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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, 2000

                                      OR

[ ]  Transition report  pursuant  to Section 13 or 15(d) of the Securities
     Exchange Act of 1934 (No Fee Required)

     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:

                                      NONE

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

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


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 [ ]


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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. [ ]

Indicate by check mark whether the Registrant has filed all documents and
reports required to be filed by Section 12, 13 or 15(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, 2000 totaled 64,932,502 shares.

The aggregate market value of the voting stock held by non-affiliates
(54,601,502 shares) of the Company on March 8, 2001 was $6,552,180. The price at
which the common stock sold on the aforesaid date was $0.12.


                       DOCUMENTS INCORPORATED BY REFERENCE
                       -----------------------------------


Part III which includes Item 10 (Directors and Executive Officers of the
Registrant), Item 11 (Executive Compensation), Item 12 (Security Ownership of
Certain Beneficial Owners and Management) and Item 13 (Certain Relationships and
Related Transactions) will be incorporated in the registrant's proxy statement
to be filed within one hundred twenty (120) days of December 31, 2000, and are
incorporated herein by reference thereto.

     In addition to historical information, This Annual Report on Form 10-K
contains certain forward-looking statements and Risk Factors. We expressly
disclaim any obligations on undertaking to release publicly any updates or
revisions to any forward-looking statements contained herein to reflect any
change in our expectations with regard thereto or to reflect any change in
events, conditions or circumstances on which any such forward-looking
statement is based in whole or in part. Readers should amongst the other
statements contained herein and future filings with the Securities and
Exchange Commission, including the Quarterly Reports on Form 10-Q to be
filed, carefully review in Item 7 "Cautionary Statements for Purposes of the
"Safe Harbor" Provisions of the Private Securities Litigation Reform Act of
1995 and Risk Factors". All of the Risk Factors contained therein should be
carefully read.

                                     PART I
                                     ------


ITEM 1 - DESCRIPTION OF BUSINESS
--------------------------------


THE COMPANY

Kenilworth Systems Corporation hereinafter referred to as "Kenilworth" or "we"
was incorporated on April 25, 1968 under the laws of the State of New York.

PLANNED BUSINESS

We plan to be engaged in the development, manufacturing, marketing and operation
of "Project Roulabette". Project Roulabette is proposed to allow casino patrons
and other players around the industrialized world to play along with live
in-progress casino table games such as Roulette, Craps, Baccarat and Black jack
via digital satellite television programming emanating from strictly state
regulated casinos located in the United States and other locations around the
world, on self-sufficient computer terminals dubbed "Roulabette".

Our present plans are to develop a wagering system, dubbed "Project Roulabette"
that would allow patrons all over the industrialized world to play and wager on



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live casino table games on terminals placed in hotels, resorts, bars and other
public gathering places and in homes and offices on personal computers (PC's) or
television sets connected to set top boxes for Interactive TV via digital
satellite broadcasts emanating from strictly regulated U.S. casinos.

The first step will be to conduct a three (3) month test of the system at our
proposed facility and, after successfully completing the test, to test the
system using a casino site. The test will be with twenty (20) Roulabette
terminals.

To conduct the tests Kenilworth believes it will require initially five million
dollars ($5,000,000) 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. In order to
market Project Roulabette while the development of the terminals proceeds
Kenilworth will require an additional five million dollars ($5,000,000) to hire
management and marketing people to secure future orders for the system.

In 1990 Kenilworth completed a prototype system that allowed casino patrons to
play along with live in-progress casino table games only within the confines of
a casino, via closed circuit television. Also in 1990, we developed and
delivered for the TAB in Australia, a cashless slot machine system. (See
"History of the Company" in this Item one). Both systems required debit cards
and central main frame computers to manage the wagers. By making use of the
expertise applied in the development of the aforementioned systems we plan to
develop a second generation terminals that will manage the wagers. This as
planned would allow a player in an interactive manner, at a remote location
(outside the casino confines), to experience the actual play and excitement at
the casino table game and to make wagers on the various games, without having to
be physically present at the casino or casino table.

The proposed Roulabette terminal consists of a personal computer (PC) with two
(2) monitors. One monitor as proposed would display the live in-progress casino
game and the second would be outfitted with a touch screen which allows a player
to place wagers directly over the games displayed on the first monitor, 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 proposed to be self- sufficient, manage wagers from $.25 to $100 or
the equivalent in most any currency and receive the table game play via
simulcast satellite TV broadcasts.

Where authorized, hotels, resorts clubs and other public gathering places will
be able to offer casino table game action in their establishments without
incurring the costs to operate a casino. The Roulabette terminal is expected to
offer an alternative to slot machine players. There are now believed to be more
than ten (10) million slot machines played throughout the world.

Terminals played in casinos would allow players to wager at table games in
progress, only a few feet away, with much lower minimum wagers. Potential table
game players can also experiment and learn the games before graduating to table
game play. In addition to developing the stand-alone terminals, we will also
seek to develop systems that will allow individuals at home and offices,
throughout the world, to place wagers along with the live, in-progress casino
games, using personal computers or modalities as a television set connected to


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the internet (interactive TV) with set top boxes as offered by AOLTV,
Microsoft's WebTV and AT&T TV.

Kenilworth will seek to promote to state lotteries, and other state regulated
entities, the ability to operate websites that will manage the wagers. The
program will ask state legislatures to amend their lottery horse/dog racing and
OTB legislation to include Roulabette wagering or promulgate new legislation.
There are no assurances that the necessary approvals will be granted.

