SECURITIES AND EXCHANGE COMMISSION
                          WASHINGTON, D. C. 20549
                                           

                                FORM 10-Q/A
                                           

                    AMENDMENT TO APPLICATION OR REPORT
                FILED PURSUANT TO SECTION 12, 13 or 15(d) 
                  OF THE SECURITIES EXCHANGE ACT OF 1934


                 INTERNATIONAL THOROUGHBRED BREEDERS, INC.
            (Exact name of registrant as specified in charter)

                      Commission File Number: 0-9624

                              AMENDMENT NO. 1

     The undersigned registrant hereby amends the following items of its
Quarterly Report for the quarter ended September 30, 1996 on Form 10-Q as set
forth in the pages attached hereto and by deleting the previously filed
Accountants Review Reports.

Amending Part I

Item I - Financial Statements

Item II - Managements Analysis of Financial Condition and Results of Operation


     Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this amendment to be signed on its behalf by the
undersigned, thereunto duly authorized.

                       International Thoroughbred Breeders, Inc.
                       
                        [Registrant]


                       By/s/Anthony Coelho                               
                         Anthony Coelho, Chairman of the Board

                          
                       By/s/Nunzio P. DeSantis                           
                         Nunzio P. DeSantis, President and Chief    
                         Executive Officer 


                       By/s/William H. Warner                            
                         William H. Warner, Principal
                         Financial and Accounting Officer
Date: May 22, 1998

                                
                       



                 INTERNATIONAL THOROUGHBRED BREEDERS, INC.
                             AND SUBSIDIARIES

                      CONSOLIDATED BALANCE SHEETS
              AS OF SEPTEMBER 30, 1996 AND JUNE 30, 1996

                                ASSETS
<TABLE>
<S>                                     <C>            <C>  <C>
                                          September 30,
                                              1996           June 30,
                                          (UNAUDITED)          1996

CURRENT ASSETS:                                        
  Cash and Cash Equivalents             $    3,680,921  $    4,216,356
  Restricted Cash and Investments            2,566,609       2,971,538
  Prepaid Expenses                           1,062,125       1,205,951
  Accounts Receivable                        2,984,755       1,892,941
  Other Current Assets                         157,184         366,656

       TOTAL CURRENT ASSETS                 10,451,594      10,653,442

LAND, BUILDINGS AND EQUIPMENT:                         
  Land and Buildings                        69,111,811      69,093,719
  Construction In Progress                  51,881,493      48,736,200
  Equipment                                  5,242,652       4,376,889

                                           126,235,956     122,206,808 

  LESS: Accumulated Depreciation             
         and Amortization                    3,218,673       2,858,439

TOTAL LAND, BUILDINGS AND EQUIPMENT, NET   123,017,283     119,348,369

LAND AND IMPROVEMENTS HELD FOR SALE, NET     6,732,177       6,719,327


OTHER ASSETS:                                          

  Deposits and Other Assets                    382,935         340,507
  Deferred Financing Costs, Net              3,798,999       4,667,415
  Goodwill, Net                              3,124,224       3,151,872

       TOTAL OTHER ASSETS                    7,306,158       8,159,794

TOTAL ASSETS                            $  147,507,212  $  144,880,933

See Notes to Consolidated Financial Statements.       
</TABLE>

                                   
                                   
               INTERNATIONAL THOROUGHBRED BREEDERS, INC.
                           AND SUBSIDIARIES
                                   
                      CONSOLIDATED BALANCE SHEETS
              AS OF SEPTEMBER 30, 1996 AND JUNE 30, 1996
                                   
                 LIABILITIES AND SHAREHOLDERS' EQUITY
                                   
<TABLE>
<S>                                     <C>             <C><C>
                                          September 30,
                                             1996       June 30,
                                          (UNAUDITED)    1996

CURRENT LIABILITIES:                                  

  Accounts Payable                      $   4,498,319   $  4,837,191
  Accrued Expenses                          4,598,290      3,056,236
  Purses Payable                            2,049,850      1,963,150
  Current Maturities of Long-Term Debt      2,786,507      3,214,100
  Deferred Revenue                          2,205,903      1,499,449

       TOTAL CURRENT LIABILITIES           16,138,869     14,570,126
                                                      

LONG-TERM DEBT, Net of Current Portion     53,064,747     50,992,702

COMMITMENTS AND CONTINGENCIES                  -              -
                                                      
SHAREHOLDERS' EQUITY:                                 

  Series A Preferred Stock                            
  $100.00 Par Value,                                 
  Authorized 500,000 Shares,                        
  Issued and Outstanding,                           
  362,463 and 362,462 Shares,              
  Respectively                             36,246,275     36,246,175

  Common Stock 
  $2.00 Par Value, Authorized                              
  25,000,000 Shares,                                 
  Issued and Outstanding,                            
  11,651,498 and 11,651,487 Shares,                  
  Respectively                             23,302,995     23,302,973

  Capital in Excess of Par                 16,463,880     16,111,652

  Retained Earnings (Deficit)                         
  (subsequent to June 30, 1993,                       
  date of quasi-reorganization)             2,458,102      3,829,336

       TOTAL                               78,471,252     79,490,136

  LESS: Deferred Compensation, Net            167,656        172,031

       TOTAL SHAREHOLDERS' EQUITY          78,303,596     79,318,105

                                                      
TOTAL LIABILITIES AND 
SHAREHOLDERS' EQUITY                     $147,507,212   $144,880,933

                                                      
See Notes to Consolidated Financial Statements.       
</TABLE>

               INTERNATIONAL THOROUGHBRED BREEDERS, INC.
                           AND SUBSIDIARIES

            CONSOLIDATED STATEMENT OF SHAREHOLDERS' EQUITY
             FOR THE THREE MONTHS ENDED SEPTEMBER 30, 1996
                              (UNAUDITED)
<TABLE>
<S>                                       <C>         <C> <C>
                                           Preferred  
                                           Number of  
                                             Shares         Amount

BALANCE - JUNE 30, 1996                       362,462  $  36,246,175

   Financing Costs for Warrants Issued                
    in Connection with Debt Financing            ---        ---

   Shares Issued for Fractional Exchanges             
     With Respect to the                              
     One-for-twenty Reverse Stock Split              1           100
     effected on March 13, 1992                      

   Amortization of Deferred
     Compensation Costs                          ---        ---

   Net Loss for the Three Months                      
    Ended September 30, 1996                     ---        ---


BALANCE - SEPTEMBER 30, 1996                  362,463  $  36,246,275

                                                      

                                             Common
                                            Number of  
                                             Shares          Amount

BALANCE - JUNE 30, 1996                    11,651,487  $   23,302,973

   Financing Costs for Warrants Issued                
    in Connection with Debt Financing         ---             ---

   Shares Issued for Fractional Exchanges             
    With Respect to the                              
    One-for-twenty Reverse Stock Split              
    effected on March 13, 1992                     11             22

   Amortization of Deferred
   Compensation Costs                         ---             ---

   Net Loss for the Three Months                      
    Ended September 30, 1996                  ---             ---

                                                      

BALANCE - SEPTEMBER 30, 1996               11,651,498   $  23,302,995

                                                      

                                            Capital   
                                           in Excess       Retained
                                             of Par        Earnings

BALANCE - JUNE 30, 1996                   $16,111,652   $   3,829,336

   Financing Costs for Warrants Issued                
    in Connection with Debt Financing         352,350         ---

   Shares Issued for Fractional Exchanges             
    With Respect to the                              
    One-for-twenty Reverse Stock Split              
    effected on March 13, 1992                  (122)         ---

   Amortization of Deferred
     Compensation Costs                          ---          ---

   Net Loss for the Three Months                      
    Ended September 30, 1996                     ---      (1,371,235)


BALANCE - SEPTEMBER 30, 1996              $16,463,880   $   2,458,102

                                                      

                                            Deferred  
                                           Compensation     Total

BALANCE - JUNE 30, 1996                   $ (172,031)   $  79,318,105
                                                      
   Financing Costs for Warrants Issued                
    in Connection with Debt Financing          ---            352,350

