10-Q

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549

FORM 10-Q

[X] QUARTERLY REPORT PURSUANT TO SECTION 13 or 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2002

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 number: 0-22494

AMERISTAR CASINOS, INC.
(Exact name of Registrant as Specified in its Charter)

Nevada	88-0304799
(State or other jurisdiction of	(I.R.S. employer
incorporation or organization)	identification no.)

3773 Howard Hughes Parkway
Suite 490 South
Las Vegas, Nevada 89109
(Address of principal executive offices)

(702) 567-7000
(Registrant’s telephone number, including area code)

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 [ ]

As of November 7, 2002, 26,211,914 shares of Common Stock of the registrant were issued and outstanding.

- 1 -

TABLE OF CONTENTS

PART I. FINANCIAL INFORMATION
	Item 1. Financial Statements
	Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
	Item 3. Quantitative and Qualitative Disclosures About Market Risk
	Item 4. Controls and Procedures
PART II. OTHER INFORMATION
	Item 6. Exhibits and Reports on Form 8-K
SIGNATURE AND CERTIFICATIONS
Exhibit 10.1
Exhibit 10.2
Exhibit 10.3
Exhibit 10.4
Exhibit 99.1
Exhibit 99.2

AMERISTAR CASINOS, INC.
FORM 10-Q

INDEX

			Page No(s).
Part I. FINANCIAL INFORMATION
	Item 1. Financial Statements:
		A. Condensed Consolidated Balance Sheets at December 31, 2001 and September 30, 2002 (unaudited)		3 - 4
		B. Condensed Consolidated Statements of Income (unaudited) for the three and nine months ended September 30, 2001 and September 30, 2002		5 - 6
		C. Condensed Consolidated Statements of Cash Flows (unaudited) for the nine months ended September 30, 2001 and September 30, 2002		7 - 8
		D. Notes to Condensed Consolidated Financial Statements		9 - 14
	Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations			15 - 24
	Item 3. Quantitative and Qualitative Disclosures about Market Risk			24
	Item 4. Controls and Procedures			24
Part II. OTHER INFORMATION
	Item 6. Exhibits and Reports on Form 8-K			25
SIGNATURE AND CERTIFICATIONS				26 - 30

- 2 -

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

AMERISTAR CASINOS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS

ASSETS
(Amounts in Thousands)

			December 31,		September 30,
			2001		2002
					(Unaudited)
CURRENT ASSETS:
	Cash and cash equivalents		$	41,143	$	47,219
	Accounts receivable, net			3,608		3,792
	Income tax refund receivable			—		4,275
	Inventories			5,206		6,550
	Prepaid expenses			7,421		10,156
	Deferred income taxes			3,452		6,996
	Assets held for sale			—		1,583
		Total current assets		60,830		80,571
PROPERTY AND EQUIPMENT Net of accumulated depreciation and amortization of $149,945 and $173,065, respectively				720,515		886,805
EXCESS OF PURCHASE PRICE OVER FAIR MARKET VALUE OF NET ASSETS ACQUIRED				83,224		82,321
DEPOSITS AND OTHER ASSETS				28,023		27,416
TOTAL ASSETS			$	892,592	$	1,077,113

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

- 3 -

AMERISTAR CASINOS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS-CONTINUED

LIABILITIES AND STOCKHOLDERS’ EQUITY
(Amounts in Thousands, Except Share Data)

			December 31,			September 30,
			2001			2002
						(Unaudited)
CURRENT LIABILITIES:
	Accounts payable		$	10,331		$	7,384
	Construction contracts payable			16,455			25,352
	Accrued liabilities			51,648			54,131
	Current obligations under capitalized leases			1,170			1,200
	Current maturities of notes payable and long-term debt			8,433			13,713
	Total current liabilities			88,037			101,780
OBLIGATIONS UNDER CAPITALIZED LEASES, net of current maturities				2,184			1,273
LONG-TERM DEBT, net of current maturities				622,071			739,665
DEFERRED INCOME TAXES AND OTHER LONG-TERM LIABILITIES				22,964			38,391
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS’ EQUITY:
	Preferred stock, $.01 par value: Authorized – 30,000,000			—			—
		shares; Issued – None Common stock, $.01 par value: Authorized – 60,000,000 shares; Issued and outstanding – 25,858,771 shares at December 31, 2001 and 26,211,713 shares at September 30, 2002		258			262
	Additional paid-in capital			141,302			145,697
	Accumulated other comprehensive loss			(1,953	)		(3,171	)
	Retained earnings			17,729			53,216
	Total stockholders’ equity			157,336			196,004
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY			$	892,592		$	1,077,113

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

- 4 -

AMERISTAR CASINOS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(Amounts in Thousands, Except Per Share Data)
(Unaudited)

					Three Months						Nine Months
					Ended September 30,						Ended September 30,
					2001			2002			2001			2002
REVENUES:
	Casino				$	142,965		$	176,347		$	409,651		$	485,881
	Food and beverage					18,589			23,039			52,351			60,722
	Rooms					6,313			6,492			17,908			18,629
	Other					5,048			5,703			13,698			14,343
						172,915			211,581			493,608			579,575
Less: Promotional allowances						17,109			24,323			42,809			63,231
	Net revenues					155,806			187,258			450,799			516,344
OPERATING EXPENSES:
	Casino					63,809			80,867			187,507			217,093
	Food and beverage					11,283			15,477			34,066			38,512
	Rooms					2,156			2,010			6,053			5,683
	Other					3,120			4,488			9,136			10,403
	Selling, general and administrative					33,492			39,443			97,556			108,953
	Depreciation and amortization					9,974			13,602			28,292			34,024
	Impairment loss on assets held for sale					—			1,077			—			5,213
	Preopening expenses					—			4,925			—			6,401
	Total operating expenses					123,834			161,889			362,610			426,282
				Income from operations		31,972			25,369			88,189			90,062
		OTHER INCOME (EXPENSE):
			Interest income			193			23			475			108
			Interest expense			(14,818	)		(13,935	)		(50,839	)		(33,931	)
			Other			143			(318	)		(143	)		(415	)
		INCOME BEFORE INCOME TAX PROVISION AND CUMULATIVE EFFECT OF CHANGE IN ACCOUNTING PRINCIPLE				17,490			11,139			37,682			55,824
			Income tax provision			6,225			3,731			13,546			20,337
		INCOME BEFORE CUMULATIVE EFFECT OF CHANGE IN ACCOUNTING PRINCIPLE				11,265			7,408			24,136			35,487
		CUMULATIVE EFFECT OF CHANGE IN ACCOUNTING PRINCIPLE – adoption of SFAS No. 133, net of income tax benefit of $73				—			—			(135	)		—
		NET INCOME			$	11,265		$	7,408		$	24,001		$	35,487

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

- 5 -

AMERISTAR CASINOS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME-CONTINUED
(Amounts in Thousands, Except Per Share Data)
(Unaudited)

		Three Months				Nine Months
		Ended September 30,				Ended September 30,
		2001		2002		2001		2002
EARNINGS PER SHARE:
Income before cumulative effect of change in accounting principle:
	Basic	$	0.54	$	0.28	$	1.17	$	1.36
	Diluted	$	0.49	$	0.28	$	1.08	$	1.34
Net income:
	Basic	$	0.54	$	0.28	$	1.16	$	1.36
	Diluted	$	0.49	$	0.28	$	1.07	$	1.34
WEIGHTED AVERAGE SHARES OUTSTANDING:
	Basic		20,845		26,159		20,655		26,067
	Diluted		22,908		26,367		22,349		26,424

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

- 6 -

AMERISTAR CASINOS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Amounts in Thousands)
(Unaudited)

			Nine Months
			Ended September 30,
			2001			2002
CASH FLOWS FROM OPERATING ACTIVITIES:
	Net income		$	24,001		$	35,487
	Adjustments to reconcile net income to net cash provided by operating activities:
		Depreciation and amortization		28,292			34,024
		Amortization of debt issuance costs and debt discounts		6,239			3,459
		Impairment loss on assets held for sale		—			5,213
		Net loss on disposition of assets		241			328
		Change in deferred income taxes		11,851			12,014
		Decrease (increase) in income tax refund receivable		125			(4,275	)
		Decrease (increase) in other current assets		514			(5,845	)
		Increase in current liabilities		5,729			1,827
	Total adjustments			52,991			46,745
Net cash provided by operating activities				76,992			82,232
CASH FLOWS FROM INVESTING ACTIVITIES:
	Capital expenditures			(65,139	)		(211,980	)
	Increase in construction contracts payable			5,262			8,897
	Proceeds from sale of The Reserve			71,559			—
	Proceeds from sale of assets (other than The Reserve)			3			8,370
	Increase in deposits and other non-current assets			(1,663	)		(3,694	)
Net cash provided by (used in) investing activities				10,022			(198,407	)
CASH FLOWS FROM FINANCING ACTIVITIES:
	Proceeds from issuance of notes payable and long-term debt			386,006			131,236
	Principal payments of notes payable, long-term debt and capitalized leases			(461,169	)		(9,710	)
	Debt issuance costs			(7,467	)		—
	Amendment fee for senior credit facilities			—			(936	)
	Proceeds from stock option exercises			1,302			1,661
Net cash (used in) provided by financing activities				(81,328	)		122,251

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

- 7 -

AMERISTAR CASINOS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS-CONTINUED
(Amounts in Thousands)
(Unaudited)

		Nine Months
		Ended September 30,
		2001		2002
NET INCREASE IN CASH AND CASH EQUIVALENTS			5,686		6,076
CASH AND CASH EQUIVALENTS – BEGINNING OF PERIOD			36,245		41,143
CASH AND CASH EQUIVALENTS – END OF PERIOD		$	41,931	$	47,219
SUPPLEMENTAL CASH FLOW DISCLOSURES:
	Cash paid for interest (net of amounts capitalized)	$	41,634	$	39,888
	Cash paid for federal and state income taxes (net	$	661	$	12,091
	of refunds received)

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

- 8 -

AMERISTAR CASINOS, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Note 1 — Principles of consolidation and basis of presentation

         The accompanying condensed consolidated financial statements include the accounts of Ameristar Casinos, Inc. and its wholly owned subsidiaries (collectively, the “Company”). Through its subsidiaries, the Company currently owns and operates six casino properties in five markets. The Company’s properties consist of Ameristar Casino St. Charles, located in St. Charles, Missouri serving the St. Louis metropolitan area; Ameristar Casino Hotel Kansas City, located in Kansas City, Missouri; Ameristar Casino Hotel Council Bluffs, located in Council Bluffs, Iowa serving the Omaha, Nebraska/Council Bluffs, Iowa metropolitan area; Ameristar Casino Hotel Vicksburg, located in Vicksburg, Mississippi; and Cactus Petes Resort Casino and The Horseshu Hotel & Casino, located in Jackpot, Nevada at the Idaho border. The Company views each property as an operating segment and all such operating segments have been aggregated into one reporting segment. All significant intercompany transactions have been eliminated.

         The accompanying condensed consolidated financial statements have been prepared by the Company, without audit, pursuant to the rules and regulations of the Securities and Exchange Commission. Accordingly, the condensed consolidated financial statements do not include all of the disclosures required by generally accepted accounting principles. However, they do contain all adjustments (consisting of normal recurring adjustments) that, in the opinion of management, are necessary to present fairly the Company’s financial position and its results of operations for the interim periods included therein. The interim results reflected in these financial statements are not necessarily indicative of results to be expected for the full fiscal year.

         Certain of the Company’s accounting policies require that the Company 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. The Company’s judgments are based in part on its historical experience, terms of existing contracts, observance of trends in the gaming industry and information available from other outside sources. There is no assurance, however, that actual results will conform to estimates. To provide an understanding of the methodology the Company applies, significant accounting policies and basis of presentation are discussed where appropriate in “Item 2 — Management’s Discussion and Analysis of Financial Condition and Results of Operations” of this Quarterly Report and in the notes to the Company’s audited consolidated financial statements included in its Annual Report on Form 10-K for the year ended December 31, 2001.

         The accompanying condensed consolidated financial statements should be read in conjunction with the financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2001.

         Certain reclassifications, having no effect on net income, have been made to the prior periods’ condensed consolidated financial statements to conform to the current periods’ presentation. Costs associated with the Company’s coin coupon offerings were previously recorded as a casino department expense through March 31, 2002. The Company has reclassified these amounts as a reduction of net revenue. These amounts totaled $6.8 million and $15.9 million for the quarter and the nine months ended September 30, 2001, respectively.

- 9 -

Note 2 – Long-term debt

         The Company’s principal long-term debt is comprised of $364.5 million of senior credit facilities and $380.0 million in aggregate principal amount of 10.75 percent senior subordinated notes due 2009. The senior credit facilities currently consist of a $75 million revolving credit facility, a $75 million revolving credit/term loan facility and term loans A and B (which had $67.7 million, $75.0 million, $30.9 million and $190.9 million outstanding, respectively, and an additional $7.3 million of revolving credit facility borrowing capacity reserved for outstanding letters of credit as of September 30, 2002). Each of these facilities bears interest at a variable rate based on LIBOR or the prime rate plus an applicable margin. The senior credit facilities and the indenture governing the senior subordinated notes require the Company to comply with various financial and other covenants. At September 30, 2002, the Company was in compliance with all covenants.

         The Company expects that it will exceed the senior credit facilities’ limitation on capital expenditures for the new casino and entertainment facility at Ameristar St. Charles in the fourth quarter of 2002 and is currently seeking an amendment to the senior credit facilities to increase this capital expenditure limitation from $180 million to $210 million. While the Company expects to obtain this amendment in the fourth quarter of 2002, there can be no assurance that this will be the case. If the Company is unable to obtain this amendment, it would likely be in default under its senior credit facilities.

         As of September 30, 2002, the Company had exhausted its borrowing capacity under the senior credit facilities. In October 2002, the Company borrowed $14 million on a secured basis from a commercial bank to finance equipment purchases for the recently opened St. Charles facility. The Company is currently seeking an additional $75 million of financing under Term Loan B of the senior credit facilities, as permitted by the governing credit agreement, in order to provide additional liquidity for the Company’s operations and to finance various capital improvements at its properties.

         The Company seeks to manage interest rate risk associated with variable rate borrowings through balancing fixed-rate and variable-rate borrowings and the use of derivative financial instruments. Derivative financial instruments are recognized as assets or liabilities, with changes in fair value affecting net income or comprehensive income. Under an interest rate swap agreement entered into in April 2001, the interest rate on $100 million of LIBOR-based borrowings under the senior credit facilities is fixed at 5.07 percent plus the applicable margin. As of September 30, 2002, the liability associated with the swap agreement was $4.9 million, $1.9 million higher than it was at December 31, 2001. This resulted in an increase of $1.2 million (net of tax) to previously-recorded accumulated other comprehensive loss in the accompanying condensed consolidated balance sheets.

         Under an interest rate collar agreement, $50.0 million of LIBOR-based borrowings under the revolving credit/term loan facility and term loan A of the senior credit facilities have a LIBOR floor rate of 5.39 percent and a LIBOR ceiling rate of 6.75 percent, plus the applicable margin. The collar agreement terminates on June 30, 2003. At September 30, 2002, the value of the collar agreement ($1.4 million) was recorded as a liability in other long-term liabilities in the accompanying condensed consolidated balance sheets. During the three and nine months ended September 30, 2002, the Company reduced interest expense by $0.2 million and $0.5 million, respectively, as the result of a decrease in the liability associated with the collar agreement.

- 10 -

Note 3 — Earnings per share

         The weighted average number of shares of common stock and common stock equivalents used in the computation of basic and diluted earnings per share is set forth in the table below. All outstanding stock options with an exercise price lower than the market price as of the last day of each period presented have been included in the calculation of diluted earnings per share.

	Three Months				Nine Months
	Ended September 30,				Ended September 30,
	2001		2002		2001		2002
			(Amounts in Thousands)
Weighted average number of shares outstanding — basic earnings per share		20,845		26,159		20,655		26,067
Dilutive effect of stock options		2,063		208		1,694		357
Weighted average number of shares outstanding — diluted earnings per share		22,908		26,367		22,349		26,424

Note 4 — Commitments and contingencies

         Self-Funded Employee Health Care Insurance Program. The Company’s employee-related health care benefits program is self-funded up to a maximum amount per claim. Claims in excess of this maximum are insured through a stop-loss insurance policy. Accruals are based on claims filed and estimates of claims incurred but not reported. At December 31, 2001 and September 30, 2002, the Company’s estimated liabilities for unpaid and incurred but not reported claims totaled $2.3 million and $2.7 million, respectively, and are included in accrued liabilities in the accompanying condensed consolidated balance sheets. While the total cost of claims incurred depends on future developments, in management’s opinion, recorded reserves are adequate to cover future claims payments.

- 11 -

Note 5 — Comprehensive income

         Comprehensive income includes all changes in stockholders’ equity from non-owner sources during each period presented. Comprehensive income includes changes in the fair value of the interest rate swap agreement described in Note 2 above.

	Three Months					Nine Months
	Ended September 30,					Ended September 30,
	2001		2002			2001		2002
	(Amounts in Thousands)
Net income	$	11,265	$	7,408		$	24,001	$	35,487
Adjustment to fair value of the interest rate swap agreement (net of tax effect)		—		(791	)		—		(1,217	)
Comprehensive income	$	11,265	$	6,617		$	24,001	$	34,270

Note 6 — Excess of purchase price over fair market value of net assets acquired

         In June 2001, the Financial Accounting Standards Board (“FASB”) issued Statement of Financial Accounting Standard (“SFAS”) No. 142, “Goodwill and Other Intangible Assets.” The primary impact on the Company is that the excess of purchase price over fair market value of the net assets acquired in connection with the acquisition of the Missouri properties in December 2000 (“goodwill”) is no longer being amortized as of January 1, 2002. Instead, goodwill must be reviewed at least annually for impairment and more frequently if events or circumstances indicate a possible impairment. The Company completed a review of goodwill and determined that no impairment existed as of January 1, 2002. The Company will perform an annual review of goodwill impairment as of January 1 of each year and will review goodwill sooner if events or circumstances indicate a possible impairment.

         During the three and nine months ended September 30, 2002, the Company did not record any goodwill amortization expense, compared to $0.8 million and $1.7 million for the corresponding periods in 2001. The balance of goodwill is continuing to be reduced through 2016 by annual tax benefits of $1.2 million resulting from differences in the values assigned to certain purchased assets for financial reporting and tax purposes.

         The unaudited pro-forma data for the three and nine months ended September 30, 2001 set forth below summarizes the Company’s net income and earnings per share as if SFAS No. 142 were effective on January 1, 2001. Actual results for the three and nine months ended September 2002 are shown for comparative purposes:

- 12 -

	Three Months				Nine Months
	Ended September 30,				Ended September 30,
	2001		2002		2001		2002
	(Amounts in Thousands)
Net income:
Reported net income	$	11,265	$	7,408	$	24,001	$	35,487
Add back: goodwill amortization expense (net of tax)		513		—		1,076		—
Net income (2001 - as adjusted)	$	11,778	$	7,408	$	25,077	$	35,487
Basic earnings per share:
Reported basic earnings per share	$	0.54	$	0.28	$	1.16	$	1.36
Add back: goodwill amortization expense		0.02		—		0.05		—
Basic earnings per share (2001 – as adjusted)	$	0.56	$	0.28	$	1.21	$	1.36
Diluted earnings per share:
Reported diluted earnings per share	$	0.49	$	0.28	$	1.07	$	1.34
Add back: goodwill amortization expense		0.02		—		0.05		—
Diluted earnings per share (2001 – as adjusted)	$	0.51	$	0.28	$	1.12	$	1.34

         In December 2000, the Company acquired proprietary marketing information valued at $6.0 million as part of the purchase of the Missouri properties. This asset is being amortized over two years and as of September 30, 2002, accumulated amortization relating to this asset was $5.2 million. During the three and nine months ended September 30, 2002, the Company recognized $0.7 and $2.2 million, respectively, in amortization expense relating to this asset. The Company anticipates recognizing $0.8 million in amortization expense associated with this asset for the three months ending December 31, 2002, at which time the asset will be fully amortized.

