##### Table of Contents



UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C. 20549
 FORM 10-Q
 QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
 FOR THE QUARTERLY PERIOD ENDED
MARCH 31, 2008
 Commission File Number: 0-26015
 YOUBET.COM, INC.
  Delaware
    
    95-4627253(State or other jurisdiction
    
    (I.R.S. Employerof incorporation or organization)
    
    Identification No.)
 5901 De Soto Avenue
Woodland Hills, California 91367
 (818) 668-2100
 þ o
 Rule 12b-2
 Large accelerated filer o
    
    Accelerated filer þ
    
    Non-accelerated filer o
    
    Smaller reporting company o(Do not check if a smaller reporting company)
 o þ




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##### 



YOUBET.COM, INC.
INDEX TO FORM 10-Q
FOR THE QUARTER ENDED
MARCH 31, 2008
 PagePART I. FINANCIAL INFORMATIONItem 1. Condensed consolidated financial statements:Balance sheets as of March 31, 2008 (unaudited) and December 31, 2007
    
    
    2Statements of operations for the three months ended March 31, 2008 and 2007 (unaudited)
    
    
    3Statements of cash flows for the three months ended March 31, 2008 and 2007 (unaudited)
    
    
    4Notes to unaudited financial statements
    
    
    5Item 2. Managements discussion and analysis of financial condition and results of operations
    
    
    14Item 3. Quantitative and qualitative disclosures about market risk
    
    
    17Item 4. Controls and procedures
    
    
    18PART II. OTHER INFORMATIONItem 1. Legal proceedings
    
    
    18Item 1A. Risk factors
    
    
    18Item 2. Unregistered sales of equity securities and use of proceeds
    
    
    18Item 3. Defaults upon senior securities
    
    
    18Item 4. Submission of matters to a vote of security holders
    
    
    18Item 5. Other information
    
    
    18Item 6. Exhibits
    
    
    19Exhibit 31.1Exhibit 31.2Exhibit 32.1
  Preliminary Note




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Part I. Financial Information
 
 Item 1. Condensed Consolidated Financial Statements
 YOUBET.COM, INC. AND SUBSIDIARIES
 
 CONDENSED CONSOLIDATED BALANCE SHEETS
 (in thousands, except share amounts)
 March 31,
    
    
    December 31,2008
    
    
    2007(unaudited)ASSETSCurrent assetsCash and cash equivalents
    
    $
    9,010
    
    
    $
    6,551Current portion of restricted cash
    
    
    7,666
    
    
    
    8,635Accounts receivable, net
    
    
    5,065
    
    
    
    7,314Inventories
    
    
    2,063
    
    
    
    2,085Prepaid expenses and other current assets
    
    
    1,111
    
    
    
    1,41724,915
    
    
    
    26,002Property and equipment, net
    
    
    23,682
    
    
    
    24,664Intangibles assets other than goodwill, net
    
    
    6,319
    
    
    
    6,505Goodwill
    
    
    6,859
    
    
    
    6,859Other assets
    
    
    994
    
    
    
    1,020$
    62,769
    
    
    $
    65,050LIABILITIES AND STOCKHOLDERS EQUITYCurrent liabilitiesCurrent portion of long-term debt
    
    $
    13,417
    
    
    $
    10,390Trade payables
    
    
    10,365
    
    
    
    10,028Accrued expenses
    
    
    9,148
    
    
    
    10,302Customer deposits
    
    
    7,115
    
    
    
    8,326Deferred revenues
    
    
    422
    
    
    
    21240,467
    
    
    
    39,258Long-term debt, net of current portion
    
    
    333
    
    
    
    4,76740,800
    
    
    
    44,025Stockholders equityPreferred stock, $0.001 par value, authorized 1,000,000 shares, none
outstandingCommon stock, $0.001 par value, authorized 100,000,000 shares,
42,562,805 and 42,562,805 shares issued
    
    
    43
    
    
    
    43Additional paid-in-capital
    
    
    134,461
    
    
    
    134,286Accumulated other comprehensive loss
    
    
    (61
    )
    
    
    (56
    )Deficit
    
    
    (110,155
    )
    
    
    (110,929
    )Less treasury stock, 1,043,781 shares at cost
    
    
    (2,319
    )
    
    
    (2,319
    )21,969
    
    
    
