FORM 10-QSB


                  SECURITIES AND EXCHANGE COMMISSION
                        Washington, D.C. 20549
                                   

(X)    QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE
       SECURITIES EXCHANGE ACT OF 1934

       For the quarterly period ended December 31, 1998

       Commission file number 0-22450

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

       For the transition period from                to                

       For quarter ended                 Commission File Number               
     

                     COUNTRY WORLD CASINOS, INC.
            (Name of Small Business Issuer in its charter)

          Nevada                                  13-3140389     
(State of jurisdiction of incorporation)  (IRS Employer I.D. Number)


     200 Monument Road, Suite 10, Bala Cynwyd, Pennsylvania 19004
               (Address of principal executive offices)

Registrant's telephone number  (610) 617-9990

     Check whether the registrant (1) has filed all reports required to be
filed by Sections 13 or 15(d) of the Securities Exchange Act during the
past 12 months (or for such shorter period as 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 ___

Indicate the number of shares outstanding of each of the issuer's class of
common stock.  The Registrant had 54,331,687 shares of its common stock
outstanding as of December 31, 1998.

<PAGE>

COUNTRY WORLD CASINOS, INC.
(A DEVELOPMENT STAGE COMPANY)

INDEX

Part I:   FINANCIAL INFORMATION

Item 1.   Financial Statements

       Balance Sheet as of December 31, 1998 (Unaudited) . . . . . . 1

       Statements of Operations for the six months ended
        December 31, 1998 and 1997 and for the period from
        November 9, 1982 (Date of Inception) through December
        31, 1998 (Unaudited) . . . . . . . . . . . . . . . . . . . . 3

       Statements of Stockholders' Equity (Unaudited). . . . . . . . 4

Item 2. Management's Discussion and Analysis or Plan of Operation. . 8

Part II:  OTHER INFORMATION

Item 1. Legal Proceedings . . . . . . . . . . . . . . . . . . . . . 11

Item 3. Defaults upon Senior Securities . . . . . . . . . . . . . . 11

Item 6. Exhibits and Reports on Form 8-K. . . . . . . . . . . . . . 11


Signature Page. . . . . . . . . . . . . . . . . . . . . . . . . . . 12

<PAGE>

COUNTRY WORLD CASINOS, INC.
(A DEVELOPMENT STAGE COMPANY)
BALANCE SHEET AS OF DECEMBER 31, 1998 (UNAUDITED)


ASSETS:
CURRENT ASSETS:
 Cash                                              $       611
 Prepaid Interest                                       61,290
 Prepaid Expense                                        15,000
 Due From Parent                                        13,283
 Due From Officers                                      93,000

 TOTAL CURRENT ASSETS                                  183,184
 

PROPERTY AND EQUIPMENT: 
 Land                                                6,750,475
 Casino Under Development                           10,741,820
 Furniture and Fixtures                                 38,888

 Total                                              17,531,183
 Less Accumulated Depreciation                          23,355

 TOTAL PROPERTY AND EQUIPMENT                       17,554,538


OTHER ASSETS
 Deposits                                               35,630

 TOTAL ASSETS                                     $ 17,773,352

See Notes to Financial Statements 

                                     1
<PAGE>

COUNTRY WORLD CASINOS, INC.
(A DEVELOPMENT STAGE COMPANY)
BALANCE SHEET AS OF DECEMBER 31, 1998 (UNAUDITED)


LIABILITIES AND STOCKHOLDERS' EQUITY:
CURRENT LIABILITIES:
 Accounts Payable                                 $  3,504,331
 Payroll and Property Taxes Payable                    158,711
 Accrued Expenses                                       21,600
 Notes Payable                                       3,128,256
 Accrued Interest                                      470,733
 Other Current Liabilities                              33,455

 TOTAL CURRENT LIABILITIES                           7,317,086

LONG-TERM LIABILITIES:

   TOTAL LONG-TERM LIABILITIES                       5,000,000

STOCKHOLDERS' EQUITY:
 Convertible Preferred Stock.  Series A. $.001
   Par Value                                         2,250,000
  Shares Authorized,  2,250,000 Shares Issued
   and Outstanding (Liquidation Preference
   $7,492,500)                                           2,250

 Common Stock, $.001 Par Value, 75,000,000
   Shares Authorized, 54,331,687 Issued and
   Outstanding                                          54,331

