**UNITED
      STATES**


**SECURITIES
      AND EXCHANGE COMMISSION**


**Washington,
      D.C. 20549**








**FORM
      10-Q**







**x**
              **QUARTERLY
                  REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
                  SECURITIES****EXCHANGE
                  ACT OF 1934**





**For
      the quarterly period ended September 30, 2008**





**OR**




** ̈**
              **TRANSITION
                  REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
                  SECURITIES****EXCHANGE
                  ACT OF 1934**




**For
      the transition period from to**




**Commission
      file number 000-25853**




**ELECTRONIC
      GAME CARD, INC.**


(Exact
      Name of Registrant as Specified in Its Charter)













**Nevada**
              **(State
                or Other Jurisdiction of**
              **Incorporation
                or Organization)**
              
              **318
                N Carson St, Suite 208Carson City, NV 89701****(Address
                of Principal Executive Offices)**
            **87-0570975**
              **(I.R.S.
                Employer**
              **Identification
                No.)**
              
              **10019**
              **(Zip
                Code)**





**(646)
      723-8946**


**(Registrant’s
      Telephone Number, Including Area Code)**





**(Former
      Name, Former Address and Former Fiscal Year, if Changed Since Last
      Report)**








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 whether the registrant is a large accelerated filer, an
      accelerated filer, or a non-accelerated filer. See definition of “accelerated
      filer” and “large accelerated filer” in Rule 12b-2 of the Exchange
      Act.




Large
                  accelerated filer ̈
              Accelerated
                  filer ̈
              Non-accelerated
                  filer ̈
              Smaller
                  reporting companyx





Indicate
      by check mark whether the registrant is a shell company (as defined by Rule
      12b-2 of the Exchange Act. Yes  ̈ No x





Indicate
      the number of shares outstanding of each of the issuer’s classes of common
      stock, as of the latest practicable date.





**Class**
            
            **Outstanding
                at October 31, 2008****Common
                Stock, $0.001 par value**
            
            **54,955,975**




1




**NOTE
      REGARDING FORWARD-LOOKING STATEMENTS**





This
      Quarterly Report on Form 10-Q contains forward-looking statements, including
      statements regarding future revenues, research and development programs,
      clinical trials and collaborations and our future cash requirements. The words
      or phrases “will”, “will likely result”, “are expected to”, “will continue”,
“estimate”, “project”, “potential”, “believe”, “plan”, “anticipate”, “expect”,
“intend”, or similar expressions and variations of such words are intended to
      identify forward-looking statements. Statements that are not historical facts
      are based on our current expectations, beliefs, assumptions, estimates,
      forecasts and projections for our business and the industry and markets related
      to our business. The statements contained in this report are not guarantees
      of
      future performance and involve certain risks, uncertainties and assumptions
      which are difficult to predict. Therefore, actual outcomes and results may
      differ materially from what is expressed in such forward-looking
      statements.





The
      forward-looking statements in this Quarterly Report on Form 10-Q speak as of
      the
      date of this report. We expressly disclaim any obligations or undertaking to
      disseminate any updates or revisions to any forward-looking statement contained
      in this Quarterly Report to reflect any change in our expectations with regard
      thereto or any change in events, conditions or circumstances on which any
      forward-looking statement is based, except as may be required by
      law.





2





**ELECTRONIC
      GAME CARD, INC.**


**TABLE
      OF CONTENTS**




**PAGE
                  #****PART
                  I.**
              **FINANCIAL
                  INFORMATION****ITEM
                  1**-
                  Financial StatementsConsolidated
                  Balance Sheets as of September 30, 2008 (Unaudited), and December
                  31,
                  2007
              4Consolidated
                  Statements of Operations and Comprehensive Loss for the
                  Fiscal
                    Three Months, and Nine months Ended September 30, 2008 and 2007
                    (Unaudited)
              5Consolidated
                  Statements of Cash Flows for the Fiscal Nine Months Ended
                  September
                    30, 2008 (Unaudited) and December 31, 2007
              6Notes
                  to Unaudited Consolidated Financial Statements
              7**ITEM
                  2**-
                  Management’s Discussion and Analysis of Financial Condition and Results of
                  Operations
              14**ITEM
                  3**-
                  Quantitative and Qualitative Disclosures About Market Risk
              19**ITEM
                  4**-
                  Controls and Procedures
              19**PART
                  II.**
              **OTHER
                  INFORMATION****ITEM
                  1**-
                  Legal Proceedings
              20**ITEM
                  2**-
                  Changes in Securities
              20**ITEM
                  3**-
                  Defaults Upon Senior Securities
              20**ITEM
                  4**-
                  Submission of Matters to a Vote of Security Holders
              20**ITEM
                  5**-
                  Other Information
              20**ITEM
                  6**-
                  Exhibits
              20**SIGNATURES**
              21


3




**PART
      I** - **FINANCIAL INFORMATION**





**ITEM
      1. FINANCIAL STATEMENTS**





**ELECTRONIC
      GAME CARD, INC.**


**CONSOLIDATED
      BALANCE SHEETS**







**September
                30, 2008**
            
            **December
                31, 2007**(Unaudited)**ASSETS**Current
                assets:Cash,
                cash equivalents and marketable
                securities
            
            $
            8,135,163
            
            $
            4,753,040Accounts
                receivable
            
            
            2,693,709
            
            
            2,323,543Inventory
            
            
            70,071
            
            
            70,071Other
                receivables
            
            
            169,078
            
            
            92,100VAT
                receivable
            
            
            30,657
            
            
            31,531Deferred
                charges
            
            
            76,238
            
            
            190,595Total
                current assets
            
            
            11,173,916
            
            
            7,460,880Net
                property, plant and equipment
            
            
            27,913
            
            
            44,050Intangible
                assets
            
            
            269,377
            
            
            183,034Investments,
                at cost
            
            
            4,926,564
            
            
            2,886,427Total
                assets
            
            $
            16,397,770
            
            $
            10,574,391**LIABILITIES
                AND SHAREHOLDERS’ EQUITY/(DEFICIT)**Current
                liabilities:Accounts
                payable
            
            $
            636,457
            
            $
            659,891Accrued
                liabilities
            
            
            880,494
            
            
            560,046Total
                current liabilities
            
            
            1,516,951
            
            
            1,219,937Deferred
                license fees
            
            
            404,625
            
            
            779,625Total
                liabilities
            
            
            1,921,576
            
            
            1,999,562Series
                A 6% convertible redeemable preferred stock, $.001 par value,
              10,000,000
                shares authorized; 6,549,922 and 7,582,806 shares issued and
              outstanding
                at of September 30, 2008 and December 31, 2007,respectively
            
            
            6,549,922
            
            
            7,582,806Shareholders’
                equity/(deficit)Common
                stock, $.001 par value, 100,000,000 shares authorized;
              53,205,975
                and 48,011,851 and shares issued and outstanding at
              September
                30, 2008 and December 31, 2007 respectively
            
            
            53,206
            
            
            48,012Capital
                in excess of par value
            
            
            29,876,745
            
            
            27,264,272Accumulated
                deficit
            
            
            (20,998,971
            )
            
            (25,463,568
            )Accumulated
                other comprehensive loss
            
            
            (1,004,708
            )
            
            (856,693
            )Total
                shareholders’ equity
            
            
            7,926,272
            
            
            992,023Total
                liabilities and shareholders’ equity
            
            $
            16,397,770
            
            $
            10,574,391





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




4




ELECTRONIC
      GAME CARD,
      INC.


