SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                    FORM 10-Q

      (Mark One)

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

                     FOR THE QUARTERLY PERIOD ENDED JUNE 30, 2001

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

             FOR THE TRANSITION PERIOD FROM  __________TO___________

                        Commission file number 000-25306

                            EQUUS GAMING COMPANY L.P.
             -------------------------------------------------------
             (Exact name of registrant as specified in its charter)

                  Virginia                               54-1719877
        -------------------------------              -------------------
        (State or other jurisdiction of               (I.R.S. Employer
        incorporation or organization)               Identification No.)

                            El Comandante Race Track
                            Main Building First Floor
                              65th  Infantry Avenue
                                Rd. 3   Km. 15.3
                              Canovanas,  PR  00729

              -----------------------------------------------------
              (Address of Principal Executive Offices and Zip Code)

                                 (787) 641-5844
              -----------------------------------------------------
              (Registrant's telephone number, including area code)


              -----------------------------------------------------
             (Former name, former address and former fiscal year, if
                           changed since last report)

Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such report(s), and (2) has been subject to such filing
requirements for the past 90 days.
                              Yes  /X/     No / /

Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date  June 12,  2002. 14,389,824
Class A Units


<PAGE>
<TABLE>
<CAPTION>
                            EQUUS GAMING COMPANY L.P.
                                    FORM 10 Q
                                      INDEX

                                                                          PAGE
                                                                         NUMBER
<S>                                                                      <C>
PART I - FINANCIAL INFORMATION


Item 1.  Consolidated Financial Statements

    Consolidated Statements of Operations for the Six Months and Three
    Months ended June 30, 2001 and 2000 (Unaudited)                           3

    Consolidated Statements of Comprehensive Loss for the Six months
    and Three Months Ended June 30, 2001 and 2000 (Unaudited)                 5

    Consolidated Balance Sheets at June 30, 2001 (Unaudited)
    and December 31, 2000 (Audited)                                           6

    Consolidated Statement of Changes in Partners' Deficit for the Six
    Months Ended June 30, 2001 (Unaudited)                                    8

    Consolidated Statements of Cash Flows for the Six
    Months Ended June 30, 2001 and 2000 (Unaudited)                           9

    Notes to Consolidated Financial Statements                               11

Item 2. Management's Discussion and Analysis of Financial Condition
          and Results of Operations

     Results of Operations                                                   30
     Liquidity and Capital Resources                                         35


PART II - OTHER INFORMATION

Item 1.  Legal Proceedings                                                   39
Item 2.  Material Modifications of Rights of Registrant's Securities         42
Item 3.  Default upon Senior Securities                                      42
Item 4.  Submission of Matters to a Vote of Security Holders                 42
Item 5.  Other Information                                                   42
Item 6.  Exhibits and Reports on Form 8-K                                    42

Signatures                                                                   43
</TABLE>


                                        2
<PAGE>
<TABLE>
<CAPTION>
                            EQUUS GAMING COMPANY L.P.
                      CONSOLIDATED STATEMENTS OF OPERATIONS
                        FOR THE SIX MONTHS ENDED JUNE 30,

                                  (UNAUDITED)

                                                      2001           2000
                                                  -------------  ------------
<S>                                               <C>            <C>
REVENUES:
   Commissions on wagering                        $ 26,774,900   $32,428,432
   Net revenues from lottery services                        -       170,348
   Gain on sale of assets                                            179,500
   Loss on sale of investments                      (1,149,579)            -
   Other revenues                                    2,186,209     1,659,429
                                                  -------------  ------------
                                                    27,811,530    34,437,709
                                                  -------------  ------------
EXPENSES:
   Payments to horseowners                          14,422,847    15,632,350
   Salaries, wages and employee benefits             4,373,578     5,010,090
   Operating expenses                                5,703,698     5,134,524
   General and administrative                        2,975,221     2,151,109
   Marketing, television and satellite costs         3,100,182     2,500,104
   Financial expenses                                5,291,860     4,902,172
   Depreciation and amortization                     1,890,800     1,915,688
                                                  -------------  ------------
                                                    37,758,186    37,246,037
                                                  -------------  ------------

LOSS  BEFORE INCOME TAXES AND MINORITY INTEREST     (9,946,656)   (2,808,328)

PROVISION FOR INCOME TAXES                             110,842       198,071
                                                  -------------  ------------


LOSS  BEFORE MINORITY INTEREST                     (10,057,498)   (3,006,399)


MINORITY INTEREST IN LOSSES                           (937,731)     (193,450)
                                                  -------------  ------------

LOSS  BEFORE EXTRAORDINARY ITEM                     (9,119,767)   (2,812,949)

EXTRAORDINARY ITEM                                           -             -

NET LOSS                                          $ (9,119,767)  $(2,812,949)
                                                  =============  ============

ALLOCATION OF NET LOSS:
   General partners                               $    (91,198)  $   (28,129)
   Limited partners                                 (9,028,569)   (2,784,820)
                                                  -------------  ------------
                                                  $ (9,119,767)  $(2,812,949)
                                                  -------------  ------------
BASIC AND DILUTED LOSS PER UNIT AMOUNTS:          $      (1.07)  $     (0.34)
                                                  -------------  ------------
</TABLE>


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


                                        3
<PAGE>
<TABLE>
<CAPTION>
                            EQUUS GAMING COMPANY L.P.
                      CONSOLIDATED STATEMENTS OF OPERATIONS
                       FOR THE THREE MONTHS ENDED JUNE 30,

                                   (UNAUDITED)

                                                      2001          2000
                                                  ------------  ------------
<S>                                               <C>           <C>
REVENUES:
   Commissions on wagering                        $10,784,162   $15,912,221
   Net revenues from lottery services                       -        62,461
   Gain on sale of assets                                   -       179,500
   Loss on sale of investments                     (1,149,579)
   Other revenues                                   1,162,990       660,782
                                                  ------------  ------------
                                                   10,797,573    16,814,964
                                                  ------------  ------------
EXPENSES:
   Payments to horseowners                          6,037,596     7,662,483
   Salaries, wages and employee benefits            1,623,102     2,561,563
   Operating expenses                               2,987,370     2,911,628
   General and administrative                       1,050,785       989,367
   Marketing, television and satellite costs        1,486,983     1,371,419
   Financial expenses                               2,354,796     2,456,338
   Depreciation and amortization                      839,596       960,605
                                                  ------------  ------------
                                                   16,380,228    18,913,403
                                                  ------------  ------------

LOSS  BEFORE INCOME TAXES AND MINORITY INTEREST    (5,582,655)   (2,098,439)

PROVISION FOR INCOME TAXES                            (24,967)       42,382
                                                  ------------  ------------

LOSS  BEFORE MINORITY INTEREST                     (5,557,688)   (2,140,821)

MINORITY INTEREST IN LOSSES                          (470,780)       64,844
                                                  ------------  ------------
LOSS BEFORE EXTRAORDINARY ITEM                     (5,086,908)   (2,205,665)

EXTRAORDINARY ITEM                                          -             -

NET LOSS                                          $(5,086,908)  $(2,205,665)
                                                  ============  ============

ALLOCATION OF NET LOSS:
   General partners                               $   (50,869)  $   (22,057)
   Limited partners                                (5,036,039)   (2,183,608)
                                                  ------------  ------------
                                                  $(5,086,908)  $(2,205,665)
                                                  ------------  ------------
BASIC AND DILUTED LOSS PER UNIT AMOUNTS:          $     (0.60)  $     (0.26)
                                                  ============  ============
WEIGHTED AVERAGE UNITS OUTSTANDING                  8,505,398     8,364,824
                                                  ------------  ------------
</TABLE>


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


                                        4
<PAGE>
<TABLE>
<CAPTION>
                            EQUUS GAMING COMPANY L.P.
                  CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS
                   FOR THE SIX AND THREE MONTHS ENDED JUNE 30,

                                   (UNAUDITED)


FOR THE SIX MONTHS ENDED JUNE 30,
                                                    2001          2000
                                                ------------  ------------
<S>                                             <C>           <C>
NET LOSS                                        $(9,119,767)  $(2,812,949)

OTHER COMPREHENSIVE LOSS:

  Currency translation adjustments                 (162,599)      221,071

                                                ------------  ------------
COMPREHENSIVE LOSS                              $(9,282,366)  $(2,591,878)
                                                ------------  ------------


FOR THE THREE MONTHS ENDED JUNE 30,

                                                    2001          2000
                                                ------------  ------------

NET (LOSSES) EARNINGS                           $(5,086,908)  $(2,205,665)

OTHER COMPREHENSIVE (LOSSES) INCOME:

  Currency translation adjustments                  (32,373)      337,033
                                                ------------  ------------
COMPREHENSIVE (LOSSES) INCOME                   $(5,119,281)  $(1,868,632)
                                                ------------  ------------
</TABLE>


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


                                        5
<PAGE>
<TABLE>
<CAPTION>
                            EQUUS GAMING COMPANY L.P.
                           CONSOLIDATED BALANCE SHEETS

                                     ASSETS

                                                   JUNE 30      DECEMBER 31
                                                    2001           2000
                                                -------------  -------------
<S>                                             <C>            <C>
                                                 (UNAUDITED)     (AUDITED)
CASH AND CASH EQUIVALENTS:
  Unrestricted                                  $    453,177   $  7,019,121
  Restricted                                         517,268        418,180
                                                -------------  -------------
                                                     970,445      7,437,301
                                                -------------  -------------

PROPERTY AND EQUIPMENT:
  Land                                             8,821,404      8,879,113
  Building and improvements                       51,211,478     55,404,357
  Equipment                                       15,797,948     17,753,880
                                                -------------  -------------
                                                  75,830,830     82,037,350
  Accumulated depreciation                       (22,936,858)   (22,282,599)
                                                -------------  -------------
                                                  52,893,972     59,754,751
                                                -------------  -------------

DEFERRED COSTS, NET:
  Financing                                        1,438,296      1,933,361
  Costs of Panama contract                                 -      1,870,000
  Other                                               56,409        206,714
                                                -------------  -------------
                                                   1,494,705      4,010,075
                                                -------------  -------------

OTHER ASSETS:
  Accounts receivable, net                         4,112,703      4,492,311
  Notes receivable                                   275,049      2,960,074
  Panama Preferred Stocks                          2,535,278              -
  Other assets                                     1,486,342      1,480,258
                                                -------------  -------------
                                                   8,409,372      8,932,643
                                                -------------  -------------

                                                $ 63,768,494   $ 80,134,770
                                                =============  =============
</TABLE>


                                  (continues)


                                        6
<PAGE>
<TABLE>
<CAPTION>
                               EQUUS GAMING COMPANY L.P.
                              CONSOLIDATED BALANCE SHEETS

                                      (continued)

                           LIABILITIES AND PARTNERS' DEFICIT

                                                         JUNE 30      DECEMBER 31
                                                          2001           2000
                                                      -------------  -------------
<S>                                                   <C>            <C>
                                                        (UNAUDITED)     (AUDITED)
FIRST MORTGAGE NOTES:
  Principal, net of note discount of
    $654,153 and $786,261                             $ 53,799,837   $ 53,667,739
  Accrued interest                                       3,460,970      3,916,669
                                                      -------------  -------------
                                                        57,260,807     57,584,408
                                                      -------------  -------------

OTHER LIABILITIES:
  Accounts payable and accrued liabilities              22,190,604     23,741,039
  Outstanding winning tickets and refunds                1,302,462      1,552,128
  Notes payable                                          8,440,412      6,549,961
  Bonds payable                                                  -      4,000,000
  Capital lease obligations                              1,637,290      2,232,559
                                                      -------------  -------------
                                                        33,570,768     38,075,687
                                                      -------------  -------------

DEFERRED INCOME TAXES                                    3,741,411      3,933,144
                                                      -------------  -------------

MINORITY INTEREST                                       (1,310,369)       753,288
                                                      -------------  -------------

COMMITMENTS AND CONTINGENCIES, SEE NOTE 2

PARTNERS' DEFICIT
  General Partner                                         (988,968)      (896,144)
  Limited Partners - 20,000,000 units authorized;
   14,389,824 units issued and outstanding.            (28,505,155)   (19,315,613)
                                                      -------------  -------------
                                                       (29,494,123)   (20,211,757)
                                                      -------------  -------------

                                                      $ 63,768,494   $ 80,134,770
                                                      =============  =============
</TABLE>


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


                                        7
<PAGE>
<TABLE>
<CAPTION>
                              EQUUS GAMING COMPANY L.P.
                CONSOLIDATED STATEMENT OF CHANGES IN PARTNERS' DEFICIT
                        FOR THE SIX MONTHS ENDED JUNE 30, 2001

                                   (UNAUDITED)

                                       GENERAL       LIMITED
                                       PARTNERS     PARTNERS         TOTAL
                                      ----------  -------------  -------------
<S>                                   <C>         <C>            <C>
BALANCES, DECEMBER 31, 2000           $(896,144)  $(19,315,613)  $(20,211,757)

  Net loss for the period               (91,198)    (9,028,569)    (9,119,767)

  Currency translation adjustments       (1,626)      (160,973)      (162,599)

