SECURITIES AND EXCHANGE COMMISSION

                              Washington, DC 20549

                                ----------------

                                   FORM 10-QSB

(Mark One)

[X]  QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
     OF 1934 FOR THE QUARTERLY PERIOD ENDED JUNE 30, 2002.

[ ]  TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
     OF 1934 FOR THE TRANSITION PERIOD FROM __________ TO _________.

                      Commission File Number: _____________

                            TOTAL ENTERTAINMENT INC.
                 ----------------------------------------------
                 (Name of Small Business Issuer in its Charter)

            INDIANA                                               35-1504940
-------------------------------                              -------------------
(State or Other Jurisdiction of                               (I.R.S. Employer
Incorporation or Organization                                Identification No.)
                                                                 (Zip Code)

          1411 Peel Street, Suite 500, Montreal, Quebec, Canada H3A 1S5
          -------------------------------------------------------------
                    (Address of Principal Executive Offices)

                                 (514) 842-6999
                           ---------------------------
                           (Issuer's telephone number)

         Check whether the issuer (1) filed all reports 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 [ ]

         As of August 19, 2002, there were _________ shares of the issuer's
common stock outstanding.

         Transitional Small Business Disclosure Format (check one): Yes [ ]
No [X]
<PAGE>

                            Total Entertainment, Inc.

                                      Index

                                                                            Page

PART I.  Financial Information (Unaudited)

Condensed Consolidated Balance Sheets
  December 31, 2001 and June 30, 2002 (Unaudited)                              3

Condensed Consolidated Statements of Operations
  Six Months Ended June 30, 2002 and 2001 (Unaudited)                          4

Condensed Consolidated Statements of Operations
  Three Months Ended June 30, 2002 and 2001 (Unaudited)                        5

Condensed Consolidated Statements of Cash Flows
  Six Months Ended June 30, 2002 and 2001 (Unaudited)                          6

Notes to Condensed Consolidated Financial Statements                      7 - 11

Management's Discussion and Analysis of Financial
  Condition and Results of Operations                                    12 - 14

PART II. Other Information                                                    14

Signatures                                                                    16


                                        2
<PAGE>

                    PART I. Financial Information (Unaudited)

                   Total Entertainment, Inc. and Subsidiaries

                           Consolidated Balance Sheet

                    as at June 30, 2002 and December 31, 2001



                                                      December 31,     June 30,
                                                          2001           2002
                                                                     (unaudited)
                                                      -----------    -----------
ASSETS

Current assets
   Cash                                               $    20,416    $       000
   Accounts receivable                                    232,527            000
                                                      -----------    -----------
         Total current assets                             252,943            000

Property and equipment
   Computer equipment                                     354,893            000
   Other furniture and fixtures                            48,845            000
                                                      -----------    -----------
                                                          403,738            000
   Less accumulated depreciation                          304,310            000
                                                      -----------    -----------
                                                           99,428            000
Other assets
   Note receivable from NetForFun                         124,717            000
   Other assets                                            41,282            000
                                                      -----------    -----------

                                                      $   518,370    $       000
                                                      ===========    ===========

LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIENCY)

Current liabilities
   Accounts payable and accrued liabilities           $   348,004    $       000
   Customer account deposits                              373,381            000
   Current maturities of capital lease
      obligations                                          11,264            000
   Deferred compensation                                1,061,050            000
   Due to directors and stockholders                      354,965            000
                                                      -----------    -----------
         Total current liabilities                      2,148,664            000

Stockholders' equity (deficiency)
   Common stock, $.001 par value; authorized,
   200,000,000 shares; issued and outstanding;
   58,388,443 shares at December 31,2001                   58,388            000
   Additional paid-in capital                           2,684,695            000
   Accumulated deficit                                 (4,373,377)           000
                                                      -----------    -----------
                                                       (1,630,294)           000
                                                      -----------    -----------

                                                      $   518,370    $       000
                                                      ===========    ===========