**CONSOLIDATED
      STATEMENTS OF OPERATIONS**


**(Unaudited)**




**For
                the Three Months Ended**
            
            **For
                the Nine Months Ended****September
                30,**
            
            **September
                30,****2008**
            
            **2007**
            
            **2008**
            
            **2007**Revenue
            
            
            3,043,566
            
            
            1,785,330
            
            $
            7,823,870
            
            $
            4,250,224Cost
                of sales
            
            
            744,000
            
            
            490,499
            
            
            1,905,589
            
            
            1,130,852**Gross
                profit**
            
            
            **2,299,566**
            
            
            **1,294,831**
            
            
            **5,918,281**
            
            
            **3,119,372**Operating
                expensesSales
                and marketing
            
            
            13,600
            
            
            1,232
            
            
            54,954
            
            
            5,204General
                and administrative
            
            
            123,639
            
            
            146,326
            
            
            451,237
            
            
            431,541Consulting
                expenses
            
            
            282,865
            
            
            125,727
            
            
            560,014
            
            
            282,585Salaries
                and wages
            
            
            104,407
            
            
            109,556
            
            
            277,397
            
            
            312,135Loss
                from joint venture
            
            
            -
            
            
            -
            
            
            -
            
            
            18,636**Total
                operating expense**
            
            
            **524,511**
            
            
            **382,841**
            
            
            **1,343,602**
            
            
            **1,050,101****Income
                from operations**
            
            
            1,775,055
            
            
            911,990
            
            
            4,574,679
            
            
            2,069,271Other
                income (expense)Interest
                income
            
            
            87,014
            
            
            49,554
            
            
            210,059
            
            
            147,669Interest
                expense
            
            
            (147,747
            )
            
            (153,205
            )
            
            (443,241
            )
            
            (488,866
            )Gain
                on termination of joint venture
            
            
            -
            
            
            -
            
            
            -
            
            
            31,127Gain
                on sale of investments
            
            
            -
            
            
            -
            
            
            122,900
            
            
            -**Total
                other income (expense)**
            
            
            **(60,733**
            **)**
            
            **(103,651**
            **)**
            
            **(110,282**
            **)**
            
            **(310,070**
            **)****Net
                income**
            
            
            **1,714,322**
            
            
            **808,339**
            
            $
            4,464,597
            
            $
            1,759,201Foreign
                currency translation (loss) gain
            
            
            (28,947
            )
            
            9,289
            
            
            (148,015
            )
            
            (58,520
            )**Comprehensive
                income**
            
            
            **1,685,375**
            
            
            **817,628**
            
            $
            4,316,582
            
            $
            1,700,681Net
                income per common share ( basic )
            
            $
            0.03
            
            $
            0.02
            
            $
            0.08
            
            $
            0.04Weighted
                average number of shares outstanding (basic)
            
            
            52,041,416
            
            
            44,168,683
            
            
            51,604,503
            
            
            44,168,683Net
                income per common share ( diluted )
            
            $
            0.02
            
            $
            0.02
            
            $
            0.07
            
            $
            0.04Weighted
                average number of shares outstanding (diluted)
            
            
            65,707,416
            
            
            44,168,683
            
            
            64,674,490
            
            
            44,168,683







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




5


**ELECTRONIC
      GAME CARD, INC.**


**CONSOLIDATED
      STATEMENTS OF CASH FLOWS**


**(Unaudited)**




**Nine
                months ended****September
                30, 2008**
            
            **September
                30, 2007**Cash
                flows from operating activities:Net
                income
            
            $
            4,464,597
            
            $
            1,759,201Adjustments
                to reconcile net income from continuing operations to net
                cash
              provided
                by operating activitiesDepreciation
            
            
            16,137
            
            
            23,538Amortization
                of deferred charges
            
            
            114,357
            
            
            114,357Deferred
                license fees
            
            
            (375,000
            )
            
            -Expenses
                paid with common stock
            
            
            192,000
            
            
            -Gain
                on sale of investments
            
            
            (122,900
            )
            
            -Gain
                on termination of joint venture
            
            
            -
            
            
            (31,127
            )Loss
                from joint venture
            
            
            -
            
            
            18,638Change
                in operating assets and liabilities:(Increase)
                accounts receivable
            
            
            (1,770,166
            )
            
            (2,421,579
            )(Increase)Value
                Added Tax receivable
            
            
            874
            
            
            (19,708
            )(Increase)
                inventory
            
            
            -
            
            
            (29,370
            )(Increase)
                other receivables
            
            
            (76,978
            )
            
            -(Decrease)
                accounts payable
            
            
            (23,434
            )
            
            77,290Increase
                in accrued liabilities and interest
            
            
            320,447
            
            
            372,000Increase
                in deferred license fees
            
            
            -
            
            
            904,625Net
                cash provided by operating activities
            
            
            2,739,934
            
            
            767,865Cash
                flows used in investing activities:Purchase
                of property and equipment
            
            
            -
            
            
            (5,132
            )Purchase
                of investments
            
            
            (958,207
            )
            
            (362,284
            )Purchase
                of intangible assets
            
            
            (86,343
            )
            
            -Proceeds
                from sale of investments
            
            
            433,754
            
            
            -Net
                cash used in investing activities
            
            
            (610,796
            )
            
            (367,416
            )Cash
                flows provided by financing activities:Proceeds
                from issuance of common stock
            
            
            -
            
            
            -Receipts
                from related party
            
            
            -
            
            
            79,275Net
                cash provided by financing activities
            
            
            -
            
            
            79,275Foreign
                currency exchange effect on cash
            
            
            (148,015
            )
            
            (58,520
            )Net
                increase in cash and cash equivalents
            
            
            1,981,123
            
            
            421,204Cash
                and cash equivalents at beginning of period
            
            
            4,753,040
            
            
            3,052,733Cash
                and cash equivalents at end of period
            
            $
            6,734,163
            
            $
            3,473,937Supplemental
                disclosure of cash flow information:Cash
                paid during the period for :Interest
            
            $
            -
            
            $
            -Income
                taxes
            
            $
            -
            
            $
            -Supplemental
                disclosure of cash flow information:Shares
                issued for investments
            
            $
            1,083,673
            
            $
            -Shares
                issued for redeemable preference shares
            
            $
            1,032,884
            
            $
            -





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




6





**ELECTRONIC
      GAME CARD, INC.**


**NOTES
      TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS**


1.
                Organization
                    and Summary of Significant Accounting
                    Policies


**Organization
        and Nature of Operations**





The
      Company was incorporated under the laws of the England on April 6, 2000, under
      the name of Electronic Game Card, Ltd. Until 2002, the Company remained dormant
      and had no operations until August 8 2002. On May 5, 2003, the Company entered
      into an agreement whereby it acquired 100% of the outstanding stock of
      Electronic Game Card Marketing, a Delaware Company.





