<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 September 30, 2000

                                      OR

/ /     Transition report pursuant to Section 13 or 15(D) of the Securities
        Exchange Act of 1934 (No Fee Required)

        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)

Securities registered pursuant to section 12(b) of the Act:

                                           Name of each exchange on
        Title of each class                    which registered
        -------------------                ------------------------
              NONE                              OTC PINK SHEETS

Securities registered pursuant to section 12(g) of the Act:

                                (Title of class)
                                ----------------
                     COMMON STOCK, PAR VALUE $.01 PER SHARE

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 / /

The number of shares of common stock, $.01 par value outstanding as of October
13, 2000:
                                   64,175,936


                                       1
<PAGE>

                    KENILWORTH SYSTEMS CORPORATION
                          INDEX TO FORM 10-Q


PART I.         FINANCIAL INFORMATION

              Item 1.     Consolidated Financial Statements

              Consolidated Condensed Balance Sheets as of September 30, 2000
              (unaudited) and December 31, 1999



              Consolidated Condensed Statement of Operations for the nine month
              periods ended September 30, 2000 and 1999 (unaudited)



              Consolidated Condensed Statements of cash flows for the nine month
              periods ended September 30, 2000 and 1999 (unaudited)


              Notes to Consolidated Condensed Financial Statements (unaudited)



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


Part II.        OTHER INFORMATION

              Item 1.     Legal Proceedings:
                          None

              Item 2.     Change In Securities:
                          None

              Item 3.     Default Upon Senior Securities:
                          None

              Item 4.     Submission of Matters to a vote of Securities Holders:


              Item 5.     Other Information:
                          None


              Item 6.     Exhibits and Reports on Form 8-K

                          Signature


                                       2
<PAGE>

            Financial Data Schedule (for electronic filing purposes)


ITEM 1.  Financial Statements

<TABLE>
<CAPTION>
                 KENILWORTH SYSTEMS CORPORATION AND SUBSIDIARIES
                  CONSOLIDATED CONDENSED BALANCE SHEETS, as of

                          ASSETS        September 30               December 31
                                            2000                       1999
                                        ------------               -----------
                                          (unaudited)
<S>                                     <C>                       <C>
Cash                                      $ 89,125                   $      2
Due from related party                    $      0                   $  9,032
Other current assets                      $    651                   $      0
                                          --------                   --------
TOTAL CURRENT ASSETS                      $ 89,776                   $  9,034
                                          ========                   ========
Equipment (less depreciation)             $  2,614                   $      0
                                          --------                   --------

TOTAL ASSETS                              $ 92,390                   $  9,034
                                          ========                   ========

<CAPTION>
                 LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)

<S>                                   <C>                       <C>
Accounts payable                          $  3,345                   $      0
Due to related party                        24,561                          0
Accrued Liabilities                              0                        242
Convertible Note                           100,000                          0
                                          --------                   --------
   TOTAL LIABILITIES                      $127,906                   $    242

Common Stock, $.01 par value, authorized
100,000,000 shares; issued and outstanding
62,289,018 in December 31, 1999 and
64,175,936 in September 30, 2000
                                           641,759                    622,890
Paid in capital                         23,813,234                 23,784,763
Deficit                                (24,490,509)               (24,398,861)
                                       --------------             ------------
TOTAL STOCKHOLDERS' EQUITY (DEFICIT)     $ (35,516)                $    8,792
                                       --------------             ------------
TOTAL LIABILITIES                        $  92,390                 $    9,034
AND STOCKHOLDERS' EQUITY (DEFICIT)     ==============             ============
</TABLE>

              The accompanying notes are an integral part of these
                       consolidated financial statements.


                                       3
<PAGE>

                 KENILWORTH SYSTEMS CORPORATION AND SUBSIDIARIES
           CONSOLIDATED CONDENSED STATEMENTS of OPERATION and DEFICIT
                                   (Unaudited)

<TABLE>
<CAPTION>
                                  Three month ended           Nine month ended
                                     September 30                September 30
                                   2000         1999           2000        1999
                            ---------------------------    --------------------------
<S>                         <C>             <C>            <C>            <C>
Revenues:
Sales                                  0              0              0              0
Costs and Expenses:
Selling, general
and administrative
expenses                          29,949          3,156         83,518          9,799
Placement cost of
Convertible Note                   8,500                         8,500
Interest expense (income)           (370)                         (370)
Total Costs and
Expenses                          38,079          3,156         91,648          9,799

