GAME FINANCIAL CORPORATION

                                   FORM 10-QSB
                                 MARCH 31, 1997

                     U.S. Securities and Exchange Commission
                             Washington, D. C. 20549

                                   FORM 10-QSB

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

                  For the quarterly period ended March 31, 1997

             [ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE
                                  EXCHANGE ACT

         For the transition period from...............to...............

                         Commission file number 0-23626

                           GAME FINANCIAL CORPORATION
               (Exact name of issuer as specified in its charter)

          Minnesota                                               41-1684452
  (State or other jurisdiction                                  (IRS Employer
of incorporation or organization)                            Identification No.)

                 13705 First Avenue North, Minneapolis, MN 55441
                    (Address of principal executive offices)

                                 (612) 476-8500
                           (Issuer's telephone number)



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____



 APPLICABLE ONLY TO CORPORATE ISSUERS: As of May 13, 1997, the Corporation had 
        4,520,622 shares of its $.01 par value common stock outstanding.



                                TABLE OF CONTENTS

                                                                          Page
                                                                          Number
                                                                          ------
PART I.  FINANCIAL INFORMATION

         Item 1. Financial Statements (Unaudited)

                 Condensed Consolidated Balance Sheets as of March 31,
                     1997 and December 31, 1996                            3

                 Condensed Consolidated Statements of Income for the
                     Three Months Ended March 31, 1997 and
                     March 31,1996                                         4

                 Condensed Consolidated Statements of Cash Flows for
                     the Three Months Ended March 31, 1997 and
                     March 31, 1996                                        5

                 Notes to Condensed Consolidated Financial Statements      6


         Item 2.  Management's Discussion and Analysis of
                    Financial Condition and Results of Operations          6 - 8


PART II. OTHER INFORMATION

         Item 6.  Exhibits and Reports on Form 8-K                         9



SIGNATURES                                                                10

Exhibit 11 - Computation of Earnings Per Share                            11

Exhibit 27 - Financial Data Schedule                                      12



                           GAME FINANCIAL CORPORATION
                      CONDENSED CONSOLIDATED BALANCE SHEETS
                                   (Unaudited)
                                     AS OF:

                                                    MARCH 31,       DECEMBER 31,
                                                       1997             1996
                                                   -----------      -----------
                          ASSETS
CURRENT ASSETS
     Cash and cash equivalents                     $ 5,982,179      $ 5,504,161
     Marketable securities                           1,328,466        1,131,736
     Receivables                                       543,398          522,007
     Other                                             677,292          341,981
                                                   -----------      -----------
          TOTAL CURRENT ASSETS                       8,531,335        7,499,885
                                                   -----------      -----------

EQUIPMENT
     Furniture, fixtures, and equipment              3,333,035        3,074,020
     Less accumulated depreciation                   1,135,207          944,317
                                                   -----------      -----------
                                                     2,197,828        2,129,703
                                                   -----------      -----------

MARKETABLE SECURITIES                                     --            301,530
                                                   -----------      -----------
                                                   $10,729,163      $ 9,931,118
                                                   ===========      ===========


           LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
     Accounts payable                              $ 1,720,519      $ 1,382,010
     Accrued expenses                                  261,114          358,194
     Income taxes payable                              295,530          190,230
     Deferred revenue                                   11,943             --
                                                   -----------      -----------
          TOTAL CURRENT LIABILITIES                  2,289,106        1,930,434
                                                   -----------      -----------

DEFERRED INCOME TAXES                                   63,000           63,000
                                                   -----------      -----------

STOCKHOLDERS' EQUITY
     Preferred Stock                                      --               --
     Common stock                                       45,206           45,206
     Additional paid-in capital                      4,719,910        4,719,910
     Retained earnings                               3,609,814        3,170,441
     Unrealized gain on investments                      2,127            2,127
                                                   -----------      -----------
                                                     8,377,057        7,937,684
                                                   -----------      -----------
                                                   $10,729,163      $ 9,931,118
                                                   ===========      ===========


            See notes to condensed consolidated financial statements



                           GAME FINANCIAL CORPORATION
                   CONDENSED CONSOLIDATED STATEMENTS OF INCOME
                                   (Unaudited)
                           FOR THE THREE MONTHS ENDED:

                                          MARCH 31,       MARCH 31,
                                            1997            1996
                                         ----------      ----------

