SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                    FORM 10-K

                ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF
                      THE SECURITIES EXCHANGE ACT OF 1934

FOR  THE  YEAR  ENDED DECEMBER 31, 2001         COMMISSION FILE NUMBER 000-25306

                            EQUUS GAMING COMPANY L.P.
                            -------------------------
             (Exact name of registrant as specified in its charter)

               Virginia                                54-1719877
     -------------------------------               ------------------
     (State or other jurisdiction of                (I.R.S. Employer
      incorporation or organization)               Identification No.)

                            El Comandante Race Track
                            Main Building First Floor
                              65th Infantry Avenue
                                Rd. 3, Km. 15.3
                              Canovanas, PR 00729
                              --------------------
              (Address of Principal Executive Offices and Zip Code)

Registrant's telephone number, including area code: (787) 641-5844

Securities registered pursuant to Section 12(b) of the Act: Not applicable

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

TITLE OF EACH CLASS                     NAME OF EXCHANGE ON WHICH REGISTERED

Class A Units representing assignment   NASDAQ  Small Cap Market System
benefit ownership of Class A limited    ("Nasdaq/SCMS") partnership interest
and evidenced by                        in January 2001 the Company was delisted
beneficial assignment                   from the NASDAQ Stock Market.
certificates ("Units")

Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the  preceding  12  months  (or  for such shorter period that the registrant was
required  to  file  such  report(s),  and  (2)  has  been subject to such filing
requirements  for  the  past  90  days.  Yes   [X]   No  [ ]

Indicate  by  check mark if disclosure of delinquent filers pursuant to Item 405
of  Regulation  S-K  is  not contained herein, and will not be contained, to the
best  of  registrant's  knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form  10-K.  [ ]

As  of  June  12,  2002,  the  aggregate market value of 3,087,892 Units held by
non-affiliates  of  the  registrant  was  $247,031.

Documents  Incorporated  By  Reference:  Not  Applicable


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                            EQUUS GAMING COMPANY L.P.

                          2001 FORM 10-K ANNUAL REPORT

                                TABLE OF CONTENTS

                                                                                Page
                                                                                ----

                                     PART I
<S>       <C>                                                                    <C>
Item 1.   Business                                                                3
Item 2.   Properties                                                              8
Item 3.   Legal Proceedings                                                       9
Item 4.   Submission of Matters to a Vote of Security Holders                    12


                                    PART II

Item 5.   Market for Registrant's Class A Units and Related Unitholders Matters  13
Item 6.   Selected Financial and Operating Data                                  13
Item 7.   Management's Discussion and Analysis of
            Financial Condition and Results of Operations                        15
Item 8.   Financial Statements and Supplementary Data                            26
Item 9.   Changes in and Disagreements with Accountants
            on Accounting and Financial Disclosure                               61


                                    PART III

Item 10.  Directors and Executive Officers of the Company and EMC                62
Item 11.  Executive Compensation                                                 64
Item 12.  Security Ownership of Certain Unitholders and Management               65
Item 13.  Certain Relationships and Related Transactions                         66


                                    PART IV

Item 14.  Exhibits, Financial Statement Schedules and Reports on Form 8-K        67
</TABLE>


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                                     PART I

ITEM  1.  BUSINESS

GENERAL

     Equus Gaming Company L.P. (the "Company"), a Virginia limited partnership,
is engaged in thoroughbred racing, wagering and other gaming businesses in the
Caribbean and South America. Through its subsidiaries, the Company operates
three racetracks and manages an off-track betting (OTB) system in the various
countries where the Company operates. Equus Management Company ("EMC") is the
general partner of the Company.

     The Company has a 99% interest in Housing Development Associates S.E.
("HDA"), the owner of El Comandante Racetrack ("El Comandante"), the only
licensed thoroughbred racing facility in Puerto Rico. El Comandante has operated
since January 1, 1998 as a wholly-owned subsidiary of HDA, El Comandante
Management Company, LLC ("ECMC").

     The Company has a 55% interest in Galapagos, S.A. ("Galapagos"), the
operator since April, 1995 of V Centenario Race Track in the Dominican Republic
("V Centenario"). The racetrack is government owned and operated by the
Company's subsidiary under a long-term license contract.

     On October 9, 2001, Equus Entertainment de Panama was restructured whereby
the Company sold its controlling interest and purchased preferred stock as of
September 30,2001. See "Notes to Consolidated Financial Statements".

     The Company also had a controlling 100% interest in Equus-Uruguay, S.A.,
which was awarded exclusive rights by the government of Uruguay to operate the
Maronas racetrack in Montevideo and an off-track betting agency network together
with the right to operate up to 5,000 slot machines in 5 locations. The
necessary restoration of the racetrack would, in management's opinion, require
an initial investment of $12 million -. Efforts to raise the $12 million by the
due date were unsuccessful. Consequently, the concession expired on March 31,
2001 and the company's bid bond in the amount of $500,000 was forfeited and thus
expensed during the period ended March 31, 2001. Subsequently, the concession
was awarded to another operator in the fourth quarter of year 2001, which
resulted in the Company writing off of its entire investment at December 31,
2001.

     The company also has a controlling 100% interest in Satellite Service
International, Inc. ("SSI") and Agency Betting Network, Inc. ("ABN"). SSI will
provide up-link services, satellite time (contracted from a third party), and
leasing of video and data telecommunication equipment, to transmit (or
simulcast) live races from and to the Company's racetracks and OTB agencies,
including live races from outside the Company's operational territories to the
agency distribution network in order to increase the level of wagering revenues
through the Company's OTB system. ABN is establishing and operating an OTB
agency system in Colombia in conjunction with Los Comuneros Race Track in
Medellin, Colombia ("Los Comuneros"), owned and operated by Equus Comuneros S.A.
("Equus-Comuneros"). The Colombia OTB system is expected to operate in Bogota,
Medellin and other major cities.

     In 1999 the Company initiated a vertical integration process to consolidate
its telecommunications needs into a centralized hub-and-spoke system based at El
Comandante racetrack in Puerto Rico. During 2000 and 2001 the development of
this system encountered significant technical obstacles, which necessitated
redesigning of its architecture, reallocation of the equipment and ultimately, a
strategic revision of the objectives for the system.

     The vertical integration process began with the development of a C-Band
satellite uplink facility in Panama in the fall of 1999 to fulfill the
broadcasting needs of this jurisdiction which, at the time, belonged to the
Company's international network of pari-mutuel operations. By December of that


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year the consolidation process had identified VSAT technology via the Ku-Band
medium as the application necessary to address the Company's needs for video and
data transmission throughout its proprietary agency-betting network in Puerto
Rico, Panama, Colombia and Dominican Republic.

