<PAGE i>

                  U.S. SECURITIES AND EXCHANGE COMMISSION
                       Washington, D.C. 20549

                             FORM 10-KSB

	[X] Annual Report under Section 13 or 15(d) of the Securities Exchange 
Act of 1934 (Fee required) for the fiscal year ended May 31, 1997

	Commission file number 0-17642

                             CREATIVE GAMING, INC.
                             ---------------------
                 (Name of Small Business Issuer in its Charter)

       New Jersey               	      22-2930106 
 -------------------------------     -----------------    
	(State or other jurisdiction of 	   (I.R.S. Employer
	Incorporation or Organization)  	   Identification No.)

          150 Morris Avenue, Springfield, NJ	     07081     
         ---------------------------------------------------
	        (Address of Principal Executive Offices)	(Zip Code)

                             (973) 467-0266                              
         ------------------------------------------------
        	(Issuer's Telephone Number, Including Area Code)

Securities registered under Section 12(b) of the Exchange Act:

NONE

Securities registered under Section 12(g) of the Act:

                  Common Stock, no par value
                  --------------------------
                      (Title of Class)

	Check whether the issuer: (1) filed all reports required to be filed by 
Section 13 or 15(d) of the Exchange Act during the past 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       
    ---    ---

	Check if there is no disclosure of delinquent filers in response to 
Item 405 of Regulation S-B contained in this form, and no disclosure will be 
contained, to the best of registrant's knowledge, in definitive proxy or 
information statements incorporated by reference in Part III of this Form 
10-KSB or any amendment to this Form 10-KSB. [    ]

	The issuer's revenues for its most recent fiscal year were $356,668.

	The aggregate market value of the voting stock held by non-affiliates 
of the registrant as of October 17, 1997 was $2,650,198.

	The number of shares outstanding of each of the registrant's classes of 
common equity on October 17, 1997 was 26,290,728 shares of Common Stock, no 
par value, and no shares of Preferred Stock, $1.00 par value.

               DOCUMENTS INCORPORATED BY REFERENCE

                             NONE

<PAGE 1>

                      CREATIVE GAMING, INC.
                         Form 10-KSB
                 Fiscal Year Ended May 31, 1997


                          Table of Contents
                          -----------------

Part I                                                         	Page
------                                                          ----

Item 1.	Description of Business                           		        2
 
Item 2.	Description of Property		                                  13

Item 3.	Legal Proceedings		                                        13

Item 4.	Submission of Matters to a Vote of 
         Security Holders	                             	           13

Part II
-------

Item 5.	Market for Common Equity and Related Stockholder Matters		 14

Item 6.	Management's Discussion and Analysis or Plan of 
         Operations		                                              16

Item 7.	Financial Statements                                     		18

Item 8.	Changes in and Disagreements with Accountants on 
         Accounting and Financial Disclosure		                     18

Part III
--------
Item 9.	Directors, Executive Officers, Promoters and Control 
         Persons;	Compliance with Section 16(a) of the 
         Exchange Act	                                            	18

Item 10.	Executive Compensation		                                  20

Item 11.	Security Ownership of Certain Beneficial Owners and 
         	Management                                             		22

Item 12.	Certain Relationships and Related Transactions	          	24

Item 13.	Exhibits, Lists and Reports on Form 8-K		                 24

Financial Statements	                                            	F-1

Signatures                                                       		33

<PAGE 2>

                                 PART I

Item 1.	Description of Business
        -----------------------
General

 Creative Gaming, Inc. (the "Company") was incorporated on 
August 31, 1988 under the laws of the State of New Jersey to 
provide management and administrative services to its wholly-
owned subsidiaries. The Company and its operating subsidiaries 
are collectively referred to herein as "CGI." As a result of the 
change in strategic focus as described in the succeeding 
paragraph, the Company's Board of Directors sought and obtained 
shareholders' consent, at the Annual Meeting of Shareholders held 
on May 8, 1997, to a change in name from Creative Learning 
Products, Inc. (its name since incorporation) to Creative Gaming, 
Inc. in order to describe better the future operations of CGI. 

 CGI is in the process of converting into a developer of 
offshore casino gaming vessels, other gaming facilities and 
entertainment as well as the development of real estate in the 
Branson, Missouri area. Management's intentions are that the 
primary future focus of CGI during the fiscal year ending May 31, 
1998 ("fiscal 1998") and the ensuing fiscal year will be on 
utilizing a vessel for gaming cruises originating in New York 
City (the "Gaming Vessel Project") (see the section "Gaming 
Vessel Project" in this Item 1 to this Report) conducted on 
behalf of the Company through CGI Vessel, Inc. ("CGIV"), a 
wholly-owned subsidiary of the Company incorporated in December 
1996. The projects to open, through another wholly-owned 
subsidiary Creative Gaming International, Inc. ("CGII") 
incorporated in March 1994 (the "Branson Projects"), a Native 
American Indian gaming casino near Seneca, Missouri and a 
hotel/convention center, and a time sharing facility on sites 
purchased by CGII in Christian County, Missouri are currently at 
a standstill, while the other Branson Project to present a play 
in Branson, Missouri has been abandoned (see the section "Branson 
Projects" in Item 1 to this Report). Assuming that definitive 
agreements are executed and that the Company obtains necessary 
governmental approvals and adequate financing, as to none of 
which there can be any assurance, management believes that the 
earliest project (i.e., the Gaming Vessel Project) will not begin 
to produce revenues for CGI until the first half of calendar 
1998, if not later, and that the other projects will take 
approximately one to two years after their resumption to produce 
revenues, if not longer. There can be no assurance that any of 
these contemplated timetables will be realized. In addition, the 
Company has been restructuring its capitalization through the 
issuance of its equity securities, in private placements and upon 
the exercise of warrants, and the satisfaction of other 
indebtedness. See the section "Certain Securities Transactions" 
in this Item 1 to this Report.

Existing Operations

 As of May 31, 1997, the Company's principal wholly-owned 
operating subsidiaries were (1) Kards for Kids, Inc. ("KFK"), an 
original subsidiary of the Company, (2) John Patrick Productions, 
Inc. ("JPP"), the net assets of which were acquired effective 
July 1, 1994, (3) CGII and (4) CGIV. CGI's results of operations 
for the fiscal years ended May 31, 1997 ("fiscal 

<PAGE 3>

1997") and 1996 ("fiscal 1996"), which are included in Item 7 to this 
Report, reflect, in addition to the Company, the consolidated operations 
of these subsidiaries.

 KFK markets and distributes products for children between the 
ages of 18 months and 12 years, including stationery, cards, 
workbooks, paper activity placemats and educational video and 
audio cassettes. KFK sells its products directly to the consumer 
and through mail order, retailers and distributors. Management 
has had preliminary discussions which dealt with a possible sale 
or license of certain assets relating to KFK business and prior 
to fiscal 1996 reduced the marketing of such operations to a 
minimum. However, as of the date of this Report, no commitment to 
sell had been made nor were there any pending negotiations and 
KFK operations were producing revenues.

 JPP is engaged primarily in the mail order business with 
products consisting of instructional video tapes and other 
products related to gaming.

Gaming Vessel Project
 
 On November 13, 1996 the Company, through CGII, purchased, for 
approximately $523,000, a hull for the purpose of converting the 
hull into an offshore gaming vessel. CGI planned to utilize the 
vessel for gaming cruises originating in New York (i.e. the 
Gaming Vessel Project). On March 7, 1997 ownership of the vessel 
was transferred from CGII to CGIV to account for its operations 
as a separate entity. Because of the significant costs to be 
incurred in refurbishing the hull (estimated to be $25,000,000), 
the Company is considering the leasing or purchasing of a smaller 
vessel (at a cost estimated to be $7,000,000) which is already 
usable as a gaming vessel. CGIV would, in such circumstances, 
defer the refurbishing of the hull pending revenues from the 
other vessel and/or additional funding in an amount sufficient to 
fund such costs of refurbishing. CGI is currently evaluating 
sites in New York to determine where the vessel will be docked. 
CGI anticipates a vessel to be in service during the first half 
of calendar 1998, if not later. Certain governmental approvals 
will be necessary before the vessel can be put into service as a 
gaming vessel and there can be no assurance that such approvals 
will be obtained. Management contemplates that, if a vessel is 
operational and the governmental approvals are obtained, the 
vessel will offer dining facilities and possibly entertainment. 
As of May 31, 1997, CGI capitalized approximately $211,000 of 
costs toward the conversion of the hull into a gaming vessel, and 
fully charged to operations approximately $153,000 of other costs 
incurred in the Gaming Vessel Project.

 Because the Gaming Vessel Project, if consummated, can create a 
revenue stream for CGI at an earlier date than the other 
contemplated gaming projects (see the sections "Branson Projects" 
and "Other Gaming Projects" in this Item 1 to this Report), CGI 
intends to give priority to this project and, if successful, to 
consider other gaming vessel projects. There can be no assurance 
that management's expectations will be realized on a timely 
basis.

Branson Projects

 Commencing in February 1994, CGI sought to initiate various 
projects in or near Branson, Missouri (in the southwest portion 
of that State), none of which has come to fruition as of this 
date and most of which, if not all, may never produce revenues 
for CGI. The Branson Projects 

<PAGE 4>

contemplated construction, financing and managing of one or two 
Native American gaming facilities, production of a musical play, 
purchase of a theater in Branson and the opening of a theme park, a 
hotel/convention center and time sharing facilities.

 On March 31, 1995, CGII purchased a 37-acre site in Christian 
County, Missouri which abuts the site referred to in the 
following paragraph. The purchase price for the land was recorded 
at $288,664. (A copy of the agreement relating to this purchase 
is filed (by incorporation by reference) as an exhibit to this 
Report and is incorporated herein by this reference.)
 
 On February 28, 1996, CGII purchased a 728-acre site in 
Christian County, Missouri, abutting approximately two and a half 
miles along State Highway 65, the main road between Springfield, 
Missouri and Branson, Missouri. (A copy of the agreement relating 
to the purchase is filed (by incorporation by reference) as an 
exhibit to this Report and is incorporated herein by this 
reference.) The purchase price for the land was recorded at 
$2,121,788. The sellers of the property hold a mortgage in the 
original amount of $1,072,475 (see Note 7 to Consolidated 
Financial Statements in Item 7 to this Report). This property and 
the property in the preceding paragraph are jointly referred to 
as the "Christian County Site".

 Management's initial intention was to use a portion of the 
Christian County Site to construct, finance and manage, under the 
Indian Gaming Regulatory Act of 1988 (the "IGRA"), a gaming 
facility for the Eastern Shawnee Tribe of Oklahoma (the "Tribe"). 
For various reasons, such project has been canceled. However, 
management was still of the opinion that the Christian County 
Site could be used for a time sharing facility, a theme park, a 
hotel/convention center and/or other activities. Management 
believed that these contemplated facilities, if opened, would 
have been added attractions to produce revenues from persons 
otherwise attracted by the other entertainment attractions of 
Branson, Missouri not operated by CGI. However, the recent shift 
in emphasis to the Gaming Vessel Project has caused management to 
temporarily suspend the development of the Christian County Site 
as initially contemplated. There can be no assurance that CGI 
will eventually utilize the sites for these purposes. Management 
believes, based on a recent third party appraisal obtained by the 
Company, that the current fair value of the Christian County Site 
supports its carrying value as of May 31, 1997.
 
 CGII had also entered into a management agreement with the 
Tribe to construct, finance and manage, pursuant to IGRA, a Class 
A/Class III gaming facility near Seneca, Missouri (the "Seneca 
Facility"). (A copy of the management agreement and the related 
loan agreement with the Tribe are filed (by incorporation by 
reference) as exhibits to this Report and are incorporated herein 
by this reference.) The IGRA creates a three-tiered 
classification of gaming operations and provides for varying 
degrees of federal, state and tribal regulation over each class. 
Class I gaming, over which Indian tribes exercise exclusive 
regulatory control, consists of social games for minimal prizes 
or as part of tribal ceremonies or celebrations. Class II gaming 
includes bingo, pull tabs and other bingo-type games, while Class 
III gaming includes all other forms of gaming, such as video 
games, slot machines, table games (i.e., blackjack, craps and 
roulette) and parimutuel wagering. 

 Because of a federal circuit court decision invalidating the 
statutory right of the Secretary of the Interior to dedicate land 
in trust for Native American Indian tribes under the Indian 
Reorganization Act and a pending battle for control of the Tribe, 
with one of the issues being the 

<PAGE 5>

management agreement with CGII, CGII had suspended any further action
by it with respect to the Seneca Facility. Depending on developments, 
CGI will review whether it will attempt to proceed with the project or 
whether it will seek to recover sums previously advanced to the Tribe 
(including $120,000 to an affiliate of the Tribe to acquire the 
site), recognizing that, because the Tribe is a sovereign nation, 
legal actions against it may be difficult. Even if the Tribe and 
CGII agree to proceed with the Seneca Facility, as to which there 
can be no assurance, because of the governmental approvals, it 
might be two years or more after resumption of the project before 
revenues could be realized from the Seneca Facility. As of May 
31, 1997, all of the costs incurred on the Seneca Facility have 
been fully charged to operations.

 Because the Gaming Vessel Project, if consummated, can create a 
revenue stream at an earlier date than any portion of the Branson 
Projects, management believes it more prudent to focus its 
immediate efforts on the Gaming Vessel Project.

 One of the Branson Projects was to purchase a theater in 
Branson, Missouri and produce a play on the life of Roy Rogers. 
The rights to the play terminated and the Company contested the 
safety of the theater with its owner. Accordingly, this aspect of 
the Branson Projects was terminated during fiscal 1996, although 
the Company may at a later date seek recovery of $775,000 in 
option payments relating to the theater, as to which claim there 
can be no assurance of success. (A copy of the agreement relating 
to the option and purchase is filed (by incorporation by 
reference) as an exhibit to this Report and is incorporated 
herein by this reference).

 As of May 31, 1996, CGI had fully charged to operations and 
retired approximately $2,800,000 of costs incurred on portions of 
the Branson Projects relating to the proposed theater acquisition 
and joint venture for the Branson Projects.

Other Gaming Projects

 As alternatives or additions to the Gaming Vessel Project and 
the Branson Projects, CGI has been exploring the possibility of 
opening and operating other gaming facilities. To assist the 
Company in seeking and negotiating such opportunities with all 
the gaming projects, CGI has been using, since May 1995, the 
services of Harvey Freeman as a consultant. Mr. Freeman was 
formerly Executive Vice President of the Trump Organization and 
is familiar with its and other gaming operations. Mr. Freeman 
intends to serve as President of CGII and CGIV when financing is 
obtained. There can be no assurance that any Other Gaming 
Projects will materialize or that thereafter CGI will obtain the 
necessary financing or governmental approvals to open and operate 
the same. During fiscal 1997, CGI charged to operations 
approximately $271,000 of other gaming costs.

Sale of Congress

 Effective November 30, 1996, Nightwing Entertainment Group, 
Inc. ("Nightwing") purchased all of the assets with a value of 
approximately $374,000 and assumed all of the liabilities of 
approximately $486,000 of Congress Entertainment, an operating 
division of KFK ("Congress"), for 2,000,000 shares of Nightwing 
common stock valued at $100,000, pursuant to a purchase agreement 
dated October 18, 1996 and an assumption agreement dated November 
30, 1996 (the 

<PAGE 6>

"Sale Agreement"). (Copies of both agreements with 
Nightwing are filed as exhibits to this Report and are 
incorporated herein by this reference.) Pursuant to the Sale 
Agreement, Nightwing was to file a Form 10 and all required 
reports under the Securities Act of 1934, as amended (the 
"Exchange Act") and to register under the Securities Exchange Act 
of 1933, as amended (the "Securities Act"), the Nightwing common 
stock issued to the Company. Congress was a distributor of 
quality sell-through pre-recorded video cassettes to schools, 
libraries, specialty retail chains and the mass merchandising 
market.