 Convertible Preferred Stock, Class B, $.25 Par
  Value, 5,000,000 Shares Authorized, 1,100,000
  Shares Issued and Outstanding                        275,000

 Additional Paid-in Capital                         11,176,474

 Deficit Accumulated During the Development Stage   (6,051,789)

 TOTAL STOCKHOLDERS' EQUITY                          5,456,266

 TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY     $   17,773,352

See Notes to Financial Statements

                                     2
<PAGE>

COUNTRY WORLD CASINOS, INC.
(A DEVELOPMENT STAGE COMPANY)

STATEMENTS OF OPERATIONS (UNAUDITED)


                                                           FOR THE PERIOD FROM
                                                             NOVEMBER 9, 1982
                                                           (DATE OF INCEPTION)
                                           SIX MONTHS ENDED      THROUGH
                                             DECEMBER 31,      DECEMBER 31,
                                           1998       1997         1998

COSTS AND EXPENSES:
 Research and Development Costs           $          $           $122,000 
 Professional Fees - Due to Bankruptcy                 23,083     514,756 
 Management Fee - Related Party            442,013    551,769   4,761,315     
 General and Administrative Expenses                              416,321 
 Depreciation                                           3,162      50,419 

 TOTALS                                    442,013    554,931   5,864,811 

OTHER INCOME (EXPENSE):
 Interest Income                                       14,678     109,490 
 Interest Expense                          (63,570)   (63,746)    (67,780)
 Interest Expense - Related Party                                (199,019)
 Rental Income                                                     45,126 
 Loss on Non-Marketable Securities                                (85,000)
 Write off Loan Receivable                                        (90,000)
 Forfeited Deposit                                               (100,000)
 Other Income                                                         735 

 TOTALS                                    (63,570)  (49,068)    (386,448)

 (Loss) from Continuing Operations
   Before Discontinued Operations
   and Extraordinary Item                 (505,583)             5,997,594

DISCONTINUED OPERATIONS:
 Gain on Disposal of Subsidiaries                                 389,286  
 (Loss from Discontinued Operations                              (389,286)

 Total Discontinued Operations                                     
 
 (LOSS)  BEFORE EXTRAORDINARY ITEM        (505,583) (627,082)  (6,251,259)

 EXTRAORDINARY ITEM:
 Extraordinary Gain on Forgiveness of Debt                        199,470

 NET (LOSS)                              $(505,583)$(627,082) $(6,051,789)

PER SHARE DATA:
 Net (Loss) Per Common Share                $(0.02)   $(0.05)


WEIGHTED AVERAGE NUMBER OF SHARES       20,365,771 13,305,310  
 
See Notes to Financial Statements

                                     3
<PAGE>

<TABLE>
COUNTRY WORLD CASINOS, INC.
(A DEVELOPMENT STAGE COMPANY)
STATEMENT OF STOCKHOLDERS' EQUITY

                                                                                                         Deficit
                                                                                                         Accumulated   Total
                               Preferred Stock                      Common Stock             Additional  During the    Stock-
                         Series A           Series B                          Subscribed      Paid-In    Development   holders'
                      Shares  Amount    Shares  Amount    Shares  Amount    Shares  Amount    Capital      Stage       Equity
<S>                      <C>     <C>       <C>     <C>       <C>     <C>       <C>     <C>         <C>          <C>         <C>
,
November 9, 1982 (Date
 of Inception)            --   $  --        --   $  --        --   $  --        --   $  --   $      --    $      --     $    --  

Issuance of Shares for
 Cash ($.51 Per Share)    --      --        --      --     2,971      15        --      --       1,510           --       1,525 
 
Issuance of Common
 Stock to the Public
 ($12.50 Per Share)       --      --        --      --     1,474       8        --      --     644,992           --     645,000 

Deferred Offering Costs   --      --        --      --        --      --        --      --    (115,690)          --    (115,690)

Cancellation of Common
 Stock                    --      --        --      --      (800)     (4)       --      --           4           --          -- 

Issuance of Shares for
  Services ($.18 Per
 Share)                   --      --        --      --    85,714     429        --      --      14,571           --      15,000 

Issuance of Common Stock
 at a Discount ($.02 Per
 Share)                   --      --        --      -- 1,339,212   6,696        --      --      13,304           --      20,000 