Net income (loss)
before other income
and (losses)                     (38,079)        (3,156)      (91,648)         (9,799)
Other income and losses
Net income (loss)                (38,079)        (3,156)       (91,648)        (9,799)
Deficit - Beginning
of period                    (24,452,430)   (24,387,031)   (24,398,861)   (24,387,031)
Deficit - End of
of period                    (24,490,509)   (24,390,187)   (24,490,509)   (24,396,830)
                            =============   ============   ============   ============
Earnings (Loss) per
Share of                               0              0              0              0
common stock (Note 5)
Average number of
shares outstanding            64,175,936    612,289,000     64,175,936     62,289,000
                            =============   ============   ============   ============
</TABLE>

                   The accompanying notes are an integral part of these
                       consolidated financial statements.


                                       4
<PAGE>

                 KENILWORTH SYSTEMS CORPORATION AND SUBSIDIARIES
                 CONSOLIDATED CONDENSED STATEMENTS of CASH FLOWS
                                   (unaudited)
<TABLE>
<CAPTION>
                                                    Nine month ended
                                                      September 30
                                                2000              1999
                                              ---------         --------
<S>                                           <C>              <C>
CASH FLOWS USED IN
OPERATING ACTIVITIES


Net Loss                                      $(91,648)         $(9,799)
Adjustments to reconcile
net income to net cash
used in operating activities                    33,593
increase (decrease) in due
to related party
Increase(Decrease)in accrued
Liabilities                                      3,104           (7,574)
                                              ---------         --------
Increase in prepaid expenses                      (651)

      TOTAL ADJUSTMENTS
      NET CASH USED IN
      OPERATING ACTIVITIES                     (55,603)         (17,373)
Cash flows from Investing
Activities
Purchase of Equipment                          (2,614)

CASH FLOWS FROM
Conversion of Promissory Notes

FINANCING ACTIVITIES
Proceeds from Private Placement                 47,340           21,000
Proceeds from issuance of
convertible Promissory Note                    100,000
                                              ---------         --------
Net Increase (Decrease) in cash                 89,123            3,627
CASH - BEGINNING OF PERIOD                           2                0
                                              ---------         --------
CASH - END OF PERIOD                          $ 89,125          $ 3,627

</TABLE>

The accompanying notes are an integral part of these financial statements


                                       5
<PAGE>


                 KENILWORTH SYSTEMS CORPORATION and SUBSIDIARIES
              NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS

NOTE 1 - Summary of Significant Accounting Policies

The Company and Nature of Business

Kenilworth Systems Corporation (the "Company") was incorporated in New York in
April 1968 and is now 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 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 27, 1982 through September 23, 1998.
(See Note 2). For the period of February 5, 1991 through September 23, 1998 the
Company ceased all operations.

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
system that allows casino patrons to play along with live table games in
progress, via closed circuit television, on terminals located within the casino
confines, and TV satellite broadcasts outside the casino confines.

Principals of Consolidation

The consolidated financial statements include the accounts of Kenilworth Systems
Corporation and its wholly owned subsidiaries: Video Wagering Systems
Corporation and Roulabette Corporation. Neither subsidiary has any assets or
liabilities.

In September 1986 the Company exchanged 466,000 shares of its common stock for
all of the outstanding common stock of Video Wagering Corporation ("Video").
This transaction was accounted for under the purchase method of accounting.

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 ($.07) for the
year ended December 31, 1999, the period November 24, 1998 to December 31, 1998
and the period January 1, 1991 to November 23, 1998, respectively.

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

Income Taxes

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

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.

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.


                                       6
<PAGE>
NOTE 2 - Bankruptcy Proceedings

Throughout the 1980's the Company experienced working capital shortages that
resulted in the Company filing a voluntary petition for reorganization under
Chapter 11 of the United States Bankruptcy Code. From August 31, 1982 to June 7,
1985 the Company operated during reorganization proceedings. On June 7, 1985, a
United States Bankruptcy Judge confirmed the Company's Plan of



Reorganization. On April 27, 1988, the Bankruptcy Court entered a final decree
in the case. On October 27, 1988, the case was re-opened on grounds the Debtor
failed to consummate its plan of reorganization and on February 25, 1991 the
case was converted to a case under Chapter 7 of the Bankruptcy Code. By order of
the Court dated June 19, 1991 the Chapter 7 was reconverted to a case under
Chapter 11 of the Bankruptcy Code. A second plan of reorganization was approved
and a second order of confirmation was entered in connection with the Chapter 11
case on October 2, 1991. However, the Debtor was unable to consummate its second
plan of reorganization, and by order dated November 25, 1991, the case was
reconverted to a case under Chapter 7 of the bankruptcy Code.


