SECURITIES AND EXCHANGE COMMISSION
                          WASHINGTON, D. C. 20549
                                           

                                FORM 10-Q/A
                                           

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


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

                      Commission File Number: 0-9624

                              AMENDMENT NO. 1

     The undersigned registrant hereby amends it's the following items of its
 Quarterly Report for the quarter ended December 31, 1996 on Form 10-Q as set
 forth in the pages attached hereto and by deleting the previously filed
 Accountants Review Reports.

Amending Part I

Item I - Financial Statements

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


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

                         International Thoroughbred Breeders, Inc.
                                      [Registrant]


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

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


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




                 INTERNATIONAL THOROUGHBRED BREEDERS, INC.
                             AND SUBSIDIARIES

                        CONSOLIDATED BALANCE SHEETS
                 AS OF DECEMBER 31, 1996 AND JUNE 30, 1996

                                  ASSETS

<TABLE>
<S><C>                              <C> <C>             <C><C>
                                       December 31,      
                                           1996               June 30,
                                        (UNAUDITED)             1996

CURRENT ASSETS:                                           

  Cash and Cash Equivalents         $          5,042,654 $       4,216,356
  Restricted Cash and Investments              1,552,732         2,971,538
  Prepaid Expenses                             3,188,321         1,892,941
  Accounts Receivable                            944,791         1,205,951
  Other Current Assets                           157,208           366,656
  Land and Improvements                                   
    Held for Sale, Net                         6,751,603                 0

       TOTAL CURRENT ASSETS                   17,637,309        10,653,442

                                                          

LAND, BUILDINGS AND EQUIPMENT:                            

  Land and Buildings                          69,180,316        69,093,719
  Construction In Progress                    49,891,023        48,736,200
  Equipment                                    5,501,344         4,376,889

                                             124,572,683       122,206,808

  LESS: Accumulated Depreciation               
          and Amortization                     3,584,417         2,858,439


       TOTAL LAND, BUILDINGS AND                          
             EQUIPMENT, NET                  120,988,266       119,348,369

LAND AND IMPROVEMENTS                                     
  HELD FOR SALE, NET                                   0         6,719,327

OTHER ASSETS:                                             

  Deposits and Other Assets                      314,590           340,507
  Deferred Financing Costs, Net                3,597,162         4,667,415
  Goodwill, Net                                3,096,576         3,151,872

       TOTAL OTHER ASSETS                      7,008,328         8,159,794

TOTAL ASSETS                        $        145,633,903 $     144,880,933

See Notes to Consolidated Financial Statements.           
</TABLE>

                 INTERNATIONAL THOROUGHBRED BREEDERS, INC.
                             AND SUBSIDIARIES

                        CONSOLIDATED BALANCE SHEETS
                 AS OF DECEMBER 31, 1996 AND JUNE 30, 1996

                   LIABILITIES AND SHAREHOLDERS' EQUITY


<TABLE>
<S><C>                                <C><C>            <C> <C>
                                         December 31,       
                                             1996              June 30,
                                         (UNAUDITED)             1996

CURRENT LIABILITIES:                                        

  Accounts Payable                    $        4,954,658   $     4,837,191
  Accrued Expenses                             5,131,440         3,056,236
  Purses Payable                                       0         1,963,150
  Current Maturities of Long-Term Debt         9,816,413         3,214,100
  Deferred Revenue                             1,479,924         1,499,449

       TOTAL CURRENT LIABILITIES              21,382,435        14,570,126

LONG-TERM DEBT, Net of Current Portion        49,420,708        50,992,702

COMMITMENTS AND CONTINGENCIES                   -                 -

SHAREHOLDERS' EQUITY:                                       

  Series A Preferred Stock $100.00 Par Value,               
    Authorized 500,000 Shares, Issued                       
    and Outstanding, 362,465 and                            
    362,462 Shares, Respectively              36,246,475        36,246,175

  Common Stock $2.00 Par Value,                             
  Authorized 25,000,000 Shares,                             
   Issued and Outstanding, 11,651,518                      
   and 11,651,487 Shares, Respectively        23,303,035        23,302,973

  Capital in Excess of Par                    16,477,550        16,111,652

  Retained Earnings (Deficit)                               
  (subsequent to June 30, 1993,                             
     date of quasi-reorganization)           (1,149,633)         3,829,336

       TOTAL                                  74,877,427        79,490,136

  LESS: Deferred Compensation, Net                46,667           172,031

       TOTAL SHAREHOLDERS' EQUITY             74,830,760        79,318,105

TOTAL LIABILITIES AND SHAREHOLDERS'                         
         EQUITY                       $      145,633,903   $   144,880,933

See Notes to Consolidated Financial Statements.    
</TABLE>

                 INTERNATIONAL THOROUGHBRED BREEDERS, INC.
                             AND SUBSIDIARIES

              CONSOLIDATED STATEMENT OF SHAREHOLDERS' EQUITY
                FOR THE SIX MONTHS ENDED DECEMBER 31, 1996
                            (UNAUDITED)  

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

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

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

   Shares Issued for Fractional Exchanges                   
      With Respect to the                                   
      One-for-twenty Reverse Stock Split                    
      effected on March 13, 1992                       3               300

   Amortization of Deferred                                 
     Compensation Costs                        ---               ---

   Cancellation of Options Granted for                      
      Deferred Compensation                                 
   Net Loss for the Six Months                              
      Ended December 31, 1996                  ---               ---

BALANCE - DECEMBER 31, 1996                      362,465   $    36,246,475


                                              Common        
                                            Number of       
                                              Shares            Amount

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


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

   Shares Issued for Fractional Exchanges                   
      With Respect to the                                   
      One-for-twenty Reverse Stock Split                    
      effected on March 13, 1992                      31                62

   Amortization of Deferred                                 
     Compensation Costs                        ---               ---

   Cancellation of Options Granted for                      
      Deferred Compensation                                 
   Net Loss for the Six Months                              
      Ended December 31, 1996                  ---               ---


BALANCE - DECEMBER 31, 1996                   11,651,518   $    23,303,035
                                                            

                                             Capital           Retained
                                            in Excess          Earnings
                                              of Par          (Deficit)

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

   Financing Costs for Warrants Issued                      
       in Connection with Debt Financing         486,000         ---

   Shares Issued for Fractional Exchanges                   
      With Respect to the                                   
      One-for-twenty Reverse Stock Split                    
      effected on March 13, 1992                   (362)         ---

   Amortization of Deferred                                 
     Compensation Costs                        ---               ---

   Cancellation of Options Granted for                      
      Deferred Compensation                    (119,740)    

   Net Loss for the Six Months                              
      Ended December 31, 1996                  ---             (4,978,969)
                                                            

BALANCE - DECEMBER 31, 1996              $    16,477,550   $   (1,149,633)

                                                            

                                             Deferred       
                                          Compensation          Total

BALANCE - JUNE 30, 1996                  $     (172,031)   $    79,318,105
                                                            

   Financing Costs for Warrants Issued                      
       in Connection with Debt Financing       ---                 486,000

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

   Amortization of Deferred                                 
     Compensation Costs                            5,624             5,624

   Cancellation of Options Granted for                      
      Deferred Compensation                      119,740               (0)

   Net Loss for the Six Months                              
      Ended December 31, 1996                  ---             (4,978,969)
                                                            

BALANCE - DECEMBER 31, 1996              $      (46,667)   $    74,830,760

                                                            
See Notes to Consolidated Financial Statements.    
</TABLE>

                 INTERNATIONAL THOROUGHBRED BREEDERS, INC.
                             AND SUBSIDIARIES

                   CONSOLIDATED STATEMENTS OF OPERATIONS
           FOR THE THREE AND SIX MONTHS ENDED DECEMBER 31, 1996 AND 1995
                             (UNAUDITED)

<TABLE>
<S><C><C>                               <C><C>           <C><C>
                                               Three Months Ended 
                                                  December 31,      
                                               1996              1995

REVENUES:                                                   

 Revenue from Operations                 $     19,928,133  $    20,586,034
 Investment Income                                 45,358         (88,735)

    TOTAL REVENUES                             19,973,491       20,497,299

EXPENSES:                                                   

 Cost of Revenues:                                          

   Purses                                       7,502,892        7,529,308
   Operating Expenses                           9,240,609        9,502,444
   Depreciation & Amortization                    396,392          375,641
 General & Administrative Expenses              2,544,659        1,707,781
 El Rancho Property Development                             
  Carrying Costs                                  189,545                0