There are powerful arguments for state legislatures to amend their Lottery Acts
to include "play along with casino games". Lottery revenue is gradually
decreasing in every state. Thirty-two (32) states and the District of Columbia
are pooling their lottery prizes with the "Power Ball" and "Big Game" national
lotteries. In most of these states, the state lottery finds it difficult to
obtain sufficient numbers of players to make up a minimum weekly lottery prize
of one million dollars ($1,000,000). In most states, the revenue from lottery
play benefits education. States need something more attractive to restore
revenue. With "play along with casino games", there is interaction, excitement
and fun. All at much better odds than may be offered by the lotteries. The
lotteries can establish maximum wagers daily, weekly and monthly limits.

Once play along in homes and other public gathering places has started, we
intend to introduce casino games such as "limited tournament play". For
twenty-five dollars ($25.00), players can sign up with their respective website
operators and make up to thirty (30) wagers on any table game. The individual
that wins the most money during a specific tournament game period may win as
much as a million dollars ($1,000,000) in addition to their game play win. As
more interactive play along with casino games develops, the prizes can be
increased and multiplied. The limited tournament play games can be scheduled
more than once a day, during specific hours of the day, on specific days or
nights of the week or once or twice a month. Actual live experience will
determine scheduling.

HISTORY OF KENILWORTH

Before entering the bankruptcy proceedings described below, Kenilworth for the
last eighteen (18) years was engaged in the development, manufacturing and
marketing of cashless casino wagering systems.

In April 1988, Kenilworth 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 one hundred twenty four (124) Player Activated Terminals
("PATs") which are similar to slot machines except they are played with debit
cards instead of coins or tokens. The PAT's offer variable denomination play and
selection of five (5) different games.

In 1990, Kenilworth had entered into contracts with three (3) Atlantic City, New
Jersey casino operators to test market Kenilworth's cashless wagering system for
a minimum of six (6) months. Each installation on the casino floor was to have a
minimum of one hundred (100) PAT's and fifty (50) slot machines, converted by
Kenilworth to be played both with cash and cashless. The combination of cash and
cashless on existing slot machines was attractive to the casino operators, as it
permitted a gradual transition from cash to cashless play.


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Kenilworth was to furnish, without expense to the casino, all the necessary
equipment, including the central computer and communications hardware. The
casino operators would provide for the installation of cables required to
interconnect the equipment, as well as provide free accommodations for the
Kenilworth's personnel necessary to operate 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 if operating profitably, the New Jersey casino regulatory agency agreed it
would commence examining the system for their approval process. We expected this
process to take at least three (3) months. When we had obtained approval from
the regulatory agencies for its system, the operators would then purchase the
system in quantities, for prices stated in the contract, or ask Kenilworth to
remove the system.

Just prior to the start of the first test, Kenilworth ceased all operations in
February 1992. Thus, none of the tests were conducted. We sold and installed
only one (1) cashless slot system, which was to the Australian agency described
above.

Throughout the 1980's Kenilworth experienced working capital shortages that
resulted in our filing a voluntary petition for reorganization under Chapter 11
of the United States Bankruptcy Code. From August 28, 1982 to June 7, 1985 we
operated during reorganization proceedings. On June 7, 1985, a United States
Bankruptcy Judge confirmed our 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,
Kenilworth 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 5, 1991 through September 23, 1998, we were 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 one hundred percent (100%) cash distribution to the creditors
and paid in full all administrative fees and expenses. We emerged from
Bankruptcy on September 23, 1998 with no assets and no liabilities and with the
Bankruptcy Court approval, all of the books and records since incorporation of
Kenilworth have been released us.

We 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 ($1,000,000) 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


<PAGE>

($8,000,000.00) in unexpired net operating tax loss carry forward credits belong
to Kenilworth. See Note 5- Notes to the Consolidated Financial Statements.

To make use of the tax credits Kenilworth must have income taxable earnings from
the same type of business as when the credits were earned. We believe that
earnings from Roulabette would qualify for the tax credits under the existing
tax code. We had no other assets and no liabilities, when we emerged from
bankruptcy.

NATURE OF PLANNED BUSINESS

The gaming industry is comprised primarily of five (5) 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.

Kenilworth intends to operate primarily in the casino segment.


                             THE ROULABETTE TERMINAL
                             -----------------------


The Roulabette terminal which is planned would consist of a personal computer
(PC) with two (2) monitors, one monitor displays the live in-progress casino
game and the second is outfitted with a touch screen which allows a player to
place wagers directly on the games, 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 proposed to be 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
(Roulette, Craps, Black Jack and Baccarat) that are available and broadcast live
via digital satellite broadcasts (simulcast) 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.

ROULETTE

When playing Roulette, the monitors are planned to 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 simulcast 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.


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The player now watches the ball go around on the wheel until the ball comes to
rest on one of the thirty-eight (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 twenty (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 proposed to be displayed on the
screen. 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.

BACCARAT

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

BLACKJACK

When playing Blackjack, the camera is proposed to show up to seven (7) 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 or by
credit to the wager's account at the website. 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 would select
instructions on how to play and may make up to ten (10) "make believe" bets for
practice. Playing along on a Roulabette terminal may be more exciting than
playing a slot machine, since the player has a hand in the outcome of the game.


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Roulabette should be a welcome addition to casino operators. It may entice slot
players to graduate to table game players.

MARKETING STRATEGY/SALES PLAN

In the United States Kenilworth expects to refrain from using the Worldwide Web
(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, Kenilworth 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 and their television sets using interactive TV set top boxes that convert
regular television sets into minicomputers 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 and/or
television sets with telephone lines not crossing any state lines, similar in
principle to telephone accounts wagering offered by the New York State Off-Track
Betting Corporation and the state of Nevada casino sports book.

After we obtain permission to play Roulabette in a given state and engages a
wager management organization in order to promote digital satellite and
interactive television to the state's residents, Kenilworth would install the
eighteen (18) inch dish antenna and converter box required to receive digital TV
programming and interactive TV at its own cost, if the subscriber opens a
Roulabette wagering account for three hundred dollars ($300). In addition,
Kenilworth would pay the monthly subscription fees to view all digital TV
programming offered and the internet service provider (ISP) subscription fee if
the customer wagers at least one hundred twenty dollars ($120) each month - win,
lose, or draw - makes no difference.

