##### Table of Contents



UNITED STATES SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C. 20549
 
 Form 10-Q
 QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
 FOR THE QUARTERLY PERIOD ENDED MARCH 31, 2006
 COMMISSION FILE NUMBER: 0-26015
 
 YOUBET.COM, INC.
 DELAWARE
    
    95-4627253
 5901 De Soto Avenue, Woodland Hills, California 91367
 (818) 668-2100
 R £
   ̈ þ  ̈
 £ R




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##### 



YOUBET.COM, INC.
 INDEX TO FORM 10-Q
FOR THE QUARTER ENDED
MARCH 31, 2006
 PagePART I. FINANCIAL INFORMATIONItem 1. Consolidated financial statementsBalance sheets as of March 31, 2006 (unaudited) and December 31, 2005
    
    
    3Statements of operations for the three months ended March 31, 2006 and 2005 (unaudited)
    
    
    4Statements of cash flows for the three months ended March 31, 2006 and 2005 (unaudited)
    
    
    5Notes to unaudited financial statements
    
    
    6Item 2. Managements discussion and analysis of financial condition and results of operations
    
    
    12Item 3. Quantitative and qualitative disclosures about market risk
    
    
    19Item 4. Controls and procedures
    
    
    19PART II. OTHER INFORMATIONItem 1. Legal proceedings
    
    
    20Item 1A. Risk factors
    
    
    20Item 2. Unregistered sales of equity securities and use of proceeds
    
    
    20Item 3. Defaults upon senior securities
    
    
    20Item 4. Submission of matters to a vote of security holders
    
    
    20Item 5. Other information
    
    
    20Item 6. Exhibits
    
    
    21EXHIBIT 10.7EXHIBIT 31.1EXHIBIT 31.2EXHIBIT 32.1
  Preliminary Note
  2




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##### Table of Contents



Part I. Financial Information
 
 Item 1. Consolidated Financial Statements
 YOUBET.COM, INC. AND SUBSIDIARIES
 
 CONSOLIDATED BALANCE SHEETS
 March 31,
    
    
    December 31,2006
    
    
    2005(Unaudited)ASSETSCurrent assetsCash and cash equivalents
    
    $
    8,503,800
    
    
    $
    16,685,787Current portion of restricted cash
    
    
    4,457,999
    
    
    
    5,185,115Accounts receivable, net of allowance for doubtful collection of $563,507 and $346,000
    
    
    8,922,396
    
    
    
    2,504,427Other receivables
    
    
    12,823
    
    
    
    27,493Inventory, net of reserve of $385,436
    
    
    2,150,736
    
    
    
    Current portion of notes receivable
    
    
    241,122
    
    
    
    Prepaid expenses
    
    
    1,587,071
    
    
    
    1,290,849Current portion of deferred tax asset
    
    
    4,464,841
    
    
    
    4,088,00030,340,788
    
    
    
    29,781,671Property and equipment, net of accumulated depreciation and amortization of $9,322,975
and $8,675,956
    
    
    21,961,425
    
    
    
    4,418,872Restricted cash, net of current portion
    
    
    381,962
    
    
    
    381,962Notes receivable, net of current portion, net of allowance for doubtful collections of $76,742
    
    
    301,416
    
    
    
    Intangibles and other, net of accumulated amortization of $690,525 and $338,388
    
    
    17,022,685
    
    
    
    5,025,339Goodwill
    
    
    10,447,106
    
    
    
    Deferred tax asset, net of current portion
    
    
    1,505,202
    
    
    
    1,221,000$
    81,960,584
    
    
    $
    40,828,844LIABILITIES AND STOCKHOLDERS EQUITYCurrent liabilitiesCurrent portion of long term debt
    
    $
    5,193,123
    
    
    $
    620,000Short term debt
    
    
    5,200,000
    
    
    
    Trade payables, TVG
    
    
    3,112,208
    
    
    
    4,805,642Trade payables, track related
    
    
    4,608,054
    
    
    
    2,337,709Trade payables, other
    
    
    2,485,262
    
    
    
    783,621Accrued expenses and other
    
    
    5,760,439
    
    
    
