**UNITED
      STATES**


**SECURITIES
      AND EXCHANGE COMMISSION**


**Washington,
      DC. 20549**




**FORM
      10-QSB**




(Mark
      One)




x
            QUARTERLY
                REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
                ACT OF
                1934.


******


For
      the
      Quarterly Period Ended November 30, 2006





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





For
      the
      transition period from ______________ to ________________





Commission
      file number 000-28506





**TrackPower,
      Inc.**


(Exact
      Name of Small Business Issuer as Specified in Its Charter)




**Wyoming**
            
            **13-3411167**(State
                or Other Jurisdiction of
                Incorporation)
            
            (I.R.S.
                Employer Identification
                No.)




**67
      Wall Street**


**Suite
      2211, New York, NY 10005**


(Address
      of Principal Executive Offices)





**(212)
      804-5704**


(Issuer’s
      Telephone Number, Including Area Code)





**N/A**


(Former
      Name, Former Address and Former Fiscal Year,


if
      Changed Since Last Report)





Check
      whether the Issuer (1) filed all reports required to be filed by
      Section 13 or 15(d) of the Exchange Act during the past 12 months (or
      for such shorter period that the registrant was required to file such reports),
      and (2) has been subject to such filing requirements for the past
      90 days.  Yes x   No
o





Indicate
      by check mark whether the registrant is a shell company (as defined in Rule
      12b-2 of the Exchange Act).


Yes
o  No x





State
      the
      number of shares outstanding of each of the issuer’s classes of common equity,
      as of the latest practicable date:





The
      number of shares of common stock outstanding as of January 12, 2007:
      762,268,540





Transitional
      Small Business Disclosure format (Check one):  Yes
o  No x





**TrackPower,
      Inc.**




**INDEX**





**PART
                I.**
            **Financial
                Information**Item
                1.
            Condensed
                Financial Statements (unaudited)Condensed
                Balance Sheet
            3Condensed
                Statements of Operations
            4Condensed
                Statements of Stockholders’ Equity
            5Condensed
                Statements of Cash Flows
            6Notes
                to Condensed Financial Statements
            7Item
                2.
            Management's
                Discussion and Analysis or Plan of Operation
            13Item
                3.
            Controls
                and Procedures
            20**PART
                II.**
            **Other
                Information**Item
                2.
            Unregistered
                Sales of Equity Securities
            21Item
                3.
            Other
                Information
            21Item
                6.
            Exhibits
            21Signatures
                and Certifications
            22







**PART
      I. Financial Information**





**Item
      1.** **** **Condensed
      Financial Statements.**





**TrackPower,
      Inc.**


**Condensed
      Balance Sheet**


**(UNAUDITED)**


November
      30, 2006


**ASSETS**Current
                  Assets:Cash
              
              $
              5,077Marketable
                  securities
              
              
              47,519Prepaid
                  expenses
              
              
              6,670Total
                  current assets
              
              
              59,266Office
                  equipment
              
              
              21,913Less:
                  Accumulated depreciation
              
              
              (15,401
              )Net
                  office equipment
              
              
              6,512Due
                  from related parties
              
              
              83,450Investments
              
              
              2,632,751**TOTAL
                  ASSETS**
              
              $
              2,781,979**LIABILITIES
                  AND SHAREHOLDERS' EQUITY**Current
                  Liabilities:Accounts
                  payable
              
              $
              260,108Due
                  to related parties
              
              
              73,048Accrued
                  dividends payable
              
              
              140,000Accrued
                  professional fees
              
              
              60,526Accrued
                  directors’ fees
              
              
              14,375Note
                  payable
              
              
              21,000Total
                  current liabilities
              
              
              569,057Note
                  payable
              
              
              400,000Total
                  liabilities
              
              
              969,057Shareholders’
                  equity:Series
                  A 8% convertible preferred stock, $3,000 initial value, no par
                  value,
                  unlimited shares authorized, 1,000 shares issued and
                  outstanding
              
              
              3,000,000Common
                  stock, $.0001 par value; unlimited shares authorized, 762,268,540
                  shares,
                  issued and outstanding
              
              
              76,227Additional
                  paid in capital
              
              
              29,916,724Common
                  stock subscribed
              
              
              100,000Accumulated
                  deficit
              
              
              (31,287,265
              )Other
                  comprehensive income
              
              
              7,236Total
                  shareholders’ equity
              
              
              1,812,922**TOTAL
                  LIABILITIES AND SHAREHOLDERS' EQUITY**
              
              $
              2,781,979




See
      accompanying notes to financial statements.


3


**TrackPower,
      Inc.**


**Condensed
      Statements of Operations**


**(UNAUDITED)**





Three
                Months Ended
              November
                30,
            
            Nine
                Months Ended
              November
                30,2006
            
            2005
            
            2006
            
            2005Revenues:
            
            $
            -
            
            $
            -
            
            $
            -
            
            $
            -Costs
                and expenses:Wages
                and consulting fees
            
            
            52,779
            
            
            342,685
            
            
            277,748
            
            
            503,307Management
                fees, related party
            
            
            239,083
            
            
            45,000
            
            
            367,019
            
            
            125,000Professional
                fees
            
            
            48,000
            
            
            54,425
            
            
            285,598
            
            
            141,886General
                and administrative
            
            
            66,110
            
            
            31,701
            
            
            202,370
            
            
            118,275Interest
            
            
            79,241
            
            
            -
            
            
            188,256
            
            
            -Depreciation
                and amortization
            
            
            511
            
            
            265
            
            
            1,292
            
            
            795Share
                of loss of equity accounted investment
            
            
            1,204,978
            
            
            -
            
            
            2,488,766
            
            
            -Loss
                on disposal of equity accounted investment
            
            
            332,751
            
            
            -
            
            
            332,751
            
            
            -Gain
                on disposal of marketable securities
            
            
            (27,426
            )
            
            (33,484
            )
            
            (41,302
            )
            
            (33,484
            )Total
                costs and expenses
            
            
            1,996,027
            
            
            440,592
            
            
            4,102,498
            
            
            855,779Net
                loss
            
            
            (1,996,027
            )
            
            (440,592
            )
            
            (4,102,498
            )
            
            (855,779
            )Preferred
                dividends
            
            
            59,836
            
            
            30,904
            
            
            180,822
            
            
            30,904Net
                loss applicable to common shareholders
            
            $
            (2,055,863
            )
            $
            (471,496
            )
            $
            (4,283,320
            )
            $
            (886,683
            )Loss
                per share of common stock:Weighted
                average number of common shares outstanding
            
            
            747,268,540
            
            
            421,036,284
            
            
            674,402,819
            
            
            365,932,948Loss
                per share
            
            $
            (0.003
            )
            $
            (0.001
            )
            $
            (0.007
            )
            $
            (0.002
            )Net
                loss
            
            $
            (2,055,863
            )
            $
            (471,496
            )
            $
            (4,283,320
            )
            $
            (886,683
            )Unrealized
                holding gain (loss) on marketable securities
            
            
            (36,146
            )
            
            -
            
            
            7,236
            
            
            -Comprehensive
                income (loss)
            
            $
            (2,092,009
            )
            $
            (471,496
            )
            $
            (4,276,084
            )
            $
            (886,683
            )




See
      accompanying notes to financial statements.


