UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION

                             WASHINGTON, D.C. 20549

                                   -----------

                                  FORM 10-QSB/A

               QUARTERLY REPORT UNDER SECTION 13 OR 15(D) OF THE
                        SECURITIES EXCHANGE ACT OF 1934

                  FOR THE QUARTERLY PERIOD ENDED MARCH 31, 2003

                       COMMISSION FILE NUMBER: 33-13789LA

                                   -----------

                                YOUBET.COM, INC.

                               DELAWARE 95-4627253

              5901 DE SOTO AVENUE, WOODLAND HILLS, CALIFORNIA 91367

                                 (818) 668-2100

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 May 9, 2003, the issuer had 26,389,396 shares of common stock issued and
outstanding. The aggregate market value of the issuer's common stock held by
non-affiliates (assuming that the Registrant's only affiliates are its officers,
directors and 10% or greater stockholders) of the issuer as of May 9, 2003 was
approximately $86,293,325 based upon the closing market price of $3.27 per
common share on that date as reported on the Nasdaq SmallCap Market.

<PAGE>

                                YOUBET.COM, INC.
                              INDEX TO FORM 10-QSB
                              FOR THE QUARTER ENDED
                                 MARCH 31, 2003

<TABLE>
<CAPTION>
                                                                                                                 PAGE
<S>                                                                                                             <C>
PART I.      FINANCIAL INFORMATION

   Item 1.   Financial Statements

                Condensed Consolidated Balance Sheet as of March 31, 2003
                (unaudited) and December 31, 2002 3 Condensed Consolidated
                Statements of Operations for the three months ended March 31,
                2003
                     and March 31, 2002 (unaudited)                                                               4
                Condensed Consolidated Statements of Cash Flows for the three months ended March 31, 2003
                     and March 31, 2002 (unaudited)                                                               5
                Notes to Unaudited Condensed Consolidated Financial Statements                                    6
   Item 2.   Management's Discussion and Analysis or Plan of Operation                                           17
   Item 3.   Controls and Procedures                                                                             21

PART II.     OTHER INFORMATION

   Item 1.   Legal Proceedings                                                                                   22
   Item 2.   Changes in Securities and Use of Proceeds                                                           22
   Item 3.   Defaults Upon Senior Securities                                                                     23
   Item 4.   Submission of Matters to a Vote of Security Holders                                                 23
   Item 5.   Other Information                                                                                   23
   Item 6.   Exhibits and Reports on Form 8-K                                                                    23
   Signatures                                                                                                    24
   Certifications                                                                                                25
   Exhibit 99.1: Certifications Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002                        29
</TABLE>

<PAGE>

PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS

                                                 YOUBET.COM, INC.
                                       CONDENSED CONSOLIDATED BALANCE SHEETS

<TABLE>
<CAPTION>
                                                                          MARCH 31,       DECEMBER 31,
                                                                            2003              2002
                                                                        ------------      ------------
                                                                         (UNAUDITED)        (AUDITED)
<S>                                                                     <C>               <C>
ASSETS:
   Current Assets:
       Cash and Cash Equivalents                                        $  5,136,182      $  4,559,897
        Restricted Cash, current (Note 2)
                                                                           2,633,217         2,351,421
        Receivables (Note 3)
                                                                             580,228           790,686
        Interest and Other Receivables
                                                                              20,897            23,682
        Prepaid Expenses
                                                                             385,575           436,119
                                                                        ------------      ------------
   Total Current Assets                                                 $  8,756,099      $  8,161,805
    Property and Equipment, net
                                                                           3,633,604         3,953,912
    Licensing Rights, net  (Note 4)
                                                                           4,118,984         5,022,830
    Deferred Lease Costs
                                                                              32,473            33,521
    Deposits (Note 6)
                                                                           1,300,785         1,300,785
                                                                        ------------      ------------
       TOTAL ASSETS                                                     $ 17,841,945      $ 18,472,853
                                                                        ============      ============
LIABILITIES AND STOCKHOLDER'S EQUITY
   Current Liabilities:
        Accounts Payable - Trade
                                                                             599,455           604,417
        Fees Payable to Related Party  (Note 4)
                                                                           1,179,409         2,113,540
        Accounts Payable - Track Related  (Note 5)
                                                                           2,850,059         4,293,289
        Accrued Expenses
                                                                           1,595,332           729,735
        Customer Deposits
                                                                           1,955,544         1,477,255
        Accrued Compensation and Related Items  (Note 8)
                                                                             237,432           532,796
        Deferred Revenues
                                                                              64,338            26,577
       Notes Payable, face $750,000, net of unamortized
           discount of $97,807  (Note 7)
                                                                                  --           652,193
                                                                        ------------      ------------
   Total Current Liabilities                                            $  8,481,569      $ 10,429,802
       Notes Payable, face $2,000,000, net of unamortized
           discount of $484,562  (Note 7)
                                                                           1,515,438                --
                                                                        ------------      ------------
       TOTAL LIABILITIES                                                $  9,997,007      $ 10,429,802
                                                                        ============      ============
   Stockholders' Equity:
        Preferred Stock, $0.001 par value, authorized
                                                                                  --                --
          1,000,000 shares, none outstanding
       Common Stock, $0.001 par value, authorized 100,000,000 shares
          23,812,139 and 23,422,600 shares outstanding
          as of March 31, 2003 and December 31, 2002, respectively      $     23,812      $     23,422
        Additional Paid In Capital
                                                                          96,912,837        95,863,660
        Accumulated Deficit
                                                                         (89,091,711)      (87,844,031)
                                                                        ------------      ------------
       TOTAL STOCKHOLDERS' EQUITY                                       $  7,844,938      $  8,043,051
                                                                        ------------      ------------
       TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY                       $ 17,841,945      $ 18,472,853
                                                                        ============      ============
</TABLE>

                 SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS


                                       3
<PAGE>

                                YOUBET.COM, INC.
                 CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS

<TABLE>
<CAPTION>
                                                              QUARTER ENDED MARCH 31,
                                                       --------------------------------------
                                                           2003                      2002
                                                       ------------              ------------
<S>                                                    <C>                       <C>
REVENUES  (NOTES 4 AND 5)
   Commissions                                         $ 10,845,220              $  2,568,970
   Subscription and Transaction Fees                         84,874                       312
   Race Information                                          76,313                    47,933
                                                       ------------              ------------
TOTAL REVENUES                                         $ 11,006,407              $  2,617,215
OPERATING EXPENSES:
   Track Fees                                             5,853,827                   457,000
   Licensing Fees - Related Party  (Note 4)               1,323,835                   439,037
   Network Operations                                       438,902                   491,935
   Research and Development                                 500,181                   489,383
   Sales and Marketing                                      257,533                   584,079
   General and Administrative                             2,167,129                 1,663,570
   Depreciation and Amortization                          1,384,260                 1,398,796
                                                       ------------              ------------
TOTAL OPERATING EXPENSES                               $ 11,925,667              $  5,523,800
                                                       ------------              ------------
LOSS FROM OPERATIONS                                   $   (919,260)             $ (2,906,585)
                                                       ============              ============
OTHER INCOME (EXPENSE):
   Interest Income                                            8,786                    16,464
   Interest Expense                                        (395,150)                   (5,407)
   Other Income                                              57,945                        --
                                                       ------------              ------------
TOTAL OTHER INCOME (EXPENSE)                           $   (328,419)             $     11,057
                                                       ------------              ------------
NET LOSS                                               $ (1,247,679)             $ (2,895,528)
                                                       ============              ============
BASIC AND DILUTED LOSS PER SHARE:
   Net Loss per Common Share                           $      (0.05)             $      (0.15)
                                                       ------------              ------------
   Weighted Average No. of Common Shares Outstanding     23,519,239                19,537,950
                                                       ============              ============
</TABLE>