 As part of a payment agreement between George Spitzer & 
Associates ("Spitzer") and the Company, and in conjunction with 
the assumption of the Congress liabilities by Nightwing, the 
Company placed 45,000 shares of the Common Stock in escrow, to be 
released to Spitzer in four years to the extent that the Congress 
liability due Spitzer and assumed by Nightwing in the amount of 
$45,845 is not paid by Nightwing during the four-year period.

 Effective March 1, 1997, because of non-payment of its 
liability to the Company, Nightwing executed a convertible 
promissory note payable to the Company (the "Note") in the 
principal amount of $347,000, at an annual interest rate of 8% 
and payable in monthly installments of $14,500 commencing March 
31, 1997. The principal amount of the Note included the amount 
due the Company from Nightwing, certain other Congress 
liabilities assumed by Nightwing that the Company may eventually 
be required to pay, and the contingent liability to Spitzer 
related to the Common Stock held in escrow.

 As of the date of this Report, Nightwing has not complied with 
the Exchange Act reporting and common stock registration 
provisions of the Sale Agreement, made no payments to the 
Company, thereby defaulting on the Note, and caused the Company 
to incur additional expenses. The Company has delivered to 
Nightwing the required notices of default pursuant to the Note, 
and is considering its legal alternatives, including the 
commencement of litigation to recover all related costs and 
damages of the Company resulting from Nightwing's defaults. As of 
May 31, 1997, the Company reserved and charged to operations the 
amounts due from Nightwing.

Former Operations

 In August 1994 substantially all of the inventory, equipment 
and machinery of Roburn International Corporation, a wholly-owned 
subsidiary of the Company ("Roburn"), was sold to Modern Mold 
International, Inc. ("MMII"). MMII waived compliance with Article 
6 of the Uniform Commercial Code as adopted in the State of New 
Jersey (the "Bulk Sales Law") in connection with this 
transaction. As inducement for such waiver, the Company issued 
150,000 shares (the "MMII Indemnity Shares") of the Company's 
Common Stock, no par value (the "Common Stock"), to MMII's escrow 
agent. Pursuant to the terms of the escrow, the MMII Indemnity 
Shares would be released to MMII to the extent necessary to 
indemnify MMII for any claims brought against it within one year 
by Roburn's creditors as a result of Roburn's and MMII's failure 
to comply with the Bulk Sales Law. As of this date, no shares 
were used for such purpose and the Company has demanded return 
and cancellation of these shares.

 Also in August 1994 the remaining assets of Roburn were sold to 
Banker's Pen, Inc., ("Banker's") and arrangements were made to 
cease the business of Roburn, including making provisions for its 
creditors. Banker's waived compliance with the Bulk Sales Laws in 
connection 

<PAGE 7>

with Roburn's sale of assets to Banker's. As inducement for such waiver, 
the Company agreed to indemnify and hold harmless Banker's for all 
claims of Roburn's creditors, except for the trade creditors' claims, 
and made available to an escrow agent 150,000 shares of the Common Stock 
(the "Trade Creditors Shares") for the benefit of the Roburn trade creditors 
whose claims Banker's had assumed. As of the date of this report, 
95,260 of the Trade Creditors Shares had been issued to Roburn 
trade creditors and 54,740 remained for future distribution. 
Richard Danziger, the then President of Roburn, agreed to be 
responsible for paying the Roburn trade creditors and will 
receive the balance of the Trade Creditors Shares to the extent 
not used to satisfy Roburn trade creditors' claims. Mr. Danziger 
has advised the Company that no further claims will be asserted 
and has requested that the remaining shares be released to him, 
which claim the Company is reviewing.

Certain Securities Transactions

 On March 30, April 13, April 19, June 27, and July 21, 1995, 
the Company issued to two unaffiliated lenders 10% Promissory 
Notes due the earlier of (1) December 29, 1995, January 12, 
January 18, March 26 and April 21, 1996, respectively, or (2) a 
closing of an anticipated private placement as to which the 
Company's then investment banker was to act as placement agent, 
in the principal amounts of $400,000, $50,000, $75,000, $200,000 
and $100,000, respectively, and Common Stock purchase warrants 
expiring September 28, October 12, October 18, December 26 and 
July 20, 2000, respectively, to purchase 50,000, 6,250, 9,375, 
20,000 and 12,500 shares, respectively, of the Common Stock, at 
exercise prices of $2.66, $2.69, $2.47, $2.38 and $2.38 per 
share, respectively. Effective August 31, 1995, the holders of 
these notes accepted an aggregate of 851,230 shares of the Common 
Stock and Common Stock purchase warrants expiring March 5, 1998 
(the "March 5 Warrants") to purchase an aggregate of 851,230 
shares of the Common Stock at an exercise price of $1.50 per 
share in full satisfaction of all principal ($825,000) and 
interest ($26,230) due. Due to the antidilution provisions in the 
above warrants, as of October 17, 1997, the first set of warrants 
represented the right to purchase 77,497, 9,687, 14,531, 38,749 
and 19,375 shares, respectively, at $1.716, $1.736, $1.594, 
$1.536 and $1.536 per share, respectively, and the March 5 
Warrants represented the right to purchase an aggregate of 
1,249,865 shares at $1.022 per share.

 On July 24, 1995, the Company issued to a shareholder a Common 
Stock purchase warrant expiring January 24, 1999 to purchase 
83,333 shares of the Common Stock at $1.00 per share, for which 
the shareholder agreed to seek financing for the Company and 
settled certain claims against the Company.

 On August 30, 1995, a corporate investor exercised its warrant 
expiring October 27, 1998 to purchase 140,000 shares of the 
Common Stock at an exercise price of $1.50. Due to the 
antidilutive provisions of this warrant, an aggregate of 143,535 
shares of the Common Stock were issued at the adjusted price of 
$1.46 for proceeds of $209,590.

 On September 5, September 29, October 31, and November 7, 1995, 
the Company issued to an unaffiliated lender 10% Promissory Notes 
due the earlier of (1) June 5, June 27, July 30 and August 6, 
1996, respectively, or (2) a closing of an anticipated private 
placement as to which the Company's then investment banker was to 
act as placement agent, in the principal amounts of $50,000, 
$60,000, $25,000 and $100,000, respectively, and Common Stock 
purchase warrants 

<PAGE 8>

expiring February 28, March 27, April 29, and May 6, 2001, respectively, 
to purchase 6,250, 7,500, 3,125 and 12,500 shares, respectively, of the 
Common Stock, at exercise prices of $2.19, $2.50, $2.19 and $3.00 per share, 
respectively. Effective November 30, 1995, the holder of these notes accepted 
an aggregate of 317,529 shares of the Common Stock and Common 
Stock purchase warrants expiring November 29, 2001 (the "November 
29 Warrants") to purchase an aggregate of 317,529 shares of the 
Common Stock at an exercise price of $1.00 per share in full 
satisfaction of all principal ($235,000) and interest ($3,147) 
due. Due to the antidilution provisions in the above warrants, as 
of October 17, 1997, the first set of warrants represented the 
right to purchase 9,176, 11,012, 4,569 and 18,271 shares, 
respectively, at $1.491, $1.703, $1.498 and $2.052 per share, 
respectively, and the November 29 Warrants represented the right 
to purchase an aggregate of 448,491 shares at $.708 per share.

 On November 30, 1995, the Company, in a private placement 
pursuant to Regulation S promulgated under the Securities Act of 
1933, as amended (the "Securities Act"), sold to two non-"U.S. 
persons" in "off-shore transactions", for gross proceeds of 
$250,000, 250,000 shares of the Common Stock and Common Stock 
purchase warrants expiring November 29, 1999 to purchase 250,000 
shares of the Common Stock at an exercise price of $1.50 per 
share. The Company paid a private placement fee of $25,000 to an 
agent for this offering. (The terms "U.S. persons" and "off-shore 
transactions", as used in this Report, are used as defined in 
paragraphs (o) and (i), respectively, of Rule 902 of Regulation S 
under the Securities Act.)
 
 On December 6, 1995, the Company, pursuant to Regulation S 
under the Securities Act, sold to a non-"U.S. person" in an "off-
shore transaction", for gross proceeds of $200,000, 200,000 
shares of the Common Stock and a Common Stock purchase warrant 
expiring December 5, 1999 to purchase 200,000 shares of the 
Common Stock at an exercise price of $1.00 per share. The Company 
paid a private placement fee of $20,000 to an agent for this 
offering.

 On January 3, 1996, the Company, pursuant to Regulation S under 
the Securities Act, sold to a non-"U.S. person" in an "off-shore 
transaction", for gross proceeds of $100,000, 100,000 shares of 
the Common Stock and a Common Stock purchase warrant expiring 
January 2, 2000 to purchase 100,000 shares of the Common Stock at 
an exercise price of $1.50 per share. The Company paid a private 
placement fee of $10,000 to an agent for this offering.

 On February 6, 1996, the Company, pursuant to Regulation S 
under the Securities Act, sold to a non-"U.S. person" in an "off-
shore transaction", for gross proceeds of $200,000, 196,928 
shares of the Common Stock. The Company paid a private placement 
fee of $23,000 to an agent for this offering.

 On February 12, 1996, the Company, pursuant to Regulation S 
under the Securities Act, sold to a non-"U.S. person" in an "off-
shore transaction", for gross proceeds of $170,000, 145,299 
shares of the Common Stock. The Company paid a private placement 
fee of $19,600 to an agent for this offering.

 On May 31, 1996, the Company, pursuant to Regulation S under 
the Securities Act, sold to a non-"U.S. person" in an "off-shore 
transaction", for gross proceeds of $600,000, 1,200,000 shares of 
the Common Stock and issued a Common Stock purchase warrant 
expiring May 23, 2001 (the "May 23 Warrant") to purchase 
1,000,000 shares of the Common Stock at an exercise price of 
$1.00 per share. The Company paid a private placement fee of 
$100,000 to an agent for 

<PAGE 9>

this offering. On May 23, 1997, the investor exercised its May 23 Warrant 
as to 1,000,000 shares of the Common Stock at $.10 per share after the Company 
lowered the exercise price to $.10 per share. In addition, on May 8, 1997, 
the Company issued the investor Common Stock purchase warrants expiring 
November 7, 1997 (the "November 7 Warrant") and May 7, 1999 (the 
"May 7 Warrant") for 1,000,000 and 2,000,000 shares of the Common 
Stock, respectively, at exercise prices of $.10 and $.175 per 
share, respectively.

 On May 31, 1996, the holder of an aggregate of $48,000 in 
principal amount of the Company's 8.5% and 10% Promissory Notes 
accepted in full settlement of all principal and interest due, an 
aggregate of 36,525 shares of the Common Stock (4,525 shares in 
lieu of interest due).
 
 On August 7, 1996 the Company issued to Peter J. Jegou, 
Chairman of the Board, President, and Chief Executive Officer of 
the Company, as consideration for the officer's services in 
securing gaming opportunities for CGI and as part of an 
employment agreement dated as of September 25, 1996 (a copy of 
which agreement is filed (by incorporation by reference) as an 
exhibit to this report and is incorporated herein by this 
reference), a Common Stock purchase warrant expiring August 6, 
1999 (the "August 6 Warrant") to purchase 1,500,000 shares of the 
Common Stock at $.75 per share. On December 26, 1996, Mr. Jegou 
exercised his August 6 Warrant as to 500,000 shares of the Common 
Stock after the Company waived the prohibition on exercise prior 
to February 7, 1997 and lowered the exercise price to $.25 per 
share for such shares. On March 3, 1997, Mr. Jegou exercised his 
August 6 Warrant as to 500,000 shares of the Common Stock after 
the Company lowered the exercise price to $.25 per share and 
subsequently to $.10 per share for such shares.

 On August 7, 1996, the Company entered into a consulting 
agreement with Lee S. Rosen which modified a previous agreement 
dated April 16, 1996. Pursuant to the initial agreement, Mr. 
Rosen received a Common Stock purchase warrant expiring April 15, 
1999 (the "April 15 Warrant") to purchase 1,000,000 shares of the 
Common Stock at an exercise price of $.75 per share. (Copies of 
both consulting agreements are filed (by incorporation by 
reference) as exhibits to this Report and are incorporated herein 
by this reference.) A separate consulting agreement dated April 
16, 1996 with a second individual, which included a Common Stock 
purchase warrant expiring April 15, 1999 to purchase 2,000,000 
shares of the Common Stock, was canceled. The terms of the 
modified consulting agreement were for Mr. Rosen to perform 
financial, public relation and gaming related consulting services 
for a period of two years at a cost of $400,000 and included the 
issuance of Common Stock purchase warrants expiring April 16, 
1999 (the "April 16 Warrant") and August 6, 1999 (the 
"Consultant's Warrant"), respectively, to purchase 2,000,000 and 
1,000,000 shares, respectively, of the Common Stock both 
exercisable at $.75 per share. Mr. Rosen also exercised his April 
15 Warrant to purchase 1,000,000 shares of the Common Stock at an 
exercise price of $.75 per share for gross proceeds of $750,000. 
Mr. Rosen retained $400,000 in accordance with his consulting 
agreement and the Company received net proceeds of $350,000. Mr. 
Rosen exercised his April 16 Warrant as to 2,000,000 shares of 
the Common Stock as follows: 500,000 shares at $.25 per share 
each on October 7, 1996 and January 16, 1997 after the Company 
waived the prohibition on exercise prior to February 7, 1997 and 
lowered the exercise price to $.25 per share for such shares; 
600,000 shares at $.50 per share on March 13, 1997 after the 
Company lowered the exercise price to $.50 per share for such 
shares; and 400,000 shares at $.25 per share on April 18, 1997 
after the Company lowered the exercise price to $.25 per share 
for such shares. On July 2, 1997, 

<PAGE 10>

Mr. Rosen exercised the Consultant's Warrant as to 1,000,000 shares of 
the Common Stock at an exercise price of $.10 per share after the Company 
lowered the exercise to $.10 per share.

 On August 22, 1996, the Company, pursuant to Regulation S under 
the Securities Act, sold to three non-"U.S. persons" in "off-
shore transactions", for gross proceeds of $500,000, 1,000,000 
shares of the Common Stock.

 On September 4, 1996, the Company, pursuant to Regulation S 
under the Securities Act, sold to a non-"U.S. person" in an "off-
shore transaction", for gross proceeds of $600,000, 1,200,000 
shares of the Common Stock and issued a Common Stock purchase 
warrant expiring September 2, 2001 (the "September 2 Warrant") to 
purchase 1,000,000 shares of the Common Stock at an exercise 
price of $1.00 per share. The Company paid a private placement 
fee of $100,000 to an agent for this offering. On May 6, 1997, the 
investor exercised its September 2 Warrant as to 1,000,000 shares 
of the Common Stock at $.10 per share after the Company lowered 
the exercise price to $.10 per share.

 On October 10, 1996 and May 2, 1997, the Company issued 100,000 
shares and 150,000 shares, respectively of the Common Stock to a 
creditor for outstanding debt and anticipated future services.

 On November 27, 1996, the Company issued, and a creditor 
accepted, 206,991 shares of the Common Stock in satisfaction of 
outstanding debt of $206,991 due to the creditor as of May 31, 
1996.
 
 On December 23, 1996, the Company sold to an investor 200,000 
shares of the Common Stock for gross proceeds of $50,000.

 On May 2, 1997, the Company issued 1,333,333 shares of the 
Common Stock to a consultant, Harvey Freeman (see the section 
"Other Gaming Projects" in this Item 1 to this Report), as an 
advance towards a bonus to be due upon achievement of a milestone 
in a gaming project.

