<PAGE>   1

================================================================================

                     U.S. 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 1934

     For the quarterly period ended September 30, 1999


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

            For the transition period from ___________ to ___________


                         Commission File Number: 0-11532



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

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

        16868 Via Del Campo Court, Suite 200, San Diego, California 92127
                    (Address of principal executive offices)

                    Issuer's telephone number: (858) 716-2100

                                 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 November 5, 1999,
4,760,786 shares of common stock, $.001 par value per share, were outstanding.

        Transitional Small Business Disclosure Format (check one): Yes [ ]No [X]

================================================================================

<PAGE>   2

                        INLAND ENTERTAINMENT CORPORATION
                                   FORM 10-QSB
                     FOR THE PERIOD ENDED SEPTEMBER 30, 1999

                                TABLE OF CONTENTS

<TABLE>
<CAPTION>
                                                                                       Page
                                                                                      Number
                                                                                      ------
<S>                                                                                      <C>
           PART I.  FINANCIAL INFORMATION

                ITEM 1.  FINANCIAL STATEMENTS (Unaudited):

                        Consolidated Balance Sheets -
                        September 30, 1999 and June 30, 1999..........................    3

                        Consolidated Statements of Operations -
                        Three months ended September 30, 1999 and 1998................    4

                        Consolidated Statements of Cash Flows -
                        Three months ended September 30, 1999 and 1998................    5

                        Notes to Interim Consolidated Financial Statements............    6

                 ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS
                                      OR PLAN OF OPERATION............................   12

           PART II.  OTHER INFORMATION

                 ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.............................   21

           SIGNATURES                                                                    23
</TABLE>


                                       2
<PAGE>   3

                         PART I - FINANCIAL INFORMATION


ITEM 1.  FINANCIAL STATEMENTS.



                        INLAND ENTERTAINMENT CORPORATION
                           CONSOLIDATED BALANCE SHEETS
                      SEPTEMBER 30, 1999 AND JUNE 30, 1999

<TABLE>
<CAPTION>
                                                                                           September 30, 1999   June 30, 1999
                                                                                               (Unaudited)
<S>                                                                                            <C>               <C>
                                              ASSETS

CURRENT ASSETS:
  Cash and cash equivalents ..............................................................     $  8,043,958      $  9,285,928
  Accounts receivable, net ...............................................................          555,170           344,059
  Prepaid expenses and other current assets ..............................................          235,457           127,935
  Due from Barona Casino - expansion project .............................................        4,300,146         3,190,146
                                                                                               ------------      ------------
          Total current assets ...........................................................       13,134,731        12,948,068

NON-CURRENT ASSETS:
  Restricted cash and other investments ..................................................        2,152,393         2,144,393
  Employee and other receivables (net of allowance of $165,279) ..........................          260,399           265,134
  Property, plant and equipment, net .....................................................        1,028,808         1,073,111
  Deferred contract costs, net ...........................................................        3,017,287         3,184,915
  Available-for-sale securities, net .....................................................          100,000                --
  Deferred taxes .........................................................................          189,834           171,070
  Goodwill and other intangibles, net of amortization ....................................        3,402,394         3,424,179
  Deposits and other assets ..............................................................          401,973           422,984
                                                                                               ------------      ------------
          Total non-current assets........................................................       10,553,088        10,685,785
                                                                                               ------------      ------------

          Total assets ...................................................................     $ 23,687,819      $ 23,633,853
                                                                                               ============      ============

                                    LIABILITIES AND SHAREHOLDERS' EQUITY

CURRENT LIABILITIES:
  Advances of future consulting fees-- Barona Casino .....................................     $  2,729,041      $  2,603,457
  Current portion of long-term debt ......................................................          400,000           400,000
  Deferred revenues ......................................................................          101,117           125,072
  Accounts payable and accrued expenses ..................................................          800,135         1,440,349
  Income taxes payable ...................................................................          453,509           386,745
                                                                                               ------------      ------------
          Total current liabilities ......................................................        4,483,802         4,955,623

LONG-TERM DEBT, LESS CURRENT PORTION .....................................................        9,900,000         9,900,000
                                                                                               ------------      ------------

          Total liabilities ..............................................................       14,383,802        14,855,623

SHAREHOLDERS' EQUITY:
  Common stock, $.001 par value, 100,000,000 shares
  authorized and 4,753,786 shares issued and outstanding .................................            4,754             4,754
  Additional paid in capital .............................................................        1,312,808         1,297,808
  Retained earnings ......................................................................        7,995,455         7,475,668
  Deferred compensation ..................................................................           (9,000)
                                                                                               ------------      ------------
          Total shareholders' equity .....................................................        9,304,017         8,778,230
                                                                                               ------------      ------------

          Total liabilities and shareholders' equity .....................................     $ 23,687,819      $ 23,633,853
                                                                                               ============      ============
</TABLE>


                                       3
<PAGE>   4

                        INLAND ENTERTAINMENT CORPORATION
                      CONSOLIDATED STATEMENTS OF OPERATIONS
                    FOR THE THREE MONTHS ENDED SEPTEMBER 30,
                                   (UNAUDITED)



<TABLE>
<CAPTION>
                                                    1999            1998
                                                -----------     -----------
<S>                                             <C>             <C>
REVENUE:
     Indian gaming consulting ..............    $ 3,184,000     $ 3,097,099
     Web-site development ..................        822,996         163,108
     Other .................................        141,053          69,554
                                                -----------     -----------
                                                  4,148,049       3,329,761
                                                -----------     -----------

OPERATING EXPENSES:
     Compensation and benefits .............      1,459,069       1,164,213
     General and administrative expenses ...      1,524,616       1,865,862
     Amortization of deferred contract costs        167,628         167,628
                                                -----------     -----------
                                                  3,151,313       3,197,703
                                                -----------     -----------

Operating profit ...........................        996,736         132,058

OTHER INCOME AND (EXPENSE):
    Interest income ........................        143,884         170,411
    Interest expense .......................       (195,833)       (145,833)
                                                -----------     -----------
                                                    (51,949)         24,578
                                                -----------     -----------
Income before income taxes .................        944,787         156,636

Income tax provision .......................        425,000          67,000
                                                -----------     -----------

Net income .................................    $   519,787     $    89,636
                                                ===========     ===========

Net income per share - basic ...............    $       .11     $       .02
                                                ===========     ===========
Net income per share - diluted .............    $       .11     $       .02
                                                ===========     ===========

Shares used in the computation of net income
    per share - basic ......................      4,753,786       4,217,045
                                                ===========     ===========
Shares used in the computation of net income
    per share - diluted ....................      4,828,724       4,798,904
                                                ===========     ===========
</TABLE>


                                       4
<PAGE>   5

                        INLAND ENTERTAINMENT CORPORATION
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                    FOR THE THREE MONTHS ENDED SEPTEMBER 30,
                                   (UNAUDITED)

<TABLE>
<CAPTION>
                                                                          1999             1998
                                                                      ------------     ------------
<S>                                                                   <C>              <C>
Net cash generated by (used in) operating activities:
     Net income ..................................................    $    519,787     $     89,636
     Adjustments to reconcile net income to net cash
      provided by operating activities:
         Depreciation and amortization ...........................         356,370          265,792
         Provision for bad debts .................................          10,000               --
         Deferred taxes ..........................................         (18,764)              --
         Compensation for granting of non-employee stock options .           6,000           15,000
         Due from Barona Casino - expansion project ..............      (1,110,000)              --
         Changes in operating assets and liabilities .............        (787,444)        (537,737)
                                                                      ------------     ------------
 Net cash used in operating activities ...........................      (1,024,051)        (167,309)
                                                                      ------------     ------------