     The significant investment made by the Company during 1999-2000 in the
satellite telecommunications equipment required to implement the VSAT system
included the development of a main uplink Hub in Puerto Rico, and of supporting
Ku-Band uplinks to service the markets of Panama and Colombia. Initial steps
were also taken to establish a supporting uplink in the Dominican Republic
although the facility has not been completed at this time.

     Several factors altered the course of the VSAT project, and namely, the
incompatibility of this technology with the Autotote system currently in use
throughout the Company's pari-mutuel operations hindered its deployment as the
primary means of transmission for the agency-betting network's wagering data.
Consequently, the Company is in the process of evaluating several alternate
commercial applications for this equipment both in Colombia and Puerto Rico.

     Conversely, the aforementioned satellite uplink facilities continue to
provide video broadcasting services for the Company's pari-mutuel operations in
Puerto Rico, Colombia and the Dominican Republic. In addition to the alternate
commercial uses being sought for the VSAT equipment, the Company's uplink
facilities are uniquely positioned to provide satellite broadcast services to
prospective clients in Puerto Rico, Colombia, and potentially in the Dominican
Republic.

A.   PUERTO RICO OPERATIONS

     El Comandante is the leading racetrack in the Caribbean when measured in
gross dollars wagered. Thoroughbred horse racing has been conducted continuously
at El Comandante since 1976 and at a predecessor facility since 1957. Races are
currently run 52 weeks per year, generally five days per week (Monday,
Wednesday, Friday, Saturday and Sunday). Wagering is conducted through
facilities at the racetrack and at independently-owned OTB agencies that are
linked via on-line computers to El Comandante. During 2001, there were
approximately 608 OTB agencies in operation.

     Since commencing the on-line wagering system, all of El Comandante's races
have been broadcast via commercial television in Puerto Rico. The contract for
production of the televised program expired in December of 2000 and as of
January of 2001 production was integrated with the racetrack's operations at a
substantial saving. The telecast permits OTB patrons to monitor odds and
handicapping information until post time and then to view the live race. Live
races are currently broadcasted through an agreement with S&E Network, Inc.
("S&E"). The Company is implementing a high technology communication system
(data and video-VSAT) with a satellite link (HUB) in Puerto Rico having the
capacity to simulcast live races to other operations and to countries in the
Caribbean and South America.

     ECMC has a new contract effective July 1, 2000 with the Puerto Rico Horse
Owners Confederation requiring that horse owners supply sufficient horses to
conduct racing operations in accordance with the racing program approved by the
Puerto Rico Racing Board, which stipulates a minimum of forty (40) races per
week. The contract obligates ECMC to provide stables and related facilities. The
contract, which establishes the amount to be paid to horse owners as purses and
other economic terms and its amendment of March 16, 2001 expires on December 31,
2010.


     COMPETITION. El Comandante, the only licensed thoroughbred racetrack
facility in Puerto Rico, is operated by ECMC under an operating license granted
by the Puerto Rico Racing Board. The operating license provides ECMC with the
exclusive right through December 14, 2004, to operate a race track in the San


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Juan Region (the largest of three regions in Puerto Rico) which includes the San
Juan metropolitan area and over three-fourths of the northern half of the
Island; the exclusive right to conduct all types of authorized betting
throughout Puerto Rico, based on races held at El Comandante; and the right to
hold a minimum of 180 day or night-race days per year. Until the expiration of
the Operating License, no other thoroughbred racetrack license for the San Juan
Region may be issued.

     ECMC faces competition from other forms of legalized gambling in Puerto
Rico. There are 19 licensed casinos in Puerto Rico offering card and dice games,
slot machines and other games of chance. The Puerto Rico Government has operated
a ticket lottery for more than 50 years and in 1991 commenced an electronic
jackpot lottery. In addition, there are numerous cock fighting venues on the
Island. ECMC also faces competition from illegal gambling. The Puerto Rico
Government may, through legislation, legalize other forms of gambling or grant
additional gaming licenses to those forms of gambling already authorized by law.

     EMPLOYEES. ECMC had approximately 178 employees as of December 31, 2001.
There were 45 employees working in the mutuel, print shop, racing closed circuit
television and help desk departments covered by a collective bargaining
agreement between ECMC and El Comandante Racetrack Employees Union, which
expired August 23, 1998 and was renewed in January 15, 2001 for a three-year
period; 75 employees performing building and premises maintenance services
covered by a collective bargaining agreement between ECMC and the General
Workers Union, which began March 1, 2000, for a three year period. There were 58
employees working in administrative positions. All the security guards positions
were eliminated at the end of 1999 and an outsourcing agreement for security
services was signed between ECMC and Ranger American of Puerto Rico for a period
of one year, with yearly renewable options, which have since been exercised,
commencing in January 2000.


B.   DOMINICAN REPUBLIC OPERATIONS

     In 1995, Galapagos was selected by the Dominican Republic Racing Commission
to operate the government-owned V Centenario racetrack in Santo Domingo pursuant
to a ten-year agreement ending April 2005. The contract may be renewed for
additional ten-year periods by mutual agreement of the parties. The contract
also provides Galapagos with the right to develop off-track betting in the
Dominican Republic and the exclusive right to simulcast live horse races from
other countries into the Dominican Republic. During the year 2000 Galapagos
requested negotiations with the National Racing Commission to extend their
contract for an additional 10-year period. As of June 12, 2002, no negotiations
have taken place.

     At December 31, 2001 there were approximately 232 installed and 175
operating OTB agencies in the Dominican Republic. The OTB system in the
Dominican Republic has been negatively impacted by the inability to obtain
dependable broadcasting of live races by commercial television with broad
island-wide penetration.

     Currently, live racing is conducted three days per week with a six-race
card. Full card wagering on simulcast races from El Comandante is offered five
days a week. During the first quarter of 2001, the Company presented to the
Dominican Republic government a legislative proposal to reduce taxes by avoiding
double taxation in the Dominican Republic and Puerto Rico on winning tickets.
The proposed legislation also provides for economic and investment incentives to
further improve the racing program and betting options, increase the pool of
horses and upgrade video transmission. As of June 12, 2002, this legislation has
not been enacted but the Company's efforts continue.

     In 2001, Galapagos S.A. applied and received from the Government a sports
book license. If developed, it would be an added source of revenue for the
Company.

     LOTTERY. Galapagos had a five-year contract with a private operator
(Autotote) to provide the wagering distribution system for a
government-sponsored electronic lottery, which commenced on November 1, 1997.


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Lottery games were sold at OTB agencies selected by Galapagos and at agencies
selected by the lottery operator. Galapagos' commissions (net of fees paid to a
third party) were 1% of gross lottery sales at lottery agencies and 2% of gross
lottery sales at OTB agencies. In addition, the lottery operator paid Galapagos
a monthly fee for each OTB agency that sells lottery games as reimbursement for
a 50% share of telephone line costs. Galapagos also selects the lottery agencies
to take Pick 6 pool wagers on Galapagos' live and simulcast races.

