FORM 10-Q

                          SECURITIES AND EXCHANGE COMMISSION
                                Washington, D.C. 20549

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

For the quarterly period ended         September 30, 2008
                               ------------------------------------------------
                                             OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
 ACT OF 1934

For the transition period from              to
                               ------------    -----------------------

                                 Commission file number  000-21430
                                                        ------------

              Riviera Holdings Corporation
      -----------------------------------------------------
   (Exact name of Registrant as specified in its charter)

                 Nevada                                     88-0296885
------------------------------------------------------------------------------
(State or other jurisdiction of               (IRS Employer Identification No.)
incorporation or organization)

2901 Las Vegas Boulevard South, Las Vegas, Nevada                         89109
-------------------------------------------------------------------------------
(Address of principal executive offices)                             (Zip Code)

              (702)794-9527
        -----------------------
 (Registrant's telephone number, including area code)

-----------------------------------------------------------------------
(Former name, former address and former fiscal year, if changed since last
report)

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

Indicate by check mark whether the registrant is a large accelerated filer, an
accelerated filer, a non-accelerated filer, or a smaller reporting company. See
the definitions of "large accelerated filer", "accelerated filer" and "smaller
reporting company" in Rule 12b-2 of the Exchange Act. (Check One)

Large accelerated filer ___ Accelerated filer _X_

Non-accelerated filer ___ (Do not check if smaller reporting company)

Smaller reporting company ___

Indicate by check mark whether the registrant is a shell company (as defined in
Rule 12b-2 of the Exchange Act).  YES ___ NO _X__

As of November 4, 2008, there were 12,498,555 shares of Common Stock, $.001 par
value per share, outstanding.





                                            RIVIERA HOLDINGS CORPORATION

                                                        INDEX

                                                                          Page
PART I.    FINANCIAL INFORMATION

Item 1.    Financial Statements

Condensed Consolidated Balance Sheets at September 30, 2008
(Unaudited) and December 31, 2007                                            3

Condensed Consolidated Statements of Operations (Unaudited) for the
Three and Nine Months Ended September 30, 2008 and 2007                      4

Condensed Consolidated Statements of Cash Flows (Unaudited) for the
Nine Months Ended September 30, 2008 and 2007                                5

Notes to Condensed Consolidated Financial Statements (Unaudited)             6

Item 2.    Management's Discussion and Analysis of Financial Condition
              and Results of Operations                                     14

Item 3.  Quantitative and Qualitative Disclosures About Market Risk         26

Item 4.   Controls and Procedures                                           27

PART II.  OTHER INFORMATION                                                 28

Item 1.  Legal Proceedings                                                  28

Item 1A.   Risk Factors                                                     28

Item 6.  Exhibits                                                           28

Signature Page                                                              29

Exhibits                                                                    30


                                        1




PART I - FINANCIAL INFORMATION

Item 1.   Financial Statements


The accompanying unaudited Condensed Consolidated Financial Statements of
Riviera Holdings Corporation have been prepared in accordance with the
instructions to Form 10-Q, and therefore, do not include all information and
notes necessary for complete financial statements in conformity with generally
accepted accounting principles in the United States. The results from the
periods indicated are unaudited, but reflect all adjustments (consisting only of
normal recurring adjustments) that management considers necessary for a fair
presentation of operating results.

The results of operations for the three and nine months ended September 30, 2008
and 2007 are not necessarily indicative of the results for the entire year.
These financial statements should be read in conjunction with the audited
consolidated financial statements and notes thereto for the year ended December
31, 2007, included in our Annual Report on Form 10-K.




                                        2



RIVIERA HOLDINGS CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands, except share amounts)                  September 30   December 31
---------------------------------------------------------------------------------
                                                         2008            2007
ASSETS                                                (unaudited)
                                                     --------------  ------------
CURRENT ASSETS:
                                                                  
   Cash and cash equivalents                              $ 20,532      $ 28,819
   Restricted cash and investments                           2,772         2,772
   Accounts receivable, net of allowances
     of $277 and $437, respectively                          2,516         3,563
   Inventories                                                 968         1,455
   Prepaid expenses and other assets                         3,039         3,602
                                                     --------------  ------------
       Total current assets                                 29,827        40,211

PROPERTY AND EQUIPMENT, net                                183,283       172,865
OTHER ASSETS, net                                            2,710         2,940
DEFERRED INCOME TAXES, net                                   2,446         2,446
                                                     --------------  ------------
TOTAL                                                    $ 218,266     $ 218,462
                                                     ==============  ============

LIABILITIES AND SHAREHOLDERS' DEFICIENCY
CURRENT LIABILITIES:
   Current portion of long-term debt                         $ 297         $ 226
   Current portion of obligation to officers                 1,000         1,000
   Notes payable                                             2,500             -
   Accounts payable                                         11,529        10,972
   Accrued interest                                             69           188
   Accrued expenses                                         11,890        14,279
                                                     --------------  ------------
     Total current liabilities                              27,285        26,665
 OBLIGATION TO OFFICER - net of current portion                285         1,063
 OBLIGATION UNDER SWAP AGREEMENT                            11,655        13,272
 LONG-TERM DEBT - Net of current portion                   225,320       225,288
                                                     --------------  ------------
       Total liabilities                                   264,545       266,288
                                                     --------------  ------------

COMMITMENTS and CONTINGENCIES (Note 7)

SHAREHOLDERS'  DEFICIENCY:
Common stock ($.001 par value; 60,000,000 shares
     authorized, 17,166,624 and 17,124,624 shares
     issued at September 30, 2008 and December 31,              17            17
     2007, respectively, and 12,498,555 and 12,456,555
     shares outstanding at September 30, 2008 and
     December 31, 2007, respectively)
   Additional paid-in capital                               19,646        18,925
   Treasury stock (4,668,069 shares at September 30,
         2008 and December 31, 2007, respectively)          (9,635)       (9,635)
   Accumulated deficit                                     (56,307)      (57,133)
                                                     --------------  ------------
      Total shareholders' deficiency                       (46,279)      (47,826)
                                                     --------------  ------------
TOTAL                                                    $ 218,266     $ 218,462
                                                     ==============  ============
See notes to condensed consolidated financial statements

                                        3



RIVIERA HOLDINGS CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)
FOR THE THREE AND NINE MONTHS ENDED
SEPTEMBER 30, 2008 AND 2007             Three Months Ended   Nine Months Ended
(In thousands, except per share  amounts) September 30,        September 30,
-------------------------------------------------------------------------------
REVENUES:                               2008       2007      2008        2007
                                      --------- ---------- --------- ----------
                                                          
  Casino                              $ 21,516   $ 28,935  $ 71,062   $ 87,941
  Rooms                                 12,138     14,812    41,561     46,276
  Food and beverage                      6,939      7,976    22,487     24,937
  Entertainment                          3,549      4,102    10,182      9,959
  Other                                  1,657      1,684     5,136      5,041
                                      --------- ---------- --------- ----------
            Total revenues              45,799     57,509   150,428    174,154
   Less - promotional allowances        (5,591)    (5,129)  (16,643)   (16,082)
                                      --------- ---------- --------- ----------
            Net revenues                40,208     52,380   133,785    158,072
                                      --------- ---------- --------- ----------

COSTS AND EXPENSES:
 Direct costs and expenses of
  operating departments:
    Casino                              11,494     13,849    36,333     42,460
    Rooms                                6,377      7,520    19,645     21,619
    Food and beverage                    5,007      6,129    16,349     18,608
    Entertainment                        2,023      2,684     6,384      6,353
    Other                                  315        368       971      1,043
Other operating expenses:
    General and administrative:
        Share-based compensation           188        206       620        759
       Selling, general and
          adminstrative                 10,631     11,496    30,561     31,924
    Mergers, acquisitions and
         development costs                  59        160       104        448
    Depreciation and amortization        3,919      3,304    10,879      9,794
                                      --------- ---------- --------- ----------
        Total costs and expenses        40,013     45,716   121,846    133,008
                                      --------- ---------- --------- ----------
INCOME FROM OPERATIONS                     195      6,664    11,939     25,064
                                      --------- ---------- --------- ----------

OTHER INCOME (EXPENSE)
     Unrealized gain (loss) on
        derivatives                        615     (7,471)    1,617     (6,644)
     Loss on retirement of debt              -    (12,878)        -    (12,878)
     Interest expense, net              (4,274)    (4,569)  (12,730)   (17,660)
                                      --------- ---------- --------- ----------
        Other income (expense), net     (3,659)   (24,918)  (11,113)   (37,182)
                                      --------- ---------- --------- ----------
NET  INCOME  (LOSS)                   $ (3,464) $ (18,254)    $ 826  $ (12,118)
                                      ========= ========== ========= ==========

INCOME (LOSS) PER SHARE DATA:
Income (loss) per share:
   Basic                               $ (0.28)   $ (1.48)   $ 0.07    $ (0.98)
                                      --------- ---------- --------- ----------
   Diluted                             $ (0.28)   $ (1.48)   $ 0.07    $ (0.98)
                                      --------- ---------- --------- ----------
Weighted-average common shares
   outstanding                          12,412     12,326    12,387     12,303
                                      --------- ---------- --------- ----------
Weighted-average common and common
   equivalent shares                    12,412     12,326    12,547     12,303
                                      --------- ---------- --------- ----------

See notes to condensed consolidated financial statements

                                        4



RIVIERA HOLDINGS CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS  (Unaudited)
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2008 AND 2007          Nine Months Ended
(in thousands)                                                   September 30,
--------------------------------------------------------------------------------
                                                               2008       2007
                                                            ---------  ---------
CASH FLOWS FROM OPERATING ACTIVITIES:
                                                                   