   Shares Issued for Fractional Exchanges             
    With Respect to the                              
    One-for-twenty Reverse Stock Split              
    effected on March 13, 1992                 ---            ---

   Amortization of Deferred  
    Compensation Costs                         4,375            4,375

   Net Loss for the Three Months                      
    Ended September 30, 1996                   ---        (1,371,235)

                                                      
BALANCE - SEPTEMBER 30, 1996              $ (167,656)   $  78,303,596
</TABLE>


               INTERNATIONAL THOROUGHBRED BREEDERS, INC.
                           AND SUBSIDIARIES

                 CONSOLIDATED STATEMENTS OF OPERATIONS
        FOR THE THREE MONTHS ENDED SEPTEMBER 30, 1996 AND 1995
                              (UNAUDITED)
<TABLE>
<S>                                      <C><C>        <C><C>
                                              Three Months Ended 
                                                 September 30,
                                               1996          1995

REVENUES:                                                

  Revenue from Operations                 $  14,246,944 $   13,562,753
  Investment Income                              84,018        192,365

        TOTAL REVENUES                       14,330,962     13,755,118

                                                         

EXPENSES:                                                

  Cost of Revenues:                                      

    Purses                                    3,904,373      3,678,809
    Operating Expenses                        7,647,154      7,454,597
    Depreciation & Amortization                 392,256        354,615
  General & Administrative Expenses           2,432,199      2,101,294
  El Rancho Property Development
    Carrying Costs                              393,125              0

        TOTAL EXPENSES                       14,769,107     13,589,315

OPERATING (LOSS) INCOME                       (438,145)        165,803

OTHER EXPENSES:                                          

  Interest Expense                              693,838        285,419
  Amortization of Financing Costs               200,041              0

        TOTAL OTHER EXPENSES                    893,879        285,419


(LOSS) BEFORE INCOME TAXES                  (1,332,024)      (119,616)
  Income Tax Expense                             39,210         30,800

NET (LOSS)                                  (1,371,234)      (150,416)

NET (LOSS) PER SHARE                      $      (0.12) $       (0.02)

WEIGHTED AVERAGE COMMON
 SHARES OUTSTANDING                          11,651,495      9,551,394

                                                         
See Notes to Consolidated Financial Statements.          
</TABLE>

               INTERNATIONAL THOROUGHBRED BREEDERS, INC.
                           AND SUBSIDIARIES

                 CONSOLIDATED STATEMENTS OF CASH FLOWS
        FOR THE THREE MONTHS ENDED SEPTEMBER 30, 1996 AND 1995
                              (UNAUDITED)
<TABLE>
<S>                                      <C><C>        <C><C>
                                              Three Months Ended 
                                                 September 30, 
                                               1996         1995

CASH FLOWS FROM OPERATING ACTIVITIES:                    

 NET (LOSS)                               $ (1,371,234) $  (150,416)

 Adjustments to reconcile net (loss)
 income to net cash   
 provided by operating activities:                     

    Depreciation and Amortization               592,298      354,615
    Compensation for Options and 
       Warrants Granted                         352,350            0
    Other                                             0      (5,000)
    Changes in Assets and Liabilities -                  
       Decrease in Restricted Cash and
       Investments                              404,929      617,364
       (Increase) in Accounts Receivable    (1,091,814)    (278,797)
       Decrease (Increase) in Other Assets      209,472      (1,781)
       Decrease in Prepaid Expenses             339,972      308,364
       Increase in Accounts and Purses
       Payable and Accrued Expenses           1,289,882    1,855,731
       Increase in Deferred Revenue             706,454      963,649

 NET CASH (USED IN) PROVIDED BY OPERATING
  ACTIVITIES                                    1,432,309  3,663,729
                                                         

CASH FLOWS FROM INVESTING ACTIVITIES:                    

    Development of El Rancho Property         (660,916)            0
    Deposits on Purchase of Land            (1,880,000)            0
    Capital Expenditures at Racetracks        (702,851)    (147,043)
    (Increase) Decrease in Other
      Investments                              (42,428)       28,848

 NET CASH (USED IN) INVESTING ACTIVITIES    (3,286,195)    (118,195)

                                                         
CASH FLOWS FROM FINANCING ACTIVITIES:                    

    Proceeds from issuance of 
    Long Term Notes                             827,891            0
    Proceeds from Line of Credit - Foothill   2,640,908            0
    Deferred Financing Costs                   (82,376)            0
    Principal Payments on Short Term Notes    (340,921)            0
    Principal Payments on Long Term Notes   (1,727,051)    (179,100)
                                                         

 NET CASH PROVIDED BY (USED IN)
 FINANCING ACTIVITIES                         1,318,451    (179,100)
                                                         

NET (DECREASE) IN CASH AND CASH EQUIVALENTS   (535,435)    3,366,434

 CASH AND CASH EQUIVALENTS AT 
 BEGINNING OF YEAR                            4,216,356   11,801,294
                                                         
 CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 3,680,921 $ 15,167,728

 Supplemental Disclosures of
 Cash Flow Information:       
                                                         
    Cash paid during the period for:                     
    Interest                              $     735,917 $     85,487
    Income Taxes                          $         710 $     23,400

 Supplemental Schedule of Non-Cash Investing and FinancingActivities:

 During the three months ended September 30, 1996 and 1995, the Company
 recorded unrealized gains of $35,000 and $50,000, 
 respectively, on trading securities.                

 During the three months ended September 30, 1996 the Company issued 
 200,000 warrants to purchase Common Stock at a fair value of $324,000 
 in connection with financing agreements.  There were no warrants issued
 in the three months ended September 30, 1995.                            

                                                         
See Notes to Consolidated Financial Statements.          
</TABLE>

              INTERNATIONAL THOROUGHBRED BREEDERS, INC.
                         AND SUBSIDIARIES

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


(1)   SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

      (A) Nature of Operations - International Thoroughbred Breeders, Inc.
and subsidiaries, collectively the Company, conducts live race meetings for
Thoroughbred and Harness (Standardbred) horses and participates in intrastate
and interstate simulcast wagering as a host track and as a receiving track in
Cherry Hill and Freehold, New Jersey.  The Company's racetrack operations are
dependent upon continued governmental acceptance of racing as a form of
legalized gambling.  The Company has to compete for gaming revenue not only
with other racetracks, but also with other forms of gaming activities, such
as, off-track betting parlors, telephone wagering, casino gambling (in
Atlantic City), slot machines at racetracks, and various state lotteries, both
from within the State of New Jersey and from neighboring states (Pennsylvania
and Delaware in particular).  From time to time, legislation has been
introduced in New Jersey and neighboring states which would further expand
gambling opportunities and increase competition.  Severe inclement weather,
which can affect the northeastern portion of the United States in the winter
months, can also adversely affect operations.  The Company is required to
annually renew its racing permits with the New Jersey Racing Commission in
order to operate.

      During the year ended June 30, 1996, the Company, under one of its
subsidiaries, purchased property for the purpose of commencing casino gaming
upon the opening of a proposed casino project in Las Vegas, Nevada.

      (B) Principles of Consolidation -   The accounts of all wholly owned
subsidiaries are included in the consolidated financial statements. All
material intercompany transactions have been eliminated.

      (C)  Classifications - Certain prior year amounts have been
reclassified to conform with the current year's presentation.  The operating
section of the Statements of Cash Flows for the three months ended September
30, 1995  have been reclassified from the direct to the indirect method to
conform with the 1996 presentation.

      (D) Allowance for Bad Debts - The Company recognizes bad debts on the
allowance method. Bad debt allowance at September 30, 1996 and 1995 was
$20,000.

      (E) Construction in Progress - Construction in progress includes the
purchase price as well as construction costs in conjunction with the
development of the El Rancho.  These amounts include land and building
acquisition costs, interest, consulting and other development costs in
connection with the project.  Such costs, aggregating approximately
$51,881,493 at September 30, 1996, include real property acquisition costs in
the amount of approximately $43,500,000 capitalized interest and other
development costs.