On
      December 5, 2003, the Company acquired 100% of the outstanding stock of the
      Electronic Game Card, Inc. (Nevada) in a reverse acquisition. At this time,
      a
      new reporting entity was created and the name of the Company was changed to
      Electronic Game Card, Inc.





The
      Company is engaged in the development, marketing, sale and distribution of
      recreational electronic software which is primarily targeted towards the global
      sales promotion, gaming and lottery markets. The Company’s patent protected
      technology was originally conceived for the global sales promotion and lottery
      industries and marketed under the name of EGC Electronic GameCardTM. The shape of
      pocket Electronic GameCards is flexible to clients’ needs but is currently
      approximately the size of a credit card, operated electronically by touch and
      incorporating a microchip and LCD screen showing numbers or icons. Additional
      markets with considerable potential for the Company's reward based games
      products are Indian Gaming, general gaming outlets like bingo halls and casinos
      and private and social lotteries. The gaming outlets (customers) who purchase
      our products are liable for payment to the “winners” from their own sales
      proceeds. The Company also is launching its technology into new market sectors
      such as Education, Sports/Hobbies and Celebrations. The Company designs its
      Electronic GameCards to play game types, formats and prize structures as
      required by its customers and has built a software library of generic game
      formats of popular, widely recognized and understood themes. The current
      software library stands at 27 unique games.





**Basis
      of Presentation**





The
      unaudited consolidated financial statements included herein have been prepared
      with accounting principles generally accepted in the United States for interim
      financial information and pursuant to the rules and regulations of the
      Securities and Exchange Commission. They do not include all information and
      notes required by generally accepted accounting principles for complete
      financial statements. However, except as disclosed herein, there have been
      no
      material changes in the information disclosed in the notes to the consolidated
      financial statements included in the Annual Report on Form 10-KSB of Electronic
      Game Card, Inc. for the year ended December 31, 2007 as amended.





In
      the
      opinion of management, all adjustments (including normal recurring accruals)
      considered necessary for a fair presentation have been included. Operating
      results for the three months and nine months ended September 30, 2008 are not
      necessarily indicative of the results that may be expected for any other interim
      period or the entire year. For further information, these unaudited consolidated
      financial statements and the related notes should be read in conjunction with
      the Company’s audited consolidated financial statements for the year ended
      December 31, 2007 included in the Company’s Annual Report on Form 10-KSB as
      amended.





**Principles
      of Consolidation**





The
      consolidated financial statements include the accounts of the following
      companies:





·
            Electronic
                Game Card, Inc. (Nevada
                Corporation)


·
            Electronic
                Game Card (UK)Ltd. (English
                Corporation)


·
            Electronic
                Game Card Marketing US, Inc (A Delaware
                Corporation)


·
            Educational
                Game Card





7




The
      results of subsidiaries acquired during the year are consolidated from their
      effective dates of acquisition. All significant inter-company accounts and
      transactions have been eliminated.





Certain
      amounts in the prior periods consolidated financial statements and notes have
      been reclassified to conform to the current period’s presentation.





**Concentrations
      of Credit Risk**





The
      Company has no significant off-balance-sheet concentrations of credit risk
      such
      as foreign exchange contracts, options contracts or other foreign hedging
      arrangements.





For
      the
      nine months ended September 30, 2008, the Company transacted its business with
      five distributors who's customers accounted for 60% of total revenues.  
Total revenues from these distributors
      and their customers were $4,695,696 for the nine months ended September
      30, 2008.  Total accounts receivable from the related distributors and
      their customers at September 30, 2008 were $775,000.


The
        Company maintains some of its cash in U.S and U.K. bank deposit accounts
        which,
        at times, exceed insured limits. No losses have been experienced related
        to such
        accounts. The Company believes it places its cash with quality financial
        institutions and is not exposed to any significant cash concentration credit
        risk.


**Cash
      and Cash Equivalents**





For
      purposes of the statement of cash flows, the Company considers all highly liquid
      instruments purchased with a maturity of three months or less to be cash
      equivalents to the extent the funds are not being held for investment
      purposes.





**Allowance
      for Doubtful Accounts**





The
      Company provides an allowance for doubtful accounts equal to the estimated
      uncollectible amounts. The Company’s estimate is based on historical collection
      experience and a review of the current status of trade accounts receivable.
      Accounts receivable are presented net of an allowance for doubtful accounts
      of
      $0 and $0 at September 30, 2008 and December 31, 2007,
      respectively.





**Depreciation**





Property
      and equipment are stated at cost. Depreciation is calculated on a straight-line
      basis over the estimated useful lives of the assets as follows:





Asset
            
            RatePlant
                and Machinery Equipment
            
            3
                yearsOffice
                Equipment
            
            3
                years





Maintenance
      and repairs are charged to operations; betterments are capitalized. The cost
      of
      property sold or otherwise disposed of and the accumulated depreciation thereon
      is eliminated from the property and related accumulated depreciation accounts,
      and any resulting gain or loss is credited or charged to income.





**Revenue
      recognition**





Revenue
      is recognized from sales of product when persuasive evidence of an arrangement
      exits. This normally takes the form of a signed order confirmation from the
      customer which generates a work order from the company to our supplier. When
      the
      supplier has confirmed delivery and invoiced the company we invoice the customer
      and recognize the sale. Provisions for discounts and rebates to customers,
      estimated returns and allowances, and other adjustments are provided for in
      the
      same period the related sales are recorded. Where products are configured to
      customer requirements, revenue is recorded upon the successful completion of
      the
      Company’s final test procedures. The company carries out credit worthiness
      checks on customers and asks for a deposit on new customer orders prior to
      placing work orders. In addition, under the license agreement with SGI (see
      note
      7) the company is entitled to a minimum annual commission of $500,000 per year
      and one quarter of this minimum fee is recognized as revenue in each
      quarter.





**Foreign
      Currency Translation**





The
      Company's functional currency for its foreign subsidiary, Electronic Game Card
      Ltd., is the British (UK) Pound and the reporting currency is the U.S. Dollar.
      All elements of financial statements are translated using a current exchange
      rate. For assets and liabilities, the exchange rate at the balance sheet date
      is
      used. Stockholders’ Equity is translated using the historical rate. For
      revenues, expenses, gains and losses the weighted average exchange rate for
      the
      period is used. Translation gains and losses are included as a separate
      component of stockholders’ equity as other comprehensive income or loss. Gain
      and losses resulting from foreign currency transactions are included
      incomprehensive income or loss from operations.





8




**Pervasiveness
      of Estimates**





The
      preparation of the consolidated financial statements in conformity with
      generally accepted accounting principles in the United States of America
      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 consolidated financial statements and the
      reported amounts of revenues and expenses during the reporting period. Actual
      results could differ from those estimates.





The
      Company’s unaudited consolidated financial statements are based on a number of
      estimates, including accruals for accounts payable and interest expense,
      amortization of deferred charges, allowance for doubtful accounts, estimated
      useful lives of property and equipment, and fair value of
      investments.