Net income (loss)                                              $ 826   $(12,118)
  Adjustments to reconcile net income (loss) to net cash
    provided by operating activities:
    Depreciation  and amortization                            10,879      9,794
    Provision for bad debts, net                                 222        214
    Stock Compensation - Restricted Stock                        462        588
    Stock Compensation - Stock Options                           158        171
    Loss on retirement of debt                                     -     12,878
    Amortization of deferred loan fees                           255        868
    (Increase)Decrease on swap fair value                     (1,617)     6,644
    Changes in operating (assets) and liabilities:
      Accounts receivable                                        825     (1,586)
      Inventories                                                487        313
      Prepaid expenses and other assets                          539        241
      Accounts payable                                        (2,551)      (980)
      Accrued interest                                          (119)      (910)
      Accrued expenses                                        (2,389)     1,910
      Deferred compensation plan liability                       (28)       (24)
      Obligation to officers                                    (750)      (750)
                                                            ---------  ---------
       Net cash provided by operating activities               7,199     17,253
                                                            ---------  ---------
CASH FLOWS FROM INVESTING ACTIVITIES:
      Capital expenditures  - Las Vegas, Nevada              (16,349)    (4,530)
      Capital expenditures - Black Hawk, Colorado             (1,610)    (1,561)
      Restricted cash and investments                              -     (2,772)
                                                            ---------  ---------
       Net cash used in investing activities                 (17,959)    (8,863)
                                                            ---------  ---------
CASH FLOWS FROM FINANCING ACTIVITIES:

      Payments on long-term borrowings                          (127)  (223,798)
      Increase in deferred loan costs                              -     (1,902)
      Proceeds from exercise of stock options                    100          -
      Proceeds from line of credit                             2,500          -
      Proceeds from issuance of long-term debt                     -    225,000
                                                            ---------  ---------
        Net cash provided by (used in) financing activities    2,473       (700)
                                                            ---------  ---------
(DECREASE)INCREASE  IN CASH AND CASH EQUIVALENTS              (8,287)     7,690
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD                28,819     25,285
                                                            ---------  ---------
CASH AND CASH EQUIVALENTS, END OF PERIOD                    $ 20,532   $ 32,975
                                                            =========  =========
SUPPLEMENTAL DISCLOSURE OF NONCASH FINANCING ACTIVITIES:
  Property acquired with debt and accounts payable           $ 3,338      $ 439

  Cash paid for interest                                    $ 12,759   $ 17,958

See notes to condensed consolidated financial statements

                                        5


1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation and Nature of Operations

Riviera Holdings Corporation ("RHC") and its wholly-owned subsidiary, Riviera
Operating Corporation ("ROC") (together with their wholly-owned subsidiaries,
the "Company"), were incorporated on January 27, 1993, in order to acquire all
assets and liabilities of Riviera, Inc. Casino-Hotel Division on June 30, 1993,
pursuant to a plan of reorganization. The Company operates the Riviera Hotel &
Casino (the "Riviera Las Vegas") on the Strip in Las Vegas, Nevada.

In February 2000, the Company opened its casino in Black Hawk, Colorado, which
is owned through Riviera Black Hawk, Inc. ("RBH"), a wholly-owned subsidiary of
ROC.

Casino operations are subject to extensive regulation in the states of Nevada
and Colorado by the respective Gaming Control Boards and various other state and
local regulatory agencies. Our management believes that the Company's procedures
comply, in all material respects, with the applicable regulations for
supervising casino operations, recording casino and other revenues, and granting
credit.

Principles of Consolidation

The consolidated financial statements include the accounts of RHC and its direct
and indirect wholly-owned subsidiaries. All material intercompany accounts and
transactions have been eliminated.

Reclassifications

Certain reclassifications, having no effect on net income have been made to the
previously issued condensed consolidated financial statements to conform to the
current period's presentation of the Company's condensed consolidated financial
statements.

Earnings Per Share

Basic net income (loss) per share amounts are computed by dividing net income
(loss) by weighted average shares outstanding during the period. Diluted net
income (loss) per share amounts are computed by dividing net income (loss) by
weighted average shares outstanding, plus, the dilutive effect of common share
equivalents during the period. The Company incurred a loss during the three
month periods ended September 30, 2008 and 2007 and the nine month periods ended
September 30, 2007 and, as a result 128,373, 267,801 and 266,385 of potentially
dilutive options and non-vested restricted shares, respectively, were excluded
from the diluted net loss per share calculation as the effect would be
anti-dilutive. Additionally, there were 72,000 and 24,000 potentially dilutive
non-employee, director options that were excluded from the diluted net income
(loss) per share calculation for the three and nine months ended September 30,
2008 and September 30, 2007, respectively, as the options' strike price exceeded
the underlying stock price as of September 30, 2008.

                                        6

Income Taxes

The income tax provision, if any, for the three and nine months ended September
30, 2008 and 2007, were fully offset by the utilization of loss carryforwards
for which a valuation allowance had been previously provided. Based on the
history of net operating losses, and current year losses, it is more likely than
not that the Company will not be able to recognize the deferred assets. As such,
a valuation allowance has been established and the current year tax benefit has
not been recognized.

We adopted the provisions of Financial Accounting Standards Board ("FASB")
Interpretation No. 48, Accounting for Uncertainty in Income Taxes ("FIN 48") on
January 1, 2007. There was no effect on our financial condition or results of
operations as a result of implementing FIN 48. The Company does not believe
there will be any material changes in our unrecognized tax positions over the
next 12 months. The Company does not have any accrued interest or penalties
associated with any unrecognized tax benefits.

Estimates and Assumptions

The preparation of condensed consolidated financial statements in conformity
with accounting principles generally accepted in the United States of America
requires our management to make estimates and assumptions that affect the
reported amounts of assets and liabilities, disclosure of contingent assets and
liabilities at the date of the financial statements, and the reported amounts of
revenues and expenses during the reporting period. Significant estimates used by
the Company include estimated useful lives for depreciable and amortizable
assets, certain accrued liabilities and the estimated allowances for
receivables, estimated fair value for stock-based compensation, estimated fair
value of derivative instruments and deferred tax assets. Actual results may
differ from estimates.

Restricted Cash

This cash is held as a  certificate  of deposit  for the benefit of the State of
Nevada Workers Compensation  Division as a requirement of our being self-insured
for Workers Compensation. The cash is held in a one-year certificate of deposit,
which  matures in 2009.  We do not believe this  certificate  of deposit will be
required after it matures in 2009 and as such the certificate of deposit is held
as a current asset.

Mergers, Acquisitions and Development Costs

Mergers, acquisitions and development costs consist of associated legal fees.

Derivative Instruments

The Company accounts for derivative instruments in accordance with Statement of
Financial Accounting Standards ("SFAS") No. 133, "Accounting for Derivative
Instruments and Hedging Activities," and all amendments and interpretations
thereto. SFAS No. 133 requires that all derivative instruments be recognized in
the financial statements at fair value. Any changes in fair value are recorded
in the statements of operations, depending on whether the derivative is
designated and qualifies for hedge accounting, the type of hedge transaction and
the effectiveness of the hedge. The estimated fair value of our derivative
instruments is based on Level 2 market prices obtained from dealer quotes. Such

                                        7

quotes represent the estimated amounts we would receive or pay to terminate the
contracts. The Company uses an interest rate swap to manage the mix of our debt
between fixed and variable rate instruments, which were entered into on June 8,
2007. As of September 30, 2008, the Company has one interest rate swap agreement
for the notional amount of $215 million. The Company has determined that the
interest rate swap does not meet the requirements to qualify for hedge
accounting and have therefore recorded a $615,000 gain and a $7.5 million loss
for the change in fair value of this derivative instrument in the condensed
consolidated statements of operations for the three month period ended September
30, 2008 and 2007, respectively. The Company has recorded a $1.6 million gain
and a $6.6 million loss for the change in fair value of this derivative
instrument in the condensed consolidated statements of operations for the nine
month period ended September 30, 2008 and 2007, respectively.

Recent Accounting Pronouncements

In May 2008, the FASB issued SFAS 162, "The Hierarchy of Generally Accepted
Accounting Principles", which identifies the sources of accounting principles
and the framework for selecting the principles used in the preparation of
financial statements of nongovernmental entities that are presented in
conformity with generally accepted accounting principles. SFAS 162 will become
effective sixty days following the Securities and Exchange Commission's approval
of the Public Company Accounting Oversight Board amendments to AU Section 411,
"The Meaning of Present Fairly in Conformity With Generally Accepted Accounting
Principles". The adoption of the provisions of SFAS 162 is not anticipated to
materially impact our consolidated financial statements.

In March 2008, the Financial Accounting Standards Board ("FASB") released
("SFAS") No. 161, "Disclosures about Derivative Instruments and Hedging
Activities." SFAS No. 161 requires additional disclosures related to the use of
derivative instruments, the accounting for derivatives and the financial
statement impact of derivatives. SFAS No. 161 is effective for fiscal years
beginning after November 15, 2008. The Company is currently assessing the impact
the adoption of SFAS No. 161 will have on the condensed consolidated financial
statements.

In February 2008, the FASB issued FASB Staff Position FAS 157-2, which defers
the effective date of SFAS 157 for nonfinancial assets and liabilities that are
recognized or disclosed at fair value in the entity's financial statements on a
recurring basis to fiscal years beginning after November 15, 2008, and interim
periods within those fiscal years. We are evaluating SFAS 157 as it relates to
nonfinancial assets and have not yet determined the impact the adoption will
have on our consolidated financial statements.

In December 2007, FASB released SFAS No. 141(R), "Business Combinations," to
establish accounting and reporting standards to improve the relevance,
comparability and transparency of financial information that an acquirer would
provide in its consolidated financial statements from a business combination.
SFAS No. 141(R) is effective for fiscal years beginning after December 15, 2008.
The Company is currently assessing the impact the adoption of SFAS No. 141(R)
will have on the Company's consolidated financial position and results of
operations.