 An investor exercised its warrant expiring December 5, 1999 as 
to 200,000 shares of the Common Stock, 100,000 shares at $.21 per 
share each on May 2 and May 19, 1997 after the Company lowered 
the exercise price to $.21 per share. Also, on June 5, 1997 the 
investor exercised its warrant expiring January 2, 2000 as to 
100,000 shares of the Common Stock at $.164 per share after the 
Company lowered the exercise price to $.164 per share. In 
addition, on May 21, 1997, the Company issued the investor a 
Common Stock purchase warrant expiring May 20, 2000 to purchase 
300,000 shares of the Common Stock at an exercise price of $.50 
per share.

 On September 29, 1997 an investor group purchased 100,000 
shares of a to be designated Series C 12% Convertible Redeemable 
Preferred Stock, $1.00 par value (the "Series C Preferred Stock") 
of the Company for $100,000. The Company also issued to the group 
common stock purchase warrants expiring September 29, 1999 to 
purchase 1,000,000 shares of common stock at an exercise price of 
$.10 per share. The Purchase Agreement provides that each share 
of the Series C Preferred Stock is convertible into 46.5 shares 
of common stock or an aggregate of 4,650,000 shares. Also, on 
September 29, 1997 the Board of Directors of the Company 
authorized a one-for-thirty reverse stock split of common stock. 

<PAGE 11>

 At the Annual Meeting of the Company on May 8, 1997, the 
shareholders voted to increase the authorized shares of the 
Common Stock from 25,000,000 shares to 100,000,000 shares.

 In compliance with commitments given to various persons, on 
January 13, 1997 the Company filed a registration statement under 
the Securities Act (the "Registration Statement"), and will 
proceed to cause the Registration Statement to become effective 
as soon as practicable after the filing of this Report. The 
Registration Statement seeks to register the shares issued to 
certain holders of the Common Stock, the shares of the Common 
Stock underlying certain Common Stock purchase warrants for 
issuance by the Company and certain shares for resale by the 
holders thereof. Most of these shares will only be issued after 
exercise of Common Stock purchase warrants and stock options. The 
offer and sale of such shares, depending on the timing thereof, 
may have an adverse impact on the market price for the Common 
Stock.

Financing

 On January 21, 1997, the Company signed a letter retaining an 
investment banker in connection with a proposed public offering 
of securities up to $20,000,000 for the development and 
construction of the Gaming Vessel Project. See the section 
"Gaming Vessel Project" in this Item 1 to this Report. (A copy of 
this letter is filed as an exhibit to this Report). This source 
of financing is still pending.
 
 Management believes that, as a result of the cash flow from 
operations and the proceeds of $260,000 received through October 
17, 1997 in recent offerings of equity and debt financing and 
potential sales of equity through private placements and 
exercises of outstanding Common Stock purchase warrants, it will 
raise sufficient funds to meet its cash requirements during the 
next 12 months based on its current level of commitments. Should 
one of the proposed gaming projects require funds for 
implementation, management believes, based on its discussions 
with persons in the investment banking community, that any funds 
required for such a project can be obtained. There can be no 
assurances that the market price of the Common Stock will be 
conducive to the exercise of Common Stock purchase warrants and 
stock options, nor that funds can be obtained to finance a 
specific project if required will be available and, if available, 
on acceptable terms.

Governmental Regulation

 CGI, as it attempts to implement the gaming aspects of the 
Gaming Vessel Project and the Branson Projects (collectively the 
"Gaming Projects"), assuming definitive agreements are executed, 
as to which there can be no assurance, will become subject to 
extensive governmental regulations. In general, both Indian and 
non-Indian gaming is extensively regulated by the federal, state 
and, in the case of Indian gaming, tribal governments and 
authorities and additional regulatory provisions are expected to 
be adopted as the Indian and non-Indian gaming industries 
continue to develop. An example of local regulation is the 
recently adopted legislation of the City of New York with which 
CGI will have to comply if the vessel is to be docked within the 
City's limits which is the current intention. Failure of CGI to 
comply with applicable laws and regulations, whether federal 
(including IGRA), state, local or tribal, could result in, among 
other things, CGI not receiving approval of its proposed 
management agreement with the Tribe or, if approved, the 
termination of such gaming management agreement or, in the case 
of the Gaming 

<PAGE 12>

Vessel Project, the inability to operate out of New 
York City. Because of CGI's intended future dependence on the 
Gaming Projects for its revenues, any such denial of approval or 
termination of the agreements would have a material adverse 
effect on CGI.

Competition

Gaming
------

 The gaming industry, including the development, operation and 
management of casinos, is highly competitive, especially given 
the rapid rate at which the industry is expanding. CGI's proposed 
gaming activities, including offshore gaming and landbased casino 
development, operation and management, will compete with other 
forms of gaming and with other entities for gaming opportunities. 
Any gaming facilities developed, operated or managed by CGI will 
compete with gaming facilities of varying quality and size that 
already exist or may be built in the future, including gaming 
facilities that are part of national or regional chains. Any 
facilities of CGI will compete with well established gaming 
operations in various states, including Colorado, Connecticut, 
Florida, Minnesota, Mississippi, Nevada, New Jersey, New York and 
South Dakota. It is likely that other states will also approve 
various forms of gaming. The Company believes that the majority 
of the companies in the gaming industry, including companies 
which develop, operate or manage casinos, have available to them 
substantially greater financial resources with more experienced 
personnel than the Company. Competition in the future may be 
affected by periodic overbuilding, which can adversely affect 
patronage levels, changes in local market conditions, changes in 
regional and local population and disposable income 
characteristics, and changes in travel patterns and preferences.

 CGI will also compete with other forms of gaming, including 
pull tab games, card clubs, parimutuel betting on horse racing 
and dog racing and state-sponsored lotteries. Finally, CGI will 
compete with other, non-gaming forms of entertainment.

Other Operations
----------------

 The children's products and mail order business markets, in 
which the operations of Kards for Kids and JPP, respectively, are 
concentrated, are all highly competitive markets, in which 
neither of the entities is a major competitive factor.

Effect on Environmental Regulations

 With the change in CGI's business, CGI does not believe that 
compliance with federal, state and local laws and regulations 
which have been enacted or adopted regulating the discharge of 
materials into the environment will have, in the foreseeable 
future, any material effect upon the capital expenditures, 
earnings or competitive position of CGI. Even with respect to its 
existing and former businesses, CGI does not believe that 
compliance with such laws and regulations had any material effect 
on CGI.

Employees

 As of October 17, 1997, CGI employed five persons, all of 
whom were full time.

 To the extent that the Company is successful in implementing 
the Gaming Projects, CGI's personnel requirements will increase 
significantly. While the Company believes that CGI will be able 
to attract and retain a sufficient number of employees to satisfy 
its future requirements, the competition for such employees, 
particularly at management levels, will increase significantly in 
the future if gaming expands throughout the United States.

 To the extent that CGI obtains a partner to operate any of the 
Gaming Projects, its personnel requirements may be reduced.

Item 2.	Description of Property
        -----------------------

 JPP currently leases 2,800 square feet of space at 150 Morris 
Avenue, Springfield, New Jersey pursuant to a lease expiring 
March 31, 1998 at a monthly base rental of $3,000.

 As part of the Branson Projects, CGII acquired in Christian 
County, Missouri a 37-acre site for $288,664 on March 31, 1995 
and a 728-acre site for $2,121,788 on February 28, 1996 (see the 
section "Branson Projects" in Item 1 to this Report).

 Copies of the leases and other agreements referred to in this 
Item 2 to this Report are filed (by incorporation by reference) 
as exhibits to this Report and are incorporated herein by this 
reference.

Item 3.	Legal Proceedings
        -----------------

 On July 18, 1995, Westminster Securities Corporation and other 
plaintiffs ("Westminster") instituted an action in the Supreme 
Court of the State of New York, New York County, against the 
Company. The action was settled on April 17, 1997 by the Company 
with the issuance of 600,000 shares of the Common Stock, which 
Westminster was to sell over an eight-month period after which 
the Company would be liable to Westminster to the extent that the 
aggregate net proceeds from such sales were less $450,000. The 
600,000 shares of the Common Stock were sold for net proceeds of 
$136,760 resulting in a claim against the Company for $313,240.

 There are no pending legal proceedings against the Company 
and/or its subsidiaries in which the claim for damages, exclusive 
of interests and costs, exceeds 10% of the current assets of CGI.

Item 4.	Submission of Matters to a Vote of Security Holders
        ---------------------------------------------------

(a)	The Annual Meeting of Shareholders was held on May 8, 1997.

(b)	Peter J. Jegou, Carol A. Kulina-Jegou, Robert W. 
Berend, Harvey I. Freeman and Lee S. Rosen were elected as 
directors at the Annual Meeting. Mr. Freeman declined to serve as 
a director.

(c)	The following proposals were voted upon at the meeting 
and the vote with respect to each matter was:

<PAGE 14>

	(1)	Election of directors

    	NOMINEE	                 FOR	               WITHHELD
     -------                  ---                --------
	Peter J. Jegou	           15,996,537	            14,225
 Carol A. Kulina-Jegou	   15,968,537             	42,225
	Robert W. Berend	        15,971,537             	39,225
	Harvey I. Freeman	       15,946,537	             64,225
	Lee S. Rosen            	15,993,537	             17,225

	(2)	Resolution to ratify the appointment by the Board of 
     Directors of BDO Seidman, LLP as independent 
     accountants for the fiscal year beginning June 1, 1997.

	FOR:	    15,999,537
	AGAINST:    	10,125
	ABSTAIN:	     1,100

	(3)	Resolution to approve Amendment to Articles of 
     Incorporation to effect a change of the name of the 
     Company from Creative Learning Products, Inc. to 
     Creative Gaming, Inc.

	FOR:	     15,947,397
	AGAINST:     	62,265
	ABSTAIN:	      1,100

	(4)	Resolution to approve Amendment to Articles of 
     Incorporation to increase authorized shares of Common 
     Stock from 25,000,000 to 100,000,000:

	FOR:      	15,256,362
	AGAINST:	     132,800
	ABSTAIN:	     621,600

(d)	There was no proxy contest, so that there was no 
settlement between the Company and any participant.

                          PART II
                          -------
Item 5.	Market for Common Equity and Related Stockholder Matters 
        --------------------------------------------------------

Market Data

The Common Stock trades on the Nasdaq System under the symbol "CLPI".

 Set forth below is the quarterly trading range of the high and 
low prices for the Common Stock during fiscal 1997 and fiscal 
1996 as reported by the National Association of Securities 
Dealers, Inc. ("NASD") in the Nasdaq System.

<PAGE 15>

Fiscal 1997:	
-----------
                                     	High	       Low
                                      ----        ---
	Quarter Ended:
 -------------

	August 31, 1996	                   $1.969	      $0.844
	November 30, 1996	                  1.313	       0.531
	February 28, 1997                  	0.781	       0.313
	May 31, 1997	                       0.625	       0.219

Fiscal 1996:	
-----------
                                     	High	        Low
                                      ----         ---
	Quarter Ended:

	August 31, 1995	                    $3.25       	$2.125
	November 30, 1995	                  3.125	         2.00
 February 28, 1996	                  2.625        	1.563
	May 31, 1996	                        2.00	        0.656


 The foregoing quotations reflect inter-dealer prices, without 
retail mark-up, mark-down or commission, and may not represent 
actual transactions.

 The closing sales price of the Common Stock as reported on the 
Nasdaq System on October 17, 1997 was $.09.

Nasdaq Trading

 As of May 31, 1997, the Company complied with all of the 
requirements of NASD for continued listing of the Common Stock in 
the Nasdaq System except that the Company did not meet the Nasdaq 
maintenance requirement of a minimum bid price for the Common 
Stock of $1.00 per share. On September 29, 1997 the Board of 
Directors approved a one-for-thirty reverse stock split which 
would enable the Company to meet this Nasdaq requirement; 
however, the Certificate of Amendment to the Certificate of 
Incorporation effecting the same has not been filed as yet. Even 
if the result of the reverse stock split is sufficient to raise 
the bid price of the Common Stock in excess of $1.00 per share, 
there can be no assurance that the Common Stock will maintain 
such level. As of May 31, 1997, the Company had continued to meet 
all of the other maintenance requirements for continued listing 
of the Common Stock in the Nasdaq System.

 If the Common Stock is delisted from the Nasdaq System at a 
later date because of a failure then to comply with the NASD's 
maintenance criteria, the Common Stock would continue to be 
traded in the over-the-counter market and reported in the NASD's 
OTC Bulletin Board or in the "pink sheets" as reported by the 
National Quotation Bureau, Inc. If the Common Stock is so deleted 
from the Nasdaq System and if, at such time, its bid price is 
below $5.00 per share (the bid price has been consistently below 
$5.00 per share since the quarter ended November 30, 1994), the 
security would become subject to Rule 15g-9 promulgated under the 
Exchange Act,

<PAGE 16>

which rule imposes additional sales practices 
requirements on a broker-dealer which sells Rule 15g-9 securities 
to persons other than the broker-dealer's established customers 
and institutional accredited investors (as such tern is defined 
in Rule 501(a) under the Securities Act). For transactions 
covered under Rule 15g-9, the broker-dealer must make a 
suitability determination of the purchaser and receive the 
purchaser's written agreement to the transaction prior to the 
sale. In addition, broker-dealers, particularly if they are 
market makers in the Common Stock have to 
comply with the disclosure requirements of Rules 15g-2, 15g-3, 
15g-4, 15g-5 and 15g-6 under the Exchange Act unless the transaction 
is exempt under Rule 15g-1. Consequently, if the foregoing events occur, 
Rule 15g-9 and these other Rules may adversely affect the ability 
of broker-dealers to sell or to make markets in the Common stock 
and also may adversely affect the ability of purchasers in this 
offering to sell their shares in the secondary market.

Holders

 The number of holders of record of the Common Stock as of 
October 17, 1997 was approximately 230. In addition, the Company, 
based on copies of annual reports and proxy statements requested 
in connection with the last Annual Meeting of Shareholders, 
believes that there are 1,445 beneficial owners of the Common 
Stock.

Dividends

 The Company has never paid cash or stock dividends and, in view 
of CGI's history of losses and the cash requirements to launch 
the Gaming Projects, the Board of Directors does not anticipate 
payment of dividends in the foreseeable future.

Item 6.	Management's Discussion and Analysis or Plan of Operations
        ----------------------------------------------------------
 The following discussion and analysis should be read in 
conjunction with the Consolidated Financial Statements included 
in Item 7 to this Report.
 
                         RESULTS OF OPERATIONS
                         ---------------------
SALES

 Sales for fiscal 1997 decreased by $1,105,238 or 76% as 
compared with sales for fiscal 1996. The decrease was principally 
due to lower sales volume with a major customer of the Congress 
operations sold during fiscal 1997 and from the continued shift 
from marketing videos and other products to the emphasis on 
gaming projects which have not as yet produced revenues.

GROSS PROFIT

 Gross profit for fiscal 1997 decreased by $432,708 or 65% as 
compared with gross profit for fiscal 1996. Gross profit margin 
for fiscal 1997 was 66% as compared with 46% for fiscal 1996. The 
changes were principally due to the decrease in sales during the 
period which resulted in changes in customer and product mix with 
higher gross margins.

<PAGE 17>

SELLING EXPENSES
 
 Selling expenses for fiscal 1997 decreased by $381,679 or 80% 
as compared with these expenses for fiscal 1996. The decrease was 
principally due to a shift in expenses from marketing videos and 
other products to emphasis on gaming projects which have not as 
yet produced revenues.

GENERAL AND ADMINISTRATIVE EXPENSES

 General and administrative expenses for fiscal 1997 increased 
by $233,062 or 14% as compared with these expenses in fiscal 
1996. The increase was principally due to financial and gaming 
consulting expenses incurred during fiscal 1997.

GAMING PROJECTS EXPENSES

 Gaming projects expenses increased for fiscal 1997 by $107,646 
or 32% as compared with these expenses for fiscal 1996. The 
increase was principally due to expenses incurred for the 
offshore gaming vessel project during fiscal 1997.

