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Arcland Energy Corp – ‘10-Q’ for 10/31/96

As of: Friday, 12/6/96 · For: 10/31/96 · Accession #: 352912-96-3 · File #: 0-10315

  As Of                Filer                Filing    For·On·As Docs:Size

12/06/96  Arcland Energy Corp               10-Q       10/31/96    1:36K

Quarterly Report — Form 10-Q
Filing Table of Contents

Document/Exhibit                   Description                      Pages   Size 

 1: 10-Q        Quarterly Report                                      21±    79K

Document Table of Contents

Page	(sequential)	\|	(alphabetic)	Top
			Alternative Formats (Word, et al.) As of October 31, 1996 Common Stock Consolidated Financial Statements Exhibits and Reports on Form 8-K Goldiggers Management's Discussion and Analysis of Management's Discussion and Analysis of Financial Condition and Results of Operations Total Liabilities
1	1st Page - Filing Submission
"	Item 1. Consolidated Financial Statements
"	As of October 31, 1996
"	Item 2. Management's Discussion and Analysis of
"	Item 6. Exhibits and Reports on Form 8-K
"	Total Liabilities
"	Common Stock
"	Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations
"	Goldiggers


SECURITIES AND EXCHANGE COMMISSION                                              

Washington, D.C.  20549                                                       

FORM 10-Q                                                                       

Quarterly Report Pursuant to Section 13 or 15(d) of the                 

Securities Exchange Act of 1934                                               

For the Quarter ended October 31, 1996                                          

Commission File No. 0-10315                                                     

ROYAL CASINO GROUP INC.                                                       

(Name of Registrant as specified in its charter)                              

Utah                                95-4091368

(State or other jurisdiction of            (IRS Employer                        

Incorporation or organization)          Identification No.)                   

152 Sherman St.                                                                 

Deadwood, SD 57732                                                              

(Address of principal executive offices)                                      

(605) 578-1299                
(605) 578-1298                                

(Registrant's telephone number)                               
(Registrant's fax number)                                                   

Securities registered pursuant to Section 12(g) of the Act:         

Common Stock,  $0.001 Par                                                 

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.                                              

[x] Yes      [ ] No                                                             

Indicate by check mark whether the registrant has filed all                     
documents and reports required to be filed by Sections 12, 13 or                
15(d) of the Securities Exchange Act of 1934 subsequent to the                  
distribution of securities under a plan confirmed by a court.                   

[x] Yes     [ ] No                                                              

As of October 31, 1996  4,436,459 shares of registrant's no par                 
value common stock were outstanding.                                            

ROYAL CASINO GROUP INC.                                                         

INDEX                                                                       

Page                                                                  

Number                                                                    

PART I.    FINANCIAL INFORMATION                                                

Item 1.    Consolidated Financial Statements                                    

Balance Sheet  (Unaudited)                                

as of October 31, 1996                                    
.................................................................             
........           3                                                          

Statement of Operations  (Unaudited)                      

as of October 31,                                         
1996.............................................................               
.............           5                                                     

Statement of Stockholder's Equity  (Unaudited)            

as of October 31,                                         
1996.............................................................               
.............           6                                                     

Statement of Cash Flows  (Unaudited)                      

as of October 31,                                         
1996.............................................................               
.............   7                                                             

Notes to Financial Statements                             
(Unaudited)...........................................                          
8                                                                               

Item 2.    Management's Discussion and Analysis of                              

Financial Condition and Results of Operations             
.....................................         12                              

PART II.   OTHER INFORMATION                                                    

Item 2.    Change in Securities.                                                
.................................................................             
.......         18                                                            

Item 6.    Exhibits and Reports on Form 8-K.                                    
...................................................         18                

ROYAL CASINO GROUP INC. AND SUBSIDIARIES                                        

CONSOLIDATED BALANCE SHEETS                                                     

OCTOBER 31, 1996                                                                

ASSETS                                                                          

Current Assets                                                                  

Cash - Bank                             $ 393,452               

Casino Funds                               202,906              

Chip/Token Liab.                              (180,152)         

                Net Casino Funds                                       $ 416,206

Accounts Receivable                            9,559            

Accrued Revenues                             13,411             

Inventories                                                     

Slot parts                             4,245    

Food                                 15,316     

Bar                                    3,777    

Souvenirs                            18,109     

Gaming Supplies                7,079            

Prepaid Device Stamps                      120,000              

Other Prepaids                             145,004              

Marketable Securities                        38,700             

Health Ins. Rcvble - CMC                     13,539             

                                                                       $ 388,739

        Total Current Assets                                           $ 804,945

Fixed Assets                                                                    

Slot Machines                           $ 513,884               

Other Gaming Device                          14,548             

Monetary Control                             53,535             

Casino F&F                                 116,713              

Deadwood Stage                     232,007                      

Restaurant Equipment                         74,237             

Restaurant Furnishing                        29,096             

Restaurant Smallware                         38,026             

Bar F&F                              17,578                     

Security & Surveillance                      43,742             

Hotel Furnishings                            27,755             

Office Equipment                             77,621             

Leasehold Improvements          1,005,973                       

Parking Lot                                  12,145             

Accum. Depreciation                     (   92,497)             

