UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                   -----------

                                   Form 10-QSB

(Mark One)

/X/  QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
     OF 1934

                FOR THE QUARTERLY PERIOD ENDED JUNE 30, 2002

                                       OR

/ /  TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
     OF 1934

                  FOR THE TRANSITION PERIOD FROM _____ TO_____

                       COMMISSION FILE NUMBER: 33-13789LA

                                   -----------

                                YOUBET.COM, INC.

             (Exact name of registrant as specified in its charter)

                DELAWARE                                   95-4627253
      (State or other jurisdiction                      (I.R.S. Employer
    of incorporation or organization)                Identification Number)


               5901 De Soto Avenue, Los Angeles, California 91367
          (Address of principal executive offices, including zip code)

                                 (818) 668-2100
                (Issuer's telephone number, including area code)

                                   -----------

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

     As of August 12, 2002, the issuer had 23,422,600 shares of common stock
issued and outstanding.

<PAGE>
<TABLE>
<CAPTION>
<S>     <C>
                                YOUBET.COM, INC.
                              INDEX TO FORM 10-QSB
                              FOR THE QUARTER ENDED
                                  JUNE 30, 2002


                                                                                                Page
PART I.   FINANCIAL INFORMATION

Item 1.   Financial Statements
            Consolidated Balance Sheets as of June 30, 2002 (unaudited) and December 31, 2001.....3
            Consolidated Statements of Operations for the three months ended June 30, 2002
              and June 30, 2001 (unaudited).......................................................4
            Consolidated Statements of Operations for the six months ended June 30, 2002
              and June 30, 2001 (unaudited).......................................................5
            Consolidated Statements of Cash Flows for the six months ended June 30, 2002
              and June 30, 2001(unaudited)........................................................6
            Notes to Unaudited Condensed Consolidated Financial Statements........................7
Item 2.   Management's Discussion and Analysis of Financial Condition and Results of Operations..15
Item 3.   Quantitative and Qualitative Disclosures About Market Risk ............................20

PART II.  OTHER INFORMATION

Item 1.   Legal Proceedings......................................................................21
Item 2.   Changes in Securities..................................................................22
Item 3.   Submission of Matters to a Vote of Security Holders....................................22
Item 4.   Other Information......................................................................22
Item 5.   Exhibits and Reports on Form 8-K.......................................................23
          Certification..........................................................................23
Signatures.......................................................................................24

</TABLE>
                                        2
<PAGE>

PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS

<TABLE>
<CAPTION>

                                                   YOUBET.COM, INC.
                                             CONSOLIDATED BALANCE SHEETS


                                                                                  June 30, 2002    December 31, 2001
                                                                                   (Unaudited)         (Audited)
                                                                                 ---------------  -------------------
<S>                                                                                     <C>              <C>
ASSETS

Current Assets:
Cash and Cash Equivalents                                                        $    4,730,741   $        3,560,740
Restricted Cash, Current Portion (Note 2)                                                     -              107,867
Receivables (Note 3)                                                                  1,113,441              278,235
Interest and Other Receivables                                                           26,228               59,468
Prepaid Expenses                                                                        302,193              433,636
                                                                                 ---------------  -------------------
Total Current Assets                                                                  6,172,603            4,439,946
                                                                                 ---------------  -------------------
Property and Equipment                                                                9,875,531            9,846,011
Less: Accumulated Depreciation and Amortization                                      (4,955,127)          (3,966,710)
                                                                                 ---------------  -------------------
Property and Equipment, net                                                           4,920,404            5,879,301
                                                                                 ---------------  -------------------
Licensing Rights, net (Note 4)                                                        6,830,521            8,638,213
Restricted Cash, net of current portion (Note 2)                                              -              812,938
Deposits and Other (Notes 1 and 2)                                                    1,533,884              115,175
                                                                                 ---------------  -------------------
Total Assets                                                                     $   19,457,412   $       19,885,573
                                                                                 ===============  ===================

LIABILITIES AND STOCKHOLDERS' EQUITY

Current Liabilities:
Accounts Payable - Trade                                                         $      963,789   $        1,158,638
Fees and Commissions Payable to Related Party (Note 4)                                1,337,444              255,127
Accounts Payable - Track Related (Note 4)                                             2,284,099              213,823
Accrued Expenses                                                                      1,188,600            1,302,106
Customer Deposits                                                                     1,295,739              361,500
Accrued Compensation and Related Items (Note 8)                                         484,523              335,113
Deferred Revenues                                                                         7,945                8,097
Notes Payable (face $750,000), net of discount of $434,742 (Note 5)                     456,125                    -
                                                                                 ---------------  -------------------
Total Current Liabilities                                                             8,018,264            3,634,404
                                                                                 ---------------  -------------------
Total Liabilities                                                                     8,018,264            3,634,404
Commitments and Contingencies (Notes 1, 2, 5, and 7)
Stockholders' Equity:
Preferred Stock, $.001 par value-Authorized 1,000,000 shares, none outstanding                -                    -
Common Stock, $.001 par value-Authorized 100,000,000 shares, 19,537,950
and 23,422,600 shares outstanding as of December 31, 2001, and  as of
 June 30, 2002, respectively.                                                            23,422               19,538
Additional Paid-in Capital                                                           95,743,164           95,084,423
Accumulated Deficit                                                                 (84,327,438)         (78,852,792)
                                                                                 ---------------  -------------------
Total Stockholders' Equity                                                           11,439,148           16,251,169
                                                                                 ---------------  -------------------
Total Liabilities and Stockholders' Equity                                       $   19,457,412   $       19,885,573
                                                                                 ===============  ===================
</TABLE>
           See accompanying notes to unaudited condensed consolidated
                              financial statements.

                                        3
<PAGE>
<TABLE>
<CAPTION>
                                   YOUBET.COM, INC.
                        CONSOLIDATED STATEMENTS OF OPERATIONS
                                      (UNAUDITED)

                                                          Three Months Ended June 30,
                                                           --------------------------
                                                               2002          2001
                                                           ------------  ------------
<S>                                                             <C>           <C>
Revenues                                                    $ 6,010,885   $ 1,717,162
Operating Expenses:
 Network Operations                                             503,501       665,124
 Research and Development                                       547,066       709,007
 Fees and Commissions - Related Party (Note 4)                1,337,444             -
 Sales and Marketing                                          3,301,147     1,557,719
 General and Administrative                                   1,359,354     1,505,301
 Depreciation and Amortization                                1,400,108       623,983
                                                            ------------  ------------
  Total Operating Expenses                                    8,448,620     5,061,134
                                                            ------------  ------------
Loss from Operations                                         (2,437,735)   (3,343,972)

Other Income (Expense):
 Interest Income                                                  6,551       106,784
 Interest Expense                                              (144,832)       (8,417)
 Other                                                              (17)         (199)
                                                            ------------  ------------
  Total Other Income                                           (138,298)       98,168
                                                            ------------  ------------
 Net Loss                                                   $(2,576,033)  $(3,245,804)
                                                            ============  ============
Basic and Diluted:
 Net Loss per Common Share                                  $     (0.13)  $     (0.17)
                                                           ============  ============

    Weighted average number of common shares outstanding    20,562,473    19,520,850
                                                           ============  ============
</TABLE>
           See accompanying notes to unaudited condensed consolidated
                              financial statements.
                                        4
<PAGE>
<TABLE>
<CAPTION>

                                   YOUBET.COM, INC.
                        CONSOLIDATED STATEMENTS OF OPERATIONS
                                      (UNAUDITED)