In states with approved lottery and/or other gambling legislation, we plan to
introduce Roulabette terminals to hotels, clubs (similar to card clubs in
California) and resorts, to provide upscale gathering places 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 would be required is an
eighteen (18) inch direct TV antenna and distribution equipment. The Roulabette
terminals are intended to be 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). We plan to lease all the equipment necessary to participants for a
share of the profits.

To gain approval for our Roulabette-style gambling in jurisdictions that have
not approved any gambling legislation, Kenilworth proposes to engage lobbyists
to introduce, promote, and obtain legislative approval to permit
Roulabette-style gambling. Our 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


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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.

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

In overseas installations, wherever permitted, Kenilworth 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 are believed to offer the same or
similar equipment or systems as intended 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 (3) major slot machine manufacturers in the United States are
International Gaming Technology, Bally Gaming and Anchor Gaming, all of which
have vastly greater resources than the Company and may have under development
systems that directly compete with Roulabette.

We immediately plan only to broadcast the live casino table games from one or
two (1 or 2) companies that own casinos. Other casino owners may start their own
broadcasts and have their own terminals manufactured that compete with
Kenilworth after Kenilworth has done all its pioneering for play-along wagering.

PATENTS

We have filed a patent application for the system "Project Roulabette" that
includes the terminal, the games and for copyright protection for its associated
software. There are no assurances that Kenilworth will be issued any patents and
if they are issued that they will deter competition and/or benefit us
financially.

GOVERNMENT REGULATIONS

Kenilworth has no licenses from casino regulating authorities at the present
time and may never become able to obtain any licenses that we will require in
the future. Each state has its own regulations, and in states where Kenilworth
does business, Kenilworth will have to comply with these regulations. The
following discussion is not necessarily complete, or current regarding laws and
regulations that may be applicable to us.

NEW JERSEY

In order to sell its Roulabette wagering systems to casinos in New Jersey,
Kenilworth 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. We will have to make arrangements to apply for
licensing in New Jersey. The New Jersey Commission may require that persons


<PAGE>

holding in excess of five percent (5%) of the publicly traded equity securities
of Kenilworth qualify under the Casino Control Act. Any beneficial holder of the
voting securities owned 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.

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 Kenilworth 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 ninety (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 us to be investigated and licensed or found suitable. Any
person who acquired five percent (5%) or more of Kenilworth's securities must
report the acquisition to the Nevada Gaming Regulators. Any person who becomes a
beneficial owner of ten percent (10%) or more of Kenilworth's securities must
apply for a finding of suitability. The Nevada Regulators have the power to
investigate any security holder of Kenilworth.

If Kenilworth 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 Kenilworth'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


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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 may also apply to our 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 pay-out 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. Our
Roulabette terminals may be considered similar to slot machines and may have to
meet these regulations.

FABRICATION/ASSEMBLY OPERATION

When we start to market the Roulabette Wagering System, we plan to
assemble/manufacture the initial terminals required for the tests at a proposed
fifteen thousand (15,000) square foot industrial facility on Long Island, New
York, from standard or specially manufactured (to our 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, we will engage subcontractors to perform the assembly work in the
interest of cost efficiency.

EMPLOYEES

Kenilworth at present has two (2) employees. One performs administration work
and the other works on research related to casino wagering around the world.
After acquiring the proposed leased industrial space, we expect to engage
immediately six (6) additional employees all of which may be former Kenilworth
employees and several consultants. One employee will be for administrative work,
and the others in software design, television broadcasting, component design and
fabrication, and assembling.

RESEARCH AND DEVELOPMENT

Kenilworth's product development work will be divided into two (2) 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 TV
broadcast system and software required to manage the wagers from outside the
casino environment.

Kenilworth presently does not have the capital to support its planned research
and development and is presently looking for sources to raise such capital, of
which there can be no assurances. Research and development costs are expected to
be five million dollars ($5,000,000) over the next six (6) to eight (8) months.
An additional five million dollars ($5,000,000) will be required to engage a
management team and marketing staff. Most of that amount will be expended for
the salaries and fees for the software programmers and consultants.


<PAGE>

BACKLOG

We do not have any backlog.


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


Kenilworth, 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.


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


Since emerging from Chapter 7 Bankruptcy Proceedings on September 23, 1998,
Kenilworth has not been involved in any legal proceedings.


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


Not Applicable.


                      EXECUTIVE OFFICERS OF THE REGISTRANT
                      ------------------------------------

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

<TABLE>
<CAPTION>
                                                               FIRST ELECTED
                                       OFFICES AND             OFFICER OF
NAME                       AGE         POSITIONS HELD          KENILWORTH
-------------------------------------------------------------------------------
<S>                      <C>          <C>                     <C>
Herbert Lindo              75          Chairman of the         1972
                                       Board, President
                                       & Treasurer

Joyce Clark                64          Director & Financial    1998
                                       Officer

Kit Wong                   71          Director                1999

Betty Sue Svandrlik        61          Vice President &        1998
                                       Secretary
-------------------------------------------------------------------------------
</TABLE>

All of the above executive officers and directors have been elected to serve
until the next Annual Meeting of Shareholders or until their respective

<PAGE>

successors are elected and qualified. The Board presently anticipates that the
Shareholders Meeting will be held in late April or early May 2001.


                                     PART II
                                     -------


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


(a) After Kenilworth 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". On January 19, 2000, our Common Stock was removed
from the NASDAQ system and started trading on the OTC Pink Sheets. The following
table sets forth high and low closing sales prices for our Common Stock, as
reported on the OTC Pink Sheets.


