date to or in connection with the
Premises or Area B, as the case may be, and any improvements constructed
thereon prior to the closing date, will be discharged by SELLER prior to the
closing date so that no mechanics', materialmen's or other lien may be filed
against the Premises, Area B or such improvements.

        (q) At Closing all taxes on the Premises or Area B, as the case may be,
will been paid in full, and there will be no penalties or delinquency charges
owing.

        (r) SELLER has no knowledge that any condition surviving closing exists
in the contract under which SELLER acquired the Premises and Area B that would
in any way impair or affect BUYER's ability to develop or use the Premises.

        (s) SELLER will keep the Premises in the same condition except as
otherwise required hereunder, and will not develop, alter or otherwise change
the condition of the Premises, however, SELLER may, at its discretion, develop,
alter or otherwise change the condition of Area B.




                                     -7-
Except for those matters that are otherwise waived or provided for elsewhere
herein, if any of the foregoing representations and warranties cannot be made
by SELLER at closing, BUYER may, notwithstanding the provisions hereof, elect
as its sole remedy therefor: (a) to waive the warranty(ies) in question and
close; or (b) to obtain an appropriate indemnity from SELLER in a form
satisfactory to BUYER; or (c) to withdraw from this transaction in accordance
with the provisions of Article 11 hereof.

     13. REPRESENTATIONS AND WARRANTIES OF BUYER.  BUYER hereby makes the
following representations and warranties to SELLER, as of the date hereof and
the closing date, which representations and warranties shall survive closing
hereunder:

        (a) BUYER is a Nevada corporation duly organized, validly existing and
in good standing under the laws of the State of Nevada and has all necessary
power, right, authority and capacity to enter into and perform this Agreement
in accordance with its terms.

        (b) This Agreement has been duly executed by BUYER and constitutes the
legal, valid, binding and enforceable obligation of BUYER.

        (c) This Agreement has been duly executed by BUYER and the execution
and performance of this Agreement will not violate any agreement to which BUYER
is a party or to which it may be bound.

     14. INDEMNITY AND AGREEMENT TO DEFEND.

        14.1. By SELLER.  SELLER shall and does hereby indemnify and hold
BUYER, its stockholders, directors, officers, employees and agents harmless
from and against any loss or expense (including attorney's fees and costs of
litigation) incurred as a result of any claim, action, demand, judgment or suit
caused or alleged to have been caused by or happening in connection with the
Premises or Area B prior to the date of closing, whether in tort, in contract
or otherwise; including, but not limited to, fines, fees or sanctions asserted
by or on behalf of any person or governmental authority arising from or in
connection with SELLER's (or SELLER's predecessors-in-ownership) use or misuse,
handling or mishandling, storage, spillage, discharge, seepage into water
bodies or ground supplies, or release into the atmosphere of any hazardous
material, pollutant or contaminant; and excluding, however, any matter arising
out of work done by BUYER. SELLER shall conduct the defense of all such
litigation at its sole cost and expense, using counsel approved by BUYER, and
SELLER shall neither offer nor accept any settlement thereof without BUYER's
prior written consent, which approval and/or consent shall not be unreasonably
withheld. The provisions of this Article 14 shall survive closing hereunder.

        14.2 By BUYER.  BUYER shall and does hereby indemnify and hold SELLER,
its partners, officers, employees and agents harmless from and against any loss
or expense (including attorney's fees and costs of litigation) incurred as a
result of any required payment, action, demand, judgment or suit caused or
alleged to have been caused by or happening in connection with the filing of
applications for master planning changes, zoning changes, annexation and
special use permits related to the development of a hotel casino on the
Premises or Area B prior to the date of closing, whether in tort, in contract
or otherwise; including, but not limited to, fines, fees or sanctions asserted
by or on behalf of any person or governmental authority arising from or in
connection with BUYER's use or

                                     -8-
misuse, handling or mishandling, storage, spillage, discharge, seepage into
water bodies or ground supplies, or release into the atmosphere of any
hazardous material, pollutant or contaminant; and excluding, however, any
matter arising out of work done by SELLER.  BUYER shall conduct the defense of
all such litigation at its sole cost and expense, using counsel approved by
SELLER, and BUYER shall neither offer nor accept any settlement thereof without
SELLER's prior written consent, which approval and/or consent shall not be
unreasonably withheld. The provisions of this Article 14 shall survive closing
hereunder.

     15 .DEFAULT.

        15.1 By BUYER.  If the sale and purchase contemplated by this Agreement
is not consummated because of BUYER's default, SELLER shall retain the Option
Consideration and any extension thereof as full liquidated damages for such
default of BUYER, Title Company shall return any deposits made with it by
either party and neither party shall have any further rights or obligations
hereunder.  The parties hereto acknowledge that it is impossible to more
precisely estimate the damages to be suffered by SELLER upon BUYER's default,
and the parties expressly acknowledge that retention of the Option
Consideration is intended not as a penalty but as full liquidated damages.
Subject to the indemnification set forth in Article 14.2, SELLER's right to
retain the Option Consideration as full liquidated damages is SELLER's sole and
exclusive remedy in the event of default hereunder by BUYER; and, in
consideration of its retention of the Option Consideration, SELLER hereby
waives and releases any right to (and hereby covenants that it shall not) (a)
sue BUYER for specific performance of this Agreement or (b) claim that SELLER's
actual damages exceed the Option Consideration.  In the event the sale and
purchase contemplated by this Agreement is not consummated because of BUYER's
default, BUYER hereby waives and releases any right to (and hereby covenants
that it shall not) sue SELLER to recover the Option Consideration or any part
thereof on the ground that it is unreasonable in amount or that its retention
by SELLER is a penalty and not agreed upon as reasonable liquidated damages.