                                                           Six Months Ended June 30,
                                                           --------------------------
                                                               2002          2001
                                                           ------------  ------------
<S>                                                             <C>           <C>
Revenues                                                    $ 8,628,099   $ 3,364,927
Operating Expenses:
 Network Operations                                             995,436     1,379,595
 Research and Development                                     1,036,449     1,422,530
 Fees and Commissions - Related Party (Note 4)                1,780,708             -
 Sales and Marketing                                          4,450,546     2,621,649
 General and Administrative                                   2,910,377     2,691,089
 Depreciation and Amortization                                2,798,904     1,117,341
                                                            ------------  ------------
  Total Operating Expenses                                   13,972,420     9,232,204
                                                            ------------  ------------
Loss from Operations                                         (5,344,321)   (5,867,277)

Other Income (Expense):
 Interest Income                                                 23,017       282,842
 Interest Expense                                              (150,240)      (12,209)
 Other                                                              (17)       (2,286)
                                                            ------------  ------------
  Total Other Income                                           (127,240)      268,347
                                                            ------------  ------------
 Net Loss                                                   $(5,471,561)  $(5,598,930)
                                                            ============  ============

Basic and Diluted:
 Net Loss per Common Share                                  $     (0.27)  $     (0.29)
                                                            ============  ============

    Weighted average number of common shares outstanding     20,053,042    19,520,850
                                                            ============  ============

</TABLE>
           See accompanying notes to unaudited condensed consolidated financial
                                   statements.
                                        5
<PAGE>
<TABLE>
<CAPTION>
                                         YOUBET.COM, INC.
                             CONSOLIDATED STATEMENTS OF CASH FLOWS
                                           (UNAUDITED)
                                      Six Months Ended June 30,

                                                                         2002          2001
                                                                     ------------  ------------
<S>                                                                      <C>           <C>
Increase (Decrease) in Cash and Cash Equivalents
Cash flows from operating activities:
     Net loss                                                         $(5,471,561)  $(5,598,930)
Adjustments to reconcile net loss to net cash provided by (used in)
operating activities:
 Depreciation and amortization                                          2,798,904     1,117,341
 Non-cash compensation                                                    218,518       300,984
 Amortization of deferred financing costs                                   2,395             -
 Proceeds from sale of assets                                               1,642             -
 Settlement with vendors                                                  123,963         1,500
 Gain on disposal of assets                                                    17         2,536
Change in operating assets and liabilities:
 Receivables                                                             (835,204)      583,706
 Prepaid expenses                                                         131,444       (84,145)
 Other current assets                                                      33,242        44,935
 Deposits                                                                (497,905)       65,369
 Accounts payable                                                        (370,953)     (810,088)
 Customer deposits                                                        768,582             -
 Accrued compensation and related items                                   347,434      (373,430)
 Fees and Commissions - Related Party                                   1,046,323             -
 Accounts Payable - Track Related                                       1,550,271             -
 Other accrued expenses                                                   464,728       362,822
 Deferred revenues                                                           (153)        2,511
 Notes Payable                                                            138,402             -
                                                                     ------------  ------------
  Net cash provided by (used in) operating activities                     450,089    (4,384,889)
                                                                     ------------  ------------

Cash flows from investing activities:
 Leasehold improvements                                                       704             -
 Purchases of property and equipment                                      (34,677)     (445,619)
                                                                     ------------  ------------
 Net cash used in investing activities                                    (33,973)     (445,619)
                                                                      ------------  ------------
Cash flows from financing activities:
 Proceeds from notes payable                                              750,000             -
 Payments on capitalized lease obligations                                      -        (8,909)
 Proceeds from exercise of stock options and warrants                       3,885             -
                                                                     ------------  ------------
  Net cash provided by (used in) financing activities                     753,885        (8,909)

Net increase (decrease) in cash and cash equivalents                    1,170,001    (4,839,417)
Cash and cash equivalents at the beginning of the period                3,560,740    12,094,172
                                                                     ------------  ------------
Cash and cash equivalents at the end of the period                    $ 4,730,741   $ 7,254,755
                                                                      ===========   ===========
Supplemental disclosure of cash flow information
 Cash paid for Interest                                               $     4,411   $    12,209
                                                                      ===========   ===========

Non-cash investing and financing activities:
 Non-cash compensation                                                $   920,805   $       893
 Fair value of warrants issued for financing costs                    $   437,137   $         -
                                                                      ===========   ===========
</TABLE>

           See accompanying notes to unaudited condensed consolidated financial
                                   statements.
                                        6
<PAGE>

                                YOUBET.COM, INC.
         NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                         SIX MONTHS ENDED JUNE 30, 2002

NOTE  1- ORGANIZATION  AND  BASIS  OF  PRESENTATION

Business

     Youbet.com,  Inc. ("Youbet.com" or the "Company") has established itself as
one of the leading global brand names for online live event sports entertainment
and  wagering.  Wagering  on  live  events,  such  as  horse racing, car racing,
soccer,  football,  etc,  is  a  large  global industry which adapts well to the
Internet  space.  The  Company  has initially focused on the United States horse
wagering market and its principal product, the YouBet Network, a PC-based system
which  allows a customer to transmit information and thereby process wagers. The
Company  is  working to expand the Youbet.com brand, product and services in the
United  States  and  overseas  market. The Company currently provides its United
States  network members the ability to watch, access a comprehensive database of
handicapping  information  and,  in  most states, the ability to wager on a wide
selection  of  coast-to-coast,  Canadian,  and  Australian thoroughbred, quarter
horse, and harness horse racing, via its exclusive virtual private network.  The
YouBet  Network  is  completely interactive and provides a real-time interactive
audio  video  environment.

     The  Company  believes it is an innovator in the online live event wagering
industry  and intends to exploit the opportunities available to it in the United
States  and  to  pursue  international markets aggressively. Future developments
include  enhancement  and improvement of its existing products and technologies,
development  of new products and international expansion. To enhance and improve
the  YouBet  Network,  the Company has developed a web-based application "Youbet
Express" which was launched in March 2001, and a state of the art phone wagering
system  which  was  launched  in  September  2001.  Additionally, the Company is
looking  into  improving  its web content management and exploring other revenue
streams.

     On August 2, 2001, the Company received a multi-jurisdictional license from
the State of Oregon horse racing authorities for the acceptance and placement of
wagers.  The  acceptance  and  placement  of  wagers is processed through Youbet
Oregon,  Inc.,  a wholly owned subsidiary of the Company.  The Company commenced
operations  in  Oregon  during  the  third  quarter  of  2001.

     On  February  21,  2002,  Youbet.com received a license from the California
Horse  Racing  Board  authorizing  the  acceptance  by the Company of online and
telephone  horse  racing  pari-mutuel  wagering  from California residents.  The
acceptance  and  placement  of  wagers  is processed through Youbet Oregon, Inc.
In  connection  with  obtaining this license, the Company placed a $500,000 cash
deposit  with  the California Horse Racing Board which is classified as deposits
in  the  accompanying  unaudited  consolidated financial statements. The Company
also  accepts  and  processes  wagers  through another licensed account-wagering
entity  owned  by  Magna  Entertainment,  Corp.,  ("Magna").