                                        3
<PAGE>

                    Total Entertainment Inc. and Subsidiaries

                      Consolidated Statement of Operations

                     Six months ended June 30, 2002 and 2001
                                   (unaudited)


                                                    June 30,          June 30,
                                                      2001              2002
                                                  ------------      ------------
Income
   Gaming revenues                                $  1,577,309      $        000
   Less: Chargebacks                                        --               000
         Complimentary and bonus                            --               000
                                                  ------------      ------------
Gaming Revenues, net                                 1,577,309               000

Costs and expenses
   Cost of operations                                  807,081               000
   Research and development                             59,014               000
   Selling, general and administrative               1,021,105               000
   Depreciation and amortization                        64,032               000
                                                  ------------      ------------
                                                     1,951,232               000
                                                  ------------      ------------
NET INCOME (LOSS) FOR THE PERIOD                  $   (373,923)     $        000
                                                  ============      ============
Income (loss) per common share
   Basic                                          $       (.01)     $         00
   Diluted                                        $       (.01)     $         00

Weighted-average shares outstanding used
   in computing income (loss) per common
   share

      Basic                                         58,388,443               000
                                                  ============      ============
      Diluted                                       58,388,443               000
                                                  ============      ============

                                        4
<PAGE>

                    Total Entertainment Inc. and Subsidiaries

                      Consolidated Statement of Operations

                    Three months ended June 30, 2002 and 2001
                                   (unaudited)


                                                    June 30,          June 30,
                                                      2001              2002
                                                  ------------      ------------
Income
   Gaming revenues                                $    785,636      $        000
   Less: Chargebacks                                        --               000
         Complimentary and bonus                            --               000
                                                  ------------      ------------
Gaming Revenues, net                                   785,636               000

Costs and expenses
   Cost of operations                                  405,243               000
   Research and development                             15,000               000
   Selling, general and administrative                 421,981               000
   Depreciation and amortization                        34,973               000
                                                  ------------      ------------
                                                       877,197               000
                                                  ------------      ------------
NET INCOME (LOSS) FOR THE PERIOD                  $    (91,561)     $        000
                                                  ============      ============
Income (loss) per common share
   Basic                                          $       (.00)     $         00
   Diluted                                        $       (.00)     $         00

Weighted-average shares outstanding used
   in computing income (loss) per common
   share

      Basic                                         58,388,443               000
                                                  ============      ============
      Diluted                                       58,388,443               000
                                                  ============      ============

                                        5
<PAGE>

                    Total Entertainment Inc. and Subsidiaries

                      Consolidated Statement of Cash Flows

                     Six months ended June 30, 2002 and 2001
                                   (unaudited)


                                                            June 30,    June 30,
                                                              2001        2002
                                                            --------    --------
Cash flows from operating activities
   Net income (loss)                                        (373,923)        000
   Adjustments to reconcile net income (loss) to
      net cash provided by (used in) operating
      activities
         Amortization of deferred licensing fees              22,441         000
         Depreciation and amortization                        64,032         000
         Amortization of prepaid advertising contract        200,000         000
         Deferred compensation                                77,300         000
         Increase (decrease) in cash from changes in
            operating assets and liabilities
               Accounts receivable                            (5,996)        000
               Prepaid expense and other                      43,750         000
               Accounts payable and accrued liabilities      (35,182)        000
               Customer account deposits                     (13,347)        000
                                                            --------    --------
                  Net cash provided by (used in)
                     operating activities                    (20,925)        000

Cash flows from investing activities
   Purchase of computers and equipment                        (3,845)        000
   Payments received on Note Receivable                           --         000
                                                            --------    --------
                  Net cash provided by (used in)
                     investing activities                     (3,845)        000

Cash flows from financing activities
   Principal payments on capital leases                       (9,140)        000
   Advances from (repayments to) directors and
      stockholders, net                                       38,493         000
                                                            --------    --------
         Net cash provided by (used in) financing
            activities                                        29,353         000
                                                            --------    --------