In December 2007, FASB also released SFAS No. 160, "Noncontrolling Interests in
Consolidated Financial Statements -- an amendment of Accounting Research
Bulletin No. 51," to improve the relevance, comparability and transparency of
the financial information that a reporting entity provides in its consolidated
financial statements by establishing accounting and reporting standards for the
noncontrolling interest in a subsidiary and for the deconsolidation of a
subsidiary. SFAS No. 160 is effective for fiscal years beginning after December
15, 2008. The Company is currently assessing the impact the adoption of SFAS No.
160 will have on the Company's consolidated financial position and results of
operations and does not believe it will have a material impact.

                                        8


2. OTHER ASSETS

Other assets included deferred loan fees of $1.5 million and $1.7 million as of
September 30, 2008 and December 31, 2007, respectively. The deferred loan fees
were associated with refinancing our debt on June 8, 2007. The Company is
amortizing the deferred loan fees over the term of the loan.

3. LONG TERM DEBT AND COMMITMENTS

On June 8, 2007, RHC and its restricted subsidiaries, namely ROC, Riviera Gaming
Management of Colorado, Inc. and RBH (collectively, the "Subsidiaries") entered
into a $245 million Credit Agreement, the "New Credit Facility") with Wachovia
Bank, National Association ("Wachovia"), as administrative agent.

The New Credit Facility includes a $225 million seven-year term loan ("Term
Loan"), with no amortization for the first three years, a one percent
amortization for each of years four through six, and a full payoff in year
seven, in addition to an annual mandatory pay down of 50% of excess cash flows,
as defined. The New Credit Facility also includes a $20 million five-year
revolving credit facility ("Revolving Credit Facility") under which RHC can
obtain extensions of credit in the form of cash loans or standby letters of
credit ("Standby L/Cs"). RHC is permitted to prepay the New Credit Facility
without premium or penalties except for payment of any funding losses resulting
from prepayment of any LIBOR rate loans. The rate for the Term Loan was LIBOR
plus 2.0%. Pursuant to a floating rate to fixed rate swap agreement that became
effective June 29, 2007 that RHC entered into under the New Credit Facility,
substantially the entire Term Loan, with quarterly step-downs, bears interest at
an effective fixed rate of 7.485% (7.405% for 2008) per annum (2.0% above the
LIBOR Rate in effect on the lock-in date of the swap agreement). The New Credit
Facility is guaranteed by the Subsidiaries and is secured by a first priority
lien on substantially all of the Company's assets.

The Company used substantially all of the proceeds of the Term Loan to discharge
its obligations under the Indenture, dated June 26, 2002 (the "Indenture"), with
The Bank of New York as trustee (the "Trustee"), governing the 11% Notes. On
June 8, 2007 RHC deposited these funds with the Trustee and issued to the
Trustee a notice of redemption of the 11% Notes, which was executed on July 9,
2007.

The interest rate on loans under the Revolving Credit Facility will depend on
whether they are in the form of revolving loans or swing line loans. For each
revolving loan, the interest rate will depend on whether RHC elects to treat the
loan as an "Alternate Base Rate" loan ("ABR Loan") or a LIBOR Rate loan. Swing
line loans will bear interest at a per annum rate equal to the Alternative Base
Rate plus the Applicable Percentage for revolving loans that are ABR Loans. The
applicable percentage for swing line loans ranges from 0.50% to 1% depending on
the Consolidated Leverage Ratio as defined in our New Credit Facility Credit
Agreement.

RHC will also pay fees under the Revolving Credit Facility as follows: (i) a
commitment fee in an amount equal to either .50% or 0.375% (depending on the
Consolidated Leverage Ratio) per annum on the average daily unused amount of the
Revolving Credit Facility; (ii) Standby L/C fees equal to between 2.00% and
1.50% (depending on the Consolidated Leverage Ratio) per annum on the average
daily maximum amount available to be drawn under each Standby L/C issued and
outstanding from the date of issuance to the date of expiration; and (iii) a
Standby L/C facing fee in the amount of 0.25% per annum on the average daily
maximum amount available to be drawn under each Standby L/C. In addition to the
Revolving Credit Facility fees, RHC will pay an annual administrative fee of
$35,000.

                                        9


The New Credit Facility contains affirmative and negative covenants customary
for financings of this nature including, but not limited to, restrictions on
RHC's incurrence of other indebtedness.

The New Credit Facility contains events of default customary for financings of
this nature including, but not limited to, nonpayment of principal, interest,
fees or other amounts when due; violation of covenants; failure of any
representation or warranty to be true in all material respects; cross-default
and cross-acceleration under RHC's other indebtedness or certain other material
obligations; certain events under federal law governing employee benefit plans;
a "change of control" of RHC; dissolution; insolvency; bankruptcy events;
material judgments; uninsured losses; actual or asserted invalidity of the
guarantees or the security documents; and loss of any gaming licenses. Some of
these events of default provide for grace periods and materiality thresholds.
For purposes of these default provisions, a "change in control" of RHC includes:
a person's acquisition of beneficial ownership of 35% or more of RHC's stock
coupled with a gaming license and/or approval to direct any of RHC's gaming
operations, a change in a majority of the members of RHC's board of directors
other than as a result of changes supported by RHC's current board members or by
successors who did not stand for election in opposition to RHC's current board,
or RHC's failure to maintain 100% ownership of the Subsidiaries.

Guarantor Information

The New Credit Facility is guaranteed by the Subsidiaries, which are all of the
restricted subsidiaries. These guaranties are full, unconditional, and joint and
several. RHC's unrestricted subsidiaries, which have no operations and do not
significantly contribute to the financial position or results of operations, are
not guarantors of the New Credit Facility.

4. STOCK REPURCHASES

There were no shares of RHC common stock purchased by the Deferred Compensation
Plan for the three months ended September 30, 2008 or 2007. The Deferred
Compensation Plan distributed to participants 94,324 shares for the nine months
ended September 30, 2007. No distribution was made for the nine months ended
September 30, 2008.

5. SHARE-BASED PAYMENTS

The Company expensed $34,000 and $158,000 for options during the three and nine
months ended September 30, 2008, respectively. The Company expensed $45,000 and
$171,000 for options during the three and nine months ended September 30, 2007,
respectively. To recognize the cost of option grants, the Company estimates the
fair value of each director or employee option grant on the date of the grant
using the Black-Scholes option pricing model. 24,000 options were granted solely
to directors during the three months ended June 30, 2008. For the valuation of
options granted in 2008, we assumed that the dividend yield was 0%. Three of the
directors have reached the age of 62. The options for these directors were
valued based on an options life expectancy of one year, a risk expected
volatility of 55% and a risk-free interest rate of 2%. The options for the
remaining director were valued based on an options life expectancy of 6.75
years, a risk expected volatility of 66% and a risk-free interest rate of 3.23%.

                                        10


Additionally, the Company amortized $154,000 and $462,000 in restricted stock
for the three and nine months ended September 30, 2008, respectively. The
Company amortized $160,000 and $588,000 in restricted stock for the three and
nine months ended September 30, 2007, respectively. Restricted stock was issued
to several key management team members and directors in 2005. The restricted
stock is amortized over a five year vesting period commencing on the date of
issuance.

The activity for all stock options currently outstanding is as follows;



                                                  Weighted Average     Aggregate
                                  Shares    Share Exercise  Remaining  Intrinsic
                                               Price          Life       Value
                                                           
Outstanding, June 30, 2008        240,000   $   8.99
   No Activity
                               -------------
Outstanding, September 30, 2008   240,000    $  8.99       6.75 years    $-0-
                               =============
Exercisable September 30, 2008    168,000   $   2.34       3.57 years   $841,680
                                ============


6. FAIR VALUE MEASUREMENT

During the nine months ended September 30, 2008, we adopted SFAS 159, "The Fair
Value Option for Financial Assets and Financial Liabilities - Including an
amendment of FASB Statement No. 115", and have not made any fair value elections
with respect to any eligible assets or liabilities as permitted under the
provisions of SFAS 159 to date. We also adopted SFAS 157, "Fair Value
Measurements" during the nine months ended September 30, 2008, for financial and
nonfinancial assets and liabilities measured on a recurring basis. We currently
do not have any nonfinancial assets or liabilities measured at fair value on a
recurring basis. SFAS 157 defines fair value, establishes a framework for
measuring fair value and expands disclosure about fair value measurements. SFAS
157 does not require any new fair value measurements, but rather applies to
other accounting pronouncements that require or permit fair value measurements.
This standard utilizes a fair value hierarchy that prioritizes the inputs to
valuation techniques used to measure fair value into three levels. Fair values
determined by Level 1 inputs utilize quoted prices (unadjusted) in active
markets for identical assets or liabilities that we have the ability to access.
Level 2 inputs include inputs other than quoted prices included in Level 1 that
are observable for the asset or liability, either directly or indirectly. Level
2 inputs include quoted prices for similar assets and liabilities in active
markets, and inputs other than quoted prices that are observable for the asset
or liability, such as interest rates and yield curves that are observable at
commonly quoted intervals. Level 3 inputs are unobservable, and include
situations in which there is little, if any, market activity for the asset or
liability at the measurement date.

The following table presents information about our financial liabilities
measured at fair value on a recurring basis at September 30, 2008, and indicates
the fair value hierarchy of the valuation techniques utilized to determine such
fair value (amounts in thousands, unaudited):



                    Quoted prices in   Significant    Significant   Balance at
                      Active Markets      Other     Unobservable   September 30,
                  For Identical Assets  Observable       Inputs       2008
                        (Level 1)        (Level 2)     (Level 3)     Inputs


Liabilities:

                                                           
Interest rate swaps        -            $11,655            -        $11,655


                                        11


The fair value of the interest rate swap is based on quoted market prices from
a major commercial bank for similar instruments. These quoted market prices are
based on relevant factors such as the contractual terms of our interest rate
swap agreement and interest rate curves and are adjusted for the non-performance
risk of either us or our counterparties, as applicable.