     In June 2000 Autotote unilaterally discontinued using the Company's
wagering distribution system and entered into a private agreement with the
service provider. The Company then initiated arbitration proceedings against the
operator and on November 21, 2001 the American Arbitration Association rendered
its final award as follows:

          1.   Galapagos owes Autotote the principal amount of $230,578 as of
               April 23, 2001, together with interest of $120,308 through
               November 21, 2001, the date of the award.

          2.   For breach of good faith and fair dealings, Autotote owes
               Galapagos $800,000, plus interest at the rate of seven (7)
               percent per annum from November 21, 2001 to the date of payment.

          3.   The parties have no further obligations to one another with
               respect to lottery operations in the Dominican Republic.

          4.   The parties shall bear equally the costs of arbitration which
               amount to $44,903 each. Any excess funds on deposit shall be
               reimbursed to the paying parties in equal amounts.

          5.   Autotote shall pay Galapagos $150,000 in reimbursement fees
               incurred in the proceedings.

          6.   Awards will be offset and the net amount owed to Galapagos of
               approximately $600,000 will accrue interest at seven (7) percent
               until paid. See Note, 3. "Legal Proceedings".


     COMPETITION. Galapagos faces competition from other forms of gambling in
the Dominican Republic. The Dominican Republic Government operates a ticket
lottery and an electronic lottery throughout the country. The electronic lottery
which commenced operations in November 1997 has steadily increased its share of
the gaming market. Lottery wagering shows strong cyclical patterns directly
linked to the amount accumulated in the jackpot. The lottery which carried
jackpot prizes exceeding US$6 million on two Saturdays in 2000 decreased the
betting handle on the best racing day of the week. The pick-6 wager represents
roughly 40% of betting handle. There are approximately 3,000 independent sports
betting agencies in the Dominican Republic. There were approximately 153 OTB
agencies at December 31, 2001. Wagering on baseball is particularly popular.
Wagering on cock fighting is both legal and popular in the Dominican Republic.
Casino gaming is permitted at hotels with a minimum of 100 rooms and there are
25 licensed casinos in operation. Galapagos also faces competition from illegal
gambling.

     EMPLOYEES. Galapagos had 117 employees at December 31, 2001. Galapagos has
no agreements with unions and has not experienced any work stoppage or material
labor difficulties.


C.   COLOMBIA OPERATIONS

     Since the beginning of 1999, Equus-Comuneros has owned and operated Los
Comuneros Racetrack in Medellin, Colombia. Prior to the Company's involvement in
these operations, Los Comuneros hosted one live meet per week with an average
handle of approximately $100,000, and employed an OTB system with a limited
number of sites and technology. During 2001 Los Comuneros operated


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approximately 150 OTB agencies. Wagering revenues from those agencies was
minimal due to limitations in the number of live races and a lack of simulcast
races from other countries.

     In December 2000 the Racing Board approved more live races and simulcasting
from other countries. In 2000, the Company entered into a totalisator agreement
with United Tote for state-of-the-art terminals that is expected to increase
significantly OTB agency betting. During 2001, Equus-Comuneros had 135 more race
days than in year 2000.

     The OTB agency network operated by ABN, a wholly owned Puerto Rican
subsidiary of the Company, will be equipped with improved satellite video and
data communication equipment with the capacity to service major cities in
Colombia. As of December 31, 2001, approximately 104 ABN antennas were installed
in Colombia.

     In mid 2001, ABN applied to the Government for a sports betting license,
which if granted could have a material impact on future earnings. As of June 12,
2002 the application is still in process; however, ABN has received verbal
approval from the city of Medellin.

     COMPETITION. Equus-Comuneros faces competition from other forms of
legalized gambling in Colombia, including a lottery system.

     EMPLOYEES. At December 31, 2001 Equus-Comuneros had 64 employees. On race
days there are an additional 51 employees operating the betting system.


D.   SATELLITE SERVICES INTERNATIONAL, INC. ("SSI")

     SSI, a wholly owned subsidiary of Equus Gaming Company L.P., will provide
up-link services, satellite time (contracted through a third party), and lease
video and data telecommunications equipment to transmit (or simulcast) live
races between the Company's racetracks and the OTB agencies. SSI will receive a
percentage of wagering handle on simulcast faces throughout the Equus network.

     The main asset of SSI is the VSAT System consisting of a hub, satellite
channel and remote VSAT's in each jurisdiction where the Company has pari-mutuel
wagering. Upon completion, the integrated system will be more efficient and
reliable than the terrestrial telephone lines currently utilized.

     As of December 31, 2001, the physical assets of SSI consisted of the
following:

     (i)   Hub Master Earth Station in San Juan, Puerto Rico

     (ii)  Satellite Uplink Stations in San Juan, Puerto Rico

     (iii) VSAT and video telecommunications equipment for 930 OTB sites in
           Puerto Rico, Colombia, Dominican Republic and Panama.


     In addition to providing video and data transmission services for
pari-mutuel wagering, the VSAT System will offer data transmission services to
closed user communities that rely on interactive broadband applications
independent from terrestrial lines such as "pay at the pump" gasoline stations,
pharmacy prescription networks and lottery sales.


E.   AGENCY BETTING NETWORK, INC. ("ABN")


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     ABN is a wholly owned subsidiary of Equus Gaming, L.P. which is currently
installing and operating an OTB agency system in Colombia, to provide satellite
and data communication system, which is contemplated to reach and penetrate all
of the major cities in Colombia.


H.   VIRGINIA RACING LICENSE

     During 1999 the Company attempted to acquire a license to own and operate a
horse racetrack in Prince William County, Virginia. On November 17, 1999 the
Virginia Racing Commission made a final decision not to award the Virginia
License to any of the applicants. The Company wrote-off all costs associated
with the license application in 1999.


ITEM  2.  PROPERTIES

     EL COMANDANTE. HDA is the owner of El Comandante, situated on a 257-acre
parcel of land in Canovanas, Puerto Rico, approximately 12 miles east of San
Juan. El Comandante properties include the following:

     a.   A building consisting of a six-level grandstand and clubhouse with
          seating for over 10,000 and a total capacity in excess of 25,000,
          including glass-enclosed, air-conditioned dining room with seating
          capacity for over 1,400;

     b.   Racing facilities, including a one-mile oval strip with a
          seven-furlong chute and a 65-foot wide exercise track;

     c.   Barn area and related facilities, including 1,595 horse stalls;

     d.   Paved parking area that can accommodate 7,250 vehicles;

     e.   Landscaped infield containing three lakes and a waterfall.

     These properties were severely damaged by Hurricane Georges in 1998. The
grandstand and clubhouse were rebuilt on a reduced scale in late 1998 and
finalized in 1999.