      (F) Goodwill - Goodwill is the excess of the cost of acquired Freehold
Raceway net assets over their fair value and is being amortized over 30 years
under the straight line method.  Accumulated amortization at September 30,
1996 was $473,405. 

      Management of the Company evaluates the periods of goodwill
amortization to determine whether later events and circumstances warrant
revised estimates of useful lives.  Management also evaluates whether the
carrying value of goodwill has become impaired.  This evaluation is done by 
analyzing the projected undiscounted cash flow from related operations.

      (G) Financing Costs - Deferred financing costs includes costs of
$2,710,812 associated with the debt incurred to fund the purchase of the El
Rancho property and $1,088,188 associated with warrants issued in connection
with the purchase and financing of the casino project, net of amortization of
$108,728 and $91,313, respectively, as of September 30, 1996.  These costs of
$3,799,000, net of amortization of $200,041, are being expensed over the five
year lives of the loan and the warrants.   

      (H) Revenue Recognition - The Company recognizes the revenues
associated with horse racing at Garden State Park and Freehold Raceway as they
are earned.  Costs and expenses associated with horse racing revenues are
charged against income in those periods in which the horse racing revenues are
recognized.  Other costs and expenses, including advertising, are recognized
as they actually occur throughout the year.  Deferred income primarily
consists of prepaid purse income recorded during simulcasting.  

      (I) Deferred Income Taxes - Deferred income taxes reflect the tax
consequences on future years of differences between the tax bases of assets
and liabilities and their financial reporting amounts.

      (J) Cash and Cash Equivalents - The Company considers all highly
liquid debt instruments purchased with a maturity of three months or less to
be cash equivalents.

      (K) Concentrations of Credit Risk - As of September 30, 1996,
financial instruments which potentially subject the Company to concentrations
of credit risk are cash and cash equivalents and receivables arising primarily
from event planning customers whose credit is routinely evaluated.  The
Company places its cash investments with high credit quality financial
institutions and currently invests primarily in U.S. government obligations
that have maturities of less than 3 months.  The amount on deposit in any one
institution that exceeds federally insured limits is subject to credit risk. 
At September 30, 1996, the Company had approximately $2,000,000 on deposit in
4 institutions with an average of $500,000 at each institution that was
subject to such risk. In addition, repurchase agreements of approximately
$3,300,000 which are classified as restricted investments are not insured. 
The Company does not require collateral for its financial instruments.

(2)   OPINION OF MANAGEMENT

      The accompanying unaudited consolidated financial statements have been
prepared in accordance with generally accepted accounting principles for
interim financial information and with the instructions to Form 10Q and Rule
10-01 of Regulation S-X.  Accordingly, they do not include all of the
information and footnotes required by generally accepted accounting principles
for complete financial statements.  In the opinion of management, all
adjustments (consisting of normal recurring accruals) considered necessary for
a fair presentation have been included.  Operating results for the three
months ended September 30, 1996 are not necessarily indicative of the results
that may be expected for the year ended June 30, 1997.  The unaudited
consolidated financial statements should be read in conjunction with the
consolidated financial statements and footnotes thereto included in the
Company's Form 10-K for the year ended June 30, 1996.

(3)   NOTES AND MORTGAGES PAYABLE

      Notes and Mortgages Payable are summarized below:

<TABLE>
<S>                          <C>                <C><C>      <C><C>
                                                September 30, 1996

                                 Interest %        Current      Long-Term

ITB:                                                  
                                                                   
Foothill Mortgage (A)           Prime plus 2.75%                           
                              (current rate 11%) $   750,000 $   13,250,000
Foothill  Line of Credit (A)                                              
                                Prime plus 2.75%                           
                              (current rate 11%)     400,000      9,078,228

Las Vegas Entertainment                      8%          -0-     10,500,000
                                                                 

Freehold  Raceway:                      Various      133,559            -0-
                                                           
                                                  
Seller's Mortgage                  80% of Prime                           
                             (not to exceed 6%) 
                              (current rate 6%)     625,000      11,250,000
                                                                   
Seller's Mortgage                  80% of Prime                           
                            (current rate 6.6%)     225,000       1,965,799

Note - Parking Lot                           8%     191,667         191,667

Notes - Other (B)                       Various       3,521          43,958
                                                      
                                                      
Garden State Park                                                      
                                                      

Mortgage Note Payable                      10%           -0-      3,000,000

Note Payable                               10%           -0-      3,000,000

Notes-Insurance Contracts              Various       252,953           - 0- 

Notes - Other(C)                       Various       204,807        785,095

    Totals                                       $ 2,786,507 $   53,064,747
</TABLE>

Prime Rate at September 30, 1996 was 8.25%  
The weighted average interest rate on short-term borrowings outstanding as of
September 30, 1996 was 9.29%.
                                                                              
      (A) On March 20, 1996, the Company and Foothill Capital Corporation of Los
Angeles, California, signed a Letter of Intent for a proposed borrowing of
$30,000,000.  Closing on the financing contract took place on June 4, 1996.  The
financing arrangement, secured by among other things, a mortgage on the El 
Rancho property, Garden State Park and a second mortgage on Freehold Raceway is
for a $16,000,000 revolving credit line and a $14,000,000 Time Loan Mortgage.
At September 30, 1996 the unused line of credit was approximately $6,522,000,
however, this amount is restricted by $3,000,000 until such time as an approved
settlement agreement has been reached concerning the shares of Common Stock
currently owned by Robert E. Brennan, the Company's former chairman.

      The revolving credit line requires the Company to make quarterly principal
payments of $400,000 beginning July 1, 1997.  The loans mature in five years. 
Interest on the outstanding balance will be paid monthly starting July 1, 1996 
at a rate of 2.75% above the current published prime lending rate per annum. 
The Time Loan Mortgage requires that the Company make equal monthly principal
payments of $250,000 plus interest beginning July 1, 1997.  Interest on the
outstanding balance was paid monthly starting July 1, 1996 at a rate of 2.75% 
above the current published prime lending rate per annum.  

      The Company is required to maintain not more than one to one ratio of 
total liabilities to tangible net worth with a minimum tangible net worth of
$70,000,000.  In the event of default of the terms of the agreement, the 
amounts due would be payable in full at that time and the Company would be 
required to pay a 2% premium of $600,000 calculated on the maximum amount of
the financing.  The financing agreement also provides for the lender to receive
200,000 shares of the Company's Common Stock,  a monthly service fee of $5,000,
a .5% monthly fee on the unused portion of the line of credit, and an annual
facility fee of $300,000.

      The total principal balance of the Revolving Credit Line and the Time 
Loan Mortgage as of September 30, 1996 was $23,478,228.  For the three month
period ended September 30, 1996, interest of $337,032 associated with the 
Foothill mortgage and revolving line of credit was capitalized and will be 
expensed (over the estimated benefit period) upon the opening of a casino on 
the El Rancho property.

      (B) On September 17, 1996, the Company entered into a lease agreement 
with Siemens Credit Corporation that provides for eighteen monthly lease
payments of $293 and an end buyout of approximately $42,000 for a new telephone
system at Freehold Raceway.  The Company recorded this transaction as a capital
lease.  The Company is in the process of extending the installation to include 
Garden State Park with a similarly priced contract agreement.  At September 30,
1996, $3,521 was classified as short term and $43,958 was classified as long 
term.

      (C) In July, 1996, the Company entered into an agreement with GE Capital
Corporation with respect to financing $827,891 at an interest rate of 9.3% for 
the purchase of 2 new natural gas powered air conditioners at Garden State 
Park.   The contract provides for sixty consecutive monthly installments of
principal and interest of $17,067 beginning August 25, 1996.  At September 30,
1996, $204,807 was classified as short term and $785,095 was classified as long
term.  Interest expense on the note for the three month period ended September
30, 1996 was $6,538.

      (D) On August 20, 1996, the Company made a final principal payment of
$1,405,000 on a note previously executed by Freehold Raceway.