Note 7 – Opening of the new St. Charles facility and associated preopening expenses

         The Company opened its new casino and entertainment facility at Ameristar St. Charles on August 6, 2002. From January 1, 2001 to September 30, 2002, the Company invested approximately $210 million in connection with the development of the new facility. In addition, the Company capitalized $31.5 million in interest associated with this project during the same period, which reduced interest expense accordingly.

         In accordance with American Institute of Certified Public Accountants’ Statement of Position No. 98-5, “Reporting on the Costs of Start-up Activities,” preopening expenses incurred prior to the opening of a new facility must be expensed immediately. During the three and nine months ended September 30, 2002, the Company incurred $4.9 million and $6.4 million, respectively, of preopening expenses associated with the opening of the new facility. These expenses included, without limitation, payroll and related benefits, contract labor, advertising and general supplies.

- 13 -

Note 8 – Impairment loss on assets held for sale

         In August 2002, the Company entered into an agreement to sell various assets that were not being utilized after the new Ameristar St. Charles facility opened, including the existing casino barge, for $6.6 million (net of expenses), in a transaction that closed in September 2002. The Company also began to solicit bids on 918 slot machines that were not being used by Ameristar St. Charles. In accordance with SFAS No. 144, “Accounting for the Impairment on Disposal of Long-Lived Assets,” during the quarter ended June 30, 2002, the Company recorded a $4.1 million impairment loss associated with these assets held for sale based on their estimated realizable values.

         During the third quarter of 2002, the Company decided to sell 2,289 slot machines that were not being used at its various properties as part of the Company’s ongoing strategy to provide patrons with the latest-technology gaming equipment. As a result, the Company recorded $1.1 million in impairment loss on these assets based on their estimated realizable values, third-party offer prices or actual sales proceeds.

Note 9 – Recently issued accounting standards

         In April 2002, the FASB issued SFAS No. 145, “Rescission of FASB Statement No. 4, 44 and 64, Amendment of FASB Statement No. 13, and Technical Corrections.” The key provision of SFAS 145 affecting the Company rescinds the existing rule on gains or losses from the extinguishment of debt. In June 2002, the FASB issued SFAS No. 146, “Accounting for Costs Associated with Exit or Disposal Activities,” which requires that a liability for a cost associated with an exit or disposal activity be recognized when the liability is incurred. The Company will adopt SFAS Nos. 145 and 146 effective January 1, 2003. Management does not believe the adoption of these accounting standards will have a material impact on the Company’s financial position or results of operations.

- 14 -

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

Overview

         We develop, own and operate casinos and related hotel, food and beverage, entertainment and other facilities, with six properties in operation in Missouri, Iowa, Mississippi and Nevada. Our properties consist of Ameristar Casino St. Charles, located in St. Charles, Missouri serving the St. Louis metropolitan area; Ameristar Casino Hotel Kansas City, located in Kansas City, Missouri; Ameristar Casino Hotel Council Bluffs, located in Council Bluffs, Iowa serving the Omaha, Nebraska/Council Bluffs metropolitan area; Ameristar Casino Hotel Vicksburg, located in Vicksburg, Mississippi; and Cactus Petes Resort Casino and The Horseshu Hotel & Casino, located in Jackpot, Nevada at the Idaho border. We acquired the Missouri properties in late December 2000. We sold The Reserve Hotel Casino in Henderson (metropolitan Las Vegas), Nevada in late January 2001. We opened a new casino and entertainment facility at Ameristar Casino St. Charles on August 6, 2002, which replaced the previous facility.

         Our operations experience some seasonality, with the winter months being the slower periods. Our quarterly and annual operating results may be affected by general economic conditions in the markets in which we operate, competitive conditions, the timing of the commencement of new gaming operations by us or our competitors, the amount of preopening costs, charges associated with debt refinancing and property acquisition and disposition transactions, construction at our existing facilities, legislative or regulatory changes in the markets in which we operate (including without limitation changes in gaming tax rates), general weather conditions and other factors. Consequently, our operating results for any quarter or year may not be indicative of results to be expected for future periods.

Results of Operations

         The following table highlights our consolidated results of operations and certain other financial information for our properties:

- 15 -

AMERISTAR CASINOS, INC. AND SUBSIDIARIES
SUMMARY CONSOLIDATED FINANCIAL DATA
(Amounts in Thousands)
(Unaudited)

		Three Months						Nine Months
		Ended September 30,						Ended September 30,
		2001			2002			2001			2002
Consolidated cash flow information
	Cash flows provided by operating activities	$	20,624		$	5,986		$	76,992		$	82,232
	Cash flows (used in) provided by investing activities		(24,010	)		(45,002	)		10,022			(198,407	)
	Cash flows provided by (used in) financing activities		4,478			40,414			(81,328	)		122,251
Net revenues (1)
	Ameristar St. Charles	$	35,928		$	54,966		$	103,176		$	131,903
	Ameristar Kansas City		50,877			55,536			153,236			159,732
	Ameristar Council Bluffs		32,497			36,920			89,965			109,647
	Ameristar Vicksburg		20,230			23,315			55,859			69,161
	Jackpot Properties		16,274			16,521			43,853			45,726
	The Reserve (2)		—			—			4,710			—
	Corporate and other		—			—			—			175
	Consolidated net revenues	$	155,806		$	187,258		$	450,799		$	516,344
Adjusted operating income (loss) (3)
	Ameristar St. Charles	$	10,867		$	8,773		$	30,828		$	31,096
	Ameristar Kansas City		10,751			10,133			35,166			32,829
	Ameristar Council Bluffs		7,791			10,324			19,501			30,225
	Ameristar Vicksburg		3,638			5,927			10,810			18,961
	Jackpot Properties		3,955			2,690			8,039			8,432
	The Reserve (2)		—			—			67			—
	Corporate and other		(5,030	)		(6,475	)		(16,222	)		(19,868	)
	Consolidated adjusted operating income	$	31,972		$	31,372		$	88,189		$	101,675
EBITDA (4)
	Ameristar St. Charles	$	11,795		$	13,067		$	33,313		$	37,843
	Ameristar Kansas City		13,804			13,476			44,345			42,122
	Ameristar Council Bluffs		10,190			12,603			26,502			37,142
	Ameristar Vicksburg		5,902			8,249			16,877			25,936
	Jackpot Properties		4,917			3,564			11,039			11,161
	The Reserve (2)		—			—			67			—
	Corporate and other		(4,662	)		(5,986	)		(15,662	)		(18,504	)
	Consolidated EBITDA	$	41,946		$	44,973		$	116,481		$	135,700

- 16 -

AMERISTAR CASINOS, INC. AND SUBSIDIARIES
SUMMARY CONSOLIDATED FINANCIAL DATA-CONTINUED
(Dollars in Thousands)
(Unaudited)

		Three Months						Nine Months
		Ended September 30,						Ended September 30,
		2001			2002			2001			2002
Adjusted operating income margins (3)
	Ameristar St. Charles		30.3	%		16.0	%		29.9	%		23.6	%
	Ameristar Kansas City		21.1	%		18.3	%		23.0	%		20.6	%
	Ameristar Council Bluffs		24.0	%		28.0	%		21.7	%		27.6	%
	Ameristar Vicksburg		18.0	%		25.4	%		19.4	%		27.4	%
	Jackpot Properties		24.3	%		16.3	%		18.3	%		18.4	%
	The Reserve (2)		—			—			1.4	%		—
	Consolidated adjusted operating income margin		20.5	%		16.8	%		19.6	%		19.7	%
EBITDA margins (4)
	Ameristar St. Charles		32.8	%		23.8	%		32.3	%		28.7	%
	Ameristar Kansas City		27.1	%		24.3	%		28.9	%		26.4	%
	Ameristar Council Bluffs		31.4	%		34.1	%		29.5	%		33.9	%
	Ameristar Vicksburg		29.2	%		35.4	%		30.2	%		37.5	%
	Jackpot Properties		30.2	%		21.6	%		25.2	%		24.4	%
	The Reserve (2)		—			—			1.4	%		—
	Consolidated EBITDA margin		26.9	%		24.0	%		25.8	%		26.3	%

(1)	We previously recorded costs associated with our coin coupon offerings as a casino department expense. These charges are now recorded as a reduction of net revenue. Accordingly, we have reclassified these charges for the prior periods to conform to current periods’ presentation.
(2)	Operating results for The Reserve in 2001 are through January 29, 2001, when we sold the property.
(3)	Adjusted operating income (loss) is income (loss) from operations (as reported) before the impairment loss on assets held for sale and preopening expenses related to the new St. Charles facility. For the three and nine month periods ended September 30, 2002, impairment loss and preopening expenses totaled $6.0 million and $11.6 million, respectively. Adjusted operating income margin is adjusted operating income as a percentage of net revenues. Adjusted operating income information is presented solely as a supplemental disclosure in addition to results defined by generally accepted accounting principles (“GAAP”). Management believes adjusted operating income information is a widely-used measure of operating performance in the gaming industry.
(4)	EBITDA consists of income from operations plus depreciation, amortization, impairment loss on assets held for sale and preopening expenses related to the new St. Charles facility. EBITDA margin is EBITDA as a percentage of net revenues. Gaming companies have historically reported EBITDA information as a supplemental performance measure in addition to the GAAP-defined results. EBITDA should not be construed as an alternative to income from operations (as determined in accordance with GAAP), as an indicator of our operating performance, as an alternative to cash flow from operating activities (as determined in accordance with GAAP), or as a measure of liquidity. We have significant uses of cash flows, including capital expenditures, interest payments, taxes and debt principal repayments, which are not reflected in EBITDA. It should also be noted that not all gaming companies that report EBITDA information calculate EBITDA in the same manner as we do.

- 17 -

         Consolidated net revenues for the quarter ended September 30, 2002 were $187.3 million, representing an increase of $31.5 million, or 20.2 percent, from the third quarter in 2001. Consolidated net revenues for the nine months ended September 30, 2002 were $516.3 million compared to $450.8 million for the same period in 2001, an increase of 14.5 percent. The growth in revenues was driven primarily by increased revenues at the new Ameristar St. Charles facility, which opened August 6, 2002, as well as continued strong operating results at our Council Bluffs and Vicksburg properties.

         Adjusted operating income for the quarter ended September 30, 2002 was $31.4 million, representing a decrease of $0.6 million, or 1.9 percent, from the third quarter of 2001. For the nine months ended September 30, 2002, adjusted operating income increased to $101.7 million from $88.2 million for the same period in 2001, an increase of 15.3 percent. Adjusted operating income for the quarter and the nine months ended September 30, 2002 excludes non-recurring charges associated with (1) preopening expenses relating to the new St. Charles facility and (2) impairment loss on assets held for sale. These charges totaled $6.0 million and $11.6 million for the quarter and the nine months ended September 30, 2002, respectively. In addition to the effect of these non-recurring charges, our net income in the third quarter of 2002 was negatively impacted by an increase in the base of depreciable assets, a reduction in capitalized interest following the opening of the new St. Charles facility and initial operating inefficiencies at the new St. Charles facility.

         Net revenues at Ameristar St. Charles for the third quarter of 2002 were $55.0 million, an increase of $19.1 million, or 53.2 percent, from the third quarter of 2001. For the nine months ended September 30, 2002, Ameristar St. Charles reported $131.9 million in net revenues, representing an increase of $28.7 million, or 27.8 percent, from the nine months ended September 30, 2001. Ameristar St. Charles continued to improve its market share, with an increase to 26.8 percent in the third quarter of 2002, up from 19.0 percent in the third quarter of 2001, due substantially to the opening of the new facility in August 2002. (All market share information included in this Quarterly Report is based on publicly reported gross gaming revenue.)

         During the three and nine months ended September 30, 2002, Ameristar St. Charles incurred $4.9 million and $6.4 million, respectively, in preopening expenses associated with the opening of the new facility. In addition, during the three and nine months ended September 30, 2002, the property recorded a $0.3 million and $4.4 million impairment loss on certain assets that were not transferred to the new facility (see Notes 7 and 8 of Notes to Condensed Consolidated Financial Statements for more information on these transactions). Adjusted operating income was $8.8 million for the three months ended September 30, 2002, representing a decrease of $2.1 million, or 19.3 percent, from the corresponding period in 2001. For the nine months ended September 30, 2002, adjusted operating income was $31.1 million, up $0.3 million, or 1.0 percent, from the corresponding period in 2001, despite the initial operating inefficiencies at the new St. Charles facility. Operating expenses (excluding impairment loss and preopening expenses) increased by $21.1 million and $28.5 million, respectively, for the three and nine months ended September 30, 2002 compared to the same periods in 2001, largely due to higher labor and related costs and depreciation expenses associated with the opening of the new facility. As a result, adjusted operating income margins for the three and nine months ended September 30, 2002 declined to 16.0 percent and 23.6 percent, respectively, compared to 30.3 percent and 29.9 percent for the same periods in 2001.

         Management expects to achieve improved operating margins in future periods through labor efficiencies, player development initiatives and other operational changes, but the property’s stabilized

- 18 -

operating income margin is not expected to reach the level of the old facility because the old facility was substantially smaller, offered limited non-gaming amenities and could not always satisfy customer demand. The new facility is designed to absorb future growth of the St. Louis market. There can be no assurance that we will be successful in improving operating margins at Ameristar St. Charles.

         Ameristar Kansas City generated net revenues of $55.5 million and $159.7 million, respectively, for the three and nine months ended September 30, 2002, which represent increases of $4.6 million, or 9.0 percent, and $6.5 million, or 4.2 percent, respectively, from the corresponding periods in 2001. The property’s 15.2 percent increase in gaming revenues from the third quarter of 2001 to the same quarter in 2002 exceeded the growth in the overall Kansas City market of 5.6 percent and improved the property’s market share in the third quarter of 2002 to 35.7 percent, up from 32.6 percent in the third quarter of the prior year. These improvements were driven in part by the completion of the 2,650-space parking garage in June 2002. Increased costs of coin coupon offerings and other targeted marketing programs, which are recorded as promotional allowances, caused net revenues to grow at a slower pace than gaming revenues during the third quarter of 2002. Ameristar Kansas City’s results were also adversely impacted by business disruption associated with construction activity related to enhancements of its casino and entertainment facilities that began in July of this year. These enhancements, undertaken to further improve its competitive position in the Kansas City market, include significant improvements to the casino and major renovations to the property’s land-based amenities, and are expected to be completed in the first quarter of 2003.

         Despite the increase in revenues, adjusted income from operations at Ameristar Kansas City decreased $0.7 million and $2.4 million, respectively, for the three and nine months ended September 30, 2002 compared to the same periods in 2001, as a result of a $5.3 million and $8.8 million increase, respectively, in operating expenses (excluding impairment loss on assets held for sale) during the same periods. The increases are mainly due to higher labor and related costs associated with customer service initiatives, increased health benefits costs as a result of the conversion to a new health benefit plan and additional expenses directly related to increased revenues, including gaming taxes and other expenses attributable to player development strategies.

         Ameristar Council Bluffs posted substantially improved financial results for the quarter and the nine months ended September 30, 2002 as it continued to benefit from the property improvements made from 1999 through 2001, the ongoing refinement of targeted marketing programs, the installation of new gaming equipment and the continuation of cost containment programs. Net revenues were $36.9 million and $109.6 million for the three and nine months ended September 30, 2002, up $4.4 million, or 13.5 percent, and $19.6 million, or 21.8 percent, respectively, from the corresponding periods in 2001. The 13.5 percent increase in net revenues during the third quarter of 2002 was driven by a 15.5 percent increase in gaming revenues in the same quarter, which far outpaced the Council Bluffs market’s 3.4 percent growth in gaming revenues. This drove Ameristar Council Bluffs’ market share to 38.0 percent for the third quarter of 2002, up from 34.4 percent in the third quarter of 2001. In addition, adjusted operating income improved significantly, up $2.5 million, or 32.1 percent, and $10.7 million, or 54.9 percent, respectively, for the three and nine months ended September 30, 2002 over the comparable periods in 2001.

         In June 2002, the Iowa Supreme Court ruled that the imposition of gaming taxes on slot machine revenues at Iowa racetracks at a higher rate than that imposed on riverboat casino revenues violates the U.S. and Iowa Constitutions. Management believes it is likely that the Iowa Legislature will consider

- 19 -

measures to overcome the budgetary constraints resulting from this court decision, including the possibility of increasing gaming taxes on riverboat casinos beginning in 2003, which would adversely affect Ameristar Council Bluffs’ future operating results.

         Ameristar Vicksburg also experienced significant improvement for the three months and nine months ended September 30, 2002, with net revenues increasing by $3.1 million, or 15.3 percent, and $13.3 million, or 23.8 percent, respectively, over the same periods in 2001. Adjusted operating income increased $2.3 million, or 63.9 percent, and $8.2 million, or 75.9 percent, respectively, for the three and nine months ended September 30, 2002, over the comparable periods in 2001. Ameristar Vicksburg’s improved performance is primarily due to the completion of a major renovation and enhancement project in 2001, which adversely impacted the results for the first quarter of 2001 due to construction disruption and has improved the property’s financial results significantly since its completion. In addition, effective targeted marketing programs and cost-control measures continued to contribute to the success of the property. Ameristar Vicksburg, the long-time market share leader in Vicksburg, improved its market share to 40.2 percent in the third quarter of 2002, up from 34.6 percent in the third quarter of 2001.

         Net revenues at the Jackpot Properties for the three and nine months ended September 30, 2002 were $16.5 million and $45.7 million, respectively, which represent increases of 1.2 percent and 4.1 percent, respectively, from the same periods in 2001. This improved performance is attributable to more effective marketing programs and an improved Southern Idaho economy. The Jackpot Properties generated adjusted operating income of $2.7 million for the three months ended September 30, 2002, down 32.5 percent from the same period in 2001. This decline is primarily the result of a $0.7 million increase in employee benefit costs. For the nine months ended September 30, 2002, the Jackpot Properties reported adjusted operating income of $8.4 million, representing an increase of $0.4 million, or 5.0 percent.

         Consolidated depreciation and amortization expense increased to $13.6 million and $34.0 million, respectively, for the three months and nine months ended September 30, 2002, from $10.0 million and $28.3 million for the same periods in 2001. These increases are primarily due to a substantial increase in depreciable assets resulting from the completion of the St. Charles project in August 2002 and the Kansas City parking garage in June 2002 as well as slot equipment additions at each property. The increase in depreciation expense was partially offset by the elimination of goodwill amortization expense resulting from the adoption of SFAS No. 142, effective January 1, 2002, as described more fully in Note 6 of Notes to Condensed Consolidated Financial Statements.

