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                                 UNITED STATES
                      SECURITIES AND EXCHANGE COMMISSION
                            WASHINGTON, D.C. 20549

                                   FORM 10-K

(Mark One)

[X]  Annual report pursuant to Section 13 OR 15(D) of the Securities
     Exchange Act of 1934

     For the fiscal year ended DECEMBER 31, 1999

                                      OR

[    ]  Transistion  report  pursuant  to Section 13 or 15(D) of the  Securities
     Exchange Act of 1934 (No Fee Requried)

     For the transition period from ________ to _______

                       Commission File Number: 0-08962
                       -------------------------------

                        KENILWORTH SYSTEMS CORPORATION
                        ------------------------------
            (Exact name of registrant as specified in its charter)

                New York                        13-2610105
                --------                        ----------
     (State of incorporation)       I.R.S. employer identification no.)

  54 Kenilworth Road, Mineola, New York            11501
  -------------------------------------            -----
(Address of principal executive offices)        (Zip Code)

                              (516) 741-1352
                              --------------
           (Registrant's telephone number, including area code)

Securities registered pursuant to section 12(b) of the Act:

                                  Name of each exchange on
        Title of each class           which registered
        -------------------       ------------------------
              NONE                  OTC BULLETIN BOARD

Securities registered pursuant to section 12(g) of the Act:

                              (Title of class)
                              ----------------
                   COMMON STOCK, PAR VALUE $.01 PER SHARE


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Indicate by check mark whether the Registrant (1) has filed all reports required
to be filed by section 13 or 15(d) of the Securities 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 [ ]

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
Of Regulation S-K (Section 229.405 of this chapter) is not contained herein, and
will not be contained, to the best of the registrant's knowledge, in definitive
proxy or information statements incorporated by reference in Part III of this
Form 10-K or any amendment to this Form 10-K. [X]

Indicate by check mark whether the Registrant has filed all documents and
reports required to be filed by Section 12, 13 or 14(d) of the Securities
Exchange Act of 1934 subsequent to the distribution of securities under a plan
confirmed by court. Yes [X } No [ ]

The number of shares outstanding of the company's common stock as of December
31, 1999 totaled 62,289,018 shares.

The aggregate market value of the voting stock held by non-affiliates
(49,989,687 shares) of the Company on March 5, 2000 was $6,998,556. The price at
which the common stock sold on the aforesaid date was $.14.

The report includes audited amended financials for the period ended December 31,
1998 (See page 22 for corrections).

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                                  PART I

Item I - Description of Business
--------------------------------

THE COMPANY:

     Kenilworth Systems Corporation (hereinafter called the "Company" or
"Kenilworth" was incorporated on April 25, 1968 under the laws of the State of
New York.

BUSINESS

The Company currently is engaged in the development, manufacturing, marketing,
and operation of "Roulabette", a system that allows casino patrons to play along
with live table games in progress, via closed circuit television, on Roulabette
terminals located within the casino confines. The Roulabette terminals are
similar to slot machines. They have a television screen for viewing the live
action from the table games, and a separate touch screen to place the wager. For
the first time casino patrons will be able to play along and participate and
wager as little as $.25 on an actual in-progress casino table game - Roulette,
Craps, Baccarat, and Blackjack. The Roulabette terminals accept bills in all
denominations, up to $100, and pay winnings by issuing bar code receipts that
are cashed at the casino cage.

     Ultimately the Company will propose to arrange to broadcast the closed
circuit casino table game action throughout the United States and the rest of
the industrialized world, via digital satellite direct TV programming. This will
permit individuals all over the world to view the live action TV broadcast on
their television sets, and place wagers with their Personal Computers (PC's), or
their TV set with a "Set-Top Box" any time, day or night. To provide 24 hour
live casino play, the broadcasts will originate, at different times, from
casinos located in Atlantic City, New Jersey, Las Vegas, Nevada, and Monte
Carlo, Monaco.

IMPORTANT EVENTS:

     The Company emerged from Chapter 7 bankruptcy proceedings on September 23,
1998 when the Trustee for the Estate of Kenilworth paid, in cash, one hundred
percent (100%) of all approved creditors claims and administration fees and
expenses out of the $4,424,056 proceeds from the sale of substantially all of
the assets of the Kenilworth Estate, recoveries of receivables and interest
income. Pursuant to the Asset Sale Agreement, the purchaser was entitled to
receive any cash funds remaining up to One Million Dollars ($1.0 million) after
all claims were paid in full. Accordingly, $123,652.62 was refunded.

     By virtue of having paid all claims in full (one hundred cents of each
dollar claimed), the residual value consisting of approximately eight million
dollars ($8,000,000.00) in unexpired net operating tax loss carryforward credits
belong to the Company and, in turn, to the shareholders of Kenilworth.


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     To make use of the tax credits, the Company must have income taxable
earnings from the same type of business as when the credits were earned.
Management plans to develop a casino wagering system, dubbed "Roulabette".
Earnings from Roulabette would qualify for the tax credits under the existing
tax code. The Company had no other assets and no liabilities, when it emerged
from bankruptcy.

     Prior to February 5, 1991, when the Chapter 7 Trustee was appointed and all
Company operation ceased, the Company was engaged primarily in the development,
manufacturing and marketing of cashless casino wagering systems. In a cashless
system, coins, bills, and tokens are replaced by debit cards issued by the
casino operator to reduce cash handling and its associated security costs. In
addition, the system offers variable denomination play (25 cents, 50 cents,
$1.00 and $5.00) on each slot machine.

HISTORY OF THE COMPANY:

     In 1971 the Company discontinued its business of teaching the operation of
Key Punch and Key Verifier machines. Between 1972 and 1979, the Company engaged
in the research and development of a method to chemically encode and decode
invisible data into plastic cards, paper cards, tickets or tokens which cannot
be easily counterfeited or altered without destroying the encoded data. In 1979,
the Company commenced commercial operations.

     The Company developed a basic system where predetermined bits of
information are chemically encoded between plastic laminates and can be decoded
by the Company's "reader/terminal". This is an alternate technology to the
magnetic character recognition system used for credit cards and other
applications. The Company sold the chemically encoded plastic cards, together
with card-reading systems, to power plants regulated by the Nuclear Regulatory
Commission. The cards were used both for security purposes and to control the
length of time employees spent in certain restricted areas. The Company
discontinued the sale of cards, cardreaders and services because of the general
reduction of operating nuclear power plants and events that prevented the
Company from continuing its operations in 1991 (see "Bankruptcy Conversion").

     Throughout the 1980's the Company experienced working capital shortages
that climaxed on August 31, 1982, when the Company filed a voluntary petition
for reorganization under Chapter 11 of the United States Bankruptcy Code. From
August 31, 1982 to June 7, 1985, the Company operated during reorganization
proceedings. When the Company's Plan of Reorganization was confirmed, debts for
employee withholding taxes totaling approximately $1.5 million were not
discharged and remained outstanding, plus interest and penalties. Although the
Company obtained a Final Decree on April 27, 1988, the Bankruptcy Court retained
jurisdiction in the matters relating to the unpaid taxes.

On February 5, 1991 the Company's Chapter 11 case was converted to a Chapter 7
proceeding and a Trustee was appointed.


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     The Company and three casino operators, Golden Nugget, Inc. (Mirage), Del
Web, Inc. and Elsinore Corporation, sponsored legislation to permit cashless
wagering in the state of Nevada. The legislation, which is in the form of an
amendment to existing casino control statutes, permits the use of account cards
(debit cards) and was signed into law by Governor Richard H. Bryan on June 13,
1985. The existing regulations for casino play in the state Of New Jersey permit
the use of account cards in place of cash in their casinos.


     In April 1988 the Company entered into a contract with the Totalizator
Agency Board (the "TAB"), a statutory agency of the State of Victoria,
Australia, to design and install computer hardware and software and supply
plastic wagering cards for high-tech cashless wagering facilities, called
"Tabarets", to be operated by the TAB within the State of Victoria. The first
Tabaret opened on November 27, 1990 with 124 Player Activated Terminals ("PATs")
which are similar to slot machines except they are played with debit cards
instead of coins or tokens, offer variable denomination play and selection of
five different games. There are now 13,000 PATs in play at 127 locations that
had revenue of Australian $4.5 billion in 1998.

     From February 1991 through September 1998, Kenilworth was inactive, except
that Herbert Lindo, the President and Chairman of the Board of Directors of
Kenilworth when the Trustee was appointed, assisted the Trustee which resulted
in obtaining $4,424,056 for the Kenilworth Estate.

     In September 1998 a United States Bankruptcy Judge in the Eastern District
of New York approved the Final Report and Accounts submitted by the Chapter 7
Trustee of the Estate of Kenilworth and, after obtaining approval from the U.S.
Trustee, the Kenilworth Trustee made the cash distribution to the creditors and
paid in full all administration fees and expenses. With the Bankruptcy Court's
approval, all of the books and records since inception of Kenilworth have been
released to Herbert Lindo.