                                        7
<PAGE>

Going  Concern

     The  accompanying  unaudited  consolidated  financial  statements have been
prepared  assuming  that  the  Company  will  continue as a going concern, which
contemplates  the  realization  of assets and the satisfaction of liabilities in
the  normal  course  of business. The Company has suffered significant recurring
operating  losses  and  needs  to  raise  additional  funds  to  accomplish  its
objectives.  These  matters  raise substantial doubt about the Company's ability
to  continue as a going concern.  The Company believes that its previous efforts
to  reduce  costs and operate more efficiently, combined with the opening of the
Oregon wagering hub in September 2001, and the Company receipt of licensing from
California in February 2002, will improve cash flows.  However, the Company will
require  additional capital to (1) fund operations and pay down its liabilities,
(2)  fund  growth,  and (3) fund restructuring of operations and infrastructure.
During  March  2002,  the Company successfully raised $750,000 in debt financing
(see  Note  5).  The  Company  is  exploring  various  alternatives to raise the
additional  capital,  but  there  can  be no assurances that the Company will be
successful  in  this  regard. To the extent that the Company is unable to secure
the  capital  necessary  to  fund its future cash requirements on a timely basis
and/or  under  acceptable  terms  and  conditions,  the  Company  may  not  have
sufficient cash resources to maintain operations. In such event, the Company may
be  required  to  consider a formal or informal restructuring or reorganization.
No adjustments have been made to the unaudited consolidated financial statements
that  might  result  from  the  outcome  of  this  uncertainty.

Basis  of  Presentation

     In  the  opinion  of  management,  the  accompanying  unaudited  financial
statements for the three and six months ended June 30, 2002 and 2001 include all
adjustments (consisting of normal recurring accruals) which management considers
necessary to present fairly the financial position of the Company as of June 30,
2002,  the results of its operations for the three and six months ended June 30,
2002  and  June  30,  2001, and its cash flows for the six months ended June 30,
2002  and  June  30,  2001  in  conformity  with  generally  accepted accounting
principles  ("GAAP"). These financial statements have been prepared consistently
with  the  accounting  policies described in the Company's Annual Report on Form
10-KSB  for  the  year ended December 31, 2001, as filed with the Securities and
Exchange  Commission  on  April  14, 2002 and should be read in conjunction with
this  Quarterly  Report  on Form 10-QSB. The results of operations for the three
and  six  months  ended  June  30,  2002  are  not necessarily indicative of the
consolidated  results  of  operations  to  be  expected for the full fiscal year
ending  December 31, 2002. Certain information and footnote disclosures normally
included in the financial statements presented in accordance with GAAP have been
condensed  or  omitted.

Use  of  Estimates

     The  preparation  of  financial  statements  in  conformity  with generally
accepted  accounting  principles  requires  management  to  make  estimates  and
assumptions  that  affect  the  reported  amounts  of assets and liabilities and
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.  Actual results could materially differ from these estimates.

                                        8
<PAGE>

Basic  and  Diluted  Loss  Per  Share

     Basic  loss  per  share  is calculated by dividing net loss by the weighted
average  number of common shares outstanding during the period. Diluted loss per
share is calculated by dividing net loss by the basic shares outstanding and all
dilutive  securities,  including  stock options, warrants, convertible notes and
preferred  stock,  but  does  not  include the impact of potential common shares
which  would  be  antidilutive.  Total warrants outstanding were 22,170,382 with
exercise  prices  between  $0.10  and $19.50 and total stock options outstanding
were  4,136,662  with  exercise  prices  between  $0.26  and  $10.50.

Concentration  of  Credit  Risk

     The  Company  maintains  cash  balances  at various financial institutions.
Deposits  not exceeding $100,000 for each institution are insured by the Federal
Deposit  Insurance  Corporation.  At  June  30, 2002, and December 31, 2001, the
Company  had  uninsured  cash  and  cash  equivalents,  and  restricted  cash of
$3,784,484  and  $4,228,800  respectively.

Reclassifications

     Certain  prior  period  amounts  have  been  reclassified to conform to the
current  period  presentation.

NOTE  2-OBLIGATIONS  UNDER  FACILITIES  LEASES

     Youbet.com's  executive  and  operating offices occupy approximately 30,000
square  feet  and  are  located  at 5901 De Soto Avenue, Los Angeles, California
under  a  lease  that  expires March 15, 2010. The base term of the lease is ten
years  with an option to extend an additional five years. Base rent payments are
$60,078  per month with annual increases as specified in the lease agreement. In
conjunction  with  this  lease  agreement,  the  Company  obtained  a  one-year
$1,029,000 letter of credit, which was secured by cash. The Company is obligated
for the next ten years to obtain a letter of credit equal to the original amount
of  $1,029,000  less  $107,867  per year for every year elapsed during the first
five  years  and less $97,867 per year for every year elapsed thereafter.  As of
December  31,  2001, Youbet.com had obtained a letter of credit in the amount of
$920,805,  which  is classified as restricted cash in the Company's accompanying
audited consolidated financial statements.  The Company did not renew the letter
of  credit  when  it  expired  on  March  28, 2002 and as such the landlord drew
$920,805  against  the  letter of credit and is holding the monies as a deposit.
Management  is  attempting to obtain a new letter of credit to replace the prior
one.  Upon  replacement  of  the  letter of credit, the landlord will refund the
aforementioned  deposit  to  the  Company.

     On  July  1, 2001 the Company entered into a lease agreement for its Oregon
facility.  The  base  term  of  the lease is three years. Base rent payments are
$2,103  per  month  with  annual  increases as specified in the lease agreement.

                                        9
<PAGE>

NOTE  3-RECEIVABLES

     The  Company  uses  several  vendors  to  process its credit card and check
transactions.  Some  of  these vendors require that the Company keep in reserve,
for  up  to six months, a certain percentage of the total amounts processed as a
security  against  any  future  potential  losses.  These  reserves  amounted to
$627,142  as  of  June  30,  2002.

NOTE  4-AGREEMENT  WITH  TVG

     In  May  2001,  Youbet.com  entered into a track content and patent license
agreement  (the  "License  Agreement")  and  a  warrant  issuance agreement (the
"Warrant  Agreement")  with  ODS  Technologies,  L.P., dba TVG. These agreements
relate  to  the  grant  by  TVG  to Youbet.com of a non-exclusive license to use
telephones  and  certain simulcast audio, video and data content for the purpose
of  streaming  such  content  online  and the agreement of race tracks to accept
wagers  based  on  such  content,  and  to use TVG's patented systems for making
pari-mutuel  wagers  on  horse  races online. Among other things, the agreements
call  for  Youbet.com,  to issue to TVG two warrants to purchase common stock of
the  Company  as  described  below.

     The  License  Agreement  remains  in  effect until the later of (i) May 18,
2011,  (ii)  the  date  of  expiration  of the last to expire of the TVG patents
licensed  to Youbet.com under the agreement, or (iii) the date on which the last
of  TVG's  agreements  with  the  TVG Exclusive Tracks expires (unless extended,
TVG's  agreements with the TVG Exclusive Tracks expire before May 18, 2011). The
License  Agreement  may  be  terminated before the expiration of its term (a) by
TVG,  if Youbet.com ceases to operate its Oregon account wagering hub or another
account  wagering  facility  approved  by  TVG at any time thereafter during the
term;  (b)  by TVG, in the event that Youbet.com brings any legal action against
TVG or any of TVG's affiliates, including Gemstar-TV Guide International, unless
it is finally determined in such action that TVG (or its affiliate) acted in bad
faith with respect to any claim that is the subject of the legal action; and (c)
by  either  Youbet.com  or  TVG,  in  the  event that the other party materially
breaches  the  License  Agreement  without  cure  upon  notice.

     In  consideration  of  the  rights  granted to Youbet.com under the License
Agreement,  Youbet.com  has  agreed  to  pay  to  TVG  fees  based on the handle
generated  by Youbet.com from wagering activity and to issue to TVG the warrants
to purchase Youbet.com common stock on the terms and conditions set forth in the
Warrant  Issuance  Agreement,  as  described below (see "Competition").  The TVG
fees  are  as  follows:

     o    With  respect to wagers processed through an account wagering facility
          other  than  Magna, 5.5% of the total handle on races conducted at the
          TVG Exclusive Tracks only. For purposes of determining these and other
          fees  payable  under  the  License  Agreement  with respect to the TVG
          Exclusive  Tracks,  tracks owned, controlled or operated by Magna will
          be  deemed  to  be  TVG Exclusive Tracks to the extent that TVG enters
          into  any agreement with any such track which provides for TVG to have
          simulcast  and account wagering rights on races from such track. These
          Magna tracks include nine tracks currently available on the Youbet.com
          network.