7. COMMITMENTS AND CONTINGENCIES

Salary Continuation Agreements

RHC, ROC and RBH, entered into Salary Continuation Agreements (the "2008
Agreements") with three named executive officers and 59 other significant
employees. The 2008 Agreements entitle such officers and employees certain
compensation and benefits if ROC or RBH, as applicable, terminates their
employment without cause (a "Company Termination") within a specified time
period after a change in control of RHC, as follows:

         (i) The Agreements ROC and RHC entered into with 53 significant ROC
employees entitle 51 such employees to six months of base salary and health
insurance benefits, subject to such employees' duty to mitigate by obtaining
similar employment elsewhere, in the event of a Company Termination within 12
months after a change in control. Two employees are entitled to 12 months of
base salary and 24 months of health insurance benefits in the event of a Company
Termination within 24 months after a change in control of RHC, with no duty to
mitigate. Substantially similar Agreements were also entered into with 6 RBH
employees, which include in such Agreements' definition of a "change in control"
the sale of RBH by RHC and/or ROC to a non-affiliate of either the Company or
ROC.

         (ii) The Agreement ROC and RHC entered into with William L Westerman,
RHC's Chief Executive Officer, President and Chairman of the Board and Tullio J.
Marchionne, RHC's Secretary and General Counsel and ROC's Secretary and
Executive Vice President, entitle Mr. Westerman and Mr. Marchionne to 24 months
of base salary and 24 months of health insurance benefits in the event of a
Company Termination within 24 months after a change in control of RHC. The
Agreement ROC and RHC entered into with Mr. Simons, RHC's Treasurer and CFO and
ROC's Vice President of Finance, entitles Mr. Simons to 12 months of base salary
and 24 months of health insurance benefits in the event of a Company Termination
within 24 months after a change in control of RHC.

The estimated total amount payable under all such agreements was approximately
$5.7 million, which includes $710,000 in benefits, as of September 30, 2008.

Legal Proceedings and Related Events

The Company is party to routine lawsuits, either as plaintiff or as defendant,
arising from the normal operations of a hotel and casino. We do not believe that
the outcome of such litigation, in the aggregate, will have a material adverse
effect on the Company's financial position or results of the operations.


                                        12

8. SEGMENT DISCLOSURES

The  Company  determines  our  segments  based  upon the  review  process of the
Company's  Chief  Financial  Officer who  reviews by  geographic  gaming  market
segments:  Riviera Las Vegas and Riviera Black Hawk. The key indicator  reviewed
by the Company's Chief Financial Officer is "property EBITDA", as defined below.
All intersegment revenues and expenses have been eliminated.



                                 Three months ended         Nine months ended
                                     September 30,              September 30,
                                 ----------------------  ---------------------
(Dollars in thousands)              2008         2007          2008       2007
                                 ---------  -----------  ---------  ----------
Net Revenues:
                                                          
   Riviera Las Vegas               $ 30,231     $ 37,940   $101,206   $ 116,597
   Riviera Black Hawk                 9,977       14,440     32,579      41,475
                                  ---------  -----------  ---------  ----------
       Total net revenues          $ 40,208     $ 52,380   $133,785   $ 158,072
                                  =========  ===========  =========  ==========

Property EBITDA (1):
  Riviera Las Vegas                $ 2,931      $ 6,131   $ 16,551    $ 24,143
  Riviera Black Hawk                 2,458        5,440      9,891      15,132

Other Costs and Expenses
   Corporate Expenses
        Equity-based compensation       188          206        620         759
        Other corporate expenses      1,028        1,237      2,900       3,210
   Depreciation and amortization      3,919        3,304     10,879       9,794
   Mergers, acquitions and
       development costs                 59          160        104         448
   Interest Expense, net              4,274        4,569     12,730      17,660
   Loss on retirement of debt             -       12,878          -      12,878
   Decrease(Increase) in value
       of deriviatives                 (615)       7,471     (1,617)      6,644
                                 -----------  -----------  ---------  ----------
               Total Other Costs
                  and Expenses        8,853       29,825     25,616      51,393
                                 -----------  -----------  ---------  ----------
               Net Income          $ (3,464)   $ (18,254)     $ 826   $ (12,118)
                                 ===========  ===========  =========  ==========

                                September 30  December 31
                               -------------  -----------
Property and Equipment, net         2008          2007
                               -------------  -----------
Las Vegas                         $ 121,587    $ 109,885
Black Hawk                           61,696       62,980
                               -------------  -----------
         Total Property and
           Equipment, net         $ 183,283    $ 172,865
                               =============  ===========

Capital Expenditures
Las Vegas                         $ 19,358
Black Hawk                           1,939
                              -------------
   Total Capital Expenditures     $ 21,297
                              =============


(1)Property   EBITDA  consists  of  earnings  before  interest,   income  taxes,
depreciation,  and  amortization.  Property  EBITDA  is  presented  solely  as a
supplemental  disclosure  because we believe that it is 1) a widely used measure
of operating  performance in the gaming  industry,  and 2) a principal basis for
valuation  of  gaming  companies  by  certain  analysts  and  investors.  We use
property-level  EBITDA (property EBITDA before corporate expense) as the primary
measure  of  our  business  segment  properties'   performance,   including  the
evaluation of operating personnel. Property EBITDA should not be construed as an
alternative to operating income,  as an indicator of our operating  performance,
as an  alternative  to cash flows  from  operating  activities,  as a measure of
liquidity,  or as any other  measure  determined in  accordance  with  generally
accepted  accounting  principles.  We  have  significant  uses  of  cash  flows,
including capital expenditures, interest payments and debt principal repayments,
which are not reflected in property  EBITDA.  Also,  other companies that report
property EBITDA  information may calculate property EBITDA in a different manner
than we do. A reconcillation of property EBITDA to net income (loss) is included
in these financial schedules.

                                        13

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

Overall Outlook and Recent Developments

General

We own and operate the Riviera Hotel and Casino on the Strip in Las Vegas,
Nevada ("Riviera Las Vegas"), and the Riviera Black Hawk Casino in Black Hawk,
Colorado ("Riviera Black Hawk").

Our capital expenditures for Riviera Las Vegas are geared to maintain the hotel
rooms and amenities in sufficient condition to compete for customers in the
convention and mature adult markets. Room rental rates and slot revenues are the
primary factors driving our operating margins. We use technology to maintain
labor costs at a reasonable level, including kiosks for hotel check-in, slot
club activities and slot ticket redemptions.

In Black Hawk, the $5 maximum bet restricts our ability to generate table games
revenue, and the area is basically a "locals" slot customer market. Our capital
expenditures in Black Hawk are geared toward maintaining competitive slot
machines in comparison to the market.

Results of Operations

Three Months Ended September 30, 2008 Compared to Three Months Ended
September 30, 2007

The following table sets forth, for the periods indicated, certain operating
data for Riviera Las Vegas and Riviera Black Hawk. Income from operations does
not include intercompany management fees.



                                                  Third Quarter
                                                             Incr/         Incr/
                         (In Thousands)     2008     2007  $ (Decr)      %(Decr)
                                            ----     ----  -------      --------

Net Revenues
                                                               
   Riviera Las Vegas                     $30,231  $37,940   $ (7,709)     (20.3%)
   Riviera Black Hawk                      9,977   14,440     (4,463)     (30.9%)
                                           -----   ------  ---------
      Total Net Revenues                 $40,208  $52,380   $(12,172)     (23.2%)
                                         =======  =======  =========

Property Income from Operations
   Riviera Las Vegas                        $229   $4,572    $(4,343)     (95.0%)
   Riviera Black Hawk                      1,241    3,695     (2,454)     (66.4%)
                                           -----    -----  ----------
   Property Income from Operations        $1,470   $8,267    $(6,797)     (82.2%)
                                          ======   ======    ========
   Corporate Expenses
         Equity Compensation               (188)    (206)         18        8.7%
         Other Corporate Expense         (1,028)  (1,237)        209       16.9%
    Mergers Acquisitions and
           Development Costs                (59)    (160)        101       63.1%
                                            ----    -----        ---
        Total Income from Operations        $195   $6,664    $(6,469)     (97.1%)
                                            ====   ======    ========

Operating Margins (1)
   Riviera Las Vegas                        0.8%    12.1%                (11.3%)
   Riviera Black Hawk                      12.4%    25.6%                (13.2%)


                                         14

(1) Operating margins represent income from operations as a percentage of net
revenues by property.

Riviera Las Vegas

Revenues

         Net revenues for the three months ended September 30, 2008 were $30.2
million, a decrease of $7.7 million, or 20.3%, from $37.9 million for the
comparable period in the prior year.

           Casino revenues for the three months ended September 30, 2008 were
$11.8 million, a decrease of $3.1 million, or 20.5%, from $14.9 million for the
comparable period in the prior year. Casino revenues are comprised primarily of
slot machine and table game revenues. In comparison to the same period in the
prior year, slot machine revenue was $9.1 million, a decrease of $1.8 million,
or 18.3%, from $10.9 million and table game revenue was $2.4 million, a decrease
of $0.7 million, or 22.7% from $3.1 million. Slot machine and table game
revenues decreased primarily due to lower slot machine and table game amounts
wagered as a result of less hotel occupancy, the effects of the slow economy on
consumer spending and encumbered access due to construction at neighboring
projects. Slot machine win per unit per day for the three months ended September
30, 2008 was $107.88, a decrease of $18.66, or 14.8%, from $126.34 for the
comparable period in the prior year.

         Room rental revenues for the three months ended September 30, 2008 were
$12.1 million, a decrease of $2.7 million, or 18.1%, from $14.8 million for the
comparable period in the prior year. The decrease in room rental revenues was
primarily due to a 12.9% decrease in occupied rooms and a 5.0% decrease in
average daily room rates. The decrease in occupancy was primarily the result of
lower leisure and convention segment occupancy due to weaker economic conditions
and higher travel costs. The decrease in average daily room rates was due to
lower leisure segment room rates. This was due to increased room supply at
competing Las Vegas hotel and casino properties resulting in significant
downward market pressure on hotel room rental rates.

