FORM 10-Q

                 SECURITIES AND EXCHANGE COMMISSION

                       Washington, D.C. 20549

(Mark One)

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

For the quarterly period ended     March 31, 1997            

                       OR

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

For the transition period from                to                   
 
Commission file number                0-9624                       

           International Thoroughbred Breeders, Inc.               
      (Exact name of registrant as specified in its charter)

   Delaware                              22-2332039                
(State or other jurisdiction of        (I.R.S. Employer  
incorporation or organization)        Identification No.)          
                  
              P.O. Box 1232, Cherry Hill, New Jersey  08034        
                 (Address of principal executive offices)
                             (Zip Code)

                         (609) 488-3838                            
        (Registrant's telephone number, including area code)

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

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

                APPLICABLE ONLY TO CORPORATE ISSUERS:

    Indicate the number of shares outstanding of each of the
issuer's classes of common stock, as of the close of the latest
practicable date.

  Class                               Outstanding at May 19, 1997
Common Stock, $ 2.00 par value          11,651,533(1)  



      INTERNATIONAL THOROUGHBRED BREEDERS, INC.
                  AND SUBSIDIARIES
    
            CONSOLIDATED BALANCE SHEETS
       AS OF MARCH 31, 1997 AND JUNE 30, 1996
    
                       ASSETS
<TABLE>
                                                  March 31,
                                                    1997         June 30,
                                                 (UNAUDITED)       1996
<CAPTION>
    CURRENT ASSETS:
    <S>                                       <C>            <C>
      Cash                                    $    3,050,202 $    4,136,356
      Short-Term Investments                          40,000         80,000
           TOTAL CASH AND CASH EQUIVALENTS         3,090,202      4,216,356
    
      Restricted Cash and Investments              1,980,960      2,971,538
      Accounts Receivable - Net                    3,809,086      1,892,941
      Prepaid Expenses                               583,014      1,205,951
      Other Current Assets                           164,013        366,656
           TOTAL CURRENT ASSETS                    9,627,275     10,653,442
    
    LAND, BUILDINGS, EQUIPMENT AND LIVESTOCK:
      Land and Buildings                          69,212,388     69,093,719
      Construction In Progress                    52,761,903     48,736,200
      Equipment                                    5,562,806      4,356,202
      Livestock                                            0         20,687
           TOTAL LAND, BUILDINGS, EQUIPMENT
               AND LIVESTOCK                     127,537,097    122,206,808
    LESS: Accumulated Depreciation                 3,943,965      2,858,439
           TOTAL LAND, BUILDINGS, EQUIPMENT
               AND LIVESTOCK  - NET              123,593,132    119,348,369
    
    LAND AND IMPROVEMENTS HELD FOR SALE - NET      6,754,459      6,719,327
    
    OTHER ASSETS:
      Deposits and Other Assets                      262,027        340,507
      Financing Costs - Net                        5,090,397      4,667,415
      Goodwill - Net                               3,068,928      3,151,872
           TOTAL OTHER ASSETS                      8,421,352      8,159,794
    
    
    TOTAL ASSETS                              $  148,396,217 $  144,880,933
</TABLE>
    
    See Notes to Financial Statements.
    
    
        LIABILITIES AND SHAREHOLDERS' EQUITY
<TABLE>
    
                                                  March 31,
                                                    1997         June 30,
                                                 (UNAUDITED)       1996
<CAPTION>
    CURRENT LIABILITIES:
    <S>                                       <C>            <C>
      Accounts Payable                        $    6,213,066 $    6,800,341
      Accrued Expenses                             5,054,697      3,004,300
      Notes and Mortgages Payable -
       Current Portion                             4,836,787      3,214,100
      State Income Taxes Payable                     122,209         30,284
           TOTAL CURRENT LIABILITIES              16,226,759     13,049,025
    
    DEFERRED INCOME                                1,144,879      1,499,449
    
    LONG-TERM LIABILITIES:
      Notes Payable - Long Term Portion           56,484,920     50,992,702
      Deferred State Income Taxes Payable             21,652         21,652
           TOTAL LONG-TERM LIABILITIES            56,506,572     51,014,354
    
    
    COMMITMENTS AND CONTINGENCIES (5)                      0              0
    
    SHAREHOLDERS' EQUITY:
      Series A (Convertible) Preferred
       Stock $100.00 Par Value,
        Authorized 500,000 Shares,
        Issued and Outstanding,
        362,468 and 362,462 Shares,
         Respectively                             36,246,775     36,246,175
      Common Stock $2.00 Par Value,
      Authorized 25,000,000 Shares,
       Issued and Outstanding, 11,651,528
       and 11,651,487 Shares, Respectively        23,303,055     23,302,973
      Capital in Excess of Par                    17,837,887     16,111,652
      Retained Earnings (Deficit)
      (subsequent to June 30, 1993, date
       of quasi-reorganization)                   (1,392,320)     3,829,336
           TOTAL                                  75,995,397     79,490,136
      LESS: Deferred Compensation - Net (6-A)      1,477,390        172,031
           TOTAL SHAREHOLDERS' EQUITY             74,518,007     79,318,105
    
    
    TOTAL LIABILITIES & SHAREHOLDERS' EQUITY  $  148,396,217 $  144,880,933
</TABLE>
    See Notes to Financial Statements.

      INTERNATIONAL THOROUGHBRED BREEDERS, INC.
                 AND SUBSIDIARIES
    
      CONSOLIDATED STATEMENT OF SHAREHOLDERS' EQUITY
      FOR THE NINE MONTHS ENDED MARCH 31, 1997
                   (UNAUDITED)
<TABLE>
                                               Preferred
                                               Number of
                                                Shares        Amount
<CAPTION>
    <S>                                           <C>     <C>
    BALANCE - JUNE 30, 1996                       362,462 $  36,246,175
    
      Options Issued for Financing Cost           ---           ---
      Deferred Compensation for Options
      Granted to Employees                        ---           ---
      Shares Issued for Fractional
      Exchanges With Respect to the
         One-for-twenty Reverse Stock Split
         effected on March 13, 1992                     6           600
      Amortization of Deferred
      Compensation Costs                          ---           ---
      Forfeiture of Options                       ---           ---
      Net (Loss) for the Nine Months
      Ended March 31, 1997                        ---           ---
    
    BALANCE - MARCH 31, 1997                      362,468 $  36,246,775
</TABLE>
<TABLE>
                                                Common
                                               Number of
                                                Shares        Amount
<CAPTION>
    <S>                                        <C>        <C>
    BALANCE - JUNE 30, 1996                    11,651,487 $  23,302,973
    
      Options Issued for Financing Cost           ---           ---
      Deferred Compensation for Options
      Granted to Employees                        ---           ---
      Shares Issued for Fractional
      Exchanges With Respect to the
         One-for-twenty Reverse Stock Split
         effected on March 13, 1992                    41            82
      Amortization of Deferred
      Compensation Costs                          ---           ---
      Forfeiture of Options                       ---           ---
      Net (Loss) for the Nine Months
      Ended March 31, 1997                        ---           ---
    
    BALANCE - MARCH 31, 1997                   11,651,528 $  23,303,055
</TABLE>
<TABLE>
    
                                                Capital
                                               in Excess     Deferred
                                                of Par     Compensation
<CAPTION>
    <S>                                     <C>           <C>  
    BALANCE - JUNE 30, 1996                 $  16,111,652 $    (172,031)
    
