**Exhibit 10.7****AMENDMENT TO MANAGEMENT RETENTION AGREEMENT**     **THIS AMENDMENT TO MANAGEMENT RETENTION AGREEMENT**is dated as of March 3, 2006 (this“Amendment”), by and among Youbet.com, Inc., a Delaware corporation (“Youbet”), UTGroup, LLC, a Delaware limited liability company (“Seller”), Joe Tracy (“Tracy”)and Terry Woods (“Woods”). Capitalized terms that are not defined elsewhere in thisAmendment shall have the meanings ascribed to such capitalized terms in the Agreement (as definedbelow).**RECITALS**     A. Youbet, Seller, Tracy and Woods are parties to that certain Management Retention Agreement,dated as of February 10, 2006 (the “Agreement”).     B. Pursuant to **Section 11**of the Agreement, Youbet, Seller, Tracy and Woods desire to amendthe Agreement upon the terms and conditions set forth in this Amendment.**AGREEMENTS**     In consideration of the mutual covenants of the parties as hereinafter set forth and othergood and valuable consideration, the receipt and sufficiency of which hereby are acknowledged, theparties hereto hereby agree as follows:     1. Recitals. Effective as of the date first set forth above, the section entitled“**RECITALS**” of the Agreement is amended and restated in its entirety to read as follows:**R E C I T A L S**     A. Youbet and Seller are parties to that certain Stock Purchase Agreement, dated as ofNovember 30, 2005 (as amended, modified or supplemented from time to time, the “PurchaseAgreement”), by and among Youbet, UT Gaming, Inc., a Delaware corporation(“Purchaser”), Seller and United Tote Company (“United Tote”), pursuant towhich Purchaser, a wholly-owned subsidiary of Youbet, acquired from Seller all of thecapital stock of United Tote.     B. As a material inducement to cause Youbet and Purchaser to enter into the PurchaseAgreement, Tracy entered into that certain Restricted Stock Purchase Agreement (the“Tracy Restricted Stock Purchase Agreement”), dated November 30, 2005, by andbetween Tracy and Youbet and that certain Lock-Up Agreement (the “Tracy Lock-UpAgreement”), dated November 30, 2005, by and between Youbet and Tracy, and Woods enteredinto that certain Restricted Stock Purchase Agreement (the “Woods Restricted StockPurchase Agreement” and, together with the Tracy Restricted Stock Purchase Agreement,the “Restricted Stock Purchase Agreements”), dated November 30, 2005, by and betweenWoods and Youbet and that certain Lock-Up Agreement (the “Woods Lock-Up Agreement”and, together with the Tracy Lock-Up
 

 
Agreement, the “Lock-Up Agreements”), dated November 30, 2005, by and betweenYoubet and Woods.     C. Upon the Closing (as defined in the Purchase Agreement), the Restricted StockPurchase Agreements and Lock-Up Agreements were terminated and Youbet, Purchaser, Tracy andWoods replaced the incentives for Tracy and Woods to remain in the employ of United Toteafter the Closing (as defined in the Purchase Agreement) provided under such agreements withthe incentives contemplated in the Agreement.     D. Tracy serves as the Vice President, Game Development of United Tote pursuant tothe terms of that certain Employment Agreement, dated as of September 5, 2003, by andbetween Tracy and United Tote, as amended by that certain First Amendment to EmploymentAgreement, dated November 30, 2005, and by that certain Second Amendment to EmploymentAgreement, dated March 3, 2006 (the “Tracy Employment Agreement”).     E. Tracy desires to continue to serve as Vice President, Game Development of UnitedTote in accordance with the terms of the Tracy Employment Agreement.     F. Effective as of the date hereof and in connection herewith, Woods and United Totehave entered into that certain Settlement and General Release Agreement, dated as of March3, 2006 (the “Release Agreement”), pursuant to which Woods resigned from hisposition as the President and Chief Operating Officer of United Tote and waived any and allclaims against United Tote and certain other released parties, including, but not limitedto, those arising in connection with that certain Employment Agreement, dated as ofSeptember 5, 2003, by and between Woods and United Tote, as amended by that certain FirstAmendment to Employment Agreement, dated November 30, 2005 (the “Woods EmploymentAgreement”).     G. Woods remains bound by certain provisions of the Woods Employment Agreement.     