         Hotel room occupancy percentage for the three months ended September
30, 2008, was 87.1% compared to 93.9% for the same period in the prior year. The
hotel room occupancy percentage is calculated by dividing total occupied rooms
by total rooms available for sale. Room renovations were the primary reason that
7.3% of the hotel rooms were unavailable during the third quarter of 2008.
During the third quarter of 2008, 50.1% and 34.7% of the occupied rooms were
leisure and convention segment rooms, respectively. Average daily room rental
rate, or ADR, was $75.17, a decrease of $3.96, or 5.0%, from $79.13 for the
comparable period in the prior year. The decrease in ADR was due primarily to a
$16.85, or 24.6%, decrease in leisure segment room rental rates to $51.58 from
$68.43 for the comparable period in the prior year. Revenue per available room,
or RevPar, was $65.47, a decrease of $8.81, or 11.9%, from $74.28 for the
comparable period in the prior year. The decrease in RevPar was the result of
decreases in occupied rooms and average daily room rental rates as described
above.

         Food and beverage revenues for the three months ended September 30,
2008 was $5.6 million, a decrease of $0.9 million, or 14.6%, from $6.5 million
for the comparable period in the prior year. The decrease in food and beverage
revenue was due primarily to a $0.8 million decrease in food revenue. Food
covers decreased 9.7% and the average check decreased 5.8% from the comparable
period in the prior year as a result of the weak economy, reduced hotel
occupancy and strategic closure of select food and beverage outlets during low
volume periods. Food and beverage revenues include $1.3 million in revenues
related to items offered to high-value guests on a complimentary basis.

                                        15


         Entertainment revenues for the three months ended September 30, 2008
were $3.5 million, a decrease of $0.6 million, or 13.5%, from $4.1 million for
the comparable period in the prior year. The decrease in entertainment revenue
is due to lower ticket sales in all our entertainment venues primarily as a
result of lower occupancy and the weaker economy.

         Promotional allowances for the three months ended September 30, 2008
were $4.4 million, an increase of $0.5 million, or 12.4%, from $3.9 million for
the comparable period in the prior year. Promotional allowances are comprised of
food, beverage, hotel room nights and other items provided on a complimentary
basis primarily to our high-value casino players. The increase in promotional
allowances is due primarily to more aggressive offerings designed to increase
casino and hotel room rental revenues.

Costs and Expenses

         Casino costs and expenses for the three months ended September 30, 2008
were $6.7 million, a decrease of $1.2 million, or 14.8%, from $7.9 million for
the comparable period in the prior year. The decrease in casino expenses is
primarily due to a reduction in slot and table game payroll and related costs
which partially offset the $3.1 million decrease in casino revenue.

         Room rental costs and expenses for the three months ended September 30,
2008 were $6.4 million, a decrease of $1.1 million, or 15.2%, from $7.5 million
for the comparable period in the prior year. The decrease in room rental
expenses partially offsets the $2.7 million decrease in room rental revenues and
is primarily due to reduced payroll and related costs in conjunction with a
12.9% decrease in occupied rooms.

         Food and Beverage costs and expenses for the three months ended
September 30, 2008 were $4.6 million, a decrease of $1.1 million, or 19.1%, from
$5.7 million for the comparable period in the prior year. The decrease in food
and beverage costs and expenses was due to reduced food and beverage cost of
sales, less payroll and related costs and less food and beverage operating
expenses to partially offset the $0.9 million decrease in food and beverage
revenues. Plus, to manage costs, several food and beverage outlets were closed
during lower occupancy periods.

         Entertainment department costs and expenses for the three months ended
September 30, 2008 were $2.0 million, a decrease of $0.7 million, or 24.6%, from
$2.7 million for the comparable period in the prior year. The decrease in
entertainment department costs and expenses is primarily due to $0.4 million
reduction in contractual payments to the entertainment producers as a result of
less ticket sales and entertainment revenues.

Income from Operations

            Income from operations for the three months ended September 30, 2008
were $0.2 million, a decrease of $4.4 million, or 95.0%, from $4.6 million for
the comparable period in the prior year. The decrease is principally due to
decreased casino, room rental and food and beverage revenues without offsetting
costs and expenses reductions.

                                        16


         Operating margins were 0.8% for the three months ended September 30,
2008 in comparison to 12.1% for the comparable period in the prior year.
Operating margins decreased primarily due to revenue decreases in the high
margin slot and room rental operations without correlating decreases in costs
and expenses. Slot revenues decreased $1.8 million, or 18.3% and room revenues
decreased $2.7 million, or 18.1%. Occupied rooms decreased by 12.9% and the
average daily room rental rate decreased by 5.0%.

Riviera Black Hawk

Revenues

         Net revenues for the three months ended September 30, 2008 were $10.0
million, a decrease of $4.4 million, or 30.9%, from $14.4 million for the
comparable period in the prior year. The decrease was primarily due to a slot
machine revenue decrease of $4.2 million, or 31.1%, to $9.5 million from $13.7
million for the comparable period in the prior year. Slot machine revenue per
unit per day was $125.24, a decrease of $41.60, or 24.9%, from $166.84 for the
comparable period in the prior year. The decrease in slot machine revenues was
primarily the result of less slot machine wagering due to increased fuel costs,
weak economic conditions and the effects of the smoking ban in Colorado which
went into effect January 1, 2008.

         Food and beverage revenues for the three months ended September 30,
2008 were $1.4 million, a decrease of $0.1 million, or 6.0%, from $1.5 million
for the comparable period in the prior year. The decrease was due primarily to
less customer redemption of player points earned and coupons for complimentary
food and beverage items. Food and beverage revenues include revenues related to
items offered to high-value guests on a complimentary basis. These revenues
represent approximately 70% of total food and beverage revenues.

Costs and Expenses

         Casino expenses for the three months ended September 30, 2008 were $4.8
million, a decrease of $1.2 million, or 19.9%, from $6.0 million for the
comparable period in the prior year. The decrease in casino expenses is due
primarily to a reduction in slot machine related labor costs to partially offset
the $4.2 million decrease in slot machine revenue.

         General and administrative expenses for the three months ended
September 30, 2008 were $2.4 million, a decrease of $0.2 million, or 10.0%, from
$2.6 million for the comparable period in the prior year. The decrease in
general and administrative expenses was primarily due to payroll and related
costs reductions to offset the $4.4 million reduction in net revenues.

Income from Operations

         Income from operations for the three months ended September 30, 2008
were $1.2 million, a decrease of $2.5 million, or 66.4%, from $3.7 million for
the comparable period in the prior year. The decrease is related primarily to
the decreased slot revenues as described above.

         Operating margins were 12.4% for the three months ended September 30,
2008 in comparison to 25.6% for the comparable period in the prior year.
Operating margins decreased primarily due to a $4.2 million decrease in slot
machine revenues within our high operating margin slot operation without
correlating reductions in costs and expenses.

                                        17


Consolidated Operations

Other Expense

                  Other expense for the three months ended September 30, 2008
was $3.7 million, a decrease of $21.2 million, or 85.3%, from $24.9 million for
the comparable period in the prior year. The decrease is primarily due to a
$12.9 million loss on retirement of debt recorded during the third quarter of
2007 and a decrease of $8.1 million in the amount recorded for unrealized loss
on derivatives. The loss on retirement of debt was related to the retirement of
our 11% Notes as described below under Liquidity and Capital Resources.
Unrealized gain on derivatives for the three months ended September 30, 2008
were $0.6 million compared to a loss of $7.5 million for the comparable period
in the prior year. The gain and loss on derivatives is the result of changes in
the valuation of our interest rate swap agreement which is referenced in the
Notes to the Condensed Consolidated Financial Statements in this Form 10-Q.

Net Loss

            Net Loss for the three months ended September 30, 2008 was $3.5
million, a decrease of $14.8 million, from $18.3 million for the comparable
period in the prior year. The decrease in net loss is primarily due to the $21.2
million decrease in other expense as described above partially offset by a $6.5
million decrease in consolidated income from operations.

Nine Months Ended September 30, 2008 Compared to Nine Months Ended
September 30, 2007

The following table sets forth certain operating data for Riviera Las Vegas and
Riviera Black Hawk for the periods indicated. Income from operations does not
include intercompany management fees.



                                              Nine Months
                                                                 Incr/    Incr/
                    (In Thousands)        2008       2007       (Decr)  (Decr)%
                                          ----       ----       ------  -------

Net Revenues
                                                              
   Riviera Las Vegas                  $101,206   $116,597    $(15,391)   (13.2%)
   Riviera Black Hawk                   32,579     41,475      (8,896)   (21.4%)
                                        ------     ------      -------
      Total Net Revenues              $133,785   $158,072    $(24,287)   (15.4%)
                                      ========   ========    =========

Income from Operations
   Riviera Las Vegas                    $9,983    $19,277     $(9,294)   (48.2%)
   Riviera Black Hawk                    5,580     10,204      (4,624)   (45.3%)
                                         -----     ------  ----------
   Property Income from Operations      15,563     29,481     (13,918)   (47.2%)
   Corporate Expenses
        Equity Compensation                620        759         139     18.3%
        Other Corporate Expenses         2,900      3,210         310      9.7%
    Mergers, Acquisitions and
           Development Costs               104        448         344     76.8%
                                           ---        ---        ----

         Total Income from Operations  $11,939    $25,064    $(13,125)   (52.4%)
                                       =======    =======   =========

Operating Margins (1)
   Riviera Las Vegas                     9.9%     16.5%                  (6.6%)
   Riviera Black Hawk                   17.1%     24.6%                  (7.5%)


 (1) Operating margins represent income from operations as a percentage of net
revenues by property.

                                        18

Riviera Las Vegas

Revenues

         Net revenues for the nine months ended September 30, 2008 were $101.2
million, a decrease of $15.4 million, or 13.2%, from $116.6 million for the
comparable period in the prior year.