SETTLEMENT EXPENSES

 Settlement expenses for fiscal 1997 increased by $729,025 or 
816% as compared with these expenses for fiscal 1996. The 
increase was principally due to litigation settlement awards 
during fiscal 1997 and related legal fees.

IMPAIRMENT OF INTANGIBLES

 Impairment of intangibles of $229,764 for fiscal 1997 was due to 
the adjustment of intangibles to their fair value at May 31, 1997 based 
on undiscounted future cash flows.

LOSS FROM SALE OF OPERATIONS

 Loss from sale of operations of $226,329 for fiscal 1997 was 
due to the sale of Congress (see the section "Sale of Congress" 
in Item 1 to this Report).

INTEREST EXPENSE

 Interest expense for fiscal 1997 increased by $74,845 or 123% 
compared with interest expense for fiscal 1996. The increase was 
principally due to the interest for the full year during fiscal 
1997 on the mortgage on property purchased in February 1996.

NAFTA

 The North American Free Trade Act does not have a significant 
effect on the consolidated operations.

INFLATION

 Inflation does not have an impact on the consolidated 
operations.

<PAGE 18>

LIQUIDITY AND CAPITAL RESOURCES

 CGI's cash position was $121,864 as of May 31, 1997 as compared 
with $541,610 as of May 31, 1996 or a decrease of $419,746. Cash 
flows from operating activities during fiscal 1997 used cash of 
$1,787,701 resulting from the net loss of $3,660,180 adjusted for 
depreciation, amortization and impairment of intangibles of 
$720,269, payment through the issuances of Common Stock and warrants
of settlement, compensation and consulting expenses of 
$306,877, loss from sale of operations of $226,329 and increases in
payables and accruals of $1,004,257 and in prepaid expenses and 
other assets of $64,965.

 During fiscal 1997, CGII expended $734,491 for gaming vessel costs
and a $93,236 net increase in receivables due from an officer resulting 
in net cash used in investing activities of $827,727.

 The net cash provided by financing activities during fiscal 
1997 was $2,195,682, consisting of net proceeds of short-term 
borrowings of $100,000 and proceeds of $1,050,000 and $1,117,000 
from issuances of the Common Stock and exercises of Common Stock 
purchase warrants, respectively. These proceeds funded 
operational requirements, deferred consulting costs and costs of 
property purchased. Liabilities of $932,750 were converted to
Common Stock during fiscal 1997.

 Management believes that, as a result of the cash flow from 
operations and the proceeds of $260,000 received through October 
17, 1997 in recent offerings of equity and debt financing and 
potential sales of equity through private placements and 
exercises of outstanding Common Stock purchase warrants, it will 
raise sufficient funds to meet its cash requirements during the 
next 12 months based on its current level of commitments. 

 The Company intends to file a registration statement under the 
Securities Act that will register shares of the Common Stock as 
soon as practicable after the filing of this Report. It is 
management's position that the filing of the registration will 
encourage the exercise of some of the underlying outstanding 
Common Stock purchase warrants. There can be no assurance that 
the Company will be able to raise this additional financing.

Item 7.	Financial Statements
        --------------------

 See accompanying Table of Contents to Consolidated Financial 
Statements on page F-1 following Item 13 to this Report.

Item 8.	Changes in and Disagreements with Accountants on 
        Accounting and Financial Disclosure
        ------------------------------------------------

Not applicable.

                              PART III
                              --------

Item 9.	Directors, Executive Officers, Promoters and Control 
        Persons; Compliance with 	Section 16(a) of the Exchange Act
        -----------------------------------------------------------

<PAGE 19>

Directors and Officers

 As of October 17, 1997, the directors and executive officers of 
the Company were as follows:

                             	Position(s)	            Year First Became Director
Name	                 Age	    with Company	           or Executive Officer 
----                  ---     --------------          -------------------------
           

Peter J. Jegou	       50	     Chairman of the Board	            1988
                            		of Directors; President and
                            		Chief Executive Officer

Carol A. Kulina-Jegou	48	     Secretary and Director	           1988

Walter J. Krzanowski 	55 	    Treasurer, Chief Financial	       1995
                            		& Chief Accounting Officer

 Mr. Jegou, Ms. Kulina-Jegou, Robert W. Berend, Lee S. Rosen and 
Harvey I. Freeman were elected as directors by the shareholders 
at the Annual Meeting held on May 8, 1997. Mr. Freeman declined 
to serve as a director of the Company. Mr. Rosen resigned as a 
director effective May 20, 1997 and Mr. Berend resigned as a 
director effective September 23, 1997. Each director serves until 
the next Annual Meeting of Shareholders and until his or her 
respective successor is duly elected and qualifies. Executive 
officers are elected by the Board to serve at the discretion of 
the directors. The Company is seeking a person experienced in the 
gaming industry to serve as the President of CGII and as a 
director of the Company. There can be, of course, no assurance 
that the Company will obtain such a person experienced in the 
gaming industry.

Business History

 Each of Peter J. Jegou and Carol A. Kulina-Jegou has had as his 
or her principal occupation for more than the past five years an 
executive position with the Company and/or its then subsidiaries. 
Effective December 31, 1995, Ms. Kulina-Jegou ceased to serve CGI 
as an executive officer and an employee.

 Walter J. Krzanowski has been Chief Financial Officer and Chief 
Accounting Officer of the Company since July 7, 1995. From 
January to June 1995, Mr. Krzanowski served as an independent 
consultant providing financial services to the Company. From 
September 1993 to December 1994, Mr. Krzanowski was self-
employed, acting as a consultant to a number of companies 
providing accounting, financial reporting and data processing 
services. From April 1986 to August 1993, Mr. Krzanowski held 
various positions including financial and management information 
services as Director of Finance for Zenith Laboratories, Inc., a 
generic pharmaceutical company. Prior to joining Zenith 
Laboratories, Mr. Krzanowski held various financial positions 
with Hoffmann-LaRoche, Inc., a major pharmaceutical company, from 
1966 to 1986.

<PAGE 20>

 No director serves as a director of another company which has a 
security registered under Section 12(b) or (g) of the Exchange 
Act or which is an investment company registered under the 
Investment Company Act of 1940, as amended.

Family Relationships

 Peter J. Jegou and Carol A. Kulina-Jegou are husband and wife. 
There are no other family relationships among the directors and 
executive officers of the Company.

Compliance with Section 16(a) of the Exchange Act

 Based solely on a review of Forms 3 and 4 furnished to the 
Company under Rule 16a-3(e) promulgated under the Exchange Act 
with respect to fiscal 1997, the Company is not aware of any 
director or officer of the Company who failed to file on a timely 
basis, as disclosed in such forms, reports required by Section 
16(a) of the Exchange Act during fiscal 1996 or prior years, 
except that Peter J. Jegou, an executive officer and a director, 
who was late in filing two Forms 4, each as to one item in fiscal 
1995 and Messrs. Berend and Rosen who subsequently resigned had 
not filed Form 3 in fiscal 1997. As of May 31, 1997, the Company 
was not aware of any beneficial owner of 10% or more of the 
outstanding shares of the Common Stock, which is the only 
security of the Company registered under Section 12 of the 
Exchange Act, except for David Slyman as the transferee of 
Bennett as disclosed in Item 11 to this Report. The Company 
believes that Mr. Slyman filed late a Form 3 relating to his 
beneficial ownership in fiscal 1995.

Item 10.	Executive Compensation
         ----------------------

 The Company has not adopted any plan providing for stock 
appreciation rights, restricted stock, stock options, phantom 
stock or similar type of stock benefits and has no other long-
term incentive plan in effect. The Company has, from time to 
time, issued to employees of CGI shares of the Common Stock as 
additional compensation for their services. There was no other 
executive officer whose compensation exceeded $100,000 in fiscal 
1997. As indicated in the ensuing tables, the Chief Executive 
Officer of the Company has been granted options.

Employment Agreements

 The Company entered into an employment agreement dated as of 
September 25, 1996 (the "Jegou Employment Agreement"), a copy of 
which is filed (by incorporation by reference) as an exhibit to 
this Report and which is incorporated herein by this reference, 
with Peter J. Jegou to continue to serve as the Company's 
Chairman, Chief Executive Officer and President. The Jegou 
Employment Agreement provides for (1) a term commencing August 7, 
1996 and terminating August 6, 1999; (2) a base salary at the 
annualized rate of $200,000; (3) such annual bonus as the Board 
of Directors in its sole discretion may determine; and (4) the 
grant of a Common Stock purchase warrant expiring August 6, 1999 
to purchase 1,500,000 shares of the Common Stock at an exercise 
price of $.75 per share (see the section "Options and Warrants to 
Directors and Officers" in this Item 10 to this Report).

<PAGE 21>

Summary Compensation Table

 The following table sets forth summary compensation information 
paid or awarded for fiscal 1997, fiscal 1996 and the fiscal year 
ended May 31, 1995 ("fiscal 1995") by the Company to its Chief 
Executive Officer and each of CGI's most highly compensated 
executive officers who served at the end of fiscal 1997 whose 
total annual salary and bonus exceeded $100,000 (there being 
none):

<PAGE 21>
<TABLE>

<S>             <C>   <C>      <C>    <C>        <C>         <C>      <C>     <C>  
                    Annual Compensation                   Long-Term Compensation
                -----------------------------    -----------------------------------------
                                                         Awards            Payouts
                                      Other      -------------------  --------------------
Name and                              Annual                          LTIP       
Principle                             Compen-    Restricted  Options  Payouts  All Other
Position        Year   Salary   Bonus sation(1)  Stock Award  (#)       ($)   Compensation
--------        ----   ------   ----- -------    -----------  ------  ------  ------------   

Peter J. Jegou,	 1997	 $180,769	   0	  $ 7,197	   1,500,000	    0 	      0	     0 
Chief Executive	 1996 	$159,346	   0	  $11,807	      10,000	    0	       0	     0 
	               	1995	 $152,957	   0	  $15,921	       0	      550,000	   0	     0 
_____________________
<FN>

(1)	Automobile expenses.

</TABLE>

Option Grants for Fiscal Year Ended May 31, 1997

 No grants of stock options were made during fiscal 1997 to the 
sole executive officer named in the Summary Compensation Table.

Aggregated Option Exercises in Last Fiscal Year and 
Fiscal Year-End Option Values

 No options were exercised during fiscal 1997 by any person 
named in the Summary Compensation Table holding options which 
were eligible to be exercised. The following table sets forth the 
fiscal 1997 ending option values of the sole executive officer 
named in the Summary Compensation Table:

<TABLE>
<S>              <C>       <C>        <C>                         <C>
                              	       Number of Unexercised	      Value of Unexercised in the
                	Shares	   Value	     Options at FY-End	         	Money Options at FY-End
Name	            Acquired	 Received	  Exercisable/Unexercisable   Exercisable/Unexercisable
----             --------  --------   -------------------------   ---------------------------

Peter J. Jegou    	0        	0	       325,000/	                   $245,000/ (1)
                                     	350,000		                   0
______________________
<FN>

(1)	Based on the closing price on May 30, 1997 ($.25) as quoted 
in the Nasdaq System and reported by NASD.

</TABLE>

<PAGE 22>

Compensation to Directors

 No compensation is paid to a director, as such, for his or her 
services, but, by resolution of the Board of Directors, a fixed 
sum and expenses for actual attendance at each regular or special 
meeting of the Board may be authorized.

Options and Warrants to Directors and Officers

 During the past two fiscal years, the Company has issued the 
Common Stock purchase warrant hereinafter described to Peter J. 
Jegou, its Chairman of the Board, President and Chief Executive 
Officer. The exercise price of the warrant was below the fair 
market value of the Common Stock on the date of grant.

1. On August 7, 1996, the Company granted to Mr. Jegou a Common 
   Stock purchase warrant expiring August 6, 1999 (the "August 
   6 Warrant") to purchase, commencing February 7, 1997, 
   1,500,000 shares of the Common Stock at $.75 per share. The 
   consideration for the August 6 warrant was Mr. Jegou's 
   services in developing alternative gaming projects for CGI 
   and as part of an employment agreement dated September 25, 
   1997.

Item 11.	Security Ownership of Certain Beneficial Owners and Management
         --------------------------------------------------------------
 The following table sets forth information, as of October 17, 
1997, with respect to (1) any person or "group" known to the 
Company to be the beneficial owner of more than five percent of 
the Common Stock; (2) each director of the Company; (3) the Chief 
Executive Officer of the Company; (4) each other executive 
officer who earned more than $100,000 in fiscal 1997 (of which 
there were none); and (5) all directors and executive officers as 
a group. Each beneficial owner has advised the Company that he or 
she has sole voting and investment power as to the shares of the 
Common Stock, except that the warrants and options described in 
the notes below do not have any voting power until exercised and 
may not be sold or otherwise transferred except in compliance 
with the Securities Act. 

Name and Address of	      Amount and Nature of	
Beneficial Owner         	Beneficial Ownership	         Percent of Class(1)
----------------          --------------------          -------------------

David Slyman	                  5,931,585 (2)	                  18.0%
2019 Ford Road
Sheffield, AL  35660

ZIMCO S.A.	                    4,200,000 (3)	                  13.0%
Rue de Neuchatel 8,
CH-2034
PESEUX, Switzerland

<PAGE 23>

Peter J. Jegou (4)(5)	          1,907,458 (6)                  	6.3%
150 Morris Avenue
Springfield, NJ 07081

Carol A. Kulina-Jegou (5)(7)	   220,000 (8)	                    0.8%
150 Morris Avenue
Springfield, NJ 07081

All directors and	              2,192,458 (6)(8)(9)	            7.2%
executive officers as
a group (3 persons)

_____________________

(1)	The percentages computed in this column of the table are 
based upon 29,290,728 shares of the Common Stock outstanding 
as of October 17, 1997, which amount excludes 150,000 shares 
(i.e., the MMII Indemnity Shares) held in escrow as security 
in the event a creditor of Roburn asserts a claim against 
MMII as the purchaser of the Roburn assets and is not 
otherwise satisfied (see the section "Former Operations" in 
Item 1 to this Report). Effect is given, where appropriate, 
pursuant to Rule 13d-3(d)(3)(i) under the Exchange Act, to 
shares issuable upon the exercise of options and warrants 
which are currently exercisable or exercisable within 60 
days of October 17, 1997.

(2)	According to a Schedule 13D filed by the holder under the 
Exchange Act, the holder acquired the shares reported in the 
table from Bennett, the purchaser from the Company in the 
September 1994 private placement. The shares include, after 
giving effect to the antidilution provisions thereof, 
3,681,585 shares of the Common Stock issuable upon the 
exercise of the Private Placement Warrant which is currently 
exercisable.

(3)	The shares reported in the table include 3,000,000 shares 
issuable upon the exercise of the November 7 Warrant and May 
7 Warrant, both of which are currently exercisable.

(4)	A director, Chairman of the Board, President and Chief 
Executive Officer of the Company. 

(5)	Peter J. Jegou and Carol A. Kulina-Jegou are husband and 
wife.

(6)	The shares reported in the table include those issuable upon 
the exercise of an option expiring May 18, 1999 to purchase 
125,000 shares of the Common Stock, the Loan Option to 
purchase 150,000 shares of the Common Stock, the Gaming 
Option to purchase 50,000 shares of the Common Stock, a 
warrant expiring one year after the effective date of a 
related registration statement of the Company to be filed to 
purchase 16,000 shares of the Common Stock, a warrant 
acquired in a February 1992 private placement and expiring 
April 29, 1998 to purchase, after giving effect to the 
antidilution provisions thereof, 264,508 shares, and a 
Common Stock purchase warrant expiring August 6, 1999

<PAGE 24>

to purchase 500,000 shares of the Common Stock, all of which 
are currently exercisable. The shares reported in the table 
do not include (a) 350,000 shares issuable upon the exercise 
of the Gaming Option as to which the Gaming Option is not 
currently exercisable or exercisable within 60 days of 
October 17, 1997, and (b) 3,856 shares of the Common Stock 
to be issued to Mr. Jegou in lieu of any claim by him to 
accumulated but undeclared and unpaid dividends on the 
Series A Preferred Stock, 51,412 shares of which he 
converted as of May 31, 1994 into 12,853 shares of the 
Common Stock.