    TOTAL EXPENSES                             19,874,097       19,115,174
                                                            
OPERATING INCOME (LOSS)                            99,394        1,382,125

OTHER EXPENSES:                                             

 Interest Expense                                 860,262          283,234
 Amortization of Financing Costs                  204,266                0
 Write Off of Deposits on Land                  2,585,000                0

    TOTAL OTHER EXPENSES                        3,649,528          283,234

(LOSS) INCOME BEFORE                                        
    INCOME TAXES                              (3,550,135)        1,098,891

  Income Tax Expense                               57,600           91,475

NET (LOSS) INCOME                             (3,607,735)        1,007,416

NET (LOSS) INCOME PER SHARE              $         (0.31)  $          0.10

WEIGHTED AVERAGE COMMON                                     
   SHARES OUTSTANDING                          11,651,509        9,660,627


                                                Six  Months Ended 
                                                   December 31,      
                                               1996              1995

REVENUES:                                                   

 Revenue from Operations                 $     34,175,077  $    34,148,787
 Investment Income                                129,376          103,630

    TOTAL REVENUES                             34,304,453       34,252,417
                                                            

EXPENSES:                                                   

 Cost of Revenues:                                          

   Purses                                      11,407,265       11,208,117
   Operating Expenses                          16,887,763       16,957,041
   Depreciation & Amortization                    788,648          730,256
 General & Administrative Expenses              4,976,858        3,809,075
 El Rancho Property Development                             
  Carrying Costs                                  582,670                0

    TOTAL EXPENSES                             34,643,204       32,704,489


OPERATING INCOME (LOSS)                         (338,752)        1,547,928
                                                            

OTHER EXPENSES:                                             

 Interest Expense                               1,554,100          568,653
 Amortization of Financing Costs                  404,307                0
 Write Off of Deposits on Land                  2,585,000                0

    TOTAL OTHER EXPENSES                        4,543,407          568,653

(LOSS) INCOME BEFORE                                        
    INCOME TAXES                              (4,882,159)          979,275

  Income Tax Expense                               96,810          122,275

NET (LOSS) INCOME                             (4,978,969)          857,000

NET (LOSS) INCOME PER SHARE              $         (0.43)  $          0.09

WEIGHTED AVERAGE COMMON                                     
   SHARES OUTSTANDING                          11,651,501        9,603,043
                                                            

See Notes to Consolidated Financial Statements.             
</TABLE>

                 INTERNATIONAL THOROUGHBRED BREEDERS, INC.
                             AND SUBSIDIARIES

                   CONSOLIDATED STATEMENTS OF CASH FLOWS
            FOR THE SIX MONTHS ENDED DECEMBER 31, 1996 AND 1995
                              (UNAUDITED)


<TABLE>
<S>                              <C>    <C><C>          <C> <C>
                                                 Six Months Ended  
                                                   December 31,      
                                               1996              1995

CASH FLOWS FROM OPERATING                                   
ACTIVITIES:                                                 

 NET (LOSS) INCOME                       $   (4,978,969)   $       857,000

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

   Depreciation and Amortization               1,192,955           730,256
   Compensation for Options
     and Warrants Granted                        486,000                 0
   Write-Off of Deposits on Land               2,585,000                 0
   Other                                               0           (5,000)
   Changes in Assets and Liabilities -                      
    Decrease in Restricted Cash and                         
    Investments                                1,418,806         1,734,274
    (Increase) in Accounts Receivable        (1,295,380)         (415,413)
    Decrease (Increase) in Other Assets          209,448             2,698
    Decrease in Prepaid Expenses                 568,897           625,448
    Increase in Accounts and Purses                         
    Payable and Accrued Expenses                 229,521           422,876
    (Decrease) Increase in Deferred
    Revenue                                     (19,527)            68,110

 NET CASH PROVIDED BY OPERATING                             
 ACTIVITIES                                      396,752         4,020,249
                                                            

CASH FLOWS FROM INVESTING                                   
ACTIVITIES:                                                 

  Development of El Rancho Property          (1,008,095)                 0
  Deposits on Purchase of Land               (2,115,000)                 0
  Capital Expenditures at Racetracks           (960,543)       (1,793,677)
  (Increase) Decrease in Other                              
  Investments                                     25,917           (2,314)

  NET CASH (USED IN) INVESTING                              
  ACTIVITIES                                 (4,057,721)       (1,795,991)
                                                            

CASH FLOWS FROM FINANCING                                   
ACTIVITIES:                                                 

  Sale of Common Stock                                 0         5,438,162
  Proceeds from issuance of                                 
  Long Term Notes                                827,891                 0
  Proceeds from Line of                                     
  Credit - Foothill                            6,162,680                 0
  Deferred Financing Fees                       (84,804)                 0
  Principal Payments on                                     
  Short Term Notes                             (600,960)                 0
  Principal Payments on                                     
  Long Term Notes                            (1,817,540)         (365,945)

  NET CASH PROVIDED BY                                      
  FINANCING  ACTIVITIES                        4,487,267         5,072,217
                                                            

NET INCREASE IN CASH AND                                    
CASH EQUIVALENTS                                 826,298         7,296,475


  CASH AND CASH EQUIVALENTS                                 
   AT BEGINNING OF YEAR                        4,216,356        11,801,294
                                                            

  CASH AND CASH EQUIVALENTS                                 
  AT END OF PERIOD                       $     5,042,654   $    19,097,769

  Supplemental Disclosures of                               
  Cash Flow Information:                                    

   Cash paid during the period for:                         
   Interest                              $     1,454,596   $       166,233
   Income Taxes                          $           710   $        23,400


  Supplemental Schedule of Non-Cash Investing and            
  Financing Activities:                                     

   During the six months ended December 31, 1996 and 1995, the Company
   the Company recorded an unrealized gain of $40,000 and              
   a net unrealized loss of $180,000,respectively, on trading
   securities.                                              

   During the six months ended December 31, 1996, the Company 
   issued 200,000 warrants to purchase Common Stock at       
   a fair value of $324,000 in connection with financing agreements.
   There were no warrants issued in the six months ended December 31, 1995.

See Notes to Consolidated Financial Statements.             
</TABLE>

(1)  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

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

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

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

     (C)  Classifications - Certain prior year amounts have been reclassified
to conform with the current year's presentation.  The operating section of the
Statements of Cash Flows for the six months ended December 31, 1995 have been
reclassified from the direct to the indirect method to conform with the 1996
presentation.

     (D) Allowance for Bad Debts - The Company recognizes bad debts on the
allowance method. Bad debt allowance at December 31, 1996 and 1995 was
$20,000.

     (E) Construction in Progress - Construction in progress includes the
purchase price as well as construction costs in conjunction with the
development of the El Rancho.  These amounts include land and building
acquisition costs, interest, consulting and other development costs in
connection with the project.  Such costs, aggregating approximately
$49,891,023 at December 31, 1996, include real property acquisition costs in
the amount of approximately $45,500,000, capitalized interest and other
development costs. 

     (F) Goodwill - Goodwill is the excess of the cost of acquired Freehold
Raceway net assets over their fair value and is being amortized over 30 years
under the straight line method.  Accumulated amortization at December 31, 1996
was $501,053. 

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

     (G) Financing Costs - Deferred financing costs includes costs of
$2,567,950 associated with the debt incurred to fund the purchase of the El
Rancho property and $1,029,213 associated with warrants issued in connection
with the purchase and financing of the casino project, net of amortization of
$286,357 and $117,950, respectively, as of December 30, 1996.  These costs of
$3,597,162, net of amortization of $404,307, are being expensed over the five
year lives of the loan and the warrants.   


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

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

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

     (K) Concentrations of Credit Risk - As of December 31, 1996, financial
instruments which potentially subject the Company to concentrations of credit
risk are cash and cash equivalents and receivables arising primarily from
event planning customers whose credit is routinely evaluated.  The Company
places its cash investments with high credit quality financial institutions
and currently invests primarily in U.S. government obligations that have
maturities of less than 3 months.  The amount on deposit in any one
institution that exceeds federally insured limits is subject to credit risk. 
At December 31, 1996, the Company had approximately $4,000,000 on deposit in 5
institutions with an average of $800,000 at each institution that was subject
to such risk. In addition, repurchase agreements of approximately $1,000,000
which are classified as restricted investments are not insured.  The Company
does not require collateral for its financial instruments.

