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, 1997

       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) 617-0400

     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 13,481,687 shares of its common stock
outstanding as of December 31, 1997.

<PAGE>

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


INDEX




Part I:   FINANCIAL INFORMATION

Item 1.   Financial Statements

       Balance Sheet as of December 31, 1997 (Unaudited) . . . . 1 - 2

       Statements of Operations for the six months ended
         December 31, 1997 and 1996 and for the period
         from November 9, 1982 (Date of Inception) through
         December 31, 1997 (Unaudited) . . . . . . . . . . . . . 3

       Statements of Stockholders' Equity (Unaudited). . . . . . 4 - 6

       Statements of Cash Flows for the six months ended
         December 31, 1997 and 1996 and For the period from
         November 9, 1982 (Date of Inception) through
         December 31, 1997 (Unaudited) . . . . . . . . . . . . . 7 - 9

       Notes to Financial Statements (Unaudited) . . . . . . . . 10

Item 2.  Management's Discussion and Analysis or Plan of
         Operation . . . . . . . . . . . . . . . . . . . . . . . 11 - 15

Part II:  OTHER INFORMATION

Item 1.   Legal Proceedings. . . . . . . . . . . . . . . . . . . 16 - 18

Item 3.   Defaults upon Senior Securities. . . . . . . . . . . . 19

Item 6.   Exhibits and Reports on Form 8-K . . . . . . . . . . . 19


Signature Page . . . . . . . . . . . . . . . . . . . . . . . . . 20

<PAGE>

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

BALANCE SHEET AS OF DECEMBER 31, 1997 (UNAUDITED)


ASSETS:
CURRENT ASSETS:
 Cash                                                   $1,115
 Prepaid Interest                                       63,333
 Prepaid Expenses                                        5,000
 Due From Parent                                         6,279

 TOTAL CURRENT ASSETS                                   75,727
 

PROPERTY AND EQUIPMENT: 
 Land                                                7,475,475
 Casino Under Development                            8,377,287
 Furniture and Fixtures                                 38,888

 Total                                              15,891,650
 Less Accumulated Depreciation                          20,193

 Total Property and Equipment                       15,871,457


OTHER ASSETS
 Deposits                                               35,630

 TOTAL ASSETS                                     $ 15,982,814


See Notes to Financial Statements 

                                    1
<PAGE>

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

BALANCE SHEET AS OF DECEMBER 31, 1997 (UNAUDITED)


LIABILITIES AND STOCKHOLDERS' EQUITY:
CURRENT LIABILITIES:
 Accounts Payable                                   $1,556,298
 Payroll and Property Taxes Payable                    149,487
 Accrued Expenses                                      137,550
 Accrued Interest - Related Parties                    221,544
 Notes Payable - Related Parties (Net of
  Deferred Financing Costs of $15,000)               2,515,900
 Other Current Liabilities                             209,171
 
 TOTAL CURRENT LIABILITIES                           4,789,950

LONG-TERM LIABILITIES:
 Notes Payable                                       2,650,000
 Notes Payable - Related Party                       2,350,000
 Other Liability                                              

   TOTAL LONG-TERM LIABILITIES                       5,000,000

COMMITMENTS AND CONTINGENCIES                                 

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, 13,481,687 Issued and
  Outstanding                                           13,482

 Convertible Preferred Stock, Class B, $.25
  Par Value, 5,000,000 Shares Authorized,
  4,000,000 Shares Issued and Outstanding
  (Liquidation Preference $1,000,000)                1,000,000

 Additional Paid-in Capital                         10,144,061

 Deficit Accumulated During the Development Stage  (4,966,929)

 TOTAL STOCKHOLDERS' EQUITY                          6,192,866

 TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY     $   15,982,814

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,
                                       1997         1996           1997

COSTS AND EXPENSES:
 Research and Development Costs      $            $              $ 122,000
 Loss on Non-Marketable Securities                                  85,000
 Write-Off of Loan Receivable                                       90,000    
 General and Administrative Expenses   551,769      337,434      3,788,806
 Management Fee - Related Party                                    408,000
 Depreciation                            3,162        3,136         45,676