         Casino revenues for the nine months ended September 30, 2008 were $39.3
million, a decrease of $8.3 million, or 17.3%, from $47.6 million for the
comparable period in the prior year. Casino revenues are primarily comprised of
slot machine and table game revenues. In comparison to the same period in the
prior year, slot machine revenue was $29.5 million, a decrease of $5.0 million,
or 16.6%, from $34.5 million and table game revenue was $8.2 million, a decrease
of $1.9 million, or 19.1% from $10.1 million. Slot machine win per unit per day
was $117.86, a decrease of $17.49, or 12.9%, from $135.35 for the comparable
period in the prior year. Slot machine and table game revenues decreased
primarily due to lower slot machine and table game amounts wagered as a result
of reduced hotel occupancy, the effect of a weak economy on consumer spending
and encumbered access due to construction at neighboring projects.

         Room rental revenues for the nine months ended September 30, 2008 were
$41.6 million, a decrease of $4.7 million, or 10.2%, from $46.3 million for the
comparable period in the prior year. The decrease in room rental revenue was
primarily due to a 25.3% decrease in leisure segment occupied rooms due to
higher travel costs and the weaker economy. Hotel room occupancy percentage for
the nine months ended September 30, 2008, was 84.4% in comparison to 94.1% for
the comparable period in the prior year. The hotel room occupancy percentage is
calculated by dividing total occupied rooms by total rooms available for sale.
Room renovations were the primary reason that 6.5% of hotel rooms were
unavailable in 2008. For the nine months ended September 30, 2008, 41.3% and
40.2% of occupied rooms were leisure and convention segment rooms, respectively.
Average daily room rental rate, or ADR, was $88.29, an increase of $5.16, or
6.2%, from $83.13 for the comparable period in the prior year. The increase in
ADR was due primarily to an $8.40, or 8.5%, increase in convention room rates.
Revenue per available room, or RevPar, was $74.51, a decrease of $3.73, or 4.8%,
from $78.24 for the comparable period in the prior year. The decrease in RevPar
was due to lower occupancy as described above.

         Food and beverage revenues for the nine months ended September 30, 2008
were $18.6 million, a decrease of $2.4 million, or 11.4%, from $21.0 million for
the comparable period in the prior year. The decrease is due to a $1.8 million
food revenue and $0.6 million beverage revenue reduction primarily as a result
of the weak economy, reduced hotel occupancy, less gaming customers and
strategic closure of select food and beverage outlets during low volume periods.
Food covers decreased primarily in the buffet, coffee shop and the sports book
delicatessen and drinks served decreased primarily in the casino bars. Food and
beverage revenues include items offered to high-value guests on a complimentary
basis.

         Entertainment revenues for the nine months ended September 30, 2008
were $10.2 million, an increase of $0.2 million, or 2.3%, from $10.0 million for
the comparable period in the prior year. The increase is due to additional
ticket sales at our show in the Versailles Theater ("ICE"), which opened April
23, 2007. Ticket sales decreased in all other entertainment venues.

                                        19


Costs and Expenses

         Casino costs and expenses for the nine months ended September 30, 2008
were $21.6 million, a decrease of $3.4 million, or 13.6%, from $25.0 million for
the comparable period in the prior year. The decrease in casino costs and
expenses is due primarily to a reduction in slot and table game payroll and
related costs in order to partially offset the $8.3 million decrease in casino
revenue.

         Room rental costs and expenses for the nine months ended September 30,
2008 were $19.6 million, a decrease of $2.0 million, or 9.1%, from $21.6 million
for the comparable period in the prior year. The decrease in room rental costs
and expenses was due primarily to reduced payroll and related costs and less
operating expenses in order to partially offset a $4.7 million decrease in room
rental revenues.

         Food and beverage costs and expenses for the nine months ended
September 30, 2008 were $15.3 million, a decrease of $2.1 million, or 12.2%,
from $17.4 million for the comparable period in the prior year. The decrease in
food and beverage cost and expenses is due primarily to a reduction in food and
beverage cost of goods, payroll and related costs and other expenses to offset a
$2.4 million food and beverage revenue decrease. Additionally, several food and
beverage outlets have been closed during low volume periods to reduce costs and
expenses.

Income from Operations

         Income from operations for the nine months ended September 30, 2008 was
$10.0 million, a decrease of $9.3 million, or 48.2%, from $19.3 million for the
comparable period in the prior year. The decrease is primarily due to lower
casino and room rental revenues without offsetting reductions in costs and
expenses.

Operating margins were 9.9% for the nine months ended September 30, 2008 in
comparison to 16.5% for the comparable period in the prior year. Operating
margins decreased primarily due to a $5.0 million revenue decrease in our high
margin slot operations resulting in a $17.49, or 12.9%, reduction in slot
machine win per unit per day and a $4.7 million decrease in room rental revenues
resulting in a $3.73, or 4.8% reduction in RevPar.

Riviera Black Hawk

Revenues

         Net revenues for the nine months ended September 30, 2008 were $32.6
million, a decrease of $8.9 million, or 21.4%, from $41.5 million for the
comparable period in the prior year.

         Casino revenues for the nine months ended September 30, 2008 were $31.7
million, a decrease of $8.7 million, or 21.4%, from $40.4 million for the
comparable period in the prior year. The decrease was primarily due to a slot
machine revenue decrease of $8.5 million, or 21.5%, to $30.9 million from $39.4
million for the comparable period in the prior year. Slot machine revenue per
unit per day was $131.34, a decrease of $27.82, or 17.5%, from $159.16 for the
comparable period in the prior year. The decrease in slot machine revenue was
primarily the result of less slot machine wagering due to the effects of high
fuel costs, a weak economy and the smoking ban in Colorado which went into
effect January 1, 2008.

                                        20


Costs and Expenses

         Casino costs and expenses for the nine months ended September 30, 2008
were $14.7 million, a decrease of $2.7 million, or 15.5%, from $17.4 million for
the comparable period in the prior year. The decrease in casino expenses is
primarily due to a reduction in slot and table game payroll and related costs
which partially offset the $8.7 million decrease in casino revenue.

         General and administrative expenses for the nine months ended September
30, 2008 were $7.0 million, a decrease of $0.8 million, or 10.4%, from $7.8
million for the comparable period in the prior year. The decrease in general and
administrative expenses was due to a credit adjustment of $0.4 million for
employee benefits and a reduction in accrued management incentives of $0.4
million.

Income from Operations

           Income from operations for the nine months ended September 30, 2008
were $5.6 million, a decrease of $4.6 million, or 45.3%, from $10.2 million for
the comparable period in the prior year. The decrease is primarily due to the
decrease in slot machine revenue without offsetting reductions in costs and
expenses.

         Operating margins were 17.1% for the nine months ended September 30,
2008 in comparison to 24.6% for the comparable period in the prior year.
Operating margins decreased primarily due to an $8.5 million slot machine
revenue decrease in our high margin slot operations.

Consolidated Operations

Other Expense

          Other expenses for the nine months ended September 30, 2008 were $11.1
million,  a decrease  of $26.1  million,  or 70.1%,  from $37.2  million for the
comparable  period in the prior year.  The decrease is primarily  due to a $12.9
million  loss on  retirement  of debt,  a decrease of $8.2 million in the amount
recorded  for  unrealized  gain  (loss) on  derivatives  and a decrease  of $4.9
million in interest expense,  net of interest income.  The loss on retirement of
debt was related to the  retirement  of our 11% Notes as  described  below under
Liquidity and Capital Resources. Unrealized gain on derivatives was $1.6 million
for the nine months ended  September 30, 2008 compared to an unrealized  loss on
derivatives  of $6.6 million for the  comparable  period in the prior year.  The
gain and loss on  derivatives  is the result of changes in the  valuation of our
interest rate swap  agreement  which is referenced in the Notes to the Condensed
Consolidated  Financial Statements in this Form 10-Q. Interest expense decreased
as a result of reduced  borrowing costs  associated with our New Credit Facility
executed June 2007.

Net Income

     Net income for the nine months ended  September  30, 2008 was $0.8 million,
an increase of $12.9 million,  or 108.8%,  from a $12.1 million net loss for the
comparable  period in the prior year.  The increase is due  primarily to a $26.1
million reduction in other expenses partially offset by a $13.1 million decrease
in consolidated income from operations.


                                        21

Liquidity and Capital Resources

     At September 30, 2008 we had cash and cash  equivalents  of $20.5  million.
Our cash and cash  equivalents  decreased by $8.3 million during the nine months
ended  September  30,  2008 due to $18.0  million in net cash used in  investing
activities  partially  offset by $7.2 million in net cash  provided by operating
activities and $2.5 million in net cash provided by financing  activities.  Cash
and cash  equivalents  increased  $7.7  million  during  the nine  months  ended
September  30, 2007 due to $17.3  million in net cash from provided by operating
activities  partially  offset  by $8.9  million  in net cash  used in  investing
activities and $0.7 million in net cash used in financing  activities.  Net cash
used in investing  activities includes $14.4 million and $1.5 million in capital
expenditures related to our Las Vegas hotel room renovation project for the nine
months ended September 30, 2008 and 2007, respectively.  Additionally,  net cash
used in  investing  activities  for the nine  months  ended  September  30, 2007
included a $2.7 million  reduction for restricted cash set aside for our workers
compensation self insurance program.  Net cash provided by operating  activities
included  $4.0  million and $1.8  million in cash  reductions  due to changes in
operating  assets and  liabilities  for the nine months ended September 30, 2008
and 2007,  respectively.  The cash reductions due to changes in operating assets
and  liabilities for the nine months ended September 30, 2008 were due primarily
to a $4.9 million decrease in accounts payable and accrued expenses  principally
due to  payment  timing  differences.  The cash  reductions  due to  changes  in
operating  assets and  liabilities  for the nine months ended September 30, 2007
were due primarily to a $1.8 million decrease in operating inventories. Net cash
provided by financing  activities  for the nine months ended  September 30, 2008
included $2.5 million drawn against our Revolving  Credit  Facility and net cash
used in  financing  activities  for the nine  months  ended  September  30, 2007
included a $215.9 million  payment to retire our 11% Notes  described  below and
$225.0 million in proceeds from our New Credit Facility.

