##### 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
JUNE 30, 2007
 Commission File Number: 0-26015
 YOUBET.COM, INC.
  Delaware
    
    95-4627253(State or other jurisdiction
    
    (I.R.S. Employerof incorporation or organization)
    
    Identification Number)
 5901 De Soto Avenue
Woodland Hills, California 91367
 (818) 668-2100
  þ o
  Large accelerated filer o
    
    Accelerated filer þ
    
    Non-accelerated filer o
  o þ




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##### 



YOUBET.COM, INC.
INDEX TO FORM 10-Q
FOR THE QUARTER ENDED
JUNE 30, 2007
 PagePART I. FINANCIAL INFORMATIONItem 1.
    
    Condensed consolidated financial statements:Balance sheets as of June 30, 2007 (unaudited) and December 31, 2006
    
    
    2Statements of operations for the three and six months ended June 30, 2007 and 2006 (unaudited)
    
    
    3Statements of cash flows for the six months ended June 30, 2007 and 2006 (unaudited)
    
    
    4Notes to unaudited condensed consolidated financial statements
    
    
    5Item 2.
    
    Managements discussion and analysis of financial condition and results of operations
    
    
    11Item 3.
    
    Quantitative and qualitative disclosures about market risk
    
    
    18Item 4.
    
    Controls and procedures
    
    
    18PART II. OTHER INFORMATIONItem 1.
    
    Legal proceedings
    
    
    19Item 1A.
    
    Risk factors
    
    
    19Item 2.
    
    Unregistered sales of equity securities and use of proceeds
    
    
    19Item 3.
    
    Defaults upon senior securities
    
    
    19Item 4.
    
    Submission of matters to a vote of security holders
    
    
    19Item 5.
    
    Other information
    
    
    20Item 6.
    
    Exhibits
    
    
    21Exhibit 10.3Exhibit 10.7Exhibit 31.1Exhibit 31.2Exhibit 32.1
  Preliminary Note
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##### Table of Contents



Part I. Financial Information
 
 Item 1.
Condensed consolidated financial statements
 
 YOUBET.COM, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands, except share amounts)
 June 30,
    
    
    December 31,2007
    
    
    2006(Unaudited)ASSETSCurrent assetsCash and cash equivalents
    
    $
    18,247
    
    
    $
    21,051Current portion of restricted cash
    
    
    5,600
    
    
    
    4,862Accounts receivable, net
    
    
    11,047
    
    
    
    13,287Inventory
    
    
    2,421
    
    
    
    2,587Prepaid expenses and other current assets
    
    
    1,551
    
    
    
    1,072Current portion of deferred tax asset
    
    
    1,153
    
    
    
    2,36740,019
    
    
    
    45,226Property and equipment, net
    
    
    29,277
    
    
    
    30,110Intangible assets other than goodwill, net
    
    
    14,403
    
    
    
    13,369Goodwill
    
    
    15,243
    
    
    
    15,243Deferred tax asset
    
    
    1,117
    
    
    
    Other assets
    
    
    1,385
    
    
    
    1,657$
    101,444
    
    
    $
    105,605LIABILITIES AND STOCKHOLDERS EQUITYCurrent liabilitiesTrade payables
    
    $
    12,788
    
    
    $
    13,759Current portion of long-term debt
    
    
    7,000
    
    
    
    8,311Accrued expenses
    
    
    9,017
    
    
    
    9,489Customer deposits
    
    
    8,683
    
    
    
    8,441Deferred revenues
    
    
    570
    
    
    
    20738,058
    
    
    
    40,207Long-term debt, net of current portion
    
    
    13,235
    
    
    
    12,054Deferred tax liability
    
    
    
    
    
    
    57051,293
    
    
    
    52,831Stockholders equityPreferred stock, $0.001 par value, 1,000,000 shares
authorized, none issued
    
    
    
    
    
    
    Common stock, $0.001 par value, 100,000,000 shares
authorized, 42,531,430 and 42,118,446 shares issued
    
    
    42
    
    
    
    42Additional paid-in capital
    
    
    133,739
    
    
    
    137,597Accumulated deficit
    
    
    (82,326
    )
    
    
    (83,555
    )Accumulated other comprehensive loss
    
    
    (4
    )
    
    
    (10
    )Treasury stock, 443,062 common shares at cost
    
    
    (1,300
    )
    
    
    (1,300
    )50,151
    
    
    