                 SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS


                                       4
<PAGE>

                                YOUBET.COM, INC.
                 CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS

<TABLE>
<CAPTION>
                                                                                      QUARTER ENDED MARCH 31,
                                                                                  ------------------------------
                                                                                     2003               2002
                                                                                  -----------        -----------
<S>                                                                               <C>                <C>
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS
    CASH FLOWS FROM OPERATING ACTIVITIES:
       Net Loss                                                                   $(1,247,679)       $(2,895,528)
    ADJUSTMENTS TO RECONCILE NET LOSS TO NET CASH USED IN OPERATING ACTIVITIES:
        Depreciation and Amortization
                                                                                    1,384,260          1,398,796
        Amortization of Fair Value of Warrants Issued for Financing Costs
                                                                                           --              2,395
        Non-Cash Interest Expense
                                                                                      358,638                 --
        Stock-Based Compensation
                                                                                       51,009            135,772
    CHANGE IN OPERATING ASSETS AND LIABILITIES:
       Restricted Cash                                                               (344,837)                --
        Receivables
                                                                                      210,458           (186,580)
        Interest and Other Receivables
                                                                                        2,785           (110,444)
        Prepaid Expenses
                                                                                       50,544            205,815
        Deposits
                                                                                        1,048           (498,951)
        Account Payable - Trade
                                                                                       (4,962)           220,809
        Fees Payable - Related Parties
                                                                                     (934,131)                --
        Accounts Payable - Track Related
                                                                                   (1,443,230)                --
        accrued Expenses
                                                                                      865,597            233,032
        Customer Deposits
                                                                                      478,289            168,708
        Accrued Compensation and Related Items
                                                                                     (295,364)            88,140
        Deferred Revenues
                                                                                       37,761                 33
                                                                                  -----------        -----------
           NET CASH USED IN OPERATING ACTIVITIES                                  $  (829,814)       $(1,238,003)
                                                                                  -----------        -----------
    CASH FLOWS FROM INVESTING ACTIVITIES:
       Restricted Cash                                                                 63,041
        Purchases of Property and Equipment
                                                                                     (160,106)           (34,677)
                                                                                  -----------        -----------
           NET CASH USED IN INVESTING ACTIVITIES                                  $   (97,065)       $   (34,677)
                                                                                  -----------        -----------
    CASH FLOWS FROM FINANCING ACTIVITIES:
        Proceeds from Exercise of Stock Options and Warrants
                                                                                      253,164                 --
        Proceeds from Notes Payable
                                                                                    2,000,000            750,000
        Payments of Notes Payable
                                                                                     (750,000)                --
                                                                                  -----------        -----------
           NET CASH PROVIDED BY FINANCING ACTIVITIES                              $ 1,503,164        $   750,000
                                                                                  -----------        -----------
    NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS                          $   576,285        $  (522,680)
     CASH AND CASH EQUIVALENTS AT THE BEGINNING OF THE PERIOD
                                                                                    4,559,897          3,560,740
                                                                                  -----------        -----------
    CASH AND CASH EQUIVALENTS AT THE END OF THE PERIOD                            $ 5,136,182        $ 3,038,060
                                                                                  ===========        ===========
    SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
       Cash Paid for Interest                                                     $    80,137        $       639
        Reclassification of Restricted Cash to Deposits
                                                                                           --            920,805
        Cash Paid for Income Tax
                                                                                           --                 --
                                                                                  ===========        ===========
    NON-CASH INVESTING AND FINANCING ACTIVITIES:
       Issuance of Warrants for $2 million note                                   $   518,223        $        --
        Issuance of Warrants for Licensing Rights
                                                                                           --            437,137
                                                                                  ===========        ===========
</TABLE>

                 SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS


                                       5
<PAGE>

YOUBET.COM, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
THREE MONTHS ENDED MARCH 31, 2003

NOTE 1:       ORGANIZATION AND BASIS OF PRESENTATION

     BUSINESS

         Youbet.com, Inc. ("Youbet.com", "Youbet", or the "Company") has
         established itself as a leading, global brand name for online, live
         event sports entertainment and wagering. Wagering on live events, such
         as horse racing, car racing, soccer, football, and other sporting
         events is a large global industry which adapts well to the Internet.
         The Company has focused on the United States horse race wagering market
         through its main product, Youbet ExpressSM, which features online
         wagering, simulcast, and in-depth, up-to-the-minute information on
         horse racing. The Company is working to expand the Youbet.com brand,
         its products, and its services throughout the United States and select
         international markets. The Company currently provides its customers
         with the ability to receive interactive, real-time audio/video
         broadcasts directly into their computers, access a comprehensive
         database of handicapping information and, in most states, wager on a
         wide selection of U.S., Canadian, and Australian horse races.

         In 2002, greater than 80% of all United States horse race wagers were
         placed through an off-track facility. Off-track wagering is typically
         captured through inter-track simulcasts, off-track betting (OTB)
         facilities, telephone-based live operator and interactive voice
         recognition (IVR), and PC-based and wireless transmissions. This
         dramatic shift from at-the-track to off-track wagering was driven by
         racing enthusiasts' desire for convenient, remote access to a wide
         range of horse racing events, the ability to deliver this service
         through developments in electronic systems, and the relatively new
         concept of advance deposit wagering (ADW). ADW is accomplished when a
         customer opens an account with a state-licensed entity and then
         deposits funds into that account for future wagering. Customers may
         then use their funds plus any realized winnings for on-going wagering.

     BASIS OF PRESENTATION

         In the opinion of management, the accompanying unaudited condensed
         financial statements for the three months ended March 31, 2003 and 2002
         include all adjustments (consisting of normal recurring accruals) which
         management considers necessary to present fairly the financial position
         of the Company as of March 31, 2003, the results of its operations for
         the three months ended March 31, 2003 and March 31, 2002, and its cash
         flows for the three months ended March 31, 2003 in conformity with
         accounting principles generally accepted in the United States. 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, 2002, as filed with the
         Securities and Exchange Commission on April 15, 2003, and should be
         read in conjunction with this Quarterly Report on Form 10-QSB. The
         results of operations for the three months ended March 31, 2003 are not
         necessarily indicative of the consolidated results of operations to be
         expected for the full fiscal year ending December 31, 2003. Certain
         information and footnote disclosures normally included in the financial
         statements


                                       6
<PAGE>

         presented in accordance with accounting principles generally accepted
         in the United States have been condensed or omitted.

         Youbet.com, Inc., a Delaware corporation, and its wholly owned
         subsidiary, Youbet Oregon, Inc., are collectively referred to herein as
         "Youbet.com", "Youbet", or the "Company". All intercompany accounts and
         transactions have been eliminated in consolidation.

     USE OF ESTIMATES

         The preparation of financial statements in conformity with accounting
         principles generally accepted in the United States requires management
         to make estimates and assumptions that affect the reported amounts of
         assets and liabilities and disclosure of contingent assets and
         liabilities as of 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.