     Our cash balances  include amounts that could be required,  upon five days'
notice, to fund our CEO's (Mr. Westerman's) pension obligation in a rabbi trust.
We pay Mr. Westerman $250,000 per quarter from his pension plan. In exchange for
these payments, Mr. Westerman has agreed to forbear on his right to receive full
transfer of his pension fund balance to the rabbi trust. This does not limit his
ability to give the  five-day  notice at any time.  Although Mr.  Westerman  has
expressed  no  current   intention  to  require  this  funding,   under  certain
circumstances,  we may be required to disburse  approximately  $1.3  million for
this purpose in a short period.

     On June 8,  2007,  RHC and the  Subsidiaries  entered  into the New  Credit
Facility.  The New Credit Facility includes a $225 million  seven-year term loan
("Term  Loan"),  and has no  amortization  for the first three years,  and a one
percent  amortization  for years four  through  six,  and a full  payoff in year
seven,  in  addition to an annual  mandatory  pay down during the term of 50% of
excess  cash flows,  as defined.  The New Credit  Facility  also  includes a $20
million five-year revolving credit facility  ("Revolving Credit Facility") under
which we can  obtain  extensions  of credit in the form of cash loans or standby
letters of credit  ("Standby  L/Cs").  We are permitted to prepay the New Credit
Facility  without premium or penalties  except for payment of any funding losses
resulting  from  prepayment of LIBOR rate loans.  The rate for the Term Loan and
Revolving  Credit  Facility is LIBOR plus 2.0%.  Pursuant to a floating  rate to
fixed rate swap  agreement  that became  effective June 29, 2007 that we entered
into under the New Credit Facility,  substantially  the entire Term Loan portion
of the New Credit  facility,  with  quarterly  step-downs,  bears interest at an
effective fixed rate of 7.485% per annum (2.0% above the LIBOR Rate in effect on
the lock-in date of the swap  agreement).  The New Credit Facility is guaranteed
by the Subsidiaries and is secured by a first priority lien on substantially all
of our assets.

                                        22


     We used substantially all of the proceeds of the Term Loan to discharge our
obligations under the Indenture, dated June 26, 2002 (the "Indenture"), with The
Bank of New York as trustee (the "Trustee"), governing the 11% Notes. On June 8,
2007 we  deposited  these  funds with the  Trustee  and issued to the  Trustee a
notice of redemption of the 11% Notes, which was finalized on July 9, 2007.

         We utilize derivative instruments for a substantial portion of our Term
Loan to manage certain interest rate risk. Our interest rate swap agreement has
a rate of 5.41% compared to the one month LIBOR rate of 3.28% effective through
September 30, 2008.

     The interest rate on loans under the Revolving  Credit Facility will depend
on whether they are in the form of revolving loans or swing line loans. For each
revolving  loan,  the interest rate will depend on whether we elect to treat the
loan as an "Alternate  Base Rate" loan ("ABR Loan") or a LIBOR Rate loan.  Swing
line loans will bear interest at a per annum rate equal to the Alternative  Base
Rate plus the Applicable  Percentage for revolving loans that are ABR Loans. The
applicable  percentage for swing line loans ranges from 0.50% to 1% depending on
the consolidated leverage ratio.

     We will also pay fees under the Revolving Credit Facility as follows: (i) a
commitment  fee in an amount  equal to either .50% or 0.375%  (depending  on the
Consolidated Leverage Ratio) per annum on the average daily unused amount of the
Revolving  Credit  Facility;  (ii)  Standby L/C fees equal to between  2.00% and
1.50%  (depending on the  Consolidated  Leverage Ratio) per annum on the average
daily  maximum  amount  available  to be drawn under each Standby L/C issued and
outstanding  from the date of  issuance to the date of  expiration;  and (iii) a
Standby  L/C facing fee in the  amount of 0.25% per annum on the  average  daily
maximum amount  available to be drawn under each Standby L/C. In addition to the
Revolving  Credit  Facility  fees, we will pay an annual  administrative  fee of
$35,000.

     The  New  Credit  Facility  contains  affirmative  and  negative  covenants
customary  for  financings  of  this  nature  including,  but  not  limited  to,
restrictions  on our incurrence of other  indebtedness.  The New Credit Facility
contains  events of default  customary for financings of this nature  including,
but not limited to,  nonpayment  of principal,  interest,  fees or other amounts
when due;  violation of covenants;  failure of any representation or warranty to
be true in all material respects; cross-default and cross-acceleration under our
other indebtedness or certain other material  obligations;  certain events under
federal  law  governing   employee   benefit   plans;  a  "change  of  control";
dissolution;   insolvency;  bankruptcy  events;  material  judgments;  uninsured
losses;  actual  or  asserted  invalidity  of the  guarantees  or  the  security
documents;  and loss of any  gaming  licenses.  Some of these  events of default
provide for grace  periods and  materiality  thresholds.  For  purposes of these
default provisions,  a "change in control" includes:  a person's  acquisition of
beneficial  ownership of 35% or more of our stock coupled with a gaming  license
and/or approval to direct any of our gaming  operations,  a change in a majority
of the  members  of our board of  directors  other  than as a result of  changes
supported by our current board  members or by  successors  who did not stand for
election in  opposition  to our current  board,  or our failure to maintain 100%
ownership of the Subsidiaries.

     As of September 30, 2008,  we are in  compliance  with the covenants of the
$225  million  Term  Loan and all of our  credit  facilities.  Our  Consolidated
Leverage  Ratio was 7.1 for the four quarters  ending  September  30, 2008.  The
maximum allowable  Consolidated  Leverage Ratio pursuant to the Revolving Credit
Facility is 6.5. However, the maximum Consolidated Leverage Ratio of 6.5 is only
applicable  if RHC has  outstanding  borrowings  against  its  Revolving  Credit
Facility exceeding $2.5 million as of the end of the applicable  quarter.  As of
September 30, 2008,  RHC has $2.5 million  outstanding  on its Revolving  Credit
Facility.

                                        23

Current Economic and Operating Environment

We believe that due to a number of factors  affecting  consumers,  including but
not limited to a slowdown in global  economies,  contracting  credit markets and
reduced consumer spending, the outlook for the gaming and hospitality industries
remains  highly  uncertain.  High travel costs have  resulted in fewer  visitors
coming to the Las  Vegas  and Black  Hawk  markets,  resulting  in lower  casino
volumes  and  a  reduced  demand  for  hotel  rooms.   Based  on  these  adverse
circumstances,  we believe that the Company will  continue to  experience  lower
than expected hotel occupancy rates and casino volumes.

Off-Balance Sheet Arrangements

It is not our usual business practice to enter into off-balance sheet
arrangements such as guarantees on loans and financial commitments,
indemnification arrangements and retained interests in assets transferred to an
unconsolidated entity for securitization purposes. Consequently, we have no
off-balance sheet arrangements.

Critical Accounting Policies

A description of our critical accounting policies and estimates can be found in
Item 7 of our Form 10-K for the year ended December 31, 2007. For a further
discussion of our accounting policies, see Note 1, Summary of Significant
Accounting Policies, in the Notes to the Condensed Consolidated Financial
Statements in this Form 10-Q.

Forward-Looking Statements

Throughout this report we make "forward-looking statements," as that term is
defined in Section 27A of the Securities Act of 1933, as amended, and Section
21E of the Securities Exchange Act of 1934, as amended (the "Exchange Act").
Forward-looking statements include the words "may," "would," "could," "likely,"
"estimate," "intend," "plan," "continue," "believe," "expect" or "anticipate"
and similar words as well as our acquisition, development and expansion plans,
objectives or expectations and our liquidity projections. These forward-looking
statements generally relate to our plans, objectives, prospects and expectations
for future operations and results and are based upon what we consider to be
reasonable future estimates. Although we believe that our plans, objectives,
prospects and expectations reflected in, or suggested by, such forward-looking
statements are reasonable at the present time, we may not achieve or we may
modify them from time to time. Furthermore, there is no assurance that any
positive trends suggested or referred to in this report will continue. You
should read this report thoroughly and with the understanding that actual future
results may be materially different from what we expect. We do not plan to
update forward-looking statements even though our situation or plans may change
in the future, unless applicable law requires us to do so.

Specific factors that might cause our actual results to differ from our plans,
objectives or expectations, might cause us to modify them, or might affect our
ability to achieve them, include, but are not limited to:

  o the effect of the termination of our previously announced
    strategic process to explore alternatives for maximizing
    shareholder value, and the possible resulting fluctuations in our
    stock price that will affect other parties' willingness to make a
    proposal to acquire us;

                                        24


  o fluctuations in the value of our real estate, particularly in Las Vegas;

  o the availability and adequacy of our cash flow to meet our requirements,
    including payment of amounts due under our debt instruments;

  o our substantial indebtedness, debt service requirements and liquidity
    constraints;

  o our ability to meet the  affirmative  and negative  covenants set forth in
    our New Credit  Facility and avoid an event of default;

  o the smoking ban in Colorado on our Riviera Black Hawk property which became
    effective on January 1, 2008;

  o the availability of additional capital to support capital improvements and
    development;

  o the ability to renegotiate union contracts in Las Vegas;

  o competition in the gaming industry, including the availability and
    success of alternative gaming venues and other entertainment
    attractions; and the approval of an initiative that would allow
    slot machines in Colorado race tracks;

  o retirement or other loss of any of our senior officers;

  o economic, competitive, demographic, business and other conditions in our
    local and regional markets;

  o changes or developments in laws, regulations or taxes in the
    gaming industry; specifically in Nevada where initiatives have
    been proposed to raise the gaming and hotel room tax;

  o actions taken or not taken by third parties, such as our
    customers, suppliers, and competitors, as well as legislative,
    regulatory, judicial and other governmental authorities;

  o changes in our personnel or their compensation, including those
    resulting from changes in federal or state minimum wage
    requirements;

  o our failure to obtain, delays in obtaining, or the loss of, any
    licenses, permits or approvals, including gaming and liquor
    licenses, or the limitation, conditioning, suspension or
    revocation of any such licenses, permits or approvals, or our
    failure to obtain an unconditional renewal of any of our licenses,
    permits or approvals on a timely basis;

  o the loss of any of our casino, hotel or convention facilities due
    to terrorist acts, casualty, weather, mechanical failure or any
    extended or extraordinary maintenance or inspection that may be
    required;

  o other adverse conditions, such as further economic downturns,
    changes in general customer confidence or spending, increased
    transportation costs, travel concerns or weather-related factors,
    that may adversely affect the economy in general or the casino
    industry in particular;

                                        25


  o changes in our business strategy, capital improvements or development plans;

  o the consequences of the war in Iraq and other military conflicts
    in the Middle East and any future security alerts or terrorist
    attacks such as the attacks that occurred on September 11, 2001;

  o other risk factors discussed elsewhere in this report; and

  o a decline in the public acceptance of gaming.