(4)   INCOME TAX EXPENSE

      Effective July 1, 1993, the Company adopted the provisions of Statement 
of Financial Standards (SFAS) No. 109, Accounting for Income Taxes.  This 
Statement requires that deferred income taxes reflect the tax consequences on 
future years of differences between the tax bases of assets and liabilities and
their financial reporting amounts.  The effect of adoption of this Statement on
current and prior financial statements is immaterial.
      
      When the Company incurs income taxes in the future, any future income tax
benefits resulting from the  utilization of net operating losses and other carry
forwards existing at June 30, 1993 to the extent resulting from a quasi-
reorganization of the Company's assets effective June 30, 1993, will be
excluded from the results of operations and credited to paid in capital. 

      Freehold Raceway incurred a state income tax liability for the three 
months ended September 30, 1996 and does not have the benefit of any state 
income tax loss carry forwards to offset this liability.  A provision of 
$39,210 was made for this liability.

A reconciliation of income tax expense at the Federal statutory rate to income 
tax expense at the Company's effective rate is as follows:
    
                             Three Months ended September 30,

<TABLE>
<S>                        <C> <C>          <C> <C>
                           1996             1995
                           
Income Taxes at the       
Federal Statutory Rate     $      -0-       $      -0-
                           
State Income Tax - Net    
of Federal Tax Benefit         39,210           30,800
                           
Provisions for Income
Taxes                      $   39,210          $30,080
                                          
</TABLE>


      At June 30, 1993, the Company effected a quasi-reorganization in
accordance with generally accepted accounting principles.  The effect of the
quasi-reorganization was to decrease asset values for financial reporting, but
not for Federal income tax purposes.  Accordingly, depreciation expense for
Federal income tax purposes continues to be based on amounts that do not 
reflect the accounting quasi-reorganization.

      The Company has a net operating loss carryforward of approximately
$167,000,000 at September 30, 1996, expiring in the years after June 30, 2001
through June 30, 2009.  SFAS No. 109 requires the establishment of a deferred
tax asset for all deductible temporary differences and operating loss
carryforwards.  Because of the uncertainty that the Company will generate 
income in the future sufficient to fully or partially utilize these
carryforwards, however, any deferred tax asset of approximately $52,000,000 is
offset by an allowance of the same amount pursuant to SFAS No. 109.  
Accordingly, no deferred tax asset is reflected in these financial statements.

(5)   COMMITMENTS AND CONTINGENCIES

      The Company's wholly owned subsidiary, ITG, is responsible for
implementing the development of casino gaming business opportunities.  In
January 1996, the Company purchased the El Rancho Hotel and Casino property 
from an unrelated party, Las Vegas Entertainment Network, Inc. ("LVEN").  The 
Company plans to develop the site through Orion Casino Corporation, a newly 
formed wholly owned Nevada subsidiary of ITG.  The acquisition of the 
twenty-one acre El Rancho property, located on the Las Vegas strip, was 
purchased for $43.5 million in cash and notes, plus contingent consideration of
up to $160 million (but not as a part of the purchase price), which is 
dependent  on future "adjusted cash flows" as contractually defined,  to LVEN 
for the development of the property by Orion.  The purchase price of 
$43,500,000 consisted of approximately $12.5 million paid in cash (exclusive of
final adjustments) with the balance financed by:  1) a $6.5 million unsecured
mortgage note at an 8% interest rate which was refinanced in fiscal 1996;  
2) assumption of a $14 million first mortgage note due on December 20, 1996, 
which was also refinanced in fiscal 1996, secured by the land and building at a
13% interest rate; and 3) a $10.5 million second mortgage note, at an 8% 
interest rate, which is payable only to the extent that certain contingent 
events occur. The purchase agreement for the El Rancho property provided that 
if, by October 25, 1996, the Company had not arranged for the necessary 
commitments to develop the "Starship Orion" project or a more modest project 
by the same date, and if the seller, LVEN,  (i) arranged for the Refinance 
Loan (as defined therein), and (ii) paid all associated costs and deposits into
an escrow account up to one year's interest on the refinanced or replaced 
Refinance Loan and up to one year's carrying costs for El Rancho, then LVEN 
may have had the non-exclusive right for up to one year (the "Option Period") 
to appoint (during the last quarter of the Option Period) an authorized 
licensed commercial real estate broker to arrange for the sale of the property
or obtain a minimum of $55 million in financing to develop the property.  
During the Option Period, the Company would have continued to have
the right to arrange for the financing to develop the El Rancho property.  If
such financing was arranged, LVEN's rights (if any) with respect to arranging
for the appointment of an authorized licensed commercial real estate broker or
refinancing would have terminated, as would any requirement to obtain LVEN's
consent before the sale by the Company of the site.  On October 25, 1996, LVEN
advised the Company that it was asserting its rights afforded during the Option
Period by arranging the prescribed escrow account.  On October 28, 1996 the
Company announced that LVEN forfeited its rights with respect to the purchase
agreement because it failed to satisfy certain contractual pre-conditions.  
LVEN has advised that it contests the Company's position.

      The Company is committed to carrying costs of the El Rancho property of
approximately $4,800,000 per year for interest, bank loan fees, real estate
taxes, security, maintenance and other related costs.  Development costs for
legal, professional and consulting costs incurred for a prospective gaming
project on the El Rancho property are estimated to be approximately $3,000,000
during  fiscal 1997.  These costs will increase substantially if the Company is
successful in obtaining financing or the partners it is seeking in order to
complete the project.  In addition to those costs, the Company made non-
refundable deposits of $1,880,000 during the first quarter of fiscal 1997 for a
proposed purchase of a parcel of land associated with the gaming development
project.  On October 21, 1996, the Company amended its agreement to extend the
closing from on or before November 29, 1996 to and including December 27, 1996
under certain terms and conditions which included a provision that the Company
be required to make an escrow deposit of $235,000 on or before October 31,
1996. On October 30, 1996, the Company perfected its election to extend the
closing date with a deposit of the required funds. This deposit will be fully 
earned by the seller on an equal daily basis through December 27, 1996.  
The purchase of the property would allow expanded frontage and room for future
expansion and increased parking.  The Company is seeking additional financing 
in order to finalize the purchase.  If the Company fails to secure adequate
financing by a settlement date of December 27, 1996, $2,350,000 of payments 
made to date in addition to the extension deposit of $235,000 would be 
forfeited.  (See Subsequent Events Footnote) No assurance can be given that 
the financing can be obtained or if it is obtained, will be prior to the 
required closing date.

      In connection with the purchase of the El Rancho project, and once the
project has been developed, completed and opened, LVEN, the seller of the
property, will retain the exclusive right to manage all aspects of Orion's
entertainment activities subject to meeting certain profitability criteria. 
This would include; (i) responsibility for management and oversight of booking
all acts, performers, entertainers, movies, virtual reality rides and other 
non-gaming attractions of any kind or nature at the property site, 
(ii) arranging all advertising for all of Orion's advertising needs, and 
(iii) managing all other entertainment venues for Orion.  The term of the 
agreement is for ten (10) years commencing on the date which is six (6) months 
prior to the projected opening date of the property, and LVEN shall have the
option to renew the agreement for two (2) consecutive five year terms.  The 
agreement provides LVEN with an annual fee of $800,000 subject to annual 
increases.  LVEN will also receive an additional; (i) twenty-five percent (25%)
of profits from entertainment activities, (ii) ten percent (10%) of the cost of
all advertising placed by Orion, and (iii) booking fees equal to ten percent
(10%) of gross compensation paid to talent. 

      In February, 1996 the Company announced that it intended to develop the
El Rancho property under a "Starship Orion" theme.  It was estimated that the
total cost of completion would be approximately $1 billion dollars and that the
Company intended to develop the property with up to as many as six partners.  
To date the Company has not engaged any partners for its "Starship Orion" theme
development. The Company engaged certain professional, legal, architectural and
consulting services in  connection with its development.  Capitalized costs of
$51,881,493 as of September 30, 1996 are required costs for any casino 
development project.