     ECMC also owns certain race track and telecommunication equipment used in
the operation of El Comandante and the off-track betting system. See Note 5 to
the Company's consolidated financial statements for a description of encumbrance
on El Comandante properties.


     V CENTENARIO. Galapagos leases V Centenario from the Dominican Republic
Government. V Centenario is situated on a parcel of land, approximately 7.5
miles east of Santo Domingo, Dominican Republic. V Centenario properties include
the following:

     a.   A building consisting of grandstand and clubhouse with seating for
          over 4,200 and total capacity in excess of 10,000, including an
          air-conditioned dining room with seating for 400;

     b.   Racing facilities, including a one-mile oval strip with a
          seven-furlong chute and a 1,400 meter exercise track;


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     c.   Barn area and related facilities, including 950 horse stalls;

     d.   Paved parking area that accommodates 1,100 vehicles.

     Galapagos also owns certain race track and telecommunication equipment used
in  the  operation  of  V  Centenario  and  the  off-track  betting  system.

     LOS  COMUNEROS.  Equus-Comuneros is the owner of Los Comuneros, situated in
Medellin,  Colombia.  Los  Comuneros  properties  include  the  following:

     a.   A building consisting of grandstand and clubhouse with total seating
          capacity of 5,500;

     b.   Racing facilities, including a 1,300-meter oval strip with a
          six-furlong chute;

     c.   Barn area and related facilities, including 300 horse stalls;

     d.   Parking area that accommodates 500 vehicles.


ITEM  3.   LEGAL  PROCEEDINGS

     The Company had a case in arbitration at the American Arbitration
Association in defense of and against Autotote, involving all the racetracks in
which Equus has an ownership interest. Autotote filed a claim against El
Comandante for unpaid service fees of $186,415 plus interest. El Comandante
agreed to pay this amount but filed a counterclaim against Autotote.

     On July 27 and November 21, 2001, American Arbitration Association rendered
its award decisions. The following is a summary of the awards by racetrack:

     EL  COMANDANTE,  PUERTO  RICO

          1.   El Comandante is to pay Autotote the principal amount of $355,496
               in unpaid service fees together with interest of $32,051, accrued
               through April 1, 2001.

          2.   El Comandante shall reimburse Autotote for costs incurred of
               $132,500.

          3.   As of December 31, 2001, the outstanding principal balance was
               $761,415 and accrued interest was $501.


     EQUUS - PANAMA

          1.   Equus - Panama is to pay Autotote the principal amount of
               $250,474 in unpaid service fees together with interest of $45,233
               accrued through June 30, 2001.

          2.   Equus-Panama shall reimburse Autotote for costs incurred of
               $25,000.

          On October 9, 2001, the Company sold its common stock and purchased
          3,000 shares of preferred stock and at the same time was released from
          any further liability under the Autotote Equus-Panama Arbitration
          Award.


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     EQUUS - COMUNEROS

          1.   Equus-Comuneros is to pay Autotote the principal amount of
               $584,262 in unpaid service fees as of April 23, 2001, together
               with interest of $218,059 accrued through December 31, 2001.

          2.   Equus-Comuneros shall reimburse Autotote costs incurred of
               $132,500.


     GALAPAGOS

          1.   Galapagos owes Autotote the principal amount of $230,578 as of
               April 23, 2001, together with interest of $120,308 through
               November 21, 2001, the date of the award.

          2.   For breach of good faith and fair dealings, Autotote owes
               Galapagos $800,000, plus interest at the rate of seven (7)
               percent per annum from November 21, 2001 to the date of payment.

          3.   The parties have no further obligations to one another with
               respect to lottery operations in the Dominican Republic.

          4.   The parties shall bear equally the costs of arbitration which
               amount to $44,903 each. Any excess funds on deposit shall be
               reimbursed to the paying parties in equal amounts.

          5.   Autotote shall pay Galapagos $150,000 in reimbursement fees
               incurred in the proceedings.

          6.   Awards will be offset and the net amount owed to Galapagos of
               approximately $600,000 will accrue interest at seven (7) percent
               until paid.

     As  of  June  12, 2002, the parties are negotiating a settlement within the
terms  of  the  arbitration  awards.

     Each entity involved in the arbitration sustains individually the
consequences of the arbiters' final award and there are no performance
guarantees by any other entity including Equus Gaming Company L.P., the parent
company.

     Costs incurred by the Company in pursuing the Arbitration with Autotote to
date total $574,042 and have been allocated to each participating entity in the
same proportion that the arbiters awarded the costs incurred by Autotote to each
entity.



     On August 18, 2001, ECMC executed a Closing Agreement (the "Agreement")
with the Municipality of Canovanas whereby ECMC settled its longstanding dispute
over the payment of the Volume of Business Tax assessed by the municipality.

     The following schedule lists the deficiencies by fiscal year with the
corresponding interest and surcharges:


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        FISCAL               INTEREST
        TAX     TAX          AND
        YEAR    DEFICIENCY   SURCHARGES    TOTAL
        ------  -----------  -----------  --------
        93/94   $    74,087  $    67,913  $142,000
        96/97       120,397       68,224   188,621
        97/98       126,666       59,110   185,776
        98/99       123,366       45,233   168,599
        99/00        93,367       45,233   118,264
        00/01       116,735       19,455   136,190
                -----------  -----------  --------

        Totals  $   654,618  $   284,832  $939,450
                ===========  ===========  ========

     Prior to settlement, the Company had accrued as of June 30, 2001 as a
liability a total of $838,396 due for municipal taxes and other charges. On June
30, 2001, the Company recorded additional penalties and interest of $101,054.

     The terms of the Agreement are as follows:

     1.   For period August 1, 2001 through January 31, 2003, ECMC will pay the
          Municipality of Canovanas $5,000 per week.

     2.   At the end of this eighteen (18) month period, the Municipality can
          decide whether to request full payment of the remaining balance,
          $559,450, or renegotiate a final twelve (12) month payoff of said
          balance.

     3.   Should ECMC default at any time on the agreed to payment terms, the
          Municipality may declare the entire remaining balance due.

     3.   To guarantee timely payments of the amounts due, ECMC has provided to
          the Municipality two (2) payments bonds in the amount of $503,732 and
          $94,886, respectively.


     As of June 12, 2002, ECMC has fully complied with the provisions of the
Agreement.

     The Company and certain of its subsidiaries are presently named defendants
in various lawsuits and could be subject to other claims arising out of its
business operations. Management, based in part upon advice from legal counsel,
believes that the results of such actions will not have a material adverse
impact on the Company's financial position or results of operations.



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

Not  applicable.


