**Exhibit 10.7****YOUBET.COM, INC. EQUITY INCENTIVE PLAN****FORMOF INCENTIVE STOCK OPTION AGREEMENT**         **Participant**                          **Date of Grant**                          **Number of Shares Purchasable**                          **Exercise Price**  $                       **Expiration Date**                 This Stock Option Agreement (“Agreement”) is made and entered into as of the Date of Grantindicated above by and between Youbet.com, Inc., a Delaware corporation (the “Company”), and theParticipant named above.WHEREAS, Participant is a director, officer, employee, consultant or advisor of, or otherindividual providing personal services to, the Company and/or an Affiliate of the Company;WHEREAS, pursuant to the Youbet.com, Inc. Equity Incentive Plan (the “Plan”), the CompensationCommittee (the “Committee”) of the Board of Directors of the Company (the “Board of Directors”) hasapproved the grant to Participant of an option to purchase shares of the common stock of theCompany (the “Common Stock”), on the terms and conditions set forth herein; andWHEREAS, capitalized terms used, but not otherwise defined, herein shall have the same meaningassigned to such term in the Plan.NOW, THEREFORE, based on the foregoing recitals and in consideration of the covenants setforth herein, the parties hereto hereby agree as follows:1. Grant of Option; Certain Terms and Conditions. The Company hereby grants toParticipant, and Participant hereby accepts, as of the Date of Grant, an option to purchase thenumber of shares of Common Stock indicated above (the “Option Shares”) at the Exercise Price pershare indicated above, which option shall expire at 5:00 o’clock p.m., California time, on theExpiration Date indicated above andshall be subject to all of the terms and conditions set forth in this Agreement and the Plan(the “Option”). This Option is intended to qualify, to the maximum extent possible, as an“incentive stock option” under the Section 422 of the Internal Revenue Code.
 
-1-

 
2. Vesting. The Options granted hereunder shall vest as follows: 1/12 per month (or                     Options per month) commencing 30 days after                                        .In the event that Participant ceases to hold any position as a director, officer, employee,consultant or advisor of, or other individual providing personal services to, the Company or anAffiliate of the Company (a “Termination”), then:(i) regardless of the reason for such Termination, all vesting of the Option shall cease as ofthe date of such Termination;(ii) if the Termination is initiated by the Company without Cause or if the Termination isinitiated voluntarily by the Participant (including as a result of Participant’s disability), thenthe vested portion of the Option shall lapse and be of no further force or effect whatsoever if(and to the extent) not exercised by 5:00 o’clock p.m., California time, on the ninetieth (90th)day after the date of such Termination (but not later than the Expiration Date);(iii) if the Termination is the result of Participant’s death, then the vested portion of theOption shall lapse and be of no further force or effect whatsoever if (and to the extent) notexercised by 5:00 o’clock p.m., California time, on the first anniversary of the date of suchTermination (but not later than the Expiration Date); and(iv) if the Termination is initiated by the Company for Cause, then any vested and unvestedportions of the Option shall be deemed forfeited, and the Option shall cease to be exercisableimmediately and shall be of no further force or effect whatsoever.3. Exercise. The Option shall be exercisable during Participant’s lifetime only byParticipant or by his or her guardian or legal representative, and after Participant’s death onlyby the person or entity entitled to do so under Participant’s last will and testament or applicableintestate law. The Option may be exercised only by the delivery to the Company of a written noticeof such exercise, which notice shall specify the number of Option Shares to be purchased and shallbe accompanied by payment in full (in accordance with Section 5.1(c) of the Plan) of the aggregateExercise Price for such Option Shares.
 