      Options Issued for Financing Cost           324,000       ---
      Deferred Compensation for Options
      Granted to Employees                      1,523,750    (1,523,750)
      Shares Issued for Fractional
      Exchanges With Respect to the
         One-for-twenty Reverse Stock Split
         effected on March 13, 1992                  (682)      ---
      Amortization of Deferred
      Compensation Costs                          ---            97,557
      Forfeiture of Options                      (120,833)      120,833
      Net (Loss) for the Nine Months
      Ended March 31, 1997                        ---           ---
    
    BALANCE - MARCH 31, 1997                $  17,837,887 $  (1,477,390)
</TABLE>
<TABLE>
    
                                               Retained
                                               Earnings        Total
<CAPTION>
    <S>                                     <C>           <C>
    BALANCE - JUNE 30, 1996                 $   3,829,336 $  79,318,105
    
      Options Issued for Financing Cost           ---           324,000
      Deferred Compensation for Options
      Granted to Employees                        ---                 0
      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                          ---            97,557
      Forfeiture of Options                       ---                 0
      Net (Loss) for the Nine Months
      Ended March 31, 1997                     (5,221,656)   (5,221,656)
    
    BALANCE - MARCH 31, 1997                $  (1,392,320)$  74,518,007
</TABLE>

      See Notes to Financial Statements.


      INTERNATIONAL THOROUGHBRED BREEDERS, INC.
      AND SUBSIDIARIES
    
      CONSOLIDATED STATEMENTS OF OPERATIONS
      FOR THE THREE AND NINE MONTHS ENDED MARCH 31, 1997 AND 1996
      (UNAUDITED)
    
<TABLE>
    
                                               Three Months Ended 
                                               March 31,      March 31,
                                                 1997           1996
<CAPTION>
    REVENUES:
    <S>                                    <C>            <C>
      Revenue from Operations              $   18,660,172 $   17,867,272
      Investment Income                           291,673        115,368
         TOTAL REVENUES                        18,951,845     17,982,640
    
    EXPENSES:
      Cost of Revenues                          6,832,124      6,697,856
      Operating Expenses                       10,180,900      9,979,873
      Depreciation & Amortization                 475,091        356,872
      General & Administrative Expenses         2,559,942      1,803,087
      Financing Cost from Options Granted               0              0
      Amortization of Financing Costs             244,161              0
      Write-Off of Deposits                             0              0
      Interest Expense                            225,357        275,834
         TOTAL EXPENSES                        20,517,575     19,113,522
    
    
    (LOSS) FROM OPERATIONS
      BEFORE TAXES                             (1,565,730)    (1,130,882)
    
        Income Tax Expense                         31,617         20,650
    
    NET (LOSS)                             $   (1,597,347)$   (1,151,532)
    
    NET (LOSS) PER SHARE                   $        (0.14)$        (0.10)
</TABLE>
    
<TABLE>
    
                                                Nine Months Ended 
                                               March 31,      March 31,
                                                 1997           1996
<CAPTION>
    REVENUES:
    <S>                                    <C>            <C>
      Revenue from Operations              $   52,835,248 $   52,016,059
      Investment Income                           421,049        218,998
         TOTAL REVENUES                        53,256,297     52,235,057
    
    EXPENSES:
      Cost of Revenues                         18,239,389     17,905,973
      Operating Expenses                       27,068,663     26,936,914
      Depreciation & Amortization               1,276,985      1,087,128
      General & Administrative Expenses         7,050,800      5,612,162
      Financing Cost from Options Granted         324,000              0
      Amortization of Financing Costs             723,543              0
      Write-Off of Deposits                     2,585,000              0
      Interest Expense                          1,081,146        844,487
         TOTAL EXPENSES                        58,349,526     52,386,664
    
    
    (LOSS) FROM OPERATIONS
      BEFORE TAXES                             (5,093,229)      (151,607)
    
        Income Tax Expense                        128,427        142,925
    
    NET (LOSS)                             $   (5,221,656)$     (294,532)
    
    NET (LOSS) PER SHARE                   $        (0.45)$        (0.03)
</TABLE>
    
    See Notes to Financial Statements.


      INTERNATIONAL THOROUGHBRED BREEDERS, INC.
      AND SUBSIDIARIES
    
      CONSOLIDATED STATEMENTS OF CASH FLOWS
      FOR THE NINE MONTHS ENDED MARCH 31, 1997 AND 1996
      (UNAUDITED)
<TABLE>
    
                                                   Nine           Nine
                                               Months Ended   Months Ended
                                                 March 31,     March 31,
                                                   1997           1996
<CAPTION>
    CASH FLOWS FROM OPERATING ACTIVITIES:
      <S>                                    <C>            <C>
      NET (LOSS)                             $   (5,221,656)$    (294,532)
      Adjustments to reconcile net (loss)
      income to net cash 
        provided by operating activities:
         Depreciation and Amortization            2,000,528     1,087,128
         Financing Cost from Options Granted        324,000             0
         (Gain) on Sale of Livestock and
         Fixed Assets                                     0        (8,314)
         Write-Off of Deposits                    2,585,000             0
         Changes in Assets and Liabilities -
            (Increase) Decrease in
             Restricted Cash and
             Investments                            990,578       544,066
            (Increase) Decrease in
             Accounts Receivable                 (1,916,145)   (1,208,213)
            (Increase) Decrease in
             Other Assets                           202,643      (127,938)
            (Increase) Decrease in
             Prepaid Expenses                       622,937       904,150
            Increase (Decrease) in
             Accounts Payable and
             Accrued Expenses                     1,555,047     3,297,873
            Increase (Decrease) in
             Deferred Income                       (354,570)     (412,328)
    NET CASH PROVIDED BY OPERATING ACTIVITIES       788,362     3,781,892
    
    CASH FLOWS FROM INVESTING ACTIVITIES:
      Proceeds from Sale of Equipment and
      Livestock                                           0         5,000
      Purchase of El Rancho Property                      0   (12,564,700)
      Deposits on Purchase of Additional
      Land in Las Vegas                          (2,115,000)            0
      Casino Development Costs                   (5,235,722)   (1,340,059)         
      Capital Expenditures at Racetracks           (960,543)   (1,341,577)
      (Increase) Decrease in Other
      Investment Activity                            78,479      (109,320)
      NET CASH (USED) BY INVESTING ACTIVITIES    (8,232,786)  (15,350,656)
    
    CASH FLOWS FROM FINANCING ACTIVITIES:
      Sale of Common Stock                                0     5,438,162
      Proceeds from issuance of Long Term Notes     827,891     6,000,000
      Proceeds from Line of Credit                8,725,371             0
      Principal Payments on Short Term Notes       (657,450)   (6,500,000)
      Principal Payments on Long Term Notes      (2,577,542)   (1,198,978)
      NET CASH PROVIDED BY FINANCING ACTIVITIES   6,318,270     3,739,184
    
    NET (DECREASE) IN CASH AND CASH EQUIVALENTS  (1,126,154)   (7,829,580)
    
      CASH AND CASH EQUIVALENTS AT
      BEGINNING OF YEAR                           4,216,356    11,801,294
    
      CASH AND CASH EQUIVALENTS AT 
      END OF PERIOD                          $    3,090,202 $   3,971,714
    
      Supplemental Disclosures of
      Cash Flow Information:
       Cash paid during the period for:
       Interest (Net of Interest Capitalized)$      893,398 $     638,942
         Income Taxes                        $       31,460 $     131,116
</TABLE>
    
      Supplemental Schedule of Non-Cash Investing
      and Financing Activities:
      During the nine months ended March 31, 1997, the Company
      recored an unrealized loss of 40,000 on trading securities.
      During the nine months ended March 31, 1997, the Company
      issued 200,000 warrants in connection with financing cost of $324,00.
      During the nine months ended March 31, 1997, the Company
      increased notes payable by $959,330 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 nine
months ended March 31, 1996 have been reclassified from the direct
to the indirect method to conform with the 1997 presentation.