         Our interest expense in the third quarter of 2002 was $13.9 million, down 6.1 percent from $14.8 million in the third quarter of 2001, due to a lower average interest rate on outstanding debt. In May 2002, we amended our senior credit facilities to reduce our borrowing costs. In September 2002, Standard & Poors’ Ratings Services increased its rating on our senior secured debt to BB-, which further reduced the interest rate on a portion of our senior credit facilities. During the fourth quarter of 2001, we reduced our outstanding debt by $97.2 million, utilizing $94.2 million of proceeds from the December 2001 secondary public offering of our common stock. During the first nine months of 2002, we borrowed $124.7 million to fund various construction projects. Interest associated with this construction financing is capitalized and included in the cost of each project. Total interest cost, before capitalizing interest associated with our ongoing construction projects, was $17.4 million in the third quarter of 2002 compared to $20.0 million for the same period in 2001. Capitalized interest declined by

- 20 -

$1.6 million from the third quarter of 2001 to the same period in 2002, mainly due to the completion of the new St. Charles facility in August 2002. Interest expense is expected to increase in future periods due to the increase in our outstanding debt and the reduction in capitalized interest.

         Interest expense for the nine months ended September 30, 2002 decreased to $33.9 million from $50.8 million in 2001 due to a lower average interest rate on the outstanding debt as described above. In addition, we recorded $17.5 million in capitalized interest associated with our construction projects for the nine months ended September 30, 2002 compared to $13.3 million for the same period in 2001.

         Our effective income tax rate for the nine months ended September 30, 2002 was 36.4 percent versus the federal statutory rate of 35 percent. The difference between the effective rate and the statutory rate is the result of state and local income taxes as well as certain non-deductible expenses. At December 31, 2001, we had approximately $71.1 million of unused operating loss carryforwards (resulting from the sale of The Reserve in 2001 and other prior-year net operating losses) that may be used to offset future taxable income. We expect to exhaust these tax loss carryforwards in 2003.

         Net income for the three months ended September 30, 2002 was $7.4 million, down $3.9 million, or 34.5 percent, from the same period in 2001. Diluted earnings per share were $0.28 for the third quarter of 2002, compared to $0.49 for the comparable period in 2001. Non-recurring charges (preopening expense associated with the new St. Charles facility and impairment loss on assets held for sale) reduced third quarter 2002 net income by approximately $3.9 million, which resulted in a decrease of $0.15 in diluted earnings per share. Net income for the nine months ended September 30, 2002 was $35.5 million, up 47.9 percent from the comparable period in 2001, despite the $7.5 million of non-recurring charges recorded in 2002. Diluted earnings per share improved from $1.07 for the nine months ended September 30, 2001 to $1.34 for the corresponding period in 2002, representing an increase of 25.2 percent.

         The number of diluted shares outstanding increased by 15.1 percent from the third quarter of 2001 to the same quarter in 2002 and by 18.2 percent from the nine months ended September 30, 2001 to the corresponding period in 2002, primarily due to the issuance of 4.9 million shares in our December 2001 secondary public stock offering. Among other factors, this increase in outstanding shares affects the comparability of earnings per share between the three and nine months ended September 30, 2002 and the comparable periods in 2001.

Liquidity and Capital Resources

         Net cash provided by operating activities was $82.2 million for the nine months ended September 30, 2002 compared to $77.0 million for the same period of 2001. This increase is primarily due to improvements in operating results, as discussed under “Results of Operations” above.

         Net cash used in investing activities for the first nine months of 2002 was $198.4 million, compared to $10.0 million provided by investing activities for the nine months ended September 30, 2001. During the first nine months of 2002, we incurred $212.0 million in capital expenditures, primarily relating to the construction of the new casino and entertainment facility at Ameristar St. Charles and the parking garage and other renovations at Ameristar Kansas City. During the first nine months of 2001, we received $71.6 million in cash proceeds from the sale of The Reserve.

- 21 -

         Net cash provided by financing activities was $122.3 million during the first nine months of 2002, compared to $81.3 million of net cash used in financing activities for the nine months ended September 30, 2001. We borrowed $124.7 million under our senior credit facilities during the first nine months of 2002. During the nine months ended September 30, 2001, we used $50.0 million of proceeds from the sale of The Reserve and $14 million from our operating cash flows to reduce outstanding debt under our senior credit facilities.

         Our principal long-term debt is comprised of $364.5 million of senior credit facilities and $380.0 million in aggregate principal amount of 10.75 percent senior subordinated notes due 2009. We expect to exceed the senior credit facilities’ limitation on capital expenditures for the new casino and entertainment facility at Ameristar St. Charles in the fourth quarter of 2002 and we are currently seeking an amendment to the senior credit facilities to increase this capital expenditure limitation from $180 million to $210 million. While we expect to obtain this amendment in the fourth quarter of 2002, there can be no assurance that this will be the case. If we are unable to obtain this amendment, we would likely be in default under our senior credit facilities and our liquidity could be materially adversely affected.

         Our capital expenditures during the nine months ended September 30, 2002 include $128.9 million relating to the new casino and entertainment facility at Ameristar St. Charles, $15.1 million relating to the recently completed parking garage at Ameristar Kansas City, $6.5 million for the ongoing renovation and enhancement project at Ameristar Kansas City, $17.5 million in capitalized interest associated with construction-in-progress and $44.0 million for other projects, including equipment and maintenance at our properties. We currently expect to incur approximately $30 million on capital improvement projects and other capital expenditures at our properties in the fourth quarter of 2002, primarily related to the Kansas City project. Our actual capital expenditures may vary based on budget modifications, construction schedule changes and other factors, including the limitation on capital expenditures under our senior credit facilities.

         We historically have funded our daily operations and capital expenditures primarily through operating cash flow, bank debt and other debt financing. As of September 30, 2002, we had exhausted our borrowing capacity under our senior credit facilities. In October 2002, we borrowed $14 million on a secured basis from a commercial bank to finance equipment purchases for the recently opened St. Charles facility. We are currently seeking an additional $75 million of financing under Term Loan B of our senior credit facilities, as permitted by the governing credit agreement, in order to provide additional liquidity for our operations and to finance various capital improvements at our properties. We believe that our operating cash flow, existing cash and cash equivalents and additional financing under our senior credit facilities, if obtained, will support our operations for the foreseeable future.

         We cannot give any assurance that we will be able to obtain the additional financing to fund our capital expenditure plans or that we will continue to be able to satisfy the financial covenants under our senior credit facilities, the senior subordinated notes or our other debt instruments. If we cannot obtain additional financing, or fail to continue to satisfy the financial covenants under our debt instruments and are unable to obtain a waiver from our lenders, we may be unable to complete our capital improvement projects as planned. Moreover, a failure to satisfy the financial covenants under our debt instruments would limit our ability to borrow under our revolving credit facilities and could require us to reduce our outstanding debt balance, which could adversely affect our liquidity, or result in an event of default

- 22 -

under one or more debt instruments. Adverse changes in our operations or operating cash flow may affect our ability to satisfy these financial covenants.

Significant Accounting Policies and Estimates

         We prepare our condensed consolidated financial statements in conformity with accounting principles generally accepted in the United States. Certain of our accounting policies, including the estimated useful lives assigned to our assets, asset impairment, health benefit reserves, purchase price allocations made in connection with our acquisitions, the determination of bad debt reserves and the calculation of our 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 in part on our historical experience, terms of existing contracts, observance of trends in the gaming industry and information available from other outside sources. We cannot assure you that our actual results will conform to our estimates. To provide an understanding of the methodology we apply, our significant accounting policies and basis of presentation are discussed where appropriate in this Item 2 and in the notes to our audited consolidated financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2001.

         In April 2002, the FASB issued SFAS No. 145, “Rescission of FASB Statement No. 4, 44 and 64, Amendment of FASB Statement No. 13, and Technical Corrections.” The key provision of SFAS 145 affecting us rescinds the existing rule on gains or losses from the extinguishment of debt. In June 2002, the FASB issued SFAS No. 146, “Accounting for Costs Associated with Exit or Disposal Activities,” which requires that a liability for a cost associated with an exit or disposal activity be recognized when the liability is incurred. We will adopt SFAS Nos. 145 and 146 effective January 1, 2003. Management does not believe the adoption of these accounting standards will have a material impact on our financial position or results of operations.

Forward-Looking Statements

         This Report contains certain forward-looking statements, including the plans and objectives of management for our business, operations and economic performance. These forward-looking statements generally can be identified by the context of the statement or the use of words such as “believes,” “anticipates,” “intends,” “expects,” “plans,” or words of similar meaning, in relation to us or our management. Similarly, statements that describe our future operating performance, financial results, plans, objectives, strategies or goals are forward-looking statements. Although management believes that the assumptions underlying the forward-looking statements are reasonable, these assumptions and the forward-looking statements are subject to various factors, risks and uncertainties, many of which are beyond our control, including but not limited to uncertainties concerning operating cash flow in future periods, our borrowing capacity under the senior credit facilities or any replacement financing, our properties’ future operating performance, our ability to undertake and complete capital expenditure projects, changes in competitive conditions, regulatory restrictions and changes in regulation or legislation (including gaming tax laws) that could affect us. Accordingly, actual results could differ materially from those contemplated by any forward-looking statement. In addition to the other cautionary statements relating to certain forward-looking statements throughout this Report, attention is directed to “Item 1. Business — Risk Factors” in our

- 23 -

Annual Report on Form 10-K for the year ended December 31, 2001 for a discussion of some of the factors, risks and uncertainties that could affect our future results.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

         As of September 30, 2002, we had $364.5 million outstanding under the senior credit facilities bearing interest at variable rates (as described more fully in Note 2 of Notes to Condensed Consolidated Financial Statements). Of this amount, $100.0 million is covered by an interest rate swap agreement that fixes the interest rate thereon and $50.0 million is covered by an interest rate collar agreement that sets a floor and ceiling for the interest rate thereon. Other than the borrowings under the senior credit facilities that are not covered by the interest rate swap agreement and $1.1 million in other long-term debt outstanding at September 30, 2002 (collectively, the “Variable Rate Debt”), all of our long-term debt bears interest at fixed rates. The senior credit facilities bear interest equal to LIBOR (in the case of Eurodollar loans) or the prime interest rate (in the case of base rate loans), plus an applicable margin. At September 30, 2002, the weighted average interest rate applicable to the Variable Rate Debt was 4.7 percent. An increase of one percentage point in the weighted average interest rate applicable to the Variable Rate Debt outstanding at September 30, 2002 would increase our annual interest cost by approximately $2.7 million. We continue to monitor interest rate markets and may enter into interest rate collar or swap agreements for additional amounts of principal under the senior credit facilities as market conditions warrant.

         Although we manage our short-term cash assets with a view to maximizing return with minimal risk, we do not invest in market rate-sensitive instruments for trading or other purposes and we have no material exposure to foreign currency exchange risks or commodity price risks.

Item 4. Controls and Procedures

         Within the 90 days prior to the date of this Report, we carried out an evaluation, under the supervision and with the participation of management, including our President and Chief Executive Officer and our Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures pursuant to Rule 13a-14 of the Securities Exchange Act of 1934, as amended. Based upon that evaluation, our President and Chief Executive Officer and our Chief Financial Officer and other members of management concluded that our disclosure controls and procedures are effective in timely alerting them to material information relating to us (including our consolidated subsidiaries) required to be included in our periodic filings with the Securities and Exchange Commission. There have been no significant changes in our internal controls or in other factors which could significantly affect internal controls subsequent to the date we carried out our evaluation.

- 24 -

PART II. OTHER INFORMATION

Item 6. Exhibits and Reports on Form 8-K

(a)  Exhibits

Exhibit
Number	Description of Exhibit	Method of Filing
10.1	Amended and Restated Excursion Boat Sponsorship and Operations Agreement, dated October 7, 2002, between Iowa West Racing Association and Ameristar Casino Council Bluffs, Inc.	Filed electronically herewith.
*10.2	Amendment No. 2 to Employment Agreement, dated as of August 15, 2002, between Ameristar Casinos, Inc. (“ACI”) and Thomas M. Steinbauer	Filed electronically herewith.
*10.3	Amendment to Amended and Restated Executive Employment Agreement, dated as of August 16, 2002, between ACI and Gordon R. Kanofsky	Filed electronically herewith.
*10.4	Amendment to Executive Employment Agreement, dated as of August 16, 2002, between ACI and Peter C. Walsh	Filed electronically herewith.
11.1	Computation of Earnings Per Share	Information required by Item 601(a)(11) of Regulation S-K is provided in Note 3 of the Notes to Condensed Consolidated Financial Statements.
99.1	Certification of Craig H. Neilsen, Chairman, President and Chief Executive Officer, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.	Filed electronically herewith.
99.2	Certification of Thomas M. Steinbauer, Senior Vice President of Finance, Chief Financial Officer and Treasurer, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.	Filed electronically herewith.

* Denotes a management contract or compensatory plan or arrangement.

(b)  Reports on Form 8-K

         None.

- 25 -

SIGNATURE AND CERTIFICATIONS

Pursuant to the requirements 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.

	AMERISTAR CASINOS, INC. Registrant
Date: November 14, 2002	By:	/s/ THOMAS M. STEINBAUER
		Thomas M. Steinbauer
		Senior Vice President of Finance,
		Chief Financial Officer and Treasurer

- 26 -

CERTIFICATION PURSUANT TO RULE 13A-14
OF THE SECURITIES EXCHANGE ACT,
AS ADOPTED PURSUANT TO SECTION
302 OF THE SARBANES-OXLEY ACT
 

I, Craig H. Neilsen, certify that:

1.     I have reviewed this Quarterly Report on Form 10-Q of Ameristar Casinos, Inc.;

2.     Based on my knowledge, this Quarterly 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 Quarterly Report;

3.     Based on my knowledge, the financial statements, and other financial information included in this Quarterly 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 Quarterly Report;

4.     The registrant’s other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and have:

         (a)  designed such disclosure controls and procedures 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 Quarterly Report is being prepared;

         (b)  evaluated the effectiveness of the registrant’s disclosure controls and procedures as of a date within 90 days prior to the filing date of this Quarterly Report (the “Evaluation Date”); and

         (c)  presented in this Quarterly Report our conclusions about the effectiveness of the disclosure controls and procedures based on our evaluation as of the Evaluation Date;

5.     The registrant’s other certifying officers and I have disclosed, based on our most recent evaluation, 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 in the design or operation of internal controls which could adversely affect the registrant’s ability to record, process, summarize and report financial data and have identified for the registrant’s auditors any material weaknesses in internal controls; and

         (b)  any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal controls; and

6. The registrant’s other certifying officers and I have indicated in this Quarterly Report whether there were significant changes in internal controls or in other factors that could significantly affect internal controls subsequent to the date of our most recent evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses.

- 27 -

November 14, 2002	By:	/s/ CRAIG H. NEILSEN
		Craig H. Neilsen
		President and Chief Executive Officer

On this 14th day of November 2002, Craig H. Neilsen directed Connie Wilson, in his presence as well as our own, to sign the foregoing document as “Craig H. Neilsen.” Upon viewing the signature as signed by Connie Wilson, and in our presence, Craig H. Neilsen declared to us that he adopted it as his own signature.

/s/ JOSIE RUBIO

Witness

/s/ MARGENE OTTEN

Witness

STATE OF NEVADA		)
	:ss
COUNTY OF CLARK		)

         I, Janet Catron, Notary Public in and for said county and state, do hereby certify that Craig H. Neilsen personally appeared before me and is known or identified to me to be the person whose name is subscribed to the within instrument in his capacity as President and Chief Executive Officer of Ameristar Casinos, Inc. Craig H. Neilsen, who being unable due to physical incapacity to sign his own name or offer his mark, did direct Connie Wilson, in his presence, as well as my own, to sign the foregoing document as “Craig H. Neilsen.” Craig H. Neilsen, after viewing his name as signed by Connie Wilson, thereupon adopted it as his own by acknowledging to me his intention to so adopt it as if he had personally executed the same and further acknowledged to me that he executed the same as the President and Chief Executive Officer of Ameristar Casinos, Inc.

         IN WITNESS WHEREOF, I have hereunto set my hand and official seal this 14th day of November 2002.

/s/ JANET CATRON

Notary Public

Las Vegas

Residing at:

My Commission Expires:

5/9/2005

- 28 -

CERTIFICATION PURSUANT TO RULE 13A-14
OF THE SECURITIES EXCHANGE ACT,
AS ADOPTED PURSUANT TO SECTION
302 OF THE SARBANES-OXLEY ACT
 

I, Thomas M. Steinbauer, certify that:

1.     I have reviewed this Quarterly Report on Form 10-Q of Ameristar Casinos, Inc.;

2.     Based on my knowledge, this Quarterly 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 Quarterly Report;

3.     Based on my knowledge, the financial statements, and other financial information included in this Quarterly 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 Quarterly Report;

4.     The registrant’s other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and have:

         (a)  designed such disclosure controls and procedures 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 Quarterly Report is being prepared;

         (b)  evaluated the effectiveness of the registrant’s disclosure controls and procedures as of a date within 90 days prior to the filing date of this Quarterly Report (the “Evaluation Date”); and

         (c)  presented in this Quarterly Report our conclusions about the effectiveness of the disclosure controls and procedures based on our evaluation as of the Evaluation Date;

5.     The registrant’s other certifying officers and I have disclosed, based on our most recent evaluation, 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 in the design or operation of internal controls which could adversely affect the registrant’s ability to record, process, summarize and report financial data and have identified for the registrant’s auditors any material weaknesses in internal controls; and

         (b)  any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal controls; and

6. The registrant’s other certifying officers and I have indicated in this Quarterly Report whether there were significant changes in internal controls or in other factors that could significantly affect internal controls subsequent to the date of our most recent evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses.