 TOTALS                                554,931      340,570      4,539,482

OTHER INCOME (EXPENSE):
 Interest Income                        14,678       22,111        109,490
 Interest Expense                     (63,746)        (628)       (135,191)
 Professional Fees-Due to Bankruptcy  (23,083)    (514,757)
 Forfeited Deposit                                                (100,000)
 Other Income                                                       45,861

 TOTALS                               (72,151)      21,483        (594,597)

 (Loss) from Continuing Operations
  Before Discontinued Operations
  and Extraordinary Item             (627,082)    (319,087)     (5,134,079)

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

 Total Discontinued Operations                                     
 
 (LOSS) BEFORE EXTRAORDINARY ITEM    (627,082)    (319,087)     (5,134,079)

EXTRAORDINARY ITEM:
 Extraordinary Gain on Forgiveness
  of Debt                                                          167,152

 NET (LOSS)                        $ (627,082)  $ (319,087)   $ (4,966,927)

PER SHARE DATA:
 Net (Loss) Per Common Share       $    (0.05)       (0.04) 


WEIGHTED AVERAGE NUMBER OF SHARES  13,305,310    6,694,097
 

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)

</TABLE>

See Notes to Financial Statements

                                    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 -
   FORWARDED                       $                 $     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

</TABLE>
See Notes to Financial Statements

                                    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 - FORWARDED       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

Net Loss for the Six Months
 Ended December 31, 1997                                                                                       (627,082)   (627,082)

 BALANCE-DECEMBER
  31, 1997               2,250,000 $ 2,250 4,000,000 $1,000,000 13,481,687 $13,482        $     $10,145,061 $(4,966,927) $6,192,866
</TABLE>
See Notes to Financial Statements

                                    6
<PAGE>

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

CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)


                                                          FOR THE PERIOD FROM
                                                            NOVEMBER 9, 1982
                                                          (DATE OF INCEPTION)
                                      SIX MONTHS ENDED           THROUGH
                                         DECEMBER 31,          DECEMBER 31,
                                      1997        1996             1997

OPERATING ACTIVITIES:
 Continuing Operations:
  (Loss) Before Extraordinary
    Item                         $ (627,082) $ (319,087)      $(5,134,079)
  Adjustments to Reconcile Net
   (Loss to Net Cash (Used for)
   Operating Activities:
   Depreciation                       3,162       3,136            45,676
   Amortization of Discount          45,000                        60,000
   Common Stock Issued for Interest                                14,451
   Common Stock Issued for Services  22,544                       860,044
   Loss on Marketable Securities                                  (85,000)
   Write Off of Loan Receivable                                  (900,000)
   Extraordinary Item                                             167,152
   Accrued Interest Related Parties                                52,514
   Allocation of Management Fees                                  408,000

 Changes in Assets and Liabilities:
  (Increase) Decrease in:
   Noncurrent Assets               (35,000)                       (35,000)
   Prepaid Interest                  9,807                       (725,640)
   Prepaid Expenses                 (5,000)      375,000           (5,000)

  Increase (Decrease) in:
   Accounts Payable              1,518,183       214,379        1,556,298
   Payroll and Property Taxes
    Payable                         54,026                        149,487
   Accrued Interest                 45,601                        221,544
   Accrued Expenses                108,772      (470,705)         137,551

 Discontinued Operations:
  Net (Loss)                                                     (389,286)
  Adjustment to Reconcile Net (Loss) to Net Cash
   (Used for) Operating Activities:
   Gain on Disposal of Assets                                     389,286

  Total Adjustments              1,767,095                      2,706,884

NET CASH USED FOR OPERATING
  ACTIVITIES -  FORWARD         $1,140,013   $(1,707,124)      $2,427,195


See Notes to Financial Statements

                                    7
<PAGE>

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

CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)


                                                          FOR THE PERIOD FROM
                                                            NOVEMBER 9, 1982
                                                          (DATE OF INCEPTION)
                                      SIX MONTHS ENDED           THROUGH
                                         DECEMBER 31,          DECEMBER 31,
                                      1997        1996             1997