From February 1991 through September 1998, the Company was inactive. In
September 1998 a United States Bankruptcy Judge in the Eastern District of New
York approved the Final Report and Accounts submitted by the Chapter 7 Trustee
of the Estate of Kenilworth and after obtaining approval from the U.S. Trustee,
Kenilworth made a 100% cash distribution to the creditors and paid in full all
administrative fees and expenses. The Company emerged from Bankruptcy on
September 23, 1998 with no assets and no liabilities. For the period September
24, 1998 through November 23, 1998 the Company was in the process of monitoring
the payments by check to the creditors. No other activity occurred during that
period.


NOTE 3 - Income Taxes

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

The Company estimates that it has available approximately $8,000,000 in net
operating loss carryforwards, of which approximately $4,000,000 will expire at
various dates through 2005 with the remaining amount expiring at various dates
through 2018. Utilization of the NOL carryforward 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 $2,800,000 arising from
its net operating loss carryforwards. The deferred tax asset has been fully
reserved due to the uncertainty of future realization.


NOTE 4 - Convertible Promissory Notes

In August 2000 the Company sold a one (1) year $100,000.00 Convertible
Promissory Note to a single, non-affiliated party. Prior thereto, the Company
had sold a total of $38,500.00 in Convertible Notes to three individuals between
December 1998 and June 30, 2000. All prior Notes were converted into restricted
common stock of the Company as the term is defined under the Securities Act of
1933. All proceeds either have been or will be used to defray current expenses,
which are minimal during present operations.


NOTE 5 - 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 offerings 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.

If initial testing is successful, the second step is to obtain the proper
licenses from the gaming control regulators in the various venues the Company
intends to offer its system. Upon successful licensing, the Company plans to
obtain financing from regular banking sources to finance the manufacturing of
the computer terminals that allow the worldwide play along.

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.

Due to related party at September 30, 2000 represents a loan from a stockholder
of the Company.


                                       7
<PAGE>

ITEM 2.  MANAGEMENT DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
         OF OPERATIONS.
--------------------------------------------------------------------------------

Between February 5, 1991, when the Trustee for the Estate of Kenilworth Systems
Corporation was appointed, and September 23, 1998, when the Trustee of the
Estate of Kenilworth paid, in cash, one hundred (100%) percent of all approved
creditors claims and administration fees and expenses out of the $4,424,056
proceeds from the sale of substantially all of the assets of the Kenilworth
Estate and recoveries of receivables and interest income, the Company did not
conduct any business and operations.

       The Company filed all reports required by the Securities and Exchange
Commission since September 23, 1998, except that the December 31, 1998 annual
report on Form 10-K, included financials, which were not audited. The statement
could not be audited since less than one year expired after the Trustee issued
checks to all creditors. All checks were cashed. No one filed objections to the
distribution of the Estate's funds. The Company included the 1998 audited
financials with the 1999 annual report on Form 10-K and is now current in its
reporting requirements.

       Because of the Company's failure to include audited financials in its
December 31, 1998 10-K report, on January 19, 2000 the Company's Common Shares
were removed from the National Association of Securities Dealers Automated
Quotation System (NASDAQ) Bulletin Board. The shares now trade in the electronic
Pink Sheets with the same ticker symbol "KENS".

       Before entering bankruptcy proceedings the Company was engaged in the
development, manufacturing and marketing of cashless casino wagering systems.

       The Company and three casino operators, Golden Nugget, Inc. (formerly
"Mirage"), Del Web, Inc. and Elsinore Corporation, sponsored legislation to
permit cashless wagering in the state of Nevada. The legislation, in the form of
an amendment to existing casino control statutes, now permits the use of account
cards (debit cards), in Nevada casinos, and was signed into law by Governor
Richard H. Bryan on June 13, 1985. The account cards are now used in every
casino throughout the United States in player tracking systems and pre-paid slot
machine wagering.