 Cash flows (used in) provided by investing activities:
     Purchase of Cyberworks, Inc. ................................                         (671,513)
     Purchase of available-for-sale securities ...................        (100,000)
     Purchase of other intangible assets .........................         (77,191)
     Maturity of short-term investments ..........................                        1,876,667
     Purchase of furniture and equipment .........................         (45,463)        (103,780)
     Payments of loans ...........................................           4,735            7,197
                                                                      ------------     ------------
 Net cash (used in) provided by investing activities .............        (217,919)       1,108,571
                                                                      ------------     ------------

 Cash flows provided by financing activities:
     Proceeds from exercise of stock options .....................                           87,500
                                                                                       ------------
 Net cash provided by financing activities .......................                           87,500
                                                                                       ------------

 (Decrease) / increase in cash ...................................      (1,241,970)       1,028,762
 Cash, beginning of period .......................................       9,285,928        9,205,502
                                                                      ------------     ------------
 Cash, end of period .............................................    $  8,043,958     $ 10,234,264
                                                                      ============     ============

 Supplemental disclosures of cash flow information:
      Interest expense paid ......................................    $    712,686     $    532,655
                                                                      ============     ============
      Income taxes paid ..........................................    $    377,000     $    300,000
                                                                      ============     ============

  Non-cash investing and financing activities:
      Acquisition of Cyberworks, Inc. ............................
       Fair value of tangible assets .............................                     $    244,226
       Goodwill ..................................................                        3,661,077
       Liabilities assumed .......................................                         (188,790)
       Stock issued (750,000 shares) .............................                       (3,045,000)
                                                                                       ------------
       Cash paid .................................................                     $    671,513
                                                                                       ============
</TABLE>


                                       5
<PAGE>   6

                        INLAND ENTERTAINMENT CORPORATION
               NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS
                               SEPTEMBER 30, 1999


1. DESCRIPTION OF BUSINESS.

Inland Entertainment Corporation, a Utah corporation formerly known as Inland
Casino Corporation ("Inland Entertainment" or the "Company"), provides
consulting and other professional services for gaming operations with Native
American tribes. A majority of its revenue is earned from a consulting agreement
with the Barona Group of Capitan Grande Band of Mission Indians (the "Barona
Tribe") in connection with the Barona Tribe's operation of a gaming facility
located north of Lakeside, California, in eastern San Diego County.

Since fiscal 1998, in addition to Indian gaming, the Company has pursued, and
continues to pursue, Internet related opportunities including, web-site
development, on-line marketing, electronic commerce applications and Internet
business related consulting.

In March 1998, the Company established a wholly-owned foreign subsidiary,
Worldwide Media Holdings N.V., a Curacao, Netherland Antilles corporation
("WMH"). WMH was formed to provide comprehensive marketing, advertising,
technical and distribution services for Internet related businesses. WMH
currently provides these services to four Internet casinos. WMH is responsible
for all marketing costs and is paid a fee for its services.

On August 27, 1998, the Company acquired all of the outstanding shares of
capital stock of Cyberworks Inc. ("Cyberworks"), a web-site development and
Internet marketing company. Cyberworks provides its services to clients in the
entertainment, technology, and business-to-business industries, and to various
professional associations and non-profit organizations. Cyberworks operates as a
wholly-owned subsidiary of the Company.

In July 1999, the Company formed an Internet business and investor relations
consulting division, which is operating under the name "Venture-Catalyst.com."
Through the Venture-Catalyst.com division, the Company offers to public and
private companies a wide array of Internet business services, including
financial public relations, venture capital sourcing and on-line business
strategy. The Division may, under certain circumstances, make equity investments
in, or take all or a portion of its consulting fees in, equity of its clients.

2. PRESENTATION OF INTERIM CONSOLIDATED FINANCIAL INFORMATION.

The accompanying interim unaudited consolidated financial statements have been
prepared by Inland Entertainment Corporation and its subsidiaries Cyberworks,
Inc. and Worldwide Media Holdings, N.V., (collectively the "Company" or
"Inland"), 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. 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. The interim unaudited consolidated financial statements reflect all
normal, recurring adjustments and disclosures which are, in the opinion of
management, necessary for a fair presentation. The interim unaudited
consolidated financial statements should be read in conjunction with the
Company's Annual Report on Form 10-KSB for the fiscal year ended June 30, 1999.
Current and future financial statements may not be directly comparable to the
Company's 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.


                                       6
<PAGE>   7

                        INLAND ENTERTAINMENT CORPORATION
               NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS
                               SEPTEMBER 30, 1999


3. BARONA CONSULTING AGREEMENT.

The Company has provided services to the Barona Tribe since 1991. The Company
provides consulting services in accordance with the terms and conditions of an
Amended and Restated Consulting Agreement (the "Amended and Restated Consulting
Agreement"). During February 1998, the Company and the Barona Tribe executed
Modification #1 to the Amended and Restated Consulting Agreement (the
"Modification") which extended the term for providing consulting services by an
additional 60 months. Unless otherwise stated herein, the Amended and Restated
Consulting Agreement, as amended by the Modification, shall be referred to
herein as the "Barona Consulting Agreement." The Barona Consulting Agreement
expires in March 2004.

In March 1996, the Barona Tribe submitted the Initial Consulting Agreement (a
predecessor agreement to the Amended and Restated Consulting Agreement) to the
National Indian Gaming Commission (the "NIGC"). In May 1996, the NIGC determined
that the Initial Consulting Agreement was not a management agreement and,
therefore, not subject to NIGC approval, and forwarded such agreement to the
Bureau of Indian Affairs (the "BIA"). In July 1997, the BIA reviewed the Initial
Consulting Agreement and determined that no further action by it with respect to
such agreement was required. The NIGC conducted an investigation of the past
relationship between the Barona Tribe and the Company that resulted in a January
1997 settlement agreement.

In January 1997, the Company submitted the Amended and Restated Consulting
Agreement to the NIGC. In April 1997, the Company received a letter from the
NIGC questioning whether the Amended and Restated Consulting Agreement was in
fact a management contract. The letter stated that additional review would be
necessary to make such a determination. In March 1999, the NIGC started a
preliminary review of the relationship between the Barona Tribe and the Company,
which will include a review of the Barona Consulting Agreement. In September
1999, the Company submitted the Modification to the NIGC. This review is
currently pending.

The Company believes that the Amended and Restated Consulting Agreement, as
amended by the Modification, is not a management contract, based on (a) the May
1996 and July 1997 determinations of the NIGC and BIA, respectively, with
respect to the Initial Consulting Agreement, (b) the NIGC's findings in the
January 1997 settlement agreement and (c) the nature of the relationship between
the Barona Casino and the Company. However, there is no assurance that the NIGC
will determine that the Barona Consulting Agreement is not a management
contract. The failure of the NIGC to determine that the Barona Consulting
Agreement is not a management contract could have a material adverse effect on
the business and financial condition of the Company and its subsidiaries. If the
NIGC concludes that the Barona Consulting Agreement is not a management
agreement, the NIGC will forward such Agreement to the BIA for its review. If
the BIA determines that its approval is required, there can be no assurance that
the BIA will approve the Barona Consulting Agreement, and such failure to
approve such Agreement may have a material adverse effect on the business and
financial condition of the Company and its subsidiaries.

4. TRIBAL-STATE COMPACTS.

BARONA COMPACT. In August 1998, a Tribal-State Compact was signed between the
State of California and the Barona Tribe (the "Barona Compact"). The U.S.
Secretary of the Interior approved the Barona Compact, effective October 22,
1998.

