**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 March 31, 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)**
              
              **19****th****Floor, 712 5****th****Avenue, New York, NY**
              **(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 May 13, 2008****Common
                Stock, $0.001 par value**
            
            **50,521,766**













**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 March 31, 2008 (Unaudited), and December
                    31,
                    2007
                4Consolidated
                    Statements of Operations and Comprehensive Loss for theFiscal
                    Three Months Ended March 31, 2008 and January 1, 2008
                    (Unaudited)
                5Consolidated
                    Statements of Cash Flows for the Fiscal Three Months EndedMarch
                    31, 2008 and January 1, 2008 (Unaudited)
                6Notes
                    to Unaudited Consolidated Financial Statements
                7**ITEM
                    2**–
                    Management’s Discussion and Analysis of Financial Condition and Results
                    of
                    Operations
                12**ITEM
                    3**–
                    Quantitative and Qualitative Disclosures About Market Risk
                16**ITEM
                    4**–
                    Controls and Procedures
                16**PART
                    II.**
                **OTHER
                    INFORMATION****ITEM
                    1**–
                    Legal Proceedings
                17**ITEM
                    2**–
                    Changes in Securities
                17**ITEM
                    3**–
                    Defaults Upon Senior Securities
                17**ITEM
                    4**–
                    Submission of Matters to a Vote of Security Holders
                17**ITEM
                    5**–
                    Other Information
                17**ITEM
                    6**–
                    Exhibits
                17**SIGNATURES**
                18
  3


**PART
      I** – **FINANCIAL INFORMATION**





**ITEM
      1. FINANCIAL STATEMENTS**





**ELECTRONIC
      GAME CARD, INC.**


**CONSOLIDATED
      BALANCE SHEETS**





**March 31, 2008**
            
            **December 31, 2007**(Unaudited)**ASSETS**Current
                assets:Cash
                and cash equivalents
            
            $
            5,706,906
            
            $
            4,753,040Accounts
                receivable
            
            
            2,623,016
            
            
            2,323,543Deposit
                on inventory
            
            
            70,071
            
            
            70,071Other
                receivables
            
            
            91,990
            
            
            92,100VAT
                receivable
            
            
            24,893
            
            
            31,531Deferred
                charges
            
            
            152,476
            
            
            190,595Total
                current assets
            
            
            8,669,352
            
            
            7,460,880Net
                property, plant and equipment
            
            
            34,727
            
            
            44,050Intangible
                assets, net
            
            
            183,034
            
            
            183,034Investments,
                at cost
            
            
            3,496,179
            
            
            2,886,427Total
                assets
            
            $
            12,383,292
            
            $
            10,574,391**LIABILITIES
                AND SHAREHOLDERS’ EQUITY/(DEFICIT)**Current
                liabilities:Accounts
                payable
            
            $
            625,695
            
            $
            659,891Accrued
                liabilities
            
            
            661,256
            
            
            560,046Total
                current liabilities
            
            
            1,286,951
            
            
            1,219,937Deferred
                license fees
            
            
            654,625
            
            
            779,625Total
                liabilities
            
            
            1,941,576
            
            
            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 andoutstanding
                at of March 31, 2008 and December 31, 2007, respectively
            
            
            6,549,922
            
            
            7,582,806Shareholders’
                equity/(deficit)Common
                stock, $.001 par value, 100,000,000 shares authorized;44,168,683
                and 50,031,766 shares issued and outstanding atDecember
                31, 2007 and March 31, 2008 , respectively
            
            
            50,030
            
            
            48,012Capital
                in excess of par value
            
            
            28,874,546
            
            
            27,264,272Accumulated
                deficit
            
            
            (24,171,740
            )
            
            (25,463,568
            )Accumulated
                other comprehensive loss
            
            
            (861,042
            )
            
            (856,693
            )Total
                shareholders’ equity
            
            
            3,891,794
            
            
            992,023Total
                liabilities and shareholders’ equity
            
            $
            12,383,292
            
            $
            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)**


**Three months ended****March 31, 2008**
              
              **March 31, 2007**Revenue
              
              $
              2,294,621
              
              $
              990,538Cost
                  of revenue
              
              
              549,000
              
              
              255,345Gross
                  margin
              
              
              1,745,621
              
              
              735,193Operating
                  expenses :Sales
                  and marketing
              