                                       10
<PAGE>

     o    With  respect  to wagers processed through Magna on races conducted at
          the TVG Exclusive Tracks, the entire commission or other consideration
          paid  to  Youbet.com  with  respect  to  such  wagers.

     o    With  respect to wagers conducted at four designated non-TVG Exclusive
          Tracks,  3.0%  of the total handle (including wagers processed through
          Magna).

     The  License  Agreement  also  provides that Youbet.com will pay to TVG the
following  fees:

     o    At  such  time  as Youbet.com opens its own account wagering facility,
          with  respect  to  wagers  accepted  or  processed  through an account
          wagering facility other than Magna, Youbet.com will charge customers a
          transaction  fee  of  25 cents per wager, with the first $3.00 of such
          fees  per  customer  per  month being retained by Youbet.com, the next
          $3.00  per  customer  per  month  being paid to TVG, and any remaining
          amounts  per  customer  per  month  being  split  equally  between the
          parties.

     o    Commencing  with  the  opening  of  Youbet.com's  own account wagering
          facility,  with  respect  to  account  wagers processed through Magna,
          Youbet.com  will,  at  its  election,  charge  customers  either  a
          transaction fee per wager of 25 cents or a monthly subscription fee of
          not  less  than  $5.95  and  will  split  such  fees equally with TVG.
          Youbet.com is permitted to defer payment of these fees until such time
          as it achieves positive cash flow sufficient to pay the deferred fees.
          Also,  Youbet.com is permitted to modify or waive transaction fees for
          certain  customers,  provided  that  it shares any such fees from such
          customers  equally  with  TVG.

     o    Commencing  with  the  first  calendar  quarter  in  which  Youbet.com
          achieves  positive cash flow, as defined in the License Agreement, and
          then  and  thereafter only to the extent of positive cash flow, 50% of
          gross  advertising  revenues  and  50%  of  the  amount by which gross
          operating  margin (revenues less direct costs) from monthly e-commerce
          revenues  exceeds  the gross operating margin from e-commerce revenues
          for  the  calendar  month  of  April  2001.

     o    With respect to account wagers on races conducted at the TVG Exclusive
          Tracks from Youbet.com customers in the states where the TVG exclusive
          tracks  are located, (i) pay source market fees and host track fees in
          accordance  with  the agreements between TVG and the applicable racing
          associations  and  other participants in the horse racing industry and
          (ii)  pay applicable state taxes and fees to the National Thoroughbred
          Racing  Association,  subject  to  a  cap  of one percent of the total
          handle.

     o    With respect to account wagers on races conducted at the TVG Exclusive
          Tracks  from  Youbet.com customers in other states, (i) pay host track
          fees  in accordance with the agreements between TVG and the applicable
          racing  associations  and  other  participants  in  the  horse  racing
          industry  and  (ii)  pay  applicable  state  taxes.

     o    With respect to account wagers on races conducted at non-TVG Exclusive
          Tracks  from  Youbet.com  customers  with  an account address within a
          25-mile  radius of any TVG Exclusive Track, Youbet.com will pay to TVG
          10% of all such account wagers, and TVG will retain 50% of such amount
          and  divide  the  remaining  50%  between the TVG Exclusive Tracks and
          Youbet.com's  partner  tracks  located  within  the  25-mile  radius.

                                       11
<PAGE>
     The  Company  issued to TVG an initial warrant (the "Initial TVG Warrant"),
on  May  18, 2001 (the time the Warrant Agreement was executed) entitling TVG to
purchase  an aggregate of up to 3,884,650 shares of Youbet.com common stock (the
"Initial  Warrant  Shares") at an exercise price of $0.001 per share exercisable
for  a period of three years. The Company recorded the fair value of the Initial
TVG  Warrant  ($2,910,000),  using  the Black-Scholes model, as a deferred asset
captioned  "Licensing  Rights"  and  is  being  amortized  over three years, the
estimated  life of the Company's technology. Accumulated amortization as of June
30,  2002  was  $1,075,749.  The  Initial  TVG  Warrant was exercised during the
quarter  ended  June  30,  2002,  resulting  in  cash  proceeds of $3,885 to the
Company.

     The  Company issued to TVG the Additional TVG Warrant on September 20, 2001
(the  time the Warrant Agreement was approved by the stockholders) entitling TVG
to  purchase  for  an  aggregate  exercise  price  of  $41,082,422  (subject  to
adjustment  as  provided  in  the  Additional TVG Warrant) a number of shares of
common stock which, when aggregated with the Initial Warrant Shares, is equal to
51%  of  the  sum  of  (i) the total number of shares of Youbet.com common stock
outstanding  on  the date the Additional TVG Warrant is exercised, plus (ii) the
total  number of shares of common stock issuable upon exercise of the Additional
TVG Warrant, plus (iii) the total number of Initial Warrant Shares then issuable
upon exercise of the Initial TVG Warrant. The Company recorded the fair value of
the  Additional  TVG  Warrant  ($7,054,000), using the Black-Scholes model, as a
deferred  asset  captioned  "Licensing Rights" and is being amortized over three
years,  the estimated life of the Company's technology. Accumulated amortization
as of June 30, 2002 was $1,396,152. The Company is obligated to issue additional
warrants  to  TVG  (in  order  to  maintain TVG's rights in acquiring 51% of the
Company)  upon  the exercise of any stock options or warrants, or if the Company
issues  any  additional  securities.  The number of warrants to be issued to TVG
would  be equivalent to the number of stock options or warrants exercised or the
number of additional securities issued.  In addition, the Additional TVG Warrant
contains  provisions  for  adjusting  the  exercise  price in the event that (i)
Youbet.com  makes  certain  additional  issuances  of common stock or securities
exercisable  for  or  convertible  into  common  stock  at a price less than the
defined  reference  price  per  share  ($2.50  per share) on which the aggregate
exercise  price  of  the  Additional  TVG  Warrant  is based, or (ii) engages in
certain  issuer  tender offers for the repurchase of shares of its common stock.

Estimated  aggregate  amortization  expense relating to Licensing Rights for the
next  three  years  is  as  follows:

   2002     $3,615,408
   2003      3,615,408
   2004        503,551

NOTE  5-NOTES  PAYABLE

     The Company entered into a Securities Purchase Agreement on March 21, 2002,
whereby  the  Company issued a series of one-year secured notes (the "Notes") in

                                       12
<PAGE>

the  aggregate  principal  amount  of $750,000 at an interest rate of 12% to the
Company's  new Chairman of the Board, to the Chief Executive Officer, and to six
other  investors  for  their $750,000 investment in the Company.  Both principal
and  all  interest  accrued  on these Notes will be payable at the earlier of a)
one-year  from  the  date  of  issuance,  or b) upon the Company's completion of
funding  in  an  amount greater than two million dollars ($2,000,000), excluding
the  Notes,  in  any  ninety-day  period  prior to the maturity of the Note.  In
connection  with issuance of the Notes, the Company issued five-year warrants to
purchase  750,000  shares  of the Company's common stock at an exercise price of
$0.50  per share.  The Company recorded the fair value of the warrants issued of
$437,137,  using  the  Black-Scholes  model,  as  a  note  discount and is being
amortized  over  one  year  as  interest  expense.