-2-

 
4. Payment of Withholding Taxes. If the Company becomes obligated to withhold anamount on account of any tax imposed as a result of the exercise of the Option, including, withoutlimitation, any federal, state, local or other income or payroll tax, then, in accordance withSection 8.6 of the Plan, Participant shall, on the first day upon which the Company becomesobligated to pay such amount to the appropriate taxing authority, pay such amount to the Company incash or by check payable to the Company.5. Notices. All notices and other communications required or permitted to be givenpursuant to this Agreement shall be in writing and shall be deemed given if delivered personally orwhen actually received after mailing by certified or registered mail, postage prepaid, returnreceipt requested: (a) to the Company, at 5901 DeSoto Avenue, Woodland Hills, California 91367,Attention: Chief Financial Officer, (b) to Participant, at the address set forth beneath his orher signature on the signature page hereto, or (c) to either party, at such other address as theparty may designate by written notice in the foregoing manner.6. Stock Exchange Requirements; Applicable Laws. Notwithstanding anything to thecontrary in this Agreement, no shares of stock purchased upon exercise of the Option, and nocertificate representing all or any part of such shares, shall be issued or delivered if (a) suchshares have not been admitted to listing upon official notice of issuance on each stock exchangeupon which shares of that class are then listed, or (b) in the opinion of counsel to the Company,such issuance or delivery would cause the Company to be in violation of or to incur liability underany federal, state or other securities law, or any requirement of any stock exchange listingagreement to which the Company is a party, or any other requirement of law or of any administrativeor regulatory body having jurisdiction over the Company.7. Plan. The Option is granted pursuant to the Plan and is subject to all the termsand conditions of the Plan, as the same may be amended from time to time, subject to Section 13.2of the Plan. Any rules and regulations the Committee may adopt for the purpose of administeringthe Plan, as well as any interpretation or construction by the Committee of the Plan or thisAgreement, shall be final and binding upon Participant and his or her heirs and assigns.8. Stockholder Rights. In accordance with Article 12 of the Plan, no person or entityshall be entitled to vote, receive dividends or be deemed for any purpose the holder of any sharesof Common Stock represented by the Option until the Option shall have been duly exercised topurchase such Option Shares (in accordance with the provisions of this Agreement) and the Companyshall have delivered to Participant stock certificates or other evidence of ownership.
 
-3-

 
9. Employment Rights. In accordance with Article 12 of the Plan, no provision ofthis Agreement or of the Option granted hereunder shall (a) confer upon Participant any right tocontinue in the service of the Company or any Affiliate, (b) affect the right of the Company andeach Affiliate to terminate Participant’s service, with or without cause, or (c) confer uponParticipant any right to participate in any employee benefit plan or program of the Company or anyAffiliate (other than the Plan). Participant hereby acknowledges and agrees that the Company andany Affiliate may terminate Participant’s service at any time and for any reason, or for no reason,unless Participant and the Company or such Affiliate are parties to a written employment or otherwritten agreement that expressly provides otherwise.10. The Company’s Rights*.*Subject to Article 10 of the Plan, nothing contained inthis Agreement shall be construed to prevent the Board of Directors from taking any corporateaction that is deemed by the Board of Directors to be appropriate or in the Company’s bestinterests, whether or not such action would have an adverse effect on the Option. In particular,the existence of the Option shall not affect in any way the right or power of the Company or itsstockholders to make or authorize any or all adjustments, recapitalizations, reorganizations orother changes in the Company’s capital structure or its business, or any merger or consolidation ofthe Company, or any issue of bonds, debentures, preferred or other stock with preference ahead ofor convertible into, or otherwise affecting the Common Stock or the rights thereof, or thedissolution or liquidation of the Company, or any sale or transfer of all or any part of theCompany’s assets or business, or any other corporate act or proceeding, whether of a similarcharacter or otherwise.11. Restriction on Transfer. Except as set forth in Section 8.7 of the Plan, theOption may not be sold, assigned, transferred, made subject to gift, mortgaged, pledged, encumberedor otherwise disposed of by the Participant, other than a transfer by will or by the laws ofdescent and distribution.12. Conformity with Plan. This Agreement is intended to conform in all respects with,and is subject to all applicable provisions of, the Plan, which is incorporated herein byreference. Inconsistencies between this Agreement and the Plan shall be resolved in accordancewith the terms of the Plan. In the event of any ambiguity in this Agreement, or any matters as towhich this Agreement is silent, the Plan shall govern. The Participant acknowledges havingreceived a copy of the Plan.13. Entire Agreement; Modification. This Agreement contains the entire agreementbetween the parties with respect to the subject matter contained herein, and may not be modified orwaived, except as provided in the Plan or in a written document signed by each of the partieshereto. Any oral or written agreements, representations, warranties, written inducements, or othercommunications made prior to the execution of this Agreement shall be void and ineffective for allpurposes
 
-4-

 
14. Governing Law. This Agreement and the Option granted hereunder shall begoverned by and construed and enforced in accordance with the laws of the State of Californiawithout reference to choice of law rules or conflict of law principles thereof.IN WITNESS WHEREOF, the Company and Participant have duly executed this Agreement effective asof the Date of Grant.       **Youbet.com, Inc.**       By:         Name: Charles F. Champion  Title: President & Chief Executive Officer       **Participant**       Signature:           Board Member’s Name
 
-5-