       In April 1988, the Company entered into a contract with the Totalizator
Agency Board (the "TAB"), a statutory agency of the State of Victoria,
Australia, to design and install computer hardware and software and supply
plastic wagering cards for high-tech cashless wagering facilities, called
"Tabarets", to be operated by the TAB within the State of Victoria. The first
Tabaret opened on November 27, 1990, with 124 Player Activated Terminals
("PATs") which are similar to slot machines except they are played with debit
cards instead of coins or tokens. The PAT's offer variable denomination play and
selection of five different games. There are now 13,000 PATs in play at 127
locations throughout the State of Victoria.

       In 1990, the Company had entered into contracts with three (3) Atlantic
City, New Jersey casino operators to test market the Company's cashless wagering
system for a minimum of six months. Each installation on the casino floor was to
have a minimum of 100 PAT's and 50 slot machines, converted by the Company to be
played both with cash and cashless. The combination of cash and cashless on
existing slot machines was attractive to the casino operators, as it permitted a
gradual transition from cash to cashless play.

       The Company was to furnish, without expense to the casino, all the
necessary equipment, including the central computer and communications hardware.
The casino operators would provide for the installation of cables required to
interconnect the equipment, as well as provide free accommodations for the
Company's personnel necessary to operate the system during the test. Each of the
operators committed a substantial budget for the promotion of the systems.


                                       8
<PAGE>

After the first system was to be in operation for a period of three (3) months,
and which operated profitably, the New Jersey casino regulatory agency agreed to
commence examining the system for their approval process. The Company expected
this process to take at least three (3) months. When the Company had obtained
approval from the regulatory agencies for its system, the operators would then
purchase the system in quantities, for prices stated in the contract, or ask the
Company to remove the system.

       Just prior to the start of the first test, the Company ceased all
operations. Thus, none of the tests were conducted. The Company sold and
installed only one cashless slot system, which was to the Australian agency
which continues to operate the system with 13,000 PAT's in 127 locations. The
Company receives no revenue from that operation.

       Present plans are by making use of the expertise applied in the
development of the cashless PATs for the TAB in Australia and an operational
cashless prototype system, developed in 1990 for closed circuit TV in house
casino play along with table game terminals, to develop a second generation of
terminals, that allows a player in an interactive manner, at a remote location
(outside the casino confines), to experience the actual play and excitement at
the casino table of Roulette, Baccarat, Craps, Blackjack, and other casino table
games, and is able to make wagers on the various games, without having to be
physically present at the casino table.

       The proposed terminal consists of a personal computer (PC) with two (2)
monitors, one of which is outfitted with a touch screen, a variable denomination
bill acceptor and a bar code ticket dispenser, all housed within an attractive
enclosure, about the size of a typical slot machine. Each terminal is
self-sufficient, manages wagers from $.25 to $100 or the equivalent in most any
currency and receives the table game play via satellite TV broadcasts.

       The terminals are legal wherever in the world slot machines are played
(there are more than 10 million slot machines played throughout the world). In
the United States, the terminals are legal in thirty-seven (37) states that
permit charitable "Nevada/Casino Nights".

       Terminals played in casinos will allow players to wager at table games in
progress, only a few feet away, with much lower minimum wagers. They can also
experiment and learn the games before graduating to table play.

       In addition to developing the stand alone terminals, the Company will
also develop systems that allow individuals at homes, offices, clubs, hotels and
other public gathering places in the industrialized world, to play along with
the live casino games in progress, using personal computers or modalities such
as a TV set connected to the internet, with set top boxes as offered by WEBTV,
AT&T TV, and AOLTV. The computers can either be stationary or the lap top
version, which can communicate wireless.

       For this form of "play along", the Company will promote to state
lotteries, and other state regulated entities, the ability to operate websites
that will manage the wagers. This program will require state legislative
approval, permitting casino play along in lottery, and/or On and Off Track
Betting (OTB) legislation.

       There are powerful arguments for state legislatures to amend their
Lottery Acts and include "play along with casino games". Lottery revenue is
gradually decreasing in every state and most are on their way out. Thirty-two
(32) states and the District of Columbia are pooling their lottery prizes with
the "Power Ball" and "Big Game" national lotteries. In most of those states, the
state lottery finds it difficult to obtain sufficient numbers of players to make
up a minimum weekly lottery prize of $1.0 million. In most states, the revenue
from lottery playing benefits education. States need something more attractive
to restore revenue. It is not "Power Ball" or "Big Game". The only excitement
derived from lottery play is when a player looks at the newspaper, listens to
the radio or views TV broadcasts to see or hear if he or she has won. With "play
along casino games", there is interaction, excitement and fun. All at much
better odds than offered by the lotteries.