NOTE  6-STOCKHOLDERS'  EQUITY

Issuance  of  Stock  Options

     During  the  six  months  ended  June 30, 2002, the Company granted various
stock  options,  as  follows:

     (1)  Stock  options  were granted to employees to purchase 90,450 shares of
          common  stock at exercise prices ranging from $0.50 to $0.94, the fair
          market value at the date of grant. These options vest over four years,
          and  are  exercisable  for  a  period  of  five  years.

     (2)  Stock  options  were granted to executive officers to purchase 900,000
          shares of common stock at exercise prices ranging from $0.50 to $0.78.
          Of  these options 400,000 were issued at $0.50, below the market value
          at  the  date of grant, which was $0.60, and the remaining shares were
          issued  at  the  fair market value at the date of grant. These options
          vest  as  follows;  100,000 vest in ninety days, and 300,000 vest over
          three  years,  500,000  vest  over  four  years.  These  options  are
          exercisable as follows; 700,000 for a period of ten years, and 200,000
          for  a  period of eighty-one months. On April 11, 2002 94,900 of these
          options  were  terminated.

     (3)  Stock  options were granted to directors to purchase 200,000 shares of
          common  stock at exercise prices ranging from $0.50 to $0.80. Of these
          options  40,000  were  issued  at $0.50, below the market value at the
          date  of  grant, which was $0.67, and the remaining shares were issued
          at  the  fair  market  value  at the date of grant. These options vest
          monthly  over one year, and are exercisable for a period of ten years.

     (4)  Stock options were granted to consultants to purchase 95,002 shares of
          common  stock at exercise prices ranging from $0.50 to $0.97. Of these
          options  60,000  were  issued  at $0.50, below the market value at the
          date  of  grant, which was $0.67, and the remaining shares were issued
          at the fair market value at the date of grant. The fair value of these
          options  is  being  expensed,  with  a  credit  to  additional
          paid-in-capital. These options vest as follows; 60,000 vest over three
          years, 30,000 in twenty-six months, 2,502 vest in one month, and 2,500
          vest  in  six months. These options are exercisable as follows; 60,000
          for  a  period  of  ten  years, and 35,002 for a period of five years.

                                       13
<PAGE>

Issuance  of  Warrants

     During  the three months ended March 31, 2002, in connection with the Notes
Payable  financing, the Company issued warrants to the lenders to purchase up to
750,000  of  common  stock  (See  Note  5).

NOTE  7-LEGAL  PROCEEDINGS

     On  June 4, 1999, a complaint was filed against the Company in the Court of
Chancery  of  the State of Delaware in and for New Castle County entitled George
Von  Opel  v. Youbet.com Inc. (C.A. No. 17200 NC). In the complaint Mr. Von Opel
alleges  that  the  Company  breached  its  contractual obligation pursuant to a
Private  Placement  Memorandum by failing to register the shares of common stock
underlying  400,000  warrants  issued  by the Company to an affiliate of Mr. Von
Opel.  The  complaint  seeks  specific  performance of the alleged obligation to
register such shares and damages for alleged breach of contract in the amount of
$8.7  million.  The  Company  has  answered  the complaint and intends to defend
itself  vigorously  in  the  action.  On August 19, 1999, Mr. Von Opel moved for
summary  judgment  on  the  issue of liability, which on June 2, 2000, the court
denied.  The Company is proceeding with discovery and has noticed the deposition
of  Mr. Von Opel. As the litigation is at an initial stage, an outcome cannot be
predicted  at  this  time.

     The  Company  received  correspondence  from the Business Software Alliance
("BSA")  alleging  the  Company  had  used  or  installed unauthorized copies of
software  products  on  its computers.  In their correspondence, BSA proposed to
settle  their  claims  against  the Company for a settlement amount of $824,000,
based  on  twice  the  alleged  value  of  the  unauthorized software installed.
Management  believes  that  the  BSA  claims  are  substantially  overstated.
Management  cannot  predict  the  outcome  of  this  claim.

     The  Company was served with a lawsuit from a vendor claiming nonpayment of
services  in  the amount of approximately $300,000.  The Company filed a counter
claim  against  the  vendor.  During  April 2002, the Company settled all of the
vendor's  claims  for  $160,000,  recognizing approximately $124,000 in gains on
settlement.

     The  Company  is  also  a  party  to  certain  other  claims,  actions, and
proceedings  incidental  to  its  business,  none of which is expected to have a
material  adverse  effect  on  the  business,  financial  position or results of
operations  of  the  Company.


                                       14
<PAGE>

NOTE  8-ACCRUED  COMPENSATION  AND  RELATED  ITEMS

     On  July 8, 1999, the Board approved the recommendation of the Compensation
Committee  to  grant to David Marshall (through his wholly-owned subsidiary) and
Russell Fine a bonus award of $300,000, payable $75,000 to each upon the Company
achieving  15,000  subscribers  and  $75,000  to each upon the Company achieving
25,000  subscribers.  As  of  June  30, 2002, the Company has accrued a total of
$150,000  ($75,000  to  each  of  Messrs.  Marshall  and  Fine).


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

FORWARD  LOOKING  STATEMENTS

     The  following  discussion  of  the  financial  condition  and  results  of
operations  of Youbet.com, Inc. should be read in conjunction with the financial
statements  and  the  related  notes  included  elsewhere  in  this 10-QSB. This
discussion  contains  forward-looking  statements  that are based on the current
beliefs  and  expectations  of  the Company's management, as well as assumptions
made  by, and information currently available to, the Company's management. Such
statements  include  those  regarding  general  economic  and  e-gaming industry
trends.  Because such statements involve risks and uncertainties, actual actions
and strategies and the timing and expected results thereof may differ materially
from  those  expressed  or  implied  by such forward-looking statements, and the
Company's  future  results,  performance or achievements could differ materially
from  those  expressed  in,  or implied by, any such forward-looking statements.
Future events and actual results could differ materially from those set forth in
or  underlying  the  forward-looking  statements.

OVERVIEW

     Youbet.com  established itself as one of the leading global brand names for
online  live  event  sports  entertainment  wagering  and  other forms of online
gaming.  The  Company  has initially focused its efforts primarily on the United
States  horse  racing industry. Youbet.com believes that online communication is
an  ideal  medium  for  live  event wagering. First, online communication allows
bettors  instant  access  to vast amounts of historical performance data used in
assessing  potential  wagers. Second, online communication offers the ability to
sort and analyze such data in ways and at speeds that are unachievable manually.
Third, online communication technology allows wagers to be placed from virtually
any location within a jurisdiction where wagering is legal, thus freeing bettors
from  traditional  site-specific  wagering  locations. In addition, the speed of
electronic communication allows wagers to be placed and acknowledged in seconds.

     Youbet.com's  initial  product,  the You Bet Network, is a PC-based system,
which  utilizes the infrastructure of the Internet and a virtual private network
with  Internet  access to provide up-to-the minute detailed information on races
taking  place  at  horse  tracks  nationwide.  The  Company also delivers a live
simulcast  of  most  of  these  races  directly  to  the customer's computer. In
addition,  customers  can  use  the You Bet Network to process wagers, using the
system's icon-driven menus to fill out an electronic betting ticket with a brief
series  of  mouse-clicks.  The  wager  is  then  transmitted electronically to a

                                       15
<PAGE>

licensed  account wagering entity.  The customer's account is debited, the wager
is  placed at the host horse track and an electronic confirmation is sent to the
customer  through  the  You  Bet Network. This entire process usually takes less
than  three  seconds.  The  subsequent  adjustment to the customer's account for
winnings  also usually takes less than three seconds after official winnings are
posted  at  the  racetrack.  To  enhance  and  improve  the You Bet Network, the
Company  has  developed  a  web-based  application  "Youbet  Express"  which was
launched  in  March 2001, and a state of the art phone wagering system which was
launched in September 2001.  Additionally, the Company is looking into improving
its  web  content  management  and  exploring  other  revenue  streams.