Land                                      337,022               

        TOTAL FIXED ASSETS                                           $ 2,501,385

Other Assets                                                                    

Investment in Subsidiary                             0          

Advance to Subsidiary                                0          

Stock Subscription Receivable                 6,250             

        TOTAL OTHER ASSETS                                              $  6,250

        TOTAL ASSETS                                                 $ 3,312,580

ROYAL CASINO GROUP INC. AND SUBSIDIARIES                                        

CONSOLIDATED BALANCE SHEETS                                                     

OCTOBER 31, 1996                                                                

LIABILITIES & EQUITY                                                            

Current Liabilities                                                             

Accounts Payable                        $   151,843             

Payroll Taxes                                  25,084           

Sales Taxes Payable                              3,259          

Accrued Interest                                        0       

Accrued Wages                                  31,028           

Health Ins. Claims Payable                     13,539           

Gaming Taxes Payable                           10,193           

Prop. Taxes Payable                            50,775           

Customer Prepaid Deposits                               0       

Chips & Token Float                                     0       

Pro. Meter Liabilities                           5,184          

Other Current Liabilities                                3,601  

Short Term Notes                                                
0                                                                     

                TOTAL CURRENT LIABILITIES                              $ 294,506

Long Term Liabilities                                                           

Capital Leases                                                  

TOTAL LIABILITIES                               

Equity                                                                          

Common Stock                            $        4,436          

Common Additional Paid in Capital          2,773,666            

Preferred Stock                            2,440,000            

Retained Earnings                         (2,200,028)           

        TOTAL EQUITY                                                 $ 3,018,074

TOTAL LIABILITIES & EQUITY                                           $ 3,312,580

PREPARED BY MANAGEMENT                                                          

(SEE ACCOMPANYING NOTES TO UNAUDITED FINANCIAL STATEMENTS)                      

ROYAL CASINO GROUP INC. AND SUBSIDIARIES                                        

CONSOLIDATED STATEMENT OF OPERATIONS                                            

OCTOBER 31, 1996                                                                

                                               October 31, 1996 October 31, 1995

(unaudited)       
(unaudited)                                                                     

REVENUES                                                                        

Casino                                                  419,734 

Food & Beverage                                 186,063         

Room                                                      64,495

Other                                                     45,647

                                                       715,939

 Less Promotional Allowances                            (  30,784)

NET REVENUES                             685,155

COSTS & EXPENSES                                                                

Casino                                                   513,371

Food & Beverage                                  166,652        

  Rooms                                                        8,983

General & Administrative                                 289,855
87,361                                                                          

 Depreciation/Amortization                                  66,651
_______                                                     

                                                     1,045,512

LOSS FROM OPERATIONS                                                            
(   360,357)                          (  87,361)                          

OTHER (INCOME) EXPENSE                                                          

Interest Expense                                                
1,565                                                                           

  Other Income                                            (   9,749)

       Interest Income                                              (   4,442)

                                                       (   12,626)

LOSS BEFORE INCOME TAXES                                                        

INCOME TAX PROVISION                                                            

NET LOSS                                                     (  347,731)       (
87,361)                                                                         

NET LOSS PER SHARE    $.078                                                     

WEIGHTED AVERAGE COMMON STOCK O/S (PRIMARY)     4,402,625                       

PREPARED BY MANAGEMENT                                                          

(SEE ACCOMPANYING NOTES TO UNAUDITED FINANCIAL STATEMENTS)                      

ROYAL CASINO GROUP INC. AND SUBSIDIARIES                                        

CONSOLIDATED STATEMENT OF SHAREHOLDERS' INVESTMENT                              

QUARTER ENDED OCTOBER 31, 1996                                                  

                                    Common Stock
Preferred Stock                 
Deficiency             Total                                                    

                          Shares
$                     Shares                 $__                    

Balance                                                                         

7/31/96                                  4,334,959     2,654,102                
1,000,000        2,440,000         <1,852,297>          
3,241,805                                                                     

Issuance of Common                                                              

Stock for Service & Debt         101,500        124,000                         

124,000                                 

Reversal of Warrants                (1,278)          (1,278)                    

(1,278)                     

Exercised                                                                       

Warrants Exercised                     1,278            1,278                   

1,278               

Net  profit <loss>                                                              

of the quarter                                                                  

ended  10/31/96                                                                 

<     347,731>     <   347,731>                                         

                      __________
________       _________     _________              _________                   
_________                                                               

Balance at                                                                      

10/31/96                                    4,436,459                           
2,778,102     1,000,000       2,440,000             <2,200,028>                 
3,018,074                                                           