Revenue                                  $6,489,957      $3,188,161

Cost of Revenue                           4,606,289       2,032,221
                                         ----------      ----------

Gross Margin                              1,883,668       1,155,940

Sales, Marketing, General And
   Administrative Expenses                1,153,204         728,132
                                         ----------      ----------

Operating Income                            730,464         427,808

Other Income                                 20,909          31,073
                                         ----------      ----------

Income Before Taxes                         751,373         458,881

Income Tax Expense                          312,000         175,000
                                         ----------      ----------

Net Income                               $  439,373      $  283,881
                                         ==========      ==========

Net Income Per Share                     $     0.09      $     0.06
                                         ==========      ==========

Weighted Average Shares Outstanding       4,670,495       4,624,356
                                         ==========      ==========


            See notes to condensed consolidated financial statements



<TABLE>
<CAPTION>
                           GAME FINANCIAL CORPORATION
                 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                                   (Unaudited)
                           FOR THE THREE MONTHS ENDED:

                                                                  MARCH 31,        MARCH 31,
                                                                   1997              1996
                                                                -----------       -----------
<S>                                                            <C>               <C>
OPERATING ACTIVITIES
     Net income                                                 $   439,373       $   283,881
     Adjustments to reconcile net income to
       net cash provided (used) by operating activities:
          Depreciation                                              190,890            88,907
          Amortization of investment premiums
               and discounts                                          4,800            21,027
     Changes in operating assets and liabilities:
          Receivables                                               (21,391)              921
          Other current assets                                     (335,311)         (118,119)
          Accounts payable                                          338,509           303,774
          Accrued expenses                                          (97,080)          (89,004)
          Income taxes payable                                      105,300            87,025
          Deferred revenue                                           11,943           110,148
                                                                -----------       -----------
               Net cash provided (used) by
                     operating activities                           637,033           688,560
                                                                -----------       -----------

INVESTING ACTIVITIES
     Proceeds from maturities of marketable securities              100,000         1,416,825
     Purchases of marketable securities                                --            (268,621)
     Purchases of equipment                                        (259,015)         (236,473)
                                                                -----------       -----------
          Net cash provided (used) by investing activities         (159,015)          911,731
                                                                -----------       -----------

NET INCREASE (DECREASE) IN CASH
AND CASH EQUIVALENTS                                                478,018         1,600,291

CASH AND CASH EQUIVALENTS
     Beginning of period                                          5,504,161           868,903
                                                                -----------       -----------
     End of period                                              $ 5,982,179       $ 2,469,194
                                                                ===========       ===========

</TABLE>

            See notes to condensed consolidated financial statements




              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1. - BASIS OF PRESENTATION - In the opinion of the Company, these unaudited
condensed consolidated financial statements contain all adjustments (consisting
of normal recurring accruals) necessary to present fairly the financial position
as of March 31, 1997 and December 31, 1996, and the results of operations and
cash flows for the three months ended March 31, 1997 and 1996. The results of
operations and cash flows for the three months ended March 31, 1997 are not
necessarily indicative of the results to be expected for the year ending
December 31, 1997, or any other period. For further information, refer to the
consolidated financial statements and footnotes included in the registrant
Company's annual report on Form 10-KSB for the year ended December 31, 1996.


NOTE 2. - REVENUE RECOGNITION - The Company has certain financial service
agreements which provide for decreasing rates of fees based on the attainment of
specified dollar amounts of transactions processed. Revenue on these contracts
are recorded using the actual transactions processed during the period at the
overall projected fee rate to be earned under the contract. The estimated fees
to be earned under these contracts are reviewed on a regular basis. The
cumulative impact of changes to these estimates are recorded in the month of the
revision.



NOTE 3. - CASINO LOCATIONS - The Company offers its cash access services
pursuant to agreements with the operators of the host casinos. Such agreements
typically have initial terms of one to three years with renewal clauses.