(7)	A director and the Secretary of the Company.

(8)	The shares reported in the table include those issuable upon 
the exercise of the Retirement Option to purchase 50,000 
shares of the Common Stock, which Option became exercisable 
only on her retirement on December 31, 1995.

(9)	The amount reported in the table reflects (a) 50,000 shares 
of the Common Stock and (b) 15,000 shares of the Common 
Stock issuable upon the exercise of an option expiring July 
6, 2000, owned by another executive officer of the Company.

Item 12.	Certain Relationships and Related Transactions
         ----------------------------------------------

 Carol Kulina-Jegou, Executive Vice President, the Secretary and 
a director of the Company, owns the copyrights for Kards for 
Kids' children's stationery, card and paper activity products. 
Ms. Kulina-Jegou also owns the following trademarks: "Mommy I Can 
Do It Myself"; "Kards for Kids"; and "Mommy I Can Learn Myself". 
Pursuant to a Trademark License Agreement dated January 15, 1987, 
effective retroactive to May 18, 1986 (the "Trademark License"). 
(A copy of the Trademark License Agreement is filed (by 
incorporation by reference) as an exhibit to this Report and is 
incorporated herein by this reference.) Ms. Kulina-Jegou retains 
the right to inspect the materials, manufacturing and recording 
processes employed by Kards for Kids in the manufacturing of the 
prerecorded video cassette tapes in order to maintain quality 
control over the products. The Trademark License has remained 
effective despite the resignation of Ms. Kulina-Jegou effective 
December 31, 1995. See the section "Directors and Officers" in 
Item 9 to this Report. Ms. Kulina-Jegou is in the process of 
negotiating with Kards For Kids a royalty for the copyrights and 
trademarks, which royalty will not exceed 5% of gross revenues as 
previously agreed.

Item 13.	Exhibits and Reports on Form 8-K
         --------------------------------

(a)	Exhibits

	All of the following exhibits designated with a 
footnote reference are incorporated herein by reference to a 
prior registration statement filed under the Securities Act or a 
periodic report filed by the Company pursuant to Section 13 or 
15(d) of the Exchange Act.  If no footnote reference is made, the 
exhibit is filed with this Report.

<PAGE 25>

Number Exhibit
------ -------

2(a)	  Copy of Agreement and Plan of Reorganization dated as 
of May 27, 1994 by and among the Company, Creative 
Crafts Acquisition Corporation, a subsidiary of the 
Company, John Patrick Productions, Inc., John Patrick, 
Dwight F. Davis and Frederick P. Ost. (1)

3(a)	Copy of Certificate of Incorporation as initially filed 
on August 31, 1988. (2)

3(a)(1)	Copy of Amendment to Certificate of Incorporation filed 
on December 30, 1988. (2)

3(a)(2)	Copy of Amendment to Certificate of Incorporation filed 
on September 12, 1991. (3)

3(a)(3)	Copy of Certificate of Designations and Preferences of 
the Series A Preferred Stock filed on September 12, 
1991. (3)

3(a)(4)	Copy of Amendment to Certificate of Incorporation filed 
on May 22, 1992. (3)

3(a)(5)	Copy of Amendment to Certificate of Incorporation filed 
on June 23, 1992. (3)

3(a)(6)	Copy of Amendment to Certificate of Incorporation filed 
on August 25, 1993. (3)

3(a)(7)	Copy of Amendment to Certificate of Incorporation filed 
on January 26, 1994. (4)

<PAGE 25>

3(a)(8)	Copy of Certificate of Designations and Preferences of 
the Series B Preferred Stock filed on August 12, 1994. 
(1)

3(a)(9)	Copy of Amendment to Certificate of Designations and 
Preferences of the Series B Preferred Stock filed on 
February 14, 1995. (4)

3(a)(10)	Copy of Amendment to Certificate of Incorporation filed 
on May 22, 1997.

3(b)	Copy of Amended and Restated By-Laws as adopted by 
shareholders on January 12, 1994. (4)

4(a)	Specimen of Common Stock certificate. (4)

10(a)	Form of Warrant Agency Agreement dated as of April 27, 
1989 between the Company and Continental Stock Transfer & 
Trust Company as Warrant Agent. (2)

10(a)(1)	Form of Common Stock Purchase Warrant issued in 
connection with February 1992 private placement. (1)

	The Company's Common Stock Purchase Warrants expiring 
April 4, 1997, January 24, 1999, April 15, 1999, April 
16, 1999, August 6, 1999, September 18, 1999, November 
29, 1999, December 5, 1999, January 2, 2000, March 15, 
2000, September 11, 2000, May 23, 2001, September 2, 
2001, October 25, 2001 and January 23, 2002 are 
substantially identical tot he form of Common Stock 
Purchase Warrant filed as Exhibit 4(b) hereto except as 
to the name of the holder, the expiration date and the 
exercise price and, accordingly, pursuant to 
Instruction 2 to Item 601 of regulation S-K under the 
securities Act are not individually filed.

10(b)	Copy of Purchase Agreement dated as of February 6, 1991 
among the Company and the purchasers listed therein. 
(4)

10(b)(1)	Form of 10% Convertible Note due March 1, 1996 of the 
Company is Exhibit B to Exhibit 10(b) hereto. (4)

<PAGE 26>

10(c)	Form of Common Stock Purchase Warrant issued in 
connection with February 1992 private placement. (1)

10(d)	Form of 10% Note due April 29, 1995 of the Company. (3)

10(d)(1)	Form of Common Stock Purchase Warrant expiring April 
29, 1998 issued by the Company. (3)

	The Company's Common Stock Purchase Warrant expiring 
July 20, 1995, July 20, 1997, March 5, 1998, March 7, 
1998, May 26, 1998, October 27, 1998, January 7, 1999, 
November 1, 1999, November 6, 1999, July 20, 2000, 
September 28, 2000, October 12, 2000, October 20, 2000, 
December 26, 2000, February 28, 2001, March 27, 2001, 
April 29, 2001 and May 6, 2001 are substantially 
identical to the form of Common Stock Purchase Warrant 
filed (by incorporation by reference) as to the form of 
Common Stock Purchase Warrant filed as Exhibit 10(d)(1) 
hereto except as to the name of the holder, the 
expiration date and the exercise price and, 
accordingly, pursuant to Instruction 2 to Item 601 of 
Regulation S-K under the Securities Act are not 
individually filed.

10(e)	Copy of Placement Agent Agreement dated April 30, 1993 
by and between the Company and Westminster Securities 
Corporation ("Westminster"). (3)

10(e)(1)	Copy of letter agreement dated March 17, 1994 between 
the Company and Westminster as placement agent. (4)

10(e)(2)	Form of Note Purchase Agreement dated May 1, 1993 among 
the Company and the listed purchasers. (3)

10(e)(3)	Form of 10% Convertible Promissory Note due April 30, 
1995 of the Company is Exhibit B to Exhibit 10(e)(2) 
hereto. (3)

10(e)(4)	Copy of Security Agreement dated as of May 1, 1993 by 
and between Roburn International Corporation, a 
subsidiary of the Company ("Roburn"), and Westminster 
as designated agent for the Noteholders. (3)

10(e)(5)	Copy of Warrant Agreement dated May 1, 1993 among the 
Company, Westminster, as agent, and the warrant holders 
to be named. (5)

10(e)(6)	Form of Common Stock Purchase Warrant expiring April 
30, 1995 issued by the Company. (3)

10(e)(7)	Copy of letter dated June 8, 1994 from the Company to 
Westminster extending expiration date of Warrant filed 
as Exhibit 10(e)(6) hereto to April 30, 1996. (1)

10(e)(8)	Form of Common Stock Purchase Warrant expiring April 
30, 1995 issued by the Company to the Westminster 
designees is the same as Exhibit 10(e)(6) hereto. (3)

<PAGE 27>

10(e)(9)	Copy of Option expiring April 30, 1995 issued by the 
Company to the Westminster designees. (1)

10(e)(10)	Copy of letter dated February 10, 1995 to Westminster's 
counsel confirming that extension of expiration date 
from April 30, 1995 to April 30, 1996 effected by 
Exhibit 10(e)(7) hereto was also intended to apply to 
the Warrants and Options, copies of which are filed as 
Exhibits 10(e)(8) and 10(e)(9) hereto. (5)

10(f)	Copy of Placement Agent Agreement dated as of May 27, 
1993 by and between the Company and Royce Investment 
Group, Inc. ("Royce"). (6)

10(g)	Form of 10% Promissory Note dated October 8, 1993 
issued by the Company. (7)

10(g)(1)	Copy of Consent dated October 13, 1994 exchanging Note 
filed as Exhibit 10(g) hereto for shares of the Common 
Stock of the Company and a Common Stock Purchase 
Warrant expiring March 7, 1998 (the "Noteholders 
Warrant"). (1)

10(h)	Copy of Purchase Agreement dated as of February 28, 
1994 among the Company and the purchasers listed 
therein. (4)

10(h)(1)	Form of 8% Convertible Note due August 31, 1994 of the 
Company is Exhibit A to Exhibit 10(h) hereto. (4)

10(h)(2)	Copies of Consents dated October 13, 1994 exchanging 
Notes filed as Exhibit 10(h)(1) hereto for shares of 
the Common Stock of the Company and Noteholders 
Warrants. (1)

10(i)	Copy of 8% Promissory Note due June 20, 1995. (1)

10(i)(1)	Copy of Letter dated June 20, 1994 modifying Warrants 
expiring July 20, 1995 and July 20, 1997 hereto for one 
of the holders. (1)

10(i)(2)	Copy of Consent dated October 13, 1994 exchanging Note 
filed as Exhibit 10(i) hereto for shares of the Common 
Stock of the Company and a Noteholders Warrant. (1)

10(j)	Copy of Option expiring May 18, 1999 issued by the 
Company to Peter J. Jegou. (2)

	The Company's Options expiring June 8, 1999, June 12, 
1999, November 6, 1999 and July 6, 2000 are substantially 
identical to the form of Option filed (by incorporation 
by reference) as Exhibit 4(f) hereto except as to the 
name of the holder, the expiration date and the exercise 
price and, accordingly, pursuant to Instruction 2 to Item 
601 of Regulation S-K under the Securities Act are not 
individually filed.

10(k)	Copy of 10% Promissory Note due March 26, 1996. (7)

10(k)(1)	Copy of Letter dated August 31, 1995 exchanging  Note 
filed as Exhibit 10(k) hereto for shares of the Common 
Stock of the Company and a Common Stock purchase 
warrant expiring March 5, 1998 (the "March 5 Warrant"). (7)

10(l)	Copy of 10% Promissory Note due September 7, 1995 (and 
subsequently extended to November 7, 1995). (7)

<PAGE 28>

10(m)	Copy of 10% Promissory Note due December 29, 1995. (5)

10(m)(1)	Copy of 10% Promissory Note due January 12, 1996. (5)

10(m)(2)	Copy of 10% Promissory Note due January 18, 1996. (5)

10(m)(3)	Copy of the 10% Promissory Note due April 21, 1996. (5)

10(m)(4)	Copy of Letter dated August 31, 1995 exchanging Notes 
filed as Exhibits 10(m), 10(m)(1), 10(m)(2) and 

10(m)(3) for shares of the Common Stock of the Company 
and a March 5 Warrant. (5)

10(n)	Copy of 10% Promissory Note due June 5, 1996.  (8)

10(n)(1)	Copy of 10% Promissory Note due June 27, 1996. (8)

10(n)(2)	Copy of 10% Promissory Note due July 30, 1996. (8)

10(n)(3)	Copy of 10% Promissory Note due August 6, 1996. (8)

10(n)(4)	Copy of Letter dated November 30, 1995 exchanging 10% 
Promissory Notes (filed as Exhibits 10(n), 10(n)(1), 

10(n)(2) and 10(n)(3) for shares of the Common Stock 
and a Common Stock Purchase Warrant expiring March 5, 
1998. (8)

10(o)	Copy of Consulting Agreement dated as of April 16, 1996 
between the Company and Lee S. Rosen. (9)

10(o)(1)	Copy of Consulting Agreement dated as of August 7, 1996 
between the Company and Lee S. Rosen. (10)

10(p)	Copy of Lease dated January 1, 1989 by Peter J. Jegou 
and Carol A. Jegou to the Company for the premises 
located at 3567 Kennedy Road, South Plainfield, New 
Jersey together with amendments dated June 1, 1990 and 
March 1, 1991. (3)

10(p)(1)	Copy of Mortgage dated December 19, 1989 by Peter J. 
Jegou and Carol A. Jegou to The Howard Savings Bank 
with respect to property located at 3567 Kennedy Road, 
South Plainfield, New Jersey. (3)

10(p)(2)	Copy of Guaranty by the Company dated June 20, 1990 of 
payment by Peter J. Jegou and Carol A. Jegou under 
Mortgage dated December 19, 1989 by Peter J. Jegou and 
Carol A. Jegou to The Howard Savings Bank. (3)

10(p)(3)	Copy of Contract dated June 10, 1993 between Peter J. 
Jegou and Carol A. Jegou, as seller, and Robert 
Mikuski, as buyer of property located at 3567 Kennedy 
Road, South Plainfield, New Jersey. (3)

10(q)	Copy of letter agreement dated February 28, 1994 
between the Company and Bauer Cohen Company, Inc. 
("Bauer Cohen"). (4)

10(q)(1)	Copy of letter agreement dated February 26, 1994 
between Bauer Cohen and The Eastern Shawnee Tribe of 
Oklahoma. (1)

10(q)(2)	Copy of letter agreement dated March 1, 1994 between FK 
Capital, Inc. and Bauer Cohen. (1)

<PAGE 29>

10(q)(3)	Copy of letter agreement dated June 9, 1994 between the 
Company and Bauer Cohen. (1)

10(q)(4)	Copy of letter agreement dated August 4, 1994 between 
the Company and Bauer Cohen. (1)

10(r)	Copy of Option to Purchase Real Estate dated March 28, 
1994 by and between Five Star Productions, Inc., as 
Optionor, and Edward H. Cohen and Peter Jegou, as 
Optionees. (1)

10(s)	Copy of Real Estate Contract dated March 16, 1994 
between Peter Jegou and Edward Cohen, as Buyer, and 
Cook Hollow Company, as Seller. (1)

10(s)(1)	Copy of Special Agreements Addendum dated March 17, 
1994 to Exhibit 10(s) hereto. (1)

10(s)(2)	Copy of Change Addendum dated November 17, 1994 to 
Exhibit 10(s) hereto. (1)

10(s)(3)	Copy of Letter dated December 13, 1995 extending option 
terms of Exhibit 10(s) hereto. (11)

10(s)(4)	Copy of Letter dated January 5, 1995 extending option 
terms of Exhibit 10(s) hereto. (11)

10(s)(5)	Copy of Assignment dated as of January 5, 1996 between 
Creative Gaming Joint Venture, Creative Gaming 
International, Inc. ("Creative Gaming") and the 
Company. (11)

10(s)(6)	Copy of Agreement dated February 28, 1996 between Cook 
Hollow Company as Seller, and Creative Gaming and the 
Company as Buyer. (11)

10(s)(7)	Copy of Promissory Note dated February 28, 1996 from 
Creative Gaming to Cook Hollow Company is Exhibit B to 
Exhibit 10(s)(6) hereto. (11)

10(s)(8)	Copy of Future Advance Obligation Wraparound Deed of 
Trust dated as of February 28, 1996 between Creative 
Gaming, Gary A. Powell, as Trustee, and Cook Hollow 
Company is Exhibit C to Exhibit 10(s)(6) hereto. (11)

10(s)(9)	Copy of Wraparound Mortgage Agreement effective 
February 28, 1996 between Creative Gaming as Borrower, 
and Cook Hollow Company, as Lender, is Exhibit D to 
Exhibit 10(s)(6) hereto. (11)

10(s)(10)	Copy of Indemnity Agreement effective February 28, 1996 
among Creative Gaming and the Company, as Indemnitors, 
and Cook Hollow Company, as Indemnitee, is Exhibit E to 
Exhibit 10(s)(6) hereto. (11)

10(s)(11)	Copy of Standstill Agreement effective June 22, 1996 
between Cook Hollow Company, as Seller, and Creative 
Gaming, as Buyer.

