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SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K

(Mark One)

For the fiscal year ended December 31, 2004

OR

Commission file number: 1-12882

BOYD GAMING CORPORATION

(Exact name of registrant as specified in its charter)

2950 Industrial Road, Las Vegas NV 89109

(Address of principal executive offices) (Zip Code)

(702) 792-7200

(Registrant’s telephone number, including area code)

Securities Registered Pursuant to Section 12(b) of the Act:

Securities Registered Pursuant to Section 12(g) of the Act:

None

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 than the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x    No ¨

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. ¨

Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Act). Yes x    No ¨

As of June 30, 2004, the aggregate market value of the voting stock held by non-affiliates of the Registrant, based on the closing price on the New York Stock Exchange for such date, was approximately $960,991,000.

As of February 28, 2005, the Registrant had outstanding 87,758,222 shares of Common Stock.

Documents Incorporated by Reference into Parts I — III

Portions of the definitive Proxy Statement for the Registrant’s 2005 Annual Meeting of Stockholders to be filed pursuant to Regulation 14A within 120 days after the Registrant’s fiscal year end of December 31, 2004 are incorporated by reference into Part III of this report.

Table of Contents

Boyd Gaming Corporation 2004 Annual Report on Form 10-K

Table of Contents

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Part I

ITEM 1.  Business

Overview

We are a multi-jurisdictional gaming company that has been operating for 30 years. Our 17 wholly-owned casino facilities, which we operate, are located in nine distinct gaming markets in five states.

We currently own and operate eleven properties in or near Las Vegas, Nevada:

We also own and operate six properties outside the State of Nevada:

We and MGM MIRAGE each own 50% of a limited liability company that owns and operates Borgata Hotel Casino and Spa, a $1.1 billion destination resort located at Renaissance Pointe in Atlantic City, New Jersey. Borgata commenced operations on July 3, 2003.

On July 1, 2004, we consummated a $1.3 billion merger with Coast Casinos, Inc., or Coast, pursuant to which Coast became a wholly-owned subsidiary of Boyd Gaming Corporation. The Coast stockholders received approximately $482 million in cash, and the Coast stock and option holders received approximately 19.4 million shares of our common stock valued at $19.08 per share. In connection with the merger, we refinanced substantially all of Coast’s debt.

On May 19, 2004, we acquired from Harrah’s all of the outstanding limited and general partnership interests of the partnership that owns the Shreveport Hotel and Casino in Shreveport, Louisiana, for approximately $197 million. After the acquisition, we renamed the property Sam’s Town Hotel and Casino, and we refer to the property as Sam’s Town Shreveport.

As of December 31, 2004 and including Borgata, we owned an aggregate of approximately one million square feet of casino space, containing 27,644 slot machines and 725 table games. We derive the majority of our gross revenues from our gaming operations, which produced 75%, 77% and 77%, respectively, of gross revenues for the years ended December 31, 2004, 2003 and 2002. Food and beverage revenues, which produced 12.9%, 11.9% and 11.7%, respectively, of gross revenues for the years ended December 31, 2004, 2003 and 2002, represent the only other revenue source which produced more than 10% of gross revenues for these time frames.

For further information related to our segment information for revenues, net income and total assets as of and for the three years in the period ended December 31, 2004, see Note 17 to our Consolidated Financial Statements presented at Item 15. “Exhibits and Financial Statement Schedules.”

Business Strategy and Competitive Strengths

We believe that the following factors have contributed to our success in the past and are central to our future success:

Properties

Las Vegas Locals — Boulder Strip Properties

Sam’s Town Hotel and Gambling Hall

The Property.  Sam’s Town Las Vegas is situated on 63 acres of land we own on the Boulder Strip, approximately six miles east of the Las Vegas Strip. Sam’s Town features a 133,000-square foot casino and a state-of-the-art 56-lane bowling center. The gaming facilities include approximately 2,868 slot machines and 40 table games, a race and sports book, keno and bingo and poker areas. The property has 648 guest rooms, eleven restaurants, a small food outlet, an ice cream parlor, 500 spaces for recreational vehicles and approximately 3,800 parking spaces. The resort features a 25,000-square foot atrium that contains extensive foliage and trees, streams, bridges and a waterfall with a laser light show. The property also offers an eighteen-screen movie theatre complex with stadium seating, an arcade, a pool, and an 11,200 square foot multi-purpose event center for concerts and meetings. For 2004, the occupancy rate and average daily room rate at Sam’s Town Las Vegas were approximately 94% and $49.

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Sam’s Town Las Vegas has a contemporary western theme. Its informal, friendly atmosphere appeals to both local residents and visitors alike. Gaming, bowling and live entertainment create a social center that attracts many Las Vegas residents. The property sponsors a NASCAR event at the Las Vegas Motor Speedway that is televised nationally. The property attracts a mix of tourists and local market patrons, many of whom are repeat customers, by offering excellent values in its food and beverage operations, and slot marketing programs that include generous slot payouts. The popularity of Sam’s Town Las Vegas among local residents allows it to benefit from the rapid development of the Las Vegas metropolitan area, which has been one of the fastest growing cities in the United States over the last decade.

Eldorado Casino

The Eldorado is situated on four acres of land we own in downtown Henderson, Nevada, which is approximately 14 miles from the Las Vegas Strip. The casino has 16,000 square feet of gaming space featuring approximately 513 slot machines and nine table games, as well as keno, bingo and a sports book. The facility also offers three restaurants, a children’s arcade and a parking garage for up to 500 cars. The principal customers of the Eldorado are Henderson residents.

Jokers Wild Casino

Jokers Wild is situated on 13 acres of land we own in Henderson, Nevada. The property offers 22,500 square feet of casino space with approximately 536 slot machines and nine table games, as well as keno, live poker and a sports book. The facility also offers a restaurant, a buffet, an entertainment lounge, a sports bar, a video arcade and approximately 800 parking spaces. Jokers Wild serves both local residents and visitors to the Las Vegas area traveling on the Boulder Highway.

Boulder Strip — Market Overview

Casinos in the Boulder Strip market generally target local residents, are less dependent upon Las Vegas visitor volumes and emphasize slot play as their major source of revenue. This emphasis on slot play at these properties reduces the risks associated with more volatile high-end table play.

Las Vegas —Coast Casinos Properties

Barbary Coast Hotel and Casino

The Property.  Barbary Coast is located on four acres of land, nearly two acres of which are leased, at the intersection of Flamingo Road and Las Vegas Boulevard, one of the busiest intersections on the Strip, along with Caesars Palace, Bally’s Las Vegas and Bellagio. Historically, Barbary Coast has relied on foot traffic on the Las Vegas Strip for a significant amount of its revenues. As a result, Barbary Coast’s primary customer base is visitors to the Las Vegas area. In addition to its favorable location on the Strip, Barbary Coast has also benefited from its more intimate gaming atmosphere, allowing it to develop a loyal base of table games and slot customers. Barbary Coast features an approximately 30,000 square foot casino, including approximately 548 slot machines, 36 table games, a race and sports book and other amenities. Our eight-story tower includes 197 spacious rooms and suites. Barbary Coast is furnished and decorated in an elegant turn-of-the-century Victorian theme and includes three bars and three restaurants: Michael’s gourmet restaurant, Drai’s on the Strip (leased to and operated by a third party) and the Victorian Room. From July 1, 2004, the date of the merger, through December 31, 2004, the occupancy rate and average daily room rate at Barbary Coast were approximately 89% and $71.

We have recently begun the process of assembling a team of professionals to evaluate the Barbary Coast site and the Las Vegas market to assist in the creation of a redevelopment plan for the site. As we are in the very early planning process, we currently do not have any significant details surrounding this potential future development.

Gold Coast Hotel and Casino

The Property.  Gold Coast is located on 26 acres of land we own on West Flamingo Road, approximately one mile west of the Las Vegas Strip and one-quarter mile west of Interstate 15, the major highway linking Las Vegas and Southern California. Its location offers easy access from all four directions in the Las Vegas valley. Gold Coast features an approximately 87,000 square foot casino, including approximately 2,052 slot machines, 48 table games, a keno lounge, a 700-seat bingo parlor, a 160-seat race and sports book and an eight table poker room. Our eleven-story tower includes 711 hotel rooms and suites, a swimming pool and fitness center. Gold Coast also features four full-service restaurants, a multi-station buffet restaurant, a fast-food restaurant, a snack bar, a coffee bar and an ice cream parlor. Entertainment amenities include a 70-lane bowling center, approximately 28,000 square feet of banquet and meeting facilities, four bars, an entertainment lounge and a showroom/dance hall with live musical entertainment. Other amenities include a gift shop, a liquor store, a beauty salon, a barbershop, a childcare facility and approximately 3,000 parking spaces. From July 1, 2004, the date of the merger, through December 31, 2004, the occupancy rate and average daily room rate at Gold Coast were approximately 92% and $52.

The Orleans Hotel and Casino

The Property.  The Orleans is located on 77 acres of leased land on Tropicana Avenue, a short distance from the Las Vegas Strip and McCarran International Airport. The Orleans provides an upscale, off-Strip experience in an exciting New Orleans French Quarter-themed environment. The Orleans features an approximately 135,000 square foot casino, including approximately 3,000 slot machines, 68 table games, a keno lounge, a 23 table poker parlor and 150-seat race and sports books. Other amenities include a spa and fitness center, 18 stadium-seating first-run movie theaters, a 70-lane bowling center, approximately 40,000 square feet of banquet and meeting facilities, including an approximately 17,000 square foot grand ballroom, seven full-service restaurants and a multi-station buffet, two fast food restaurants, specialty themed bars, a swimming pool, a barber shop, a beauty salon, a childcare facility, a video arcade and approximately 8,000 parking spaces. The Orleans’ 850-seat showroom features headliner entertainment and other special events, and the special events arena seats up to 9,500 patrons. From July 1, 2004, the date of the merger, through December 31, 2004, the occupancy rate and average daily room rate at The Orleans were approximately 94% and $63.

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In the fourth quarter of 2004, we completed the construction of a new hotel tower at The Orleans. The project included 461 hotel rooms, which increased the total number of hotel rooms to 1,885, and a remodeled and expanded swimming pool area.

Suncoast Hotel and Casino

The Property.  Suncoast serves one of the fastest growing areas of the Las Vegas valley and is located on approximately 49 acres of leased land in Peccole Ranch, a master-planned community adjacent to Summerlin. Suncoast is located at the intersection of Rampart Boulevard and Alta Drive, readily accessible from most major points in Las Vegas, including downtown (approximately eight miles) and the Strip (approximately nine miles). Suncoast is a Mediterranean-themed facility featuring approximately 82,000 square feet of casino space, including approximately 2,423 slot machines, 52 table games, a 150-seat race and sports book and a 600-seat bingo parlor. Suncoast has 419 spacious hotel rooms and suites, approximately 25,000 square feet of banquet and meeting facilities, 16 stadium-seating movie theaters, five full-service restaurants, a multi-station buffet restaurant, a 64-lane bowling center, a swimming pool and approximately 6,000 parking spaces. From July 1, 2004, the date of the merger, through December 31, 2004, the occupancy rate and average daily room rate at Suncoast were approximately 80% and $86.