                                      ----------  -------------  -------------
BALANCES, JUNE 30, 2001               $(988,968)  $(28,505,155)  $(29,494,123)
                                      ==========  =============  =============
</TABLE>


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


                                        8
<PAGE>
<TABLE>
<CAPTION>
                            EQUUS GAMING COMPANY L.P.
                      CONSOLIDATED STATEMENT OF CASH FLOWS
                        FOR THE SIX MONTHS ENDED JUNE 30,
                                   (UNAUDITED)


                                                     2001          2000
                                                 ------------  ------------
<S>                                              <C>           <C>
CASH FLOWS FROM OPERATING ACTIVITIES

  Net loss                                       $(9,119,767)  $(2,812,949)

  Adjustments to reconcile losses to net cash
    (used in) provided by operating activities
      Depreciation and amortization                2,267,076     2,373,958
      Deferred income tax provision                   26,916       198,071
      Currency translation adjustments               373,490      (245,299)
      Minority interest                             (937,731)     (198,450)
      Loss on sale of investment                   1,149,579             -
  Increase in assets
    Accounts receivable                              (88,226)     (289,267)
    Prepayments and other assets                    (188,570)     (718,769)

  Increase (decrease) in liabilities
    Accounts payable and accrued liabilities         849,695     4,122,024
    Outstanding winning tickets and refunds          139,754      (145,747)

                                                 ------------  ------------
      Total adjustments                            3,591,983     5,096,521
                                                 ------------  ------------

  Net cash used in operating activities           (5,527,784)    2,283,572
                                                 ------------  ------------


CASH FLOWS FROM INVESTING ACTIVITIES

  Capital expenditures (net of retirements)         (559,083)     (758,127)
  Deferred costs                                     192,435      (434,659)
  (Increase) decrease in notes receivable, net       252,910      (603,332)
  Panama deconsolidation                             (83,895)            -
  Purchase of Panama Preferred Stocks             (2,535,278)            -
                                                 ------------  ------------
  Net cash used in investing activities           (2,732,911)   (1,796,118)
                                                 ------------  ------------
</TABLE>


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


                                        9
<PAGE>
<TABLE>
<CAPTION>
                              EQUUS GAMING COMPANY L.P.
                        CONSOLIDATED STATEMENTS OF CASH FLOWS
                          FOR THE SIX MONTHS ENDED JUNE 30,
                                   (UNAUDITED)
                                   (continued)


                                                      2001          2000
                                                  ------------  ------------
<S>                                               <C>           <C>
CASH FLOWS FROM FINANCING ACTIVITIES:
    Payments of financing costs                   $         -   $         -
    Loan proceeds from affiliates                   2,325,025
    Loan proceeds from financial institutions               -       720,000
    Increase in deferred costs                                     (155,001)
    Payments on notes payable and capital
      lease obligations                              (531,186)   (1,482,776)
                                                  ------------  ------------
Net cash used in  financing activities              1,793,839      (917,777)
                                                  ------------  ------------

NET DECREASE IN CASH AND
   CASH EQUIVALENTS                                (6,466,856)     (425,323)

CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD      7,437,301     2,307,933

                                                  ------------  ------------
CASH AND CASH EQUIVALENTS, END OF PERIOD          $   970,445   $ 1,882,610
                                                  ============  ============

SUPPLEMENTAL INFORMATION:
    Interest paid                                 $ 4,142,095   $ 4,497,528

NON-CASH TRANSACTIONS:
    Equipment acquired through capital leases               -        80,362
</TABLE>


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


                                       10
<PAGE>
                            EQUUS GAMING COMPANY L.P.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


1.   BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES:

     Equus  Gaming Company L.P. (the "Company"), a Virginia limited partnership,
is  engaged  in thoroughbred racing, wagering and other gaming businesses in the
Caribbean,  Central  and  South  America.  Through its subsidiaries, the Company
currently  operates  three racetracks and manages an extensive off-track betting
("OTB")  system  in  the  various  countries  where  the  Company  operates.

     The Company has a 99% interest in Housing Development Associates S.E.
("HDA"), the owner of El Comandante Race Track ("El Comandante"), the only
licensed thoroughbred racing facility in Puerto Rico.  El Comandante has been
operated since January 1, 1998 by the wholly owned subsidiary of HDA, El
Comandante Management Company, LLC ("ECMC").  The Company also has a controlling
100% interest in Satellite Services International, Inc. ("SSI") and Agency
Betting Network, Inc. ("ABN").  SSI will provide up-link services, satellite
time (contracted from a third party), and leasing of video and data
telecommunication equipment, to transmit (or simulcast) live races from and to
the Company's race tracks and OTB agencies, including live races from outside
the Company's operational territories to the agency distribution network in
order to increase the level of wagering revenues through the Company's OTB
system. ABN is establishing and operating an OTB agency system in Colombia in
conjunction with Los Comuneros Race Track in Medellin, Colombia ("Los
Comuneros"), owned and operated by Equus Comuneros SA. ("Equus-Comuneros").
The Colombia OTB system is expected to operate in Bogota, Medellin and other
major cities.

     In 1999 the Company initiated a vertical integration process to consolidate
its telecommunications needs into a centralized hub-and-spoke system based at El
Comandante racetrack in Puerto Rico.  During 2000 and 2001 the development of
this system encountered significant technical obstacles which necessitated
redesigning of its architecture, reallocation of the equipment and ultimately, a
strategic revision of the objectives for the system.

     The vertical integration process began with the development of a C-Band
satellite uplink facility in Panama in the fall of 1999 to fulfill the
broadcasting needs of this jurisdiction which, at the time, belonged to the
Company's international network of pari-mutuel operations.  By December of that
year the consolidation process had identified VSAT technology via the Ku-Band
medium as the application necessary to address the Company's needs for video and
data transmission throughout its proprietary agency-betting network in Puerto
Rico, Panama, Colombia and Dominican Republic.

     The significant investment made by the Company during 1999-2000 in the
satellite telecommunications equipment required to implement the VSAT system
included the development of a main uplink Hub in Puerto Rico, and of supporting
Ku-Band uplinks to service the markets of Panama and Colombia. Initial steps
were also taken to establish a supporting uplink in the Dominican Republic
although the facility has not been completed at this time.

     Several factors altered the course of the VSAT project, and namely, the
incompatibility of this technology with the Autotote system currently in use
throughout the Company's pari-mutuel operations hindered its deployment as the
primary means of transmission for the agency-betting network's wagering data.
Consequently, the Company is in the process of evaluating several alternate
commercial applications for this equipment both in Colombia and Puerto Rico.

     Conversely, the aforementioned satellite uplink facilities continue to
provide video broadcasting services for the Company's pari-mutuel operations in
Puerto Rico, Colombia and the Dominican Republic.    In addition to the
alternate commercial uses being sought for the VSAT equipment, the Company's


                                       11
<PAGE>
uplink facilities are uniquely positioned to provide satellite broadcast
services to prospective clients in Puerto Rico, Colombia, and potentially in the
Dominican Republic.

     In 2000, the Company was awarded exclusive rights by the Government of
Uruguay to operate the Maronas racetrack in Montevideo and an off-track betting
agency network together with the right to operate up to 5,000 slot machines in 5
locations.   The necessary  restoration of the racetrack would , in management's
opinion,  have required an initial investment of $12 million.   Efforts to raise
the $12 million by the due date were unsuccessful.   Consequently, the
concession expired in March 31, 2001, and the Company's bid bond in the amount
of $500,000 was forfeited and thus, expensed during the period ended June 30,
2001.   Subsequently,  the concession was awarded to another operator in the
fourth quarter of 2001 which will result in the Company writing off its entire
investment by December 31, 2001.

     The Company has a 55% interest in Galapagos, S.A. ("Galapagos"), the
operator since April 1995 of the V Centenario Race Track in the Dominican
Republic ("V Centenario").  The racetrack is government-owned and operated by
the Company's subsidiary under long-term contract.

     The Company had a 51% interest in Equus Entertainment de Panama, S.A., the
operator since January, 1998 of the Presidente Remon Race Track in the Republic
of Panama.

     On October 9, 2001, the Company entered into the following restructuring
with its minority shareholder of Equus Entertainment de Panama, Wall Street
Securities Trading Group, Inc. effective September 30, 2001.

     1.   The Company entered into a stock purchase agreement whereby in
          exchange for release from all liabilities related to the operation of
          Equus Entertainment de Panama, the company gave to its minority
          partner, Wall Street Securities, its 204,000 shares of common stock
          which represented 51% of the total issued and outstanding shares of
          Equus Entertainment de Panama. This transaction resulted in a net loss
          of $1,149,579 to the Company.

          a)   The Company has been released of all prior, present and future
               obligations, known or unknown from October 9, 2001, until the
               "Termination and Mutual Release" document is signed.

          b)   The issuer has committed to using its best efforts to release the
               Company from any obligations the Company may have assumed under
               its concession from the Government of Panama in opening and
               managing Hipodromo Presidente Remon. Until such time as the
               aforementioned release is received by the Company, the purchaser
               has drafted an "Undertaking and Indemnity" document indemnifying
               the Company from any claims by the Government of Panama under the
               Concession Agreement.

     2.   The Company then acquired 3,000 shares of $1,000 par value, preferred
          stock in exchange for net claims due the Company. The number of shares
          issued will be reduced if the net claims are less than $2,859,680. The
          final net claims on the Company's books amount to $3,294,391 and the
          investment and recorded at that amount as of September 30, 2001. Terms
          and conditions of the preferred stock issue are as follows:

          a)   The shares will be redeemed by the issuer upon the race track's
               concession agreement being terminated or on October 31, 2031,
               whichever comes first.

          b)   The issuer has the option to redeem the shares at par at any
               time.

          c)   No dividends will accumulate up to October 31, 2006; thereafter,
               the shares will earn an annual cumulative dividend of 12%,
               payable quarterly.


                                       12
<PAGE>
          d)   The shares have no voting rights except that no change in the
               terms can occur without the consent of the preferred
               shareholders.

          e)   No other preferred shares can be issued with priority over these
               shares, and in liquidation these shares have the same priority as
               common shares now existing.

          f)   No dividends will be paid to common shares while accumulated
               dividends are payable to the preferred shares.

     As of June 12, 2002, the Company has not received copies of the fully
executed documents mentioned above, nor received the 3,000 shares of preferred
stock.,

     The Company owns a controlling 50% interest in Equus Comuneros S.A.
("Equus-Comuneros"), the owner and operator of Los Comuneros in Colombia.
Equus-Comuneros received in 1999 the assets and liabilities of the prior
operator of the racetrack. The assets consisted of land, buildings and equipment
valued at approximately $4.7 million and liabilities of approximately $2.6
million. The Company paid $2.1 million for its interest in Equus-Comuneros

     On July 13, 2001, Kempt Corporation, a Puerto Rico corporation wholly owned
by Wilson Securities Corporation, an entity controlled by the Wilson family,
purchased seven (7) million shares of Equus Entertainment Class A, 12%
cumulative preferred stock, $1.00 par value.

     Equus  Entertainment  then  applied  $3.8  million  to  offset the advances
against  dividends  made  to  the  Company.

     Equus  Entertainment  reimbursed  the  El  Comandante  Group (consisting of
Housing  Development  Associates  S.E., El Comandante Capital Corporation and El
Comandante  Management  Company  LLC) for all advances made by the El Comandante
Group  to  affiliate  companies.  Equus  Entertainment  also  purchased  the
inter-company  receivables  of  the  El  Comandante  Group  that  were  due from
affiliate  companies.

     The  Net  proceeds  of  $6,882,037  were  used  to  pay  the  following:

     1)   The June 14, 2001 interest payment on the First Mortgage Notes of
          $3,595,500 plus $32,408 of penalty interest for the period June 15,
          2001 through July 13, 2001.

     2)   Payoff of $2,604,747 HDA Note payable to FirstBank together with
          interest accrued through July 13, 2001, of $14,370.

     3)   Payoff of $500,000 HDA line of credit with FirstBank together with
          interest accrued through July 13, 2001, of $2,903.

     4)   Advances to consolidated affiliates of $132,108 to cover operational
          expenses.

     As noted in the accompanying consolidated financial statements, the Company
has incurred recurring losses from operations, has a partners' deficit of
$29,494,123 and had negative cash flows for the remainder of 2001.  It also
failed to make the mandatory interest and principal payments due in December
2001 as required under the First Mortgage Notes Indenture.  These factors, among
others, raise substantial doubts about the Company's ability to continue as a
going concern.   The accompanying financial statements do not include any
adjustments relating to the recoverability and classification of asset carrying
amounts or the amount and classification of liabilities that might result should
the Company be unable to continue as a going concern.


                                       13
<PAGE>
     Management's plans to deal on its Company's financial problems are as
follow:

     (i)  Continue t o implement cost reductions at the race tracks.

     (ii) Seek legislation designating El Comandante as a tourist zone to allow
          for the refinancing of the First Mortgage Notes with low interest
          government backed bonds and reduced utility charges.

    (iii) Seek legislation and approvals to operate slot machines and other
          gaming devices at El Comandante. As of May 31, 2002, such approvals
          have not been obtained.