(2)  OPINION OF MANAGEMENT

     The accompanying unaudited consolidated financial statements have been
prepared in accordance with generally accepted accounting principles for
interim financial information and with the instructions to Form 10Q and Rule
10-01 of Regulation S-X.  Accordingly, they do not include all of the
information and footnotes required by generally accepted accounting principles
for complete financial statements.  In the opinion of management, all
adjustments (consisting of normal recurring accruals) considered necessary for
a fair presentation have been included.  Operating results for the three and
six months ended December 31, 1996 are not necessarily indicative of the
results that may be expected for the year ended June 30, 1997.  The unaudited
consolidated financial statements should be read in conjunction with the
consolidated financial statements and footnotes thereto included in the
Company's Form 10-K for the year ended June 30, 1996.




(3)  NOTES AND MORTGAGES PAYABLE
Notes and Mortgages Payable are summarized below:
<TABLE>
<S>            <C>        <C> <C>         <C><C>
                                  December 31, 1996  

               Interest %       Current        Long-Term

ITB:                                         

Foothill Mortgage(A)
          Prime plus 2.75%
         (current rate 11%) $    1,500,000      12,500,000                    

Foothill       Prime plus                   
Line of           2.75%            800,000      12,200,000
Credit (A)     (current                   
                rate 11%)                    

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

Notes -Insurance       Various      66,779            -0-
 Contracts                                             

ITG:                                         

Notes -Insurance       
 Contracts             Various      89,951          -0-  

FREEHOLD                                     
RACEWAY:                                     

Seller's Mortgage
                  80% of Prime     
                   (not to 
                    exceed 6%)                                
                  (current         
                    rate 6%)       625,000      11,250,000               
                                             

Seller's Mortgage
                  80% of Prime       
                   (current
                     rate 6.6%)    225,000       1,928,299
                                             

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

Notes - Telephone(B)   Various       3,521          43,958
                                             

GARDEN STATE                                 
PARK:                                        

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

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

Notes-Insurance        
  Contracts            Various      81,334            -0-
                                             

Notes - Telephone(B)   Various      28,354         72,891
                                             

Notes - Equipment(C)   Various     204,807        733,893
                                             

    Totals                   $   9,816,413  $   49,420,708

</TABLE>

Prime Rate at December 31, 1996 was 8.25%  
The weighted average interest rate on short-term borrowings outstanding as of
December 30, 1996 was 9.67%.

  (A) On March 20, 1996, the Company and Foothill Capital Corporation of
Los Angeles, California, signed a Letter of Intent for a proposed borrowing of
$30,000,000.  Closing on the financing contract took place on June 4, 1996. 
The financing arrangement, secured by among other things, a mortgage on the El
Rancho property, Garden State Park and a second mortgage on Freehold Raceway is
for a $16,000,000 revolving credit line and a $14,000,000 Time Loan Mortgage. 
At December 31, 1996 the unused line of credit was approximately $3,000,000,
however, this amount was restricted until such time as an approved settlement
agreement was reached concerning the shares of Common Stock currently owned by
Robert E. Brennan, the Company's former chairman.   On February 7, 1997 the
restriction was released following the approved sale of Mr. Brennan's shares on
January 15, 1997. (See Note 11-B)

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

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

  The total principal balance of the Revolving Credit Line and the Time
Loan Mortgage as of December 31, 1996 was $27,000,000.  For the six month
period ended December 31, 1996, interest of $951,034 associated with the
Foothill mortgage and revolving line of credit was capitalized and will be
expensed (over the estimated benefit period) upon the opening of a casino on
the El Rancho property.

  (B) On September 17, 1996, the Company entered into a lease agreement
with Siemens Credit Corporation that provides for eighteen monthly lease
payments of $293 and an end buyout of approximately $42,000 for a new telephone
system at Freehold Raceway.  On December 16, 1996, the Company entered into a
lease agreement with Siemens Credit Corporation that provides for eighteen
monthly lease payments of $2,363 and an end buyout of approximately $66,000 for
a new telephone system at Garden State Park. The Company recorded these
transactions as capital leases.   At December 31, 1996, $31,875 was classified
as short term and $116,849 was classified as long term on these leases.

  (C) In July, 1996, the Company entered into an agreement with GE Capital
Corporation with respect to financing $827,891 at an interest rate of 9.3% for
the purchase of 2 new natural gas powered air conditioners at Garden State
Park.  The contract provides for sixty consecutive monthly installments of
principal and interest of $17,067 beginning August 25, 1996.  At December 31,
1996, $204,807 was classified as short term and $733,893 was classified as long
term.  Interest expense on the note for the six month period ended December 31,
1996 was $16,346.

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


(4)    INCOME TAX EXPENSE

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

  Freehold Raceway incurred a state income tax liability for the three and
six months ended December 31, 1996 and does not have the benefit of any state
income tax loss carryforwards to offset this liability.  A provision of $57,600
and $96,810 was made for the respective three and six month periods for this
liability.

A reconciliation of income tax expense at the Federal statutory rate to income
tax expense at the Company's effective rate is as follows:


                           Three Months ended           Six Months ended 
                               December 31,              December 31,  

                               1996         1995         1996         1995

Income Taxes at the Federal                      
  Statutory Rate           $      -0- $    373,623 $       -0-   $   332,953 
                                                                  
Utilization of Tax
Depreciation                      -0-     (373,623)        -0-      (332,953)

State Income Tax - Net of                      
 Federal Tax Benefit            57,600      91,475      96,810       122,275 

Provisions for Income Taxes $   57,600 $    91,475 $    96,810   $   122,275 
                                                                  

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

  The Company has a net operating loss carryforward of approximately
$170,000,000 at December 31, 1995, expiring in the years after June 30, 2001
through June 30, 2009.  SFAS No. 109 requires the establishment of a deferred
tax asset for all deductible temporary differences and operating loss
carryforwards.  Because of the uncertainty that the Company will generate
income in the future sufficient to fully or partially utilize these
carryforwards, however, any deferred tax asset of approximately $53,000,000 is
offset by an allowance of the same amount pursuant to SFAS No. 109 
Accordingly, no deferred tax asset is reflected in these financial statements.
   

(5)    COMMITMENTS AND CONTINGENCIES

  The Company's wholly owned subsidiary, International Thoroughbred Gaming
Development Corp ("ITG"), is responsible for implementing the development of
casino gaming business opportunities.  In January 1996, the Company purchased
the El Rancho Hotel and Casino property from an unrelated party, Las Vegas
Entertainment Network, Inc. ("LVEN").  The Company plans to develop the site
through Orion Casino Corporation.  The acquisition of the twenty-one acre El
Rancho property, located on the Las Vegas strip, was purchased for $43.5
million in cash and notes, plus contingent consideration of up to $160 million
(but not as a part of the purchase price), which is dependent on future
"adjusted cash flows" as contractually defined,  to LVEN for the development
of the property by Orion.  The purchase price of $43,500,000 consisted of
approximately $12.5 million paid in cash (exclusive of final adjustments) with
the balance financed by:  1) a $6.5 million unsecured mortgage note at an 8%
interest rate which was refinanced in fiscal 1996;  2) assumption of a $14
million first mortgage note due on December 20, 1996, which was also
refinanced in fiscal 1996, secured by the land and building at a 13% interest
rate; and 3) a $10.5 million second mortgage note, at an 8% interest rate,
which is payable only to the extent that certain contingent events occur. The
purchase agreement for the El Rancho property provided that if, by October 25,
1996, the Company had not arranged for the necessary commitments to develop
the "Starship Orion" project or a more modest project by the same date, and if
the seller, LVEN,   (i) arranged for the Refinance Loan (as defined therein),
and (ii) paid all associated costs and deposits into an escrow account for a
minimum of six (6) month's interest on the refinanced or replaced Refinance
Loan and up to a minimum of  six (6) month's carrying costs for El Rancho,
then LVEN may have had the non-exclusive right for up to one year (the "Option
Period") to appoint (during the last quarter of the Option Period) an
authorized licensed commercial real estate broker to arrange for the sale of
the property or obtain a minimum of $55 million in financing to develop the
property.  During the Option Period, the Company would have continued to have
the right to arrange for the financing to develop the El Rancho property.  If
such financing was arranged, LVEN's rights (if any) with respect to arranging
for the appointment of an authorized licensed commercial real estate broker or
refinancing would have terminated, as would any requirement to obtain LVEN's
consent before the sale by the Company of the site.  On October 25, 1996, LVEN
advised the Company that it was asserting its rights afforded during the
Option Period by arranging the prescribed escrow account.  On October 28, 1996
the Company announced that LVEN forfeited its rights with respect to the
purchase agreement because it failed to satisfy certain contractual pre-
conditions.  LVEN advised that it contested the Company's position.  On
February 4, 1997, the Company announced that all prior disagreements with LVEN
regarding their development of the El Rancho property have been resolved and
that preliminary construction is underway on a more modest project with a
country and western theme to be known as "Countryland USA."  Subject to the
completion of the financing arrangements, it is expected that a casino opening
will occur some time during the third quarter of fiscal 1998.  To date the
Company has not engaged any partners for its "Starship Orion" theme
development.  The Company has not abandoned the "Starship Orion" concept as of
this date and is evaluating its use at this or another location to be
determined.