Coast Casinos — Market Overview

Las Vegas is one of the fastest growing entertainment markets in the United States and, with its robust economy and favorable demographics, one of the strongest gaming markets. The primary target market for Gold Coast and Suncoast consists of local middle-market customers who gamble frequently. Coast Casinos seeks to attract and retain these customers through easy access, a friendly atmosphere, a value-oriented gaming product and a wide variety of non-gaming amenities. Construction is underway at a new hotel casino that is approximately three miles away from Suncoast. In early 2006 when this new casino opens, it will compete directly with Suncoast and could have a material adverse impact on the operations of Suncoast.

In addition to the growing local resident market, Las Vegas is one of the fastest growing entertainment markets in the United States. Barbary Coast’s customer base is primarily comprised of visitors to the Las Vegas area. The target markets for The Orleans are both local residents and visitors to the Las Vegas area.

Las Vegas Strip — Stardust Resort and Casino

The Property.  The Stardust is a casino hotel complex with approximately 75,000 square feet of casino space, a conference center with approximately 35,000 square feet of meeting space, a 40,000 square foot special event pavilion/exhibit center and the 950-seat Wayne Newton Theatre. The property site consists of 72 acres of land on the Las Vegas Strip. We own 63 acres of this land, including a 13-acre site acquired in November 2004 that is currently occupied by a motel. The casino offers approximately 1,237 slot machines, 61 table games as well as keno and poker. It also has a well-known race and sports book that is the home of the Stardust line, a sports line service that is quoted throughout the United States and abroad. The Stardust features a 32-story hotel tower and has 1,552 guest rooms. The Stardust complex is distinguished by its dramatic building lighting and has five restaurants, two small food outlets, a shopping arcade, two swimming pools and parking spaces for approximately 2,400 cars. For 2004, the occupancy rate and average daily room rate at the Stardust were approximately 91% and $59.

Marketing Overview.  The property caters primarily to adult Las Vegas visitors seeking the classic Las Vegas gaming experience. Using its extensive database, the property promotes customer loyalty and generates repeat customer business by communicating with its customers regarding special events, new product offerings and special incentive promotions at the property. The Stardust uses a network of tour operators and wholesalers to reach customers who prefer packaged trips, and print and broadcast media to attract the independent traveler. It also attracts proven slot and table game players through direct mail promotions for tournaments, events and a variety of special offers. In addition to walk-in customers, the Stardust also attracts meeting, banquet and exhibit business. Patrons of the property are primarily from Southern California, Arizona and the Midwest.

Recently, we have begun the process of assembling a team of professionals to evaluate the Stardust site and the Las Vegas market to assist in the creation of a master plan for the entire 63 acres of owned land. As we are in the very early planning process, we currently do not have any significant details surrounding this potential future development.

Downtown Las Vegas Properties

California Hotel and Casino

The California is situated on 13.9 acres of land we own and 1.6 acres of land we lease in downtown Las Vegas. It has 36,000 square feet of gaming space, 781 guest rooms, four restaurants, a snack bar, an ice cream parlor, approximately 5,000 square feet of meeting space and more than 800 parking spaces, including a parking garage for up to 425 cars. The casino offers approximately 1,114 slot machines and 34 table games, as well as a sports book and keno. For 2004, the occupancy rate and average daily room rate at the California were approximately 93% and $32.

Fremont Hotel and Casino

The Fremont is situated on 1.4 acres of land we own and 0.9 acres of land we lease adjacent to the principal pedestrian thoroughfare in downtown Las Vegas known as the Fremont Street Experience. The property has 32,000 square feet of casino space and includes 1,095 slot machines and 25 table games, keno, as well as a race and sports book. The hotel has 447 guest rooms and five restaurants, including the Second Street Grill, an upscale contemporary restaurant, and the Paradise Buffet, which features tropical-themed surroundings. The property also has approximately 8,200 square feet of meeting space and a parking garage for up to 350 cars. For 2004, the occupancy rate and average daily room rate at the Fremont were approximately 93% and $34.

Main Street Station Casino, Brewery and Hotel

Main Street Station is situated on fifteen acres of land we own in downtown Las Vegas. The property includes 28,500 square feet of gaming space with approximately 890 slot

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machines and 19 table games. The property also includes 406 hotel rooms, a 475-seat buffet, a 125-seat specialty restaurant, a 200-seat brewpub and oyster bar and parking for over 2,000 cars. We also have a 96-space recreational vehicle park, the only such facility in the downtown area. For 2004, the occupancy rate and average daily room rate at Main Street Station were approximately 93% and $35.

Our Unique Downtown Niche.  We have developed a distinct niche for our downtown properties by focusing on customers from Hawaii. Our marketing strategy for the downtown properties targets gaming enthusiasts from Hawaii and tour and travel agents in Hawaii with whom we have cultivated relationships since we opened the California in 1975. Through our Hawaiian travel agency, Vacations Hawaii, we currently operate six wide-body charter flights from Honolulu to Las Vegas each week, helping to ensure a stable supply of reasonably priced air seats. Vacations Hawaii operates with an agreement with Omni Air International to provide direct air service from Hawaii to Las Vegas. We also have strong, informal relationships with other Hawaiian travel agencies and offer affordable all-inclusive packages. These relationships combined with our Hawaiian promotions have allowed the California, the Fremont and Main Street Station to capture a significant share of the Hawaiian tourist trade in Las Vegas.

We believe that for more than twenty-five years the California, and more recently the Fremont and Main Street Station, have been the leading Las Vegas destinations for visitors from Hawaii. We attribute this success to the amenities and atmosphere at the properties, which are designed to appeal specifically to visitors from Hawaii, and to our marketing strategy featuring significant promotions in Hawaii and a bi-monthly newsletter circulated to approximately 94,000 households, primarily in Hawaii. For the year ended December 31, 2004, patrons from Hawaii comprised approximately 69% of the occupied room nights at the California, 60% of the occupied room nights at the Fremont and 58% of the occupied room nights at Main Street Station.

Downtown Las Vegas — Market Overview

The downtown Las Vegas market is located approximately three miles from the Stardust. The Fremont Street Experience is a five-block long pedestrian mall that draws millions of customers to it each year with numerous fine dining venues, a variety of retail attractions and the uniqueness of having the world’s largest LED canopy screen that measures 1,500 feet long by 90 feet high, incorporates over 12 million LED lamps, and shows fun and entertaining light and sound shows several times on a nightly basis. In addition, a large parcel of land adjacent to Main Street is in the process of being developed and is expected to include a performing arts center and medical, residential and commercial components.

Central Region Properties

Sam’s Town Hotel and Gambling Hall

The Property.  Sam’s Town Tunica is located on 272 acres in Tunica County, Mississippi. The Sam’s Town Tunica complex includes a 75,000-square foot casino, a hotel featuring 801 rooms and 44 suites, a recreational-vehicle park and a 1,000-car parking garage. The casino offers approximately 1,397 slot machines, 46 table games, a 10-table poker room and the only live keno game in the market. The property has extensive amenities, including an entertainment lounge, four restaurants, two casino bars, a specialty shop, and the 1,650-seat River Palace Arena. For 2004, the occupancy rate and average daily room rate at Sam’s Town Tunica were approximately 74% and $49.

In 2002, we acquired the former Isle of Capri property, located next door to Sam’s Town Tunica. The 225 hotel room portion of the facility is currently being operated to accommodate demand during busy periods. Sam’s Town Tunica and two other neighboring casino properties are each one-third partners in an entity that owns River Bend Links, an eighteen-hole championship golf course.

Market Overview.  Tunica is the closest gaming market to Memphis, Tennessee and is located off of State Highway 61, approximately 30 miles south of Memphis. The adult population within a 200-mile radius is over three million people and includes the cities of Nashville and Memphis, Tennessee; Jackson, Mississippi and Little Rock, Arkansas.

Par-A-Dice Hotel and Casino

The Property.  Par-A-Dice is a riverboat casino operating dockside on the Illinois River, in East Peoria, Illinois. The Par-A-Dice riverboat measures 240 feet long and 66 feet wide and features 26,000 square feet of gaming space on four levels. The casino has 1,172 slot machines and 21 table games. Located adjacent to the Par-A-Dice riverboat is a land-based pavilion that features three restaurants and a gift shop. Also located on Par-A-Dice’s 20 acres of land we own is a 208-room hotel with a cocktail lounge and 20,000 square feet of banquet and meeting space. For 2004, the occupancy rate and average daily room rate at Par-A-Dice were approximately 90% and $52.

Market Overview.  East Peoria, Illinois is approximately 170 miles southwest of Chicago, Illinois and 170 miles north of St. Louis, Missouri. Par-A-Dice is strategically located within three-quarters of a mile from Interstate 74, a major east-west interstate highway. Par-A-Dice is the only gaming facility located within approximately 90 miles of Peoria, Illinois. On July 1, 2002, Par-A-Dice began paying higher gaming taxes pursuant to new legislation in Illinois. In July 2003, the tax rate was again increased. The July 2003 increase contains a provision for the termination of the new taxes, returning them to pre-July 2003 levels, commencing upon July 1, 2005 or the award and opening of the tenth Illinois casino license, whichever transpires first. For more information, see “Governmental Gaming Regulations – Illinois” at Exhibit 99.1 that is incorporated herein by reference.

Treasure Chest Casino

The Property.  Treasure Chest is a dockside casino located on 14 acres of leased land in the western suburbs of New Orleans, Louisiana. The property is designed as a classic 18th-century Victorian-style paddle-wheel riverboat. The riverboat has a total capacity for 1,750 people, and contains approximately 24,000 square feet of casino space, 970 slot machines and 40 table games. The entertainment complex located adjacent to the riverboat houses a 140-seat Caribbean showroom, as well as three restaurants, the Treasure Island Buffet, Pontchartrain Grille and the Pointe Deli.

Market Overview.  Treasure Chest is located on the scenic Lake Pontchartrain in Kenner, Louisiana, approximately five miles from the New Orleans International Airport. Treasure

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Chest primarily serves suburban New Orleans, and currently competes with two other riverboats and one land-based casino.

Blue Chip Hotel & Casino

The Property.  Blue Chip is a riverboat gaming property located in Michigan City, Indiana. The three-level dockside riverboat measures 348 feet long by 80 feet wide. The casino features 1,724 slot machines, 49 table games and three bars and can accommodate up to 3,000 passengers in its 42,500 square feet of space. The 87,000 square-foot land-based pavilion includes three large meeting rooms, a grand ballroom, deli, players club, gift shop, 252-seat buffet and 74-seat gourmet restaurant. The property, which sits on 37 acres of land we own, includes a 188-room hotel that is attached to the pavilion and casino complex. For 2004, the occupancy rate and average daily room rate at Blue Chip were approximately 98% and $54.

Construction is underway for significant redevelopment at Blue Chip. We are building a new boat, which will allow for more gaming positions and for the casino to be located on one floor rather than the three-story boat now in operation. The $163 million project, which includes a new parking structure and pavilion enhancements, is expected to be completed near the end of 2005.