Capital Contribution      --      --        --      --        --      --        --      --       2,850           --       2,850 

Net Loss for the Period
 From November 9, 1982
 (Date of Inception)
 Through June 30, 1992    --      --        --      --        --      --        --      --          --     (221,169)   (221,169)

 Balance - June 30, 1992  --      --        --      -- 1,428,571   7,144        --      --     561,541     (221,169)    347,516 

Issuance of Common Stock
 at a Discount for
 Services ($.02 Per
 Share, May 1993          --      --        --      --   714,287   3,571        --      --       8,929           --      12,500 

Net Loss for Year Ended
 June 30, 1993            --      --        --      --        --      --        --      --          --     (373,401)   (373,401)

 Balance - June 30, 
  1993 - Forward          --   $  --        --   $  -- 2,142,858 $10,715        --   $  --    $570,470    $(594,570)   $(13,385)


See Notes to Financial Statements
</TABLE>

                                     4
<PAGE>
<TABLE>
COUNTRY WORLD CASINOS, INC.
(A DEVELOPMENT STAGE COMPANY)
STATEMENT OF STOCKHOLDERS' EQUITY

                                                                                                         Deficit
                                                                                                         Accumulated   Total
                               Preferred Stock                      Common Stock             Additional  During the    Stock-
                         Series A           Series B                          Subscribed      Paid-In    Development   holders'
                      Shares  Amount    Shares  Amount    Shares  Amount    Shares  Amount    Capital      Stage       Equity
<S>                      <C>     <C>       <C>     <C>       <C>     <C>       <C>     <C>         <C>          <C>         <C>

 Balance - June 30, 
  1993 - Forward          --   $  --       --    $  -- 2,142,858 $10,715        --   $  --    $570,470    $(594,570)   $(13,385)

Change in Par Value
 from $.005 to $.001      --      --       --       --        --  (8,572)       --      --       8,572           --          --  

Issuance of Shares for
 Cash September 1993
 ($1.00 Per Share)        --      --       --       --   600,000     600        --      --     599,400           --     600,000 
 
Issuance of Shares for
 Cash September 1993
 ($1.00 per Share         --      --       --       -- 1,500,000   1,500        --      --   1,498,500           --   1,500,000 

Issuance of Convertible
 Preferred Stock for
 Acquisition of Land
 Valued at $1.00 Per
 Share Issued July
 1993              2,250,000   2,250       --       --        --      --        --      --   2,247,750           --   2,250,000 

Issuance of Stock to
 Related Party for
 Cash and Services
 Pursuit to Exercise
 of Options ($1.00
 Per Share)               --      --       --       --   250,000     250        --      --     249,750           --     250,000 

Purchase and Cancellation
 of Treasury Stock ($1.00
 Per Share                --      --       --       --  (125,000)   (125)       --      --    (124,875)          --    (125,000)

Issuance of Stock for
 Cash (140,000 Shares
 and 60,662 Shares
 Issued December 1993
 and January 1994,
 Respectively) at
 $2.50 Per Share          --      --       --       --   200,000     200        --      --     499,800           --     500,000 

Balance of Common Stock
 for Acquisition of
 Land Valued at $1.00
 Per Share Issued June
 1994                     --      --       --       --   250,000     250        --      --     249,750           --     250,000 

Issuance of Common Stock
 for Cash and Services
 Pursuant to Exercise of
 Options (75,000 Shares
 and 20,000 Shares Issued
 April and June 1994
 Respectively at $2.50
 Per Share)               --      --       --       --    95,000      95        --      --     237,405           --     237,500 

Issuance of Common Stock
 for Services Rendered
 Valued at $2.50 Per
 Share Issued April 1994  --      --       --       --   200,000     200        --      --     499,800           --     500,000 

Subscription of Common
 Stock Pursuant to
 Private Placement
 Offering ($3.00 Per
 Share)                   --      --       --       --        --      --   262,667     263     787,737           --      788,000 

Net Loss for Year Ended
 June 30, 1994            --      --       --       --        --      --        --      --          --   (1,490,785)  (1,490,785)

Balance - June 30,
 1994 - Forward    2,250,000  $2,250       --     $ -- 5,113,520  $5,113   262,667    $263  $7,324,059  $(2,085,355)  $5,246,330  