4


**TrackPower,
      Inc.**


**Condensed
      Statements of Stockholders’ Equity**


**(UNAUDITED)**




Preferred Stock
            
            Common StockShares
            
            Amount
            
            Shares
            
            Amount
            
            Common
              Stock
              Subscribed
            
            Additional
              Paid-in
              Capital
            
            Accumulated
              Deficit
            
            Other
                Comprehensive Income
            
            Total
              Stockholders’
              EquityBalance,
                February 28, 2006
            
            
            1,000
            
            $
            3,000,000
            
            
            468,052,951
            
            $
            46,805
            
            $
            909,200
            
            $
            26,866,267
            
            $
            (27,003,945
            )
            
            -
            
            $
            3,818,327Common
                stock issued in connection with private placements
            
            
            -
            
            
            
            
            
            202,920,000
            
            
            20,292
            
            
            (909,200
            )
            
            1,906,893
            
            
            -
            
            
            -
            
            
            1,017,985Common
                stock issued pursuant to compensation arrangement
            
            
            -
            
            
            
            
            
            9,008,089
            
            
            901
            
            
            -
            
            
            242,318
            
            
            -
            
            
            -
            
            
            243,218Common
                stock issued for consulting services provided
            
            
            -
            
            
            
            
            
            500,000
            
            
            50
            
            
            -
            
            
            17,950
            
            
            -
            
            
            -
            
            
            18,000Common
                stock issued in lawsuit settlement
            
            
            -
            
            
            
            
            
            4,500,000
            
            
            450
            
            
            -
            
            
            120,150
            
            
            -
            
            
            -
            
            
            120,600Common
                stock subscribed
            
            
            -
            
            
            
            
            
            -
            
            
            -
            
            
            370,000
            
            
            -
            
            
            -
            
            
            -
            
            
            370,000Loss
                for the three month period ended May 31, 2006
            
            
            -
            
            
            
            
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            (907,073
            )
            
            -
            
            
            (907,073
            )Balance,
                May 31, 2006
            
            
            1,000
            
            $
            3,000,000
            
            
            684,981,040
            
            $
            68,498
            
            $
            370,000
            
            $
            29,153,578
            
            $
            (27,911,018
            )
            $
            -
            
            $
            4,681,058Common
                stock issued in connection with private placements
            
            
            -
            
            
            
            
            
            54,725,000
            
            
            5,473
            
            
            (547,250
            )
            
            541,777
            
            
            -
            
            
            -
            
            
            -Common
                stock issued for consulting services provided
            
            
            -
            
            
            
            
            
            4,562,500
            
            
            456
            
            
            -
            
            
            61,169
            
            
            -
            
            
            -
            
            
            61,625Common
                stock subscribed
            
            
            -
            
            
            
            
            
            -
            
            
            -
            
            
            277,250
            
            
            -
            
            
            -
            
            
            -
            
            
            277,250Loss
                for the three month period ended August 31, 2006
            
            
            -
            
            
            
            
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            (1,320,384
            )
            
            -
            
            
            (1,320,384
            )Unrealized
                holding gain on marketable securities
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            90,627
            
            
            90,627Balance,
                August 31, 2006
            
            
            1,000
            
            $
            3,000,000
            
            
            744,268,540
            
            $
            74,427
            
            $
            100,000
            
            $
            29,756,524
            
            $
            (29,231,402
            )
            $
            90,627
            
            $
            3,790,176Common
                stock issued in settlement
            
            
            -
            
            
            
            
            
            18,000,000
            
            
            1,800
            
            
            -
            
            
            160,200
            
            
            -
            
            
            -
            
            
            162,000Loss
                for the three month period ended November 30, 2006
            
            
            -
            
            
            
            
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            (2,055,863
            )
            
            -
            
            
            (2,055,863
            )Unrealized
                holding gain on marketable securities
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            (83,391
            )
            
            (83,391
            )Balance,
                November 30, 2006
            
            
            1,000
            
            $
            3,000,000
            
            
            762,268,540
            
            $
            76,227
            
            $
            100,000
            
            $
            29,916,724
            
            $
            (31,287,265
            )
            $
            7,236
            
            $
            1,812,922


5


**TrackPower,
      Inc.**


**Condensed
      Statements of Cash Flows**


**(UNAUDITED)**





Nine
                Months EndedNovember
                30,2006
            
            2005**Net
                cash from operations**Net
                (loss)
            
            $
            (4,283,320
            )
            $
            (886,683
            )Adjustments
                to reconcile net (loss)to
                net cash used in operating activities:Depreciation
                and amortization
            
            
            1,292
            
            
            795Loss
                in equity accounted investment
            
            
            2,488,766
            
            
            -Loss
                on disposal of equity accounted investment
            
            
            332,751
            
            
            -Gain
                on disposal of marketable securities
            
            
            (41,302
            )
            
            (33,484
            )Common
                stock issued for consulting services provided
            
            
            241,625
            
            
            86,800Amortization
                of deferred financing costs
            
            
            74,250
            
            
            -Changes
                in:Prepaid
                expenses
            
            
            43,330
            
            
            (839
            )Due
                from/to related parties
            
            
            (54,327
            )
            
            -Preferred
                dividends payable
            
            
            80,822
            
            
            30,904Accounts
                payable and accrued expenses
            
            
            (141,841
            )
            
            110,809Net
                cash used in operating activities
            
            
            (1,257,954
            )
            
            (691,698
            )**Cash
                flows from investing activities:**Purchase
                of office equipment
            
            
            (4,826
            )
            
            -Proceeds
                on disposal of equity accounted investment
            
            
            2,300,000
            
            
            -Proceeds
                on disposal of marketable securities
            
            
            79,433
            
            
            56,595Acquisition
                of investment
            
            
            -
            
            
            (41,525
            )Increase
                in due from/to related parties
            
            
            -
            
            
            94,228Capital
                contributions to investments
            
            
            (1,300,000
            )
            
            (1,205,009
            )Net
                cash used in investing activities
            
            
            1,074,607
            
            
            (1,095,711
            )**Cash
                flows from financing activities:**Repayment
                of notes payable
            
            
            (2,486,616
            )
            
            -Issuance
                of notes payable
            
            
            400,000
            
            
            -Increase
                in bank indebtedness
            
            
            -
            
            
            15,009Proceeds
                on issuance of common stock
            
            
            1,565,236
            
            
            1,772,400Proceeds
                from common stock subscribed
            
            
            100,000
            
            
            -Net
                cash provided by financing activities
            
            
            (421,380
            )
            
            1,787,409Increase
                in cash
            
            
            (604,727
            )
            
            -**Cash**,
                beginning of period
            
            
            609,804
            
            
            -**Cash,**end of period
            
            $
            5,077
            
            $
            -





Noncash
      activities:





During
      the nine month period ended November 30, 2006 the Company issued:




1.
            A
                total of 5,062,500 shares of its common stock, valued at $79,625
                for
                consulting services provided,





2.
            9,008,089
                common shares, valued at $243,218 to an officer pursuant to a compensation
                arrangement,





3.
            4,500,000
                common shares, valued at $120,600, as part of a lawsuit
                settlement.