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                                    PART II

ITEM  5.  MARKET  FOR  REGISTRANT'S  UNITS  AND  RELATED  UNITHOLDER  MATTERS

     The Units, which represent the assignment of beneficial ownership of the
Company's Class A limited partnership interests, have been listed and traded on
Nasdaq National Market System since February 7, 1995 and, effective December 8,
1998, on NASDAQ Small Cap Market System. The following table sets forth, for the
periods indicated, the high and low sales prices per Unit, as reported by the
NASDAQ Stock Market, and cash distributions paid to Unitholders during these
periods. In January 2001 the Company was delisted from the Nasdaq Stock Market.

<TABLE>
<CAPTION>
                   CASH DISTRIBUTIONS          PRICE RANGE OF UNITS
              ----------------------------  ----------------------------
                 TOTAL          PER UNIT        HIGH           LOW
              -------------  -------------  -------------  -------------
<S>           <C>            <C>            <C>            <C>
2001 QUARTER
  Fourth                  -              -          0.220          0.110
  Third                   -              -          0.080          0.200
  Second                  -              -          1.050          0.410
  First                   -              -          1.000          0.530

2000 QUARTER
  Fourth                  -              -          1.375          0.813
  Third                   -              -          1.500          0.875
  Second                  -              -          1.375          0.875
  First                   -              -          1.437          1.000
</TABLE>

     On June 12, 2002, the closing sale price of Units was $0.08 as reported on
NASDAQ. As of June 12, 2002, there were 14,389,824 Units outstanding and
approximately 209 Unitholders of record. Of the units outstanding, 3,082,892
have not been registered under the Securities Exchange Act of 1934, and
therefore, cannot be traded.

     The Company does not expect to make cash distributions to its Unitholders
in the foreseeable future.  The Company's principal source of cash has been
distributions from HDA.  The trust indenture related to the First Mortgage Notes
limits distributions by HDA to the Company to approximately 48% of HDA's
consolidated net income.  It allows additional cash distributions only if
certain debt coverage ratios are met.  To date these ratios have not been
achieved, nor is it likely they will be in 2002.


ITEM 6.  SELECTED FINANCIAL AND OPERATING DATA

     The following table sets forth selected financial data for the Company.
The historical income statement and balance sheet data for periods prior to 2001
are derived from audited, consolidated financial statements of the Company.  As
a result of the disruption within Arthur Andersen LLP caused by the Government
recent indictment, the Company's consolidated financial statements are unaudited
for the year 2001.    This information should be read in conjunction with, and
is qualified in its entirety by, the consolidated financial statements of the
Company and related notes (see Item 8) and "Management's Discussion and Analysis
of Financial Condition and Results of Operations" (see Item 7).


                                       12
<PAGE>
<TABLE>
<CAPTION>
                                                      FOR THE YEARS ENDED DECEMBER 31,
                                              -----------------------------------------------------
                                                                  HISTORICAL(1)                      PROFORMA
                                              -----------------------------------------------------
                                                2001       2000       1999       1998       1997      1997(2)
                                              ---------  ---------  ---------  ---------  ---------  ---------
<S>                                           <C>        <C>        <C>        <C>        <C>        <C>
EARNINGS STATEMENT DATA:
--------------------------------------------
Revenues:
  Commissions on wagering                     $ 51,561   $ 64,387   $ 66,744   $ 52,529   $  4,619   $ 59,512
  Net revenues from lottery services                 -        168        546        656         88         88
  Income from insurance settlement                   -          -          -     12,856          -          -
  Rental income(3)                                   -          -          -          -     13,720
  Gain from sale of assets                           -        180          -          -      4,669      4,669
  Loss on valuation of investments              (3,089)
  Loss on sale of investments                   (1,149)         -          -          -          -
  Loss on write-off of investments              (4,422)         -          -          -          -
  Other Revenues                                 8,442      3,857      4,035      2,931      1,487      3,949
                                              ---------  ---------  ---------  ---------  ---------  ---------
                                                51,343     68,592     71,325     68,972     24,583     68,218
Payments to horseowners                         28,820     31,146     32,697     25,996      2,309     29,669
Other expenses                                  30,997     35,252     29,954     27,617      6,460     23,558
                                              ---------  ---------  ---------  ---------  ---------  ---------
                                                (8,474)     2,194      8,674     15,359     15,814     14,991
Financial expenses                               9,355     10,473      8,480      9,109      8,735      9,013
Depreciation and amortization                    3,986      4,261      3,594      3,756      2,368      3,303
Impairment loss on El Comandante
  intangible                                         -          -          -      3,136          -          -
                                              ---------  ---------  ---------  ---------  ---------  ---------
                                               (21,815)   (12,540)    (3,400)      (642)     4,711      2,675
Provision for income taxes                         144        620        742      1,110      1,028        505
Minority interest in (losses) earnings)(4)      (1,166)    (1,315)    (1,030)       228       (878)      (878)
Extraordinary income (loss)(5)                       -          -         22        167       (326)     1,558
Cumulative effect                                    -          -          -       (403)         -          -
                                              ---------  ---------  ---------  ---------  ---------  ---------
Net (loss) earnings                           $(20,793)  $(11,845)  $ (3,090)  $ (1,760)  $  2,479   $  2,850
                                              =========  =========  =========  =========  =========  =========
Net (loss) earnings per unit(6)                  (1.45)  $  (1.39)  $  (0.39)  $  (0.28)  $   0.39   $   0.45

                                                                    DECEMBER 31,
                                              -----------------------------------------------------
                                                 2001       2000       1999       1998       1997
                                              ---------  ---------  ---------  ---------  ---------
BALANCE SHEET DATA:
--------------------------------------------
Cash and cash equivalents                     $  1,388   $  7,437   $  2,308   $  6,637   $    508
Race tracks property and
  equipment(7)                                  51,795     59,755     59,857     47,470     45,056
Deferred costs                                   2,726      4,010      4,992      5,375      6,316
Receivables from ECOC(3)                             -          -          -          -      3,106
Total assets                                    60,606     80,135     70,943     64,039     56,187
First Mortgage Notes and
  accrued interest                              57,409     57,584     53,834     56,512     63,681
Notes, bonds payable and
  capital lease obligations                      7,421     10,283     13,461      9,091      1,876
Total liabilities                               94,774    100,347     85,728     78,105     68,280
Partners' deficit                              (34,168)   (20,212)   (14,785)   (14,066)   (12,093)


<FN>
(1)  Effective March 8, 1995 the Company consolidates the accounts of Housing
     Development Associates S.E. ("HDA") and its subsidiaries in its financial
     statements.


                                       13
<PAGE>
(2)  Effective January 1, 1998, HDA terminated the lease agreement with El
     Comandante Operating Company, Inc. ("ECOC") and commenced operating El
     Comandante Race Track through a wholly-owned subsidiary. The proforma
     statement of operations was prepared as if the accounts of ECOC had been
     consolidated in the Company's financial statements since January 1, 1997.