   (D) Allowance for Bad Debts - The Company recognizes bad
debts on the allowance method. Bad debt allowance at March 31,
1997 and 1996 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 $53,000,000,  include real property acquisition
costs in the amount of approximately $43,500,000, development and
carrying costs of approximately $6,900,000 and capitalized
interest of $2,600,000 through March 31, 1997. 

   (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 March 31, 1997 was $528,701. 

   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 $3,482,022 associated with the debt incurred to fund the
purchase of the El Rancho property and $1,608,375 associated with
warrants issued in connection with the purchase and financing of
the casino project, net of amortization of $434,005 and $289,537,
respectively, as of March 31, 1997.  These costs of $5,090,397,
net of amortization of $723,542, 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 March 31, 1997,
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 March 31, 1997, the Company had
approximately $2,500,000 on deposit in 6 institutions with an
average of $315,000 at each institution that was subject to such
risk. In addition, repurchase agreements of approximately
$1,900,000 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 and nine months ended March 31, 1997 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:



                                                March 31, 1997

                                Interest %          Current         Long-Term


ITB:

Foothill Mortgage (A)        Prime plus 2.75%
                                (current rate
                                      11.25%)     $  2,250,000   $  11,750,000

Foothill  Line of
 Credit (A)                  Prime plus 2.75%
                                (current rate
                                      11.25%)        1,200,000      14,776,000

Las Vegas Entertainment
Network, Inc. Mortgage                    8%               -0-      10,500,000


ITG:

Notes -Insurance Contracts           Various            59,967            -0-


Freehold  Raceway:

Seller's Mortgage            80% of Prime
                             (not to exceed
                                        6%)
                              (current rate
                                        6%)           625,000      10,625,000


Seller's Mortgage            80% of Prime
                             (current rate
                                     6.6%)            225,000       1,872,050


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

Notes - Telephone (B)              Various              3,521          21,709


Garden State Park:

Mortgage Note Payable (See
Note 11-A)                            10%                 -0-       3,000,000

Note Payable (See Note 11-A)          10%                 -0-       3,000,000

Notes-Insurance Contracts         Various              50,833             -0- 

Notes - Telephone (B)             Various              25,992          65,802

Notes - Equipment (C)             Various             204,807         682,692

    Totals                                       $  4,836,787   $  56,484,920


Prime Rate at March 31, 1997 was 8.50 
The weighted average interest rate on short-term borrowings outstanding as of
March 31, 1997 was 9.4%.

   (A) On June 4, 1996, the Company closed on the financing of
$30,000,000 from Foothill Capital Corporation ("Foothill") of Los
Angeles, California.  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 includes a
$16,000,000 revolving credit line and a $14,000,000 Term Loan
Mortgage.  At March 31, 1997 the line of credit was drawn down in
the amount of $15,976,000. 

   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 is payable monthly at a rate of 2.75% above the current
published prime lending rate per annum. The Term 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 a 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 a
default in 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.   At March 31, 1997, the Company did not meet the
net worth ratio, however, Foothill subsequently waived the event
of default. (See Note 11-C) 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, an annual
facility fee of $300,000 and 200,000 shares of the Company's
Common Stock.

   The total principal balance of the Revolving Credit Line and
the Term Loan Mortgage as of March 31, 1997 was $29,976,000.  For
the nine month period ended March 31, 1997, interest of $2,135,464
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.  On December 16, 1996, the Company entered into a lease
agreement with Siemens Credit Corporation that provides for
eighteen monthly lease payments of $2,363 and an end buyout of
approximately $66,000 for a new telephone system at Garden State
Park. The Company recorded these transactions as capital leases.  
At March 31, 1997, $29,513 was classified as short term and
$87,511 was classified as long term on these leases.

   (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 two 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 March 31,
1997, $204,807 was classified as short term and $682,692 was
classified as long term.  Interest expense on the note for the
nine month period ended March 31, 1997 was $26,153.

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

   (E) During the quarter ended March 31, 1997, the Company paid
and capitalized $1,000,000 of fees associated with new financing
for the development of the El Rancho Property and for working
capital. These fees will be expensed over the life of the loan. 
(See Note 11-B)

(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 and nine months ended March 31, 1997 and does not have
the benefit of any state income tax loss carryforwards to offset
this liability.  A provision of $31,617 and $128,427 was made for
the respective three and nine month periods 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 March 31,   Nine Months ended March 31,

                      1997          1996             1997          1996


Income Taxes
at the Federal
Statutory Rate     $    -0-       $    -0-          $    -0-       $   -0-


Utilization of
Tax Depreciation        -0-            -0-               -0-           -0-


State Income Tax -
Net of Federal
Tax Benefit          31,617         20,650           128,427       142,925


Provisions for 
Income Taxes       $ 31,617       $ 20,650        $  128,427     $ 142,925



   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 $171,600,000 at March 31, 1997, 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
$53,500,000 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, International
Thoroughbred Gaming Development Corp ("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 ITG's subsidiary, Orion Casino
Corporation.  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 $43.5 million 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 paid in fiscal 1996;  2)
assumption of a $14 million first mortgage note due on December
20, 1996, which was also paid 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 i)Orion's receipt of proceeds of any debt
financing of the El Rancho property in excess of $55 million;   
ii)the sale of the El Rancho property, prior to opening a casino
on the property, with proceeds sufficient enough to cover:  a) all
principal, interest and other amounts and costs of whatever nature
owing under the outstanding loans on the property; and  b) the
amount of all cash payments comprising a part of the purchase
price plus $2 million and any and all reasonable documented costs,
expenses and any additional investment in, or debt incurred in the
furtherance of the development of, the property after ITB's
purchase, together with an accrued return thereon in the amount of
eight percent (8%) per annum;   and iii) the holder's right to
receive payments of "Adjusted Cash Flow", as defined in the
purchase agreement dated January 22, 1996. According to the
agreement, the holder has the right to receive these payments only
after Orion has first received: 1) one hundred percent (100%) of
Adjusted Cash Flow until such time as it has recouped the
aggregate amount of cash payments applied to the purchase price
and payments, if any, made under the $6.5 million note and/or the
$10.5 million note;   2) $2 million plus any amounts that are
invested in the property after International Thoroughbred
Breeders, Inc.'s ( the "Company") purchase;   and  3)  interest at
eight percent (8%) per annum from the date of the investment on
the investment and the $2 million.  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 for a minimum of six (6) month's
interest on the refinanced or replaced Refinance Loan and up to a
minimum of  six (6) month'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 advised that it contested the Company's position.  On
February 4, 1997, the Company announced that all prior
disagreements with LVEN regarding their development of the El
Rancho property have been resolved and that preliminary
construction is underway on a more modest project with a country
and western theme to be known as "Countryland USA."  Subject to
the completion of the financing arrangements, it is expected that
a casino opening will occur some time during the third quarter of
fiscal 1998.  It was estimated that the total cost of completion
of "Starship Orion" project 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 has not abandoned the "Starship Orion" concept as of this
date and is evaluating its use at this or another location to be
determined.

   The Company engaged certain professional, legal,
architectural and consulting services in  connection with the
Company's casino development.  Capitalized costs of $57,852,300 as
of March 31, 1997 are costs required for the casino development
project.