4.
            18,000,000
                common shares, valued at $162,000, as a settlement with a former
                director.





During
      the nine month period ended November 30, 2005 the Company issued:




1.
            1,000,000
                shares of its common stock, valued at $26,800 for investor relations
                consulting services provided.





2.
            2,000,000
                shares of its common stock, valued at $60,000 for Tioga Downs strategic
                consulting services provided.




See
      accompanying notes to financial statements.


6


**TrackPower,
      Inc.**





Notes
      to
      Condensed Financial Statements


November
      30, 2006





**Summary
      of Significant Accounting Policies**




**Nature
      of Business**




TrackPower’s
      present business strategy and direction is primarily to acquire interests in
      horseracing tracks and also to evaluate other horseracing industry
      opportunities.





**Basis
      of Presentation**





The
      accompanying unaudited financial statements of TrackPower, Inc. have been
      prepared in accordance with generally accepted accounting principles for interim
      financial information and with the instructions to Form 10-QSB and item 310
      (b)
      of Regulation S-B. Accordingly they do not include all of the information and
      footnotes required by generally accepted accounting principles for complete
      financial statements. In the opinion of management, all adjustments (consisting
      of normal recurring accruals) considered necessary for a fair presentation
      have
      been included. Operating results for the three and nine months ended November
      30, 2006 are not necessarily indicative of the results that may be expected
      for
      the fiscal year ending February 28, 2007. For further information, refer to
      the
      financial statements and footnotes thereto included in the Company’s annual
      report on Form 10-KSB for the fiscal year ended February 28, 2006.





**Going
      Concern**





The
      accompanying financial statements have been prepared assuming the Company will
      continue on a going concern basis, which contemplates the realization of assets
      and the satisfaction of liabilities in the normal course of business. The
      Company has suffered recurring losses from operations during its operating
      history. The ability of the Company to continue as a going concern is dependent
      upon obtaining future financing and profitable operations. Management is in
      the
      process of evaluating future business opportunities, which would generate
      revenue to sustain the operations of the Company. The financial statements
      do
      not include any adjustments relating to the recoverability and classification
      of
      recorded assets and classification of liabilities that might be necessary should
      the Company be unable to continue as a going concern.




**Use
      of Estimates**





The
      preparation of financial statements in conformity with generally accepted
      accounting principles requires management to make estimates and assumptions
      that
      affect the reported amounts of assets and liabilities and disclosure of
      contingent assets and liabilities at the date of the financial statements and
      the reported amounts of revenues and expenses during the reporting period.
      Significant estimates include the recoverability of assets and the fair value
      of
      common stock and other equity securities issued. Actual results could differ
      from those estimates.





**Due
      to/from Related Parties**





Periodically,
      the Company advances funds and pays expenses on behalf of related parties and
      funds are advanced and expenses are paid by related parties on behalf of the
      Company. These transactions result in non-interest bearing payables or
      receivables to related parties.




7




At
      November 30, 2006, amounts due from related parties were:





November
                30, 2006Entities
                with certain common shareholders
            
            $
            83,450





At
      November 30, 2006, amounts due to related parties were:





November
                30, 2006Officers
                and directors
            
            $
            30,512Entities
                  with certain common directorsand/or officers
            
            
            42,536Total
            
            $
            73,048





Amounts
      due to or from related parties are non-interest bearing, unsecured and do not
      have any specific repayment terms.





**Investments**





Available
      for Sale Marketable Securities





Baymount
      Incorporated





The
      Company accounts for its investment in Baymount Incorporated as available for
      sale marketable securities. Available for sale marketable securities are
      recorded at fair value and unrealized gains and losses, net of tax are recorded
      separately in stockholders’ equity. Realized gains or losses and other than
      temporary declines in value are reported in other income or expense as
      incurred.





As
      of
      November 30, 2006, the Company holds 799,000 common shares of Baymount
      Incorporated. The Company also holds the following warrants of Baymount: (i)
      400,000 warrants that are exercisable at a price of CAD$0.30 per common share
      and vest on the date that Wheat City Horse Park receives regulatory approval
      for
      a horseracing license in the Province of Manitoba; and (ii) 400,000 warrants
      that are exercisable at a price of CAD$0.40 per common share and vest on the
      date that Wheat City receives from its auditors an audited consolidated
      financial statement evidencing that Wheat City’s cash flow for the previous
      financial year was positive.





During
      the three month period ended November 30, 2006, the Company disposed of 661,000
      Baymount Incorporated common shares at an average price of $0.081 per share,
      for
      net proceeds of $53,321 and recorded a gain of $27,426 (cost basis for such
      shares was $25,895 or approximately $0.04 per share).




8




The
      carrying value of the investment, based on the closing share price of Baymount
      on November, 2006 of $0.061 (CAD$0.07), was $47,519 and the unrealized holding
      gain recorded within other comprehensive income was $7,236.





Equity
      Accounted Investment





American
      Racing and Entertainment, LLC.





The
      Company records its investment in American Racing and Entertainment, LLC as
      an
      equity accounted investment. Investments in entities under significant influence
      are reported using the equity basis for accounting.





On
      October 14, 2005, the Company issued $3,000,000 Series A 8% Convertible
      Cumulative Preferred Stock to acquire a 50% membership interest in Tioga Downs
      Racetrack, LLC (“TDRLLC”) (an entity which owned Tioga Downs Racetrack) from
      Asolare II LLC, a related party due to two directors of the Company also being
      members of Asolare II. The other 50% member of TDRLLC was Southern Tier
      Acquisition II, LLC. On November 8, 2005, the Company entered into agreements
      with Southern Tier Acquisition II, LLC and Nevada Gold NY, Inc. (a wholly owned
      subsidiary of Nevada Gold & Casinos, Inc. AMEX:UWN) pursuant to which on
      November 28, 2005, the Company exchanged its 50% membership interest in Tioga
      Downs Racetrack, LLC (“TDRLLC”) for a 25% membership interest in American Racing
      and Entertainment, LLC (“American Racing”). On March 1, 2006, the Company
      reduced its ownership interest in American Racing from 25% to 20% as a result
      of
      a $20,000,000 investment ($5,000,000 by way of equity and $15,000,000 by way
      of
      proposed indebtedness) in American Racing by Oneida Entertainment
      LLC.