10(t)	Management Agreement dated as of October 20, 1995 
between Eastern Shawnee Tribe of Oklahoma (the "Tribe") 
and Creative Gaming. (8)

<PAGE 30>

10(t)(1)	Option Agreement dated as of November 8, 1995 between the 
Tribe and CGI. (8)

10(t)(2)	Copy of Letter dated December 13, 1995 extending option 
terms of Exhibit 10(t) hereto. (8)

10(t)(3)	Copy of Loan Agreement relating to Exhibit 10(t) 
hereto. (12)

10(u)	Copy of Lease dated February 26, 1993 between MAP 
Investment Co., as landlord, and John Patrick 
Productions, Inc., as tenant. (1)

10(u)(1)	Copy of Lease dated May 13, 1995 between Rambo Realty, 
Inc., as landlord, and John Patrick Productions, Inc., 
as tenant. (5)

10(v)	Copy of Agreement dated June 13, 1994 between Roburn 
and National Pen Corporation (later changed to Modern 
Mold International, Inc. ("MMII")). (1)

10(v)(1)	Copy of Amendment No. 1 to the Agreement filed as 
Exhibit 10(v) hereof. (1)

10(v)(2)	Copy of Amendment No. 2 dated August 8, 1994 to the 
Agreement filed as Exhibit 10(v) hereof. (1)

10(v)(3)	Copy of Amendment No. 3 dated October 6, 1994 to the 
Agreement filed as Exhibit 10(v) hereof. (1)

10(v)(4)	Copy of Escrow Agreement dated July 25, 1994 among 
Mission Valley Escrow, MMII and Roburn. (1)

10(v)(5)	Copy of Amendment No. 1 dated August 8, 1994 to the 
Escrow Agreement filed as Exhibit 10(v)(4) hereof. (1)

10(v)(6)	Copy of Amendment No. 2 dated October 6, 1994 to the 
Escrow Agreement filed as Exhibit 10(v)(4) hereof. (1)

10(w)	Copy of Agreement dated August 15, 1994 among Banker's 
Pen, Inc. ("Banker's), the Company and Roburn. (1)

10(w)(1)	Copy of Agreement dated as of August 15, 1994 among 
Richard Danziger, the Company and Roburn. (1)

10(w)(2)	Copy of Agreement dated August 10, 1994 among Richard 
Danziger, the Company and Roburn. (1)

10(w)(3)	Copy of Escrow Agreement dated August 9, 1994 among the 
Company, Roburn, Richard Danziger and Uscher, Quiat, 
Uscher & Strull as Escrow Agent. (1)

10(w)(4)	Copy of Agreement dated August 15, 1994 among the 
Company, Banker's, Richard Danziger and Gold. (1)

10(x)	Copy of Agreement dated January 11, 1994 among Congress 
Entertainment, Ltd., Charles Staley, Barry Hirschberg, 
Hirschberg Productions, Inc., the Company, and Kards 
for Kids. (1)

10(x)(1)	Copy of Agreement dated January 11, 1994 between 
Hirschberg Productions, Inc. and Kards for Kids. (1)

<PAGE 31>

10(x)(2)	Copy of Employment Agreement effective as of January 
11, 1994 between Charles Staley and Kards for Kids. (1)

10(x)(3)	Copy of Consulting Agreement effective as of January 
11, 1994 between Barry Hirschberg and Kards for Kids. (1)

10(x)(4)	Copy of Letter Agreement dated January 11, 1994 among 
Barry Hirschberg, Charles Staley and Kards for Kids. (1)

10(x)(5)	Copy of Lease dated June 30, 1995 between Grant Holmes, 
Inc., as landlord, and Congress Entertainment, Ltd., as 
tenant. (5)

10(x)(6)	Copy of Agreement dated October 18, 1996 by and among 
the Company, Kards for Kids, Inc. and Nightwing 
Entertainment Group, Inc. (14)

10(y)	Copy of Trademark License Agreement dated January 15, 
1987 between Carol Kulina-Jegou and Kards for Kids, 
Inc. (2)

10(z)	Copy of Real Estate Sales Contract dated April 11, 1994 
between Peter J. Jegou and Edward Cohen, Buyer, and 
Wayne and Levita Lindsey, Seller. (2)

10(aa)	Copy of Subscription Agreement dated January 25, 1995 
between Shirley A. Walker and the Company. (5)

10(bb)	Copy of Purchase and Sale Agreement dated as of October 
__, 1996 by and among Jerry Ward Cars, Inc., Edward 
Lockel, Jim's Truck and Equipment, Inc. and CGI. (14)

10(bb)(1)	Copy of Sale Agreement dated March 7, 1997 between 
Creative Gaming and CGI Vessel, Inc.

10(cc)	Copy of Employment Agreement dated as of September 25, 
1996 by and between the Company and Peter J. Jegou. (13)

21		List of Subsidiaries of the Company. (5)
______________________________

(1)	Filed as an exhibit to the Company's Annual Report on 
Form 10-KSB for the fiscal year ended May 31, 1994 and 
incorporated herein by this reference.

(2)	Filed as an exhibit to the Company's Registration 
Statement on Form S-18, File No. 33-27027, and 
incorporated herein by this reference.

(3)	Filed as an exhibit to the Company's Annual Report on 
Form 10-KSB for the fiscal year ended May 31, 1993 and 
incorporated herein by this reference.

(4)	Filed as an exhibit to the Company's Quarterly Report 
on Form 10-QSB for the quarter ended February 28, 1994 
and incorporated herein by this reference.

(5)	Filed as an exhibit to the Company's Annual Report on 
Form 10-KSB for the fiscal year ended May 31, 1995 and 
incorporated herein by this reference.

<PAGE 32>

(6)	Filed as an exhibit to the Company's Current Report on 
Form 8-K dated July 21, 1993 and incorporated herein by 
this reference.

(7)	Filed as an exhibit to the Company's Quarterly Report 
on Form 10-QSB for the quarter ended August 31, 1993 
and incorporated herein by this reference.

(8)	Filed as an exhibit to the Company's Quarterly Report 
on Form 10-QSB for the quarter ended November 30, 1995 
and incorporated herein by this reference.

(9)	Filed as an exhibit to the Company's Registration 
Statement on Form S-8 filed on June 7, 1996 and 
incorporated herein by this reference.

(10)	Filed as an exhibit to the Company's Registration 
Statement on Form S-8, File No. 333-13343, and 
incorporated herein by this reference.

(11)	Filed as an exhibit to the Company's Quarterly Report 
on Form 10-QSB for the quarter ended February 29, 1996 
and incorporated herein by this reference.

(12)	Filed as an exhibit to the Company's Annual Report on 
Form 10-KSB for the fiscal year ended May 31, 1996 and 
incorporated herein by this reference.

(13)	Filed as an exhibit to the Company's Registration 
Statement on Form S-8, File No. 333-13847, and 
incorporated herein by this reference.

(14)	Filed as an exhibit to the Company's Quarterly Report 
on Form 10-QSB for the quarter ended November 30, 1996 
and incorporated herein by this reference.

(b)		Reports on Form 8-K

<PAGE 32>

		There were no current Reports on Form 8-K filed 
during the quarter ended May 31, 1997. 

<PAGE 33>

                           SIGNATURES


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


                                 	CREATIVE GAMING, INC.
                                            	Registrant



                            	By:      /s/ Peter J. Jegou       
                                 -------------------------
                                	Peter J. Jegou, President


Dated:  October 20, 1997


Pursuant to the requirements of the Securities Act of 1933, 
this Report has been signed below by the following persons on 
behalf of the Registrant on October 20, 1997 in the capacities 
indicated:


	Signatures	Title


/s/ Peter J. Jegou    	            Principal Executive
-------------------                Officer and Director                
   (Peter J. Jegou)


/s/ Walter J. Krzanowski 	         Treasurer and
------------------------           Chief Financial Officer
   (Walter J. Krzanowski)	         


/s/ Carol A. Kulina-Jegou         	Director
-------------------------
   (Carol A. Kulina-Jegou)

<PAGE F-1>

                  CREATIVE GAMING, INC. AND SUBSIDIARIES
       
             TABLE OF CONTENTS TO CONSOLIDATED FINANCIAL STATEMENTS

Report of Indenpendent Certified Public Accountants           F-2

Consolidated Balance Sheet as of May 31, 1997                 F-3

Consolidated Statement of Operations-
 Years Ended May 31, 1997 and 1996                            F-5

Consolidated Statements of Stockholders' Equity-
 Years Ended May 31, 1997 and 1996                            F-6

Consolidated Statements of Cash Flows-
 Years Ended May 31, 1997 and 1996                            F-7

Notes to Consolidated Financial Statements                    F-8


<PAGE F-2>

Report of Independent Certified Public Accountants

Stockholder of 
 Creative Gaming, Inc.
Springfield, New Jersey

We have audited the accompanying consolidated balance sheet of Creative
Gaming, Inc. and Subsidiaries (formerly Creative Learning Products, Inc.)
as of May 31, 1997, and the related consolidated statements of operations,
stockholders' equity and cash flows for each of the two years in the period 
ended May 31, 1997.  These financial statements are the responsibility of
the Company's management.  Our responsibility is to report on these 
financial statements based on our audits.

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

The accompanying consolidated finacial statements have been prepared 
assuming that the Company will continue as a going concern.  As discussed
in Note 1 to the consolidated financial statements, the Company has suffered
substantial recurring losses from operations and has a deficit in working
capital at May 31, 1997.  The Company has been dependent on sales of equity
securities and exercises of warrants to meet its cash flow requirements
that raise substantial doubt about its ability to continue as a going concern.
Management's plans in regard to these matters are also described in Note 1.
The consolidated financial statements do not include any adjustments that
might result from the outcome of this uncertainty.

Because of the significance of the uncertainty of the Company's ability to 
continue as a going concern, as discussed in the preceding paragraph, we are
unable to express, and we do not express, an opinion on these financial 
statements.

/s/ BDO Seidman, LLP
--------------------
    BDO Seidman, LLP

New York, New York

October 20, 1997

<PAGE F-3>
 
              CREATIVE GAMING, INC. AND SUBSIDIARIES

                    Consolidated Balance Sheet
                         May 31, 1997



                           	ASSETS

Current assets:
	Cash		                              $  121,864
	Accounts receivable - net of 
  allowance for doubtful 
  accounts of $4,792	                   	27,944
	Inventories (Note 4)                   	56,168
	Prepaid expenses and other current 
  assets	(Note 3)                       159,171
 		Total current assets		               365,147

Property and equipment:
	Land		                               2,410,452
	Gaming vessel                        		734,491
	Furniture and equipment, net		          23,326
                                      ---------
 		Net property and equipment		       3,168,269
                                      ---------

Other assets:
	Receivable from officer (Note 5)       182,364
	Deferred consulting expenses 
  (Note 11b)		                          321,404
	Intangibles, net of accumulated 
  amortization of $594,511	      	      194,896
                                       --------
 		Total other assets	           	      698,664
                                       --------

                                 				$4,232,080
                                     ==========


See Notes to Consolidated Financial Statements.

<PAGE F-4>

               CREATIVE GAMING, INC. AND SUBSIDIARIES

                   Consolidated Balance Sheet
                         May 31, 1997


           	LIABILITIES AND STOCKHOLDERS' EQUITY


Current liabilities:
	Short-term loan (Note 6)	                    	$      94,099
	Accounts payable, accrued expenses 
  and other liabilities                              591,928
	Payable and accrued settlement 
  expenses (Notes 9b)                                366,925
	Payable and accrued legal fees	                     409,518
 Payable and accrued taxes                          	220,863
	Collateralized legal fees payable 
  (Note 11c)	                     	                  156,250
                                                  ----------
 		Total current liabilities		                     1,839,583
                                                  ----------

Long-term liabilities:
	Long-term debt (Note 7)                         	1,001,157
	Collateralized settlement 
  payable	(Notes 3 and 11c)                          45,844
                                                 ----------
		Total long-term liabilities		                   1,047,001
                                                 ----------

Commitments and contingencies (Note 9)

Stockholders' equity (Notes 11 and 13):
	Common stock, no par value; authorized: 
  100,000,000 shares;issued and 
  outstanding: 24,058,128 shares	              	19,273,330
	Additional paid-in capital	                    	3,198,592
	Accumulated deficit		                         (20,674,332)
	Unearned consulting and other 
  expenses related to issued 
  and/or escrowed common stock     		             (452,094)
                                              -------------
		Total stockholders' equity		                   1,345,496
                                              -------------
 
                                          				$  4,232,080
                                              =============


See Notes to Consolidated Financial Statements.

<PAGE F-5>

                CREATIVE GAMING, INC. AND SUBSIDIARIES

               Consolidated Statements of Operations

                                          				Year Ended May 31,
                                              ------------------
                                             	1997	         1996
                                              ----          ----

Net sales	                            	$    356,668	  $  1,461,906
Cost of goods sold		                        120,149	       792,679
                                       ------------   ------------

Gross profit		                              236,519	       669,227
                                       ------------   ------------

Selling expenses                           		98,349	       480,028
General and administrative expenses	      1,948,027	     1,714,963
Gaming projects expenses	                  	440,070	       332,424
Settlement expenses	                       	818,324        	89,299
Loss from sale of operations (Note 3)      	226,329           	-
Impairment of intangibles (Note 1c)        	229,764           	-
Interest expense		                          135,836	        60,991
                                       ------------    -----------
                                    		    3,896,699	     2,677,705
                                       ------------    -----------

Net loss	                               	$(3,660,180) 	$(2,008,478)
                                       =============   ===========


Net loss per share                           $ (.17)	      $ (.18)
                                             =======       =======        


See Notes to Consolidated Financial Statements.

<PAGE F-6>

<TABLE>

                          CREATIVE GAMING, INC. AND SUBSIDIARIES
                      Consolidated Statements of Stockholders' Equity
                            For the Two Years Ended May 31, 1997

                                                                     Unearned and/or         Additional
                                Preferred     Common Stock        Escrowed Common Stock(b)  Paid-In     Accumulated  Subscriptions
                                Stock (a)    Shares     Amount      Shares     Amounts      Capital     Deficit      Receivable 
                                ---------    ------    -------      ------     -------      -------     -------      ----------
<S>                             <C>         <C>        <C>           <C>        <C>         <C>         <C>           <C>
                                                                                                             
Balance, May, 31, 1995          $ 200,000   9,627,820  $13,097,429    0        $   0        $2,679,541  $(15,005,674) $(30,000)
                                                                                                                              
Issuance of Common Stock                    3,684,563    2,949,862                                                           
Retirement of preferred stock    (200,000)                                                     200,000                        
Reduction of subscriptions                                                                                            
 receivable                                                                                                             30,000
New loss for year ended May 31,                                                                                                 
 1996                                                                                                     (2,008,478)        
                                ---------  ----------  ----------    ---------     ------    ---------   -----------    -------
Balance, May 31, 1996                   0  13,312,383  16,047,291            0          0    2,879,541   (17,014,152)         0   

Issuance of warrants:
 Compensation to consultants                                                                   176,553
 Employee compensation                                                                         129,113
 Debt of issuance costs                                                                         13,385
Exercise of warrants:
 Cash                                       5,066,667   1,117,000
 Offset to accounts payable                   533,333     400,000
Issuances of common stock: 
 Payments to vendors                        2,096,745     506,250    1,628,333   (452,094)
 Cash                                       2,400,000   1,050,000
 Employee compensation                         49,000      16,029
 In settlement of litigation                  600,000     136,760

New loss for year ended May 31, 
 1997                                                                                                   (3,660,180)
                                 -------- ----------- -----------   ---------   ---------- ---------- ------------- --------
Balance, May 31, 1997            $      0  24,058,128 $19,273,330   1,628,333   $(452,094) $3,198,592 $(20,674,332)  $    0
                                 ======== =========== ===========   =========   ========== ========== ============= ========
<FN>

a) All Preferred Stock transactions represented shares of the Preferred 
    Stock at $1.00 per share.
b) Shares are to be earned based on future operations, passage of time or 
    payment of certain payables.

