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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549


FORM 10-QSB

(Mark One)

x
    
    QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934For the quarterly period ended September 30, 2003o
    
    TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACTFor the transition period from  to


Commission File Number: 0-11532

VENTURE CATALYST INCORPORATED

(Exact name of small business issuer as specified in its charter)


Utah
(State or other jurisdiction of incorporation or organization)
    
    33-0618806
(I.R.S. Employer Identification No.)


591 Camino De La Reina, Suite 418, San Diego, California 92108
(Address of principal executive offices)

(858) 385-1000

---

(Issuers telephone number)


Not Applicable

---

(Former name, former address and former fiscal year, if changed since last report)


APPLICABLE ONLY TO CORPORATE ISSUERS

State the number of shares outstanding of each of the issuers classes of
common equity, as of the latest practicable date: as of October 31, 2003,
7,206,598 shares of common stock, $.001 par value per share, were outstanding.

Transitional Small Business Disclosure Format (check one):

Yes o No x



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TABLE OF CONTENTS



|                               |                                                                   |                                            |  |  |  |  |  | 
|------------------------------ | ----------------------------------------------------------------- | ------------------------------------------ |  |  |  |  |  | 
|PART I  FINANCIAL INFORMATION
|                               | Item 1. Financial Statements.                                    
|                               |                                                                   | CONSOLIDATED BALANCE SHEETS               
|                               |                                                                   | CONSOLIDATED STATEMENTS OF OPERATIONS     
|                               |                                                                   | CONSOLIDATED STATEMENTS OF CASH FLOWS     
|                               |                                                                   | NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
|                               | Item 2. Managements Discussion and Analysis or Plan of Operation
|                               | Item 3. Controls and Procedures                                  
|PART II  OTHER INFORMATION   
|                               | Item 6. Exhibits and Reports on Form 8-K.                        
|SIGNATURES                    
|Exhibit Index                 
|EXHIBIT 31.1                  
|EXHIBIT 31.2                  
|EXHIBIT 32.1                  
|EXHIBIT 32.2                  



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VENTURE CATALYST INCORPORATED
FORM 10-QSB
FOR THE PERIOD ENDED SEPTEMBER 30, 2003

TABLE OF CONTENTS

Page NumberPART I  FINANCIAL INFORMATIONItem 1. Financial StatementsConsolidated Balance Sheets  September 30, 2003 and June 30, 2003
    
    
    1Consolidated Statements of Operations  Three months ended September 30, 2003 and September 30, 2002
    
    
    2Consolidated Statements of Cash Flows  Three months ended September 30, 2003 and September 30, 2002
    
    
    3Notes to Consolidated Financial Statements
    
    
    4Item 2. Managements Discussion and Analysis or Plan of Operation
    
    
    11Item 3. Controls and Procedures
    
    
    19PART II  OTHER INFORMATIONItem 6. Exhibits and Reports on Form 8-K
    
    
    20SIGNATURES
    
    
    21


FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-QSB contains forward-looking statements
within the meaning of Section 21E of the Securities Exchange Act of 1934, as
amended, and Section 27A of the Securities Act of 1933, as amended, reflecting
managements current expectations. Examples of such forward-looking statements
include our expectations with respect to our strategy. Although we believe
that our expectations are based upon reasonable assumptions, there can be no
assurances that our financial goals will be realized. Such forward-looking
statements involve known and unknown risks, uncertainties and other factors
that may cause our actual results, performance or achievements, or industry
results, to be materially different from any future results, performance or
achievements expressed or implied by such forward-looking statements. Numerous
factors may affect our actual results and may cause results to differ
materially from those expressed in forward-looking statements made by or on
behalf of us. For this purpose, any statements contained herein that are not
statements of historical fact may be deemed to be forward-looking statements.
Without limiting the foregoing, the words, believes, anticipates, plans,
expects and similar expressions are intended to identify forward-looking
statements. The important factors discussed under the caption Factors That
May Affect Future Results in Part I. Item 2  Managements Discussion and
Analysis or Plan of Operation, herein, among others, would cause actual results
to differ materially from those indicated by forward-looking statements made
herein and represent managements current expectations and are inherently
uncertain. Investors are warned that actual results may differ from
managements expectations. We assume no obligation to update the
forward-looking information to reflect actual results or changes in the factors
affecting such forward-looking information.





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PART I  FINANCIAL INFORMATION







Item 1. Financial Statements.







VENTURE CATALYST INCORPORATED
CONSOLIDATED BALANCE SHEETS

September 30, 2003(unaudited)
    
    June 30, 2003ASSETSCurrent Assets:Cash and cash equivalents
    
    $
    6,919,523
    
    
    $
    6,835,190Prepaid expenses and other current assets
    
    
    368,789
    
    
    
    195,867Costs in excess of billings, software contracts
    
    
    45,812
    
    
    
    Accounts receivable, net
    
    
    25,575
    
    
    
    21,897Total current assets
    
    
    7,359,699
    
    
    
    7,052,954Non-Current Assets:Property, plant and equipment, net
    
    
    135,060
    
    
    
    150,197Capitalized software, net
    
    
    63,643
    
    
    
    95,469Deposits and other assets
    
    
    8,321
    
    
    
    8,321Total non-current assets
    
    
    207,024
    
    
    
    253,987Total assets
    
    $
    7,566,723
    
    
    $
    7,306,941LIABILITIES AND SHAREHOLDERS DEFICITCurrent Liabilities:Advances of future consulting fees-Barona Tribe
    
    $
    3,072,003
    
    
    $
    3,076,746Accounts payable and accrued expenses
    
    
    624,561
    
    
    
    533,978Billings in excess of costs, software contracts
    
    
    
    
    
    
    71,140Total current liabilities
    
    
    3,696,564
    
    
    
    3,681,864Long-term debt
    
    
    11,136,706
    
    
    
    10,881,330Total liabilities
    
    
    14,833,270
    
    
    
    14,563,194Commitments and Contingencies
    
    
    
    
    
    
    Shareholders Deficit:Common stock, $.001 par value, 100,000,000 shares
authorized and 7,206,598 shares issued
    
    
    7,207
    
    
    
    7,207Additional paid-in-capital
    
    
    11,946,978
    
    
    
    11,946,978Deferred compensation
    
    
    (1,176
    )
    
    
    (1,680
    )Retained deficit
    
    
    (19,219,556
    )
    
    
    (19,208,758
    )Total shareholders deficit
    
    
    (7,266,547
    )
    
    
    (7,256,253
    )Total liabilities and shareholders deficit
    
    $
    7,566,723
    
    
    $
    7,306,941


The accompanying notes are an integral part of this statement.

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VENTURE CATALYST INCORPORATED
CONSOLIDATED STATEMENTS OF OPERATIONS
( UNAUDITED)

For the three monthsended September 30,2003
    
    2002Revenues:Consulting services
    
    $
    1,950,900
    
    
    $
    2,195,000Software products and services
    
    
    1,816
    
    
    
    Total revenues
    
    
    1,952,716
    
    
    
    2,195,000Cost of Revenues:Consulting services
    
    
    603,153
    
    
    
    2,201,418Anticipated contract loss
    
    
    
    
    
    
    938,700Software products and services
    
    
    236,737
    
    
    
    109,273Total cost of revenues
    
    
    839,890
    
    
    
    3,249,391Gross profit (loss)
    
    
    1,112,826
    
    
    
    (1,054,391
    )Operating expenses:General and administrative
    
    
    629,767
    
    
    
    793,880Sales and marketing
    
    
    238,606
    
    
    
    155,406Research and development
    
    
    13,714
    
    
    
    161,034Total operating expenses
    
    
    882,087
    
    
    
    1,110,320Operating profit (loss)
    
    
    230,739
    
    
    
    (2,164,711
    )Other income (expense):Interest income
    
    
    13,839
    
    
    
    30,297Interest expense
    
    
    (255,376
    )
    
    
    (229,660
    )Other gains
    
    
    
    
    
    
    2,500Other expense
    
    
    (241,537
    )
    
    
    (196,863
    )Net loss
    
    
    (10,798
    )
    
    
    (2,361,574
    )Basic and diluted loss per share:Net loss per sharebasic and diluted
    
    $
    (.00
    )
    
    $
    (.33
    )Weighted average common shares outstanding
Basic and diluted
    
    
    7,206,598
    
    
    
    7,206,598


The accompanying notes are an integral part of these statements.