     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 anti-dilutive. As
         of March 31, 2003, total warrants outstanding were 21,092,627 with
         exercise prices between $0.001 to $19.50 and total stock options
         outstanding were 6,424,878 with exercise prices between $0.01 and
         $6.13.

     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 March 31, 2003 and December
         31, 2002, the Company had uninsured cash and cash equivalents and
         restricted cash of $7,799,618 and $4,440,698, respectively.

     RECLASSIFICATIONS

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

NOTE 2:       RESTRICTED CASH, CURRENT

     PLAYERS TRUSTSM

         As of March 31, 2003, the balance of customer accounts maintained in
         Players TrustSM was $1,909,641 all which is recorded as restricted
         cash, current. This amount was $132,174 in excess of amounts due to
         customers.


                                       7
<PAGE>

     CREDIT CARD RESERVES

         The Company uses outside vendors to process its credit card and check
         transactions. These vendors require the Company to keep in reserve, for
         up to six months, a certain percentage of the total amounts processed
         as a reserve against any future potential losses. As of March 31, 2003,
         these reserves amounted to $473,576 all of which is recorded as
         restricted cash, current.

     OREGON RACING COMMISSION

         The Company placed a Letter of Credit with the Oregon Racing Commission
         in the amount of $250,000 to secure customer deposits on hand for
         Oregon residents. As of March 31, 2003, the letter of credit is
         recorded as restricted cash, current.

NOTE 3:       RECEIVABLES

     As of March 31, 2003, receivables of $580,228 primarily consist of (1)
     $213,782 due from Magna Entertainment Corporation for fees earned on handle
     generated through Magna's Call-A-Bet system, (2) $149,353 due from various
     tracks for settlement of wagers processed through the Company's Oregon hub,
     and (3) $215,734 due from the Company's landlord.

     As of December 31, 2002, receivables of $790,686 primarily consist of (1)
     $302,000 due from Magna Entertainment Corporation for fees earned on wagers
     processed through Magna's Call-A-Bet system, (2) $377,000 due from various
     tracks for settlement of wagers processed through the Company's Oregon Hub,
     and (3) $107,867 due from the Company's landlord.

NOTE 4:       LICENSING RIGHTS - RELATED PARTY

     TVG LICENSING FEES

         In May 2001, Youbet entered into a track content and patent license
         agreement (the "License Agreement") and a warrant issuance agreement
         with TVG. These agreements relate to the grant by TVG to Youbet 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 racetracks 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
         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 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
         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 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


                                       8
<PAGE>

         subject of the legal action; and (c) by either Youbet 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 under the License
         Agreement, Youbet has agreed to pay to TVG fees based on the handle
         generated by Youbet from wagering activity and to issue to TVG the
         warrants to purchase Youbet common stock on the terms and conditions
         set forth in the Warrant Issuance Agreement, as described below. 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 which include Aqueduct,
            Arlington International, Belmont Park, Calder Race Course, Churchill
            Downs, Del Mar, Ellis Park, Emerald Downs, Fairplex Park, Hollywood
            Park, Hoosier Park, Keeneland, Laurel Park, Lone Star Park, Los
            Alamitos, Oak Tree/Santa Anita, Pimlico, Portland Meadows, Prairie
            Meadows, Ruidoso Downs, Saratoga, Saratoga Harness, Suffolk Downs,
            Turf Paradise, and Turfway Park. 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 network.

         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 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 will pay to TVG the
            following fees:

         o  At such time as Youbet opens its own account wagering facility, with
            respect to wagers accepted or processed through an account wagering
            facility other than Magna, Youbet 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, 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's own account wagering
            facility, with respect to account wagers processed through Magna,
            Youbet 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 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 is permitted to modify or waive transaction fees for
            certain customers, provided that it shares any such fees from such
            customers equally with TVG.


                                       9
<PAGE>

         o  Commencing with the first calendar quarter in which Youbet 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 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 customers in other states other, (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 customers with an account address
            within a 25-mile radius of any TVG Exclusive Track, Youbet 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's partner tracks located within the 25-mile
            radius.

         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 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 method, as a deferred asset
         captioned "Licensing Rights" and is being amortized over three years,
         the estimated life of the licensed technology. Accumulated amortization
         as of March 31, 2003 was $1,803,881. The Initial Warrant was exercised
         during the quarter ended June 30, 2002, resulting in cash proceeds to
         the Company of $3,885 and issuance of 3,884,650 shares of Youbet.com
         common stock.

         The Company issued to TVG an additional warrant (the "Additional TVG
         Warrant"), on September 20, 2001 (the time the Warrant Agreement was
         approved by the stockholders) entitling TVG to purchase from the
         Company at any time prior to 5:00 p.m. Pacific Standard Time on May 18,
         2004, 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 TVG
         Warrant Shares, is equal to 51% of the sum of (i) the total number of
         shares of Youbet 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 method, as a deferred asset captioned "Licensing Rights"
         which is being


                                       10
<PAGE>

         amortized over three years. Accumulated amortization as of March 31,
         2003 was $4,041,492.

         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 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. As of May 15, 2003, the
         Company has acknowledged adjustments to the aggregate exercise price of
         the Additional TVG Warrant have resulted in an adjusted aggregate
         exercise price of $40,041,566.

         Remaining estimated aggregate amortization expense related to Licensing
         Rights for the next three years is:

                              2003       $       2,711,537
                              2004               1,407,447
                                        ------------------
                             Total       $       4,118,984
                                        ==================

         We periodically review the carrying value of these rights based upon
         our estimates of future cash flows. While we believe our estimates of
         future cash flows are reasonable, different assumptions regarding such
         cash flows could materially affect our valuation.

NOTE 5:       AGREEMENT WITH MAGNA AND INDEPENDENT TRACKS

     In addition to revenue generated from its relationship with TVG as
     discussed in Note 4, the Company generates revenue under agreements with
     Magna and various independent tracks.

     Magna Entertainment Corporation (Magna), one of the largest
     owners/operators of premier horse racetracks in the United States,
     acquires, develops, and operates horse racetracks and related pari-mutuel
     wagering operations. Magna tracks include Santa Anita Park, Gulfstream
     Park, Lone Star Park, Bay Meadow, Golden Gate Fields, Portland Meadows,
     Remington Park, Thistle Down, Great Lakes Downs, The Meadows, and Flamboro.

     In June 1997, Youbet entered into a Telecommunication Facilitation
     Agreement with Mountain Laurel Racing, Inc. and Washington Trotting
     Association, Inc., both subsidiaries of Ladbroke USA (collectively,
     "Ladbroke"). During 2001, Ladbroke was acquired by Magna. Under the
     agreement as modified, the Company provides Magna with an interactive
     graphics interface into Youbet ExpressSM through which Youbet customers who
     have established accounts with Magna's Call-A-Bet System may communicate
     with Magna to transmit wagering information.

     Pari-mutuel racetrack operators typically retain a portion of all wagers as
     their commission prior to distributing payoffs to the winners. In
     accordance with various agreements with Magna and


                                       11
<PAGE>

      independent racetracks, Youbet receives a pre-arranged fee from each
      racetrack for wagers delivered to their respective pari-mutuel pools.
      Through the introduction of the Total Access product, Youbet currently has
      independent simulcast agreements with over 65 tracks that are paid a host
      fee for their signal. These fees are based on handle generated by Youbet
      members to the respective tracks.