- 29 -

November 14, 2002	By:	/s/ THOMAS M. STEINBAUER
		Thomas M. Steinbauer
		Senior Vice President of Finance,
		Chief Financial Officer and Treasurer

- 30 - EX-10.1 3 v85734exv10w1.txt EXHIBIT 10.1 EXHIBIT 10.1 AMENDED AND RESTATED EXCURSION BOAT SPONSORSHIP AND OPERATIONS AGREEMENT THIS AMENDED AND RESTATED EXCURSION BOAT SPONSORSHIP AND OPERATIONS AGREEMENT is made and entered into as of the 7th day of October, 2002, by and between Iowa West Racing Association (hereinafter referred to as "Iowa West"), an Iowa nonprofit corporation, and Ameristar Casino Council Bluffs, Inc. (hereinafter referred to as "Ameristar"), an Iowa corporation. WHEREAS, on September 15, 1994, Iowa West and Ameristar entered into that certain Excursion Boat Sponsorship and Operations Agreement (the "Sponsorship Agreement"); and WHEREAS, paragraph 11 of the Sponsorship Agreement provides that the initial term of the Sponsorship Agreement expires on December 31, 2002 and will be automatically renewed unless either party gives at least six months' prior notice of its intention not to renew the Sponsorship Agreement; WHEREAS, on June 28, 2002, Ameristar gave written notice to Iowa West of its intention not to renew the Sponsorship Agreement; WHEREAS, the parties have since come to a mutual agreement for the renewal of the Sponsorship Agreement on the terms set forth herein; WHEREAS, paragraph 14 of the Sponsorship Agreement requires that any amendment to or modification of the Sponsorship Agreement would only be effective if it is in writing and signed by both parties, and, if required, approved by the Iowa Racing and Gaming Commission (the "Commission"); and WHEREAS, the parties do now wish to amend and restate in its entirety the Sponsorship Agreement as hereinafter set forth. NOW THEREFORE, in consideration of the mutual covenants and agreements herein contained and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, it is hereby mutually agreed as follows: 1. LICENSE APPLICATION. Iowa West shall, each year, or as otherwise required, promptly and timely apply to the Commission pursuant to Chapter 99F of the Iowa Code as a sponsor for a license to conduct gambling games. Ameristar shall, each year, or as otherwise required, promptly and timely apply to the Commission for a license to operate an excursion gambling boat under Chapter 99F of the Iowa Code. 2. CONDITIONS PRECEDENT TO SPONSORSHIP AND OPERATIONS AGREEMENT. This Agreement shall be effective only upon the approval of this Agreement by the Commission. The parties shall coordinate their efforts and cooperate with one another to seek this approval as expeditiously as possible. 3. NON-ASSIGNABILITY OF LICENSES. Neither party may assign any of its rights, duties or obligations under any license issued by the Commission without the prior approval of the Commission. 4. LICENSE AGREEMENT AND OPERATION FEE. (a) During the term of this Agreement, Ameristar shall pay to Iowa West an operation fee determined in accordance with the following schedule: (i) A fee of five percent (5%) of the Adjusted Gross Receipts generated by the Ameristar excursion gambling boat shall be applicable to the first Thirty Million Dollars ($30,000,000) of Adjusted Gross Receipts generated by the Ameristar excursion gambling boat each calendar year; (ii)A fee of four percent (4%) of the Adjusted Gross Receipts generated by the Ameristar excursion gambling boat shall be applicable to such Adjusted Gross Receipts in excess of Thirty Million Dollars ($30,000,000) up to and including Sixty Million Dollars ($60,000,000) each calendar year; (iii) A fee of three percent (3%) of the Adjusted Gross Receipts generated by the Ameristar excursion gambling boat shall be applicable to such Adjusted Gross Receipts in excess of Sixty Million Dollars ($60,000,000) up to and including Ninety Million Dollars ($90,000,000) each calendar year; (iv) A fee of two percent (2%) of the Adjusted Gross Receipts generated by the Ameristar excursion gambling boat shall be applicable to such Adjusted Gross Receipts in excess of Ninety Million Dollars ($90,000,000) up to and including One Hundred Twenty Million Dollars ($120,000,000) each calendar year; and (v) A fee of one-half of one percent (0.5%) of the Adjusted Gross Receipts generated by the Ameristar excursion gambling boat shall be applicable to such Adjusted Gross Receipts in excess of One Hundred Twenty Million Dollars ($120,000,000) up to and including One Hundred Fifty Million Dollars ($150,000,000) each calendar year. No fee shall be payable with respect to any Adjusted Gross Receipts generated by the Ameristar excursion gambling boat in excess of One Hundred Fifty Million Dollars ($150,000,000) each calendar year. The operation fee shall be paid monthly on or before the 10th day of the month following the month in which the Adjusted Gross Receipts were generated upon which such operation fee is based. As used herein, the term "Adjusted Gross Receipts" shall have the same meaning as set forth in Section 99F.1(1) of the Iowa Code. (b) Ameristar shall be solely responsible for the payment of all admission fees owing to the state and local governments under Section 99F.10 of the Iowa Code or any -2- succeeding provision, including admission fees relating to passengers with complimentary passes. The parties agree that the fees set forth above are the only sums to which Iowa West is entitled under this Agreement (other than amounts payable pursuant to the indemnification provision set forth herein), and all such fees paid to Iowa West are deemed and agreed to be subject to the restrictions imposed by Section 99F.6(4)(a) of the Iowa Code or any succeeding provision. (c) Ameristar shall pay to the Commission all the wagering taxes imposed by Section 99F.11 of the Iowa Code or any succeeding provision. (d) Ameristar shall indemnify and hold Iowa West harmless from any and all claims relating to all sums due for admission fees owing to any government entity under Section 99F.10 of the Iowa Code or any succeeding provision, all income or excise taxes owed to the United States or any state government, and all wagering taxes owing to the State of Iowa under Section 99F.11 of the Iowa Code or any succeeding provision; provided, however, that Ameristar shall have no liability or obligation to indemnify or hold Iowa West harmless from any tax liability Iowa West may incur with respect to the monies paid to Iowa West by Ameristar. 5. LICENSE APPLICATION FEES AND ATTORNEYS FEES. Each party hereto shall be responsible for its own license fees and expenses in connection with the approval and performance of this Agreement, and any application fee required in connection therewith, including DCI investigation fees, and its own attorneys fees in connection with this Agreement and the license applications contemplated hereby. 6. IOWA WEST ORGANIZATIONAL AND GOVERNANCE REQUIREMENTS. (a) REPRESENTATIONS OF IOWA WEST. Iowa West represents and warrants to Ameristar that as of the date of this Agreement: each of Iowa West, the Foundation (defined below) and Wescorp (defined below) is a nonprofit corporation organized, existing and in good standing under the laws of the State of Iowa; the articles of incorporation of each of Iowa West and the Foundation respectively authorize only a single membership in each such corporation, and Wescorp is the sole member of each of Iowa West and the Foundation. (b) COVENANTS OF IOWA WEST. At all times during the term of this Agreement following the Effective Date (as defined below), Iowa West agrees that: (i) Grant Committee. Iowa West Foundation (the "Foundation") shall permit each operator of an excursion gambling boat or land-based gaming facility for which Iowa West or an affiliate serves as the qualified sponsoring organization (each, a "Sponsored Gaming Entity") to appoint one (1) representative to the Foundation's Grant Committee (being an advisory committee to the board of directors of the Foundation); provided, however, that each person so appointed must, at the time of appointment, have obtained the age of majority, must be a permanent legal resident of Pottawattamie County, Iowa (the "County"), and must be knowledgeable in matters concerning the City of Council Bluffs, Iowa (the "City") and the County and the -3- purposes of Iowa West and the Foundation's Grant Committee. All such appointees must maintain continuing permanent residency in the County in order to be eligible to continue to serve on such Committee. The Foundation may refuse to seat any such appointee who, based upon the reasonable and good faith determination of the Wescorp Board (as defined below), does not meet such requirements and any such appointee who is seated may be removed from the Committee if such residency is not maintained. If such appointee is not seated or is removed, the Sponsored Gaming Entity that appointed such unqualified or removed appointee, shall have the right to designate a qualified replacement. The Foundation's Grant Committee shall consist of the number of representatives named by the Sponsored Gaming Entities, plus an additional number of members equal to not less than 75% of the number of directors of Wescorp and not more than 100% of the number of directors of Wescorp. All members of the Foundation's Grant Committee, other than the appointees of the Sponsored Gaming Entities, shall be members of the Wescorp Board and shall be appointed by the Wescorp Board. (ii) Wescorp Board of Directors. (A) Prior to the Effective Date, Iowa Wescorp Association ("Wescorp") shall amend its bylaws to increase the size of its board of directors (the "Wescorp Board") to seventeen (17) members, with the four new members to be selected at Wescorp's 2003 Annual Meeting (which will occur prior to February 1, 2003) (the "2003 Annual Meeting") as described below for terms commencing on the date of the 2003 Annual Meeting. Once a majority of the members of the Wescorp Board are Nominated Directors (as defined below), Wescorp may amend its bylaws to reduce the number of directors as and to the extent it deems such reduction appropriate, provided that: (1) after such reduction, the Wescorp Board shall continue to satisfy the requirement that a majority of its members be Nominated Directors; and (2) the Wescorp Board shall not be reduced below eleven (11) members. (B) From the Effective Date until the expiration or termination of this Agreement, selection of each member of the Wescorp Board (including the re-election of sitting members eligible for re-election) shall be made from a pool of nominees (the "Nominated Pool") which will consist of: (1) in the case of any board position for which a sitting director is eligible for re-election, desires to be re-elected, and is nominated by the Wescorp Board's nominating committee, the sitting director, and (2) a minimum of three nominees for each Wescorp Board seat subject to election (or more nominees, if requested by Wescorp) identified by each Nominating Body (which nominees may include sitting directors eligible for re-election). -4- It is understood that nominations are not specific to any particular Wescorp Board seat in question. Any member of the Nominated Pool may be elected to any seat on the Wescorp Board. As used herein, the term "Nominating Body" or "Nominating Bodies" shall include the City Council of the City, the Board of Supervisors of the County, the board of directors of the Council Bluffs Chamber of Commerce, the Board of Education of the Council Bluffs Community School District, and such other governmental entities, civic and nonprofit organizations generally representative of the broad-based constituencies within the greater Council Bluffs/Pottawattamie County, Iowa community, if any, as may be selected from time to time by the Wescorp Board (it being understood and agreed that any nonprofit entity selected as a Nominating Body shall be an established nonprofit organization with broad-based community representation). Persons nominated by a Nominating Body who are selected as directors of Wescorp (whether or not they are sitting directors eligible for re-election) are hereinafter referred to as "Nominated Directors." Any sitting director who is nominated for re-election by a Nominating Body and is re-elected to the Board shall, from and after such election and continuing for so long as such director thereafter serves on the Board, be considered a Nominated Director, notwithstanding the fact that such director was not a Nominated Director prior thereto. All nominees must meet the minimum eligibility requirements for board membership set forth in subparagraph 6(b)(ii)(D) hereof. In the event that the Wescorp Board or its nominating committee reasonably and in good faith determines that any nominee nominated by a Nominating Body fails to meet such requirements, the Nominating Body which nominated such nominee shall name a replacement nominee upon the request of Wescorp. In the event that any Nominating Body shall fail or refuse to nominate the number of nominees required under subparagraph (B)(2) above, such failure shall not disqualify the remaining nominees (if any) named by such Nominating Body or any other Nominating Body; provided, that Wescorp may, at its option, request the remaining Nominating Bodies to provide nominees to fill the pool of candidates to the required number. (C) Not later than February 1, 2003, the Wescorp Board shall include not less than five (5) Nominated Directors. Not later than February 1, 2005, the Wescorp Board shall include not less than seven (7) Nominated Directors. Not later than February 1, 2007, and throughout the remaining term of this Agreement, a majority of the members of the Wescorp Board shall be Nominated Directors. (D) It is understood and agreed that: (1) the pool of nominees named by the Nominating Bodies shall represent a diverse range of interests and points of view within the greater Council Bluffs/Pottawattamie County, Iowa community. (2) the actual selection and terms of service of members of the Wescorp Board shall be governed by the Articles of Incorporation and Bylaws of Wescorp applicable thereto. -5- (3) each nominee shall be a permanent legal resident of the County, shall be of legal age, shall be generally familiar with matters concerning the City, the County and the purposes of Wescorp, shall be capable, in the reasonable and good faith judgment of the Wescorp Board, of performing the duties of a director, and shall meet such other uniformly applicable eligibility requirements as may be established pursuant to the bylaws of Wescorp. (4) no nominee shall be an employee, officer or elected official of any of the Nominating Bodies, any Sponsored Gaming Entity, any formally-organized special interest group or any formally-organized lobbying group; provided, however, that an employee, officer or elected official of such a special interest group or lobbying group shall be disqualified from the pool of nominees only if the Wescorp Board reasonably and in good faith determines that such nominee's role in or for such group involves an actual or potential conflict of interest with the purposes of Wescorp or the broad interests of the greater Council Bluffs/Pottawattamie County, Iowa community. (5) each nominee, if selected, shall agree that he or she will be acting as a director in his or her capacity as a citizen of the community and will not be acting as a representative of the Nominating Body or Nominating Bodies by whom he or she was nominated or of any other group or organization. (6) each nominee shall agree to submit to such investigations as may be required in connection with any license, findings of suitability or other approval required of Iowa West, in each case as may be required under applicable provisions of the Iowa Code or the rules and regulations of the Commission or the Iowa Department of Public Safety (or its Division of Criminal Investigation) in connection with such nominee's service on the Wescorp Board or the board of directors of either Iowa West or the Foundation, and any person who fails to satisfy these requirements may be removed from the pool of nominees. (7) at no time from the date of this Agreement throughout the term of this Agreement shall Wescorp materially amend in any substantive manner, without the prior written consent of Ameristar or as otherwise permitted by this Agreement: (A) Article V, Section 1 of its bylaws as it relates to the length of terms of directors; (B) Article V, Section 2 of its bylaws as it relates to limitations on terms of service of directors; (C) Article V, Section 5 of its bylaws as it relates to the required quorum for actions of the board of directors; (D) Article V, Section 6 of its bylaws as it relates to the removal of directors, or (E) Article V, Section 3 of its bylaws relating to the establishment of eligibility requirements for Wescorp Board membership. Iowa West represents and warrants that true, correct and complete copies of each of such -6- provisions have been given to Ameristar prior to its execution of this Agreement. (8) at no time from the date of this Agreement throughout the term of this Agreement shall the Foundation: have any member other than Wescorp; or amend its articles of incorporation or bylaws or adopt any resolution to provide for any member of the Foundation other than Wescorp, in each case without the prior written consent of Ameristar or as otherwise may be permitted by this Agreement. (9) at no time from the date of this Agreement throughout the term of this Agreement shall Iowa West: have any member other than Wescorp; or amend its articles of incorporation or bylaws or adopt any resolution to provide for any member of Iowa West other than Wescorp, in each case without the prior written consent of Ameristar or as otherwise may be permitted by this Agreement. (iii) Iowa West and Foundation Boards of Directors. From the 2003 Annual Meeting and continuing throughout the term of this Agreement, the boards of directors of the Foundation and Iowa West, respectively, shall consist of nine (9) members each selected from among the members of the Wescorp Board. Overlap between members of the two boards shall be minimized to the extent numerically possible (e.g., when the Wescorp Board consists of seventeen (17) members and each of the Foundation and Iowa West boards consist of nine (9) members, the two boards shall have only one common board member). In the event that the number of directors on the Wescorp Board is reduced as provided in paragraph 6(b)(ii)(A) hereof, the number of members of the Iowa West and Foundation boards may also be reduced to a number not less than one-half of the number of members of the reduced Wescorp Board; provided that at all times after the reduction of the size of the Wescorp Board, the number of Wescorp Board members serving on both the Iowa West and Foundation boards shall continue to be minimized to the extent numerically possible. The number of Nominated Directors serving on each of the boards of Iowa West and the Foundation shall, to the extent numerically possible, be proportionate to the representation of the Nominated Directors on the Wescorp Board; provided, however, that this requirement shall not require any common member of both the Iowa West and the Foundation boards to be a Nominated Director. (iv) Public Relations Committee. Wescorp shall create a Public Relations Committee whose membership shall consist of: (A) One (1) member appointed by each Sponsored Gaming Entity; (B) One (1) member appointed by Iowa West; and -7- (C) Two (2) "at-large" members selected and approved by the Chairperson of Wescorp from nominees representative of the public to be named by each of the Sponsored Gaming Entities. The purpose of the Public Relations Committee shall be to advise the boards of directors of Iowa West and Wescorp with respect to public relations activities and affairs; provided, that the ultimate authority for making decisions with respect to such matters shall reside in the respective boards of directors of such entities. The Public Relations Committee shall meet not less frequently than quarterly and may submit written reports and recommendations to the Wescorp Board. The member appointed by Iowa West shall serve as a liaison between the Wescorp Board and the Public Relations Committee, and shall make oral reports to the Wescorp Board from time to time as requested by the Public Relations Committee. The Public Relations Committee shall have the opportunity to meet with the Wescorp Board not less frequently than once per calendar year. (v) Delegation. Each of the Wescorp Board, the board of directors of Iowa West and the board of directors of the Foundation may delegate any of its respective authority to a committee of directors; provided that such delegation is approved by not less than two-thirds of the authorized and appointed directors of such entity; and provided further that the following authority may not be delegated: the authority of the Wescorp Board to appoint the directors of Iowa West or the Foundation or the members of the Foundation's Grant Committee, or the authority otherwise to exercise any rights of Wescorp acting in its capacity as the member of either Iowa West or the Foundation. The number of Nominated Directors serving on any such committee, other than the executive committee of Wescorp, shall be proportionate, to the extent numerically possible, to the representation of the Nominated Directors on the Wescorp Board. (vi) Inspection Rights. Wescorp, Iowa West and the Foundation shall make their corporate records, including organizational documents and minutes and written consents, available for inspection by Ameristar or its counsel from time to time (but no more frequently than annually) upon reasonable advance written notice from Ameristar solely for the purpose of allowing Ameristar to determine compliance with the provisions of this paragraph 6. Ameristar agrees that any such inspection shall be on a strictly confidential basis; provided, however, that such obligation of confidentiality shall not limit or restrict the exercise by Ameristar of its rights under paragraph 6(c). Ameristar agrees that any such inspection shall, if requested by Iowa West, be conducted in the presence of a representative or representatives of Iowa West. (c) Default and Remedy. If there shall be any failure to comply with any of the requirements of paragraph 6(b), Ameristar may give written notice to Iowa West specifying with particularity the failure or failures to comply. If all such specified failures are not remedied within sixty (60) days following the giving of such notice, Ameristar may suspend making one-half of the amount of each payment to Iowa West or its assignee under -8- paragraph 4 of this Agreement and instead shall deposit the amount of such suspended and withheld payments in a segregated interest-bearing escrow account at the branch of a national or state chartered bank located in the County, until such time as all such failures have been remedied or the termination of this Agreement (it being understood that the remaining one-half of such fees shall continue to be due and payable to Iowa West as provided herein). If all such failures are cured prior to the giving by Ameristar of a notice of termination (as provided for below), such escrowed funds, together with all interest earned thereon, shall be released to Iowa West or its assignee. If all such specified failures are not remedied within ninety (90) days following the giving of such notice, Ameristar may give a written notice of termination of this Agreement to Iowa West, which termination shall be effective on the last day of the sixth (6th) month following the giving of the notice of termination or, if Iowa West disputes the termination as provided below, the termination shall be effective on the last day of the sixth (6th) month following the final determination by a court of competent jurisdiction of Ameristar's right to terminate this Agreement. In the event of such a termination of this Agreement while such funds are held in escrow, all escrowed funds, together with all interest earned thereon, shall be paid to the successor qualified sponsoring organization for Ameristar's excursion gambling boat. If Iowa West disputes Ameristar's right to terminate this Agreement under this paragraph and a court of competent jurisdiction finally determines that Ameristar does not have a right to terminate this Agreement under this paragraph, this Agreement shall continue in full force and effect and all escrowed funds, together with all interest earned thereon, shall be released to Iowa West or its assignee. In the event of such a dispute, Iowa West agrees to assert its claim within thirty (30) days following its receipt of the notice of termination from Ameristar, and both parties agree to seek a trial date within ninety (90) days of the assertion of Iowa West's dispute. As used in this Agreement, a determination by a court shall not become final until the exhaustion or waiver by the losing party of all rights of appeal. 