    3,193,625Customer deposits
    
    
    6,071,008
    
    
    
    5,905,099Deferred revenues
    
    
    464,114
    
    
    
    121,02732,894,208
    
    
    
    17,766,723Long term debt, net of current portion
    
    
    14,726,927
    
    
    
    177,655Fair value of interest rate swaps
    
    
    11,985
    
    
    
    47,633,120
    
    
    
    17,944,378Stockholders equityPreferred stock, $0.001 par value, authorized 1,000,000 shares, none outstanding
    
    
    
    
    
    
    Common stock, $0.001 par value, authorized 100,000,000 shares, 35,760,543 and 33,451,809
shares outstanding
    
    
    35,761
    
    
    
    33,452Additional paid-in capital
    
    
    115,829,560
    
    
    
    105,715,395Deficit
    
    
    (80,174,606
    )
    
    
    (81,524,009
    )Accumulated other comprehensive loss
    
    
    (22,879
    )
    
    
    Treasury stock (457,015 and 457,015 shares at cost)
    
    
    (1,340,372
    )
    
    
    (1,340,372
    )34,327,464
    
    
    
    22,884,466$
    81,960,584
    
    
    $
    40,828,844
 See notes to unaudited consolidated financial statements
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YOUBET.COM, INC. AND SUBSIDIARIES
 
 CONSOLIDATED STATEMENTS OF OPERATIONS
 (UNAUDITED)
 Three Months Ended March 31,2006
    
    
    2005RevenuesCommissions
    
    $
    23,921,590
    
    
    $
    17,763,048Contract revenues
    
    
    2,851,891
    
    
    
    Equipment sales
    
    
    135,651
    
    
    
    Other
    
    
    846,821
    
    
    
    752,31027,755,953
    
    
    
    18,515,358Operating costs and expensesTrack fees
    
    
    11,577,615
    
    
    
    8,625,132Licensing, TVG
    
    
    3,103,740
    
    
    
    3,011,857Contract costs
    
    
    1,934,135
    
    
    
    Equipment costs
    
    
    89,254
    
    
    
    Network operations
    
    
    1,283,433
    
    
    
    995,201Research and development
    
    
    766,270
    
    
    
    319,876Sales and marketing
    
    
    2,070,869
    
    
    
    1,276,148General and administrative
    
    
    4,417,361
    
    
    
    3,182,438Depreciation and amortization
    
    
    1,140,214
    
    
    
    231,82526,382,891
    
    
    
    17,642,477Income from operations
    
    
    1,373,062
    
    
    
    872,881Other income (expense)Interest income
    
    
    157,205
    
    
    
    89,421Interest expense
    
    
    (188,218
    )
    
    
    (18,827
    )Other
    
    
    77,675
    
    
    
    86,523Equity in net income of joint venture
    
    
    24,072
    
    
    
    70,734
    
    
    
    157,117Income before income taxes
    
    
    1,443,796
    
    
    
    1,029,998Income taxes
    
    
    (94,393
    )
    
    
    Net income
    
    $
    1,349,403
    
    
    $
    1,029,998Income per share  basic
    
    $
    0.04
    
    
    $
    0.03Income per share  diluted
    
    $
    0.04
    
    
    $
    0.03
 See notes to unaudited consolidated financial statements
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YOUBET.COM, INC. AND SUBSIDIARIES
 
 CONSOLIDATED STATEMENTS OF CASH FLOWS
 (UNAUDITED)
 Three Months Ended March 31,2006
    
    
    2005Operating activitiesNet income
    
    $
    1,349,403
    
    
    $
    1,029,998Adjustments to reconcile net income to net cash provided by operating activitiesDepreciation and amortization
    
    
    1,140,214
    
    
    
    231,825Equity in net income of joint venture
    
    
    (24,072
    )
    
    
    Stock-based compensation expense (benefit)
    
    
    201,421
    
    
    
    (52,726
    )Change in operating assets and liabilitiesRestricted cash
    
    
    (41,530
    )
    
    
    (33,891
    )Receivables
    
    
    (1,821,772
    )
    
    
    (46,928
    )Other receivables
    
    
    17,231
    
    
    