The initial term of the Barona Compact will end on January 1, 2009. The Barona
Tribe has been given the option to renew the Barona Compact for two additional
five (5) year terms upon written notice of renewal to


                                       7
<PAGE>   8

                        INLAND ENTERTAINMENT CORPORATION
               NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS
                               SEPTEMBER 30, 1999


the Governor prior to the termination date. Such options may be denied if the
Barona Tribe has been found to have engaged in unauthorized Class III gaming on
two or more occasions or to have committed violations of the terms of the Barona
Compact on five or more occasions.

Rather than the electronic machines currently in play at the Barona Casino, the
Barona Compact permits the following two varieties of Indian Lottery Games: (a)
Indian Video Lottery Match Game and (b) Indian Video Lottery Scratcher Game. The
Barona Tribe is allowed to operate 1,057 machines, but has been allocated only
199 machines. The balance of machines must be licensed from other Federally
recognized tribes for an annual fee of $5,000 per machine.

Pursuant to an informal agreement with the California Division of Gaming Control
(the "Gaming Control Division"), the Barona Tribe has been permitted to continue
to operate its current 1,057 electronic gaming devices at the Barona Casino for
an indefinite period of time. With the consent of the Gaming Control Division,
of the 1,057 electronic gaming devices being operated at the Barona Casino, 8
are prototypes of the Indian Gaming Machines prescribed by the Barona Compact.
At the present time, there are no such Indian Lottery devices available to any
compacted Indian tribe in California other than for testing purposes.

The Indian Lottery Games are not similar in functional capability to any
existing electronic gaming device or conventional slot machine, have not yet
been commercially produced and are currently being tested in a public
environment. Based upon the limited testing, there is insufficient data to
determine whether these compact-defined devices will produce an income stream
comparable to those machines currently in play at the Barona Casino. In the
event the lottery-based devices do not produce an income stream consistent with
that being earned by the machines currently in play at the Barona Casino, the
resulting decline in revenue from Barona operations may have a materially
adverse impact on the fees paid to the Company under the Consulting Agreement.

In August 1998, the California Legislature passed legislation ("AB489")
specifically authorizing the Governor of the State of California to execute the
various compacts which had been negotiated between the State of California and
Indian tribes, including, the Barona Tribe. As a non-urgency measure, AB489 was
scheduled to go into effect on January 1, 1999; however, a referendum petition
to overturn AB489 qualified for the March 2000 general election ballot. The
effect of qualifying such referendum provision is that AB489 did not become
effective and will not become effective until the voters of California vote to
uphold AB489. Accordingly, there is a legal question as to whether the
Governor's signature on the Compact between the Barona Tribe and the State of
California is sufficient.

On September 10, 1999, the California legislature approved State Constitution
amendment 11, ("SCA 11"), a proposed amendment to the California Constitution
which would significantly expand the scope of Indian gaming in the State of
California. SCA 11 addresses the deficiencies of Proposition 5. Proposition 5,
the Tribal Government Gaming and Economic Self Sufficiency Act of 1998, was
approved by the California Voters in the November 1998 General Election. In
August 1999, the California Supreme Court ruled that those provisions of
Proposition 5 which attempted to amend the California constitutional prohibition
against gaming was unconstitutional. If approved by the people of California on
the March 2000 General Election Ballot, SCA 11 would authorize the Governor to
negotiate and conclude tribal-state gaming compacts for the operation of slot
machines and for the conduct of lottery games and banking and percentage card
games by Federally recognized Indian tribes on Indian lands in California. SCA
11 further provides that any such compact would be subject to ratification by
the California legislature.


                                       8
<PAGE>   9

                        INLAND ENTERTAINMENT CORPORATION
               NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS
                               SEPTEMBER 30, 1999


BARONA COMPACT II. On September 10, 1999, the Governor of the State of
California entered into new Tribal-State Compacts with over 50 Federally
recognized Indian tribes, including the Barona Tribe. The compacts are subject
to ratification by the California legislature, approval by the U.S. Secretary of
the Interior and passage of California State Constitutional Amendment 11. On
September 10, 1999, the California Legislature voted to ratify each of the
above-referenced compacts including the Barona Compact II. There is no assurance
that the remaining conditions will be satisfied. The new Tribal-State Compacts
significantly expand the permissible scope of Indian Gaming beyond that
permitted by the Barona Compact. Until the above-referenced conditions are
satisfied, the Barona Compact shall remain in effect.

5. DUE FROM BARONA CASINO - EXPANSION PROJECT.

The Barona Tribe is in the planning stages of an approximately $150 million
expansion project. The Company is assisting the Barona Casino in obtaining
outside financing for the project. Prior to the time that the Barona Casino
obtains such financing, the Company is sharing in funding the expansion costs
incurred with the Barona Tribe. The Company expects to commit approximately
$8,300,000 as an unsecured, non-interest-bearing advance to the Barona Casino.
As of September 30, 1999, the Company has advanced $4,300,146; these advances
have been, and will be, accounted for as a receivable from the Barona Casino to
the Company. Payment of the receivable is expected to occur when the Barona
Tribe obtains outside financing which is expected to be sometime in early
calendar year 2000.

6. ACQUISITIONS.

On August 27, 1998, the Company acquired all of the outstanding shares of
capital stock of Cyberworks in exchange for 750,000 shares of its common stock
and $500,000 in cash, in a transaction valued, exclusive of acquisition costs,
at $3,560,000. Cyberworks is being operated as a wholly-owned subsidiary of the
Company. The acquisition was accounted for as a purchase and the accounts of
Cyberworks have been included in the accompanying financial statements since
August 27, 1998. The excess of the total acquisition cost over the fair value of
net assets acquired ("goodwill") was approximately $3,732,000 and is being
amortized on a straight-line basis over 10 years.

In July 1999, the Company purchased $100,000 in assets from Typhoon Capital
Consulting, LLC, an investor relations and Internet strategy consulting firm,
consisting of three domain names, including "Venture-Catalyst.com", computer
equipment, office equipment and furniture. The excess of the acquisition cost
over the fair value of net assets acquired ("other intangible assets") was
approximately $77,000 and is being amortized on a straight-line basis over 3
years.

Goodwill and other intangible assets net of amortization as of September 30,
1999 is $3,402,394 and amortization expense of $98,976 has been recorded for
Fiscal 2000 through September 30, 1999. On an ongoing basis, the Company will
review the valuation and recoverability of the unamortized goodwill costs and
other intangible assets and will expense all or any portion of the unamortized
amounts determined necessary for fair statement.

7. RESTRICTED CASH AND OTHER INVESTMENTS.

From June 1996 to May 1997, the Company provided consulting services to the
Klamath and Modoc Tribes and the Yahooskin Band of Snake Indians (collectively,
the "Klamath Tribes"). The Klamath Tribes constructed the Kla-Mo-Ya Casino near
Chiloquin, in south central Oregon, a gaming facility funded by revenue bonds
issued by the Klamath Tribes. In connection with such bond financing, the
Company has a


                                       9
<PAGE>   10

                        INLAND ENTERTAINMENT CORPORATION
               NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS
                               SEPTEMBER 30, 1999


net investment of $493,393 in revenue bonds with a principal face amount of
$500,000. In addition, as a condition of the bond financing, the Company agreed
to hold the bonds for a five-year period. Pre-opening costs and expenses of
approximately $1.5 million were financed by loans made pursuant to a third-party
bank credit agreement with the Klamath Tribes. The Company pledged to such bank
a certificate of deposit for $1,518,000 as collateral for such loans. If the
Klamath Tribes are unable to pay its obligations, the Company may lose all or a
portion of its investment in the revenue bonds it purchased and its certificate
of deposit pledged as collateral for bank loans to the Klamath Tribes. The
Klamath Tribes have made all required interest payments during Fiscal 1999 on
the bonds held by the Company.