(3)  Relates to rent paid by ECOC to HDA until December 31, 1997.

(4)  Includes minority interest in losses of Galapagos and Equus-Comuneros net
     of the Company's minority interest in HDA's net earnings. For 2001, 2000,
     1999 and 1998 the amount recognized as the minority interest in Galapagos'
     losses was limited to the minority partners' investment (see Note 1 to the
     Company's consolidated financial statements).

(5)  Represents premium (discount) on the early redemption and the purchase in
     the open market of First Mortgage Notes and corresponding write-off of
     deferred financing costs and note discount. On a proforma basis in 1997, it
     also includes income from the cancellation of certain indebtedness of ECOC.

(6)  Net (loss) earnings allocable to the units are based on an interest of
     approximately 99%. The remaining 1% is held by the Company's general
     partner. The per unit amount is calculated based on weighted average of
     Units outstanding since the distribution on February 6, 1995 of 8,505,398
     in 2000, 7,796,191 in 1999, 6,342,606 in 1998, 6,333,617 in 1997 and 1996.

(7)  Includes a step-up of $5,650,000, resulting from the issuance of Units by
     the Company for a 15% interest in HDA on March 8, 1995, net of related
     accumulated depreciation and reduced by a net write-off in 1998 of $919,580
     in connection with damage caused by Hurricane Georges to El Comandante Race
     Track. The net book value of the asset resulting from the step-up at
     December 31, 2001, 2000, 1999, 1998, and 1997 was approximately $3,519,190,
     $3,669,520, $4,234,000, $3,970,180, and $5,097,000, respectively.
</TABLE>


ITEM 7.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
         RESULTS OF OPERATIONS

     The Company's results of operations are principally attributable to its
interests in thoroughbred horse race tracks in three countries, each of which is
owned and/or operated by a subsidiary:  (i) El Comandante in Puerto Rico, owned
by Housing Development Associates S.E. ("HDA") and operated since January 1,
1998 by El Comandante Management Company, LLC ("ECMC"), (ii) V Centenario in the
Dominican Republic, operated since April 1995 by Galapagos S.A. and (iii) Los
Comuneros in Medellin, Colombia, owned and operated since early 1999 by Equus
Comuneros, S.A. ("Equus-Comuneros")



     The following discussion compares: (i) the results of operations of the
Company for 2001 with the results for 2000 and (ii) the Company's consolidated
results of operations for 1999 with results for 1999.   Effective January 1,
1998 HDA terminated the lease agreement with El Comandante Operating Company,
Inc. ("ECOC") and commenced operating El Comandante through ECMC, its
wholly-owned subsidiary (the "Proforma Transaction").  As a result, the
Company's historical results of operations for 1998 are not readily comparable
with results of operations for 1997.  Accordingly, the unaudited proforma
results for 1997 have also been presented as if the Proforma Transaction had
occurred on January 1, 1997 and the accounts of ECOC had been included in the
Company's historical results of operations, after eliminating all intercompany
transactions.


                                       14
<PAGE>
THE  COMPANY'S  RESULTS  OF  OPERATIONS

2001  COMPARED  TO  2000
------------------------


REVENUES

     Consolidated Revenues decreased by approximately , $17,250,000 or (25.1%),
in 2001 to $51,342,000 from  $68,592,000 in 2000. The majority of this decrease
was due to the sale of the Company's investment in Panama and the corresponding
deconsolidation for the year 2001.

     COMMISSIONS ON WAGERING

     Commissions on wagering decreased by approximately, $12,826,000 or (19.9%)
in 2000 to $51,561,000 as compared to $64,387,000 in 2000.  The decrease in
commissions was attributable to the following operations: El Comandante
($4,600,000) and Panama ($8,540,000), net of the increase in commissions
attributable to Colombia ($274,000) and Galapagos ($41,000).

     During contract negotiations in January 2000, the Puerto Rico horse owners
cancelled their prior approval of simulcast of live races from Puerto Rico to
the Dominican Republic.  In February this action was reversed by the Racing
Board.  This cancellation had an adverse economic impact on commissions on
wagering in the Dominican Republic and Puerto Rico.  In July 2000 the Puerto
Rico Horse owners' Association reached an agreement with El Comandante
Management Company on a new 10-year contract providing for simulcasting of
races.

     PUERTO RICO.  Commissions on wagering at El Comandante decreased $4,600,000
(9.0%) from $50,971,000 in 2000 to $46,371,000 in 2001.   Commissions on
wagering are directly related to the racetrack handle, which has been in decline
and hence a decline in the racetracks' commissions. There was a  drop in off
track betting of $9,780,000.   El Comandante experienced declines in betting
handle as a result of the poor racing program due to lack of proper scheduling
of races by the Government Racing Authorities.

     Substantial increases in on track and simulcasting commissions did not
compensate for the decline in off track wagering.

     PANAMA.  Commissions on wagering at Presidente Remon decreased by
$8,540,000 (100.0%)  from $8,540,000 in 2000 to $0 in 2001.  The decrease was
attributable to the sale of Panama's investment and the corresponding
deconsolidation for the year 2001.


     DOMINICAN REPUBLIC.  Commissions on wagering at V Centenario increased by
$41,000 (1.2%) from $3,315,000 in 2000 to $3,356,000 in 2001.

     COLOMBIA.  Commissions on wagering at Los Comuneros increased by $274,000,
17.6% from $1,560,000 in 2000 to $1,834,000 in 2001. This increase was primarily
due to the opening of new OTB agencies and expanded wagering from simulcasting.


                                       15
<PAGE>
     NET REVENUES FROM LOTTERY SERVICES

     Since June 30, 2000, Autotote had provided services directly to the Lottery
Operations [Dominican International Electronic Lottery, Inc. (LEIDSA)] and
refused to pay Galapagos service fees under its service contract.  See Item 3,
"Legal Proceedings".

     OTHER REVENUES

     During 2001 other revenues increased by approximately $4,585,000, 118.9%
compared to 2000. The increase was primarily due to SSI recognizing as current
year income, $3,800,000 of previously deferred income from the sale of betting
technology to Equus-Uruguay.


EXPENSES

     For reasons set forth below, total expenses during the year ended December,
2001 decreased by $7,975,000 (9.8%) compared to 2000.    Some of these expenses
were non-recurring and are reported below under appropriate categories.