 NET CASH USED FOR OPERATING ACTIVITIES - 
  FORWARDED                       $1,140,013  $(1,707,124)    $(2,427,195) 
 
INVESTING ACTIVITIES:
 Purchase of Land and Payment
   of Casino Development Costs    (2,404,687)    (200,097)     (7,619,558)
 (Purchase) Disposal of Furniture
   and Fixtures                        5,209                      (52,197)
 Investment in Patents                                            (62,000)
 Deposits and Other                                                  (630)
 (Increase) Decrease in Restricted Cash                          (451,896)
  

 NET CASH USED FOR INVESTING
  ACTIVITIES                      (2,399,478)  1,165,220       (7,734,385)

FINANCING ACTIVITIES:
 Payment of Capital Lease Obligation                               (4,233)
 Proceeds from Long-Term Borrowings  419,581                    6,419,581
 Advances to/from Related Party      836,038      148,350       1,973,662
 Repayments on Long-Term
  Borrowings-Subject to
  Compromise                                   (1,110,837)     (3,450,000)
 Proceeds from Stock and Warrant
  Issuance                                                      5,220,835
 Capital Contribution                                               2,850

 NET CASH (USED FOR) PROVIDED FOR
  FINANCING ACTIVITIES             1,255,619     (962,487)     10,162,695

 Net (Decrease) Increase in Cash      (3,846)       5,456           1,115

Cash - Beginning of Period            (4,961)       6,291               

 Cash - End of Periods            $    1,115    $  11,747      $    1,115


SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
 Interest paid during the six months ended December 31, 1997 and 1996 was $0
and $1430 respectively, net of interest capitalized.  No income taxes were
paid during the six months ended December 31, 1997 and 1996.

See Notes to Financial Statements

                                    8
<PAGE>

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

STATEMENTS OF CASH FLOW (UNAUDITED)

SUPPLEMENTAL DISCLOSURE OF NON-CASH INVESTING AND FINANCING ACTIVITIES:


See Notes to Financial Statements

                                    9
<PAGE>

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

NOTES TO FINANCIAL STATEMENTS (UNAUDITED)

[1] Summary of Significant Accounting Policies

     Significant accounting policies of Country World Casinos, Inc. are set 
forth in the Company's Form 10-KSB for the period ended June 30, 1997, as 
filed with the Securities and Exchange Commission.

[2] Business of Reporting

     The accompanying unaudited financial statements 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 the information and 
footnotes required by generally accepted accounting principles for complete 
financial statements.  In the opinion of management, such statements include 
all adjustments (consisting of normal recurring items) which are considered 
necessary for a fair presentation.  Operating results for the three months 
ended December 31, 1997 and 1996 are not necessarily indicative of the results 
that may be expected for the year June 30, 1998.  It is suggested that these 
financial statements be read in conjunction with the financial statement and 
notes for the period ended June 30, 1997, included in the Country World 
Casinos, Inc. Form 10-KSB.


[3] Earnings Per Share

     Earnings per share are based on 13,305,310 and 6,694,097 shares 
outstanding for the six months ended December 31, 1997 and 1996, 
respectively.  Such amounts of shares represent the weighted average number of 
shares outstanding for the periods.  The effect of outstanding warrants and 
convertible preferred stock  were not included in the calculations.

                                    10
<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.

     In order to begin the process of timely completing its goals the Company 
has 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 has 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 
management agreement with Luciani & Associates, LLC. of Atlantic City, New 
Jersey, to manage the casino operations.  All parties will assist the 
architect in design of their respective operations.

     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 planned Hotel Casino will be a seven story complex, featuring 
five stories of hotel rooms above a two-story, 75,000 square foot casino, and 
an underground 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 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.  The Company plans to seek $79,500,000 of debt financing from 
institutional investors through the issuance of notes secured by a first deed 
of trust on the Hotel Casino property and by a security interest in the 
revenues from the operation of the Hotel Casino.  There can be no assurance, 
however, that the Company will be successful in raising such financing or that 
the proceeds of such financing will be sufficient to complete construction and 
provide working capital for the opening and operation of the Hotel Casino.