      In December 1995, Garden State Race Track, Inc. entered into an agreement
with an unaffiliated party, The Four B's of Vineland, New Jersey, to sell a 56
acre parking lot tract at the Garden State Park which is presently unused for
racing purposes.  The contract calls for a purchase price of $11 million for 
the property, subject to normal closing adjustments.  The agreement provides 
for a closing on or before December 15, 1996 (which date may be extended for a
six month period) and is subject to standard real estate contingencies 
including the receipt of all necessary governmental approvals to construct a
retail shopping center of approximately 300,000 square feet on the site, also
providing the purchaser a period of time to evaluate the feasibility of the
project. 

      On November 2, 1995, Robert E. Brennan resigned as Chairman of the Board
and Chief Executive Officer of the Company.  Mr. Brennan resigned these
positions at the urging of the Company's Board of Directors based on actions
taken by New Jersey regulatory authorities which oversee the casino and horse
racing industries in the state.  The New Jersey Division of Gaming Enforcement
("Division") filed a complaint with the New Jersey Casino Control Commission
("Commission") seeking to prohibit the Company's two racetracks, Garden State
Park ("Garden State") and Freehold Raceway ("Freehold") from conducting 
industry business with any casino licensees.  Garden State and Freehold 
currently receive revenues from parimutuel wagering on races, including their 
own, simulcast to certain of the Atlantic City casinos.  The Division based its
complaint on the fact that Mr. Brennan, who is also a principal shareholder of 
the Company, had been found in a June 1995 decision by Judge Richard Owen of 
the United States District Court for the Southern District of New York in a
civil action to be "liable for violating federal securities laws in the years 
1982 to 1985."  None of the alleged securities law violations involved the 
Company, its securities, or its operations.  The Division claims that Mr. 
Brennan's participation in the Company's racetrack subsidiaries "would be 
inimical to the policies of the Casino Control Act" and according to the
Division, this would disqualify him and the Company's two New Jersey racetracks
from continued licensure with the Commission.  Mr. Brennan has denied 
committing any violations of the federal securities laws and is currently 
appealing Judge Owen's decision. 

      The Division subsequently indicated a willingness to seek to resolve the
complaint provided that Mr. Brennan resign as Chairman of the Board, a director
of the Company and as an officer of any of the Company's subsidiaries and
provided further that Mr. Brennan enter into an agreement which would place his
approximately 2,900,000 shares of the Company's Common Stock into an 
irrevocable dispositive trust, which would provide for the liquidation of all
his shares. On November 6, 1996, the Commission, over Mr. Brennan's objections,
accepted a proposed stipulation of settlement between Mr. Brennan and the
Division requiring Mr. Brennan to place his shares into a liquidating trust 
contingent upon the approval, within sixty days thereafter,  of the bankruptcy
court overseeing Mr. Brennan's personal Chapter 11 bankruptcy proceeding.  The
liquidating trustee will hold the shares in escrow and will vote the shares in
the same proportion as the other stockholders of the Company.  The agreement 
requires that the liquidating trustee dispose of the shares no later than
October 19, 1997 in the absence of  the occurrence of certain events.

      The Company was also advised by the New Jersey Racing Commission, which
annually grants permits for the conduct of parimutuel racing at Garden State 
and Freehold, that the Racing Commission is considering the issuance of a 
Notice of Intention to suspend or revoke the permits held by Garden State and 
Freehold based on Judge  Owen's decision.  At a subsequent meeting, a 
representative of the Racing Commission indicated that the previously described
settlement to be considered by the Commission regarding Mr. Brennan would be
presented to the Racing Commission for its consideration.  The Racing 
Commission has been apprised of the settlement by the Casino Control Commission
and has stated that it will consider it as a resolution of its concerns 
following the approval of the bankruptcy court.  Management believes a 
settlement will be reached which is beneficial to the continuation of racing at
Garden State Park and Freehold Raceway.

      On March 20, 1996, the Company and Foothill Capital Corporation of Los
Angeles, California, signed a Letter of Intent for a proposed borrowing of
$30,000,000.  Closing on the financing contract took place on June 4, 1996.  
The financing arrangement, secured by among other things, a mortgage on the El
Rancho property, Garden State Park and a second mortgage on Freehold Raceway is
for a $16,000,000 revolving credit line and a $14,000,000 Time Loan Mortgage,
used at settlement to pay off the $14,000,000 mortgage note referred above due
on December 20, 1996.   The maximum line of credit balance is restricted by
$3,000,000 until such time that an approved settlement agreement has been
reached concerning the shares of Common Stock currently owned by Robert E.
Brennan, the Company's former chairman.  The revolving credit line requires 
that the Company make quarterly principal payments of $400,000 beginning 
July 1, 1997.  Interest on the outstanding balance will be paid monthly 
starting July 1, 1996 at a rate of 2.75% above the current published prime 
lending rate per annum. The Time Loan Mortgage requires that the Company make
equal monthly principal payments of $250,000 plus interest beginning July 1, 
1997.  Interest on the outstanding balance will be paid monthly starting
July 1, 1996 at a rate of 2.75% above the current published prime lending rate
per annum.

      The Company is a defendant in various lawsuits incident to the ordinary
course of business.  It is not possible to determine with any precision the
probable outcome or the amount of liability, if any, under these lawsuits:
however, in the opinion of the Company and its counsel, the disposition of 
these lawsuits will not have a material adverse effect on the Company's 
financial position, results of operations, or cash flows.

      On August 19, 1996, the Company and its financial advisor, Standard
Capital, agreed to terminate their agreement relationship.  In consideration of
the agreement, the Company agreed to pay Standard Capital all outstanding fees
and expenses totaling $120,000 as of August 14, 1996.  The Company, which had
previously agreed to provide Standard Capital with 250,000 five year warrants,
each exercisable to purchase one share of ITB Common Stock at an exercise price
of $5.00, agreed to provide Standard Capital with an additional 200,000
warrants, each identical to the initial warrants. Financing costs of $324,000
have been accounted for and expensed in the first quarter of fiscal 1997 for
these warrants.

      On September 12, 1996, the Company engaged Southcoast Capital Corporation
to act as its exclusive financial advisor in order to render certain financial
advisory and investment banking services to the Company with respect to
potential transactions aimed at enabling the Company to capitalize on its
existing growth opportunities and to maximize shareholder value.  In connection
with these services, the Company agreed to pay Southcoast a monthly retainer 
fee of $20,000 plus commissions in the event capital is raised.

      On September 17, 1996, the Company entered into a lease agreement with
Siemens Credit Corporation that provides for eighteen monthly lease payments of
$293 and an end buyout of approximately $42,000 for a new telephone system at
Freehold Raceway.  The Company recorded this transaction as a capital lease. 
The Company is in the process of extending the installation to include Garden 
State Park with a similarly priced contract agreement.

      On September 26, 1996 the Board of Directors approved a three-year
employment contract for Joel H. Sterns, Chairman of the Board.  The contract
provided for Mr. Sterns to serve a full-time basis through the period ending on
June 30, 1997 during which he would have devoted an average of thirty to forty
hours per week to the Company for an annual compensation of $384,000.   The
contract also provides that upon a "Termination Event", Mr. Sterns may be
entitled to receive certain amounts. (See Note 9 A)
      
(6)   INVESTMENTS 

      Short term investments, classified as cash equivalents, consist of
trading securities, and interest bearing certificates of deposit and  money
market accounts whose cost approximates fair value due to the short period to
maturity.  Investment income consists of interest income and realized and
unrealized gains on trading securities.  In computing the realized gain, cost
was determined under the specific identification method.

      Short-term investments, classified as current assets on the balance
sheet, include the following captions:

                                    September 30,                    
                                1996                1995
      Trading            $   115,000         $   290,000
      Available For Sale   1,140,499           2,857,074
          Totals         $ 1,255,499         $ 3,147,074    

      Management determines the appropriate classification of its investments
in debt and equity securities at the time of purchase and reevaluates such
determination at each balance sheet date.  Trading securities are securities
bought and held principally for the purpose of selling them in the near term 
and are reported at fair value, with unrealized gains and losses included in
operations for the current year.  Any material unrealized gain and or loss from
available for sale securities would be reported as a separate component of
stockholders equity.