    52,774$
    101,444
    
    
    $
    105,605
 The accompanying notes are an integral part of these condensed consolidated financial statements.
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YOUBET.COM, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
(in thousands, except per share amounts)
 Three Months Ended
    
    
    Six Months EndedJune 30,
    
    
    June 30,2007
    
    
    2006
    
    
    2007
    
    
    2006RevenuesCommissions
    
    $
    29,365
    
    
    $
    30,892
    
    
    $
    58,211
    
    
    $
    54,813Contract revenues
    
    
    6,571
    
    
    
    6,863
    
    
    
    11,673
    
    
    
    9,715Equipment sales
    
    
    394
    
    
    
    816
    
    
    
    514
    
    
    
    951Other revenues
    
    
    971
    
    
    
    1,019
    
    
    
    1,886
    
    
    
    1,86737,301
    
    
    
    39,590
    
    
    
    72,284
    
    
    
    67,346Cost of revenuesTrack fees
    
    
    13,664
    
    
    
    14,782
    
    
    
    28,289
    
    
    
    26,360Licensing fees
    
    
    5,617
    
    
    
    6,176
    
    
    
    8,440
    
    
    
    9,280Network operations
    
    
    1,384
    
    
    
    1,516
    
    
    
    2,682
    
    
    
    2,800Contract costs
    
    
    4,401
    
    
    
    3,858
    
    
    
    8,242
    
    
    
    5,792Cost of equipment sales
    
    
    121
    
    
    
    444
    
    
    
    209
    
    
    
    53325,187
    
    
    
    26,776
    
    
    
    47,862
    
    
    
    44,765Gross profit
    
    
    12,114
    
    
    
    12,814
    
    
    
    24,422
    
    
    
    22,581Operating expensesGeneral and administrative
    
    
    4,868
    
    
    
    5,575
    
    
    
    10,347
    
    
    
    9,992Sales and marketing
    
    
    3,905
    
    
    
    2,482
    
    
    
    6,326
    
    
    
    4,553Research and development
    
    
    919
    
    
    
    909
    
    
    
    1,846
    
    
    
    1,675Depreciation and amortization
    
    
    2,429
    
    
    
    1,730
    
    
    
    4,307
    
    
    
    2,87012,121
    
    
    
    10,696
    
    
    
    22,826
    
    
    
    19,090Income (loss) from operations
    
    
    (7
    )
    
    
    2,118
    
    
    
    1,596
    
    
    
    3,491Interest income
    
    
    185
    
    
    
    129
    
    
    
    384
    
    
    
    286Interest expense
    
    
    (562
    )
    
    
    (533
    )
    
    
    (1,018
    )
    
    
    (721
    )Other income
    
    
    9
    
    
    
    493
    
    
    
    19
    
    
    
    595Income (loss) before income taxes (benefit)
    
    
    (375
    )
    
    
    2,207
    
    
    
    981
    
    
    
    3,651Income taxes (benefit)
    
    
    (18
    )
    
    
    12
    
    
    
    (248
    )
    
    
    106Net income (loss)
    
    $
    (357
    )
    
    $
    2,195
    
    
    $
    1,229
    
    
    $
    3,545Earnings (loss) per share  basic
    
    $
    (0.01
    )
    
    $
    0.06
    
    
    $
    0.03
    
    
    $
    0.10Earnings (loss) per share  diluted
    
    $
    (0.01
    )
    
    $
    0.06
    
    
    $
    0.03
    
    
    $
    0.09
 The accompanying notes are an integral part of these condensed consolidated financial statements.
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YOUBET.COM, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
(in thousands)
 Six Months EndedJune 30,2007
    
    
    2006Operating activitiesNet income
    
    $
    1,229
    
    
    $
    3,545Adjustments to reconcile net income to
net cash provided by operating activities:Depreciation and amortization of property
    
    
    3,427
    
    
    
    1,962Amortization of intangibles
    
    
    880
    
    
    
    908Stock-based compensation
    
    
    369
    
    
    
    405Bad debts
    
    
    443
    
    
    
    Increase in operating (assets) liabilities
    
    
    (2,441
    )
    
    
    3,581Net cash provided by operating activities
    
    
    3,907
    
    
    
    10,401Investing activitiesCash paid in
connection with acquisition of United Tote Company,
net of $160 in cash acquired in 2006
    
    
    (4,473
    )
    
    
    (10,094
    )Purchases of property and equipment
    
    
    (2,128
    )
    
    
    (2,156
    )Decrease in restricted cash
    
    
    106
    
    
    