The following table summarizes the number of locations at which the Company
operated at the indicated dates:

                                               NUMBER OF LOCATIONS AT:
                                               -----------------------

SERVICES PROVIDED                    12/31/94    12/31/95    12/31/96    3/31/97
-----------------                    --------    --------    --------    -------

Credit card only                            5          19          48         48
Credit card and check cashing               5           9          15         14
Credit card and ATM                         -           -           4          5
Credit card, check cashing and ATM          -           -           6          9
Check Cashing Only                          -           -           -          1
ATM only                                    -           -           3          2
                                           --          --          --         --
Total                                      10          28          76         79
                                           ==          ==          ==         ==

Number of states                            6          14          19         20

NOTE 4. - ACCOUNTING CHANGES - Earnings per Share SFAS 128, "Earnings per
Share," supercedes APB Opinion 15, "Earnings per Share," by replacing the method
currently used to compute earnings per share with basic and diluted earnings per
share. Under the new requirements, the dilutive effect of stock options will be
excluded from the calculation of basic earnings per share. Diluted earnings per
share will be calculated similarly to the current fully diluted earnings per
share. SFAS 128 is effective for periods ending after December 15, 1997, with
earlier application prohibited. After the effective date, all prior period
earnings per share data presented shall be restated to conform to the provisions
of this statement. The adoption of SFAS 128 is not expected to have a material
impact on the calculation of earnings per share.



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

The Company's GameCash solution enables casinos to offer their patrons
comprehensive cash access services including credit card cash advances, check
cashing and ATMs. Revenue, which is derived from fees charged for cash access
services, has increased significantly as a result of an increase in the number
of locations at which the Company provides cash access services, the
establishment of operations at larger casinos, and an increase in the volume of
transactions at existing locations. The Company provided GameCash cash access
services at 79 locations at March 31, 1997, compared to compared to 76 and 28 at
the end of 1996 and 1995, respectively.

Cost of revenue consists principally of credit card cash advance processing fees
paid to credit card companies, commissions paid to casino operators pursuant to
cash access service agreements, payroll for employees staffing GameCash service
desks at check cashing locations, depreciation related to the equipment at the
locations, bad check expense and operating supplies of the locations. Fees paid
to credit card companies for processing cash advances are based on a percentage
of the dollar volume of transactions processed. While the applicable rates
payable by the Company decrease slightly at specified aggregate dollar volumes
of transactions processed, processing fees generally increase in proportion to
increases in revenue. Casino commissions also increase with increases in
revenue. However, as existing casinos in emerging markets mature and as
competition for contracts with casinos in both the traditional and emerging
markets intensifies, the Company's margins on new contracts or renewals of
existing contracts may decrease due to higher commission rates payable by the
Company to casino operators. The Company is seeking to expand into the
traditional gaming markets of Nevada and Atlantic City. While larger casinos in
these markets generate higher volumes of cash access revenue, margins for cash
access services are dramatically lower due to the higher commissions generally
paid to casino operators.

Sales, marketing, general and administrative expenses have increased as a result
of the expansion of the Company's sales staff and increased marketing efforts
designed to promote the recognition of Game Financial Corporation and its
GameCash services and systems. The Company's sales staff currently consists of 5
full-time employees, all of whom have experience in the gaming industry. In
addition, Gary A. Dachis, President and Chief Executive Officer of the Company,
continues to spend a significant amount of time with current and potential
customers. Sales, marketing, general and administrative expenses also reflect
the Company's continuing investment in the development of new and the
enhancement of existing technology for cash access services.

REVENUE

Revenue for the quarter ended March 31, 1997 was $6,490,000, a 104% increase
over $3,188,000 for the same period in 1996.

COST OF REVENUE

Cost of revenue for the quarter ended March 31, 1997 was $4,606,000 a 127%
increase over $2,032,000 for the first quarter of 1996. The variable nature of
the majority of the direct expenses is the primary cause of the increase in cost
of revenue.

The gross margin percentage was 29% for the quarter ended March 31, 1997
compared to 36% for the same period last year. The reduction in gross margin as
a percentage of revenue was due primarily to higher casino commission rates
payable to casino operators under certain new or renewed contracts, as well as
start-up expenses, primarily payroll and supplies, related to check cashing
locations opened during the first quarter of 1997 and the end of 1996.

Management continues to believe that as the Company enters into more established
markets with larger properties, primarily Las Vegas and Atlantic City, there
will be increased pressure on gross margins. The Company is continuing its
efforts to improve operating efficiencies and improve the cost effectiveness of
its equipment.