    21,025$
    62,769
    
    
    $
    65,050
 The accompanying notes are an integral part of these condensed consolidated financial statements.
  2




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YOUBET.COM, INC. AND SUBSIDIARIES
 
 CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
 (UNAUDITED)
 (in thousands, except per share amounts)
 Three Months EndedMarch 31,2008
    
    
    2007RevenuesCommissions
    
    $
    18,422
    
    
    $
    22,372Contract revenues
    
    
    5,171
    
    
    
    5,185Equipment sales
    
    
    164
    
    
    
    120Other
    
    
    754
    
    
    
    91524,511
    
    
    
    28,592Costs and expensesTrack fees
    
    
    8,277
    
    
    
    10,261Licensing fees
    
    
    2,098
    
    
    
    2,823Contract costs
    
    
    3,536
    
    
    
    3,760Equipment costs
    
    
    88
    
    
    
    88Network costs
    
    
    925
    
    
    
    1,20314,924
    
    
    
    18,135Gross profit
    
    
    9,587
    
    
    
    10,457Operating expensesGeneral and administrative
    
    
    4,198
    
    
    
    5,004Sales and marketing
    
    
    1,243
    
    
    
    2,141Research and development
    
    
    862
    
    
    
    865Depreciation and amortization, including intangibles
    
    
    1,806
    
    
    
    1,6188,109
    
    
    
    9,628Income from continuing operations
    
    
    1,478
    
    
    
    829Interest income
    
    
    69
    
    
    
    199Interest expense
    
    
    (354
    )
    
    
    (457
    )Other
    
    
    9
    
    
    
    11Income from continuing operations  before income tax (benefit)
    
    
    1,202
    
    
    
    582Income tax (benefit)
    
    
    19
    
    
    
    (230
    )Income from continuing operations
    
    
    1,183
    
    
    
    812Discontinued operationsIncome
(loss) from discontinued operations, without tax effect
    
    
    (409
    )
    
    
    774Net income
    
    $
    774
    
    
    $
    1,586Basic income (loss) per shareIncome from continuing operations
    
    $
    0.03
    
    
    $
    0.02Income (loss) from discontinued operations
    
    
    (0.01
    )
    
    
    0.02Net income per common share
    
    
    0.02
    
    
    
    0.04Diluted income (loss) per shareIncome from continuing operations
    
    $
    0.03
    
    
    $
    0.02Income (loss) from discontinued operations
    
    
    (0.01
    )
    
    
    0.02Net income per common share
    
    
    0.02
    
    
    
    0.04Weighted average shares outstandingBasic
    
    
    41,519,024
    
    
    
    41,694,939Diluted
    
    
    41,906,975
    
    
    
    42,988,619
 The accompanying notes are an integral part of these condensed consolidated financial statements.
  3




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YOUBET.COM, INC. AND SUBSIDIARIES
 
 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
 (UNAUDITED)
 (in thousands)
 Three Months EndedMarch 31,2008
    
    
    2007(in thousands)Operating activitiesNet income
    
    $
    774
    
    
    $
    1,586Income (loss) from discontinued operations
    
    
    (409
    )
    
    
    774Income from continuing operations
    
    
    1,183
    
    
    
    812Adjustments to reconcile net income to net cash
provided by operating activitiesDepreciation and amortization of property
    
    
    1,621
    
    
    
    1,432Amortization of intangibles
    
    
    185
    
    
    
    185Stock-based compensation
    
    
    175
    
    
    
    175Provision for doubtful accounts receivables
    
    
    277
    
    
    
    280Increase in operating (assets) and liabilities
    
    
    1,233
    
    
    
    (1,866
    )Net cash provided by operating activities
    
    
    4,674
    
    
    
    1,018Investing activitiesPurchase of property and equipment
    
    
    (304
    )
    
    
    (1,558
    )Cash paid for United Tote Company (make-whole)
    
    
    
    
    
    
    (4,473
    )Increase in restricted cash (other than Players TrustSM)
    
    
    (48
    )Decrease in restricted cash (other than Players TrustSM)
    
    
    
    
    
    
    106Other
    
    
    34Net cash used in investing activities
    
    
    (318
    )
    
    
    (5,925
    )Financing activitiesProceeds from exercise of stock options and warrants
    
    
    
    
    
    
    276Proceeds from debt
    
    
    308
    
    
    
    1,081Repayment of debt
    
    
    (2,186
    )
    