PREPARED BY MANAGEMENT                                                          

(See accompanying notes to unaudited financial statements)              

ROYAL CASINO GROUP INC.                                                         

CONSOLIDATED STATEMENT OF CASH FLOWS                                            

QUARTER ENDED OCTOBER 31, 1996                                                  

Cash flows from operating activities:                                           

Net profit  <loss>                              

$   <347,731>                                                                 

              Adjustments to reconcile net loss to net cash from operations:

                Depreciation/Amortization                                 66,651

                Stock issued for Services                                124,000

                Unrealized Gain on Marketable Securities                       -
8,700                                                                           

                        (Increase) Decrease In Prepaid Expenses                (
12,926)                                                                         

(Increase) Decrease In Accounts Receivable      
7,922                                                                           

(Increase) Decrease In Deposits and Other       
3,586                                                                           

                Increase (Decrease) In Accounts Payable                (130,866)

                Increase (Decrease) In Accrued Expenses                        (
15,014)                                                                         

Increase (Decrease) In Other Current Liabilities
(  27,113)                                                                      

                Increase (Decrease) In Accrued Payroll                 ( 44,412)

-------------                                 

        Net cash  used for operating activities:
                       (384,603)

    Cash Flows From Investing Activities

                Acquisitions of Property & Equipment                   ( 35,260)

------------                                  

       Net cash  used for investing activities
                        (  35,260)

    Cash flows from financing activities

                Principal Payments on Short Term Debt                  (178,632)

-------------                                 

                        Net cash from financing activities
(178,632)                                                             

                    Net increase <decrease> in cash and cash equivalents
                           (598,495)

Cash & Cash Equivalents, Beginning of Period                    
1,014,701                                                                       

-------------                                   

        Cash & Cash Equivalents, End of Period                           416,206

                                                          PREPARED BY MANAGEMENT

                                  (See
accompanying notes to unaudited financial statements)                           

ROYAL CASINO GROUP INC.                                                         

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS                                      

THREE MONTHS ENDED OCTOBER 31, 1996                                             

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES                                      

Organization, Business and Basis of Presentation:                               

The Company, which is a Utah Corporation, was originally formed 
on March 21, 1981, under the name "Arrowhead Energy Corporation"                
("Arrowhead") which later changed its name to "Reliance                         
Enterprises, Inc." ("Reliance").  At the time of incorporation,                 
Arrowhead, and subsequently  Reliance,  were engaged primarily                  
in the acquisition and drilling of oil and gas prospects                        
principally through private sales of limited partnership                        
interests.  On March 5, 1986, Reliance filed for protection                     
under Chapter 11 of the United States Bankruptcy Code. On April                 
18, 1988, Reliance acquired Capitol Television Network Inc., a                  
California corporation  ("CTN California")  formed on December                  
31, 1986, in exchange for a controlling interest in Reliance.                   
"CTN California's" president and largest shareholder was Jon                    
Elliott.   Pursuant to a Plan of Reorganization, as Confirmed by                
the U.S. Bankruptcy Court, Reliance emerged from bankruptcy                     
proceedings and amended its Articles of Incorporation to change                 
its name to Capitol Television Network Inc.  The Company was                    
formed to establish a national broadcasting network to provide                  
programming via satellite for independent and low power                         
television stations. Due to the company's inability to attract                  
the necessary funds to commence and sustain operations, combined                
with the then current recession, the Company ceased operations                  
in January, 1992.  The Company was dormant until January, 1994                  
when it amended its Articles of Incorporation to change its name                
to Royal Casino Group Inc.                                                      

Goldiggers Hotel & Gaming Establishment                         

On August 17, 1995 the Company entered into an Agreement in     
Principal with Casino Magic to acquire all the assets and                       
liabilities, exclusive of inter-company debt, of "Goldiggers"                   
Hotel and Gaming Establishment in Deadwood, South Dakota for one                
million shares of the Company's non-dividend bearing,                           
convertible, redeemable preferred stock. Although the Company                   
can redeem any amount of these shares at any time up to 36                      
months from issuance, Casino Magic may convert one third of the                 
shares into common shares on a one-for-one basis each year. As                  
part of the transaction Casino Magic was issued 500,000 warrants                
to be converted on a one-for-one basis into the Company's common                
shares with an exercise price of $4 each.  The warrants are                     
callable by the company at $1 each, expire in five years and                    
will be registered if called.  Customary piggy-back registration                
rights apply.  The transaction was subject to two conditions;                   
the first called for a definitive agreement to be approved by                   
the board's of both companies which was accomplished and signed                 
in December, 1995, and the second condition being the issuance                  
to Royal Casino Group of a gaming license by the South Dakota                   
Commission on Gaming.  Royal Casino received this license on                    
June 6, 1996.  The acquisition of this property allowed the                     
Company to commence operations with a casino that is generating                 
revenues of approximately $2.5M annually.  In addition this                     
acquisition allows the Company to move out of the developmental                 
stage, achieve a flow of revenues and net assets of $2.4M.                      