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VENTURE CATALYST INCORPORATED
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)

For the Three Months EndedSeptember 30,2003
    
    2002Increase (decrease) in cash:Cash flows provided by (used in) operating activities:Net loss
    
    $
    (10,798
    )
    
    $
    (2,361,574
    )Adjustments to reconcile net loss to net cash provided by (used in) operating
activities:Depreciation and amortization
    
    
    53,458
    
    
    
    59,072Amortization of stock based compensation
    
    
    504
    
    
    
    284Anticipated contract loss
    
    
    
    
    
    
    938,700Cost of revenues related to the 1996 Consulting Agreement
    
    
    
    
    
    
    1,599,968Interest expense, long-term debt
    
    
    255,375
    
    
    
    229,660Changes in operating assets and liabilities
    
    
    (207,711
    )
    
    
    (862,163
    )Net cash provided by (used in) operating activities
    
    
    90,828
    
    
    
    (396,053
    )Cash flows used in investing activities:Purchase of furniture and equipment
    
    
    (6,495
    )
    
    
    (6,514
    )Net cash used in investing activities
    
    
    (6,495
    )
    
    
    (6,514
    )Net increase (decrease) in cash
    
    
    84,333
    
    
    
    (402,567
    )Cash at beginning of period
    
    
    6,835,190
    
    
    
    8,908,095Cash at end of period
    
    $
    6,919,523
    
    
    $
    8,505,528Supplemental disclosures of cash flow information:Interest expense paid
    
    $
    
    
    
    $
    Income taxes paid
    
    $
    900
    
    
    $
    1,994


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

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VENTURE CATALYST INCORPORATED
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
September 30, 2003

Note 1. Basis of Presentation and Description of Business

Basis of Presentation

The unaudited financial statements for Venture Catalyst Incorporated have
been prepared by VCAT in conformity with generally accepted accounting
principles for interim financial information and with the rules and regulations
of the U.S. Securities and Exchange Commission. As used in this Report, the
terms we, us, our and VCAT refer to Venture Catalyst Incorporated.
Certain information and footnote disclosures normally included in financial
statements prepared in accordance with generally accepted accounting principles
have been condensed or omitted pursuant to such regulations.

In the opinion of management, these financial statements reflect all
normal, recurring adjustments and disclosures which are necessary for a fair
presentation. The interim unaudited consolidated financial statements should
be read in conjunction with our Annual Report on Form 10-KSB for the fiscal
year ended June 30, 2003 (fiscal 2003). Certain items in the financial
statements for fiscal 2003 have been reclassified to conform to the current
years presentation. Current and future financial statements may not be
directly comparable to our historical financial statements. The results of
operations for the interim period are not necessarily indicative of the results
to be expected for the full year.

Description of Business

VCAT is a provider of consulting services, infrastructure and technology
in the gaming and hospitality market. We operate two business divisions:
consulting services and software. Our consulting services division offers
comprehensive gaming and hospitality consulting services, financial advisory
services, public and governmental relations, strategic planning, technology
solutions and professional and technical expertise. We currently have one
client in our consulting services division, the Barona Group of Capitan Grande
Band of Mission Indians (the Barona Tribe), a federally recognized, sovereign
Native American tribe. We have provided services to the Barona Tribe since
1991. Consulting services are currently provided to the Barona Tribe pursuant
to an Amended and Restated Consulting Agreement dated April 29, 1996, as
modified on February 17, 1998 (the 1996 Consulting Agreement or the
Consulting Agreement), which expires March 31, 2004, unless renewed or
extended. We currently provide services to the Barona Tribe in connection with
their operation of the Barona Valley Ranch Resort & Casino (the Barona Valley
Ranch), a $260 million destination resort that was completed in December 2002.
The Barona Valley Ranch consists of the Barona Casino, a 397-room hotel, an
18-hole championship golf course, convention space and an events center. The
Barona Valley Ranch is located in Lakeside, California, near San Diego.

Our software division is dedicated to the ongoing product and business
development of Mariposa, an enterprise level customer relationship management
(CRM) and marketing software product for license to businesses in the gaming
and hospitality industry. We believe that Mariposa is the first
fully-integrated CRM and marketing software system designed specifically for
the gaming and hospitality industry. Mariposa consists of a suite of
applications that operate in conjunction with existing player tracking and
other data systems, transforming the data into useful and usable information.
The applications can be licensed individually or as a fully integrated system.

Note 2. Summary of Significant Accounting Policies

Stock Based Compensation

Employee stock options are accounted for using the intrinsic value method
under APB No. 25 and related interpretations. Effective March 31, 2003, we
adopted Statement of Financial Accounting Standards (SFAS) 148 Accounting
for Stock Based Compensation Transition and Disclosure that supercedes SFAS
123 Accounting for Stock Based Compensation. SFAS 148 requires pro forma
disclosure of net income or loss per share as if the fair value method of
accounting for stock-based compensation has been applied for both employee and
non-employee stock option grants. It also requires disclosure of option status
on a more frequent basis. The exercise price of each option equals the market
price of our common stock on the date of grant; accordingly, under APB No. 25,
no compensation costs for employee grants were recognized for the options. Had
compensation cost for the options been determined based on the fair value of
the options at the grant dates, our net loss and loss per share would have
increased to the pro forma net loss and loss per share amounts indicated below:

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VENTURE CATALYST INCORPORATED
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
September 30, 2003

Three months ended September 30,2003
    
    2002Net loss:As reported
    
    $
    (10,978
    )
    
    $
    (2,361,574
    )Deduct: Total
stock-based
employee
compensation
expense determined
under fair value
based method for
all option grants,
net of related tax
effects
    
    $
    (80,837
    )
    
    
    (154,843
    )Pro forma
    
    $
    (91,815
    )
    
    $
    (2,516,417
    )Net loss per share:As reported
    
    $
    (.00
    )
    
    $
    (.33
    )Pro forma
    
    $
    (.01
    )
    
    $
    (.35
    )


The fair value of each option grant is estimated on the date of the grant
using the Black-Scholes options-pricing model with the following
weighted-average assumptions used for grants during the three months ended
September 3, 2003 and 2002, respectively: expected volatility of 2.27 and 2.05; average risk-free interest rates of 2.92% and 3.79%; expected lives of approximately 7 and 9 years and
no dividends during the expected term.

The Black-Scholes option-pricing model was developed for use in estimating
the fair value of traded options that have no vesting restrictions and are
fully transferable. In addition, option valuation models require the input of
highly subjective assumptions including the expected stock price volatility.
Because employee stock options have characteristics significantly different
from those of traded options, and because changes in the subjective input
assumptions can materially affect the fair value estimate, in our
opinion, the existing models do not necessarily provide a reliable single
measure of the fair value of its employee stock options.

The pro forma calculations are not indicative of current or future
operating results. In addition, the pro forma charges to net loss are
calculated without income tax benefits since none of the outstanding options
have been exercised. The stock option exercise date determines when the
benefits may be recorded.

Revenue Recognition

Consulting Services.Revenue from the Barona Tribe is recorded as
earned under the terms of the 1996 Consulting Agreement. Under the Consulting
Agreement, the Barona Tribe has the right to draw a minimum income stream from
the net operating income of the Barona Valley Ranch (the Tribal Draw), which
consists of a base amount plus certain additional amounts calculated as a
percentage of various components of the revenues of the Barona Valley Ranch.

The amount earned by and payable to us in a given month, which we refer to
as the consulting fee, is determined through a series of calculations.
First, a gross consulting fee for the month is calculated in accordance with
the formula set forth in the Consulting Agreement, consisting of a monthly base
fee of $475,000, plus additional fees if the net operating income of the Barona
Valley Ranch, including certain adjustments in accordance with the terms of the
agreement, exceeds a fixed base amount.

Next, our consulting fee is determined. The consulting fee is the gross
consulting fee adjusted upward or downward, if applicable, as a result of
accommodating the Tribal Draw, as described below. Under the Consulting
Agreement, our consulting fee for a given month is limited to the lesser of (a)
the gross consulting fee calculated in accordance with the formula described
above or (b) the net operating income of the Barona Valley Ranch after the
Tribal Draw is made. To the extent the net operating income of the Barona
Valley Ranch is insufficient to cover both our gross consulting fee and the
Tribal Draw for a given month, the net operating income is allocated first to
the Tribal Draw and our gross consulting fee is reduced accordingly. The
amount by which our gross consulting fee is reduced becomes a deferred fee
which we could, under certain circumstances, be entitled to recover in
subsequent months to the extent the net operating income for the Barona Valley
Ranch exceeds the sum of the Tribal Draw and our gross consulting fee.
Deferred fees would have to be made up within a contract year, which is a 12
month period from April to March. If the deferred fees are not made up within
the contract year, they are lost permanently.

Since our monthly consulting fee cannot be less than zero, if in a given
month the net operating income of the Barona Valley Ranch is less than the
amount of the Tribal Draw, the gross consulting fee will be adjusted downward,
our consulting fee for that month will be zero and a shortfall with respect to
the Tribal Draw will be created. Once a Tribal Draw shortfall has been
created,

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VENTURE CATALYST INCORPORATED
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
September 30, 2003

the net operating income of the Barona Valley Ranch for a given month is
allocated as follows: first to pay the Tribal Draw for the current month; next
to eliminate the Tribal Draw shortfall from prior months; and, finally, to our
consulting fees. If the net operating income from the Barona Valley Ranch is
less than the sum of the Tribal Draw for the current month and a Tribal draw
shortfall exists from prior months, the balance of the Tribal Draw shortfall is
increased to the extent the net operating income was less than the Tribal Draw
for the month and the Tribal Draw shortfall is carried forward indefinitely
until it is eliminated in subsequent months where the net operating income is
sufficient to cover the current Tribal Draw plus any accumulated Tribal Draw
shortfall. Accordingly, in any month where a Tribal Draw shortfall exists, our
consulting fees are zero.

