<PAGE>

                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                    FORM 10-Q
(Mark One)

[X]   Quarterly report pursuant to Section 13 OR 15(D) of the Securities
      Exchange Act of 1934

      For the quarterly period ended March 31, 2001

                                       OR

[ ]   Transition report pursuant to Section 13 or 15(D) of the Securities
      Exchange Act of 1934

      For the transition period from ________ to _______

                         Commission File Number: 0-08962
                        --------------------------------

                         KENILWORTH SYSTEMS CORPORATION
                         ------------------------------
             (Exact name of registrant as specified in its charter)

                New York                        13-2610105
                --------                        -----------
      (State of incorporation)     (I.R.S. employer identification no.)

  54 Kenilworth Road, Mineola, New York            11501
  -------------------------------------            -----
(Address of principal executive offices)         (Zip Code)

                                 (516) 741-1352
                                 ---------------
              (Registrant's telephone number, including area code)

Indicate by check mark whether the Registrant (1) has filed all reports required
to be filed by section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 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 [ ]

State the number of shares outstanding of each of the issuer's classes of common
stock as of the latest practical date

The number of shares of common stock, $.01 par value of the Registrant
outstanding as of May 1, 2001 was:

                                   64,932,502
<PAGE>

                         KENILWORTH SYSTEMS CORPORATION
                               INDEX TO FORM 10-Q

                                     PART I
                              FINANCIAL INFORMATION

ITEM 1.  FINANCIAL STATEMENTS

                         KENILWORTH SYSTEMS CORPORATION
                      CONDENSED CONSOLIDATED BALANCE SHEETS

<TABLE>
<CAPTION>
                                                     March 31      December 31
                                                       2001            2000
                                                   ------------    ------------
                                                   (unaudited)
<S>                                                <C>             <C>
                         ASSETS
Cash                                               $        495    $      8,582
Due from shareholder                                          0          28,982
Other current assets                                          0               0
Property, Plant and Equipment, Net                        9,723          10,295
                                                   ------------    ------------

TOTAL ASSETS                                       $     10,218    $     47,859
                                                   ============    ============


LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)


Accrued Liabilities                                $     56,136    $     15,139
Due to shareholder                                        7,618               0
Payroll Taxes Payable                                     2,595           3,226
Note Payable                                              2,000          10,000
                                                   ------------    ------------
TOTAL LIABILITIES                                  $     68,349    $     28,365
                                                   ============    ============


Common Stock, $.01 par value, authorized
 100,000,000 shares; issued and outstanding
 64,932,502 in December 31, 2000 and
 on March 31, 2001                                 $    649,325    $    649,325
Paid in capital                                      23,905,619      23,905,619
Deficit                                             (24,613,075)    (24,535,450)
                                                   ------------    ------------
TOTAL STOCKHOLDERS' EQUITY (DEFICIT)               $    (58,131)   $     19,494
                                                   ------------    ------------
TOTAL LIABILITIES                                  $     10,218    $     47,859
 AND STOCKHOLDERS' EQUITY (DEFICIT)                =============   ============
</TABLE>

See accompanying notes
<PAGE>

                         KENILWORTH SYSTEMS CORPORATION
           CONDENSED CONSOLIDATED STATEMENTS OF OPERATION AND DEFICIT

<TABLE>
<CAPTION>
                                                      Three-month ended
                                                           March 31
                                                   2001                2000
                                               ------------        ------------
                                                (unaudited)         (unaudited)
<S>                                            <C>                 <C>
Revenues:                                      $          0        $          0
Sales
Costs and Expenses:
Selling, general
 and administrative
 expenses                                            77,470              32,447
Placement cost of
 Convertible Note
Interest expense (income)                              --                  --
Total Costs and
 Expenses                                      $     77,470        $     32,447

Net income (loss)                              $    (77,470)       $    (32,447)
 before other income
 and (losses)
Income Taxes                                            155                   0
                                               ------------        ------------
Net income (loss)                              $    (77,625)       $    (32,477)
Deficit - Beginning
 of period                                      (24,535,450)        (24,398,861)
                                               ------------        ------------
Deficit - End of
 of period                                      (24,613,075)        (24,431,308)
                                               ============        ============

Earnings (Loss) per
Share of
 common stock (Note 5)                         $          0        $          0
Average number of
 shares outstanding                              64,932,502          63,389,000
</TABLE>

See accompanying notes
<PAGE>

                 KENILWORTH SYSTEMS CORPORATION AND SUBSIDIARIES
                 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>
                                                         Three-month ended
                                                              March 31
                                                        2001             2000
                                                      --------         --------
                                                     (unaudited)      (unaudited)
<S>                                                   <C>              <C>
CASH FLOWS USED IN
 OPERATING ACTIVITIES