**Marketable
      Securities**





The
      Company determines the appropriate classification of its investments in debt
      and
      equity securities at the time of purchase or acquisition and reevaluates such
      determinations at each balance-sheet date. Debt securities are classified as
      held-to-maturity when the Company has the positive intent and ability to hold
      the securities to maturity. Debt securities for which the Company does not
      have
      the intent or ability to hold to maturity are classified as available-for-sale.
      Held-to-maturity securities are recorded as either short-term or long-term
      on
      the Balance Sheet based on contractual maturity date and are stated at amortized
      cost. Marketable securities that are bought and held principally for the purpose
      of selling them in the near term are classified as trading securities and are
      reported at fair value, with unrealized gains and losses recognized in earnings.
      Debt and marketable equity securities not classified as held-to-maturity or
      as
      trading, are classified as available-for-sale, and are carried at fair market
      value, with the unrealized gains and losses, net of tax, included in the
      determination of comprehensive income and reported in shareholders’ equity.





The
      fair
      value of substantially all securities is determined by quoted market prices.
      The
      estimated fair value of securities for which there are no quoted market prices
      is based on similar types of securities that are traded in the market.




The
      Company’s marketable securities are classified as available-for-sale as of
      September 30, 2008.





9




**Income
      (Loss) per Share**





Basic
      income (loss) per share has been computed by dividing the income/(loss) for
      the
      year applicable to the common stockholders by the weighted average number of
      common shares outstanding during the period. As of September 30, 2008, the
      Company had options and warrants outstanding to purchase up to 5,349,633 shares
      of common stock.





**Stock
      Compensation for Non-Employees**





The
      Company accounts for the fair value of its stock compensation grants for
      non-employees in accordance with FASB Statement 123(R). The fair value of each
      grant is equal to the market price of the Company’s stock on the date of grant
      if an active market exists or at a value determined in an arms length
      negotiation between the Company and the non-employee.





**Recent
      Accounting Pronouncements**





In
      December 2007, the FASB issued SFAS No. 141(R), *Business
      Combinations* (SFAS
      141(R)), which replaces SFAS 141, *Business
      Combinations* ,
      requires an acquirer to recognize the assets acquired, the liabilities assumed,
      and any non-controlling interest in the acquiree at the acquisition date,
      measured at their fair values as of that date, with limited exceptions. This
      Statement also requires the acquirer in a business combination achieved in
      stages to recognize the identifiable assets and liabilities, as well as the
      non-controlling interest in the acquiree, at the full amounts of their fair
      values.





SFAS
      141(R) makes various other amendments to authoritative literature intended
      to
      provide additional guidance or to confirm the guidance in that literature to
      that provided in this Statement. This Statement applies prospectively to
      business combinations for which the acquisition date is on or after the
      beginning of the first annual reporting period beginning on or after
      December 15, 2008. We do not expect this will have a significant impact on
      our financial statements.





In
      December 2007, FASB issued SFAS 160, *Noncontrolling
      Interests in Consolidated Financial Statements* ,
      which
      amends Accounting Research Bulletin No. 51, *Consolidated
      Financial Statements* ,
      to
      improve the relevance, comparability, and transparency of the financial
      information that a reporting entity provides in its consolidated financial
      statements. SFAS 160 establishes accounting and reporting standards that require
      the ownership interests in subsidiaries not held by the parent to be clearly
      identified, labeled and presented in the consolidated statement of financial
      position within equity, but separate from the parent’s equity. This statement
      also requires the amount of consolidated net income attributable to the parent
      and to the non-controlling interest to be clearly identified and presented
      on
      the face of the consolidated statement of income. Changes in a parent’s
      ownership interest while the parent retains its controlling financial interest
      must be accounted for consistently, and when a subsidiary is deconsolidated,
      any
      retained non-controlling equity investment in the former subsidiary must be
      initially measured at fair value. The gain or loss on the deconsolidation of
      the
      subsidiary is measured using the fair value of any non-controlling equity
      investment. The Statement also requires entities to provide sufficient
      disclosures that clearly identify and distinguish between the interests of
      the
      parent and the interests of the non-controlling owners. This Statement applies
      prospectively to all entities that prepare consolidated financial statements
      and
      applies prospectively for fiscal years, and interim periods within those fiscal
      years, beginning on or after December 15, 2008. We are currently evaluating
      the impact on our financial statements, if any





In
      February 2007, the FASB issued SFAS 159, *The
      Fair Value Option for Financial Assets and Financial Liabilities—Including an
      amendment of FASB Statement No. 115* (SFAS
      159), which is effective for fiscal years beginning after November 15,
      2007. SFAS 159 permits the Company to choose to measure many financial
      instruments and certain other items at fair value. The objective is to improve
      financial reporting by providing entities with the opportunity to mitigate
      volatility in reported earnings caused by measuring related assets and
      liabilities differently without having to apply complex hedge accounting
      provisions. SFAS 159 is expected to expand the use of fair value measurement,
      which is consistent with the FASB’s long-term measurement objectives for
      accounting for financial instruments. The Company adopted the provisions of
      this
      statement on January 1, 2008.





10




In
      September 2006, the FASB issued SFAS No. 157, *Fair
      Value Measurements* (SFAS
      157). SFAS 157 defines fair value, establishes a framework for measuring fair
      value and enhances disclosures about fair value measures required under other
      accounting pronouncements, but does not change existing guidance as to whether
      or not an instrument is carried at fair value. SFAS No. 157 was effective
      as of the beginning of the Company’s 2008 year. The provisions of SFAS 157 were
      adopted January 1, 2008. In February 2008, the FASB staff issued Staff
      Position No. 157-2 “Effective Date of FASB Statement No. 157” (FSP FAS
      157-2). FSP FAS 157-2 delayed the effective date of SFAS 157 for nonfinancial
      assets and nonfinancial liabilities, except for items that are recognized or
      disclosed at fair value in the financial statements on a recurring basis (at
      least annually). The provisions of FSP FAS 157-2 are effective for the Company’s
      fiscal year beginning January 1, 2009.





SFAS
      157
      establishes a fair value hierarchy that prioritizes the inputs to valuation
      techniques used to measure fair value. The hierarchy gives the highest priority
      to unadjusted quoted prices in active markets for identical assets or
      liabilities (Level 1 measurements) and the lowest priority to unobservable
      inputs (Level 3 measurements). The three levels of the fair value hierarchy
      under SFAS 157 are described below:





Level 1
            Unadjusted
                quoted prices in active markets that are accessible at the measurement
                date for identical, unrestricted assets or liabilities;




Level 2
            Quoted
                prices in markets that are not active, or inputs that are observable,
                either directly or indirectly, for substantially the full term of
                the
                asset or liability;




Level 3
            Prices
                or valuation techniques that require inputs that are both significant
                to
                the fair value measurement and unobservable (supported by little
                or no
                market activity).




2.
            Going
                Concern


The
      accompanying unaudited consolidated financial statements have been prepared
      on
      the basis of accounting principles applicable to a “going concern”, which assume
      that the Company will continue in operation for at least one year and will
      be
      able to realize its assets and discharge its liabilities in the normal course
      of
      operations.