7. TERM OF AGREEMENT. (a) This Agreement shall become effective at 12:00:01 a.m. on January 1, 2003 (the "Effective Date") and shall terminate at 11:59:59 p.m. on March 31, 2010. Notwithstanding the foregoing, if the Commission changes its current practice of issuing licenses for a one-year period from April 1 of a given year to March 31 of the following year, the parties shall amend this Agreement to provide for the expiration of this Agreement concurrently with the expiration date of the licenses issued to Iowa West and Ameristar for the Ameristar excursion gambling boat that is closest in time to the otherwise scheduled expiration date of this Agreement. Until the Effective Date, the rights and obligations of the parties to each other shall be governed exclusively by the Sponsorship Agreement. (b) Ameristar may terminate this Agreement upon six (6) months' prior written notice to Iowa West if Iowa law is amended to no longer require excursion gambling boats to operate under the sponsorship of a qualified sponsoring organization. (c) Iowa West agrees and acknowledges that, upon the termination of this Agreement for any reason, whether upon the expiration without renewal of this Agreement or -9- otherwise, Iowa West shall, upon the written request of Ameristar, surrender to the Commission (and all other government entities, if any) all licenses issued by the Commission as contemplated by paragraph 1 (and all other licenses permits and other approvals issued under the relevant provisions of the Iowa Code to Iowa West to serve as the qualified sponsoring organization for the Ameristar excursion gambling boat), which licenses, permits or other approvals, if any, may be reissued to another qualified sponsoring organization without any compensation to Iowa West from Ameristar, the State of Iowa or any other person or entity, except for the compensation from Ameristar expressly provided for in this Agreement. Nothing in this Agreement shall prohibit or restrict Ameristar from entering into an agreement with another qualified sponsoring organization for the sponsorship of the operations of the Ameristar gambling excursion boat effective upon the expiration or termination of this Agreement for any reason. Notwithstanding the foregoing, Iowa West shall not be required to take any action or surrender any license, permit or other approval to the extent that the failure to do so does not interfere with Ameristar's continuing operation of its excursion gambling boat under the relevant provisions of the Iowa Code. (d) In the event that this Agreement terminates or expires at a time at which Ameristar would be forced to cease the operation of its excursion gambling boat because it is not able immediately thereafter to operate its excursion gambling boat under the license and sponsorship of another qualified sponsoring organization, Ameristar shall have the option to extend the term of this Agreement on a month-to-month basis for up to six (6) additional months (provided, however, that Ameristar shall pay all costs associated with such extension, including, without limitation, Iowa West's reasonable attorneys' fees, together with all fees and costs associated with the extension or renewal of Iowa West's license, if necessary). If Ameristar desires to exercise this option, it shall give written notice to Iowa West at least ten (10) days prior to the otherwise scheduled expiration or termination date. If Ameristar exercises this option, it thereafter may terminate this Agreement as of the end of any subsequent calendar month on not less than five (5) days prior written notice to Iowa West. 8. HOLD HARMLESS AND INSURANCE REQUIREMENTS. During the term of this Agreement, Ameristar shall indemnify, defend and hold harmless Iowa West, Wescorp, the Foundation, and its and their officers, directors, employees, and agents, from and against any and all liabilities, obligations, claims damages, causes of action, cost and expenses imposed upon, incurred by, or asserted against them by reason of all operations, whether insurable or not, for any accident, injury to or death of persons, or loss of or damage to property occurring on the excursion gambling boat. Ameristar further covenants and agrees that it will at its own expense procure comprehensive public liability insurance insuring both Ameristar and Iowa West in an amount not less than $5,000,000.00 single limit, subject to commercially reasonable deductibles or self-insured retentions. Said liability insurance policy shall apply with respect to all operations and functions of the excursion gambling boat that are insurable on a commercially reasonable basis. A copy of policies of insurance protecting the interests of Iowa West shall be forwarded directly to Iowa West. 9. NON-EXCLUSIVITY. It is understood that Iowa West has entered into or may enter into sponsorship agreements with other parties for the conduct of gambling games. Iowa -10- West has provided a true, complete and correct copy to Ameristar of each such agreement as in force on the date of this Agreement. Ameristar agrees to consider all information therein as confidential, except to the extent such information is otherwise publicly available or is required to be made public in order to enforce Ameristar's rights hereunder. Iowa West further agrees that in the event it agrees to any amendment or modification of the material economic terms of the existing sponsorship agreement (the "Existing Harveys Agreement") with Harveys Iowa Management, Inc. or an affiliate thereof or any assignee thereof or an affiliate of any assignee thereof ("Harveys") prior to the expiration or termination thereof in a manner that is more beneficial to Harveys than the corresponding provisions of this Agreement, Iowa West shall notify Ameristar in writing of such amendment or modification (which notice shall include a copy of the amendment or modification). Ameristar shall have a period of thirty (30) days after receipt of such notice in which to elect to enter into the same amendment or modification with respect to the corresponding terms of this Agreement. Ameristar's election shall be exercised by written notice delivered to Iowa West and received by Iowa West within such thirty-day period. As used herein, the "material economic terms" of the Existing Harveys Agreement shall be deemed to be the provisions regarding the amount or rate of fees payable by Harveys to Iowa West (whether denominated as operating fees or otherwise) and the provisions regarding the term of the Existing Harveys Agreement. If during the term of this Agreement the Commission determines that the Pottawattamie County area is not able to support two excursion gambling boats and one land-based gambling operation at Bluffs Run Greyhound Park (or another location), Iowa West agrees that it will adopt a position of complete neutrality with respect to which operations should be licensed under the sponsorship of Iowa West. 10. IOWA WEST GAMING LICENSES/FINDINGS OF SUITABILITY IN OTHER JURISDICTIONS. Iowa West acknowledges that Ameristar's parent company and other current and future affiliates ("Ameristar Affiliates") possess and may obtain additional privileged gaming licenses, findings of suitability and other approvals (collectively, "Licenses") in various states in addition to the State of Iowa. Pursuant to such Licenses, the Ameristar Affiliates are and will be subject to statutes, regulations and investigative powers of agencies having jurisdiction over gaming activities (the "Gaming Authorities"). The Ameristar Affiliates from time to time may be required by the Gaming Authorities to report and obtain approvals for this Agreement and the relationship of Ameristar with Iowa West. Additionally, the Gaming Authorities are permitted to investigate transactions in which Ameristar and the Ameristar Affiliates are engaged and may call Iowa West and one or more of its affiliates forward for licensing, findings of suitability and/or such other approvals as may be required by the Gaming Authorities. Iowa West agrees to cooperate as reasonably requested in connection with any investigation or other request by Gaming Authorities relating to such required licenses, findings of suitability and other approvals; provided, however, that Ameristar agrees to pay all reasonable costs and expenses in connection with any such investigation or request. Notwithstanding the foregoing, Ameristar shall not be obligated to pay the costs and expenses of any investigation or other request made by the Commission, except to the extent that such investigation or request is due to the acts or omissions of Ameristar. -11- 11. ASSIGNABILITY. (a) Iowa West shall not have the right, power or authority to assign all or any portion of this Agreement or its rights hereunder or to delegate any duties or obligations arising under this Agreement voluntarily, involuntarily or by operation of law, without Ameristar's prior written consent. (b) Ameristar shall have the right, power and authority to assign all or any portion of this Agreement or its rights hereunder or to delegate any duties or obligations arising under this Agreement, voluntarily, involuntarily or by operation of law, and without Iowa West's consent to any successor operator of Ameristar's excursion gambling boat or to any financial institution extending credit to Ameristar in the ordinary course of business, subject only to Commission or other governmental approval, if required. (c) Notwithstanding anything herein to the contrary, both parties hereto expressly acknowledge that Iowa West may assign its rights to receive payments hereunder to any affiliate of Iowa West, subject only to Commission approval, if required; provided, however, that Iowa West shall remain liable for all obligations imposed upon it under this Agreement. 12. AMENDMENT. This Agreement may be amended or modified at any time, but only by a writing signed by both parties and, if required, approved by the Commission. 13. GOVERNING LAW. This Agreement shall be governed by the laws of the State of Iowa and the rules and regulations of the Commission, and each party shall be responsible for its own compliance with all laws of the State of Iowa and the rules of the Commission. 14. REPORTS, ACCOUNTING AND AUDITING. (a) Iowa West and Ameristar shall prepare and file all reports, including financial reports, as required of each such party, respectively, by Iowa law and the rules and regulations of the Commission. In addition, each party shall keep such books and records and have audits performed as required of it, respectively, by Iowa law and the Commission. Each party shall be responsible for providing at its own expense all audit and accounting services for any reports and audits required by the Commission. (b) Each party agrees that the Commission and the other party to this Agreement shall have the right to audit such party's records to the extent necessary to provide verification of compliance under this Agreement. In the event the Commission or either party determines that a party is not in compliance with the terms of this Agreement, then in addition to all other remedies provided for by law, each party shall have the right to specifically enforce the terms and provisions of this Agreement. As between the parties to this Agreement, the party requesting such audit shall provide reasonable advance notice in writing of such request, and such audit shall be conducted at reasonable times and in the presence of a representative of the party being audited. -12- 15. DEFAULT. (a) The occurrence of any one or more of the following events shall constitute a default by a party hereunder: (i) Failure of the party to perform or comply in any material respect with any of the material duties and obligations imposed upon said party under the terms of this Agreement. (ii) The suspension or revocation of the party's license under Chapter 99F of the Iowa Code by the State of Iowa or the Commission. (iii) (A) If a party shall generally not pay its debts as they become due, or shall admit in writing its inability to pay its debts, or shall make a general assignment for the benefit of creditors; (B) if a party shall commence any case, proceeding or other action seeking reorganization, arrangement, adjustment, liquidation, dissolution or composition of it or its debts under any law relating to bankruptcy, insolvency, reorganization or relief of debtors, or seeking appointment of a receiver, trustee, custodian or other similar official or representative for it or for all or any substantial part of its property; (C) if a party shall take any corporate or other action to authorize any of the actions set forth in clause (A) or (B) above; or (D) if any case, proceeding or other action against a party is commenced seeking to have an order for relief entered against it as a debtor, or seeking reorganization, arrangement, adjustment, liquidation, dissolution or composition of it or its debts under any law relating to bankruptcy, insolvency, reorganization or relief of debtors, or seeking appointment of a receiver, trustee, custodian or other similar official or representative for it or for all or any substantial part of its property, and such case, proceeding or action (x) results in the entry of an order for relief against it which is not fully stayed within thirty (30) days after the entry thereof or (y) remains undismissed for a period of ninety (90) or more consecutive days. (b) Except as otherwise provided in this paragraph 15, (x) if one of the acts of default described in clauses (a)(i) and (ii) occurs and is not remedied by the defaulting party within thirty (30) days after the giving of written notice by the non-defaulting party of said default or (y) if one of the acts of default described in clause (a)(iii) occurs, then the non-defaulting party shall have the right to terminate this Agreement in addition to all rights and remedies provided at law or in equity, including without limitation specific performance or injunctive relief. (c) If a default by Iowa West occurs that results in the suspension of gambling on the Ameristar excursion gambling boat or the suspension or revocation of any License held by any Ameristar Affiliate, and such suspension would not have been ordered but for the default by Iowa West hereunder, Ameristar will have available to it immediately the right to terminate this Agreement in addition to all rights and remedies provided at law or in equity, including without limitation specific performance or injunctive relief. Notwithstanding any -13- provision hereof to the contrary, Ameristar shall not be required to submit to non-binding mediation prior to exercising its right of termination under this clause (c). (d) Notwithstanding any other provision of this Agreement to the contrary, paragraph 6(c) sets forth the exclusive remedy of Ameristar in the event of a default under paragraph 6(b). (e) Except as otherwise provided herein, the remedies of the non-defaulting party shall be cumulative, and the exercise of any one or more remedies shall not be construed as a waiver of any other remedies. Further, no course of dealing between the parties or failure on the part of a non-defaulting party to exercise any right or remedy shall operate as a waiver of such right to claim a default in the future. 16. NON-BINDING MEDIATION OF DISPUTES. Each party agrees to enter into non-binding mediation at the request of the other with respect to any dispute arising under this Agreement upon the giving by Ameristar of a notice of non-compliance under paragraph 6(c) or upon the giving of a notice of default by a party under paragraph 15(a)(i). In the case of mediation of a dispute under paragraph 6(c), Ameristar shall not be required to engage in mediation for more than forty-five (45) days following the giving by Ameristar of the notice of non-compliance under paragraph 6(c), and in the case of mediation of a dispute under paragraph 15(a)(i), the party that gives the notice of default shall not be obligated to engage in mediation for more than thirty (30) days following its giving of notice of default. Any such mediation shall be conducted on a confidential basis with a single mediator selected by the mutual agreement of the parties, or by the American Arbitration Association if the parties are unable to agree upon a mediator. 17. MISCELLANEOUS PROVISIONS. (a) NOTICES. All notices, request, demands and other communications hereunder shall be deemed to have been given if delivered in person or if sent by certified mail, postage prepaid, or by fax, or by reputable overnight courier service, to the other party at the following addresses: To Iowa West: Iowa West Racing Association Attention: Executive Director 500 West Broadway Suite 100 Council Bluffs, Iowa 51503 Telephone: 712-325-3133 Fax: 712-322-2267 -14- With duplicate to: James A. Campbell Peters Law Firm, P.C. 233 Pearl Street P.O. Box 1078 Council Bluffs, Iowa 51502-1078 Telephone: 712-328-3157 Fax: 712-328-9092 To Ameristar: Ameristar Casino Council Bluffs, Inc. c/o Ameristar Casinos, Inc. Attention: President and CEO 3773 Howard Hughes Parkway Suite 490 S Las Vegas, Nevada 89109 Telephone: 702-567-7000 Fax: 702-369-8860 or to such other address or such other person as a party shall have last designated by notice to the other party. All notices shall be deemed to be given when received. All notices given by fax shall be confirmed by the delivery of a copy thereof by another permitted means of delivery, provided that such notice shall be deemed to have been given when received by fax. (b) RELATIONSHIP OF PARTIES. Nothing in this Agreement shall be construed to create a partnership between the parties, a relationship of employer and employee between the parties, or a relationship of principal and agent between the parties. (c) AUTHORIZATION. Each party represents and warrants to the other that this Agreement has been duly authorized on its behalf and that this Agreement is the valid, binding and enforceable agreement of such party. (d) NONPROFIT AND TAX EXEMPT STATUS. Notwithstanding any provision of this Agreement to the contrary, it is understood and agreed that if, in the opinion of counsel to Iowa West (such counsel to be competent in matters concerning tax-exempt organizations and related matters), any change in law or regulation (whether by statute, regulation, judicial ruling, administrative ruling or otherwise) enacted, adopted or promulgated following the date of this Agreement prohibits or restricts the ability of Iowa West, Wescorp or the Foundation to (i) comply with any of its obligations under paragraph 6(b) and (ii) satisfy applicable requirements for the maintenance of its status as (A) an Iowa nonprofit corporation, and (B) a corporation which is exempt from federal income taxation as an organization described in Section 501(c)(3) of the Internal Revenue Code of 1986, as amended (the "Code"), and (C) an organization that is not a private foundation in accordance with Section 509(a) of the Code, then the parties shall meet and confer in good faith to consider amending this Agreement to preserve the status of Iowa West, Wescorp and -15- the Foundation while at the same time materially maintaining the protections provided for in paragraph 6(b). If both such objectives cannot be achieved through a mutually acceptable amendment, then Iowa West, Wescorp and the Foundation shall not be required to comply with paragraph 6(b) to the extent necessary to maintain their respective statuses described above, but Ameristar may, at its option, terminate this Agreement on not less than six (6) months written notice to Iowa West. If requested by Ameristar, the opinion of counsel to Iowa West shall be a written opinion addressed jointly to Iowa West and Ameristar. (e) SUCCESSORS AND ASSIGNS. This Agreement, and all of the obligations, duties and rights of the parties hereunder shall inure to and be binding upon the heirs, successors and permitted assigns of the parties. (f) COMPLETE AGREEMENT. Subject to the last sentence of paragraph 7(a) of this Agreement, this Agreement embodies the entire agreement between the parties and supersedes all prior oral and written proposals and communications. (g) COUNTERPARTS. This Agreement may be executed in multiple counterparts, and if so executed, each such counterpart is deemed an original for all purposes, and all such counterparts shall collectively constitute one agreement. (h) TIME IS OF THE ESSENCE. Time is of the essence in the performance of this Agreement and each and every provision contained herein. (i) CONSTRUCTION. This Agreement shall be construed to comply with all applicable Iowa laws, Commission rules and regulations relating to excursion boat gambling, and may be amended from time to time in order to comply with such laws, Commission rules and regulations; provided, however, that no such amendment shall materially and adversely affect the rights and obligations of a party without such party's written consent. (j) HEADINGS. Paragraph headings herein are for reference purposes only. IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first above written at Council Bluffs, Iowa. IOWA WEST RACING ASSOCIATION AMERISTAR CASINO COUNCIL BLUFFS, INC. By: /s/ Charles L. Smith By: /s/ Gordon R. Kanofsky --------------------------------- --------------------------------- President Vice President By: /s/ Joseph D. Lehan ---------------------------------- Vice President -16- EX-10.2 4 v85734exv10w2.txt EXHIBIT 10.2 EXHIBIT 10.2 AMENDMENT NO. 2 TO EMPLOYMENT AGREEMENT THIS AMENDMENT NO. 2 TO EMPLOYMENT AGREEMENT (this "Amendment") is made and entered into as of the 15th day of August 2002 by and between AMERISTAR CASINOS, INC., a Nevada corporation (the "Employer"), and THOMAS M. STEINBAUER (the "Employee") for the purpose of amending that certain Employment Agreement dated November 15, 1993 between the parties, as amended by that certain Amendment No. 1 to Employment Agreement dated October 5, 2001 between the parties (the "Agreement"). Unless otherwise required by the context, capitalized terms used herein without definition have the same meaning as used in the Agreement. This Amendment has been authorized and approved by the Board of Directors of the Employer and the Compensation Committee of the Board of Directors of the Employer. 1. AMENDMENT OF SECTION 5.5(b) OF THE AGREEMENT. Section 5.5(b) of the Agreement is hereby amended by deleting clauses (3) and (4) thereof in their entirety and replacing them with the following: "(3) the Employer shall pay to the Employee a pro rata portion of his bonus for the 2002 calendar year, using an assumed bonus amount for the entire 2002 calendar year of $125,000 on which to base the pro rated bonus amount; provided, however, that this clause (3) shall not apply in the event that Employee terminates his employment pursuant to clause (e) of Section 5.3; (4) notwithstanding any contrary provisions of any stock option agreements between the Employer and the Employee: (A) such options shall terminate upon the later of one year after the termination date of Employee's employment with the Employer and 90 days after the termination of any other qualifying relationship between the parties (e.g., a consulting relationship) unless the Employee has resumed or initiated a qualifying relationship and has such a qualifying relationship on such date. During such period, the Employee may exercise such options provided that any such option has not expired in accordance with its terms or has otherwise terminated as provided in the applicable stock option agreement; (B) all unvested options granted to the Employee prior to 2000 shall be deemed fully vested as of July 31, 2002; and (C) the vesting of the option exercisable for 20,000 shares granted on October 16, 2000 by the Employer to the Employee shall be accelerated with respect to 7,200 of such shares, and such option shall be deemed fully vested with respect to such 7,200 shares on July 31, 2002 (in addition to the vesting of such option with respect to 4,000 shares on October 16, 2001, as provided in the applicable stock option agreement); and". -1- 2. ACKNOWLEDGMENT BY THE EMPLOYEE. The Employee represents and acknowledges the following: (a) he has carefully read the Agreement and this Amendment in their entirety; (b) he understands the terms and conditions contained therein and herein; (c) he has had the opportunity to review this Amendment with legal counsel of his own choosing, and has done so or has knowingly chosen not to do so, and has not relied on any statements made by the Employer or its legal counsel as to the meaning of any term or condition contained in the Agreement and this Amendment or in deciding whether to enter into this Amendment; and (d) he is entering into this Amendment knowingly and voluntarily. 3. AGREEMENT REMAINS IN FULL FORCE AND EFFECT. Except as modified hereby, the Agreement remains in full force and effect. IN WITNESS WHEREOF, the parties have executed this Amendment as of the day and year first above written. EMPLOYER: AMERISTAR CASINOS, INC. By: /s/ Gordon R. Kanofsky ----------------------------------------- Gordon R. Kanofsky Executive Vice President EMPLOYEE: /s/ Thomas M. Steinbauer ----------------------------------------- Thomas M. Steinbauer -2- EX-10.3 5 v85734exv10w3.txt EXHIBIT 10.3 EXHIBIT 10.3 AMENDMENT TO AMENDED AND RESTATED EXECUTIVE EMPLOYMENT AGREEMENT THIS AMENDMENT TO AMENDED AND RESTATED EXECUTIVE EMPLOYMENT AGREEMENT (this "Amendment") is made and entered into as of August 16, 2002, by and between Ameristar Casinos, Inc., a Nevada corporation (the "Company"), and Gordon R. Kanofsky (the "Executive"). WHEREAS, the Company and the Executive are parties to an Amended and Restated Executive Employment Agreement, dated as of March 11, 2002 (the "Agreement"); and WHEREAS, the Company and the Executive desire to amend the Agreement in certain respects as more particularly set forth in this Amendment. NOW, THEREFORE, in consideration of the foregoing and for other good and valuable consideration, the Company and the Executive agree as follows: 1. Amendment to Section 6.4(h). Section 6.4(h) of the Agreement is hereby amended by (i) deleting the word "primary" preceding the phrase "group health insurance" and (ii) deleting the word "excluding" preceding the phrase "Exec-U-Care or substitute benefits" and replacing it with the word "including". 2. Amendment to Section 6.5(h). Section 6.5(h) of the Agreement is hereby amended by (i) deleting the word "primary" preceding the phrase "group health insurance" and (ii) deleting the word "excluding" preceding the phrase "Exec-U-Care or substitute benefits" and replacing it with the word "including". 3. Amendment to Section 7.2(h). Section 7.2(h) of the Agreement is hereby amended by (i) deleting the word "primary" preceding the phrase "group health insurance" and (ii) deleting the word "excluding" preceding the phrase "Exec-U-Care or substitute benefits" and replacing it with the word "including". 4. Confirmation. Except as amended pursuant to this Amendment, the terms of the Agreement shall continue in full force and effect. IN WITNESS WHEREOF, the undersigned have executed this Amendment as of the date first written above. AMERISTAR CASINOS, INC. EXECUTIVE: By: /s/ Peter C. Walsh /s/ Gordon R. Kanofsky ------------------------------------ ----------------------------------- Name: Peter C. Walsh GORDON R. KANOFSKY Title: Senior Vice Presidentand General Counsel EX-10.4 6 v85734exv10w4.txt EXHIBIT 10.4 EXHIBIT 10.4 AMENDMENT TO EXECUTIVE EMPLOYMENT AGREEMENT THIS AMENDMENT TO EXECUTIVE EMPLOYMENT AGREEMENT (this "Amendment") is made and entered into as of August 16, 2002, by and between Ameristar Casinos, Inc., a Nevada corporation (the "Company"), and Peter C. Walsh (the "Executive"). WHEREAS, the Company and the Executive are parties to an Executive Employment Agreement, dated as of March 13, 2002 (the "Agreement"); and WHEREAS, the Company and the Executive desire to amend the Agreement in certain respects as more particularly set forth in this Amendment. NOW, THEREFORE, in consideration of the foregoing and for other good and valuable consideration, the Company and the Executive agree as follows: 1. Amendment to Section 6.4(g). Section 6.4(g) of the Agreement is hereby amended by (i) deleting the word "primary" preceding the phrase "group health insurance" and (ii) deleting the word "excluding" preceding the phrase "Exec-U-Care or substitute benefits" and replacing it with the word "including". 2. Amendment to Section 6.5(g). Section 6.5(g) of the Agreement is hereby amended by (i) deleting the word "primary" preceding the phrase "group health insurance" and (ii) deleting the word "excluding" preceding the phrase "Exec-U-Care or substitute benefits" and replacing it with the word "including". 3. Amendment to Section 7.2(g). Section 7.2(g) of the Agreement is hereby amended by (i) deleting the word "primary" preceding the phrase "group health insurance" and (ii) deleting the word "excluding" preceding the phrase "Exec-U-Care or substitute benefits" and replacing it with the word "including". 4. Confirmation. Except as amended pursuant to this Amendment, the terms of the Agreement shall continue in full force and effect. IN WITNESS WHEREOF, the undersigned have executed this Amendment as of the date first written above. AMERISTAR CASINOS, INC. EXECUTIVE: By: /s/ Gordon R. Kanofsky /s/ Peter C. Walsh ----------------------------------- ----------------------------------- Name: Gordon R. Kanofsky PETER C. WALSH Title: Executive Vice President EX-99.1 7 v85734exv99w1.txt EXHIBIT 99.1 EXHIBIT 99.1 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 Quarterly Report on Form 10-Q of Ameristar Casinos, Inc. (the "Company") for the period ending September 30, 2002, as filed with the Securities and Exchange Commission on the date hereof (the "Report"), I, Craig H. Neilsen, Chairman, President and CEO of the Company, certify, pursuant to 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 and result of operations of the Company. /s/ Craig H. Neilsen Craig H. Neilsen Chairman, President and CEO November 14, 2002 On this 14th day of November, 2002, Craig H. Neilsen directed Connie Wilson, in his presence as well as our own, to sign the foregoing document as "Craig H. Neilsen." Upon viewing the signature as signed by Connie Wilson, and in our presence, Craig H. Neilsen declared to us that he adopted it as his own signature. /s/ JOSIE RUBIO ------------------------------------ Witness /s/ MARGENE OTTEN ------------------------------------ Witness STATE OF NEVADA ) :ss COUNTY OF CLARK ) I, Janet Catron, Notary Public in and for said county and state, do hereby certify that Craig H. Neilsen personally appeared before me and is known or identified to me to the person whose name is subscribed to the within instrument. Craig H. Neilsen, who being unable to due to physical incapacity to sign his own name or offer his mark, did direct Connie Wilson, in his presence, as well as my own, to sign the foregoing document as "Craig H. Neilsen." Craig H. Neilsen, after viewing his name as signed by Connie Wilson, thereupon adopted it as his own by acknowledging to me his intention to so adopt it as if he had personally executed the same. IN WITNESS WHEREOF, I have hereunto set my hand and official seal this 14th day of November, 2002. /s/ JANET CATRON ------------------------------------ Notary Public Residing at: Las Vegas ------------------------------------ My Commission Expires: 5/9/2005 - ----------------------- EX-99.2 8 v85734exv99w2.txt EXHIBIT 99.2 EXHIBIT 99.2 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 Quarterly Report on Form 10-Q of Ameristar Casinos, Inc. (the "Company") for the period ending September 30, 2002, as filed with the Securities and Exchange Commission on the date hereof (the "Report"), I, Thomas M. Steinbauer, Senior Vice President of Finance of the Company, certify, pursuant to 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 and result of operations of the Company. /s/ Thomas M. Steinbauer Thomas M. Steinbauer Senior Vice President of Finance November 14, 2002 -----END PRIVACY-ENHANCED MESSAGE-----