         NET INCREASE (DECREASE) IN CASH                       4,583         000

Cash at beginning of period                                      369         000
                                                            --------    --------

Cash at end of period                                          4,952         000
                                                            ========    ========

                                        6
<PAGE>

                            TOTAL ENTERTAINMENT, INC.
              CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (UNAUDITED)


NOTE A - Summary of Accounting Policies

         The unaudited interim financial statements of Total Entertainment, Inc.
and Subsidiaries (the "Company") have been prepared in accordance with
accounting principles generally accepted in the United States of America and
rules and regulations of the Securities and Exchange Commission for interim
financial information. Accordingly, they do not include all of the information
and footnotes required by generally accepted accounting principles of complete
financial statements.

         In the opinion of the Company's management, the accompanying unaudited
financial statements contain all adjustments (consisting of normal recurring
entries) necessary to present fairly the financial position as of June 30, 2002
and the results of operations for the three and six month periods ended June 30,
2002 and 2001 and cash flows for the six months ended June 30, 2002 and 2001,
respectively.

         The accounting policies followed by the Company are set forth in Note A
of the Company's financial statements as contained in the Form 10-KSB for the
year ended December 31, 2001 filed with the Securities and Exchange Commission.
The Form 10-KSB contains additional data and information with respect to
intangible assets, stock option plans, reserved shares, income taxes,
commitments and contingencies, and other items and is incorporated by reference.

         The results reported for the three and six month periods ended June 30,
2002 are not necessarily indicative of the results of operations which may be
expected for a full year.

NOTE B - NETFORFUN TRANSACTIONS

         When the Company sold its remaining interest in www.slotsvegas.com
website in 2000, we received common stock of Netforfun and a note receivable. In
January 2002 Netforfun was taken over by Spectrafax. The Netforfun common stock
related to sale of www.slotsvegas.com in 2000 was replaced by 1,800,000 shares
of Spectrafax common stock. The Company received approximately $74,000 from the
sale of 1,275,000 shares of Spectrafax during the quarter ended March 31, 2002,
which has been accounted for as a reduction of the note receivable from
Netforfun.

         The Company has not recognized any value of its holdings of Spectrafax
common stock due to the uncertainty of the valuation of the common stock upon
receipt of Netforfun common stock in 2000.

NOTE C - NET INCOME (LOSS) PER COMMON STOCK

         The Company computes earnings (loss) per share in accordance with
Statement of Financial Accounting Standards No. 128 Earnings per Share (SFAS
128) which specifies the compilation, presentation and disclosure requirements
for earnings per share for entities with publicly held common stock or
instruments which are potentially common stock.

                                        7
<PAGE>

         Basic earnings (loss) per common share is determined by dividing the
net income by the weighted average number of shares of common stock outstanding.
Diluted earnings per common share is determined by dividing the net income
(loss) by the weighted number of shares outstanding and dilutive common
equivalent shares from stock options and warrants. In the second quarter of
2001, 69,250,000 options were not included in the loss per share calculation
because their effect was antidilutive.

                                            Six Months Ended    Six Months Ended
                                             June 30, 2001        June 30, 2002
                                              -----------          -----------

Basic Shares                                   58,388,443                  000
                                              ===========          ===========

(Loss) available to
   Common shareholders                           (373,923)                 000

Basic (loss) per share                        $      (.01)         $        00



                                         Three Months Ended   Three Months Ended
                                            June 30, 2001        June 30, 2002
                                             -----------          -----------

Basic Shares                                  58,388,443                  000
                                             ===========          ===========

(Loss) available to
   Common shareholders                           (91,561)                 000

Basic (loss) per share                       $      (.00)         $        00


NOTE D - RELATED PARTY TRANSACTIONS

1.   Deferred Compensation

         Sandy Masselli, together with certain other senior officers and
employees of the Company, have agreed to defer their annual salaries until such
time as determined by the relevant officer, without interest and not funded. The
deferred salaries shall be paid to such persons in cash or stock of the Company
at such future time as each person may elect by written notice to the Company.
The total amount of deferred officer salaries at June 30, 2002 was approximately
$___________. During the quarter ended June 30, 2002, $________ of officers
salaries were paid in cash and $______ was deferred.