   The Company is committed to yearly minimum carrying costs of
the El Rancho property of approximately $8,000,000 per year for
interest, bank loan fees, real estate taxes, security,
maintenance, legal, professional, consulting and other related
costs.  Various demolition and construction contracts of
approximately $1,000,000 have been executed for renovating a
portion of the existing structures.   These costs will increase
substantially if the Company is successful in obtaining financing
it is seeking in order to complete the project.

   The Company made non-refundable deposits of $2,350,000
through the second 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
was fully earned by the seller on December 27, 1996.  The purchase
of the property would have allowed expanded frontage and room for
future expansion and increased parking.  The Company was unable to
procure the additional financing in order to finalize the
purchase.  According to the contract, if the Company failed to
secure adequate financing by a settlement date of December 27,
1996, deposits of $2,350,000 made to date in addition to the
extension deposit of $235,000 would be forfeited.  On January 9,
1997, the Company announced that it decided not to close on the
acquisition of this parcel of land.  The Company reported an
expense  for the six months ended December 31, 1996 of $2,585,000
associated with this decision.

   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 Countryland USA entertainment or any
other themed casino'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,  rides and other non-gaming
attractions of any kind or nature at the property site, (ii)
arranging all advertising needs, and (iii) managing all other
entertainment venues.  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 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
agreement originally called for a purchase price of $11 million
for the property, subject to normal closing adjustments and
provided for a closing on or before December 15, 1996 (which date
was extended until June 15, 1997 following a deposit of $100,000
that was made on December 15, 1996).  Closing 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.  On
January 31,1997, the purchase agreement was amended to reflect a
new purchase price of $9,000,000 and, if certain government
approvals are subsequently obtained, the purchase price could
increase by $2,000,000.  The purchaser has deposited in escrow an
irrevocable Letter of Credit in the amount of $375,000 in addition
to the initial deposit previously made of $25,000 on December
15,1995 and the deposit of $100,000 made on December 15, 1996.  In
May 1997, the agreement was further amended to reflect that:  1)
the closing to take place on or before July 21, 1997; 2)  deposits
totaling $500,000 are deemed non-refundable;  3) all fees and out
of pocket expenses associated with the proposed Sun National Bank
refinancing of the $6,000,000 mortgage loans secured by the
property plus interest through August 21, 1997, shall be paid by
the purchaser;  4) in the event the closing does not occur by July
21, 1997, all fees and expenses, up to $75,000,  in connection
with any subsequent refinancing of the Sun National Bank loan will
be paid by the purchaser.  The Company anticipates that the net
proceeds from the sale will be approximately $2,300,000 after the
$6,000,000 Sun note is paid.  (See Notes 3 & 11-A)

   On November 2, 1995, Robert E. Brennan resigned as Director,
as Chairman of the Board and as 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  appealed Judge Owen's decision. On December
10, 1996, the ruling against Mr. Brennan was upheld by a federal
appellate court. 

   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 was to hold the
shares in escrow and vote the shares in the same proportion as the
other stockholders of the Company.  The agreement  required that
the liquidating trustee dispose of the shares no later than
October 19, 1997 in the absence of  the occurrence of certain
events.  On January 8, 1997, the Company was advised that the
federal bankruptcy court approved the sale of Mr. Brennan's shares
to NPD, Inc.  Closing on the sale of the shares was completed on 
January 15, 1997.

   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 was 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 was apprised of the
settlement by the Casino Control Commission and stated that it
considered it a resolution of its concerns. 

   On June 4, 1996, the Company closed on the financing of
$30,000,000 from Foothill.  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 includes a
$16,000,000 revolving credit line and a $14,000,000 Term 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 was restricted by $3,000,000 until such time that
an approved settlement agreement had been reached concerning the
shares of Common Stock then owned by Robert E. Brennan, the 
Company's former chairman.  The restriction was released following
the approved sale of Mr. Brennan's shares on January 15, 1997. 
The revolving credit line requires that the Company make quarterly
principal payments of $400,000 beginning July 1, 1997.  Interest
on the  outstanding balance is payable monthly at a rate of 2.75%
above the current published prime lending rate per annum. The Term
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 is payable monthly at a
rate of 2.75% above the current published prime lending rate per
annum.  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 (as of
March 31, 1997, the Company's tangible net worth was $71,449,078); 
and (ii) liabilities to tangible net worth ratio of not more than
one to one (as of March 31, 1997, the Company's liability to
tangible net worth ratio was 1.034 to 1.0).  At March 31, 1997,
the Company did not meet the liabilities to net worth ratio,
however, Foothill subsequently waived the non-compliance. (See
Note 11-C) The credit facility also requires that additional
purchase money financing and/or capital leases cannot exceed an
aggregate $3,000,000.

   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 Group Inc. ("Standard Capital"), agreed to
terminate their prior contractual relationship.  In connection
with the termination of the agreement, the Company paid Standard
Capital all outstanding fees and expenses totaling $120,000 as of
August 14, 1996.  The Company, which had previously provided
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, provided Standard Capital in connection with such
termination with an additional 200,000 warrants, each identical to
the initial warrants. Financing costs of $324,000 have been
accounted for and expensed during the first half of fiscal 1997
for these warrants.  During the quarter ended March 31, 1997, the
Company paid $1,000,000 to Standard Capital Group to act as the
Company's financial advisor and 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. (See Note 11)

   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.  On December 16, 1996, the Company entered into a lease
agreement with Siemens Credit Corporation that provides for
eighteen monthly lease payments of $2,363 and an end buyout of
approximately $66,000 for a new telephone system at Garden State
Park. The Company recorded these transactions as capital leases.
(See Note 3-B)

   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 on a full-time basis 
through the period ending on June 30, 1997 for an
annual compensation of $384,000.  The contract also provided that
upon a "Termination Event", Mr. Sterns may be entitled to receive
certain amounts.  The removal of Mr. Sterns on November 4, 1996
prior to the expiration of his term was deemed a "Termination
Event" which, based on his employment contract, exposed the
Company to a future potential liability and expense.  On January
15, 1997, a settlement agreement was approved whereby Mr. Sterns
accepted $252,000 in full and final settlement of all salary,
reimbursable expenses and termination payments to which he may be
entitled.  Payments are scheduled to include: 1) $75,000 paid in
January 1997; 2) $15,000 per month from February 1997 until
December 1997; and 3) a  payment of $12,000 in June 1997.  At
March 31, 1997, $147,000 has been accrued for these payments.

    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 was duly
elected and qualified were: Frank A. Leo, John U. Mariucci, James
J. Murray and Frank Koenemund.  At a meeting of the Board of
Directors on November 5, 1996, Frank A. Leo was named Chairman of
the Board.

   On December 5, 1996, NPD, Inc. ("NPD") entered into an
agreement with Robert E. Brennan to purchase 2,904,016, or 24.9%, 
of the Company's Common Stock owned by Mr. Brennan.  Following the
purchase on January 15, 1997, the current directors of the Company
other than Frank A. Leo, Robert J. Quigley, Charles R. Dees, Jr.
and Francis W. Murray resigned and Nunzio P. DeSantis, Anthony
Coelho, Michael C. Abraham, Kenneth Scholl and Joseph Zappala were
appointed directors to serve until the next annual meeting of
stockholders of the Company and until their successors are duly
elected.  Mr. Zappala's term did not commence until January 25,
1997. Mr. Coelho was named as the Company's Chairman and Mr.
DeSantis was named the Company's Chief Executive Officer. 