Additionally, the Company issued an irrevocable letter of credit for $133,000 to
satisfy the terms of its corporate office lease agreement. Such letter of credit
will automatically renew on an annual basis until October 31, 2002 unless
canceled by the lessor.

8. EQUITY INVESTMENTS.

During the three months ended September 30, 1999, the Company, through its
Venture-Catalyst.com division, acquired a minority equity position in
MediaCycle, Inc., the owner and operator of "spun.com". The investment is
classified as available-for-sale securities.

9. SEGMENT REPORTING.

The Company has four business segments: Indian Gaming Consulting, Web-Site
Development Services, Internet Gaming Consulting, and Internet Business and
Investor Relations Consulting (operating under the name "Venture-Catalyst.com".)

Information on segments and reconciliation to income, before income taxes, for
the three months ending September 30, 1999 and 1998 are as follows:

<TABLE>
<CAPTION>
                                       INDIAN         INTERNET         WEB-SITE         VENTURE-      ADJUSTMENTS &    CONSOLIDATED
                                       GAMING          GAMING         DEVELOPMENT    CATALYST.COM     ELIMINATIONS        TOTALS
                                  ---------------- --------------- ---------------- -------------- ----------------- ---------------
<S>                                  <C>             <C>              <C>              <C>             <C>              <C>
For the three months ended
September 30, 1999:

Revenues (external) ............     $ 3,184,000     $   110,053      $   822,996     $    31,000               --      $ 4,148,049
Revenues (intersegment) ........              --              --      $    13,225              --      $   (13,225)     $        --

Segment operating profit/(loss)      $ 1,054,925     $   (56,730)     $    59,315     $  (112,723)              --      $   944,787

For the three months ended
September 30, 1998:

Revenues (external) ............     $ 3,097,099     $    69,554      $   163,108              --                       $ 3,329,761
Revenues (intersegment) ........              --              --      $   121,485              --      $  (121,485)

Segment operating profit/(loss)      $ 1,159,032     $(1,045,609)     $    43,213              --               --      $   156,636
</TABLE>


                                       10
<PAGE>   11

                        INLAND ENTERTAINMENT CORPORATION
               NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS
                               SEPTEMBER 30, 1999


10. NET INCOME PER SHARE.

Below is the reconciliation of the components of the calculation of basic and
diluted net income per share for the time periods indicated:

<TABLE>
<CAPTION>
                                                          FOR THE THREE MONTHS
                                                           ENDED SEPTEMBER 30,

                                                          1999           1998
                                                       ----------     ----------
<S>                                                    <C>            <C>
     Net income available to common shareholders       $  519,787     $   89,636
                                                       ==========     ==========

     Weighted average shares outstanding-- basic        4,753,786      4,217,045
     Effect of stock options                               74,938        581,859
                                                       ----------     ----------
     Weighted average shares outstanding-- diluted      4,828,724      4,798,904
                                                       ==========     ==========
</TABLE>

For the three months ended September 30, 1999, options to purchase 4,342,101
shares of the Company's common stock, at prices ranging from $2.75 to $4.13 per
share, were not included in the computation of diluted EPS because the options'
exercise price was greater than the average market price of the common shares.
The options, which expire on various future dates through June 2009, were still
outstanding at September 30, 1999.


                                       11
<PAGE>   12

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

OVERVIEW

Inland Entertainment Corporation operates in four business segments: (a) Indian
Gaming Consulting; (b) Web-site Development services; (c) Internet Gaming
Consulting, and (d) Internet Business and Investor Relations Consulting. During
the quarter ended September 30, 1999, approximately 77% of the revenue earned
was attributable to Indian Gaming Consulting. Unless otherwise specified in this
Item 2, "Inland Entertainment Corporation" or the "Company" refers to the
Company and its subsidiaries.

INDIAN GAMING CONSULTING

The Company has provided services to the Barona Group of Capitan Grande Band of
Mission Indians (the "Barona Tribe") since 1991. The Company is currently
providing consulting services to the Barona Tribe at the Barona Casino under the
terms of the Amended and Restated Consulting Agreement, as amended by
Modification #1 to such agreement (hereinafter referred to as the "Barona
Consulting Agreement" or the "Consulting Agreement") which expires in March
2004. The total consulting fees paid to the Company under the Consulting
Agreement are based upon a net profits formula which includes the Barona
Casino's income and expenses. Accordingly, although gross revenues of the Barona
Casino may increase, the Company's consulting revenue may not correspondingly
increase because expenses at the Barona Casino also may have increased.

From February 1992 through March 1996, the Company provided casino management
services at the Barona Casino pursuant to a management agreement with the Barona
Tribe. During that same period, funds to purchase or construct all fixed assets
such as buildings, equipment and capital improvements, were contributed to the
Barona Casino by the Company. In the aggregate, the Company contributed
approximately $13,000,000 over the period. Neither the Barona Tribe nor the
Barona Casino paid for any of the fixed assets at the Barona Casino during such
period. Due to the "investment" made by the Company to the Barona Casino, the
value of the Barona Casino has increased, thereby enhancing the potential fees
which may be earned by the Company over the life of its contractual relationship
with the Barona Tribe. These monies contributed to the Barona Casino which have
been used to purchase or construct fixed assets have been viewed by the Company
as intangible assets and referred to as "deferred contract costs" and are being
amortized to expense over the remaining life of the Consulting Agreement through
March 2004. However, given the nature of the asset, if the recoverability is
determined not to be probable, the Company will charge to expense the
unamortized portion.

In 1996, the Barona Casino had become financially self-sufficient and the
Company's relationship with the Barona Tribe had evolved from that of manager of
the Barona Casino to consultant to the Barona Tribe which was now acting as the
manager of the Barona Casino. Since the Company has transitioned from manager to
consultant, there have been only two categories of investments by the Company in
the Barona Casino. The first category related to project commitments made to the
Barona Tribe by the Company when the Company was acting as "manager" pursuant to
the management agreement. Funds attributable to this category have equaled in
the aggregate approximately $550,000. The second category related to a
$2,000,000 NIGC settlement. Commencing in November 1996, the Company committed
to contribute $2,000,000 to the Barona Tribe to be used to construct a new road
and entrance to the Barona Casino. As of September 30, 1999, the Company has
paid $1,200,000 of the $2,000,000 commitment.

At this time, the Company has no plans to contribute additional funds to the
Barona Casino or the Barona Tribe in the form of deferred contract costs.
However, the Company will assist the Barona Casino from time to time in
obtaining third party outside financing, if internal funding from the Barona
Casino is not adequate to meet the Barona Casino's project needs. See the
discussion herein under the caption "Liquidity and Capital Resources" relating
to the Company's advance of funds to the Barona Casino in connection with the
Casino's current expansion project.


                                       12
<PAGE>   13

In August 1998, a Tribal-State Compact was entered into between the State of
California and the Barona Tribe (the "Barona Compact"). The Barona Compact was
signed by the Governor of California and the Chairman of the Barona Tribe on
August 12, 1998; thereafter, the Barona Tribal Council voted to submit the
Barona Compact to the U.S. Secretary of the Interior (the "Secretary"). The
Secretary's approval of the Barona Compact was published in the Federal Register
on October 22, 1998.