2.   Due to Directors and stockholders

         Intercapital Asset Management Inc., an entity which is controlled by
the Company's Chief Executive Officer, was owed a total of $______ by the
Company as at June 30,2002. This amount is included in due to Directors and
Stockholders. The amount advanced bears no interest and has no scheduled
repayment terms.

         From time to time, directors and stockholders of the Company have
directly paid certain Company expenses. Such transactions have been recorded as

                                        8
<PAGE>

due to directors and stockholders, and do not bear interest. There are no
scheduled terms of repayment of such amounts.


NOTE E - COMMITMENTS AND CONTINGENCIES

1.   Legislative Risks and Uncertainties

     The Company and its subsidiaries are subject to applicable laws in the
     jurisdictions in which they operate or offer services. While some
     jurisdictions have attempted to restrict or prohibit Internet gaming, other
     jurisdictions, such as several Caribbean countries, Australia and certain
     native Indian territories, have taken the position that Internet gaming is
     legal and/or have adopted, or are in the process of reviewing, legislation
     to regulate Internet gaming in such jurisdictions. As companies and
     consumers involved in Internet gaming are located around the globe, there
     is uncertainty regarding exactly which government has jurisdiction or
     authority to regulate or legislate with respect to various aspects of the
     industry. Furthermore, it may be difficult to identify or differentiate
     gaming-related transactions from other Internet activities and link those
     transmissions to specific users, in turn making enforcement of legislation
     aimed at restricting Internet gaming activities difficult. The uncertainty
     surrounding the regulation of Internet gaming could have a material adverse
     effect on the Company's business, revenues, operating results and financial
     condition.

     On March 8, 2001, the government of the United Kingdom (UK) announced that
     effective January 1, 2002, the current 6.75% betting duty that is passed
     onto a player, and 9% total betting duty, will be eliminated. The UK
     government believed that this tax reform was necessary for UK companies to
     compete with the offshore market, which already offers bettors duty free
     gambling, and to help regulate the UK bookmaking industry. The reform is
     also intended to bring home major UK bookmakers who have fled to offshore
     tax havens such as Gibraltar, Malta, Antigua and Alderney. A UK government
     issued Bookmakers Permit will be required to accept wagers. Currently, a UK
     based bookmaker may operate an Internet bookmaking site, but must collect
     the betting duty. This reform is expected to make the UK the hub of gaming.
     It is predicted that their official entry into online gaming could put
     pressure on the United States and other entities toward regulating the
     industry. The Company plans to apply for a UK Bookmakers Permit.


     Pending United States Legislation and Other Existing Laws

     Governments in the United States or other jurisdictions may in the future
     adopt legislation that restricts or prohibits Internet gambling. After
     previous similar bills failed to pass in 1998, in November, 1999, the
     United States Senate passed a bill intended to prohibit and criminalize
     Internet gambling (other than certain state regulated industries). A
     similar bill failed to pass the United States House of Representatives.
     There can be no assurance as to whether the Senate bill or any similar bill
     will become law.

     In addition, existing in U.S. Federal statutes and state laws could be
     construed to prohibit or restrict gaming through the use of the Internet,

                                        9
<PAGE>

     and there is a risk that government authorities may view the Company as
     having violated such statutes or laws, notwithstanding the Company's gaming
     licenses issued to Intercapital Global by the governments of Honduras,
     Costa Rica and the Dominican Republic. Several State Attorney Generals and
     court decisions have upheld the applicability of state anti-gambling laws
     to Internet casino companies.

     Accordingly, there is a risk that criminal or civil proceedings could be
     initiated in the United States or other jurisdictions against the Company
     and/or its employees, and such proceedings could involve substantial
     litigation expense, penalties, fines, diversion of the attention of key
     executives, injunctions or other prohibitions being invoked against the
     Company and/or its employees. Such proceedings could have a material
     adverse effect on the Company's business, revenues, operating results and
     financial condition.