Market Overview.  Michigan City, Indiana is located 60 miles east of Chicago and 40 miles west of South Bend, Indiana. The Blue Chip casino property is the first stop for customers that live to the east in northwest Indiana and southwest Michigan. To the west, the property competes primarily with four casinos in northern Indiana and, to a lesser extent, with Illinois casinos in the Chicago area.

There is currently an additional Illinois casino license that is the subject of litigation and administrative action. If a gaming facility is opened, depending on its location, it could compete with Blue Chip. In addition, in Michigan, the Pokagon Band of Potawatomi Indians, a federally recognized Native American tribe, announced, in 1994, its intentions to construct a land-based gaming operation in or near the City of New Buffalo, Michigan, which is located less than fifteen miles from Blue Chip. In August 2004, the Pokagons received a favorable ruling from the Michigan Supreme Court regarding the validity of their compact with the State of Michigan; however, the Pokagons have other remaining legal and regulatory issues that must be resolved prior to construction of the proposed gaming facility. If their facility is constructed and begins operations, it could have a material adverse impact on the operations of Blue Chip.

Delta Downs Racetrack Casino & Hotel

The Property.  On May 31, 2001, we acquired substantially all of the assets of the Delta Downs Racetrack in Vinton, Louisiana. Delta Downs is situated on 211 acres of land we own and has historically conducted horse races on a seasonal basis and operated year-round simulcast facilities for customers to place bets on races held at other tracks.

On February 13, 2002, we began slot operations in connection with a $33 million renovation project that expanded the facility and equipped the new casino. The property features 1,461 slot machines, a 260-seat buffet, a 160-seat fine dining restaurant, a lounge and two snack bars.

In July 2003, we announced development plans for Delta Downs and subsequently began an expansion project at Delta Downs that is expected to cost approximately $65 million. The first two phases, which were completed in 2004, involved expanding the size of the casino building to provide customers with a more open and comfortable environment, including wider aisles on the slot floor. The final phase of the project included the development of a 206-room hotel at the property, the addition of food and beverage amenities and an events center. Construction of the final phase began in early 2004 and was completed in March 2005.

Market Overview.  Delta Downs is approximately 25 miles closer to Houston than the next closest gaming market, located in Lake Charles, Louisiana. Customers traveling from Houston, Beaumont and other parts of southeastern Texas will generally have to drive past Delta Downs to reach Lake Charles, and we market to those customers. In October 2001, the Louisiana Gaming Control Board awarded the fifteenth and final riverboat gaming license to Pinnacle Entertainment to operate in Lake Charles, Louisiana. Pinnacle’s new casino is scheduled to open in spring of 2005, complete with a luxury hotel and golf course.

Sam’s Town Hotel and Casino

The Property.  Sam’s Town Shreveport is located on 18 acres of leased land along the Red River in Shreveport Louisiana. The property features a 19^th century themed riverboat casino with 30,000 square feet of gaming space, including approximately 1,103 slot and video poker machines and 33 table games. The hotel offers 514 rooms, including spacious suites boasting up to 1,500 square feet. Other amenities at the property include a spa, heated pool, four restaurants, a live entertainment venue and 18,000 square feet of convention and meeting space. During the period in 2004 that we owned Sam’s Town Shreveport, the occupancy rate and average daily room rate were approximately 92% and $87.

Market Overview.  Shreveport is the largest gaming market in the state of Louisiana, located off of Interstate 20. Feeder markets include east Texas such as Tyler and the Dallas/Ft. Worth area. Other feeder markets include Texarkana, Arkansas and surrounding Louisiana cities including Bossier City, Minden, Ruston and Monroe.

Borgata

The Property.  Borgata Hotel Casino and Spa opened at Renaissance Point in Atlantic City, New Jersey on July 3, 2003. The $1.1 billion property is an equity method joint venture project. We and MGM MIRAGE each own a 50% interest in this project. As the managing venturer, we are responsible for the day-to-day operations of Borgata, including the operation and improvement of the facility and business. Borgata employs a management team and full staff to perform these services for the property. We maintain the oversight and responsibility for the operations, but do not directly operate Borgata. As such, we do not receive a management fee from Borgata.

Borgata’s 124,000 square feet of gaming contains 135 table games and 3,541 slot machines and poker tables and a race book. Borgata features 2,000 guest rooms and suites, 11 destination restaurants, 11 retail boutiques and a 50,000-square foot European-style health spa. The property also contains meeting space and several

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entertainment venues. The property has 70,000 square feet of event space and parking for approximately 6,000 cars. For 2004, the occupancy rate and average daily room rate at Borgata were approximately 92% and $127.

In July 2004, we announced that Borgata has commenced planning and design work for substantial additions of both gaming and non-gaming amenities, including additional slot machines, table games, poker tables, restaurants and nightclubs. Construction has begun on the public space expansion project and completion is expected to occur in the second quarter of 2006. The total estimated cost of the public space expansion is approximately $200 million.

In October 2004, we announced that Borgata is in the planning phases for a further expansion involves a new hotel tower, a new spa and additional meeting room space. As the rooms expansion project is currently in the planning process and subject to various approvals, we have not yet determined the cost of the project. Construction for the rooms expansion is expected to commence in the fourth quarter of 2005 with completion scheduled for the fourth quarter of 2007. Borgata expects to finance the expansions from Borgata’s cash flow from operations and from Borgata’s recently modified bank credit facility, which is capable of being expanded. We do not expect to make further capital contributions to Borgata for these projects.

Market Overview.  Atlantic City is the second largest gaming jurisdiction in the United States by revenues and is predominantly a regional day-trip and overnight-trip market.

Corporate Structure

We currently conduct substantially all of our business through ten wholly-owned subsidiaries:

California Hotel and Casino directly owns and operates Sam’s Town Las Vegas and the California and owns and operates the Stardust, the Fremont, the Eldorado, Jokers Wild and Main Street Station through wholly-owned subsidiaries. Coast Casinos, Inc. owns and operates Barbary Coast, Gold Coast, The Orleans and Suncoast through a wholly-owned subsidiary. Boyd Tunica, Inc. owns and operates Sam’s Town Tunica. Boyd Kenner, Inc. operates Treasure Chest, owns a 15% equity interest in Treasure Chest Casino, L.L.C., the owner of Treasure Chest and operates Sam’s Town Shreveport through a wholly-owned subsidiary that owns a 99% equity interest in the property. Boyd Louisiana L.L.C. owns the remaining 85% equity interest in Treasure Chest Casino, L.L.C. Boyd Red River LLC owns the remaining 1% equity interest in Sam’s Town Shreveport. Par-A-Dice Gaming Corporation owns and operates the Par-A-Dice. Blue Chip Casino, LLC owns and operates Blue Chip. Boyd Louisiana Racing, Inc. owns Boyd Racing, L.L.C. which owns and operates Delta Downs. Boyd Atlantic City, Inc. owns a 50% interest in Marina District Development Holding Company, the company that owns Borgata.

Corporate History, Availability of Reports and Corporate Governance Information

We were incorporated in Nevada in June 1988. Our principal executive offices are located at 2950 Industrial Road, Las Vegas, NV 89109, and our main telephone number is (702) 792-7200. We make our annual reports on Form 10-K, our quarterly reports on Form 10-Q, our current reports on Form 8-K and all amendments to these reports available free of charge on our corporate website as soon as reasonably practicable after such reports are filed with, or furnished to, the SEC. In addition, our Code of Business Conduct, Corporate Governance Guidelines, charters of the Audit Committee, Compensation and Stock Option Committee and the Corporate Governance and Nominating Committee are available on our website. Our website is www.boydgaming.com. We will provide reasonable quantities of electronic or paper copies of filings free of charge upon request. In addition, we will provide a copy of the above referenced charters to stockholders upon request.

INVESTMENT CONSIDERATIONS

This Annual Report on Form 10-K contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Such statements include statements regarding:

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Forward-looking statements involve certain risks and uncertainties, and actual results may differ materially from those discussed in any such statement. Factors that could cause actual results to differ materially from such forward-looking statements include the risks described in greater detail in the following paragraphs. All forward-looking statements in this document are made as of the date hereof, based on information available to the Company as of the date hereof, and the Company assumes no obligation to update any forward-looking statement.

Intense competition exists in the gaming industry and we expect competition to continue to intensify.

The gaming industry is highly competitive. We compete with numerous casinos and casino hotels of varying quality and size in market areas where our properties are located. We also compete with other non-gaming resorts and vacation areas, and with various other casino and other entertainment businesses and could compete with any new forms of gaming that may be legalized in the future. The casino entertainment business is characterized by competitors that vary considerably by their size, quality of facilities, number of operations, brand identities, marketing and growth strategies, financial strength and capabilities, level of amenities, management talent and geographic diversity. In most markets, we compete directly with other casino facilities operating in the immediate and surrounding market areas. In some markets, we face competition from nearby markets in addition to direct competition within our market areas.

In recent years, with fewer new markets opening for development, competition in existing markets has intensified. Many casino operators, including us, have invested in expanding existing facilities, developing new facilities and acquiring established facilities in existing markets, such as our acquisition of Coast Casinos and Sam’s Town Shreveport. This expansion of existing casino entertainment properties, the increase in the number of properties and the aggressive marketing strategies of many of our competitors has increased competition in many markets in which we compete and this intense competition can be expected to continue.

If our competitors operate more successfully, if competitors’ properties are enhanced or expanded, or if additional hotels and casinos are established in and around the locations in which we conduct business, we may lose market share. In particular, the expansion of casino gaming in or near any geographic area from which we attract or expect to attract a significant number of our customers could have a significant adverse effect on our business, financial condition and results of operations.

We also compete with legalized gaming from casinos located on Native American tribal lands. A proliferation of Native American gaming in California, or a proliferation of Native American gaming in other areas located near our properties, could have an adverse effect on our operating results in those markets.

In Michigan, the Pokagon Band of Potawatomi Indians, a federally recognized Native American tribe, announced, in 1994, its intention to construct a land-based gaming operation in or near the City of New Buffalo, Michigan, which is located less than fifteen miles from Blue Chip. Although the Pokagons have legal and regulatory issues that must be resolved prior to construction of the proposed gaming facility, if their facility is constructed and begins operations, it could have a significant adverse impact on the operations of Blue Chip.

Our expansion, development and renovation projects may face significant risks inherent in construction projects or implementing a new marketing strategy, including receipt of necessary government approvals.

We regularly evaluate expansion, development and renovation opportunities. For example, we are currently involved in expanding our Blue Chip property and we are involved in developing a new property, the South Coast. We are also in the early planning phases for potential future redevelopments of the Stardust and Barbary Coast sites. In addition, Borgata has begun construction on a public space expansion and is in the planning phases for a new hotel tower. These projects will be subject to the many risks inherent in the expansion or renovation of an existing enterprise, including unanticipated design, construction, regulatory, environmental and operating problems and lack of demand for our projects. In particular, we may experience:

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Our anticipated costs and construction period for projects are based upon budgets, conceptual design documents and construction schedule estimates prepared by us in consultation with our architects and contractors. The cost of any project may vary significantly from initial expectations, and we may have a limited amount of capital resources to fund cost overruns on any project. If we cannot finance cost overruns on a timely basis, the completion of one or more projects may be delayed until adequate funding is available. The completion dates of any of our projects could also differ significantly from expectations for construction-related or other reasons. We cannot assure you that any project will be completed, if at all, on time or within established budgets. Significant delays or cost overruns on our projects could have a material adverse effect on our business, financial condition and results of operations.