     PAYMENTS TO HORSE OWNERS

     Payment of purses to horse owners decreased $2,325,000 (7.5%) in 2001
compared to 2000. The majority of this decrease was due to the sale of the
Company's investment in Panama and the corresponding deconsolidation for the
year 2001:


                                                 Increase
                        2001         2000       (decrease)
                     --------------------------------------
ECMC(a)              $26,009,000  $25,529,000  $   480,000
Panama                         -    2,691,000   (2,691,000)
Dominican Republic     1,678,000    1,623,000       55,000
Colombia               1,133,000    1,302,000     (169,000)
                     --------------------------------------
                     $28,820,000  $31,145,000  $(2,325,000)
                     ======================================

(a) Summary of new horse owners contract provision for ECMC:

     The new Puerto Rico horse owners contract, signed in July 2000, provides
for a non-recurring cash payment of approximately $1 million.  Approximately
$600,000 was accrued in 1999.  The remaining $400,000 was charged to operating
expenses in 2000.

     Under the contract, the horse owners are guaranteed minimum earnings of
$25,032,000 for 2000 and 2001.  ECMC is obligated among other items to pay the
horse owners $90,000 annually for administrative costs and 50% of the principal
and interest owed on an outstanding horse owners loan  with a principal balance
due of $526,000, plus accrued interest.  ECMC must also invest $3,000,000 in
improvements to the racetrack during the 10-year term of the contract, as well
as provide $2,000,000 of financing for the purchase of horses.

     Additional costs incurred in the year 2000 related to the new horse owners
contract are included in other expenses.

     On March 16, 2001 an "Addendum to Contract" was executed by the Horse
Owners Confederation and the Company, whereby the parties jointly agreed to:


                                       16
<PAGE>
     (i)  Increase the number of simulcast races each live race day from three
          (3) to six (6).

     (ii) Place three (3) of the simulcast races before the first live race and
          three (3) after the fifth live race.

     (iii)Include simulcasting of nine (9) to twelve (12) races on Thursday,
          currently a dark day.

     (iv) In consideration for the above items, ECMC will pay an additional
          $1,000,000 to the Horse Owners Confederation when and if the
          additional simulcasting is approved by the Racing Board.

     On June 28, 2001, the Puerto Rico Racing Board granted ECMC the right to
increase the number of simulcast races from the United States from three (3) to
six (6) per live race day.   The Order allowed a three(3) month probationary
period commencing July 1, 2001 for ECMC to place three(3) simulcast races before
the first live race and three (3) after the fifth live race.

     The Racing Board declined the simulcasting of races during the probationary
period on Thursdays, a day that currently holds no live races.

     Pending final approval of the complete simulcast package by the Racing
Board, ECMC was obligated to pay the Horse Owners' Confederation $1,000,000.

     On October 16, 2001, the Racing Board suspended, effective October 22,
2001, simulcasting permitted during the probationary period but not otherwise.

     Simulcasting of special events such as the Breeders's Cup, Kentucky Derby
and the Preakness as well as the Caribbean Classic and the Confraternity Classic
is still permitted.   However, ECMC will perform a cost/benefit analysis to
determine if the limited simulcasting is economically viable per event.

     FINANCIAL EXPENSES

     Financial expenses decreased by $1,118,000 (10.7%) compared to 2000,
primarily related to the use of a line of credit facility for development of
agency operations, including additional agencies and improvements in simulcast
and transmission facilities, and a non-recurring charge off of expenses incurred
in negotiating a loan that would have provided funding for the VSAT equipment
and the purchase of the outstanding mortgage notes.  In the end, the terms
offered by the lender were not acceptable to the Company.


     DEPRECIATION AND AMORTIZATION

     Depreciation in 2001 decreased by $275,000 (6.5%) compared to 2000.

     OTHER EXPENSES

     Other expenses increased by $4,256,000 (12.1%) to $30,997,000 from
$35,252,000 in 2000, attributable to the new horse owners contract,  increased
racetrack security costs and expenses relating to SSI and VSAT.   Other
increases were in professional fees (increase of $304,000) in connection with
the unsuccessful financing, travel expenses incurred in connection with the
Uruguay project, and utility increases due to Friday night racing, as well as an
overall increase in electricity costs.


                                       17
<PAGE>
PROVISION FOR INCOME TAXES

     The provision for income tax is primarily attributable to Puerto Rico
operations.


MINORITY INTEREST

     The Company's minority interest shown is income and loss allocable to
minority partner interests in HDA, Galapagos and Equus-Comuneros.  Because
accumulated losses of Galapagos allocable to minority partners exceeded their
investment during 2001 and 2000, the Company did not recognize a minority
interest in losses of Galapagos.  If Galapagos generates profits in 2002, no
minority interest will be recognized by the Company in profits up to $
2,835,978.


2000 COMPARED TO 1999
---------------------

REVENUES

     Consolidated Revenues decreased by approximately $2,733,000, or 3.8%, in
200 to $68,592,000 from $71,325,000 in 1999.

     COMMISSIONS ON WAGERING

     Commissions on wagering decreased by $2,357,000 (3.5%) in 2000 to
$64,387,000  as compared to $66,745,000 in 1999.  The decreased in commissions
was attributable to the following operations: El Comandante ($1,105,000),
Galapagos ($520,000), and Panama ($848,000), net of the increase in commissions
attributable to Colombia ($115,000).

     During contract negotiations in January 2000, the Puerto Rico horseowners
cancelled their prior approval of simulcast of live races from Puerto Rico to
the Dominican Republic.  In February this action was reversed by the Racing
Board.  This cancellation had an adverse economic impact on commissions on
wagering in the Dominican Republic and Puerto Rico.  In July 2000 the Puerto
Rico Horse owners' Association reached an agreement with El Comandante
Management Company on a new 10-year contract providing for simulcast of races.


     PUERTO RICO.  Commissions on wagering at El Comandante decreased $1,105,000
(2.1%) from $52,76,000 in 1999 to $50,971,000 in 2000.   Commissions on wagering
are directly related to the racetrack handle, which has been in decline and
hence a decline in the racetracks' commissions.  There was a drop in off track
betting of $9,780,000.  El Comandante experienced declines in betting handle as
a result of the poor racing program due to lack of proper scheduling of races by
the Government Racing Authorities.

     Substantial increases in on track and simulcasting commissions did not
compensate for the decline in off track wagering.

     DOMINICAN REPUBLIC. Commissions on wagering at V Centenario decreased by
$520,000 (13.6%) from $3,835,000 in 1999 to $3,315,000 in 2000.  This decrease
was primarily attributable to the interruption and simulcast races in the first
quarter of the year, as well as lower numbers of agencies in operation due to
transmission and telecommunications interruptions.


                                       18
<PAGE>
     PANAMA.  Commissions on wagering at  Presidente Remon decreased by $848,000
(9.0%) from $9,388,000 in 1999 to $8,540,000 in 2000.  The decrease was
attributable to a decline in the economy.

     COLOMBIA.  Commissions on wagering at Los Comuneros increased by $115,000
(8.0%) from $1,445,000 in 1999 to $3,315,000 in 2000.  This increase was
primarily due to the opening of new OTB agencies and expanded wagering from
simulcasting.