    
    (2,653
    )Other
    
    
    
    
    
    
    (88
    )Net cash used in financing activities
    
    
    (1,878
    )
    
    
    (1,384
    )Net cash provided by (used in) discontinued operationsNet cash provided by (used in) operating activities
    
    
    (14
    )
    
    
    930Foreign currency translation adjustments
    
    
    (5
    )Net increase (decrease) in cash and cash equivalents
    
    
    2,459
    
    
    
    (5,361
    )Cash and cash equivalents at the beginning of period
    
    
    6,551
    
    
    
    21,051Cash and cash equivalents at the end of period
    
    $
    9,010
    
    
    $
    15,690
 The accompanying notes are an integral part of these condensed consolidated financial statements.
  4




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YOUBET.COM, INC. AND SUBSIDIARIES
 
 NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
 THREE MONTHS ENDED MARCH 31, 2008
 Note 1: Basis of Presentation
    Note 2: Earnings Per Share
  Three Months Ended March 31,2008
    
    
    2007Weighted
    
    
    
    
    
    
    
    
    
    
    WeightedAverage
    
    
    
    
    
    
    
    
    
    
    AverageNet Income
    
    
    Shares
    
    
    EPS
    
    
    Net Income
    
    
    Shares
    
    
    EPSEPS  Basic
    
    $
    1,183
    
    
    
    41,519
    
    
    $
    0.03
    
    
    $
    812
    
    
    
    41,695
    
    
    $
    0.02Effect of dilutive securities
    
    
    
    
    
    
    388
    
    
    
    
    
    
    
    
    
    
    
    1,295EPS  Diluted
    
    $
    1,183
    
    
    
    41,907
    
    
    $
    0.03
    
    
    $
    812
    
    
    
    42,990
    
    
    $
    0.02
  5




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Note 3: Detail of Selected Balance Sheet Accounts
 March 31,
    
    
    December 31,2008
    
    
    2007(unaudited)(in thousands)Accounts receivable, netTrack receivables
    
    $
    6,182
    
    
    $
    7,964Player receivable
    
    
    46
    
    
    
    60Other
    
    
    287
    
    
    
    2,6966,515
    
    
    
    10,720Less allowance for doubtful accounts
    
    
    (1,450
    )
    
    
    (3,406
    )$
    5,065
    
    
    $
    7,314InventoryTotalizator components
    
    $
    1,451
    
    
    $
    1,477Ticket stock
    
    
    612
    
    
    
    608$
    2,063
    
    
    $
    2,085Property and equipment, netPari-mutual equipment
    
    $
    22,730
    
    
    $
    21,966Computer equipment
    
    
    14,531
    
    
    
    14,520Computer equpment under capital lease
    
    
    1,605
    
    
    
    1,605Software
    
    
    4,198
    
    
    
    4,347Leasehold improvements
    
    
    3,201
    
    
    
    3,201Office furniture, fixtures and equipment
    
    
    639
    
    
    
    66346,904
    
    
    
    46,302Less accumulated depreciation
    
    
    (23,222
    )
    
    
    (21,638
    )$
    23,682
    
    
    $
    24,664Intangibles assets other than goodwill, netIntangibles, other than goodwill
    
    $
    7,925
    
    
    $
    10,274Less accumulated amortization
    
    
    (1,606
    )
    
    
    (3,769
    )$
    6,319
    
    
    $
    6,505
  6




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Note 4: Debt
  March 31,
    
    
    December 31,2008
    
    
    2007(unaudited)(in thousands)Promissory note
    
    $
    3,200
    
    
    $
    3,200Bank term loan
    
    
    9,250
    
    
    
    10,958Capital lease obligations and other
    
    
    1,300
    
    
    
    99913,750
    
    
    
    15,157Less: short-term debt and current portion of long-term debt
    
    
    13,417
    
    
    
    10,390Long-term debt, less current maturities
    
    $
    333
    
    
    $
    4,767
  
    
    
    change the maturity date to January 31, 2009;
    
    eliminate the Companys option to have our interest rate determined by reference to
LIBOR;
    
    provide for additional payments on principal of $1.0 million each on the date of the
amendment, July 1, 2008 and September 1, 2008, respectively, and $0.5 million on December 1,
2008;
    
    set the prime rate margin at 1.50%;
    
    modify the definition of EBITDA and the adjustments to EBITDA for purposes of the credit
facility; and
    
    amend the minimum EBITDA level and leverage ratio the Company is required to maintain.
    7




