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:
          
                         Amending Part 1

                   Item 1 - Financial Statements              

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

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/Robert J. Quigley
                               Robert J. Quigley, President

                              By/s/William H. Warner
                               William H. Warner, Principal
                               Financial and Accounting Officer





INTERNATIONAL THOROUGHBRED BREEDERS, INC.
AND SUBSIDIARIES

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

<TABLE>

ASSETS
<CAPTION>
                                                   September 30,
                                                       1996         June 30,
                                                    (UNAUDITED)       1996
CURRENT ASSETS:
<S>                                              <C>            <C>
  Cash                                           $    2,425,422 $    1,069,282
  Short-Term Investments                              1,255,499      3,147,074
     TOTAL CASH AND CASH EQUIVALENTS                  3,680,921      4,216,356

  Restricted Cash and Investments                     2,566,609      2,971,538
  Accounts Receivable - Net                           2,984,755      1,892,941
  Prepaid Expenses                                    1,062,125      1,205,951
  Other Current Assets                                  157,184        366,656
     TOTAL CURRENT ASSETS                            10,451,594     10,653,442

LAND, BUILDINGS, EQUIPMENT AND LIVESTOCK:
  Land and Buildings                                 69,111,811     69,093,719
  Construction In Progress                           51,980,677     48,736,200
  Equipment                                           5,221,965      4,356,202
  Livestock                                              20,687         20,687
     TOTAL LAND, BUILDINGS, EQUIPMENT
         AND LIVESTOCK                              126,335,140    122,206,808
LESS: Accumulated Depreciation                        3,218,673      2,858,439
     TOTAL LAND, BUILDINGS, EQUIPMENT
         AND LIVESTOCK  - NET                       123,116,467    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
  Financing Costs - Net                               4,512,212      4,667,415
  Goodwill - Net                                      3,124,224      3,151,872
     TOTAL OTHER ASSETS                               8,019,371      8,159,794


TOTAL ASSETS                                     $  148,319,608 $  144,880,933
</TABLE>
See Notes to Financial Statements.


INTERNATIONAL THOROUGHBRED BREEDERS, INC.
AND SUBSIDIARIES

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

<TABLE>

LIABILITIES AND SHAREHOLDERS' EQUITY
<CAPTION>
                                                   September 30,
                                                       1996         June 30,
                                                    (UNAUDITED)       1996
CURRENT LIABILITIES:
<S>                                              <C>            <C>
  Accounts Payable and Accrued Expenses          $   11,056,023 $    9,804,641
  Notes and Mortgages Payable - Current Portion       2,786,507      3,214,100
  State Income Taxes Payable                             68,784         30,284
       TOTAL CURRENT LIABILITIES                     13,911,314     13,049,025

DEFERRED INCOME                                       2,205,903      1,499,449

LONG-TERM LIABILITIES:
  Notes Payable - Long Term Portion                  53,064,747     50,992,702
  Deferred State Income Taxes Payable                    21,652         21,652
       TOTAL LONG-TERM LIABILITIES                   53,086,399     51,014,354


COMMITMENTS AND CONTINGENCIES                                 0              0

SHAREHOLDERS' EQUITY:
  Series A (Convertible) 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                           16,435,530     16,111,652
  Retained Earnings
   (subsequent to June 30, 1993, date of
   quasi-reorganization)                              3,298,848      3,829,336
     TOTAL                                           79,283,648     79,490,136
  LESS: Deferred Compensation                           167,656        172,031
     TOTAL SHAREHOLDERS' EQUITY                      79,115,992     79,318,105

TOTAL LIABILITIES & SHAREHOLDERS' EQUITY         $  148,319,608 $  144,880,933
</TABLE>
See Notes to Financial Statements.