                          THE ROULABETTE TERMINAL

     The Roulabette Terminal consists of a personal computer (PC) with two
monitors, one of which is outfitted with a touch screen, a variable denomination
bill acceptor and a bar code ticket dispenser, all housed within an attractive
enclosure, about the size of a typical slot machine. Each terminal is
self-sufficient and manages wagers from $.25 to $100 or the equivalent in most
any currency.

HOW TO PLAY ROULABETTE

     After depositing money via the bill acceptor, the terminal displays the
amount deposited and prompts the player to select one of the four table games
that are available and broadcast live on closed circuit television to the
terminal. The player then is asked to select a denomination, from $.25 up to
$100, by touching the selected amount on the touch screen.


<PAGE>

ROULETTE

     When playing Roulette, the monitors display the table (without the wheel)
on the touch screen. The player, by touching the spot on the table, places a
wager directly on the table, most often on top of a chip placed on the table by
the players of the televised games. The touch screen displays a distinctive
image of a chip (1,2,3, chips, etc.) placed by the Roulabette player, for easy
identification. There is a spot on the touch screen where the last or all wagers
can be canceled, and a spot where the wagers are confirmed. Immediately after
the wager is confirmed, the amount wagered is debited from the last amount shown
in the credit account.

     When the television camera, over the Roulette wheel, spots the ball going
around in the wheel, the upper screen displays "No More Bets" and the terminal
is locked for betting.

     The player now watches the ball go around on the wheel until the ball comes
to rest on one of the 38 numbers of the wheel. After a second the upper screen
shows the table, and after the marker is placed by the croupier at the table on
the winning number, all losing chips are removed from the table, including the
losing chips of the Roulabette terminal players. If the player has chips on the
winning number, the lower screen shows the amount won and after the player
confirms the pay-off by touching the winning number, the amount won is credited
to the account and displayed on the lower screen. After a short period of time,
the new wagering for the next game begins.

     A player can wager on all positions available at the table game. The
winning numbers of the previous 20 games are displayed on the upper screen to
assist the player in selecting new wagers. If a player has a problem with the
terminal, or disagrees with the winning payoff, there is a spot on the lower
screen to call for an attendant.

CRAPS

     When the player selects Craps, half the table is displayed on the screens.
The wagers are placed in the same manner as if the player were playing at the
Crap table. All bets available on the table are available on the Roulabette
terminals. When the croupier pushes the dice from the center of the table toward
the table player, the terminal locks for removing bets only. Additional bets may
be placed during the game. After the dice are rolled and come to rest, the TV
camera zooms in on the dice separately and the Roulabette player can read the
numbers on the dice. A laser beam locates the dice and directs the cameras to
them.

BACCARAT

     When playing Baccarat, the entire table is shown on the upper screen with a
wide-angle TV camera. The player either selects the bank (which holds back a 5%
commission on all wins) or the player. Cards are confirmed by character
recognition.


<PAGE>

BLACKJACK

     When playing Blackjack, the camera shows up to seven hands being played at
the table and the house cards. The Roulabette player selects a player and bets
along with his or her hand. The Roulabette player MAKES NO DECISION whether to
hit or stay. Since there are seven (7) players, if dissatisfied with one
player's play, another player can be selected.

     At the end of the play, all credits (winnings) are paid by the Roulabette
Terminal issuing a bar code receipt which states the amount of credit and is
cashed out at a casino cage or cashier located in hotels, clubs, pubs, etc. A
computer link between the Cashier Stations and each Roulabette Terminal verifies
that the bar code receipt specifying a certain amount of money was issued by the
designated Roulabette Terminal.

INSTRUCTION AND PRACTICE PLAY

     After making a deposit in the Roulabette terminal, a player can select
instructions on how to play and may make up to 10 "make believe" bets for
practice. Playing along on a Roulabette terminal only a few yards away from the
actual table game may be more exciting than playing a slot machine, since the
player has a hand in the outcome of the game. Roulabette should be a welcome
addition to casino operators. It obviously may entice slot players to graduate
to table game players.

CASINO TEST PROGRAMS

     In 1990, before the Company ceased operation (bankruptcy proceedings), the
Company had entered into contracts with three (3) Atlantic City, New Jersey
casino operators to test market the Company's cashless wagering system for a
minimum of six months. Each installation on the casino floor was to have a
minimum of 100 PAT's and 50 slot machines converted by the Company to be played
both with cash and cashless. The combination of cash and cashless on existing
slot machines was attractive to the casino operators to permit a gradual
transition period from cash to cashless play.

     The Company was to furnish without expense to the casino, all the necessary
equipment, including the central computer and communications hardware. The
casino operators would only have to provide for the installation of cables
required to interconnect the equipment and provide free accommodations for the
Company's personnel who would have operated the system during the test. Each of
the operators committed a substantial budget for the promotion of the systems.

After the first system was to be in operation for a period of three (3) months,
and operated profitably, the New Jersey casino regulatory agency had agreed to
commence examining the system for their approval process. The Company expected
this process to take at least three (3) months. When the Company had obtained
approval from the regulatory agency for its system, the operators would then
purchase the system in quantities, for prices stated in the contract, or ask the
Company to remove the system.

None of the tests were conducted. The Company sold and installed only one (1)
Cashless slot system, which was to the Australian agency which (2) continues to
operate the system with 13,000 PAT's in 127 locations. The Company receives no
revenue from that operation.

<PAGE>

The PAT system became obsolete when the industry installed Dollar Bill
acceptors, credit meters, and slot play tracking systems with MVP (most valuable
player) cards.

To conduct the tests, the Company will require approximately $3.0 million and
until these funds are available to the Company, the test cannot take place.

Industry Background

The gaming industry is comprised of five service industries; (1) traditional
pari-mutuel wagering on horse and dog racing; (2) casino, Indian Reservations,
and riverboat gambling, (3) lotteries, (4) charitable organization gambling
(Bingo and Las Vegas nights), and (5) sports book.

Currently, the Company operates primarily in the casino segment.

MARKETING STRATEGY/SALES PLAN

Direct Marketing to Casinos

Every casino in the world offers the same slot machines, the same table games,
with the same odds. The only difference between one casino and the

other casino is how well they treat their customers with complementaries. Even
there, they offer the same $20.00 in coins up front, and the same $5.00 discount
for the buffet lunch. Fortunately for the Company, once one casino adopts
cashless wagering, if history repeats itself, the rest will follow suit.

The Company experienced this scenario in 1990 in Atlantic City, after one casino
agreed to undertake the testing of the Company's cashless wagering system, two
other casino operators surfaced immediately and offered to conduct similar
tests.

Similarly, Nevada casino operators will wish to test the system after the first
results from Atlantic City are available. The Company will sell the Roulabette
terminals and supporting system to the casinos. The Company will supervise the
installation and train casino personnel in the operation of the system. During
the test period, before the casino operator purchases the system, the Company,
at its own cost, will furnish and install a minimum of forty (40) and up to one
hundred (100) Roulabette terminals, all the supporting computer and TV
equipment, and will provide personnel to trouble-shoot the system on a 24-hour
basis.

If the casino operator fails to purchase the Roulabette system at the end of the
test period, the Company will be obliged to remove the system. Since the
terminals and equipment belong to the Company, the Company can use and sell the
equipment to other casino operators or other purchasers.


<PAGE>

MARKETING TO THE ROULABETTE PLAYER AT HOME

In the United States the Company will refrain from using the WWW Internet to
manage wagers from individuals outside of the casino confines. Legislators have
voiced strong objections to having their constituents' gamble one-on-one against
computers located on Caribbean islands, totally unregulated. In Roulabette, the
play-along broadcast emanates from casinos that are regulated by strict and
comprehensive rules and state regulations, enforced by gaming control regulators
and everybody plays along with the same live table game. There is a world of
difference between playing in a virtual make believe casino compared with an
actual casino.

For the reasons stated, the Company will ask state lotteries, Off-Track Betting
(OTB) corporations, pari-mutuel race tracks, and other state and federal
regulated agencies to manage the wagers from individuals playing along on their
PC's, within their state.

The individuals would have to pre-deposit funds into an account with the wager
management company and then place wagers with their credit balance. The wagers
and running balances will be transmitted to the Roulabette Player's PC on
telephone lines not crossing any state lines, similar in principle to telephone
accounts wagering offered by the New York State Off-Track Betting Corporation.

Horse players in New York State watch the live horse races from all over the
country (simulcasts) on their home/office television sets and place wagers on
the horse races with their OTB telephone account.

After the Company obtains permission to play Roulabette in a given state and
engages a wager management organization in order to promote satellite digital
direct TV to the state's residents, the Company will install the 18 inch dish
antenna and converter box required to receive digital TV programming at its own
cost, if the subscriber opens a Roulabette wagering account for $300. In
addition, the Company will pay the monthly subscription fee to view all digital
TV programming offered if the customer wagers at least $100 each month - win,
lose, or draw - makes no difference.