On
      October 23, 2006, the Company disposed of one half of its membership interest
      in
      American Racing (a 10% in the entity) to Southern Tier and Oneida Entertainment
      (each receiving one half of the 10% membership interest) for cash proceeds
      of
      $2,300,000. At closing the Company advanced $1,300,000 to American Racing in
      payment of a past due capital contribution. The remaining proceeds were used
      to
      repay the Melillo Investments $1,000,000 note payable.





Since
      the
      formation of TDRLLC and subsequent transfer to American Racing, the Company
      has
      made capital contributions totaling $4,870,966 (including the $1,300,000 past
      due contribution made at closing of the October 23, 2006 sale).





American
      Racing owns Tioga Downs racetrack and on May 1, 2006 acquired Vernon Downs
      racetrack. The Tioga Downs and Vernon Downs facilities have been renovated
      and
      are open as horseracing and electronic gaming facilities. The members of
      American Racing are assisting in the development of the properties and in the
      event that proposed debt financing is not sufficient to complete the projects,
      each of the parties may be required to make additional material capital
      contributions. Due to the Company’s ability to exhibit significant influence
      over the day to day business affairs of American Racing, the Company uses the
      equity method to account for its investment in American Racing.




9




The
      carrying value of the Company’s investment in American Racing at November 30,
      2006 was as follows:





Acquisition
                cost of Tioga Downs interest
            
            $
            3,000,000Capital
                contributions to Tioga Downs Racetrack, LLC or American
                Racing
            
            
            4,870,966Total
            
            $
            7,870,966Less:
                Membership share of losses since acquisitionOctober
                15, 2005 to December 31, 2005
            
            
            116,698January
                1 to March 31, 2006
            
            
            321,068April
                1 to June 30, 2006
            
            
            962,720July
                1 to October 23, 2006
            
            
            1,204,978Total
            
            
            2,605,464Carry
                value as of October 23, 2006
            
            $
            5,265,502Less:
                carrying value of 10% membership interest disposed of on October
                23,
                2006
            
            
            2,632,751Carrying
                value of remaining 10% membership interest at November 30,
                2006
            
            $
            2,632,751





The
      $1,400,486 membership share of losses represents the Company’s portion of losses
      for the period since acquisition on October 14, 2005 to June 30, 2006. Losses
      for the period July 1, 2006 to October 23, 2006 were $6,024,888 and $1,204,978
      or 20% were attributable to the Company’s investment in American
      Racing.





The
      fiscal year end of American Racing is December 31. The equity portion of losses
      recorded by the Company in the financial statements as at November 30, 2006
      was
      up to October 23, 2006.





The
      Company recorded a loss on disposal of the membership interest as
      follows:





Proceeds
                on disposal of 10% membership interest
            
            $
            2,300,000Carrying
                value of membership interest
            
            
            2,632,751Loss
                on disposal
            
            $
            (332,751
            )





**Notes
      Payable**





November
                30, 2006SIG
                Communications Partnership 10% unsecured promissory note
            
            $
            21,000Southern
                Tier Acquisition II, LLC and Oneida Entertainment Holdings Inc.,
                15% 5
                year secured promissory note
            
            
            400,000Total
            
            $
            421,000Less:
                current portion
            
            
            21,000Long
                term portion
            
            $
            400,000




10




SIG
      Communications Partnership Promissory Note





10%
      promissory note due to SIG Communications Partnership in the amount of $20,000
      (excluding an interest accrual of $1,000). The SIG Communications Partnership
      note and related accrued interest was due May 16, 2000. During fiscal 2002,
      accrued interest of $4,500 was added to the note principal. The Company agreed
      to repay the outstanding balance in monthly payments of $3,500. At February
      28,
      2006, $3,500 has been repaid. The Company is in default of its
      agreement.





Southern
      Tier and Oneida Entertainment Promissory Note





On
      October 20, 2006, the Company issued a $400,000 15% secured promissory note
      to
      Southern Tier Acquisition II LLC and Oneida Entertainment Holdings Inc. The
      financing consisted of a $200,000 loan from each of Southern Tier and Oneida.
      Interest is paid monthly beginning December 1, 2006 and the promissory note
      matures on November 1, 2011. The
      Company entered into a pledge and security agreement to secure the promissory
      note providing as collateral all of the Company’s remaining 10% membership
      interest in American Racing. Pursuant to the terms of the promissory note the
      Company has the option to request a further $300,000 loan on January 17,
      2007.





Melillo
      Investments Promissory Note





On
      January 13, 2006, the Company issued a $1,000,000
      11% secured promissory note to Melillo Investments pursuant to a financing.
      The
      financing consisted of a $1 million loan and a commitment fee of 3,000,000
      shares of the Company’s common stock. The promissory note pays interest
      quarterly in arrears beginning on March 31, 2006 at the rate of 11% per annum.
      The promissory note matures on the earlier of the fifth anniversary of the
      date
      of issuance or on the closing date of new debt financing of no less than $5
      million. Additionally, the Company entered into a pledge and security agreement
      to secure the promissory note providing as collateral all of the Company’s 20%
      membership interest in American Racing. Two
      of
      the Company’s directors executed a limited personal guaranty agreement whereby
      they both individually guaranteed the obligations of the Company under
      promissory note.





On
      October 23, 2006, at closing of the Company’s sale of 10% of its membership
      interest in American Racing, the Company repaid the principal and interest
      owed
      on the Melillo Investments Promissory Note.





**Loss
      per Share**





Loss
      per
      common share is based on the weighted average number of shares outstanding
      during each period presented. Warrants to purchase stock are included as common
      stock equivalents only when dilutive.




11




**Related
      Party Transactions**





During
      the nine month period ended November 30, 2006, the Company paid $50,000 in
      compensation to two directors for their personal guarantee of a $1,000,000
      note
      payable and $102,015 to officers and directors as a 5% success fee on private
      placements arising from their introductions. An entity solely owned by a
      director of the Company paid certain expenses on behalf of the Company totaling
      $150,000. The Company has paid $139,140 for strategic consulting services to
      a
      director of the Company during the nine month period ended November 30, 2006.
      The Company issued 18,000,000 common shares, valued at $162,000, as a settlement
      upon the resignation of the Company’s Chairman of the Board.