<TABLE>
<CAPTION>
                                     Low Sales Prices      High Sales Prices

                                                      1999
                                                      ----
        <S>                              <C>                    <C>
         January 1, 1999
         Through March 31, 1999              $.08                     $.20

         April 1, 1999
         Through June 30, 1999               $.05                     $.08

         July 1, 1999
         Through September 30, 1999          $.05                     $.08

         October 1, 1999
         Through December 31, 1999           $.02.5                   $.08

<CAPTION>
                                                      2000
                                                      ----
        <S>                              <C>                    <C>
         January 1, 2000
         Through March 31,2000               $.05                     $.35

         April 1, 2000
         Through June 30, 2000               $.11                     $.39

         July 1, 2000
         Through September 30, 2000          $.20                     $.44

         October 1, 2000
         Through December 31, 2000           $.12                      $.23
</TABLE>


(b) Holders. There were approximately 3,400 holders of record of Common Stock of
Kenilworth as of December 31, 2000.


<PAGE>

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


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


The following table summarizes certain selected financial data and is qualified
by reference to, and should be read in conjunction with, the Consolidated
Financial Statements and related Notes thereto and with "Management's Discussion
and Analysis of Financial Condition and Results of Operations" included
elsewhere herein.

Selected Financial Data for the five (5) years ended December 31, 2000, are as
follows:

<TABLE>
<CAPTION>
                                     SUMMARY OF OPERATIONS

                          2000             1999              1998            1997       1996
                          ----             ----              ----            ----       ----
<S>                     <C>             <C>              <C>                <C>
Net sales
from operations          $     -0-       $    -0-         $       -0-        The Company did
Other income                             $    -0-         $ 4,300,403        not have any
Payments of                                                                  operations
  Liabilities                            $    -0-         $(8,767,921)       during
Earnings (loss)          $(136,589)      $(11,830)        $(4,475,430)       Bankruptcy
Earnings (loss)                                                              Proceedings.
  per common share       $    (.00)      $   (.01)        $      (.07)
Fully diluted            $    (.00)      $   (.01)        $      (.02)
CAPITAL RESOURCES
as of December 31,
Total assets             $  47,859       $    -0-         $        -0-
Current assets           $  37,564       $  9,034         $     16,000
Current liabilities      $  28,365       $    242         $      7,912
Stockholders' equity     $  19,494       $  8,792         $        -0-
</TABLE>


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


(a) RESULTS OF OPERATIONS

Since we emerged from bankruptcy proceedings on September 23, 1998, we had no
revenues from operations, and therefore sustained losses from general
administration expenses amounting to $136,589 in 2000 and $11,830 in 1999.
Kenilworth has had no revenues from operations during the past eight (8) years
and there can be no assurances that it will ever have revenue from present
planned operations.

(b) LIQUIDITY AND CAPITAL RESOURCES


<PAGE>

Kenilworth has not conducted any business and operations since 1991. At December
31, 2000 our working capital was $9,199. In Kenilworth's present state of
operation to formulate a viable business plan, Kenilworth requires very little
funding to continue this planning. We have been dependant upon the resources of
its President who receives no compensation and funds received in 2000 from
private investors of $7,500.

Our present plans are to develop a wagering system dubbed "Project Roulabette"
that would allow patrons all over the industrialized world to play and wager on
live casino table games on terminals placed in hotels, resorts, bars and other
public gathering places and in homes and offices on personal computers (PC's) or
television sets connected to set top boxes for Interactive TV via digital
satellite broadcasts emanating from strictly regulated U.S. casinos.

The first step will be to conduct a three (3) month test of the system at our
proposed facility and, after successfully completing the test, to test the
system using a casino site. The test will be with twenty (20) Roulabette
terminals.

To conduct the tests Kenilworth believes it will require initially five million
dollars ($5,000,000) 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. In order to
market Project Roulabette while the development of the terminals proceeds we
will require an additional five million dollars ($5,000,000) to hire management
and marketing people to secure future orders for the system.

Unless we are able to obtain these funds, of which there are no assurances none
of the tests and initial development work can commence; and we will not be able
to commence our planned business.

Kenilworth 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.
There can be no assurances that the Company will be able to secure any of these
funds.

When the tests are completed and we have obtained all required licenses from the
gaming control regulators and the state legislatures to broadcast the live
in-progress casino table games and has contracts with franchisees to place
terminals around the world, we expect to commence normal business. Kenilworth
will also seek to obtain production financing from regular banking sources to
finance the manufacturing of the Roulabette terminals. There can be no
assurances that any such financing will be available to us.


CAUTIONARY STATEMENT FOR PURPOSES OF THE "SAFE HARBOR" PROVISIONS OF THE PRIVATE
SECURITIES LITIGATION REFORM ACT OF 1995 AND RISK FACTORS

The information contained in this Form 10-K and Kenilworth's other filings with
the Securities Exchange Commission may contain "forward-looking" statements
within the meaning of section 27A of the Securities Act of 1933, as amended, and
Section 21E of the Securities Exchange Act of 1934, as amended, and is subject
to the safe harbors created thereby. Such information involves important risks
and uncertainties that could significantly affect results in the future and,


<PAGE>

accordingly, such results may differ from those expressed in any forward looking
statements herein. Future operating results may be adversely affected as a
result of a number of factors. Set forth below are certain important factors
that could cause actual results to differ materially from those in such
"forward-looking" statements that are directed to each shareholder and potential
shareholder of Kenilworth.

YOU SHOULD NOT RELY ON FORWARD-LOOKING STATEMENTS BECAUSE THEY ARE INHERENTLY
UNCERTAIN

You should not rely on forward-looking statements in this Form 10-K. This Form
10-K contains forward-looking statements that involved risks and uncertainties.
We use words such as "anticipates", "believes", "plans", "expects", "future",
"intends" and similar expressions to identify such forward-looking statements.
You should not place undue reliance on these forward-looking statements, which
apply only as of the date of this Form 10-K. Our actual results could differ
materially from those anticipated in these forward-looking statements for many
reasons, including the risks faced by Kenilworth as described below and
elsewhere in this Form 10-K.