SALES, MARKETING, GENERAL AND ADMINISTRATIVE EXPENSES

Sales, marketing, general and administrative expenses for the quarter ended
March 31, 1997 were $1,153,000 a 58% increase over $728,000 for the same period
last year. The reduction in these expenses as a percentage of revenue was due to
the fixed nature of many of the items, the rapid growth in revenue and the
Company's cost control measures.

The Company will continue to prudently invest in the development of new and
improved applications of technology for the financial services segment of the
gaming industry. In addition, through ongoing contact with current customers,
the Company is continually upgrading and implementing system enhancements.

NET INCOME

For the quarter ended March 31, 1997, net income increased 55% to $439,000 or 9
cents per share compared with $284,000, or 6 cents per share for the same period
last year. All earnings per share amounts have been adjusted to reflect the
5-for-4 stock split effected as a 25% stock dividend paid in September 1995 and
June 1996.

LIQUIDITY AND CAPITAL RESOURCES:

The Company's primary capital requirements have been to fund purchases of
equipment for use at new casino locations and provide working capital for
operating new and existing locations. Cash inventory requirements will increase
as the Company increases the number of locations at which it provides its
GameCash check cashing and ATM services. At March 31, 1997, the Company had
$8,531,000 in current assets compared with $7,500,000 at December 31, 1996.
Cash, cash equivalents and marketable securities totaled $7,311,000 at March 31,
1997 compared with $6,937,000 at December 31, 1996. The Company's business
requires it to maintain cash inventories for check cashing and ATM services.
Cash inventory requirements increase as the Company increases the number of
locations at which it provides its GameCash services. The Company is currently
exploring sources of capital to supplement internally generated funds to address
the cash requirement of continued growth.

Operating activities during the quarter ended March 31, 1997 generated $637,000
of net cash compared with $689,000 of cash for the same period last year. Though
net income was $155,000 more in the first quarter of 1997, the increase in other
current assets offset the difference and the net cash provided by operating
activities was comparable between the quarters. The Company's investment in
property and equipment of $259,000 during the quarter ended March 31, 1997 was
slightly above the investment in equipment during the same period last year.
Investments in property are primarily related to equipment used in casino
locations.

FORWARD LOOKING STATEMENTS
The Private Securities Litigation Reform Act of 1995 provides a safe harbor for
forward-looking statements. This document contains forward-looking statements
relating to such matters as plans for future expansion, business prospects,
anticipated financial performance and similar matters. These statements by their
nature involve substantial risks and uncertainties, and actual results may
differ materially from the anticipated results or other expectations expressed
in the forward-looking statements. These risks and uncertainties include, but
are not limited to, those described in "Management's Discussion and Analysis of
Financial Condition and Results of Operations."



                           PART II. OTHER INFORMATION

ITEM 1.  LEGAL  PROCEEDINGS

              No significant legal proceedings

ITEM 2.  CHANGES IN SECURITIES

              None

ITEM 3.  DEFAULT UPON SENIOR SECURITIES

              None

ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

              None

ITEM 5.  OTHER INFORMATION

              None

ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K

              Exhibits:

              (11) Statement re: computation of earnings per share

              (27)  Financial Data Schedule

              Reports on Form 8-K:

              None


                                   SIGNATURES


     In accordance with Section 13 or 15(d) of the Exchange Act, the registrant
has caused this report to be signed on its behalf by the undersigned, thereunto
duly authorized.




                                                GAME FINANCIAL CORPORATION
                                                (Registrant)

Dated:  May 13, 1997                       By:  /s/ Gary A. Dachis
                                                ------------------
                                                Gary A. Dachis, President and
                                                Chief Executive Officer


In accordance with the Exchange Act, this report has been signed below by the
following persons on behalf of the registrant and in the capacities and on the
dates indicated.


SIGNATURE                      TITLE                                   DATE
---------                      -----                                   ----


/s/ Gary A. Dachis             President, Chief Executive Officer,     5/13/97
---------------------------    Secretary, Treasurer and Director
Gary A. Dachis

/s/ Stephen P. Weisbrod        Vice President Information Systems      5/13/97
---------------------------    and Director
Stephen P. Weisbrod

/s/ Jeffrey Ringer             Vice President Finance and Chief        5/13/97
---------------------------    Financial Officer
Jeffrey L. Ringer

/s/ Paul H. Ravich             Director                                5/13/97
---------------------------
Paul H. Ravich

/s/ Thomas Grossman            Director                                5/13/97
---------------------------
Thomas Grossman