**Recent
      Accounting Pronouncements**





In
      February 2006, the FASB issued SFAS No. 155, “Accounting for Certain Hybrid
      Financial Instruments.” which amends SFAS No. 133 and SFAS No. 140. SFAS No. 155
      permits hybrid financial instruments that contain an embedded derivative that
      would otherwise require bifurcation to irrevocably be accounted for at fair
      value, with changes in fair value recognized in the statement of income. The
      fair value election may be applied on an instrument-by-instrument basis. SFAS
      No. 155 also eliminates a restriction on the passive derivative instruments
      that
      a qualifying special purpose entity may hold. SFAS No. 155 is effective for
      those financial instruments acquired or issued after December 1, 2006. At
      adoption, any difference between the total carrying amount of the individual
      components of the existing bifurcated hybrid financial instrument and the fair
      value of the combined hybrid financial instrument will be recognized as a
      cumulative-effect adjustment to beginning retained earnings. The Company does
      not expect the new standard to have any material impact on our financial
      position and results of operations.





In
      March
      2006, the FASB issued SFAS No. 156, “Accounting for Servicing of Financial
      Assets, an amendment of FASB Statement No. 140.” SFAS No. 156 requires all
      separately recognized servicing assets and servicing liabilities to be initially
      measured at fair value, if practicable. The standard permits an entity to
      subsequently measure each class of servicing assets or servicing liabilities
      at
      fair value and report changes in fair value in the statement of income in the
      period in which the changes occur. SFAS No. 156 is effective for the Company
      as
      of December 1, 2006. The Company does not expect the new standard to have any
      material impact on our financial position and results of
      operations.





In
      July
      2006, the FASB issued FASB Interpretation No. 48, “Accounting for Uncertainty in
      Income Taxes - an interpretation of FASB Statement No. 109 (FIN 48), which
      clarifies the accounting for uncertainty in tax positions. This Interpretation
      requires that we recognize in our financial statements, the impact of a tax
      position, if that position is more likely than not of being sustained on audit,
      based on the technical merits of the position. The provisions of FIN 48 are
      effective as of the beginning of our 2007 fiscal year, with the cumulative
      effect of the change in accounting principle recorded as an adjustment to
      opening retained earnings. We are currently evaluating the impact of adopting
      FIN 48 on our financial statements.





In
      September 2006, FASB issued SFAS 157 ‘Fair Value Measurements’. This Statement
      defines fair value, establishes a framework for measuring fair value in
      generally accepted accounting principles (GAAP), and expands disclosures about
      fair value measurements. This Statement applies under other accounting
      pronouncements that require or permit fair value measurements, the Board having
      previously concluded in those accounting pronouncements that fair value is
      the
      relevant measurement attribute. Accordingly, this Statement does not require
      any
      new fair value measurements. However, for some entities, the application of
      this
      Statement will change current practice. This Statement is effective for
      financial statements issued for fiscal years beginning after November 15, 2007,
      and interim periods within those fiscal years. The management is currently
      evaluating the effect of this pronouncement on financial
      statements.




12




**Item
      2.** **** **Management’s
      Discussion and Analysis or Plan of Operation** .




**Forward
      Looking Statements**




Certain
      matters discussed in this Quarterly Report may constitute forward-looking
      statements within the meaning of the Private Securities Litigation Reform Act
      of
      1995 and as such may involve risks and uncertainties. These forward-looking
      statements relate to, among other things, expectations of the business
      environment in which the Company operates, projections of future performance,
      perceived opportunities in the market and statements regarding the Company's
      goals. The Company's actual results, performance, or achievements expressed
      or
      implied in such forward-looking statements may differ. We are under no duty
      to
      update, and do not undertake to update, any of the forward-looking statements
      contained in this quarterly report to conform them to actual results or to
      changes in our expectations.





**Recent
      Developments**





**Sale
      of Membership Interest in American Racing**




On
      October 23, 2006, the Company sold one half of its membership interest in
      American Racing to Southern Tier and Oneida Entertainment for cash proceeds
      of
      $2,300,000. At closing the Company advanced $1,300,000 of the proceeds to
      American Racing for past due capital contributions and utilized the remaining
      $1,000,000 of the proceeds to repay the Melillo Investments 11% secured
      promissory note. Each of Southern Tier and Oneida Entertainment acquired half
      of
      the membership interest sold by the Company. Post closing the remaining
      membership interest in American Racing is 10%.




**Southern
      Tier and Oneida Entertainment Loan**





On
      October 20, 2006, the Company obtained a $200,000 15% secured loan from each
      of
      Southern Tier Acquisition II LLC and Oneida Entertainment Holdings Inc. The
      loan
      matures on November 1, 2011. The
      Company entered into a pledge and security agreement to secure the loan
      providing as collateral all of the Company’s remaining 10% membership interest
      in American Racing. Pursuant to the terms of the promissory note the Company
      has
      the option to request a further $300,000 loan on January 17, 2007.





**Resignation
      of Director**





On
      November 3, 2006, John G. Simmonds, resigned as a director and chairman of
      the
      board. The Company issued 18,000,000 common shares, valued at $162,000 as a
      settlement upon his resignation.




13




**Plan
      of Operations**




The
      Company holds a 10% membership interest in American Racing and Entertainment,
      LLC, a New York Limited Liability company, that is developing a horseracing
      and
      gaming facility in Nichols, New York known as Tioga Downs and is renovating
      another New York facility known as Vernon Downs. The Tioga Downs facility began
      to operate in June 2006 and the Company is in the process of reopening the
      Vernon Downs facility. Under the terms of the operating agreement with American
      Racing the Company, TrackPower and its partners are obligated to advance further
      amounts to the venture.




The
      Company will need to raise additional cash to continue to pay its operating
      expenses in the next twelve months until the distribution from the new ventures
      exceed the day to day operating costs. The Company also plans to seek other
      racing and gaming opportunities in the United States.




The
      Company plans to raise additional funds, in the next twelve months, through
      the
      issuance of its common stock or through a combination of equity and debt
      security instruments. It is anticipated that the debt security instruments
      will
      have conversion features that would cause further dilution to existing
      shareholders.




**Results
      of Operations**




**For
      the three month period ended November 30, 2006**





Total
      costs and expenses totaled $1,996,027 during the three-month period ended
      November 30, 2006 compared to $440,592 during the three month period ended
      November 30, 2005. The reason for the substantial increase results from the
      Company’s acquisition of a membership interest in American Racing and
      Entertainment, LLC which has opened for operations but has not yet achieved
      breakeven results. For the three month period November 30, 2006 the Company
      has
      recognized $1,204,978 of equity losses in that investment.