     In addition, as electronic commerce further develops, it may generally be
     subject to government regulation. Current laws which pre-date or are
     incompatible with Internet electronic commerce may be enforced in a manner
     that restricts the electronics commerce market. Any such developments could
     have a material adverse effect on the Company's business, revenues,
     operating results and financial condition.

     The Company intends to minimize the potential legal risks by continuing to
     conduct its Internet business from offshore locations that permit online
     gaming and by increasing its marketing efforts in Asia and other foreign
     jurisdictions. There is no assurance, however, that these efforts will be
     successful in mitigating the substantial legal risks and uncertainties
     associated with the Company's internet gaming business.

2.   Litigation

     KNOBLOCK LITIGATION
     -------------------
     Robert W. Knoblock, Carole Knoblock and Jille Knoblock, officers, directors
     and/or principal shareholders of Kit, predecessor to the Company, have
     filed a lawsuit against the Company and certain affiliates. The lawsuit
     arises out of a January 1998 reverse merger between Kit and Mint and
     restrictive legends on certain Company stock certificates issued to the
     Knoblocks in connection with this merger. The Knoblocks claim that they are
     shareholders and that the restrictive legends are improper as a matter of
     law, and that the Company and other defendants are liable to them, under
     different theories, for failure to remove the restrictive legends. Some
     defendants are defendants for purposes of some counts, but not others.
     There is another count raised against defendant S. Masselli only, for
     payment under a $175,000 promissory note, but the Company is not a
     defendant to that claim. Plaintiffs seek more than $5.5 million in damages,
     in addition to prejudgment interest, punitive damages and attorney's fees.
     Defendant Equity Transfer Services, Inc., the Company's stock transfer
     agent, also filed a cross-claim against the Company for defense costs and
     indemnification.

     The Company denies the claims, and has filed a counterclaim. The Company's
     counterclaim is based on a claim that plaintiffs represented that only
     12,000,000 shares were outstanding at the time of the merger, when more
     than 40,000,000 shares were outstanding. The Company seeks $2.7 in damages,
     in addition to prejudgment interest, punitive damages and attorney's fees.
     The facts of the case are not clearly established because discovery has

                                       10
<PAGE>

     been limited. The case stalled when plaintiffs' counsel withdrew and one of
     the plaintiffs died. New counsel appeared last fall. The trial, which was
     set for January 2002, was continued, and no new date has been set. The
     parties have been ordered to mediation, but a date has not been set. A
     summary judgment motion was filed on the promissory note claim against
     defendant S. Masselli, and his response was filed on May 3, 2002. It is
     premature to predict the outcome of this lawsuit.

     DISCOUNT CHARGE CARD LIMITED
     ----------------------------
     Discount Charge Card Limited ("DCC") filed an arbitration proceeding
     against the Company and Intercapital Global in state court in Florida
     alleging breach of contract. In turn, the Company and Intercapital Global
     have filed an action, in state court in Florida, asserting that DCC and
     other parties violated agreements with the Company and Intercapital Global,
     as well as committed fraud. Both matters are currently pending. DCC is
     seeking damages of $400,000 in the arbitration proceeding. The damages
     under the Company's state court counter-claim have not yet been
     ascertained.

     The Company and its subsidiaries are a party to various claims and
     litigation arising in the normal course of conducting its business. The
     Company believes that these matters, taken individually, or in the
     aggregate, would not have a material adverse impact on the Company's
     financial position or results of operations.

     Although the Company's management believes it has meritorious defenses,
     there can be no assurance that the company will prevail. If the Company
     does not prevail, it may have a material adverse impact of the financial
     condition of the Company.