These
      unaudited consolidated financial statements do not reflect adjustments that
      would be necessary if the Company were unable to continue as a “going concern”.
      While management believes that the actions already taken or planned, will
      mitigate any adverse conditions and events which raise doubt about the validity
      of the “going concern” assumption used in preparing these financial statements,
      there can be no assurance that these actions will be successful.





If
      the
      Company were unable to continue as a “going concern”, then substantial
      adjustments would be necessary to the carrying values of assets, the reported
      amounts of its liabilities, the reported expenses, and the balance sheet
      classifications used.




3.
              Income
                  Taxes
 The
        Company is subject to income taxes in the United States of America, United
        Kingdom, and the state of New York. As of September 30, 2008, the Company
        had a
        net operating loss carry forward for income tax reporting purposes of
        approximately $13,810,558 in the United States and $7,044,540 in the United
        Kingdom that may be offset against future taxable income through 2023. Current
        tax laws limit the amount of loss available to be offset against future taxable
        income when a substantial change in ownership occurs. Therefore, the amount
        available to offset future taxable income may be limited. Accordingly, the
        potential tax benefits of the loss carry-forwards are offset by a valuation
        allowance of the same amount.





For
      the
      years ending December 31, 2007 and 2006, income tax expense was $0 and $0.





SFAS
      No.109 requires recognition of deferred income tax assets and liabilities for
      the expected future income tax consequences, based on enacted tax laws, of
      temporary differences between the financial reporting and tax bases of assets
      and liabilities.




4.
            Related
                Party Transactions




During
      the three months ended September 30, 2008 and the nine months ended September
      30, 2008 the Company incurred rent expense for the London office of $ 0and
      $0
      compared with $20,000 and $40,000 in the same periods in the prior year.




11




5.
            Fair
                Value Accounting


The
      following table sets forth the Company’s financial assets and liabilities
      measured at fair value by level within the fair value hierarchy. As required
      by
      SFAS 157, assets and liabilities are classified in their entirety based on
      the
      lowest level of input that is significant to the fair value
      measurement.


**Fair
                  Value at September 30, 2008****Total**
              
              **Level
                  1**
              
              **Level 2**
              
              **Level 3**Assets:Investments
              
              $
              6,326,564
              
              $
              1,400,000
              
              $
              —
              
              $
              4,926,564$
              6,326,564
              
              $
              1,400,000
              
              $
              —
              
              $
              4,926,564Liabilities:$
              —
              
              $
              —
              
              $
              —
              
              
              ——
              
              
              —
              
              
              —
              
              $
              —




The
      Company’s marketable securities are classified within Level 1 since they are
      from quoted prices in active markets.





The
      Company’s investments (at cost) are classified within Level 3 of the fair value
      hierarchy because they are privately held companies with no market activity
      or
      quoted prices.





6.
            Stock
                Options / Warrants


In
      accordance with the fair value recognition provisions of SFAS 123(R), we
      estimate the stock-based compensation cost at the grant date based on the fair
      value of the award and recognize it as an expense on a graded vesting
      schedule over the requisite service period of the award.





The
          Company has adopted a stock compensation plan entitled the 2007 Equity
          Compensation Plan. Pursuant to this 2007 Equity Compensation Plan, grants
          of
          shares can be made to:





(i)
            designated
                employees of Electronic Game Card Inc. (the “Company”) and its
                subsidiaries including Electronic Game Card
                Ltd,





(ii)
            certain
                advisors who perform services for the Company or its subsidiaries,
                and





(iii)
                non-employee
                    members of the Board of Directors of the Company (the “Board”) with the
                    opportunity to receive grants of incentive stock options, nonqualified
                    options, share appreciation rights, restricted shares, dividend
                    equivalent
                    rights and cash awards. The Company believes that the Plan will
                    encourage
                    the participants to contribute materially to the growth of the
                    Company,
                    thereby benefiting the Company’s shareholders, and will align the economic
                    interests of the participants with those of the shareholders.
                    The 2007
                    Equity Compensation Plan provides for options equivalent up to
                    10% of the
                    issued share capital of the company to be offered to those qualifying
                    under the scheme. On February 6, 2007 the Company issued 2,000,000
                    options
                    to management and staff at an exercise price of 17.5c per share
                    and
                    2,000,000 at an exercise price of 25c per
                    share.




The
          company has a total of 5,349,633 options and warrants outstanding at September
          30 2008.





12




7.
            License
                Agreement




Pursuant
      to a License Agreement dated April 27, 2007, Scientific Games International
      (SGI) shall have the exclusive right, for a period of three years (subject
      to
      extension as discussed below), to produce, market, sell and distribute the
      EGC
      Electronic GameCard TM in
      compliance with all applicable laws, to all public lotteries operated by
      national, state or provincial governmental entities or private entities
      operating such public lotteries on behalf of such governmental entities (the
      “Public Lotteries”) in the U.S., Canada, Mexico and Italy. SGI also shall have a
      non-exclusive license to produce, market, sell and distribute the EGC
      Electronic GameCard TM worldwide during the ten year term of the License
      Agreement and any extensions thereof. For
      purposes of the License Agreement, the term “Public Lotteries” does not include
      lotteries conducted by charitable entities or lotteries conducted by other
      persons, entities or bodies that are not operated on behalf of national, state
      or provincial governmental entities. SGI agreed to package and label EGC
      Electronic GameCard TM as requested by the Company at a reasonable rate of
      compensation to be mutually agreed by the parties. EGC retained
      all other rights with respect to the intellectual property which is the subject
      of the License Agreement. In connection with the sale, marketing, production
      and
      distribution of the EGC Electronic GameCard TM, EGC shall provide SGI full access
      to EGC’s producers, manufacturers and suppliers of all components for and
      assembly of the EGC Electronic GameCard TM.





SGI
      may
      extend its exclusive rights with respect to “Public Lotteries” in the U.S.,
      Canada, Mexico and Italy during the term of the License Agreement on a yearly
      basis beyond the first three years of the License Agreement. To affect such
      an
      extension of exclusivity, SGI must pay to EGC in cash, the sum of at least
      $500,000 in license fees for the year preceding the extension.





During
      the term of the License Agreement, SGI
      have
      agreed to pay to the Company as a royalty fee (“Royalty Fee”) on a quarterly
      basis the greater of $.05 per EGC Electronic GameCard TM and five percent (5%) of
      the gross selling price without deduction of taxes, expenses or promotions,
      for
      EGC Electronic GameCard TM sold by SGI or its affiliates. SGI
      may
      not assign, sublicense or otherwise transfer the License Agreement to a third
      party without the prior written consent of EGC .