Direct Marketing to State Lotteries

In states with approved lottery and/or other gambling legislation, the Company
plans to introduce Roulabette to hotels, clubs (similar to card clubs in
California) and resorts, to provide an upscale gathering place for tourists and
local residents. Charitable organizations that are permitted to conduct "Nevada
Nights" and Bingo games may wish to offer Roulabette gaming on a more permanent
basis. To receive the broadcast signal, all that is required is an 18" direct TV
antenna and distribution equipment. The Roulabette terminals are self sufficient
and accept dollar bills (or script, to control the amount an individual is
allowed to wager in one day or other time period). The Company plans to lease
all the equipment necessary to participants for a share of the profits.


<PAGE>

To gain approval for the Company's Roulabette-style gambling in jurisdictions
that have not approved any gambling legislation, the Company proposed to engage
lobbyists to introduce, promote, and obtain legislative approval to permit
Roulabette-style gambling. The Company's strategy is to find depressed resort
areas and have the resort/hotel operators convince their local politicians of
the benefits to their business and the local economies and request them to
promote legislative approval, either state-wide or limited to their areas.
Riverboat gambling started to rehabilitate decaying waterfronts. Roulabette can
do the same in depressed economic areas.

Global Marketing

When the live casino TV broadcasts are beamed for global viewing, the Company
will seek out similar organizations, as proposed for the United States, that can
provide the servicing of individual accounts and placement of Roulabette
terminals in hotels, clubs, pubs, racetracks, golf clubs, etc. In all instances,
the Company plans to offer only profit sharing arrangements to franchisees,
which most likely will require leasing all the equipment necessary to the
franchisee, to discourage competition.

In overseas installations, wherever possible, the Company will make use of the
WWW Internet to manage the wagers.

Competition

Many segments of the gaming industry are characterized by intense competition,
with a large number of companies offering the same type of wagering products and
services. None of these companies at present offer the same or similar equipment
or systems as represented by Roulabette. The most likely competition will come
from slot machine manufacturers who could relatively quickly adapt slot machines
to play along with live casino table games. The three major slot machine
manufacturers in the United States are WMS Industries, International Gaming
Technology, and Anchor Gaming, all of which have vastly greater resources than
the Company and may have under development systems that directly compete with
Roulabette.

The Company plans only to broadcast the live casino table games from one or two
companies that own casinos. Other casino owners may start their own broadcasts
and have their own terminals manufactured and compete with the Company after the
Company did all the pioneering for play-along wagering.

Government Regulation

New Jersey

In order to sell its Roulabette wagering systems in New Jersey, the Company must
be licensed by the New Jersey Casino Control Commission (CCC) in accordance with
the New Jersey Casino Control Act as a manufacturer and distributor of gaming
equipment. The Company will have to make arrangements to apply for licensing in
New Jersey. The New Jersey Commission may require that persons holding in excess
of 5% of the publicly-traded equity securities of the Company qualify under the
Casino Control Act. Any beneficial holder of the voting securities owned

<PAGE>

may be required to file an application, be investigated, and have his
qualifications determined if the CCC has reason to believe that such ownership
may be inconsistent with the declared policies of the Casino Control Act. After
the Company completes the proposed live field test at a New Jersey casino for 90
days, a license in the State must be obtained within about 90 days thereafter.

Nevada

The manufacture and distribution of gaming devices in Nevada are subject to the
Nevada Gaming Control Act (the "Nevada Act"), and to licensing and regulatory
control by the State Gaming Control Board and various local, city and county
regulatory agencies (collectively, the "Nevada Gaming Regulators"). The laws,
regulations and supervisory procedures of the Nevada Gaming Regulators are based
upon declarations of public policy which are concerned with, among other things,
(i) the character of persons having any direct or indirect involvement with
gaming, (ii) application of appropriate accounting practices and procedures,
(iii) maintenance of internal fiscal affairs and the safeguarding of assets and
revenues, (iv) record keeping and reporting to the Nevada Gaming Regulators, (v)
fair operations of games, and (vi) the raising of revenues through taxation and
licensing fees.

No publicly traded corporation is eligible to apply for, or hold gaming licenses
in Nevada. A publicly traded corporation may be registered and found suitable to
acquire or to hold an interest in a corporate subsidiary which holds such gaming
licenses. Before the Company may do business in Nevada, it will have to register
with the Nevada Gaming Regulators as a publicly traded holding company and found
suitable to hold an interest in a licensed subsidiary. After an investigation is
completed, licensing may take approximately 90 days. No proceeds from the public
sale of securities by a registered holding company may be used to acquire,
construct, operate, or finance gaming facilities in Nevada or to retire or
extend obligations incurred for such purposes unless the public offering of
those securities has been approved by the Nevada Gaming Regulators.

The Nevada Gaming Regulators may require any individual who has a material
relationship with the Company to be investigated and licensed or found suitable.
Any person who acquired 5% or more of the Company's securities must report the
acquisition to the Nevada Gaming Regulators. Any person who becomes a beneficial
owner of 10% or more of the Company's securities must apply for a finding of
suitability. The Nevada Regulators have the power to investigate any security
holder of the Company. The applicant stockholder is required to pay all costs of
such investigation. The Company will pay such costs for its officers, directors,
or employees. The Company does not plan to impose any restrictions on the
acquisition of 5% or more of its stock since a person acquiring more than 5% is
likely to be aware of the regulatory requirements. However, the Company expects
to cooperate with any regulatory investigations and actions by government
authorities to enforce the restrictions.

<PAGE>

Any person who fails or refuses to apply for a finding of suitability or a
license within 30 days after being ordered to so do by the Nevada Gaming
Regulators may be found unsuitable. The same restrictions apply to a beneficial
owner if the record owner, after request, fails to identify the beneficial
owner. Any stockholder found unsuitable who holds, directly or indirectly, any
beneficial ownership of the Common Stock beyond such period of time as may be
prescribed by the Nevada Gaming Regulators may be guilty of a gross misdemeanor.
The Company and/or its subsidiary are subject to disciplinary action if, after
notice is received that a person is unsuitable to be a stockholder or to have
any other relationship with the Company or its subsidiary, the Company or its
subsidiary (i) pays that person any dividend or interest upon voting securities
of the Company, (ii) allows indirectly any voting right conferred through
securities held by that person, or (iii) gives remuneration in any form to that
person. If a security holder is found unsuitable, the Company may itself be
found unsuitable if it fails to pursue all lawful efforts to require such
unsuitable person to relinquish his voting securities, including the purchase of
such securities by the Company for cash at fair market value.

If the Company registers as a publicly traded holding company, the Nevada Gaming
Regulators would have the power at any time to require the Company's stock
certificates to bear a legend indicating that the stock is subject to the Nevada
Gaming Control Act and the regulations of the Nevada Gaming Regulators. The
Nevada Gaming Regulators, through the power to regulate licensees and otherwise
under Nevada law, would have the power to impose additional restrictions on the
holders of the Company's securities at any time.

Federal

The Federal Gambling Devices Act of 1962 (the "Federal Act") makes it unlawful
for a person to manufacture, deliver, or receive gaming machines, gaming
machine-type devices and components thereof across interstate lines unless that
person has first registered with the Attorney General of the United States. In
addition, various record keeping and equipment identification requirements are
imposed by the Federal Act. Violations of the Federal Act may result in seizure
or forfeiture of equipment, as well as other penalties.

Other Regulations

The manufacture, distribution, sale, and use of slot machines is controlled by
state and federal law which also applies to the Company's Roulabette gaming
terminals. Certain foreign countries permit the importation, sale, or operation
of slot machines. Where importation is permitted, some countries prohibit or
restrict the payout feature of the traditional slot machine or limit the
operation of slot machines to a controlled number of casinos or casino-like
locations. Certain of these jurisdictions also require the licensing of gaming
devices. The Company's Roulabette terminals may be considered similar to slot
machines and may have to meet these regulations.

<PAGE>

Fabrication/Assembly Operation

When the Company receives orders for the Roulabette Wagering System, it plans to
assemble/manufacture the initial orders for the tests at a proposed 10,000
square foot industrial facility on Long Island, New York, from standard or
specially manufactured (to Company specifications) electronic, TV, and other
components purchased from vendors or manufactured by subcontractors. Assembly
equipment and tools, benches, racks, and quality control testing equipment
required for the assembly operations are not extensive and are readily
available. When larger quantities for the system hardware are required, the
Company will engage subcontractors to perform the assembly work in the interest
of cost efficiency.

The Company is not materially dependent upon any single supplier for materials
and parts. The Company, however, in the interest of economy, will utilize only
one set of molds in its cabinetry and is accordingly dependent upon deliveries
from a single source of supply for that component.