All future written and oral forward-looking statements attributable to us or any
person acting on our behalf are expressly qualified in their entirety by the
cautionary statements contained or referred to in this section. In light of
these and other risks, uncertainties and assumptions, the forward-looking events
discussed in this report might not occur.

ITEM 3. Quantitative and Qualitative Disclosures About Market Risk

Market risks relating to our operations result primarily from changes in
interest rates. We invest our cash and cash equivalents in U.S. Treasury Bills
with maturities of 30 days or less. Such investments are generally not affected
by changes in interest rates.

As of September 30, 2008, we had $228.1 million in borrowings. The borrowings
include a $225.0 million Term Loan maturing in 2014 and three capital leases
maturing in 2009, 2012 and 2013. The capital leases have a fixed interest rate
of 5.5%. The borrowings also include a $215,000 special improvement district
("SID") bond offering with the City of Black Hawk. Our share of the debt on the
SID bonds of $1.2 million is payable over ten years beginning in 2000. The SID
bonds bear interest at rate of 5.5%. We are not susceptible to interest rate
risk because our outstanding debt is primarily at fixed rates. As of September
30, 2008, we had $2.5 million outstanding under our Revolving Credit Facility.
The Revolving Credit Facility amount outstanding bears interest at LIBOR plus
2%. As of September 30, 2008, we have one interest rate swap arrangement to
hedge the underlying interest rate risk on a total of $225.0 million of
borrowings under the Term Loan, which bears interest at LIBOR plus 2%. Under
this interest rate swap agreement, we pay a fixed rate of 5.405% plus 2% on the
$218 million notional amount, which expires on June 8, 2014. The interest rate
swap arrangement has periodic step-downs beginning in 2008 and expiring June 8,
2014. Although this interest rate swap agreement is highly effective
economically in fixing the interest rate on this borrowing under the Term Loan
at 7.405%, changes in fair value of our interest rate swap for each reporting
period are, and will continue to be, recorded as an increase /(decrease) in swap
fair value as the swap does not qualify for hedge accounting.

A hypothetical one percent change in interest rate would not have a material
effect on our financial statements, as the interest rate swap we currently have
effectively locks our debt at 7.405%.

                                        26



Interest Rate Sensitivity
Principal (Notional Amount by Expected Maturity)
Average Interest Rate
(Dollars in                                                                                  Fair Value
thousands)                     2008    2009    2010     2011    2012   Thereafter    Total   at 9/30/08

Long-Term Debt Including
   Current Portions
Equipment loans and
                                                                          
 capital leases-Las Vegas      $ 48     $ 76    $ 23     $ 24    $ 19                 $ 190      $ 190
Average interest rate          5.5%     5.5%    5.5%     5.5%    5.5%

 $225 million Term Loan                      $ 1,125  $ 2,250 $ 2,250  $ 219,375  $ 225,000  $ 225,000
Average interest rate                           7.5%     7.5%    7.5%       7.5%

Notes payable               $ 2,500                                                 $ 2,500    $ 2,500
Average interest rate          6.0%

Equipment loans and
 capital leases-Black Hawk     $ 10    $ 43    $ 44      $ 44    $ 45      $ 26       $ 212      $ 212
Average interest rate          5.5%     5.5%    5.5%     5.5%    5.5%       5.5%

SID Bonds -
 Black Hawk, Colorado          $ 70    $ 145                                          $ 215      $ 215
Average interest rate          5.5%     5.5%
Total all long-term debt,
including current portions  $ 2,628    $ 264 $ 1,192  $ 2,318 $ 2,314  $ 219,401  $ 228,117  $ 228,117

Other Long-Term Liabilities
  including Current Portion
CEO pension plan obligation   $ 250  $ 1,035                                        $ 1,285    $ 1,285
Average interest rate          9.7%     9.7%

Interest rate derivatives
Derivative instrument
  Pay fixed                                                            $ 215,795              $ 11,655
    Average receivable rate                                                 3.7
    Average payable rate                                                    5.4


ITEM 4.  Controls and Procedures

We maintain disclosure controls and procedures (as defined in Exchange Act Rules
13a-15(e) and 15d-15(e)) that are designed to ensure that  information  required
to be disclosed in our Exchange Act reports is recorded,  processed,  summarized
and  reported  within the time  periods  specified in the rules and forms of the
Securities and Exchange Commission, and that such information is accumulated and
communicated  to our management,  including our chief executive  officer ("CEO")
and chief financial officer ("CFO"),  as appropriate,  to allow timely decisions
regarding  required  disclosure.  In designing  and  evaluating  the  disclosure
controls  and  procedures,  our  management  recognized  that any  controls  and
procedures,  no  matter  how  well  designed  and  operated,  can  provide  only
reasonable  assurance  of  achieving  the desired  control  objectives,  and our
management  necessarily  was  required to apply its judgment in  evaluating  the
cost-benefit relationship of possible controls and procedures.

As of September 30, 2008, we carried out an  evaluation,  under the  supervision
and with the participation of our management,  including our CEO and CFO, of the
effectiveness  of the  design  and  operation  of our  disclosure  controls  and
procedures.  Based  on the  foregoing,  our  CEO  and  CFO  concluded  that  our
disclosure controls and procedures were effective.

                                        27


During our last fiscal  quarter  there were no changes in our  internal  control
over financial reporting,  (as defined in Exchange Act Rules 13a-15(f) and 15(d)
- 15(f)), that have materially affected,  or are reasonably likely to materially
affect, our internal control over financial reporting.

Part II.  OTHER INFORMATION

Item 1. Legal Proceedings

We are party to routine lawsuits,  either as plaintiff or as defendant,  arising
from the normal  operations  of a hotel and casino.  We do not believe  that the
outcome of such  litigation,  in the  aggregate,  will have a  material  adverse
effect on The Company's financial position or results of our operations.

Item 1A.  Risk Factors.

Our annual report on Form 10-K for the fiscal year ended  December 31, 2007 (our
"2007 Form  10-K")  contains  a detailed  discussion  of our risk  factors.  The
information  below  updates  and  should  be read in  conjunction  with the risk
factors and other information disclosed in our 2007 Form 10-K.

|X|      We are subject to Potential Exposure to Envirionmental Liabilities

                  Generally, we are subject to various federal, state and local
         governmental laws and regulations relating to the use, storage,
         discharge, emission and disposal of hazardous materials. Failure to
         comply could result in the imposition of severe penalties or
         restrictions on our operations by governmental agencies or courts. We
         experienced a diesel leak at our Las Vegas property. Our continuing
         efforts to monitor and remediate the effects of this leak, which
         occurred in 2002, have been affected by construction at neighboring
         projects. We are continuing to monitor this matter. In order to come to
         final resolution regarding this issue with the Nevada Department of
         Environmental Protection, we may be required to take remediation steps,
         including the excavation of the effected area. We are unable to
         estimate the cost of remediation at the present time. Riviera Black
         Hawk is located within a 400-square mile area that in 1983 was
         designated as the Clear Creek Central/City National Priorities List
         Site Study Area under the Comprehensive Environmental Response,
         Compensation and Liability Act of 1980, as amended. Although Riviera
         Black Hawk is not within any of the specific areas currently identified
         for investigation or remediation under that statute, environmental
         problems may subsequently be discovered, including in connection with
         any future construction on our property. Furthermore, governmental
         authorities could broaden their investigations and identify areas of
         concern within the site, we could be identified as a "potentially
         responsible party" and any related liability could have a material
         adverse effect on us. We do not have insurance to cover environmental
         liabilities, if we incur any.

Item 6.  Exhibits.

         See list of exhibits on page 30.




                                        28




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


                                        RIVIERA HOLDINGS CORPORATION


                                        By: /s/ William L. Westerman
                                        William L. Westerman
                                        Chairman of the Board and
                                        Chief Executive Officer

                                        By: /s/ Phillip B. Simons
                                        Phillip B. Simons
                                        Treasurer and
                                        Chief Financial Officer


                                        Date: November 7, 2008





                                        29






                   Exhibits


Exhibits:

10.1(A)* Forms of Salary Continuation Agreements with Riviera Holdings
         Corporation, Riviera Operating Corporation and Riviera Black
         Hawk, Inc. dated May 27 2008 and August 12, 2008.

31.1     Certification of the Principal Executive Officer of the Registrant
         pursuant to Exchange Act Rule 13a-14(a).

31.2     Certification of the Principal Financial Officer of the Registrant
         pursuant to Exchange Act Rule 13a-14(a).

32.1     Certification of the Principal Executive Officer of the Registrant
         pursuant to Exchange Act Rule 13a-14(b) and 18 U.S.C. 1350.

32.2     Certification of the Principal Financial Officer of the Registrant
         pursuant to Exchange Act Rule 13a-14(b) and 18 U.S.C. 1350.


 * Management contract or compensatory plan or arrangement




                                        30