  INTERNATIONAL THOROUGHBRED BREEDERS, INC.
               AND SUBSIDIARIES

CONSOLIDATED STATEMENT OF SHAREHOLDERS' EQUITY
FOR THE THREE MONTHS ENDED SEPTEMBER 30, 1996
                 (UNAUDITED)
<TABLE>
<CAPTION>
                                                Preferred
                                                Number of
                                                  Shares       Amount
<S>                                                <C>     <C>
BALANCE - JUNE 30, 1996                            362,462 $ 36,246,175

   Options Issued for Financing Cost               ---          ---
   Shares Issued for Fractional
   Exchanges With Respect to the
      One-for-twenty Reverse Stock Split
      effected on March 13, 1992                         1          100
   Amortization of Deferred Compensation Costs     ---          ---
   Net (Loss) for the Three Months Ended
   September 30, 1996                              ---          ---

BALANCE - SEPTEMBER 30, 1996                       362,463 $ 36,246,275
</TABLE>

<TABLE>
<CAPTION>
                                                  Common
                                                Number of
                                                  Shares       Amount
<S>                                             <C>        <C>
BALANCE - JUNE 30, 1996                         11,651,487 $ 23,302,973

   Options Issued for Financing Cost               ---          ---
   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
</TABLE>

<TABLE>
<CAPTION>
                                                 Capital      Deferred
                                                in Excess   Compensation
                                                  of Par        Cost
<S>                                           <C>          <C> 
BALANCE - JUNE 30, 1996                       $ 16,111,652 $   (172,031)

   Options Issued for Financing Cost               324,000      ---
   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     ---            4,375
   Net (Loss) for the Three Months Ended
   September 30, 1996                              ---          ---

BALANCE - SEPTEMBER 30, 1996                  $ 16,435,530 $   (167,656)
</TABLE>

<TABLE>
<CAPTION>
                                                 Retained
                                                 Earnings      Total
<S>                                           <C>          <C>
BALANCE - JUNE 30, 1996                       $  3,829,336 $ 79,318,105

   Options Issued for Financing Cost               ---          324,000
   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
   Net (Loss) for the Three Months Ended
   September 30, 1996                             (530,488)    (530,488)

BALANCE - SEPTEMBER 30, 1996                  $  3,298,848 $ 79,115,992
</TABLE>
See Notes to Financial Statements.







INTERNATIONAL THOROUGHBRED BREEDERS, INC.
AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE THREE MONTHS ENDED SEPTEMBER 30, 1996 AND 1995
(UNAUDITED)
<TABLE>
<CAPTION>
                                    Three Months Ended  Three Months Ended
                                       September 30,     September 30,
                                            1996             1995
REVENUES:
<S>                                 <C>               <C>               
  Revenue from Operations           $      14,246,945 $     13,562,753
  Investment Income                            84,018          192,365
   TOTAL REVENUES                          14,330,963       13,755,118

EXPENSES:
  Cost of Revenues                          3,904,373        3,678,809
  Operating Expenses                        7,647,154        7,454,597
  Depreciation & Amortization                 392,256          354,615
  General & Administrative Expenses         2,079,849        2,101,294
  Financing Cost from Options Granted         324,000                0
  Amortization of Financing Costs             237,579                0
  Interest Expense                            237,030          285,419
   TOTAL EXPENSES                          14,822,241       13,874,734


(LOSS) FROM OPERATIONS
  BEFORE TAXES                               (491,278)        (119,616)

  Income Tax Expense                           39,210           30,800


NET (LOSS)                          $        (530,488)$       (150,416)


NET (LOSS) PER SHARE                $           (0.05)$          (0.02)
</TABLE>
See Notes to Financial Statements.







INTERNATIONAL THOROUGHBRED BREEDERS, INC.
AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE THREE MONTHS ENDED SEPTEMBER 30, 1996 AND 1995
(UNAUDITED)
<TABLE>
<CAPTION>
                                                   Three Months   Three Months
                                                       Ended         Ended
                                                    September 30, September 30,
                                                         1996         1995
CASH FLOWS FROM OPERATING ACTIVITIES:
<S>                                                 <C>          <C>
 NET (LOSS)                                         $   (530,488)$   (150,416)
 Adjustments to reconcile net (loss) to net cash 
  provided by operating activities:
   Depreciation and Amortization                         629,835      354,615
   Financing Cost from Options Granted                   324,000            0
   (Gain) on Sale of Livestock and Fixed Assets                0       (5,000)
   Changes in Assets and Liabilities -
      (Increase) Decrease in Restricted Cash &
        Investments                                      404,929      617,364
      (Increase) Decrease in Accounts Receivable      (1,091,814)    (278,797)
      (Increase) Decrease in Other Assets                209,472       (1,781)
      (Increase) Decrease in Prepaid Expenses            143,826      308,364
      Increase (Decrease) in Account Payable and
        Accrued Expenses                               1,289,882    1,855,731
      Increase (Decrease) in Deferred Income             706,454      963,649
 NET CASH PROVIDED BY OPERATING ACTIVITIES             2,086,096    3,663,729