Employees

The Company at present does not employ anyone. After acquiring the proposed
leased industrial space, the Company expects to engage six (6) employees and
several consultants. One employee will be for administrative work, and the
others specialists in software design, television broadcasting, component design
and fabrication, and assembling. Former key employees of the Company may be
available for some of the positions. The Company did not formerly, nor does it
expect to in the future, have any collective bargaining agreements with its
employees. The Company may sign employment contracts with key personnel.

Research and Development

The Company's product development work will be divided into two areas: hardware
and software. Current development efforts will be directed at using
off-the-shelf computer equipment, dollar bill acceptors, and bar code receipt
printers, in the design for the Roulabette terminals. Software efforts are aimed
at component integration with software features unique to the overall closed
circuit TV broadcast system and software required to manage the wagers from
outside the casino environment.

The Company's research and development costs will be approximately $3,000,000
(three million dollars) over the next six 6) to eight (8) months. Most of that
amount will be expended for the salaries and fees for the software programmers
and consultants.

Backlog

The Company does not have any backlog.

<PAGE>

Insurance

At present, the Company does not maintain any insurance. When employees are
hired the Company will maintain liability and Workers Compensation insurance,
which will cover injury to employees. In order to attract employees with special
skills, the Company may also have to implement a medical insurance plan.

ITEM 2 - PROPERTIES
-------------------

The Company, until it can relocate into larger industrial space, operates out of
an office located in the president's private residence at 54 Kenilworth Road,
Mineola, NY 11501, rent free.

To conduct the initial phase of the Company's business and casino test program,
the Company will have to lease approximately 10,000 square feet of industrial
and office space preferably on Long Island, New York, for an annual rent of
approximately $60,000. When orders for Roulabette terminals and systems are
generated, the industrial space will have to be increased. In prior years, the
Company occupied approximately 20,000 square feet of office and industrial space
on Long Island.

ITEM 3 - LEGAL PROCEEDINGS
--------------------------

Since emerging from Chapter 7 Bankruptcy Proceedings on September 23, 1998, the
Company is not involved in any legal proceedings.

ITEM 4 - SUBMISSION OF MATTERS TO A VOTE OF SHAREHOLDERS
--------------------------------------------------------

The Company has not held a meeting of shareholders since 1988 because the cost
of soliciting proxies and holding a meeting for the large number of persons
(approximately 11,000) who own its shares is excessively costly. The directors
and officers continue to serve under provisions of the By-Laws which allow them
to continue in office until their successors are elected and take office.

At the next Annual Meeting of Shareholders the shareholders of the Company will
be asked to ratify the following: (a) An amendment to the Company's Certificate
of Incorporation to increase the authorized number of Common Shares from
61,000,000 shares to 100,000,000 shares, and to permit the Company's Board of
Directors, without further action by the shareholders, to issue from time to
time up to 1,000,000 authorized but unissued shares of Preferred Stock, and to
fix and determine the terms, limitations, relative rights and preferences of the
Preferred Stock, in order to obtain financing, capital and/or acquire other
businesses that can improve the performance or growth of the Company. When any
shares of Preferred Stock are issued, certain rights of their holders may affect
the rights of the holders of Common Stock. In addition to any other powers
conferred on the Preferred Stock, holders of the Preferred Stock would have,
under New York General Corporation Law, the right to vote as

<PAGE>

a separate class on any increased, decrease or change in the rights of the
Preferred Stock. The affirmative vote of a majority of the outstanding shares of
Preferred Stock would be required for approval of any such increase, decrease,
or change. The authority of the Board of

Directors to issue shares of Preferred Stock with characteristics it determines
(such as preferential voting, conversion redemption and liquidation rights) may
have a deterrent effect on persons who might wish to make a takeover BID to
purchase shares of the Company at a price which might be attractive to its
shareholders. However, the Board of Directors must fulfill its fiduciary
obligation to the Company and its shareholders in evaluating any takeover BID;
and (b) The creation of a stock option and stock award plan (the "Plan") which
will authorize the grant of options to purchase common shares of the Company to
key employees (including directors who are employees), which may be "incentive
stock options" (ISO's) within the meaning of Section 422 of the Internal Revenue
Code of 1986, as amended, or nonqualified options. The Plan also will provide
for the grant of stock appreciation rights and stock awards to eligible
participants subject to forfeiture restrictions; (c) The creation of a Directors
Stock Option Plan pursuant to which stock options are awarded to those directors
who are not officers or employees of the Company ("outside directors").
Presently, there are no outside directors. The plan will permit the Company to
recruit and retain outside directors who will use their best efforts to promote
the success of the Company's business, (d) The election of members to the Board
of Directors; and (e) Ratify the selection of Arthur Yorkes and Company as the
independent public accountant of the Company for the ensuing fiscal year.

Management at present does not know of any other matters that may be presented
to a vote at the Annual Meeting of Shareholders.

<PAGE>

PART II
-------

ITEM 5 -  MARKET PRICES OF THE COMPANY'S COMMON STOCK AND RELATED
          STOCKHOLDER MATTERS.
-----------------------------------------------------------------

(a) After the Company emerged from Bankruptcy Proceedings in September of 1998,
its Common Stock resumed trading on the National Association of Security Dealers
Automated Over the Counter Market (OTC) Bulletin Board, on October 5, 1998 under
the old trading symbol "KENS". The following table sets forth high and low
closing sales prices for the Company's Common Stock, as reported on the Bulletin
Board and the OTC Pink Sheets.

         4th Quarter                       Low Bid                    High Bid
         Through December 31, 1998          $.005                      $.05

         1st Quarter
         Through March 5, 1999               $.08                      $.20

         2nd Quarter
         Through June 30, 1999               $.05                      $.08

         3rd Quarter
         Through September 30, 1999          $.05                      $.08

         4th Quarter
         Through December 31, 1999         $.02.5                      $.08

         1st Quarter
         Through March 31, 2000              $.07                      $.29

(b) Holders. There were approximately 11,000 holders of record of Common Stock
of the Company as of December 31, 1999 and 1998, when the market quotation was
$.02 Bid and $.04 offered, as reported in the Over The Counter Pink Sheets. The
approximate number of record holders is based upon the actual number of holders
registered on the books of the Company at the latter date and includes an
estimate of beneficial holders of shares in "street name" or persons,
partnerships, associations, corporations, or other entities identified in
security position listings maintained by depository trust companies. The
calculation of the number of shares of the Company's Common Stock held by
non-affiliates shown on the cover of this Form 10-K was made on the assumption
that there were no affiliates other than officers, directors, and holders of
over five percent (5%) of the Common Stock of the Company.

(c) Dividends. The Company has not paid any dividends on its Common Stock. The
Company plans to apply any earnings it achieves to expansion of the business and
does not expect to pay any dividends in the foreseeable future.

<PAGE>

Description of the Company's Securities

Common Stock

The authorized capital stock of the Company consists of 100,000,000 Common
Shares, $.01 par value ("Common Stock"), of which 62,289,018 shares are issued
and outstanding as at December 31, 1998.

The holders of Common Stock are entitled to one vote for each share held of
record on all matters to be voted on by stockholders. There is no cumulative
voting with respect to the election of directors, with the result that the
holders of more than 50% of the shares voting for the election of directors can
elect all of the directors then up for election. The holders of Common Stock are
entitled to receive ratably such dividends when, as, and if declared by the
Board of Directors out of funds legally available therefrom. In the event of
liquidation, dissolution or winding up of the Company, the holders of Common
Stock are entitled to share ratably in all assets remaining which are available
for distribution to them after payment of liabilities and after provision has
been made for each class of stock, if any, having preference over the Common
Stock. Holders of shares of Common Stock, as such, have no conversion,
preemptive or other subscription rights, and there are no redemption provisions
applicable to the Common Stock. All of the outstanding shares of Common Stock
are fully paid and non-assessable.

ITEM 6 - SELECTED FINANCIAL DATA
--------------------------------

Operations for the years ended December 31, 1999, 1998, 1990, 1989 and 1988.

<TABLE>
<CAPTION>
                                       Summary of Operations
                       1999         1998           1990          1989        1988
<S>                   <C>        <C>          <C>          <C>           <C>
Net sales
 from operations     $    -0-   $       -0-    $ 3,316,040    $1,940,832   $1,745,486
Other income         $    -0-   $ 4,300,403
Payments of
  Liabilities        $    -0-   $(8,767,921)
Earnings (loss)      $(11,830)  $(4,475,430)   $(1,186,737)   $ (735,288)  $ (251,954)
Earnings (loss)
  per common share   $   (.01)        $(.07)         $(.02)        $(.02)      $(.005)
Fully diluted        $   (.01)        $(.02)         $(.02)       $(.005)      $(.005)
CAPITAL RESOURCES
as of December 31,
Total assets              -0-   $        -0-   $ 7,846,169    $7,724,687   $8,551,288
Current assets       $  9,034   $    16,000    $ 1,118,735    $  842,959   $1,330,635
Current liabilities  $    242   $     7,912    $ 3,670,901    $1,810,105   $2,901,418
Stockholders' equity $  8,792   $       -0-    $ 4,175,268    $4,194,582   $5,649,870
</TABLE>

<PAGE>
ITEM 7 - MANAGEMENT DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
         RESULTS OF OPERATIONS.
----------------------------------------------------------------------

     (a) Liquidity and Capital Resources:

Between February 5, 1991, when the Trustee for the Estate of Kenilworth Systems
Corporation was appointed, and September 23, 1998, when the Trustee paid in cash
one hundred (100) cents on the dollar of all approved creditors' claims and
administration fees and expenses, the Company did not conduct any business and
operations.