See Notes to Financial Statements
</TABLE>
                                     5
<PAGE>
<TABLE>
COUNTRY WORLD CASINOS, INC.
(A DEVELOPMENT STAGE COMPANY)
STATEMENT OF STOCKHOLDERS' EQUITY

                                                                                                         Deficit
                                                                                                         Accumulated   Total
                               Preferred Stock                      Common Stock             Additional  During the    Stock-
                         Series A           Series B                          Subscribed      Paid-In    Development   holders'
                      Shares  Amount    Shares  Amount    Shares  Amount    Shares  Amount    Capital      Stage       Equity
<S>                      <C>     <C>       <C>     <C>       <C>     <C>       <C>     <C>         <C>          <C>         <C>

Balance - June 30,
 1994 - Forward    2,250,000  $2,250       --     $ -- 5,113,520  $5,113   262,667    $263  $7,324,059  $(2,085,355)  $5,246,330  

Issuance of Common
 Stock Pursuant to
 Private Placement
 Offering ($2.67
 Per Share)               --      --       --       --   460,000     460        --      --   1,229,040           --    1,229,500 
 
Issuance of Stock
 for Outstanding
 Note Issued April
 20, 1995 ($.20 Per
 Share)                   --      --       --       -- 5,000,000   5,000        --      --   1,009,451           --    1,014,451

Convert Subscribed
 Stock to Common and
 Record Fees              --      --       --       --   262,667     263  (262,667)   (263)         --           --           --

Net Loss for Year
 Ended June 30, 1995      --      --       --       --        --      --        --      --          --     (757,659)    (757,659)

Balance - June 30,
 1995              2,250,000  $2,250       --       --10,836,187  10,836        --      --   9,562,550   (2,843,014)   6,732,622

Net Loss for Year
 Ended June 30,
 1996                     --      --       --       --        --      --        --      --          --     (416,440)    (416,440)

Balance - June 30,
 1996              2,250,000  $2,250       --       --10,836,187  10,836        --      --   9,562,550   (3,259,454)   6,316,182 

Issuance of Preferred
 Stock - Class B in
 Exchange for Related
 Party Debt ($.25 Per
 Share) April 1997        --     -- 4,000,000 1,000,000       --      --        --      --          --           --    1,000,000

Common Stock Issued in
 Exchange for Debt ($.25
 Per Share) April 1997    --     --        --        -- 1,250,000  1,250        --      --     248,750           --      250,000 

Warrants Issued for
 1,000,000 Shares of
 Common Stock in
 Connection with
 Norlar, Inc. Debt
 Financing ($.06 Per
 Warrant                  --     --        --        --       --      --        --      --      60,000           --       60,000 

Net Loss for Year
 Ended June 30, 1997      --     --        --        --       --      --        --      --          --   (1,080,391)  (1,080,391)

Balance - June 30,
 1997              2,250,000  2,250 4,000,000 1,000,000 12,086,187 12,086       --      --   9,871,300   (4,339,845)   6,545,791

Issuance of Common
 Stock for Services
 Rendered Valued at
 $.20 per Share, July
 1997                     --      --       --       -- 1,000,000   1,000        --      --     199,999           --      200,000 

Issuance of Common Stock
 in Exchange for Debt
 and Services to be
 Rendered ($.1875 Per
 Share) September 1997    --      --       --       --   395,500     396        --      --      73,761           --       74,157

Issuance of Common Stock
 for Services Rendered
 and Debt Exchange
 ($0.86 Per Share)
 March 1998               --      --       --       --    85,000     850        --      --      72,413           --       72,263
</TABLE>
                                     6
<PAGE>
<TABLE>
COUNTRY WORLD CASINOS, INC.
(A DEVELOPMENT STAGE COMPANY)
STATEMENT OF STOCKHOLDERS' EQUITY

                                                                                                         Deficit
                                                                                                         Accumulated   Total
                               Preferred Stock                      Common Stock             Additional  During the    Stock-
                         Series A           Series B                          Subscribed      Paid-In    Development   holders'
                      Shares  Amount    Shares  Amount    Shares  Amount    Shares  Amount    Capital      Stage       Equity
<S>                      <C>     <C>       <C>     <C>       <C>     <C>       <C>     <C>         <C>          <C>         <C>
Convert Preferred to
 Common Stock April
 1998                     --      --(4,000,000)(1,000,000)40,000,000 40,000     --      --     960,000           --           -- 