NO OPERATING HISTORY

We have had no revenues from operations since 1991. We emerged from our
bankruptcy proceedings in 1998 without assets. We have had no revenue from
operations since then and we may never have any revenues from operations in the
future.

WE HAVE NO WORKING CAPITAL

As of December 31, 2000 the working capital of Kenilworth is $9,199. This will
not enable Kenilworth to achieve any of its planned operations. There can be no
assurances that Kenilworth would ever have sufficient working capital to engage
in its planned operations.

OUR BUSINESS IS ONLY IN THE PLANNING STAGE

Kenilworth's business presently is solely in the planning stage. We plan to
engage in the development, manufacturing, marketing of an operation entitled
"Project Roulabette". Project Roulabette would allow casino patrons and other
players to play along with live in-progress casino table games such as Roulette,
Craps, Baccarat, and Blackjack via digital satellite television broadcasts
(simulcasts) emanating from strictly state regulated casinos located in the
United States and other locations around the world, to self-sufficient computer
terminals dubbed "Roulabette". The Roulabette terminal is a proposal intended to
be built and there can be no assurances that it will ever be built. We have no
agreements, customers or proposals for any future business.

WE NEED AT LEAST TEN MILLION DOLLARS ($10,000,000)

In order to develop the Roulabette terminal, we estimate at this time, that we
will need at least approximately ten million dollars ($10,000,000). We do not
have this money nor do we have any agreements or understanding to procure this
money. We may never get this money. If we do obtain this money, it may not be
sufficient. Further, should such monies be available it may not be available on
terms satisfactory to Kenilworth or it may be available on such terms that
substantially dilute the interest of existing shareholders. If we obtain this
money, we will need substantial additional funds for the proposed marketing plan


<PAGE>

and there can be no assurances that such funds will ever be available to allow
Kenilworth to engage in business on a profitable basis.

OUR BUSINESS IS SUBJECT TO OUR ABILITY TO OBTAIN AND RETAIN KEY PERSONNEL

At the present time, we do not have any employees who will be able to develop
Roulabette. It will be necessary for us to obtain personnel qualified and with
the expertise to develop Roulabette. We believe at this time we would require
initially six (6) employees and several consultants. There can be no assurances
of the availability of any such employees and consultants.

WE ARE DEPENDANT UPON OUR PRESIDENT

Kenilworth has been dependant upon the services of its president Herbert Lindo
who is 75 years old. Herbert Lindo has performed his services during the past
recent years without compensation. Should Kenilworth procure working capital,
there can be no assurances that he will continue to work without compensation.
There also can be no assurances of Herbert Lindo's continued availability.

RAPID CHANGES IN TECHNOLOGY

The technology and Project Roulabette in general is subject to rapid change.
Kenilworth will need to maintain an ongoing research and development effort of
which there can be no assurances of success or availability of funds.
Additionally, there can be no assurances that the development of technologies
and products by competitors will not render the Kenilworth's products or
technologies non-competitive or obsolete.

WE ARE ENGAGED IN A HIGHLY COMPETITIVE INDUSTRY

Our business is subject to significant competition. Competition exists from
larger companies that possess substantially greater technical, financial, sales
and marketing resources that Kenilworth presently possesses. Such competition is
expected to increase. Such increased competition may have a material adverse
effect on Kenilworth's ability to successfully market its products.

WE HAVE FILED A PATENT APPLICATION FOR ROULABETTE BUT THERE CAN BE NO ASSURANCE
A PATENT WILL BE ISSUED

We have filed a patent application for the system "Project Roulabette". There
can be no assurances that a patent will be issued or that if issued, the
challenges will not be instituted against the validity or enforceability of such
patent.

OUR ROULABETTE TERMINAL IS SUBJECT TO VARIOUS FEDERAL, STATE AND LOCAL LAWS AND
REGULATIONS

The use of Roulabette is subject to various federal, state and local laws and
regulations both in the United States and over seas countries. There can be no
assurances that we will ever be able to obtain licenses or permits necessary to
conduct our business or that we will be able to comply with these applicable
laws and regulations.

PRIOR CONVICTION OF HERBERT LINDO

Herbert Lindo, the president of Kenilworth, was convicted in 1993 on three (3)
counts of having permitted three (3) banks located in the Upper Peninsula of


<PAGE>

Michigan to sell unregistered, legended, restricted Kenilworth shares pursuant
to SEC Rule 144 prior to the bank having the then required two (2) year holding
period. The sales took place in 1987 and 1988. Mr. Lindo was found not guilty of
conspiring to sell unregistered securities which was not 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 one thousand (1,000) hours of community
service, fifteen (15) months house arrest, and fined six hundred thousand
dollars ($600,000).

In 1992, the holding period for exemption pursuant to Rule 144 was reduced to
one (1) year. The changed Rule did not apply to the 1987-88 sales. No one lost
any money and Kenilworth 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 sales by the banks.

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

THERE CAN BE NO ASSURANCES THAT CASINO OPERATIONS WILL PARTICIPATE IN THE
ROULABETTE BUSINESS

The Roulabette system is planned to allow casino patrons and other players to
play along with live in progress casino table games such as Roulette, Craps,
Baccarat and Blackjack via digital satellite television programming emanating
from state regulated casinos. There can be no assurances that casino operators
will ever participate in Kenilworth's business.