In August 1998, the California Legislature passed legislation ("AB489")
specifically authorizing the Governor of the State of California to execute the
various compacts which had been negotiated between the State of California and
certain Indian tribes, including the Barona Tribe. AB489 was scheduled to go
into effect on January 1, 1999; however, a referendum petition to overturn AB489
qualified for the March 2000 general election ballot. The effect of qualifying
such referendum provision is that AB489 did not become effective and will not
become effective until the voters of California vote to uphold AB489.
Accordingly, there is a legal question as to whether the Governor's signature on
the Barona Compact is sufficient.

On September 10, 1999, the California legislature approved State Constitutional
Amendment 11 ("SCA 11"), a proposed amendment to the California Constitution
which would significantly expand the scope of Indian gaming in the State of
California. If approved by the California voters on the March 2000 General
Election Ballot, SCA 11 would authorize the Governor to negotiate and conclude
tribal-state gaming compacts for the operation of slot machines and for the
conduct of lottery games and banking percentage card games by Federally
recognized Indian tribes on Indian lands in California.

On September 10, 1999 the Governor of the State of California entered into new
Tribal-State Compacts with over 50 Federally recognized Indian tribes, including
the Barona Tribe (the "Barona Compact II"). The compacts are subject to
ratification by the California Legislature, approval by the U.S. Secretary of
the Interior and passage of SCA 11. On September 10, 1999, the California
legislature voted to ratify these compacts, including the Barona Compact II.
There is no assurance that the remaining conditions will be satisfied. The new
Tribal-State Compacts significantly expand the permissible scope of Indian
gaming beyond that permitted by the Barona Compact. Until the above-referenced
conditions are satisfied, the Barona Compact shall remain in effect. Management
believes the Barona Compact and the Barona Compact II ended a significant amount
of uncertainty and concern about the future of gaming activities at the Barona
Casino.

WEB-SITE DEVELOPMENT BUSINESS

On August 27, 1998, the Company acquired Cyberworks, Inc. ("Cyberworks"), a
web-site development and Internet marketing company. Cyberworks operates as a
wholly-owned subsidiary of the Company. Cyberworks' services include full
service web-site development, strategic consulting for interactive and on-line
business development and custom Internet application. Cyberworks provides its
services to clients in the entertainment, technology, and business-to-business
industries, and to various professional associations and non-profit
organizations.

INTERNET GAMING CONSULTING

In March 1998, the Company established a wholly-owned foreign subsidiary,
Worldwide Media Holdings, N.V. ("WMH"), a Curacao, Netherland Antilles
corporation. WMH provides consulting services related to Internet casinos,
including the development of casino-style games and marketing and promoting of
Internet casinos through web-site development, Internet advertising and
conventional advertising. Currently, WMH is providing consulting and marketing
services to four international Internet casinos; Casino Australia, the Kenny
Rogers Casino, The Good Luck Club and Las Vegas At Home Casino. WMH does not
operate any of these casinos and none of the casinos accept wagers from the
United States or its territories. WMH earns fees to promote and market such
casinos based on a percentage of the net profits of the on-line casinos.


                                       13
<PAGE>   14

In July, 1999, the Company launched the "Vegas At Home" portal web-site, which
is designed to provide both the gaming industry and its patrons with an on-line,
central location containing a variety of gaming related products, merchandise,
information and links to most significant traditional casinos, as well as links
to the four above-referenced Internet-based casino web-sites.

INTERNET BUSINESS AND INVESTOR RELATIONS CONSULTING

In July, 1999, the Company formed an Internet business and investor relations
consulting division, which is operating under the name "Venture-Catalyst.com."
Through the Venture-Catalyst.com division, the Company offers to public and
private companies a wide array of Internet business services, including
financial public relations, venture capital sourcing and on-line business
strategy. The Division's objective is to serve as a consultant to and/or
"incubate" Internet entrepreneurial ventures during every stage of their
financial growth. The Division may, under certain circumstances, make equity
investments in, or take all or a portion of its consulting fees in equity of its
clients.

The Company has made, and expects to continue to make, investments in personnel
to allow the Venture-Catalyst.com division to grow. During the three month
period ended September 30, 1999, the Company hired five employees to lead in the
development and expansion of the new venture catalyst division. The Company is
now better positioned to leverage its financial resources, management consulting
expertise, knowledge of the Internet and existing web-development platform.

RESULTS OF OPERATIONS

THREE MONTHS ENDED SEPTEMBER 30, 1999 COMPARED WITH THE THREE MONTHS ENDED
SEPTEMBER 30, 1998.

REVENUE. Consolidated revenues increased 24.6% to $4,148,049 for the three
months ended September 30, 1999 from $3,329,761 for the three months ended
September 30, 1998. Revenues from Indian gaming consulting increased 2.8% to
$3,184,000 from $3,097,099 earned during the same quarter last year, primarily
as a result of higher revenues at the Barona Casino, partially off-set by
increased expenses at the facility.

Revenues earned by Cyberworks from web-site development and on-line marketing in
fiscal 2000 were $822,996, an increase of 404.6% from the $163,108 earned during
the same quarter in fiscal 1999. The increase was due to (a) three months of
fees earned during fiscal 2000, as opposed to approximately one month of fees
earned during the same period in fiscal 1999, and (b) increased services
performed for external clients.

Revenues earned by WMH for marketing and consulting related to Internet gaming
increased 58.2% to $110,053 for the three months ended September 30, 1999 from
$69,554 during the same period in fiscal 1999 as a result of (a) increased
activity in the casinos marketed by WMH, and (b) providing consulting services
to an additional casino.

During the three month period ended September 30, 1999, the Company had one
other source of revenue not present during the same quarter last year. Since
July 16, 1999, $31,000 was earned by Venture-Catalyst.com for Internet business
and investor relations consulting services performed.

COMPENSATION AND BENEFITS. Compensation and benefits expenses increased 25.3% to
$1,459,069 for the three months ended September 30, 1999, from $1,164,213 during
the same quarter last year. The increase was primarily a result of (a) the
addition of Cyberworks employees for the entire quarter in the current year, as
opposed to only approximately one month during the same period last year, and
(b) the addition of five Venture-Catalyst.com employees during the current
quarter.


                                       14
<PAGE>   15

OPERATING EXPENSES. General and administrative expenses decreased 18.3% to
$1,524,616 for the three months ended September 30, 1999 from $1,865,862 for the
three months ended September 30, 1998, resulting primarily from decreases in (a)
start-up costs, advertising, marketing, and promotion of the on-line casinos and
(b) third-party consulting fees incurred by the Company in connection with
web-site development and consulting services provided to Internet casinos. These
decreases were partially offset by increases in (a) third-party consulting fees
incurred by the Company in connection with its performance of consulting
services to the Barona Casino; (b) third-party consulting fees incurred by the
Company in connection with its performance of web-site development and on-line
marketing services; (c) amortization of goodwill related to the acquisition of
Cyberworks; and (d) client relation expenses, which included a contribution for
the design and construction of a Native American museum on the Barona
Reservation.

Amortization of deferred contract costs were flat at $167,628 for the three
months ended September 30, 1999 and 1998, as a result of the total deferred
contract costs and amortization period for these costs remaining unchanged
during these periods.

OTHER INCOME AND EXPENSE. For the three months ended September 30, 1999,
interest income was approximately $144,000 compared to approximately $170,000
for the three months ended September 30, 1998. The decrease was due to the
decrease in the Company's investments and cash equivalent balances during the
current quarter.

Interest expense increased to approximately $196,000 for the three months ended
September 30, 1999 from approximately $146,000 for the three months ended
September 30, 1998, as a result of an increase in notes payable to two
shareholders, including a former director of the Company, in connection with the
repurchase of shares of the Company's common stock held by them.