    1,013Increase in restricted cash
    
    
    
    
    
    
    (250
    )Other
    
    
    
    
    
    
    97Net cash used in investing activities
    
    
    (6,495
    )
    
    
    (11,390
    )Financing activitiesProceeds from long-term debt
    
    
    2,259
    
    
    
    Repayment of long-term debt
    
    
    (3,792
    )
    
    
    (1,760
    )Proceeds from sale-leaseback transaction
    
    
    1,065
    
    
    
    Proceeds from exercise of stock options
    
    
    334
    
    
    
    259Other
    
    
    (88
    )
    
    
    Net cash used in financing activities
    
    
    (222
    )
    
    
    (1,501
    )Foreign currency translation adjustment
    
    
    6
    
    
    
    (36
    )Decrease in cash and cash equivalents
    
    
    (2,804
    )
    
    
    (2,526
    )Cash and cash equivalents, beginning of period
    
    
    21,051
    
    
    
    16,686Cash and cash equivalents, end of period
    
    $
    18,247
    
    
    $
    14,160
 The accompanying notes are an integral part of these condensed consolidated financial statements.
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YOUBET.COM, INC. AND SUBSIDIARIES
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
SIX MONTHS ENDED JUNE 30, 2007
 Note 1: Basis of Presentation
    Note 2: Earnings (Loss) Per Share
  Three Months Ended
    
    
    Six Months EndedJune 30,
    
    
    June 30,2007
    
    
    2006
    
    
    2007
    
    
    2006Numerator:Net income (loss)
    
    $
    (357
    )
    
    $
    2,195
    
    
    $
    1,229
    
    
    $
    3,545Denominator:Basic weighted average shares outstanding
    
    
    42,052
    
    
    
    35,362
    
    
    
    41,875
    
    
    
    34,748Effect of dilutive stock options
    
    
    
    
    
    
    3,225
    
    
    
    1,157
    
    
    
    3,275Diluted weighted average shares outstanding
    
    
    42,052
    
    
    
    38,587
    
    
    
    43,032
    
    
    
    38,023Earnings (loss) per share  basic
    
    $
    (0.01
    )
    
    $
    0.06
    
    
    $
    0.03
    
    
    $
    0.10Earnings (loss) per share  diluted
    
    $
    (0.01
    )
    
    $
    0.06
    
    
    $
    0.03
    
    
    $
    0.09
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Note 3: Detail of Selected Balance Sheet Accounts:
 June 30,
    
    
    December 31,2007
    
    
    2006(unaudited)(in thousands)Accounts receivable, net:Track receivables
    
    $
    11,000
    
    
    $
    12,512Player receivables
    
    
    1,090
    
    
    
    1,249Other receivables
    
    
    500
    
    
    
    1,33912,590
    
    
    
    15,100Less: allowance for doubtful accounts
    
    
    (1,543
    )
    
    
    (1,813
    )$
    11,047
    
    
    $
    13,287Inventory:Totalizator components
    
    $
    1,407
    
    
    $
    1,091Work in process
    
    
    210
    
    
    
    130Ticket stock
    
    
    613
    
    
    
    493Finished goods
    
    
    191
    
    
    
    873$
    2,421
    
    
    $
    2,587Property and equipment, net:Pari-mutuel equipment
    
    $
    22,703
    
    
    $
    21,668Computer equipment
    
    
    14,695
    
    
    
    14,138Software
    
    
    4,761
    
    
    
    4,386Leasehold improvements
    
    
    3,221
    
    
    
    3,130Office furniture, fixtures and equipment
    
    
    645
    
    
    
    576Work-in-progress
    
    
    545
    
    
    
    46,570
    
    
    
    43,898Less: accumulated depreciation and amortization
    
    
    (17,293
    )
    
    
    (13,788
    )$
    29,277
    
    
    $
    30,110Intangibles assets other than goodwill, net:Non-compete agreements
    
    $
    4,593
    
    
    $
    3,636Customer lists
    
    
    4,593
    
    
    
    3,636Developed technology
    
    
    3,805
    
    
    
    3,805Trademarks
    
    
    3,400
    
    
    
    3,400Other intangibles
    
    
    721
    
    
    
    72117,112
    
    
    
    15,198Less: accumulated amortization
    
    
    (2,709
    )
    
    
    (1,829
    )$
    14,403
    
    
    $
    13,369
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Note 4: Debt
  June 30,
    