  It was estimated that the total cost of completion of "Starship Orion"
project would be approximately $1 billion dollars and that the Company
intended to develop the property with up to as many as six partners.  The
Company engaged certain professional, legal, architectural and consulting
services in  connection with its development.  Capitalized costs of
$49,891,023 as of December 31, 1996 are costs required for the casino
development project.

  The Company is committed to yearly minimum carrying costs of the El
Rancho property of approximately $8,000,000 per year for interest, bank loan
fees, real estate taxes, security, maintenance, legal, professional,
consulting and other related costs.  Various demolition and construction
contracts of approximately $1,100,000 have been executed subsequent to
December 1996 for renovating a portion of the existing structures.   These
costs will increase substantially if the Company is successful in obtaining
financing it is seeking in order to complete the project.

  The Company made non-refundable deposits of $2,350,000 through the
second quarter of fiscal 1997 for a proposed purchase of a parcel of land
associated with the gaming development project.  On October 21, 1996, the
Company amended its agreement to extend the closing from on or before November
29, 1996 to and including December 27, 1996 under certain terms and conditions
which included a provision that the Company be required to make an escrow
deposit of $235,000 on or before October 31, 1996.  On October 30, 1996, the
Company perfected its election to extend the closing date with a deposit of
the required funds. This deposit was fully earned 
by the seller on December 27, 1996.  The purchase of the property would have
allowed expanded frontage and room for future expansion and increased parking. 
The Company was unable to procure the additional financing in order to
finalize the purchase.  According to the contract, if the Company failed to
secure adequate financing by a settlement date of December 27, 1996, deposits
of $2,350,000 made to date in addition to the extension deposit of $235,000
would be forfeited. On January 9, 1997, the Company announced that it decided
not to close on the property.  Therefore, the Company  expensed deposits of
$2,585,000 for the six months ended December 31, 1996. (See Note 11-A)

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

  In December 1995, Garden State Race Track, Inc. entered into an
agreement with an unaffiliated party, The Four B's of Vineland, New Jersey, to
sell a 56 acre parking lot tract at the Garden State Park which is presently
unused for racing purposes.  The contract calls for a purchase price of $11
million for the property, subject to normal closing adjustments.  The
agreement provided for a closing on or before December 15, 1996 (which date
was extended until June 15, 1997 following a deposit of $100,000 that was made
on December 15, 1996)  and is subject to standard real estate contingencies
including the receipt of all necessary governmental approvals to construct a
retail shopping center of approximately 300,000 square feet on the site, also
providing the purchaser a period of time to evaluate the feasibility of the
project.  On January 31,1997, the purchase agreement was amended to reflect a
new purchase price of $9,000,000 and if certain government approvals are
subsequently obtained the purchase price could increase by $2,000,000.  The
amended contract calls for the sale to close on or before  May 5, 1997 and the
purchaser has deposited in escrow an irrevocable Letter of Credit in the
amount of $375,000 in addition to the initial deposit previously made of
$25,000 on December 15,1995 and the deposit of $100,000 made on December 15,
1996.  The Company anticipates that the net proceeds from the sale will be
approximately $2,300,000 after the $6,000,000 in foreign notes are paid.  (See
Notes 3 and 11-G)

  On November 2, 1995, Robert E. Brennan resigned as Director, as Chairman
of the Board and as Chief Executive Officer of the Company.  Mr. Brennan
resigned these positions at the urging of the Company's Board of Directors
based on actions taken by New Jersey regulatory authorities which oversee the
casino and horse racing industries in the state.  The New Jersey Division of
Gaming Enforcement ("Division") filed a complaint with the New Jersey Casino
Control Commission ("Commission") seeking to prohibit the Company's two
racetracks, Garden State Park ("Garden State") and Freehold Raceway
("Freehold") from conducting industry business with any casino licensees. 
Garden State and Freehold currently receive revenues from parimutuel wagering
on races, including their own, simulcast to certain of the Atlantic City
casinos.  The Division based its complaint on the fact that Mr. Brennan, who
is also a principal shareholder of the Company, had been found in a June 1995
decision by Judge Richard Owen of the United States District Court for the
Southern District of New York in a civil action to be "liable for violating
federal securities laws in the years 1982 to 1985."  None of the alleged
securities law violations involved the Company, its securities, or its
operations.  The Division claims that Mr. Brennan's participation in the
Company's racetrack subsidiaries "would be inimical to the policies of the
Casino Control Act" and according to the Division, this would disqualify him
and the Company's two New Jersey racetracks from continued licensure with the
Commission.  Mr. Brennan has denied committing any violations of the federal
securities laws and  appealed Judge Owen's decision. On December 10, 1997, the
ruling against Mr. Brennan's was upheld by a federal appellate court. 

  The Division subsequently indicated a willingness to seek to resolve the
complaint provided that Mr. Brennan resign as Chairman of the Board, a
director of the Company and as an officer of any of the Company's subsidiaries
and provided further that Mr. Brennan enter into an agreement which would
place his approximately 2,900,000 shares of the Company's Common Stock into an
irrevocable dispositive trust, which would provide for the liquidation of all
his shares. On November 6, 1996, the Commission, over Mr. Brennan's
objections, accepted a proposed stipulation of settlement between Mr. Brennan
and the Division requiring Mr. Brennan to place his shares into a liquidating
trust contingent upon the approval, within sixty days thereafter,  of the
bankruptcy court overseeing Mr. Brennan's personal Chapter 11 bankruptcy
proceeding.  The liquidating trustee was to hold the shares in escrow and vote
the shares in the same proportion as the other stockholders of the Company. 
The agreement  required that the liquidating trustee dispose of the shares no
later than October 19, 1997 in the absence of  the occurrence of certain
events.  On January 8, 1997, the Company was advised that the federal
bankruptcy court approved the sale of Mr. Brennan's shares to NPD, Inc. 
Closing on the sale of the shares was completed on 
January 15, 1997. (See Note 11-B)

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

  On March 20, 1996, the Company and Foothill Capital Corporation
("Foothill") of Los Angeles, California, signed a Letter of Intent for a
proposed borrowing of $30,000,000.  Closing on the financing contract took
place on June 4, 1996.  The financing arrangement, secured by among other
things, a mortgage on the El Rancho property, Garden State Park and a second
mortgage on Freehold Raceway is for a $16,000,000 revolving credit line and a
$14,000,000 Time Loan Mortgage, used at settlement to pay off the $14,000,000
mortgage note referred above due on December 20, 1996.   The maximum line of
credit balance is restricted by $3,000,000 until such time that an approved
settlement agreement has been reached concerning the shares of Common Stock
currently owned by Robert E. Brennan, the Company's former chairman.  The
Company anticipates that the restriction will be released following the
approved sale of Mr. Brennan's shares on January 15, 1997. (See Note 11-B) 
The revolving credit line requires that the Company make quarterly principal
payments of $400,000 beginning July 1, 1997.  Interest on the  outstanding
balance will be paid monthly starting July 1, 1996 at a rate of 2.75% above
the current published prime lending rate per annum. The Time Loan Mortgage
requires that the Company make equal monthly principal payments of $250,000
plus interest beginning July 1, 1997.  Interest on the outstanding balance
will be paid monthly starting July 1, 1996 at a rate of 2.75% above the
current published prime lending rate per annum.  The credit facility contains
financial and other covenants that  require the Company to maintain certain 
standards with respect to: (i) minimum tangible net worth of $70,000,000 (as
of December 31, 1996, the Company's tangible net worth was $72,940,091);  and
(ii) liabilities to tangible net worth ratio of not more than one to one (as
of December 31, 1996, the Company's liability to tangible net worth ratio was
 .971 to 1.0).  The covenants also require that (iii) that additional purchase
money financing and/or capital leases cannot exceed an aggregate $3,000,000.
(See Notes 11-D & 11-J)