Certain permits, licenses and approvals necessary for some of our current projects have not yet been obtained. The scope of the approvals required for our expansion projects can be extensive and may include the need to obtain gaming approvals, state and local land-use permits and building and zoning permits. Unexpected changes or concessions required by local, state or federal regulatory authorities could involve significant additional costs and delay the scheduled openings of the facilities. We may not receive the necessary permits, licenses and approvals or obtain the necessary permits, licenses and approvals within the anticipated time frame.

In addition, although we design our projects for existing facilities to minimize disruption of existing business operations, expansion and renovation projects require, from time to time, portions of the existing operations to be closed or disrupted. Any significant disruption in operations could have a significant adverse effect on our business, financial condition and results of operations.

We face risks associated with growth and acquisitions.

As part of our business strategy, we regularly evaluate opportunities for growth through development of gaming operations in existing or new markets, through acquiring other gaming entertainment facilities or through redeveloping our existing gaming facilities. The expansion of our operations, whether through acquisitions, development or internal growth could divert management’s attention and could also cause us to incur substantial costs, including legal, professional and consulting fees. There can be no assurance that we will be able to identify, acquire, develop or profitably manage additional companies or operations or successfully integrate such companies or operations into our existing operations without substantial costs, delays or other problems.

If we are unable to finance our expansion and renovation projects as well as other capital expenditures through cash flow, borrowings under our bank credit facility and additional financings, our expansion and renovation efforts will be jeopardized.

We intend to finance our current and future expansion and renovation projects primarily with cash flow from operations, borrowings under our bank credit facility and equity or debt financings. If we are unable to finance our current or future expansion projects, we will have to adopt one or more alternatives, such as reducing or delaying planned expansion, development and renovation projects as well as capital expenditures, selling assets, restructuring debt, or obtaining additional equity financing or joint venture partners, or modifying our bank credit facility. These sources of funds may not be sufficient to finance our expansion, and other financing may not be available on acceptable terms, in a timely manner or at all. In addition, our existing indebtedness contains certain restrictions on our ability to incur additional indebtedness. If we are unable to secure additional financing, we could be forced to limit or suspend expansion, development and renovation projects, which may adversely affect our business, financial condition and results of operations.

If we are not ultimately successful in dismissing the action filed against our Treasure Chest Casino property, we may potentially lose our ability to operate the Treasure Chest Casino property and our business, financial condition and results of operations could be materially adversely affected.

Alvin C. Copeland is the sole shareholder of an entity that applied in 1993 for a riverboat license at the location of our Treasure Chest Casino. Copeland was unsuccessful in the application process and has made several attempts to have the Treasure Chest license revoked and awarded to his company. In 1999, Copeland filed a direct action against Treasure Chest and certain other parties seeking the revocation of Treasure Chest’s license, an award of the license to him and monetary damages. The suit was dismissed by the trial court citing that Copeland failed to state a claim on which relief could be granted. The dismissal was appealed by Copeland to the First Circuit Court of Appeal. On June 21, 2002, the First Circuit Court of Appeal reversed the trial court’s decision and remanded the matter to the trial court. On January 14, 2003, we filed a motion to dismiss the matter and that motion was denied. The court of appeal refused to reverse the denial of the motion to dismiss. In May 2004, we filed additional motions to dismiss on other grounds, which motions are currently pending. It is not possible to determine the likely date of trial, if any, at this time. We intend to vigorously defend the lawsuit.

If we are not ultimately successful in dismissing or prevailing in these claims, we may lose our license for the Treasure Chest and may possibly be subject to significant monetary damages, which would have a significant adverse effect on our business, financial condition and results of operations.

We are subject to extensive governmental gaming regulation and taxation policies, which may harm our business.

We are subject to a variety of regulations in the jurisdictions in which we operate. Regulatory authorities at the federal, state and local levels have broad powers with respect to the licensing of casino operations and may revoke, suspend, condition or limit our gaming or other licenses, impose substantial fines and take other actions, any one of which could have a significant adverse effect on our business, financial condition and results of operations. A more detailed description of the regulations to which we are subject is contained in Exhibit 99.1 to this Annual Report on Form 10-K, which exhibit is incorporated herein by reference.

If additional gaming regulations are adopted in a jurisdiction in which we operate, such regulations could impose restrictions or costs that could have a significant adverse effect

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on us. From time to time, various proposals are introduced in the legislatures of some of the jurisdictions in which we have existing or planned operations that, if enacted, could adversely affect the tax, regulatory, operational or other aspects of the gaming industry and our company. Legislation of this type may be enacted in the future. The federal government has also previously considered a federal tax on casino revenues and may consider such a tax in the future. In addition, gaming companies are currently subject to significant state and local taxes and fees in addition to normal federal and state corporate income taxes, and such taxes and fees are subject to increase at any time. If there is any material increase in state and local taxes and fees, our business, financial condition and results of operations could be adversely affected.

Our directors, officers and key employees must also be approved by certain state regulatory authorities. If state regulatory authorities were to find a person occupying any such position unsuitable, we would be required to sever our relationship with that person. Certain public and private issuances of securities and certain other transactions by us also require the approval of certain state regulatory authorities.

Our businesses are subject to various federal, state and local laws and regulations in addition to gaming regulations. These laws and regulations include, but are not limited to, restrictions and conditions concerning alcoholic beverages, environmental matters, employees, currency transactions, taxation, zoning and building codes, and marketing and advertising. Such laws and regulations could change or could be interpreted differently in the future, or new laws and regulations could be enacted. Material changes, new laws or regulations, or material differences in interpretations by courts or governmental authorities could adversely affect our operating results.

Riverboats and dockside facilities are subject to risks relating to weather or mechanical failure and must comply with applicable regulations.

Gaming operations conducted on riverboat casinos or at dockside facilities could be lost from service for a variety of reasons, including casualty, forces of nature, mechanical failure or extended or extraordinary maintenance.

Our riverboats must comply with U.S. Coast Guard requirements as to boat design, on-board facilities, equipment, personnel and safety. Each riverboat must hold a Certificate of Inspection or must be approved by the American Bureau of Shipping for stabilization and flotation, and may also be subject to local zoning and building codes. The U.S. Coast Guard requirements establish design standards, set limits on the operation of the vessels and require individual licensing of all personnel involved with the operation of the vessels. Loss of a vessel’s Certificate of Inspection or American Bureau of Shipping approval would preclude its use as a casino.

U.S. Coast Guard regulations require a hull inspection for all riverboats at five-year intervals. Under certain circumstances, extensions may be approved. The U.S. Coast Guard may require that such hull inspections be conducted at a U.S. Coast Guard-approved dry-docking facility, and if so required, the travel to and from such docking facility, as well as the time required for inspections of the Treasure Chest, Par-A-Dice, Blue Chip and Sam’s Town Shreveport riverboats, could be significant. To date, the U.S. Coast Guard has allowed in-place inspections of some of our riverboats. The U.S. Coast Guard may not allow these types of inspections in the future. The loss of a dockside casino or riverboat casino from service for any period of time could adversely affect our business, financial condition and results of operations.

U.S. Coast Guard regulations also require us to prepare and follow certain security programs. In 2004, we implemented the American Gaming Association’s Alternative Security Program at our riverboat casinos and dockside facilities. The American Gaming Association’s Alternative Security Program is specifically designed to address riverboat casinos and their respective dockside facilities maritime security requirements. Adhering to these regulations could adversely affect our business, financial condition and results of operations.

We draw a significant percentage of our customers from limited geographic regions. Events adversely impacting the economy or these regions, including terrorism, may also impact our business.

The California, Fremont and Main Street Station draw a substantial portion of their customers from the Hawaiian market. For the year ended December 31, 2004, patrons from Hawaii comprised approximately 69% of the room nights sold at the California, 60% at the Fremont and 58% at Main Street Station. An increase in fuel costs or transportation prices, a decrease in airplane seat availability, or a deterioration of relations with tour and travel agents, particularly as they affect travel between the Hawaiian market and our facilities, could adversely affect our business, financial condition and results of operations.

Our Las Vegas properties also draw a substantial number of customers from certain other specific geographic areas, including Southern California, Arizona, Las Vegas and the Midwest. Native American California casinos have diverted some potential visitors away from Nevada, which has and could continue to negatively affect Nevada gaming markets. In addition, due to our significant concentration of properties in Nevada, any terrorist activities or disasters in or around Nevada could have a significant adverse effect on our business, financial condition and results of operations. Each of our other properties located outside of Nevada depends primarily on visitors from their respective surrounding regions. The outbreak of public health threats, or the perception that such threats exist, at any of our properties as well as adverse economic conditions that affect the economy or any of these regions resulting from war, terrorist activities or other geopolitical conflict could have a significant adverse effect on our business, financial condition and results of operations.

In addition, to the extent that the airline industry is negatively impacted due to the outbreak of war, public health threats, terrorist or similar activity, increased security restrictions or the public’s general reluctance to travel by air, our business, financial condition and results of operations could be significantly adversely affected.

Energy price increases may adversely affect our cost of operations and our revenues.

Our casino properties use significant amounts of electricity, natural gas and other forms of energy. In addition, our Hawaiian air charter operation uses a significant amount of jet fuel. While no shortages of energy or fuel have been experienced to date, substantial increases in energy and fuel prices in the United States have negatively affected and may

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continue to negatively affect, our operating results. The extent of the impact is subject to the magnitude and duration of the energy and fuel price increases, but this impact could be material. In addition, energy and gasoline price increases in cities that constitute a significant source of customers for our properties could result in a decline in disposable income of potential customers and a corresponding decrease in visitation and spending at our properties, which would negatively impact revenues.

Certain of our stockholders own large interests in our capital stock and may significantly influence our affairs.

William S. Boyd, our Chairman and Chief Executive Officer, together with his immediate family, beneficially owned approximately 36% of our outstanding shares of common stock as of December 31, 2004. Michael J. Gaughan, the Chief Executive Officer of Coast Casinos, Inc., a subsidiary of Boyd Gaming, beneficially owned approximately 17% of our outstanding shares of common stock as of December 31, 2004. As a result, the Boyd family and/or Mr. Gaughan have the ability to significantly influence our affairs, including the election of our directors and, except as otherwise provided by law, approving or disapproving other matters submitted to a vote of our stockholders, including a merger, consolidation or sale of assets.

Some of our hotel casinos are located on leased property. If any default on its leases, the lessor could terminate the lease and we may lose possession of the hotel casino.

We lease certain parcels of land on which The Orleans, Suncoast, Barbary Coast, Treasure Chest and Sam’s Town Shreveport are located. In addition, we lease other parcels of land on which portions of California, Fremont and Sam’s Town Tunica are located. If we were to default on any lease, the lessor could terminate the lease and we could lose possession of the affected land and any improvements on the land, including the hotel-casinos. This would have a significant negative impact on our financial position and results of operations as we would then be unable to operate The Orleans, Suncoast, Barbary Coast, Treasure Chest and Sam’s Town Shreveport or portions of California, Fremont and Sam’s Town Tunica.