    
    December 31,2007
    
    
    2006(unaudited)(in thousands)Promissory notes
    
    $
    3,200
    
    
    $
    5,000Bank revolving line of credit
    
    
    3,156
    
    
    
    990Bank term loan
    
    
    12,500
    
    
    
    14,007Capital lease obligations and other
    
    
    1,379
    
    
    
    36820,235
    
    
    
    20,365Less: current maturities
    
    
    (7,000
    )
    
    
    (8,311
    )Long-term debt, less current maturities
    
    $
    13,235
    
    
    $
    12,054
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Note 5: Income Taxes
     Note 6: Contingencies
  Note 7: Stock Options
 ,
 Shares
    
    
    WeightedSubject to
    
    
    AverageStock
    
    
    ExerciseOptions
    
    
    Price(in thousands)Balance at December 31, 2006
    
    
    4,906
    
    
    $
    2.61Granted
    
    
    575
    
    
    
    2.99Exercised
    
    
    (413
    )
    
    
    0.81Cancelled
    
    
    (198
    )
    
    
    3.24Balance at June 30, 2007
    
    
    4,870
    
    
    
    2.78
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Options Outstanding
    
    
    Options ExercisableWeightedNumber
    
    
    Weighted
    
    
    Average
    
    
    Number
    
    
    Weightedof
    
    
    Average
    
    
    Remaining
    
    
    of
    
    
    AverageShares
    
    
    Exercise
    
    
    Contractual
    
    
    Shares
    
    
    Exercise(in thousands)
    
    
    Price
    
    
    Life (years)
    
    
    (in thousands)
    
    
    PriceRange of Exercise Prices:$0.49 to $1.00
    
    
    902
    
    
    $
    0.53
    
    
    
    4.8
    
    
    
    902
    
    
    $
    0.53$1.49 to $2.49
    
    
    1,413
    
    
    
    2.26
    
    
    
    4.8
    
    
    
    1,400
    
    
    
    2.26$2.72 to $3.99
    
    
    1,405
    
    
    
    3.28
    
    
    
    8.4
    
    
    
    284
    
    
    
    3.13$4.00 to $4.99
    
    
    1,006
    
    
    
    4.47
    
    
    
    7.6
    
    
    
    621
    
    
    
    4.44$5.00 to $6.19
    
    
    144
    
    
    
    5.30
    
    
    
    7.9
    
    
    
    63
    
    
    
    5.34Total at June 30, 2007
    
    
    4,870
    
    
    
    2.78
    
    
    
    6.5
    
    
    
    3,270
    
    
    
    2.33
 Note 8: United Tote Acquisition
  
    
    $9.75 million in cash;
    
    Three unsecured promissory notes with an aggregate principal amount of $10.2 million; and
    
    2,181,818 shares of Youbet common stock subject to a make-whole provision valuing such
 shares at $5.50 per share.
    Six Months Ended June 30,2007
    
    
    2006Actual
    
    
    Pro forma
    
    
    As reportedRevenue
    
    $
    72,284
    
    
    $
    69,696
    
    
    $
    67,346Net income
    
    $
    1,229
    
    
    $
    3,295
    
    
    $
    3,545Earnings per share  basic
    
    $
    0.03
    
    
    $
    0.09
    
    
    $
    0.10Earnings per share  diluted
    
    $
    0.03
    
    
    $
    0.09
    
    
    $
    0.09
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Note 9: Segment Reporting
  Three Months Ended
    
    
    Six Months EndedJune 30,
    
    
    June 30,2007
    
    
    2006
    
    
    2007
    
    
    2006(unaudited, in thousands)RevenueAdvance deposit wagering segment
    
    $
    30,458
    
    
    $
    31,927
    
    
    $
    60,468
    
    
    $
    56,695Totalizator services segment
    
    
    7,455
    
    
    
    7,983
    
    
    
    12,856
    
    
    
    11,05837,913
    
    
    
    39,910
    
    
    
    73,324
    
    
    
    67,753Intersegment eliminations
    
    
    (612
    )
    
    
    (320
    )
    
    
    (1,040
    )
    
    
    (407
    )$
    37,301
    
    
    $
    39,590
    
    
    $
    72,284
    
    
    $
    67,346Revenue by Geographic AreaUnited States
    
    $
    36,700
    
    
    $
    38,469
    
    
    $
    71,277
    
    
    $
    65,407International
    
    
    601
    
    
    
    1,121
    
    
    
    1,007
    
    
    