Issuance of Stock for
 Services April 1998      --      --  100,000   25,000        --      --        --      --          --           --       25,000

Net Loss for the Year 
 Ended June 30, 1998      --      --       --       --        --      --        --      --          --   (1,238,679)  (1,238,679)

Balance - June 30,
 1998              2,250,000  $2,250  100,000  $25,000 53,566,687 $54,332       --    $ -- $11,176,474  $(5,578,524)  $5,653,532

Common Stock issued
 in Exchange for Debt
 ($.25 per Share)
 October 1998             --      --1,000,000  250,000        --      --        --      --          --           --           --

Net Loss for the Six
 Months Ended
 December 31, 1998        --      --       --       --        --      --        --      --          --     (505,583)    (505,583)


Balance - December
 31, 1998          2,250,000   2,250 1,100,000 275,000 53,566,687 54,332        --      --  11,176,474   (6,051,789)   5,456,266

See Notes to Financial Statements
</TABLE>
                                     7
<PAGE>

COUNTRY WORLD CASINOS, INC.
(A DEVELOPMENT STAGE COMPANY)

ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION

CERTAIN STATEMENTS INCLUDED HEREIN OR INCORPORATED BY REFERENCE CONSTITUTE 
"FORWARD-LOOKING STATEMENTS" WITHIN THE MEANING OF THE PRIVATE SECURITIES 
LITIGATION REFORM ACT OF 1995 (THE "REFORM ACT").  THE COMPANY DESIRES TO TAKE 
ADVANTAGE OF CERTAIN "SAFE HARBOR" PROVISIONS OF THE REFORM ACT AND IS 
INCLUDING THIS SPECIAL NOTE TO ENABLE THE COMPANY TO DO SO.  FORWARD-LOOKING 
STATEMENTS INCLUDED OR INCORPORATED BY REFERENCE IN THIS PART INVOLVE KNOWN 
AND UNKNOWN RISKS, UNCERTAINTIES AND OTHER FACTORS WHICH WOULD CAUSE THE 
COMPANY'S ACTUAL RESULTS, PERFORMANCE (FINANCIAL OR OPERATING) OR ACHIEVEMENTS 
TO DIFFER MATERIALLY FROM THE FUTURE RESULTS, PERFORMANCE (FINANCIAL OR 
OPERATING) OR ACHIEVEMENTS EXPRESSED OR IMPLIED BY SUCH FORWARD LOOKING 
STATEMENTS.

     Since the Company's purchase of the Black Hawk Property in August 1993, 
the Company's activities have focused on obtaining the necessary financing and 
making preparations for construction of the casino on the Property.  In July 
1997, the Company signed a financing agreement with U2 Consulting, LLC., an 
affiliate of Pacific Genesis, Inc. and Western Equities, Inc., to raise $79.5 
million through the issuance of corporate bonds.  The parties had 180 days to 
provide for the financing, were unable to complete same and said agreement 
with U2 Consulting was terminated in December 1997.

     In January 1998, the Company again began the process of acquiring 
financing. After much discussion and many contacts with a wide range of 
financing groups, the Company has entered into three separate agreements to 
provide the necessary financing.  Although the Company is confident in the 
abilities of these three organizations to provide the necessary capital, there 
can be no assurance that any funds will be provided immediately or in the 
future.

     Each of the three agreements, which are strictly confidential until 
completed, obligates the respective parties to provide at least $80 million 
for the development and construction of the project.  Each agreement provides 
for distinctly different means of raising the required funds, as well as 
distinctly different means of repayment and different levels of equity 
participation.

     Once financed, the Company's ability to operate the casino will be 
dependent upon substantial other conditions, including the obtaining of 
licenses and compliance with governmental regulations, grading and 
construction of the casino, obtaining the necessary permits and approvals from 
the City of Black Hawk and other regulatory bodies, procuring gaming equipment 
on satisfactory terms, and accomplishing these objectives in a timely manner.