We have not earned any consulting fees pursuant to the Consulting
Agreement since October 2002 and we do not anticipate earning fees pursuant to
the formula under the Consulting Agreement through the end of its current term
in March 2004. However, during the three months ended September 30, 2003 we
earned $1,951,000 in consulting fees in connection with the performance of
consulting services for the Barona Tribe, which were fees voluntarily paid to
us by the Barona Tribe as a sign of their good faith in the ongoing
negotiations relating to restructuring of our Consulting Agreement. Revenue
with respect to these good faith payments is recognized when the services with
respect to which the payments were made were rendered, provided that we have
received indications from the Barona Tribe that they intend to make a good
faith payment for that period. Based on indications from the Barona Tribe, we
anticipate that they will continue to make good faith payments of $650,000 to
us through the end of the term of the Consulting Agreement in March 2004.

Software.We derive a portion of our revenues from licensing Mariposa
and the sale of related services, including integration, installation,
training, (collectively, professional services), and maintenance and support
services (support services). We recognize revenue from software licensing
and related professional services in accordance with Statement of Position
(SOP) 97-2, Software Revenue Recognition,as amended by SOP 98-9. If the
arrangement between us and the purchaser does not require significant
production, modification, or customization of software, we will generally
recognize revenue when all of the following criteria are met as set forth in
paragraph 8 of SOP 97-2:



| |  |  | persuasive evidence of an arrangement exists;
| | - |  | ---------------------------------------------



| |  |  | delivery has occurred;
| | - |  | ----------------------



| |  |  | the fee is fixed or determinable; and
| | - |  | -------------------------------------



| |  |  | collectibility is probable.
| | - |  | ---------------------------

Our standard license arrangements are multiple element arrangements that
include both software products and professional services. The professional
services are essential to the functionality of the software products, which
require significant modification to meet the customers purpose; therefore, in
accordance with paragraph 69 of SOP 97-2, ARB No. 45 and SOP 87-1, contract
accounting is applied to both the software and service elements of the
arrangement. The final determination for revenue recognition, and related
accounting issues, will be made based on the specific details of each license
arrangement, which could result in the application of alternative revenue
recognition policies in the future.

We have only been in the software business since November 2002, and, as of
September 30, 2003, we have successfully completed only one full installation
of Mariposa, at our primary clients facility, the Barona Valley Ranch.
Mariposa is a complex enterprise level software system that, in order to meet
the customers functionality, must work in conjunction with the customers
player tracking system and a number of other customer data systems. Initially,
as a result of the difficulty in making dependable estimates, the inherent
risks associated with new technologies and our ability to fulfill our
obligations under the license arrangements, we are using the completed contract
method of accounting and will recognize revenue and cost of revenues for each
license arrangement at the time of completion of all elements of a multiple
element arrangement.

Billings and costs are accumulated on the balance sheet. When accumulated
costs exceed related billings to date, they are recorded as an asset called
costs in excess of billings, software contracts. If billings to date exceed
related costs incurred, a liability is recorded called billings in excess of
costs, software contracts. Contracts are segregated for purposes of recording
related assets and liabilities. Provisions for contract adjustments and losses
are recorded in the period such items are identified.

Services not included in our software arrangements are billed on a time
and materials or fixed fee basis and revenues related to the additional
services are recorded as services are provided.

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VENTURE CATALYST INCORPORATED
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
September 30, 2003

Support services will be provided pursuant to a separate contractual
arrangement. Fees for support services are recognized ratably over the term of
the support period. Deferred revenues are recorded when billings for support
services exceed revenues recognized to date.

We recognize revenues related to certain out-of-pocket expenses in
accordance with EITF No. 01-14 Income Statement Characterization of
Reimbursements Received for Out-of-Pocket Expenses Incurred (EITF 01-14).
EITF 01-14 requires that certain out-of-pocket expenses rebilled to customers
be recorded as revenue versus an offset to the related expense. The
out-of-pocket expenses rebilled to customers are included in revenues.

Capitalized Software

We account for software development costs in accordance with SFAS 86,
Accounting for the Costs of Computer Software to Be Sold, Leased, or Otherwise
Marketed (SFAS 86). Under SFAS 86, software costs incurred in connection
with creating computer software products, which are to be marketed, are
expensed until completion of a working model. Thereafter, all software
development costs are capitalized until the product is completed and ready for
sale. The capitalized software costs are subsequently reported at the lower of
unamortized cost or estimated net realizable value. Capitalized software costs
are amortized based on current and future revenues for each product with an
annual minimum equal to the straight-line amortization over the remaining
estimated useful life of the product. We periodically review capitalized
software costs for impairment where the fair value is less than the carrying
value.

During fiscal 2002, we capitalized $247,000 of our software development
costs related to Mariposa. Mariposa was completed on June 30, 2002 and no
further capitalization is expected. We are amortizing the capitalized software
development costs on a straight-line basis over the estimated useful life of
two years. Amortization of the capitalized software development costs, which
is included in cost of revenues, was $32,000 during the three months ended
September 30, 2003 and 2002.

Note 3. Agreements with the Barona Tribe

We have provided services to the Barona Tribe since 1991. Consulting
services are currently provided to the Barona Tribe pursuant to the 1996
Consulting Agreement, which expires March 31, 2004, unless renewed or extended.

Under the Consulting Agreement, the amount, if any, that we are paid by
the Barona Tribe for services rendered is determined using a complex series of
calculations that take into account (a) the monthly gross revenues of the
Barona Valley Ranch; (b) the monthly cash and non-cash expenses (and
capitalized interest of the Barona Tribe related to its operations during the
development project); (c) the funds that the Barona Tribe draws from the gross
revenues of the Barona Valley Ranch for the month; and (d) certain adjustments
related to deferred consulting fees or distributions to the Barona Tribe from
prior months. For a detailed explanation of the consulting fee calculation,
see Note 2, Summary of Significant Accounting Policies  Revenue Recognition.

During the three months ended September 30, 2003 we earned $1,951,000 in
consulting fees in connection with the performance of consulting services for
the Barona Tribe, which were fees voluntarily paid to us by the Barona Tribe as
a sign of their good faith in the ongoing negotiations relating to
restructuring of our Consulting Agreement. Although we have been receiving
good faith payments from the Barona Tribe, we have not earned any consulting
fees pursuant to the Consulting Agreement since October 2002 and we do not
anticipate earning fees pursuant to the formula under the Consulting Agreement
through the end of its current term in March 2004. However, based on
indications from the Barona Tribe, we anticipate that they will continue to
make good faith payments of $650,000 to us through the end of the term of the
Consulting Agreement in March 2004.

In January 2003, as a sign of our good faith intentions in our ongoing
discussions to restructure our business relationship with the Barona Tribe and
in return for use of the Barona Tribes gaming operations as a testing and
marketing platform for Mariposa, we:



| |  |  | granted to the Barona Tribe a perpetual, royalty-free,
non-exclusive and non-transferable license to use Mariposa at the
Barona Valley Ranch including all upgrades, maintenance and support;
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | entered into a profit sharing arrangement with the Barona Tribe,
whereby, so long as we have a consulting agreement in place with the
Barona Tribe, we will share a percentage of any net profits generated
by Mariposa on a quarterly basis, starting January 1, 2003, based on
the following sliding scale:
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

7



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VENTURE CATALYST INCORPORATED
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
September 30, 2003



| |  |  | 25% percent of the first $250,000 of the net profits per quarter;
| | - |  | -----------------------------------------------------------------



| |  |  | 30% percent of the second $250,000 of the net profits per quarter;
| | - |  | ------------------------------------------------------------------



| |  |  | 35% percent of the net profits in excess of $500,000 per quarter;
and
| | - |  | ---------------------------------------------------------------------



| |  |  | agreed never to provide Mariposa or future related software products
developed by us to any Native American tribe in San Diego County or within
sixty-five miles of the Barona Valley Ranch.
| | - |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

The operation of any type of gaming casino on Native American land is
subject to extensive Federal, state and tribal regulation. The regulatory
environment regarding Native American gaming is evolving rapidly. Changes in
Federal, state, or tribal law or regulations may limit or otherwise affect
Native American gaming and could therefore have a material adverse effect on
our operations. In March 1999, the NIGC commenced a preliminary review of our
relationship with the Barona Tribe, including a review of the 1996 Consulting
Agreement. The review is currently pending. In August 2003, we submitted an
application for a suitability determination to the California Gambling Control
Commission. That review also is pending.

Note 4. Business Concentration and Dependence on Key Personnel

Historically, a significant portion of our revenue has been earned from
the Barona Tribe. Although we expect to generate revenues from Mariposa
license arrangements, we expect the majority of our revenues to be generated
from the Barona Tribe for the foreseeable future. During the three months
ended September 30, 2003 and 2002, revenues from the Barona Tribe were
$1,951,000 and 2,195,000, respectively, representing substantially all of our
total revenues.

Our success largely depends upon the continued contributions of L. Donald
Speer, II, our Chairman of the Board and Chief Executive Officer. We have not
entered into an employment agreement with Mr. Speer. The loss of Mr. Speers
services, for any reason, would have a material adverse effect on our success
and prospects.

Note 5. Advances of Future Consulting Fees

We currently have an obligation called advances of future consulting
fees due to the Barona Tribe of $3,072,000. These advances represent payments
made to us in excess of consulting fees earned and are unsecured and
non-interest bearing. We are currently negotiating a possible new business
relationship with the Barona Tribe that could, among other things, result in
the release of all liabilities between the two parties, including the advances
of future consulting fees.

Note 6. Cash and Cash Equivalents

For purposes of the balance sheet and the statement of cash flows, cash
equivalents include time deposits and all highly liquid debt instruments with
original maturities of three months or less.