    124,625Inventory
    
    
    26,578
    
    
    
    Prepaid expenses
    
    
    4,920
    
    
    
    (664,304
    )Deposits and others
    
    
    310,213
    
    
    
    Unamortized intangibles and other
    
    
    
    
    
    
    (45,529
    )Trade payables, TVG
    
    
    (1,693,434
    )
    
    
    (916,303
    )Trade payables, track related
    
    
    2,270,344
    
    
    
    478,626Trade payables, other
    
    
    231,073
    
    
    
    183,294Accrued expenses and other
    
    
    749,011
    
    
    
    1,123,835Customer deposits
    
    
    165,909
    
    
    
    30,538Deferred revenues
    
    
    (55,709
    )
    
    
    10,595Net cash provided by operating activities
    
    
    2,829,800
    
    
    
    1,453,655Investing activitiesPurchases of property and equipment
    
    
    (1,087,569
    )
    
    
    (416,807
    )Notes receivable
    
    
    37,964
    
    
    
    Cash paid for United Tote Company acquisition, net of cash acquired of $159,762
    
    
    (10,094,105
    )
    
    
    Investments in intangibles and other
    
    
    
    
    
    
    (1,751
    )Decrease in restricted cash
    
    
    1,018,647
    
    
    
    Increase in restricted cash
    
    
    (250,000
    )
    
    
    (3,113
    )Net cash used in investing activities
    
    
    (10,375,063
    )
    
    
    (421,671
    )Financing activitiesProceeds from exercise of stock options and warrants, net
    
    
    96,871
    
    
    
    832,988Repayment of long term debt
    
    
    (722,701
    )
    
    
    (95,108
    )Net cash provided (used) by financing activities
    
    
    (625,830
    )
    
    
    737,880Foreign currency translation adjustment
    
    
    (10,894
    )
    
    
    Increase (decrease) in cash and cash equivalents
    
    
    (8,181,987
    )
    
    
    1,769,864Cash and cash equivalents, beginning of period
    
    
    16,685,787
    
    
    
    13,287,492Cash and cash equivalents, end of period
    
    $
    8,503,800
    
    
    $
    15,057,356
 See notes to unaudited consolidated financial statements
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YOUBET.COM, INC. AND SUBSIDIARIES
 
 NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
 THREE MONTHS ENDED MARCH 31, 2006
 Note 1: Basis of presentation
    Accounting for
Stock-Based Compensation Accounting for Stock Issued to Employees Share-Based Payment
 Note 2: Accounts receivable
  March 31,
    
    
    December 31,2006
    
    
    2005Track receivables, net of allowance for doubtful collection of $217,507 and $0
    
    $
    7,445,567
    
    
    $
    671,720Player receivables
    
    
    1,080,632
    
    
    
    1,421,458Magna receivable, net of allowance for doubtful collection of $346,000 and $346,000
    
    
    346,000
    
    
    
    346,000Other
    
    
    50,197
    
    
    
    65,249$
    8,922,396
    
    
    $
    2,504,427
 Note 3: Inventories
  March 31,2006Raw materials, net of reserve of $287,096
    
    $
    1,428,381Work in process
    
    
    126,255Ticket stock
    
    
    316,310Finished goods, net of reserve of $98,339
    
    
    279,790$
    2,150,736
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##### Table of Contents



Note 4: Property and equipment
  March 31,
    
    
    December 31,2006
    
    
    2005Computer equipment, owned
    
    $
    5,978,030
    
    
    $
    5,571,870Computer equipment under capital lease
    
    
    175,623
    
    
    
    755,302Pari-mutuel equipment
    
    
    17,531,120
    
    
    
    Software
    
    
    2,862,728
    
    
    
    2,512,252Office furniture, fixtures and equipment
    
    
    1,414,260
    
    
    
    1,222,991Leasehold improvements
    
    
    3,078,779
    
    
    
    3,032,413Building
    
    
    220,708
    
    
    
    Land
    
    
    23,152
    
    
    
    31,284,400
    
    
    
    13,094,828Less: Accumulated depreciation
    
    
    (9,322,975
    )
    