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Note 5: Income Taxes
        Note 6: Litigation and Contingencies
   8




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Note 7: Stockholders Equity
  WeightedAverageStock
    
    
    ExerciseOptions
    
    
    Price(in thousands)Balance at December 31, 2007
    
    
    4,717
    
    
    $
    2.70Options granted
    
    
    
    
    
    
    Options exercised
    
    
    
    
    
    
    Options cancelled
    
    
    (585
    )
    
    
    3.62Balance at March 31, 2008
    
    
    4,132
    
    
    
    2.57
  Options Outstanding
    
    

Options
ExercisableWeightedWeighted
    
    
    Average
    
    
    
    
    
    
    WeightedAverage
    
    
    Remaining
    
    
    
    
    
    
    AverageNumber of Shares
    
    
    Exercise
    
    
    Contractual
    
    
    Number of Shares
    
    
    ExerciseRange of Exercise Prices:
    
    (in thousands)
    
    
    Price
    
    
    Life (years)
    
    
    (in thousands)
    
    
    Price$0.49 to $1.00
    
    
    870
    
    
    $
    0.53
    
    
    
    4.17
    
    
    
    870
    
    
    $
    0.53$2.32 to $2.99
    
    
    1,804
    
    
    
    2.39
    
    
    
    5.62
    
    
    
    1,455
    
    
    
    2.34$3.04 to $3.91
    
    
    767
    
    
    
    3.52
    
    
    
    6.77
    
    
    
    381
    
    
    
    3.34$4.00 to $4.91
    
    
    578
    
    
    
    4.40
    
    
    
    6.20
    
    
    
    487
    
    
    
    4.40$5.00 to $6.19
    
    
    113
    
    
    
    5.30
    
    
    
    7.15
    
    
    
    84
    
    
    
    5.32Total at March 31, 2008
    
    
    4,132
    
    
    
    2.57
    
    
    
    5.65
    
    
    
    3,277
    
    
    
    2.36
  9




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Note 8: United Tote Acquisition
     
 
    
    $9.75 million in cash;
    
    Three unsecured promissory notes with an aggregate principal amount of $10.2 million; and
    
    2,181,818 shares of Youbet common stock that were subject to a make-whole provision
which valued such shares at $5.50 per share.
     10




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Note 9: Segment Reporting
  Three Months EndedMarch 31,2008
    
    
    2007RevenueAdvance deposit wagering segment
    
    $
    19,176
    
    
    $
    23,287Totalizator services segment
    
    
    5,335
    
    
    
    5,305$
    24,511
    
    
    $
    28,592Revenue by Geographic AreaUnited States
    
    $
    24,053
    
    
    $
    28,183International
    
    
    458
    
    
    
    409$
    24,511
    
    
    $
    28,592Reconciliation to Income Before Income Tax Expense or BenefitIncome (loss) from operationsAdvance deposit wagering segment
    
    $
    2,296
    
    
    $
    2,055Totalizator service segment
    
    
    (818
    )
    
    
    (1,226
    )1,478
    
    
    
    829Interest income
    
    
    69
    
    
    
    199Interest expense
    
    
    (354
    )
    
    
    (457
    )Other
    
    
    9
    
    
    
    11Income (loss) before income taxes from continuing operations
    
    
    1,202
    
    
    
    582Income (loss) before income taxes from discontinued operations
    
    
    (409
    )
    
    
    774Income (loss) before income taxes
    
    $
    793
    
    
    $
    1,356Capital Spending,includes capital leasesAdvance deposit wagering segment
    
    $
    721
    
    
    $
    456Totalizator services segment
    
    
    54
    
    
    
    1,102$
    775
    
    
    $
    1,558Depreciation and AmortizationAdvance deposit wagering segment
    
    $
    438
    
    
    $
    452Totalizator services segment
    
    
    1,368
    
    
    
    1,166$
    1,806
    
    
    $
    1,618Total AssetsAdvance deposit wagering segment
    
    $
    23,172
    
    
    $
    43,866Totalizator services segment
    
    
    39,597
    
    
    
    55,482$
    62,769
    
    
    $
    99,348
  11




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Note 10: Impairment of Intangibles and Goodwill
 