</TABLE>

See Notes to Consolidated Financial Statements.

<PAGE F-7>


              CREATIVE GAMING, INC. AND SUBSIDIARIES
               Consolidated Statements of Cash Flows

                                                    	  Year Ended May 31,	
                                                       ------------------
                                                        1997	        1996
                                                        ----         ----
Cash flows from operating activities:
	Net loss		                                         $(3,660,180) 	$(2,008,478)
                                                    ------------  ------------
	Adjustments to reconcile net loss to net 
  cash used in	operating activities:
		 Depreciation and amortization		                      232,681	     273,849
		 Amortization of deferred consulting expenses		       257,824        	-
 		Impairment of intangibles                            229,764         -
 		Paid from issuances of common stock and 
   warrants:	
	  	Settlement expenses		                               139,948        	-
			 Compensation and consulting expenses	              	166,929	        -
 		Loss from sale of operations		                       226,329	        -
		 Other, net		                                        (320,288)    	30,000
		 Changes to operating assets and liabilities:
	  	Accounts receivable	                                	46,498    	(18,235)
		  Inventories                                       		(24,054)    	65,208
		  Prepaid expenses and other assets                 		(87,409)	  (102,180)
		  Accounts Payable and accrued expenses               159,636   		303,845
   	Payable and accrued legal fees                     	100,583	    208,597
   	Payable and accrued settlement expenses		           366,925       	-
   	Payable and accrued taxes                          	220,863	      	-
   	Collateralized legal fees payable                   156,250		      -
                                                     ----------  ----------
   		Total adjustments		                              1,872,479	    761,084
                                                     ----------  ----------
 		  Net cash used in operating activities		         (1,787,701) (1,247,394)
                                                     ----------- -----------

Cash flows from investing activities:
	Purchases of property                                	(734,491) (1,491,605)
	Advances to officer, net of repayments		               (93,236)    		2,925
                                                      ---------- -----------
		  Net cash used in investing activities		            (827,727)	(1,488,680)
                                                      ---------- -----------

Cash flows from financing activities:
	Proceeds from short-term borrowings	                  	169,454	    625,000
	Repayment of short-term borrowings	                   	(69,454)	   (74,000)
	Proceeds from long-term borrowings	                       	-		   1,072,475
	Repayment of long-term debt		                          (71,318)	      -
	Proceeds from issuances of common stock	            	1,050,000	  1,322,370
	Proceeds from exercises of warrants		                1,117,000	    209,590
                                                      ---------   ---------
		  Net cash provided by financing activities		       2,195,682	  3,155,435
                                                      ---------   ---------

Net increase (decrease) in cash                      		(419,746)	   419,361
Cash at beginning of year		                             541,610	    122,249
                                                      ---------- ----------
Cash at end of year		                                $  121,864	  $ 541,610
                                                     =========== ===========

Supplemental disclosure of cash flow information:
	Cash paid during the year for interest              $   80,819	  $  11,858
                                                     =========== ==========  
Supplemental schedule of non-cash financing 
 activities:
	Debt and other liabilities converted to common 
  stock	                                          	  $  932,750  $1,417,902
                                                     ==========  ==========

<PAGE F-8>


             CREATIVE GAMING, INC. AND SUBSIDIARIES
          NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                  TWO YEARS ENDED MAY 31, 1997

Note 1 - Business and Principles of Consolidation

 Creative Gaming, Inc. (the "Company"), formerly Creative 
Learning Products, Inc., was formed in August 1988 to provide 
management and administrative services to its wholly-owned 
subsidiaries. The operating subsidiaries of the Company include 
Creative Gaming International, Inc., CGI Vessel, Inc., Kards For 
Kids, Inc. and John Patrick Productions, Inc. The Company and its 
operating subsidiaries are collectively referred to herein as "CGI". 

 CGI is in the process of converting to an entity offering 
offshore gaming vessels, other gaming facilities, entertainment 
and development of real estate. CGI sells their products, 
consisting of educational videos, books, gaming related items and 
children's paper products, through mail order and through 
retailers, brokers and distributors. 

 The consolidated financial statements include the accounts of 
the Company and its subsidiaries, all of which are wholly owned. 
Significant intercompany accounts and transactions have been 
eliminated in consolidation.

 CGI's accompanying consolidated financial statements have been 
prepared on a going concern basis. During the past several years, 
CGI has experienced substantial recurring losses from operations and 
has a working capital deficit.  CGI has been dependent, in part, on 
proceeds from sales of debt and equity securities and the exercise of 
warrants and options. While management believes its ability to raise 
additional capital will provide sufficient cash for CGI to meet its 
operating requirements for the year ending May 31, 1998 and manage its 
working capital deficit, there can be no assurances that CGI will 
maintain its ability to continue as a going concern.

 To facilitate comparison with the current year, certain amounts 
in the prior year have been reclassified.

Note 2 - Summary of Significant Accounting Policies

a) Inventories

Inventories are stated at the lower of cost (first-in, first-
out method) or market and reflect write-downs to net realizable 
value.

b) Property and Equipment

Property and equipment are recorded at cost. Depreciation is 
provided at rates designed to recover the cost of property and 
equipment over their estimated service lives. Depreciation 
expense for the years ended May 31, 1997 and 1996 was 
approximately $11,600 and $44,500, respectively. Accumulated 
depreciation on furniture and equipment for the year ended May 
31, 1997 was approximately $89,500. Land is not a depreciable 
asset. The gaming vessel is recorded at cost, and expenditures 
associated with readying it for its intended use are capitalized. 
Expenditures for maintenance and repairs are charged to expense 
as incurred, whereas 

<PAGE F-9>

expenditures for renewals and betterments are generally capitalized. 
Furniture and equipment is being depreciated over their estimated
useful lives of 3-10 years.

c) Intangibles

 Intangibles, including customer lists and goodwill, are 
recorded at fair value and are amortized over five years. 
Amortization expense for the years ended May 31, 1997 and 1996 
was approximately $206,700 and $209,500, respectively. CGI 
assesses the fair value of such intangibles based upon several 
factors, including management's intention with respect to the 
operations and those operations' projected undiscounted cash 
flows. As of May 31, 1997, CGI adjusted the fair value of 
intangibles and charged to operations approximately $230,000.

d) Loss Per Share

 Loss per share is based upon the weighted average 
shares outstanding of 20,968,347 and 10,996,147 for the years 
ended May 31, 1997 and 1996, respectively. Losses per share were 
computed by dividing the corresponding loss for each year by the 
weighted average number of shares of common stock outstanding for 
each year. Common stock equivalents are not included because the 
effect would be anti-dilutive.

 Fully diluted computations are not shown because all 
potentially dilutive securities would have an anti-dilutive 
effect on per share amounts.

e) Use of Estimates

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

f) Recent Accounting Pronouncements

 CGI adopted Statement of Financial Accounting Standards 
("SFAS") No. 121, "Accounting for the Impairment of Long-Lived 
Assets and for Long-Lived Assets to be Disposed Of" for the year 
ended May 31, 1997. The adoption of SFAS No. 121 as of June 1, 
1996 did not have a material effect on the consolidated financial 
statements.

 In October 1995, the Financial Accounting Standards Board 
("FASB") issued SFAS No. 123, "Accounting for Stock-Based 
Compensation." SFAS No. 123 establishes a fair value method for 
accounting for stock-based compensation plans either through 
recognition or disclosure. Effective December 16, 1995, CGI has 
reflected all issuances of equity instruments to non-employees
at their respective fair values.

 In February 1997, the FASB issued SFAS No. 128, "Earnings Per 
Share", which is effective for fiscal years beginning after 
December 15, 1997. CGI will adopt SFAS No. 128 on June 1, 1998. 
The adoption of this standard is not expected to have a material 
effect on CGI's consolidated financial statements.

 In June 1997, the FASB issued SFAS No. 130, "Reporting 
Comprehensive Income", which established standards for reporting 
and display of comprehensive income, its components

<PAGE F-10>

and accumulated balances. Comprehensive income is defined to include 
all changes in equity except those resulting from investments by 
distributions to owners. Among other disclosures, SFAS No. 130 
requires that all items that are required to be recognized under 
current accounting standards as components of comprehensive 
income be reported in a financial statement that is displayed 
with the same prominence as other financial statements.

 SFAS No. 130, effective for all years beginning after December 
31, 1997, requires comparative information for earlier years to 
be restated and early adoption is permitted. CGI intends to adopt 
SFAS No. 130 effective June 1, 1998. Results of operations and 
financial position will be unaffected by implementation of this 
standard.

 In June 1997, the FASB issued SFAS No. 131, "Disclosures about 
Segments of an Enterprise and Related Information", which is 
effective for fiscal years beginning after December 15, 1997. 
This standard establishes disclosure requirements for operating 
segments' products and services, geographic areas, and major 
customers. CGI will adopt SFAS No. 131 on June 1, 1998. The 
adoption of this standard will not impact CGI's results of 
operations, financial position or cash flows.

g) Fair Value of Financial Instruments

 The carrying values of financial instruments including cash, 
accounts receivable and accounts payable approximate fair value 
due to the relatively short maturities of these instruments. The 
carrying value of the long-term debt approximates fair value.

Note 3 - Sale of Operations

 Effective November 30, 1996, all the assets of an operating 
division of CGI were sold to and all its liabilities were assumed 
by a purchaser for 2,000,000 shares of the purchaser's restricted 
common stock.

 Effective March 1, 1997, the purchaser executed a convertible 
promissory note payable to CGI (the "Note") in the principal 
amount of $347,000 at an annual interest rate of 8% and payable 
in monthly installments of $14,500 commencing March 31, 1997. The 
principal amount of the Note included the net amount due CGI from 
the purchaser, and potential and contingent liabilities CGI may 
eventually be required to pay. As part of the sale, CGI placed 
45,000 shares of common stock in escrow until such contingent 
liabilities are satisfied. Due to non-payment of the Note, CGI 
has charged to operations the entire balance, which has been 
reflected as a component of the loss on the sale.

 The value of the purchaser's common stock, included in prepaid expenses
and other current assets, was reduced to $20,000 as of May 31, 1997.

Note 4 - Inventories

 Inventories of continuing operations consisted of the following 
at May 31, 1997:
	               Raw materials		   $ 11,392
               	Work-in-process		    4,381
               	Finished goods		    40,395

<PAGE F-11>
		
Note 5 - Receivable From Officer

 As of May 31, 1997, the receivable from officer represents 
amounts advanced to CGI's President and Chief Executive Officer.

Note 6 - Short-term Loan

 On March 19, 1997, CGI executed a term note for $100,000, at an 
annual interest rate of 12%, due in one year. In conjunction with 
this note, CGI issued a common stock purchase warrant expiring in 
four years to purchase 100,000 shares of common stock at $.25 per 
share. The fair value of this warrant was recorded as prepaid 
interest and is being amortized over the life of the note.

Note 7 - Long-term Debt

 On February 28, 1996, CGI, as part of its purchase of certain 
property, was issued a 10% mortgage from the sellers in the 
principal amount of $1,072,475, with payments of $50,000 
(including interest) due every three months and a final payment 
of principal and interest due at the end of two years. Effective 
May 31, 1997 the payment terms of the mortgage were extended to a 
payment due June 1, 1998 for full principal balance and accrued 
interest. As part of the agreement to extend the due date of the 
mortgage, CGI issued 100,000 shares of common stock to the 
sellers and placed a lien on adjacent property owned by CGI as 
collateral for the mortgage.

Note 8 - Income Taxes

 As of May 31, 1997, the primary component of CGI's deferred tax 
asset consisted of its net operating loss carryforwards ("NOL"). 
The deferred tax benefit related to the NOL has been fully 
reserved.

 As of May 31, 1997, CGI has NOL's of approximately $19,400,000 
which are available to offset future taxable income, if any, 
through 2012.

 As a result of various "ownership changes" occurring prior to 
fiscal 1996, future utilization of the Company's NOL 
carryforwards are subject to certain limitations under Section 
382 of the Internal Revenue Code.

Note 9 - Commitments and Contingencies

a) Leases

 The Company leases its office and warehouse facilities and 
certain equipment pursuant to non-cancelable operating leases 
expiring through October 1999. The following are the future 
minimum annual rental payments:

                  	Year ended May 31,
                   ------------------
                  	1998		     $38,200
                  	1999	       	5,100
                  	2000		       1,200

 Rent expense was approximately $57,400 and $103,000 for the 
years ended May 31, 1997 and 1996, respectively.

<PAGE F-12>

b) Litigation
 
 On July 18, 1995, a placement agent and ten other persons 
instituted an action in the Supreme Court of the State of New 
York against CGI. The action was settled on April 17, 1997 by 
CGI with the issuance of 600,000 shares of common stock, which 
the plaintiffs were to sell over an eight-month period after 
which CGI would be liable to the plaintiffs to the extent that 
the aggregate net proceeds from such sales were less than 
$450,000, which was charged to operations. The 600,000 shares of 
common stock were sold for net proceeds of $136,760 resulting in 
a claim against CGI for $313,240, which was accrued as 
settlement payable as of May 31, 1997.

 CGI is, and has been from time to time, a defendant in various 
other legal actions. Management believes that the ultimate 
outcome of these pending actions or claims will not have a 
material adverse effect on CGI's consolidated financial 
position.

c) Employment Agreement

 CGI entered into an employment agreement effective August 7, 
1996 for three years with its Chief Executive Officer and 
President which provides for minimum compensation of $200,000, 
$200,000 and $37,000 for the years ending May 31, 1998, 1999 and 
2000, respectively.

Note 10 - Major Customers

 During the year ended May 31, 1996 an individual customer 
accounted for approximately 42% of sales from operations. No 
other customers accounted for 10% or more of sales from 
operations during the years ended May 31, 1997 and 1996.

Note 11 - Common Stock

a) Fiscal 1996 Equity Transactions

 On July 18, 1995, a placement agent and ten other persons 
instituted an action in the Supreme On July 24, 1995, the 
Company issued to a shareholder a common stock purchase warrant 
expiring January 24, 1999 to purchase 83,333 shares of common 
stock at an exercise price of $1.00 commencing January 24, 1996, 
for which the shareholder agreed to seek financing for the 
Company and settled certain claims against the Company.

 On August 30, 1995, a corporate investor exercised its warrant 
expiring October 27, 1998 to purchase 140,000 shares of common 
stock at an exercise price of $1.50. Due to the antidilutive 
provisions of this warrant, an aggregate of 143,535 shares of 
common stock were issued at the adjusted price of $1.46 for 
proceeds of $209,590.

 On August 31, 1995, the holders of an aggregate of $825,000 in 
principal amount of the Company's short-term 10% Promissory 
Notes accepted, in full settlement of all principal and interest 
due, an aggregate of 851,230 shares of common stock (26,230 
shares in lieu of interest due) and common stock purchase 
warrants expiring March 5, 1998 to purchase an aggregate of 
851,230 shares of common stock at an exercise price of $1.50 per 
share commencing August 31, 1996.