        15.2 By SELLER.  If the sale and purchase contemplated by this
Agreement is not consummated because of SELLER's default, BUYER shall elect as
BUYER's remedy: (a) to withdraw from this transaction in accordance with the
provisions of Article 11 hereof, (b) to seek and obtain specific performance of
this Agreement, or (c) to pursue all other rights or remedies available at law
or in equity including an action for damages.

      INITIALS OF BUYER:       INITIALS OF SELLER:

     16. AGENTS.  SELLER and BUYER, respectively, (a) represent to the other
that this transaction was not brought about by any broker, finder or other
agent consulted or engaged by either, and (b) agree to indemnify the other
against any claim by any such broker, finder or other agent for fees in
connection with this transaction.

     17. ASSIGNMENT.  BUYER may at any time assign this Agreement, but shall
not be relieved thereby of any of its obligations hereunder.

     18. NOTICES.  Any notice hereunder shall be in writing and shall be deemed
given when personally delivered or when deposited in the United States mail
registered or certified with return receipt requested, postage or


                                     -9-
charges prepaid, and addressed to the party for whom intended at such party's
address set forth below, or at such other address as such party may have
substituted therefor by proper notice to the other.

SELLER's address for notice:         South Hills Investment Company
                                     1175 West Moana Lane
                                     Reno, Nevada  89509

BUYER'S address for notice:          Monarch Casino & Resort, Inc.
                                     Resident Agent:
                                     Kummer Kaempfer Bonner & Renshaw
                                     3800 Howard Hughes Parkway
                                     Las Vegas, Nevada  89109

     19. EXECUTION-ENTIRETY-SUCCESSION.  This Agreement shall not be binding on
BUYER and SELLER unless and until it is signed on BUYER's behalf by a duly
authorized representative of BUYER and duly delivered to SELLER and
subsequently signed on SELLER's behalf by a duly authorized representative of
SELLER.  This Agreement comprises the entire Agreement, merges and supersedes
all prior representations and understandings between SELLER and BUYER
concerning the subject matter of this Agreement and shall bind and inure to the
benefit of SELLER's heirs, administrators, executors, successors and assigns
and BUYER's heirs, administrators, executors, successors and assigns.

     20. SECTION 1031 TAX-DEFERRED EXCHANGE.  SELLER and BUYER agree that one
or both of the parties may at the closing assign to a credit worth assignee all
of its rights and duties as purchaser under this Agreement so that the party
may acquire the Premises and, if applicable, Area B from its assignee under
this Article 20 pursuant to a tax-deferred exchange of real estate within the
meaning of 26 U.S.C. Section 1031. The parties agree that the applicable party
will execute such agreements and other documents as may be necessary, in the
opinion of counsel for BUYER, to complete and otherwise effectuate such tax-
deferred exchange in accordance with 26 U.S.C. Section 1031.

     21. LITIGATION.  In the event of litigation with respect to this
agreement, the prevailing party shall be entitled to recover its costs and such
expenses and fees (including reasonable attorney's fees) as shall be fixed by a
court.

     22. VENUE.  In the event of a dispute arising out of this Agreement, the
parties agree that sole jurisdiction shall lie in the District Courts of the
State of Nevada located in Washoe County, Nevada or in the Federal District
Court, District of Nevada located in Reno, Nevada.














                                     -10-
EXECUTED by SELLER and BUYER as of the date first herein specified.

Monarch Casino & Resort, Inc.              BUYER
                                    By:
- -------------------------              -----------------------
Witness                                Name: Bahram Farahi
                                       Title: President

South Hills Investment Company      SELLER

                                    --------------------------
                                    a Nevada general partnership

- -----------------------             By:-------------------------
Witness
                                      Name:
                                      Title:

                                      Business ID No.:

                                       /s/ David Farahi
                                       ----------------
                                           DAVID FARAHI

                                       /s/ John Farahi
                                       ----------------
                                           JOHN FARAHI

                                       /S/ Bahram Farahi
                                       -----------------
                                           BAHRAM FARAHI

                                       /s/ Ben Farahi
                                       --------------
                                           BEN FARAHI

                                       /s/ Ben Farahi
                                       -----------------------------
                                           FARAHI INVESTMENT COMPANY

                                       /S/ Joseph Marvizi
                                       ------------------
                                           JOSEPH MARVIZI

                                       /S/
                                       --------------------
                                           SAYAREH HALLEGUA

                                       /S/ John (E) Farahi
                                       -------------------
                                           JOHN (E) FARAHI

                                       /S/ Judah Farahi
                                       ----------------
                                           JUDAH FARAHI



                                  -11-
                                       /S/ Yaghoub Saeedi
                                       ------------------
                                           YAGHOUB SAEEDI

                                       /S/ Soleiman Saeedi
                                       -------------------
                                           SOLEIMAN SAEEDI

                                       /S/
                                       ---------------------
                                       So. Hills, a California Ltd.

                 (Append appropriate acknowledgments)













































                                     -12-

</TEXT>
</DOCUMENT>
</SEC-DOCUMENT>
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