3.   Liquidity

     The accompanying financial statements have been prepared in conformity with
     generally accepted accounting principles, which contemplate continuation of
     the Company as a going concern. We have a deficiency in working capital of
     approximately $_________ as at June 30, 2002. We have also incurred a loss
     from operations in all periods since inception. There are also legislative
     risks and uncertainties regarding online casinos, and certain litigation
     against the Company; the cost of defending such actions could be
     significant. We have financed our operations to date primarily through the
     deferral of officers' salaries, advances made by affiliates, advances made
     by SGL pursuant to a working capital loan agreement, and the proceeds of
     the sale of our Slotsvegas site. These factors raise substantial doubts
     about our ability to continue as a going concern.

     We may seek additional funding through public or private financing or other
     arrangements. Adequate funds may not be available when needed or may not be
     available on terms acceptable to us. If additional funds are raised by
     issuing equity securities, dilution to existing stockholders could result.
     If funding is insufficient at any time in the future, we may be unable to
     develop or enhance our products and services, take advantage of business
     opportunities or respond to competitive pressures, any of which could have
     a material adverse effect on our business, financial condition and results
     of operations.

                                       11
<PAGE>

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

         The following discussion of the financial condition and results of our
operations should be read in conjunction with our financial statements and
related notes appearing elsewhere in this Form 10-QSB and Form 10-KSB for the
year ended December 31, 2001. Except for the historical information contained
herein, the discussion in this Form 10-QSB contains forward-looking statements
that involve risks, uncertainties and assumptions such as statements of our
plans, objectives, expectations and intentions. The cautionary statements made
in this Form 10-QSB should be read as being applicable to all related forward-
looking statements wherever they appear in this document. The actual results,
levels of activity, performance, achievements and prospects could differ
materially from those discussed below. Factors that could cause or contribute to
such differences include those discussed elsewhere in this Form 10-QSB.

Overview

         From 1996 through August 1998, we were considered a development stage
company. On September 12, 1998, we launched the www.theonlinecasino.com Web site
and began generating revenues.

         We have incurred significant losses and negative cash flows from
operations since inception due to the initial research, technology
infrastructure development and starting of our business. Our revenues have not
been sufficient to cover our expenses to date. In order to significantly
increase revenues we will be required to incur significant advertising and
promotional expenses. We anticipate additional revenues to occur in the fall and
winter months, when wagering on professional and college football and, to a
lesser extent basketball, and internet gaming activities as a whole, are
expected to be at their highest levels. In anticipation of an expansion of our
operations, we have been expanding our management personnel. We intend to employ
additional personnel in such areas as sales, technical support and finance.
These actual and proposed increases in personnel will significantly increase our
selling, general and administrative expenses.

         Our limited operating history and the uncertain nature of the markets
we address or intend to address make prediction of our future results of
operations difficult. Our operations may never generate significant revenues,
and we may never achieve profitable operations. Our quarterly and annual
operating results are likely to fluctuate significantly in the future due to a
variety of factors, including the seasonal effects of the Sportsbook operation,
many of which are outside our control.

         A decision last quarter by a majority of major U.S.-based banks to
restrict the use of their credit cards for Internet gaming had a significant
impact on the industry and the Company.

Results of Operations

         Revenues. Gaming revenues in the quarter ended June 30, 2002 were
approximately $_______. Our revenues are recognized upon completion of the
sporting event or game of chance. Sporting event revenues have a strong
seasonality towards U.S. professional and college football and basketball
seasons in the fall and winter months.

                                       12
<PAGE>

         Cost of Operations. Cost of operations consists primarily of software
licensing and maintenance costs, royalty payments, credit card processing fees,
and internet service provider costs. For the quarter ended June 30, 2002 such
cost amounted to $________.

         Research and Development Expenses. Research and development expenses
consist principally of costs associated with the development and implementation
of the Web sites, developing a methodology for online gaming and investigating
the development of certain software products. Total expenses in the quarter
ended June 30, 2001 was approximately $______.

         General and Administrative Expenses. General and administrative
expenses consist primarily of salary costs, telecommunication, travel and other
administrative costs including professional service fees. Total general and
administrative expenses for the three months ended June 30, 2002 were
approximately $_______.