     (iv) Obtain new bank financing or financing by private investors.

     For  the  six months ended June 30, 2001,  accumulated losses not allocated
to  Galapagos  minority  partners  were  $2,097,649.    Equus-Comuneros minority
partners  own  a  50%  interest.

     GOVERNMENT MATTERS

     El Comandante is required to pay the Government of Puerto Rico various
taxes on wagering placed on thoroughbred horse races held at or simulcasted by
El Comandante (Puerto Rico).  The taxes on  wagering are required to be remitted
to the Department of the Treasury of Puerto Rico within two (2) days of the date
wagers are placed.   From October 16, 2000 to February 7, 2001,  El Comandante
failed to remit tax payments totaling $9,949,182

     On May 24, 2001, ECMC executed a "Closing Agreement"(the "Agreement") with
the Secretary of the Treasury of Puerto Rico (the "Secretary") whereby ECMC will
settle its assessed debt of unpaid excise taxes and commissions for the period
October, 2000 through February, 2001, in the amount of $11,172,450 (including
interest and late charges), plus an additional assessment of $60,141 (including
interest) for unpaid commissions for the period February 2, 2001 through
February 7, 2001 as follows:

     1.   Upon execution of the Agreement, ECMC delivered a check to the
          Secretary for $60,141 in full payment of the February, 2001
          assessment.

     2.   For a six-month period commencing June 1,2001 and ending November 30,
          2001, ECMC will pay $50,000 per week against the October, 2000 through
          January, 2001 assessment. After the six-month period, the Secretary
          was to reevaluate the financial condition of ECMC, and could, upon
          reasonable grounds, continue, modify or revoke the Agreement. As of
          the date of these consolidated financial statements, no modification
          of the original agreement had been made.

     3.   ECMC will continue to pay on a timely basis current excise taxes and
          commissions.

     4.   ECMC will provide and maintain a bond in favor of the Secretary in the
          amount of $500,000.

     5.   In the event ECMC defaults during the term of the Agreement, the
          Secretary may accelerate the balance due plus any additional amounts
          owed as a result of the default.

     As of June 12, 2002, ECMC has fully complied with all terms and provisions
of the Agreement.

     On April 2, 2001, the House of Representatives of the Commonwealth of
Puerto Rico adopted a resolution ordering an investigation of the operations of
ECMC with emphasis on the fiscal and financial administration of El Comandante
and its tax delinquency. As of October 22, 2001, all requested information had
been submitted by ECMC. The investigation has been completed, but as of this
date, the House of Representatives has not issued their report or otherwise
disclosed their findings.


                                       14
<PAGE>
     As of June 30, 2001, Equus Comuneros owed the Colombian Tax and National
Customs Administration approximately $652,877, including interest for
withholding at source tax. Management has recently met with the Government to
settle the amount outstanding. The plan proposed to the Government is as
follows:

     1.   Five (5) year balance amortization of 10%, 15%, 20%, 25% and 30%,
          respectively.

     2.   The Government is requesting a down payment, which is currently being
          negotiated.

     On August 18, 2001, ECMC executed a Closing Agreement (the "Agreement")
with the Municipality of Canovanas whereby ECMC settled its long-standing
dispute over the payment of the Volume of Business Tax assessed by the
municipality.

     The following schedule lists the deficiencies by fiscal year with the
corresponding interest and surcharges:

<TABLE>
<CAPTION>
          FISCAL                INTEREST
          TAX         TAX          AND
          YEAR    DEFICIENCY   SURCHARGES    TOTAL
          ------  -----------  -----------  --------
<S>               <C>          <C>          <C>
          93/94   $    74,087  $    67,913  $142,000
          96/97       120,397       68,224   188,621
          97/98       126,666       59,110   185,776
          98/99       123,366       45,233   168,599
          99/00        93,367       24,897   118,264
          00/01       116,735       19,455   136,190
                  -----------  -----------  --------

          Totals  $   654,618  $   284,832  $939,450
                  ===========  ===========  ========
</TABLE>

     Prior to settlement, ECMC had accrued as of June 30, 2001 a total of
$838,396 due for municipal taxes and other charges. On June 30, 2001, ECMC
recorded additional penalties and interest of $101,054.

     The terms of the Agreement are as follows:

     1)   For the period August 1, 2001 through January 31, 2003, ECMC will pay
          the Municipality of Canovanas $5,000 per week.

     2)   At the end of this eighteen (18) month period, the Municipality can
          decide to request full payment of the remaining balance, $559,450, or
          renegotiate a final twelve (12) month payoff of the balance at $46,621
          per month.

     3)   Should ECMC default at any time on the agreed terms, the Municipality,
          on demand, may declare the remaining balance due.

     4)   To guarantee timely payments, ECMC will provide two (2) performance
          bonds in the amount of $503,732 and $94,886, respectively.

     As of June 12, 2002,  ECMC was in compliance with the provisions of the
Agreement.


                                       15
<PAGE>
     CONSOLIDATION  AND  PRESENTATION

     The consolidated financial statements as of June 30, 2001 and for the six
months ended June 30, 2001 and 2000 are unaudited but include all adjustments
(consisting of normal recurring adjustments) which management considers
necessary for a fair presentation of the consolidated results of operations for
the interim periods. The operating results for the six months ended June 30,
2001 are not necessarily indicative of results for the year. Net losses per unit
are calculated based on weighted average number of Units outstanding.
Outstanding warrants to purchase Units do not have a material dilutive effect on
the calculation of earnings per Unit.

     The preparation of financial statements in conformity with accounting
principles generally accepted in the United States ("GAAP") requires management
to make estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities, if any, 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.

     These unaudited consolidated financial statements have been prepared
pursuant to the rules and regulations of the Securities and Exchange Commission.
Certain information and note disclosures normally included in financial
statements prepared in accordance with GAAP have been condensed or omitted.
While management believes that the disclosures presented are adequate to make
the information not misleading, it is suggested that these financial statements
be read in conjunction with the financial statements and the notes of the
Company included in the Company's Annual Report filed on Form 10-K for the year
ended December 31, 2000.

     The Company consolidates the entities in which it has a controlling
interest. The accompanying consolidated financial statements include the
accounts of the Company and its subsidiaries after eliminating all significant
inter-company transactions.  All of the entities included in the consolidated
financial statements are hereinafter referred to collectively, when practicable,
as the "Company".

     The Company has minority partners in HDA, Galapagos, Equus-Panama and
Equus-Comuneros.  Therefore, the Company recorded minority interest based on the
earnings (losses) of these consolidated subsidiaries that are attributable to
the minority partners, as follows:

<TABLE>
<CAPTION>
                        FOR THE SIX MONTHS ENDED JUNE 30,      FOR THE THREE MONTHS ENDED JUNE 30,
                     --------------------------------------  --------------------------------------
                            2001                2000                2001                2000
                     ------------------  ------------------  ------------------  ------------------
<S>                  <C>                 <C>                 <C>                 <C>
SUBSIDIARY:
  HDA                $         (35,150)  $         (12,090)  $         (18,000)  $         (13,586)
  Galapagos                          -                   -                   -                   -
  Equus-Panama                       -             113,750              65,651              88,003
  Equus-Comuneros             (902,581)           (295,110)           (518,431)             (9,573)
                     ------------------  ------------------  ------------------  ------------------
                     $        (937,731)  $        (193,450)  $        (470,780)  $          64,844
                     ------------------  ------------------  ------------------  ------------------
</TABLE>

     In general, the minority interest is calculated based on the ownership
interest of the minority partners. HDA has a minority partner owning a 1%
interest.   Galapagos' minority partners own a 45% interest.   However, during
the six months ended June 30, 2001 and 2000 the Company did not recognize a
minority interest in Galapagos' losses amounting to $250,867, and $188,054,
respectively, because the minority partners have no legal obligation to fund
losses in excess of their investment.  As of June 30, 2001 the accumulated
losses, not allocated to the minority partners, amount to $2,097,649.
Equus-Panama minority partners own a 49% interest.  Equus-Comuneros minority
partners own a 50% interest.


                                       16
<PAGE>
     CURRENCIES

     The Company consolidates its accounts with Galapagos and Equus-Comuneros
whose functional currency are the Dominican Republic peso and the Colombian
peso, respectively.  The United States dollars ("US$") are also a recording
currency in these countries.  US$ are exchanged into those foreign currencies
("FC$") and vice versa through commercial banks and/or the central banks of the
respective countries.  The Company remeasures the monetary assets and
liabilities of the foreign subsidiaries that were recorded in US$ into the FC$
using the exchange rates in effect at the balance sheet date (the "current
rate") and all other assets and liabilities and capital accounts, at the
historical rates.  The Company then translates the financial statements of the
foreign subsidiaries from FC$ into US$ using the current rates, for all assets
and liabilities, and the average exchange rates prevailing during the year, for
revenues and expenses.

     For the six months ended June 30, 2001 and 2000, net exchange losses
resulting from re - measurement of accounts, together with losses from foreign
currency transactions, amounted to $92,223 and  $235,846 respectively, which
amounts are included as operating expenses.  Accumulated net loss from changes
in exchange rates due to the translation of assets and liabilities of the
foreign subsidiaries are included in partners' deficit and at June 30, 2001 and
2000 amounted to $162,598 and $221,070 respectively.

     The current exchange rates in Dominican Republic as of June 30, 2001 and
2000 were US$1.00 to FC$16.66 and US$1.00 to FC$16.35, respectively.  The
average exchange rates in Dominican Republic prevailing during the six months
ended June 30, 2001 and 2000 were  US$1.00 to FC$16.65 US$1.00 to FC$16.27,
respectively.  The current exchange rate in Colombia as of June 30, 2001and 2000
were US$1.00 to FC$2,305 and $US1.00 to FC$2,139.  The average exchange rate in
Colombia prevailing during the six months ended June 30, 2001 and 2000 were
US$1.00 to FC$2,297 and US$1.00 to FC$2,016.  The Company also consolidates its
accounts with Equus-Panama whose functional currencies are the Panama Balboas
and the US$.  Because these currencies are of equivalent value, there is no
effect attributed to foreign currency transactions of Equus-Panama.


2.   COMMITMENTS AND CONTINGENCIES:

     HORSE OWNERS' AGREEMENTS

     The Company has separate agreements with the Horse Owners' Confederation of
each country. The agreements establish the amount payable to horse owners as
purses. In general, payments to horse owners are based on a percentage of
wagering.

     The Panama contract expires in December 2007.  Commencing with the year
2000, and each year thereafter, there is no longer a "minimum guaranteed
payment" to horse owners, as previously.   However for the year 2000, $4.1
million was paid to the horse owners even though the calculated payment per the
contract was $2.7 million.  The payment of $1.4 million was recorded as an
account receivable from the Horse Owners' Association.     On October 9, 2001,
the Company exchanged its common stock and various claims for 3,000 shares of
preferred stock and at the same time was released from any further liability
under the Panama Horse Owners Agreement.

     The Dominican Republic contract expires in December 2005.  The Colombia
contract expires on December 31, 2009.  It provides for certain minimum
guaranteed payments to horse owners during the first three years $1.2 million in
2001, increased in 2002 and 2003 in accordance with an inflation factor).

     The Puerto Rico horse owners contract expires in July 2010.  Under the
contract, the horse owners are guaranteed minimum earnings of $25,032,000.
ECMC is obligated among other things to pay the horse owners $90,000 annually
for administrative costs and 50% of the principal and interest owed on an


                                       17
<PAGE>
outstanding Confederation loan with a principal balance due of $526,000, plus
accrued interest.  ECMC must also invest $3,000,000 in improvements to the
racetrack during the 10-year term of the contract, as well as provide up to
$2,000,000 of financing for the purchase of horses.   Additional costs incurred
for the six months ended June 30, 2001 related to the new horse owners contract
are included in other expenses.

     On March 16, 2001, an  "Addendum to Contract" was executed by the Horse
Owners Confederation and the Company, whereby the parties agreed to:

     (i)  Increase the number of simulcast races each live race day from three
          (3) to six (6).

     (ii) Place three (3) of the simulcast races before the first live races and
          three (3) after the fifth live race.

    (iii) Include simulcasting of nine (9) to twelve (12) races on Thursday,
          currently a dark day.

     (iv) In consideration of the above, ECMC will pay an additional $1,000,000
          to the Horse Owners Confederation when and if the additional
          simulcasting is approved by the Racing Board

     On June 28, 2001, the Puerto Rico Racing Board granted ECMC the right to
increase the number of simulcast races from the United States from three (3) to
six (6) per live race day. The Order allowed a three (3) month probationary
period commencing July 1, 2001, for ECMC to place three (3) simulcast races
before the first live race and three (3) after the fifth live race.

     The Racing Board declined the simulcasting of races during the probationary
period on Thursday's, a day that currently holds no live races.

     On October 16, 2001, following a hearing, the Racing Board suspended,
effective October 22,  2001, all simulcasting permitted during the probationary
period.  Since no final approval was obtained from the Racing Board for the
simulcasting of races, ECMC is no longer obligated to pay the additional
$1,000,000 to the Horse Owners Confederation.