     In order to begin the process of timely completing its goals, in July 
1997 the Company  contracted with Colorado Gaming Development Company, Inc., 
Semple Brown Roberts, P.C. and PCL Construction Services, Inc., all of Denver, 
Colorado to design and construct the planned casino and hotel complex.  In 
addition, the Company signed a management agreement with Signature Hospitality 
Resources, Inc. of Denver, Colorado to manage its Radisson Black Hawk Hotel, a 
separate agreement to use the national flag of Radisson on the hotel and a 
contract with Luciani & Associates, LLC of Atlantic City, New Jersey, to 
manage the casino operations.  All parties assisted the architect in design of 
their respective operations.  The Agreement with Luciani & Associates, LLC has 
expired and they advised the Company of such in writing in February 1998.  
Once financing has been secured, the Company will attempt to negotiate a new 
agreement, either with Luciani & Associates or others yet be determined.

     The Company is engaged in the design, development and construction of the 
Radisson Hotel and Country World Casino (the "Hotel Casino") in Black Hawk, 
Colorado.  The revised plan for the  Hotel Casino will be an eight level 
complex, featuring three stories of hotel rooms above a two-story, 75,000 
square foot casino, and a three story parking garage.  Other amenities will 
include one or more full service restaurants, a buffet, entertainment lounge 
and retail shops.  When completed as planned, the Hotel Casino will be

                                     8
<PAGE>

COUNTRY WORLD CASINOS, INC.
(A DEVELOPMENT STAGE COMPANY)

largest hotel and casino complex in Colorado.  Construction and opening of the 
Hotel Casino is dependent upon the Company's ability to successfully raise the 
required capital discussed above.

     The casino level of the project, at approximately 75,000 square feet, 
will be the largest in Colorado and will be capable of accommodating 1,800 
slot machines and 32 gaming tables.  The Company will open the facility with 
1,000 slot machines, 20 blackjack tables and 12 poker tables, and may add up 
to 800 additional slot machines if management determines that the additional 
gaming devices will produce equal per square foot revenue and will not create 
excess capacity.  The Company expects that slot machines will be the greatest 
source of its gaming revenues.  Slot machines are less labor intensive and 
require less square footage than table games, and also generate higher profit 
margins. 

     The Country World Casino's atmosphere will feature a country western 
music theme similar to the rock and roll music theme successfully employed by 
the Hard Rock Cafe.  The Casino decor is planned to include memorabilia from 
the great country singers, both past and present.  The country western theme 
has not been established in the Black Hawk/Central City, Colorado gaming 
market, and therefore will give the Country World Casino its own unique 
identity.  Management believes that as casinos have become more numerous, the 
gaming industry has begun to recognize that popular themes and amenities such 
as quality dining and hotel accommodations play an important role in 
attracting customers to casinos.  The theme is intended to appeal to the Hotel 
Casino's target customer base, which consists primarily of residents of the 
Denver metropolitan area as well as other Colorado communities located within 
driving distance of Black Hawk.

     The Hotel will provide overnight accommodations with 200 +/- rooms and  
suites, making it one of the first destination resort of its kind in Black 
Hawk.  Complimenting both the casino and hotel will be a three story 
underground parking facility for approximately 1,000 cars featuring both valet 
and self parking options, and the only covered on-site bus turnaround 
currently available in Black Hawk for the convenience of day trip customers.

Liquidity & Capital Resources

     The Company's ability to obtain the financing and to proceed with its 
plans for a gaming facility had been affected by the Company's disputes with 
New Allied, which had culminated in litigation and foreclosure proceedings on 
the Property in 1995, and the Company's filing of a bankruptcy petition under 
Chapter 11.  The Bankruptcy Case was dismissed in March 1997 and Summary 
Judgement was granted in favor of the Company with regard to all other 
litigation issues in October 1998.

     In March 1996, the Company borrowed $5 million from Kennedy Funding, 
Inc.  The Company issued a Promissory Note effective May 20, 1996 payable at 
the rate of 15% per annum until May 19, 1997 (the "First Year Interest 
Obligation") and at a rate of 24% per annum thereafter.  Payments of principal 
and interest are payable as follows: (a) the First Year Interest Obligation 
was prepaid at closing; (b) commencing on May 19, 1997 and for each month 
thereafter, the Company is to make interest only payments, in advance, in the 
amount of 2% of the then existing principal balance due under the Note; and 
(c) the entire outstanding principal balance, together with all accrued and 
unpaid interest, if not previously paid, shall be finally due and payable on 
May 19, 1999.  The holder of the Note may accelerate the due date for the 
entire balance of principal, interest and other sums due upon maturity in the 
event of default under the Note.  The default rate of interest is 24% during 
the first loan year and 36% thereafter.  The Note is secured by a first deed 
of trust on the Property.