   On January 15, 1997, the Company obtained a commitment for a
revolving $5,000,000 line of credit which may be called upon by
the Company's Board of Directors.  The Company believes that it is
unlikely that the line of credit will be utilized due to
restrictions in existing financing arrangements.  
   
   Effective February 1, 1997, the Company accepted the
resignation of Arthur Winkler, a Director and Executive Vice
President of the Company and President of the racetrack
subsidiaries.  Mr. Winkler had been associated with the Company
for the previous thirteen years.  As conditions of the termination
of his five year employment contract with the Company, Mr.
Winkler:  1) will be paid $200,000 over a twenty month period,
$100,000 of which was paid on the effective date and $5,000 to be
paid per month, commencing on February 1, 1997 until September 1,
1998;   2) surrendered 125,000 stock options previously granted to
him at an exercise price of $5.875 per share; and  3) retained
200,000 options previously granted to him at an exercise price of
$4.00 per share.  (See Note 6).  The Company  expensed the entire
compensation package of approximately $200,000 during the three
months ended March 31, 1997.

(6)     STOCK OPTIONS AND WARRANTS

   (A)  EMPLOYEE AND DIRECTORS STOCK OPTIONS

   On December 20, 1996, the Company granted 425,000 options to
certain employees and directors.  On November 3, 1996, 200,000
stock options previously issued to two former directors, Mr.
Peloquin and Mr. Goldman were forfeited as a result of their
removal from the board of directors.  (See Note 5)  At March 31,
1997, total employee options outstanding were 1,825,000.  Total
compensation cost recognized against income for stock-based
employee compensation awards was $97,558 and $-0- for the nine
months ended March 31, 1997 and 1996, respectively.  On January
20, 1997, the Company granted 450,000 options to certain employees
and directors.  On February 1, 1997, Mr. Winkler surrendered
125,000 stock options previously granted to him at an exercise
price of $5.875 per share.

   (B)  NON-EMPLOYEE WARRANTS

   The Company issued 200,000 warrants in connection with the
financing of the El Rancho property. Financing costs of $324,000
have been accounted for and expensed during the first half of
fiscal 1997 for these warrants.  At March 31, 1997, total non-employee options 
outstanding were 1,125,000.  Total compensation
cost recognized against income for stock-based non-employee
compensation awards was $289,538 and $-0- for the nine months
ended March 31, 1997 and 1996, respectively.


   As of March 31, 1997 and 1996 , outstanding warrants and
stock options were as follows:



                                        March 31,

                                     1997                1996


                                   Related                Related
Expiration       Per Share         Parties    Others      Parties    Others
  Date              Price$         (000's)   (000's)      (000's)   (000's)

Term of
Employment(1)       5.875             200       -0-          325       -0-

3/14/01 (2)          5.00             -0-       200          -0-       200

3/14/01 (2)          5.25             -0-       200          -0-       200

6/4/01 (3)           5.00             -0-       250          -0-       -0-

1/24/06 (4)          4.00             325       -0-          325       -0-

4/23/06 (5)          4.00             -0-       275          -0-       -0-

4/23/06 (6)         4.625             225       -0-          -0-       -0-

5/14/06 (7)          4.00             200       -0-          -0-       -0-

8/14/01 (8)          5.00             -0-       200          -0-       -0-

12/20/06 (9)         4.00             400       -0-          -0-       -0-

12/20/01 (10)        4.00              25       -0-          -0-       -0-

1/15/07 (11)         5.00             450       -0-          -0-       -0-

                   Totals           1,825     1,125          650       400


(1)   For a five year period between 12/20/94 to 12/20/99 to three employees, 
      if employed. 
(2)   Issued to two foreign banks in connection with two $3 million notes.
(3)   Issued to Standard Capital in connection with the Foothill financing   
      agreement. 
(4)   25,000 options each issued to three directors, namely Mr. Bodman, 
      Mr. Dees, and Mr. Quigley and two former directors namely,
      Mr. Fisher and Mr. Fitzpatrick and 200,000 options issued to Mr. Winkler,
      a former director and officer of the Company.
(5)   275,000 options issued to George E. Norcross III or his designee as a fee
      in connection with the El Rancho property.
(6)   Issued 75,000 options each to three directors namely, Mr. Quigley (also 
      an officer), Mr. Bodman and Mr. Dees.  
(7)   Issued 200,000 options to Mr. Joel Sterns, the Company's former chairman. 
(8)   Issued to Standard Capital in connection with the financing costs. 
(9)   Issued 200,000 options to Francis W. Murray, a director, and 200,000
      options to Mr. Leo, the Company's former chairman.
(10)  Issued 25,000 options to Francis X. Murray, an employee, if employed.
(11)  Issued 300,000 options to Francis W. Murray, a director, 25,000 options 
      each issued to three former directors, namely Mr. Koenemund, Mr. 
      Mariucci, and Mr. Murray, 25,000 to Mr. Francis X. Murray, an employee, 
      and 50,000 to Edward Ryan, an employee if employed. 

(7)   INVESTMENTS
   
   Short term investments, classified as cash equivalents, consist
of trading securities.  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.  At March 31, 1997, $40,000 was
classified as short term investments.

   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 March 31, 1997, the Company held approximately $1,980,960,
which was classified as restricted cash an  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,
all of which are classified as accounts payable. 

   Investment income for the three months ended March 31, 1997
includes an unrealized loss of $80,000 on trading securities. 
Investment income for the three months ended March 31, 1996
includes an unrealized holding gain of $40,000 on trading
securities.  Investment income for the nine months ended March 31,
1997 includes a net unrealized holding loss of $40,000 which
consists of an unrealized holding loss of $80,000 on trading
securities recognized during the third quarter of the fiscal year 
offset by unrealized holding gains of $35,000 and $5,000
recognized during the first and second respective quarters of the
fiscal year.   Investment income for the nine months ended March
31, 1996 includes a net unrealized holding loss of $140,000 which
consists of an unrealized holding loss of $230,000 on trading
securities recognized during the second quarter of the 1996 fiscal
year offset by unrealized holding gains of $50,000 and $40,000
recognized during the first and third respective quarters of the
1996 fiscal year.  Interest income for the three and nine months
ended March 31, 1997 was $371,673 and $461,049, respectively, and
$75,368 and $358,998 for the respective three and nine month
periods in fiscal 1996.

(8)   WRITE-OFF OF DEPOSITS

   The Company made non-refundable deposits of $2,350,000 through
the second quarter of fiscal 1997 for a proposed purchase of a
parcel of land associated with the gaming development project.
(See Note 5)  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 was fully earned by the seller on December 27, 1996.  The
purchase of the property would have allowed expanded frontage and
room for future expansion and increased parking.  The Company was
unable to procure the additional financing in order to finalize
the purchase.  According to the contract, if the Company failed to
secure adequate financing by a settlement date of December 27,
1996, deposits of $2,350,000 made to date in addition to the
extension deposit of $235,000 would be forfeited.  On January 9,
1997, the Company announced that it decided not to close on the
property.  Therefore, the Company has expensed deposits of
$2,585,000 during the six months ended December 31, 1996.

(9)   NET INCOME PER SHARE

   Income (loss) per share for the three and nine month periods
ended March 31, 1997 and 1996 is computed on the weighted average
number of shares outstanding.  The Convertible Preferred Stock has
not been included in the computations because the conversion
period has expired.  Outstanding Stock Options of 2,950,000 which
are considered common stock equivalents for fiscal 1997 were not
included in the computation of average shares outstanding because
their inclusion would be anti-dilutive.  Fully diluted loss per
share has not been shown since such amount would not be dilutive. 
The number of shares used in the computations were 11,651,510 and
11,451,462 for the three months ended March 31, 1997 and 1996,
respectively and for the respective nine month periods were
11,651,527 and 10,214,702.