Net Loss                                              $(77,625)        $(32,447)
Adjustments to reconcile
 net income to net cash
 used in operating activities
Depreciation                                               572
increase (decrease) in due
 to related party                                                         2,603
Increase(Decrease)in accrued
 liabilities                                            40,366           23,098
                                                      --------         --------
      TOTAL ADJUSTMENTS                                 40,938            6,746
      NET CASH USED IN                                    --               --
      OPERATING ACTIVITIES                             (36,687)          17,500

Cash flows from Investing
 Activities
Purchase of Equipment                                 $      0         $      0

CASH FLOWS FROM
Conversion of Promissory Notes                               0           12,500

FINANCING ACTIVITIES
Increase (decrease) in due to
 Shareholder                                            36,600            5,000
Proceeds from issuance of
 Repayment Promissory Notes                             (8,000)
                                                      --------         --------
Net cash provided by financing
 Activities                                             28,600                0
Net Increase (Decrease) in cash                         (8,087)
CASH - BEGINNING OF PERIOD                               8,582                2
                                                      --------         --------
CASH - END OF PERIOD                                  $    495         $  6,746
                                                      ========         ========
</TABLE>

See accompanying notes
<PAGE>

                         KENILWORTH SYSTEMS CORPORATION
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1 - BASIS OF PRESENTATION

In the opinion of management, the accompanying unaudited condensed consolidated
financial statements of Kenilworth Systems Corporation and subsidiaries
("Kenilworth") contain all adjustments (consisting of only normal accruals)
necessary to present fairly the consolidated balance sheets as of March 31, 2001
(unaudited) and December 31, 2000 and the related statements of operations and
cash flows for the three month periods ended March 31, 2001 and 2000.

The results of operations for the three-month periods ended March 31, 2001 are
not necessarily indicative of the results for the entire year.

NOTE 2- THE COMPANY AND NATURE OF BUSINESS

Kenilworth Systems Corporation (the "Company") was incorporated in New York in
April 1968 and now plans to be engaged in the business of developing and
manufacturing terminals that permit individuals from remote locations, to play
along with live in progress casino table games located inside and outside the
casino confines via TV (simulcast) satellite broadcast around the world.

The Company was in bankruptcy proceedings under Chapter 7 and 11 of the
Bankruptcy Code for the period from August 28, 1982 through September 23, 1998.
The Company ceased all operations, between February 2, 1991 through September
23, 1998.

The Company emerged from Chapter 7 bankruptcy on September 23, 1998 and plans to
be engaged in the development, manufacturing, marketing and operation of a
systems that allows casino patrons to play along with live table games in
progress via TV satellite broadcasts on terminals located within the casino
confines and outside the casino confines.

NOTE 3 - PRINCIPLES OF CONSOLIDATION

The consolidated financial statements include the accounts of Kenilworth Systems
Corporation and its wholly owned subsidiaries: Video Wagering Systems
Corporation, Roulabette Nevada Corporation and Kenilworth Systems Nevada
Corporation. None of these subsidiaries has any assets or liabilities.

NOTE 4 - EARNINGS PER SHARE

The Company computes and presents earnings (loss) per share in accordance with
the requirements of Statement of Financial Accounting Standards ("SFAS") No. 128
"Earnings Per Share".

Basic loss per share is based on the weighted-average number of shares of common
stock outstanding for the period, which were ($.00), ($.00), and ($.00) for the
year ended December 31, 2000, and the periods March 31, 2001 and March 31, 2000.

Diluted earnings per share have not been presented in the accompanying financial
statements because the effect of assumed conversion of convertible promissory
notes was anti-dilutive.
<PAGE>

NOTE 5 - INCOME TAXES

The Company uses the liability method to account for income taxes in accordance
with requirements of SFAS No. 109.

The Company is a "C" Corporation for tax purposes.

The Company estimates that it has available approximately eight million three
hundred thousand dollars ($8,300,000) in net operating loss carry-forwards,
which expire at various dates through 2020. Utilization of the NOL carry-forward
may be limited under various sections of the Internal Revenue Code depending on
the nature of the Company's operations.

The Company has a deferred tax asset of approximately two million eight hundred
thousand dollars ($2,800,000) arising from its net operating loss carry-
forwards. The deferred tax asset has been fully reserved due to the uncertainty
of future realization.

NOTE 6 - USE OF ESTIMATES IN THE FINANCIAL STATEMENTS

The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of revenues and expenses during the reporting period.
Actual results could differ from these estimates.

NOTE 7 - FAIR VALUE OF FINANCIAL INSTRUMENTS

The Company's financial statements include cash, receivables and accounts
payable. Due to the short-term nature of these instruments, the fair value of
these instruments approximates their recorded values.