    
    (8,675,956
    )$
    21,961,425
    
    
    $
    4,418,872
 Note 5: Unamortized intangibles and other
  March 31,
    
    
    December 31,2006
    
    
    2005Intangibles, net of accumulated amortization of $690,525 and $338,388
    
    $
    14,940,146
    
    
    $
    3,209,687Unamortizing intangibles
    
    
    151,433
    
    
    
    65,094Investments
    
    
    1,658,730
    
    
    
    1,512,243Long term deposits
    
    
    159,876
    
    
    
    134,426Trademark and trade names
    
    
    77,597
    
    
    
    Investment in joint venture
    
    
    10,000
    
    
    
    Other
    
    
    24,903
    
    
    
    103,889$
    17,022,685
    
    
    $
    5,025,339
 Note 6: Joint venture
  Note 7: Debt
  March 31,
    
    
    December 31,2006
    
    
    2005Capital lease obligations and other financing arrangements
    
    $
    541,505
    
    
    $
    797,655Promissory notes
    
    
    10,200,000
    
    
    
    Revolving line of credit
    
    
    1,775,513
    
    
    
    Bank equipment term loan
    
    
    12,078,256
    
    
    
    Bank mortgage term loan
    
    
    507,500
    
    
    
    Notes payable
    
    
    17,276
    
    
    
    25,120,050
    
    
    
    797,655Short term debt and current portion of long term debt
    
    
    10,393,123
    
    
    
    620,000Long term debt, less current maturities
    
    $
    14,726,927
    
    
    $
    177,655
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United Tote Acquisition
  Principal
    
    
    Maturity
    
    
    Interest Rate
    
    
    PaymentsShort term promissory note
    
    $
    5,200,000
    
    
    
    2/9/2007
    
    
    
    5.02
    %
    
    Principal due at maturity and interest due quarterly.Long term promissory note
    
    
    3,200,000
    
    
    
    2/8/2008
    
    
    
    5.02
    %
    
    Principal and accrued interest due at maturity.Long term promissory note
    
    
    1,800,000
    
    
    
    2/8/2008
    
    
    
    5.02
    %
    
    Principal and accrued interest due at maturity.10,200,000Less short term
promissory note
    
    
    (5,200,000
    )Long term
debt less short term promissory
note
    
    $
    5,000,000
 United Tote Credit Facility
  March 31,2006Revolving line of credit
    
    $
    1,775,513Bank equipment term loans, monthly principal payments plus interest
at LIBOR plus 3.25% (7.72% at March 31, 2006); balances due
November 2009 through September 2010
    
    
    12,078,256Bank mortgage term loan, monthly principal payments plus interest
at LIBOR plus 3.0% (7.47% at March 31, 2006); balance due September
2008
    
    
    507,500Note payable, payable in monthly installments; maturing in July 2009
    
    
    17,27614,378,545Less current maturities
    
    
    (4,793,742
    )Long term debt, less current maturities
    
    $
    9,584,803
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Note 8: Income taxes
     Note 9: Income per share
  Three Months Ended March 31,2006
    
    
    2005Weighted
    
    
    
    
    
    
    
    
    
    WeightedNet
    
    Average
    
    
    
    
    
    Net
    
    AverageIncome
    
    Shares
    
    EPS
    
    Income
    
    Shares
    
    EPSEPS  Basic
    
    $
    1,349,403
    
    
    
    34,206,932
    
    
    $
    0.04
    
    
    $
    1,029,998
    
    
    
    30,538,253
    
    
    $
    0.03Effect of dilutive securities
    
    
    
    
    
    
    2,170,674
    
    
    
    
    
    
    
    
    
    
    
    3,899,603
    
    
    
    EPS  Diluted
    
    $
    1,349,403
    
    
    
    36,377,606
    
    
    $
    0.04
    
    
    $
    1,029,998
    
    
    
    34,437,856
    
    
    $
    0.03
 Note 10: Stockholders equity
 Warrants
  WeightedAverage ExerciseWarrants
    
    
    PriceBalance, December 31, 2005
    
    
    35,000
    
    
    $
    1.58Warrants expired
    
    
    (10,000
    )
    