OUR OFFICERS AND DIRECTORS WILL HAVE SIGNIFICANT CONTROL OVER US AND MAY APPROVE
OR REJECT MATTERS CONTRARY TO A VOTE OF OUR SHAREHOLDERS

Our executive officers and directors together with their affiliates beneficially
own a significant percentage of our outstanding common stock. These
stockholders, if acting together, will be able to significantly influence all
matters requiring approval by our stockholders including the election of
directors and the approval of mergers or similar transactions even if the
stockholders disagree.

SHARES ELIGIBLE FOR FUTURE SALE COULD CAUSE OUR STOCK PRICE TO FALL

If our stockholders sell substantial amounts of our common stock in the public
market, the market price of our common stock could fall. As of December 31, 2000
we had 64,932,502 shares of common stock outstanding.

WE DO NOT INTEND TO PAY DIVIDENDS

We are not able to pay any dividends because we have no funds available to do
so. Even if we had funds available, we do not intend or declare to pay any
dividends on our common stock.


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

<PAGE>

The financial statements, the accompanying notes and the Report of Independent
Accountants that are filed as part of this Report are annexed at the end of this
report.


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


                                      NONE


                                    PART III
                                    --------


Item 10, Item 11, Item 12, and Item 13 (DIRECTOS AND EXECUTIVE OFFICERS OF THE
REGISTRANT, EXECUTIVE COMPENSATION, SECURITY OWNERSHIP OF CERTAIN BENEFICIAL
OWNERS AND MANAGEMENT, and CERTAIN RELATIONSHIPS AND RELATED TRANACTIONS,
respectively), will be incorporated in the registrant's Proxy Statement to be
filed within one hundred twenty (120) days of December 31, 2000, and will be
incorporated herein by reference.


                                     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, 2000 and 1999          F-2

Consolidated statement of operations and deficit for the periods
beginning November 24, 1998 to December 31, 1998,and for the years
ended December 31, 1999 and 2000                                      F-3

Consolidated statement of cash flows for the periods beginning
November 24, 1998 to December 31, 1998, and for the years ended
December 31, 2000 and 1999.                                           F-4

Consolidated statement of changes in stockholders equity
(deficit) for the periods beginning November 24, 1998 to
December 31, 1998, and for the years ended December 31, 2000
and 1999.                                                             F-5

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

(b)    None


<PAGE>

(c)    Exhibits

3(1)   Certificate of Incorporation and Amendments

3(2)   By-Laws

10     Kenilworth Performance and Equity Incentive Plan

21     Subsidiaries of the Registrant


                                   SIGNATURES
                                   ----------


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


                                   KENILWORTH SYSTEMS CORPORATION

                                   By: /s/ Herbert Lindo
                                   -------------------------------------
                                   Herbert Lindo, President, Chief
                                   Executive and Chief Financial Officer


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


/s/ Herbert Lindo
---------------------------
Herbert Lindo, Director

Date:  March 29, 2001


/s/ Joyce Clark
---------------------------
Joyce Clark, Director

Date:  March 29, 2001


/s/ Kit Wong
---------------------------
Kit Wong, Director

Date:  March 29, 2001


<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 and subsidiaries as of December 31, 2000 and 1999 and the
related consolidated statements of operations and deficit stockholders' equity
(deficit) and cash flows for the years ended December 31, 2000 and 1999. These
financial statements are the responsibility of the Company's management. Out
responsibility is to express an opinion on these financial statements based on
our audits.

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 principals 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 consolidated financial position of
Kenilworth Systems Corporation as of December 31, 2000 and 1999 and the results
of its operations and its cash flows for the years then ended in conformity with
generally accepted accounting principals.

The accompanying consolidated financial statements have been prepared assuming
that the Company will continue as a going concern. As discussed in Note 8 to the
consolidated 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 8. The consolidated financial statements do
not include any adjustments that might result from the outcome of this
uncertainty.


Peter C. Cosmas Co., CPAs
New York, New York
March 25, 2001


                                      F-1
<PAGE>


                 KENILWORTH SYSTEMS CORPORATION AND SUBSIDIARIES
                       CONSOLIDATED BALANCE SHEETS, as of
                           December 31, 2000 and 1999


                                     ASSETS
<TABLE>
<CAPTION>
                                                       2000            1999
                                                       ----            ----
<S>                                            <C>            <C>
Cash                                            $     8,582    $          2

Due from related party                               28,982           9,032
Property, Plant and Equipment, Net                   10,295
                                                -----------    ------------
     TOTAL ASSETS                               $    47,859    $      9,034
                                                ===========    ============


                 LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)

Accrued Liabilities                             $    15,139    $        242

Payroll Taxes Payable                                 3,226               0
Note Payable                                         10,000
                                                -----------    ------------
    TOTAL LIABILITIES                           $    28,365    $        242
                                                ===========    ============

Common Stock, $.01 par value, authorized
 100,000,000 shares; issued and outstanding
 62,289,018 in December 31, 1999 and
 64,932,502 in December 31, 2000                $   649,325    $   622,890

Paid in capital                                  23,905,619     23,784,763

Deficit                                         (24,535,450)   (24,398,861)
                                                -----------    ------------

    TOTAL STOCKHOLDERS' EQUITY                       19,494           8,792
                                                -----------    ------------
    TOTAL LIABILITIES
      AND STOCKHOLDERS' EQUIY                        47,859           9,034
                                                ===========    ============
</TABLE>

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


                                      F-2
<PAGE>


                 KENILWORTH SYSTEMS CORPORATION AND SUBSIDIARIES
                CONSOLIDATED STATEMENTS of OPERATION and DEFICIT
             For the periods November 24, 1998 to December 31, 1998,
                   the years ended December 31, 2000 and 1999.