      For the three months ended March 31, 2003 and 2002, $484,259 and $918,661,
      respectively, of the Company's revenues were generated through the Magna
      simulcast agreement.

NOTE 6:       DEPOSITS

     As of March 31, 2003 and December 31, 2002, deposits primarily include (1)
     $705,071 lease deposit for the Company's Woodland Hills facility, (2)
     500,000 deposit for licensing with the California Horse Racing Board, and
     (3) $60,078 security deposit for the Company's Woodland Hills facility, (4)
     $10,000 for the Global Cash reserve deposit, (5) $15,835 contract deposit
     for Stargate Pennsylvania facility, (6) $8,251 for corporate housing
     deposit, (7) $1,350 deposit for UPS, and (8) $200 deposit for office
     furniture.

NOTE 7:       NOTES PAYABLE

     The Company entered into a Securities Purchase Agreement on March 21, 2002,
     whereby the Company issued 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 and Chief Executive Officer, and to
     seven other investors for their $750,000 loan to the Company. 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 warrants expire five years from the issuance date
     and contain certain registration rights and cashless exercise feature.
     Using the Black-Scholes model, the Company recorded the fair value of the
     warrants issued, $437,137, as a note discount and were amortized over one
     year as interest expense. Accumulated amortization of discount on the Notes
     was $339,330 as of December 31, 2002. On January 24, 2003, the Notes were
     retired ahead of schedule and $80,137 for all accrued interest through
     February 8, 2003, was paid.

     The Company entered into a second Securities Purchase Agreement on February
     11, 2003, whereby the Company issued two-year unsecured notes (the "Second
     Notes") in the aggregate principal amount of $2,000,000 at an interest rate
     of 10% to several investors (the "Investors"). Interest is accrued monthly
     and paid quarterly; principal is due on February 11, 2005. In addition to
     the issuance of the Second Notes, the Company agreed to cause the
     assignment to the Investors of a portion of warrants previously issued by
     the Company. In this connection, holders of the Company's C and M warrants
     (the "Holders") were offered the opportunity to assign a portion of their
     warrants to the investors on the following basis: (a) the per share
     exercise price of warrants held by the Holders would be reduced to $.8075;
     (b) the term of the warrants would be extended to February 11, 2005; and
     (c) the number of warrant shares retained by the Holders would be reduced
     to 20% of the warrant shares that were currently issuable pursuant to the
     exercise of the warrants (the "Retained Warrant Shares"). The warrant
     shares other than the Retained Warrant Shares would be either cancelled by
     the Company or assigned to the Investors. During the quarter, warrants to
     acquire 693,194 shares of the Company's Common Stock were cancelled, the
     number of Retained Warrant Shares was 2,034,963 and warrants to purchase an
     aggregate of 1,334,000


                                       12
<PAGE>

     shares were assigned to the Investors at an exercise price of $0.8075 per
     share (representing a discount of 15% from the closing market price of the
     Company's Common Stock of $0.95 on the date of the Securities Purchase
     Agreement). The fair value of the 542,296 retained warrants of
     approximately $227,000 was recorded as an expense in the current period.
     The relative fair value of the 1,334,000 assigned warrants of approximately
     $518,223 was recorded as a discount to the face value of the note that will
     be amortized as interest expense over the two year life of the notes.

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 March 31, 2003, the Company had
     accrued a total of $300,000 ($150,000 to each of Messrs. Marshall and
     Fine). The bonuses were paid on April 21, 2003.

     The Board approved the recommendation of the Compensation Committee to
     grant to Charles Champion an increase in annual compensation from $200,000
     to $340,000 in connection with Mr. Champion's promotion to President and
     Chief Executive Officer of the Company effective September 1, 2002 through
     March 2005. The increase in compensation is being accrued until the Company
     achieves and sustains positive cashflow for at least two consecutive fiscal
     quarters. As of March 31, 2003, compensation payable to Mr. Champion was
     $81,669.

NOTE 9:       STOCKHOLDERS' EQUITY

     The Company has issued various stock options and warrants in non-capital
     raising transactions for services rendered and to be rendered, and as
     financing costs. The Company accounts for stock options and warrants
     granted to employees and non-employees in accordance with Statement of
     Financial Accounting Standards No. 123. The Company has calculated the fair
     value of such warrants and stock options according to the Black-Scholes
     pricing model.

     All securities described below were issued under an exemption to the
     registration requirements of the Securities Act of 1933, as amended,
     pursuant to Section 4(2) thereof and Regulation D.

     ISSUANCE OF WARRANTS

         During the three months ended March 31, 2003, in connection with the
         Second Notes, the Company issued warrants to the lenders to purchase up
         to 1,334,000 shares of common stock at an exercise price of $0.8075 per
         share (See Note 6).

         Information with respect to common stock purchase warrants issued is
         summarized as follows:


                                       13
<PAGE>

                                                             WEIGHTED AVERAGE
                                               WARRANTS       EXERCISE PRICE
                                             -----------      --------------
BALANCE, DECEMBER 31, 2002                    21,792,078           $   2.61
    Warrants Issued                            1,334,000               0.81
    Warrants Expired                          (1,933,451)              2.59
    Warrants Exercised                          (100,000)              0.50
                                             -----------      --------------
WARRANTS EXERCISABLE AT MARCH 31, 2003        21,092,627           $   2.23
                                             ===========

          In order to maintain TVG's rights in acquiring 51% of the Youbet, the
          Company is obligated to issue additional warrants to TVG upon the
          exercise of any stock options or warrants, or if the Company issues
          any additional securities. (See Note 4)

          Additional information about outstanding warrants to purchase the
          Company's common stock at March 31, 2003 is as follows:

<TABLE>
<CAPTION>
                                                               WARRANTS OUTSTANDING AND EXERCISABLE
                                                     ---------------------------------------------------------
                                                                          WEIGHTED AVG.           WEIGHTED
                                                                            REMAINING             AVERAGE
                                                         NUMBER          CONTRACTUAL LIFE         EXERCISE
                                                       OF SHARES            (IN YEARS)             PRICE
                                                     ---------------  -----------------------  ---------------
<S>                                                  <C>                <C>                       <C>
             RANGE OF EXERCISE PRICES:
                  $0.001 - $0.50                            656,499            4.07                $ 0.50
                  $0.8075                                 2,397,100            1.01                  0.81
                  $1.09                                   1,200,000            5.00                  1.09
                  $2.50                                  16,592,028            1.07                  2.50
                  $3.125 - 5.25                              22,000      Not determinable            3.84
                  $7.93 - 19.50                             225,000            1.10                 14.33
                                                     ---------------                           ---------------
                       TOTAL                             21,092,627                                $ 2.23
                                                     ===============                           ===============
</TABLE>

     STOCK OPTION ARRANGEMENTS

         As of December 31, 2002, under the 1998 Stock Option Plan, there were
         6,523,858 stock options granted out of a total approved amount of
         8,500,000.