NOTE 8 - PROPERTY AND EQUIPMENT

Property and Equipment are stated at cost. For financial reporting purposes,
property and equipment are depreciated utilizing the straight-line Method over
the estimated useful lives of the related assets as follows:
<PAGE>

<TABLE>
<CAPTION>
                                             YEARS
                                             -----
<S>                                           <C>
               Office Equipment                5
               Vehicles                        5
</TABLE>

Property and Equipment consist of the following as of March 31, 2001 and March
31, 2000

<TABLE>
<CAPTION>
                                                           Three-month ended
                                                                March 31
                                                           2001            2000
                                                         -------         -------
<S>                                                      <C>             <C>
Office Equipment                                         $ 2,939         $     0
Vehicles                                                   8,500               0
                                                         -------         -------
                                                         $11,439               0
Less-Accumulated Amortization                              1,716               0
                                                         -------         -------
Total Property and Equipment, Net                        $ 9,723         $     0
                                                         =======         =======
</TABLE>

Depreciation expense for the quarters ended March 31, 2001 and March 31, 2000
was $572 and $-0- respectively.

NOTE 9 - DUE TO/FROM SHAREHOLDERS AT MARCH 31, 2000

Due to/from shareholders at March 31, 2001 and December 31, 2000 represents
advances made to a stockholder of the Company or loaned to the Company in the
normal course of business. Such amounts are non-interest bearing and have no
definite repayment terms. The advances were repaid as at March 31, 2001.

NOTE 10 - NOTE PAYABLE

At December 31, 2000 the Company had a ten thousand-dollar ($10,000) Note
Payable with interest at 8.5% and principal due on January 15, 2001. The loan is
guaranteed by a shareholder of the Company. Subsequent to year-end the Note was
repaid in full.

NOTE 11 - CONVERTIBLE PROMISSORY NOTES

In August 2000, the Company sold a one (1) year one hundred thousand dollar
($100,000.00) Convertible Promissory Note to a single, non-affiliated party. The
Note was converted in December 2000 into nine hundred thirty seven thousand
seven hundred seventy eight (937,778)
<PAGE>

shares which included twenty one thousand one hundred six (21,106) shares for
the accrued interest. Prior thereto, the Company has sold a total of thirty
eight thousand five hundred ($38,500.00) in Convertible Notes to three (3)
individuals between December 1998 and June 30, 2000. All prior Notes were also
converted into restricted common stock of the Company as the term is defined
under the Securities Act of 1933. All proceeds have been used to defray current
expenses, which are minimal during present operations.

NOTE 12 - GOING CONCERN UNCERTAINTY

As indicated in Note 2, the Company emerged from Chapter 7 in September 1998 and
has not yet commenced operations. These factors create uncertainty as to the
Company's ability to operate as a going-concern. Management plans to develop a
wagering system that allows casino patrons and individuals outside the casino to
play along with live casino table games. The first step in the plan is to
conduct testing. Unless the Company is able to obtain sufficient funds, none of
the tests and initial development work can commence. The Company plans to obtain
the necessary funding by offering its common stock, or Senior Cumulative
Convertible Preferred Shares in a private placement, or selling limited joint
venture participations in future "play along with casino game" franchises. There
can be no assurances the Company can be successful in obtaining such financing.

The accompanying financial statements have been prepared assuming the Company is
a going-concern and do not reflect adjustments, if any, that would be necessary
if the Company were not a going-concern.

NOTE 13 - COMMITMENTS AND CONTINGENCIES

OUTSTANDING PAYROLL TAXES

As of year-end, 2000, the Internal Revenue Service is contending that the
Company owes payroll taxes including interest and penalties totaling almost
$400,000 for various periods from 1985-1991. The Company is currently in
negotiations with the IRS to resolve these issues. In management's opinion, no
accruals are necessary since it believes that these assessments are incorrect
and were discharged in its bankruptcy proceedings.

NOTE 14 - AUTHORIZED SHARES

On December 8, 1998, the Company filed a Certificate of Amendment to its
Certificate of Incorporation increasing its authorized number of shares to one
hundred million (100,000,000) at $.01 par value. The amendment was filed without
a shareholder's meeting. The Company will
<PAGE>

be submitting to its shareholders at its next annual meeting, a proposal to
ratify the Certificate of Amendment filed and to approve the issuance of shares
in excess of the sixty million (60,000,000) shares previously authorized by the
shareholders.

ITEM 2  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
        RESULTS OF OPERATIONS

RESULTS OF OPERATIONS

Since we emerged from bankruptcy proceedings on September 23, 1998 we have had
no revenues from operations. We sustained substantial losses from general
administrative expenses amounting to $136,589 in 2000, $11,830 in 1999 and for
the three-months ended march 31, 2001 we sustained losses from general
administrative expenses amounting to $77,625 compared to a loss of $32,447 for
the quarter ending March 31, 2000. Kenilworth has had no revenues from
operations during the past eight (8) years and there can be no assurances that
it will ever have revenues from present planned operations.