Goldiggers Hotel & Gaming Est. consists of three separate but   
connected buildings housing 87 slot machines, 10 video lottery                  
machines plus three blackjack tables, a fine dining restaurant,                 
bar and nine room hotel located in historic Deadwood, South                     
Dakota.  Deadwood, a turn-of-the-century restored gold mining                   
town nestled in the famous Black Hills of South Dakota, is on                   
the National Historical Registry and attracts over 1.5 million                  
visitors per year.  In addition to acquiring Goldiggers, the                    
Company acquired the Deadwood Stage, a transportation system                    
consisting of two 47 passenger buses, three 25 passenger buses,                 
a20 passenger bus plus an assortment of vans and school buses                   
which are primarily used to bring gaming patrons to the casino.                 

Wyatt, Missouri Riverboat Casino                                

On November 9, 1995 the Company signed a definitive 25 year     
Docking and Franchise agreement with the City of Wyatt, Missouri                
granting Royal Casino Group the exclusive right to develop and                  
manage a Riverboat Casino Entertainment Center on the                           
Mississippi River. The agreement contains five additional five                  
year renewal periods at Royal's option.  Wyatt is located where                 
the states of Missouri, Illinois & Kentucky meet and is just 20                 
miles from Tennessee. The location, strategically situated at                   
the confluence of the Ohio and Mississippi Rivers, is visible                   
from both Interstate 57, the main north-south artery from                       
Chicago to New Orleans, and U.S. Highways 60/62 connecting                      
Southeast Missouri to both Illinois & Kentucky.  Highway 60/62,                 
currently being widened to four lanes, is the main trafficked                   
road to Branson, Missouri and its millions of annual visitors.                  
Combined daily vehicle count tops 15,000 with an additional                     
10,000 vehicles traveling each day on Interstate 55 less than                   
twenty minutes from the site.  Interstate 55 is the main                        
north-south artery between St. Louis & New Orleans.  A 5-state                  
territory with a population of just under 2 million is within                   
100 miles. The closest operating riverboat casino is Players                    
located approximately 40 miles away in Metropolis, IL  with                     
annual revenues in excess of $70M.   ROYAL plans, subject to                    
receiving the required regulatory approvals, to develop a                       
Riverboat Casino Entertainment Complex including a 7,400 square                 
foot Visitor's Center containing a 150 seat buffet restaurant,                  
lounge, ticketing area plus a Missouri Arts & Craft shop.                       

On March 23, 1996 the Company  and a local landowner entered    
into a three year lease with an unlimited number of five year                   
renewal options (at base plus customary CPI adjustments) plus an                
option to purchase 50 acres of land directly on the Mississippi                 
River near Wyatt, Missouri.  The term and annual lease payments                 
of $50,000 commence upon the earlier of the Company beginning                   
construction on the land or the selection of its gaming                         
application for review by the Missouri Gaming Commission.  The                  
Company has an option for three years to purchase the land for                  
$300,000 with 50% of the rent  paid credited towards the                        
purchase price.  Ten percent of the rental sum due for the                      
initial three year term will be payable in the Company's                        
restricted common stock priced at the average ask price of the                  
Company's shares for the preceding 15 trading days prior to the                 
payment due date. As a condition of the transaction, the City of                
Wyatt will annex the property into the city with the lessor                     
paying the costs associated with this procedure.  This                          
annexation is anticipated to be completed during the first                      
quarter of 1997 although no assurances to this effect can be                    
given due to the complexities and variables associated with this                
procedure.                                                                      

In April, 1996 the Company submitted its application for the    
required regulatory docking permits to the Army Corps of                        
Engineers. [See Subsequent Events]                                              

Current Operations                                              

The Company made no material sales from inception until its     
acquisition of Goldiggers Hotel & Gaming Est. from Casino Magic                 
Corp. on June 13, 1996.  Consequently, the revenues shown are                   
difficult to compare to the previous years same quarter when the                
Company had not yet achieved any revenues.  Additionally, many                  
non-reoccurring costs associated with the closing of the                        
acquisition are expensed in this quarter.  Further, the Company                 
made capital improvements to the property which are also                        
reflected in this quarter's statements.  The Company, through                   
its desire to make every employee a stockholder gave shares to                  
its employees which resulted in a one-time salary and payroll                   
taxexpense of $116,159.  It is anticipated that additional                      
losses will be incurred in the future as the Company continues                  
to make capital improvements to Goldiggers and develops other                   
casino properties and will continue until the planned expansion                 
to Goldiggers has been completed and/or Company's second                        
property is operational.                                                        