(10)  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 $53 million in construction and related
costs associated with its El Rancho/Orion project.  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.

   The FASB has issued SFAS No. 128, "Earnings Per Share".  SFAS
No. 128 simplifies the computation of EPS by replacing the
presentation of primary EPS with a presentation of basic EPS.  It
requires dual presentation of basic and diluted EPS by entities
with complex capital structures.  SFAS No. 128 is effective for
financial statements issued for periods ending after December 15,
1997.  Adoption of SFAS No. 128 is not expected to have a material
impact on the Company's financial statements.

   The FASB has issued SFAS No. 129, "Disclosure of Information
about Capital Structure".  SFAS No. 129 is applicable to all
entities, whether or not they have publicly held stock. SFAS No.
129 contains no change in disclosure requirements for companies
that were subject to the previously existing requirements found in
APB Opinion No. 15, Earnings Per Share, and FASB Statement No. 47,
Disclosure of Long-Term Obligations.  However, the requirements
have been consolidated in SFAS No. 129.  SFAS No. 129 is effective
for financial statements issued for periods ending after December
15, 1997. 

(11)  SUBSEQUENT EVENTS

      A.     In May 1997 various amendments were executed to the
agreement to sell a 56 acre parking lot tract at Garden State Park
to The Four B's of Vineland, New Jersey, including the extension of
the closing until July 21, 1997 and the non-refundable deposits of $500,000;
(See Note 5)  In consideration for amending the agreement, the purchaser has
agreed to a refinancing with Sun National Bank ("SUN") of the $6,000,000 foreign
notes on the tract of land.  The Company anticipates that, subject to the
receipt of certain consents from the Company's existing and
potential new lenders, that the refinancing with SUN will close
shortly.  The Company anticipates that the net proceeds from the
sale will be approximately $2,300,000 after the $6,000,000 Sun
note is paid.  (See Notes 3 & 5)

      B.     The Company is negotiating a loan with Credit Suisse
First Boston Mortgage Capital LLC for $55,000,000.  The Company
expects to close the Credit Suisse loan shortly.  The Company will
use the proceeds of the loan for the purpose of refinancing
various loans, including Foothill,  affecting the Company's
properties, funding certain working capital needs, and funding
certain development costs of the El Rancho property.  (See Notes 3
& 5)

      C.     On May 19, 1997, the Company was advised by Foothill
that it waived the Company's non-compliance with financial covenants for the 
fiscal quarter ended March 31, 1997.  The waiver is effective until May
31, 1997, at which time, if the obligations owed to Foothill have
not been paid in full by the Company, Foothill reserves its rights
to take additional action.<PAGE>

              INTERNATIONAL THOROUGHBRED BREEDERS, INC.
                          AND SUBSIDIARIES

         REVIEW BY INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
          FOR THE NINE MONTHS ENDED MARCH 31, 1997 AND 1996



   An independent accountant has 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 ACCOUNTANTS

The Board of Directors and Shareholders
of International Thoroughbred Breeders, Inc.
            and Subsidiaries



   We have reviewed the accompanying  consolidated balance sheet
of International Thoroughbred Breeders, Inc., and subsidiaries as
of March 31, 1997, and the related consolidated statement of
shareholders' equity for the nine month period then ended, the 
consolidated statements of operations for the three and nine month
periods ended March 31, 1997 and 1996, and the  consolidated
statement of cash flows for the nine month periods ended March 31,
1997 and 1996.  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 accompanying consolidated balance
sheet as of June 30, 1996, presented herein for comparative
purposes, 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.



                           MOORE STEPHENS, P.C.
                           Certified Public Accountants


Cranford, NJ
May 15, 1997


OPERATIONS

   Total revenues for the three months ended March 31, 1997 and
1996 were $18,951,845 and $17,982,640  respectively.  Total
revenues for the nine months ended March 31, 1997 and 1996 were
$53,256,297 and $52,235,057 respectively.  The $969,205 or 5.4%
increase in revenues for the third quarter of the fiscal year are
primarily the result of an increase in revenues generated by
Freehold Raceway and Garden State Park during the third quarter of
the 1997 fiscal year as compared to the same quarter in fiscal
1996 when severe weather conditions forced the cancellation of 10
scheduled days at Garden State Park and 6 scheduled days at
Freehold Raceway.  The $1,021,240 or approximate 2% increase in
revenues during the nine month period is primarily the net result
of the an increase in revenues generated by Freehold Raceway
partially offset by a decrease in revenues generated by Garden
State Park during the comparable periods. 

   Total expenses for the three and nine months ended March 31,
1997 and 1996 increased $1,404,053 or 7% and $5,962,862 or 11%,
respectively,  primarily as a result of:  1) a write off of
$2,585,000 in deposits associated with the option to purchase a
parcel of land adjoining the El Rancho property in Las Vegas;   
2) an increase in corporate expenses primarily associated with the
Company's involvement in gaming development projects;   3) an
increase in interest expense and financing costs primarily
resulting with the debts incurred to finance the casino project
and continuing operations;  and 4) an increase in expenses
associated with the increase in the number of race days during the
comparable periods.

   The Company incurred a net loss from operations before taxes of
$1,565,730 and $5,093,229 for the respective three and nine month
periods ended March 31, 1997 as compared to a net loss from
operations before taxes of $1,130,882 and $151,607 for the
comparable periods in fiscal 1996.  The net increase in losses for
the three and nine month periods primarily resulted from:  1) an
increase in net income generated by Freehold Raceway;   2) an
increase in net losses realized by Garden State Park as compared
to the prior fiscal year;  and 3) an increase in losses associated
with the casino development projects as discussed above. 

   Depreciation and amortization expense for the three and nine
months ended March 31, 1997 was $719,252 and $2,000,528 as
compared to $356,872 and $1,087,128 for the comparable periods in
fiscal 1996 reflecting a $362,380 and $913,400 increase primarily
as a result of increased costs associated with Company stock
options granted during fiscal 1997.
   
Garden State Park:

   Quarterly and year-to-date net operating income and losses at
Garden State Park for the current fiscal  year as compared to last year are as 
follows:


                           Net Income (Loss)            Net Increase

                     Fiscal 1997     Fiscal 1996         (Decrease)


1st Quarter         $  (122,928)       $  66,313       $  (189,241)

2nd Quarter              356,070         187,723            168,347

3rd Quarter          (1,839,523)     (1,567,751)          (271,772)

Year to Date       $ (1,606,381)    $(1,313,715)       $  (292,666)


   During the fiscal quarter ended March 31, 1997, Garden
State's revenue increased $167,298 or 2% from $7,794,056 for the
third quarter of fiscal 1996 to $7,961,354 for the comparable
quarter in fiscal 1997, primarily as a result of the net effect of
the increased revenues associated with the increased number of
race dates as compared to the same quarter in fiscal 1996 when
severe weather conditions forced the cancellation of 10 scheduled
days partially offset by a decrease in revenues generated by live
on-track racing and simulcasting. Total expenses for the third
quarter of fiscal 1997 increased $439,070 or 5% from $9,361,807
for the third quarter of fiscal 1996 to $9,800,877 for the
comparable quarter in fiscal 1997 primarily as a result of the
increase in the number of live racing dates.  The net effect of
increased revenues and expenses primarily accounted for the
track's net loss of $1,839,523 for the three months ended March
31, 1997, an increased loss of $271,772 from a loss of $1,567,751
during the three months ended March 31, 1996.