              
              791
              
              
              1,172General
                  and administrative
              
              
              128,149
              
              
              104,617Consulting
                  expenses
              
              
              151,482
              
              
              95,005Salaries
                  and wages
              
              
              86,886
              
              
              112,245Loss
                  from joint venture
              
              
              -
              
              
              18,638Total
                  operating expenses
              
              
              367,308
              
              
              331,677Operating
                  income
              
              
              1,378,313
              
              
              403,516Other
                  income (expense):Interest
                  income
              
              
              61,577
              
              
              42,701Interest
                  expense
              
              
              (148,062
              )
              
              (168,056
              )Net
                  income
              
              $
              1,291,828
              
              $
              278,161Other
                  comprehensive (loss) gain:Foreign
                  currency translation loss
              
              
              (4,349
              )
              
              (63,048
              )Comprehensive
                  income
              
              $
              1,287,479
              
              $
              215,113Net
                  income per common share (basic)
              
              $
              0.03
              
              $
              0.01Weighted
                  average number of common shares outstanding (basic)
              
              
              50,031,766
              
              
              44,168,683Net
                  income per common share (diluted)
              
              $
              0.02
              
              $
              0.00Weighted
                  average number of common shares outstanding (diluted)
              
              
              62,487,058
              
              
              58,184,857




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


5


**ELECTRONIC
      GAME CARD, INC.**


**CONSOLIDATED
      STATEMENTS OF CASH FLOWS**


**(Unaudited)**





**Three
                months ended****March
                31, 2008**
            
            **March
                31, 2007**Cash
                flows from operating activities:Net
                income
            
            $
            1,291,828
            
            $
            278,161Adjustments
                to reconcile net income from continuing operations to net cashused
                in operating activitiesDepreciation
                and amortization
            
            
            9,321
            
            
            3,085Amortization
                of deferred charges
            
            
            38,119
            
            
            38,119Deferred
                License Fees
            
            
            (125,000
            )
            
            -Loss
                from joint venture
            
            
            -
            
            
            18,638Stock
                issued for services
            
            
            23,200
            
            
            -Change
                in assets and liabilities:Accounts
                receivable
            
            
            (299,473
            )
            
            (566,201
            )Value
                Added Tax receivable
            
            
            6,638
            
            
            3,274Other
                receivables
            
            
            110
            
            
            -Accounts
                payable
            
            
            (34,196
            )
            
            24,961Accrued
                liabilities and interest payable
            
            
            101,210
            
            
            129,000Net
                cash provided by (used in) operating activities
            
            
            1,011,757
            
            
            (70,963
            )Cash
                flows fro investing activities:Purchase
                of property and equipment
            
            
            -
            
            
            (93
            )Purchase
                of investments
            
            
            (53,542
            )
            
            (164,624
            )Net
                cash provided by (used in) investing activities
            
            
            (53,542
            )
            
            (164,717
            )Cash
                flows from financing activities:Receipts
                on related party receivable
            
            
            -
            
            
            79,275Net
                cash provided by financing activities
            
            
            -
            
            
            79,275Foreign
                currency exchange effect on cash
            
            
            (4,349
            )
            
            (63,048
            )Net
                increase in cash and cash equivalents
            
            
            953,866
            
            
            (219,453
            )Cash
                and cash equivalents at beginning of period
            
            
            4,753,040
            
            
            3,052,733Cash
                and cash equivalents at end of period
            
            $
            5,706,906
            
            $
            2,833,280Supplemental
                disclosure of cash flow information:Cash
                paid during the period for :Interest
            
            $
            -
            
            $
            -Income
                Taxes
            
            $
            -
            
            $
            -Supplemental
                disclosure of cash flow information:Shares
                issued for investments
            
            $
            556,210
            
            $
            -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**





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 Electronic GameCardTM. The shape of a
      pocket GameCard 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 Company is launching its technology into new market
      sectors such as Education, Sports/Hobbies and Celebrations. The Company designs
      its GameCards to play game types, formats and prize structures as required
      by
      its customers. The Company is building 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.





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 ended March 31, 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.





**Principles
      of Consolidation**





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





·
              Electronic
                  Game Card, Inc. (Nevada
                  Corporation)


·
              Electronic
                  Game Card, Ltd. (English
                  Corporation)


·
              Electronic
                  Game Card Marketing (A Delaware
                  Corporation)




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.





**Concentration
      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.





**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.





**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; product has been shipped to customers; a fee is fixed or determinable;
      and, collectibility is reasonably assured.