                                       9
<PAGE>

       To open an account with the lottery to "play along with casino games", a
player must have a credit card. Those that can least afford it usually do not
have a valid credit card. They are in debt and their credit lines are exhausted.
They purchase lottery tickets to live from day to day, hoping to get lucky and
win. A family with an annual income in excess of $75,000.00 does not play the
lottery, proportionately, in dollar amounts or as often as a family that earns
less than $30,000.00.

       TV broadcasts of sporting events is beneficial to illegal bookmaking,
with no tax benefit to the state governments. The same applies to offshore
virtual casinos. Roulette and Baccarat play are associated with the rich and
famous. It is the "elite" gambling sport. Like horse-racing is the sport of
kings, it is for people that can afford the risks without diminishing their
lifestyle.

       The lotteries can establish maximum wagers, daily, weekly and monthly
limits. The lotteries can identify problem gamblers and can address the issue.
Casinos cannot. Before the average casino player drives to a casino, he or she
has to spend $25.00 for tolls, parking and gasoline. For the same $25.00, "play
along with casino games" offers an enjoyable, exciting night of gambling at
home.

       Once play along in homes and other public gathering places has started,
the Company will introduce casino games such as "limited tournament play." For
$25.00, players can sign up with their respective website operators and make up
to 30 wagers on any table game. The individual that wins the most money during a
specific tournament game period, will win a million dollars, in addition to
their game play win. As more interactive play along with casino games develop,
the prizes will be increased and multiplied. This is how to become a millionaire
by adding skill to the luck needed to win the lottery, while enjoying oneself.
The limited tournament play games can be scheduled more than once a day, during
specific hours of the day, on specific days or nights of the week or once or
twice a month. Actual live experience will determine scheduling.

       Casino gambling has spread throughout the nation. Now, even in
California, constituents, who live within driving distance of Nevada, have
approved casinos on Indian Reservations. Indian tribes have announced that they
have backers and operators for three (3) multi-million dollar casinos.

       Other Indian tribes in other states may wish to earn income from casino
wagering. But, many casinos will be located in areas that cannot be supported by
the surrounding population. "Play along with casino games" is the perfect
solution for such areas. Not only on Indian Tribe land, but also to rehabilitate
economically depressed resorts areas, in the same manner that river boats have
started to rehabilitate decaying waterfronts.

       As a first step to bringing live casino table game play in an interactive
manner to remote sites from the actual casino table, while still having a view
of and experiencing the live casino action and excitement while the games are
being played, the Company must obtain an agreement, preferably with a well
recognized casino operator, to permit the telecasting of live in-progress table
games around the world.

       The Company will first install a number of its terminals in the casino,
from which the world wide TV broadcast will emanate, using a closed circuit, in
house, broadcast of the table games to bring the action to the terminals. The
Company and the sponsoring casino will require the approval of the state casino
control commission for a three month test of the system. Later, the approval of
the terminal as a viable gaming device will be necessary. The Company believes
it can complete this phase within 12 months.

       While the test is in progress, the Company and the sponsoring casino
operator will apply to the State Legislature for a permit allowing the Company
to use the closed circuit television play being broadcast within the casino for
simulcast, via a satellite broadcaster as content for a TV channel, similar to
the HBO, Disney, Horseracing, etc. channels. Eventually, worldwide distribution
will occur, as more TV satellites operate worldwide.

       In order to conduct testing, the Company will require approximately
$5,000,000 to: (a) purchase computers, digital television broadcast equipment
and table games and (b) defray facility costs and hire twenty (20)employees,
including former Company employees, who are specialists in software design, TV
broadcasts and mechanical design and, from time to time, consultants to the
design team.

       Unless the Company is able to obtain these funds, none of the tests and
initial development work can commence.

       The company plans to obtain the necessary funding by offering in a
Private Placement, Common Shares, or Cumulative Convertible Preferred Shares,
and/or by the sale of limited joint venture participations in future play along
with casino franchises.


                                       10
<PAGE>

       In connection with the initial funding of $5,000,000.00, the Company has
been advised by a finder who, in prior years, has obtained capital for the
Company, that his investors are prepared to make additional investments after
the Company obtains permission from a well established casino operator to
conduct the test for in house play along. There can be no assurances that even
if the Company obtains the permission to conduct the first test that the finder
will be able to provide working capital to meet the Company's initial
requirements.