The consummation of the merger with Coast Casinos has raised union organization rights under certain of our and Coast’s collective bargaining agreements.

Four of our subsidiaries that operate the Stardust, Fremont, Main Street and Eldorado, and Barbary Coast are parties to collective bargaining agreements with the Local Joint Executives Board of Las Vegas (the “Union”) affiliated with the Hotel and Restaurant Employees International Union. Officials of the Union believe that the Union has organization rights at the non-union properties of Coast Casinos: The Orleans, Gold Coast and Suncoast. On August 12, 2004, the Culinary and Bartenders Unions (Unions) filed an action in the U.S. District Court to attempt to force us to arbitrate the Unions’ claim that the Stardust contract with those Unions requires us to “take a positive approach to unionization of employees” at Gold Coast, Suncoast and The Orleans, as well as to recognize the Unions at those properties and to extend the Stardust contract to each of those hotel-casinos and Barbary Coast. The Unions are seeking over $1.9 million in damages per month. For more information about this, see Item 3. “Legal Proceedings.”

Leverage and Debt Service

We have a significant amount of indebtedness. At December 31, 2004, we had total consolidated long-term debt, less current maturities, of approximately $2.3 billion. We may incur substantial additional indebtedness in the future. Our substantial indebtedness could have important consequences. For example it could:

In addition, the interest rates on a portion of our long-term debt are subject to fluctuation based upon changes in short-term interest rates. Interest expense could increase as a result of this factor.

Our current debt service requirements on our bank credit facility primarily consist of interest payments on outstanding indebtedness. The bank credit facility consists of a $1.1 billion revolver component that matures in June 2009, and $500 million in a term loan. The term loan is being repaid in increments of $1.25 million per quarter that began on September 30, 2004 and will continue through March 31, 2011. The remaining balance of the term loan matures in June 2011.

Debt service requirements under our $200 million 9.25% senior notes due 2009, $250 million 8.75% senior subordinated notes due 2012, $300 million 7.75% senior subordinated notes due 2012, and $350 million 6.75% senior subordinated notes due 2014 consist of semi-annual interest payments and repayment of the $200 million, $250 million, $300 million and $350 million of principal on August 1, 2009, April 15, 2012, December 15, 2012 and April 15, 2014 respectively.

Our ability to make payments on and to refinance our indebtedness and to fund planned capital expenditures and expansion efforts will depend upon our ability to generate cash in the future. This to a certain extent, is subject to general economic, financial, competitive, legislative, regulatory and other factors that are beyond our control.

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It is unlikely that our business will generate sufficient cash flow from operations to enable us to pay our indebtedness as it matures and to fund our other liquidity needs. We believe that we will need to refinance all or part of our indebtedness at maturity. However, we may not be able to refinance any of our indebtedness on commercially reasonable terms or at all. We could have to adopt one or more alternatives, such as reducing or delaying planned expenses and capital expenditures, selling assets, restructuring debt, or obtaining additional equity or debt financing or joint venture partners. These financing strategies may not be effected on satisfactory terms, if at all. In addition, certain states’ laws contain restrictions on the ability of companies engaged in the gaming business to undertake certain financing transactions. Some restrictions may prevent us from obtaining necessary capital.

Employees

At December 31, 2004, we employed approximately 19,293 persons. On such date, we had collective bargaining relationships with seven unions covering approximately 2,473 employees, substantially all of whom are employed at the Stardust, the Fremont, Eldorado, Main Street Station, Barbary Coast and Blue Chip. Several collective bargaining agreements are currently in effect and other agreements are in various stages of negotiation. Employees covered by expired agreements have continued to work during the negotiations, in one case under the terms of the expired agreements and, in another, under modifications thereof.

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ITEM 2.  Properties

The following table sets forth certain information regarding our properties as of December 31, 2004.

ITEM 3.  Legal Proceedings

Alvin C. Copeland is the sole shareholder of an entity that applied in 1993 for a riverboat license at the location of our Treasure Chest Casino. Copeland was unsuccessful in the application process and has made several attempts to have the Treasure Chest license revoked and awarded to his company. In 1999, Copeland filed a direct action against Treasure Chest and certain other parties seeking the revocation of Treasure Chest’s license, an award of the license to him and monetary damages. This suit was dismissed by the trial court citing that Copeland failed to state a claim on which relief could be granted. The dismissal was appealed by Copeland to the First Circuit Court of Appeal. On June 21, 2002, the First Circuit Court of Appeal reversed the trial court’s decision and remanded the matter to the trial court. On January 14, 2003, we filed a motion to dismiss the matter and that motion was denied. The court of appeal refused to reverse the denial of the motion to dismiss. In May 2004, we filed additional motions to dismiss on other grounds, which motions are currently pending. It is not possible to determine the likely date of trial, if any, at this time. We intend to vigorously defend the lawsuit. If we are not ultimately successful in dismissing these claims, we may lose our license for Treasure Chest and may possibly be subject to significant monetary damages, which would have a significant adverse effect on our business, financial condition and results of operations. Due to the nature of the potential losses in this matter, we cannot estimate the amount of any potential loss.

Immediately after the merger of Coast Casinos, Inc. with Boyd Gaming Corporation (“Boyd”), the Local Joint Executive Board of Las Vegas (Culinary Union and Bartenders Union) (“the Union”) demanded that its collective bargaining agreement (“CBA”) with Mare-Bear, Inc. d.b.a. Stardust Resort and Casino (“Stardust CBA”), be extended to the Coast’s Barbary Coast Hotel and Casino, which has a current and different CBA with the Union, and also to other Coast properties: Gold Coast, The Orleans and Suncoast. This demand was based on a “neutrality agreement” and other provisions of the Stardust

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CBA. This demand of the Union was rejected. On August 12, 2004, the Union filed a lawsuit in the U. S. District Court for the District of Nevada against Boyd and Mare-Bear, Inc., seeking to compel arbitration of alleged violations of the Stardust neutrality agreement. On September 1, 2004, Boyd filed a motion to dismiss the Union’s lawsuit as to Boyd. This motion is still pending before the Court. Mare-Bear filed an answer to the complaint on September 2, 2004. On September 23, 2004, Boyd, Coast Casinos, Inc. and its subsidiary, Coast Hotels and Casinos, Inc., filed a complaint for declaratory relief in the U. S. District Court against the Union, seeking a judgment that the Barbary Coast CBA continued in effect and was binding upon Boyd, the Barbary Coast and the Union. On December 15, 2004, a judgment for declaratory relief was granted on behalf of Boyd and the Barbary Coast, affirming that the Barbary Coast CBA remains in effect and is binding on Boyd, the Barbary Coast and the Union. On December 22, 2004, Boyd filed unfair labor practice charges against the Union with the National Labor Relations Board (“NLRB”), alleging that the Union’s lawsuit was filed for an illegal purpose and that the provisions of the Stardust agreement on which the Union relies are unlawful. Coast Hotels and Casinos, Inc. also filed similar unfair labor practice charges against the Union with the NLRB on December 22, 2004. There are currently many cases pending before the NLRB challenging the legality of neutrality agreements similar to the provisions in the Stardust agreement. On February 8, 2005, Boyd filed additional unfair labor practice charges against the Union with the NLRB, challenging the legality of the Stardust neutrality agreement. On December 15, 2004, the Union produced a document in its lawsuit, alleging that it is seeking damages of over $1.9 million dollars a month. Boyd believes these alleged damages are speculative. Boyd and Mare-Bear have been granted a protective order by the U. S. District Court, staying discovery sought by the Union, pending the Court’s ruling on Boyd’s motion to dismiss. All discovery is now stayed in that lawsuit by stipulation. Boyd and Mare-Bear intend to vigorously defend the lawsuit filed by the Union. Boyd does not anticipate that these matters will be finally resolved for a period of months or years. In the event Boyd, Mare-Bear and/or Coast are ultimately unsuccessful, monetary damages, if any, are impossible to estimate at this time.

On October 15, 2004, a complaint for declaratory and injunctive relief was filed against the United States Army Corps of Engineers (the “Corps”) and others in their official capacities on behalf of the Corps, challenging the Corps’ issuance of a permit to Blue Chip Casino, LLC under Section 404 of the Clean Water Act, 33 U.S.C. § 1344, and Section 10 of the Rivers and Harbors Appropriation Act, 33 U.S.C. § 403, authorizing certain work related to Blue Chip’s expansion of gaming operations. The plaintiffs are the Pokagon Band of Potawatomi Indians, New Buffalo Township, Michigan, and nine individuals. The litigation was filed in the United States District Court for the District of Columbia and is now pending in the United States District Court for the Eastern District of Michigan. Blue Chip has been granted leave to intervene in the litigation as a defendant. The plaintiffs generally allege that the Corps acted arbitrarily and capriciously and contrary to law and its own guidance and policies in issuing the permit to Blue Chip. The plaintiffs have moved for a preliminary injunction prohibiting further work under the permit until final resolution of the litigation and a declaratory judgment and a permanent injunction declaring the permit invalid and unenforceable, revoking the permit and requiring the Corps to prepare an environmental impact statement before considering Blue Chip’s permit application. The preliminary injunction hearing was held on January 7, 2005, and on March 10, 2005, the Court issued its order denying the plaintiffs’ motion for preliminary injunction. At this time, there is no schedule for proceeding on the merits of the litigation and it is not possible to predict the schedule or if the plaintiffs will appeal the denial of their motion for preliminary injunction. We intend to vigorously defend the litigation along with the Corps. If we are not ultimately successful in defending this litigation, the Blue Chip expansion may be delayed, which may cause a significant increase in project costs, or the expansion may not be completed, all of which would have a significant adverse effect on our business, financial condition and results of operations. Due to the nature of potential losses in this matter, we cannot estimate the amount of any potential loss.

On May 11, 2004, two individuals who claimed to be adversely affected by the Indiana Department of Environmental Management’s, or IDEM, issuance of two permits necessary for the Blue Chip expansion, Robert and Michele Nauyokas, filed with the Indiana Office of Environmental Adjudication a petition for administrative review and a petition for stay of effectiveness. The petitioners generally alleged that the IDEM acted contrary to law and arbitrarily and capriciously in issuing the permits to Blue Chip and sought revocation of, and reconsideration of, the permits. On November 12, 2004, Chief Environmental Law Judge Davidsen dismissed the plaintiffs’ case for lack of standing and the appeal period to challenge the ruling has lapsed. Therefore, this litigation has been concluded.

We are also parties to various legal proceedings arising in the ordinary course of business. We believe that, except for the matters discussed above, all pending claims, if adversely decided, would not have a material adverse effect on our business, financial position or results of operations.

ITEM 4.  Submission of Matters to a Vote of Security Holders

There were no matters subject to a vote of our security holders during the fourth quarter of 2004.

ITEM 4A.  Executive Officers of the Registrant

The following table sets forth the non-director executive officers of Boyd Gaming Corporation as of February 28, 2005:

Ellis Landau has served as our Executive Vice President since January 1997 and Senior Vice President and Chief Financial Officer since August 1990. Mr. Landau also served as our Treasurer from August 1990 to February 2004.