**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 in net
      income or loss from operations.





**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.


8





**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 March 31, 2008, the Company
      had options and warrants outstanding to purchase up to 10,183,368 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. 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 do not expect this will
      have a significant impact on our financial statements.





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.


9





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 March 31, 2008, the Company had a
      net
      operating loss carry forward for income tax reporting purposes of approximately
      $19,711,106 in the United States and $7,913,052 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 March 31, 2008 and 2007, 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.


10





4.
            Related
                Party Transactions





During
      the three months ended March 31, 2008 and the year ended December 31, 2007
      the
      Company incurred rent expense of $17,797 and $108,028 for the London office,
      respectively.





**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 March 31, 2008****Total**
              
              **Level
                  1**
              
              **Level 2**
              
              **Level 3**Assets:Investments
              
              $
              3,496,179
              
              $
              -
              
              $
              -
              
              $
              3,496,179$
              3,496,179
              
              $
              -
              
              $
              -
              
              $
              3,496,179Liabilities:
              
              $
              -
              
              $
              —
              
              $
              -
              
              $
              -





The
      Company’s investments 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





The
                Company has adopted a stock compensation plan entitled the 2007 Equity
                Compensation Plan. Pursuant to this 2002 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.





In
                connection with a private placement on March, 2005, the Company issued
                3,426,875 warrants. Each warrant is exercisable for a period of five
                years
                at a price of $0.50 for one share of common stock.The company has
                a total
                of 6,433,668 warrants outstanding at March 31 2008.




11


7.
              License
                  Agreement
 
 Pursuant
        to the License Agreement, 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 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 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 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 Electronic GameCard TM, EGC shall provide SGI full access to
        EGC’s producers, manufacturers and suppliers of all components for and assembly
        of the 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 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
      have
      agreed to pay to the Company as a royalty fee (“Royalty Fee”) on a quarterly
      basis the greater of $.05 per Electronic GameCard TM and five percent (5%) of the
      gross selling price without deduction of taxes, expenses or promotions, for
      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 6th,
                2005 the Registrant 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. 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).





9.
            Common
                Stock Transactions





On
                January 10th,
                2008, the Company issued 391,864 shares of common stock to AliQuantum
                Gaming as part payment of a contract for exclusive use of a proprietary
                mobile phone games platform to be used by Prize Mobile Group plc
                in
                conjunction with existing intellectual property. A further 391,867
                shares
                were issued on February 22, 2008, to complete the contract. The effect
                of
                these issuances increased the Company’s investment in Prize Mobile by
                $399,007.




**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 GameCard, a unique credit card-sized pocket
      game combining interactive capability with "instant win"
      excitement.


12





**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 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 GameCard was designed
      by us to be rich in functionality, customizable, portable, and cost efficient.
      The 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





A n
      opportunity exists for the Company to
      sell
      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.





**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 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.





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 forma 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 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 GameCard 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").


13





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 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 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 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 Electronic GameCardTMGameCard TM and five
      percent (5%) of the gross selling price without deduction of taxes, expenses
      or
      promotions, for Electronic GameCardTMGameCards 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 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 National Indian Gaming Commission (“NIGC”)
      that the EGC GameCard 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.





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





**Business
      Strategy**





During
      2007, the Company expanded its volume production of the Electronic GameCardsTM.
      This necessitated the cost effective and secure design of GameCards from the
      manufacturers, involving quality control practices of an extremely high level.
      The Company marketed the Electronic GameCardTM during 2007 in conjunction with
      Scientific Games International, Inc. through the distribution agreement for
      North America, Mexico and Italy distribution of Electronic GameCardsTM to the
      lottery industry and directly to sales promotion companies and lotteries in
      Europe excluding Italy. Staff are responsible for either selling the GameCards
      direct (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 increase product.





Indian
      Gaming appertains solely to the sale of 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


14





**Product
      Development**





The
      company has a continuous program of product development comprising improvement
      of existing designs and additions to the suite of games currently on offer
      to
      clients. Game design is divided into four stages; concept development, software,
      testing and finally manufacturing. Product development and improvement is
      generated by in house review and response to specific customer
      recommendations.





The
      physical make-up of the GameCard has been enhanced through modifications to
      circuit design, leading to a more robust product. Independent Quality Assurance
      testing from our most recent manufacturing runs indicates that we are now
      producing our most reliable product to date. Performance is constantly being
      reviewed to improve the GameCard still further. In addition to improved circuit
      design, we are currently upgrading the MCU Body (chip) on a number of our games.
      This will further improve reliability.