      At September 30, 1996, the Company held approximately $2,566,600, which
was classified as restricted cash and  investments.  These funds are primarily
cash received from horsemen for nomination and entry fees to be applied to
upcoming racing meets, purse winnings held in trust for horsemen and unclaimed
ticket holder winnings, which are classified as current liabilities. 

      Investment income for the three months ended September 30, 1996 and 1995
includes unrealized gains of $35,000 and $50,000, respectively, on this
security.  Interest income for the three months ended September 30, 1996 and
1995 was $ 49,018 and $134,865, respectively.  Realized gains resulting from 
the sale of trading securities for the three months ended September 30, 1996 
and 1995 were $-0-, $7,500, respectively.


(7)   NET (LOSS) PER SHARE

      Net (loss) per share for the three months ended September 30, 1996 and
1995 is computed on the weighted average number of shares outstanding.  The
conversion period for the Convertible Preferred Stock concluded as of July 31,
1993, therefore the Convertible Preferred Stock has not been included in the
computations.  The number of shares used in the computations were 11,651,495 
and 9,551,394 at September 30, 1996 and 1995, respectively. 

(8)   NEW AUTHORITATIVE PRONOUNCEMENTS
          
      The Financial Accounting Standards Board (FASB) issued Statement of
Financial Accounting Standards (SFAS) No. 121, Accounting for the Impairment of
Long-Lived Assets and for Long-Lived Assets to be Disposed Of in March of
1995. SFAS No. 121 establishes accounting standards for the impairment of
long-lived assets, certain identifiable intangibles, and goodwill related to 
those assets to be held and used, and for long-lived assets and certain 
identifiable intangibles to be disposed of.   SFAS No. 121 is effective for 
financial statements issued for fiscal years beginning after December 15, 1995.
The Company adopted SFAS No. 121 on July 1, 1996.

      As more fully discussed in Notes 1-(E) & 5, the Company has incurred
approximately $52 million in construction and related costs associated with its
El Rancho/Orion project, which is estimated to cost approximately $1 billion. 
The Company is still in the process of obtaining financing for this project. 
While the Company intends to proceed with this casino project, any significant
reduction in financing will result in a more modestly scaled project. 
Application of SFAS No. 121 could prospectively result in a write-down of costs
incurred on the project if there is any significant decrease in the market 
value of the property; any significant adverse change in business climate; or
any accumulation of costs significantly in excess of amounts expected to 
complete the project.

      In October 1995, the Financial Accounting Standards Board issued SFAS
123, "Accounting for Stock Based Compensation," which is effective for fiscal
years beginning after December 15, 1995.  Under SFAS 123, companies can elect,
but are not required, to recognize compensation expense for all stock-based
awards to employees, using a fair value methodology.  The Company implemented on
July 1, 1996 the disclosure only provisions of the fair value method, as
permitted by SFAS 123 for awards to employees.  The Company will continue to
account for stock-based awards to employees under the intrinsic value method in
accordance with Accounting Principles Board Opinion No. 25 "Accounting for 
Stock Issued to Employees."  SFAS 123 also applies to transactions in which 
an entity issues its equity instruments to acquire goods or services from 
non-employees.  Those transactions must be accounted for based on the fair
value of the consideration received or the fair value of the equity instrument 
issued, whichever is more reliably measurable.  This requirement is effective 
for transactions entered into after December 15, 1995.   The Company adopted 
the requirements of SFAS 123 for non-employee awards for the year ended 
June 30, 1996.

      The FASB has also issued SFAS No. 125, "Accounting for Transfers and
Servicing of Financial Assets and Extinguishment of Liabilities".  SFAS No. 125
is effective for transfers and servicing of financial assets and extinguishment
of liabilities occurring after December 31, 1996.  Earlier application is not
allowed.  The provisions of SFAS No. 125 must be applied prospectively;
retroactive application is prohibited.  Adoption on January 1, 1997 is not
expected to have a material impact on the Company.

(9)   SUBSEQUENT EVENTS

      (A) On November 3, 1996 a group ("the Group") of shareholders,
representing approximately 56% (of which Robert E. Brennan represented 25%) of
the Company's outstanding Common Stock, filed a consent in accordance with
Section 228 of the Delaware General Corporation law to remove certain directors
and to elect four new directors to the board of the Company.

      Those immediately removed as directors were Joel Sterns, Chairman of the
Board, Roger Bodman, Clifford Goldman, Steve Norton, Robert Peloquin and Arthur
Winkler.  Those elected as directors of the Company to fill the vacancies on 
the Board of Directors, each to serve until the next annual meeting of 
stockholders or until his successor is duly elected and qualified are: Frank A.
Leo, John U. Mariucci, James J. Murray and Frank Koenemund.  At a meeting of 
the Board of Directors on November 6, 1996, Frank A. Leo was named Chairman of 
the Board. 
      
     On September 26, 1996 the Board of Directors approved a three year
employment contract for Joel H. Sterns, then Chairman of the Board.  The
contract provided that upon a "Termination Event", Mr. Sterns would 
receive certain amounts.  The removal of Mr. Sterns on November 4, 1996 prior 
to the expiration of his term may be deemed a "Termination Event" which, based
on his employment contract, may expose the Company to a future 
potential liability and expense.

      (B) On October 21, 1996, the Company amended its agreement of April 25,
1996 with a subsidiary of ITT Corporation to purchase 15 acres of unimproved
land located directly behind and contiguous to the site of the Company's
recently purchased El Rancho Hotel and Casino property.  The amendment provided
the Company a right to extend the closing from on or before November 29, 1996 
to and including December 27, 1996 under certain terms and conditions which
included a provision that the Company is required to make an escrow deposit of
$235,000 on or before October 31, 1996.  On October 30, 1996, the Company
perfected its election to extend the closing date with a deposit of the 
required funds. This deposit will be fully earned by the seller on an equal 
daily basis through December 27, 1996.  The purchase of the property would 
allow expanded frontage and room for future expansion and increased parking. 
The Company is seeking additional financing in order to finalize the purchase. 
If the Company fails to secure adequate financing by a settlement date of 
December 27, 1996, $2,350,000 of payments made to date in addition to the
extension deposit of $235,000 would be forfeited.

      (C) On October 25, 1996, Las Vegas Entertainment Network, Inc. (LVEN)
advised the Company that it was asserting its rights afforded during the Option
Period by arranging the prescribed escrow account.  On October 28, 1996, the
Company announced that LVEN forfeited certain rights with respect to the El
Rancho Hotel and Casino because it failed to satisfy certain contractual pre-
conditions.  LVEN has advised that it contests the Company's position. 
(See Note 5)

      (D) On November 6, 1996, the New Jersey Casino Control Commission
accepted a proposed stipulation of settlement between Mr. Brennan, over his
objections,  and the New Jersey Division of Gaming Enforcement which would
require Mr. Brennan to place his shares of the Company's Common Stock into a
liquidating trust contingent upon Bankruptcy Court approval within 60 days from
such date.  The Commission has designated Frank J. Dodd as the trustee of the
liquidating trust.  Management is of the belief that the action taken by the
Commission will not have an impact on the Company's day to day operations.  Mr.
Brennan has informed the Company that he is also in negotiations to divest
himself of his shares through a sale to an independent group of investors.


             INTERNATIONAL THOROUGHBRED BREEDERS, INC.
                         AND SUBSIDIARIES
                                 
           MANAGEMENT'S ANALYSIS OF FINANCIAL CONDITIONS
                     AND RESULTS OF OPERATIONS
             FOR THE QUARTER ENDED SEPTEMBER 30, 1996 

OPERATIONS
                                 
      Total revenues for the three months ended September 30, 1996 and 1995
were $14,330,962 and  $13,755,118, respectively.  The increase of approximately
4% is primarily the net result of an approximate 14% increase in revenues
generated by Freehold Raceway partially offset by a 5% decrease in revenues
generated by Garden State Park and a decrease in investment income of $108,347
for the three month period.
                                 