     ISSUANCE OF STOCK OPTIONS

         During the three months ended March 31, 2003, the Company granted
various stock options, as follows:

     o    Stock options were granted to employees to purchase 150,700 shares of
          common stock at exercise prices ranging from $0.77 to $1.90, the fair
          market value at the date of grant. These options vest over four years,
          and are exercisable for a period of five years.

     o    Stock options were granted to a non-employee Director to purchase
          40,000 shares of common stock at an exercise price of $0.74, the fair
          market value on the date of the grant. These options vest ratably over
          a 12 month period and are exercisable for a period of ten years.


                                       14
<PAGE>

     o    Stock options were granted to an ex-director to purchase 13,334 shares
          of common stock at an exercise price of $0.68, below the market value
          at the date of grant which was $1.50. These options were granted to
          correct a prior award. They vest immediately and are exercisable for a
          period of one year.

Information with respect to activity under the Company's Stock Option Plans is
summarized below.

<TABLE>
<CAPTION>
                                                                                                WEIGHTED AVERAGE
                                                                          STOCK OPTIONS          EXERCISE PRICE
                                                                      ---------------------  ----------------------
<S>                                                                              <C>                <C>
         BALANCE, DECEMBER 31, 2002                                              6,598,075          $0.84
             Options Granted                                                       204,034           1.27
             Options Exercised                                                    (289,539)          0.70
             Options Cancelled                                                      (1,124)          0.94
             Options Forfeited                                                     (86,568)          4.22
                                                                      ---------------------
         BALANCE, MARCH 31, 2003                                                 6,424,878           0.80
                                                                      =====================
         OPTIONS EXERCISABLE (VESTED) AT MARCH 31, 2003                          4,863,845          $0.93
                                                                      =====================
</TABLE>

         Additional information about outstanding options to purchase the
         Company's common stock at March 31, 2003 is as follows:

<TABLE>
<CAPTION>
                                               OPTIONS OUTSTANDING                      OPTIONS EXERCISABLE
                                -------------------------------------------------- -------------------------------
                                                 WEIGHTED AVERAGE
                                                    REMAINING         WEIGHTED                       WEIGHTED
             RANGE OF EXERCISE     NUMBER OF    CONTRACTUAL LIFE       AVERAGE         NUMBER OF      AVERAGE
                   PRICES           SHARES         (IN YEARS)       EXERCISE PRICE      SHARES     EXERCISE PRICE
             -----------------------------------------------------------------------------------------------------
<S>          <C>                     <C>              <C>              <C>              <C>            <C>
             $0.01 - $0.99           5,336,605        7.16             $ 0.62           3,834,047      $ 0.64
             $1.00 - 2.00              756,449        4.71               1.05             702,974        1.05
             $2.50                     234,500        1.44               2.50             234,500        2.50
             $2.63 - 3.88               34,824        2.56               3.09              34,824        3.09
             $5.31 - 6.13               62,500        4.06               5.48              57,500        5.44
                                ---------------                                    ---------------
                    TOTAL            6,424,878        6.63             $ 0.80           4,863,845      $ 0.93
                                ===============                                    ===============
</TABLE>

         On August 1, 2001, the Board of Directors approved an option repricing
         plan whereby each current non-executive employees' previously issued
         stock options at a strike price above $1.00, were repriced to the then
         current market price of the common stock ($1.00). The Board of
         Directors believed that many of the stock options previously granted by
         the Company no longer provided the performance incentive intended by
         the option because the exercise price of many of the Company's
         outstanding stock options was well in excess of the market price of the
         common stock. Pursuant to the repricing plan, 378,774 options were
         repriced to $1.00. Each repriced option retained its expiration date
         and vesting schedule.


                                       15
<PAGE>

         As of December 31, 2002, the Company had one stock-based employee
         compensation plan, The 1998 Stock Option Plan. The Company accounts for
         stock options issued to officers and employees under the recognition
         and measurement principles of APB Opinion No. 25, ACCOUNTING FOR STOCK
         ISSUED TO EMPLOYEES, and related interpretations. No stock-based
         employee compensation cost is reflected in net income, as all options
         granted under the plan had an exercise price equal to the market value
         of the underlying common stock on the date of grant. Options granted to
         outside directors and consultants are accounted for in accordance with
         STATEMENT OF FINANCIAL ACCOUNTING STANDARDS NO. 123.

         If compensation expense for stock options issued to officers and
         employees had been determined based upon the fair value at the grant
         date consistent with the methodology prescribed under Statement of
         Financial Accounting Standards No. 123, the net loss and basic loss per
         share would have been as shown below. The fair value of stock options
         granted under the Company's Plans was estimated on the date of grant
         using the Black-Scholes option pricing model using the following
         weighted average assumptions:

                                          THREE MOS.
                                         ENDED 3/31/03      2002          2001
                                      -----------------  ------------   --------
             Expected Life in Years           6.1           8.6           6.3
             Risk Free Interest Rate         5.0%           5.2%          5.2%
             Dividend Yield                   0%             0%            0%
             Expected Volatility             73.3%         109.5%        135.8%

         The weighted average fair value at the date of grant for stock options
         and warrants granted during the three months ended March 31, 2003 was
         $0.90 per option and $0.75 per warrant.

                                         THREE MONTHS ENDED
                                            MARCH 31, 2003         2002
                                         ------------------    -------------
AS REPORTED NET LOSS                        $(1,247,679)        $(2,895,528)
   Add:  Stock-based employee
   compensation expense included in
   reported income, net of related tax
   effects                                  $    40,799              77,366
   Less:  Total stock based employee
   compensation expense determined under
   fair value based methods for all
   awards, net of related tax effects          (405,152)           (693,525)
                                            -----------         -----------
PRO FORMA NET LOSS                          $(1,612,032)        $(3,511,687)
                                            ===========         ===========
NET LOSS PER SHARE:
   As Reported                              $     (0.05)        $     (0.15)
   Pro Forma                                $     (0.07)        $     (0.18)

NOTE 10:      LEGAL PROCEEDINGS


                                       16
<PAGE>

     Youbet currently and from time to time is involved in litigations arising
     in the ordinary course of its business. Youbet can give no assurance that
     the resolution of any particular claim or proceeding would not have a
     material adverse effect on its results of operations, cash flows, or
     financial condition.

ITEM 2.    MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION

     FORWARD LOOKING STATEMENTS

          The following discussion and analysis of Youbet's financial condition
          and results of operations should be read in conjunction with Youbet's
          Consolidated Financial Statements and other financial information
          included herein. This Management's Discussion and Analysis or Plan of
          Operation and other sections of this report contain 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.

          This Quarterly Report on Form 10-QSB for the three months ended March
          31, 2003 contains "forward-looking" statements within the meaning of
          the Federal securities laws. These forward-looking statements involve
          a number of risks and uncertainties, including the timely development
          and market acceptance of products and technologies, successful
          integration of acquisitions, the ability to secure additional sources
          of financing, the ability to reduce operating expense and other
          factors described in the Company's filing with the Securities and
          Exchange Commission. The actual results that the Company achieves may
          differ materially from any forward-looking statements due to such
          risks and uncertainties. The forward-looking statements in this
          Quarterly Report on Form 10-QSB for the three months ended March 31,
          2003 are subject to risks and uncertainties that could cause actual
          results to differ materially from those results expressed in or
          implied by the statements contained herein.