EX-10.1

                                                                    EXHIBIT 10.1

                              AMENDED AND RESTATED
               EXCURSION BOAT SPONSORSHIP AND OPERATIONS AGREEMENT

        THIS AMENDED AND RESTATED EXCURSION BOAT SPONSORSHIP AND OPERATIONS
AGREEMENT is made and entered into as of the 7th day of October, 2002, by and
between Iowa West Racing Association (hereinafter referred to as "Iowa West"),
an Iowa nonprofit corporation, and Ameristar Casino Council Bluffs, Inc.
(hereinafter referred to as "Ameristar"), an Iowa corporation.

        WHEREAS, on September 15, 1994, Iowa West and Ameristar entered into
that certain Excursion Boat Sponsorship and Operations Agreement (the
"Sponsorship Agreement"); and

        WHEREAS, paragraph 11 of the Sponsorship Agreement provides that the
initial term of the Sponsorship Agreement expires on December 31, 2002 and will
be automatically renewed unless either party gives at least six months' prior
notice of its intention not to renew the Sponsorship Agreement;

        WHEREAS, on June 28, 2002, Ameristar gave written notice to Iowa West of
its intention not to renew the Sponsorship Agreement;

        WHEREAS, the parties have since come to a mutual agreement for the
renewal of the Sponsorship Agreement on the terms set forth herein;

        WHEREAS, paragraph 14 of the Sponsorship Agreement requires that any
amendment to or modification of the Sponsorship Agreement would only be
effective if it is in writing and signed by both parties, and, if required,
approved by the Iowa Racing and Gaming Commission (the "Commission"); and

        WHEREAS, the parties do now wish to amend and restate in its entirety
the Sponsorship Agreement as hereinafter set forth.

        NOW THEREFORE, in consideration of the mutual covenants and agreements
herein contained and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, it is hereby mutually agreed as
follows:

        1. LICENSE APPLICATION. Iowa West shall, each year, or as otherwise
required, promptly and timely apply to the Commission pursuant to Chapter 99F of
the Iowa Code as a sponsor for a license to conduct gambling games. Ameristar
shall, each year, or as otherwise required, promptly and timely apply to the
Commission for a license to operate an excursion gambling boat under Chapter 99F
of the Iowa Code.

        2. CONDITIONS PRECEDENT TO SPONSORSHIP AND OPERATIONS AGREEMENT. This
Agreement shall be effective only upon the approval of this Agreement by the
Commission. The parties shall coordinate their efforts and cooperate with one
another to seek this approval as expeditiously as possible.



        3. NON-ASSIGNABILITY OF LICENSES. Neither party may assign any of its
rights, duties or obligations under any license issued by the Commission without
the prior approval of the Commission.

        4. LICENSE AGREEMENT AND OPERATION FEE.

           (a) During the term of this Agreement, Ameristar shall pay to Iowa
West an operation fee determined in accordance with the following schedule:

               (i) A fee of five percent (5%) of the Adjusted Gross Receipts
           generated by the Ameristar excursion gambling boat shall be
           applicable to the first Thirty Million Dollars ($30,000,000) of
           Adjusted Gross Receipts generated by the Ameristar excursion gambling
           boat each calendar year;

               (ii)A fee of four percent (4%) of the Adjusted Gross Receipts
           generated by the Ameristar excursion gambling boat shall be
           applicable to such Adjusted Gross Receipts in excess of Thirty
           Million Dollars ($30,000,000) up to and including Sixty Million
           Dollars ($60,000,000) each calendar year;

               (iii) A fee of three percent (3%) of the Adjusted Gross Receipts
           generated by the Ameristar excursion gambling boat shall be
           applicable to such Adjusted Gross Receipts in excess of Sixty Million
           Dollars ($60,000,000) up to and including Ninety Million Dollars
           ($90,000,000) each calendar year;

               (iv) A fee of two percent (2%) of the Adjusted Gross Receipts
           generated by the Ameristar excursion gambling boat shall be
           applicable to such Adjusted Gross Receipts in excess of Ninety
           Million Dollars ($90,000,000) up to and including One Hundred Twenty
           Million Dollars ($120,000,000) each calendar year; and

               (v) A fee of one-half of one percent (0.5%) of the Adjusted Gross
           Receipts generated by the Ameristar excursion gambling boat shall be
           applicable to such Adjusted Gross Receipts in excess of One Hundred
           Twenty Million Dollars ($120,000,000) up to and including One Hundred
           Fifty Million Dollars ($150,000,000) each calendar year.

No fee shall be payable with respect to any Adjusted Gross Receipts generated by
the Ameristar excursion gambling boat in excess of One Hundred Fifty Million
Dollars ($150,000,000) each calendar year. The operation fee shall be paid
monthly on or before the 10th day of the month following the month in which the
Adjusted Gross Receipts were generated upon which such operation fee is based.
As used herein, the term "Adjusted Gross Receipts" shall have the same meaning
as set forth in Section 99F.1(1) of the Iowa Code.

           (b) Ameristar shall be solely responsible for the payment of all
admission fees owing to the state and local governments under Section 99F.10 of
the Iowa Code or any


                                      -2-




succeeding provision, including admission fees relating to passengers with
complimentary passes. The parties agree that the fees set forth above are the
only sums to which Iowa West is entitled under this Agreement (other than
amounts payable pursuant to the indemnification provision set forth herein), and
all such fees paid to Iowa West are deemed and agreed to be subject to the
restrictions imposed by Section 99F.6(4)(a) of the Iowa Code or any succeeding
provision.

           (c) Ameristar shall pay to the Commission all the wagering taxes
imposed by Section 99F.11 of the Iowa Code or any succeeding provision.

           (d) Ameristar shall indemnify and hold Iowa West harmless from any
and all claims relating to all sums due for admission fees owing to any
government entity under Section 99F.10 of the Iowa Code or any succeeding
provision, all income or excise taxes owed to the United States or any state
government, and all wagering taxes owing to the State of Iowa under Section
99F.11 of the Iowa Code or any succeeding provision; provided, however, that
Ameristar shall have no liability or obligation to indemnify or hold Iowa West
harmless from any tax liability Iowa West may incur with respect to the monies
paid to Iowa West by Ameristar.

           5. LICENSE APPLICATION FEES AND ATTORNEYS FEES. Each party hereto
shall be responsible for its own license fees and expenses in connection with
the approval and performance of this Agreement, and any application fee required
in connection therewith, including DCI investigation fees, and its own attorneys
fees in connection with this Agreement and the license applications contemplated
hereby.

           6. IOWA WEST ORGANIZATIONAL AND GOVERNANCE REQUIREMENTS.

           (a) REPRESENTATIONS OF IOWA WEST. Iowa West represents and warrants
to Ameristar that as of the date of this Agreement: each of Iowa West, the
Foundation (defined below) and Wescorp (defined below) is a nonprofit
corporation organized, existing and in good standing under the laws of the State
of Iowa; the articles of incorporation of each of Iowa West and the Foundation
respectively authorize only a single membership in each such corporation, and
Wescorp is the sole member of each of Iowa West and the Foundation.

           (b) COVENANTS OF IOWA WEST. At all times during the term of this
Agreement following the Effective Date (as defined below), Iowa West agrees
that:

               (i) Grant Committee. Iowa West Foundation (the "Foundation")
        shall permit each operator of an excursion gambling boat or land-based
        gaming facility for which Iowa West or an affiliate serves as the
        qualified sponsoring organization (each, a "Sponsored Gaming Entity") to
        appoint one (1) representative to the Foundation's Grant Committee
        (being an advisory committee to the board of directors of the
        Foundation); provided, however, that each person so appointed must, at
        the time of appointment, have obtained the age of majority, must be a
        permanent legal resident of Pottawattamie County, Iowa (the "County"),
        and must be knowledgeable in matters concerning the City of Council
        Bluffs, Iowa (the "City") and the County and the


                                      -3-


        purposes of Iowa West and the Foundation's Grant Committee. All such
        appointees must maintain continuing permanent residency in the County in
        order to be eligible to continue to serve on such Committee. The
        Foundation may refuse to seat any such appointee who, based upon the
        reasonable and good faith determination of the Wescorp Board (as defined
        below), does not meet such requirements and any such appointee who is
        seated may be removed from the Committee if such residency is not
        maintained. If such appointee is not seated or is removed, the Sponsored
        Gaming Entity that appointed such unqualified or removed appointee,
        shall have the right to designate a qualified replacement. The
        Foundation's Grant Committee shall consist of the number of
        representatives named by the Sponsored Gaming Entities, plus an
        additional number of members equal to not less than 75% of the number of
        directors of Wescorp and not more than 100% of the number of directors
        of Wescorp. All members of the Foundation's Grant Committee, other than
        the appointees of the Sponsored Gaming Entities, shall be members of the
        Wescorp Board and shall be appointed by the Wescorp Board.

               (ii) Wescorp Board of Directors.

                    (A) Prior to the Effective Date, Iowa Wescorp Association
        ("Wescorp") shall amend its bylaws to increase the size of its board of
        directors (the "Wescorp Board") to seventeen (17) members, with the four
        new members to be selected at Wescorp's 2003 Annual Meeting (which will
        occur prior to February 1, 2003) (the "2003 Annual Meeting") as
        described below for terms commencing on the date of the 2003 Annual
        Meeting. Once a majority of the members of the Wescorp Board are
        Nominated Directors (as defined below), Wescorp may amend its bylaws to
        reduce the number of directors as and to the extent it deems such
        reduction appropriate, provided that: (1) after such reduction, the
        Wescorp Board shall continue to satisfy the requirement that a majority
        of its members be Nominated Directors; and (2) the Wescorp Board shall
        not be reduced below eleven (11) members.

                    (B) From the Effective Date until the expiration or
        termination of this Agreement, selection of each member of the Wescorp
        Board (including the re-election of sitting members eligible for
        re-election) shall be made from a pool of nominees (the "Nominated
        Pool") which will consist of:

                        (1) in the case of any board position for which a
               sitting director is eligible for re-election, desires to be
               re-elected, and is nominated by the Wescorp Board's nominating
               committee, the sitting director, and

                        (2) a minimum of three nominees for each Wescorp Board
               seat subject to election (or more nominees, if requested by
               Wescorp) identified by each Nominating Body (which nominees may
               include sitting directors eligible for re-election).


                                      -4-


        It is understood that nominations are not specific to any particular
        Wescorp Board seat in question. Any member of the Nominated Pool may be
        elected to any seat on the Wescorp Board. As used herein, the term
        "Nominating Body" or "Nominating Bodies" shall include the City Council
        of the City, the Board of Supervisors of the County, the board of
        directors of the Council Bluffs Chamber of Commerce, the Board of
        Education of the Council Bluffs Community School District, and such
        other governmental entities, civic and nonprofit organizations generally
        representative of the broad-based constituencies within the greater
        Council Bluffs/Pottawattamie County, Iowa community, if any, as may be
        selected from time to time by the Wescorp Board (it being understood
        and agreed that any nonprofit entity selected as a Nominating Body shall
        be an established nonprofit organization with broad-based community
        representation). Persons nominated by a Nominating Body who are selected
        as directors of Wescorp (whether or not they are sitting directors
        eligible for re-election) are hereinafter referred to as "Nominated
        Directors." Any sitting director who is nominated for re-election by a
        Nominating Body and is re-elected to the Board shall, from and after
        such election and continuing for so long as such director thereafter
        serves on the Board, be considered a Nominated Director, notwithstanding
        the fact that such director was not a Nominated Director prior thereto.
        All nominees must meet the minimum eligibility requirements for board
        membership set forth in subparagraph 6(b)(ii)(D) hereof. In the event
        that the Wescorp Board or its nominating committee reasonably and in
        good faith determines that any nominee nominated by a Nominating Body
        fails to meet such requirements, the Nominating Body which nominated
        such nominee shall name a replacement nominee upon the request of
        Wescorp. In the event that any Nominating Body shall fail or refuse to
        nominate the number of nominees required under subparagraph (B)(2)
        above, such failure shall not disqualify the remaining nominees (if any)
        named by such Nominating Body or any other Nominating Body; provided,
        that Wescorp may, at its option, request the remaining Nominating Bodies
        to provide nominees to fill the pool of candidates to the required
        number.