We maintain our cash in bank deposit and checking accounts that, at times,
may exceed federally insured limits. To date, we have not experienced any
losses in such accounts. Our cash equivalents consist of commercial paper and
certificate of deposit instruments with maturities ranging from three weeks to
three months. Interest rates earned during the three months ended September
30, 2003 on such investments ranged from .89% to 1.09%, as compared to 1.52%
earned during the three months ended September 30, 2002.

Note 7. Available-for-Sale Securities

We classify our investments in equity securities as available-for-sale
securities. These securities are carried at fair value, less deemed
impairment. On an ongoing basis, we review the valuation and recoverability of
the investments and record a realized loss for any portion of the securities
determined necessary for fair statement. Collectively, these investments had
no carrying value at September 30, 2003. We will continue to monitor the
operations of these companies and the valuation of the investments and will
establish a fair value and record an unrealized gain, if deemed appropriate.

8



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VENTURE CATALYST INCORPORATED
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
September 30, 2003

Note 8. Net Loss Per Share

At September 30, 2003, options to purchase 5,683,250 shares of our common
stock, at prices ranging from $0.13 to $12.50 per share, respectively, were not
included in the computation of diluted EPS because they were anti-dilutive for
that purpose. The options expire on various future dates through June 2013.
At September 30, 2002, options to purchase 5,146,312 shares of our common
stock, at prices ranging from $0.13 to $12.50 per share, respectively, were not
included in the computation of diluted EPS because they were anti-dilutive for
that purpose. The options expire on various future dates through November
2011.

Note 9. Stock Options

The following table summarizes stock option activity under our 1995 Stock
Option Plan and 1996 Non-employee Directors Stock Option Plan (collectively the
Plans) for the three months ended September 30, 2003:

Options PriceOptions Outstanding
    
    Per ShareOutstanding, July 1, 2003
    
    
    5,693,250
    
    
    $
    0.13--$12.50Granted
    
    
    
    
    
    
    Exercised
    
    
    
    
    
    
    Cancelled
    
    
    (10,000
    )
    
    $
    4.00Outstanding, September 30, 2003
    
    
    5,683,250
    
    
    $
    0.13--$12.50


Note 10. Segment Reporting

During the second quarter of fiscal 2003, we changed the way we manage our
business and now operate with two business divisions, consulting services and
software, which comprise our segments. We do not allocate operating expenses,
including sales and marketing, general and administrative and research and
development, to our two business divisions. We have prepared operating segment
information in accordance with SFAS No. 131 Disclosures About Segments of an
Enterprise and Related Information to report components that are evaluated
regularly by our decision making group in deciding how to allocate assets and
resources and in assessing performance.

We do not evaluate performance based on return on assets at the segment
level and do not identify or allocate our assets by operating segments. As
such, segment asset information is not disclosed. Information on segments and
a reconciliation to the operating profit (loss) before other expense for the three months ended September 30, 2003 and 2002 is as
follows:

Consulting
    
    
    
    
    
    UnallocatedServices
    
    Software
    
    Operating Expenses
    
    TotalThree months ended September 30, 2003:Revenues
    
    $
    1,950,900
    
    
    $
    1,816
    
    
    
    
    
    
    $
    1,952,716Operating profit (loss)
    
    $
    1,347,747
    
    
    $
    (234,921
    )
    
    $
    (882,087
    )
    
    $
    230,739Three months ended September 30, 2002:Revenues
    
    $
    2,195,000
    
    
    $
    
    
    
    
    
    
    
    $
    2,195,000Operating loss
    
    $
    (945,118
    )
    
    $
    (109,273
    )
    
    $
    (1,110,320
    )
    
    $
    (2,164,711
    )


Note 11. Stock Repurchase/ Long-Term Debt

In September 1996, we entered into a Stock Purchase and Settlement and
Release Agreement with two shareholders, including a former director (the
Stock Purchase Agreement). The terms of the Stock Purchase Agreement
included (a) an aggregate cash payment of $200,000 to such shareholders at the
closing; (b) the issuance of two unsecured promissory notes in the aggregate

9



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VENTURE CATALYST INCORPORATED
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
September 30, 2003

principal amount of $3,500,000, with interest at the rate of 10% per
annum, payments of interest only for the first three years commencing September
30, 1997, followed by three equal annual installments of principal repayment,
with interest on the remaining balance, commencing September 30, 2000; (c) a
contingent obligation (the Initial Contingent Obligations) to issue an
aggregate principal amount of $9,856,000 in unsecured promissory notes to such
shareholders including $2,000,000 in principal amount of notes each year for
four years and $1,856,000 in principal amount of notes to be issued in a fifth
year, each note with interest at 10%, payment of interest only for three years,
followed by three equal annual installments of principal plus interest on the
remaining principal balance; and (d) another contingent obligation (the Second
Contingent Obligation) to issue an additional aggregate principal amount of
$3,000,000 in unsecured promissory notes (or cash, if we have closed a firm
commitment underwritten public offering of securities of not less than
$35,000,000 prior to the contingencies being met). The contingent obligations
will be recorded as the additional cost of the repurchase of our common stock,
as each contingency or condition is met.

The Initial Contingent Obligations are contingent upon our retained
earnings balance, with certain adjustments, being at least $4,000,000 for the
fiscal year ending immediately prior to the date the notes are to be issued.
The test is to be made each year for eight successive years that commenced with
the fiscal year ended June 30, 1997. The Initial Contingent Obligation was met
for the first four test periods; accordingly, $2,000,000 in obligations were
recorded at each of June 30, 1997, 1998, 1999 and 2000, and were treated as
additional consideration for the common stock repurchased under the Stock
Purchase Agreement. The retained earnings balance test was not met on June 30,
2001, 2002 or 2003; accordingly, we did not record the issuance of any
additional notes during those fiscal years.

The Second Contingent Obligation is subject to the following conditions
(a) the Barona Tribe enters into a Class III Gaming Compact with the State of
California which permits the operation of video gaming machines at the Barona
Casino in San Diego County; (b) at the time that the Barona Tribe enters into a
compact, we have a consulting agreement or similar contractual arrangement with
the Barona Tribe; and (c) consulting fees paid to us by the Barona Tribe
relating to the Barona Casino for any consecutive 12-month period within five
years after the Barona Tribe has entered into the Compact, equal or exceed one
and one-half times the consulting fees for the fiscal year ended June 30, 1996.
To date, only (a) and (b) above have been satisfied; accordingly, we have not
recorded the issuance of any note pursuant to the Second Contingent Obligation.

In April 2000, VCAT and the two note holders announced that $3,069,000 of
current and future corporate indebtedness would be exchanged for equity prior
to its maturity. Pursuant to the terms of the exchange, a total of 579,000
shares of our restricted stock and warrants to acquire an additional 145,000
shares of our common stock at $5.89 per share were issued to retire the debt.
The warrants expired in April 2003, unexercised.

All payments pursuant to the Stock Purchase Agreement and the notes are
subject to our ability to meet certain financial tests and compliance with
certain state law provisions and our Articles of Incorporation concerning
repurchase transactions. Because of our current financial position, we were
not required to make payments under the notes in September 2003, 2002 or 2001.
This does not constitute a default under the notes. However, pursuant to the
terms of the stock purchase agreement and the applicable notes, accrued
interest of $1,009,000 and $918,000, in September 2003 and 2002 respectively,
was added to the principal amount of the debt which will continue to accrue
interest pending certain other events, including the permissibility of us to
make payments in the future.

The remaining principal amount of the debt and accrued interest related to
this stock repurchase (including the accrued interest that was added to
principal as a result of VCAT not making the scheduled payments in September
2003, 2002 and 2001) was $11,137,000 as of September 30, 2003. Based upon our
current financial position and our current sources of revenue, we do not expect
that such payments will be required for the foreseeable future; therefore all
amounts have been classified as non-current liabilities. However, if we are
successful in restructuring our business relationship with the Barona Tribe or if we
generate significant revenue under the Consulting Agreement or from Mariposa or
other sources, it is possible that a portion of the long-term debt and related
interest due to the note holders will be paid in the future. In such case, we
will classify the respective amount as a current liability at the time we
believe such amount becomes current.

If our financial condition improves to the extent that we meet the
financial tests set forth in the Stock Purchase Agreement and the notes and, at
the time a scheduled payment becomes due, we do not have sufficient cash on
hand to pay the scheduled payments and sustain our ongoing operations, we will
need to seek additional capital to repay some or all of this debt. There can
be no assurance that this alternative would be available at the time or on
terms acceptable to us.

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

Overview

We are a provider of consulting services, infrastructure and technology in
the gaming and hospitality market. Since the second quarter of fiscal 2003, we
have operated two business divisions: consulting services and software. Our
consulting services division offers comprehensive gaming and hospitality
consulting services, financial advisory services, public and governmental
relations, strategic planning, technology solutions and professional and
technical expertise and our software division is dedicated to the ongoing
product and business development of Mariposa. As used in this Report, the
terms we, us, our and VCAT refer to Venture Catalyst Incorporated.
This discussion and analysis should be read in conjunction with Managements
Discussion and Analysis or Plan of Operation set forth in our Annual Report on
Form 10-KSB for the year ended June 30, 2003.