     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,

                                    11
<PAGE>

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

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

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 will include memorabilia from the great 
country singers, both past and present, with a star walk of their own.  The 
country western music 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 Radisson Black Hawk Hotel will provide overnight accommodations with 
290 standard rooms and 35 suites, making it 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 865 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.

     Black Hawk is a picturesque mountain town approximately 40 miles west of 
Denver.  In the past year, Black Hawk hosted approximately 3 million visitors 
and generated almost 60% of the state's gaming revenues.  The 112,000 square 
foot Hotel Casino site on the northern most end of the Black Hawk gaming 
district is in a most highly visible location as it is in a direct line of 
site to all visitors approaching Black Hawk's main intersection on State 
Highway 119.  The seven story structure will tower high above all existing 
facilities.  The Black Hawk and nearby Central City casino market includes 
many small, privately held gaming facilities that the Company believes offer 
limited amenities and are characterized by a shortage of convenient on-site 
parking.  There are a few large facilities currently operating with varying 
levels of services and amenities, as well as new facilities planned.  The 
Country World Casino's country western music theme, country hospitality, ample 
parking, modern hotel accommodations and a full line of amenities, will set it 
apart from, and should give it a competitive advantage over, the other casinos 
in the Black Hawk/Central City market.

     The Hotel Casino complex will be designed and constructed pursuant to a 
guaranteed maximum price agreement which is to be finalized prior to 
construction.  The design and construction team consists of Semple Brown 
Roberts, P.C., a Denver based architectural firm (the "Architect") and PCL 
Construction Services, Inc., a multi-billion dollar North American 
construction

                                    12
<PAGE>

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

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

firm with U.S. headquarters located in Denver.  The Architect is the designer 
of Fitzgerald's Casino in Black Hawk, while the Contractor's gaming credits 
include the MGM Grand Hotel Casino and Stratosphere Tower in Las Vegas, 
Nevada, as well as the Chinook Winds Gaming and Convention Center in Lincoln 
City, Oregon.

     Gaming operations at the Country World Casino will be under the 
management of Luciani & Associates, LLC of Atlantic City, New Jersey (the 
"Casino Manager"), who are leaders in casino design, management and security 
services.  

     Hotel operations will be under the management of Signature Hospitality 
Resources, Inc. of Denver, Colorado (the "Hotel Manager'), which provides a 
full range of hotel and resort support services including operations, sales, 
marketing, food, beverage, human resources, MIS and technical services.

     The Company has incurred substantial net losses to date.  Insofar as the 
Company has not completed its casino facility, it has received no revenues 
from operations from these planned business activities.  The Company's 
financial statements have been presented on the basis that it is a going 
concern, which contemplates the realization of assets and the satisfaction of 
liabilities in the normal course of business.  The Company's ability to 
continue in existence is dependent upon its ability to obtain additional 
long-term financing and achieve profitable operations.  The financial 
statements do not include any adjustments relating to the recoverability and 
classification of recorded asset or liability amounts which might be necessary 
should the Company be unable to continue in existence.

     During the six months ended December 31, 1997, the Company had general 
and administrative expenses of $551,769, depreciation expense of $3,162, 
interest expense of $63,746 and legal fees incurred for its bankruptcy 
proceedings of $23,083.  The Company remains in the development stage and has 
incurred a loss from inception thorough December 31, 1997 of $4,966,927.

     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.

     During the fiscal year ended June 30, 1995 and 1996, the Company had 
disagreements with 
New Allied.  As a result of New Allied's unwillingness to cooperate with the 
Company, New Allied's failure to secure a release of the $475,000 first deed 
of trust on the Property, New Allied's misrepresentations to the Company and 
subsequent legal problems involving New Allied, the Company instituted 
litigation against New Allied.