      For the first quarter of fiscal 1997, the Company realized a loss, 
of ($438,145) as compared to a income from
operations, of ($165,803) for the corresponding quarter 
in the preceding year.  The increase in loss primarily resulted from: 1) an
increase of approximately $393,125 in certain expenses associated with the
casino carrying costs;  2) an increase of $408,419 in interest expense which
reflects higher indebtedness levels incurred by the Company; 3) the net loss
generated by Garden State Park during the period as compared to income for the
comparable period in fiscal 1996; partially offset by 4) an increase in the net
income generated by Freehold Raceway during the comparable periods.
                                 
      Depreciation and amortization expense of financing costs and options
granted for the quarters ended September 30, 1996 and 1995 was $944,647 and
$354,615, respectively, reflecting a $590,032 increase during comparable 
periods primarily reflecting the recognition of a portion of deferred finance 
costs associated with the financing of the El Rancho project and options 
granted to non-employees and consultants.
                                 
Garden State Park:                
                                 
      During the three months ended September 30, 1996, Garden State Park's
revenue decreased $295,615 or 5%, from $6,395,564 to $6,099,949 for the
corresponding three month periods in fiscal 1996, primarily reflecting the
effect of a decrease in revenues generated from live racing and simulcasting to
and from other racetracks. Expenses before interest due to parent decreased 
$106,374 or 2% for the three months ending September 30, 1996 when compared to
the same period last year.  Garden State Park experienced at its current live
Harness Meet a 22% decrease in average daily handle during the first quarter of
fiscal 1997 as compared to the first quarter of fiscal 1996.  As a result of 
the decreased revenues and expenses, Garden State Park realized a loss from
operations, before interest due the parent company, of ($122,928) as compared 
to income of $66,313 in the same quarter last fiscal year.
                                 
      Garden State Park's 1996 Standardbred (Harness) Racing Meet began
September 6, 1996 and is scheduled to run 55 dates primarily on a four night 
per week basis until December 14, 1996.  Garden State Park's 1997 Thoroughbred
Racing Meet is scheduled to begin January 1, 1997 and is scheduled to run 63
dates primarily on a three day per week basis until May 26, 1997.  Racing will
be conducted on Friday and Saturday nights, Sunday racing will be conducted
during the day.
                                 
      ATTENDANCE AND HANDLES - The following summarizes average daily
attendance and wagering at Garden State Park as well as wagering on Garden 
State Park races simulcast to other racing facilities and the Atlantic
City Casinos for the three month fiscal periods from July 1, 1996 thru
September 30, 1996 and July 1, 1995 thru September 30, 1995:

<TABLE>
<S>                            <C>          <C>   <C>        <C> <C>
                               Approximate                  
                               Commission             DAILY AVERAGES  
                               % of handle                  
                                              

HARNESS MEETS                                 Fiscal 1997    Fiscal 1996

Attendance                                        2,536            2,640

Live Handle                    13.4%         $  162,542      $   207,620

Simulcast Sending Signal:                            

New Jersey Tracks (Avg. %)     3.3%          $  336,216      $   394,892

     Atlantic City Casinos     4.4%          $   24,930      $    37,194

       Out-of-State Tracks     1.5%          $  714,518      $   846,257

Combined Handles                             $1,238,206      $ 1,485,963

Number of Live Race Days                          14              14
</TABLE>

      The following summarizes average handles experienced by Garden State
Park in connection with receiving simulcasts for the three month fiscal periods
from July 1, 1996 thru September 30, 1996 and July 1, 1995 thru September 30,
1995: 

<TABLE>
<S>                         <C>           <C>      <C>         <C>
                               AVERAGE DAILY SIMULCAST HANDLES               

                            Fiscal 1997            Fiscal 1996
                                          

From Tracks *:                 # of       ( $)         # of    ( $)  
                               days                    days  
                                          

New Jersey Tracks:                                        

            Monmouth(T)          46        57,088       48      70,985

       Atlantic City(T)          35        42,490       38      46,048

         Meadowlands(T)          17        55,747       20      82,152

            Freehold(S)          36        26,570       36      30,963

         Meadowlands(S)          31        52,101       31      78,870

Out-of-State Tracks (T,S)        92       225,073       92     217,568

TOTAL RECEIVING                        28,339,225           30,376,006
HANDLE                                                    

(T) = Thoroughbred, (S) = Standardbred*The commission percentage of 
handleaveraged approximately 12% of total handles on simulcasting received 
during the three months ended September 30, 1996.                    
                                                          
</TABLE>

Freehold Raceway:

      The Company conducts Harness Racing through Freehold Racing
Association, Inc. ("FRA") and Atlantic City Harness, Inc. ("ACH"), the
operating companies of  Freehold Raceway.

       During the three months ended September 30, 1996, Freehold
Raceway's revenue increased $1,017,400 or 14%, from $7,169,350 to
$8,186,750 for the corresponding three month periods in fiscal 1996,
primarily reflecting the result of:  1) an increase in revenues from
receiving simulcasting during the day at the track in July and August of
fiscal 1997 as compared to fiscal 1996 when simulcasting was not
conducted during the day at the track; partially offset by 2) a net
decrease in revenues as a result of a decrease in average handles from
live racing and simulcasting activities.  Expenses before interest due
to parent increased $561,193 or 9% for the three months ending September
30, 1996 when compared to the same period last year primarily as a
result of the increased expenses associated with the increased simulcast
receiving activities.  Freehold Raceway experienced at its current live
FRA Harness Meet an 8% decrease in average daily handle during the first
quarter of fiscal 1997 as compared to the first quarter of fiscal 1996. 
As a result of the overall increased revenues and despite increased
expenses, Freehold Raceway realized income from operations, before
interest due the parent company, of $1,242,275 as compared to income of
$786,068 in the same quarter last fiscal year.  

      During fiscal 1997, Freehold Raceway will race under two
separate identities.  FRA will race 100 days from August 15, 1996 thru
December 31, 1996.  ACH has applied to the New Jersey Racing Commission
to race 106 days from January 1, 1997 through May 26, 1997.  FRA has
applied to the New Jersey Racing Commission to race 97 days from August
14, 1997 through December 31, 1997.
      
      ATTENDANCE AND HANDLES - The following summarizes average daily
attendance and wagering at Freehold Raceway as well as wagering on
Freehold Raceway races simulcast to other racing facilities and the
Atlantic City Casinos for the three month fiscal periods from July 1,
1996 thru September 30, 1996 and July 1, 1995 thru September 30, 1995:

<TABLE>
<S>                              <C>          <C>              <C>
                                 Approximate                 
                                 Commission                               
                                 % of handle            DAILY     AVERAGES

FRA HARNESS MEETS                              Fiscal 1997     Fiscal 1996

Attendance                                     $       2,339   $    2,449

Live Handle                       9.3%         $     283,019   $  308,624

Simulcast Sending Signal:                              

New Jersey Tracks (Avg. %)         3.6%        $     185,534   $  185,211

    Atlantic City Casinos         4.5%         $      30,304   $   26,818

      Out-of-State Tracks         1.5%         $     336,083   $  374,600

Combined Handles                               $     834,940   $  895,253

Number of Live Race Days                                  36           36
</TABLE>


      The following summarizes average handles experienced by Freehold Raceway 
in connection with receiving simulcasts for the three month fiscal periods 
from July 1, 1996 thru September 30, 1996 and July 1, 1995 thru September 30,
1995:

<TABLE>
<S>                          <C>        <C>          <C>      <C>
AVERAGE DAILY SIMULCAST HANDLES                             

                             Fiscal 1997             Fiscal 1996
                                          
From Tracks *:                # of      ($)          # of     ($)  
                              days                   days   
                                          

New Jersey Tracks:                                          