In November 1991 the Trustee, on orders from the Bankruptcy Court, sold at
public auction substantially all of the assets of the Kenilworth Estate, for
$2,800,000 (two million eight hundred thousand dollars) and an additional
$1,000,000 (one million dollars) escrow deposit to be available to add to the
purchase price, in order to pay all creditors and other expenses one hundred
(100) cents on the dollar. After the Trustee paid all claims, the Trustee
refunded $123,652.62 of the $1.0 million escrow deposit to the purchaser.

Thus, the Company emerged from bankruptcy proceedings with no assets, no
liabilities, and approximately $8,000,000 in available carry-forward income tax
credits.

Present plans are to develop a wagering system, dubbed "Roulabette", that allows
patrons visiting a casino and individuals at home, offices, clubs, or other
gathering places all over the industrialized world, to play along on live casino
table games, either via closed circuit television in the casino confines, or the
broadcast of the same live action via digital direct satellite TV broadcast
around the world.

The first step will be to conduct a three (3) month test of the system at the
proposed Company facility and, after successfully completing the test, to test a
system at a casino preferably located in Atlantic City. Each test will be with
forty (40) Roulabette terminals.

To conduct these two tests will require $3,000,000 to; a) purchase computers,
digital television broadcast equipment and table games; and, b) defray the cost
of the facility and pay the salaries of six (6) employees who are specialists in
software design, TV broadcasts, and mechanical design, for a period of eighteen
(18) months, and from time to time, consultants who will assist the design team.

Unless the Company is able to obtain these funds, none of the tests and initial
development work can commence.

The Company plans to obtain the necessary funding by offering in a Private
Placement, Common Shares, Cumulative Convertible Preferred Shares and/or by the
sale of limited joint venture participations in future Roulabette franchises.

<PAGE>

When the tests are completed and the Company has obtained licenses from the
gaming control regulators for the sale of Roulabette systems to U.S. casinos,
the Company will obtain production financing from regular banking sources to
finance the manufacturing of the Roulabette terminals leased or sold.

Results of Operations

Since the Company emerged from bankruptcy proceedings on September 23, 1998, the
Company had no revenue from operations, and therefore sustained losses from
general administration expenses amounting to $11,830 in 1999 and $7,912 in 1998.

Inflation

Inflation has not had in the past, nor does the Company expect it in the future
to have a significant impact on the Company's business.

Forward Looking and Cautionary Statements

This report contains "forward looking statements," including without
limitations; (a) statements of proposed financing, (b) assumptions that casinos
will participate in a test of Roulabette, and later actually purchase,
Roulabette systems; (c) granting of licenses from casino regulatory agencies
permitting the sale of Roulabette systems, (d) proposed broadcasting of live
casino games; (e) obtaining permission from state and foreign governmental
agencies allowing their residents to watch on television and wager along with
the live casino broadcast; (f) the feasibility to profitably operate such play
along casino games, (g) changes in the competitive environment for Roulabette,
and (h) general economic factors in markets where the Company's products are
proposed to be offered, franchised and sold.

ITEM 8 - FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
----------------------------------------------------

Our financial statements, the accompanying notes and the Report of Independent
Accountants that are filed as part of this Report are listed under Item 14
"Exhibits, Financial Statements Schedules and Reports on Form 8-K" and are set
forth on pages F-1 through F-9 immediately following the signature page of this
Report.

ITEM 9 - CHANGES AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING
         AND FINANCIAL DISCLOSURE
-----------------------------------------------------------------

For more than ten (10) years prior to the Company entering Chapter 7 Bankruptcy
proceedings in February 1991, The Company's financials were audited annually by
Arthur Yorkes & Company. The Company had planned to again engage Arthur Yorkes &
Company to conduct an audit of its financials for the December 31, 1999 Annual
Report, when Arthur Yorkes & Company informed the Company that they may have a
conflict of interest in conducting audits for the Company. Since an immediate
determination of the possible conflict of interest could not be made, The
Company engaged new Independent Auditors.

<PAGE>

PART III
--------

ITEM 10 - DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
------------------------------------------------------------

The  names,  ages and  positions  held by each of the  Company's  directors  and
executive officers are as follows:

Name
Herbert Lindo           73      Chairman of the Board,
                                        President and Treasurer.
Joyce Clark             55      Director and Financial Officer
Kit Wong                64      Director
Betty Sue Svandrlik     53      Vice President and Secretary

All the directors are also members of the Executive Committee. The directors
serve for a term of one year and until their successors are elected and assume
office.

Herbert Lindo has held his present position since March 1972.

Joyce Clark became a director and the financial officer in October 1998.

Kit Wong was elected to the Board of Directors in October, 1999 as an "Outside
Director".

Betty Sue Svandrlik became a vice president and secretary in October 1998. She
has been in the employ of the Company since August 1978, as office manager and
assistant secretary.

Family Relationship

Joyce Clark and Betty Sue Svandrlik are sisters.

Business Experience

Herbert Lindo is the founder of the Company.

Joyce Clark is the controller of a private wholesale door and window
Manufacturer for more than five years. She has a degree in accounting.

Kit Wong is a member of the Board of Directors of Plastic Recycling Corp. (a
public company). Before semi-retiring, he was an environmental engineer and
consultant to the EPA (Environmental Protection Agency). He is the President and
Chairman of the Board of XZL Corp. which operates restaurants primarily in the
state of New Jersey.

Betty Sue Svandrlik received a diploma in business administration and has been
promoted to office manager and assistant secretary since joining the Company.

<PAGE>

Involvement in Legal Proceedings

Except for Herbert Lindo, to the best of the Company's knowledge and belief,
other than in connection with the Chapter 7 or 11 reorganization of the Company
and correspondence received from the SEC describing proposed enforcement
proceedings for failure to file reports in 1990 which reports have since been
filed, none of the Company's directors and officers has been involved in any
proceedings during the last five years that are material to an evaluation of the
ability of such persons to be directors or officers of the Company.

Herbert Lindo, the president of the Company, was convicted in 1993 on three
counts of having permitted three banks located in the Upper Peninsula of
Michigan to sell unregistered, legended, restricted Kenilworth shares pursuant
to SEC Rule 144 prior to the bank having held the securities as collateral for
loans made by third parties for the then required two year holding period. The
sales took place in 1987 and 1988. Mr. Lindo was found not guilty of conspiring
to sell unregistered securities and on another count where the required time to
sell unregistered securities was met pursuant to SEC Rule 144. The Securities
and Exchange Commission did not enter into the case. The indictments were
brought by the U.S. Attorney of the Western District of Michigan. Mr. Lindo was
sentenced to 1000 hours of community service, 15 months house arrest, and fined
$600,000.

In 1992, the holding period for exemption pursuant to Rule 144 was reduced to
one year. The changed Rule did not apply to the 1987/8 sales. No one lost any
money and the Company had received fair value for the pledged securities. The
government never charged Mr. Lindo with fraud. Mr. Lindo claimed he had no
knowledge of the sale by the banks.

Because of this conviction, Herbert Lindo will not be found suitable by any
Casino Control Commission to hold licenses. When the time to apply for licensing
Roulabette arrives, Mr. Lindo will resign totally from the Company and place his
Kenilworth shares into a voting trust. Mr. Lindo believes that he is best suited
to manage the post bankruptcy reorganization and to transform the Company into a
viable business.

ITEM 11 - EXECUTIVE COMPENSATION
--------------------------------

None of the present executives, until the Company is in full profitable
operation, will receive any compensation. When the Company turns profitable, the
executives will receive compensation approved by the Compensation Committee of
the Board of Directors.

Directors are reimbursed for out-of-pocket expenses.

ITEM 12 - SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.

(a) Security Ownership of Certain Beneficial Owners

Other than as set forth in subparagraph (b) below, no person is known to the
Company as the beneficial owner of more than 5% of its common stock.

<PAGE>

(b) Security  Ownership of Management

The table below reflects the beneficial ownership of the shares of the Company's
Common Shares as of December 31, 1999, owned by each director and all directors
and officers of the Company as a group. The table also reflects the percentage
of the common shares owned by the persons indicated.