     New Allied commenced foreclosure proceedings involving the Property.  Due 
to the

                                    13
<PAGE>

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

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

pendency of these proceedings, on October 12, 1995, the Company filed a 
Voluntary Petition Under Chapter 11 of the Bankruptcy Code in the United 
States Bankruptcy Court, District of Colorado (Case No. 95 20563 RJB).  As a 
result, all creditors of the Company were stayed from commencing or continuing 
any action or enforcing any judgment of lien against the Company or property 
of the Company, except as otherwise authorized pursuant to Title 11 U.S.C. 
362(b).  Relief may be sought by the filing of a complaint in the Bankruptcy 
Court, pursuant to Title 11 U.S.C. 362(d).

     In March 1996 the Bankruptcy Court granted the Company's motion to 
approve $5 million in financing, which financing was obtained on May 31, 
1996.  The $5 million financing was obtained from a group of lenders led by 
Kennedy Funding, Inc. and Anglo-American Financial as agent (the "Kennedy 
Funding Loan").

     In connection with this financing, the Company made 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, or so much thereof as may 
have been advanced by maker, for general corporate purposes.  As of September 
1997, the Company owed approximately $600,000 on the Norlar Note.  In October 
1997, the Company issued a second promissory note and a fourth deed of trust 
on the property to Norlar, Inc., again for a maximum of $600,000.  As of 
December 1997, the Company owed approximately $206,000 on the 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 loan will bear interest at 12% per annum 
and is to be repaid upon the earlier to the sale of the property or the 
contemplated refinance of the property.

     In September 1996, the Bankruptcy Court held hearings to determine the 
amounts due to New Allied as well as other issues.  The Company utilized the 
proceeds from the $5 million Kennedy Funding Loan in accordance with the 
Court's Order and paid New Allied and all unsecured creditors in full, as 
determined by the Court.

                                    14
<PAGE>

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

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


     In addition to obtaining the necessary financing, the Company must obtain 
from the Colorado Gaming Commission approval to commence gaming operations.  
The Commission's action is predicated upon approval of the applications of all 
of the Company's principals.  The Company is taking the steps necessary to go 
forward with its submission to state authorities of its gaming application in 
1998 and receive the required approvals to engage in gaming operations within 
the State of Colorado. However, there can be no assurance that the Company 
will be successful in its efforts. Management believes that the length of time 
and disposition of the gaming approval process cannot be accurately predicted 
at this point, but that the process could be time consuming and expensive.


<PAGE>

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

PART II. OTHER INFORMATION


Item 1 - Legal Proceedings

     The Company is the plaintiff and a counterclaim defendant in a lawsuit 
pending in Denver, Colorado District Court, Case No. 95CV2310, entitled 
Country World Casinos, Inc., a Nevada corporation, Plaintiff, v. Tommyknocker 
Casino Corp., a Colorado corporation and New Allied Development Corporation, a 
Colorado corporation, Defendants, v. Country World Casinos, Inc., a Nevada 
Corporation, Holly Products, Inc., a New Jersey corporation, Ronald G. Nathan, 
Sal Lauria,  Roger D. Leclerc, William H. Patrowicz and David Singer, 
counterclaim Defendants.  This lawsuit was commenced by the Company on May 26, 
1995.  In the Company's Amended Complaint, the Company asserted eight claims 
against New Allied Development Corporation ("New Allied") and its subsidiary 
Tommyknocker Casino Corp. ("TKCC").

     In its complaint, the Company sought a declaration that it was not 
obligated to make any additional payments to TKCC under a certain promissory 
note executed by the Company in connection with its purchase of the Black Hawk 
property, until such time as TKCC secured the release of a prior deed of 
trust.  The Company also sought recovery of more than $656,000 paid to or on 
behalf of TKCC to clean up and remediate environmental contamination on the 
property purchased from TKCC in August 1993.  The Company sought to recover 
all or part of this amount from TKCC under the following legal theories: (1) 
that the environmental contamination on the property constitutes an 
encumbrance, which is in breach of the covenant against encumbrances contained 
in the warranty deed by which TKCC conveyed the property to the Company; (2) 
that TKCC and New Allied made fraudulent misrepresentations to the Company 
regarding the costs of the environmental clean up and remediation and that the 
Company is entitled to recover damages resulting from this misrepresentations, 
as well as exemplary damages; (3) that TKCC and New Allied made negligent 
misrepresentations to the Company regarding the costs of the environmental 
clean up and remediation and that the Company is entitled to recover damages 
resulting from these misrepresentations, as well as exemplary damages; (4) 
that TKCC's and New Allied's actions violated their duties of good faith and 
fair dealing; (5) that the misrepresentations of TKCC and New Allied 
constitute deceptive trade practices in violation of the Colorado Consumer 
Protection Act; and (6) that any agreement under which the Company purportedly 
agreed to pay for the environmental remediation and clean up costs (which 
agreement the Company denies exists) is void and unenforceable under various 
principles of law, including the statute of frauds and CERCLA.