Keith E. Smith was elected by the Board of Directors to become the President and a director of the Company effective April 1, 2005. Mr. Smith was promoted to Chief Operating Officer in October 2001 and has served as our Executive Vice President since May 1998. Mr. Smith joined us in September 1990, serving in various controllership positions, the last of which was Senior Vice President and Controller.

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Paul J. Chakmak joined the Company in February 2004 as our Senior Vice President — Finance and Treasurer. From June 1987 to February 2004, Mr. Chakmak was employed by CIBC World Markets in various positions, the last of which was as managing director. CIBC World Markets is the global investment banking arm of Canadian Imperial Bank of Commerce (CIBC), a leading North American financial institution.

Brian A. Larson has served as our Secretary since February 2001 and as our Senior Vice President and General Counsel since January 1998. He became our Associate General Counsel in March 1993 and Vice President — Development in June 1993.

Jeffrey G. Santoro has been Vice President since February 2001 and Controller since May 1998. Mr. Santoro joined the Company in March 1997 as our Director of Financial Reporting.

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Part II

ITEM 5.  Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities

Our Common Stock is listed on the New York Stock Exchange under the symbol “BYD.” Information with respect to sales prices and record holders of our Common Stock is set forth below:

PRICE RANGE OF COMMON STOCK

The following table sets forth, for the calendar quarters indicated, the high and low sales prices of the Common Stock as reported on the NYSE Composite Tape.

On February 28, 2005, the closing sales price of our Common Stock on the NYSE was $49.01 per share. On that date, we had approximately 1,174 holders of record of our Common Stock.

In July 2003, our Board of Directors instituted a policy of quarterly cash dividends on our common stock. Dividends are declared at our Board’s discretion; however, we do expect, for the near future, to continue to pay a quarterly dividend. We are subject to certain limitations regarding the payment of dividends, such as restricted payment limitations related to our outstanding notes and our bank credit facility. The following table sets forth the cash dividends declared and paid:

We did not repurchase any securities during the fourth quarter 2004. Item 12 of Part III contains information concerning securities authorized for issuance under equity compensation plans.

ITEM 6.  Selected Consolidated Financial Data

We have derived the selected consolidated financial data presented below as of December 31, 2004 and 2003 and for the three years in the period ended December 31, 2004 from the audited consolidated financial statements contained elsewhere in this Form 10-K. The selected consolidated financial data presented below as of December 2002 and as of and for the years ended December 31, 2001 and 2000 have been derived from our audited consolidated financial statements not contained herein. Operating results for the periods presented below are not necessarily indicative of the results that may be expected for future years.

The following is a listing of our major acquisitions and dispositions that occurred during the five year period ended December 31, 2004:

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ITEM 7.  Management’s Discussion and Analysis of Financial Condition and Results of Operations

We are a diversified operator of seventeen wholly-owned gaming entertainment properties, one joint venture property, a Hawaiian travel agency and an offsite sports book. Headquartered in Las Vegas, we have gaming operations in Nevada, Illinois, Louisiana, Mississippi, Indiana and New Jersey. Our main business emphasis is on slot revenues, which are highly dependent on the volume of customers at our properties. Gross revenues are one of the main performance indicators of our properties. Most of our revenue is cash-based, and our properties generate significant operating cash flow. Our industry is capital intensive, and we rely heavily on the ability of our properties to generate operating cash flow to repay debt financing, fund maintenance capital expenditures and provide excess cash for future development and the payment of dividends.

Results of Operations

We have aggregated certain of our wholly-owned properties in order to present five reportable segments: Boulder Strip, Coast Casinos, Stardust, Downtown Properties and Central Region. Prior to the acquisition of Coast Casinos, we presented our reporting segments differently. In order to conform to this new presentation, we have reclassified the results for the years ended December 31, 2003 and 2002. The table below lists the classification of each of our wholly-owned properties.

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The following table sets forth, for the periods indicated, certain operating data for our reportable segments. We completed our acquisition of Sam’s Town Shreveport on May 19, 2004. Also, on July 1, 2004, we completed our merger with Coast Casinos. Borgata, our Atlantic City joint venture that is accounted for using the equity method, commenced operations on July 3, 2003. Delta Downs Racetrack and Casino was acquired May 31, 2001 and commenced slot operations on February 13, 2002.

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The following table sets forth, for the periods indicated, certain operating data for Borgata, our 50% joint venture in Atlantic City. Borgata commenced operations on July 3, 2003.

The following table reconciles the presentation of our share of Borgata’s operating results in our accompanying consolidated statements of operations to the presentation of our share of Borgata’s results in the table of operating data by reportable segments.

Management Overview

Over the past few years, we have been working to strategically position our Company for greater success by strengthening our operating foundation and effecting strategic growth in order to attempt to increase shareholder value. In 2004, we added five casino hotel properties through the July 2004 merger with Coast Casinos and the May 2004 acquisition of the Shreveport property. Coast Casinos’ four hotel casino properties in Las Vegas cater mainly to Las Vegas local residents providing us with a greater presence in the historically profitable and growing Las Vegas market.

We are currently focused on expansion projects at several of our properties and the development of a new property in the Las Vegas locals market, the South Coast. These projects are described in more detail at “— Projects.” In addition, we recently have begun the process of assembling a team of professionals to evaluate the Stardust and Barbary Coast sites and the Las Vegas market to assist in the creation of master plans for these properties. As we are in the very early planning process, we currently do not have any significant details surrounding this potential future development.

In addition to our expansion projects mentioned above, we regularly evaluate opportunities for growth through development of gaming operations in existing or new markets and through acquiring other gaming entertainment facilities.

Year Ended December 31, 2004 Compared to the Year Ended December 31, 2003

Consolidated Gross Revenues

Consolidated gross revenues increased $538 million, or 39%, for the year ended December 31, 2004 compared to the year ended December 31, 2003. The primary reason for the increase in consolidated gross revenues was the addition of Coast Casinos and Sam’s Town Shreveport. Excluding the results of the recently acquired Coast Casinos and Sam’s Town Shreveport, gross revenues increased 3.2% for the year ended December 31, 2004 as compared to the prior year. The increase is due mainly to increased slot and table game wagering at Stardust and at the Boulder Strip properties, where gross revenue increased by 10.4% and 8.9%, respectively.

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Construction disruption at Delta Downs related to its casino remodeling and reconfiguration was the primary cause of a 4.2% decline in the property’s gross revenues during the year ended December 31, 2004 as compared to the prior year. The Delta Downs project was completed in March 2005 and is further described at “— Projects — Delta Downs.”

Total Adjusted EBITDA

Total adjusted EBITDA increased $186 million, or 71%, for 2004 as compared to 2003. The primary reason for the increase in total adjusted EBITDA is the addition of Coast Casinos and Sam’s Town Shreveport as well as a $61 million increase in operating income from Borgata, before preopening expenses and our amortization expenses, which operated for only six months during the year ended December 31, 2003. Prior to Borgata’s July 2003 opening, our share of its results was characterized as preopening expenses, which is excluded from our adjusted EBITDA presentation.

Consolidated Operating Income

For the year ended December 31, 2004, consolidated operating income nearly doubled to $296 million from $149 million for the year ended December 31, 2003. The primary reason for the increase in consolidated operating income is the increase in total adjusted EBITDA discussed above. Additionally, we recorded our share of preopening expenses from Borgata of $20 million during 2003, thereby reducing our operating income during the prior year. Included in operating income for the year ended December 31, 2004 are $6.5 million of merger, acquisition and transition related expenses that relate to the merger with Coast Casinos and the Shreveport acquisition. Operating income for the year ended December 31, 2004 was also impacted by a $43 million increase in depreciation and amortization expenses due mainly to the Coast Casinos and Shreveport acquisitions.

A consulting agreement signed in connection with Blue Chip’s purchase agreement provided for a $5.0 million contingent payment if certain tribal gaming facilities had not commenced gaming operations near our Blue Chip casino by a specified date. As tribal gaming facilities had not commenced by the specified date, we expensed and paid the $5.0 million fee during the quarter ended December 31, 2004.

Sam’s Town Tunica reported an operating loss of $1.6 million for the year ended December 31, 2004. Due to a history of operating losses at Sam’s Town Tunica, we tested the assets of Sam’s Town Tunica for recoverability pursuant to Statement of Financial Accounting Standards No. 144, or SFAS No. 144, Accounting for the Impairment or Disposal of Long-Lived Assets. The asset recoverability test requires estimating Sam’s Town Tunica’s undiscounted future cash flows and comparing that aggregate total to the property’s carrying value. As the property’s estimated undiscounted future cash flows exceed its carrying value, we do not believe Sam’s Town Tunica’s assets to be impaired at this time. However, we are continuing to monitor the performance of Sam’s Town Tunica and will, if necessary, continue to update our asset recoverability test under SFAS No. 144. If future asset recoverability tests indicate that the assets of Sam’s Town Tunica are impaired, we will be subject to a non-cash write- down of its assets which would likely have a material impact on our consolidated financial statements.

Due to a recently issued accounting standard, beginning July 1, 2005, we will be required to expense the cost of share-based compensation awards. We expect the adoption of this standard will have a material impact on our consolidated statement of operations but have not yet completed our analysis to quantify this impact. In addition, in 2005, we will adopt the guidance of the Emerging Issues Task Force regarding the methodology used to perform our impairment tests on our indefinite-lived intangible assets. This change in methodology could result in a non-cash impairment charge which could materially affect our 2005 consolidated financial statements and would be reported as a cumulative effect of a change in accounting principle. We are currently in the process of performing the impairment tests, but have not yet concluded on the results of the tests. For more information, refer to “— New Accounting Policies.”

Other Non-Operating Costs and Expenses

Other non-operating costs and expenses are primarily comprised of interest expense. For the year ended December 31, 2004 and 2003, interest expense, net of interest income and capitalized interest, was $102 million and $74 million, respectively. Capitalized interest for 2004 and 2003 was $5.5 million and $9.2 million, respectively. As a result of the fair value hedge accounting for our interest rate swaps outstanding during the periods, our interest expense during the year ended December 31, 2004 and 2003 was $5.1 million and $4.8 million, respectively, less than the contractual rate of the hedged debt. The primary reasons for the increase in interest expense during the year ended December 31, 2004 were higher outstanding debt during the current period due to the acquisitions of Coast Casinos and Sam’s Town Shreveport and higher interest rates on our variable rate debt.

Other non-operating costs and expenses for the year ended December 31, 2004 include a $4.3 million non-cash loss on early retirement of debt related to the write-off of unamortized debt fees associated with our old bank credit facility that was refinanced on July 1, 2004 in connection with the merger with Coast Casinos. During 2004, we sold certain parcels of undeveloped land and recorded an aggregate gain on the sales of $9.9 million. There were no such transactions during 2003.

In addition, other non-operating costs and expenses include our share of Borgata’s non-operating expenses that are comprised primarily of interest expense that was partially offset by a benefit from state income taxes that is discussed below. For the years ended December 31, 2004 and 2003, our share of these expenses was $12.6 million and $8.8 million, respectively. In addition, Borgata’s other non-operating expense for the year ended December 31, 2003 was partially offset by a state tax benefit that is related to the recognition of operating loss carryforwards accumulated during Borgata’s development period.