                                    Number of Shares
Title, Name and Address of Owner          Owned               % of Class
--------------------------------    ----------------          ----------

Herbert Lindo                         10,333,132 (a)             17.00
Chairman and President
54 Kenilworth Road
Mineola, NY 11501

Joyce Clark                              100,000 (b)               .01
Vice President and Director
115 Old Farmingdale Road
West Babylon, NY 11704

Betty Sue Svandrlik                       54,200                  .01
Vice President and Director
35 Greenhaven Drive
Port Jefferson, NY 11776

Jeffrey Lindo (more than 5%)           5,331,000 (c)             8.81
162 Sycamore Circle
Stony Brook, NY 11790

Kit Wong                                      -0-                 -0-
Director
6 Princeton Place
Princeton Junction, NJ 08550

All officers and directors
 as a group                          10,487,332                  17.10

(a) Does not include 551,000 shares owned by the wife and children of Herbert
Lindo (the Lindos' are separated since January 1991).

(b) Does not include 150,700 shares owned by the daughter of Joyce Clark.

(c) Jeffrey Lindo is Herbert Lindo's son.

<PAGE>

SIGNATURES

Pursuant to the requirements of Section 13 of 15(d) of the Securities Exchange
Act of 1934, as amended, the Registrant has duly caused this report to be signed
in its behalf by the undersigned thereunto duly authorized.

KENILWORTH SYSTEMS CORPORATION

By   Herbert Lindo
  Herbert Lindo, President and
  Treasurer

Pursuant to the requirements of the Securities Exchange Act of 1934, as amended,
this  report has been  signed  below by the  following  persons on behalf of the
Registrant and in the capacities indicated on the dates indicated.

By  Herbert Lindo                           Date:  March 28, 2000
  Herbert Lindo, Director

By  Joyce Clark                             Date:  March 28, 2000
  Joyce Clark, Director

By  Kit Wong                        Date:  March 28, 2000
  Joyce Clark, Director

AMENDMENT TO 1998 FINACIALS:

The financials include amendments made to the financials filed for the period
ended December 31, 1998 which consists of (a) a reduction of the NOL
carry-forward to approximately $8,000,000, (b) the earlier recording of a
$6,000,000 and $10,000 convertible notes, which were converted.

<PAGE>

PART IV
-------

ITEM 14 - EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND
          REPORTS ON FORM 8-K
------------------------------------------------------

(a)      (1)      Financial Statements
Independent Auditor's Report                                          F-1

Consolidated balance sheets as of December 31, 1999 and 1998          F-2

Consolidated statement of operations and deficit for the periods
beginning January 1, 1991 to November 23, 1998, November 24, 1998
to December 31, 1998,and for the year ended December 31, 1999 and
1998                                                                  F-3

Consolidated statement of cash flows for the periods Beginning
January 1, 1991 to November 23, 1998, November 24, 1998 to
December 31, 1998, and for the year ended December 31, 1999           F-4

Consolidated statement of changes in stockholders equity
(deficit) for the periods beginning January 1, 1991 to November
23, 1998, November 24, 1998 to December 31, 1998, and for theyear
ended December 31, 1999                                               F-5

Notes to consolidated financial statements.                           F-6 - F-9

(a)      (3)      Exhibits

Exhibit
No.

2(1)*   Notice to shareholders dated September 21, 1998.

2(2)*   Notice of filing Final Accounts of Trustee of Hearing on Applications
        for Compensation (and of Hearing on abandonment of property by the
        Trustee) 1998.

2(3)*   Applications for Compensation for Trustee's Attorneys and Accountants
        1998.

2(4)*   List of creditors paid by Trustee 1998.

2(5)*   Order approving Trustee's Final Account 1998.

2(6)*   Order directing Trustee to abandon books and records of Debtor to the
        Debtor by the President, Herbert Lindo 1998.

2(7)    Former Independent Auditors letter declining to continue to audit the
        Company's financials because of a conflict of interest.

2(8)    Form of convertible Notes sold by the Company.

2(9)    Minutes of Board of Directors Meetings held in October 12, 1999.


*       Filed as an exhibit on Form 10-K, dated November 23, 1998 (File No.
        0-08962) and incorporated herein by reference.

(b) Reports on Form 8-K

The Company filed Current reports on Form 8-K on December 9, 1998, April 20,
1998 and March 15, 2000.

<PAGE>

CONVERTIBLE PROMISSORY NOTE

$0,000                                                       Dated:         1999
                                                             Due:           2000

        FOR VALUE RECEIVED, KENILWORTH SYSTEMS CORPORATION, a New York
corporation (herein called the "Company"), Promises to pay to the order of
_________________ ____________________________________________ (herein called
the "Holder") or registered assigns, at the principal office of the Company
(presently located at 54 Kenilworth Road, Mineola, New York 11501) in lawful
monies of the United States of America, the principal sum of
______________________ DOLLARS (received by the Company in cash) with accrued
and unpaid interest thereon, at the prevailing prime rate as quoted by Citibank,
on or before June 14, 2000. The first quarterly interest accrual date on the
unpaid principal amount shall be ___________________ and all other accrual dates
every three months thereafter.

        This note may be prepaid in whole or in part at any time and from time
to time, without penalty, but with interest on the amount prepaid to the date of
prepayment.

        The Holder of this note has the right at any time through _____________
2000, to convert all or any part of the indebtedness represented by this note,
including the accrued interest, through the date of conversion, into fully paid
and non-assessable common stock, par value $.01 per share, of the Company at the
conversion price of one (1) share for the lower of (a) $.06 per share or (b) the
bid price, at any time from date hereof to date of exercise, for the shares of
the Company as traded in the public market, of unpaid principal and accrued
interest. If the Holder shall elect to exercise such conversion right, then
he/she shall notify the Company, in writing of such election, specifying the
principal amount and interest to be converted, and shall, if the Note shall be
converted in full, surrender the Note to the Company for cancellation and, if
this Note be converted in part, shall surrender this Note to the Company so that
there may be endorsed thereof the reduction of the principal and interest the
same which has been converted, after which the Note shall be returned to the
Holder.

        Prior to due presentment for registration or transfer of this Note, the
Company and its agents may deem and treat the person in whose name this Note
shall be registered upon the books of the Company as the absolute owner of this
Note (whether or not this Note shall be overdue and notwithstanding any notation
of ownership or other writing thereon) for the purpose of receiving payment of
or on account of the principal hereof and interest due hereon and for all other
purposes, and neither the Company nor its agents shall be affected by any notice
to the contrary.

        Neither this Convertible Promissory Note nor the common shares issuable
on conversion thereof (in whole or in part) have been registered under the
Securities Act of 1933 (the "Act") and may not be sold, transferred, pledged, or
offered for sale in the absence of an effective registration statement relating
to these securities under said Act, or an opinion of counsel to the Company that
such registration is not required, or an exemption from the Act is available.

<PAGE>

        If during the convertible period of this Note the Company shall (i) pay
a stock dividend or make a distribution of its common stock into a greater
number of shares, (ii) combine its outstanding stock into a smaller number of
shares, or (iii) issue by reclassification of its common stock any shares of
capital stock of the Company then the conversion right shall be adjusted so that
the holder thereof, if he/she shall elect to convert the same, after the record
date or the effective date of any such event as the case may be, shall be
entitled to receive the number of shares of common stock or other capital stock
of the Company which he/she would have owned or have been entitled to receive
after any of the events described above, had the Note been converted at the
record date in the case of a stock dividend or stock distribution or the
effective date in the case of a sub-division, combination or reclassification.

        The Company agrees that in the event it shall hereafter file a
registration statement under the Act which includes shares on behalf of any
shareholders, that it will give notice in writing of said registration to the
Holder thereof. In the event the Holder shall in writing addressed and delivered
to the Company elect to exercise such conversion right hereinbefore granted
within the time period specified in said notice, then the Company agrees to
include so much of said stock as the Holder shall be entitled to receive as a
result of said conversion proportionately to the other shareholders included in
the registration statement and to file same with the Securities and Exchange
Commission and agrees to use its best efforts to cause the same to become
effective under the said Act as promptly as possible, so that the stock may be
publicly offered and sold by the Holder after such effectiveness in compliance
with the requirements of said Act and other applicable provisions of federal and
state securities laws.

        If this Note is not paid when due, whether at maturity or by
acceleration by other events, the Company agrees to pay reasonable costs of
collection and such costs shall include without limitation all costs, attorney's
fees and expenses incurred by the Holder hereof in connection with any
insolvency, bankruptcy, reorganization, arrangement or similar proceedings
involving the Company, or involving any endorser or guarantor hereof, which in
any way affect the exercise by the Holder hereof of his/her rights and remedies
under this Note.

        Presentment, demand, protest, notices of protest, dishonor and
non-payment of this Note and all notices of every kind are waived.

        The issuance and execution of this Note has been authorized and approved
by the Board of Directors of the Company.

        The terms "Company" and "Holder" used herein shall be construed to
include their respective heirs, personal representatives, successors, subsequent
holders, and assigns.