8.
            Series
                A Preferred Convertible Redeemable
                Stock





On
        March
        24, and April 6 th ,
        2005
        the Company sold a total of $8,666,000 Convertible Promissory Notes to
        accredited investors in a private placement of securities. This note was
        payable
        upon written demand which may be made on or after March 31, 2007, and was
        converted into Series A Preferred Convertible Redeemable Stock (“Series A”) at
        the Company’s election on November 29, 2006. Each share of Series A is
        convertible into one share of Common Stock at no cost by stockholder and
        is
        redeemable by the Company not later than March 15, 2010. Series A pays interest
        at 6% per annum. Dividends payable are included within accrued liabilities
        on
        the Company’s balance sheet. Also, the Registrant issued one (1) warrant (a
        "Warrant") to acquire one (1) share of Series A Preferred Stock for every
        two
        shares of Series A stock. The Warrants shall be exercisable to acquire shares
        of
        Series A upon the effectiveness of actions by the Registrant's shareholders
        to
        authorize the Series A. The Warrants shall be exercisable at $0.50 per share
        of
        Series A, subject to adjustment, and shall be exercisable for a period of
        5
        years. In addition, at the option of the holder, each Warrant is also
        immediately exercisable directly to acquire, instead of shares of Series
        A,
        shares of Common Stock on an as-converted-from-Series-A basis. Unexercised
        Warrants shall expire earlier upon notice by the Company to the holders of
        the
        Warrants following any consecutive 30-day trading period during which the
        Common
        Stock trades on its principal market at a price at or above three (3) times
        the
        then applicable exercise price with average daily volume of at least 100,000
        shares (subject to adjustment of such trading volume threshold in the event
        of
        stock splits, reverse stock splits, stock dividends, recapitalizations or
        similar events). Currently there are 6,549,922 Series A shares outstanding
        there
        were no conversions in the period presented. During the nine months ended
        September 30 2008 1,022,657 shares of Series A stock have been converted
        to
        common stock.




9.
            Common
                  Stock Transactions


During
          the nine months ended September 30, 2008 the company issued 400,000 shares
          of
          common stock to consultants for development work to enhance the companies
          platform technologies.




During
          the three months ended, 1,766,342 shares were issued for the exercise of
          options.


10.
            Available-for-Sale
                    Securities


Available-for-sale
      securities consist of the following:




13




**September
                30, 2008****Estimated**
              **Fair**
              **Value**
            
            **Gains
                in**
              **Accumulated**
              **Other**
              **Comprehensive**
              **Income**
            
            **Losses
                in**
              **Accumulated**
              **Other**
              **Comprehensive**
              **Income**Current:Common
                Stock
            
            $
            1,400,000
            
            
            5,000
            
            
            -Total
                current securities
            
            
            1,400,000
            
            
            5,000
            
            
            -Total
                available-for-sale securities
            
            $
            1,400,000
            
            
            5,000
            
            
            -








Net
      unrealized holding losses on available-for-sale securities in the amount of
      approximately $5,000 for the period ended September
      30, 2008 have
      been included in accumulated other comprehensive income.


11.
              Investments
  At
        September 30, 2008, the Company had investments in the following various
        entities:
 
 Prize
                  Mobile Ltd.
              
              $
              1,860,235XOGO
                  Ltd.
              
              
              1,314,736Plus
                  Digital Solutions Ltd.
              
              
              1,001,593Avatar
                  Gateways
              
              
              500,000DG2L
                  Technologies
              
              
              250,000Total
                  cost
              
              $
              4,926,564
 
 The
        Company currently holds less than 10% of each of the respective privately-held
        entities which approximates the Company’s pro rata share of their underlying
        value. It is not practicable to estimate the fair value of the Company’s
        investment in the common stock of these entities because of the lack of quoted
        market prices and the inability to estimate fair value without incurring
        excessive costs. However, management believes that the carrying amount (on
        the
        cost method) of $4,926,563 was not impaired as of September 30,
        2008.


**ITEM
                  2.**
              **MANAGEMENT’S
                  DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
                  OPERATIONS**





The
      following information should be read in conjunction with the consolidated
      financial statements and notes thereto appearing elsewhere in this Form
      10-Q.





**General**





Electronic
      Game Card, Inc. (referred to as "EGC", "us", "we" or "Company") is a supplier
      of
      innovative games to the promotional, gaming and lottery markets worldwide.
      The
      Company’s lead product is the EGC, Electronic GameCard TM a
      unique
      credit card-sized pocket game combining interactive capability with "instant
      win" excitement.




**The
      Company**





Electronic
      Game Card, Inc. is an emerging international corporation developing reward
      based
      games for the sales promotions, casino and lottery and incentive markets. EGC’s
      core product is the EGC Electronic GameCardTM, a unique and innovative
      proprietary technology adapted to a platform, with patents pending worldwide
      and
      with the technology that can be adapted to other markets. The EGC Electronic
      GameCardTM was designed by us to be rich in functionality, customizable,
      portable, and cost efficient. The EGC Electronic GameCard platform is currently
      embedded in a credit card size digital device with an LCD window, touch pad
      controls and microchip, allowing for many game formats to be programmed to
      suit
      a variety of applications in several industry sectors.





EGC’s
      GameCards are used in the sales promotion market as an incentive or loyalty
      sales promotion tool to be given away by the brand promoter to the consumer
      with
      prizes given as rewards for winning simple fun games designed specially for
      the
      brand. The Jack Meyers Media Business Report states that the global media market
      for 2007 is $752 billion of which sales promotion and consumer incentives are
      $136 billion. www.jackmyers.com





An
      opportunity exists for the Company to sell EGC Electronic GameCards for re-sale
      to the public as a gaming device in selected areas of the casino market in
      which
      blackjack, poker, bingo or similar games may be played. In other areas of the
      world, however, re-sale is permitted and EGC expects to start marketing its
      range of game formats as soon as they are developed during the year. EGC also
      intends to leverage its gaming, manufacturing and technology IP knowledge to
      the
      wider market place anticipated from rapidly expanding areas of digital
      communications offering reward based games opportunities. To this end the
      company has purchased a small shareholding in DG2L, an interactive television
      set top box (STB) manufacturer and in February 2005 set up a division to
      investigate opportunities in mobile phones and the Prize Mobile investment
      in
      this area has now applied for a public listing on the Plus exchange in London.





**Sales
      Promotion Market**





The
      sales
      promotion prize and competition market is one in which the promoter (usually
      a
      well known brand) must not be seen to obtain money for entry, and where no
      purchase of the brand's goods is necessary in order not to fall under the laws
      by which lotteries are regulated, Our EGC Electronic GameCards can be applied
      to
      a broad range of potential promotional opportunities although introducing
      a new product into the sales and promotion marketing arena, despite its demand
      for novelty products and innovative ideas, takes time and adaptability to market
      needs.





14




Within
      the sales promotion market, the Poker sector has developed into a distinct
      and
      vibrant opportunity. In Europe, Australasia and South Africa playing and
      watching Poker at tournaments and, on-line or on television has moved from
      a
      specialist area to mainstream entertainment and gaming in the last 12
      months.





The
      large
      number of Poker players and viewers form a substantial and dynamic opportunity
      for the gaming sector, and the profile being generated by marketers is of a
      vibrant and expanding sector with increased promotional budgets. The Company
      is
      currently working on development of specialist EGC Electronic GameCards and
      promotions to extend the interest and impact of Poker to maximize this
      opportunity.





**Lottery
      Market**





Lottery
      operators currently make use of paper scratch cards to give players an "instant"
      win or lose reward experience. Over the last several years, scratch cards have
      become increasingly large and complex to accommodate consumer demand for
      multiple plays and multiple chances to win. The EGC Electronic GameCardTM offers
      the potential to simplify the scratch card while giving the opportunity to
      raise
      the selling price to consumers and increase sales. Our product has been seen
      by
      some leaders in the lottery industry as potentially providing the next
      contemporary digital evolution of the scratch card, offering multiple plays
      and
      multiple chances to win in an entertaining and secure manner while using
      existing methods of distribution as with scratch cards.