     Youbet.com  derives  revenue from the You Bet Network in three ways. First,
it  receives  commissions  derived  from  wagers placed by Youbet.com customers.
Second, it charged a monthly subscription fee of $5.95 per month until September
1,  2001  when  the  Company  eliminated  its $5.95 subscription fee and instead
started  charging a transaction fee of $0.25 per bet placed.  Beginning November
2001,  the transaction fee was waived.  Third, it receives revenue from the sale
of  handicapping  information.

CONSOLIDATED  RESULTS OF OPERATIONS-THREE MONTHS ENDED JUNE 30, 2002 COMPARED TO
THREE  MONTHS  ENDED  JUNE  30,  2001

     Revenues  for  the  three  months  ended June 30, 2002, were $6,010,885, an
increase of $4,293,723, or 250%, from $1,717,162 for the three months ended June
30, 2001. The Company receives commission revenues through its subsidiary Youbet
Oregon,  Inc.  The  Company  records  gross  commission proceeds as revenues and
records  the related costs as Sales and Marketing expenses and as Marketing Fees
and  Commissions.  In addition, the Company recognizes net commissions earned on
wagers  as  revenue  as  wagers  are  placed  at third party wagering facilities
("Magna").  The increase in revenues was mainly due to an increase in the amount
of  wagers  placed  by Youbet.com customers at the Oregon wagering hub which was
opened  during  September  2001


OPERATING  EXPENSES

     NETWORK  OPERATIONS-Network operations costs consist primarily of salaries,
data center management and telecommunications costs.  For the three months ended
June  30,  2002,  network  operations  costs  decreased  by $161,623 or 24.3% to
$503,501 in 2002 from $665,124 in 2001. The decrease was mainly due to decreases
in  salaries  and  non-cash  compensation.

     RESEARCH  AND  DEVELOPMENT-Research and development costs consist primarily
of salaries.  For the three months ended June 30, 2002, research and development
costs  decreased by $161,941 or 22.8% to $547,066 in 2002 from $709,007 in 2001.
This  decrease  resulted  primarily  from  decreases  in  salaries, and non-cash
compensation.  The  Company  will  continue  to invest in the development of the
YouBet  Network  and  other projects, which management believes are of value and
critical  to  achieving  its  strategic  objectives.

     FEES  AND  COMMISSIONS  -  RELATED  PARTY - Fees and commissions represents
amounts  incurred  to  related  parties for the three months ended June 30, 2002
were  $1,337,444  as  a  result  of  the  agreement  with  TVG.  (See  Note 4).

                                       16
<PAGE>

     SALES  AND  MARKETING-Sales  and  marketing  expenses  consist primarily of
marketing  program  expense,  salaries,  and  commissions.  For the three months
ended  June  30,  2002, sales and marketing expenses increased by $1,743,428, or
112%,  to  $3,301,147  in  2002  from $1,557,719 in 2001. Marketing program cash
expenses  and marketing operations decreased by $777,635, or 60%, to $528,603 in
2002  from $1,306,238 in 2001. Customer service and Youbet Oregon, Inc. expenses
increased  by  $336,249, or 174%, to $529,598 in 2002, from $193,349 in 2001 due
primarily  to  the  commencement  of Youbet Oregon, Inc. operations in the third
quarter of 2001.  Track related commissions and fees which are included in sales
and  marketing  were  $2,242,946  in  2002  and  $0 in 2001 (See Notes 1 and 4).

     GENERAL  AND  ADMINISTRATIVE-General  and  administrative  expenses consist
principally  of  salaries,  facilities expenses, legal, accounting, and investor
relations.  For the three months ended June 30, 2002, general and administrative
expenses  decreased by $145,947 or 9.7% to $1,359,354 in 2002 from $1,505,301 in
2001.  The  decrease  resulted  primarily  from  the settlement of payables with
vendors  in  2002  (See  Note  7).

     DEPRECIATION  AND  AMORTIZATION-For  the  three months ended June 30, 2002,
depreciation  and  amortization increased by $776,125 or 124.4% to $1,400,108 in
2002  from  $623,983  in  2001.  The  increase  was  due  to the amortization of
licensing  rights  (See  Note  4).

OTHER  INCOME  (EXPENSE)

     INTEREST  INCOME-For  the three months ended June 30, 2002, interest income
decreased  by  $100,233  or  93.9%  to $6,551 in 2002 from $106,784 in 2001. The
decrease  is due to lower cash balances being utilized for the period in 2002 as
compared  to  2001,  and  to  lower  interest  rates  in  2002.

     INTEREST EXPENSE-For the three months ended June 30, 2002, interest expense
was  $144,832 as compared to $8,417 in 2001.  The increase is due to interest on
the  notes  payable  and  the  amortization  of  the note discount (See Note 5).


CONSOLIDATED  RESULTS OF OPERATIONS-SIX MONTHS ENDED JUNE 30, 2002 COMPARED
TO  SIX  MONTHS  ENDED  JUNE  30,  2001

REVENUES

     Revenues  for  the  six  months  ended  June  30, 2002, were $8,628,099, an
increase  of  $5,263,172, or 156%, from $3,364,927 for the six months ended June
30, 2001. The Company receives commission revenues through its subsidiary Youbet
Oregon,  Inc.  The  Company  records  gross  commission proceeds as revenues and
records  the related costs as Sales and Marketing expenses and as Marketing Fees
and  Commissions.  In addition, the Company recognizes net commissions earned on
wagers  as  revenue  as  wagers  are  placed  at third party wagering facilities
("Magna").  The increase in revenues was mainly due to an increase in the amount
of  wagers  placed  by Youbet.com customers at the Oregon wagering hub which was
opened  during  September  2001.

                                       17
<PAGE>

OPERATING  EXPENSES

     NETWORK  OPERATIONS-Network operations costs consist primarily of salaries,
data  center  management and telecommunications costs.  For the six months ended
June  30,  2002,  network  operations  costs  decreased  by $384,159 or 27.9% to
$995,436  in  2002  from  $1,379,595  in  2001.  The  decrease was mainly due to
decreases  in  telecommunication  costs, salaries, moving related costs, and non
cash  compensation.

     RESEARCH  AND  DEVELOPMENT-Research and development costs consist primarily
of  salaries.  For  the six months ended June 30, 2002, research and development
costs  decreased  by  $386,081 or 27.1% to $1,036,449 in 2002 from $1,422,530 in
2001. This decrease resulted primarily from reductions in salaries, and non cash
compensation.  The Company will continue to invest in the development of the You
Bet  Network  and  other  projects,  which  management believes are of value and
critical  to  achieving  its  strategic  objectives.

     FEES  AND COMMISSIONS - Fees and commissions represents amounts incurred to
related  parties  for  the  six  months ended June 30, 2002 were $1,780,708 as a
result  of  the  agreement  with  TVG.  (See  Note  4).

     SALES  AND  MARKETING-Sales  and  marketing  expenses  consist primarily of
marketing  program  expense,  salaries and commissions. For the six months ended
June  30, 2002, sales and marketing expenses increased by $1,828,897 or 69.8% to
$4,450,546  in 2002 from $2,621,649 in 2001. Marketing program cash expenses and
marketing operations decreased by $1,153,556, or 55.0%, to $945,187 in 2002 from
$2,098,743  in  2001.  Customer  service and Oregon Youbet expenses increased by
$544,368,  or  146%, to $918,310 in 2002, from $373,942 in 2001 due primarily to
the  commencement  of  Oregon  Youbet  operations  in the third quarter of 2001.
Track  related  commissions  and  fees which are included in sales and marketing
were  $2,587,048  in  2002  and  $0  in  2001  (See  Notes  1  and  4).