Royal Casino Group Inc. Is a publicly traded company whose      
stock trades on the NASDAQ Over-The-Counter ("OTC") Bulletin                    
Board under the symbol "WINZ".                                                  

Basis of Financial Statements:                                                  

The accompanying financial statements have been prepared with                   
the Company as a going concern.  Royal Casino's revenues are                    
derived solely from its wholly-owned subsidiary,                                
Atlantic-Pacific Corp. which operates Goldiggers Hotel & Gaming                 
establishment in Deadwood, South Dakota.  Goldiggers has its own                
revenues and expenses while Royal Casino Group has additional                   
corporate operating expenses normally associated with a                         
developing company.  The Company will require a continuous flow                 
of capital to develop the casinos the Company aspires to open.                  

Income Taxes:                                                                   

The Company is current with all its Federal and State Income Tax                
filings. The Company does not owe any Federal or State Income                   
Taxes.  The Company has recorded a full evaluation allowance                    
against income tax benefits for all years presented in its July                 
31, 1996 audit due to uncertainty related to the Company's                      
ability to realize such tax benefits in future periods. The                     
Company's deferred tax assets and net operating loss                            
carryforwards are $373,000 for 1996 and $111,925 for 1995.                      

Officers' Salaries:                                                             

Officers' salary expense for the period was $56,250.                            

Loans payable, Officers/Directors-Stockholders:                                 

There are no Officers or Directors loans outstanding at the end                 
of this quarter.                                                                

Stockholders' Equity                                                            

Common Stock:                                                                   

The Company has 150,000,000 shares authorized, 4,436,459 issued                 
and outstanding. There are presently outstanding 1,611,846 "B"                  
Warrants which entitle the holder to purchase one share of                      
Common Stock at a purchase price of $20 until January 26, 1997.                 
The "B" Warrants are callable by the Company at a purchase price                
of $.20 per Warrant.                                                            

Preferred Stock:                                                                

The Company has 100,000,000 shares authorized of which 1,000,000                
are issued and outstanding.  In June, 1996  the Company issued                  
1,000,000 Class A Preferred Shares to Casino Magic Corp. in                     
connection with its acquisition of Goldiggers Hotel & Gaming                    
Establishment.  These shares are non-dividend bearing,                          
convertible and redeemable up to one third of the total number                  
of shares issued each year for three years at Casino Magic's                    
option.  The Company has received a request from Casino Magic to                
convert one third of theshares into common shares.  The Company                 
is actively preparing a registration statement to do so although                
there can be no assurance when it will become effective.                        

Stockholders' Equity                                                            

Stock Options:                                                                  

Under the terms of its nonqualified employee stock option plan                  
the Company is authorized to establish a plan for up to two                     
hundred and fifty thousand (250,000) shares of Common Stock                     
pursuant to a resolution of the Board of Directors and by                       
Amendment of its Certificate of Incorporation and/or Bylaws. The                
Company has issued one hundred and seventy thousand (170,000)                   
options to its officers/directors-stockholders.  The options may                
be exercised at a purchase price of $1.25 per share.  The                       
options expire on January 31, 1999.  The common stock issued                    
pursuant to these options are restricted under the Securities                   
and Exchange Commission Rule 144.                                               

                        PREPARED BY MANAGEMENT

Item 2.   MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL                     
CONDITION AND RESULTS OF OPERATIONS.                                            

The following discussion provides information on results of     
operations, liquidity, capital resources, and the impact of                     
inflation on the Company.  The financial statements and notes                   
thereto also contain information that is pertinent to this                      
analysis.                                                                       

Selected Financial Data:                                                        

The selected financial data set forth below should be read in                   
conjunction with the financial statements and related notes.                    
Balance sheet information is presented as of the end of the                     
period shown.                                                                   

The following table summarizes certain selected unaudited       
financial data and is qualified in its entirety by the more                     
detailed financial statements included elsewhere herein. For the                
quarter ended October 31, 1996, the Company had revenues of                     
$715,939 and a consolidated net loss of $347,731.  The Company's                
revenues are derived from its wholly-owned subsidiary,                          
Atlantic-Pacific Corp. which operates Goldiggers Hotel &                        
GamingEstablishment in Deadwood, South Dakota.                                  

October 31, 1996                                                                

(Unaudited)                                                                     

Total Assets                                                                    
.................................................................             
...............................   $ 3,312,580                                 

Total                                                                           
Liabilities......................................................               
.......................................   $     294,506                       

Shareholders' Equity                                                            
.................................................................             
.................    $ 3,018,074                                              

Shares Outstanding                                                              

Common Stock .............................................      
4,436,459  (1)                                                                  

Series A Preferred Stock ..............................         
1,000,000                                                                       

Net Tangible Book Value                                                         

Per Share of Common                                             

Stock . . . . . . . . . . . . . . . .  $0.68                    

(1) There are presently outstanding 1,611,846 "B" Warrants      
which entitle the holder to purchase one share of Common Stock                  
at a purchase price of $20 until January 26, 1997.   The "B"                    
Warrants are callable by the Company at a price of $.20 per                     
Warrant.  This calculation assumes that none of the                             
aforementioned "B" Warrants have been exercised.                                