H. Woods and Purchaser are parties to that certain Non-Compete Agreement, dated as ofNovember 30, 2005 (the “Non-Compete Agreement”).     2. Termination of Certain Agreements. Effective as of the date first set forth above,**Section 1**of the Agreement is amended and restated in its entirety to read as follows:     **1.**Termination of Certain Agreements. The parties hereto hereby acknowledgeand agree that, upon the Closing, the Restricted Stock Purchase Agreements and Lock-UpAgreements terminated and became null and void, without any liability of any party to anyother party thereunder.     3. Payments upon Termination of Employment. Effective as of the date first set forthabove, **Section 2**of the Agreement is amended and restated in its entirety to read as follows:
 

 
     **2.**Payments upon Termination of Tracy’s Employment.     (a) In the event that Tracy ceases to be employed by United Tote, Youbet or any otherdirect or indirect subsidiary of Youbet prior to February 9, 2007 for any reason, (i) Youbetshall have the right to set off $500,000 against any amounts due or outstanding under the$1.8 Million Note (as defined in the Purchase Agreement), or (ii) if the $1.8 Million Notehas been voluntarily prepaid, Youbet and Seller shall jointly direct the escrow agent inwriting to pay $500,000 to Youbet from the escrow account established pursuant to Section2(b) of the $1.8 Million Note (the “Retention Escrow Account”), by delivery ofwritten notice of such termination and Youbet’s exercise of either such right to Seller;provided, that this Section 2(a) shall not apply in the event (i) United Tote,Youbet or any other direct or indirect subsidiary of Youbet terminates Tracy’s employmentwithout “Cause”, as defined in the Tracy Employment Agreement, (ii) Tracy’s employment isterminated as a result of him suffering any mental or physical impairment or disablementthat prevents him from performing his duties as an employee of United Tote, Youbet or anyother direct or indirect subsidiary of Youbet for a period of 90 days (whether or notconsecutive) in any 180 day period or (iii) Tracy’s employment is terminated as a result ofhis death, and after such termination described in clause (i) or (ii) Tracy ceases to beemployed by United Tote, Youbet or any other direct or indirect subsidiary of Youbet.     (b) In the event that prior to February 9, 2007, Woods breaches Sections 5, 6, 7 or 8of the Woods Employment Agreement or any provision of the Non-Compete Agreement or theRelease Agreement (collectively, the “Woods Covenants”), Youbet shall have the rightto set off $500,000 against any amounts due or outstanding under the $1.8 Million Note, or(ii) if the $1.8 Million Note has been voluntarily prepaid, Youbet and Seller shall jointlydirect the escrow agent in writing to pay $500,000 to Youbet from the Retention EscrowAccount, by delivery of written notice of such breach and Youbet’s exercise of either suchright to Seller. Nothing contained in this Agreement shall be deemed to amend the terms andconditions of the Woods Covenants in any respect.     (c) For the avoidance of doubt, the obligations set forth in Sections 2(a) and (b) arecumulative, such that if, prior to February 9, 2007, Tracy ceases to be employed by UnitedTote, Youbet or any other direct or indirect subsidiary of Youbet and Woods breaches any ofthe Woods Covenants, an aggregate of $1,000,000 shall be subject to set off by Youbet orpayment from the Retention Escrow Account.     (d) Seller, Tracy and Woods hereby agree that (i) with respect to each of Tracy andWoods, if Youbet sets off $500,000 against amounts due and outstanding under the $1.8Million Note or is paid $500,000 from the Retention Escrow Account as provided in eitherSection 2(a) or (b), then such $500,000 shall be deemed to be an advance toTracy or Woods, as applicable, on distributions to be made pursuant to Section 7.2 ofSeller’s Limited Liability Company Agreement, dated as of September 5, 2003, as amended (the“Seller LLC Agreement”; and any such advance, a “Deemed ExecutiveDistribution”), and shall appropriately reduce distributions to be made thereafter bySeller to Tracy or Woods, as applicable, under Section 7.2 of the Seller LLC Agreement, whenand as made by Seller, and (ii) that appropriate adjustments, as determined by Seller’sboard of directors, will be made to the allocations of “Profits” and “Losses”, asapplicable, to take into account any such Deemed Executive Distribution.