On
      April
      27, 2007 (the “Effective Date”), Electronic Game Card, Inc. (the "Company" or
“EGC”) entered into a license agreement (the “License Agreement”) with
      Scientific Games International, Inc. ("SGI"). The parties agreed to terminate
      their joint venture agreement dated October 12, 2004 (the “Joint Venture
      Agreement”), settling outstanding amounts due to each party and owed by each
      party to the joint venture or to each other. Pursuant to the License Agreement,
      SGI have the exclusive right, for a period of three years (subject to extension
      as discussed below), to produce, market, sell and distribute the EGC Electronic
      GameCardTM in
      compliance with all applicable laws, to all public lotteries operated by
      national, state or provincial governmental entities or private entities
      operating such public lotteries on behalf of such governmental entities (the
      “Public Lotteries”) in the U.S., Canada, Mexico and Italy. SGI also have a
      non-exclusive license to produce, market, sell and distribute the EGC Electronic GameCardTM
      worldwide during the term of the License Agreement and any extensions
      thereof. For
      purposes of the License Agreement, the term “Public Lotteries” does not include
      lotteries conducted by charitable entities or lotteries conducted by other
      persons, entities or bodies that are not operated on behalf of national, state
      or provincial governmental entities. SGI agreed to package and label EGC
      Electronic GameCardTM as requested by the Company at a reasonable rate of
      compensation to be mutually agreed by the parties. The
      Company retained
      all other rights with respect to the intellectual property which is the subject
      of the License Agreement. SGI
      may
      extend its exclusive rights with respect to “Public Lotteries” in the U.S.,
      Canada, Mexico and Italy during the term of the License Agreement on a yearly
      basis beyond the first three years of the License Agreement. To effect such
      an
      extension of exclusivity, SGI must pay to EGC in cash, the sum of at least
      $500,000 in license fees for the year preceding the extension.





During
      the term of the License Agreement, SGI
      has
      agreed to pay to the Company as a royalty fee (“Royalty Fee”) on a quarterly
      basis the greater of $.05 per EGC Electronic GameCardTM and five percent (5%) of
      the gross selling price without deduction of taxes, expenses or promotions,
      for
      EGC Electronic GameCardTM sold by SGI or its affiliates. SGI
      may
      not assign, sublicense or otherwise transfer the License Agreement to a third
      party without the prior written consent of EGC .





**Indian
      Gaming Market**





The
      Indian Gaming on Native American Tribal Lands covers parts of 28 States within
      the United States of America and represents a significant portion of the total
      gaming industry. The National Indian Gaming Commission (NIGC) report that the
      market was $25.7 billion dollars in revenue in 2006 with 415 casinos operated
      by
      more than 200 tribes across the United States.





The
      Company has a legal opinion from the NIGC that the EGC Electronic GameCardTM is a
      Class II device under IGRA (Indian Gaming Regulatory Act). The Class II
      designation is significant because it exempts the Company from becoming subject
      to the state license procedures and requirements.





15




The
      success of sales promotion in the Gaming sector, and in particular the sale
      to
      the Santa Ana Star Casino, New Mexico demonstrates the interest in the EGC
      Electronic GameCardTM in this sector. Therefore, EGC continues its sales and
      marketing activity to generate sales around Class II gaming.





Sovereign
      Game Card LLC





On
      September 16, 2008 the company announced that it had signed a five-year license
      agreement containing established yearly minimum royalty payments with Arizona
      based Sovereign Game Cards, LLC (“Sovereign”) for distribution of the EGC
      Electronic GameCardTM into Native American Indian-owned casinos within the United
      States and Canada.  Tom L. Darwin, founder and managing principal of
      Sovereign, with his affiliates and distributors have a 20-year history of
      service to the Native American Indian community, and has financed numerous
      projects, including Native American casinos.  Mr. Darwin recently
      established Sovereign specifically to introduce, sell and distribute the EGC
      Electronic GameCardTM into Native American Indian territories.





**Business
      Strategy**





During
      2007, the Company expanded its volume production of the EGC Electronic
      GameCardsTM. This necessitated the cost effective and secure design of EGC
      Electronic GameCards from the manufacturers, involving quality control practices
      of an extremely high standard. The Company marketed the EGC Electronic GameCardTM
during 2007 in conjunction with Scientific Games International, Inc. through
      the
      distribution agreement for North America, Mexico and Italy. Staff are
      responsible for either selling the EGC Electronic GameCards direct (via Agents)
      in the case of sale promotion products or in the case of lotteries, through
      an
      exclusive distribution license.





We
      market
      our products through agents in the US, Europe and the rest of the World. We
      currently have outlets in New York and London (U.K.). Our management team has
      relevant experience in their appropriate markets to contract agents and
      distributors to sell and our products.





Indian
      Gaming appertains solely to the sale of EGC Electronic GameCards as gaming
      devices directly to the public in casinos and reservations owned and operated
      by
      Indian Tribes in the USA. The Company has received Class II classification
      for
      its products from the National Indian Gaming Council (NIGC)National Indian
      Gaming Association states that in 2006 Tribal Governments gaming revenue was
      $25.7 billion dollars. www.indiangaming.org/library/indian-gamingfacts/index.shtml




16




**Product
      Development**




The
      company continues its focus on game development with the emphasis on
      improvements in game behavior, reliability and flexibility as well as expanding
      the existing game portfolio with a series of engaging, innovative
      concepts.




During
      the last quarter the company directed creative resources on developing game
      concepts for our new target markets in Children’s Education, Greetings Card and
      Collectible product





New
      game
      concepts have now been produced as flash versions and will be tested for
      integrity, accuracy and suitability in Q4.





Q4
      will
      see further resource directed at product enhancement as we look to maximize
      the
      potential of the gamecard through the implementation of even more sophisticated
      components, such as HTN & STN LCD screens into the game platform. This will
      allow for even greater flexibility in terms of performance and behavior in
      new
      areas such as screen animation.





17




**Results
      of Operations**





The
      company has recorded $3,043,566 of revenues this quarter compared with
      $1,785,330 in the same period in 2007 and $ 7,283,870 and $4,250,224 in the
      comparable nine months period to September 30, 2008.This represents revenue
      growth of 70% and 84% respectively coming from additional orders from existing
      customers and also new customers in sales promotion, poker and charity lotteries
      as the company has widened its range of games to attract new customers. Gross
      margins were maintained at 76% of revenue compared with 73% in the comparable
      period. The company purchases its manufactured stock in USD and the relative
      strength or weakness of the currency can affect the cost of raw material prices
      however the company has been able to hold the price of raw materials and chips
      at previous levels by negotiating improved terms on higher volumes.





Sales
      and
      Marketing costs were $13,600 compared with $1,232 for the comparable quarter
      and
      $54,954 and $5,204 for the comparable nine months. There has been a slight
      reduction in activity during this quarter following an intensive marketing
      effort on new products in the first half year.