    Garden State Park(S)      14         67,840         14     82,474

          Meadowlands(S)      30        118,367         30    154,363

          Meadowlands(T)      17         41,837         20     54,932

        Atlantic City(T)      38         24,970         38     37,932

Out-of-State Tracks  (T,S)    92        232,946         81    173,991

TOTAL RECEIVING                      
HANDLE                               27,517,048            22,418,867

(T) = Thoroughbred, (S) = Standardbred*The commission percentage ofhandle 
averaged approximately 11.6% of total handles on simulcasting receivedduring 
the three months ended September 30, 1996.   27,517,048
                                                            
</TABLE>


LIQUIDITY AND FINANCIAL RESOURCES
      
      The Company's working capital (deficit), on a consolidated basis, as
of September 30, 1996, was ($5,687,275) which represents a decrease of
approximately $11,400,000 from September 30, 1995.  This decrease in
working capital of approximately $11,400,000  is primarily the result of
the following factors: 1) the utilization of cash of approximately
$12,600,000  for the purchase of the El Rancho property and deposits of
$2,350,000 made for the purchase of an adjoining piece of property from
Sheraton Gaming Corporation for the casino development project;   2) an
increase in cash of approximately  $30,000,000 generated from debt
financing offset by principal payments of  approximately $23,800,000;  3)
cash of approximately $5,440,000 from a Regulation S offering of Common
Stock;  4) capitalized expenditures and improvements of  $7,000,000
associated with future casino development and $2,200,000 for the two
racetrack properties;   5) $400,000 for the purchase of land for a parking
lot at the Freehold racetrack facility (previously leased by the Company); 
and   6) cash in the amount of $1,100,000 generated from operating
activities.

      The Company's cash flows from operations were $1,236,163 during the
first quarter of fiscal 1997 compared to $3,663,729 for the comparable
period in fiscal 1996.  Although the Company suffered a net loss of
($1,371,234) for the three months ended September 30, 1996,  it deferred
payment of  certain accounts payable which, along with other adjustments
affecting cash flow (such as depreciation and amortization), resulted in
cash being provided from operations.

        Cash used for investing activities was $3,286,195 during the first
quarter of fiscal 1997 compared to $118,195 for the comparable period in
fiscal 1996.  The increase was the result of deposits made on an adjacent
piece of property in the amount of $1,880,000, an increase of $555,808 in
capital expenditures for improvements at the two racetrack properties and
expenditures for future casino development of $660,916.  

      Cash provided by financing activities was $1,318,451 for the first
quarter of fiscal 1997 compared to cash (used) during the comparable period
by financing activities in fiscal 1996 of $(179,100).  The increase was the
result of an increase in cash of $2,640,908 generated from debt financing
primarily associated with the revolving credit line with Foothill Capital
Corporation and note proceeds of $827,891 in borrowings in connection
with new air conditioning equipment at Garden State Park offset by an
increase in principal payments of  $1,888,872 primarily as a result of a
final payment of $1,405,000 on a note previously executed by Freehold
Raceway.

      Restricted Cash and Investments of $2,566,609 as of September 30,
1996 consisted of horsemen's deposits held by the racetrack for race
nominations,  purse winnings,  and funds held for uncashed mutuel ticket
sales due to the patrons or government authorities.  These balances  are
offset with the Company's payables.  As restricted cash these cash funds
are not available for Company operations.

      On January 14, 1996, in connection with the Company's purchase of
the El Rancho Hotel and Casino property  the Company issued its $10,500,000 
second mortgage note at 8% interest, which is payable only to the extent
that certain contingent events occur.  At September 30, 1996, this amount
is classified as long term debt since the Company does not anticipate these
contingencies occurring before October of 1997.

      On March 20, 1996, the Company and Foothill Capital Corporation of
Los Angeles, California, signed a Letter of Intent for the proposed
borrowing of $30,000,000.  Closing on the financing contract took place on
June 4, 1996.  The financing arrangement, secured by, among other things, a
mortgage on the El Rancho property, Garden State Park, and a second
mortgage on Freehold Raceway, is for a $16,000,000 revolving credit line
and a $14,000,000 Time Loan Mortgage, used at settlement to pay off the
$14,000,000 first mortgage note referred to in Note 5 above due on December
20, 1996.  The revolving credit line is restricted by $3,000,000 until such
time that an approved settlement agreement between the New Jersey Division
of Gaming Enforcement, the Company and Robert E. Brennan, the Company's
former chairman, has been approved by the Bankruptcy Court overseeing Mr.
Brennan's personal Chapter 11 bankruptcy proceeding.  The revolving credit
line requires that the Company make quarterly principal payments of
$400,000 beginning July 1, 1997.  Interest on the outstanding balance will
be paid monthly starting July 1, 1996 at a rate of 2.75% above the current
published prime lending rate per annum.  The Time Loan Mortgage requires
that the Company make equal monthly principal payments of $250,000 plus
interest beginning July 1, 1997.  Interest on the outstanding balance will
be paid monthly starting July 1, 1996 at a rate of 2.75% above the current
published prime lending rate per annum.   The financing agreement also
provides for the lender to receive a monthly service fee of $5,000;  a .5%
monthly fee on the unused portion of the line of credit;  and an annual 1%
lender's commitment fee.  The total principal balance of the revolving
credit line and the Time Loan Mortgage as of September 30, 1996 was
$23,478,228 leaving a balance to draw on at September 30, 1996 of
$3,521,772, before the release of the $3,000,000 restriction.  Subsequent
to September 30, 1996 and as of November 10, 1996 the Company has drawn an
additional $228,908, leaving a balance of $3,521,665 to draw upon before
the release of the $3,000,000 restriction.   The credit facility contains
financial and other covenants that  require the Company to maintain certain 
standards with respect to: (i) minimum tangible net worth of $70,000,000; 
and (ii) liabilities to tangible net worth ratio of not more than one to
one.  The covenants also require that (iii) Foothill Capital receive a
subordinated Deed of Trust on the adjacent property upon completion of its
purchase; and (iv) that additional purchase money financing and/or capital
leases cannot exceed an aggregate $3,000,000.  The Company believes it will
continue to be in compliance with these arrangements during fiscal 1997. 

      In June, 1996 the Company entered into a purchase agreement with
Sheraton Gaming Corporation  to purchase a fifteen acre tract directly
behind its El Rancho property.  On October 30, 1996, the Company made a
payment of $235,000 to extend the original closing date of November 29,
1996 to December 27, 1996.  The Company made payments of $470,000 during
fiscal 1996 and  $1,880,000 during the first quarter of fiscal 1997.  The
Company will need to seek financing in order to finalize the purchase.  If
the Company fails to secure adequate financing by the amended date of
December 27, 1996, the total $2,585,000  payments made to date would be
forfeited.  No assurance can be given that the financing will be obtained,
or,  if it is obtained, will be prior to the required closing date.  

       In July, 1996, the Company entered into an agreement with GE
Capital Corporation with respect to financing $827,891 at an interest rate
of 9.3% for the purchase of 2 new natural gas powered air conditioners at
Garden State Park.  The contract provides for sixty consecutive monthly
installments of principal and interest of $17,067 beginning August 25,
1996. 

      On September 17, 1996 the Company entered into a lease agreement
with Siemens Credit Corporation that provides for eighteen monthly lease
payments of $293 and an end buy out of approximately $42,000 for a new
telephone system at Freehold Raceway.  The Company is in the process of
extending the installation to include Garden State Park with a similarly
priced contract agreement.

      
Seasonality and Effect of Inclement Weather

      Because horse racing is conducted outdoors, a number of variables
contribute to the seasonality of the business, most importantly weather. 
Weather conditions, particularly during the winter months, sometimes cause
cancellation of races or severely curtail attendance, which reduces
wagering and live racing and simulcast wagering both on site and off site. 
Attendance and wagering also have been adversely affected by major winter
storms which have affected the entire Northeast part of the country during
the 1995-96 winter season.

      In addition a disproportionate amount of ITB's revenue is received
during the period September through May of each year because Garden State
Park and Freehold Raceway only conduct simulcast receiving (not live
racing) during the summer months.  As a result, the Company's revenue has
been greatest in the second and third quarters of the year.      


INFLATION

      To date, inflation has not had a material effect on the Company's
operations.