General Financial Condition                                                     

The Company is in good financial condition with assets including                
cash and no debt.  The Company has the ability to borrow funds                  
for modest capital improvements to its existing gaming property                 
through its current banking relationship.  The Company will be                  
seeking to finalize the funding necessary for expansion to                      
Goldiggers within the Company's second fiscal quarter although                  
there is no guarantee that the funding will be available on                     
terms and conditions acceptable to the Company                                  

Results of Operations:                                                          

From May, 1996 until their expiration on July 26, 1996, over                    
1,000,000 of the Company's Class "A" Warrants were exercised at                 
$1 providing the Company with substantial operating capital to                  
complete the acquisition of Goldiggers from Casino Magic and                    
commence operations.  The Company has funds on hand and                         
borrowing capabilities at its bank to manage ongoing operations                 
for the 1997 fiscal year without seeking additional financing.                  
However, to acquire or develop additional gaming properties and                 
expand its existing property, the Company will require funding                  
in varying amounts, time frames and methods corresponding to                    
each of the gaming opportunities the Company elects to pursue.                  

Goldiggers                                                      

The Company, since it assumed control of Goldiggers Hotel &     
Gaming Est. in mid-June, has continued to invest in capital                     
improvements.  First, Royal Casino Group has replaced more than                 
50% of the slot machine game program chips with current, new,                   
more customer-appealing games and redesigned the casino's layout                
to create a more open customer-friendly appeal.  Second, the                    
Company has turned the adjacent land into a parking lot for its                 
hotel guests saving $50,000 per year in parking expense.  Third,                
the Company has relocated and built a new gift shop and ordered                 
new apparel with the Goldiggers logo.  Fourth, the Company has                  
installed new kitchen equipment resulting in increased                          
efficiency in Goldiggers' restaurant and upgraded the quality of                
the food.  Fifth, the Company has undertaken a major cleanup of                 
the property; repainting the front, side and rear entrances,                    
refurbishing the copper and brass entrance moldings, ordering                   
new signs for the front of the building, new roof lights to                     
brighten the front of the building and new uniforms for its                     
managerial personnel.  Simultaneously, the Company has                          
implemented cost cutting measures such as instituting a                         
comprehensive yet less expensive employee health insurance                      
program.  Royal Casino Group is developing an aggressive                        
marketing program.                                                              

Viewing a year-over-year comparison of operations gross casino  
revenues were down 18% in this period. Management attributes                    
this decrease to less visitors in the Black Hills in general and                
Deadwood in particular as compared to the previous summer                       
tourist season as a direct result of the cutting of the State's                 
tourism budget.  Deadwood gaming revenues have been negatively                  
impacted.  Further comparison shows that despite the decrease in                
the number of tourists to the area and customers in Goldiggers,                 
restaurant and beverage sales remained constant with last year,                 
hotel revenue increased 18% while management-implemented                        
cost-cutting measures and tighter expense controls reduced the                  
casino's operating costs in excess of 11%.  Although the                        
property experienced a loss of $25,000 for the quarter, overall                 
EBITDA resulted in a 22% improvement as compared to last year.                  

Wyatt, Missouri Riverboat Casino                                

On October 8, 1996 the Army Corps of Engineers issued a public  
notice seeking comments to determine whether to grant a Section                 
401 water quality certification permit which would grant Royal                  
Casino Group the permission necessary to dock its planned                       
riverboat at its planned location in Wyatt, Missouri.                           
Interested parties have until November 7, 1996 to respond.  It                  
is anticipated that the Army Corps together with the Missouri                   
Department of Natural Resources will make a determination on                    
this matter within several weeks after receiving the comments,                  
although no time frame can be assured due to the potential for                  
unanticipated delays.                                                           

Amendment to Articles of Incorporation                          

Subject to the Corporation's request on August 5, 1996 the      
Company received a Certificate from the Utah Division of                        
Corporations and Commercial Code amending its Articles of                       
Incorporation to include the par value of a mil per share for                   
the Corporation's Common and Preferred Stock as of August 1,                    
1996.                                                                           

Appointment of Auditors                                         

At a Board of Directors meeting on August 12, 1996 the Board    
decided to replace the Company's auditors, Caldwell, Becker                     
Dervin & Petrick of Woodland Hills, California with Arthur                      
Andersen LLP.  A Form 8-K stating this event and that there were                
no disagreements with the previous auditors was filed on August                 
14, 1996 a copy of which is included as an exhibit to this                      
report.                                                                         