Wages
      and
      consulting fees were $342,685 during the three month period ended November
      30,
      2005 compared to $52,779 during the three month period ended November 30, 2006.
      Wages and consulting fees during the three month period ended November 30,
      2005
      represented $229,412 paid for consulting costs of the Company’s CEO (of which
      $134,687 was the accrued fair value of 6,700,824 shares of the Company’s common
      stock issuable pursuant to Mr. Tracy’s employment letter agreement), various
      miscellaneous consulting costs associated with the American Racing and
      Entertainment and Tioga Downs Racetrack ventures totaling $80,000, wage costs
      of
      a part time accountant totaling $5,849, marketing consulting costs of $16,724
      and corporate secretarial consulting services of $10,700. Wages and consulting
      costs during the three month period ended November 30, 2006 consisted of
      employment costs of $37,000 paid to the Company’s CEO, and various consulting
      fees totaling $15,005.





Management
      and consulting fees paid to related parties were $45,000 during the quarter
      ended November 30, 2005 and $239,083 in the current quarter. During the current
      quarter, the Company issued 18,000,000 common shares valued at $162,000 as
      a
      settlement upon the resignation of a director and chairman of the board, paid
      $49,140 in strategic consulting services of that director and $27,943 was paid
      for corporate secretarial services of an officer.




14




General
      and administrative expenses were $31,701 during the three month period ended
      November 30, 2005 compared to $66,110 during the three month period ended
      November 30, 2006.





Within
      general and administrative costs; 1) rent and insurance expenses were $5,279
      in
      the prior year and $13,259 in the current quarter, 2) auto lease, repair and
      gasoline expenses were $6,156 during the three month period ended November
      30,
      2005 and $12,833 in the comparative period in the current year, 3) travel,
      meals
      and entertainment totaled $8,379 during the three month period ended November
      30, 2005 and 9,623 in the current quarter, 4) corporate fees and directors
      fees
      totaled $5,574 during the three month period ended November 30, 2005 and $9,639
      during the comparative period in the current year, 5) telephone and cellular
      costs were $6,019 in the current quarter and $3,420 in the prior year, and
      7)
      other miscellaneous costs totaled $14,737 during the current quarter compared
      to
      $2,893 in the prior year.





Professional
      fees during the three month period ended November 30, 2006 were $48,000
      marginally lower compared to $54,425 during the quarter ended November 30,
      2005.
      Accounting fees were $9,000 during both the three month period ended November
      30, 2006 and 2005. Legal fees were $23,995 during the quarter ended November
      30,
      2006 and $45,425 in the prior period. The Company also incurred $15,005 in
      various professional consulting fees during the current quarter.





Amortization
      increased from $265 during the three month period ended November 30, 2005 to
      $511 during the current quarter.





The
      Company disposed of 661,000 common shares of Baymount Incorporated during the
      three month period ended November 30, 2006, for a gain of $27,426. The Company
      received net proceeds of $53,321 and the common shares had a cost base of
      $25,895.





Interest
      expense during the three month period ended November 30, 2006 was $79,241.
      Interest expenses arose from a note payable issued during fiscal 2006. Interest
      expense also included the full amortization of $66,150 remaining deferred
      financing costs associated with the Melillo Investments loan.





The
      Company began to account for its investment in American Racing and
      Entertainment, LLC through the equity method effective at acquisition date
      on
      October 14, 2005. During the three month period ended November 30, 2006, the
      Company recorded $1,204,978 in equity losses arising from the operations of
      American Racing. Consolidated losses of American Racing were $6,024,888 during
      the period July 1 to October 23, 2006 of which 20% or $1,204,978 were recorded
      as equity losses in the financial records of Trackpower for the three month
      period ended November 30, 2006. In addition on October 23, 2006, the Company
      disposed of one half of its investment in American Racing for cash proceeds
      of
      $2,300,000. The carrying value of the interest sold was $2,632,751 and therefore
      the Company recorded a loss on disposal of $332,751.





The
      Company also accrued $59,836 as dividends on the Series A 8% Convertible
      Cumulative Preferred Stock issued during the quarter ended November 30,
      2006.




15




The
      Company recorded a net loss of $2,055,863 during the three month period ended
      November 30, 2006 ($0.003 per share) compared to a net loss of $471,496 ($0.001
      per share) during the comparative period in the prior year.





**For
      the nine month period ended November 30, 2006**





Total
      costs and expenses totaled $4,102,498 during the nine-month period ended
      November 30, 2006 compared to $855,779 during the nine month period ended
      November 30, 2005. The reason for the substantial increase results from the
      Company’s acquisition of a membership interest in American Racing and
      Entertainment, LLC which has opened for operations but has not yet achieved
      breakeven results. For the nine month period November 30, 2006 the Company
      has
      recognized $2,488,766 of equity losses in that investment.





Wages
      and
      consulting fees were $503,307 during the nine month period ended November 30,
      2005 compared to $277,748 during the comparative period in the current year.
      Wages and consulting fees during the nine month period ended November 30, 2005
      represented $361,353 paid for consulting costs of the Company’s CEO (of which
      $134,687 was the accrued fair value of 6,700,824 shares of the Company’s common
      stock issuable pursuant to Mr. Tracy’s employment letter agreement), various
      miscellaneous consulting costs associated with the American Racing and
      Entertainment and Tioga Downs Racetrack ventures totaling $80,000, wage costs
      of
      a part time accountant totaling $13,827, marketing consulting costs of $37,427
      and corporate secretarial consulting services of $10,700. Wages and consulting
      costs during the nine month period ended November 30, 2006 consisted of
      employment costs of $188,386 (including an accrual of $43,861 representing
      future common stock based compensation pursuant to an employment letter
      memorandum) paid to the Company’s CEO, financial accounting consulting costs
      totaling $21,689 and various consulting fees totaling $67,673.





Management
      and consulting fees paid to related parties were $125,000 during the three
      month
      period ended November 30, 2005 and $367,019 during the current period. During
      the current period $139,140 was for the strategic consulting services of a
      director and $65,879 was for corporate secretarial services of an officer.
      The
      Company also issued 18,000,000 common shares valued at $162,000 as a settlement
      upon the resignation of a director and chairman of the board.





General
      and administrative expenses were $118,275 during the nine month period ended
      November 30, 2005 compared to $202,370 during the nine month period ended
      November 30, 2006.