     Simulcasting of special events such as the Breeders' Cup, Kentucky Derby
and the Preakness as well as the Caribbean Classic and the Confraternity Classic
is still permitted.   However,  ECMC will perform a cost/benefit analysis to
determine if the limited simulcasting is economically viable per event.

     WAGERING SERVICES AGREEMENTS

     The Company has separate agreements with Autotote Systems, Inc.
("Autotote") and United Tote Company ("United Tote") to provide wagering
services, software and equipment to each racetrack, necessary for the operation
of the off-track betting system. Payments under these contracts are summarized
as follows:

<TABLE>
<CAPTION>
1.   AUTOTOTE
     --------

                          EL COMANDANTE    V CENTENARIO    LOS COMUNEROS
                         ---------------  --------------  -----------------
<S>                      <C>              <C>             <C>
Expiration date            March 2004       March 2004      January 2006
Cost of services, as a
 percentage of wagering          0.65%          0.65%(a)           1.20%
Minimum amount per year  $    800,800     $  200,000     $           -  (b)
</TABLE>


                                       18
<PAGE>
     (a)  Galapagos also receives services from Autotote for the distribution
          system of the electronic lottery. Fees to Autotote are 2% of gross
          sales at lottery agencies and 1% of gross sales at OTB agencies. See
          note 8, "Legal Proceedings".

     (b)  Based on a minimum monthly payment of $39,795 for 2001, increased each
          subsequent year, up to $50,240 in 2005. For the year 2000 the minimum
          payment was $450,480.


2.   UNITED TOTE
     -----------

     In August 2000 the Company obtained a $2.5 million unsecured loan at 3%
over prime due in December 29, 2004.    Principal and interest are to be paid
from .25% of the wagering handle for the first four (4) years of the service
contract with United Tote.

<TABLE>
<CAPTION>
                          EL COMANDANTE    V CENTENARIO    LOS COMUNEROS
                          --------------  --------------  --------------
<S>                       <C>             <C>             <C>
Commencement date (a)      March 2004      March 2004      August 2000
Expiration date           December 2010   December 2010   December 2010
Cost of services, as a
 percentage of wagering        (b)             (b)             (b)
Minimum amount per year        n/a             n/a             n/a
Additional fees (d)            n/a             n/a             n/a
</TABLE>


     (a) The services agreement with United Tote specifies that the commencement
     date shall be the earlier of the date that the agreement with Autotote
     expires or the date the agreement is properly terminated. See note 2. (1.c)
     above for the termination of the Autotote agreement with Los Comuneros.

<TABLE>
<CAPTION>
     (b) Total Handle in a contract year   % of Total Handle received by United Tote
     ------------------------------------  -----------------------------------------
<C>                                        <S>
     $ 350,000,000                         0.95% in the first four (4) years and .7%
                                           thereafter, see note (e) below.

     350,000,001 to $500,000,000           0.5% of Total Handle

     500,000,001 and over                  0.4% of Total Handle
</TABLE>


     (c)  Pursuant to the service contract, there are minimum annual guaranteed
     wagering handles for the twelve months from the date that totalizator
     service is first initiated by United Tote at two or more existing or new
     racetracks, and continues in twelve months intervals subsequent to that
     date for the remaining term of the contract.

     (d)  The Company will also pay United Tote a weekly fee of $2,625 as a
     "central hub allocation fee" until service by United Tote is furnished to
     two or more existing or new racetracks.

     (e)  During the first four (4) years, a fee of 0.25% of the handle will be
     applied to principal and interest on the unsecured note of $2.5 million due
     December 29, 2004.


     OTHER LONG-TERM AGREEMENTS

     The Company's subsidiaries have also entered in other various long-term
contracts that are essential for the operation of its racetracks. ECMC has an
agreement with S&E Network, Inc. (S&E") that requires the purchase of television


                                       19
<PAGE>
time for an annual minimum of 910 hours at the rate of $725 (effective February
1997) per hour, adjusted annually by the Consumer Price Index ("CPI"), or at the
rate of $900 per hour, also subject to CPI adjustments for television time after
7:00 PM. The contract is non-cancelable by either party during the initial term,
which expires in December 2006. The term is automatically extended for
successive 5 years periods by request of ECMC. During an extended term, the
contract can be canceled by S&E, upon payment of liquidated damages of $2
million plus CPI after January 1997.



3.  FIRST MORTGAGE NOTES:

     On December 15, 1993, pursuant to a private offering, (i) El Comandante
Capital Corp. ("ECCC"), a single-purpose wholly owned subsidiary of HDA, issued
first mortgage notes in the aggregate principal amount of $68 million (the
"First Mortgage Notes") under an indenture (the "Indenture") between ECCC, HDA
and Banco Popular de Puerto Rico, as trustee  (the  "Trustee"), and (ii) Housing
Development Associates Management Company ("HDAMC") issued Warrants to purchase
68,000 shares of Class A Common Stock of HDAMC.  In March 1995, the Warrants
automatically became exercisable to purchase an aggregate of 1,205,232 units of
the Company from HDAMC.  Upon issuance of the Warrants, HDA recorded note
discount of $2,040,000 equal to the fair value of the Warrants.  Such note
discount is being amortized using the interest method over the term of the First
Mortgage Notes.

     The First Mortgage Notes mature on December 15, 2003 and bear interest at
11.75% payable semiannually.  Payment of the First Mortgage Notes is guaranteed
by HDA.  The First Mortgage Notes are secured by a first mortgage on El
Comandante and by certain other collateral which together encompass a lien on
(i) the fee interests of HDA in the land and fixtures comprising El Comandante,
(ii) all related equipment, structures, machinery and other property, including
intangible property, ancillary to the operations of El Comandante, and (iii)
substantially all of the other assets and property of HDA, including the capital
stock of ECCC owned by HDA.

     During the past several years HDA has made early redemptions of First
Mortgage Notes in connection with certain transactions.  The Company has also
purchased in the open market First Mortgage Notes which the Company intends to
hold until maturity in cancellation of required partial redemptions in 2000 and
2001, as explained below.  Following is a summary of these transactions:

<TABLE>
<CAPTION>
TYPE OF TRANSACTION              DATE      VALUE      JUNE 30, 2001    DISCOUNT
------------------------------  ------  -----------  ---------------  -----------
<S>                             <C>     <C>          <C>              <C>
Redemption                      Mar-97  $   737,000  $            -   $        -
Redemption                      Sep-97    2,500,000               -     (250,000)
Purchase in open market         Dec-98    7,500,000       7,500,000    1,000,000
Redemption, reduced by amount
  of notes held by the Company  Jan-99    2,620,000        (380,000)    (262,000)
Purchase in open market         May-99      189,000         189,000       22,680
Redemption, reduced by amount
  of notes held by the Company  Jan-01      563,000        (563,000)           -
                                        -----------  ---------------  -----------
                                        $14,109,000  $    6,746,000   $  510,680
                                        -----------  ---------------  -----------
</TABLE>


     In  connection  with these transactions, the Company wrote-off a portion of
the  note  discount  and  deferred  financing  costs.


                                       20
<PAGE>
     ECCC is required to partially redeem First Mortgage Notes commencing on
December 15, 2000.  The stated maturities of the First Mortgage Notes, reduced
by prior redemptions, are as follows (in thousands):

<TABLE>
<CAPTION>
          DUE DURING THE TWELVE MONTHS   GROSS    PURCHASED IN     NET
              ENDING DECEMBER 31,        AMOUNT    OPEN MARKET    AMOUNT
          ----------------------------  --------  -------------  --------
<S>                                     <C>       <C>            <C>
          2001                           10,200           6,746    3,454
          2002                           10,200               -   10,200
          2003                           40,800               -   40,800
                                        --------  -------------  --------
                                         61,200           6,746   54,454
          Less - discount                  (577)             77     (654)
                                        --------  -------------  --------
                                        $60,623   $       6,823  $53,800
                                        --------  -------------  --------
</TABLE>

     On July 13, 2001, Kempt Corporation, a Puerto Rico corporation wholly owned
by  Wilson  Securities  Corporation,  an entity controlled by the Wilson family,
purchased  seven  (7)  million  shares  of  Equus  Entertainment  Class  A,  12%
cumulative  preferred  stock,  $1.00  par  value.

     Equus  Entertainment  then  applied  $3.8  million  to  offset the advances
against  dividends  made  to  the  Company.

     Equus  Entertainment  reimbursed  the  El  Comandante  Group (consisting of
Housing  Development  Associates  S.E., El Comandante Capital Corporation and El
Comandante  Management  Company LLC)  for all advances made by the El Comandante
Group  to  affiliate  companies.  Equus  Entertainment  also  purchased  the
inter-company  receivables  of  the  El  Comandante  Group  that  were  due from
affiliate  companies.

     The  Net  proceeds  of  $6,882,037  were  used  to  pay  the  following:

     1)   The June 14, 2001 interest payment on the First Mortgage Notes of
          $3,595,500 plus $32,408 of penalty interest for the period June 15,
          2001 through July 13, 2001.

     2)   Payoff of $2,604,747 HDA Note payable to FirstBank together with
          interest accrued through July 13, 2001, of $14,370.

     3)   Payoff of $500,000 HDA line of credit with FirstBank together with
          interest accrued through July 13, 2001, of $2,903.

     4)   Advances to consolidated affiliates of $132,108 to cover operational
          expenses.


     On December 15, 2001 the Company failed to pay interest of $3.6 million and
principal of $10.2 million on the first Mortgage Notes. This constitutes a
default under the Indenture. In addition, defaults have occurred in the
performance or breach of covenants and/or warranties of HDA and/or ECC. There
have been discussions with representatives of the Government Development Bank
for Puerto Rico and other government officials to explore ways to obtain funding
to bring the interest and principal current on the Notes.

     It is not expected that the Company will be able to meet the mandatory
maturity dates of the First Mortgage Notes as set forth above without obtaining
additional financing from lending institutions or investors. Although the
Company had had discussions with possible lenders and investors, it has received
no commitments or other form of assurance that such financing will be


                                       21
<PAGE>
forthcoming. Absent such financing, the Company will not be able to meet its
long-term commitments. The Trustee of the First Mortgage Notes had advised the
Company's legal counsel that the bondholders will demand payment in full of the
First Mortgage Notes, as provided by the Indenture.

     HDA may also redeem First Mortgage Notes at the following redemption prices
(expressed  as  percentages  of  principal  amount),  in each case together with
accrued  and  unpaid  interest:

          DURING THE 12 MONTH PERIOD
          BEGINNING ON DECEMBER 15,
          --------------------------
                    2000                        101.50%
                    2001                        100.00%

     HDA is required to purchase First Mortgage Notes, at face value, to the
extent that HDA has accumulated excess cash flow, asset sales with net proceeds
in excess of $5 million (to the extent these proceeds are not invested in HDA's
racing business within a year), or a total taking or casualty, or in the event
of a change of control of HDA.

     The Indenture contains certain covenants, one of which restricts the amount
of distributions by HDA to its partners, including the Company.  Permitted
distributions are limited to approximately 48% of HDA's consolidated net
earnings.  In connection with certain approvals required from note holders, HDA
agreed to temporarily reduce these distributions by 17%.  HDA is permitted to
make additional cash distributions to partners and other Restricted Payments, as
defined under the Indenture, equal to 44.25% of the excess of HDA's cumulative
consolidated net income after December 31, 1993 over the cumulative amount of
the 48% Distributions, provided that HDA meets a certain minimum debt coverage
ratio.  HDA has not met this debt coverage ratio.  As of June 30, 2001, HDA has
advanced to the Company approximately $3.8 million against its allowable future
distributions of profits, which is not in conformity with the terms of the
Indenture.

     Management repaid these advances with the proceeds of a private placement
offering of Equus Entertainment preferred stock on July 13, 2001.  See Note 5,
"Related Party Transactions".


4.   BONDS AND NOTES PAYABLE AND CAPITAL LEASES:

     The  Company's  outstanding  notes  payable  consist  of  the  following:

<TABLE>
<CAPTION>
                                                                        BALANCE AT
                                           MATURITY   INTEREST    JUNE 30,    DECEMBER 31,
BORROWER               DESCRIPTION           DATE       RATE        2001          2000
-------------------  ---------------       ---------  ---------  -----------  -------------
<S>                  <C>              <C>  <C>        <C>        <C>          <C>
HDA                  Note payable     (a)  15-Dec-01    P+1.00%  $ 3,000,000  $   3,000,000
HDA                  Line of credit   (b)  15-Dec-01    P+1.00%      500,000        500,000
Equus-Panama         Term loan        (c)  25-Apr-00     10.75%            -              -
Equus-Panama         Line of credit   (c)   various      10.75%            -        280,349
Equus-Comuneros      Term loans       (d)   various    variable     115,387         269,612
Equus Gaming         Note payable     (e)  29-Dec-04    P+3.00%    2,500,000      2,500,000
Equus Entertainment  Promissory Note  (f)  On Demand    P+1.00%      100,000              -
Equus Entertainment  Promissory Note  (g)  On Demand    P+1.00%       50,000              -
Equus Entertainment  Promissory Note  (h)  On Demand    P+1.00%      120,000              -
Equus Entertainment  Promissory Note  (i)  On Demand    P+1.00%      250,025              -
Equus Entertainment  Promissory Note  (j)  On Demand    P+1.00%      300,000              -
Equus Entertainment  Promissory Note  (k)  On Demand    P+1.00%      205,000              -
Equus Entertainment  Promissory Note  (l)  On Demand    P+1.00%    1,300,000              -
                                                                 -----------  -------------
                                                                 $ 8,440,412  $   6,549,961
                                                                 -----------  -------------
</TABLE>

     At June 30, 2001 and December 31, 2000, the prime rate (P) was 6.75% and
9.50%, respectively.