   Note 11: Discontinued Operations
   
    
    repurchase by the Company from the buyer of 13,953 shares of the Companys common
stock with a value as of the closing date of $17,022 (13,953 shares@ $1.22/sh);
 
    
    an amount of $108,000 was attributed to the buyer cancelling all rights of the buyer to
receive any shares of the Companys common stock pursuant to the original purchase
agreement; and
 
    
    payment in cash of $77,478.
  Sales
    
    $
    249Cost of services
    
    
    78Gross profit
    
    
    171Operating expenses
    
    
    225Net loss
    
    $
    (54
    )
 
  12




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2008
    
    
    2007Revenues
    
    $
    46
    
    
    $
    6,474Cost of revenues
    
    
    67
    
    
    
    4,707Gross profit
    
    
    (21
    )
    
    
    1,767Operating expenses
    
    
    388
    
    
    
    939Net income (loss)
    
    $
    (409
    )
    
    $
    828
  13




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Item 2. Managements discussion and analysis of financial condition and results of operations
 Forward-looking statements
  Overview
  www.youbet.com
      14




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Critical accounting estimates and policies
  Recent Accounting Pronouncements
 Fair Value Measurements. The Fair Value Option for Financial
Assets and Financial Liabilities  including an amendment of FAS 115.
  Business Combinations. 
  Noncontrolling Interests in
Consolidated Financial Statements-An Amendment of ARB No. 51. 
 Disclosures About Derivative Instruments and Hedging
Activities  an amendment of FASB Statement No. 133
 Results of continuing operations for the three months ended March 31, 2008 compared to the three
months ended March 31, 2007
 Revenues
   15




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Operating expenses
 Track fees
 Licensing fees
 Contract costs
 Network operations
 Research and development
 Sales and marketing
 General and administrative
 Depreciation and amortization
 Interest expense (income)
  16




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Liquidity and capital resources
         
 Item 3. Quantitative and qualitative disclosures about market risk
   17




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Item 4. Controls and procedures
   
 Part II. Other information
 
 Item 1. Legal proceedings
  
 Item 1A. Risk factors
  
 Item 2. Unregistered sales of equity securities and use of proceeds
  
 Item 3. Defaults upon senior securities
  
 Item 4. Submission of matters to a vote of security holders
  
 Item 5. Other information
   18




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Item 6. Exhibits
 3.1
    
    
    Certificate of Incorporation of Youbet.com, as amended (incorporated by
reference to Exhibit 3.1 to Youbets Form 10-Q SB for the quarter ended
September 30, 2003).3.2
    
    
    Amended and Restated Bylaws of Youbet.com, as amended (incorporated by reference
to Exhibit 3.1 to Youbets Current Report on Form 8-K filed April 20, 2007).10.1
    
    
    Credit Agreement, dated as of July 27, 2006, by and among Youbet.com, Inc. and
United Tote Company, as borrowers, the lenders signatory thereto, as lenders,
and Wells Fargo Foothill, Inc., as arranger and administrative agent
(incorporated by reference to Exhibit 10.1 to Youbets Current Report on Form
8-K filed July 28, 2006).10.2
    
    
    First Amendment to Credit Agreement and Waiver, dated as of March 14, 2007, by
and among Youbet.com, Inc. and United Tote Company, as borrowers, and Wells
Fargo Foothill, Inc., as arranger and agent (incorporated by reference to
Exhibit 10.16 to Youbets Form 10-K for the year ended December 31, 2006).10.3
    
    
    Consent to Stock Repurchase, dated April 10, 2007, between Youbet.com, Inc., as
administrative borrower, and Wells Fargo Foothill, Inc., as administrative agent
(incorporated by reference to Exhibit 10.3 to Youbets Current Report on Form
8-K filed April 11, 2007).10.4
    
    
    Waiver of Default Side Letter Agreement, dated as of October 30, 2007, by and
among Youbet.com, Inc. and United Tote Company, Inc., as borrowers, and Wells
Fargo Foothill, Inc., as administrative agent (incorporated by reference to
Exhibit 10.5 to Youbets Current Report on Form 8-K filed November 5, 2007).10.5
    
    
    Consent Letter, dated as of February 13, 2008, by and among Youbet.com, Inc. and
United Tote Company, Inc., as borrowers, and Wells Fargo Foothill, Inc., as agent
and as lender (incorporated by reference to Youbets Current Report on Form 8-K
filed February 13, 2008).10.6
    