Our Consulting Division

We currently have one client in our consulting services division, the
Barona Group of Capitan Grande Band of Mission Indians (the Barona Tribe).
We provide services to the Barona Tribe in connection with their operation of
the Barona Valley Ranch Resort & Casino (the Barona Valley Ranch), pursuant
to an Amended and Restated Consulting Agreement dated April 29, 1996 (effective
March 27, 1996), as modified on February 17, 1998 (the 1996 Consulting
Agreement or the Consulting Agreement). The Consulting Agreement expires
March 31, 2004.

Under the Consulting Agreement, the amount, if any, that we are paid by
the Barona Tribe for services rendered is determined using a complex series of
calculations that take into account (a) the monthly gross revenues of the
Barona Valley Ranch; (b) the monthly cash and non-cash expenses (and
capitalized interest of the Barona Tribe related to its operations during the
development project); (c) the funds that the Barona Tribe draws from the gross
revenues of the Barona Valley Ranch for the month; and (d) certain adjustments
related to deferred consulting fees or distributions to the Barona Tribe from
prior months.

Under the Consulting Agreement, the Barona Tribe has the right to draw a
minimum income stream from the net operating income of the Barona Valley Ranch
(the Tribal Draw), which consists of a base amount plus certain additional
amounts calculated as a percentage of various components of the revenues of the
Barona Valley Ranch. The amount earned by and payable to us in a given month,
which we refer to as the consulting fee, is determined through a series of
calculations. First, a gross consulting fee for the month is calculated in
accordance with the formula set forth in the Consulting Agreement, consisting
of a monthly base fee of $475,000, plus additional fees if the net operating
income of the Barona Valley Ranch, including certain adjustments in accordance
with the terms of the agreement, exceeds a fixed base amount. Next, our
consulting fee is determined. The consulting fee is the gross consulting fee
adjusted upward or downward, if applicable, as a result of accommodating the
Tribal Draw, as described below. Under the Consulting Agreement, our
consulting fee for a given month is limited to the lesser of the gross
consulting fee calculated in accordance with the formula described above or the
net operating income of the Barona Valley Ranch after the Tribal Draw is made.
To the extent the net operating income of the Barona Valley Ranch is
insufficient to cover both our gross consulting fee and the Tribal Draw for a
given month, the net operating income is allocated first to the Tribal Draw and
our gross consulting fee is reduced accordingly. The amount by which our gross
consulting fee is reduced becomes a deferred fee which we could, under
certain circumstances, be entitled to recover in subsequent months to the
extent the net operating income for the Barona Valley Ranch exceeds the sum of
the Tribal Draw and our gross consulting fee. Deferred fees would have to be
made up within a contract year, which is a 12 month period from April to
March. If the deferred fees are not made up within the contract year, they are
lost permanently.

Since our monthly consulting fee cannot be less than zero, if in a given
month the net operating income of the Barona Valley Ranch is less than the
amount of the Tribal Draw, the gross consulting fee will be adjusted downward,
our consulting fee for that month will be zero and a shortfall with respect to
the Tribal Draw will be created. Once a Tribal Draw shortfall has been
created, the net operating income of the Barona Valley Ranch for a given month
is allocated as follows: first to pay the Tribal Draw for the current month;
next to eliminate the Tribal Draw shortfall from prior months; and, finally, to
our consulting fees. If the net operating income from the Barona Valley Ranch
is less than the sum of the Tribal Draw for the current month and a Tribal draw
shortfall exists from prior months, the balance of the Tribal Draw shortfall is
increased to the extent the net operating income was less than the Tribal Draw
for the month and the Tribal Draw shortfall is carried forward indefinitely
until it is eliminated in subsequent months where the net operating income is
sufficient to cover the current Tribal Draw plus any accumulated Tribal Draw
shortfall. Accordingly, in any month where a Tribal Draw shortfall exists, our
consulting fees are zero.

We have not earned any consulting fees pursuant to the Consulting
Agreement since October 2002 and we do not anticipate earning fees pursuant to
the formula under the Consulting Agreement through the end of its current term
in March 2004. However, during the three months ended September 30, 2003 we
earned $1,951,000 in consulting fees (which included three payments of
$650,000) in connection with the performance of consulting services for the
Barona Tribe. These fees were voluntarily paid to us by the Barona Tribe as a
sign of their good faith in the ongoing negotiations relating to the
restructuring of our Consulting Agreement.

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Our consulting fees resulting from our consulting services to the Barona
Tribe are VCATs principal source of revenues and liquidity. Based on
indications from the Barona Tribe, we anticipate that they will continue to
make good faith payments of $650,000 to us through the end of the term of the
Consulting Agreement in March 2004. We do not anticipate earning fees pursuant
to the formula under the Consulting Agreement through the end of the current
term of the Consulting Agreement because of the existing cumulative shortfall
and the formula established in the Consulting Agreement is unlikely to result
in consulting fees. Accordingly, consistent with our ongoing efforts, we
intend to continue to discuss with the Barona Tribe a restructuring of our
consulting relationship to take into account these factors. We anticipate that
our discussions with the Barona Tribe relating to restructuring our economic
relationship will coincide with our discussions relating to extending the term
of the Consulting Agreement. At this time, there can be no assurance as to
whether we will be successful in negotiating a new consulting agreement with
the Barona Tribe with terms which will provide predictable monthly income.

In January 2003, as a sign of our good faith intentions in our ongoing
discussions to restructure our business relationship with the Barona Tribe and
in return for use of the Barona Tribes gaming operations as a testing and
marketing platform for Mariposa, we:



| |  |  | granted to the Barona Tribe a perpetual, royalty-free,
non-exclusive and non-transferable license to use Mariposa at the
Barona Valley Ranch including all upgrades, maintenance and support;
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | entered into a profit sharing arrangement with the Barona Tribe,
whereby, so long as we have a consulting agreement in place with the
Barona Tribe, we will share a percentage of any net profits generated
by Mariposa on a quarterly basis, starting January 1, 2003, based on
the following sliding scale:
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | 25% percent of the first $250,000 of the net profits per quarter;
| | - |  | -----------------------------------------------------------------



| |  |  | 30% percent of the second $250,000 of the net profits per quarter;
| | - |  | ------------------------------------------------------------------



| |  |  | 35% percent of the net profits in excess of $500,000 per quarter;
and
| | - |  | ---------------------------------------------------------------------



| |  |  | agreed never to provide Mariposa or future related software products
developed by us to any Native American tribe in San Diego County or within
sixty-five miles of the Barona Valley Ranch.
| | - |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Our Software Division

During fiscal 2001, we initiated a project focused on creating a fully
integrated customer relationship management (CRM) and marketing software
product for the gaming and hospitality industry, which is marketed under the
name Mariposa. Mariposa has been deployed at the Barona Valley Ranch and in
April 2003, we announced that we entered into our first licensing agreement for
Mariposa with the Hard Rock Hotel & Casino in Las Vegas, Nevada. We are in the
process of completing the installation of Mariposa at their facility and we are
actively marketing Mariposa to potential clients. We have made, and will
continue to make, material organizational changes, including adding staff, to
cultivate additional qualified sales leads and to maintain, support and
continue development of Mariposa. This will involve material additions to our
expenses and additional capital. At this time, we are uncertain whether we
will be able to generate enough revenue to absorb the additional expenses.

Critical Accounting Policies

Our discussion and analysis of our financial condition and results of
operations is based upon our consolidated financial statements, which have been
prepared in accordance with accounting principles generally accepted in the
United States. The preparation of these financial statements requires us to
make estimates and judgments that affect the reported amount of assets and
liabilities and disclosure of contingent assets and liabilities at the date of
the financial statements and the reported amount of revenues and expenses for
each period. Critical accounting policies are defined as policies that
management believes are (a) the most important to the portrayal of our
financial condition and results of operations; and (b) that require our most
difficult, subjective or complex judgments, often as a result of the need to
make estimates about the effects of matters that are inherently uncertain.

We believe that revenue recognition and our treatment of the anticipated
contract loss and accrued consulting costs are the most critical accounting
policies that impact our consolidated financial statements.

Revenue RecognitionConsulting Services.In accordance with the
governing revenue recognition guidelines, revenue for consulting services is
recognized when the services are rendered, provided all of the following
criteria are met:

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| |  |  | persuasive evidence of an arrangement exists;
| | - |  | ---------------------------------------------



| |  |  | the fee is fixed or determinable; and
| | - |  | -------------------------------------



| |  |  | collectibility is reasonably assured.
| | - |  | -------------------------------------

Revenue relating to the above-referenced good faith payments is recognized
when the services with respect to which the payments were made were rendered,
provided that we have received indications from the Barona Tribe that they
intend to make a good faith payment for that period.