CASH FLOWS FROM INVESTING ACTIVITIES:
    Proceeds from Sale of Equipment and Livestock              0        5,000
    Deposits on Purchase of Additional Land
     in Las Vegas                                     (1,880,000)           0
    Casino Development Costs                            (724,887)           0
    Capital Expenditures for Racetracks                 (702,851)    (147,043)
    (Increase) Decrease in Other Investment
     Activity                                            (42,428)      23,848
 NET CASH (USED) BY INVESTING ACTIVITIES              (3,350,166)    (118,195)

CASH FLOWS FROM FINANCING ACTIVITIES:
    Proceeds from issuance of Long Term Notes            827,891            0
    Proceeds from Line of Credit                       2,016,862            0
    Principal Payments on Short Term Notes              (389,067)           0
    Principal Payments on Long Term Notes             (1,727,051)    (179,100)
 NET CASH PROVIDED (USED) BY FINANCING ACTIVITIES        728,635     (179,100)

NET (DECREASE) INCREASE 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 (Net of Interest Capitalized)           $     58,905 $     85,487
   Income Taxes                                     $        710 $     23,400
</TABLE>
Supplemental Schedule of Non-Cash Investing and Financing Activities:
During the three months ended September 30, 1996, the Company
  recorded an unrealized gain of $35,000 on trading securities.
During the three months ended September 30, 1996, the Company
  issued 200,000 warrants in connection with financing cost of $324,000.
During the three months ended September 30, 1996, the Company
  increased notes payable by $642,608 for interest which was capitalized.

See Notes to Financial Statements.



               INTERNATIONAL THOROUGHBRED BREEDERS, INC.
                          AND SUBSIDIARIES
                    NOTES TO 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
development costs in conjunction with the acquisition of the El Rancho Hotel
and Casino which the Company has capitalized.  These costs include land and
building acquisitions costs, interest, legal, consulting and other
professional fees, other development and carrying costs in connection with the
future development of the casino project.  Such costs totaling approximately
$52,000,000,  include real property acquisition costs in the amount of
approximately $43,500,000 and capitalized interest of $1,566,960 through
September 30, 1996. 

     (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 $1,801,400 associated with warrants issued in connection
with the purchase and financing of the casino project, net of amortization of
$187,836 and $128,851, respectively, as of September 30, 1996 and June 30,
1996.  These costs of $4,512,212, net of amortization of $316,687, 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>
<CAPTION>
                                                     September 30, 1996
                                   Interest %       Current     Long-Term
ITB:
<S>                            <C>               <C>          <C>
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
Network, Inc. Mortgage         8%                           0   10,500,000

Notes-Insurance Contracts      Various                133,559            0

FREEHOLD RACEWAY:

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 averaged 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 $642,608 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
carryforwards 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 carryforwards 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:

<TABLE>
                                        Three Months ended  
                                           September 30,
<CAPTION>
<S>                                      <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 precribed 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 $56,492,889 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 bankrupcy 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:

<TABLE>
                                  September 30,             
<CAPTION>
<S>                   <C>                 <C>
                             1996                1995
Trading               $   115,000         $   290,000
Available For Sale      1,140,499           2,857,074
       Totals         $ 1,255,499         $ 3,147,074    
</TABLE>

  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 ticketholder 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

       REVIEW BY INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
     FOR THE THREE MONTHS ENDED SEPTEMBER 30, 1996 AND 1995

  Independent accountants have reviewed the financial information herein
in accordance with standards established by the American Institute of
Certified Public Accountants.  All adjustments and additional disclosures
proposed by said independent accountants have been reflected in the data
presented.

           Review Report of Independent Accountant's

The Board of Directors and Shareholders

International Thoroughbred Breeders, Inc.
           
  We have reviewed the accompanying consolidated balance sheet of
International Thoroughbred Breeders, Inc., and subsidiaries as of September
30, 1996, and the related consolidated statement of shareholders' equity for
the three month period then ended, and the consolidated statements of
operations, and cash flows for the three month periods ended September 30,
1996 and 1995.  These financial statements are the responsibility of the
company's management.