 

 
     4. Management Retention Agreement not a Service Contract. Effective as of the datefirst set forth above, **Section 3**of the Agreement is amended and restated in its entirety to readas follows:     **3.**Management Retention Agreement not a Service Contract. This Agreement isnot an employment or service contract, this Agreement shall not be deemed to create (norshall it be interpreted or construed as creating) any service contract or an employment orservice relationship and nothing herein shall be deemed to create in any way whatsoever anyobligation on Tracy’s part to continue in the employ of United Tote or its affiliates, or ofUnited Tote or its affiliates to continue Tracy’s employment.     5. Full Force and Effect. Except as is expressly stated herein, the Agreement, asfurther modified by this Amendment, shall remain in full force and effect and unchanged.     6. Counterparts. This Amendment may be executed simultaneously in severalcounterparts, each of which shall be deemed an original, but all of which together shall constituteone and the same instrument. This Amendment, to the extent signed and delivered by means of afacsimile machine, e-mail of a PDF file or other electronic transmission, shall be treated in allmanner and respects as an original agreement or instrument and shall be considered to have the samebinding legal effect as if it were the original signed version thereof delivered in person. At thereasonable request of any party hereto, each other party hereto shall re-execute original formsthereof and deliver them to all other parties. No party hereto shall raise the use of a facsimilemachine, e-mail of a PDF file or other electronic transmission to deliver a signature or the factthat any signature or agreement or instrument was transmitted or communicated through the use of afacsimile machine, e-mail of a PDF file or other electronic transmission as a defense to theformation or enforceability of a contract and each such party forever waives any such defense.     7. Governing Law; Consent To Jurisdiction. THE RIGHTS AND OBLIGATIONS OF THE PARTIESHEREUNDER AND THE INTERPRETATION OF THIS AMENDMENT SHALL BE GOVERNED BY THE LAWS OF THE STATE OFNEW YORK (WITHOUT REGARD TO THE PRINCIPLES OF CONFLICTS OF LAW) APPLICABLE TO CONTRACTS EXECUTEDAND TO BE PERFORMED IN SUCH STATE. EACH PARTY HERETO CONSENTS TO THE PERSONAL JURISDICTION OF THECOURTS OF THE STATE OF NEW YORK IN CONNECTION WITH ANY CLAIM OR DISPUTE ARISING IN CONNECTION WITHTHIS AMENDMENT. ANY ACTION OR PROCEEDING SEEKING TO ENFORCE ANY PROVISION OF, OR ANY RIGHT ARISINGOUT OF THIS AMENDMENT MAY BE BROUGHT AGAINST EACH PARTY HERETO IN THE COURTS OF THE STATE OF NEWYORK.     8. Waiver of Jury Trial. EACH OF THE PARTIES HERETO HEREBY KNOWINGLY, VOLUNTARILY,UNCONDITIONALLY, IRREVOCABLY AND INTENTIONALLY FOREVER WAIVES ANY RIGHT IT MAY HAVE TO TRIAL BYJURY IN RESPECT OF ANY LITIGATION (WHETHER ARISING IN TORT OR CONTRACT) BASED ON, OR ARISING OUTOF, UNDER OR IN CONNECTION WITH, THIS AMENDMENT, OR ANY COURSE OF CONDUCT, COURSE OF DEALING,STATEMENTS (VERBAL OR WRITTEN) OR ACTION OF ANY PERSON OR ANY EXERCISE BY ANY PARTY OF THEIRRESPECTIVE RIGHTS UNDER THIS
 

 
AMENDMENT (INCLUDING WITHOUT LIMITATION ANY ACTION TO RESCIND OR CANCEL THIS AMENDMENT OR ANYCLAIMS OR DEFENSES ASSERTING THAT THIS AMENDMENT WAS FRAUDULENTLY INDUCED OR IS OTHERWISE VOID ORVOIDABLE). THIS PROVISION IS A MATERIAL INDUCEMENT TO ENTER INTO THIS AMENDMENT.     9. Headings. The subject headings of this Amendment are included for purposes ofconvenience only and shall not affect the construction or interpretation of any of its provisions.     10. No Strict Construction. The language used in this Amendment will be deemed to bethe language chosen by the parties hereto to express their mutual intent, and no rule of strictconstruction will be applied against any party hereto.     11. Entire Agreement. All references in the Agreement, or otherwise to the Agreement,hereafter shall be deemed to include the Agreement as amended by this Amendment.     **IN WITNESS WHEREOF,**the parties have executed this Amendment to Management Retention Agreementas of the date first above written.      **YOUBET.COM, INC.**