     OVERVIEW

         Youbet.com, Inc. ("Youbet.com", "Youbet", or the "Company") has
         established itself as a leading, global brand name for online, live
         event sports entertainment and wagering. Wagering on live events, such
         as horse racing, car racing, soccer, football, and other sporting
         events is a large global industry which adapts well to the Internet.
         The Company has focused on the United States horse race wagering market
         through its main product, Youbet ExpressSM, which features online
         wagering, simulcast, and in-depth, up-to-the-minute information on
         horse racing. The Company is working to expand the Youbet.com brand,
         its products, and its services throughout the United States and select
         international markets. The Company currently provides its customers
         with the ability to receive interactive, real-time audio/video
         broadcasts directly into their computers, access a comprehensive
         database of


                                       17
<PAGE>

         handicapping information and, in most states, wager on a wide
         selection of U.S., Canadian, and Australian horse races.

         In 2002, greater than 80% of all United States horse race wagers were
         placed through an off-track facility. Off-track wagering is typically
         captured through inter-track simulcasts, off-track betting (OTB)
         facilities, telephone-based live operator and interactive voice
         recognition (IVR), and PC-based and wireless transmissions. This
         dramatic shift from at-the-track to off-track wagering was driven by
         racing enthusiasts' desire for convenient, remote access to a wide
         range of horse racing events, the ability to deliver this service
         through developments in electronic systems, and the relatively new
         concept of advance deposit wagering ("ADW"). ADW is accomplished when a
         customer opens an account with a state-licensed entity and then
         deposits funds into that account for future wagering. Customers may
         then use their funds plus any realized winnings for on-going wagering.

         Pari-mutuel racetrack operators typically retain a portion of all
         wagers as their commission prior to distributing payoffs to the
         winners. In accordance with the TVG and Magna Agreements (SEE NOTES 4
         AND 5) and various agreements with independent racetracks, Youbet
         receives a pre-arranged fee from each racetrack for wagers delivered to
         their respective pari-mutuel pools. In the aggregate, these fees
         represent Youbet's primary revenue stream. The Company expects the
         majority of its future revenues to be in the form of fees from
         wagering. Additional revenues are generated from monthly subscription
         fees and the sale of handicapping information. Youbet also expects
         additional future revenues from advertising at the Youbet ExpressSM
         website, advertising on live simulcasts, and the sale of sports
         information and merchandise.

         Youbet has incurred significant losses since inception, and as of March
         31, 2003, had an accumulated deficit of $89,091,710. Included in this
         accumulated deficit is $25,738,003 in non-cash expenses related to (1)
         the amortization of the fair value of warrants issued, (2) the expense
         of stock options exercised, (3) the conversion into common stock and
         warrants of discounts on bridge loans, accounts payable, and employee
         deferred salaries, and (4) the release of forfeiture provisions on
         certain shares of common stock. The recognition of these non-cash
         expenses did not affect working capital or cash flows. The Company does
         not expect these types of costs to continue at these levels.

         Management believes that its ongoing efforts to reduce costs and
         operate more efficiently, combined with the growth of its Oregon
         wagering hub and the receipt of licensing from California in February
         2002, has improved working capital to a level needed to support future
         operations. However, the Company may from time to time require
         additional capital to fund operations, reduce its liabilities, and fund
         its expansion plans consistent with the Company's anticipated changes
         in operations and infrastructure.

RESULTS OF OPERATIONS FOR THE THREE MONTHS ENDED MARCH 31, 2003 COMPARED TO THE
THREE MONTHS ENDED MARCH 31, 2002

     Revenues increased 321% to $11,006,407 for the quarter ended March 31, 2003
     as compared to $2,617,215 in the first quarter of 2002. The Company
     experienced growth in its customer base with 49,450 active customer
     accounts as of March 31, 2003 as compared to 28,567 as of March 31, 2002.
     Gross handle grew substantially from $27,093,842 for the first quarter
     2002, to $60,996,241 for the most recent quarter with record-breaking gross
     handle of $21,112,703


                                       18
<PAGE>

     in March 2003. These results were primarily due to (1) an increase in
     wagering activity at the Company's Oregon wagering hub, (2) customer
     account growth (3) increased awareness of Youbet in the horse racing
     industry due to co-marketing agreements with Churchill Downs, Maryland
     Jockey Club, Hollywood Park, and the California Authority of Racing
     Affairs, and (4) enhancements in Web content and functionality.

     The Company records gross proceeds from its wholly-owned subsidiary, Youbet
     Oregon, Inc., as revenues and records the related costs as fees. The
     Company also recognizes as revenue net fees earned on wagers generated at
     third party wagering facilities ("Magna").

     OPERATING EXPENSES

         TRACK FEES: Track Fees increased to $5,853,827 in 2003, as compared to
         $457,000 in 2002. The increase was primarily due to an increase in
         handle and revenues. Track Fees consist of amounts paid and payable to
         various tracks, the California Horse Racing Board, and the Oregon
         Racing Commission.

         LICENSING FEES - RELATED PARTY: Licensing Fees - Related Party
         represents amounts paid and payable as a result of the agreement with
         TVG (See Note 4). For the three months ended March 31, 2003, Licensing
         Fees - Related Party increased to $1,323,835 as compared to $439,037 in
         2002 primarily due to increased wagering on TVG tracks.

         NETWORK OPERATIONS: Network Operations decreased 11% to $438,902 in
         2003, as compared to $491,935 in 2002. The decrease was primarily due
         to lower telecommunication costs. Network Operations consist of costs
         for salaries, data center management, and telecommunications.

         RESEARCH AND DEVELOPMENT: Research and Development increased 2% to
         $500,181 in 2003, as compared to $489,383 in 2002. The Company will
         continue to invest in the development of its network infrastructure
         which management believes to be necessary in achieving its strategic
         objectives.

         SALES AND MARKETING: Sales and Marketing decreased 56% to $257,533 in
         2003, as compared to $584,079 in 2002. The decrease was primarily due
         to reduced expenses associated with marketing programs, salaries, and
         commissions.

         GENERAL AND ADMINISTRATIVE: General and Administrative increased 30% to
         $2,167,129 in 2003 as compared to $1,663,570 in 2002. The increase was
         primarily due to an increase in salaries, stock-based compensation, and
         administrative expenses. General and Administrative consists primarily
         of salaries, benefits, insurances, facilities expenses, legal,
         accounting, and investor relations.

         DEPRECIATION AND AMORTIZATION: Depreciation and Amortization decreased
         1% to $1,384,260 in 2003 as compared to $1,398,796 in 2002.
         Depreciation and Amortization primarily consists of amortization of
         licensing rights related to the TVG Agreement (See Note 4).

     OTHER INCOME (EXPENSE)


                                       19
<PAGE>

         INTEREST INCOME: Interest Income decreased 47% to $8,786 in 2003 as
         compared to $16,464 in 2002. The decrease was primarily due to lower
         balances of cash in banks and lower interest rates in 2003 as compared
         to 2002.

         INTEREST EXPENSE: Interest Expense increased to $395,150 in 2003 as
         compared to $5,407 in 2002. The increase was primarily due to (1)
         expense associated with the reissuance of Series C and M Warrants and
         (2) accrued interest on newly issued unsecured notes and amortization
         of the note discount (See Note 6).

         OTHER INCOME: Other Income represents the write-off of $57,945 related
         to the settlement of a disputed invoice with a vendor.