INCOME TAX PROVISION. The income tax provision increased to $425,000 for the
three months ended September 30, 1999 from $67,000 for the three months ended
September 30, 1998, based on increased operating profits for the quarter.

LIQUIDITY AND CAPITAL RESOURCES

The Company's principal sources of liquidity at September 30, 1999 consisted of
unrestricted cash of $8,043,958 and future revenues generated from operations.
The Company believes that these sources of liquidity will be sufficient to meet
the Company's operating and capital requirements for the foreseeable future.

During the three months ended September 30, 1999, the Company's cash position
decreased by $1,241,970 to $8,043,958, from the June 30, 1999 balance of
$9,285,928. The decrease was a result of cash flows used in operating activities
of approximately $1,024,000 and cash flows used in investing activities of
approximately $218,000 during the period.

Cash flows used in operating activities include: (a) $1,110,000 in short-term
advances to the Barona Casino for the Barona Casino expansion project discussed
above; (b) increases in accounts receivable of approximately $221,000 primarily
due to Cyberworks' billings for services performed; (c) decreases in accounts
payable and accrued expenses of approximately $640,000; and (d) an increase in
prepaid assets of approximately $108,000 primarily due to prepayments of
insurance premiums during the quarter.

Cash flows provided by operating activities include: (a) net income of $519,787;
(b) amortization of deferred contract costs of approximately $168,000; (c)
depreciation on property and equipment of approximately $90,000; (d) goodwill
amortization of approximately $99,000 primarily related to the acquisition of
Cyberworks; (e) an increase in income taxes payable of approximately $67,000;
and (f) an increase in the Advances of Future Consulting fees of approximately
$126,000 primarily due to timing differences between consulting revenues earned
and recognized but not yet paid.


                                       15
<PAGE>   16

Cash flows used in investing activities include: (a) a $100,000 minority equity
investment in MediaCycle, Inc. and (b) net investments in fixed assets of
approximately $45,000. Additionally, the Company purchased $100,000 of assets
from Typhoon Capital Consulting, LLC, an investor relations and Internet
strategy consulting firm, consisting of three domain names, including
"Venture-Catalyst.com", computer equipment, office equipment, and furniture.
Approximately $23,000 of equipment and furniture is included in the $45,000 of
fixed asset purchases noted above. The excess of the acquisition cost over the
fair value of net assets acquired ("other intangible assets") was approximately
$77,000 and is being amortized on a straight-line basis over 3 years.

With respect to the current project to expand the Barona Casino discussed above,
the Company and the Barona Tribe will share in funding the expansion costs
incurred prior to obtaining outside financing. The Company expects to commit
approximately $8,300,000 as an unsecured, non-interest-bearing advance to the
Barona Casino. As of September 30, 1999, the Company had advanced $4,300,146.
These advances have been, and such future advances will be, accounted for as a
receivable from the Barona Casino to the Company. Payment of the receivable is
expected to occur when the Barona Tribe obtains outside financing which is
expected to be sometime in early calendar year 2000.

In 1992, there was a one-time advance of future fees under the Consulting
Agreement with the Barona Tribe of approximately $2,500,000. At the beginning of
the management relationship in 1992 between the Barona Tribe and the Company,
the Barona Tribe was not in a financial position to make required investments in
the Barona Casino. The Company invested approximately $2,500,000 into the Casino
that was accounted for as revenue to the Barona Casino and expensed by the
Company due to the uncertainty of recovery. The amount was not accounted for as
a deferred contract cost (similar to those investments discussed in the Overview
above). As the Barona Casino became profitable between 1992 and 1994, $2,500,000
of the initial profits of the Barona Casino were distributed to the Company and
were recorded on its books as an obligation called "Advances of Future
Consulting Fees." The Barona Casino established a corresponding receivable. When
the consulting relationship ends, the Company and the Barona Tribe will discuss
how to handle this balance. Depending on the outcome, if the obligation is
forgiven by the Barona Tribe, the Company may have an additional source of
liquidity in the sense that a debt may not need to be repaid; however, if the
balance reverts back to the Barona Casino or the Barona Tribe, the Company may
have a debt to repay. There is no indication how this issue will ultimately be
resolved. All other transactions between the two parties are being treated
independently. The remaining difference of the September 30, 1999 balance in
Advances of Future Consulting fees of $2,729,041 and the $2,500,000 is due
primarily to timing differences between consulting revenues earned and
recognized but not yet paid and the actual payment of the consulting revenues.
Consulting fees have typically been paid in the month subsequent to the month in
which services were performed.

In September 1996, the Company 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 upon closing, (b) the
issuance of two unsecured promissory notes in the aggregate principal amount of
$3,500,000, with interest at the rate of 10% per annum, payments of interest
only for the first three years, followed by three equal annual installments of
principal repayment, with interest on the remaining balance commencing September
30, 1997, (c) a contingent obligation (the "Initial Contingent Obligations") to
issue an aggregate principal amount of $9,856,488 in unsecured promissory notes
to such shareholders including $2,000,000 in principal amount of notes each year
for four years and $1,856,488 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 Company has
closed a firm commitment underwritten public offering of securities of not less
than $35 million prior to the contingencies being met).


                                       16
<PAGE>   17

The Initial Contingent Obligations are contingent upon the Company's 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 Second Contingent Obligation is subject to
the following conditions: (a) the Barona Tribe enters into a Class III Gaming
Compact (the "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 the Compact, the Company has a consulting
agreement or similar contractual arrangement with the Barona Tribe; and (c)
consulting fees paid to the Company 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, equals or exceeds one and one-half times the
consulting fees for the fiscal year ended June 30, 1996. The Company intends to
record as the additional cost of the repurchase of its common stock, each
contingent obligation as each contingency or condition is met. All payments
pursuant to the Stock Purchase Agreement are further subject to compliance with
certain state law provisions and the Company's Articles of Incorporation
concerning repurchase transactions. The Initial Contingent Obligation has been
met for the first three test periods.

The Company's long-term debt in connection with this stock repurchase is
$9,500,000 as of September 30, 1999. In addition, if all contingent obligations
are met, a maximum of $6,856,488 of aggregate additional consideration may still
have to be repaid under the Stock Purchase Agreement. Management believes that
future revenues generated from operations and unrestricted cash will be
sufficient to service and repay the aggregate amount of this long-term debt.

Restricted cash and other investments of approximately $2,152,000 include; (a)
an irrevocable letter of credit for $133,000 to satisfy the terms of the
corporate lease agreement that will automatically renew on an annual basis until
October 31, 2002, unless canceled by the lessor; and (b) funds in the amount of
$2,011,393 which have been invested or pledged as security for amounts borrowed
by third parties in connection with the construction of the Kla-Mo-Ya Casino, a
gaming facility near Chiloquin, in south central Oregon. From June 1996 to May
1997, the Company provided consulting services to the Klamath and Modoc Tribes
and the Yahooskin Band of Snake Indians (collectively, the "Klamath Tribes").
The Klamath Tribes issued revenue bonds to fund the construction of the
Kla-Mo-Ya Casino. In connection with such bond financing, the Company has a net
investment of $493,393 in revenue bonds with a principal face amount of
$500,000. In addition, as a condition of the bond financing, the Company agreed
to hold the bonds for a five-year period. Pre-opening costs and expenses of
approximately $1.5 million were financed by loans made pursuant to a third-party
bank credit agreement with the Klamath Tribes. The Company pledged a certificate
of deposit for $1,518,000 as collateral for such loans. If the Klamath Tribes
are unable to pay its obligations, the Company may lose all or a portion of its
investment in the revenue bonds it purchased and its certificate of deposit
pledged as collateral for bank loans to the Klamath Tribes. The Klamath Tribes
have made all required interest payments during the fiscal year on the bonds
held by the company. (See Notes to Interim Consolidated Financial Statements,
Note 7. Restricted cash and other investments.)