     On or about June 15, 1995, following the Company's commencement of the 
lawsuit described above, TKCC filed a notice of election to foreclose on its 
note and deed of trust which were secured by the Company's Black Hawk 
property.  The Company denied that it was in default under the note because of 
TKCC's prior breach of the terms of the note by its failure to secure the 
immediate release of the first deed of trust on the property upon its receipt 
of $725,000 in January 1995.  A Denver District Court Magistrate ruled that 
since the Company has not paid to TKCC the monthly installments under the note 
since May 1995, the Company was in default, despite TKCC's failure to secure 
the release of the first deed of trust.  The Magistrate's Order is neither 
appealable nor binding in any subsequent proceeding.

                                    15
<PAGE>

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

PART II. OTHER INFORMATION


     On October 12, 1995, the Company filed a Chapter 11 Petition in 
bankruptcy in the United States Bankruptcy in the United States Bankruptcy 
Court for the District of Colorado, Case No. 95-
20563 RJB. The filing of the Company's bankruptcy petition stayed TKCC's 
pending foreclosure sale of the Black Hawk property.  The Bankruptcy Court 
ruled that the Company was obligated to pay the principal amount of the note 
plus accrued interest, but not certain default interest claimed by TKCC to be 
owing.  The Bankruptcy Court also ruled against the Company on the claims 
pertaining to the cost of environmental clean-up. The Company paid New Allied 
approximately $2,300,000 and all prior deeds of trust were released.  The 
Company has filed an appeal of the Bankruptcy Court's ruling.  New Allied has 
crossed appealed the denial of late payment fees and interest.  Such appeals 
are pending.

     In March 1996 the Bankruptcy Court granted the Company's motion to 
approve $5 million in financing, which financing was obtained on May 31, 
1996.  The $5 million financing was obtained from a group of lenders led by 
Kennedy Funding, Inc. and Anglo-American Financial as agent ("Kennedy").

     In September 1996, the Bankruptcy Court held hearings to determine the 
amounts due to New Allied as well as other issues. The Company utilized the 
proceeds from the $5 million Kennedy loan in accordance with the Court's Order 
and paid New Allied and all unsecured creditors in full, as determined by the 
Court.

     The Company disagreed with the amounts deemed by the Bankruptcy Court to 
be owed to New Allied and in December 1996 filed an appeal of the Court's 
ruling.  New Allied cross appealed and such appeals are pending.

     In March 1997, the Court ordered the dismissal of the Company from 
Chapter 11 but retained jurisdiction over the appeals.
     The pending lawsuit between the Company and New Allied and TKCC was 
stayed upon the filing of the Company's bankruptcy petition.  That stay was 
lifted when the bankruptcy case was dismissed in March 1997, and the Company 
is now moving forward with these proceedings.

     The Company is seeking a court order requiring TKCC and New Allied to 
sell to the Company their 2.5 million shares of voting stock in the Company at 
the price set forth in ss.47.1-4.508 Rule 4.5 of the Colorado Gaming 
Regulations on the basis that New Allied and TKCC might possibly be unsuitable 
to hold voting securities in a licensed casino.  As part of the consideration 
given by the Company to TKCC to purchase the Black Hawk property, the Company 
issued to TKCC 2,250,000 shares of non-voting preferred stock in the Company.  
That preferred stock was subsequently given voting rights.  In a subsequent 
real estate purchase transaction, the Company issued to New Allied 250,000 
share of common stock.