                                       22
<PAGE>
(a)  Considered Refinancing Indebtedness under the terms of the Indenture.
     Collateralized by First Mortgage Notes purchased in the open market (see
     Note 3). Payable in quarterly installments commencing on March 31, 2000.
     Paid in full July 13, 2001. See Note 5 "Related Party Transactions".

(b)  Revolving line of credit available until December 15, 2001, for its
     operational needs. Interest is calculated on balances outstanding at a rate
     equivalent to one point over prime rate. Principal is due upon maturity on
     December 15, 2001. Paid in full July 13, 2001. See Note 5 "Related Party
     Transactions".

(c)  Available to finance loans to Panama horse owners for the acquisition of
     horses. Payable in equal monthly installments, principal and interest, with
     various maturity dates from June, 2001 to November, 2001. On October 9,
     2001, the Company entered into a stock purchase agreement whereby in
     exchange for release from all liabilities related to the operation of Equus
     Entertainment de Panama, the Company gave to its minority partner, Wall
     Street Securities, its 204,000 shares of common stock which represented 51%
     of the total issued and outstanding shares of Equus Entertainment de
     Panama. At the same time, the Company was released from any further
     liability under this line of credit for horse financing.

(d)  Collateralized by a certificate of deposit for $140,000, which is included
     in the accompanying balance sheet as of June 30, 2001 and December 31, 2000
     as restricted cash. Management is in the process of renegotiating the terms
     of these financial obligations. Interest rates range from 7% to 14.01% over
     Colombia's Fixed Term Deposit (FTD) rate. FTD at June 30, 2001 was 12.75%.

(e)  In August 2000 the Company obtained a $2.5 million unsecured loan at 3%
     over prime due December 29, 2004. Principal and interest payments are to be
     paid from .25% of the wagering handle for the first four (4) years of the
     service contract with United Tote as outlined in Note 2 of the consolidated
     financial statements, "Wagering Service Agreements".

(f)  On March 21, 2001, the Company received $100,000 from El Monte Properties,
     an entity controlled by the Wilson family which also owns a controlling
     interest in the Company under an unsecured promissory note payable on
     demand with interest accruing at 1% over prime. The proceeds were used to
     purchase El Comandante receivables due from non-Puerto Rico affiliates and
     working capital

(g)  On March 21, 2001, the Company received $50,000 from Santa Maria
     Associates, an entity controlled by the Wilson family which also owns a
     controlling interest in the Company under an unsecured promissory note
     payable on demand with interest accruing at 1% over prime. The proceeds
     were used to purchase El Comandante receivables due from non-Puerto Rico
     affiliates and working capital.

(h)  On April 6, 2001, the Company received $120,000 from El Monte Properties,
     an entity controlled by the Wilson family which also owns a controlling
     interest in the Company, under an unsecured promissory note payable on
     demand with interest accruing at 1% over prime, payable on demand by El
     Monte Properties, controlled by the Wilson family which also owns a
     controlling interest in the Company. The proceeds were used to purchase El
     Comandante receivables due from non-Puerto Rico affiliates and working
     capital.

(i)  On April 26, 2001, the Company received $250,025 from Insular Properties,
     an entity controlled by the Wilson family which also owns a controlling
     interest in the Company, under an unsecured promissory note payable on
     demand with interest accruing at 1% over prime. The proceeds were used to
     purchase El Comandante receivables due from non-Puerto Rico affiliates and
     working capital.


                                       23
<PAGE>
(j)  On April 30, 2001, the Company received $300,000 from Insular Properties,
     an entity controlled by the Wilson family which also owns a controlling
     interest in the Company, under an unsecured promissory note payable on
     demand with interest accruing at 1% over prime. The proceeds were used to
     purchase El Comandante receivables due from non-Puerto Rico affiliates and
     working capital.

(k)  On May 11, 2001, the Company received $205,000 from Insular Properties, an
     entity controlled by the Wilson family which also owns a controlling
     interest in the Company under an unsecured promissory note payable on
     demand with interest accruing at 1% over prime. The proceeds were used to
     purchase El Comandante receivables due from non-Puerto Rico affiliates and
     working capital.

(l)  On June 14, 2001, the Company received $1,300,000 from El Monte Properties,
     an entity controlled by the Wilson family which also owns a controlling
     interest in the Company, under an unsecured promissory note payable on
     demand with interest accruing at 1% over prime. The proceeds were used to
     purchase El Comandante receivables due from non-Puerto Rico affiliates and
     working capital.

(m)  The Company also guarantees a $250,000 loan by the operator of the
     restaurant at Presidente Remon. The proceeds of this loan were used by
     Equus-Panama to finance improvements to the restaurant. On October 9, 2001,
     the Company entered into a stock purchase agreement whereby in exchange for
     release from all liabilities related to the operation of Equus
     Entertainment de Panama, the Company gave to its minority partner, Wall
     Street Securities, its 204,000 shares of common stock which represented 51%
     of the total issued and outstanding shares of Equus Entertainment de
     Panama. At the same time, the Company was released from any further
     liability under this loan guarantee.

(n)  In October 1998, Equus-Panama issued $4 million in unsecured bonds pursuant
     to a public offering. Interest is payable quarterly at the rate of 11% per
     annum. The bonds may be redeemed by Equus-Panama prior to June 30, 2001 at
     a redemption price of 102% of the principal amount and thereafter at par.
     Under the loan documents there are certain restrictions that limit the
     capacity of Equus-Panama to incur indebtedness and pay dividends to
     shareholders. On October 9, 2001, the Company entered into a stock purchase
     agreement whereby in exchange for release from all liabilities related to
     the operation of Equus Entertainment de Panama, the Company gave to its
     minority partner, Wall Street Securities, its 204,000 shares of common
     stock which represented 51% of the total issued and outstanding shares of
     Equus Entertainment de Panama. At the same time, the Company was released
     from any further liability under this Bond Indenture.


     The following table summarizes future minimum payments on capital leases,
notes payable and bonds of the Company and its consolidated subsidiaries:


                                       24
<PAGE>
DUE DURING THE TWELVE     CAPITAL       NOTES
MONTHS ENDING JUNE 30,    LEASES       PAYABLE
----------------------  -----------  -----------
         2002           $  762,735   $6,185,592
         2003              596,439            -
         2004              447,489    2,500,000
         2005               79,637            -
         2006                    -            -
                        -----------  -----------
                         1,886,300    8,685,592
  Imputed interest        (249,010)    (245,180)
                        -----------  -----------
                        $1,637,290   $8,440,412
                        -----------  -----------

5.   RELATED PARTY TRANSACTIONS:

     The following is a summary of amounts accrued for services rendered by or
from certain related parties, namely, EMC, American Community Properties Trust
("ACPT") and Interstate General Company L.P. ("IGC") during the six and three
months ended June 30, 2001 and 2000:

<TABLE>
<CAPTION>

                                               SIX MONTHS ENDED JUNE 30,        THREE MONTHS ENDED JUNE 30,
                                           --------------------------------  --------------------------------
ENTITY             NATURE OF SERVICE            2001             2000             2001             2000
------------  ---------------------------  ---------------  ---------------  ---------------  ---------------
<S>           <C>                          <C>              <C>              <C>              <C>
Rendered by:
  ACPT        Support agreement            $           800  $        16,200  $           200  $         8,100
  ACPT        Rent office space                     14,000           21,000            3,500           10,500
  EMC         Directors' fees                       45,500           43,500           20,000           18,000
  IGC         Services of James J. Wilson          207,628           67,500          113,151           33,750
                                           ---------------  ---------------  ---------------  ---------------
                                           $       267,928  $       148,200  $       136,851  $        70,350
                                           ===============  ===============  ===============  ===============
</TABLE>


     On July 13, 2001, Kempt Corporation, a Puerto Rico corporation wholly owned
by  Wilson  Securities  Corporation,  an entity controlled by the Wilson family,
purchased  seven  (7)  million  shares  of  Equus  Entertainment  Class  A,  12%
cumulative  preferred  stock,  $1.00  par  value.

     Equus  Entertainment  then  applied  $3.8  million  to  offset the advances
against  dividends  made  to  the  Company.

     Equus  Entertainment  reimbursed  the  El  Comandante  Group (consisting of
Housing  Development  Associates  S.E., El Comandante Capital Corporation and El
Comandante  Management  Company  LLC) for all advances made by the El Comandante
Group  to  affiliate  companies.  Equus  Entertainment  also  purchased  the
inter-company  receivables  of  the  El  Comandante  Group  that  were  due from
affiliate  companies.

     The Net proceeds of $6,882,037 were used to pay the following:

     1.   The June 14, 2001 interest payment on the First Mortgage Notes of
          $3,595,500 plus $32,408 of penalty interest for the period June 15,
          2001 through July 13, 2001.

     2.   Payoff of $2,604,747 HDA Note payable to FirstBank together with
          interest accrued through July 13, 2001, of $14,370.

     3.   Payoff of $500,000 HDA line of credit with FirstBank together with
          interest accrued through July 13, 2001 of $2,903.

     4.   Advances to consolidated affiliates of $132,108 to cover operational
          expenses.


                                       25
<PAGE>
     During  the  first  six  (6)  months  of  2001 the Company executed various
unsecured  promissory  notes  with several of its affiliates, see Note 4, "Bonds
and  Notes  Payable  and  Capital  Leases"


6.   FAIR VALUE OF FINANCIAL INSTRUMENTS:

     Based on quoted market prices, the fair value of the First Mortgage Notes
as of June 30, 2001 was approximately $42,798,100 (as compared with a carrying
value of $53,799,837).  The carrying value of notes payable, capital leases and
notes receivable approximates fair value. These obligations provide for variable
rate interest. The carrying value of accounts receivable and accounts payable
approximates fair value due to their short maturities.


7.   SEGMENT INFORMATION:

     The Company has identified five reportable segments, based on geographical
considerations:  Puerto Rico, Dominican Republic, Colombia, Panama and Uruguay.
The accounting policies of the segments are the same as those described in the
summary of accounting policies.  The Company evaluates performance based on
profit or loss before income taxes, not including nonrecurring gains and losses
and foreign exchange gains and losses.  The following presents the segment
information for the six and three months ended June 30, 2001 and 2000 (in
thousands).


                                       26
<PAGE>
<TABLE>
<CAPTION>
                                  PUERTO    DOMINICAN
2001 - SIX MONTHS                  RICO     REPUBLIC     COLOMBIA    PANAMA    URUGUAY    TOTAL
                                 --------  -----------  ----------  --------  ---------  --------
<S>                              <C>       <C>          <C>         <C>       <C>        <C>
Commissions on wagering          $24,077   $    1,756   $     941   $     -   $      -   $26,774
Total revenues                    24,611        2,379         816         -          6    27,812
Financial expenses                 4,852          105         327         -          8     5,292
Depreciation and amortization      1,543          179         168         -          -     1,890
Earnings (Loss) before income                                                                  -
   taxes and minority interest    (6,939)        (557)     (1,787)        -       (663)   (9,946)
Capital improvements (net)           410          163         (14)        -          -       559
Total assets                      57,894        2,533       3,340         -          -    63,767

2000 - SIX MONTHS
Commissions on wagering          $25,616   $    1,618   $     730   $ 4,464   $      -   $32,428
Total revenues                    26,758        2,042         839     4,799          -    34,438
Financial expenses                 4,421           15         160       306          -     4,902
Depreciation and amortization      1,326          172         109       309          -     1,916
Earnings (Loss) before income                                                                  -
   taxes and minority interest    (1,295)        (418)     (1,328)      232          -    (2,809)
Capital improvements (net)         1,289           45        (748)      173          -       759
Total assets                      54,332        1,865       5,568     9,566          -    71,331

2001 - QUARTER
Commissions on wagering          $11,555   $      820   $     460   $(2,051)  $      -   $10,784
Total revenues                    11,225        1,292         380    (2,099)         -    10,798
Financial expenses                 2,121          101         272      (139)         -     2,355
Depreciation and amortization        813           92          94      (159)         -       840
Earnings (Loss) before income                                                                  -
   taxes and minority interest    (4,190)        (367)     (1,028)      134       (131)   (5,582)
Capital improvements (net)           414           96        (254)      (31)         -       225

2000 - QUARTER
Commissions on wagering          $12,487   $      833   $     365   $ 2,228   $      -   $15,913
Total revenues                    12,862        1,043         426     2,484          -    16,815
Financial expenses                 2,217            7          79       154          -     2,457
Depreciation and amortization        665           92          48       155          -       960
Earnings (Loss) before income                                                                  -
   taxes and minority interest    (1,395)        (119)       (764)      180          -    (2,098)
Capital improvements (net)           714           10        (786)      129          -        67
</TABLE>


8.   LEGAL PROCEEDINGS:

     The Company and/or where applicable, its subsidiaries, had a case in
arbitration at the American Arbitration Association in defense of and against
Autotote, involving all the racetracks in which Equus has an ownership interest.
Autotote filed a claim against El Comandante for unpaid service fees of $186,415
plus interest.   El Comandante agreed to pay this amount but filed a
counterclaim against Autotote.