                    (C) Not later than February 1, 2003, the Wescorp Board shall
        include not less than five (5) Nominated Directors. Not later than
        February 1, 2005, the Wescorp Board shall include not less than seven
        (7) Nominated Directors. Not later than February 1, 2007, and throughout
        the remaining term of this Agreement, a majority of the members of the
        Wescorp Board shall be Nominated Directors.

                    (D) It is understood and agreed that:

                        (1) the pool of nominees named by the Nominating Bodies
               shall represent a diverse range of interests and points of view
               within the greater Council Bluffs/Pottawattamie County, Iowa
               community.

                        (2) the actual selection and terms of service of members
               of the Wescorp Board shall be governed by the Articles of
               Incorporation and Bylaws of Wescorp applicable thereto.


                                      -5-


                        (3) each nominee shall be a permanent legal resident of
               the County, shall be of legal age, shall be generally familiar
               with matters concerning the City, the County and the purposes of
               Wescorp, shall be capable, in the reasonable and good faith
               judgment of the Wescorp Board, of performing the duties of a
               director, and shall meet such other uniformly applicable
               eligibility requirements as may be established pursuant to the
               bylaws of Wescorp.

                        (4) no nominee shall be an employee, officer or elected
               official of any of the Nominating Bodies, any Sponsored Gaming
               Entity, any formally-organized special interest group or any
               formally-organized lobbying group; provided, however, that an
               employee, officer or elected official of such a special interest
               group or lobbying group shall be disqualified from the pool of
               nominees only if the Wescorp Board reasonably and in good faith
               determines that such nominee's role in or for such group involves
               an actual or potential conflict of interest with the purposes of
               Wescorp or the broad interests of the greater Council
               Bluffs/Pottawattamie County, Iowa community.

                        (5) each nominee, if selected, shall agree that he or
               she will be acting as a director in his or her capacity as a
               citizen of the community and will not be acting as a
               representative of the Nominating Body or Nominating Bodies by
               whom he or she was nominated or of any other group or
               organization.

                        (6) each nominee shall agree to submit to such
               investigations as may be required in connection with any license,
               findings of suitability or other approval required of Iowa West,
               in each case as may be required under applicable provisions of
               the Iowa Code or the rules and regulations of the Commission or
               the Iowa Department of Public Safety (or its Division of Criminal
               Investigation) in connection with such nominee's service on the
               Wescorp Board or the board of directors of either Iowa West or
               the Foundation, and any person who fails to satisfy these
               requirements may be removed from the pool of nominees.

                        (7) at no time from the date of this Agreement
               throughout the term of this Agreement shall Wescorp materially
               amend in any substantive manner, without the prior written
               consent of Ameristar or as otherwise permitted by this Agreement:
               (A) Article V, Section 1 of its bylaws as it relates to the
               length of terms of directors; (B) Article V, Section 2 of its
               bylaws as it relates to limitations on terms of service of
               directors; (C) Article V, Section 5 of its bylaws as it relates
               to the required quorum for actions of the board of directors; (D)
               Article V, Section 6 of its bylaws as it relates to the removal
               of directors, or (E) Article V, Section 3 of its bylaws relating
               to the establishment of eligibility requirements for Wescorp
               Board membership. Iowa West represents and warrants that true,
               correct and complete copies of each of such


                                      -6-


               provisions have been given to Ameristar prior to its execution of
               this Agreement.

                        (8) at no time from the date of this Agreement
               throughout the term of this Agreement shall the Foundation: have
               any member other than Wescorp; or amend its articles of
               incorporation or bylaws or adopt any resolution to provide for
               any member of the Foundation other than Wescorp, in each case
               without the prior written consent of Ameristar or as otherwise
               may be permitted by this Agreement.

                        (9) at no time from the date of this Agreement
               throughout the term of this Agreement shall Iowa West: have any
               member other than Wescorp; or amend its articles of incorporation
               or bylaws or adopt any resolution to provide for any member of
               Iowa West other than Wescorp, in each case without the prior
               written consent of Ameristar or as otherwise may be permitted by
               this Agreement.

                    (iii) Iowa West and Foundation Boards of Directors. From the
        2003 Annual Meeting and continuing throughout the term of this
        Agreement, the boards of directors of the Foundation and Iowa West,
        respectively, shall consist of nine (9) members each selected from among
        the members of the Wescorp Board. Overlap between members of the two
        boards shall be minimized to the extent numerically possible (e.g., when
        the Wescorp Board consists of seventeen (17) members and each of the
        Foundation and Iowa West boards consist of nine (9) members, the two
        boards shall have only one common board member). In the event that the
        number of directors on the Wescorp Board is reduced as provided in
        paragraph 6(b)(ii)(A) hereof, the number of members of the Iowa West and
        Foundation boards may also be reduced to a number not less than one-half
        of the number of members of the reduced Wescorp Board; provided that at
        all times after the reduction of the size of the Wescorp Board, the
        number of Wescorp Board members serving on both the Iowa West and
        Foundation boards shall continue to be minimized to the extent
        numerically possible. The number of Nominated Directors serving on each
        of the boards of Iowa West and the Foundation shall, to the extent
        numerically possible, be proportionate to the representation of the
        Nominated Directors on the Wescorp Board; provided, however, that this
        requirement shall not require any common member of both the Iowa West
        and the Foundation boards to be a Nominated Director.

                    (iv) Public Relations Committee. Wescorp shall create a
        Public Relations Committee whose membership shall consist of:

                    (A) One (1) member appointed by each Sponsored Gaming
               Entity;

                    (B) One (1) member appointed by Iowa West; and


                                      -7-


                    (C) Two (2) "at-large" members selected and approved by the
               Chairperson of Wescorp from nominees representative of the public
               to be named by each of the Sponsored Gaming Entities.

        The purpose of the Public Relations Committee shall be to advise the
        boards of directors of Iowa West and Wescorp with respect to public
        relations activities and affairs; provided, that the ultimate authority
        for making decisions with respect to such matters shall reside in the
        respective boards of directors of such entities. The Public Relations
        Committee shall meet not less frequently than quarterly and may submit
        written reports and recommendations to the Wescorp Board. The member
        appointed by Iowa West shall serve as a liaison between the Wescorp
        Board and the Public Relations Committee, and shall make oral reports to
        the Wescorp Board from time to time as requested by the Public Relations
        Committee. The Public Relations Committee shall have the opportunity to
        meet with the Wescorp Board not less frequently than once per calendar
        year.

                    (v) Delegation. Each of the Wescorp Board, the board of
        directors of Iowa West and the board of directors of the Foundation may
        delegate any of its respective authority to a committee of directors;
        provided that such delegation is approved by not less than two-thirds of
        the authorized and appointed directors of such entity; and provided
        further that the following authority may not be delegated: the authority
        of the Wescorp Board to appoint the directors of Iowa West or the
        Foundation or the members of the Foundation's Grant Committee, or the
        authority otherwise to exercise any rights of Wescorp acting in its
        capacity as the member of either Iowa West or the Foundation. The number
        of Nominated Directors serving on any such committee, other than the
        executive committee of Wescorp, shall be proportionate, to the extent
        numerically possible, to the representation of the Nominated Directors
        on the Wescorp Board.

                    (vi) Inspection Rights. Wescorp, Iowa West and the
        Foundation shall make their corporate records, including organizational
        documents and minutes and written consents, available for inspection by
        Ameristar or its counsel from time to time (but no more frequently than
        annually) upon reasonable advance written notice from Ameristar solely
        for the purpose of allowing Ameristar to determine compliance with the
        provisions of this paragraph 6. Ameristar agrees that any such
        inspection shall be on a strictly confidential basis; provided, however,
        that such obligation of confidentiality shall not limit or restrict the
        exercise by Ameristar of its rights under paragraph 6(c). Ameristar
        agrees that any such inspection shall, if requested by Iowa West, be
        conducted in the presence of a representative or representatives of Iowa
        West.

               (c) Default and Remedy. If there shall be any failure to comply
with any of the requirements of paragraph 6(b), Ameristar may give written
notice to Iowa West specifying with particularity the failure or failures to
comply. If all such specified failures are not remedied within sixty (60) days
following the giving of such notice, Ameristar may suspend making one-half of
the amount of each payment to Iowa West or its assignee under


                                      -8-


paragraph 4 of this Agreement and instead shall deposit the amount of such
suspended and withheld payments in a segregated interest-bearing escrow account
at the branch of a national or state chartered bank located in the County, until
such time as all such failures have been remedied or the termination of this
Agreement (it being understood that the remaining one-half of such fees shall
continue to be due and payable to Iowa West as provided herein). If all such
failures are cured prior to the giving by Ameristar of a notice of termination
(as provided for below), such escrowed funds, together with all interest earned
thereon, shall be released to Iowa West or its assignee. If all such specified
failures are not remedied within ninety (90) days following the giving of such
notice, Ameristar may give a written notice of termination of this Agreement to
Iowa West, which termination shall be effective on the last day of the sixth
(6th) month following the giving of the notice of termination or, if Iowa West
disputes the termination as provided below, the termination shall be effective
on the last day of the sixth (6th) month following the final determination by a
court of competent jurisdiction of Ameristar's right to terminate this
Agreement. In the event of such a termination of this Agreement while such funds
are held in escrow, all escrowed funds, together with all interest earned
thereon, shall be paid to the successor qualified sponsoring organization for
Ameristar's excursion gambling boat. If Iowa West disputes Ameristar's right to
terminate this Agreement under this paragraph and a court of competent
jurisdiction finally determines that Ameristar does not have a right to
terminate this Agreement under this paragraph, this Agreement shall continue in
full force and effect and all escrowed funds, together with all interest earned
thereon, shall be released to Iowa West or its assignee. In the event of such a
dispute, Iowa West agrees to assert its claim within thirty (30) days following
its receipt of the notice of termination from Ameristar, and both parties agree
to seek a trial date within ninety (90) days of the assertion of Iowa West's
dispute. As used in this Agreement, a determination by a court shall not become
final until the exhaustion or waiver by the losing party of all rights of
appeal.

        7. TERM OF AGREEMENT.

           (a) This Agreement shall become effective at 12:00:01 a.m. on January
1, 2003 (the "Effective Date") and shall terminate at 11:59:59 p.m. on March 31,
2010. Notwithstanding the foregoing, if the Commission changes its current
practice of issuing licenses for a one-year period from April 1 of a given year
to March 31 of the following year, the parties shall amend this Agreement to
provide for the expiration of this Agreement concurrently with the expiration
date of the licenses issued to Iowa West and Ameristar for the Ameristar
excursion gambling boat that is closest in time to the otherwise scheduled
expiration date of this Agreement. Until the Effective Date, the rights and
obligations of the parties to each other shall be governed exclusively by the
Sponsorship Agreement.

           (b) Ameristar may terminate this Agreement upon six (6) months' prior
written notice to Iowa West if Iowa law is amended to no longer require
excursion gambling boats to operate under the sponsorship of a qualified
sponsoring organization.

           (c) Iowa West agrees and acknowledges that, upon the termination of
this Agreement for any reason, whether upon the expiration without renewal of
this Agreement or


                                      -9-


otherwise, Iowa West shall, upon the written request of Ameristar, surrender to
the Commission (and all other government entities, if any) all licenses issued
by the Commission as contemplated by paragraph 1 (and all other licenses permits
and other approvals issued under the relevant provisions of the Iowa Code to
Iowa West to serve as the qualified sponsoring organization for the Ameristar
excursion gambling boat), which licenses, permits or other approvals, if any,
may be reissued to another qualified sponsoring organization without any
compensation to Iowa West from Ameristar, the State of Iowa or any other person
or entity, except for the compensation from Ameristar expressly provided for in
this Agreement. Nothing in this Agreement shall prohibit or restrict Ameristar
from entering into an agreement with another qualified sponsoring organization
for the sponsorship of the operations of the Ameristar gambling excursion boat
effective upon the expiration or termination of this Agreement for any reason.
Notwithstanding the foregoing, Iowa West shall not be required to take any
action or surrender any license, permit or other approval to the extent that the
failure to do so does not interfere with Ameristar's continuing operation of its
excursion gambling boat under the relevant provisions of the Iowa Code.

           (d) In the event that this Agreement terminates or expires at a time
at which Ameristar would be forced to cease the operation of its excursion
gambling boat because it is not able immediately thereafter to operate its
excursion gambling boat under the license and sponsorship of another qualified
sponsoring organization, Ameristar shall have the option to extend the term of
this Agreement on a month-to-month basis for up to six (6) additional months
(provided, however, that Ameristar shall pay all costs associated with such
extension, including, without limitation, Iowa West's reasonable attorneys'
fees, together with all fees and costs associated with the extension or renewal
of Iowa West's license, if necessary). If Ameristar desires to exercise this
option, it shall give written notice to Iowa West at least ten (10) days prior
to the otherwise scheduled expiration or termination date. If Ameristar
exercises this option, it thereafter may terminate this Agreement as of the end
of any subsequent calendar month on not less than five (5) days prior written
notice to Iowa West.

        8. HOLD HARMLESS AND INSURANCE REQUIREMENTS. During the term of this
Agreement, Ameristar shall indemnify, defend and hold harmless Iowa West,
Wescorp, the Foundation, and its and their officers, directors, employees, and
agents, from and against any and all liabilities, obligations, claims damages,
causes of action, cost and expenses imposed upon, incurred by, or asserted
against them by reason of all operations, whether insurable or not, for any
accident, injury to or death of persons, or loss of or damage to property
occurring on the excursion gambling boat. Ameristar further covenants and agrees
that it will at its own expense procure comprehensive public liability insurance
insuring both Ameristar and Iowa West in an amount not less than $5,000,000.00
single limit, subject to commercially reasonable deductibles or self-insured
retentions. Said liability insurance policy shall apply with respect to all
operations and functions of the excursion gambling boat that are insurable on a
commercially reasonable basis. A copy of policies of insurance protecting the
interests of Iowa West shall be forwarded directly to Iowa West.

        9. NON-EXCLUSIVITY. It is understood that Iowa West has entered into or
may enter into sponsorship agreements with other parties for the conduct of
gambling games. Iowa


                                      -10-


West has provided a true, complete and correct copy to Ameristar of each such
agreement as in force on the date of this Agreement. Ameristar agrees to
consider all information therein as confidential, except to the extent such
information is otherwise publicly available or is required to be made public in
order to enforce Ameristar's rights hereunder. Iowa West further agrees that in
the event it agrees to any amendment or modification of the material economic
terms of the existing sponsorship agreement (the "Existing Harveys Agreement")
with Harveys Iowa Management, Inc. or an affiliate thereof or any assignee
thereof or an affiliate of any assignee thereof ("Harveys") prior to the
expiration or termination thereof in a manner that is more beneficial to Harveys
than the corresponding provisions of this Agreement, Iowa West shall notify
Ameristar in writing of such amendment or modification (which notice shall
include a copy of the amendment or modification). Ameristar shall have a period
of thirty (30) days after receipt of such notice in which to elect to enter into
the same amendment or modification with respect to the corresponding terms of
this Agreement. Ameristar's election shall be exercised by written notice
delivered to Iowa West and received by Iowa West within such thirty-day period.
As used herein, the "material economic terms" of the Existing Harveys Agreement
shall be deemed to be the provisions regarding the amount or rate of fees
payable by Harveys to Iowa West (whether denominated as operating fees or
otherwise) and the provisions regarding the term of the Existing Harveys
Agreement. If during the term of this Agreement the Commission determines that
the Pottawattamie County area is not able to support two excursion gambling
boats and one land-based gambling operation at Bluffs Run Greyhound Park (or
another location), Iowa West agrees that it will adopt a position of complete
neutrality with respect to which operations should be licensed under the
sponsorship of Iowa West.

        10. IOWA WEST GAMING LICENSES/FINDINGS OF SUITABILITY IN OTHER
JURISDICTIONS. Iowa West acknowledges that Ameristar's parent company and other
current and future affiliates ("Ameristar Affiliates") possess and may obtain
additional privileged gaming licenses, findings of suitability and other
approvals (collectively, "Licenses") in various states in addition to the State
of Iowa. Pursuant to such Licenses, the Ameristar Affiliates are and will be
subject to statutes, regulations and investigative powers of agencies having
jurisdiction over gaming activities (the "Gaming Authorities"). The Ameristar
Affiliates from time to time may be required by the Gaming Authorities to report
and obtain approvals for this Agreement and the relationship of Ameristar with
Iowa West. Additionally, the Gaming Authorities are permitted to investigate
transactions in which Ameristar and the Ameristar Affiliates are engaged and may
call Iowa West and one or more of its affiliates forward for licensing, findings
of suitability and/or such other approvals as may be required by the Gaming
Authorities. Iowa West agrees to cooperate as reasonably requested in connection
with any investigation or other request by Gaming Authorities relating to such
required licenses, findings of suitability and other approvals; provided,
however, that Ameristar agrees to pay all reasonable costs and expenses in
connection with any such investigation or request. Notwithstanding the
foregoing, Ameristar shall not be obligated to pay the costs and expenses of any
investigation or other request made by the Commission, except to the extent that
such investigation or request is due to the acts or omissions of Ameristar.


                                      -11-


        11. ASSIGNABILITY.

            (a) Iowa West shall not have the right, power or authority to assign
all or any portion of this Agreement or its rights hereunder or to delegate any
duties or obligations arising under this Agreement voluntarily, involuntarily or
by operation of law, without Ameristar's prior written consent.

            (b) Ameristar shall have the right, power and authority to assign
all or any portion of this Agreement or its rights hereunder or to delegate any
duties or obligations arising under this Agreement, voluntarily, involuntarily
or by operation of law, and without Iowa West's consent to any successor
operator of Ameristar's excursion gambling boat or to any financial institution
extending credit to Ameristar in the ordinary course of business, subject only
to Commission or other governmental approval, if required.

            (c) Notwithstanding anything herein to the contrary, both parties
hereto expressly acknowledge that Iowa West may assign its rights to receive
payments hereunder to any affiliate of Iowa West, subject only to Commission
approval, if required; provided, however, that Iowa West shall remain liable for
all obligations imposed upon it under this Agreement.

        12. AMENDMENT. This Agreement may be amended or modified at any time,
but only by a writing signed by both parties and, if required, approved by the
Commission.

        13. GOVERNING LAW. This Agreement shall be governed by the laws of the
State of Iowa and the rules and regulations of the Commission, and each party
shall be responsible for its own compliance with all laws of the State of Iowa
and the rules of the Commission.

        14. REPORTS, ACCOUNTING AND AUDITING.

            (a) Iowa West and Ameristar shall prepare and file all reports,
including financial reports, as required of each such party, respectively, by
Iowa law and the rules and regulations of the Commission. In addition, each
party shall keep such books and records and have audits performed as required of
it, respectively, by Iowa law and the Commission. Each party shall be
responsible for providing at its own expense all audit and accounting services
for any reports and audits required by the Commission.

            (b) Each party agrees that the Commission and the other party to
this Agreement shall have the right to audit such party's records to the extent
necessary to provide verification of compliance under this Agreement. In the
event the Commission or either party determines that a party is not in
compliance with the terms of this Agreement, then in addition to all other
remedies provided for by law, each party shall have the right to specifically
enforce the terms and provisions of this Agreement. As between the parties to
this Agreement, the party requesting such audit shall provide reasonable advance
notice in writing of such request, and such audit shall be conducted at
reasonable times and in the presence of a representative of the party being
audited.


                                      -12-


        15. DEFAULT.

            (a) The occurrence of any one or more of the following events shall
constitute a default by a party hereunder:

                (i) Failure of the party to perform or comply in any material
        respect with any of the material duties and obligations imposed upon
        said party under the terms of this Agreement.