Within
      general and administrative costs; 1) travel, meals and entertainment totaled
      $37,643 during the nine month period ended November 30, 2005 and were $58,102
      in
      the comparative period in the current year, 2) auto lease, repair and gasoline
      expenses were $20,352 during the nine month period ended November 30, 2005
      and
      $33,543 during the nine month period ended November 30, 2006, 3) corporate
      fees
      and directors fees totaled $23,031 during the nine month period ended November
      30, 2005 and $30,833 during the comparative period in the current year 4) rent
      and insurance expenses were $28,406 in the current nine month period and $11,669
      in the prior year, 5) communications costs including cellular service and land
      line were $18,884 in the current nine month period up from $6,090 in the prior
      year 6) investor relations costs of $7,350 during the nine month period ended
      November 30, 2005 and compared to $6,850 in the current year, and 7) other
      miscellaneous costs totaled $25,752 during the current nine month period and
      $12,140 during the nine month period ended November 30, 2005.




16




Professional
      fees were $141,886 during the nine month period ended November 30, 2005
      substantially less than $285,598 during the comparative period in the current
      year. Accounting fees were $27,000 during the nine month period ended November
      30, 2005 and $37,975 during the nine month ended November 30, 2006. Legal fees
      were $114,886 during the nine month period ended November 30, 2005 and $132,104
      in the comparative period in the current year. During the nine month period
      ended November 30, 2006, the Company incurred $50,000 in guarantee fees
      associated with two directors personally guaranteeing a $1,000,000 note payable
      and $65,519 in various professional consulting fees a portion ($50,514) of
      which
      was settled with 4,562,500 shares of the Company’s common stock.





Amortization
      increased from $795 during the nine month period ended November 30, 2005 to
      $1,292 during the current period.





The
      Company disposed of 931,000 common shares of Baymount Incorporated during the
      nine month period ended November 30, 2006, for a gain of $41,302. The Company
      received net proceeds of $79,433 and the common shares had a cost base of
      $38,131.





Interest
      expense during the nine month period ended November 30, 2006 was $188,256.
      Interest expenses arose from a note payable issued during fiscal 2006. Interest
      expense also included the amortization of $74,250 deferred financing costs
      associated with the Melillo Investments loan.





The
      Company began to account for its investment in American Racing and
      Entertainment, LLC through the equity method effective at acquisition date
      on
      October 14, 2005. During the nine month period ended November 30, 2006, the
      Company recorded $2,488,766 in equity losses arising from the operations of
      American Racing. On October 23, 2006, the Company disposed of one half of its
      investment in American Racing for cash proceeds of $2,300,000. The carrying
      value of the interest sold was $2,632,751 and therefore the Company recorded
      a
      loss on disposal of $332,751.





The
      Company also accrued $180,822 as dividends on the Series A 8% Convertible
      Cumulative Preferred Stock issued during the nine month ended November 30,
      2006.





The
      Company recorded a net loss of $4,283,320 during the nine month period ended
      November 30, 2006 ($0.007 per share) compared to a net loss of $886,683 ($0.002
      per share) during the comparative period in the current year.





**Critical
      Accounting Policies and Estimates**





The
      discussion and analysis of results of operations and financial condition are
      based upon the financial statements, which have been prepared in accordance
      with
      accounting principles generally accepted in the United States of America (GAAP).
      The preparation of these financial statements requires management to make
      estimates and judgments that affect the reported amounts of assets, liabilities,
      revenues and expenses, and related disclosure of contingent assets and
      liabilities. Management evaluates the estimates on an on-going basis, including
      those related to bad debts, investments, customer accounts, intangible assets,
      income taxes, and contingencies and litigation. Management bases its estimates
      on historical experience and on various other assumptions that they believe
      to
      be reasonable under the circumstances, the results of which form the basis
      for
      making judgments about the carrying values of assets and liabilities that are
      not readily apparent from other sources. Actual results may differ from these
      estimates under different assumptions or conditions. Note 2 of the "Notes to
      Financial Statements" of the Company’s Annual Audited Financial Statements
      includes a summary of the significant accounting policies and methods used
      in
      the preparation of the financial statements. The following is a brief
      description of the more significant accounting policies and methods the Company
      uses.




17




Fair
      Value of Financial Instruments:





Cash,
      accounts payable, accrued expenses, note payable and loans receivable are
      carried in the financial statements at amounts which approximate fair
      value.





Investments:





The
      Company’s investments consist of common stock of publicly quoted company and a
      membership interest in a private New York Limited Liability Company. The common
      stock of the publicly quoted company are considered “available for sale
      securities” and are recorded at fair value with unrealized gains and losses, net
      of tax are recorded separately in stockholders’ equity. Realized gains or losses
      and other than temporary declines in value are reported in other income or
      expense as incurred. The investment in the private New York Limited Liability
      Company is accounted for using the equity method.




**Financial
      Condition**





During
      the nine month period ended November 30, 2006, total assets decreased from
      $7,273,764 to $2,781,979. The
      decrease is primarily the result of the Company’s share of equity losses and the
      divestiture of a 10% interest membership interest in American
      Racing.




Current
      assets decreased from $659,804 at February 28, 2006 to $59,266 at November
      30,
      2006. The reduction is attributable to a reduction in cash from $609,804 to
      $5,077, a reduction in prepaid costs and expenses from $50,000 to $6,670 and
      an
      increase in marketable securities from zero to $47,519. Marketable securities
      at
      November 30, 2006, included 799,000 common shares of Baymount Incorporated
      valued at $47,519.




The
      carrying value of the American Racing investment, of $2,632,751, consists of
      the
      original amount paid for the Tioga Downs Racetrack, LLC interest, cash amounts
      transferred to Tioga Downs Racetrack, LLC or American Racing less the Company’s
      share of losses from operations.





The
      Company’s liabilities decreased from $3,455,437 at the beginning of the year to
      $969,057 at November 30, 2006. The decrease is substantially the result of
      the
      Company repaying a $1,486,616 note payable which matured subsequent to year
      end.





Accounts
      payable remains materially unchanged at $261,403 at the beginning of the year
      compared to $260,108 at November 30, 2006. Due to related parties decreased
      from
      $287,143 at February 28, 2006 to $73,048 at November 30, 2006. Amounts owed
      to
      related parties primarily represents unpaid amounts for services rendered to
      the
      Company by related parties. Due from related parties increased from nil at
      February 28, 2006 to $83,450 at November 30, 2006. Amounts owed by related
      parties primarily represent costs and expenses paid by the Company on behalf
      of
      related parties.




18




The
      Company settled a lawsuit with a former consultant by issuing 4,500,000 shares
      of the Company’s common stock, valued at $120,600 and by issuing a cash payment
      of $125,000 during the first half of the year which had been fully accrued
      for
      at February 28, 2006. Accrued professional fees decreased from $73,134 at
      February 28, 2006 to $60,526 at November 30, 2006.





During
      the year ended February 28, 2006, the Company issued $3,000,000 in Series A
      preferred shares to acquire the Tioga Downs assets, which formed the basis
      of
      the eventual American Racing investment.