   During the nine months ended March 31, 1997 Garden State's
revenue decreased $586,781 or 2% when compared to the same period
last year, primarily reflecting a decrease in  revenues generated
by live on-track racing and simulcasting partially offset by the
net increase in revenues from the increase in race dates during
the third quarter as discussed above.  Expenses decreased $294,115
for the nine months ending March 31, 1997 when compared to the
same period last year.  Garden State Park realized a loss, before
interest due to the parent, of $1,606,381 for the nine month
period ended March 31, 1997 as compared to a loss of $1,313,715
for the nine months ended March 31, 1996.
   On-track wagering during the 1997 Thoroughbred Meet, through
March 31, 1997, averaged $148,999 over 39 dates of live racing. 
During the 1996 Thoroughbred Meet, through March 31, 1996, on-track wagering 
averaged $163,000 over 33 dates of live racing.

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 nine month fiscal periods
from July 1, 1996 thru March 31, 1997 and July 1, 1995 thru March
31, 1996:


                   Approximate Commission 
                       % of handle                DAILY AVERAGES
HARNESS MEETS 
                                             Fiscal 1997    Fiscal 1996

Attendance                                      2,206             2,434

Live Handle               13.4%          $    154,242     $     182,103

Simulcast
Sending Signal:

  New Jersey
  Tracks (Avg.%)           3.3%          $    342,124     $    391,232

  Atlantic City
  Casinos                  4.4%          $     25,609     $     36,553

  Out-of-State
  Tracks                   1.5%          $    888,891     $    929,190

Combined Handles                         $  1,410,867     $  1,539,079

Number of Live
Race Days                                          55              53


THOROUGHBRED MEETS 

Attendance                                      2,857            2,745

Live Handle               12.5%          $    148,999       $  163,000

Simulcast
Sending Signal:

  New Jersey 
  Tracks (Avg.%)          3.4%           $   187,954       $   269,913

  Atlantic City
  Casinos                 4.4%           $    22,319       $    29,276

  Out-of-State 
  Tracks                  1.5%           $  588,668        $   923,388

Combined Handles                         $  947,942        $ 1,385,576

Number of Live
Race Days                                        39                 33


The following summarizes average handles experienced by Garden
State Park in connection with receiving simulcasts for the nine
month fiscal periods from July 1, 1996 thru March 31, 1997 and
July 1, 1995 thru March 31, 1996:


                              AVERAGE DAILY SIMULCAST HANDLES

                              Fiscal 1997              Fiscal 1996

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

New Jersey Tracks:

    Monmouth      (T)           46    57,088           48       70,985
    Atlantic City (T)           35    42,490           38       46,048
    Meadowlands   (T)           68    56,256           66       76,023
    Freehold      (S)          167    23,340          160       27,628
    Meadowlands   (S)          106    57,481          103       71,769

Out-of-State
Tracks:         (T,S)          274   237,951              269  241,856


TOTAL RECEIVING
HANDLE                            83,127,833                87,046,749


(T) = Thoroughbred, (S) = Standardbred    *The commission percentage of
handle averaged approximately 11.3% of total handles on simulcasting
received during the nine months ended March 31, 1997.


  Garden State Park's 1996 Thoroughbred Meet began on January
1, 1997 and is scheduled to run through May 23, 1997.  Racing was
conducted three times a week during the month of January, Friday
and Saturday nights and Sunday and holiday Monday afternoons until
April 3, 1997 when the Sunday afternoon race days were
discontinued and replaced by Thursday night racing which is
scheduled to continue for the remainder of the 63 date race meet.

  The Company has received approval from the New Jersey Racing
Commission to run a 51 night harness meet from September 5 through
December 12, 1997.


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 March 31, 1997, Freehold
Raceway's revenue increased $663,425 or 7% when compared to the
same period last year, primarily reflecting the net effect of:  
1) increased revenues associated with the increased number of race
dates as compared to the same quarter in fiscal 1996 when severe
weather conditions forced the cancellation of 6 scheduled days;  
2) an increase in revenues generated from the simulcasting  into
Freehold from out-of-state racetracks;  partially offset by 3) a
decrease in revenues generated from the simulcasting of Freehold's
races into other racetracks and a decrease in revenues generated
by live on-track racing;   and  4) a decrease in revenues
generated by simulcasting into Freehold from other New Jersey
racetracks.  Expenses increased $243,490 or 3% for the three
months ending March 31, 1997 when compared to the same period last
year primarily as a result of an increase in operating expenses
associated with the increase in the number of race days.  The
increase in revenues and in expenses primarily accounted for the
racetrack realizing net income from operations of $1,527,869 for
the three months ended March 31, 1997 as compared to income of
$1,107,934 during the three months ended March 31, 1996. 

  During the nine months ended March 31, 1996 Freehold
Raceway's revenue increased $1,504,983 or 5% when compared to the
same period last year, primarily reflecting the net effect of: 1)
the increase in the number of race days during the third quarter
of this fiscal year;   2) an increase in revenues generated from
the simulcasting into Freehold from out-of-state racetracks;  
partially offset by  3) the decrease in revenues generated by
simulcasting and live on-track racing as discussed above. 
Expenses increased $1,198,211 or 5% for the nine months ending
March 31, 1997 when compared to the same period last year
primarily as a result of an increase in operating expenses.   As a
result of increased revenues and expenses, Freehold Raceway
realized income of $3,945,622 for the nine months ended March 31,
1997 as compared to income of $3,638,850 for the comparable period
in fiscal 1996. 

  Quarterly and year-to-date net income at Freehold Raceway
for the current fiscal year as compared to net income for last
year are as follows:

                              Net Income                     Net Increase
                 Fiscal 1997               Fiscal 1996           (Decrease)

1st Quarter     $  1,242,275              $    786,069           $  456,206

2nd Quarter        1,175,478                 1,744,847            (569,369)

3rd Quarter        1,527,869                 1,107,934              419,935

Year-to-Date    $  3,945,622               $ 3,638,850           $  306,772



   During Fiscal 1997, Freehold Raceway will race under two
separate identities.  FRA raced 100 days from 
August 15, 1996 thru December 31, 1996.  ACH will race 106 days
from January 1, 1997 through May 26, 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 nine month fiscal
periods from July 1, 1996 thru March 31, 1997 and July 1, 1995
thru March 31, 1996:


                   Approximate Commission 
                       % of handle                   DAILY  AVERAGES


FRA HARNESS MEETS                                Fiscal 1997     Fiscal 1996

Attendance                                             2,161           2,286

Live Handle                    9.3%              $   248,819    $    283,361

Simulcast Sending Signal:

  New Jersey Tracks (Avg. %)  3.6%               $   154,472    $    170,226

  Atlantic City Casinos       4.4%               $    23,947    $     23,547

  Out-of-State Tracks         1.5%               $   347,626    $    392,705

Combined Handles                                 $   787,096    $    869,839

Number of Live Race Days                                 100              99


ACH HARNESS MEETS

Attendance                                             2,032           1,971

Live Handle                 9.3%                 $   209,956    $    241,099

Simulcast Sending Signal:

  New Jersey Tracks        
  (Avg. %)                 3.6%                  $  165,345     $    175,620

  Atlantic City Casinos    4.4%                  $   21,035     $     22,430

  Out-of-State Tracks      1.5%                  $  393,277     $    383,131

Combined Handles                                 $  789,613     $    822,280

Number of Live Race Days                                 65               61


   The following summarizes average handles experienced by
Freehold Raceway in connection with receiving simulcasts for the
nine month fiscal periods from July 1, 1996 thru March 31, 1997
and July 1, 1995 thru March 31, 1996:


                   AVERAGE DAILY SIMULCAST HANDLES

                                Fiscal 1997                 Fiscal 1996

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


New Jersey Tracks:

  Garden State Park  (S)          55    71,393                53        80,887

  Garden State Park  (T)          39    23,412                33        24,664

  Meadowlands        (S)         106   109,296               103       123,087

  Meadowlands        (T)          68    42,204                66        51,717

  Atlantic City      (T)          35    24,970                38        37,932


Out-of-State 
Tracks             (T,S)         271   259,958               258       218,907


TOTAL
RECEIVING HANDLE                    88,064,190                      79,111,631


(T) = Thoroughbred, (S) = Standardbred    *The commission percentage
of handle averaged approximately 11.0% of total handles on simulcasting
received during the nine months ended March 31, 1997.

  
LIQUIDITY AND FINANCIAL RESOURCES

  The Company's working capital (deficit), on a consolidated
basis, as of March 31, 1997, was ($6,599,485) which represents a
decrease of approximately $12,000,000 from the March 31, 1996
working capital (deficit) of ($18,508,387).  This working capital
deficit decrease is primarily the result of  the refinance of a
$14,000,000 short term mortgage associated with the purchase of
the El Rancho Hotel into long term debt which has the effect of
classifying $12,500,000 of the previous short term liability as
long term.

  The Company's cash flows provided by operations were
$788,363 during the nine months ended March 31, 1997 compared to
cash provided from operations of $3,781,892 for the comparable
period in fiscal 1996.  The decrease of $2,993,529 was primarily
the result of the expense of writing off deposits of $2,585,000
associated with the forfeited option to purchase additional land
adjoining the El Rancho project during the three months ended
December 31, 1996.

    Cash used for investing activities was $8,232,786 during
the nine months ended March 31, 1997 compared to $15,350,656 for
the comparable period in fiscal 1996.  The decrease was primarily
the result of a decrease in expenditures for casino development of
$7,328,928 in addition to $2,115,000 for deposits associated with
the forfeited option to purchase additional land adjoining the El
Rancho project and a decrease of $1,721,093 in cash used for
improvements at the two racetrack properties.

  Cash provided by financing activities was $6,318,270 for the
nine months ended March 31, 1997 compared to cash provided during
the comparable period in fiscal 1996 by financing activities of
$3,739,184.  During the nine months ended March 31,1996, the
Company raised $5,438,162 through a Regulation S offering of the
Company's Common Stock in addition to refinancing a $6,500,000
short term note with long term debt. During the nine months ended
March 31, 1997, cash was generated from debt financing of
$8,725,371 primarily associated with the revolving credit line
with Foothill Capital Corporation and from note proceeds of
$827,891 in borrowings in connection with new air conditioning
equipment at Garden State Park.  Also during fiscal 1997, there
was an increase in principal payments of  $2,036,014 primarily as
a result of a final payment of $1,405,000 on a note previously
executed by Freehold Raceway and $657,450 of principal payments
made on short term financing. 

  Restricted Cash and Investments of $1,980,960 as of March
31, 1997 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
accounts payable.  As restricted cash these cash funds are not
available for Company operations.

  On June 4, 1996, the Company closed on the financing of 
$30,000,000 from Foothill.  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 includes a
$16,000,000 revolving credit line and a $14,000,000 Term 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 was restricted by $3,000,000 until such time
that an approved settlement agreement had been reached concerning
the shares of Common Stock then owned by Robert E. Brennan, the
Company's former chairman.  The restriction was released following
the approved sale of Mr. Brennan's shares on January 15, 1997. 
The revolving credit line requires that the Company make quarterly
principal payments of $400,000 beginning July 1, 1997.  Interest
on the  outstanding balance is payable monthly at a rate of 2.75%
above the current published prime lending rate per annum. The Term
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 is payable monthly at a
rate of 2.75% above the current published prime lending rate per
annum.  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 (as of
March 31, 1997, the Company's tangible net worth was $71,449,078); 
and (ii) liabilities to tangible net worth ratio of not more than
one to one (as of March 31, 1997, the Company's liability to
tangible net worth ratio was 1.034 to 1.0).  At March 31, 1997,
the Company did not meet the liabilities to net worth ratio,
however, Foothill subsequently waived the non-compliance.  The
credit facility also requires that additional purchase money
financing and/or capital leases cannot exceed an aggregate
$3,000,000.

  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.  During the current quarter, the
Company could not arrange the necessary financing to finalize the
purchase.  Payments totaling $2,585,000 were forfeited on December
27, 1996.

   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.    On December 16, 1996, the Company entered into a lease
agreement with Siemens Credit Corporation that provides for
eighteen monthly lease payments of $2,363 and an end buyout of
approximately $66,000 for a new telephone system at Garden State
Park.
  
  On January 15, 1997, the Company obtained a commitment for a
revolving $5,000,000 line of credit which may be called upon by
the Company's Board of Directors.  The Company believes that it is
unlikely that the line of credit will be utilized due to
restrictions in outside financing arrangements. 

  In May 1997 various amendments were executed to the
agreement to sell a 56 acre parking lot tract at Garden State Park
to The Four B's of Vineland, New Jersey, including the extension of
the closing until July 21, 1997 and the non-refundable statis of the
deposits of $500,000.  In consideration for amending the agreement, the
purchaser has agreed to a refinancing
with Sun National Bank ("SUN") of the $6,000,000 foreign notes on
the tract of land.  The Company anticipates that, subject to the
receipt of certain consents from the Company's existing and
potential new lenders, that the refinancing with SUN will close
shortly.  The Company anticipates that the net proceeds from the
sale will be approximately $2,300,000 after the $6,000,000 SUN
note is paid.

  The Company is negotiating a loan with Credit Suisse First
Boston Mortgage Capital LLC for $55,000,000.  The Company expects
to close the Credit Suisse loan shortly.  The Company will use the
proceeds of the loan for the purpose of refinancing various loans,
including Foothill,  affecting the Company's properties, funding
certain working capital needs, and funding certain development
costs of the El Rancho property. 

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 signals.  Attendance and wagering may be adversely
affected by major winter storms which 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
simulcasting 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.



              INTERNATIONAL THOROUGHBRED BREEDERS, INC.
                          AND SUBSIDIARIES

                               PART II

                          OTHER INFORMATION

Item 6.     Reports on Form 8-K

  During the quarter ended March 31, 1997 the registrant filed
a current report on Form 8-K dated January 15, 1997 reporting the
following:

        Item 1 - Changes in Control of Registrant

                 The acquisition from Robert E. Brennan of
                 2,904,016 shares of the Company's Common Stock
                 by NPD, Inc., a Delaware corporation.

        Item 7 - Financial Statements and Exhibits

                 Stock Purchase Agreement by and between Robert
                 E. Brennan and NPD*

                 Revolving Loan Agreement by and between Nunzio
                 P. DeSantis and ITB*
        
*Incorporated by reference from exhibits filed with
NPD's Schedule 13D dated January 15, 1997.


              INTERNATIONAL THOROUGHBRED BREEDERS, INC.
                          AND SUBSIDIARIES

                             SIGNATURES



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



              INTERNATIONAL THOROUGHBRED BREEDERS, INC.




May 20, 1997               /s/Robert J. Quigley                 
                           Robert J. Quigley
                           President




May 20, 1997               /s/William H. Warner               
                           William H. Warner
                           Treasurer, Principal Financial and
                           Accounting Officer