Anticipated Contract Loss.If, at any time through the end of the term
of the Consulting Agreement in March 2004, estimated future costs exceed
estimated future revenues under the Consulting Agreement we will record a loss
related to the Consulting Agreement for the amount the estimated expenses
exceed the estimated revenues. The loss will be recorded as an anticipated
contract loss and corresponding liabilities will be established for the current
and non-current amounts, which are recorded as accrued consulting costs. Once
recorded, the accrued consulting costs will fluctuate throughout the term of
the Consulting Agreement as a result of the timing of revenues earned and costs
incurred. The accrued consulting costs will increase in any period when
anticipated revenues are earned that are in excess of actual costs incurred, by
the amount that the anticipated revenues earned exceed the costs incurred, and
a corresponding increase in cost of revenues will be recorded in order to
reflect no income earned from the Consulting Agreement. Alternatively, when
actual costs incurred exceed revenues earned in any period, the accrued
consulting costs and cost of revenues will be reduced by the amount the costs
incurred exceed the revenues such that the Consulting Agreement will have no
impact on our income or loss. The anticipated contract loss and related
liabilities were reduced to zero in the fourth quarter of fiscal 2003. As a
result of the good faith payments received during the quarter, no further
losses related to the Consulting Agreement were recorded during the three
months ended September 30, 2003.

Revenue RecognitionSoftware Products and Services.We expect to derive
a portion of our revenues from licensing of Mariposa software applications and
the sale of related professional services, including integration, installation,
training, (collectively, professional services), and maintenance and support
services (support services). Inherent in the software revenue recognition
process are significant estimates and judgments which influence the timing and
amount of revenues recognized.

In accordance with the governing revenue recognition guidelines, if the
arrangement between vendor and purchaser does not require significant
production, modification, or customization of software, revenue should be
recognized when all of the following criteria are met:



| |  |  | persuasive evidence of an arrangement exists;
| | - |  | ---------------------------------------------



| |  |  | delivery has occurred;
| | - |  | ----------------------



| |  |  | the vendors fee is fixed or determinable; and
| | - |  | ----------------------------------------------



| |  |  | collectibility is probable.
| | - |  | ---------------------------

Our standard license arrangements are multiple element arrangements that
include both software products and professional services. The professional
services are essential to the functionality of the software products, which
require significant modification to meet the customers purpose;, therefore, in
accordance with paragraph 69 of SOP 97-2, ARB No. 45 and SOP 87-1, contract
accounting is applied to both the software and professional service elements of
the arrangement. The final determination for revenue recognition policies, and
related accounting issues, will be made based on the specific details of each
arrangement, which could result in the application of alternative revenue
recognition policies in the future.

We have only been in the software business since November 2002, and as of
September 30, 2003 we have successfully completed only one full installation of
Mariposa, at the Barona Valley Ranch, and we are in the process of completing
the installation of Mariposa at the Hard Rock Hotel & Casino in Las Vegas,
Nevada. Mariposa is a complex enterprise level software system that, in order
to meet the customers functionality, must work in conjunction with the
customers player tracking system and a number of other customer data systems.
Initially, as a result of the difficulty in making dependable estimates, the
inherent risks associated with new technologies and our ability to fulfill our
obligations under the license arrangements, we are using the completed contract
method and will recognize revenue and cost of revenues for each license
arrangement at the time of completion of all elements of a multiple element
arrangement.

Billings and costs related to license arrangements are accumulated on the
balance sheet. When accumulated costs exceed related billings to date, they
are recorded as an asset called costs in excess of billings, software
contracts. If billings to date exceed related costs incurred, a liability is
recorded called billings in excess of costs, software contracts. Contracts
are segregated for

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##### Table of Contents



purposes of recording related assets and liabilities. Provisions for
contract adjustments and losses are recorded in the period such items are
identified.

Services not included in our software license arrangements are billed on a
time and materials or fixed fee basis and revenues related to the additional
services are recorded as services are provided.

Support services will be provided pursuant to a separate contractual
arrangement. Fees for support services are recognized ratably over the term of
the support period. Deferred revenues are recorded when billings for support
services exceed revenues recognized to date.

Results of Operations

Revenues

Revenues for the three months ended September 30, 2003 were $1,953,000,
compared to $2,195,000 during the same period last year. During the three
months ended September 30, 2003, we earned $1,951,000 in
consulting fees, resulting from three good faith payments from the Barona Tribe, for services provided during the
period. During the three months ended September 30, 2002, we earned (a)
$1,690,000 for services provided in July and August 2002 pursuant to the
formula in the Consulting Agreement, (b) a $475,000 good faith payment from the
Barona Tribe for services provided in September 2002, and (c) $30,000 from
other clients as a result of a one-time payment for financial advisory
services.

Cost of Revenues

Cost of revenues for the three months ended September 30, 2003 decreased
74%, to $840,000 from $3,249,000, during the three months ended September 30,
2002.

Cost of revenues in our consulting services division consists primarily of
compensation and other personnel-related expenses, costs of services provided
by third-party consultants and service providers, client relations expenses and
other direct costs related primarily to providing consulting services to the
Barona Tribe. The cost of revenues during the three months ended September 30,
2003 in the consulting services division was $603,000, a decrease of 81%
compared to $3,141,000 recorded during the same period in fiscal 2003. During
the prior year period, the actual cost of revenues incurred related to the
Consulting Agreement were $602,000, however, the cost of revenues were
increased by an aggregate amount of $2,539,000, attributable to the
anticipated contract loss, of which $939,000 was recorded as an
increase to the anticipated contract loss. In the fourth quarter of fiscal 2003,
the remaining anticipated contract loss was reduced to zero and no adjustments
to the cost of revenues were recorded during the three months ended September
30, 2003 as a result of the anticipated contract loss. For a more detailed
discussion of the anticipated contract loss, see Critical Accounting
Policies, above.

The cost of revenues in our software division consist primarily of costs
for services provided by a third-party software development firm engaged by us
in connection with maintenance and support services for Mariposa, compensation
and other personnel-related expenses, amortization of capitalized software
costs and other direct costs related to Mariposa. The cost of revenues in the
software division during the three months ended September 30, 2003 increased
117% to $237,000 from $109,000 during the three months ended September 30,
2002. Expenses during the current year period increased primarily as a result
of increases in (a) maintenance and support services, primarily related to the
ongoing enhancements and bug fixes of the initial version of Mariposa, and
(b) compensation and other personnel-related expenses.

General Operating and Administrative Expenses

General and administrative expenses include costs associated with our
finance, human resources, legal and other administrative functions. These
costs consist primarily of compensation and other personnel-related expenses,
professional fees, facilities, depreciation, insurance costs and other general
overhead and administrative costs. General operating and administrative
expenses decreased 21% to $630,000 for the three months ended September 30,
2003, from $794,000 during the same period last year. The decrease was
primarily attributable to a decrease in legal fees and professional services,
which in the prior year period were significant as a result of the proposed
merger transaction and related litigation at that time, and insurance expense.
The decrease was partially offset by an increase in compensation and other
personnel-related expenses.

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Other Income and Expense

For the three months ended September 30, 2003, interest income decreased
to $14,000 compared to $30,000 for the same period last year, as a result of
lower average cash balance and lower interest rates on investments. Interest
expense increased to $255,000 from $230,000, as a result of the increase in the
principal amount of notes payable related to the 1996 repurchase of shares of
our common stock which is discussed in greater detail under the caption
Liquidity and Capital Resources, below.

There was no other income recorded during the three months ended September
30, 2003. During the prior year period, other income was $2,500, resulting
from a gain on an asset sale.

Income Tax Benefit

During the three months ended September 30, 2003 and 2002, the income tax
benefit was zero, as a result of our net operating loss carry-forward.

Liquidity and Capital Resources

Our principal sources of liquidity at September 30, 2003 to fund ongoing
operations are cash provided from operations and unrestricted cash and cash
equivalents of $6,920,000. During the three months ended September 30, 2003,
our cash position increased by $84,000 from the June 30, 2003 balance of
$6,835,000. This increase was a result of net cash provided by operating
activities of $91,000 partially offset by cash used in investing activities of
$7,000.

The cash provided by operating activities of $91,000 resulted primarily
from revenue received from the Barona Tribe less cash expenditures and annual
insurance premium payments made during the period. Cash used in investing
activities of $7,000 resulted from the purchase of fixed assets.

In September 1996, we entered into a Stock Purchase and Settlement and
Release Agreement with two of our shareholders (the Stock Purchase
Agreement). In connection with the Stock Purchase Agreement, we incurred debt
in the form of unsecured promissory notes. For a description of the notes, see
Note 11 to the Consolidated Financial Statements.

As of September 30, 2003, the remaining principal amount of debt and
accrued interest was $11,137,000. Based upon our current stockholders deficit
balance, estimates of fees under the Consulting Agreement and our current
sources of revenues, pursuant to the terms of the notes, we do not expect that
we will be obligated to make a payment of principal or interest for the
foreseeable future; accordingly, all amounts have been classified as
non-current liabilities. However, if we are successful in restructuring the
Consulting Agreement or if we generate significant revenue under the Consulting
Agreement beyond our expectations or from other sources, a portion of the
long-term debt due to the noteholders could be paid in the future. In such
case, we would classify the respective amount as a current liability at that
time.

At September 30, 2003, we have an obligation called advances of future
consulting fees due to the Barona Tribe of $3,072,000. These advances are
unsecured and non-interest bearing. At the beginning of the management
relationship in 1992 with the Barona Tribe, the Barona Tribe was not in a
financial position to make required investments in the Barona Casino. We
invested approximately $2,500,000 into the Barona Casino for additional working
capital needs that was accounted for as revenue to the Barona Casino and
expensed by us due to the uncertainty of recovery. As the Barona Casino became
profitable between 1992 and 1994, $2,500,000 of the initial profits of the
Barona Casino were distributed to us after all draws, distributions and
payments were made to the Barona Tribe and were recorded on our books as an
obligation called advances of future consulting fees. The Barona Casino
established a corresponding receivable. The remaining balance in advances of
future consulting fees at September 30, 2003 of $572,000 is due primarily to
timing differences between payments to us and consulting revenues earned and
recognized since that time. Forgiveness of this liability is one of the issues
under consideration by us and the Barona Tribe in connection with the ongoing
negotiations to restructure our business relationship with the Barona Tribe.
We are not certain on how this issue will ultimately be resolved.