         Depreciation and Amortization. Depreciation and amortization expenses
consist primarily of the depreciation of furniture and in-house computers,
servers and telecommunications equipment. Total depreciation and amortization
expense was approximately $_________ for the quarter ended June 30, 2002.

         Income Taxes. We have incurred net losses for each period from
inception through 1999 and recorded a modest profit in 2000. Since we have not
yet filed our 1996 through 2001 tax returns for Mint and affiliates and Total
Entertainment Inc., losses generated in prior years may not be available. We are
expecting to file such tax returns in the near future, which could yield
approximately $2,000,000 of net operating loss carry forwards as of December 31,
2000 for United States federal income tax purposes, which will expire in the
year 2018. Due to the uncertainty of obtaining such benefits and of future
profitability, a valuation allowance equal to the deferred tax assets has been
recorded for such carry forwards. Changes in ownership resulting from
transactions among our stockholders and sales of common stock by us, may limit
the future annual realization of the tax net operating loss carry forwards under
Section 382 of the Internal Revenue Code of 1986.

Critical Accounting Policies

         REVENUE RECOGNITION. Gaming revenues are recognized when the sporting
event or game of chance has been completed. Credit card deposits held by the
Company for individual customers are recorded as customer account deposits until
earned by the Company or returned to the customer. Gaming revenues are presented
on a net basis (i.e., net of customer winnings).

Liquidity and Capital Resources.

         The accompanying financial statements have been prepared in conformity
with generally accepted accounting principles, which contemplate continuation of
the Company as a going concern. We have a deficiency in working capital of
approximately $_________ as at June 30, 2002. We have also incurred a loss from
operations in all periods since inception. There are also legislative risks and
uncertainties regarding online casinos, and certain litigation against the
Company; the cost of defending such actions could be significant. We have
financed our operations to over the past year primarily through the deferral of
officers' salaries, advances made by affiliates, and the proceeds of the sale of
our Slotsvegas site (including our Spectrafax stock). Due to our limited cash
balances, we expect to have to continue these financing methods. These factors
raise substantial doubt about our ability to continue as a going concern.

                                       13
<PAGE>

         Net cash provided by (used in) operating activities was approximately
$________and ($21,000) for the quarters ended June 30, 2002 and 2001.

         During the first quarter of 2002, we borrowed funds totaling $82,000
from directors and stockholders to fund our operations under short-term advances
without fixed repayment terms. Repayments on these advances totaled
approximately $25,000 for in the first quarter of 2002. We also received
approximately $74,000 from the sale of Spectrafax stock in the first quarter of
2002.

         Our material capital commitments consist of obligations under
facilities and operating leases. We anticipate that we will experience an
increase in our capital expenditures and lease commitments consistent with our
anticipated growth in operations, infrastructure and personnel. We anticipate
devoting additional resources to building the strength of our brand name,
through increased marketing and sales efforts. We have used our common stock
where possible to obtain required products and services without using cash.

         We may seek additional funding through public or private financing or
other arrangements. Adequate funds may not be available when needed or may not
be available on terms acceptable to us. If additional funds are raised by
issuing equity securities, dilution to existing stockholders could result. If
funding is insufficient at any time in the future, we may be unable to develop
or enhance our products and services, take advantage of business opportunities
or respond to competitive pressures, any of which could have a material adverse
effect on our business, financial condition and results of operations.


                            PART II-OTHER INFORMATION

Item 1.  Legal Proceedings

         Please refer to Item 3, of the Condensed Notes to Consolidated
Financial Statements and the Company's report on Form 10-KSB for the year ended
December 31,2001 for a description of the material legal proceedings in which
the Company is involved.