General
      and Administration expenses were $ 123,639 September 30, 2008 compared with
      $146,326 for the same period in 2007 and $451,237 and $431,541 for the
      comparable nine month period. The reduction in this expense during the quarter
      follows the disposal of non core activities referred to in the June 10Q report.




Consultancy
      costs were higher at $282,865 compared with $125,727 for the three months to
      September 30, 2008 and 2007 and for the comparable nine month period
      $560,014,and $282,585. Higher costs were due to continuation of development
      work
      on new product areas for the EGC Electronic Gamecard and as reported in the
      June
      filing these will continue at similar levels while new products are
      developed.





Salaries
      and payroll costs were $104,407compared with $109,556 and $277,397 and $312,135
      for the comparable three months and nine months to September 30, 2008 and 2007
      respectively. Salary costs have reduced slightly in the September quarter as
      a
      result of disposals referred to above. We consider that as product moves through
      development into production and sales that payroll costs will
      increase.





Income
      from operations excluding the interest for the three months to 30 th September 2008 improved to $1,775,055 compared with $911,990 and for the nine
      month to September 30 2008 $4,574,679 compared with $2,069,271 in 2007. Higher
      revenues and continued control of expenses combined to produce a cash increase
      of $1,981,123 for the nine months to September 2008.





Total
      comprehensive income for the three months to September 30 2008 was $1,685,375
      compared with $817,628 for the same period in 2007 and $4,316,582 compared
      with
      $1,700,681 for the comparable nine month periods.





Basic
      earnings per share for the quarter were were $0.03 compared with $0.02 in the
      same period of 2007 and $0.08 compared with $0.04 for the nine months. Fully
      diluted earnings were $0.02 and $0.07 for the quarter and year to date
      respectively.





**Liquidity
      and Financial Resources**





The
      Company had cash and cash equivalents of $6,734,163 at September 30, 2008
      compared with S6,885,351 at June 30, 2008 and $3,473,937 a year ago. Operating
      expenses are approximately $400,000 per quarter. As of September 30, 2008,
      current assets were $11,173,916 and current liabilities were $1,516,951.
      Stockholders’ equity at September 30, 2008 was $7,926,272. We had net cash
      provided by (used in) operating activities for the three months ended September
      30, 2008 and 2007 of $4,139,934and $767,865, respectively.




18




**Off-Balance
      Sheet Arrangements**





As
      of the
      date of this Report, the Company does not have any off-balance sheet
      arrangements that have or are reasonably likely to have a current or future
      effect on the Company’s financial condition, changes in financial condition
      revenues or expenses, results of operations, liquidity, capital expenditures
      or
      capital resources that are material to investors. The term “off-balance sheet
      arrangement” generally means any transaction, agreement or other contractual
      arrangement to which an entity unconsolidated with the Company is a party,
      under
      which the Company has (i) any obligation arising under a guarantee contract,
      derivative instrument or variable interest; or (ii) a retained or contingent
      interest in assets transferred to such entity or similar arrangement that serves
      as credit, liquidity or market risk support for such assets.





**ITEM
      3.**  **QUANTITATIVE
      AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK**





There
      have been no material changes in our market risk since December 31,
      2007.




We
      have
      Series A Redeemable convertible stock which carries a 6% dividend and is
      redeemable in May 2010. There are currently 6,549,922 shares of Series A
      outstanding These instruments are not leveraged and are held for purposes other
      than trading.




**Interest
      Rate Risk**


We
      do not
      engage in trading market risk sensitive instruments or purchasing hedging
      instruments or “other than trading” instruments that are likely to expose us to
      market risk, whether interest rate, foreign currency exchange, commodity price
      or equity price risk. We have not purchased options or entered into swaps,
      or
      forward or future contracts. We do consider that we have any significant
      exposure to interest rate variations.





**ITEM
      4.**  **CONTROLS
      AND PROCEDURES**





At
      the
      end of the period covered by this report the Company carried out an evaluation
      under the supervision and with the participation of the Company’s management
      including the Company’s Chief Executive Officer and the Company’s Chief
      Financial Officer of the effectiveness of the design and operation of the
      Company’s disclosure controls and procedures (as defined in Rules 13a-15e and
      15d -15-e under the Securities Exchange Act of 1934 as amended). Based on this
      evaluation, the Company’s Chief Executive Officer and the Company’s Chief
      Financial Officer the Company concluded that information is recorded, processed,
      summarized and reported within the time period specified by the Commission’s
      rules and forms, and that information is accumulated and communicated to our
      management, including our Chief Executive Officer (or Acting Chief Executive
      Officer, as the case may be) and our Chief Financial Officer, as appropriate,
      to
      allow timely decisions regarding required disclosure. Under the supervision
      and
      with the participation of our Chief Executive Officer (or acting Chief Executive
      Officer, as the case may be) and our Chief Financial Officer, we evaluated
      the
      effectiveness of the design and operation of our disclosure controls and
      procedures (as defined in Rule 13a-15(e) under the Exchange Act) as of September
      30, 2008, the end of the period. Following the review by our Chief Executive
      Officer (or acting Chief Executive Officer, as the case may be) and our Chief
      Financial Officer, each of them has determined that our disclosure controls
      and
      procedures are effective.





**Changes
      in Internal Controls over Financial Reporting**





There
      were no changes in the Company’s internal controls over financial reporting that
      occurred during the period covered by this report that has materially affected,
      or are reasonably likely to materially affect the Company's internal control
      over financial reporting.





19




**PART
      II - OTHER INFORMATION**




**ITEM
      1.****LEGAL
      PROCEEDINGS**





None.




**ITEM
      2.****CHANGES
      IN SECURITIES**





None.




**ITEM
      3.****DEFAULTS
      UPON SENIOR SECURITIES**





None.




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





None.




**ITEM
      5.****OTHER
      INFORMATION**





On
      October 2, 2008 The Company announced the appointment of Paul Farrell as a
      Director.





**ITEM
      6.****EXHIBITS
      AND REPORTS ON FORM 8-K**





(a)  The
      following exhibits are included as part of this report:





**Exhibit**
            **Description**





31.1
            Certification
                Pursuant to Section 302 of the Sarbanes-Oxley Act of
                2002.





31.2
            Certification
                Pursuant to Section 302 of the Sarbanes-Oxley Act of
                2002.





32.1
            Certification
                Pursuant to Section 906 of the Sarbanes-Oxley Act of
                2002.





32.2
            Certification
                Pursuant to Section 906 of the Sarbanes-Oxley Act of
                2002.




20


**SIGNATURES**
 
 In
        accordance with the requirements of the Exchange Act, the Registrant caused
        this
        report to be signed on its behalf by the undersigned, thereby duly
        authorized.
   **ELECTRONIC
                  GAME CARD**Date: November
                14, 2008
              By:
              /s/ Lee
                ColeLee
                  ColeActing
                  President and Acting Chief
                Executive
                  Officer
 Date: November
                  14, 2008
                By:
                /s/ Linden
                  BoyneLinden
                      BoyneSecretary
                      / Treasurer
                  (Principal
                      Financial Officer)
 21