     On July 27, 2001 and November 21,2001, American Arbitration Association
rendered its award decisions.  The following is a summary of the awards by
racetrack:

     EL COMANDANTE, PUERTO RICO

     1.   El Comandante is to pay Autotote the principal amount of $355,496 in
          unpaid service fees together with interest of $32,051, accrued through
          April 1, 2001. Additional interest will be assessed at a rate of 24%
          per annum for any outstanding principal balance since April 1, 2001
          until payment.


                                       27
<PAGE>
     2.   El Comandante shall reimburse Autotote for costs incurred of $132,500.

     3.   As of June 30, 2001, the outstanding principal balance was $327,893
          and accrued interest was $504.


     EQUUS - PANAMA

     1.   Equus - Panama is to pay Autotote the principal amount of $250,474 in
          unpaid service fees together with interest of $45,233 accrued through
          June 30, 2001. Additional interest will be assessed at a rate of 24%
          per annum for any outstanding principal balance since June 30, 2001
          until payment.

     2.   Equus-Panama shall reimburse Autotote for costs incurred of $25,000.

     On October 9, 2001, the Company entered into a stock purchase agreement
whereby in exchange for release from all liabilities related to the operation of
Equus Entertainment de Panama, the Company gave to its minority partner, Wall
Street Securities, its 204,000 shares of common stock which represented 51% of
the total issued and outstanding shares of Equus Entertainment de Panama. At the
same time, the Company was released from any further liability under this
Autotote Equus-Entertainment arbitration award.


EQUUS - COMUNEROS

     1.   Equus-Comuneros is to pay Autotote the principal amount of $584,262 in
          unpaid service fees as of April 23, 2001, together with interest of
          $218,059 accrued through June 30, 2001. Additional interest will be
          assessed at a rate of 24% per annum for any outstanding principal
          balance since June 30, 2001 until payment.

     2.   Equus-Comuneros shall reimburse Autotote costs incurred of $132,500.


GALAPAGOS

     1.   Galapagos owes Autotote the principal amount of $230,578 as of April
          23, 2001, together with interest of $120,308 through November 21,
          2001, the date of the award.

     2.   For breach of good faith and fair dealings, Autotote owes Galapagos
          $800,000, plus interest at the rate of seven (7) percent per annum
          from November 21, 2001 to the date of payment.

     3.   The parties have no further obligations to one another with respect to
          lottery operations in the Dominican Republic.

     4.   The parties shall bear equally the cost of arbitration which amount to
          $44,903 each. Any excess funds on deposit shall be reimbursed to the
          paying parties in equal amounts.

     5.   Autotote shall pay Galapagos $150,000 in reimbursement fees incurred
          in the proceedings.

     6.   Awards will be offset and the net amount owed to Galapagos of
          approximately $600,000 will accrue interest at the rate of seven (7)
          percent per annum from November 21, 2001 until paid.


                                       28
<PAGE>
     Each entity involved in the arbitration sustains individually the
consequences of the arbiters' final award and there are no performance
guarantees by any other entity including Equus Gaming Company L.P., the parent
company.

     Costs incurred by the Company in pursuing the Arbitration with Autotote to
date total $574,042 and have been allocated to each participating entity in the
same proportion that the arbiters awarded the costs incurred by Autotote to each
entity.

     On August 18, 2001, ECMC executed a Closing Agreement (the "Agreement")
with the Municipality of Canovanas whereby ECMC settled its longstanding dispute
over the payment of the Volume of Business Tax assessed by the municipality, see
Note 1, "Government Matters".

     Certain  of the Company's subsidiaries are presently named as defendants in
various  lawsuits and might be subject to other claims arising out of the normal
business  operations.  Management, based in part upon advice from legal counsel,
believes  that  the  results  of  such  actions will not have a material adverse
impact  on  the  Company's  financial  position  or  results  of  operations.


                                       29
<PAGE>
ITEM 2.   MANAGEMENT'S  DISCUSSION  AND  ANALYSIS  OF  FINANCIAL  CONDITION AND
          RESULTS  OF  OPERATIONS

     The Company's operations consist principally of its interests in
thoroughbred horse race tracks in four countries, each of which is owned and/or
operated by a subsidiary:  (i) El Comandante in Puerto Rico, owned by Housing
Development Associates S.E. ("HDA") and operated since January 1, 1998 by El
Comandante Management Company, LLC ("ECMC"), (ii) V Centenario in the Dominican
Republic, operated since April 1995 by Galapagos S.A., ("Galapagos"), (iii)
Presidente Remon in Panama, operated since January 1, 1998 by Equus
Entertainment de Panama, S.A. ("Equus-Panama") and  (iv) Los Comuneros in
Medellin, Colombia, owned and operated since early 1999 by Equus Comuneros, S.A.
("Equus-Comuneros").

     The  following discussion compares the results of operations of the Company
for  three  and six months ended June 30,2001 with the results for the three and
six  months  ended  June  30,  2000.


                              RESULTS OF OPERATIONS

     QUARTER AND SIX MONTHS ENDED JUNE 30, 2001 COMPARED TO QUARTER AND SIX
     ----------------------------------------------------------------------
                           MONTHS ENDED JUNE 30, 2000
                           --------------------------

REVENUES

     Consolidated Revenues decreased in the second quarter of 2001 by
$6,018,000, or (35.8%), as compared to the same quarter in 2000.  During the six
months ended June 30, 2001, revenues decreased $6,626,000, (19.2%), from the
same period in 2000.  This decrease was primarily attributable to the decrease
in commissions at El Comandante, as explained below, and the loss of revenues
from lottery services at Galapagos, as explained below.

     COMMISSIONS ON WAGERING

     Commissions on wagering decreased by  $5,128,000, (32.2%) to $10,784,000
for the second quarter ended June 30, 2001 as compared to $15,912,000 in the
second quarter of 2000. During the six months ended June 30, 2001, commissions
on wagering decreased $5,653,000, (17.4%), to $26,775,000 from $32,428,000 in
the same period for 2000. The decrease in commissions was attributable to the
following operations: El Comandante $(1,539,000), and Panama $(4,464,000).
However, the Colombia and Dominican Republic operations reflect an increase of
$211,000 and $138,000 respectively.

     During contract negotiations in January 2000, the Puerto Rico horse owners
cancelled their prior approval of simulcast of live races from Puerto Rico to
the Dominican Republic.  In February 11, 2000  the Racing Board reversed this
action and simulcasting of races was immediately resumed.  This cancellation had
an adverse economic impact on commissions on wagering in the Dominican Republic
and Puerto Rico for the three months ended March 31, 2000.

     PUERTO RICO.  Commissions on wagering at El Comandante decreased $932,000,
(7.5%), to $11,555,000 in the second quarter of 2001 as compared to $12,487,000
in the second quarter of 2000.  During the six months ended June 30, 2001,
commissions on wagering decreased $1,539,000, (6.0%), to $24,077,000 as compared
to  $25,616,000 for the six months ended June 30, 2000.  The decrease in
commissions was attributable to:

     (a)  Commissions from Live Racing declined $3.1 million as a result of
          wagering decline from short fields, integrity of the races as reported
          by the media and a shift in wagering from the "Exotic" bets to the
          "Win/Place" bets (which have a lower commission takeout).


                                       30
<PAGE>
     (b)  Offsetting the decrease, commissions from Simulcasting -In from the
          United States resulted in an added $1.4 million.

     (c)  Commission from Simulcasting out increased $65 thousand because
          Simulcast to Galapagos was for the entire period in 2001 whereas in
          2000 it was delayed until February 11, 2000 and simulcasting to Panama
          commenced March, 2001.


     PANAMA.     On October 9, 2001, the Company entered into a stock purchase
agreement whereby in exchange for release from all liabilities related to the
operation of Equus Entertainment de Panama, the Company gave to its minority
partner, Wall Street Securities, its 204,000 shares of common stock which
represented 51% of the total issued and outstanding shares of Equus
Entertainment de Panama.  Therefore, no revenues are reflected in 2001.


     DOMINICAN REPUBLIC. Commissions on wagering at V Centenario ("Galapagos")
decreased by $13,000 (1.6%) to $820,000 in the second quarter of 2001 as
compared to $833,000 in the second quarter of 2000. During the six months ended
June 30, 2001, commissions on wagering increased $138,000, (8.5%), to $1,756,000
as compared to $1,618,000 for the six months ended June 30, 2000. The increase
was primarily attributable to:

     (a)  The fact that for the first 1 1/2 months of 2000 there was no
          simulcasting from El Comandante race track.

     (b)  During the first six (6) months of 2000, commissions earned were
          shared equally with the horse owners. This practice was discontinued
          effective July 1, 2000.

     COLOMBIA.  Commissions on wagering at Comuneros S.A. increased by $95,000
(26.0%) to $460,000 in the second quarter of 2001 as compared to $365,000 in the
second quarter of 2000. During the six months ended June 30, 2001, commissions
on wagering increased $211,000, (28.9%), to $941,000 as compared to $730,000 for
the six months ended June 30, 2000.  This increase was primarily attributable to
fifty-nine  (59) additional race days for the six months ended June 30, 2001.

     NET REVENUES FROM LOTTERY SERVICES

     Net revenues from lottery services by Galapagos in the Dominican Republic
for the three and six months ended June 30, 2001 decreased by $62,000, (100%)
and $170,000 (100%), respectively, as compared to the same periods in 2000.

     Since June 30, 2000, Autotote has provided services directly to the Lottery
Operations [Dominican International Electronic Lottery, Inc. (LEIDSA)] and
refused to pay Galapagos service fees under its service contract.  The Company
subsequently entered into arbitration proceeds with Autotote regarding this
issue.  See note 8,  "Legal Proceedings".

     OTHER REVENUES

     Other revenues during the three and the six months ended June 30, 2001
increased by  $502,000, 75.9% and $527,000, 31.8%, respectively, as compared to
the same period in 2000.


                                       31
<PAGE>
EXPENSES

     For the reasons set forth below, total expenses during the three and six
months ended June 30, 2001 decreased by $2,532,000, (13.4%) and  increased by
$513,000, 1.4%, respectively, as compared to the same period in 2000.

     PAYMENTS TO HORSE OWNERS

     Payments of purses to horse owners during the three and the six months
ended June 30, 2001 decreased by $1,624,000 (21.2%) and $1,209,000 (7.7%),
respectively, as compared to the same period in 2000.  This was essentially due
to the provisions of the respective horse owner contracts and/or Government
Racing Board orders that provided additional payments to horse owners from
sources other than purses.

     Under El Comandante  contract with horse owners, the horse owners are
guaranteed minimum earnings of $25,032,000 for 2000 and 2001.  ECMC is obligated
among other items to pay the horse owners $90,000 annually for administrative
costs and 50% of the principal and interest owed on an outstanding horse owners
loan with a principal balance due of $526,000, plus accrued interest.  ECMC must
also invest $3,000,000 in improvements to the racetrack during the 10-year term
of the contract, as well as provide $2,000,000 of financing for the purchase of
horses.

     On March 16, 2001 an "Addendum to Contract" was executed by the Horse
Owners' Confederation and the Company, whereby the parties jointly agreed to:

     (i)  Increase the number of simulcast races each live race day from three
          (3) to six (6).

     (ii) Place three (3) of the simulcast races before the first live race and
          place three (3) intermingled races after the fifth live race;.

    (iii) Include simulcasting of nine (9) to twelve (12) races on Thursdays of
          each week, a day that currently holds no live races.

     (iv) In consideration for the above items, ECMC will pay an additional
          $1,000,000 to the Horse owners Confederation if approved by the Racing
          Board.

      On June 28, 2001, the Puerto Rico Racing Board granted ECMC the right to
increase the number of simulcast races from the United States from three (3) to
six (6) per live race day. The Order allowed a three (3) month probationary
period commencing July 1, 2001 for ECMC to place three (3) simulcast races
before the first live race and three (3) after the fifth live race.

     The Racing Board declined simulcasting of races during the probationary
period on Thursday's, a day that currently holds no live races.

     Pending final approval by the Racing Board, ECMC was obligated to pay the
Horse Owners' Confederation $1,000,000.

     On October 16, 2001 following a hearing,  the Racing Board suspended
effective October 22, all simulcasting temporarily allowed during the
probationary period.    Since no final approval was obtained from the Racing
Board for the simulcasting of races, ECMC is no longer obligated to pay the
additional $1,000,000 to the Horse Owners Confederation.