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

  On August 19, 1996, the Company and its financial advisor, Standard
Capital Group Inc. ("Standard Capital"), agreed to terminate their contractual
relationship.  In consideration of the agreement, the Company agreed to pay
Standard Capital all outstanding fees and expenses totaling $120,000 as of
August 14, 1996.  The Company, which had previously agreed to provide Standard
Capital with 250,000 five year warrants, each exercisable to purchase one
share of ITB Common Stock at an exercise price of $5.00, agreed to provide
Standard Capital with an additional 200,000 warrants, each identical to the
initial warrants. Financing costs of $334,000 have been accounted for and
expensed during the first half of fiscal 1997 for these warrants. (See Note
11-F)

  On September 17, 1996, the Company entered into a lease agreement with
Siemens Credit Corporation that provides for eighteen monthly lease payments
of $293 and an end buyout of approximately $42,000 for a new telephone system
at Freehold Raceway.  On December 16, 1996, the Company entered into a lease
agreement with Siemens Credit Corporation that provides for eighteen monthly
lease payments of $2,363 and an end buyout of approximately $66,000 for a new
telephone system at Garden State Park. The Company recorded these transactions
as capital leases.

  On September 26, 1996 the Board of Directors approved a three-year
employment contract for Joel H. Sterns, Chairman of the Board.  The contract
provided for Mr. Sterns to serve on a full-time basis through the period
ending on June 30, 1997 for an annual compensation of $384,000.  The contract
also provided that upon a "Termination Event", Mr. Sterns may be entitled to
receive certain amounts.  The removal of Mr. Sterns on November 4, 1996 prior
to the expiration of his term was deemed a "Termination Event" which, based on
his employment contract, exposed the Company to a future potential liability
and expense.  On January 15, 1997, a settlement agreement was approved whereby
Mr. Sterns would accept $252,000 in full and final settlement of all salary,
reimbursable expenses and termination payments to which he may be entitled. 
Payments are scheduled to include: 1) $75,000 in January 1997; 2) $15,000 per
month from February 1997 until December 1997; and 3) a  payment of $12,000 in
June 1997.  (See Note 11-C)

   On November 3, 1996 a group ("the Group") of shareholders, representing
approximately 56% (of which Robert E. Brennan represented 25%) of the
Company's outstanding Common Stock, filed a consent in accordance with Section
228 of the Delaware General Corporation law to remove certain directors and to
elect four new directors to the board of the Company.  Those immediately
removed as directors were Joel Sterns, Chairman of the Board, Roger Bodman,
Clifford Goldman, Steve Norton, Robert Peloquin and Arthur Winkler.  Those
elected as directors of the Company to fill the vacancies on the Board of
Directors, each to serve until the next annual meeting of stockholders or
until his successor is duly elected and qualified are: Frank A. Leo, John U.
Mariucci, James J. Murray and Frank Koenemund.  At a meeting of the Board of
Directors on November 5, 1996, Frank A. Leo was named Chairman of the Board.

  On December 5, 1996, NPD, Inc. ("NPD") entered into an agreement with
Robert E. Brennan to purchase 2,904,016, or 24.9%,  of the Company's Common
Stock owned by Mr. Brennan.  Following the purchase on January 15, 1997, the
current directors of the Company other than Frank A. Leo, Robert J. Quigley,
Charles R. Dees, Jr. and Francis W. Murray resigned and Nunzio P. DeSantis,
Anthony Coelho, Michael C. Abraham, Kenneth Scholl and Joseph Zappala were
appointed directors to serve until the next annual meeting of stockholders of
the Company and until their successors are duly elected.  Mr. Zappala's term
did not commence until January 25, 1997. Mr. Coelho will serve as the
Company's Chairman and Mr. DeSantis will be the Company's Chief Executive
Officer. (See Note 11-B)

  On January 15, 1997, the Company obtained a commitment for a revolving
$5,000,000 line of credit which may be called upon by the Company's Board of
Directors, subject to the approval of Foothill.  The Company is currently
negotiating with Foothill for said approval.  (See Note 11-D)

(6)    STOCK OPTIONS AND WARRANTS

  (A)  EMPLOYEE AND  NON-EMPLOYEE OPTIONS
  
  In December 1994, the Company's Board of Directors and shareholders
adopted and approved the 1994 Employees' Stock Option Plan ("Plan").  The Plan
permits the grant of options to purchase up to 475,000 shares of common stock,
at a price per share no less than 100% of the fair market value of the Common
Stock on the date the option is granted.  The price would be no less than 110%
of fair market value in the case of an incentive stock option granted to any
individual who owns more than 10% of the Company's outstanding Common Stock. 
The Plan provides for the granting of both incentive stock options intended to
qualify under section 422 of the Internal Revenue Code of 1986, and non-
qualified stock options which do not qualify.  No option may have a term
longer than 10 years (limited to five years in the case of an option granted
to a 10% or greater stockholder of the Company).  Options under the Plan are
non-transferable except in the event of death and are only exercisable by the
holder while employed by the Company. Unless the Plan is terminated earlier by
the Board of Directors, the Plan will terminate in June 2004.

  In addition, the Company has also granted non-qualified stock options
for the purchase of Common Stock to employees and directors of the Company
that are not part of the above mentioned plan.  These options have been
granted with terms of five and ten years.  These options have been granted at
prices per share that have been below, equal to or above the fair market value
on the grant date.
  
  On December 20, 1996, the Company granted 425,000 options to certain
employees.   At December 31, 1996, total employee options outstanding were
1,275,000.  On November 3, 1996, 200,000 stock options previously issued to
two former directors, Mr. Peloquin and Mr. Goldman were forfeited as a result
of their removal from the board of directors.  (See Note 5)   At December 31,
1996, total non-employee options outstanding were 225,000. On January 15,
1997, the Company granted 375,000 options to certain employees and 75,000
options to certain directors.  (See Note 11-E)

 . During 1995, the Financial Accounting Standards Board adopted Statement
of Financial Accounting Standards No. 123 ("SFAS 123"), "Accounting for Stock-
Based Compensation", which has recognition provisions that establish a fair
value based method of accounting for stock-based employee compensation plans
and established fair value as the measurement basis for transactions in which
an entity acquires goods or services from non-employees in exchange for equity
instruments.  SFAS 123 also has certain disclosure provisions.  Adoption of
the recognition provisions of SFAS 123 with regard to these transactions with
nonemployees was required for all such transactions entered into after
December 15, 1995, and the Company adopted these provisions as required.  The
recognition provision with regard to the fair value based method of accounting
for stock-based employee compensation plans is optional.  Accounting
Principles Board Opinion No. 25 "Accounting for Stock Issued to Employers"
("APB 25") uses what is referred to as an intrinsic value based method of
accounting.  The Company has decided to continue to apply APB 25 for its
stock-based employee compensation arrangements.  Accordingly, no compensation
cost has been recognized.  The Company estimates the fair value of each option
and warrant granted on the date of grant using the Black-Scholes option-
pricing model with the following assumptions: a weighted average risk-free
interest rate of 6.3%, a weighted average expected life of 5 years based on
Company expectations, and a weighted average expected volatility of 56.29%. 

  (B)  WARRANTS 
  
  The fair value of warrants issued during the six months ended December
31, 1996 and 1995 was $324,000 and $-0-, respectively.  At December 31, 1996,
total warrants outstanding were 1,125,000 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. 

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

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

                             December 31,               
                          1996           1995

  Trading               $   120,000  $       60,000
  Available For Sale      2,159,957       5,699,747
     Totals             $ 2,279,957  $    5,759,747   

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

  At December 31, 1996, the Company held approximately $1,552,732, which
was classified as restricted cash and  investments.  These funds are primarily
cash received from horsemen for nomination and entry fees to be applied to
upcoming racing meets, purse winnings held in trust for horsemen and unclaimed
ticket holder winnings, all of which are classified as accounts payable. 