    1,939$
    37,301
    
    
    $
    39,590
    
    
    $
    72,284
    
    
    $
    67,346Reconciliation to Income (Loss)
Before Income TaxesIncome (loss) from operationsAdvance deposit wagering segment
    
    $
    (186
    )
    
    $
    740
    
    
    $
    2,643
    
    
    $
    2,331Totalizator services segment
    
    
    179
    
    
    
    1,378
    
    
    
    (1,047
    )
    
    
    1,160(7
    )
    
    
    2,118
    
    
    
    1,596
    
    
    
    3,491Interest income
    
    
    185
    
    
    
    129
    
    
    
    384
    
    
    
    286Interest expense
    
    
    (562
    )
    
    
    (533
    )
    
    
    (1,018
    )
    
    
    (721
    )Other
    
    
    9
    
    
    
    493
    
    
    
    19
    
    
    
    595Income (loss) before income taxes
    
    $
    (375
    )
    
    $
    2,207
    
    
    $
    981
    
    
    $
    3,651
 June 30,
    
    
    December 31,2007
    
    
    2006(unaudited)(in thousands)Total AssetsAdvance deposit wagering segment
    
    $
    46,530
    
    
    $
    50,280Totalizator services segment
    
    
    54,914
    
    
    
    55,325$
    101,444
    
    
    $
    105,605
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Item 2. Managements discussion and analysis of financial condition and results of operations
 Forward-looking statements
  Overview
  www.youbet.com
      - 11 -




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Critical accounting estimates and policies
  Revenues
   Allowance for doubtful accounts
  
    
    customer-specific allowance;
    
    amounts based upon an aging schedule; and
    
    an estimated amount, based on our historical experience, for issues not yet identified.
 Inventory obsolescence
  Valuation of long-lived assets
   
    
    significant underperformance relative to expected historical or projected future operating results;
    
    significant changes in the manner of our use of the acquired assets or the strategy of our overall business;
    
    significant negative industry or economic trends;
    
    significant decline in our stock price for a sustained period; and
    
    our market capitalization relative to net book value.
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Internally developed software
 Accounting for the Costs of Computer Software Developed or Obtained for
Internal Use,
 Recent accounting pronouncements
  Fair Value Measurements. The Fair Value Option for Financial Assets and Financial Liabilities 
including an amendment of FAS 115.
 Results of operations for the three months ended June 30, 2007 compared to the three months ended June 30, 2006
 Revenues
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Operating expenses
 Track fees
 Licensing fees:
 Contract costs
 Network operations
 Research and development
 Sales and marketing
 General and administrative
 Depreciation and amortization
 Other income (expense)
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Results of operations for the six months ended June 30, 2007 compared to the six months ended June 30, 2006
 Revenues
    Operating expenses
 Track fees
 Licensing fees
 Contract costs
 Network operations
 Research and development
 Sales and marketing
 General and administrative
 Depreciation and amortization
 Interest expense
 Other income
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Outlook for the remainder of 2007
   Liquidity and capital resources
        - 16 -




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Credit facility
  United Tote make-whole provision
  IRG
  Potential repurchase of our common stock
  Competition
      - 17 -




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NYRA bankruptcy
  
 Item 3. Quantitative and qualitative disclosures about market risk
  
 Item 4. Controls and procedures
   
    
    Pervasive control deficiencies across key Committee of Sponsoring Organizations of the
Treadway Commission components, including information technology general controls (ITGC),
information technology (IT) application controls, and business processes.
    
    Pervasive control deficiencies across key ITGC categories relating to IT operations, planning and management.
    
    Control deficiencies across key business processes at all operating units.
  
    
    As of July 9, 2007, we hired a new Chief Financial Officer, allowing the previous Chief
Financial Officer to resume his role as Chief Operating Officer.
 
    
    In addition to the previously reported hiring of a new Chief Accounting Officer in January
2007, we also hired a Director  Financial Reporting and a new Accounting Manager for United
Tote in March 2007, as well as various other accounting personnel who have enhanced the
competency of the accounting department.
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##### Table of Contents



Part II. Other information
 
 Item 1. Legal proceedings
  
 Item 1A. Risk factors
  
    
    We face strong competition from the Television Games Network and others.
    
    Our inability to retain our relationships with our content providers would have a material
adverse effect on our business.
    
    Our inability to collect revenue due to the NYRA bankruptcy could reduce our revenue and
cause our businesses to suffer.
  