       When the tests are complete and the company has obtained a license from
the gaming control regulators for the use of the terminals in the sponsoring
casino, the Company will obtain production financing from regular banking
sources. This will allow it to finance the manufacturing of the terminals and
supporting equipment, which will be leased to franchisees on a revenue sharing
arrangement.

       The Company has filed a patent application for the system that includes
the terminals, games and for copyright protection for its associated software.
There are no assurances that the Company will be issued any patents and if they
are issued that they will deter competition and/or benefit the Company
financially. The Company's best protection against competition is to be the
first to broadcast from one of the best known names in the casino industry, and
its ability to obtain from traditional sources the substantial amounts of money
necessary to implement the worldwide wagering systems.

       The casino operator will receive an annual license fee and royalty
payment from the worldwide net win of all play along wagers. Net win is the
difference between the amount the lotteries or other franchisee's collect in
wagers and the amount they pay for winnings.

       The lotteries will earn commissions on each wager and the franchisees
will retain their agreed upon share. The Company retains the balance. The
Company will be responsible for furnishing websites or other monitoring systems
at its own expense. It will only make available stand alone self-sufficient
"play along with casino games" terminals on a lease and revenue sharing
arrangement.

       The Company will market the stand alone terminals to slot route
operators, betting shops in Europe and Asia, racetrack, hotel and resort
operators.

       As an inducement to play along with casino games, the Company proposes
offering to install, free of charge, the satellite dish required to receive
satellite broadcasts, and the TV set top box, which converts the TV set into an
interactive mini computer and allows individuals sitting in their living room to
"play along with the casino games", with a wireless remote control, when an
individual first opens an account with the lottery or other franchisee for
$300.00, or the equivalent in any foreign currency. The Company will also pay
the monthly subscription fee to view all digital TV programming offered and the
internet service (ISP) fee if the customer wagers at least $150.00 each month,
win, loose or draw.

       The Company plans to offer to every hotel operator in the industrialized
world, the installation of TV set top boxes on their guest room television sets,
allowing their guests to play along with the live casino games broadcast via
satellite. As an alternative the Company will install a cash management system,
as used with the PAT's in Australia's Tabarets, on a revenue sharing basis.
Hotels then can also offer free play as a bonus to promote room rentals and not
be responsible to the website management operator.


       The Company believes that as viewers throughout the world will play along
with the same games emanating from a single, well-recognized casino with strict
government regulations, a sense of common interest will develop, which offers
the opportunity to establish a website to market goods and services unrelated to
"play along" with casino games.


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<PAGE>

       Now that the Company has completed the filing for patent and copyright
protection for its new generation terminals, the ability to have individuals at
homes, offices, clubs hotels and other public gathering places in the
industrialized world using computers or other modalities such as TV sets
connected to the internet, with set top boxes for play along with casino games
in progress, the Company has started to seek out a casino operator. In
connection therewith, the Company has presented a proposal to the operator, of
who the Company believes to be, the best recognized name in the domestic and
international casino industry, for preliminary discussions to explore the
feasibility of broadcasting worldwide, live casino table games in progress, via
satellite and cable television. The proposal includes the test of the system in
one of the operators casinos and the granting of an option, for the Company to
acquire an exclusive license, with the right to sublicense, to send the closed
circuit in house TV broadcast, for distribution as content to satellite and
cable television providers for inter-active "play along with casino games".

       Discussions, which have started more than three (3) months ago, are
continuing with no definitive results. Until now, the Company refrained from
offering proposals to other suitable casino operators in the United States. Most
of their names are not as recognizable outside of the domestic market, as with
the casino operator we are presently engaged in discussions. One of the time
consuming aspects is the broad legality aspect of our proposal.

       The Company has embarked to acquire a suitable casino broadcast site
in Europe for the European market, where placing wagers (bets), using the
worldwide web (WWW), are permitted. There is no assurance that an
acceptable agreement can be reached with any casino operator.

(a)    Liquidity and Capital Resources

Results of Operation

       Since the Company emerged from bankruptcy proceedings on September 23,
1998, the Company had no revenue from operations, and therefore sustained losses
from general administration expenses amounting to $91,648 during the nine (9)
month period ending on September 30,2000 and $9,799 in 1999. The losses will
continue until the Company has revenue from profitable operations.