  Investment income for the three and six months ended December 31, 1996
includes unrealized gains of $5,000 and $40,000, respectively.  Investment
loss for the three months ended December 31, 1995 includes an unrealized
holding loss of $230,000 on trading securities.  Investment income for the six
months ended December 31, 1995 includes the unrealized holding loss of
$230,000 recognized during the second quarter of fiscal 1996 offset by an
unrealized holding gain of $50,000  on trading securities recognized during
the first quarter of fiscal 1996.  For the three and six months ended December
30, 1996, the were no realized gains resulting from the sale of trading
securities.  Realized gains resulting from the sale of trading securities for
the three and six months ended December 31, 1995 were $-0-, $7,500,
respectively.  Interest income for the three and six months ended December 31,
1996 was $40,358 and $89,376, respectively, and $141,265 and $283,630 for the
respective three and six month period in fiscal 1995.

(8)    WRITE-OFF OF DEPOSITS

  The Company made non-refundable deposits of $2,350,000 through the
second quarter of fiscal 1997 for a proposed purchase of a parcel of land
associated with the gaming development project. (See Note 5)  On October 21,
1996, the Company amended its agreement to extend the closing from on or
before November 29, 1996 to and including December 27, 1996 under certain
terms and conditions which included a provision that the Company be required
to make an escrow deposit of $235,000 on or before October 31, 1996.  On
October 30, 1996, the Company perfected its election to extend the closing
date with a deposit of the required funds. This deposit was fully earned by
the seller on December 27, 1996.  The purchase of the property would have
allowed expanded frontage and room for future expansion and increased parking. 
The Company was unable to procure the additional financing in order to
finalize the purchase.  According to the contract, if the Company failed to
secure adequate financing by a settlement date of December 27, 1996, deposits
of $2,350,000 made to date in addition to the extension deposit of 
$235,000 would be forfeited.  On January 9, 1997, the Company announced that
it decided not to close on the property.  Therefore, the Company has expensed
deposits of $2,585,000 during the six months ended December 31, 1996.

(9)    NET INCOME PER SHARE

  Income per share for the three and six month periods ended December 31,
1996 and 1995 is computed on the weighted average number of shares
outstanding.  The Convertible Preferred Stock has not been included in the
computations because the conversion period has expired.  Outstanding Stock
Options of 2,425,000 which are considered common stock equivalents for fiscal
1997 were not included in the computation of average shares outstanding
because their inclusion would be anti-dilutive.  Fully diluted loss per share
has not been shown since such amount would not be dilutive.  The number of
shares used in the computations were 11,651,509 and 9,660,627 for the three
months ended December 31, 1996 and 1995, respectively and for the respective
six month periods were 11,651,501 and 9,603,043.

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

  As more fully discussed in Notes 1-(E) & 5, the Company has incurred
approximately $50 million in construction and related costs associated with its
El Rancho/Orion project.  The Company is still in the process of obtaining
financing for this project.  While the Company intends to proceed with this
casino project, any significant reduction in financing will result in a more
modestly scaled project.  Application of SFAS No. 121 could prospectively
result in a write-down of costs incurred on the project if there is any
significant decrease in the market value of the property; any significant
adverse change in business climate; or any accumulation of costs significantly
in excess of amounts expected to complete the project.

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

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

(11)   SUBSEQUENT EVENTS

  (A) On January 9, 1997, the Company announced that it decided not to
close on the acquisition of a 15 acre supplemental, off-strip parcel adjacent
to its primary Las Vegas Strip property.    The Company reported an expense 
for the six months ended December 31, 1996 of $2,585,000 associated with this
decision. (See Note 8)

   (B) On January 15, 1997, NPD, Inc. completed a purchase, approved by the
federal bankruptcy court overseeing the assets of Robert E. Brennan, of
2,904,016 shares of the Company's Common Stock from Mr. Brennan, the Company's
former Chairman of the Board and Chief Executive Officer.  Following the
purchase, the current directors of the Company other than Frank A. Leo, Robert
J. Quigley, Charles R. Dees, Jr. and Francis W. Murray resigned and Nunzio P.
DeSantis, Anthony Coelho, Michael C. Abraham, Kenneth Scholl and Joseph Zappala
were appointed directors to serve until the next annual meeting of stockholders
of the Company and until their successors are duly elected.  Mr. Zappala's term
did not commence until January 25, 1997. Mr. Coelho will serve as the Company's
Chairman and Mr. DeSantis will be the Company's Chief Executive Officer. 

    (C) On January 15, 1997, a settlement agreement was approved whereby
Joel H. Sterns would accept $252,000 in full and final settlement of all
salary, reimbursable expenses and termination payments to which he may be
entitled as a result of the termination of his employment contract with the
Company effective November 2, 1997.  Payments are scheduled to include: 1)
$75,000 in January 1997; 2) $15,000 per month from February 1997 until December
1997; and 3) a  payment of $12,000 in June 1997.  Costs of $252,000 related to
this agreement have been expensed as of December 31, 1996.  (See Note 5)

    (D) On January 15, 1997, the Company obtained a commitment for a
revolving $5,000,000 line of credit which may be called upon by the Company's
Board of Directors, subject to the approval of Foothill.  The Company is
currently negotiating with Foothill for said approval.  

  (E) On January 15, 1997, the Company granted 450,000 options to certain
employees and directors.  The Company issued 300,000 options to purchase
300,000 shares of common stock at $5.00 per share to Francis W. Murray, a
director, 50,000 options to purchase 50,000 shares of common stock at $5.00 per
share to Edward Ryan, General Manager of Freehold Raceway, and 25,000 options
each to purchase 25,000 shares of common stock at $5.00 per share each to
Francis X. Murray, a director of Orion Casino Corp and to Frank Koenemund, John
Mariucci and James Murray, directors.  ( See Note 6).

  (F)  On January 27, 1997, the Company paid $250,000 to engage Standard
Capital Group to act as the Company's financial advisor and in order to render
certain financial advisory and investment banking services to the Company with
respect to potential transactions aimed at enabling the Company to capitalize
on its existing growth opportunities and to maximize shareholder value.

  (G) On January 31,1997, the purchase agreement between Garden State Race
Track, Inc. and the Four B's was amended to reflect a new purchase price of
$9,000,000, subject to obtaining certain government approvals which could
increase the purchase price by $2,000,000.  The amended contract calls for the
sale to close on or before  May 5, 1997 with the purchaser providing the
Company with an irrevocable Letter of Credit in the amount of $375,000 in
addition to the initial deposit previously made of $25,000 on December 15, 1995
and the deposit of $100,000 made on December 15, 1996 which extended the
closing until May 1997.  The Company anticipates that the net proceeds from the
sale will be approximately $2,300,000 after the two $3,000,000 foreign notes
are paid. (See Notes 3 and 5)

  (H) Effective February 1, 1997, the Company accepted the resignation of
Arthur Winkler, a Director and Executive Vice President of the Company and
President of the racetrack subsidiaries.  Mr. Winkler had been associated with
the Company for the past thirteen years.  As conditions of the termination of
his five year employment contract with the Company, Mr. Winkler will: 1) be
paid $200,000 over a twenty month period, $100,000 paid on the effective date
and $5,000 per month, commencing on February 1, 1997 until September 1, 1998;  
2) will surrender 125,000 stock options previously granted to him at an
exercise price of $5.87 per share; and  3) will retain 200,000 options
previously granted to him at an exercise price of $4.00 per share.  (See Note
6).  The Company will expense the entire compensation package of approximately
$200,000 during the third quarter of fiscal 1997.

  (I)  On February 4, 1997, the Company announced that all prior
disagreements with LVEN regarding their development of the El Rancho property
have been resolved and that preliminary construction is underway with an
expected casino opening under a country and western theme to be known as
"Countryland USA"  scheduled for some time during the third quarter of fiscal
1998.

  (J)  On February 7, 1997, Foothill released the restriction on the
$3,000,000 line of credit that was pending an approved settlement agreement 
concerning the shares of Common Stock owned as of December 31, 1996 (sold on
January 15, 1997) by Robert E. Brennan, the Company's former chairman.  These
funds are expected to be drawn down in full during the fiscal year ended June
30, 1997. (See Note 3)

 OPERATIONS

Results of Operations for the Three Months Ended December 31, 1996
  
  For the three months ended December 31, 1996, the Company's operating
income was $99,394 as compared to operating income for the fiscal year of
$1,382,125 a decrease of $1,282,731.  Revenue from operations declined at
Freehold Raceway and Garden State Park for a combined decrease of $634,306
from the three months ended December 31, 1996.  Total operating expenses
increased $758,923.  Direct operating expenses, cost of revenues and
depreciation and amortization decreased less than 1%.  General and
administrative expense of $2,544,659 increased $836,878 or 49%, from the prior
year amount of $1,707,781.  The increase in General and Administrative
expenses is attributable to an increase in the legal, professional and
consulting fees associated with the Company's casino project and termination
of the Company's Chairman of the Board in November, 1996.  Carrying costs of
$189,545 were incurred for the El Rancho property.