    
    Second Amendment to Credit Agreement and Acknowledgement of Guarantors, dated as
of March 28, 2008, by and among Youbet.com, Inc. and United Tote Company, Inc., as
borrowers, and Wells Fargo Foothill, Inc., as arranger and agent, and
acknowledged by IRG US Holdings Corp., IRG Services, Inc. and UT Gaming, Inc.,
as guarantors (incorporated by reference to Exhibit 10.23 to Youbets Form 10-K
for the year ended December 31, 2007).31.1
    
    
    Certification of President and Chief Executive Officer Pursuant to Rule
13a-14(a) of the Securities Exchange Act of 1934.31.2
    
    
    Certification of Chief Financial Officer and Treasurer Pursuant to Rule
13a-14(a) of the Securities Exchange Act of 1934.32.1
    
    
    Certification Pursuant to Rule 13a-14(b) of the Securities Exchange Act of 1934.
  19




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SIGNATURES
  YOUBET.COM, INC.May
8, 2008
    By:
    /s/ Michael BrodskyMichael BrodskyChief Executive OfficerMay
8, 2008
    By:
    /s/ James A. BurkJames A. BurkChief Financial Officer  20




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EXHIBIT INDEX
 ExhibitNo.
    
    Description3.1
    
    
    Certificate of Incorporation of Youbet.com, as amended (incorporated by
reference to Exhibit 3.1 to Youbets Form 10-Q SB for the quarter ended
September 30, 2003).3.2
    
    
    Amended and Restated Bylaws of Youbet.com, as amended (incorporated by reference
to Exhibit 3.1 to Youbets Current Report on Form 8-K filed April 20, 2007).10.1
    
    
    Credit Agreement, dated as of July 27, 2006, by and among Youbet.com, Inc. and
United Tote Company, as borrowers, the lenders signatory thereto, as lenders,
and Wells Fargo Foothill, Inc., as arranger and administrative agent
(incorporated by reference to Exhibit 10.1 to Youbets Current Report on Form
8-K filed July 28, 2006).10.2
    
    
    First Amendment to Credit Agreement and Waiver, dated as of March 14, 2007, by
and among Youbet.com, Inc. and United Tote Company, as borrowers, and Wells
Fargo Foothill, Inc., as arranger and agent (incorporated by reference to
Exhibit 10.16 to Youbets Form 10-K for the year ended December 31, 2006).10.3
    
    
    Consent to Stock Repurchase, dated April 10, 2007, between Youbet.com, Inc., as
administrative borrower, and Wells Fargo Foothill, Inc., as administrative agent
(incorporated by reference to Exhibit 10.3 to Youbets Current Report on Form
8-K filed April 11, 2007).10.4
    
    
    Waiver of Default Side Letter Agreement, dated as of October 30, 2007, by and
among Youbet.com, Inc. and United Tote Company, Inc., as borrowers, and Wells
Fargo Foothill, Inc., as administrative agent (incorporated by reference to
Exhibit 10.5 to Youbets Current Report on Form 8-K filed November 5, 2007).10.5
    
    
    Consent Letter, dated as of February 13, 2008, by and among Youbet.com, Inc. and
United Tote Company, Inc., as borrowers, and Wells Fargo Foothill, Inc., as agent
and as lender (incorporated by reference to Youbets Current Report on Form 8-K
filed February 13, 2008).10.6
    
    
    Second Amendment to Credit Agreement and Acknowledgement of Guarantors, dated as
of March 28, 2008, by and among Youbet.com, Inc. and United Tote Company, Inc., as
borrowers, and Wells Fargo Foothill, Inc., as arranger and agent, and
acknowledged by IRG US Holdings Corp., IRG Services, Inc. and UT Gaming, Inc.,
as guarantors (incorporated by reference to Exhibit 10.23 to Youbets Form 10-K
for the year ended December 31, 2007).31.1
    
    
    Certification of President and Chief Executive Officer Pursuant to Rule
13a-14(a) of the Securities Exchange Act of 1934.31.2
    
    
    Certification of Chief Financial Officer and Treasurer Pursuant to Rule
13a-14(a) of the Securities Exchange Act of 1934.32.1
    
    
    Certification Pursuant to Rule 13a-14(b) of the Securities Exchange Act of 1934.
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