        This Convertible Promissory Note shall be enforced in accordance with
the laws of the State of New York, U.S.A., and shall be construed in accordance
thereof.

<PAGE>

        IN WITNESS WHEREOF, the undersigned has executed this Convertible
Promissory Note as of the day and year first above written.

                                   KENILWORTH SYSTEMS CORPORATION

                                   By:  Herbert Lindo
                                        ----------------------------------
                                        Herbert Lindo, President

ATTEST:

* * * * * * * * * *
--------------------

In the event of conversion, the Holder agrees to
accept any shares for investment and consents to
the endorsement on said shares of an appropriate
legend

* * * * * * * * * *
-------------------

<PAGE>
                Minutes of the Board of Directors Meeting of
                       Kenilworth Systems Corporation

A meeting of the Board of Directors of Kenilworth Systems Corporation was held
at the Company's offices at 54 Kenilworth Road, Mineola, NY 11501, on the 12th
day October 1999 at 7:00PM.

The following individuals were present:
Herbert Lindo,    Director
Joyce Clark,      Director

which constitutes all of the Directors. In addition, Mrs. Betty Sue Svandrlik,
the Company's Secretary attended the meeting. Mr. Lindo acted as Chairman and
Mrs. Svandrlik served as Recording Secretary.

The Chairman opened the meeting and asked the Secretary of the Company to read
the minutes of the last Board of Directors Meeting held on December 11, 1998.
Upon motion duly made and seconded and unanimously approved, the minutes were
accepted by the Board as read.

The Chairman then advised members of the Board that this meeting was called to
nominate and elect Mr. Kit Wong as an outside Director to the Board of Directors
of this Company. He explained to the members that the Securities and Exchange
Commission ("SEC") now requires public companies to have so called "Outside
Directors", who are not officers of the Company, to vote on officers salaries
and stock options. At present the Company does not have any salaried officers
nor a stock option plan. He explained that when he interviewed members of law
firms to represent the Company in SEC matters, he discovered that insurance
companies that insure SEC law firms require that their clients have Outside
Directors on their boards. To meet this requirement Mr. Wong has agreed to serve
in that position on the Board.

After a brief discussion, Mr. Lindo nominated Mr. Wong to become a member of
this Company's Board of Directors. Upon motion duly made and seconded, Mr. Wong
was elected to the board of Directors of the company. There being no further
business upon motion duly made, seconded and unanimously carried, the meeting
was adjourned at 7:30PM.

Date:  December 10, 1999

      Betty Sue Svandrlik
--------------------------------
  Betty Sue Svandrlik, Secretary

<PAGE>
                         INDEPENDENT AUDITORS' REPORT



To the Board of Directors of
Kenilworth Systems Corporation


We have audited the accompanying consolidated balance sheets of Kenilworth
Systems Corporation as of December 31, 1999 and 1998 and the related statement
of operations and deficit, stockholders' equity (deficit) and cash flows for the
period from November 24, 1998, December 31, 1998 and the year ended December 31,
1999. These financial statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on these financial
statements based on our audit.

We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the financial position of Kenilworth Systems
Corporation as of December 31, 1999 and 1998 and the results of operations and
its cash flows for the period from November 24, 1998 to December 31, 1998 and
the year ended December 31, 1999 in conformity with generally accepted
accounting principals.

The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern. As discussed in Note 5 to the
financial statements, the Company has recently emerged from bankruptcy and has
not yet commenced operations. Future operations are contingent on obtaining
funding. These conditions raise substantial doubt about its ability to continue
as a going concern. Management's plans regarding those matters are also
described in Note 5. The financial statements do not include any adjustments
that might result from the outcome of this uncertainty.


Peter C. Cosmas Co., CPA's

New York, New York
March 30, 2000

<PAGE>

              KENILWORTH SYSTEMS CORPORATION AND SUBSIDIARIES

                    CONSOLIDATED BALANCE SHEETS, as of
                       December 31, 1999 and 1998

<TABLE>
<CAPTION>
                         ASSETS

                                                              1999                     1998
<S>                                                       <C>                      <C>

 Cash                                                     $          2             $         --

 Due from related party                                          9,032                   16,000
                                                          ------------             ------------
     TOTAL ASSETS                                         $      9,034             $     16,000
                                                          ============             ============

        LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)

Accrued Liabilities                                       $        242             $      7,912

Convertible Promissory Note Payable                                  0                   10,000
                                                          ------------             ------------

    TOTAL LIABILITIES                                     $        242             $     17,912

Common Stock, $.01 par value, authorized
 100,000,000 shares; issued and outstanding
 60,877,352 in December 31, 1998 and
 62,289,018 in December 31, 1999                               622,890                  608,773

Paid in capital                                             23,784,763               23,776,346

Deficit                                                    (24,398,861)             (24,387,031)
                                                          ------------             ------------

    TOTAL STOCKHOLDERS' EQUITY (DEFICIT)                         8,792                   (1,912)
                                                          ------------             ------------
    TOTAL LIABILITIES                                            9,034                   16,000
      AND STOCKHOLDERS' EQUIY (DEFICIT)                   ============             ============
</TABLE>

              The accompanying notes are an integral part of these
                       consolidated financial statements.

<PAGE>
                 KENILWORTH SYSTEMS CORPORATION AND SUBSIDIARIES

                CONSOLIDATED STATEMENTS of OPERATION and DEFICIT
             For the periods January 1, 1991 to November 23, 1998,
                     November 24, 1998 to December 31, 1998
                      and the year ended December 31, 1999

<TABLE>
<CAPTION>
                           Year Ended       Nov. 24, to    Jan. 1, 1991
                          DEC. 31, 1999    Dec. 31, 1998   NOV. 23, 1998
<S>                            <C>              <C>              <C>
Revenues:
 Sales                      $     -0-        $     -0-        $     -0-

Costs and Expenses:
 Selling, general
 and administrative
 expenses                     11,636            7,912               -0-
 Interest expense (income)       194               -0-              -0-
   Total Costs and            11,830            7,912               -0-
   Expenses
     Net income (loss)
      before other income
      and (losses)           (11,830)          (7,912)              -0-

OTHER INCOME AND (LOSSES):
 Sale of assets                  -0-               -0-      $3,676,347
 Other gains                     -0-               -0-         108,000
 Interest income                 -0-               -0-         516,056
   Total Other
   Income                        -0-               -0-       4,300,403
 (a) Payment of liabilities
     net of eliminations         -0-               -0-             -0-
 (b) bankruptcy costs            -0-               -0-             -0-
 (c) elimination of assets       -0-               -0-             -0-
 (d) cancellation of
     treasury stock              -0-               -0-      (8,767,921)
   Other losses                  -0-               -0-      (4,467,518)
     Net income (loss)      (11,830)           (7,912)      (4,467,518)
Deficit - Beginning
   Of year              (24,387,031)      (24,379,119)     (19,911,601)
Deficit - End of
   Of year             $(24,398,861)     $(24,509,784)    $(24,379,119)
                        =============     =============    =============
Earnings (Loss) per
   Share of
   common stock (Note 5)    $-0-              $-0-            ($.07)
Average number of
   shares outstanding   62,049,130        60,509,784       60,477,352
                        ==========        ==========       ==========
</TABLE>

              The accompanying notes are an integral part of these
                       consolidated financial statements.

<PAGE>
              KENILWORTH SYSTEMS CORPORATION AND SUBSIDIARIES

                            STATEMENTS of CASH FLOWS
                   for the periods ending November 23, 1998,
                    December 31, 1998 and December 31, 1999

<TABLE>
<CAPTION>
                                Year Ended    Nov. 24, to    Jan. 1, 1991
                               DEC. 31, 1999  Dec. 31, 1998  NOV. 23, 1998
<S>                                 <C>            <C>           <C>
CASH FLOWS USED IN
   OPERATING ACTIVITIES

Net Loss                         $(11,830)       $(7,912)       $    -0-
Adjustments to reconcile
 net income to net cash
 used in operating activities
 (Increase) decrease in due
 from related party                 6,968             -0-            -0-
Decrease in accrued
 Liabilities                         (330)         7,912             -0-
      TOTAL ADJUSTMENTS             6,638          7,912             -0-

      NET CASH USED IN
       OPERATING ACTIVITIES        (5,192)            -0-            -0-

CASH FLOWS FROM
   FINANCING ACTIVITIES
Proceeds from issuance of
 convertible  promissory note       5,194             -0-            -0-
Net Increase (Decrease) in cash         2             -0-            -0-
CASH - BEGINNING OF PERIOD             -0-            -0-            -0-
CASH - END OF PERIOD                    2             -0-            -0-

</TABLE>

Non-cash transactions:

The Company issued convertible promissory notes on November 13, 1998 and
December 29, 1998 in exchange for receivable from a related party in the amounts
of $6,000 and $10,000 respectively. These notes were later converted to 400,000
and 477,666 shares of common stock during the period November 24, 1998 and
December 31, 1998, respectively.