     TKCC and New Allied have filed an answer to some of the Company's claims, 
denying liability.  
In addition, TKCC and New Allied have filed counterclaims against the Company, 
as well

                                    16
<PAGE>

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

PART II. OTHER INFORMATION


as against Holly Products, Inc. ("Holly"), the majority shareholder in the 
Company, Ronald G. Nathan ("Nathan"), Sal Lauria ("Lauria"), and David Singer 
("Singer") former directors of the Company, and Roger G. Leclerc ("Leclerc") 
and William H. Patrowicz ("Patrowicz"), who are currently officers and 
directors of the Company.  TKCC alleges that the Company has breached an 
agreement to file a registration statement for the preferred stock given to 
TKCC as part of the consideration for purchase of the Black Hawk property.  
The Company has filed an answer denying liability on this counterclaim.  The 
Federal Bankruptcy Court ruled that the Company was not in breach of its 
agreement.

     TKCC and New Allied have asserted that the Company, as well as Holly, 
Nathan, Lauria, Leclerc, Patrowicz and Singer, breached their fiduciary duties 
by the issuance of five million shares of common stock in the Company to 
Holly.  TKCC and New Allied seek actual and exemplary damages allegedly caused 
by said alleged wrongful issuance of stock.  TKCC and New Allied seek an 
injunction requiring the Company and it board of directors to cancel the five 
million shares of stock issued to Holly.

     The Company, as well as Leclerc, Holly, Patrowicz and Singer, have filed 
answers denying any wrongful conduct or any liability to TKCC or New Allied 
resulting from said issuance of stock to Holly and have affirmatively asserted 
that said issuance of stock was proper.  Neither Nathan nor Lauria has been 
served with the summons and counterclaim and have not yet appeared in this 
lawsuit.

     The Company is a defendant in a lawsuit pending in Travis County, Texas 
District Court, Cause No. 95-04782, 200th Judicial District, entitled James 
Hamilton, Plaintiff v. Robert Todd Financial Corporation; Dean Anthony 
Esposito; Marco Guy Fiore, Jr.; Robert Bobak Fallah; Optex Biomedical Inc.; 
Pacific Rim Entertainment, Inc.; Country World Casinos, Inc., Defendants.  The 
Plaintiff James Hamilton ("Hamilton") contends that Defendants Robert Todd 
Financial Corporation, and its agents and/or employees, Defendants Dean 
Anthony Esposito, Marco Guy Fiore, Jr. and Robert Bobak Fallah, made 
misrepresentations regarding the Company's stock, which allegedly induced 
Hamilton's purchase of said stock.  Hamilton alleges that Defendants Robert 
Todd Financial Corporation, Dean Anthony Esposito, Marco Guy Fiore, Jr. and 
Robert Bobak Fallah, were authorized agents of the Company, and therefore, 
Hamilton alleges that the Company is liable for the alleged wrongful conduct 
of said Defendants.

     The Company has filed a Special Appearance and Answer, objecting to the 
jurisdiction of the Travis County, Texas District Court, as well as denying 
all material allegations of Hamilton's Original Petition.

     During the fiscal year ended June 30, 1994, the Company was informed by 
the Securities and Exchange Commission (the "SEC") that the SEC had instituted 
a formal order of investigation concerning the possibility of violations of 
the federal securities laws by the Company.  In August 1996, the Company was 
advised that the investigation had been terminated and that, at this time, no 
enforcement action has been recommended by the staff of the SEC. 

                                    17
<PAGE>

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

PART II. OTHER INFORMATION


ITEM 3.  DEFAULTS UPON SENIOR SECURITIES

     The Company has not made payments on a $725,000 note due to NADC secured 
by a deed of trust on the Property.  The Company is engaged in negotiations 
with NADC regarding this matter and other matters involving them.  No 
assurance can be given that an agreement will be concluded, or if concluded, 
that the terms will be favorable to the Company.

ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K
     None

                                    19
<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, 1998

                                    20
<PAGE>