Based on New Jersey state income tax rules, Borgata is eligible for a refundable state tax credit under the New Jersey New Jobs Investment Tax Credit because Borgata made a qualified investment in a new business facility that created new jobs. The total estimated available tax credit is approximately $75 million over a five-year period, subject to annual conditions. Borgata has filed a request for a net refund of approximately $8.5 million related to the year ended December 31, 2003 and expects to file requests for refunds for each of the four years ending December 31, 2004 through December 31,

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2007, ranging from approximately $14 million to $18 million per year. Due to various uncertainties, Borgata had placed a valuation reserve on the entire amount of these state tax credits earned through September 30, 2004. In February 2005, Borgata received a refund notice from the New Jersey Division of Taxation that caused it to reassess the valuation reserve and realize the benefit of all state tax credits earned through December 31, 2004. As such, Borgata recorded $23 million of net tax benefits (including a 2003 valuation reversal benefit of $8.5 million) related to the New Jersey New Jobs Investment Tax Credit in the year ended December 31, 2004. Borgata may be entitled to incremental New Jersey New Jobs Investment Tax Credits as a result of the Borgata expansion as discussed in “— Projects.”

Borgata is also entitled to a 50% credit against its New Jersey adjusted net profits tax if they make qualifying capital expenditures, as defined by statute. In 2003, Borgata placed a valuation reserve of approximately $0.5 million on the credit because it had not made any qualifying capital expenditures nor did it have any definitive expansion plans. In December 2004, Borgata commenced an expansion project and submitted the appropriate applications for reimbursement of this tax. As such, Borgata released the valuation allowance on the 2003 credit and realized an additional credit of $2.4 million, representing 50% of the New Jersey adjusted net profits tax paid in 2004. This $2.9 million aggregate state tax benefit is included in Borgata’s consolidated statement of operations for the year ended December 31, 2004.

Provision for Income Taxes

The effective tax rate for the year December 31, 2004 was 40% as compared to 38% for 2003. Included in the provision for the year ended December 31, 2004 was a $5.7 million charge, net of federal benefit, related to an adverse tax ruling in Indiana. In 2003, we received a proposed assessment from the Indiana Department of Revenue based upon its position that our Indiana gaming revenue tax is not deductible for Indiana state income tax purposes. An unrelated third party had been litigating the issue in the Indiana Tax Court for several years under a similar fact pattern. Due to the uncertainty of the outcome of the Tax Court litigation, we had been accruing a portion of the proposed assessment and our estimate of potential future assessments based on our estimate of the probability of loss. On April 19, 2004, the Indiana Tax Court ruled against the third party. On September 28, 2004, the Indiana Supreme Court denied the third party’s petition for review, affirming the Tax Court’s earlier decision. After the April 2004 ruling, we determined that it was probable that we had incurred a liability for the entire assessment and estimated future assessments and have recorded the related remaining amounts. As such, we recorded a $5.7 million charge, net of federal income tax benefit, to our income tax provision during the three months ended March 31, 2004. As of December 31, 2004, we have settled all outstanding assessments related to this issue. We intend to compute our future Indiana state tax expense consistent with the Indiana Tax Court ruling.

Net Income

As a result of these factors, we reported net income of $111 million and $41 million for the years ended December 31, 2004 and 2003, respectively.

Year Ended December 31, 2003 Compared to the Year Ended December 31, 2002

Consolidated Gross Revenues

Consolidated gross revenues increased 2.7% for the year ended December 31, 2003 compared to the year ended December 31, 2002. The primary reason for the increase in gross revenues was the commencement of slot operations at Delta Downs and dockside operations at Blue Chip. Delta Downs Racetrack and Casino commenced slot operations in February 2002 and its gross revenues increased $22 million for the year ended December 31, 2003 as compared to 2002. A portion of this increase was due to increased slot wagering for the period of time the property was open in both 2003 and 2002 as the property refined its marketing programs during those periods. In August 2002, Blue Chip commenced dockside operations which resulted in a 6.3% increase in gross revenues for 2003 as compared to 2002. Also contributing to the increase in gross revenues for the year ended December 31, 2003 was increased slot wagering at Sam’s Town Las Vegas due to more effective marketing strategies. As a result of these main factors, gross revenues at Sam’s Town Las Vegas increased 6.0% for 2003 as compared to 2002.

Partially offsetting the increases in gross revenue was a 3.3% decline in gross revenue at Par-A-Dice. The property has experienced declines in slot wagering during 2003 due primarily to the effects of competition, mainly from neighboring states that have a more favorable gaming tax structure than Illinois.

Total Adjusted EBITDA

Total adjusted EBITDA decreased 4.2% for the year ended December 31, 2003 as compared to the year ended December 31, 2002. The primary reasons for the declines in total adjusted EBITDA are declines in adjusted EBITDA at the Central Region and Downtown properties as well as the Stardust of 12.1%, 13.2% and 37% respectively. Adjusted EBITDA at the Central Region properties declined during 2003 due mainly to the increase in gaming taxes experienced at both Par-A-Dice and Blue Chip. For the year ended December 31, 2003, based on 2003’s gaming revenue and admissions, Par-A-Dice’s gaming tax expense increased $10.5 million as compared to 2002. Blue Chip’s gaming tax increased $12.8 million for 2003 as compared to 2002 based on 2003’s gaming revenue and admissions. In addition, Blue Chip recorded a $3.5 million one-time retroactive gaming tax charge reflecting taxes imposed by the State of Indiana during the year ended 2003.

The decline in the Downtown properties’ adjusted EBITDA for the year ended December 31, 2003 as compared to 2002 was due mainly to higher charter costs, including fuel costs experienced at Vacations Hawaii, our Hawaiian travel agency. Heavier marketing and promotional spending at the Stardust due to the competition on the Las Vegas Strip was the primary factor that caused a 37% decline in the property’s adjusted EBITDA.

Consolidated Operating Income

Consolidated operating income decreased 9.5% to $149 million for the year ended December 31, 2003 from $164 million for the year ended December 31, 2002. The primary reason for the decline in consolidated operating income is the decline in total

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adjusted EBITDA discussed above. Partially offsetting the decline in consolidated operating income was a decrease in operating loss from Borgata. The operations from Borgata, which commenced on July 3, 2003, nearly offset their preopening expenses for 2003. Our share of operating loss from Borgata for 2002 only includes our share of Borgata’s preopening expenses. Consolidated operating income during the 2002 year includes $7.3 million of preopening expenses that related mainly to Delta Downs, as well as our unsuccessful efforts related to a potential Rhode Island casino. In addition, during 2002, we recorded a $3.8 million loss on assets held for sale as we reduced the carrying value of these assets to their estimated fair value less costs to sell.

Other Non-Operating Costs and Expenses

Other non-operating costs and expenses are primarily comprised of interest expense. For the years ended December 31, 2003 and 2002, interest expense, net of interest income and capitalized interest, was $74 million and $72 million, respectively. These amounts are net of capitalized interest of $9.2 million and $17.7 million, respectively, for the years ended December 31, 2003 and 2002. Interest expense was higher during 2003 due mainly to a decline in capitalized interest during 2003. Also impacting interest expense during 2003 were lower average outstanding debt balances, declines in interest rates due to our fixed-rate debt refinancings that occurred during 2002 and declines in interest rates on our variable rate debt. In addition, as a result of the fair value hedge accounting for our interest rate swaps outstanding during the periods, our interest expense during 2003 and 2002 was $4.8 million and $3.8 million, respectively, less than the contractual rate of the hedged debt.

In addition, other non-operating costs and expenses include our share of Borgata’s non-operating expenses of $8.8 million. During the year ended December 31, 2003, Borgata’s non-operating expenses were primarily comprised of interest expense that was partially offset by a state tax benefit that is related to the recognition of operating loss carryforwards accumulated during Borgata’s development period. This net tax benefit was partially offset by state tax expense resulting from Borgata’s operations.

During the year ended December 31, 2002, we recorded a $15.1 million loss on the early retirement of debt related to the purchase and cancellation of approximately $77.8 million original principal amount of our 9.25% senior notes due 2003 and the tender and call for redemption of our 9.50% senior subordinated notes due 2007, partially offset by the adjusted basis of certain hedged debt as a result of fair value hedge terminations.

Cumulative Effect of a Change in Accounting Principle

For the quarter ended March 31, 2002, in connection with the initial application of SFAS No. 142, Goodwill and Intangible Assets, we reported an $8.2 million charge as the cumulative effect of a change in accounting principle to write-down the remaining goodwill balance related to the 1985 acquisition of the Stardust. The fair value of Stardust’s goodwill was determined by management through the use of available and forecasted operating information as well as the use of an independent appraisal.

Net Income

As a result of the factors discussed above, we reported net income of $41 million and $40 million for the years ended December 31, 2003 and 2002, respectively.

Liquidity and Capital Resources

Cash Flow from Operating Activities and Working Capital

For the year ended December 31, 2004, we generated operating cash flow of $270 million compared to $173 million for 2003. The primary reason for the increase in operating cash flow is the addition of the earnings from Coast Casinos and Sam’s Town Shreveport, which we acquired in July and May 2004, respectively. As of December 31, 2004 and 2003, we had balances of cash and cash equivalents of $161 million and $88 million, respectively, and working capital deficits of $60 million and $41 million, respectively.

Historically, we have operated with minimal or negative levels of working capital in order to minimize borrowings and related interest costs under our bank credit facility. The revolver portion of our bank credit facility generally provides any necessary funds for our day-to-day operations, interest and tax payments as well as capital expenditures. On a daily basis, we evaluate our cash position and adjust our revolver balance as necessary by either paying it down with the excess cash or borrowing under the revolver. We also plan the timing and the amounts of our capital expenditures. We believe that our bank credit facility and cash flows from operating activities will be sufficient to meet our projected operating and maintenance capital expenditures for the next twelve months and the costs associated with the expansions at Delta Downs and Blue Chip and the development of South Coast.

Cash Flows from Investing Activities

We are committed to continually maintaining and enhancing our facilities, most notably by upgrading and remodeling our casinos, hotel rooms, restaurants, and other public spaces and by providing the latest slot machines for our customers. We are also committed to continually maintaining and enhancing our computer system infrastructure and our slot systems. Our capital expenditures primarily related to these purposes were approximately $79 million and $76 million, respectively, for the years ended December 31, 2004 and 2003.

During the year ended December 31, 2004, we paid approximately $43 million for the expansion of Delta Downs, approximately $40 million for the expansion of Blue Chip and approximately $60 million for the South Coast project. For more information about these projects, see “— Projects.” In addition, we paid approximately $20 million for The Orleans hotel tower project that added 461 rooms and opened in October 2004. During the year ended December 31, 2003, we paid $2.7 million for the expansion of Delta Downs’ casino and $2.4 million for the expansion of Blue Chip.

In November 2004, we purchased a 13-acre site contiguous to the Stardust for a purchase price of $43 million, including the assumption of approximately $16 million in debt.

During the year ended December 31, 2004, we paid net cash of $187 million for the acquisition of the partnership interests of Harrah’s Shreveport Hotel and Casino. We funded this acquisition with approximately $49 million of the net proceeds from the issuance of $350 million principal amount of 6.75% senior subordinated notes issued in April 2004, with the remainder of the cash payment provided by availability under our bank credit facility.