The
      GameCard has recently passed a series of stringent tests by Gaming Laboratories,
      Inc. (GLI), one of the most respected testing houses in the global gaming
      industry. These tests proved the GameCard’s ability to resist attempts at
      manipulating the IC logic or otherwise breaching the numerous security measures
      incorporated in the GameCard. This formal endorsement by GLI of the GameCard’s
      effective security defenses demonstrates the Company’s continuing commitment to
      product development and security.





Recent
      game development includes Tic Tac Toe, & Poker Winning Seats. The
      development of Tic Tac Toe was a result of our flexible approach to game design
      and product innovation. While this game had not been considered until recently,
      however, the concept was developed and has been well received and the game
      has
      been added to the portfolio of available games.





Poker
      Winning Seats is a new concept game – a clever variation on our existing Pocket
      Poker game which offers a bonus play for players and audiences of the various
      real and virtual Poker Tours worldwide. A new game for 2008 is Lucky 8-8-8,
      a
      game designed to appeal to the Asian market, where the number 8 is regarded
      as a
      lucky number and also to mark the opening of the Olympic Games in Beijing in
      August 2008 (08-08-08).





Other
      gaming concepts which continue to push the boundaries of the GameCard
      performance and functionality, such as a US Bingo style game and multi-outcome
      games are constantly being devised and developed. Furthermore, development
      and
      design has commenced to produce GameCards for the non-gaming sectors, such
      as
      education, sports, music and collectables.





We
      now
      offer 27 games to clients.





**Results
      of Operations**





The
      company has recorded $2,294,621 of revenues this quarter compared with $990,538
      in the same period in 2007. Cost of product has reduced as volume has increased
      and Gross Profit was $1,745,621 compared with $735,193 in 2007. The company
      purchases its manufactured stock in USD and any further price reduction for
      volume purchase will depend on the strength of the currency at the time of
      ordering.





Sales
      and
      Marketing costs were $791 compared with $1,172 in the same period for 2007,
      primarily due to staff economies and a reduction in attendance at trade shows
      and events during the period. The
      current staffing levels can be maintained but are unlikely to reduce further.





General
      and Administration expenses were $128,149 compared with $104,617 for the same
      period in 2007. This expense was lower than the comparable period as we were
      able to make further economies, mostly linked to lower staff numbers, during
      the
      period.





Consultancy
      costs were higher at $151,482 compared with $95,005 in the previous year this
      was due to examination of new product areas for the gamecard and will continue
      as new products are developed.





Salaries
      and payroll costs were $86,886 compared with $112,245 in 2007 as costs were
      closely controlled in the period and will continue to be so, on an on-going
      basis.


15





Operating
      income excluding the interest charges was $1,378,313 compared with $403,516
      in
      the comparable period of 2007. Higher revenues and lower cost of sales and
      operating expenses combined to produce this improvement.





Total
      comprehensive income was $1,287,479 compared with a $215,113 for the same period
      in 2007.





Basic
      earnings per share were $0.03 in 2008 compared with $0.01 in the comparable
      period of 2007.





**Liquidity
      and Financial Resources**





The
      Company had cash and cash equivalents of $5,706,906 at March 31, 2008 compared
      to $4,753,040 at December 31, 2007. Operating expenses are approximately
      $367,000 per quarter. As of March 31, 2008, EGC current assets were $8,669,352
      and current liabilities were $1,286,951. Stockholders’ equity at March 31, 2008
      was $3,891,794. We had net cash provided by (used in) operating activities
      for
      the three months ended March 31, 2008 and 2007 of $1,011,757 and ($70,963),
      respective ly.





**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 of Series A
      outstandingThese 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 March
      31,
      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. However the company has found it necessary to upgrade its
      procedure for contact with our auditors. A misunderstanding with our auditors
      caused the company to file its 10KSB without appropriate approval and in future
      all filings will require sign off by not less than two
      officers.


16





**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.





**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**





None.





**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.




17




**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
                : May 14 2008
            By:
                /s/ Lee ColeLee
                ColeActing
                President and Acting ChiefExecutive
                Officer




Date
                : May 14 2008
            By:
                /s/ Linden BoyneLinden
                BoyneSecretary
                / Treasurer(Principal
                Financial Officer)


**End
        of Filing**


18