    
    4.28Warrants exercised
    
    
    (25,000
    )
    
    
    0.50Warrants exercisable at March 31, 2006
    
    
    
    
    
    
    0.00
 Stock options
  9




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Weighted AverageStock Options
    
    
    Exercise PriceBalance, December 31, 2005
    
    
    4,394,372
    
    
    $
    2.30Options granted
    
    
    82,664
    
    
    
    4.27Options exercised
    
    
    (101,916
    )
    
    
    0.83Options cancelled
    
    
    (50,800
    )
    
    
    4.38Options forfeited
    
    
    (77,350
    )
    
    
    4.44Balance, March 31, 2006
    
    
    4,246,970
    
    
    
    2.31Options exercisable (vested) at March 31, 2006
    
    
    3,479,343
    
    
    
    1.93
  Options Outstanding
    
    
    Options ExercisableWeightedAverage
    
    
    Weighted
    
    
    
    
    
    
    WeightedRemaining
    
    
    Average
    
    
    
    
    
    
    AverageNumber of
    
    
    Contractual
    
    
    Exercise
    
    
    Number of
    
    
    ExerciseRange of Exercise Prices
    
    Shares
    
    
    Life (in years)
    
    
    Price
    
    
    Shares
    
    
    Price$0.49  $0.99
    
    
    1,413,329
    
    
    
    4.20
    
    
    $
    0.62
    
    
    
    1,360,185
    
    
    $
    0.62$1.00  $1.99
    
    
    173,605
    
    
    
    1.44
    
    
    
    1.45
    
    
    
    148,380
    
    
    
    1.39$2.00  $4.99
    
    
    2,504,161
    
    
    
    6.72
    
    
    
    3.13
    
    
    
    1,943,278
    
    
    
    2.84$5.00  $10.50
    
    
    155,875
    
    
    
    9.15
    
    
    
    5.40
    
    
    
    27,500
    
    
    
    5.72TOTAL
    
    
    4,246,970
    
    
    
    5.75
    
    
    
    2.31
    
    
    
    3,479,343
    
    
    
    1.93
 Note 11: Acquisition
  
    
    $9.75 million in cash (including the release of $1.0 million previously held in escrow
and net of a $0.25 million adjustment due to an increase in United Totes secured debt and
certain other indebtedness);
    
    Three unsecured promissory notes with an aggregate principal amount of $10.2 million;
and
    
    2,181,818 shares of Youbet common stock that are subject to certain make-whole
provisions which value such shares at $5.50 per share.
   Three Months Ended March 31,2006
    
    
    2005Revenue
    
    $
    30,092,324
    
    
    $
    23,693,043Net income
    
    
    1,097,105
    
    
    
    358,762Basic earnings per share
    
    $
    0.03
    
    
    $
    0.01Diluted earnings per share
    
    $
    0.03
    
    
    $
    0.01
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Note 12: Segment reporting
  Three Months Ended March 31,2006
    
    
    2005RevenueAdvance deposit wagering segment
    
    $
    24,768,411
    
    
    $
    18,515,358Totalizator services segment
    
    
    3,074,387
    
    
    
    27,842,798
    
    
    
    18,515,358Intercompany elimination of totalizator services
    
    
    (86,845
    )
    
    
    $
    27,755,953
    
    
    $
    18,515,358
 Three Months Ended March 31,2006
    
    2005Revenue by Geographic AreaUnited States
    
    $
    27,148,149
    
    
    $
    18,515,358International
    
    
    607,804
    
    
    
    $
    27,755,953
    
    
    $
    18,515,358
 Three Months Ended March 31,2006
    
    
    2005Reconciliation of Income
Before Income TaxesIncome (loss) from operationsAdvance deposit wagering segment
    
    $
    1,591,207
    
    
    $
    872,881Totalizator services segment
    
    
    (218,145
    )
    
    
    1,373,062
    
    
    
    872,881Interest income
    
    
    157,205
    
    
    
    89,421Interest expense
    
    
    (188,218
    )
    
    
    (18,827
    )Other
    
    
    77,675
    
    
    
    86,523Equity in net income of joint venture
    
    
    24,072
    
    
    