WMH has entered into a long-term contract that obligates it to spend $120,000 a
year for marketing services related to the promotion of on-line casinos.

The Company has a commitment of approximately $220,000 towards the design and
construction of a Native American museum on the Barona Reservation. As of
November 5, 1999, the Company has paid approximately $65,000 towards this
commitment.


FORWARD-LOOKING STATEMENTS AND CERTAIN FACTORS THAT MAY AFFECT FUTURE RESULTS

Included in this Item 2, and in the Notes to the Interim Consolidated Financial
Statements are certain forward-looking statements within the meaning of the
Private Securities Litigation Reform Act of 1995 reflecting the Company's
current expectations. Although the Company believes that its expectations are


                                       17
<PAGE>   18

based on reasonable assumptions, there can be no assurance that the Company's
financial goals or expectations will be realized. Such forward-looking
statements involve known and unknown risks, uncertainties and other factors that
may cause the actual results, performance or achievements of the Company, or
industry results, to be materially different from future results, performance or
achievements expressed or implied by such forward-looking statements. Numerous
factors may affect the Company's actual results and may cause results to differ
materially from those expressed in forward-looking statements made by or on
behalf of the Company. The Company assumes no obligation to update or revise any
such forward-looking statements or the factors listed below to reflect events or
circumstances that may arise after this Report is filed, and that may have an
effect on the Company's overall performance.

    o  DEPENDENCY ON REVENUES FROM THE BARONA CASINO

    The Company historically has derived substantially all of its income, and
    currently derives the majority of its income, from services provided to the
    Barona Tribe. While the Company is taking steps to diversify its business
    activities and resulting revenues, those activities are producing revenues
    significantly lower than revenues provided from the Company's services to
    the Barona Casino. Accordingly, any material reduction in fees payable to
    the Company in connection with its consulting relationship with the Barona
    Tribe could have a material adverse affect on the business and financial
    condition of the Company, if the Company could not either reduce expenses or
    increase revenues from other sources.

    o  THE BARONA CONSULTING AGREEMENT

    Appropriate regulatory authorities have not yet approved the Consulting
    Agreement. If the Consulting Agreement is not approved or is significantly
    modified from the standpoint of consulting revenue, such action would have a
    material adverse effect on the business and financial condition of the
    Company. (See Notes to Consolidated Financial Statements, Note 3. -- Barona
    Consulting Agreement.)

    o  UNCERTAINTIES CONCERNING INTERNET GAMING

    Many of the laws and regulations concerning the regulation of the business
    of Internet gaming in the United States and in other countries are currently
    being developed. The evolution of the laws and statutes regarding Internet
    gaming will have a significant impact on the Company's Internet gaming
    business. It is not known at what rate or direction the evolution of such
    gaming regulations and statutes will take place. The Company is competing
    with other entities, some of which have been in the market longer than the
    Company. In addition, certain current competitors and potential future
    competitors have, or may have greater resources than the Company to devote
    further technologies and new product developments to the development of
    Internet gaming. There can be no assurance that existing or future
    competitors will not develop or offer technologies that provide significant
    economic, technological, creative or strategic advantages over those offered
    by the Company. The Company's future success in the Internet Gaming
    Consulting field is dependent on the evolving regulatory and competitive
    environment. There is no assurance that the Company's present and
    contemplated services provided to "Internet gaming casinos" will achieve or
    maintain sufficient commercial acceptance, or if they do, that regulatory
    developments will not diminish the full economic potential of such virtual
    gaming sites.

    o  VOLATILITY OF STOCK PRICE

    The trading price of the Company's Common Stock has been, and will likely
    continue to be, subject to wide fluctuations because of Indian gaming
    regulatory developments, quarterly variations in the Company's operating
    results, announcements of new products or business activities by the Company
    or its 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.


                                       18
<PAGE>   19

     o  YEAR 2000 READINESS DISCLOSURE

     Many of the world's computer systems currently record years in a two-digit
     format. Such computer systems will be unable to properly interpret dates
     beyond the year 1999 that could lead to business disruptions in the U.S.
     and internationally (the "Year 2000 issue"). The potential costs and
     uncertainties associated with the Year 2000 issue will depend on a number
     of factors, including software, hardware and the nature of the industries
     in which the Company and its subsidiaries operate. Additionally, companies
     must coordinate with other entities with which they electronically
     interact, such as customers and creditors.

     The Company has addressed the critical systems and related software used in
     the Cyberworks business as well as Inland's internal financial and
     administrative systems and has determined that they are Year 2000 compliant
     or are not adversely impacted by the Year 2000 issue. No significant costs
     were incurred to perform the evaluation and testing of these systems, and
     all costs have been expensed as incurred. The Company will continue to
     evaluate all system upgrades, new hardware and software purchases through
     the Year 2000.

     The Company is addressing the impact to their most significant customer,
     the Barona Casino, and the impact to WMH's on-line gaming computer software
     vendor.

     The Barona Casino has formed a committee to address the Year 2000 issue. It
     has a strategy that includes an analysis phase, project plan, testing
     phase, implementation phase and a risk contingency plan. The Company is in
     the process of reviewing their strategic plan and has made formal inquiries
     as to their progress during the first quarter of Fiscal 2000. According to
     representations made by Barona Casino management, they have (a) sent
     letters to critical vendors requesting Year 2000 compliance and contingency
     plan information; (b) identified problem systems; (c) implemented and
     tested software patches and/or upgrades to various systems, including
     inventory, accounting, human resources, and payroll; (d) substantially
     completed the replacement of all personal computers to Year 2000 compliant
     hardware; (e) replaced network servers; and (f) purchased Year 2000
     diagnostic software that has been, and will continue to be in use
     throughout the year to test PC's, servers and software. None of the vendor
     responses received to date indicate that a material Year 2000 related
     disruption to systems or operations will adversely impact the Barona
     Casino. Additionally, the Barona Casino has evaluated the potential impact
     of the Year 2000 issues on it's equipment and machines that contain
     software or microchips that have date logic dependencies. Based on
     inquiries to vendors, bench tests, and other diagnostic procedures, the
     Barona Casino believes that there will be no material adverse impact or
     failures caused by Year 2000 issues related to it's equipment or machines.

     The on-line gaming casinos marketed and promoted by WMH are dependent on a
     third-party foreign computer software supplier (the "supplier"). The
     supplier provides both the gaming casino software as well as the electronic
     commerce system that handles all wagers. The Company has requested Year
     2000 compliance and contingency plan information from this supplier.
     According to representations made by the management of the supplier, they
     have undertaken an evaluation of the potential impact of the transition to
     the Year 2000 on their products and they are not aware of any material
     issues relating to Year 2000 compliance in respect to their products.
     However, the Year 2000 compliance of the supplier's products may be
     affected to the extent that the supplier's electronic commerce and gaming
     software incorporates or operates in conjunction with the software of other
     developers which may not be Year 2000 compliant. If the systems of the
     financial institutions, credit card processors, or others involved in
     electronic commerce transactions are not Year 2000 compliant, there can be
     no assurance that the supplier's software, in connection with these
     products, will operate consistently in the Year 2000. The supplier is still
     in the process of assessing the extent to which they are vulnerable to the
     failure of their significant customers and suppliers to remediate their own
     Year 2000 issues, and is making an attempt to obtain assurance from the
     credit card processors and other suppliers of their Year 2000 readiness. In
     the event of inconsistent operation of the supplier's casino software and
     electronic commerce system in the


                                       19
<PAGE>   20

     Year 2000, there could be a material adverse impact on the operations of
     WMH's on-line gaming operations.