  During the three months ended December 31, 1996, the Company incurred a
net loss of ($3,607,735) in comparison to a net income of $1,007,416 for the
prior year.  The increase in losses of $4,615,151 primarily resulted from the
effects of: 1) a write-off 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; 2) an increase of $577,028 in interest expense which reflects
higher indebtedness levels incurred by the Company; 3) an increase of the
amortization of financing costs of $204,266 which reflects the cost associated
with the Company's new indebtedness and 4) negative change of $1,282,731 in
the operating loss as described above.

Results of Operations for the Six Months Ended December 31, 1996

  For the six months ended December 31, 1996 the Company's operating loss
was ($338,752) as compared to operating profits for the prior year of
$1,547,928 a decrease of $1,886,680.  Revenue from operations increased  at
Freehold Raceway and declined at Garden State Park for a net combined increase
of $87,479 from the prior year.  Total operating expenses increased $1,938,715
or 6%.  Direct operating expenses, cost of revenues and depreciation and
amortization increased less than 1%.  General and administrative expenses of
$4,976,858 increased $1,167,783, or 30%, from the prior year amount of
$3,809,075.  The increase in General and Administrative expenses is
attributable to an increase in the legal, professional and consulting fees
associated with the Company's casino project and termination of the Company's
Chairman of the Board in November, 1996.  Carrying costs of $582,670 were
incurred for the El Rancho property.

   During the six months ended December 31, 1996, the Company incurred a
net lost of ($4,978,969) in comparison to net income of $857,000 for the prior
year.  The increase in losses of $5,835,969 primarily resulted from the
effects of: 1) a write-off 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; 2) an increase of $985,447 in interest expense which reflects
higher indebtedness levels incurred by the Company; 3) an increase of the
amortization of financing costs of $404,307 which reflects the cost associated
with the Company's new indebtedness and 4) negative change of $1,886,680 in
the operating loss as described above.



Garden State Park:

  During the three and six months ended December 31, 1996, Garden State
Park realized income of $356,070 and $233,142, respectively.

  Quarterly and year-to-date net income (loss) at Garden State Park for
the current fiscal year as compared to the net losses for last year are as
follows:
<TABLE>
<S>           <C><C>            <C><C>         <C><C>
              Net Income (Loss)                Net

              Fiscal 1997       Fiscal 1996    Increase (Decrease)
              __                __                               

1st Quarter   $        (122,928)$        66,313$        (189,241)
2nd Quarter              356,070        187,723           168,347
Year-to-Date  $          233,142$       254,036$         (20,894)
                                                  
</TABLE>


  During the three months ended December 31, 1996, Garden State Park's
revenue decreased $458,464 or 5% when compared to the same period last year,
primarily reflecting the net effect of:  1) decreased revenues generated by
simulcasting to and from the other racetracks;  and  2) decreased revenues
generated by live on-track racing. Expenses decreased $626,811 or 6% for the
three months ending December 31, 1996 when compared to the same period last
year primarily as a result of a decrease in general and administrative costs. 
The decrease in revenues and expenses primarily accounted for the racetrack
realizing net income from operations of $356,070 for the three months ended
December 31, 1996 as compared to income of $187,723 during the three months
ended December 31, 1995.

  During the six months ended December 31, 1996 Garden State's revenue
decreased $754,079 or 5% when compared to the same period last year, primarily
reflecting the net effect of the decreased revenues generated by simulcasting
and live on-track racing as discussed above.  Expenses decreased $733,185 or
5% for the six months ending December 31, 1995 when compared to the same
period last year primarily as a result of a decrease in general and
administrative costs.  As a result of decreased revenues and expenses, Garden
State Park realized income of $233,142 for the first half of fiscal 1997 as
compared to income of $254,036 for the first half of fiscal 1996.

  Garden State Park's 1996 Standardbred (Harness) Racing Meet began
September 6, 1996 and ran 55 dates on a four night per week basis until
December 14, 1996.

  ATTENDANCE AND HANDLES - The following summarizes average daily
attendance and wagering at Garden State Park as well as wagering on Garden
State Park races simulcast to other racing facilities and the Atlantic City
Casinos for the six month fiscal periods from July 1, 1996 thru December 31,
1996 and July 1, 1995 thru December 31, 1995:

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

HARNESS MEETS                                Fiscal 1997     Fiscal 1996

Attendance                                         2,206           2,434

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

Simulcast Sending Signal:                                 

New Jersey Tracks (Avg. %)            3.3% $     338,424 $       391,232

    Atlantic City Casinos             4.4% $      29,309 $        36,553

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

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

Number of Live Race Days                              55              53
</TABLE>

  The following summarizes average handles experienced by Garden State Park in
connection with receiving simulcasts for the six month fiscal periods from
July 1, 1996
thru December 31, 1996 and July 1, 1995 thru December 31, 1995:
<TABLE>
<S>                  <C>     <C>       <C>         <C><C>    <C>
AVERAGE DAILY SIMULCAST HANDLES                              

                             Fiscal 1997             Fiscal 1996
_____________________________                                            

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

New Jersey Tracks:                                           

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

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

          Meadowlands(T)             68      56,256        66      76,023

             Freehold(S)            101      24,242        99      29,426

          Meadowlands(S)             34      54,149        36      76,122

Out-of-State Tracks  (T,S)          184     223,570       182     229,560

TOTAL RECEIVING HANDLE                   53,364,958            57,608,093

(T) = Thoroughbred, (S) = Standardbred*The commission percentage of handle
averaged approximately 12% of total handles on
simulcasting received during the six                                  
months ended December 31, 1996.                              
                                                             
                                                             
</TABLE>

     Garden State Park's 1997 Thoroughbred Meet began January 1, 1997 and
is scheduled to run through May 23, 1997.  Racing was conducted three times a
week during the month of January and is scheduled for Friday and Saturday
nights, and Sunday and holiday Monday afternoons 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 6 through December
13, 1997.

Freehold Raceway:

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

     During the three and six months ended December 31, 1996, Freehold
Raceway realized income of $1,175,478 and $2,417,753, respectively before
income tax and interest due the parent company of $1,744,847 and $2,530,916
for the respective three and six month periods. 

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

<TABLE>
<S>           <C><C>            <C><C>         <C><C>
              Net Income                       Net

              Fiscal 1997       Fiscal 1996    Increase (Decrease)
              __                __                                 

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

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

Year-to-Date  $        2,417,753 $    2,530,916 $         (113,163)
</TABLE>

     During the three months ended December 31, 1996, Freehold Raceway's
revenue decreased $175,842 or 2% when compared to the same period last year,
primarily reflecting the net effect of:  1) a decrease in revenues generated
from the simulcasting of Freehold's races into other racetracks and a decrease
in revenues generated by live on-track racing;   2) a decrease in revenues
generated by simulcasting into Freehold from other New Jersey racetracks; 
partially offset by   3) an increase in revenues generated from the
simulcasting  into Freehold from out-of-state racetracks.  Expenses increased
$393,527 or 5% for the three months ending December 31, 1996 when compared to
the same period last year primarily as a result of an increase in operating
expenses.  The decrease in revenues and increase in expenses primarily
accounted for the racetrack realizing net income from operations of $1,175,478
for the three months ended December 31, 1996 as compared to income of
$1,744,847 during the three months ended December 31, 1995.

     During the six months ended December 31, 1996 Freehold Raceway's revenue
increased $841,558 or 5% when compared to the same period last year, primarily
reflecting the net effect of the decreased revenues generated by simulcasting
and live on-track racing as discused above offset by an increase in revenues
generated from the simulcasting into Freehold from out-of-state racetracks. 
Expenses increased $954,721 or 6% for the six months 
ending December 31, 1996 when compared to the same period last year primarily
as a result of an increase in operating expenses.   As a result of increased
revenues and expenses, Freehold Raceway realized income of $2,417,753 for the
first half of fiscal 1997 as compared to income of $2,530,916 for the first
half of fiscal 1996.