Item 2.  Changes in Securities and Use of Proceeds

         NOT APPLICABLE

Item 3.  Defaults upon Senior Securities

         NOT APPLICABLE

Item 4.  Submission of Matters to a Vote of Security Holders

         NOT APPLICABLE

Item 5.  Other Information

         NOT APPLICABLE

                                       14
<PAGE>

Item 6.  Exhibits and Reports on Form 8-K

         (a) Exhibits

         3.1      Certificate of Incorporation and amendments*
         3.2      Bylaws
         10.1     Merger Agreement dated November 17, 1997 entered into between
                  Mint Energy Corporation and Kit Farms Inc., as amended by the
                  First Amendment thereto dated January 15, 1998, and Plan of
                  Merger/Exchange dated January 23, 1998*
         10.2     License Agreements dated April 9, 1999 and June 23, 1999
                  between Intercapital Global Fund, Ltd. and Online Gaming
                  Systems, Ltd (f/k/a. Atlantic International Entertainment,
                  Ltd.), and related Software Support Maintenance Agreements*
         10.3     Amended and Restated Purchase Agreement dated May 5, 1999
                  between Intercapital Global Fund, Ltd. and Summerhill Gaming
                  Limited*
         10.4     Agreement dated August 18, 1998 between Intercapital Global
                  Fund, Ltd. and MPACT Immedia Transaction Services Ltd.*
         10.5     Equipment Lease Agreement dated August 18, 1999 between Total
                  Entertainment Canada, Ltd. (formerly Intercapital Canada Ltd.)
                  and Dell Financial Services Canada Limited*
         10.6     Lease Agreement dated June 22, 1999 between Marine Properties
                  Ltd., as Landlord, and Total Entertainment Canada, Ltd.
                  (formerly Intercapital Canada Ltd.), as Tenant*
         10.7     Lease Agreement dated July 30, 1999 between Devonshire House,
                  Ltd., as Landlord, and Intercapital Global Fund, Ltd., as
                  Tenant*
         10.8     Revolving Credit Note dated May 5, 1999 payable to Summerhill
                  Gaming Limited*
         10.9     Marketing and License Agreement dated January 14, 2000 between
                  Intercapital Global and Online Gaming Systems, Ltd.**
         10.10    Information Services Provider Agreement dated February 1, 2000
                  between Intercapital Global and Caribbean Entertainment
                  International, S.A.**
         10.11    Purchase Agreement dated March 1, 2000 between Intercapital
                  Global and Netforfun.com Inc., and related Software Support
                  Maintenance Agreement**
         10.12    Agreement with Summerhill Gaming Limited dated March 24, 2000
                  regarding debt to equity conversion**
         10.13    Agreement with Discount Charge Card, Ltd. dated June 13, 2000
                  regarding provision of advertising media and related
                  cross-guaranty of parent companies***
         10.14    Agreement with Northstar Advertising, Inc. regarding provision
                  of public relations services***


* Incorporated by reference from the Company's Form 10-SB Registration Statement
dated December 14, 1999.
** Incorporated by reference from the Company's Form 10-KSB Annual Report for
the year ended December 31, 1999.
*** Incorporated by reference from the Company's Form 10-KSB Annual Report for
the year ended December 31, 2000.

         (c) No reports on Form 8-K were filed during the quarter for which this
report is filed.

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<PAGE>

                                   SIGNATURES

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

                                       TOTAL ENTERTAINMENT INC.




Signature                                   Title                     Date
---------                                   -----                     ----

/s/ SANDY J. MASSELLI, JR.     Chairman of the Board, Chief      August 19, 2002
--------------------------     Executive Officer and Director
Sandy J. Masselli, Jr.,

/s/ MITCHELL BROWN             President, Chief Operating        August 19, 2002
--------------------------     Officer and Director
Mitchell Brown

/s/ T.R. ANTHONY MALCOM        Director                          August 19,2002
--------------------------
T.R. Anthony Malcom

/s/ ROBERT D. BONNELL          Director                          August 19, 2002
--------------------------
Robert D. Bonnell

/s/ RICHARD B. DAVIS           Director                          August 19, 2002
--------------------------
Richard B. Davis

/s/ JOHN J. MASSELLI           Director                          August 19, 2002
--------------------------
John J. Masselli

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