On
      October 20, 2006, the Company issued a $400,000 15% 5 year promissory note
      to
      Southern Tier and Oneida Entertainment. The proceeds were used for general
      corporate purposes.





The
      stockholders’ equity decreased from $3,818,327 at February 28, 2006 to
      $1,812,922 at May 31, 2006. The decrease is attributable to:




-
            257,645,000
                common shares issued for net proceeds of $2,474,436 ($909,200 of
                which had
                been received during fiscal 2006 and recorded in common stock subscribed
                at February 28, 2006) and further subscriptions for 10,000,000 common
                shares (for proceeds of $100,000) but not issued as of November 30,
                2006,




-
            5,062,500
                common shares issued for consulting services provided valued at
                $79,625,




-
            9,008,089
                common shares (valued at $243,218) issued to an officer and director
                pursuant to compensation arrangements,




-
            18,000,000
                common shares (valued at $162,000) issued as a settlement with a
                resigning
                director and chairman of the board,




-
            4,500,000
                shares of common stock (valued at $120,600) issued as part of a lawsuit
                settlement,




-
            an
                unrealized holding gain on marketable securities of $7,236,
                and




-
            an
                increase in the accumulated deficit arising from the $4,283,320 loss
                for
                the period.




**Liquidity
      and Capital Resources**




During
      the nine month period ended November 30, 2006, the Company used $1,257,954
      in
      cash from operating activities primarily as a result of operating losses. Cash
      provided used in financing activities during the first nine months amounted
      to
      $421,380, which resulted from private placements of shares of the Company’s
      common stock totaling $1,665,236 offset by a net repayment of notes payable
      of
      $2,086,616. Cash provided by investing activities totaled $1,074,607 and
      primarily arose from the disposal of certain investments.




The
      revenues of the Company during the nine month period ended November 30, 2006
      were zero therefore did not play a significant role in financing operations.
      Management expects to begin receiving distributions from the American Racing
      investment during fiscal 2008.




19




During
      the nine month period ended November 30, 2006, the Company divested of one
      half
      of its membership interest in American Racing in order to meet past due capital
      contributions and repay a promissory note. The Company received $2.3 million
      in
      cash, used $1.3 million of it for capital contributions and the remaining $1.0
      million was used to retire a $1.0 million loan.




Also
      during the most recent quarter the Company obtained a new $400,000 loan and
      used
      the proceeds for general corporate purposes.




The
      Company continues to be successful in raising sufficient funds to offset
      operating losses. The Company issued 257,645,000 common shares under private
      placements for total net proceeds of approximately $2.5 million. In addition
      the
      Company received common stock subscriptions totaling $100,000 during the nine
      ended November 30, 2006 for which stock certificates totaling 10,000,000 common
      shares had not been issued as of November 30, 2006. There can be no assurance
      that the Company’s ability to raise capital through private placements will
      continue.




Management
      is hopeful that the future business direction of the Company will substantially
      decrease the history of operating losses and provide the ability to improve
      the
      Company’s liquidity. The Company will require additional capital over the next
      year in order to satisfy existing liabilities and to provide further capital
      contributions to its investments. Failure to obtain such capital could adversely
      impact the Company's operations and prospects.




**Off-balance
      sheet arrangements.**




The
      Company does not have any off balance sheet arrangements. However, the Company
      may be obligated under its membership interest in American Racing and
      Entertainment, LLC to make further pro-rata capital contributions to fund the
      development of Tioga Downs and Vernon Downs.




**Item
      3. Controls and Procedures** .





As
      of the
      end of the period covered by this report, an evaluation was carried out under
      the supervision and with the participation of the Company’s management,
      including the Company’s Chief Executive Officer and Chief Financial Officer, of
      the effectiveness of the Company’s disclosure controls and procedures, as
      defined in Rule 13a-15(e) promulgated under the Securities and Exchange Act
      of
      1934 (the “Exchange Act”). Based on their evaluation, the Company’s Chief
      Executive Officer and Chief Financial Officer have concluded that the Company’s
      disclosure controls and procedures are effective to ensure that information
      required to be disclosed by the Company in reports that it files or submits
      under the Exchange Act is recorded, processed, summarized and reported within
      the time periods specified in Securities and Exchange Commission rules and
      forms.





There
      have been no changes in the Company’s internal controls over financial reporting
      during the Company’s most recently completed fiscal quarter that have materially
      affected, or are reasonably likely to materially affect, our internal controls
      over financial reporting.


20





**PART
      II. Other Information**





**Item
      2.** **** **Unregistered
      Sales of Equity Securities.**





The
      Company issued the following unregistered securities as a settlement with a
      resigning director during the three month period ended November 30, 2006.





Number
                ofDate
            
            Securities
                issued to
            
            SharesIssuances
              during November 2006
            
            
            John
                G. Simmonds
            
            
            18,000,000





The
      issuance of the foregoing securities by the Company was a private placement
      made
      in reliance on Section 4(2) of the Securities Act of 1933, as amended.




**Item
      3. Defaults Upon Senior Securities**





None




**Item
      6.** **** **Exhibits**




**Exhibit**
            
            **Document**31.1
            
            Certification
                pursuant to Section 302 of the Sarbanes-Oxley Act of
                2002.*31.2
            
            Certification
                pursuant to Section 302 of the Sarbanes-Oxley Act of
                2002.*32.1
            
            Certification
                pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section
                906 of
                the Sarbanes-Oxley Act of 2002. *32.2
            
            Certification
                pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section
                906 of
                the Sarbanes-Oxley Act of 2002. *





(*)  Filed
      with this Report.




**(Remainder
      of page left intentionally blank)**


21


**SIGNATURES**





In
      accordance with the registration requirements of the Securities Exchange Act
      of
      1934, the registrant has duly caused this report to be signed on its behalf
      by
      the undersigned, thereto duly authorized.




DATE:
              JANUARY 19,
              2007
            BY:
            /s/
              Edward TracyEdward
                M. Tracy
              President
                and Chief Executive Officer




DATE:
              JANUARY 19,
              2007
            BY:
            /s/ James
              AhearnJames
                Ahearn
              Chief
                Financial Officer
              (principal
                financial officer)


22





**Exhibit
      Index**





**Exhibit**
            
            **Document**31.1
            
            Certification
                pursuant to Section 302 of the Sarbanes-Oxley Act of
                2002.*31.2
            
            Certification
                pursuant to Section 302 of the Sarbanes-Oxley Act of
                2002.*32.1
            
            Certification
                pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section
                906 of
                the Sarbanes-Oxley Act of 2002. *32.2
            
            Certification
                pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section
                906 of
                the Sarbanes-Oxley Act of 2002. *







(*)  Filed
      with this Report.




**(Remainder
      of page left intentionally blank)**




23