In connection with a $200,000,000 loan obtained by the Barona Tribe in
July 2001, we entered into a Reaffirmation, Consent and Amendment of
Intercreditor and Subordination Agreement (Subordination Agreement). The
Subordination Agreement permits consulting fees or other amounts owed to us to
be paid up to the amounts permitted under the debt coverage ratios set forth in
the permanent financing loan agreement. No payments may be made if there is a
default under the terms of the permanent financing loan agreement that has not
been cured or waived. As of September 30, 2003, we are not aware of any
default by the Barona Tribe of any of the terms of the loan agreement. Our
consulting fees will still be subject to the Subordination Agreement if we
enter into a new business relationship with the Barona Tribe pursuant to terms
substantially similar to those currently being discussed.

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Based upon the current level of operations, we believe that the cash
generated from operations and available cash and cash equivalents will be
adequate to meet our operating expenses and to service our debt requirements as
they come due for at least the next twelve months. Our consulting agreement
with the Barona Tribe expires in March 2004 and our consulting fees resulting
from our consulting services to the Barona Tribe are VCATs principal source of
revenues and liquidity. Although, based upon indications from the Barona
Tribe, we expect to receive good faith payments of $650,000 through
the end of the current term of the Consulting Agreement in March 2004, we do
not anticipate earning fees pursuant to the formula under the Consulting
Agreement through the end of the current term of the Consulting Agreement in
March 2004. Consistent with our ongoing efforts, we intend to continue to
discuss with the Barona Tribe a restructuring of our consulting relationship.
Unless or until we enter into a new consulting agreement with the Barona Tribe
and our consulting fees and other current sources of revenue become more
certain and predictable, there can be no assurance that our business will
generate sufficient cash flow from operations to sustain our long-term working
capital, capital expenditure and debt service needs.

Factors That May Affect Future Results

Risks Related to our Financial Condition

We have incurred substantial losses recently and our future sources of
revenues are uncertain.

We incurred net losses of $11,000 during the three months ended September
30, 2003, and $1,430,000 during fiscal 2003 and $5,715,000 during fiscal 2002.
At September 30, 2003, our total liabilities exceeded our assets by $7,267,000.
Although we anticipate receiving monthly fee payments from the Barona Tribe of
$650,000 through the end of the current term of the Consulting Agreement in
March 2004, the Barona Tribe is not obligated to make these payments to us
under the terms of the Consulting Agreement; therefore, our revenues remain
uncertain for the foreseeable future as we continue to explore restructuring
and extending our business relationship with the Barona Tribe. Additionally,
we are uncertain as to the amount and timing of revenues from other sources,
including Mariposa as we evaluate the extent of the acceptance of Mariposa in
the marketplace and we evaluate the demand in the marketplace for other gaming
related consulting services which we are currently offering.

We have limited resources to grow our business.

Our cash and cash equivalents were $6,920,000 as of September 30, 2003.
The uncertainty and unpredictability of our future revenue may reduce our
ability to pursue or exploit additional business opportunities. If we are
unable to pursue or exploit future business opportunities, it could have an
adverse effect on the growth of our business.

Risks Related to our Consulting Agreement and Business Concentration with the
Barona Tribe

Our revenues are currently dependent upon one client, the Barona Tribe.

We have historically derived substantially all of our revenue from
providing consulting services to the Barona Tribe. The Consulting Agreement
expires in March 2004 and, although our intention is to extend our business
relationship beyond the term of the Consulting Agreement, we are not certain
that the Barona Tribe will agree to an extension. If we are successful in
extending our relationship, we are uncertain as to the term of such extension
or the fees we will be entitled to under such extension. Loss of the Barona
Tribe as a client, or a material reduction in the fees we earn from the Barona
Tribe, would have a material adverse effect on our business and may result in
our inability to continue to operate the business.

Our revenues from the Barona Tribe are subject to significant fluctuation
and uncertainty.

During the past two fiscal years, we have derived consulting revenues
earned under the Consulting Agreement and from voluntary payments made by the
Barona Tribe to us relating to consulting services rendered to them in
connection with their gaming operations. Revenues and profits related to the
operation of the Barona Valley Ranch are factors in determining the consulting
revenues earned by us under the Consulting Agreement. Accordingly, an
understanding of the uncertainties associated with operating a gaming property
are important to an understanding of why our revenues may fluctuate or be
uncertain from time to time.

In general, gaming revenues are difficult to estimate because of a variety
of factors including general economic conditions, competition with other gaming
venues for patrons, and sporadic high-end play results. For example, the
recent expansion of gaming activities in California has resulted in experienced
gaming companies negotiating or entering into contracts with Native American
tribes in California and there has been an increase in the number of Native
American casinos operating in the San Diego marketplace. The number of casinos
has grown from four to ten since 2000 and there are additional casinos that
will be opening, or that are attempting to open, in this area, all of which may
be competing for the same customers. This increased competition could reduce
the profit levels achieved at the Barona Valley Ranch which could adversely
impact our ability to restructure and or extend our business relationship with
the Barona Tribe, or if we are successful in restructuring and or extending the
relationship, the amount of fees earned by us from the Barona Tribe under such
extension.

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The gaming and hospitality industry is also particularly susceptible to
global geopolitical events, such as terrorist attacks, acts of war or other
hostilities, and natural disasters such as the recent wildfires in the San
Diego area and elsewhere in Southern California. These extraordinary events
also may adversely affect the Barona Valley Ranch and could have an adverse
effect on our consulting revenues.

Accordingly, we anticipate that our revenues may continue to be subject to
significant fluctuations and uncertainties. Although we anticipate receiving
payments from the Barona Tribe of $650,000 a month through the end of the
current term of the Consulting Agreement in March 2004, the Barona Tribe is not
obligated to make fee payments to us under the terms of the Consulting
Agreement, therefore, our revenues remain uncertain for the foreseeable future
as we continue to explore restructuring and extending our business relationship
with the Barona Tribe.

We have entered into subordination agreements that, under certain
circumstances, may preclude the Barona Tribe from making payments to us for
consulting services.

Our right to receive fees from the Barona Tribe is subordinated to certain
senior debt of the Barona Tribe. In connection with two of the Barona Tribes
financings, we entered into agreements pursuant to which the Barona Tribe under
the applicable financing documents shall pay no fees to us if there is a
default. In addition, one of those agreements also limits the Barona Tribes
ability to make payments to us if the debt coverage ratios set forth in the
loan agreement are not met. Moderate or severe economic downturns or adverse
conditions, nationally and especially in Southern California, may negatively
affect the Barona Valley Ranchs operations which may result in the Barona
Tribe being precluded from making payments to us. If, as a result of negative
economic or other adverse conditions, the Barona Tribe is precluded from making
payments to us during a time when the Consulting Agreement is in effect, we
will still be obligated to provide services to the Barona Tribe under the
Consulting Agreement. In connection with providing such services, it is
possible that we will deplete our cash and cash equivalents. If that should
occur, and we are not able to generate alternative sources of revenues to
finance our operations, we will not be able to continue to operate our
business.

Approval of the Consulting Agreement by appropriate regulatory authorities
is still pending.

Appropriate regulatory authorities have not yet approved the Consulting
Agreement. If the Consulting Agreement is not approved or is significantly
modified by regulatory authorities to our detriment, such action could have a
material adverse effect on our business and financial condition. In addition,
the regulatory review could result in our being required to pay fines or incur
additional expenses, all of which could have a material adverse effect on our
business and financial condition.

Our application for a determination of suitability by appropriate regulatory
authorities is still pending.

In August 2003, we submitted an application for a suitability
determination to the California Gambling Control Commission (the CGCC). If
the CGCC determines that we would not qualify for a gambling license under
state law, the Barona Tribe would be required to terminate the Consulting
Agreement. There can be no assurance that the CGCC will approve our
application for a suitability determination, and failure to receive such
approval may have a material adverse effect on our business and financial
condition.

Risks Related to Mariposa and our Software Business

We may not be able to compete in the CRM software market.

We compete in the highly competitive CRM software market. A principal
source of competition is the internal information technology departments at
potential customers, which may develop systems that provide for some or all of
the functionality of our applications. Our products compete with products or
solutions offered by numerous competitors. Compared to us, many of these
competitors have a longer operating history, greater name recognition, larger
customer bases and significantly greater financial resources. This may place
us at a disadvantage in responding to our competitors pricing strategies,
technological advances, advertising campaigns, strategic partnerships and other
initiatives. Competitive pressures and our perceived viability in this market
may make it difficult for us to acquire and retain customers.

If we fail to keep pace with technological innovation, improve our existing
products, or develop new products, our application suite could become
obsolete.