Inflation

       Inflation has not had in the past, nor does the Company expect it in the
future a significant impact on the Company's business.

Forward Looking and Cautionary Statements

       This report contains "forward looking statements", including without
limitations: (a) statements of proposed financing; (b) assumptions that casino
operators in the United States or Europe will participate in tests of the play
along systems; (c) obtaining the licenses from the casino regulatory agencies
permitting the use of the gaming systems, (d) proposed broadcasting of live
casino games; (e) obtaining permission from state and foreign governmental
agencies allowing their residents to watch on television and wager along with
the live casino broadcast; (f) the feasibility to profitably operate such play
along casino games, (g) changes in the competitive environment, and (h)general
economic factors in markets where the Company's products and systems are
proposed to be offered, franchised and leased.

Item 4.  Submission of Matters to a vote of Securities Holders:

The Company has not held a meeting of shareholders since 1988 as the cost of
soliciting proxies and holding a meeting for the large number of shareholders
(approximately 11,000) is excessively costly, as it relates to its income. The
directors and officers continue to serve under provisions of the By-Laws which
allow them to continue in office until their successors are elected and take
office.


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<PAGE>

At the next Annual Meeting of Shareholders the shareholders of the Company will
be asked to ratify the following: (a) To approve an amendment to the Company's
Certificate of Incorporation that increased the authorized number of Common
Shares from 61,000,000 shares to 100,000,000 shares, an increase to 200,000,000
shares and to permit the Company's Board of Directors, without further action by
the shareholders, to issue from time to time up to 10,000,000 authorized but
unissued shares of Preference Stock, and to fix and determine the terms,
limitations, relative rights and preferences of the Preferred Stock, in order to
obtain financing, capital and/or acquire other businesses that can improve the
performance or growth of the Company. When any shares of Preferred Stock are
issued, certain rights of their holders may affect the rights of the holders of
Common Stock. In addition to any other powers conferred on the Preferred Stock,
holders of the Preferred Stock would have, under New York General Corporation
Law, the right to vote as a separate class on any increase, decrease or change
in the rights of the Preferred Stock. The affirmative vote of a majority of the
outstanding shares of Preferred Stock would be required for approval of any such
increase, decrease, or change. The authority of the Board of Directors to issue
shares of Preferred Stock with characteristics it determines (such as
preferential voting, conversion redemption and liquidation rights) may have a
deterrent effect on persons who might wish to make a takeover bid to purchase
shares of the Company at a price which might be attractive to its shareholders.
However, the Board of Directors must fulfill its fiduciary obligation to the
Company and its shareholders in evaluating any takeover bid; and (b) The
creation of a stock option and stock award plan (the "Plan") which will
authorize the grant of options to purchase common shares of the Company to key
employees (including directors who are employees), which may be "incentive stock
options" (ISO's) within the meaning of Section 422 of the Internal Revenue Code
of 1986, as amended, or non-qualified options. The Plan also will provide for
the grant of stock appreciation rights and stock awards to eligible participants
subject to forfeiture restrictions; (c) The creation of a Directors Stock Option
Plan pursuant to which stock options are awarded to those directors who are not
officers or employees of the Company ("outside directors"). The plan will permit
the Company to recruit and retain outside directors who will use their best
efforts to promote the success of the Company's business,(d) The election of
members to the Board of Directors; and (e)Ratify the selection of Peter C.
Cosmas Co., CPA's, as the independent public accountant of the Company for the
ensuing fiscal year.

Management at present does not know of any other matters that may be presented
to a vote at the Annual Meeting of Shareholders.


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<PAGE>

SIGNATURE

Pursuant to the requirements of Section 13 of 15(d) of the Securities Exchange
Act of 1934, as amended, 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 and Treasurer



Dated: October 23, 2000



Item 6. Exhibits and Reports on Form 8-K

(a) Exhibits.

    99(a)  Convertible Promissory Note
    99(b)  Letter Agreement with Jeffrey Erb (Consultant)
    99(c)  Letter Agreement with Gordon Copelin, Esq.
    27     Financial Data Schedule

(b) Reports on Form 8-K

The Company filed Current reports on Form 8-K on March 15, 2000 to explain the
reason for the delisting from the NASDAQ Bulletin Board and March 30, 2000 to
give notice that the Company is current with its SEC financial reporting
requirements.


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