LIQUIDITY AND CAPITAL RESOURCES

     The Company has financed its operations primarily through the sale of its
     securities, convertible debt, and private debt placements. At March 31,
     2003, the Company had net working capital of $274,530 compared to a net
     working capital deficit of $2,267,997 at December 31, 2002. The Company
     incurred net losses from operations for the quarter ended March 31, 2003
     and year ended December 31, 2002. As of March 31, 2003, the Company had
     $5,136,182 in cash and cash equivalents and $2,633,217 in restricted cash.
     The Company's principal recurring cash commitments consist of payroll and
     benefits, business insurance, and real estate leases. Management believes
     that its ongoing efforts to reduce costs and operate more efficiently,
     combined with the growth of its Oregon wagering hub and revenues resulting
     from the receipt of licensing from California in February 2002, has
     improved cash flow to a level needed to support future operations. However,
     the Company may from time to time seek additional capital to fund
     operations, reduce its liabilities, and fund its expansion plans consistent
     with the Company's anticipated changes in operations and infrastructure.

     The Company entered into a Securities Purchase Agreement on March 21, 2002,
     whereby the Company issued 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 and Chief Executive Officer, and to
     seven other investors for their $750,000 investment in the Company. On
     January 24, 2003, the Notes were retired ahead of schedule and $80,137 for
     all accrued interest through February 8, 2003, was paid. 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 warrants expire five years from the issuance date and
     contain certain registration rights and cashless exercise feature. Using
     the Black-Scholes model, the Company recorded the fair value of the
     warrants issued, $437,137, as a note discount and were amortized over one
     year as interest expense. On January 24, 2003, the Notes were retired ahead
     of schedule and $80,137 for all accrued interest through February 8, 2003,
     was paid.

     The Company entered into a second Securities Purchase Agreement on February
     11, 2003, whereby the Company issued two-year unsecured notes (the "Second
     Notes") in the aggregate principal amount of $2,000,000 at an interest rate
     of 10% to several investors (the "Investors"). Interest is accrued monthly
     and paid quarterly; principal is due on February 11, 2005. In addition to
     the issuance of the Second Notes, the Company agreed to cause the
     assignment to the Investors of a portion of warrants previously issued by
     the Company. In


                                       20
<PAGE>

     this connection, holders of the Company's C and M warrants (the "Holders")
     were offered the opportunity to assign a portion of their warrants to the
     investors on the following basis: (a) the per share exercise price of
     warrants held by the Holders would be reduced to $.8075; (b) the term of
     the warrants would be extended to February 11, 2005; and (c) the number of
     warrant shares retained by the Holders would be reduced to 20% of the
     warrant shares that were currently issuable pursuant to the exercise of the
     warrants (the "Retained Warrant Shares"). The warrant shares other than the
     Retained Warrant Shares would be either cancelled by the Company or
     assigned to the Investors. As of April 4, 2003, warrants to acquire 693,194
     shares of the Company's Common Stock were cancelled, the number of Retained
     Warrant Shares was 2,034,963 and warrants to purchase an aggregate of
     1,334,000 shares were assigned to the Investors at an exercise price of
     $0.8075 per share (representing a discount of 15% from the closing market
     price of the Company's Common Stock of $0.95 on the date of the Securities
     Purchase Agreement). Using the Black-Scholes model, the Company recorded
     the fair value of the warrants assigned, $518,223, as a note discount to be
     amortized over two years as interest expense. Accumulated amortization of
     discount on the Second Notes was $33,661 as of March 31, 2003.

     Net cash used in operating activities was $829,814 and $1,238,003 for the
     three months ended March 31, 2003 and 2002. The decrease in 2003 from 2002
     in cash used in operating activities of $408,189 was primarily due to (1) a
     decrease in net loss of $1,647,849, (2) an increase in non-cash interest
     expense of $358,638, (2) an increase in accounts receivable of $397,038,
     (3) an increase in accrued expenses of $606,264, and (4) an increase in
     customer deposits of $309,581. These changes were partially offset by (1) a
     decrease in fees payable - related parties of $934,131, (2) a decrease in
     accounts payable - track related of $1,443,230, (3) an increase in
     restricted cash of $344,837, and (4) a decrease in accrued compensation of
     $358,504.

     Net cash used in investing activities was $97,065 and $34,677 for the three
     months ended March 31, 2003 and 2002, respectively. The increase in 2003
     from 2002 in cash used in investing activities of $62,388 was primarily due
     to an increase in purchases of property and equipment offset by a decrease
     in investing related restricted cash.

     Net cash provided by financing activities was $1,503,164 and $750,000 for
     the three months ended March 31, 2003 and 2002, respectively. The increase
     of $753,164 in 2003 from 2002 in cash provided by financing activities was
     primarily due to proceeds from a second notes payable of $2,000,000 plus
     proceeds from the exercise of stock options and warrants of $253,164 offset
     by payment of a prior note payable of $750,000.

ITEM 3.       CONTROLS AND PROCEDURES

             (a)  Evaluation of Disclosure Controls and Procedures

                  Disclosure controls and procedures are designed to ensure that
                  information required to be disclosed in the reports filed or
                  submitted under the Exchange Act is recorded, processed,
                  summarized and reported, within the time periods specified in
                  the SEC's rules and forms. Disclosure controls and procedures
                  include, without limitation, controls and procedures designed
                  to ensure that information required to be disclosed in the
                  reports filed under the Exchange Act is accumulated and
                  communicated to management, including the Chief Executive
                  Officer and Chief


                                       21
<PAGE>

                  Financial Officer, as appropriate, to allow timely decisions
                  regarding required disclosure.

                  Within the 90 days prior to the filing of this report, the
                  Company carried out an evaluation, under the supervision and
                  with the participation of the Company's management, including
                  the Company's Chief Executive Officer and Chief Financial
                  Officer, of the effectiveness of the design and operation of
                  the Company's disclosure controls and procedures. Based upon
                  and as of the date of that evaluation, the Chief Executive
                  Officer and Chief Financial Officer concluded that the
                  Company's disclosure controls and procedures are effective to
                  ensure that the information required to be disclosed in the
                  reports the Company files and submits under the exchange act
                  is recorded, processed, summarized and reported as and when
                  required.

              (b) Changes in Internal Controls

                  There were no changes in the Company's internal controls or in
                  other factors that could have significantly affected those
                  controls subsequent to the date of the Company's most recent
                  evaluation.

PART II.      OTHER INFORMATION

ITEM 1.       LEGAL PROCEEDINGS

     Youbet currently and from time to time is involved in litigations arising
     in the ordinary course of its business. Youbet can give no assurance that
     the resolution of any particular claim or proceeding would not have a
     material adverse effect on its results of operations, cash flows, or
     financial condition.

 ITEM 2.      CHANGES IN SECURITIES AND USE OF PROCEEDS

     All securities described below were issued under an exemption to the
     registration requirements of the Securities Act of 1933, as amended,
     pursuant to Section 4(2) thereof and Regulation D.

     ISSUANCE OF STOCK OPTIONS

         During the three months ended March 31, 2003, the Company granted
various stock options, as follows:

               o    Stock options were granted to employees to purchase 150,700
                    shares of common stock at exercise prices ranging from $0.77
                    to $1.90, the fair market value at the date of grant. These
                    options vest over four years, and are exercisable for a
                    period of five years.

               o    Stock options were granted to a non-employee Director to
                    purchase 40,000 shares of common stock at an exercise price
                    of $0.74, the fair market value on the date of the grant.
                    These options vest ratably over a 12 month period and are
                    exercisable for a period of ten years.