     The Company has received approval from the New Jersey Racing Commission
to run a 99 day FRA harness meet from August 14 through December 31, 1997.

     During Fiscal 1997, Freehold Raceway will race under two separate
identities.  FRA raced 100 days from August 17, 1996 thru December 31, 1996. 
ACH will race 106 days from January 1, 1997 through May 26, 1997.

     ATTENDANCE AND HANDLES - The following summarizes average daily
attendance and wagering at Freehold Raceway as well as wagering on Freehold
Raceway races simulcast to other racing facilities and the Atlantic City
Casinos for the six month fiscal periods from July 1, 1996 thru December 31,
1996 and July 1, 1995 thru December 31, 1995:

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

FRA HARNESS MEETS                                Fiscal          Fiscal
                                                 1997            1996

Attendance                                             2,286       2,161

Live Handle                              9.3%$       248,816$    283,361

Simulcast Sending Signal:                                    

  New Jersey Tracks (Avg. %)             3.6%$       166,714$    170,226

       Atlantic City Casinos             4.4%$        23,937$     23,547

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

Combined Handles                             $       787,096$    869,839

Number of Live Race Days                                 100          99
</TABLE>



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

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

                             Fiscal 1997            Fiscal 1996
_____________________________                                            

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

New Jersey Tracks:                                           

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

          Meadowlands(S)             34    119,360         35     148,714

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

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

Out-of-State Tracks  (T,S)          182    244,918        169     216,299

TOTAL RECEIVING HANDLE                     502,845                535,543

(T) = Thoroughbred, (S) = Standardbred*The commission percentage of handle
averaged approximately 11.3% of total handles on
simulcasting received during the six                                      
months ended December 31, 1996.                              
                                                             
                                                             
</TABLE>


LIQUIDITY AND FINANCIAL RESOURCES

      The Company's working capital (deficit), on a consolidated basis, as
of December 31, 1996, was ($3,745,126) which represents a decrease of
approximately $15,100,000 from December 31, 1995.  This decrease in working
capital is primarily the result of the following factors: 1) the utilization
of cash of approximately $12,600,000  for the purchase of the El Rancho
property and deposits of $2,585,000 made and subsequently forfeited on
December 27, 1997 for an adjoining piece of property;   2) an increase in cash
of approximately $34,000,000 generated from debt financing offset by principal
payments of  approximately $24,200,000;  3) capitalized expenditures and
improvements of $7,870,000 associated with future casino development and
$2,200,000 for the two racetrack properties;   5) $400,000 for the purchase of
land for a parking lot at the Freehold racetrack facility (previously leased
by the Company);  and   6) cash of approximately $397,000 provided by
operating activities.

      The Company's cash flows provided by operations were $396,752 during
the first half of fiscal 1997 compared to cash provided from operations of
$4,020,249 for the comparable period in fiscal 1996.  The decrease of
$3,623,497 was primarily the result of the expense of writing off deposits of
$2,585,000 associated with the forfeited option to purchase additional land
adjoining the El Rancho project during the three months ended December 31,
1996 and additional depreciation and amortization.

        Cash used for investing activities was $4,057,721 during the first
half of fiscal 1997 compared to $1,795,991 for the comparable period in fiscal
1996.  The increase was primarily the result of expenditures for future casino
development of $1,008,095 in addition to $2,115,000 for deposits associated
with the forfeited option to purchase additional land adjoining the El Rancho
project partially offset by a decrease of $833,134 in cash used for
improvements at the two racetrack properties.

      Cash provided by financing activities was $4,487,267 for the first
half of fiscal 1997 compared to cash provided during the comparable period by
financing activities in fiscal 1996 of $5,072,217.  During the first six
months of fiscal 1996, the Company raised $5,438,162  through a Regulation S
offering of the Company's Common Stock. During the first six months of fiscal
1997, cash was generated from debt financing of $6,162,680 primarily
associated with the revolving credit line with Foothill Capital Corporation
and from note proceeds of $1,024,037 in borrowings in connection with new air
conditioning equipment at Garden State Park.  Also during fiscal 1997, there
was an increase in principal payments of  $2,052,555 primarily as a result of
a final payment of $1,405,000 on a note previously executed by Freehold
Raceway and $600,960 of principal payments made on short term financing. 

      Restricted Cash and Investments of $1,552,732 as of December 31, 1996
consisted of horsemen's deposits held by the racetrack for race nominations, 
purse winnings,  and funds held for uncashed mutuel ticket sales due to the
patrons or government authorities.  These balances are offset with the
Company's accounts payable.  As restricted cash these cash funds are not
available for Company operations.

      On March 20, 1996, the Company and Foothill Capital Corporation of Los
Angeles, California, signed a Letter of Intent for the proposed borrowing of
$30,000,000.  Closing on the financing contract took place on June 4, 1996. 
The financing arrangement, secured by, among other things, a mortgage on the
El Rancho property, Garden State Park, and a second mortgage on Freehold
Raceway, is for a $16,000,000 revolving credit line and a $14,000,000 Time
Loan Mortgage, used at settlement to pay off the $14,000,000 first mortgage
note referred to in Note 5 above due on December 20, 1996.  The revolving
credit line is restricted by $3,000,000 until such time that an approved
settlement agreement between the New Jersey Division of Gaming Enforcement,
the Company and Robert E. Brennan, the Company's former chairman, has been
approved by the Bankruptcy Court overseeing Mr. Brennan's personal Chapter 11
bankruptcy proceeding.  The revolving credit line requires that the Company
make quarterly principal payments of $400,000 beginning July 1, 1997. 
Interest on the outstanding balance will be paid monthly starting July 1, 1996
at a rate of 2.75% above the current published prime lending rate per annum. 
The Time Loan Mortgage requires that the Company make equal monthly principal
payments of $250,000 plus interest beginning July 1, 1997.  Interest on the
outstanding balance will be paid monthly starting July 1, 1996 at a rate of
2.75% above the current published prime lending rate per annum.   The
financing agreement also provides for the lender to receive a monthly service
fee of $5,000;  a .5% monthly fee on the unused portion of the line of credit; 
and an annual 1% lender's commitment fee.  The total principal balance of the
revolving credit line and the Time Loan Mortgage as of December 31, 1996 was
$27,000,000 leaving a balance to draw on at September 30, 1996 of $3,521,772,
before the release of the $3,000,000 restriction.  Subsequent to September 30,
1996 and as of November 10, 1996 the Company has drawn an additional $228,908,
leaving a balance of $3,000,000 to draw upon.   The credit facility contains
financial and other covenants that  require the Company to maintain certain 
standards with respect to: (i) minimum tangible net worth of $70,000,000 (as
of December 31, 1996, the Company's tangible net worth was $72,940,091);  and
(ii) liabilities to tangible net worth ratio of not more than one to one (as
of December 31, 1996, the Company's liability to tangible net worth ratio was
 .971 to 1.0).  The covenants also require that (iii) that additional purchase
money financing and/or capital leases cannot exceed an aggregate $3,000,000. 

      In June 1996 the Company entered into a purchase agreement with
Sheraton Gaming Corporation  to purchase a fifteen acre tract directly behind
its El Rancho property.  On October 30, 1996, the Company made a payment of
$235,000 to extend the original closing date of November 29, 1996 to December
27, 1996.  The Company made payments of $470,000 during fiscal 1996 and 
$1,880,000 during the first quarter of fiscal 1997.  During the current
quarter, the Company could not arrange the necessary financing to finalize the
purchase.  Payments totaling $2,585,000 were forfeited on December 27, 1996.

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

      On September 17, 1996 the Company entered into a lease agreement with
Siemens Credit Corporation that provides for eighteen monthly lease payments
of $293 and an end buy out of approximately $42,000 for a new telephone system
at Freehold Raceway.    On December 16, 1996, the Company entered into a lease
agreement with Siemens Credit Corporation that provides for eighteen monthly
lease payments of $2,363 and an end buyout of approximately $66,000 for a new
telephone system at Garden State Park.
      
      On January 15, 1997, the Company obtained a commitment for a revolving
$5,000,000 line of credit which may be called upon by the Company's Board of
Directors, subject to the approval of Foothill.  The Company is currently
negotiating with Foothill for said approval.  


Seasonality and Effect of Inclement Weather

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

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

INFLATION

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