Employment Agreements                                           

At a September 25, 1996 Board Meeting the Board formally        
approved of the Employment Agreements for both Jon Elliott, the                 
Corporation's President and CEO and Larry Close, the                            
Corporation's Vice President of Gaming.    In addition the Board                
approved the automobile leases for both Mr. Elliott and Mr.                     
Close.  Further, since the Corporation was relocating its                       
Corporate Headquarters from California to South Dakota, the                     
Board approved the Company purchasing a residence on behalf of                  
Mr. Elliott until Mr. Elliott received approval from his                        
mortgage lender.  The Corporation agreed to resell the home to                  
Mr. Elliott at the same price however, Mr. Elliott agreed to pay                
the Company 9% per annum interest on all funds expended in this                 
fashion.  The home was purchased on August 19, 1996 and resold                  
to Mr. Elliott on September 13, 1996.  Mr. Elliott has paid the                 
Company its interest in full in regards to this transaction.                    

Consulting Agreements                                           

On August 13, 1996 the Company entered into a public relations  
contract with Pinnacle Funding Corp. of West Palm Beach,                        
Florida.  The agreement calls for the Company to pay Pinnacle                   
$7,500 per month for nine months, issue Pinnacle 90,000 common                  
shares from its active S-8 registration to be delivered 30,000                  
upon signing, 30,000 in three months and 30,000 in six months                   
and grant Pinnacle options to purchase 350,000 common shares at                 
prices ranging from $1.25 to $2.50.                                             

On October 1, 1996 the Company renewed its financial public     
relations contract with Gaming Venture Corp. (formerly Lucky                    
Management) for a fee of $2,500 per month plus options to                       
purchase 18,000 restricted common shares of the Company's stock                 
at $0.88.                                                                       

Stock Issuances                                                 

On August 14, 1996 the Corporation instructed its transfer      
agent to issue three certificates each in the amount of 30,000                  
common shares in the name of Pinnacle Funding Corp. from the                    
Company's active S-8 Registration # 33-34786.  One of these                     
certificates has been delivered to Pinnacle.                                    

On October 9, 1996 the Company instructed its transfer agent to 
issue:  7,000 common shares in the name of Dalton & Mathias as a                
portion of their consulting compensation for their efforts as                   
the Corporation's outside accounting firm and, 2,500 common                     
shares to Lloyd Covens, for his consulting services in Trinidad,                
Colorado in connection with the Company's efforts to develop a                  
casino in that community.  Both of these issuances were from the                
Company's active S-8 registration # 33-34786.                                   

Atlantic-Pacific Corp. Audit                                    

Pursuant to a Securities & Exchange Commission requirement that 
in an acquisition, if the acquired entity represents 40% or more                
of the annual sales of the acquiring entity, a Form 8-K must be                 
filed within 15 days announcing the acquisition with a second                   
Form 8-K containing audited financial statements for the                        
acquired entity's most recent three year period filed within the                
following 60 days.   As Atlantic-Pacific, the Company's                         
wholly-owned subsidiary which owns and operates Goldiggers, was                 
deemed not material by Casino Magic's auditors due to the                       
percentage of total sales it represented, the Company retained                  
the Minneapolis office of Arthur Anderson, LLP to conduct the                   
required audit.  The audit was completed and filed with a Form                  
8-K within the allowed time frame on August 28, 1996.  Acopy of                 
this Form 8-K is included as an exhibit with this report.                       

Other Matters                                                   

On September 18, 1996 the Company filed a Form 8-KA replacing   
the Form 8-K filed August 14, 1996.  The amended filing included                
the words "through the date of dismissal" to Item 4. (a) (iv) in                
connection with the absence of any disagreement with the                        
Company's former auditors on any work they performed on the                     
Company's behalf.  A copy of this Form 8-KA is included as an                   
exhibit with this report.                                                       

On August 5, 1996 Stephen Grogan, a former Officer and          
Director of the Company sued Royal Casino Group Inc. and Jon                    
Elliott, its President seeking unspecified damages alleging                     
breach of contract against the Company, conversion and statutory                
theft against both the Company and Jon Elliott and tortuous                     
interference with contract and exemplary damages against Jon                    
Elliott.  The Company strongly believes these charges are                       
meritless and intends to vigorously defend these actions.  In                   
addition, the Company has asserted numerous affirmative defenses                
in response to the action filed by Mr. Grogan.  This action                     
stems from the Company canceling shares issued to Mr. Grogan for                
services to be performed as an officer and director.  As Mr.                    
Grogan voluntarily resigned as both an officer and director the                 
Company believes he defaulted on his obligations to the Company                 
and by his action rendered his ability to perform the duties for                
which he was to receive shares impossible.  Further, the Company                
believes Mr. Grogan performed acts that were contrary to the                    
interests of the Company and its shareholders and caused damages                
to the Company.                                                                 