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Also during 2004, we paid net cash of $909 million for the acquisition of Coast Casinos. We funded this acquisition with availability under our new bank credit facility that became effective on July 1, 2004. For more information on this acquisition, see “— Coast Casinos Merger.”

For the year ended December 31, 2004, we invested $31 million in Borgata, our Atlantic City joint venture, which represented our final capital contribution to Borgata pursuant to an agreement of final project costs with MGM MIRAGE. For 2003, we invested or advanced a total of $50 million, including capitalized interest, in Borgata.

During 2004 we sold several parcels of undeveloped land as well as an airplane and received a total of approximately $31 million from the net proceeds. There were no such transactions during 2003.

During 2004, we paid approximately $11.7 million for restricted investments as part of our investment strategy for funds held in trust related to our Hawaiian travel agency and received approximately $1.1 million in proceeds from the sale of certain of these investments.

Subsequent Event.  On February 15, 2005, Borgata distributed $6.7 million to us and made a corresponding distribution to MGM MIRAGE.

Coast Casinos Merger.  On July 1, 2004, we consummated a $1.3 billion merger with Coast, pursuant to which Coast became a wholly-owned subsidiary of Boyd Gaming Corporation. The Coast stockholders received approximately $482 million in cash and the Coast stock and option holders received 19.4 million shares of our common stock valued at $19.08 per share. The recorded value of the common stock issued was based upon the average of the closing stock prices of Boyd Gaming three days before and three days after the merger was agreed to and announced.

In connection with the merger, we refinanced substantially all of Coast’s debt, including $325 million principal amount of 9.50% senior subordinated notes due in April 2009. On July 1, 2004, we accepted and paid for approximately $301 million in aggregate principal amount of these notes pursuant to a tender offer and consent solicitation which offered a tender price of $1,031.25 and a consent solicitation fee of $20.00 per $1,000 principal amount of notes accepted for payment by a specified date. We paid approximately $323 million of total consideration, including accrued interest, for these notes. Also on July 1, 2004, we called for the redemption of the remaining $24 million principal amount of notes outstanding at that date. On August 2, 2004, we paid approximately $26 million for the remaining notes based upon a redemption price of $1,047.50 per $1,000 principal amount of notes, plus accrued interest to the date of redemption. In addition to Coast’s senior subordinated notes that we refinanced, we also repaid the outstanding balance on Coast’s bank credit facility, which totaled $105 million on July 1, 2004. The total amount paid to retire all of Coast’s outstanding debt, including premiums and interest, represents a portion of the $1.3 billion total merger consideration.

We financed the cash portion of the consideration in the merger, including merger related costs, and refinanced both Coast’s debt and our old bank credit facility with availability under our new bank credit facility that became effective on July 1, 2004. For more information on the new bank credit facility, see “— Indebtedness — Bank Credit Facility.”

Cash Flows from Financing Activities

Substantially all of the funding for our acquisitions and our renovation and expansion projects comes from cash flows from existing operations as well as debt financing and equity issuances.

In April 2004, we issued, through a private placement, $350 million principal amount of 6.75% senior subordinated notes due April 2014. Our net proceeds from the issuance of these notes were approximately $345 million, from which we repaid approximately $296 million of outstanding indebtedness under our bank credit facility. We used approximately $49 million of the net proceeds from this issuance to pay for a portion of the Shreveport acquisition.

During 2004, we had net borrowings on our bank credit facilities of $845 million due primarily to the acquisitions of Coast Casinos and Sam’s Town Shreveport as compared to net borrowings of $106 million during 2003. Due to the refinancing of our bank credit facility that became effective on July 1, 2004, we paid $9.0 million in refinancing costs during the year ended December 31, 2004. Also during 2004, we received $23 million from the issuance of common stock through the exercise of employee stock options as compared to $7.5 million during 2003.

In January 2003, we redeemed the outstanding $116 million principal amount of 9.50% senior subordinated notes due 2007, pursuant to a redemption notice given on December 30, 2002. The redemption price for these notes was 104.75% and as such, we paid approximately $122 million for these notes. In March 2003, we repaid and retired approximately $6.1 million of our other indebtedness with borrowings from our bank credit facility. In February 2003, we issued a $16 million note to finance an equipment purchase. For more information about this note, see “— Indebtedness.” On October 1, 2003, we repaid the $122.2 million outstanding principal amount of 9.25% senior notes at their maturity.

In November 2002, we announced that our Board of Directors had authorized the repurchase of up to two million shares of our common stock. Depending upon market conditions, shares may be repurchased from time to time at prevailing market prices through open market or negotiated transactions. No date was established for the completion of the share repurchase program and we are not obligated to purchase any shares. Subject to applicable securities laws, repurchases may be made at such times and in such amounts as management deems appropriate. Purchases under the program can be discontinued at any time management feels additional purchases are not warranted. We will finance any purchases with funds from our operations. We did not repurchase any stock during the year ended December 31, 2004. However, during 2003, we repurchased an aggregate of approximately 1.1 million shares of our common stock at a total cost of $13.4 million. These shares were retired and are classified as authorized but unissued shares.

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In July 2003, our Board of Directors instituted a policy of quarterly cash dividends on our common stock. Dividends are declared at our Board’s discretion. We are subject to certain limitations regarding the payment of dividends, such as restricted payment limitations related to our outstanding notes and our bank credit facility. The following table sets forth the cash dividends declared and paid:

Projects

Delta Downs.  In July 2003, we announced development plans for our Delta Downs property and subsequently began an expansion project at Delta Downs that is expected to cost approximately $65 million. The first two phases, which were completed in 2004, involved expanding the size of the casino building to provide customers with a more open and comfortable environment, including wider aisles on the slot floor. The final phase of the project included the development of a 206-room hotel at the property, the addition of food and beverage amenities and an events center. Construction of the final phase began in early 2004 and was completed in March 2005. As of December 31, 2004, we have paid approximately $47 million related to this project since its inception in 2003. We intend to position ourselves better in the market by improving Delta Downs’ casino environment and offering our customers more amenities. In addition, the expansion is intended to help us compete with the casino that Pinnacle Entertainment is expected to open in spring 2005 in Lake Charles, Louisiana.

Blue Chip.  Construction is underway for significant redevelopment at our Blue Chip Hotel and Casino. We are building a new boat, which will allow for more gaming positions and for the casino to be located on one floor instead of on the three-story boat now in operation. We are also constructing a new parking structure and reconfiguring and refurbishing the existing pavilion. With this project, we intend to position ourselves better in the current market environment with an improved facility and to be prepared to compete more effectively if a land-based casino operation is developed in our area in the future. The project is expected to cost approximately $163 million and be completed near the end of 2005. As of December 31, 2004, we have paid approximately $43 million related to this project since its inception in 2003.

We intend to utilize the existing three-story boat in our operations after the completion of the expansion of the gaming operations onto the new boat. We are currently contemplating operational uses for the old boat including utilizing its space for conventions and meetings, offices and/or warehouse storage. Should we decide to sell the old boat, abandon it, or cease to use it in our operations, we would become subject to either an impairment analysis or accelerated depreciation expense, depending upon our intentions, which could have a material impact on our results of operations.

All of the necessary permits are in place for the construction of the Blue Chip project. However, three of our permits have been challenged by third parties. These challenges may cause a delay in the expansion project, which may cause a significant increase in project costs or the expansion may not be completed, all of which would have a significant adverse effect on our business, financial condition and results of operations. These are described in more detail at Item 3. “Legal Proceedings.”

The Pokagon Band of Potawatomi Indians, a federally recognized Native American tribe, announced, in 1994, its intentions to construct a land-based gaming operation in or near the City of New Buffalo, Michigan, which is located less than fifteen miles from Blue Chip. In August 2004, the Pokagons received a favorable ruling from the Michigan Supreme Court regarding the validity of their compact with the State of Michigan; however, the Pokagons have other remaining legal and regulatory issues that must be resolved prior to construction of the proposed gaming facility. If their facility is constructed and begins operations, it could have a material adverse impact on the operations of Blue Chip.

South Coast.  In April 2004, Coast Casinos broke ground for a new hotel-casino named South Coast that is located on approximately 53 acres of land on Las Vegas Boulevard South, adjacent to Interstate 15 and approximately five miles south of Mandalay Bay Resort and Casino. South Coast is expected to include 662 rooms and suites, approximately 2,400 slot machines, 60 table games, seven restaurants, 16 movie theaters, race and sports books, bingo, bowling, an equestrian events center and 150,000 square feet of convention, exhibit and banquet space. Based upon the current construction plans, we expect to spend approximately $470 million, from the date of the merger, to complete the project that is expected to open in early 2006. From July 1, 2004 through December 31, 2004, we have paid approximately $60 million related to this project.

The source of funds for the Delta Downs, Blue Chip and South Coast projects is expected to come from cash flows from operations and availability, after we meet our working capital needs, under our bank credit facility. We could also fund these projects with incremental bank financing, additional debt or equity offerings. Additional financing may not be available to us, or, if available, may not be on terms favorable to us.

Borgata.  In July 2004, we announced that Borgata has commenced planning and design work for substantial additions of both gaming and non-gaming amenities, including additional slot machines, table games, poker tables, restaurants and nightclubs. Construction has begun on the public space expansion project and completion is expected to occur in the second quarter of 2006. The total estimated cost of the public space expansion is approximately $200 million.

In October 2004, we announced that Borgata is in the planning phases for a further expansion that involves a new hotel tower, a new spa and additional meeting room space. As the hotel expansion is currently in the planning process and subject to various approvals, we have not yet determined the cost of the project. Construction for the rooms expansion is expected to commence in the fourth quarter of 2005 with completion scheduled for the fourth quarter of 2007. Borgata expects to finance the expansions from Borgata’s cash flow from operations and from Borgata’s recently

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modified bank credit facility, which is capable of being expanded. We do not expect to make further capital contributions to Borgata for these projects.

We can provide no assurances that our expansion and development projects will be completed within our current estimates, commence operations as expected, include all of the anticipated amenities, features or facilities or achieve market acceptance. Our expansion project at Blue Chip and the expansion of Borgata are subject to the many risks inherent in expansion projects, including potential unanticipated design, construction, regulatory and environmental problems, increased project costs and timing delays. In addition, the South Coast development project is subject to all of the same risks discussed above, as well as those additional risks inherent in the development and operation of a new or expanded business enterprise, including potential unanticipated operating problems. If any of our expansion or development projects do not become operational within the time frame and project costs currently contemplated or do not successfully compete in their markets, it could have a material adverse effect on our business, financial condition and results of operations. Once our projects become operational, they will face many of the same risks that our current properties face including, but not limited to, increases in taxes due to changes in legislation. In addition, the expansion projects relating to existing properties may not help us compete with new or increased competition.

Other Opportunities.  We regularly investigate and pursue additional expansion opportunities both in Nevada and in other markets where casino gaming is currently permitted. We also pursue expansion opportunities in jurisdictions where casino gaming is not currently permitted in order to be prepared to develop projects upon approval of casino gaming. Such expansions will be affected and determined by several key factors, including: