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, 1998  
                                                              
                                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 15, 1998 
   
Common Stock, $ 2.00 par value            13,978,095 Shares




             INTERNATIONAL THOROUGHBRED BREEDERS, INC.
                         AND SUBSIDIARIES

                    CONSOLIDATED BALANCE SHEETS
              AS OF MARCH 31, 1998 AND JUNE 30, 1997

                              ASSETS

<TABLE>
<S><C>                                <C><C>        <C><C>
                                         March 31,    
                                            1998        June 30,
                                        (UNAUDITED)       1997

CURRENT ASSETS:                                       

  Cash and Cash Equivalents           $    4,536,527 $   3,784,895
  Restricted Cash and Investments          2,412,472     3,730,323
  Reserve Escrow Deposits                 11,352,950    16,773,824
  Accounts Receivable                      2,785,452     1,497,254
  Prepaid Expenses                           521,085     1,396,766
  Other Current Assets                       993,037       664,226
  Land and Improvements                               
      Held for Sale, Net                           0     6,762,809

       TOTAL CURRENT ASSETS               22,601,523    34,610,097

LAND, BUILDINGS AND EQUIPMENT:                        

  Land and Buildings                      69,338,613    69,255,937
  Construction In Progress                50,863,921    50,624,333
  Equipment                                5,523,237     5,261,367

                                         125,725,771   125,141,637

  LESS: Accumulated Depreciation           
          and Amortization                 5,451,021     4,278,754

       TOTAL LAND, BUILDINGS AND                      
           EQUIPMENT, NET                120,274,750   120,862,883
                                                      

OTHER ASSETS:                                         

  Deposits and Other Assets                  930,490       272,337
  Deferred Financing Costs, Net            3,637,254     5,907,432
  Goodwill, Net                            2,958,336     3,041,280

       TOTAL OTHER ASSETS                  7,526,080     9,221,049
                                                      

TOTAL ASSETS                          $  150,402,353 $ 164,694,029

See Notes to Consolidated Financial Statements.       
</TABLE>



             INTERNATIONAL THOROUGHBRED BREEDERS, INC.
                         AND SUBSIDIARIES

                    CONSOLIDATED BALANCE SHEETS
              AS OF MARCH 31, 1998 AND JUNE 30, 1997

               LIABILITIES AND STOCKHOLDERS' EQUITY



<TABLE>
<S><C>                                <C><C>        <C><C>
                                         March 31,    
                                            1998        June 30,
                                        (UNAUDITED)       1997

CURRENT LIABILITIES:                                  

  Accounts Payable                    $    4,363,512 $   3,984,638
  Accrued Expenses                         6,069,610     5,228,655
  Purses Payable                             412,650     1,984,050
  Current Maturities of                               
     Long-Term Debt                       56,054,808    62,963,178
  Deferred Revenue                         1,142,542     1,750,572

       TOTAL CURRENT LIABILITIES          68,043,122    75,911,093

LONG-TERM DEBT,                                       
   Net of Current Portion                 12,124,933    13,131,003
                                                      

COMMITMENTS AND CONTINGENCIES                -             -

STOCKHOLDERS' EQUITY:                                 

  Series A Preferred Stock,                            
    $100.00 Par Value,                           
    Authorized 500,000 Shares,                        
    Issued and Outstanding,                          
    362,477 and 362,470 Shares,                       
    Respectively                          36,247,675    36,246,975

  Common Stock, $2.00 Par Value,                       
    Authorized 25,000,000 Shares,                     
    Issued and Outstanding,                           
    13,978,093 and 13,978,060 Shares,                 
    Respectively                          27,956,185    27,956,119

  Capital in Excess of Par                25,867,398    25,048,752

  (Deficit)(subsequent to
   June 30, 1993,                      
   date of quasi-reorganization)        (19,799,043)  (13,558,246)

       TOTAL                              70,272,215    75,693,600

  LESS: Deferred Compensation, Net            37,917        41,667

       TOTAL STOCKHOLDERS' EQUITY         70,234,298    75,651,933

TOTAL LIABILITIES AND                                 
   STOCKHOLDERS' EQUITY               $  150,402,353 $ 164,694,029

See Notes to Consolidated Financial Statements.       
</TABLE>

             INTERNATIONAL THOROUGHBRED BREEDERS, INC.
                         AND SUBSIDIARIES

          CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY
             FOR THE NINE MONTHS ENDED MARCH 31, 1998
                         (UNAUDITED)


<TABLE>
<S><C>                                <C><C>        <C><C>
                                         Preferred    
                                         Number of    
                                           Shares        Amount

BALANCE - JUNE 30, 1997                      362,470 $  36,246,975
                                                      

   Compensation for Options                           
      Granted to Non-Employees              ---           ---

   Shares Issued for Fractional                       
      Exchanges With Respect to the                   
      One-for-twenty Reverse Stock Split              
      effected on March 13, 1992                   7           700

   Amortization of Deferred                           
    Compensation Costs                      ---           ---

   Gain on Sale of Land                     ---           ---

   Net (Loss) for the Nine Months                     
     Ended March 31, 1998                   ---           ---
                                                      

BALANCE - MARCH 31, 1998                     362,477 $  36,247,675


                                           Common     
                                         Number of    
                                           Shares        Amount

BALANCE - JUNE 30, 1997                   13,978,060 $  27,956,119


   Compensation for Options                           
      Granted to Non-Employees              ---           ---

   Shares Issued for Fractional                       
      Exchanges With Respect to the                   
      One-for-twenty Reverse Stock Split              
      effected on March 13, 1992                  33            66

   Amortization of Deferred                           
    Compensation Costs                      ---           ---

   Gain on Sale of Land                     ---           ---

   Net (Loss) for the Nine Months                     
     Ended March 31, 1998                   ---           ---


BALANCE - MARCH 31, 1998                  13,978,093 $  27,956,185
                                                      

                                          Capital     
                                         in Excess      
                                           of Par      (Deficit)

BALANCE - JUNE 30, 1997                $  25,048,752 $(13,558,246)

                                                      

   Compensation for Options                           
      Granted to Non-Employees               819,412      ---

   Shares Issued for Fractional                       
      Exchanges With Respect to the                   
      One-for-twenty Reverse Stock Split              
      effected on March 13, 1992               (766)      ---

   Amortization of Deferred                           
    Compensation Costs                      ---           ---

   Gain on Sale of Land                     ---          1,687,095

   Net (Loss) for the Nine Months                     
     Ended March 31, 1998                   ---        (7,927,892)

                                                      

BALANCE - MARCH 31, 1998               $  25,867,398 $(19,799,043)
                                                      

                                          Deferred    
                                        Compensation     Total

BALANCE - JUNE 30, 1997                $    (41,667) $  75,651,933


   Compensation for Options                           
      Granted to Non-Employees                 ---         819,413

   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                         3,750         3,750

   Gain on Sale of Land                        ---       1,687,095

   Net (Loss) for the Nine Months                     
     Ended March 31, 1998                      ---     (7,927,892)

                                                      

BALANCE - MARCH 31, 1998               $    (37,917) $  70,234,298


See Notes to Consolidated Financial Statements.     
</TABLE>


             INTERNATIONAL THOROUGHBRED BREEDERS, INC.
                         AND SUBSIDIARIES

               CONSOLIDATED STATEMENTS OF OPERATIONS
         FOR THE THREE AND NINE MONTHS ENDED MARCH 31, 1998 AND 1997
                          (UNAUDITED)

<TABLE>
<S><C><C>                             <C><C>        <C><C>
                                            Three Months Ended 
                                                 March 31,    
                                            1998          1997

REVENUES:                                              

  Revenue from Operations               $ 18,827,867  $ 18,660,171
  Investment Income                           42,331       291,673

     TOTAL REVENUES                       18,870,198    18,951,844

EXPENSES:                                              

  Cost of Revenues:                                    

    Purses                                 6,909,265     6,832,124
    Operating Expenses                     8,749,470    10,180,900
    Depreciation & Amortization              432,125       398,902
  General & Administrative Expenses        2,642,550     2,753,244
  Non-Employee Option Costs                   11,138        12,150
  El Rancho Property Development                       
    Carrying Costs                           203,448       117,232

     TOTAL EXPENSES                       18,947,996    20,294,552

OPERATING INCOME (LOSS)                     (77,798)   (1,342,708)

OTHER EXPENSES:                                        

  Interest Expense                         1,792,312       488,510
  Amortization of Financing Costs            764,801       206,623
  Write Off of Deposits on Land                    0             0

     TOTAL OTHER EXPENSES                  2,557,113       695,133

(LOSS) BEFORE INCOME TAXES               (2,634,911)   (2,037,841)
  Income Tax Expense                          51,263        31,617

NET (LOSS)                               (2,686,174)   (2,069,458)

BASIC (LOSS) PER COMMON SHARE           $     (0.19)  $     (0.18)


WEIGHTED AVERAGE                                 
  SHARES OUTSTANDING                      13,978,076    11,651,527
                                                       

                                            Nine Months Ended 
                                                March 31,    
                                            1998          1997

REVENUES:                                              

  Revenue from Operations               $ 53,960,624  $ 52,835,248
  Investment Income                          121,464       421,049

     TOTAL REVENUES                       54,082,088    53,256,297

EXPENSES:                                              

  Cost of Revenues:                                    

    Purses                                18,929,028    18,239,389
    Operating Expenses                    24,091,965    27,068,663
    Depreciation & Amortization            1,297,738     1,187,550
  General & Administrative Expenses        8,262,692     7,568,102
  Non-Employee Option Costs                  819,413       174,150
  El Rancho Property Development                       
    Carrying Costs                           777,490       699,902

     TOTAL EXPENSES                       54,178,326    54,937,756

OPERATING INCOME (LOSS)                     (96,238)   (1,681,459)
                                                       

OTHER EXPENSES:                                        

  Interest Expense                         5,421,373     2,042,610
  Amortization of Financing Costs          2,288,781       610,930
  Write Off of Deposits on Land                    0     2,585,000

     TOTAL OTHER EXPENSES                  7,710,154     5,238,540

(LOSS) BEFORE INCOME TAXES               (7,806,392)   (6,919,999)
  Income Tax Expense                         121,500       128,427

NET (LOSS)                               (7,927,892)   (7,048,426)

BASIC (LOSS) PER COMMON SHARE           $     (0.57)  $     (0.60)

WEIGHTED AVERAGE                                 
  SHARES OUTSTANDING                      13,978,084    11,651,510


See Notes to Consolidated Financial Statements.        
</TABLE>


             INTERNATIONAL THOROUGHBRED BREEDERS, INC.
                         AND SUBSIDIARIES

               CONSOLIDATED STATEMENTS OF CASH FLOWS
         FOR THE NINE MONTHS ENDED MARCH 31, 1998 AND 1997



<TABLE>
<S><C><C>                             <C><C>        <C><C>
                                            Nine Months Ended 
                                                 March 31,    
                                            1998          1997

CASH FLOWS FROM OPERATING                              
ACTIVITIES:                                            

  NET (LOSS)                            $(7,927,892)  $(7,048,426)

  Adjustments to reconcile net (loss)                  
    income to net cash                                 
    provided by operating activities:                  
     Depreciation and Amortization         3,586,519     1,798,480
     Compensation for Options Granted        819,413       498,150
     Loss on Disposal of Fixed Assets         32,673             0
     Write-Off of Deposits                         0     2,585,000
     Changes in Assets and Liabilities -               
       Decrease in Restricted Cash                     
         and Investments                   1,317,851       990,578
       (Increase) in Accounts Receivable (1,288,198)   (2,108,905)
       (Increase) Decrease in                      
          Other Assets                     (328,811)       210,795
       Decrease in Prepaid Expenses          875,681       930,674
       (Decrease) Increase in Accounts                 
        and Purses Payable                             
        and Accrued Expenses               (351,571)     1,913,055
       (Decrease) in Deferred Revenue      (608,030)     (354,570)

  NET CASH (USED IN) PROVIDED BY                       
      OPERATING ACTIVITIES               (3,872,365)     (585,169)


CASH FLOWS FROM INVESTING                              
ACTIVITIES:                                           

    Proceeds from Sale of Land             8,449,904             0
    Development of El Rancho Property      (239,588)   (3,054,053)
    Deposits on
     New Mexico Racetrack Options          (600,000)             0
    Deposits on Purchase of Land                   0   (2,115,000)
    Capital Expenditures                   (409,891)     (960,543)
    (Increase) Decrease in
      Other Investments                     (60,417)        78,479

  NET CASH PROVIDED (USED IN)                          
   INVESTING ACTIVITIES                    7,140,008   (6,051,117)


CASH FLOWS FROM FINANCING ACTIVITIES:                  

    Proceeds from issuance of                          
       Long Term Notes                             0       827,891
    Proceeds from Line of Credit -                     
       Foothill                                    0     9,138,680
    Deferred Financing Costs                (22,445)   (1,146,525)
    Escrow Deposits Utilized               6,790,994             0
    Proceeds from Land Sale to                         
       Reserve Escrow Deposits           (1,370,120)             0
    Principal Payments on Sun Bank Note  (6,000,000)             0
    Principal Payments on
       Short Term Notes                    (908,371)     (728,224)
    Principal Payments on
       Long Term Notes                   (1,006,070)   (2,581,689)
                                                       

  NET CASH (USED IN) PROVIDED BY                       
    FINANCING ACTIVITIES                 (2,516,011)     5,510,132


NET INCREASE IN CASH AND                               
   CASH EQUIVALENTS                          751,632   (1,126,154)
                                                       

  CASH AND CASH EQUIVALENTS                            
    AT BEGINNING OF YEAR                   3,784,895     4,216,356
                                                       

  CASH AND CASH EQUIVALENTS                            
    AT END OF PERIOD                    $  4,536,527  $  3,090,202


  Supplemental Disclosures of Cash Flow Information:   

     Cash paid during the period for:                  
     Interest                           $  5,832,726  $  3,239,198
     Income Taxes                       $    100,000  $        710
                                                       

  Supplemental Schedule of Non-Cash Investing and Financing Activities:

  During the nine months ended March 31, 1998 and 1997,
  the Company recorded unrealized losses of $3,334 and $40,000,                
  respectively on trading securities.              

  During the nine months ended March 31, 1997 the Company issued 
  warrants to purchase 200,000 shares Common Stock at                       
  a fair value of $324,000 in connection with financing agreements.
  There were no warrants issued in the nine months   
  ended March 31, 1998.                          

See Notes to Consolidated Financial Statements.        
</TABLE>


INTERNATIONAL THOROUGHBRED BREEDERS, INC.
AND SUBSIDIARIES

NOTES TO FINANCIAL 
(Unaudited)

(1)  BASIS OF PRESENTATION

     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, 1998 are not necessarily indicative of the results
that may be expected for the year ended June 30, 1998.  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, 1997.

     The accompanying consolidated financial statements have been prepared
assuming the Company will continue as a going concern.  As discussed in Note
6, the Company is in violation of several non-financial loan covenants with
its major lender.  As a result of not obtaining waivers of these violations,
its $55 million Credit Facility has been classified as a current liability and
could be demanded  immediately.  The Company is continuing discussions with
this lender as to the granting of waivers or other remedies that could be
reached in connection with the litigation settlement negotiations described
below.  

     Additionally, the Company and certain of its directors and stockholders
are involved in various legal proceedings  as more fully described in Note 8. 
Several of these actions are at a standstill as the parties are in the final
stages of settlement negotiations.  Although the parties believe a settlement
is imminent, there can be no assurance that a settlement will be reached or as
to the terms thereof.  In the event a settlement cannot be reached, it is not
possible to determine with any precision the probable outcome or the amount of
liability, if any, and the resultant effects on the Company's financial
position, results of operations or cash flows.

     Additionally, the Company has sustained net losses of approximately $17.4
million and $1.1 million during the fiscal years 1997 and 1996, respectively,
and a net loss of $7,927,892 through March 31, 1998.  While the Company believes
its projected cash flows will be sufficient to meet its operating needs
through March 1999, there can be no assurances beyond that date.  These
projections do not reflect the impact of its default under the above
mentioned credit facility or the effects of the above mentioned litigation.

     While the Company is continuing to monitor and reduce its operating
expenses, including payroll, it is also considering the sale of certain assets
or operations, including the possible sale of the El Rancho property as part
of the litigation settlement negotiations described above and the possible
sale of all or some of its racing operations.

(2)  CONSTRUCTION IN PROGRESS

      Construction in progress includes the purchase price as well as
preliminary construction  costs in conjunction with the development of the El
Rancho property.  These costs include real property acquisition costs in the
amount of approximately $43,500,000, capitalized interest of $4,182,007 and
other development costs in addition to approximately $2.7 million in carrying
costs.  As of July 1997, development has been temporarily suspended as
additional funding is being secured.  Accordingly, capitalization of interest
costs have been suspended, until the Company obtains additional financing and
resumes construction.


(3)  ACQUISITIONS AND DISPOSITIONS

     OPTION TO PURCHASE OPERATING LEASES

     On July 1, 1997, the Company made a non-refundable payment of $600,000
to purchase an option to acquire the operating leases from D&C Gaming
Corporation ("D&C"), a company owned equally by the Company's CEO and the
President and Chairman of Las Vegas Entertainment Network, Inc. ("LVEN"), to
acquire operating leases for two New Mexico racetracks.  The option agreement
has been terminated and D&C has agreed to repay the $600,000 deposit.

     LAND AND IMPROVEMENTS HELD FOR SALE - NET

     On October 20, 1997, the Company sold a parcel of land contiguous to
Garden State Park for $9,000,000 exclusive of closing costs of approximately
$545,000.  The carrying value of such property at September 30, 1997 was
$6,767,715.  From the sales proceeds $6,000,000 was used to repay an existing
mortgage on the property.  The resulting gain was recorded as an adjustment to
Stockholders' Equity in accordance with generally accepted accounting
principles applicable to a quasi-reorganization.

(4)  INVESTMENTS

     At March 31, 1998, the Company had approximately $2,412,472 which was
classified as restricted cash and  investments.  These funds are primarily
cash received from horsemen for nomination and entry fees to be applied to
upcoming racing meets, purse winnings held in trust for horsemen and amounts
held for unclaimed ticketholder winnings. 
     
(5)  RESERVE ESCROW DEPOSITS

     At March 31, 1998, $11,352,950 was held in various reserve cash escrow
deposit accounts that were established in connection with the Company's two-
year $55 million credit facility with Credit Suisse First Boston Mortgage
Capital LLC ("Credit Suisse").  The financing agreement provided for reserve
accounts to be held by LaSalle National Bank ("the Depository").  The Company
is currently in default with respect to the Credit Suisse credit facility.  As
a result Credit Suisse could apply any remaining escrow amounts to any
outstanding borrowings.  Therefore, all balances in the Reserve Escrow
Deposits have been classified as current assets.  On the maturity date of the
facility, any amounts remaining on deposit shall, at Credit Suisse's option,
be applied against outstanding borrowings or returned to the Company.
     
      Interest Reserve Account. $10,000,000 of the loan proceeds were placed
in a Interest Reserve Account to fund the monthly interest due on the $55
million credit facility (approximately $588,000 per month).

     El Rancho Reserve Account. $3,759,615 of the loan proceeds were
deposited to reimburse the Company for expenditures in connection with the
development and carrying costs of the El Rancho property.  Through March 31,
1998, the Company has been reimbursed $1,465,000 from this account.

     Working Capital Account. $760,000 of the loan proceeds were deposited
for working capital purposes.  Upon the sale of certain Garden State property
on October 20, 1997 (See Note 3), the Company deposited an additional
$1,370,120 in this account.

     Tax and Insurance Account. $916,898 of the loan proceeds were deposited
into a Tax and Insurance Reserve Account.  Each month the Company will make
deposits equal to one-twelfth, or approximately $300,000, of the amount
reasonably estimated by Credit Suisse to be sufficient to pay all taxes,
general and special assessments, water and sewer rents and other similar
charges levied against certain of the Company's properties. 
     



     Deferred Maintenance Account. $500,000 of the loan proceeds were
deposited to be used to reimburse the Company's racetracks for maintenance
expenditures.

     Environmental Remediation Account.$1,000,000 of the loan proceeds were
deposited to be used to reimburse the Company for expenditures made in
connection with approved environmental remediation expenditures.

The Escrow Accounts are summarized below: 
<TABLE>
<S>                       <C><C>
Account                     March 31, 1998

Interest Reserve          $       3,929,176
El Rancho Reserve                 2,293,666
Working Capital                   2,130,122
Tax and Insurance                 1,591,119
Deferred Maintenance                408,867
Environmental Remediation         1,000,000

Total                     $      11,352,950
</TABLE>

(6)  NOTES AND MORTGAGES PAYABLE

          Notes and Mortgages Payable are summarized below:

<TABLE>
<S>                    <C>                   <C><C>          <C><C>
                             Interest %              March 31, 1998   
                             Per Annum            Current      Long-Term

INTERNATIONAL THOROUGHBREDBREEDERS INC.:                      
                                                              

Credit Suisse         LIBOR Rate plus 7%           
  First Boston(A)   (3/31/98  rate 12.6875%)  $    55,000,000$      -0-

FREEHOLD  RACEWAY:                                            

Kenneth R. Fisher (B)    80% of Prime (not to                 
                                   exceed 6%)         625,000  10,000,000
                            (3/31/98 rate 6%)                 

Kenneth R. Fisher (C)            80% of Prime                 
                          (3/31/98 rate 6.6%)         225,000   1,647,049

GARDEN STATE PARK:                                            

Other                                 Various         204,808     477,884

    Totals                                    $    56,054,808$ 12,124,933
</TABLE>

The effective LIBOR Rate and the Prime Rate at March 31, 1998 was 5.6875% and
8.50%, respectively. 

     
     (A) On May 23, 1997, the Company entered into a two-year $55 million
credit facility with Credit Suisse secured by a pledge of certain of the
personal and real property of the Company and its subsidiaries (the "Credit
Suisse Credit Facility").  Proceeds of this facility were used to repay in
full the Company's $30 million credit facility with Foothill Capital
Corporation and will also provide funds for working capital and other general
corporate purposes, including, but not limited to, preliminary development of
the El Rancho property.  Interest under this Credit Suisse Credit Facility is
payable monthly in arrears at 7% over the London interbank offered rate
("LIBOR"). The scheduled maturity date of the facility is June 1, 1999.  Of
the remaining facility borrowings, approximately $16.8 million was placed in
escrow accounts, financing and closing fees of $4.3 million were incurred and
$3.9 million was used by the Company for general corporate purposes and
repayment of certain financial obligations.

     The Credit Suisse Credit Facility is evidenced by a convertible
promissory note (the "Credit Suisse Note") pursuant to which up to $10 million
of the aggregate principal amount of the Credit Suisse Note can be converted,
in certain circumstances, including upon the maturity date of the note, upon
the prepayment of $10 million in aggregate principal amount of the note or
upon the acceleration of the Credit Suisse Note, at the option of Credit Suisse,
into shares  of the Company's Common Stock at a conversion price of $8.75 per
share (subject to adjustment in certain events).  In addition, Credit Suisse
was granted warrants to purchase 1,044,000 shares at an exercise price of
$4.375 per share (subject to adjustment in certain events).  The warrants to
purchase 546,847 shares is immediately exercisable, have been valued at
approximately $1.6 million and have been recorded as original issue discount. 
The warrants to purchase 497,153 shares become exercisable at such time as
Credit Suisse delivers to the Company a firm commitment for additional funding
of no less than $50 million to the Company in connection with the development
of the El Rancho property.

     Credit Suisse also received 232,652 shares of Common Stock upon the
conversion into Common Stock of a $10.5 million promissory note issued by the
Company to LVEN  in consideration for Credit Suisse's consent and for certain
advisory services in connection with this  transaction.  Credit Suisse has the
right to receive further shares upon the consummation of a proposed related
acquisition by the Company of Casino-Co., a subsidiary of LVEN, equal to 10%
of the stock consideration paid by the Company for such acquisition.  The
Company has granted Credit Suisse certain registration rights with respect to
the warrants and the shares.

     The Credit Suisse Credit Facility also provides for both affirmative and
negative covenants, including financial covenants such as tangible net worth,
as defined in the Credit Facility.  The Company is not in compliance with
certain non-financial covenants.  As a result of not obtaining waivers of
these violations, its $55 million credit facility has been classified as a
current liability and could be demanded immediately.

     In connection with pending litigation, the minority Board members have
challenged the authorization and enforceability of certain agreements entered
into and actions taken by the Company, including the Credit Facility and
certain related agreements and related actions. (See Note 8). 

     (B) On February 2, 1995, the Company entered into an agreement with the
former owner of Freehold Raceway whereby the $12.5 million balance of the
purchase price of the Freehold Raceway was financed by an eight year
promissory note at 80% of the prevailing prime rate, not to exceed 6%.  Yearly
principal and interest payments during the first five (5) years commencing
January 1, 1996 is based upon a twenty (20) year principal amortization
schedule.  During each of the next three (3) years, commencing January 1,
2001, yearly principal and interest payments shall be based upon a ten (10)
year amortization schedule.  On January 1, 2003, the entire unpaid principal
balance, together with any accrued interest, becomes due and payable.  The
note is secured by a mortgage on the land and buildings at Freehold Raceway. 

     
     (C) On February 2, 1995, the seller of Freehold Raceway  advanced to
Freehold Raceway $2,584,549 towards the retirement of $5.2 million of existing
debt on Freehold Raceway.  The seller received from Freehold Raceway in 
fiscal 1995, a promissory note evidencing the indebtedness secured by a
mortgage on the racetrack property and other collateral.  Equal monthly
principal installments of $18,750 beginning on February  1, 1995 is paid to
the seller together with accrued interest.  Interest is calculated at 80% of
the prime rate at January 1 of each year.  The note is secured by a mortgage
on the land and buildings at Freehold Raceway.


(7)  INCOME TAX EXPENSE

     The Company's income tax expense for the three and nine month periods
ending March 31, 1998 and 1997 relates to New Jersey income taxes for its
Freehold Raceway operations.

(8)  COMMITMENTS AND CONTINGENCIES 

     During January 1996 the Company purchased the El Rancho property from
LVEN.  The original agreement provided that, following the development of the
property, LVEN would receive as additional consideration an interest in the
"adjusted cash flow" in the amount of 50% for the first six (6) years
following the opening of a casino and 25% thereafter until such time as LVEN
has received $160,000,000, but only after (a) the Company recouped: 1) the
aggregate amount of cash payments applied to the purchase price; 2) payments
made under the $6.5 million note and the $10.5 million note;   3) $2 million;  
and 4) any amounts that the Company invested in the property after the
purchase,  together with interest at eight percent (8%) per annum from the
date of the investment; (b) LVEN has:   1) received payment of all principal
and interest, if any, remaining outstanding under the $6.5 million note and/or
the $10.5 million note;   and 2) recouped $4 million plus any amount invested
in the El Rancho property after the purchase and approved by the Company,
together with interest thereon at a rate of 8% per annum from the date of
investment; and (c) the Company has received an additional $2 million,
together with interest thereon at the rate of 8% per annum from the date of
the purchase.  This agreement was amended on May 23, 1997 by the Bi-Lateral
Agreement between the Company and LVEN to limit to $35 million the aggregate
amount for which the Company is entitled to recover under (a) and (c) above.

     The term "adjusted cash flow", as defined, refers to cash flow from the
property before taxes, less the payment of any debt retirements and capital
lease payments and less certain fees received or accrued for certain initial
rent or lease payments.  The Bi-Lateral Agreement, signed in connection with
the $55 million Credit Facility limited the maximum debt service to be netted
against cash flow from operations of the El Rancho property in computing
"adjusted cash flow" to $65 million, with a further limitation to $27 million
in the event that additional financing over the $55 million is not required
for the development of the El Rancho property. 

      On May 23, 1997, the original agreement with LVEN was also amended by a
Tri-Party Agreement among the Company, LVEN and Credit Suisse whereby the
Company is required to acquire Casino-Co, a wholly owned subsidiary of LVEN,
whose principal asset is the $160 million profit participation note described
in the preceding paragraphs.  The acquisition may be accomplished by the
purchase of all the stock of Casino-Co or a merger of the companies.  The
Company would be required to issue its stock, the price of which will be
subject to fairness opinions from independent investment banking firms
independently representing the Company and LVEN, to:  1) LVEN in an amount
equal to 90% of the greater of the fairness opinions obtained by the Company
and LVEN;   and to 2) Credit Suisse in an amount equal to 10% of the greater
of the fairness opinions obtained by the Company and LVEN.  If this
acquisition is approved by the Company's stockholders and Board of Directors,
and completed, the Company's requirement for the sharing of cash flow,
described above, will be canceled.


     In connection with the purchase of the El Rancho property, Las Vegas
Communications Corporation ("LVCC") a subsidiary of LVEN, retained the
exclusive right to manage all aspects of the property's entertainment
activities.   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 LVCC shall have the option to renew the agreement for two (2)
consecutive five year terms.  The agreement provides LVCC with an annual fee
of $800,000 subject to annual increases and other additional amounts. Pursuant
to the Bi-Lateral Agreement entered into by the Company and LVEN in connection
with the Credit Suisse Credit Facility, the parties agreed to amend the
entertainment management agreement to provide for a lease by the Company to
LVCC of space within the El Rancho Property on or from which all food,
beverage and retail activities will be conducted (exclusive of the mezzanine
space, the rights to which will be retained by the Company).  The terms of
such lease arrangements have not been finalized.

     In connection with pending litigation, the minority Board members have
challenged the authorization and enforceability of certain agreements entered
into and actions taken by the Company, including the Credit Facility and 
certain related agreements and related actions.
     
     Effective to January 15, 1997, the Company entered into a ten-year
employment contract with Nunzio P. DeSantis, the Company's Chief Executive
Officer.  The contract provides for annual compensation of $450,000, adjusted
annually by increases, if any, in certain Consumer Price Indexes.  Mr.
DeSantis will also receive a performance bonus for each fiscal year during the
term of the agreement equal to the excess of the amount, if any, by which the
pre-tax income of the Company exceeds $2 million, limited to an amount equal
to his base salary.  As part of his contract, Mr. DeSantis was awarded
options, subject to stockholder approval, to purchase 5,000,000 shares of the
Company's Common Stock at an exercise price of $4 per share.  Upon obtaining
stockholder approval for the awarding of the options, the Company may need to
record as compensation an expense calculated by multiplying the number of shares
covered by the option by the difference between the intrinsic value of each
share and the exercise price at the measurement date.  An expense would only
be recorded if the exercise price is below the market price at the 
measurement date. Options to purchase 500,000 shares of Common Stock would be
exercisable immediately and options to purchase an additional 500,000
shares of Common Stock would become exercisable on each succeeding
anniversary of the effective date of the agreement,  provided, however,
that all options shall be fully vested if Mr. DeSantis resigns for good
reason (as defined in the agreement), resigns upon a change of control, or if
he is discharged without cause.  Mr. DeSantis is entitled to additional
fringe benefits, including the use of a private jet, in connection with the
performance of his duties. This contract is a subject of the pending
litigation discussed below. 

     Effective January 15, 1997, the Company entered into a consulting
contract with Anthony Coelho, the Company's Chairman of the Board, that
provides for $10,000 per month in consulting fees on a month-to-month basis,
$2,500 for each director's meeting he attends and other fringe benefits.  As
part of this contract, Mr. Coelho was awarded options, subject to stockholder
approval, to acquire 1,000,000 shares of the Company's Common Stock at an
exercise price of $4 per share.  100,000 shares would become exercisable
immediately and options to acquire 100,000 shares would become exercisable on
each succeeding anniversary of the effective date of the agreement.  Upon
obtaining stockholder approval for the awarding of these options, the Company
will need to record an expense calculated by using the fair value of the
options at that date. This contract is a subject of the pending litigation
discussed below.

     During July 1997, the Company executed an agreement to lease office
space in Albuquerque, New Mexico for a five year period, expiring on July 31,
2002.   The lease provides for a monthly rent of approximately $10,000 when
the space is fully occupied.  In connection with this lease, the Company has
sub-leased a portion of the premises to AutoLend Group, Inc. ("AutoLend"), for
$600 per month.  The sublease is terminable on 30 days written notice.  Mr.
DeSantis is the Chairman, Chief Executive Officer and a principal stockholder
of AutoLend and Mr. Coelho is a director. 


     During October 1997, the Company terminated the employment of the
Company's President, Robert J. Quigley.  The severance package approximating
$300,000, payable through December 1998, was expensed in the second quarter of
fiscal 1998.

     The New Jersey Division of Gaming Enforcement ("DGE") is currently
investigating in accordance with its statutory obligation to determine the
qualification the Company and its directors and significant stockholders in
connection with Garden State Park's and Freehold Raceway's licenses with the
Casino Control Commission ("CCC") and the Racing Commission.  The Company has
no information with respect to the potential outcome of such investigation. 
In the event that the DGE concludes that one or more of such individuals are
not qualified, the CCC and/or the Racing Commission may require any such
stockholder to divest his interests and any such director may be asked to
resign.  Failure of such individuals to comply with such requests could
jeopardize the Company's racing licenses and ability to conduct business with
any casino licensees, including simulcasting to Atlantic City casinos.


     LEGAL PROCEEDINGS

     On or about September 10, 1997, three actions were filed in Delaware
Court of Chancery in and for New Castle County (the"Chancery Court"), each of
which named the Company as a nominal defendant (collectively, the "Delaware
Actions").  Additionally, on or about February 24, 1998, another action was
filed in the United States District Court for the District of New Jersey
(the "New Jersey District Court")
naming the Company as a nominal defendant.  These actions are summarized
below:

Mariucci et. al. v. DeSantis et. al.

     The first Delaware Action, captioned John Mariucci, Robert J. Quigley,
Charles R. Dees, Jr., James J. Murray, Francis W. Murray, Frank A. Leo, and
The Family Investment Trust (Henry Brennan as Trustee) v. Nunzio P. DeSantis,
Michael Abraham, Anthony Coelho, Kenneth W. Scholl and Joseph Zappala and
International Thoroughbred Breeders, Inc., C.A. No. 15918NC ("Mariucci"),
alleged, among other things, that (i) NPD had breached the terms of the NPD
Acquisition Agreement by failing to fund a line of credit, (ii) as a result of
such breach, the resignations of Messrs. Mariucci, James Murray and Keonemund
("the Old Directors") were ineffective and (iii) Messrs. DeSantis, Coelho,
Abraham, Scholl and Zappala (" the New Directors") were misusing the assets of
the Company for their personal benefit.  The Mariucci complaint sought an
order (a) pursuant to Section 225 of the Delaware General Corporation Law,
determining that (1) the New Directors were never validly appointed or elected
to the Board and (2) Frank Koenemund, John Mariucci and James Murray,
notwithstanding their resignations upon the NPD Acquisition and the 
acceptance of those resignations by the Company's Board, continued
as directors of the Company (the "Section 225 Claims") and
(b) preserving the status quo pending a final adjudication of the
Section 225 Claims.  On September 18, 1997,
the plaintiffs filed an amended complaint.  On September 26, 1997, the
New Directors and the Company filed a motion to dismiss, or in the
alternative, to strike allegations of the amended complaint (the "Motion to
Dismiss").  The Chancery Court granted the Motion to Dismiss by opion dated
October 14, 1997.  The time for appeal of the Chancery Court order
has expired and no appeal has been taken by the plaintiffs.


Quigley et. al. v. DeSantis et. al.

     The second Delaware Action, captioned Robert J. Quigley, Frank A. Leo ,
and The Family Investment Trust (Henry Brennan as Trustee) v. Nunzio P.
DeSantis, Michael Abraham, Anthony Coelho, Kenneth W. Scholl, Joseph Zappala,
Joseph A. Corazzi and Las Vegas Entertainment Network, Inc. and International
Thoroughbred Breeders, Inc., C.A. No. 15919NC ("Quigley"), is a derivative
suit brought by two of the Old Directors (Messrs. Quigley and Leo) and the
Family Investment Trust (collectively, the "Quigley Plaintiffs") which
alleges, among other things, that the New Directors have breached their
fiduciary duties to the Company, usurped corporate opportunities belonging to
the Company and incorrectly stated minutes of Board meetings to omit material
discussions.  The Quigley complaint alleges that the New Directors entered
into certain agreements on behalf of the Company in violation of the "super-
majority" voting provisions of the Company's By-laws and their fiduciary duty
to the Company, including but not limited to, the Credit Suisse Loan Agreement,
the Tri-Party Agreement, the Bi-Lateral Agreement, the D&C Gaming option
agreement, the DeSantis employment agreement and Coelho consulting agreement. 
The Quigley complaint seeks (i) a declaratory judgment that (a) certain
actions taken by the New Directors are null and void and
(b) the "super-majority" provisions of the Company's By-laws remain
in full force and effect, (ii) recision of certain actions taken by the
Company's Board and (iii) damages as a result of the allegedly unauthorized
and allegedly unlawful conduct of the defendants.  On November 7, 1997, the
New Directors and the Company filed  answers to the Quigley complaint denying
all of the material allegations contained in the Quigley complaint.

     On November 18, 1997, the Company filed an amended answer and
counterclaim (the "Counterclaim") against Messrs. Quigley, Leo, Francis Murray
and Dees (collectively, the "Counterclaim Defendants").  The Counterclaim
alleges that the Counterclaim Defendants have breached their fiduciary duty to
the Company by  (i) adopting, and subsequently refusing to recognize the
repeal of certain "super-majority" By-law provisions in order to aid Brennan
in retaining control of the Company's business affairs and jeopardizing the
Company's licenses and registrations, (ii) interfering in the Company's hiring
of new independent auditors thereby causing the Company to be delinquent in
its required filings with the Securities and Exchange Commission ("SEC") and
causing the suspension of trading in the Company's stock on the American Stock
Exchange, (iii) using corporate funds for their personal uses and (iv) 
usurping corporate opportunities properly belonging to the Company.  The
Counterclaim seeks injunctive relief enjoining the Counterclaim Defendants
from, among other things, interfering in the Company's day-to-day business
operations, the establishment of a constructive trust over certain assets of
the Counterclaim Defendants, a declaratory judgement that the "super-majority"
voting provisions have been repealed and money damages.  On December 4, 1997,
the Quigley Plaintiffs filed a motion to conduct a separate expedited trial on
the "super-majority" By-law issues, which motion was withdrawn by the Quigley
Plaintiffs at a February 10, 1998 scheduling conference.  At the February
scheduling conference, the Chancery Court scheduled this matter for trial to
have commenced on May 20, 1998.  The Counterclaim Defendants answered the
Counterclaim on January 12, 1998 (the "Counterclaim Answer") and, in the
Counterclaim Answer, Mr. Murray asserted a wrongful discharge and seeks
monetary damages.

Rekulak et. al. v. DeSantis et. al.

     The third Delaware Action, captioned James Rekulak v. Nunzio P.
DeSantis, Michael Abraham, Anthony Coelho, Kenneth W. Scholl, Joseph Zappala,
Las Vegas Entertainment Network, Inc. and Joseph A. Corazzi and International
Thoroughbred Breeders, Inc., C.A. No. 15920 ("Rekulak"), is a derivative suit
which in essence repeats the allegations contained in the Quigley complaint
and seeks similar relief.  The Rekulak action was consolidated with the
Quigley action pursuant to a stipulation and order dated January 13, 1998.

     The trustee of Brennan's Bankruptcy Estate, as well as the SEC, have
participated to a limited extent in discovery in the litigation of the Quigley
and Rekulak actions.   The Trustee's and the SEC's involvement is predicated
upon overseeing any possible interests of the Bankruptcy Estate and the SEC.


Rekulak et. al. v. DeSantis, et al.

     On or about October 8, 1997, James Rekulak filed a complaint in the
Chancery Court captioned Rekulak v. DeSantis, et al., Civil Action No. 15978,
which purports to be a complaint under Section 225 of the Delaware General
Corporation Law and contains substantive allegations that are virtually
identical to those in the complaint in the Mariucci action described above. 
On October 8, 1997, the plaintiff in this action sought to have his complaint
consolidated with the complaint in the Mariucci action and represented to the
Chancery Court that he was willing to be bound by the Court's decision on
defendants' Motion to Dismiss the Mariucci action.  As set forth above, the
Mariucci action was dismissed by the Chancery Court's opinion dated October
14, 1997, and thereafter, this action was dismissed with prejudice by a
stipulation and order dated February  9, 1998.

Harris v. DeSantis, et al.

  The most recent action, filed on February 24, 1998
in the New Jersey District Court, captioned Myron
Harris, derivatively on behalf of International Thoroughbred Breeders, Inc., a
Delaware corporation v. Nunzio P. DeSantis, Anthony Coelho, Kenneth W. Scholl,
Michael Abraham, Joseph Zappala, Frank A. Leo, Robert J. Quigley, Charles R.
Dees, Jr. and Francis W. Murray ("Harris"), C.A. No. 98-CV-517 (JBS), is a
derivative suit brought by a stockholder of the Company.  The factual
allegations and claims asserted in the Harris complaint are virtually
identical to the claims asserted in the Quigley complaint and in the
Counterclaim asserted by the Company in the Quigley action.

     The Harris action has been assigned to The Honorable Jerome B. Simandle,
United States District Judge.  On April 28, 1998, all defendants in the Harris
action filed a Motion for Reassignment, seeking that the Harris case be
reassigned to The Honorable Joseph H. Rodriguez, United States District Judge,
as Judge Rodriguez had already been assigned two related cases involving
members of the Board.  See NPD v. Quigley, et al. and Green v. DeSantis, et
al., discussed below.  On May 4, 1998, all defendants filed a motion to
dismiss or in the alternative a motion to stay the Harris action, pending a
resolution of the Quigley action.  The plaintiff's response will be due thirty
days subsequent to the filing of the motion.  On May 4, 1998, the plaintiff
filed an amended complaint to, among other things, add another stockholder as
an additional plaintiff.

  The litigation in the Quigley, Rekulak and NPD actions is at a standstill
as the parties are in the final stages of settlement negotiations.  Although
the parties believe that a settlement is imminent, there can be no
assurance that a settlement will be reached or to the terms thereof.  In the
event a settlement cannot be reached, there can be no assurance as to the
outcome of such litigation and the impact the litigation itself or any
resolution thereof may have on the Company's financial position, results of
operations or cash flows.  As discussed above, the Quigley, Rekulak and Green
actions challenge the authorization and enforceability of certain actions 
taken and agreements entered into by the Company, including the Credit Suisse
Credit Facility and related documents.  In the event plaintiffs prevail in
such litigation, such actions and agreements may be subject to modification,
termination or revision, the impact of which on the Company cannot be
predicted.

  As part of the proposed settlement, it is the Company's intention to dispose
of the El Rancho property.  However, there can be no assurance that the 
settlement and subsequent sale of the El Rancho property can be completed
or as to the terms thereof.

  In November 1997, two separate actions were filed in the New Jersey District
Court against various directors of the Company and other affiliated parties.  
The Company is not a party to either of these actions, both of which are
summarized below. 



NPD, Inc. v. Quigley, et. al.

     On November 18, 1997, NPD (the Company's largest stockholder and whose
stockholders are Messrs. DeSantis and Coelho), filed a complaint captioned
NPD, Inc. v. Robert J. Quigley, Francis W. Murray, Frank A. Leo, Charles R.
Dees, Jr., John Mariucci, Frank Koenemund and James J. Murray, C.A. 97-CV-5657
("NPD"), in the New Jersey District Court. 
The complaint alleges, among other things, that Messrs. Quigley, Francis
W. Murray, Leo and Dees, each of whom is currently a director
of the Company, and Messrs.
Mariucci, Koenemund and James Murray, each of whom is a former director of the
Company, conspired with one another and with Robert E. Brennan
("Brennan") to defraud NPD by (i) approving and subsequently concealing from
NPD the existence of the "super-majority" voting provision of the Company's
By-laws and (ii) purporting to repeal such provision and subsequently filing
suit in an effort to restore such provision, all of which has had the effect
of attempting to deprive NPD of control of the Company and perpetuating the
control of Brennan and his associates.  The NPD suit seeks compensatory and
punitive damages.  On January 8, 1998, the defendants served a motion to
dismiss NPD's complaint.  NPD has not yet responded to that motion.  The
Company is not a party to the NPD suit.


Green v. DeSantis, et. al.

     Certain officers, directors and affiliates of the Company are parties to
an action filed on November 30, 1997 by Robert William Green ("Green"), a
stockholder of the Company and Chief Executive Officer of Philadelphia Park,
captioned Robert William Green v. Nunzio DeSantis, Joseph Corazzi, Anthony
Coelho, Las Vegas Entertainment Network, Inc. and NPD, Inc., C.A. 97-
5359(JHR), in the New Jersey District Court. 
The complaint alleges, among other things, that the defendants have usurped
certain corporate opportunities at the expense of the Company, have diluted
Green's interest in the Company though the issuance of shares of stock and
have conspired to deprive him of certain rights under an option granted to him
by NPD (the "Green Option").   Subject to regulatory approval, the Green
Option grants Green the right to purchase approximately 50% of the shares of
the Company's Common Stock which are held by NPD.  The Green Option terminated
by its terms on January 15, 1998 and Green did not exercise the option by such
date.  Green seeks (i) compensatory and punitive damages, (ii) an order
enjoining defendants from transferring, encumbering or alienating the
Company's Common Stock subject to the Green Option, (iii) an order declaring
the issuance of certain shares of Common Stock to be a nullity, and (iv)
reformation of the Green Option to extend the termination date. This action
also raises claims substantially similar to those made in the Quigley action.
The defendants have not yet filed a response to the complaint.  The Company is
not a party to this action.


     The Company is a defendant in various other 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.


(9)  DEFERRED FINANCING COSTS

      Deferred financing costs at March 31, 1998 include those amounts
associated with the Credit Suisse Credit Facility.  (See Note 6).   These
costs of $6,238,732, net of amortization of $2,601,478, are being expensed
over the two year life of the loan.   Amortization expense for the three and
nine months ended March 31, 1998 was $764,801 and $2,288,781, respectively.


(10) STOCK OPTIONS AND WARRANTS

     (A)  EMPLOYEE AND  NON-EMPLOYEE OPTIONS
          
     On August 21, 1997, the Company granted non-qualified stock options to
purchase an aggregate of 300,000 shares of Common Stock to certain directors.  
The fair value of options issued recognized as non-employee option costs
during the three months ended March 31, 1998 and 1997 was $11,137 and $12,150,
respectively.  The fair value of options issued during the nine months ended
March 31, 1998 and 1997 was $819,413 and $174,150, respectively.  At March 31,
1998, total employee options outstanding were 1,300,000 and total non-employee
options outstanding were 600,000.  Options to purchase an aggregate of
6,000,000 shares of Common Stock have been granted, subject to stockholder
approval, to the Company's Chief Executive Officer and its Chairman of the
Board and are not reflected in the above numbers. 

     (B)  WARRANTS  
     
     The fair value of warrants issued during the six months ended March 31,
1998 and 1996 was $ -0- and $324,000, respectively.  At March 31, 1998, total
warrants outstanding were 1,671,847 and have been accounted for as deferred
financing costs and costs associated with the acquisition of the El Rancho
property.  The deferred financing costs are being amortized over the terms of
the related indebtedness.  The fair value of the warrants issued in connection
with the acquisition of the El Rancho property has been capitalized and will
be amortized when the facility becomes operational. 

(11) RELATED PARTY TRANSACTIONS

     In connection with the NPD acquisition, NPD borrowed the sum of
$2,900,000 from Casino-Co. Mr. Nunzio DeSantis, the Company's Chief Executive
Officer, holds options to acquire 1,500,000 shares of LVEN's common stock at
an exercise price of $1.00 per share.  Mr. DeSantis was also paid a commitment
fee by LVEN of $110,000 in connection with a standby financing commitment he
made to LVEN on October 31, 1996 as replacement financing for the El Rancho
property.  This standby financing commitment was never drawn upon and was
terminated in January 1997.  Mr. DeSantis is a 25% owner in Electric Media
Company, Inc., a subsidiary of LVEN.    

     Mr. DeSantis owned 80% of Nordic Gaming Corporation, an Ontario
corporation, which purchased the Fort Erie Racetrack in Fort Erie, Canada on
August 27, 1997.  The Company was offered, but rejected, the opportunity to
make this investment because of the demands on cash flow.  Nordic Gaming
borrowed $182,000 from LVEN for a deposit on the purchase which was repaid to
LVEN at the closing.  LVEN has also provided Nordic Gaming with a $1.3 million
secured line of credit to fund operating losses at the Fort Erie Racetrack. 
On May 15, 1998, Mr. DeSantis sold his Nordic Gaming shares to Erie Gaming
Organization, Inc., an Ontario corporation which holds the other 20% interest
in Nordic Gaming.  In consideration for his shares, Mr. DeSantis received
$10.00 and each of Nordic Gaming, Mr. DeSantis and Erie Gaming each exchanged
mutual general releases.  In connection with the pending litigation, the
minority Board members have challenged the decision to reject the 
opportunity to purchase Fort Erie Racetrack.  (See Note 8).

     During Fiscal 1997, the Company paid approximately $217,000, and in the
first nine months of fiscal 1998 paid an additional $12,200, to
March 31, 1998, to Southwest Jet Group in connection with the
use of a private jet by certain officers and directors of the Company,
including Mr. DeSantis, for Company
business.  Southwest Jet Group is a Nevada corporation, owned by Mr. DeSantis'
son, which operates private jets, including one which was partially financed
by Messrs. DeSantis and Corazzi.  Messrs. DeSantis and Corazzi used private
jets operated by Southwest Jet Group for certain personal matters for which
the Company advanced approximately $220,000 from January 15, 1997 to March 31,
1998, and which LVEN has agreed to reimburse to the Company.


     Mr. DeSantis and Mr. Joseph Corazzi, President and Chairman of LVEN, are
the sole stockholders of D&C Gaming Corporation, a Delaware corporation
("D&C").  On July 1, 1997, the Company paid for an option to acquire certain
leasehold interests relating to two New Mexico racetracks from D&C for a non-
refundable deposit of $600,000 which was to be credited towards the purchase
price.  The option agreement has been terminated and D&C has agreed to repay
the $600,000 deposit.  In the pending litigation, the minority directors have
challenged the authorization and enforceability of certain agreements,
including the option agreement.  (See Note 8).

     During the nine months ended March 31, 1998, the Company paid $90,000 in
consulting fees and $4,500 for an auto allowance to Anthony Coelho, the
Company's Chairman, pursuant to an agreement effective January 15, 1997.  Mr.
Coelho's consulting agreement is month to month, under which he is to be paid
$10,000 per month for ongoing consulting services, $2,500 for each board
meeting he attends and a $500 monthly automobile allowance. (See Note 8).

     Kenneth Scholl, a director of the Company, provides consulting services
to LVEN and certain of its subsidiaries through the Stanford Company of which
he is the President.  Until December 31, 1997,  LVEN paid Mr. Scholl $10,000
per month through Stanford Company,  for consulting services, including his
services as project manager for the El Rancho property.  Mr. Scholl is
currently the Secretary of Casino-Co and was its President from March 1996 to
May 19, 1997.  Effective January 1, 1998, the Company began paying Mr. Scholl
$10,000 per month for consulting services as project manager for its El Rancho
property. 
     
     During the nine months ended March 31, 1998, the Company paid
approximately $90,000 in consulting fees and reimbursed expenses to Joseph
Zappala, a director of the Company.  Subsequent to September 30, 1997, the
Company has paid approximately $10,000 per month plus expenses to Mr. Zappala
for ongoing consulting services.        
     The Company paid LVEN $75,000 in September 1997 under a letter agreement
executed in connection with the purchase of the El Rancho property, which
provides for a $25,000 per month fee with respect to maintenance and
supervision of the property prior to and during development.  The Company
terminated the letter agreement on December 17, 1997.

     The Company subleased a portion of its office space in Albuquerque, New
Mexico to AutoLend Group, Inc. for $600 per month, which sublease is
terminable on 30 days' notice.   Mr. DeSantis is the Chairman, Chief Executive
Officer and a principal stockholder of AutoLend and Mr. Coelho is a director. 
Mr. Corazzi has been using an office at the Company's Albuquerque office,
although no sublease has been executed for such office.

     For additional information regarding related party transactions, see
Footnotes 3 and 8 above.

INTERNATIONAL THOROUGHBRED BREEDERS, INC.
AND SUBSIDIARIES

MANAGEMENT'S ANALYSIS OF FINANCIAL CONDITIONS
AND RESULTS OF OPERATIONS FOR THE THREE AND SIX MONTHS ENDED DECEMBER 31,1997


ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITIONS AND
RESULTS   OF OPERATIONS

Liquidity and Capital Resources

     The Company's working capital, as of March 31, 1998, was a deficit of
($45,441,599) which represents an increase of approximately $38,257,000 from
the March 31, 1997 working capital deficit of ($7,184,956).  On May 23, 1997,
the Company obtained a credit facility from Credit Suisse First Boston
Mortgage Capital LLC ("Credit Suisse").  This two-year $55 million facility
was secured by a pledge of certain of the personal and real property of the
Company and its subsidiaries (the "Credit Suisse Credit Facility").  Proceeds
of this facility were used to repay in full the Company's $30 million credit
facility with Foothill Capital Corporation ("Foothill") and were used to
provide funds for working capital and other general corporate purposes,
including, but not limited to, preliminary development of the El Rancho
property.  Interest under the Credit Suisse Credit Facility is payable monthly
in arrears at 7% over the London Interbank Offered Rate ("LIBOR").  Of the
remaining facility borrowings, approximately $16.8 million was placed in
escrow accounts ( including $10 million in an interest reserve account, which
balance at March 31, 1998 was $3,929,117).   Financing and closing fees of
$4.3 million were paid and $3.9 million was used by the Company for general
corporate purposes and repayment of certain financial obligations.  At March
31, 1998, the interest rate on the Credit Suisse Credit Facility was 12.69%. 
The Company is not in compliance with certain non-financial covenants of the
Credit Suisse Credit Facility.  As a result of not receiving waivers of these
violations, Credit Suisse could accelerate the $55 million loan at anytime and
therefore, the loan has been classified as a current liability.  Additionally,
all escrow amounts have been classified as current assets.

     In connection with pending litigation, the minority Board members have
challenged the authorization and enforceability of certain agreements entered
into and actions taken by the Company, including the Credit Facility and 
certain related agreements and related actions. (See Note 8 to the consolidated
financial statements). 

     The net loss for the nine months ended March 31, 1998 was ($7,927,892). 
Cash flows used by operating activities amounted to approximately $3,870,000. 
The net loss incurred by the Company includes approximately $4,400,000 of
other non-cash expenses.

       Cash provided by investing activities was $7,140,008 during the nine
months ended March 31, 1998, primarily the result of proceeds of approximately
$8,400,000 from the sale of land at Garden State Park, offset by a non-
refundable payment of $600,000 to purchase an option to acquire certain
leasehold interests, El Rancho development costs of approximately $140,000 and
capital expenditures of approximately $410,000.

     Cash used in financing activities was $2,516,011, during the nine months
ended March 31, 1998, consisting principally of principal payments made to Sun
Bank in the amount of $6,000,000, deposits of $1,370,120 to Credit Suisse
escrow funds as a result of the sale of land at Garden State Park, and
payments made on various short and long term notes of $1,915,000, partially
offset by amounts drawn from the Credit Suisse escrow accounts in the amount
of $6,790,994.

     Restricted cash and investments of $2,412,472 as of March 31, 1998
consisted of horsemen's deposits held by the racetracks for race nominations, 
purse winnings,  and funds held for uncashed mutuel ticket sales due to the
patrons or government authorities.  As restricted cash, these cash funds are
not available for other Company operations.

     The Company's scheduled principal payment on debt service, excluding the
acceleration of the Credit Suisse Note will be approximately $1,055,000 
during the next twelve months for payments on the Freehold Racetrack mortgages
and miscellaneous note payments.



     Capital expenditures were approximately $585,000 during the first nine
months of fiscal 1998 and are expected to be approximately $625,000 in fiscal
1998.  Interest on the Credit Facility was approximately $5,300,000 for the
first nine months of fiscal 1998.  Expenses in connection with the El Rancho
property for carrying costs, including real estate taxes, utilities, security
and maintenance were $777,000 in the nine months ended March 31, 1998.  

     The Company currently estimates that the funds made available from the
$55 million Credit Suisse Credit Facility and placed in the interest reserve
and El Rancho project escrow accounts, together with the Company's cash
balances, will be sufficient to finance the Company's operations and the
expected expenditures and carrying costs of the El Rancho property at least
through March 31, 1999.  The Company believes that additional financing in the
amount of $50 million will be sufficient to complete the development of the El
Rancho property under the "CountryLand" theme.  The Company has also
considered expanding the CountryLand project to the extent that the
development costs could increase by an additional $25 million.  If the Company
is successful in obtaining the necessary funding, it anticipates that once
construction is fully under way at the El Rancho property, it would take
approximately eighteen months to complete and commence gaming operations. 
However, due to the pending litigation discussed in Note 8 to the
consolidated financial statements, it is unlikely that any additional 
funding will be obtained in order to develop the El Rancho property. 

     The Company is involved in various lawsuits brought by certain minority
Board members and believes that while such litigation is pending, it is
unlikely that Credit Suisse or another major lending institution will provide
additional funding to the Company.  The Company's inability to obtain such
additional funding by March 31, 1999 could have a serious financial impact
upon the Company and its results of operations.  If the Company is
unsuccessful in obtaining such additional funding, whether from Credit Suisse
or another lender, by the end of calendar year 1998, it may be necessary to
either (i) establish a joint venture relationship with respect to the El
Rancho property and/or other Company property or (ii) sell the El Rancho
property and/or other corporate assets in order to satisfy the outstanding
Credit Suisse debt in the amount of $55 million, becoming due on June 1, 1999,
if no extension is granted and also to provide funds for working capital
purposes beyond such date.

     The accompanying consolidated financial statements have been prepared
assuming the Company will continue as a going concern.  As discussed in Note 6
to the consolidated financial statements, the Company is in violation of
several loan covenants with its major lender.  As a result of not obtaining
waivers of these violations, its $55 million credit facility has been
classified as a current liability and payment could be demanded immediately. 
The Company is continuing discussions with this lender as to the granting of
waivers or other remedies that could be reached in connection with the
litigation settlement negotiations described below. (See Note 8 to the
consolidated financial statements). 

     The Company and certain of its directors and stockholders are involved
in various legal proceedings  as more fully described in Note 8 to the
consolidated financial statements. Several of
these actions are at a standstill as the parties are in the midst of
settlement negotiations.  Although the parties believe a settlement is
imminent, there can be no assurance that a settlement will be reached or as to
the terms thereof.  In the event a settlement cannot be reached, it is not
possible to determine with any precision the probable outcome or the amount of
liability, if any, and the resultant effects on the Company's financial
position, results of operations or cash flows.

     Additionally, the Company has sustained a net loss of approximately
$17.4 million and $1.1 millions during the fiscal years 1997 and 1996,
respectively, and a net loss of $7,927,892 through March 31, 1998.
While the Company believes its projected cash flows from operations will be
sufficient to meet its operating needs through March 1999, there can be no
assurances beyond that date.  These projections do not reflect the impact 
of its default under the Credit Suisse Credit Facility or the effects of the
above mentioned litigation.

     While the Company is continuing to monitor and reduce its operating
expenses, including payroll, it is also considering the sale of certain assets
or operations, including the possible sale of the El Rancho property, as part
of the litigation settlement negotiations described above and the possible
sale of all or some of its racing operations.

     
Seasonality and Effect of Inclement Weather

     Because horse racing is conducted outdoors, a number of variables
contribute to the seasonality of the business, most importantly weather. 
Weather conditions, particularly during the winter months, sometimes cause
cancellation of races or severely curtail attendance, which reduces live and
simulcast wagering both on site and off site. 

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

Impact of Year 2000 on the Company's Systems

     Management is in the process of determining whether all of the Company's
accounting and operational systems are year 2000 compliant.  Although there
can be no assurances, management does not expect the costs associated with any
required conversions of systems to ensure year 2000 compliance to be
significant.


OPERATIONS

Results of Operations for the Three Months Ended March  31, 1998
     
     Total revenues for the three months ended March 31, 1998 and 1997 were
$18,870,198 and $18,951,844 respectively.  The decrease of $81,646 is
primarily the net result of a slight decrease in revenues generated by 
Freehold Raceway and a decrease in investment income for the three months
period of approximately $250,000, partially offset by an increase in revenue
generated by Garden State Park as is more fully described below.

     For the three months ended March 31, 1998, the Company's operating loss
was ($77,798) as compared to operating loss for the same period in the prior
fiscal year of ($1,342,708), a decrease in the loss of $1,264,910.   Total
operating expenses decreased $1,346,556 or 6.6%.  Direct operating expenses,
cost of revenues and depreciation and amortization decreased $1,321,066 or 7%
due to reduced expenses at the racetracks primarily associated with decreased
wages and benefits.  General and administrative expense of $2,642,550
decreased $110,694 or 4%, from the prior year amount of $2,753,244.  The
decrease in general and administrative expenses is principally attributable
to: 1) a decrease in real estate taxes at Garden State Park as a result of a
settlement of a tax appeal filed effective January 1, 1998;  2) a decrease in
professional consulting fees;   3) severance amounts accrued for a terminated
officer during last year; partially offset by 4) an increase in the legal,
professional and consulting fees associated with the various legal actions
filed in Delaware Chancery Court and the DGE investigation; and 5) corporate,
administrative, rent and travel expenses associated with establishing an
executive office in New Mexico.   Carrying costs incurred for the El Rancho
property increased $86,216 from $117,232 in the comparable period of fiscal
1997 to $203,448 for the current nine month period.

     During the three months ended March 31, 1998, the Company incurred a net
loss of ($2,686,174) in comparison to a net loss of ($2,069,458) for the same
period in the prior fiscal year.  The increase in losses of $616,716 from the
three months ended March 31, 1997 primarily resulted from the net effects of:
1)  an increase in interest expense of $1,303,802 which reflects higher
indebtedness levels incurred by the Company and the Company's current policy
of expensing all interest due to the suspended development of the El Rancho
property;  2)  an increase of the amortization of financing costs of $558,178
which reflects the cost associated with the Company's new indebtedness;  
partially offset by  3) an decrease in the operating loss of $1,264,910 as
discussed above.


Results of Operations for the Nine Months Ended March 31, 1998

     Total revenues for the nine months ended March 31, 1998 and 1997 were
$54,082,088 and $53,256,297 respectively.  The increase of $825,791 is
primarily the net result of an increase in revenues at the Company's
racetracks, as is more fully described below partially offset by a decrease in
investment income of approximately $300,000.

     For the nine months ended March 31, 1998 the Company's incurred an
operating loss of ($96,238) as compared to an operating loss for the same
period in the prior fiscal year of ($1,681,459), a decrease in the loss of
$1,585,221.  Total operating expenses decreased $759,430 or 1.4%.  Direct
operating expenses, cost of revenues and depreciation and amortization
decreased $2,176,871 or 5% due to reduced expenses at the racetracks primarily
associated with decreased wages and benefits.  General and administrative
expenses of $8,262,692 increased $694,590, or 9%, from the prior year amount
of $7,568,102.  The increase in General and Administrative expenses is
attributable to: 1) an increase in the legal, professional and consulting fees
associated with the various legal actions filed in Delaware Chancery Court and
the DGE investigation;   2) an executive officer hired January 15, 1997;   3)
severance amounts accrued for a terminated officer;  and 4) corporate,
administrative, rent and travel expenses associated with establishing an
executive office in New Mexico.  Carrying costs incurred for the El Rancho
property increased $77,588 from $699,902 the comparable period in 1997 to
$777,490 for the current nine month period.

     During the nine months ended March 31, 1998, the Company incurred a net
loss of ($7,927,892) in comparison to a net loss of ($7,048,426) for the same
period in the prior fiscal year.  The increase in losses of $879,466 from the
nine months ended March 31, 1997 primarily resulted from the net effects of:  
1) an increase in interest expense of $3,378,763 which reflects higher
indebtedness levels incurred by the Company and the Company's current policy
of expensing all interest due to the suspended development of the "El Rancho"
property;  2) an increase of the amortization of financing costs of $1,677,851
which reflects the cost associated with the Company's new indebtedness;  
partially offset by  3)  a non-recurring write-off in the second quarter of
fiscal 1997 of $2,585,000 in non-refundable deposits associated with the
option to purchase a parcel of land adjoining the El Rancho property in Las
Vegas;  and 4)  a decrease in the operating losses of $1,585,221 as discussed
above.

     The New Jersey Division of Gaming Enforcement ("DGE") is currently
investigating in accordance with its statutory obligation to determine the
qualification of the Company and its directors and significant stockholders in
connection with Garden State Park's and Freehold Raceway's licenses with the
Casino Control Commission ("CCC") and the Racing Commission.  The Company has
no information with respect to the potential outcome of such investigation. 
In the event that the DGE concludes that one or more of such individuals are
not qualified, the CCC and/or the Racing Commission may require any such
stockholder to divest his interest and any such director may be asked to
resign.  Failure of such individuals to comply with such requests could
jeopardize the Company's racing licenses and ability to conduct business with
any casino licensees, including simulcasting to Atlantic City casinos, which
could have a significant negative impact on the Company's future operations.

Garden State Park:

     Garden State Park's 1997 Harness Meet began
September 5, 1997 and ran 51 dates primarily on a four night per week basis
until December 13, 1997.

     Garden State Park's 1998 Thoroughbred Meet began January 1, 1998 and is
scheduled to run through May 23, 1998.  Racing was conducted in the afternoon
on the opening day and is being conducted in the evenings for three times a
week during the remainder of the meet, for a total of 63 racing dates.

     The Company has received approval from the New Jersey Racing Commission
to run a 51 night harness meet from September 4 through December 12, 1998.

     During the three and nine months ended March 31, 1998, Garden State Park
realized net (loss) income of ($320,395) and $1,097,750, respectively. 

     Comparative quarterly and year-to-date net income (loss) at Garden State
Park  are as follows:
<TABLE>
<S>           <C><C>            <C><C>         <C><C>
                     Net Income (Loss)                Net Increase
                 Fiscal 1998       Fiscal 1997         (Decrease)

1st Quarter   $          662,723$     (122,928)$            785,651

2nd Quarter              755,422        356,070             399,352

3rd Quarter            (320,395)    (1,883,698)           1,563,303

Year-to-Date  $        1,097,750$   (1,650,556)$          2,748,306
</TABLE>

     During the three months ended March 31, 1998, Garden State Park's revenue
increased $421,671 or 5% to $8,383,025 from the $7,961,354 for the corresponding
three month period in the prior fiscal year, primarily reflecting the effect of
an increase in revenues generated from simulcasting to and from other racetracks
partially offset by a decrease in live wagering income.  Total expenses
decreased $1,141,632  or 13% for the three months ended
March 31, 1998, primarily as a result of wages and benefits
decreasing $548,000 or 15% as a result of the Company's effort to
cut overhead and operating costs.  Additional savings were
realized by reducing outside services, advertising and promotions, insurance,
materials and supplies and real estate taxes as a result of a settlement
of a tax appeal filed effective January 1, 1998.
As a result of the increased revenues and decreased expenses,
Garden State Park realized a net loss of ($320,395), as
compared to a net loss of ($1,883,698) in the same quarter of the prior fiscal
year.

     During the nine months ended March 31, 1998, Garden State Park's revenue
increased $789,782 or 3% to $24,481,049 from the $23,691,267 for the
corresponding nine month period in the prior fiscal year, primarily reflecting
the effect of  increased revenues generated from simulcasting to and from other
racetracks partially offset by a decrease in live wagering income.  Expenses
decreased $1,958,524 or 8% for the nine months ended March 31, 1998  primarily
as a result of wages and benefits decreasing $1,251,000 or 13% as a result
of the Company's effort to cut overhead and operating costs.
Additional savings were realized in reducing outside services,
advertising and promotions, insurance, materials and supplies
and real estate taxes as a result of a settlement of a tax
appeal filed effective January 1, 1998.  As a result of the increased revenues
and decreased expenses, Garden State Park realized net income of $1,097,750 as
compared to a net loss of ($1,650,556) during the comparable nine month period
in the prior fiscal year.
     
     During the three month period of thoroughbred racing ending March 31, 1998
the average live wagering at Garden State Park was $120,884 an 18% decrease from
the corresponding prior period amount of $148,999.  During this period 39 live
days of wagering were conducted for the current year and for the prior year. 
During the periods of live racing Garden State Park also simulcasted its racing
signal to other race tracks around the country.  The average simulcast wagering
at these tracks increased 10.7% over the prior year.  During periods of live
racing and most other days Garden State Park receives simulcasts from other
racetracks during the day and evening.  The average daily wagering on simulcasts
was $349,065 for the three months ended March 31, 1998, a 4.6% increase from the
corresponding prior period amount of $330,699.

     During the nine month period ending March 31, 1998 of harness and
thoroughbred racing the average live wagering at Garden State Park was $128,238
a 16% decrease from the corresponding prior period amount of $152,067.  During
this period 90 live days of wagering were conducted during the current year as
compared to 94 days for the prior year.  During the periods of
live racing Garden State Park also simulcasted its racing signal to
other race tracks around the country.  The average simulcast wagering
at these tracks increased 14% over the prior year.  During periods of
live racing and most other days Garden State Park receives simulcasts from
other racetracks during the day and evening.  The average daily wagering on
simulcasts was $309,453 for the six months ended March
31, 1998, a 1.6% increase from the corresponding prior period amount
of $304,498.

Freehold Raceway:

     The Company conducts its Harness Meet through Freehold Racing Association,
Inc. ("FRA") and Atlantic City Harness, Inc. ("ACH"), the operating companies
of Freehold Raceway. Freehold Raceway  races under two separate identities. 
FRA raced 99 days from August 14, 1997 thru December 31, 1997.  ACH will
race 97 days from January 1, 1998 through May 25, 1998. The Company has
received approval from the New Jersey Racing Commission to run a 92 day FRA
harness meet from August 13 through December 31, 1998.

     During the three and nine months ended March 31, 1998, Freehold Raceway
realized net income before taxes of $1,722,219 and $4,484,306, respectively.

     Comparative quarterly and year-to-date net income before taxes at Freehold
Raceway are as follows:

<TABLE>
<S>           <C><C>            <C><C>         <C><C>
                   Net Income Before Taxes            Net Increase
                 Fiscal 1998       Fiscal 1997         (Decrease)

1st Quarter   $        1,063,542$     1,203,898$          (140,356)

2nd Quarter            1,698,545      1,118,505             580,040

3rd Quarter            1,722,219        824,595             897,624

Year-to-Date  $        4,484,306$     3,146,998$          1,337,308
</TABLE>

     During the three months ended March 31, 1998, Freehold Raceway's revenue
was $10,467,263, a decrease of $233,021 or 2% due to a slight decline in the
average live wagering and a decrease in the number of live race days when
compared to the corresponding three month period in the prior fiscal year of
$10,700,284.  Expenses decreased $1,130,645 or 10% for the three months ended
March 31, 1998 when compared to the same period in the prior fiscal year
primarily as a result of a decrease in salary and benefit expense primarily
resulting from the Company's effort to cut overhead and operating
costs partially offset by an accrual for an executive termination
in the thrid quarter of 1997. 
The decrease in expenses primarily accounted for the racetrack realizing income
before taxes of $1,722,219 for the three months ended March 31, 1998 as compared
to income before taxes of $824,595 during the three months ended March 31, 1997.

     During the nine months ended March 31, 1998 Freehold Raceway's revenue was
$29,555,040, a slight increase when compared to the corresponding period in the
prior fiscal year of $29,195,296.  Expenses decreased
$977,564 or 4% for the nine
months ended March 31, 1998 when compared to the same period in the prior fiscal
year primarily as a result of a decrease in salaries and benefits expense
primarily resulting from the Company's effort to cut overhead and operating
costs.   As a result of the decreased expenses, Freehold Raceway realized income
before taxes of $4,484,306 for the first nine months of fiscal 1998 as compared
to income before taxes of $3,146,998 for the first nine months of fiscal 1997.
     

     During the three month period of harness racing ending March 31, 1998 the
average live wagering at Freehold Raceway was $207,000 a 1% decrease from the
corresponding prior period amount of $210,000.  During this period 57 live days
of wagering were conducted for the current year and 65 days for the prior
year. 
During the periods of live racing Freehold Raceway also simulcasted its racing
signal to other race tracks around the country.  The average simulcast wagering
at these tracks increased 10% over the prior year. During periods of live
racing and most other days Freehold Raceway receives simulcasts from other
racetracks during the day and evening.  The average daily wagering on
simulcasts was $379,000 for the three months ended March 31, 1998, a 6%
increase from the corresponding prior period amount of $357.000.
     
     During the nine month period of harness racing ending March 31, 1998 the
average live wagering at Freehold Raceway was $213,000 a 9% decrease from the
corresponding prior period amount of $234,000.  During this period 156 live days
of wagering were conducted during the current year as compared to 165 days for
the prior year.  During the periods of live racing Freehold Raceway also
simulcasted its racing signal to other race tracks around the country.  The
average simulcast wagering at these tracks increased 5% over the prior year. 
During periods of live racing and most other days Freehold Raceway receives
simulcasts from other racetracks during the day and evening.  The average daily
wagering on simulcasts was $347,000 for the nine months ended March 31, 1998 a
7% increase from the corresponding prior period amount of $325,000.   
                    
            INTERNATIONAL THOROUGHBRED BREEDERS, INC.
                         AND SUBSIDIARIES

                             PART II

                        OTHER INFORMATION


Item 6.   Exhibits and Reports on Form 8-K

     The Company did not file any reports on Form 8-K with respect to the
quarter ended March 31, 1998.


            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 22, 1998                       /s/Nunzio P, DeSantis                
   
                                   Nunzio P. DeSantis, President,     
                                   Chief Executive Officer and Director
                                   (Principal Executive Officer)
                                   


May 22, 1998                       /s/William H. Warner                 
                                   William H. Warner
                                   Treasurer
                                   (Principal Financial and Accounting
                                            Officer)