                (ii) The suspension or revocation of the party's license under
        Chapter 99F of the Iowa Code by the State of Iowa or the Commission.

                (iii) (A) If a party shall generally not pay its debts as they
        become due, or shall admit in writing its inability to pay its debts, or
        shall make a general assignment for the benefit of creditors; (B) if a
        party shall commence any case, proceeding or other action seeking
        reorganization, arrangement, adjustment, liquidation, dissolution or
        composition of it or its debts under any law relating to bankruptcy,
        insolvency, reorganization or relief of debtors, or seeking appointment
        of a receiver, trustee, custodian or other similar official or
        representative for it or for all or any substantial part of its
        property; (C) if a party shall take any corporate or other action to
        authorize any of the actions set forth in clause (A) or (B) above; or
        (D) if any case, proceeding or other action against a party is commenced
        seeking to have an order for relief entered against it as a debtor, or
        seeking reorganization, arrangement, adjustment, liquidation,
        dissolution or composition of it or its debts under any law relating to
        bankruptcy, insolvency, reorganization or relief of debtors, or seeking
        appointment of a receiver, trustee, custodian or other similar official
        or representative for it or for all or any substantial part of its
        property, and such case, proceeding or action (x) results in the entry
        of an order for relief against it which is not fully stayed within
        thirty (30) days after the entry thereof or (y) remains undismissed for
        a period of ninety (90) or more consecutive days.

            (b) Except as otherwise provided in this paragraph 15, (x) if one of
the acts of default described in clauses (a)(i) and (ii) occurs and is not
remedied by the defaulting party within thirty (30) days after the giving of
written notice by the non-defaulting party of said default or (y) if one of the
acts of default described in clause (a)(iii) occurs, then the non-defaulting
party shall have the right to terminate this Agreement in addition to all rights
and remedies provided at law or in equity, including without limitation specific
performance or injunctive relief.

            (c) If a default by Iowa West occurs that results in the suspension
of gambling on the Ameristar excursion gambling boat or the suspension or
revocation of any License held by any Ameristar Affiliate, and such suspension
would not have been ordered but for the default by Iowa West hereunder,
Ameristar will have available to it immediately the right to terminate this
Agreement in addition to all rights and remedies provided at law or in equity,
including without limitation specific performance or injunctive relief.
Notwithstanding any


                                      -13-


provision hereof to the contrary, Ameristar shall not be required to submit to
non-binding mediation prior to exercising its right of termination under this
clause (c).

            (d) Notwithstanding any other provision of this Agreement to the
contrary, paragraph 6(c) sets forth the exclusive remedy of Ameristar in the
event of a default under paragraph 6(b).

            (e) Except as otherwise provided herein, the remedies of the
non-defaulting party shall be cumulative, and the exercise of any one or more
remedies shall not be construed as a waiver of any other remedies. Further, no
course of dealing between the parties or failure on the part of a non-defaulting
party to exercise any right or remedy shall operate as a waiver of such right to
claim a default in the future.

        16. NON-BINDING MEDIATION OF DISPUTES. Each party agrees to enter into
non-binding mediation at the request of the other with respect to any dispute
arising under this Agreement upon the giving by Ameristar of a notice of
non-compliance under paragraph 6(c) or upon the giving of a notice of default by
a party under paragraph 15(a)(i). In the case of mediation of a dispute under
paragraph 6(c), Ameristar shall not be required to engage in mediation for more
than forty-five (45) days following the giving by Ameristar of the notice of
non-compliance under paragraph 6(c), and in the case of mediation of a dispute
under paragraph 15(a)(i), the party that gives the notice of default shall not
be obligated to engage in mediation for more than thirty (30) days following its
giving of notice of default. Any such mediation shall be conducted on a
confidential basis with a single mediator selected by the mutual agreement of
the parties, or by the American Arbitration Association if the parties are
unable to agree upon a mediator.

        17. MISCELLANEOUS PROVISIONS.

            (a) NOTICES. All notices, request, demands and other communications
hereunder shall be deemed to have been given if delivered in person or if sent
by certified mail, postage prepaid, or by fax, or by reputable overnight courier
service, to the other party at the following addresses:

               To Iowa West:                Iowa West Racing Association
                                            Attention:  Executive Director
                                            500 West Broadway
                                            Suite 100
                                            Council Bluffs, Iowa  51503
                                            Telephone:  712-325-3133
                                            Fax:  712-322-2267


                                      -14-


                  With duplicate to:    James A. Campbell
                                        Peters Law Firm, P.C.
                                        233 Pearl Street
                                        P.O. Box 1078
                                        Council Bluffs, Iowa  51502-1078
                                        Telephone:  712-328-3157
                                        Fax:  712-328-9092

           To Ameristar:                Ameristar Casino Council Bluffs, Inc.
                                        c/o Ameristar Casinos, Inc.
                                        Attention:  President and CEO
                                        3773 Howard Hughes Parkway
                                        Suite 490 S
                                        Las Vegas, Nevada  89109
                                        Telephone:  702-567-7000
                                        Fax:  702-369-8860

or to such other address or such other person as a party shall have last
designated by notice to the other party. All notices shall be deemed to be given
when received. All notices given by fax shall be confirmed by the delivery of a
copy thereof by another permitted means of delivery, provided that such notice
shall be deemed to have been given when received by fax.

            (b) RELATIONSHIP OF PARTIES. Nothing in this Agreement shall be
construed to create a partnership between the parties, a relationship of
employer and employee between the parties, or a relationship of principal and
agent between the parties.

            (c) AUTHORIZATION. Each party represents and warrants to the other
that this Agreement has been duly authorized on its behalf and that this
Agreement is the valid, binding and enforceable agreement of such party.

            (d) NONPROFIT AND TAX EXEMPT STATUS. Notwithstanding any provision
of this Agreement to the contrary, it is understood and agreed that if, in the
opinion of counsel to Iowa West (such counsel to be competent in matters
concerning tax-exempt organizations and related matters), any change in law or
regulation (whether by statute, regulation, judicial ruling, administrative
ruling or otherwise) enacted, adopted or promulgated following the date of this
Agreement prohibits or restricts the ability of Iowa West, Wescorp or the
Foundation to (i) comply with any of its obligations under paragraph 6(b) and
(ii) satisfy applicable requirements for the maintenance of its status as (A) an
Iowa nonprofit corporation, and (B) a corporation which is exempt from federal
income taxation as an organization described in Section 501(c)(3) of the
Internal Revenue Code of 1986, as amended (the "Code"), and (C) an organization
that is not a private foundation in accordance with Section 509(a) of the Code,
then the parties shall meet and confer in good faith to consider amending this
Agreement to preserve the status of Iowa West, Wescorp and


                                      -15-


the Foundation while at the same time materially maintaining the protections
provided for in paragraph 6(b). If both such objectives cannot be achieved
through a mutually acceptable amendment, then Iowa West, Wescorp and the
Foundation shall not be required to comply with paragraph 6(b) to the extent
necessary to maintain their respective statuses described above, but Ameristar
may, at its option, terminate this Agreement on not less than six (6) months
written notice to Iowa West. If requested by Ameristar, the opinion of counsel
to Iowa West shall be a written opinion addressed jointly to Iowa West and
Ameristar.

            (e) SUCCESSORS AND ASSIGNS. This Agreement, and all of the
obligations, duties and rights of the parties hereunder shall inure to and be
binding upon the heirs, successors and permitted assigns of the parties.

            (f) COMPLETE AGREEMENT. Subject to the last sentence of paragraph
7(a) of this Agreement, this Agreement embodies the entire agreement between the
parties and supersedes all prior oral and written proposals and communications.

            (g) COUNTERPARTS. This Agreement may be executed in multiple
counterparts, and if so executed, each such counterpart is deemed an original
for all purposes, and all such counterparts shall collectively constitute one
agreement.

            (h) TIME IS OF THE ESSENCE. Time is of the essence in the
performance of this Agreement and each and every provision contained herein.

            (i) CONSTRUCTION. This Agreement shall be construed to comply with
all applicable Iowa laws, Commission rules and regulations relating to excursion
boat gambling, and may be amended from time to time in order to comply with such
laws, Commission rules and regulations; provided, however, that no such
amendment shall materially and adversely affect the rights and obligations of a
party without such party's written consent.

            (j) HEADINGS. Paragraph headings herein are for reference purposes
only.

        IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first above written at Council Bluffs, Iowa.

IOWA WEST RACING ASSOCIATION               AMERISTAR CASINO COUNCIL BLUFFS, INC.



By: /s/ Charles L. Smith                   By: /s/ Gordon R. Kanofsky
    ---------------------------------          ---------------------------------
    President                                  Vice President

By: /s/ Joseph D. Lehan
   ----------------------------------
   Vice President


                                      -16-

EX-10.2

                                                                    EXHIBIT 10.2

                    AMENDMENT NO. 2 TO EMPLOYMENT AGREEMENT

        THIS AMENDMENT NO. 2 TO EMPLOYMENT AGREEMENT (this "Amendment") is made
and entered into as of the 15th day of August 2002 by and between AMERISTAR
CASINOS, INC., a Nevada corporation (the "Employer"), and THOMAS M. STEINBAUER
(the "Employee") for the purpose of amending that certain Employment Agreement
dated November 15, 1993 between the parties, as amended by that certain
Amendment No. 1 to Employment Agreement dated October 5, 2001 between the
parties (the "Agreement"). Unless otherwise required by the context, capitalized
terms used herein without definition have the same meaning as used in the
Agreement. This Amendment has been authorized and approved by the Board of
Directors of the Employer and the Compensation Committee of the Board of
Directors of the Employer.

        1. AMENDMENT OF SECTION 5.5(b) OF THE AGREEMENT. Section 5.5(b) of the
Agreement is hereby amended by deleting clauses (3) and (4) thereof in their
entirety and replacing them with the following:

           "(3) the Employer shall pay to the Employee a pro rata portion of his
        bonus for the 2002 calendar year, using an assumed bonus amount for the
        entire 2002 calendar year of $125,000 on which to base the pro rated
        bonus amount; provided, however, that this clause (3) shall not apply in
        the event that Employee terminates his employment pursuant to clause (e)
        of Section 5.3;

           (4) notwithstanding any contrary provisions of any stock option
        agreements between the Employer and the Employee:

               (A) such options shall terminate upon the later of one year after
           the termination date of Employee's employment with the Employer and
           90 days after the termination of any other qualifying relationship
           between the parties (e.g., a consulting relationship) unless the
           Employee has resumed or initiated a qualifying relationship and has
           such a qualifying relationship on such date. During such period, the
           Employee may exercise such options provided that any such option has
           not expired in accordance with its terms or has otherwise terminated
           as provided in the applicable stock option agreement;

               (B) all unvested options granted to the Employee prior to 2000
           shall be deemed fully vested as of July 31, 2002; and

               (C) the vesting of the option exercisable for 20,000 shares
           granted on October 16, 2000 by the Employer to the Employee shall be
           accelerated with respect to 7,200 of such shares, and such option
           shall be deemed fully vested with respect to such 7,200 shares on
           July 31, 2002 (in addition to the vesting of such option with respect
           to 4,000 shares on October 16, 2001, as provided in the applicable
           stock option agreement); and".


                                      -1-


        2. ACKNOWLEDGMENT BY THE EMPLOYEE. The Employee represents and
acknowledges the following:

           (a) he has carefully read the Agreement and this Amendment in their
        entirety;

           (b) he understands the terms and conditions contained therein and
        herein;

           (c) he has had the opportunity to review this Amendment with legal
        counsel of his own choosing, and has done so or has knowingly chosen not
        to do so, and has not relied on any statements made by the Employer or
        its legal counsel as to the meaning of any term or condition contained
        in the Agreement and this Amendment or in deciding whether to enter into
        this Amendment; and

           (d) he is entering into this Amendment knowingly and voluntarily.

        3. AGREEMENT REMAINS IN FULL FORCE AND EFFECT. Except as modified
hereby, the Agreement remains in full force and effect.

        IN WITNESS WHEREOF, the parties have executed this Amendment as of the
day and year first above written.

                                  EMPLOYER:
                                  AMERISTAR CASINOS, INC.



                                  By:  /s/ Gordon R. Kanofsky
                                       -----------------------------------------
                                       Gordon R. Kanofsky
                                       Executive Vice President



                                  EMPLOYEE:

                                  /s/ Thomas M. Steinbauer
                                  -----------------------------------------
                                  Thomas M. Steinbauer


                                      -2-

EX-10.3

                                                                   EXHIBIT 10.3

                       AMENDMENT TO AMENDED AND RESTATED
                         EXECUTIVE EMPLOYMENT AGREEMENT

        THIS AMENDMENT TO AMENDED AND RESTATED EXECUTIVE EMPLOYMENT AGREEMENT
(this "Amendment") is made and entered into as of August 16, 2002, by and
between Ameristar Casinos, Inc., a Nevada corporation (the "Company"), and
Gordon R. Kanofsky (the "Executive").

        WHEREAS, the Company and the Executive are parties to an Amended and
Restated Executive Employment Agreement, dated as of March 11, 2002 (the
"Agreement"); and

        WHEREAS, the Company and the Executive desire to amend the Agreement in
certain respects as more particularly set forth in this Amendment.

        NOW, THEREFORE, in consideration of the foregoing and for other good and
valuable consideration, the Company and the Executive agree as follows:

        1. Amendment to Section 6.4(h). Section 6.4(h) of the Agreement is
hereby amended by (i) deleting the word "primary" preceding the phrase "group
health insurance" and (ii) deleting the word "excluding" preceding the phrase
"Exec-U-Care or substitute benefits" and replacing it with the word "including".

        2. Amendment to Section 6.5(h). Section 6.5(h) of the Agreement is
hereby amended by (i) deleting the word "primary" preceding the phrase "group
health insurance" and (ii) deleting the word "excluding" preceding the phrase
"Exec-U-Care or substitute benefits" and replacing it with the word "including".

        3. Amendment to Section 7.2(h). Section 7.2(h) of the Agreement is
hereby amended by (i) deleting the word "primary" preceding the phrase "group
health insurance" and (ii) deleting the word "excluding" preceding the phrase
"Exec-U-Care or substitute benefits" and replacing it with the word "including".

        4. Confirmation. Except as amended pursuant to this Amendment, the terms
of the Agreement shall continue in full force and effect.

        IN WITNESS WHEREOF, the undersigned have executed this Amendment as of
the date first written above.

AMERISTAR CASINOS, INC.                     EXECUTIVE:

By: /s/ Peter C. Walsh                       /s/ Gordon R. Kanofsky
   ------------------------------------     -----------------------------------
Name:   Peter C. Walsh                      GORDON R. KANOFSKY
Title:  Senior Vice Presidentand
        General Counsel

EX-10.4

                                                                    EXHIBIT 10.4

                  AMENDMENT TO EXECUTIVE EMPLOYMENT AGREEMENT

        THIS AMENDMENT TO EXECUTIVE EMPLOYMENT AGREEMENT (this "Amendment") is
made and entered into as of August 16, 2002, by and between Ameristar Casinos,
Inc., a Nevada corporation (the "Company"), and Peter C. Walsh (the
"Executive").

        WHEREAS, the Company and the Executive are parties to an Executive
Employment Agreement, dated as of March 13, 2002 (the "Agreement"); and

        WHEREAS, the Company and the Executive desire to amend the Agreement in
certain respects as more particularly set forth in this Amendment.

        NOW, THEREFORE, in consideration of the foregoing and for other good and
valuable consideration, the Company and the Executive agree as follows:

        1. Amendment to Section 6.4(g). Section 6.4(g) of the Agreement is
hereby amended by (i) deleting the word "primary" preceding the phrase "group
health insurance" and (ii) deleting the word "excluding" preceding the phrase
"Exec-U-Care or substitute benefits" and replacing it with the word "including".

        2. Amendment to Section 6.5(g). Section 6.5(g) of the Agreement is
hereby amended by (i) deleting the word "primary" preceding the phrase "group
health insurance" and (ii) deleting the word "excluding" preceding the phrase
"Exec-U-Care or substitute benefits" and replacing it with the word "including".

        3. Amendment to Section 7.2(g). Section 7.2(g) of the Agreement is
hereby amended by (i) deleting the word "primary" preceding the phrase "group
health insurance" and (ii) deleting the word "excluding" preceding the phrase
"Exec-U-Care or substitute benefits" and replacing it with the word "including".

        4. Confirmation. Except as amended pursuant to this Amendment, the terms
of the Agreement shall continue in full force and effect.

        IN WITNESS WHEREOF, the undersigned have executed this Amendment as of
the date first written above.

AMERISTAR CASINOS, INC.                     EXECUTIVE:

By: /s/ Gordon R. Kanofsky                  /s/ Peter C. Walsh
   -----------------------------------       -----------------------------------
Name:   Gordon R. Kanofsky                  PETER C. WALSH
Title:  Executive Vice President

EX-99.1

                                                                    EXHIBIT 99.1

                            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 Quarterly Report on Form 10-Q of Ameristar
Casinos, Inc. (the "Company") for the period ending September 30, 2002, as filed
with the Securities and Exchange Commission on the date hereof (the "Report"),
I, Craig H. Neilsen, Chairman, President and CEO of the Company, certify,
pursuant to 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 and result of operations of the
        Company.

                                            /s/ Craig H. Neilsen

                                            Craig H. Neilsen
                                            Chairman, President and CEO
                                            November 14, 2002


On this 14th day of November, 2002, Craig H. Neilsen directed Connie Wilson, in
his presence as well as our own, to sign the foregoing document as "Craig H.
Neilsen." Upon viewing the signature as signed by Connie Wilson, and in our
presence, Craig H. Neilsen declared to us that he adopted it as his own
signature.


                                            /s/ JOSIE RUBIO
                                            ------------------------------------
                                            Witness

                                            /s/ MARGENE OTTEN
                                            ------------------------------------
                                            Witness

STATE OF NEVADA       )
                      :ss
COUNTY OF CLARK       )

        I, Janet Catron, Notary Public in and for said county and state, do
hereby certify that Craig H. Neilsen personally appeared before me and is known
or identified to me to the person whose name is subscribed to the within
instrument. Craig H. Neilsen, who being unable to due to physical incapacity to
sign his own name or offer his mark, did direct Connie Wilson, in his presence,
as well as my own, to sign the foregoing document as "Craig H. Neilsen." Craig
H. Neilsen, after viewing his name as signed by Connie Wilson, thereupon adopted
it as his own by acknowledging to me his intention to so adopt it as if he had
personally executed the same.

        IN WITNESS WHEREOF, I have hereunto set my hand and official seal this
14th day of November, 2002.

                                            /s/ JANET CATRON
                                            ------------------------------------
                                            Notary Public

                                            Residing at: Las Vegas
                                            ------------------------------------

My Commission Expires:

5/9/2005
- -----------------------

EX-99.2

                                                                    EXHIBIT 99.2

                            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 Quarterly Report on Form 10-Q of Ameristar
Casinos, Inc. (the "Company") for the period ending September 30, 2002, as filed
with the Securities and Exchange Commission on the date hereof (the "Report"),
I, Thomas M. Steinbauer, Senior Vice President of Finance of the Company,
certify, pursuant to 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 and result of operations of the
        Company.

                                     /s/ Thomas M. Steinbauer

                                     Thomas M. Steinbauer
                                     Senior Vice President of Finance
                                     November 14, 2002