    Income before income taxes
    
    $
    1,443,796
    
    
    $
    1,029,998
 As of March 31,
    
    
    As of December 31,2006
    
    
    2005Total AssetsAdvance deposit wagering segment
    
    $
    34,358,328
    
    
    $
    40,828,844Totalizator services segment
    
    
    47,602,256
    
    
    
    $
    81,960,584
    
    
    $
    40,828,844
 Note 13: Contingencies
 Accounting for Contingencies
 TVG Arbitration
    Note and Warrant Litigation
  11




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Other
  
 Item 2. Managements discussion and analysis of financial condition and results of operations
 Forward looking statements
  Overview
 www.youbet.com
  12




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Key developments
  Critical accounting estimates and policies
 Use of estimates.
 Revenue recognition.
 Cash and cash equivalents.
 Accounts receivable and allowance for doubtful accounts.
 Fair value of financial instruments.
 13




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Accounting for Derivative Instruments and Hedging Activities
       Foreign currency.
 Inventories and obsolescence.
 Property and equipment.
 . Accounting for the Costs of Computer Software
Developed or Obtained for Internal Use
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Legal defense costs.
 Basic and diluted earnings (loss) per share.
 Stock based compensation. Share-Based Payment Accounting for Stock-Based Compensation Accounting for Stock Issued to Employees
  Results of operations for the three months ended March 31, 2006 compared to the three months ended
March 31, 2005
    Operating expenses
     15




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16




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##### Table of Contents



Liquidity and capital resources
     United Tote Acquisition
  
    
    $9.75 million in cash (including the release of $1.0 million previously held in escrow
and net of a $0.25 million adjustment due to an increase in United Totes secured debt
and certain other indebtedness);
    
    Three unsecured promissory notes with an aggregate principal amount of $10.2 million; and
    
    2,181,818 shares of Youbet common stock that are subject to make-wholeprovisions
(described further below) which value such shares at $5.50 per share.
   make-whole
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make-whole
 Other
    Regulatory considerations
 Legal issues concerning online wagering that may adversely effect our business.
  Various state legislatures, Congress and federal and state executive authorities have proposed laws
and regulations directly applicable to online and Internet gaming which could have a material
adverse effect on our business .
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Item 3. Quantitative and qualitative disclosures about market risk
  
 Item 4. Controls and procedures
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Internal Control-Integrated Framework
 
 Part II. Other information
 
 Item 1. Legal proceedings
  
 Item 1A. Risk factors
  
    
    An adverse ruling on one or more claims in our arbitration proceedings with TVG could
adversely affect our liquidity and operating performance.
    
    If credit card companies, as a policy, refuse to process wagering account transactions
due to perceived legal uncertainty surrounding online, live event wagering, our business
and results of operations could be adversely affected.
    
    If, in response to allegations brought before the WTO, the U.S. government amends
existing laws to exempt foreign providers of online gambling from, or restricts domestic
service providers, our business could be adversely affected.
  
 Item 2. Unregistered sales of equity securities and use of proceeds
 
 
 Item 3. Defaults upon senior securities
  
 Item 4. Submission of matters to a vote of security holders
  
 Item 5. Other information
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Item 6. Exhibits
 3.1
    
    Certificate of Incorporation of Youbet.com, as amended through November 12,
2001 (incorporated by reference to Exhibit 3.1 to the Form 10-Q of Youbet.com.
Inc. for the quarter ended September 30, 2003).3.2
    
    Amended and Restated Bylaws of Youbet.com (incorporated by reference to Exhibit
3.1 to the Form 8-K of Youbet.com, Inc. filed February 23, 2004).2.1
    
    Stock Purchase Agreement, dated as of November 30, 2005, by and among
Youbet.com, Inc., UT Gaming, Inc., UT Group LLC, and United Tote Company
(incorporated by reference to Exhibit 2.1 the Form 8-K of Yuobet.com dated
November 30, 2005 and filed December 5, 2005).2.2
    