  We conducted our reviews in accordance with standards established by
the American Institute of Certified Public Accountants.  A review of interim
financial information consists principally of applying analytical procedures
to financial data and making inquiries of persons responsible for financial
and accounting matters.  It is substantially less in scope than an audit
conducted in accordance with generally accepted auditing standards, the
objective of which is the expression of an opinion regarding the financial
statements taken as a whole. Accordingly, we do not express such an opinion.

  Based on our reviews, we are not aware of any material modifications
that should be made to the consolidated financial statements referred to
above for them to be in conformity with generally accepted accounting
principles.

  We have previously audited, in accordance with generally accepted
auditing standards, the consolidated balance sheet as of June 30, 1996, and
the related consolidated statements of operations, shareholders' equity, and
cash flows for the year then ended (not presented herein); and in our report
dated August 23, 1996, we expressed an unqualified opinion on those
consolidated financial statements. In our opinion, the information set forth
in the accompanying consolidated balance sheet as of June  30, 1996, is
fairly stated, in all material respects, in relation to the consolidated
balance sheet from which it has been derived.

                                  MOORE STEPHENS, P.C.
                                  Certified Public Accountants 

Cranford, New Jersey
November 6, 1996

           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 $14,330,963 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 decrease in
revenues generated by Garden State Park and a decrease in investment income
for the three month period.

     For the first quarter of fiscal 1997, the Company realized a loss from
operations, before income taxes, of $491,278 as compared to a loss from
operations, before income taxes,  of $119,616 for the corresponding quarter
in the preceeding year.  The increase in loss primarily resulted from: 1) an
increase of approximately $996,000 in certain Corporate expenses associated
with the development of casino gaming opportunities;  2) 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 3) an increase in
the net income generated by Freehold Raceway during the comparable periods.

     Depreciation and amortization expense for the quarters ended September
30, 1996 and 1995 was $629,835 and $354,615, respectively, reflecting a
$275,220 increase during comparable periods primarily reflecting the
recognition of a portion of deferred finance costs associated with the
financing of the El Rancho project.

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>
<CAPTION>
                            Approximate
                            Commission
                            % of handle           DAILY AVERAGES

HARNESS MEETS                               Fiscal 1997      Fiscal 1996
<S>                                    <C>    <C>       <C>    <C>
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>
<CAPTION>
                                      AVERAGE DAILY SIMULCAST HANDLES

                                      Fiscal 1997       Fiscal 1996
                                      # of              # of
From Tracks*:                         days       $      days      $
New Jersey Tracks:
<S>                         <C>          <C> <C>          <C> <C>
    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
    HANDLE                                   28,339,225       30,376,006
</TABLE>
(T)=Thoroughbred, (S)=Standardbred    *The commission percentage of handle
averaged approximately 12% of total handles on simulcasting received
during the three months ended September 30, 1996.



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>
<CAPTION>
                            Approximate
                            Commission
                            % of handle           DAILY AVERAGES

FRA HARNESS MEETS                           Fiscal 1997      Fiscal 1996

<S>                               <C>  <C>      <C>     <C>      <C>
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>
                                      AVERAGE DAILY SIMULCAST HANDLES
<CAPTION>
                                      Fiscal 1997       Fiscal 1996
                                      # of              # of
From Tracks*:                         days       $      days      $
<S>                         <C>          <C> <C>          <C> <C>
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
</TABLE>
(T)=Thoroughbred, (S)=Standardbred    *The commission percentage of handle
averaged approximately 11.6% of total handles on simulcasting received
during the three months ended September 30, 1996.



LIQUIDITY AND FINANCIAL RESOURCES
     
     The Company's working capital (deficit), on a consolidated basis, as
of September 30, 1996, was ($3,459,720) which represents a decrease of
approximately $11,700,000 from September 30, 1995.  During the comparable
period the Company's cash and cash equivalents, decreased by $11,486,807 and
its short term notes and mortgages payable decreased by $471,558, along with
an increase in accounts payable and accrued expenses of $2,471,712.   This
decrease in working capital of approximately $11,700,000  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 $2,086,096 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 $530,488
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 $3,350,166 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 $724,887.  

     Cash provided by financing activities was $728,635 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 $2,016,862 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  $1,937,018 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 happening by June 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
reached by the New Jersey Casino Control Commission and 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 it 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

     Horse racing is conducted outdoors, therefore 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 and net income
have 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.