The market for CRM software products is marked by rapid technological
change, frequent new product introductions, uncertain product life cycles,
changes in client demands and evolving industry standards. If we are unable to
market Mariposa on a

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timely and cost-effective basis, we may not realize any revenues from the
sale or license of the software. In marketing Mariposa, we may:



| |  |  | fail to respond to technological changes in a timely or
cost-effective manner;
| | - |  | ------------------------------------------------------------------------------



| |  |  | encounter software products, capabilities or technologies developed
by others that render Mariposa obsolete or noncompetitive or that
shorten the life cycle of Mariposa;
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | experience difficulties that could delay or prevent the successful
development, introduction and marketing of Mariposa; or
| | - |  | --------------------------------------------------------------------------------------------------------------------------



| |  |  | fail to achieve market acceptance of Mariposa.
| | - |  | ----------------------------------------------

If our product does not operate with the wide variety of hardware, software
and operating systems used by our current and potential customers, our
revenues would be harmed.

We currently market Mariposa to a customer base that uses a wide variety
of constantly changing hardware, software applications, operating and other
systems. Mariposa will gain broad market acceptance only if it can support a
wide variety of hardware, software applications, systems and standards,
including those developed in the future.

Mariposa could contain undetected errors or failures.

If we license Mariposa, it may contain undetected errors or failures.
This may result in the loss of, or delay in, the market acceptance of Mariposa
and could cause us to incur significant costs to correct errors or failures or
to pay damages suffered by customers as a result of such errors or failures.

Errors in Mariposa also may be caused by defects in third-party software
incorporated into our software. If so, we may not be able to fix the defects
without the cooperation of the software providers. Since these defects may not
be as significant to the software provider as they are to us, we may not
receive the rapid cooperation that it requires. We may not have the
contractual right to access the source code of third-party software and, even
if we have the right to access the source code, we may not be able to fix the
defect. Our customers could seek significant compensation from us for their
losses resulting from defects in our products. Even if unsuccessful, a product
liability claim brought against us could be time consuming and costly.

We rely on a third-party services firm for development, installation,
integration and support in connection with our software business.

We rely on a third-party software development firm to handle the majority
of our software development efforts. In addition, we use a third-party service
firm to support our products and to assist our customers with the installation
and integration of our products. If we are unable to maintain and develop
relationships with third-party firms to provide these services, we would be
required to hire and train additional personnel, which would result in higher
expenses and delays in our ability to generate revenue.

If we are unable to protect our intellectual property or become subject to
intellectual property infringement claims, we may lose a valuable asset or
incur costly and time-consuming litigation.

Our success depends in part on the development and protection of the
proprietary aspects of our technology as well as our ability to operate without
infringing the proprietary rights of others. To protect our proprietary
technology, we rely primarily upon the protections afforded under the trade
secret, copyright, trademark, and patent laws, as well as upon confidentiality
procedures and contractual restrictions. Despite our efforts to protect our
proprietary rights and technology, unauthorized parties may attempt to copy
aspects of our products, obtain the source code to our software, or use other
information that we regard as proprietary. Such parties may also attempt to
develop software competitive to ours. Our means of protecting our proprietary
rights may not be adequate, and our competitors may independently develop
similar technology or duplicate our products or software. Litigation may be
necessary in the future to enforce our intellectual property rights, to protect
our trade secrets, to determine the validity and scope of the proprietary
rights of others, or to defend against claims of infringement or invalidity.
Any such litigation could result in substantial costs and diversion of
resources that could have a material adverse effect on our business, operating
results, and financial condition.

We have filed two U.S. patent applications and two corresponding
international patent applications. It is possible that these patent
applications will not issue as patents, and that even if issued the validity or
enforceability of such patents may be successfully challenged. It is also
possible that we may not develop additional proprietary products or
technologies that are patentable; that any patents issued to us may fail to
provide us with competitive advantage and that the patents of others may
materially harm our ability to do business. In the future, a third party may
bring suit claiming that our products or software infringe its patents, trade
secrets or

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copyrights. Any claims, with or without merit, could be costly and
time-consuming to defend, divert our managements attention, or cause product
delays. If our products or software were found to infringe a third partys
proprietary rights, we could be required to enter into royalty or licensing
agreements to be able to license or sell our products or software. Royalty and
licensing agreements, if required, may not be available on terms that are
acceptable to us (or at all), which could materially harm our business.

Other Risks

Our business is subject to strict regulation by gaming authorities.

We operate in a highly regulated industry and our ability to operate in
certain jurisdictions could be subject to extensive federal, state, local and
foreign regulation by various gaming authorities. Although the laws and
regulations of the various jurisdictions in which we may operate vary in their
technical requirements, and are subject to amendment from time to time,
virtually all these jurisdictions could require licenses, permits,
documentation of the qualification, including evidence of integrity and
financial stability, and other forms of approval for us, as well as for our
officers, directors, major shareholders and key personnel. We will attempt to
obtain all government licenses, registrations, findings of suitability, permits
and approvals necessary, however, there can be no assurance those licenses,
registrations, findings of suitability, permits, or approvals will be granted.
Additionally, there can be no assurance that any regulatory agency will not
enact new rules or change regulations that would negatively impact our ability
to operate within such jurisdictions.

We are dependent upon our Chairman and Chief Executive Officer.

Our success largely depends upon the continued contributions of L. Donald
Speer, II, our Chairman of the Board and Chief Executive Officer. The loss of
Mr. Speers services, for any reason, would have a material adverse effect on
our success and prospects. We have not entered into an employment agreement
with Mr. Speer. If Mr. Speer were to leave VCAT or become unavailable, there
can be no assurance that we will be able to find a suitable replacement,
particularly in connection with our ability to perform consulting services to
the Barona Tribe.

We depend upon our key personnel.

Our future performance also depends in significant part upon the continued
service of our key technical and senior management personnel. We have a small
number of employees and our dependence on maintaining our relationships with
key employees is particularly significant.

Our common stock is subject to wide fluctuations.

The trading price of our common stock has been, and will likely continue
to be, subject to wide fluctuations because of regulatory developments,
quarterly variations in our operating results, the market where our common
stock trades, announcements of new services or business activities by us or our
competitors, general market fluctuations, and other events and factors. These
factors, coupled with the small public float, have in the past, and could in
the future, result in wide fluctuations in the market-trading price. Our
common stock currently trades on the Over-The-Counter (OTC) Bulletin Board.
This generally is considered to be a less efficient trading market and our
stock price as well as liquidity in our common stock may be adversely affected.
Low-priced stocks are subject to additional risks, including additional state
regulatory requirements and the potential loss of effective trading markets.







Item 3. Controls and Procedures

Based on an evaluation of the effectiveness of our disclosure controls and
procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities
Act of 1934, as amended), our Chief Executive Officer and Chief Financial
Officer have concluded that such controls and procedures were effective as of
the period covered by this report. In connection with such evaluation, no
change in our internal control over financial reporting occurred during the
period covered by this report that has materially affected, or is reasonably
likely to materially affect, our internal control over financial reporting.

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PART II  OTHER INFORMATION







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

(a) Exhibits.

The Exhibits listed below are hereby filed with the U.S. Securities and
Exchange Commission (the Commission) as part of this Quarterly Report on Form
10-QSB.

ExhibitNo.
    
    Description31.1
    
    
    Certification of Chief Executive Officer of Venture Catalyst
Incorporated, Pursuant to Rule 13a-14 of the Securities
Exchange Act31.2
    
    
    Certification of Chief Financial Officer of Venture Catalyst
Incorporated, Pursuant to Rule 13a-14 of the Securities
Exchange Act32.1
    
    
    Certification of Chief Executive Officer of VCAT, Pursuant to
18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of
the Sarbanes-Oxley Act of 2002.32.2
    
    
    Certification of Chief Financial Officer of VCAT, Pursuant to
18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of
the Sarbanes-Oxley Act of 2002.


(b) Reports onForm 8-K.

During the three months ended September 30, 2003, VCAT filed one Current
Report on Form 8-K dated, and filed with the Commission, on September 25, 2003,
reporting our operating results for the three months and fiscal year ended June
30, 2003.

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SIGNATURES

In accordance with the requirements of the Exchange Act, the registrant
caused this report to be signed on its behalf by the undersigned, thereunto
duly authorized.

VENTURE CATALYST INCORPORATED,
a Utah CorporationDate: November 13, 2003
    
    By:
    
    /s/  L. DONALD SPEER, IIL. Donald Speer, II
Chairman of the Board and Chief
Executive Officer
(Authorized Signatory, Principal
Executive Officer)Date: November 13, 2003
    
    By:
    
    /s/ KEVIN MCINTOSHKevin McIntosh
Senior Vice President, Chief
Financial Officer, Secretary and
Treasurer
(Authorized Signatory, Principal
Financial and Accounting Officer)


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Exhibit Index

ExhibitNo.
    
    Description31.1
    
    
    Certification of Chief Executive Officer of Venture Catalyst
Incorporated, Pursuant to Rule 13a-14 of the Securities
Exchange Act31.2
    
    
    Certification of Chief Financial Officer of Venture Catalyst
Incorporated, Pursuant to Rule 13a-14 of the Securities
Exchange Act32.1
    
    
    Certification of Chief Executive Officer of VCAT, Pursuant to
18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of
the Sarbanes-Oxley Act of 2002.32.2
    
    
    Certification of Chief Financial Officer of VCAT, Pursuant to
18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of
the Sarbanes-Oxley Act of 2002.