 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
   Nominee:
    
    Votes For
    
    Votes WithheldCharles F. Champion
    
    
    36,305,683
    
    
    
    2,987,768David M. Marshall
    
    
    37,598,417
    
    
    
    1,695,034Gary Adelson
    
    
    37,496,514
    
    
    
    1,796,937Joseph F. Barletta
    
    
    36,395,897
    
    
    
    2,897,554Michael Brodsky
    
    
    37,792,383
    
    
    
    1,501,068James Edgar
    
    
    36,824,262
    
    
    
    2,469,189Steven C. Good
    
    
    34,518,532
    
    
    
    4,774,919F. Jack Liebau
    
    
    36,421,749
    
    
    
    2,871,702Jay R. Pritzker
    
    
    37,793,604
    
    
    
    1,499,847
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##### Table of Contents



Audit Committee
 Compensation Committee
 Nominating and Corporate Governance Committee
  
 Item 5. Other information
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##### Table of Contents



Item 6. Exhibits
 3.1
    
    
    Certificate of Incorporation of Youbet.com, Inc., as amended (incorporated by
reference to Exhibit 3.1 to Youbets quarterly report on Form 10-QSB for the
quarter ended September 30, 2003).3.2
    
    
    Amended and Restated Bylaws of Youbet.com, Inc. (incorporated by reference to
Exhibit 3.1 to Youbets current report on Form 8-K filed April 20, 2007).10.1
    
    
    Credit Agreement dated as of July 27, 2006, by and among Youbet.com, Inc. and
United Tote Company, as borrowers, the lenders signatory thereto, as lenders,
and Wells Fargo Foothill, Inc., as arranger and administrative agent
(incorporated by reference to Exhibit 10.1 to Youbets current report on Form
8-K filed July 28, 2006).10.2
    
    
    First Amendment to Credit Agreement and Waiver, dated as of March 14, 2007, by
and among Youbet.com, Inc. and United Tote Company, as borrowers, and Wells
Fargo Foothill, Inc., as arranger and agent (incorporated by reference to
Exhibit 10.16 to Youbets annual report on Form 10-K for the year ended December
31, 2006).10.3
    
    
    Waiver of Events of Default, dated as of August 3, 2007, by and among
Youbet.com, Inc., as administrative borrower, and Wells Fargo Foothill, Inc., as
administrative agent.10.4
    
    
    Consent to Stock Repurchase, dated April 10, 2007, between Youbet.com, Inc., as
administrative borrower, and Wells Fargo Foothill, Inc., as administrative agent
(incorporated by reference to Exhibit 10.3 to Youbets current report on Form
8-K filed April 11, 2007).10.5
    
    
    Youbet.com, Inc. Equity Incentive Plan (incorporated by reference to Exhibit
10.2 to Youbets registration statement on Form S-3, File No. 333-126131).*10.6
    
    
    Form of Employee Incentive Stock Option Agreement (incorporated by reference to
Exhibit 10.2 of Youbets quarterly report on Form 10-Q for the quarter ended
June 30, 2005).*10.7
    
    
    Form of Non-Employee Director Incentive Stock Option Agreement.*10.8
    
    
    License and Content Agreement, dated as of May 18, 2001, by and among ODS
Technologies, L.P., ODS Properties, Inc. and Youbet.com, Inc. (incorporated by
reference to Exhibit 10.27 to Youbets quarterly report on Form 10-Q for the
quarter ended June 30, 2001).10.9
    
    
    Amendment to License and Content Agreement dated as of June 6, 2007, by and
among ODS Technologies, L.P., ODS Properties, Inc. and Youbet.com, Inc.
(incorporated by reference to Exhibit 10.2 to Youbets current report on Form
8-K filed June 12, 2007).10.10
    
    
    Employment Agreement, dated as of July 9, 2007, by and between Youbet.com, Inc.
and James A. Burk (incorporated by reference to Exhibit 10.1 to Youbets current
report on Form 8-K filed July 11, 2007).*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 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.August 8, 2007
    By:
    /s/ Charles F. ChampionCharles F. ChampionPresident and Chief Executive Officer August 8, 2007
    By:
    /s/ James A. BurkJames A. BurkChief Financial Officer  - 22 -




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EXHIBIT INDEX
 ExhibitNumber
    
    Description10.3
    
    
    Waiver of Events of Default, dated as of August 3, 2007, by and among
Youbet.com, Inc., as administrative borrower, and Wells Fargo Foothill, Inc., as
administrative agent.10.7
    
    
    Form of Non-Employee Director Incentive Stock Option Agreement.*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 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.
   - 23 -