   The Company continues to pursue the acquisition and
development of small to mid-sized casino opportunities                          
throughout the country                                                          

Revenues                                                                        

The Company's revenues are derived from its wholly-owned                        
subsidiary, Atlantic-Pacific Corp. which operates Goldiggers                    
Hotel & Gaming Establishment in Deadwood, South Dakota. Viewing                 
a year-over-year comparison of operations gross casino revenues                 
were down 18% in this period. Management attributes this                        
decrease to less visitors in the Black Hills in general and                     
Deadwood in particular as compared to the previous summer                       
tourist season as a direct result of the cutting of the State's                 
tourism budget.  Deadwood gaming revenues have been negatively                  
impacted.  Further comparison shows that despite the decrease in                
the number of tourists to the area and customers in Goldiggers,                 
restaurant and beverage sales remained constant with last year,                 
hotel revenue increased 18% while management-implemented                        
cost-cutting measures and tighter expense controls reduced the                  
casino's operating costs in excess of 11%.  Although the                        
property experienced a loss of $25,000 for the quarter, overall                 
EBITDA resulted in a 22% improvement as compared to last year.                  

Direct Expenses                                                                 

The Company has had sufficient cash on hand to pay all its                      
expenses associated with maintaining the Company                                

Consulting Fees                                                                 

The Company expensed $70,900 in consulting fees in this period.                 
Of this amount  $20,900 is outstanding, $20,000  was paid in                    
cash and the balance was paid in common stock.                                  

Equipment Rental, Overhead Reimbursement, Rent, Support Services                

The Company pays rent of $425 per month for its corporate                       
offices.  Atlantic-Pacific pays a monthly rent of $19,500 for                   
Goldiggers.  Atlantic-Pacific has $4,368 owed on equipment                      
rental.                                                                         

Impact Of Inflation Upon The Company                                            

Inflation has not impacted the Company.                                         

Subsequent Events                                                               

Royal Casino Group had an active interest in an initiative in                   
Trinidad, Colorado which would have allowed a local referendum                  
to permit gaming.  The Company had a representative in the                      
community negotiating with Realtor's which, the Company                         
believed, would give it a significant competitive advantage over                
the competition.  However,  the measure was defeated in the                     
November 4 election.                                                            

The Company reached an accord to lease a Nevada casino property                 
with an option to buy, however negotiations to complete the                     
transaction appear to have stalled.                                             

The Company is in the early stages of actively investigating and                
evaluating specific casino opportunities in certain markets                     
which fit the Company's goal to acquire and manage casinos in                   
small to mid-sized markets.                                                     

The Company believes that Stephen Grogan, a former Officer and                  
Director of the Company, performed acts while serving as an                     
Officer and Director of the Company that were contrary to the                   
interests of the Company and its shareholders and caused damages                
to the Company.  As such on November 21, 1996 the Company filed                 
suit against Stephen Grogan in Lawrence County, South Dakota,                   
the County where the Company maintains its corporate                            
headquarters.  The suit alleges deceit, fraud and breach of                     
fiduciary duties against Stephen Grogan and seeks the return of                 
the Company's stock issued to Mr. Grogan together with the                      
return of the proceeds Mr. Grogan received from the sale of                     
common shares of the Company's stock.                                           

                                           PART II.  OTHER INFORMATION

Item 2.         Changes in Securities                                           

NONE                            

Item 6.         Exhibits and Reports on Form 8-K                                

a.      Exhibits                                

None.                           

Exhibits others than those listed have been omitted because     
they are non-           existent, inapplicable or because the                   
information is given in the financial                                           
statements of the Company.                                      

b.      Reports on Form 8-K                     

                1.     Form 8-K which was filed with the SEC on August 12, 1996,
with                            exhibits.                                       

2.      Form 8-K which was filed with the SEC on August 27, 1996 with           

 exhibits.

               3.      Form 8-KA which was filed with the SEC on September 18,
1996                                                                            

with exhibits.                  

                              SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of                  
1934, the Registrant has duly caused this report to be signed by                
the undersigned thereunto duly authorized.                                      

ROYAL CASINO GROUP INC.                               

(Registrant)            

By: _  _/s/  Jon F. Elliott____________                             

Jon F. Elliott, President                                 

and Chief Executive Officer                               

Date:  December 15, 1996_____                                                   

By: _  _/s/   Larry C. Close                                          

Larry C. Close                                          

Director, Vice President

Dates Referenced Herein and Documents Incorporated by Reference

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Arcland Energy Corp – ‘10-Q’ for 10/31/96

As of: Friday, 12/6/96 · For: 10/31/96 · Accession #: 352912-96-3 · File #: 0-10315

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