     GENERAL  AND  ADMINISTRATIVE-General  and  administrative  expenses consist
principally  of  salaries,  facilities expenses, legal, accounting, and investor
relations.  For  the  six months ended June 30, 2002, general and administrative
expenses  increased by $219,288 or 8.2% to $2,910,377 in 2002 from $2,691,089 in
2001.  The  increase  resulted primarily from increases in salaries, bonuses and
professional  fees.  These  increases  were  partially  offset  by settlement of
payables  with  vendors  in  2002  (See  Note  7).

     DEPRECIATION  AND  AMORTIZATION-For  the  six  months  ended June 30, 2002,
depreciation and amortization increased by $1,681,563 or 150.5% to $2,798,904 in
2002  from  $1,117,341  in  2001.  The  increase  was due to the amortization of
licensing  rights  (See  Note  4).

OTHER  INCOME  (EXPENSE)

     INTEREST  INCOME-For  the  six  months ended June 30, 2002, interest income
decreased  by  $259,825  or  91.9% to $23,017 in 2002 from $282,842 in 2001. The
decrease  is  mainly due to lower cash balances being utilized for the period in
2002  as  compared  to  2001,  and  to  lower  interest  rates  in  2002.

     INTEREST  EXPENSE-For  the six months ended June 30, 2002, interest expense
was  $150,240  as  compared to $12,209 in 2001.  The increase is due to interest
expense  on  notes  payable  and amortization of the note discount (See Note 8).


                                       18
<PAGE>

LIQUIDITY  AND  CAPITAL  RESOURCES

     The  Company  has financed its operations primarily through the sale of its
securities  and  convertible  debt as Youbet.com has incurred only negative cash
flow  from  operations  since  inception.  At  June  30,  2002,  Youbet.com  had
$4,730,741  in  cash  and  cash  equivalents. Youbet.com's principal commitments
consist  of  real  estate  and  capital  equipment  leases.

     At  June  30,  2002,  the  Company  had  negative  net  working  capital of
$1,845,661  compared  to  net  working capital of $805,542 at December 31, 2001.
The Company incurred net losses from operations for the years ended December 31,
2001,  2000  and  1999,  and  needs  to raise additional funds to accomplish its
objectives. The Company's independent certified public accountants have included
an  explanatory  paragraph in their report for the year ended December 31, 2001,
which  indicates  there  is  substantial  doubt  about  the Company's ability to
continue as a going concern. (See Note 1 to the unaudited consolidated financial
statements  for additional information).  The Company believes that its previous
efforts  to reduce costs and operate more efficiently, combined with the opening
of  the  Oregon  wagering  hub  in  September  2001,  and the Company receipt of
licensing  from  California in February 2002, will improve cash flows.  However,
the  Company will require additional capital to fund operations and pay down its
liabilities, as well as to fund its expansion plans consistent with Youbet.com's
anticipated  changes  in  operations and infrastructure.  During March 2002, the
Company  successfully  raised  $750,000  in  debt  financing.  The  Company  is
exploring  various alternatives to raise additional capital, but there can be no
assurances  that  the  Company will be successful in this regard.  To the extent
that  the  Company  is unable to secure the capital necessary to fund its future
cash  requirements  on  a  timely  basis  and/or  under  acceptable  terms  and
conditions,  the  Company  may  not  have  sufficient cash resources to maintain
operations.  In  such event, the Company may be required to consider a formal or
informal restructuring or reorganization, severely curtail, or cease operations.
No  adjustments  have  been  made  to the consolidated financial statements that
might  result  from  the  outcome  of  this  uncertainty.

     The Company entered into a Securities Purchase Agreement on March 21, 2002,
whereby  the  Company issued a series of one-year secured notes (the "Notes") in
the  aggregate  principal  amount  of $750,000 at an interest rate of 12% to the
Company's  new  Chairman  of  the  Board, to the Chief Executive Officer and six
other  investors  for  their $750,000 investment in the Company.  Both principal
and  all  interest  accrued  on these Notes will be payable at the earlier of a)
one-year  from  the  date  of  issuance,  or b) upon the Company's completion of
funding  in  an  amount greater than two million dollars ($2,000,000), excluding
the  Notes,  in  any  ninety-day  period  prior to the maturity of the Note.  In
connection  with issuance of the Notes, the Company issued five-year warrants to
purchase  750,000  shares  of the Company's common stock at an exercise price of
$0.50  per  share.

     Net  cash  provided  by  operating  activities  was  $450,086  compared  to
$4,384,889  used  in operations for the six months ended June 30, 2002 and 2001,

                                       19
<PAGE>

respectively.  The  increase  in  2002  from  2001 in cash provided by operating
activities  of  $4,834,975  was  mainly  due to 1) a decrease in net loss before
depreciation  and amortization of $1,681,563, 2) an increase in accounts payable
of  $439,135, 3) an increase in customer deposits of $768,582, 4) an increase in
accrued  expenses  -  related  party,  of  $1,046,323, 5) an increase in accrued
expenses - track related, of $1,550,271 and 6) other accrued expenses (including
accrued  compensation) of $822,767.  These changes were partially offset by 1) a
decrease  in  deposits  of $539,607, and 2) a decrease in prepaids, receivables,
and  other  current  assets  totaling  $1,217,014.

     Net  cash used in investing activities was $33,973 and $445,619 for the six
months  ended  June  30,  2002 and 2001, respectively. The decrease in 2002 from
2001  in  cash  used  in  investing  activities  of $411,646 was mainly due to a
decrease  in  purchases  of  property  and  equipment  by  $410,942.

     Net  cash  provided by financing activities was $753,883 for the six months
ended  June  30,  2002  as  compared to net cash used in financing activities of
$8,909  for  the  same  period in the prior year.  The increase of $762,793 from
2001  in  cash  provided  (used) in financing activities was due to the $750,000
generated  in  2002 from the proceeds of notes payable, which is fully described
in  Note  5  to  the  accompanying  unaudited consolidated financial statements.

ITEM  3.  QUANTITATIVE  AND  QUALITATIVE  DISCLOSURES  ABOUT  MARKET  RISK

     The  majority of the Company's cash equivalents are bank accounts and money
markets,  and  the  Company  does  not  believe  it  has significant market risk
exposure  with  regard  to  its  financial  instruments.  The  Company has notes
payable  which  carry  a  fixed  interest  rate  at  12%.

PART  II.  OTHER  INFORMATION

     Youbet.com  has  received  a  determination  from  the  Nasdaq  Listing
Qualifications Panel regarding its request for continued inclusion on the Nasdaq
National  Market  and  has  been  denied  its request and will transfer from The
Nasdaq  National  Market to The Nasdaq SmallCap Market effective at the start of
trading  on August 9, 2002.  The panel noted that the Company appears to satisfy
all  requirements  for continued listing on The Nasdaq SmallCap Market, with the
exception of  the $1.00 bid price requirement for which the Company was eligible
for  the  remainder  of  the  180-day  grace period through August 13, 2002.  In
addition,  the  Panel  noted that the Company may be eligible for the additional
180-day  grace  period  afforded  certain SmallCap issuers, through February 10,
2002.