The Company issued common stock in lieu of payment for services rendered in the
amount of $7,340, during the year ended December 31, 1999.

During the period ending December 31, 1999, 200,000 shares of Common Stock were
issued for no consideration.

In connection with the emergence from bankruptcy the trustee distributed
$4,300,403 for the payment of priority liabilities and bankruptcy costs.

The accompanying notes are an integral part of these consolidated financial
statements.

<PAGE>
              KENILWORTH SYSTEMS CORPORATION AND SUBSIDIARIES

                           CONSOLIDATED STATEMENTS of
                         STOCKHOLDERS' EQUITY (DEFICIT)
                for the year ended December 31, 1999, the periods
                beginning November 24, 1998 to December 31, 1998,
                      January 1, 1991 to November 23, 1998
                 and the years ended December 31, 1990 and 1989

<TABLE>
<CAPTION>
                                                                          Additional
                                               Common Shares                Paid-in         Retained
                                            Shares          Amount          Capital         Earnings
                                         ------------    ------------    ------------     ------------
<S>                                      <C>             <C>             <C>              <C>
Balances, December 31, 1990              $ 60,477,352    $    604,773    $ 23,774,346     $(19,911,601)
Net Loss                                           --              --              --     $ (4,467,518)
Balances, February 23, 1998              $ 60,477,352    $    604,773    $ 23,774,346     $(24,379,119)
Balances, November 23, 1998              $ 60,477,352    $    604,773    $ 23,774,346     $(24,379,119)
Issuance of Common Stock                      400,000           4,000           2,000
Net Loss                                           --              --              --     $     (7,912)
                                         ------------    ------------    ------------     ------------
Balances, December 31, 1998              $ 60,477,352    $    608,773    $ 23,776,346     $(24,387,031)
Issuance of Common Stock in
 connection with conversion of debt           477,666           4,777          10,417
Issuance of Common Stock For services         734,000           7,340
Non-Cash Issuance of Securities               200,000           2,000          (2,000)    $    (11,830)
Net Earnings
                                         ------------    ------------    ------------     ------------
Balances December 31, 1999               $ 62,289,018    $    622,890    $ 23,784,763     $(24,398,861)
                                         ============    ============    ============     ============
</TABLE>


              The accompanying notes are an integral part of these
                       consolidated financial statements.

<PAGE>
               KENILWORTH SYSTEMS CORPORATION and SUBSIDIARIES
                 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1 - Summary of Significant Accounting Policies

The Company and Nature of Business

Kenilworth Systems Corporation (the "Company") was incorporated in New York in
April 1968 and is now engaged in the business of developing, manufacturing, and
operating of casino machines, named Roulabette" terminals.

The Company was in bankruptcy proceedings under Chapter 7 and 11 of the
Bankruptcy Code for the period from August 27, 1982 through September 23, 1998.
(See Note 2). For the period of February 5, 1991 through September 23, 1998 the
Company ceased all operations. The Company emerged from Chapter 7 bankruptcy on
September 23, 1998 and plans to be engaged in the development, manufacturing,
marketing and operation of "Roulabette", a system that allows casino patrons to
play along with live table games in progress, via closed circuit television, on
"Roulabette" terminals located within the casino confines.

Principals of Consolidation

The consolidated financial statements include the accounts of Kenilworth Systems
Corporation  and  its  wholly  owned   subsidiaries:   Video  Wagering   Systems
Corporation  and Roulabette  Corporation.  Neither  subsidiary has any assets or
liabilities.

In September 1986 the Company exchanged 466,000 shares of its common stock for
all of the outstanding common stock of Video Wagering Corporation ("Video").
This transaction was accounted for under the purchase method of accounting.

Earnings Per Share

The Company computes and presents earnings (loss) per share in accordance with
the requirements of Statement of Financial Accounting Standards ("SFAS") No. 128
"Earnings Per Share".

Basic loss per share is based on the weighted-average number of shares of common
stock outstanding for the period, which were ($.00), ($.00) and ($.07) for the
year ended December 31, 1999, the period November 24, 1998 to December 31, 1998
and the period January 1, 1991 to November 23, 1998, respectively.

Diluted earnings per share has not been presented in the accompanying financial
statements because the effect of assumed conversion of convertible promissory
notes was anti-dilutive.

Income Taxes

The Company uses the liability method to account for income taxes in accordance
with requirements of SFAS No. 109.

<PAGE>

Use of Estimates in the Financial Statements

The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of revenues and expenses during the reporting period.
Actual results could differ from these estimates.

Fair Value of Financial Instruments

The Company's financial statements include cash, receivables and accounts
payable. Due to the short-term nature of these instruments, the fair value of
these instruments approximates their recorded values. Convertible promissory
notes at December 31, 1998, are stated at fair market value, which management
believes equal to their cost.

NOTE 2 - Bankruptcy Proceedings

Throughout the 1980's the Company experienced working capital shortages that
resulted in the Company filing a voluntary petition for reorganization under
Chapter 11 of the United States bankruptcy Code. From August 31, 1982 to June 7,
1985 the Company operated during reorganization proceedings. On June 7, 1985, a
United States Bankruptcy Judge confirmed the Company's Plan of Reorganization.
On April 27, 1988, the Bankruptcy Court entered a final decree in the case. On
October 27, 1988, the case was re-opened on grounds the Debtor failed to
consummate its plan of reorganization and on February 25, 1991 the case was
converted to a case under Chapter 7 of the Bankruptcy Code. By order of the
Court dated June 19, 1991 the Chapter 7 was reconverted to a case under Chapter
11 of the Bankruptcy Code. A second plan of reorganization was approved and a
second order of confirmation was entered in connection with the Chapter 11 case
on October 2, 1991. However, the Debtor was unable to consummate its second plan
of reorganization, and by order dated November 25, 1991, the case was
reconverted to a case under Chapter 7 of the bankruptcy Code.

From February 1991 through September 1998, the Company was inactive. In
September 1998 a United States Bankruptcy Judge in the Eastern District of New
York approved the Final Report and Accounts submitted by the Chapter 7 Trustee
of the Estate of Kenilworth and after obtaining approval from the U.S. Trustee,
Kenilworth made a 100% cash distribution to the creditors and paid in full all
administrative fees and expenses. The Company emerged from Bankruptcy on
September 23, 1998 with no assets and no liabilities. For the period September
24, 1998 through November 23, 1998 the Company was in the process of monitoring
the payments by check t o the creditors. No other activity occurred during that
period.

NOTE 3 - Convertible Promissory Notes

At November 23, 1998, the Company had outstanding a convertible promissory note
for $6,000 bearing interest at prime and maturing on November 13, 1999. The
holder of the note had the right to convert all or part of the note into fully
paid non-assessable common stock at various stated conversion prices. The note
was converted by the holder into 400,0000 shares of common stock on December 29,
1998.

<PAGE>

At December 31, 1998, the Company had outstanding a convertible promissory note
in the amount of $10,000, bearing interest at prime and maturing on December 29,
1999. The holder of the note had the right to convert all or part of the note
into fully paid non-assessable common stock at various stated conversion prices.
The note was converted by the holder into 333,334 shares of common stock on
January 7, 1999.

NOTE 4 - Income Taxes

The Company is a "C" Corporation for tax purposes.

The Company estimates that it has available approximately $8,000,000 in net
operating loss carryforwards, of which approximately $4,000,000 will expire at
various dates through 2005 with the remaining amount expiring at various dates
through 2018. Utilization of the NOL carryforward may be limited under various
sections of the Internal Revenue Code depending on the nature of the Company's
operations.

The Company has a deferred tax asset of approximately $2,800,000 arising from
its net operating loss carryforwards. The deferred tax asset has been fully
reserved due to the uncertainty of future realization.

NOTE 5 - Going Concern Uncertainty

As indicated in Note 2, the Company emerged from Chapter 7 in September 1998 and
has not yet commenced operations. These factors create uncertainty as to the
Company's ability to operate as a going-concern. Management plans to develop a
wagering system, called "Roulabette", that allows patrons to play along with
live casino table games. The first step in the plan is to conduct testing.
Unless the Company is able to obtain sufficient funds, none of the tests and
initial development work can commence. The Company plans to obtain the necessary
funding by offerings its common stock, or private placement, Senior Cumulative
Convertible Preferred Shares, or selling limited joint venture participants in
future Roulabette franchises.

If initial testing is successful, the second step is to obtain the proper
licenses from the gaming control regulators. Upon successful licensing, the
Company plans to obtain financing from regular banking sources to finance the
manufacturing of the Roulabette terminals.

The accompanying financial statements have been prepared assuming the Company is
a going-concern and do not reflect adjustments, if any, that would be necessary
if the Company were not a going-concern.

NOTE 6 - Related Party Transactions

Due from related party at November 23, 1998 and December 31, 1998 represents a
receivable from a stockholder of the Company in connection with the issuance of
convertible promissory notes.