    First Amendment to Stock Purchase Agreement, dated as of December 22, 2005, by
and among Youbet.com, Inc., UT Gaming, Inc., UT Group LLC, and United Tote
Company (incorporated by reference to Exhibit 2.2 to the Form 8-K of Youbet.com
dated and filed December 22, 2005).2.3
    
    Second Amendment to Stock Purchase Agreement, dated as of January 26, 2006, by
and among Youbet.com, Inc., UT Gaming, Inc., UT Group LLC, and United Tote
Company (incorporated by reference to Exhibit 2.3 to the Form 8-K of Youbet.com
dated and filed January 26, 2006).2.4
    
    Third Amendment to Stock Purchase Agreement, dated as of February 10, 2006, by
and among Youbet.com, Inc., UT Gaming, Inc., UT Group LLC, and United Tote
Company (incorporated by reference to Exhibit 2.4 to the Form 8-K of Youbet.com
dated February 10, 2006 and filed February 13, 2006).4.1
    
    Stockholder Rights Agreement, dated as of February 10, 2006, by and between
Youbet.com, Inc. and UT Group LLC (incorporated by reference to Exhibit 4.1 to
the Form 8-K of Youbet.com dated February 10, 2006 and filed February 13,
2006).4.2
    
    Waiver Letter, dated as of April 11, 2006, by and among Youbet.com, Inc., UT
Gaming, Inc., UT Group LLC, and United Tote Company (incorporated by reference
to Exhibit 4.5 to the Registration Statement of Form S-3 of Youbet.com (File
No. 333-133478) filed April 21, 2006).10.1
    
    Credit Agreement, dated as of September 5, 2003, between United Tote Company
and Manufacturers and Traders Trust Company, as amended (incorporated by
reference to Exhibit 10.1 to the Form 8-K of Youbet.com dated February 10, 2006
and filed February 13, 2006).10.2
    
    Continuing Guarantee, dated as of February 9, 2006, of Youbet.com, Inc. in
favor of Manufacturers and Traders Trust Company (incorporated by reference to
Exhibit 10.2 to the Form 8-K of Youbet.com dated February 10, 2006 and filed
February 13, 2006).10.3
    
    Forbearance Letter Agreement, dated as of February 9, 2006, among Manufacturers
and Traders Trust Company, Youbet.com, Inc., UT Gaming, Inc. and United Tote
Company (incorporated by reference to Exhibit 10.3 to the Form 8-K of
Youbet.com dated February 10, 2006 and filed February 13, 2006).10.4
    
    Forbearance Letter Agreement, dated
as of April 19, 2006, among Manufacturers
and Traders Trust Company, Youbet.com, Inc., UT Gaming, Inc. and United Tote
Company (incorporated by reference to Exhibit 10.3 to the Form 8-K of
Youbet.com dated April 19, 2006 and filed April 25, 2006).10.5
    
    Promissory Notes issued by Youbet.com, Inc. in favor of UT Group LLC
(incorporated by reference to Exhibit 10.4 to the Form 8-K of Youbet.com dated
February 10, 2006 and filed February 13, 2006).10.6
    
    Management Retention Agreement, dated as of February 10, 2006, by and among
Youbet.com, Inc., UT Group LLC, Joe Tracy and Terry Woods (incorporated by
reference to Exhibit 10.5 to the Form 8-K of Youbet.com dated February 10, 2006
and filed February 13, 2006).10.7
    
    Amendment to Management Retention Agreement, dated as of February 10, 2006, by
and among Youbet.com, Inc., UT Group LLC, Joe Tracy and Terry Woods.
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31.1
    
    Certification of President and Chief Executive Officer Pursuant to Rule
13a-14(a) of the Securities Exchange Act of 1934.31.2
    
    Certification of Chief Financial Officer and Treasurer Pursuant to Rule
13a-14(a) of the Securities Exchange Act of 1934.32.1
    
    Certification Pursuant to Rule 13a-14(b) of the Securities Exchange Act of 1934.
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SIGNATURES
  YOUBET.COM, INC.May 10, 2006
    By:
    /s/ Charles F. ChampionCharles F. ChampionPresident and Chief Executive OfficerMay 10, 2006
    By:
    /s/ Gary W. SprouleGary W. SprouleChief Financial Officer 23