     The Company has requested and obtained Year 2000 compliance and contingency
     plan information from other major suppliers and customers of the Company
     and its subsidiaries to assess the potential risks of non-compliance and
     the resulting impact on the Company. At this time, the Company has not
     identified any major supplier or customer that is non-compliant or that
     poses a risk to the Company. The Company has completed the process for all
     identified existing suppliers and customers, and will continue this process
     throughout 1999 for new suppliers and customers. The Company, however, will
     not be able to independently verify that such external suppliers and
     customers are, in fact, Year 2000 compliant.

     The Company's plan to evaluate the status of suppliers' and customers'
     efforts is a means of managing risk but cannot eliminate the potential for
     disruption due to third party failure. If it is determined that any of the
     Company's or its subsidiaries' vendors, major suppliers, customers or other
     parties with which the Company or its subsidiaries conduct business, has an
     issue with Year 2000 compliance, the Company will pursue alternative
     business relationships (with the exception of the Barona Casino) to
     minimize the impact, if any, that such a relationship(s), will have on the
     Company's and its subsidiaries' operations. If it is determined that the
     Barona Casino has a Year 2000 compliance problem, the Company would
     actively support their efforts to gain compliance in a timely manner to
     mitigate system failures causing disruptions in their operations. The cost
     or the likelihood of this event occurring is not known at this time.

     As of September 30, 1999, total costs relating to the Company's compliance
     efforts, based upon management's best estimates, were 45 man-hours of the
     Company's personnel and $3,400. Costs for Year 2000 compliance evaluation
     will continue to be expensed as incurred and are not expected to have a
     material impact on the Company's consolidated results of operations.

    The information set forth above under this caption "Year 2000 Readiness
    Disclosure" relates to the Company's efforts to address the Year 2000
    concerns regarding the Company's (a) operations; (b) services, products and
    technologies sold to third parties; and (c) major suppliers and customers.
    Such statements are intended as Year 2000 Statements and Year 2000 Readiness
    Disclosures and are subject to the Year 2000 Information Readiness Act.


                                       20
<PAGE>   21

                           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.

<TABLE>
<CAPTION>
        EXHIBIT
          NO.                           DESCRIPTION
        -------                         -----------
<S>                           <C>
          2.1                 Asset Purchase Agreement dated as of July 16, 1999
                              by and among the Company, Typhoon Capital
                              Consultants, LLC, Sanjay Sabnani and Manisha
                              Sabnani, previously filed as Exhibit 2.4 to the
                              Company's Annual Report on Form 10-KSB for the
                              Fiscal Year ended June 30, 1999, dated September
                              27, 1999 and filed with the Commission on
                              September 28, 1999 (File No. 0-11532) (the "Fiscal
                              1999 Annual Report"), is hereby incorporated
                              herein by reference.

          10.1                Employment Agreement by and between the Company
                              and Sanjay Sabnani, dated July 16, 1999,
                              previously filed as Exhibit 10.8 to the Fiscal
                              1999 Annual Report, is hereby incorporated herein
                              by reference.

          10.2                Assignment, Assumption and Consent dated September
                              28, 1999 by and between Typhoon Capital
                              Consultants, LLC, dba: Venture-Catalyst.com,
                              Inland Entertainment Corporation and Spieker
                              Properties, L.P. relating to the March 22, 1999
                              Santa Monica, California Office Lease.

          10.3                Lease Agreement dated March 22, 1999, by and
                              between Typhoon Capital Consultants, LLC, dba:
                              Venture-Catalyst.com, and Spieker Properties, L.P.

          10.4                Assignment and Assumption Agreement dated as of
                              July 16, 1999, by and among the Company, Typhoon
                              Capital Consultants, LLC, Sanjay Sabnani and
                              Manisha Sabnani.

          10.5                Negotiable Secured Promissory Note, dated August
                              5, 1999, of Christopher Wm. Voisin, in favor of
                              the Company in the principal amount of $49,462,
                              previously filed as Exhibit 10.37 to the Fiscal
                              1999 Annual Report (specifically included in
                              Amendment No. 1 to the 1999 Annual Report dated
                              and filed with the Commission on Form 10-KSB/A on
                              October 27, 1999), is hereby incorporated herein
                              by reference

          27                  Financial Data Schedule.
</TABLE>


                                       21
<PAGE>   22
 (b) Reports on Form 8-K. During the Company's first quarter ended September 30,
1999 the Company filed two Current Reports on Form 8-K; one dated July 28, 1999,
and the other dated September 13, 1999. Each such Current Report reported under
"Item 5. Other Events" an updated Beneficial Ownership Table for the Company.


                                       22
<PAGE>   23

                                   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.

                                      INLAND ENTERTAINMENT CORPORATION,
                                      a Utah Corporation



Date:           November 12, 1999          By: /S/ ANDREW B. LAUB
                                               --------------------
                                           Andrew B. Laub
                                           Executive Vice President,
                                           Chief Financial Officer and
                                           Treasurer
                                           (Authorized Signatory, Principal
                                           Financial Officer)

Date:           November 12, 1999          By: /S/ KEVIN MCINTOSH
                                               --------------------
                                           Kevin McIntosh
                                           Controller
                                           (Principal Accounting Officer)


                                       23
<PAGE>   24

                                  EXHIBIT INDEX


<TABLE>
<CAPTION>
        EXHIBIT
          NO.                              DESCRIPTION
        -------                            -----------
<S>                           <C>
          2.1                 Asset Purchase Agreement dated as of July 16, 1999
                              by and among the Company, Typhoon Capital
                              Consultants, LLC, Sanjay Sabnani and Manisha
                              Sabnani, previously filed as Exhibit 2.4 to the
                              Company's Annual Report on Form 10-KSB for the
                              Fiscal Year ended June 30, 1999, dated September
                              27, 1999 and filed with the Commission on
                              September 28, 1999 (File No. 0-11532) (the "Fiscal
                              1999 Annual Report"), is hereby incorporated
                              herein by reference.

          10.1                Employment Agreement by and between the Company
                              and Sanjay Sabnani, dated July 16, 1999,
                              previously filed as Exhibit 10.8 to the Fiscal
                              1999 Annual Report, is hereby incorporated herein
                              by reference.

          10.2                Assignment, Assumption and Consent dated September
                              28, 1999 by and between Typhoon Capital
                              Consultants, LLC, dba: Venture-Catalyst.com,
                              Inland Entertainment Corporation and Spieker
                              Properties, L.P. relating to the March 22, 1999
                              Santa Monica, California Office Lease.

          10.3                Lease Agreement dated March 22, 1999, by and
                              between Typhoon Capital Consultants, LLC, dba:
                              Venture-Catalyst.com, and Spieker Properties, L.P.

          10.4                Assignment and Assumption Agreement dated as of
                              July 16, 1999, by and among the Company, Typhoon
                              Capital Consultants, LLC, Sanjay Sabnani and
                              Manisha Sabnani.

          10.5                Negotiable Secured Promissory Note, dated August
                              5, 1999, of Christopher Wm. Voisin, in favor of
                              the Company in the principal amount of $49,462,
                              previously filed as Exhibit 10.37 to the Fiscal
                              1999 Annual Report (specifically included in
                              Amendment No. 1 to the 1999 Annual Report dated
                              and filed with the Commission on Form 10-KSB/A on
                              October 27, 1999), is hereby incorporated herein
                              by reference

          27                  Financial Data Schedule.
</TABLE>


                                       24