     The Racing Board will allow simulcasting of such special events as the
Breeders' Cup, Kentucky Derby and the Preakness as well as the Caribbean Classic
and the Confraternity Classic from the host country if these races are not held
in Puerto Rico. ECMC is currently doing a cost/benefit analysis to determine if
the limited simulcasting will be economically worthwhile.


                                       32
<PAGE>
     FINANCIAL EXPENSES

     Financial expenses for the three and the six months ended June 30, 2001
decreased by $101,000 (4.1%) and increased by $390,000, 8.0%, respectively,  as
compared to the same period in 2000.  This increase is primarily attributable to
interest and late charges owed by ECMC on the delinquent excise taxes.  See Part
II, Item I, "Legal Proceedings".

     DEPRECIATION AND AMORTIZATION

     Depreciation and amortization expenses for the three and the six months
ended June 30, 2001 decreased by $121,000 (12.6%) and $25,000 (1.3%),
respectively, as compared to the same period in 2000,  which is primarily due to
additions of capital improvements at El Comandante as well as an increased
monthly provision in 2001 which more accurately reflects the true expense.

     OTHER EXPENSES

     Other expenses for the three and the six months ended June 30, 2001
decreased by $686,000 (8.8%) and  increased by $3,357,000, 9.2%, respectively,
as compared to the same period in 2000.  This increase is primarily attributable
to new: operations, including additional expenses relating to the SSI and the
VSAT system, satellite related expenses which have yet to be recovered through
revenues, severance payments and horse owners contract expenses incurred by El
Comandante and additional professional fees incurred by Equus Entertainment
Corporation (see tables below).

<TABLE>
<CAPTION>
                                      OTHER EXPENSES BY COUNTRY
           INCREASE (DECREASE) FOR THREE MONTHS ENDED JUNE 30, 2001 WHEN COMPARED WITH 2000

                 Salaries, wages    Operating      General and      Marketing , TV   Net (decrease)
Country           and benefits       expenses     administrative    and satellite       increase
--------------  -----------------  ------------  ----------------  ----------------  ---------------
<S>             <C>                <C>           <C>               <C>               <C>
Puerto Rico:    $        (29,000)  $   742,000   $         7,000   $       260,000   $      980,000
Dominican Rep.            19,000       360,000            56,000            21,000          456,000
Panama                  (889,000)   (1,153,000)          (65,000)         (155,000)      (2,262,000)
Colombia                 (40,000)      193,000          (133,000)          (10,000)          10,000
Uruguay                        -        93,000            37,000                 -          130,000
                -----------------  ------------  ----------------  ----------------  ---------------
                $       (939,000)  $   235,000   $       (98,000)  $       116,000   $     (686,000)
                =================  ============  ================  ================  ===============
</TABLE>

<TABLE>
<CAPTION>
                                      OTHER EXPENSES BY COUNTRY
            INCREASE (DECREASE) FOR SIX MONTHS ENDED JUNE 30, 2001 WHEN COMPARED WITH 2000

                 Salaries, wages    Operating      General and      Marketing , TV   Net (decrease)
Country           and benefits       expenses     administrative    and satellite       increase
--------------  -----------------  ------------  ----------------  ----------------  ---------------
<S>             <C>                <C>           <C>               <C>               <C>
Puerto Rico:    $        268,000   $ 1,143,000   $       456,000   $       702,000   $    2,569,000
Dominican Rep.             5,000       310,000           (13,000)           16,000          318,000
Panama                  (909,000)   (1,189,000)         (107,000)         (181,000)      (2,386,000)
Colombia                       -       212,000           (80,000)           62,000          194,000
Uruguay                        -        94,000           568,000                 -          662,000
                -----------------  ------------  ----------------  ----------------  ---------------
                $       (636,000)  $   570,000   $       824,000   $       599,000   $    1,357,000
                =================  ============  ================  ================  ===============
</TABLE>


                                       33
<PAGE>
     SSI AND VSAT EXPENSES

      The increase in operating expenses and marketing/satellite expenses for
the three and six months ended June 30, 2001, as compared to the same period in
2000, are primarily due to the additional expenses for the planning, engineering
and startup expenses on the wagering system (VSAT) and leased satellite time.
The Company has not been able to recover these additional operating expenses
since the new equipment is not yet in service.


PROVISION FOR INCOME TAXES

     The provision for income tax relates to deferred Puerto Rico income taxes
on the Company's income and losses for its interest in Puerto Rico, without
taking into account results of operations of Galapagos, Equus-Panama and
Equus-Comuneros.   Due to the accumulated losses, none of these foreign
subsidiaries require a provision for income taxes.


MINORITY INTEREST

     The Company's minority interest is attributed to the income and losses
allocable to the minority partners of HDA, Galapagos, Equus-Panama and
Equus-Comuneros.  Since the accumulated losses of Galapagos allocable to
minority partners exceeded their investment, for the six months ended June 30,
2001, the Company did not recognize minority interest losses of Galapagos of
$250,867 and $188,054, respectively.  During 2001:  (i) if and while Galapagos
continues incurring losses, no minority interest in Galapagos' net losses will
be recognized, and (ii) if Galapagos generates profits, no minority interest in
Galapagos' net income will be recognized up to $2,097,649.


                                       34
<PAGE>
                         LIQUIDITY AND CAPITAL RESOURCES


     OVERVIEW

     The Company is the owner of Housing Development Associates S.E. ("HDA") and
its consolidated subsidiary, El Comandante Management Company LLC ("ECMC"), as
well as the owner of Agency Betting Network, Inc. ("ABN"), Satellites Services
International, Inc. ("SSI") and foreign subsidiaries (Equus Comuneros S.A.,
Equus Entertainment de Panama, S.A. and Galapagos, S.A.). The principal source
of cash of Equus Gaming Company L.P. (the "Company" or, when referring to the
individual entity, "Equus") is related to its ownership interest in HDA, the
owner and operator (through its wholly owned subsidiary ECMC) of El Comandante
Race Track in Puerto Rico.   Due to certain restrictions under HDA's indenture
for the issuance of its 11.75% First Mortgage Notes due 2003 (the "Indenture"),
cash held by HDA or its consolidated subsidiaries (including ECMC) is restricted
to ensure payment of interest and certain obligations on the First Mortgage
Notes.

     The following is a discussion of the liquidity and capital resources of the
Company, including HDA and its subsidiary ECMC, as well as the Company's other
subsidiaries ABN and SSI.  Net cash flow from foreign subsidiaries of the
Company (Equus Comuneros, S.A., Equus Entertainment de Panama, S.A. and
Galapagos, S.A) did not materially affect the consolidated cash flow of the
Company for the three and six months ended June 30, 2001 and these activities
are not discussed herein.

LIQUIDITY AND CAPITAL RESOURCES OF THE COMPANY (AND ITS CONSOLIDATED
SUBSIDIARIES)

     Cash and cash equivalents of the Company and its consolidated subsidiaries
increased by approximately $147 thousand during the quarter ended June 30, 2001.
The Company has historically met its liquidity requirements principally from
cash flow generated by (i) the operations of El Comandante Race Track in Puerto
Rico, (ii) short-term loans and capital leases for acquisition of new equipment,
and (iii) investment by the Wilson Family.

     During the three and six months ended June 30, 2001, the principal uses of
cash by the Company and its consolidated subsidiaries for its financing and
investing activities were as follows:

     (i)  Payment January 2, 2001 of interest on First Mortgage Notes due
          December 14, 2000 of $3.7 million.

    (ii)  Payments on capital leases for equipment used in the Company's
          operations.

   (iii)  Capital improvements and acquisition of equipment.

    (iv)  Payments of financial obligations.

     (v)  Weekly payment of delinquent excise taxes pursuant to Agreement.


For the remainder of the year 2001 projected uses of cash for the Company's
activities are:

     (i)  Interest payments of $3.6 million on the First Mortgage Notes due June
          15, 2001 (since paid) and on December 15, 2001 (remains unpaid).

    (ii)  Additional investments in ABN for its Colombian operations.

   (iii)  Additional investments in SSI, principally for the payment of
          satellite time contracted from a third party.


                                       35
<PAGE>
    (iv)  Redemption of First Mortgage Notes of $3,454,000, (remains unpaid).

     (v)  Weekly payment of delinquent excise taxes pursuant to Agreement, $1.3
          million, from July 1, 2001 through December 31, 2001.

    (vi)  Weekly payment of delinquent volume of business taxes pursuant to
          Agreement, $1.3 million from August 1, 2001 through December 31, 2001.

   (vii)  Monthly payment of prior arrearages owed to Puerto Rico Telephone
          Company pursuant to Agreement, of approximately $211 thousand from
          August 30, 2001, through December 31, 2001.

  (viii)  Payment to the Puerto Rico Horse Owners Confederation of $1,000,000
          under the guaranteed minimum take provision of the Horse Owners
          Contract, see Note 2, "Commitments and Contingencies".

     INVESTMENT  IN  TELECOMMUNICATIONS  EQUIMENT  AND  MARKET  EXPANSION

     The  Company  plans to install over the next twelve (12) months up to 1,000
VSAT  (video  and  data communication units for OTB agencies in all  operations.
The  communications up-link satellite control center (the "Hub") installation is
largely  complete  and  operation.  SSI  will  be  the  service provider for all
telecommunications  and  satellite  usage  by  the  Company's  affiliates.  The
estimated  $12  million  capital  investment  in  the  VSAT expansion, for which
financing  is  sought,  is expected to be recovered over a five-year period from
the  next  VSAT  units.

     There  can  be  no  assurance  that  the Company will be able to obtain the
financing  or expand the satellite time required to build out the proposed video
and data communication system.  The failure to do so could cause the Company not
to  have  sufficient  funds  to  operate.

     LONG-TERM  COMMITMENTS.  In  addition  to  capital  leases,  long-term cash
commitments  of  the Company (excluding foreign subsidiaries) are a $2.5 million
unsecured  note  and  the  First  Mortgage  Notes.

     In August 2000 the Company obtained a $2.5 million unsecured loan at 3%
over prime due in December 29, 2004.    Principal and interest are to be paid
from .25% of the wagering handle for the first four (4) years of the service
contract with United Tote as outlined in note 2 of the consolidated financial
statements, "wagering service agreement".

     HDA's First Mortgage Notes bear interest at 11.75%, payable semiannually on
June 15th and December 15th, and are secured by El Comandante assets.  The First
Mortgage Notes are redeemable, at the option of HDA, in 2001 and thereafter at
100% of the principal amount, together with accrued and unpaid interest.  The
maturity dates of First Mortgage Notes, reduced by prior redemptions and by the
Notes purchased by ECMC, are as follows (in thousands):

                  YEAR  ENDING      NET AMOUNT
                  DECEMBER 31,     (FACE VALUE)
                 -------------     ------------

                     2001             $  3,454
                     2002               10,200
                     2003               40,800
                                   -----------
                                       $54,454
                                   ===========

     To the extent First Mortgage Notes are not acquired in the open market or
redeemed, Management expects to refinance this obligation not later than
December 2002.


                                       36
<PAGE>
     As of June 30, 2001, HDA had advanced to Equus approximately $3.8 million
against allowable future distributions of profits, which is not in conformity
with the terms of the Indenture.  Management cured these advances with the
proceeds of a private placement offering of Equus Entertainment preferred stock
on July 13, 2001.  See Note 5, "Related Party Transactions".

     U.S. VIRGIN ISLANDS- The Company has been awarded the right to operate the
racetrack in St. Thomas and the off-track betting agency system in St. Thomas
and St. John. The Company has negotiated a contract with the Racing Board for
the exclusive rights to simulcast unlimited live races from the United States to
the Virgin Islands and is awaiting final approval from the Legislature and
Governor, which is expected by mid June, 2002. Revenues from simulcasting are
expected to begin in July, 2002. Revenues from live racing will be phased in as
the racetrack and spectator facilities are refurbished. This is expected to be
completed by September, 2002.

     The total investment in the Virgin Islands project is expected to be
approximately $500,000.  Financial resources necessary for such investment have
not been obtained as of May 31, 2002.

     GOVERNMENT  MATTERS.    El Comandante's horse racing and pari-mutuel
wagering operations are subject to substantial government regulations.
Pursuant to the Puerto Rico Horse Racing Industry and Sports Act (the "Racing
Act"), the Racing Board and the Puerto Rico Racing Administrator (the "Racing
Administrator") exercise regulatory control over El Comandante's racing and
wagering operations.  For example, the Racing Administrator determines the
monthly racing program for El Comandante and approves the number of annual race
days in excess of the statutory minimum of 180.  The Racing Act also apportions
payments of monies wagered that would be available as commissions to ECMC.  The
Racing  Board consists of three persons appointed for four-year terms by the
Governor of Puerto Rico.  The Governor also appoints the Racing Administrator
for a four-year term.