 On November 30, 1995, the Company, in a private placement 
pursuant to Regulation S promulgated under the Securities Act of 
1933, as amended (the "Securities Act"), sold to two 

<PAGE F-13>

non-"U.S. persons" in "off-shore transactions", for gross proceeds of 
$250,000, 250,000 shares of common stock and common stock 
purchase warrants expiring November 29, 1999 to purchase, 
commencing November 30, 1996, 250,000 shares of common stock at 
an exercise price of $1.50 per share. The Company paid a private 
placement fee of $25,000 to an agent for this offering. (The 
terms "U.S. persons" and "off-shore transactions", as used in 
this Report, are used as defined in paragraphs (o) and (i), 
respectively, of Rule 902 of Regulation S under the Securities 
Act).

 On November 30, 1995, the holder of an aggregate of $235,000
in principal amount of the Company's short-term 10% Promissory 
Notes accepted, in full settlement of all principal and interest 
due, an aggregate of 317,529 shares of common stock (4,196 
shares in lieu of interest due) and a common stock purchase 
warrant expiring March 5, 1998 to purchase, commencing November 
30, 1996, an aggregate of 317,529 shares of common stock at an 
exercise price of $1.00 per share. 

 On December 6, 1995, the Company, pursuant to Regulation S 
under the Securities Act, sold to a non-"U.S. person" in an 
"off-shore transaction", for gross proceeds of $200,000, 200,000 
shares of common stock and a common stock purchase warrant 
expiring December 5, 1999 to purchase, commencing December 6, 
1996, 200,000 shares of common stock at an exercise price of 
$1.00 per share. The Company paid a private placement fee of 
$20,000 to an agent for this offering.

 On January 3, 1996, the Company, pursuant to Regulation S 
under the Securities Act, sold to a non-"U.S. person" in an 
"off-shore transaction", for gross proceeds of $100,000, 100,000 
shares of common stock and a common stock purchase warrant 
expiring January 2, 2000 to purchase, commencing January 3, 
1997, 100,000 shares of common stock at an exercise price of 
$1.50 per share. The Company paid a private placement fee of 
$10,000 to an agent for this offering.

 On January 31, 1996, the holder of an aggregate of $25,000 in 
principal amount of CGI's 10% Promissory Note due November 7, 
1995 accepted, in full settlement of all principal and interest 
due, an aggregate of 40,667 shares of common stock (667 shares 
in lieu of interest due). 

 On February 6, 1996, the Company, pursuant to Regulation S 
under the Securities Act, sold to a non-"U.S. person" in an 
"off-shore transaction", for gross proceeds of $200,000, 196,928 
shares of common stock. The Company paid a private placement fee 
of $23,000 to an agent for this offering.

 On February 12, 1996, the Company, pursuant to Regulation S 
under the Securities Act, sold to a non-"U.S. person" in an 
"off-shore transaction", for gross proceeds of $170,000, 145,299 
shares of common stock. The Company paid a private placement fee 
of $19,600 to an agent for this offering.

 On February 28, 1996, CGI, as part of its purchase of a 728-
acre parcel of land, issued 30,000 shares of common stock to the 
sellers of the property.

 On May 31, 1996, the Company, pursuant to Regulation S under 
the Securities Act, sold to a non-"U.S. person" in an "off-shore 
transaction", for gross proceeds of $600,000, 1,200,000 shares 
of common stock and a common stock purchase warrant expiring May 23, 2001 to 

<PAGE F-14>

purchase, commencing May 31, 1996, 1,000,000 shares of common stock 
at an exercise price of $1.00 per share. The Company paid a private 
placement fee of $100,000 to an agent for this offering.

 On May 31, 1996, the holder of an aggregate of $48,000 in 
principal amount of CGI's 8.5% and 10% Promissory Notes 
accepted, in full settlement of all principal and interest due, 
an aggregate of 36,525 shares of common stock (4,525 shares in 
lieu of interest due).

 During the year ended May 31, 1996, CGI issued 172,850 shares 
of common stock in exchange for various services rendered. The 
stock was valued at the value of the services rendered.

b) Exercises of Warrants

 On August 7, 1996 the Company issued to an officer of the 
Company, as consideration for the officer's services in securing 
gaming opportunities for CGI and as part of an employment 
agreement dated as of September 25, 1996, a common stock 
purchase warrant expiring August 6, 1999 to purchase 1,500,000 
shares of common stock at $.75 per share commencing February 7, 
1997. On December 26, 1996, the officer exercised his warrant as 
to 500,000 shares of common stock after the Company waived the 
prohibition on exercise prior to February 7, 1997 and lowered 
the exercise price to $.25 per share for such shares. On March 
3, 1997, the officer exercised his warrant as to 500,000 shares 
of common stock after the Company lowered the exercise price to 
$.25 per share and subsequently to $.10 per share for such 
shares.

 On August 7, 1996, the Company entered into a consulting 
agreement with an individual which modified a previous agreement 
dated April 16, 1996. Pursuant to the initial agreement, the 
individual received a common stock purchase warrant expiring 
April 15, 1999 to purchase 1,000,000 shares of common stock at 
an exercise price of $.75 per share. The terms of the modified 
consulting agreement were for the individual to perform 
financial, public relation and gaming related consulting 
services for a period of two years at a cost of $400,000 and 
included the issuance of common stock purchase warrants expiring 
April 16, 1999 and August 6, 1999, respectively, to purchase 
2,000,000 and 1,000,000 shares, respectively, of common stock 
both exercisable at $.75 per share. The individual exercised his 
warrant expiring April 15, 1999 to purchase 1,000,000 shares of 
common stock at an exercise price of $.75 per share for gross 
proceeds of $750,000. The individual retained $400,000 in 
accordance with his consulting agreement and the Company 
received net proceeds of $350,000. The individual exercised his 
warrant expiring April 16, 1999 to purchase 2,000,000 shares of 
common stock as follows: 500,000 shares at $.25 per share each 
on October 7, 1996 and January 16, 1997 after the Company waived 
the prohibition on exercise prior to February 7, 1997 and 
lowered the exercise price to $.25 per share for such shares; 
600,000 shares at $.50 per share on March 13, 1997 after the 
Company lowered the exercise price to $.50 per share for such 
shares; and 400,000 shares at $.25 per share on April 18, 1997 
after the Company lowered the exercise price to $.25 per share 
for such shares. These transactions were recorded as deferred 
consulting costs at their fair values totaling $579,228 and are 
being amortized over the life of the consulting agreement. 
Amortization expense for the year ended May 31, 1997 amounted to 
$257,824. On July 2, 1997, the individual exercised his warrant 
expiring August 6, 1999 to purchase 1,000,000 shares of common 
stock at an exercise price of $.10 per share after the Company 
lowered the exercise price to $.10 per share.

<PAGE F-15>

 An investor exercised its warrant expiring December 5, 1999 as 
to 200,000 shares of common stock, 100,000 shares at $.21 per 
share each on May 2 and May 19, 1997 after the Company lowered 
the exercise price to $.21 per share. Also, on June 5, 1997 the 
investor exercised its warrant expiring January 2, 2000 as to 
100,000 shares of common stock at $.164 per share after the 
Company lowered the exercise price to $.164 per share. In 
addition, on May 21, 1997, the Company issued the investor a 
common stock purchase warrant expiring May 20, 2000 to purchase 
300,000 shares of common stock at an exercise price of $.50 per 
share.

 On May 6, 1997, an investor exercised its warrant expiring 
September 2, 2001 as to 1,000,000 shares of common stock at $.10 
per share after the Company lowered the exercise price to $.10 
per share.

 On May 23, 1997, an investor exercised its warrant expiring 
May 23, 2001 as to 1,000,000 shares of common stock at $.10 per 
share after the Company lowered the exercise price to $.10 per 
share. In addition, on May 8, 1997, the Company issued common 
stock purchase warrants expiring November 7, 1997 and May 7, 
1999, both commencing June 18, 1997, for 1,000,000 and 2,000,000 
shares of common stock, respectively, at exercise prices of $.10 
and $.175 per share, respectively.

 The previous five paragraphs reflect, through the exercises of 
warrants, the issuance of 6,200,000 shares of common stock for 
amounts of $1,117,000 of cash proceeds, $400,000 of payments to 
consultants and $136,760 of settlement costs.

c) Payments to Vendors
 
 In June 1996, the Company issued to an individual for services 
rendered 50,000 shares of common stock and a common stock 
purchase warrant expiring June 11, 2001 to purchase 50,000 
shares of common stock at an exercise price of $1.50 per share 
commencing December 12, 1996.

 On June 27, 1996, the Company issued and a creditor accepted 
47,000 shares of common stock in satisfaction of outstanding 
debt of $63,296 as of May 31, 1996.

 On November 27, 1996, CGI issued and a creditor accepted 
206,991 shares of common stock in satisfaction of outstanding 
debt of $206,991 as of May 31, 1996.

 During the year ended May 31, 1997, CGI issued 164,421 shares 
of common stock in exchange for various services rendered. The 
stock was valued at the fair values of the services rendered.

 On October 10, 1996 and on May 2, 1997, CGI issued 100,000 
shares and 150,000 shares, respectively, of common stock to a 
creditor for outstanding debt and anticipated future services. 
These shares were recorded at their fair values at dates of 
issuance totaling $156,250. Proceeds from the sale of these 
shares will be applied toward the liabilities of CGI due the 
creditor.

 On May 2, 1997, CGI issued 1,333,333 shares of common stock to 
a consultant as an advance to be earned upon achievement of a 
milestone in a gaming project upon the opening of a casino.

 45,000 shares are being held in escrow to guarantee the 
satisfaction of a settlement owed by the division of CGI sold in 
November 1996.

 The previous six paragraphs reflect the issuances of 2,096,745 
shares of common stock to vendors in the aggregate amount of 
$506,250. 1,628,333 of these shares of common stock are 

<PAGE F-16>

either held in escrow to be released upon the occurrence of a future 
event or the proceeds upon sale by the holder are to be applied 
to satisfy outstanding debt of CGI, and are recorded as unearned 
or escrowed common stock at a value of $452,094 as of May 31, 
1997.

d) Employee Compensation

 During the year ended May 31, 1997, CGI issued to employees as 
compensation 49,000 shares of common stock valued at their fair 
values of $16,029.

e) Private Placements

 On August 22, 1996, the Company, pursuant to Regulation S 
under the Securities Act, sold to three non-"U.S. persons" in 
"off-shore transactions", for gross proceeds of $500,000, 
1,000,000 shares of common stock.

 On September 4, 1996, the Company, pursuant to Regulation S 
under the Securities Act, sold to a non-"U.S. person" in an 
"off-shore transaction", for gross proceeds of $600,000, 
1,200,000 shares of common stock and issued a common stock 
purchase warrant expiring September 2, 2001 to purchase 
1,000,000 shares of common stock at an exercise price of $1.00 
per share. The Company paid a private placement fee of $100,000 
to an agent for this offering.

 On December 23, 1996, the Company sold to an investor 200,000 
shares of common stock for gross proceeds of $50,000.

 The previous three paragraphs reflect the issuances of 
2,400,000 shares of common stock for net cash proceeds of 
$1,050,000.

f) Stock Options and Warrants

 At May 31, 1997, an aggregate of 16,379,727 shares of common 
stock were issuable upon (i) the exercise of warrants 
(15,326,730 shares), (ii) the exercise of options (1,030,000 
shares) and (iii) the issuance of shares (22,997) in lieu of 
dividends on the conversion of convertible preferred stock.

 The Company has issued various options and warrants to 
purchase its common stock. Effective December 16, 1995, under 
the accounting provisions of SFAS No. 123, the Company has 
valued its stock options and warrants granted to non-employees 
in accordance with the fair-value-based method. The Company 
estimates the fair value of each stock option and warrant at the 
grant date by using the Black-Scholes option pricing model. Key 
assumptions used to apply this pricing model include: an assumed 
50% discount on the underlying stock appropriate for its 
nonmarketable and restrictive characteristics; a life estimated 
as the midpoint of the period between issuance and expiration 
dates; a volatility factor of 39.5%; a risk-free rate of return 
using the yield at the grant date of a U.S. Treasury security 
with a maturity date approximating the estimated life used in 
the analysis; and no dividends paid for all years.

 The following is a summary of the activity of options and 
warrants to purchase shares of common stock for the year ended 
May 31, 1997:


                           	Options	                  Warrants (a)
	                  Outstanding	  Weighted	      Outstanding	 Weighted
	                    Shares	      Average	        Shares	     Average
	                  Purchasable	 Exercise Price	 Purchasable	Exercise Price
                   -----------  --------------  ----------- --------------
	May 31, 1996		     1,030,000	     $1.10	        10,132,121	    $1.05
	Granted		          	                            	9,320,000    	$ .61
	Exercised			                                   	(6,200,000)	   $ .29
	Dilutions		                                      2,074,609
                    ---------                     ---------
	May 31, 1997	    	1,030,000	      $1.10	        15,326,730     $ .74

 The following summarizes information about options and 
warrants to purchase common stock at May 31, 1997: 
 
                                	Range of Original Exercise Prices
                               	Options	               Warrants (a)
                        	  $.75-$1.50	  $.10-$1.49  	$1.50-$4.00	  $.10-$4.00
                           ----------   ----------   -----------   ----------
Outstanding May 31, 1997:
	Shares purchasable		       1,030,000	   7,432,257	    7,894,473  	15,326,730
	Weighted - average 
  exercise price	              	$1.10        	$.41	        $1.03	        $.74
	Weighted - average 
  remaining contractual 
  life (years)		                 2.27	        1.43	         1.09	        1.25

Exercisable at May 31, 1997:
	Shares purchasable		         555,000	   4,332,257    	7,894,473	  12,226,730
	Weighted - average 
  exercise price              		$1.11	        $.60        	$1.03	       $ .87

(a) Various warrants contain antidilutive provisions, for 
which the cumulative additional shares reserved are included. 

Note 12 - Business Segments

 The primary business segments of CGI consist of 1) gaming 
projects and 2) the distribution of educational and 
entertainment videos and other related products. Information 
concerning the Company's business segments in fiscal 1997 and 
1996 is as follows:

    	                                             	  Video and Other
                          	Gaming Projects   	    Product Distribution
                           ---------------        --------------------
                          	 1997	       1996	        1997        	1996
Sales                		$     -	      $   -	        $356,668  	$1,461,906
Operating Loss		       (1,063,342)   (676,269)   (1,074,004)    (751,497)
Identifiable Assets		   3,200,021	  2,413,534	      305,981	   1,157,738
Depreciation and 
 Amortization	               	286	      2,801	      228,558	     269,971
Capital Expenditures		    734,491	  1,481,305         	-	         10,300

<PAGE F-18>

Note 13 - Subsequent Events

 On June 5, 1997 the Company issued to an investor 200,000 
shares of common stock for gross proceeds of $30,000 and issued 
a common stock purchase warrant expiring June 29, 2001 to 
purchase 200,000 shares of common stock at an exercise price of 
$.25 per share, commencing December 30, 1997.

 On June 21, 1997 the Company entered into a consulting 
agreement with an individual to perform financial and public 
relation consulting services for a period of three months. The 
Company issued 500,000 shares of common stock to the individual 
for these services.

 On July 29, 1997 CGI issued 100,000 shares of common stock 
each to two individuals for services rendered and issued to each 
individual a common stock purchase warrant expiring August 5, 
2000 to purchase 100,000 shares of common stock at an exercise 
price of $.25 per share.

 On September 29, 1997, the Company entered into an agreement 
for an investor group to purchase 100,000 shares of a to be 
designated Series C 12% Convertible Redeemable Preferred Stock, 
$1.00 par value (the "Series C Preferred Stock") of the Company 
for $100,000. The Company also issued to the group common stock 
purchase warrants expiring September 29, 1999 to purchase 
1,000,000 shares of common stock at an exercise price of $.10 
per share. The agreement provides that each share of the Series 
C Preferred Stock is convertible into 46.5 shares of common 
stock or an aggregate of 4,650,000 shares. Also on September 29, 
1997, the Board of Directors of the Company agreed to a one-for-
thirty reverse stock split of common stock, as of a date yet to 
be determined.