<TABLE>
<CAPTION>
                                              Year Ended      Year Ended       Nov. 24, to
                                            DEC. 31, 2000    DEC. 31, 1999    Dec. 31, 1998

<S>                                        <C>              <C>              <C>
Revenues:
Sales                                       $        -0-     $      -0-       $    -0-

Costs and Expenses:
 Selling, general
 and administrative
 expenses                                        133,964         11,636          7,912
 Interest expense (income)                         3,216            194             -0-
   Total Costs and                               137,180         11,830          7,912
   Expenses
     Net income (loss)
      before other income
      and (losses)                              (137,180)       (11,830)        (7,912)

OTHER INCOME AND (LOSSES):
 Sale of assets                                      -0-            -0-            -0-
 Other gains                                         -0-            -0-            -0-
 Interest income                                    591             -0-            -0-
   Total Other                                      591
   Income                                            -0-            -0-            -0-
 (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-            -0-
   Other losses                                      -0-            -0-            -0-
     Net income (loss)                         (136,589)       (11,830)        (7,912)
Deficit - Beginning
   Of year                                  (24,398,861)   (24,387,031)   (24,379,119)
Deficit - End of
   Of year                                 $(24,535,450)  $(24,398,861)  $(24,509,784)
                                           ============   ============   ============

Earnings (Loss) per
   Share of
   common stock (Note 5)                   $        -0-   $        -0-   $        -0-
Average number of
   shares outstanding                        64,264,323     62,049,130     60,509,784
                                           ============   ============   ============
</TABLE>


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

                                      F-3
<PAGE>


                 KENILWORTH SYSTEMS CORPORATION AND SUBSIDIARIES
                            STATEMENTS of CASH FLOWS
                   For the periods beginning November 24, 1998
                              to December 31, 1998
               and for the years ended December 31, 2000 and 1999.

<TABLE>
<CAPTION>
                                           Year Ended           Year Ended            NOV. 24, to
                                          DEC. 31, 2000        DEC. 31, 1999         DEC. 31, 1998
<S>                                       <C>                  <C>                  <C>
CASH FLOWS USED IN
 OPERATING ACTIVITIES

Net Loss                                   $  (136,589)         $  (11,830)          $   (7,912)
 Adjustments to reconcile
  net loss to net cash provided
  by (used in) operating
  activities:
  Stock issuance for services
  rendered                                      26,624                 -0-                   -0-
  Depreciation                                   1,144                 -0-                   -0-
Changes in operating assets and
 Liabilities:
  Due from Shareholder                         (19,950)             6,968                    -0-
  Accrued expenses and taxes                    18,123               (330)                 7,912
                                           -----------          ----------           -----------
TOTAL ADJUSTMENTS                               25,941              6,638                  7,912

NET CASH USED IN
 OPERATING ACTIVITIES                         (110,648)           (5,192)                    -0-

CASH FLOWS FROM
 INVESTING ACTIVITIES
Purchases of Property and
 Equipment                                     (11,439)               -0-                    -0-
                                           -----------          ----------           -----------
NET CASH USED IN INVESTING
 ACTIVITIES                                    (11,439)               -0-                    -0-

CASH FLOWS FROM
   FINANCING ACTIVITIES
Proceeds from loans payable                    123,167             5,194                     -0-
Proceeds from stock issuances                    7,500                -0-                    -0-
                                           -----------          ----------           -----------
NET CASH PROVIDED BY
 FINANCING ACTIVITIES                         130,667              5,194                     -0-

Net Increase (Decrease) in cash                 8,580                  2                     -0-
CASH - BEGINNING OF PERIOD                          2                -0-                     -0-
                                           -----------          ----------           -----------
CASH - END OF PERIOD                       $    8,582           $      2             $       -0-
                                           ===========          ==========           ===========
</TABLE>

<PAGE>

NON-CASH TRANSACTIONS

During the year ended December 31, 2000 the Company issued Convertible
Promissory Notes for 944,028 shares of common stock.

The Company issued common stock in lieu of payment for services rendered in the
amounts of $16,995 and $7,340 during the years ended December 31, 2000 and
December 31, 1999 respectively.

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 six thousand and ten thousand dollars ($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.

During the period ending December 31, 1999, 200,000 shares of Common Stock were
issued at par value.

In connection with the emergence from bankruptcy the trustee distributed four
million three hundred thousand four hundred and three dollars ($4,300,403) for
the payment of priority liabilities and bankruptcy costs.


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

                                      F-4
<PAGE>

                 KENILWORTH SYSTEMS CORPORATION AND SUBSIDIARIES
                           CONSOLIDATED STATEMENTS OF
                         STOCKHOLDERS' EQUITY (DEFICIT)
              For the years ended December 31, 2000, 1999, and 1998

<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)
Net Earnings                                                                                 $    (11,830)
                                         ------------    ------------       ------------     -------------
Balances December 31, 1999                 62,289,018    $    622,890       $ 23,784,763     $(24,398,861)
                                         ============    ============       ============     =============
Issuance of Stock in connection with
 Conversion of debt                          944,028            9,440           111,227
For services                               1,699,456     $     16,995       $     9,629
Net Income/(Loss)                                                                                (136,589)
                                         -----------     ------------       ------------     -------------
December 31, 2000 Balances                64,932,502         649,325         23,905,619       (24,535,450)
                                         ===========     ============       ============     =============
</TABLE>


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

                                      F-5
<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 now plans to be engaged in the business of developing and
manufacturing terminals that permit individuals from remote locations, to play
along with live in progress casino table games located inside and outside the
casino confines via TV (simulcast) satellite broadcast around the world.

The Company was in bankruptcy proceedings under Chapter 7 and 11 of the
Bankruptcy Code for the period from August 28, 1982 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 a
systems that allows casino patrons to play along with live table games in
progress via TV satellite broadcasts on terminals located within the casino
confines and outside the casino confines.

ADVERTISING COSTS

Advertising costs are expensed as incurred.