     On May 24, 2001, ECMC executed a "Closing Agreement"(the "Agreement") with
the Secretary of the Treasury of Puerto Rico (the "Secretary") whereby ECMC will
settle its assessed debt of unpaid excise taxes and commissions for the period
October, 2000 through February, 2001, in the amount of $11,172,450 (including
interest and late charges), plus an additional assessment of $60,141 (including
interest) for unpaid commissions for the period February 2, 2001 through
February 7, 2001 as follows:

     1.   Upon execution of the Agreement, ECMC paid $60,141 in full payment of
          the February, 2001 assessment.

     2.   For a six-month period commencing June 1, 2001 and ending November 30,
          2001, ECMC will pay $50,000 per week against the October, 2000 through
          January, 2001 assessment. After the six-month period, the Secretary
          will reevaluate the financial condition of ECMC, and may, upon
          reasonable grounds, continue, modify or revoke the Agreement.

     3.   ECMC will continue to pay on a timely basis current excise taxes and
          commissions.

     4.   ECMC will provide and maintain a bond in favor of the Secretary in the
          amount of $500,000.

     5.   In the event ECMC defaults during the term of the Agreement, the
          Secretary may accelerate the balance due plus any additional amounts
          due as a result of the default.

     As of June 12, 2002, ECMC had fully complied with  the terms and provisions
of the Agreement.

     On April 2, 2001, the House of Representatives of the Commonwealth of
Puerto Rico adopted a resolution ordering an investigation of the operations of
ECMC with emphasis on the fiscal and financial administration of El Comandante
and its tax delinquency. As of October 22, 2001, all requested information had
been submitted by ECMC. This investigation has been completed, but as of this
date, the House of Representatives has not issued their report or otherwise
disclosed their findings.


                                       37
<PAGE>
     As of June 30,  2001, Equus Comuneros owed the Colombian Tax and National
Customs Administration approximately $652,877, including interest for
withholding at source tax.   Management has recently met with the Government to
settle the amount outstanding.  The plan proposed to the Government is as
follows:

     1)   Five (5) year amortization of 10%, 15%, 25% and 30%, respectively.

     2)   The Government is requesting a down payment, which is currently being
          negotiated.


     On August 18, 2001, ECMC executed a Closing Agreement (the "Agreement")
with the Municipality of Canovanas whereby ECMC settled a longstanding dispute
over the payment of the Volume of Business Tax assessed by the municipality.

     The following schedule lists the deficiencies by fiscal year with the
corresponding interest and surcharges:

<TABLE>
<CAPTION>
          FISCAL               INTEREST
          TAX     TAX          AND
          YEAR    DEFICIENCY   SURCHARGES    TOTAL
          ------  -----------  -----------  --------
<S>               <C>          <C>          <C>

          93/94   $    74,087  $    67,913  $142,000
          96/97       120,397       68,224   188,621
          97/98       126,666       59,110   185,776
          98/99       123,366       45,233   168,599
          99/00        93,367       24,897   118,264
          00/01       116,735       19,455   136,190
                  -----------  -----------  --------

          Totals  $   654,618  $   284,832  $939,450
                  ===========  ===========  ========
</TABLE>

     Prior to settlement, the Company had accrued as of June 30, 2001a total
liability of $838,396 due for municipal taxes and other charges. On June 30,
2001, the Company recorded additional penalties and interest of $101,054.

     The terms of the Agreement are as follows:

     1.   For period August 1, 2001 through January 31, 2003, ECMC will pay the
          Municipality of Canovanas $5,000 per week.

     2.   At the end of this eighteen (18) month period, the Municipality can
          request full payment of the remaining balance, $559,450, or
          renegotiate a final twelve (12) month payoff of the balance at $46,621
          per month.

     3.   Should ECMC default at any time on the agreed payment terms, the
          Municipality may declare the entire remaining balance due.

     4.   To guarantee the timely payments, ECMC will provide two (2)
          performance bonds in the amount of $503,732 and $94,886, respectively.

     As of June 12, 2002, ECMC had fully complied with all the provisions of the
Agreement.


                                       38
<PAGE>
FORWARD-LOOKING STATEMENT

     Certain matters discussed and statements made within this Form 10-Q are
forward-looking statements within the meaning of the Private Litigation Reform
Act of 1995 and as such may involve known and unknown risks, uncertainties, and
other factors that may cause the actual results, performance or achievements of
the Company to be different from any future results, performance or achievements
expressed or implied by such forward-looking statements.  Although the Company
believes the expectations reflected in such forward-looking statements are based
on reasonable assumptions, it can give no assurance that its expectations will
be attained. These risks are detailed from time to time in the Company's filing
within the Securities and Exchange Commission or other public statements.


PART II - OTHER INFORMATION


ITEM 1.  LEGAL PROCEEDINGS:

     On May 24, 2001, ECMC executed a "Closing Agreement" (the "Agreement") with
the Secretary of the Treasury of Puerto Rico (the "Secretary"), whereby ECMC
will settle its assessed debt for unpaid excise taxes and commissions for the
period October, 2000 through February, 2001, in the amount of $11,172,450
(including interest and late charge), plus an additional assessment of $60,141
(including interest) for unpaid commissions for the period February 2, 2001
through February 7, 2001, as follows:

     1.   Upon execution of the Agreement, ECMC paid $60,141 in full payment of
          the February, 2001 assessment.

     2.   For a six-month period commencing June 1, 2001 and ending November 30,
          2001, ECMC is obligated to pay $50,000 per week against the October,
          2000 through January, 2001 assessment. After the six-month period, the
          Secretary will reevaluate the financial condition of ECMC and may,
          upon reasonable grounds, continue, modify or revoke the Agreement.

     3.   ECMC will continue to pay on a timely basis the current excise taxes
          and commissions.

     4.   ECMC will provide and maintain a bond to the Secretary in the amount
          of $500,000.

     5.   In the event ECMC defaults during the term of the Agreement, the
          Secretary may accelerate the balance due plus any additional amounts
          due as a result of the default.

     As of June 12, 2002 all terms and conditions of the Agreement had been met
by ECMC.

     As of June 30, 2001,  Equus Comuneros owed the Tax and National Customs
Administration approximately $652,877, including interest  for tax withholding
at source tax.  Management is in the process of negotiating a repayment plan
which has not been finalized.

     On August 18, 2001, ECMC executed a Closing Agreement (the "Agreement")
with the Municipality of Canovanas whereby ECMC settled a longstanding dispute
over the payment of the Volume of Business Tax assessed by the municipality.


                                       39
<PAGE>
     The following schedule lists the deficiencies by fiscal year with the
corresponding interest and surcharges:

<TABLE>
<CAPTION>
          FISCAL               INTEREST
          TAX     TAX          AND
          YEAR    DEFICIENCY   SURCHARGES    TOTAL
          ------  -----------  -----------  --------
<S>               <C>          <C>          <C>
          93/94   $    74,087  $    67,913  $142,000
          96/97       120,397       68,224   188,621
          97/98       126,666       59,110   185,776
          98/99       123,366       45,233   168,599
          99/00        93,367       24,897   118,264
          00/01       116,735       19,455   136,190
                  -----------  -----------  --------

          Totals  $   654,618  $   284,832  $939,450
                  ===========  ===========  ========
</TABLE>

     Prior to settlement, the Company had accrued as of June 30, 2001 total
liabilities of $838,396 due for municipal taxes and other charges. On June 30,
2001, the Company recorded additional penalties and interest of $101,054.

     The terms of the Agreement are as follows:

     1.   For period August 1, 2001 through January 31, 2003, ECMC will pay the
          Municipality of Canovanas $5,000 per week.

     2.   At the end of this eighteen (18) month period, the Municipality can
          request full payment of the remaining balance, $559,450, or
          renegotiate a final twelve (12) month payoff of the balance at $46,621
          per month.

     3.   Should ECMC default at any time on the agreed payment terms, the
          Municipality may declare the entire remaining balance due.

     4.   To guarantee the timely payments of the amounts due, ECMC has provided
          to the Municipality two (2) payments bonds in the amount of $503,732
          and $94,886, respectively.

     As of June 12, 2002 the terms and conditions of the Agreement have been met
by ECMC.

     The Company and/or its subsidiaries had a case in arbitration at the
American Arbitration Association in defense of and against Autotote, involving
all the racetracks in which Equus has an ownership interest. Autotote filed a
claim against El Comandante for unpaid service fees of $186,415 plus interest.
El Comandante agreed to pay this amount but filed a counterclaim against
Autotote.

     On July 27, 2001, American Arbitration Association rendered its award.  The
following is a summary of the awards by racetrack:

     EL COMANDANTE, PUERTO RICO

     1.   Comandante is to pay Autotote the principal amount of $355,496 in
          unpaid service fees together with interest of $32,051, accrued through
          April 1, 2001.

     2.   Comandante shall reimburse Autotote for costs incurred of $132,500.

     3.   As of June 30, 2001, the outstanding principal balance was $327,893
          and accrued interest was $504.


                                       40
<PAGE>
EQUUS - PANAMA

     1.   Equus - Panama is to pay Autotote the principal amount of $250,474 in
          unpaid service fees together with interest of $45,233 accrued through
          June 30, 2001.

     2.   Equus-Panama shall reimburse Autotote for costs incurred of $25,000.

EQUUS - COMUNEROS

     1.   Equus-Comuneros is to pay Autotote the principal amount of $584,262 in
          unpaid service fees as of April 23, 2001, together with interest of
          $218,059 accrued through June 30, 2001.

     2.   Equus-Comuneros shall reimburse Autotote costs incurred of $132,500.


     GALAPAGOS

     1.   Galapagos owes Autotote the principal amount of $230,578 as of April
          23, 2001, together with interest of $120,308 through November 21,
          2001, the date of the award.

     2.   For breach of good faith and fair dealings, Autotote owes Galapagos
          $800,000, plus interest at the rate of seven (7) percent per annum
          from November 21, 2001 to the date of payment.

     3.   The parties have no further obligations to one another with respect to
          lottery operations in the Dominican Republic.

     4.   The parties shall bear equally the cost of arbitration which amount to
          $44,903 each. Any excess funds on deposit shall be reimbursed to the
          paying parties in equal amounts.

     5.   Autotote shall pay Galapagos $150,000 in reimbursement fees incurred
          in the proceedings.

     6.   Awards will be offset and the net amount owed to Galapagos of
          approximately $600,000 will accrue interest at seven (7) percent until
          paid.

     Each entity involved in the arbitration sustains individually the
consequences of the arbiters' final award and there are no performance
guarantees by any other entity including Equus Gaming Company L.P., the parent
company.

     Costs  incurred by the Company in pursuing the arbitration with Autotote to
date  total $574,042 and have been allocated to each participating entity in the
same proportion that the arbiters awarded the costs incurred by Autotote to each
entity.

     On August 18, 2001, ECMC executed a Closing Agreement (the "Agreement")
with the Municipality of Canovanas whereby ECMC settled its longstanding dispute
over the payment of the Volume of Business Tax assessed by the municipality.


                                       41
<PAGE>
     The following schedule lists the deficiencies by fiscal year with the
corresponding interest and surcharges:

<TABLE>
<CAPTION>
                  FISCAL       INTEREST
          TAX     TAX          AND
          YEAR    DEFICIENCY   SURCHARGES    TOTAL
          ------  -----------  -----------  --------
<S>               <C>          <C>          <C>
          93/94   $    74,087  $    67,913  $142,000
          96/97       120,397       68,224   188,621
          97/98       126,666       59,110   185,776
          98/99       123,366       45,233   168,599
          99/00        93,367       45,233   118,264
          00/01       116,735       19,455   136,190
                  -----------  -----------  --------

          Totals  $   654,618  $   284,832  $939,450
                  ===========  ===========  ========
</TABLE>

     Prior to settlement, ECMC had accrued as of June 30, 2001 a total of
$838,396 due for municipal taxes and other charges. On June 30, 2001, ECMC
recorded additional penalties and interest of $101,054.

     The terms of the Agreement are as follows:

     1.   For period August 1, 2001 through January 31, 2003, ECMC will pay the
          Municipality of Canovanas $5,000 per week.

     2.   At the end of this eighteen (18) month period, the Municipality can
          decide whether to request full payment of the remaining balance,
          $559,450, or renegotiate a final twelve (12) month payoff of said
          balance at $46,621 per month.

     3.   Should ECMC default at any time on the agreed to payment terms, the
          Municipality may declare the entire remaining balance due.

     4.   To guarantee timely payments of the amounts due, ECMC shall provide to
          the Municipality two (2) payments bonds in the amount of $503,732 and
          $94,886, respectively.

     As of June 12, 2002, ECMC has fully complied with the provisions of the
Agreement.

     Certain of the Company's subsidiaries are presently named as defendants in
various lawsuits and might be subject to other claims arising out of normal
business operations. Management, based in part upon advice from legal counsel,
believes that the results of such actions will not have a material adverse
impact on the Company's financial position or results of operations.


ITEMS 2-6 NONE


                                       42
<PAGE>
                                   SIGNATURES

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


                                     Equus Gaming Company L.P.
                               -----------------------------------------
                                            (Registrant)


                               By:  Equus Management Company
                                    Managing General Partner



June 21, 2002                  /s/  Thomas B. Wilson
-------------                  -----------------------------------------
                               President, Chief Executive Officer,
                                 Director and Acting Chief
                                 Financial Officer



June 21, 2002                  /s/ James J. Wilson
-------------                  -----------------------------------------
                               Co-Chairman


                                       43
<PAGE>