                                       22
<PAGE>

     ISSUANCE OF WARRANTS

         During the three months ended March 31, 2003, in connection with the
         Second Notes, the Company issued warrants to the lenders to purchase up
         to 1,334,000 shares of common stock at an exercise price of $0.8075 per
         share (See Note 6).

ITEM 3.       DEFAULTS UPON SENIOR SECURITIES

     None.

ITEM 4.       SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

     No matters were submitted to a vote of Youbet.com's stockholders during the
     fiscal quarter ended March 31, 2003.

ITEM 5.       OTHER INFORMATION

     The Company received a letter from the Nasdaq Listing Qualifications Panel
     (the "Panel") stating their decision dated February 19, 2003 whereby the
     Panel determined to continue the listing of Youbet.com, Inc. on The Nasdaq
     SmallCap Market. Specifically, on or before May 20, 2003, the Company was
     required to evidence a closing bid price of at least $1.00 per share and,
     immediately thereafter, a closing bid price of at least $1.00 per share for
     a minimum of ten consecutive trading days. As of the close of business on
     March 31, 2003, the Company demonstrated a closing bid price of $1.75 per
     share, and had evidenced a closing bid price of at least $1.00 per share
     for 32 consecutive trading days. Accordingly, the Panel determined to
     continue the listing of the Company's securities on The Nasdaq SmallCap
     Market. The hearing file has been closed.

ITEM 6.       EXHIBITS AND REPORTS ON FORM 8-K

     (a) Exhibits

         Exhibit 99.1:    Certifications Pursuant to Section 906 of the
         Sarbanes-Oxley Act of 2002

     (b) Reports on Form 8-K

         Form 8-K dated March 6, 2003 relating to the $2,000,000 Private
         Placement Financing dated February 11, 2003


                                       23
<PAGE>

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange
Act of 1934, the registrant has duly caused this report to be signed on its
behalf by the undersigned thereunto duly authorized,

                                    YOUBET.COM, INC.

     May 15, 2003        By:  /s/   CHARLES F. CHAMPION
                                    ------------------------------------------
                                    Charles F. Champion
                                    President and Chief Executive Officer

     May 15, 2003        By:  /s/   GARY W. SPROULE
                                    ------------------------------------------
                                    Gary W. Sproule
                                    Chief Financial Officer


                                       24
<PAGE>

CERTIFICATIONS

        I, Charles Champion, certify that

         1.   I have reviewed this quarterly report on Form 10-QSB of
              Youbet.com, Inc.;

         2.   Based on my knowledge, this quarterly report does not contain any
              untrue statement of a material fact or omit to state a material
              fact necessary to make the statements made, in light of the
              circumstances under which such statements were made, not
              misleading with respect to the period covered by this quarterly
              report;

         3.   Based on my knowledge, the financial statements, and other
              financial information included in this quarterly report, fairly
              present in all material respects the financial condition, results
              of operations and cash flows of the registrant as of, and for, the
              periods presented in this quarterly report.

         4.   The registrant's other certifying officer and I are responsible
              for establishing and maintaining disclosure controls and
              procedures (as defined in Exchange Act Rules 13a-14 and 15d-14)
              for the registrant and we have:

               a.   designed such disclosure controls and procedures to ensure
                    that material information relating to the registrant,
                    including its consolidated subsidiaries, is made known to us
                    by others within those entities, particularly during the
                    period in which this quarterly report is being prepared;

               b.   evaluated the effectiveness of the registrant's disclosure
                    controls and procedures as of a date within 90 days prior to
                    the filing date of this quarterly report (the "Evaluation
                    Date"); and

               c.   presented in this quarterly report our conclusions about the
                    effectiveness of the disclosure controls and procedures
                    based on our evaluation as of the Evaluation Date;

         5.   The registrant's other certifying officer and I have disclosed,
              based on our most recent evaluation, to the registrant's auditors
              and the audit committee of registrant's board of directors (or
              persons performing the equivalent function):

               d.   all significant deficiencies in the design or operation of
                    internal controls which could adversely affect the
                    registrant's ability to record, process, summarize and
                    report financial data and have identified for the
                    registrant's auditors any material weaknesses in internal
                    controls; and

               e.   any fraud, whether or not material, that involves management
                    or other employees who have a significant role in the
                    registrant's internal controls; and

         6.   The registrant's other certifying officer and I have indicated in
              this quarterly report whether or not there were significant
              changes in internal controls or in other factors that could
              significantly affect internal controls subsequent to the date of
              our most recent evaluation, including any corrective actions with
              regard to significant deficiencies and material weaknesses.

                    May 15, 2003         By:  /s/   CHARLES CHAMPION
                                                    ----------------------------
                                                    Charles Champion
                                                    Chief Executive Officer,
                                                    President


                                       25
<PAGE>

CERTIFICATIONS

        I, Gary Sproule, certify that

         1.   I have reviewed this quarterly report on Form 10-QSB of
              Youbet.com, Inc.;

         2.   Based on my knowledge, this quarterly report does not contain any
              untrue statement of a material fact or omit to state a material
              fact necessary to make the statements made, in light of the
              circumstances under which such statements were made, not
              misleading with respect to the period covered by this quarterly
              report;

         3.   Based on my knowledge, the financial statements, and other
              financial information included in this quarterly report, fairly
              present in all material respects the financial condition, results
              of operations and cash flows of the registrant as of, and for, the
              periods presented in this quarterly report.

         4.   The registrant's other certifying officer and I are responsible
              for establishing and maintaining disclosure controls and
              procedures (as defined in Exchange Act Rules 13a-14 and 15d-14)
              for the registrant and we have:

               f.   designed such disclosure controls and procedures to ensure
                    that material information relating to the registrant,
                    including its consolidated subsidiaries, is made known to us
                    by others within those entities, particularly during the
                    period in which this quarterly report is being prepared;

               g.   evaluated the effectiveness of the registrant's disclosure
                    controls and procedures as of a date within 90 days prior to
                    the filing date of this quarterly report (the "Evaluation
                    Date"); and

               h.   presented in this quarterly report our conclusions about the
                    effectiveness of the disclosure controls and procedures
                    based on our evaluation as of the Evaluation Date;

         5.   The registrant's other certifying officer and I have disclosed,
              based on our most recent evaluation, to the registrant's auditors
              and the audit committee of registrant's board of directors (or
              persons performing the equivalent function):

               i.   all significant deficiencies in the design or operation of
                    internal controls which could adversely affect the
                    registrant's ability to record, process, summarize and
                    report financial data and have identified for the
                    registrant's auditors any material weaknesses in internal
                    controls; and

               j.   any fraud, whether or not material, that involves management
                    or other employees who have a significant role in the
                    registrant's internal controls; and

         6.   The registrant's other certifying officer and I have indicated in
              this quarterly report whether or not there were significant
              changes in internal controls or in other factors that could
              significantly affect internal controls subsequent to the date of
              our most recent evaluation, including any corrective actions with
              regard to significant deficiencies and material weaknesses.

                         May 15, 2003    By:  /s/   GARY SPROULE
                                                    ----------------------------
                                                    Gary Sproule
                                                    Chief Financial Officer


                                       26