     The  Company  was not  able to demonstrate a closing bid price of at least
$1.00  per  share  as  of  August  13,  2002,  the  end  of  the 180-day period.
Immediately  thereafter,  the  Company  must  evidence a closing bid price of at
least  $1.00  per  share  for  a minimum of ten consecutive trading days. In the
event  the  Company  is unable to achieve a $1.00 bid price at the expiration of
the  exception,  it  may be eligible for an additional 180-day extension to this
term  of  the exception, provided it is able to demonstrate shareholders' equity
of  at  least $5,000,000, a market capitalization of at least $50,000,000 or net
income  of  at  least $750,000 (in the most recently completed fiscal year or in
two  of the last three fiscal years based upon its most recently filed financial
information).  In  order  to  fully comply with the terms of this exception, the
Company  must  be  able  to  demonstrate  compliance  with  all requirements for
continued  listing  on  The  Nasdaq  SmallCap  Market.  In the event the Company
believes  it  has  satisfied  the  bid price requirement prior to the expiration
date, it  must immediately notify the Hearings Department. Finally, in the event
the  Company  fails  to  comply  with  any  of  the terms of this exception, its
securities  will  be  delisted  from  The  Nasdaq  Stock  Market.

                                       20
<PAGE>

     The  transition  to  The  Nasdaq  SmallCap  Market  will not change how the
Company's  stock is traded.  Youbet.com will retain the ticker symbol "UBET" and
investors  should  see  no  differences in how they obtain stock price quotes or
news  about  the  company.

ITEM  1.  LEGAL  PROCEEDINGS

     On  June 4, 1999, a complaint was filed against the Company in the Court of
Chancery  of  the State of Delaware in and for New Castle County entitled George
Von  Opel  v. Youbet.com Inc. (C.A. No. 17200 NC). In the complaint Mr. Von Opel
alleges  that  the  Company  breached  its  contractual obligation pursuant to a
Private  Placement  Memorandum by failing to register the shares of common stock
underlying  400,000  warrants  issued  by the Company to an affiliate of Mr. Von
Opel.  The  complaint  seeks  specific  performance of the alleged obligation to
register such shares and damages for alleged breach of contract in the amount of
$8.7  million.  The  Company  has  answered  the complaint and intends to defend
itself  vigorously  in  the  action.  On August 19, 1999, Mr. Von Opel moved for
summary  judgment  on  the  issue of liability, which on June 2, 2000, the court
denied.  The Company is proceeding with discovery and has noticed the deposition
of  Mr. Von Opel. As the litigation is at an initial stage, an outcome cannot be
predicted  at  this  time.

     The  Company  received  correspondence  from the Business Software Alliance
("BSA")  alleging  the  Company  had  used  or  installed unauthorized copies of
software  products  on  its computers.  In their correspondence, BSA proposed to
settle  their  claims  against  the Company for a settlement amount of $824,000,
based  on  twice  the  alleged  value  of  the  unauthorized software installed.
Management  believes  that  the  BSA  claims  are  substantially  overstated.
Management  cannot  predict  the  outcome  of  this  claim.

     The  Company was served with a lawsuit from a vendor claiming nonpayment of
services  in  the amount of approximately $300,000.  The Company filed a counter
claim  against  the  vendor.  During  April 2002, the Company settled all of the
vendor's  claims  for  $160,000, resulting in approximately $124,000 in gains on
settlement.

     The  Company  is  also  a  party  to  certain  other  claims,  actions, and
proceedings  incidental  to  its  business,  none of which is expected to have a
material  adverse  effect  on  the  business,  financial  position or results of
operations  of  the  Company.


                                       21
<PAGE>

ITEM  2.  CHANGES  IN  SECURITIES

Issuance  of  Stock  Options

     During  the  six  months  ended  June 30, 2002, the Company granted various
stock  options,  as  follows:

     (1)  Stock  options  were granted to employees to purchase 90,450 shares of
          common  stock at exercise prices ranging from $0.60 to $0.94, the fair
          market value at the date of grant. These options vest over four years,
          and  are  exercisable  for  a  period  of  five  years.

     (2)  Stock  options  were granted to executive officers to purchase 900,000
          shares of common stock at exercise prices ranging from $0.50 to $0.78.
          Of  these options 400,000 were issued at $0.50, below the market value
          at  the  date of grant, which was $0.60, and the remaining shares were
          issued  at  the  fair market value at the date of grant. These options
          vest  as  follows;  100,000 vest in ninety days, and 300,000 vest over
          three  years,  500,000  vest  over  four  years.  These  options  are
          exercisable as follows; 700,000 for a period of ten years, and 200,000
          for  a  period of eighty-one months. On April 11, 2002 94,900 of these
          options  were  terminated.

     (3)  Stock  options were granted to directors to purchase 200,000 shares of
          common  stock at exercise prices ranging from $0.50 to $0.80. Of these
          options  40,000  were  issued  at $0.50, below the market value at the
          date  of  grant, which was $0.67, and the remaining shares were issued
          at  the  fair  market  value  at the date of grant. These options vest
          monthly  over one year, and are exercisable for a period of ten years.

     (4)  Stock options were granted to consultants to purchase 95,002 shares of
          common  stock at exercise prices ranging from $0.50 to $0.97. Of these
          options  60,000  were  issued  at $0.50, below the market value at the
          date  of  grant, which was $0.67, and the remaining shares were issued
          at the fair market value at the date of grant. The fair value of these
          options  is  being  expensed,  with  a  credit  to  additional
          paid-in-capital. These options vest as follows; 60,000 vest over three
          years, 30,000 in twenty-six months, 2,502 vest in one month, and 2,500
          vest  in  six months. These options are exercisable as follows; 60,000
          for  a  period  of  ten  years, and 35,002 for a period of five years.

Issuance  of  warrants

     See  Note  5  to  the  accompanying  notes  to  the  unaudited  condensed
consolidated  financial  statements.

ITEM  3.  SUBMISSION  OF  MATTERS  TO  A  VOTE  OF  SECURITY  HOLDERS

     No matters were submitted to a vote of Youbet.com's stockholders during the
second  quarter  of  the  fiscal  year  ended  December  31,  2002.

ITEM  4.  OTHER  INFORMATION

ITEM  5.  EXHIBITS  AND  REPORTS  ON  FORM  8-K

                                       22
<PAGE>

(A)     Exhibits

     The  following  exhibits  are  submitted  herewith:

     EXHIBIT  99.1

     CERTIFICATION  PURSUANT  TO  SECTION  906  OF  THE  SARBANES-OXLEY  ACT
     OF  2002

In connection with the filing of the Quarterly Report on form 10-QSB for the
Quarter Ended June 30, 2002 (the "Report") by Youbet.com, Inc., each of the
undersigned hereby certifies that:

1.     The Report complies in all material respects with the requirements of
section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended, and

2.     The information contained in the Report fairly presents, in all material
respects, the financial condition and results of the operations of Registrant.


                                        /s/ David Marshall
                                        ------------------
                                        Chief Executive Officer


                                        /s/Gary Sproule
                                        ---------------
                                        Chief Financial Officer

(B)     Reports  On  Form  8-K

There were no reports filed on form 8-K for the quarter ended June 30, 2002.

                                       23
<PAGE>


                                   Signatures



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



                             YOUBET.COM,  INC.


Date:  August  12,  2002     By:  /s/  David  M.  Marshall
       -----------------          ------------------------

                             David  M.  Marshall
                             Director  and  Chief  Executive  Officer


Date:  August  12,  2002     By:  /s/  Charles  F.  Champion
       -----------------          --------------------------

                             Charles  F.  Champion
                             Director,  President and Chief Operating Officer


Date:  August  12,  2002     By:  /s/  Gary  Sproule
       -----------------          ------------------
                             Gary  Sproule
                             Chief  Financial  Officer



                                       24
<PAGE>