LIQUIDITY AND CAPITAL RESOURCES

We plan to be engaged in the development, manufacturing, marketing and operation
of "Project Roulabette". Project Roulabette is proposed to allow casino patrons
and other players around the industrialized world to play along with live
in-progress casino table games such as Roulette, Craps, Baccarat and Black Jack
via digital satellite television programming emanating from strictly state
regulated casinos located in the United States and other locations around the
world, on self-sufficient computer terminals dubbed "Roulabette".

Our present plans are to develop a wagering system dubbed "Project Roulabette"
that would allow patrons all over the industrialized world to play and wager on
live casino table games on terminals placed in hotels, resorts, bars and other
public gathering places and in homes and offices on personal computers (PC's) or
television sets connected to set top boxes for Interactive TV via digital
satellite broadcasts emanating from strictly regulated U.S. casinos.

The first step will be to conduct a three (3) month test of the system at our
proposed facility and, after successfully completing the test, to test the
system using a casino site. The test will be with twenty (20) Roulabette
terminals.

To conduct the tests Kenilworth believes it will require initially five million
dollars ($5,000,000) to a) purchase computers, digital television broadcast
equipment and table games; and, b) defray the cost of the facility and pay the
salaries of six (6) employees who are specialists in software design, TV
broadcasts, and mechanical design, for a period of eighteen (18) months, and
from time to time, consultants who will assist the design team. In order to
market Project Roulabette while the development of the terminals proceeds we
<PAGE>

will require an additional five million dollars ($5,000,000) to hire management
and marketing people to secure future orders for the system. There can be no
assurances this money will ever be available to Kenilworth. As of March 31, 2001
we had no working capital.

CAUTIONARY STATEMENT FOR PURPOSES OF THE "SAFE HARBOR" PROVISIONS OF THE PRIVATE
SECURITIES LITIGATION REFORM ACT OF 1995 AND RISK FACTORS

The information contained in this Form 10-Q and Kenilworth's other filings with
the Securities Exchange Commission may contain "forward-looking" statements
within the meaning of section 27A of the Securities Act of 1933, as amended, and
Section 21E of the Securities Exchange Act of 1934, as amended, and is subject
to the safe harbors created thereby. Such information involves important risks
and uncertainties that could significantly affect results in the future and,
accordingly, such results may differ from those expressed in any forward looking
statements herein. Future operating results may be adversely affected as a
result of a number of factors.

You should not rely on forward-looking statements in this Form 10-Q. This Form
10-Q contains forward-looking statements that involved risks and uncertainties.
We use words such as "anticipates", "believes", "plans", "expects", "future",
"intends" and similar expressions to identify such forward-looking statements.
You should not place undue reliance on these forward-looking statements, which
apply only as of the date of this Form 10-Q. Our actual results could differ
materially from those anticipated in these forward-looking statements for many
reasons, including the risks faced by Kenilworth as described below and
elsewhere in this Form 10-Q.

RISKS

Specific reference is made to each of the risks described in Item 7 of the Form
10-K for December 31, 2000 under the discussion "Cautionary Statement For
Purposes of the Safe Harbor Provisions of the Private Securities Litigation
Reform Act of 1995 and Risk Factors". Reference is also made to future filings
under Forms 10-Q and Forms 10-K and filings under the Securities Exchange Act of
1934 as amended and as may be applicable under the Securities Act of 1933 as
amended.

                                    PART II.
                                OTHER INFORMATION

Item 1.  LEGAL PROCEEDINGS:

         None

Item 2.  CHANGE IN SECURITIES:

         None
<PAGE>

Item 3.  DEFAULT UPON SENIOR SECURITIES:

         None

Item 4.  SUBMISSION OF A MATTER TO A VOTE OF SECURITIES HOLDERS:

         None

Item 5.  OTHER INFORMATION:

The Company is obligated to issue seven hundred and fifty thousand (750,000)
common shares for professional services rendered to the Company. The shares
cannot be issued until the shareholders approve the increase in the authorized
number of shares that the Company is authorized to issue at the next annual
meeting of shareholders.

Item 6.: EXHIBITS AND REPORTS ON FORM 8-K:

         None
<PAGE>

                                    SIGNATURE


Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed in its behalf by the
undersigned thereunto duly authorized.


     KENILWORTH SYSTEMS CORPORATION


By:  /s/ Herbert Lindo
     --------------------------------------
     Herbert Lindo, President, Chief
     Executive Officer and Chief Financial Officer
     May 13, 2001