PRINCIPLES OF CONSOLIDATION

The consolidated financial statements include the accounts of Kenilworth Systems
Corporation and its wholly owned subsidiaries: Video Wagering Systems
Corporation, Roulabette Nevada Corporation and Kenilworth Systems Nevada
Corporation. None of the subsidiary has any assets or liabilities.

In September 1986 the Company exchanged four hundred sixty-six thousand
(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 ($.00) for the
year ended December 31, 2000, and 1999, and the period November 24, 1998 to
December 31, 1998, respectively.


                                      F-6
<PAGE>

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.

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.

PROPERTY AND EQUIPMENT

Property and Equipment are stated at cost. For financial reporting purposes,
property and equipment are depreciated utilizing the Straight-Line Method over
the estimated useful lives of the related assets as follows:

<TABLE>
<CAPTION>
                                                        YEARS
                                                        -----
             <S>                                       <C>
                Office Equipment                          5
                Vehicles                                  5
</TABLE>


NOTE 2 - DUE FROM RELATED PARTIES AT DECEMBER 31, 2000
------


Due from related parties at December 31, 2000 represents advances made to a
stockholder of the Company in the normal course of business. Such amounts are
non-interest bearing and have no definite repayment terms.


NOTE 3 - PROPERTY AND EQUIPMENT
------


Property and Equipment consist of the following as of December 31, 2000 and
December 31, 1999

<TABLE>
<CAPTION>
                                                    2000          1999
                                                    ----          ----
<S>                                               <C>            <C>
        Office Equipment                          $ 2,939         $   -0-
        Vehicles                                    8,500             -0-
                                                  -------         -------
                                                  $11,439             -0-
        Less-Accumulated Amortization               1,144             -0-
                                                  -------         -------
        Total Property and Equipment, Net         $10,295         $   -0-
                                                  =======         =======
</TABLE>

<PAGE>

Depreciation expense for the years ended December 31, 2000 and December 31, 1999
was $1,144 and $0, respectively.


NOTE 4 - 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 28, 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 one hundred percent (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 to the creditors. No other activity
occurred during that period.


NOTE 5 - INCOME TAXES
------


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

The Company estimates that it has available approximately eight million three
hundred thousand dollars ($8,300,000) in net operating loss carry-forwards,
which expire at various dates 2020. Utilization of the NOL carry-forward 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 two million eight hundred
thousand dollars ($2,800,000) arising from its net operating loss carry-


<PAGE>

forwards. The deferred tax asset has been fully reserved due to the uncertainty
of future realization.


NOTE 6 - NOTE PAYABLE
------


At December 31, 2000 the Company had a ten thousand dollar ($10,000) Note
Payable with interest at 8.5% and principal due on January 15, 2001. The loan is
guaranteed by a shareholder of the Company. Subsequent to year-end the Note was
repaid in full.


NOTE 7 - CONVERTIBLE PROMISSORY NOTES
------


In August 2000, the Company sold a one (1) year one hundred thousand dollar
($100,000.00) Convertible Promissory Note to a single, non-affiliated party. The
Note was converted in December 2000 into six hundred eighty seven thousand seven
hundred seventy two (687,772) shares of which included twenty one thousand one
hundred six (21,106) shares for the accrued interest. Prior thereto, the Company
has sold a total of thirty eight thousand five hundred ($38,500.00) in
Convertible Notes to three (3) individuals between December 1998 and June 30,
2000. All prior Notes were also converted into restricted common stock of the
Company as the term is defined under the Securities Act of 1933. All proceeds
either have been or will be used to defray current expenses, which are minimal
during present operations.


NOTE 8 - 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 that allows casino patrons and individuals outside the casino 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 offering its common stock, or Senior Cumulative
Convertible Preferred Shares in a private placement, or selling limited joint
venture participations in future "play along with casino game" franchises.

If initial testing is successful, the second step is to obtain the proper
licenses from the gaming control regulators in the various venues the Company
intends to offer its system. Upon successful licensing, the Company plans to
obtain financing from regular banking sources to finance the manufacturing of
the computer terminals that allow the worldwide play along.

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.

<PAGE>

NOTE 9 - COMMITMENTS AND CONTINGENCIES
------


OUTSTANDING PAYROLL TAXES

As of year-end, the Internal Revenue Service is contending that the Company owes
payroll taxes including interest and penalties totaling almost $400,000 for
various periods from 1985-1991. The Company is currently in negotiations with
the IRS to resolve these issues. In management's opinion, no accruals are
necessary since it believes that these assessments are incorrect and were
discharged in its bankruptcy proceedings.

NOTE 10 - QUARTERLY FINANCIAL INFORMATION--UNAUDITED
-------


The following table sets forth certain unaudited condensed quarterly financial
data for the fiscal years ended December 31, 2000 and 1999. This information
has been prepared on the same basis as the consolidated financial statements
and all necessary adjustments have been included in the amounts stated below
to present fairly the selected quarterly information when read in conjunction
with its consolidated financial statements and notes thereto. Historical
quarterly financial results and trends may not be indicative of future
results.


                        KENILWORTH SYSTEMS CORPORATION
                                QUARTERLY DATA
                                1999 AND 2000


<TABLE>
<CAPTION>
                            1Q99     2Q99     3Q99    4Q99    1999      1Q00     2Q00     3Q00      4Q00      2000
<S>                        <C>    <C>       <C>     <C>     <C>      <C>       <C>       <C>      <C>     <C>

NET SALES                     0       0        0       0        0        0         0        0         0         0

GROSS PROFIT                  0       0        0       0        0        0         0        0         0         0

NET INCOME (LOSS)             0    (6,643)  (3,150)  (2,052) (71,851) (32,447)  (21,125) (38,075) (44,841)  (138,888)

NET INCOME (LOSS) PER SHARE
    BASIC                     0       0        0       0        0        0         0        0         0          0
    DILUTED                   0       0        0       0        0        0         0        0         0          0
</TABLE>