     In May 1997, the Company issued a promissory note and second deed of 
trust on the property to Norlar, Inc. for a maximum of $600,000 (First Norlar 
Note), or so much thereof as may have been advanced by maker, for payments due 
on the Kennedy loan and for general corporate purposes.  As of December 1998, 

                                     9
<PAGE>

COUNTRY WORLD CASINOS, INC.
(A DEVELOPMENT STAGE COMPANY)

the Company owed $600,000 on the First Norlar Note.  In October 1997, the 
Company issued a second promissory note (Second Norlar Note) and a fourth deed 
of trust on the property to Norlar, Inc., again for a maximum of $600,000.  As 
of December 1998, the Company owed $600,000 on the Second Norlar Note.  In 
April 1998, the Company issued a third promissory note (Third Norlar Note) and 
fifth deed of trust on the property to Norlar, Inc. again for a maximum of 
$600,000.  As of December 1998, the Company owed $600,000 on the Third Norlar 
Note.  In August 1998, the Company issued a fourth promissory note (Fourth 
Norlar Note) and sixth deed of trust on the property to Norlar, Inc. again for 
$600,000.  As of December 1998, the Company owed $555,184 on the Fourth Norlar 
note.  In addition, for each $100,000 Norlar, Inc. has loaned to the Company, 
it has authorized the issuance of 500,000 warrants to purchase shares of 
common stock at $0.20 per share.  Norlar, Inc. is a closely-held corporation 
beneficially owned by Larry Berman and his wife.  Mr. Berman is Chairman and 
Chief Executive Officer of the Company. The loans bear interest at 12% per 
annum and is to be repaid upon the earlier of the sale of the property, 
refinance of the property or the financing of the project.

In July 1998, the Company settled an ongoing dispute with New Allied 
Development Corporation with regard to a piece of property outside the gaming 
district in Black Hawk, Colorado.  Title to such property was returned to New 
Allied, therefore reducing the Company's debt by $750,000, plus applicable 
interest and taxes due.
     
In October 1998, the Company converted $250,000 of debt to the Company's 
officers into Series B preferred stock.

Results of Operations

     The Company has had no revenues from operations.  The Company continues 
to incur losses of approximately $125,000 per month to service the Kennedy 
Funding Note and other ongoing obligations such as rent and utilities for the 
Company's corporate office.  The ability of the Company to achieve revenues in 
the future will be dependent upon realization of its plans to develop a gaming 
and hotel complex on the property.

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COUNTRY WORLD CASINOS, INC.
(A DEVELOPMENT STAGE COMPANY)

PART II.   OTHER INFORMATION

ITEM 1.  LEGAL PROCEEDINGS

     The Company was the plaintiff and a counterclaim defendant in a lawsuit 
pending in Denver, Colorado District Court, Case No. 95CV2310.  This lawsuit 
was commenced by the Company on May 26, 1995.  The lawsuit between the Company 
and New Allied and TKCC was stayed upon the filing of the Company's bankruptcy 
petition in October 1995.  That stay was lifted when the bankruptcy case was 
dismissed in March 1997, and the Company moved forward with these 
proceedings.  The Company filed for Summary Judgment in this matter and 
hearings were held September and October 1998.  Such summary judgment was 
granted in favor of the Company in October 1998.  In addition, the Company 
filed an appeal of the Bankruptcy Court's ruling.  New Allied cross appealed.  
Such appeals were denied by the United States District Court in August 1998 
and the appeals matters are continuing as the Company has appealed this matter 
to a higher court unopposed.

     ITEM 3.  DEFAULTS UPON SENIOR SECURITIES

None

ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K

None

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<PAGE>

COUNTRY WORLD CASINOS, INC.
(A DEVELOPMENT STAGE COMPANY)

SIGNATURES

          In accordance with the requirements of Sections 13 or 15(d) of the 
Securities Exchange Act of 1934, as amended, the Registrant has caused this 
Report to be signed on its behalf by the undersigned, thereunto duly 
authorized.


                                 COUNTRY WORLD CASINOS, INC.


                              By:/s/William H. Patrowicz
                                 William H. Patrowicz, Secretary & Treasurer



Date: February 14, 1999

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