     NET REVENUES FROM LOTTERY SERVICES

     During 2000, net revenues from lottery services in the Dominican Republic
decreased by  aproximately $377,000 compared to 1999. The decrease was due to a
reduction in the amount billed to the lottery operator as reimbursement for
telephone line costs, pursuant to an amendment to the contract.

     Since June 30, 2000, Autotote has provided services directly to the Lottery
Operations [Dominican International Electronic Lottery, Inc. (LEIDSA) and
refused to pay Galapagos service fees under its service contract.  The Company
has filed suit in Federal Court in Puerto Rico against Autotote and is also
pursuing arbitration.


     OTHER REVENUES

     During 2000 other revenues decreased by aproximately $178,000 as compared
to 1999.  El Comandante card sales "impresos" decreased by $98,000, because of
the decrease in wagering.  Galapagos lost lottery commissions beginning the end
of June, 2000 as noted previously.

     GAIN ON SALE OF ASSETS

     The gain of $180,000 is attributable to the sale of a television license in
Panama no longer needed.


EXPENSES

     For reasons set forth below, total expenses during the year ended December
2000 increased by $6,407,000 (8.6%) compared to 1999.  Some of these expenses
were non-recurring and are reported below under appropriate categories.

     PAYMENT TO HORSE OWNERS

     Payments of purses to horseowners decreased $1,551,000 (4.7%) in 2000
compared to 1999 as noted below:


                                       19
<PAGE>
                                                INCREASE
                        2000         1999       (DECREASE)
                     --------------------------------------
ECMC(a)              $25,529,000  $26,037,000  $  (508,000)
Panama                 2,691,000    3,900,000   (1,209,000)
Dominican Republic     1,623,000    1,913,000     (290,000)
Colombia               1,302,000      846,000      456,000
                     --------------------------------------
                     $31,145,000  $32,696,000  $(1,551,000)
                     ======================================


(a)  Summary of new horse owners contract provision for ECMC:

     The new Puerto Rico horse owners contract, signed in July 2000, provides
for a non-recurring cash payment of approximately $1 million.  Approximately
$673,000 was accrued in 1999.  The remaining $364,000 was charged to operating
expenses in 2000.

     Under the contract, the horse owners are guaranteed minimum earnings of
$25,032,000 for 2000 and 2001.  ECMC is obligated among other items to pay the
horse owners $90,000 annually for administrative costs and 50% of the principal
and interest owed on an outstanding horse owners loan with a principal balance
due of $526,000, plus accrued interest.  ECMC must also invest $3,000,000 in
improvements to the racetrack during the 10-year term of the contract, as well
as provide $2,000,000 of financing for the purchase of horses.

     Additional costs incurred in the year 2000 related to the new horse owners
contract are included in other expenses.

     On March 16, 2001, an "Addendum to Contract" was executed by the Horse
Owners Confederation and the Company, whereby the parties agreed to:

     (i)  Increase the number of simulcast races each live race day from three
          (3) to six (6).

     (ii) Place three (3) of the simulcast races before the first live races and
          three (3) after the fifth live race.

     (iii)Include simulcasting of nine (9) to twelve (12) races on Thursday,
          currently a dark day.

     (iv) In consideration of the above, ECMC will pay an additional $1,000,000
          to the Horse Owners Confederation when and if the additional
          simulcasting is approved by the Racing Board

     On June 28, 2001, the Puerto Rico Racing Board granted ECMC the right to
increase the number of simulcast races from the United States from three (3) to
six (6) per live race day. The Order allowed a three (3) month probationary
period commencing July 1, 2001, for ECMC to place three (3) simulcast races
before the first live race and three (3) after the fifth live race.


     The Racing Board declined the simulcasting of races during the probationary
period on Thursday's, a day that currently holds no live races.

     Pending final approval of the complete simulcast package by the Racing
Board, ECMC is obligated to pay the Horse Owners' Confederation $1,000,000.


                                       20
<PAGE>
     On October 16, 2001, the Racing Board suspended, effective October 22, 2001
simulcasting permitted during the probationary period but not otherwise.

     Simulcasting of special events such as the Breeders' Cup, Kentucky Derby
and the Preakness as well as the Caribbean Classic and the Confraternity Classic
is still permitted.   However, ECMC is doing a cost/benefit analysis to
determine if the limited simulcasting is economically viable per event.


     FINANCIAL EXPENSES

     Financial expenses increased by $1,923,000 (23.5%) compared to 1999,
primarily related to use of line of credit facilities for development of agency
operations, including additional agencies and improvements in simulcasting and
transmission facilities, and a non-recurring charge off of expenses incurred in
negotiation a loan that would have provided funding for the VSAT equipment and
the purchase of the outstanding mortgage notes.  In the end, the terms offered
by the lender were not acceptable to the Company.

     DEPRECIATION AND AMORTIZATION

     Depreciation in 2000 increased by $667,000 (18.6%) compared to 1999,
primarily due to capital improvements at El Comandante.

          OTHER EXPENSES

     Other expenses increased by  $5,300,000 (17.7%) to $35,252,000 from
$29,954,000 in 1999, attributable to the new horse owners contract, increased
racetrack security costs and expenses relating to SSI and VSAT.  Other increases
were in professional fees (increase of $304,000) in connection with the
unsuccessful financing, travel expenses incurred in connection with the Uruguay
project, and utility increases due to Friday night racing, as well as an overall
increase in electricity costs.


PROVISION FOR INCOME TAXES

     The provision for income taxes is primarily attributable to Puerto Rico
operations.


MINORITY INTEREST

     The Company's minority interest shown represents the pro-rata share of loss
allocable to minority partner interest in HAD, Galapagos, Equus-Panama and
Equus-Comuneros.  Because accumulated losses of Galapagos allocable to minority
partners exceeded their investment during 2000 and 1999, the Company did not
recognize a minority interest in losses of Galapagos.  If Galapagos generates
profits in 2001, no minority interest will be recognized by the Company in
profits up to $1,846,786.


EXTRAORDINARY ITEM

     The extraordinary item in 1999 relates to the early redemption and purchase
of First Mortgage Notes.  In June 1999, the Company recognized income of $22,680
on the purchase of $189,000 of First Mortgage Notes.


                                       21
<PAGE>
LIQUIDITY  AND  CAPITAL  RESOURCES

     OVERVIEW

     The Company is the owner of Housing Development Associates S.E. ("HDA") and
its consolidated subsidiary, El Comandante Management Company LLC ("ECMC"), as
well as the owner of Agency Betting Network, Inc. ("ABN"), Satellites Services
International, Inc. ("SSI") and foreign subsidiaries (Equus Comuneros S.A., and
Galapagos, S.A.). The principal source of cash of Equus Gaming Company L.P. (the
"Company" or, when referring to the individual entity, "Equus") is related to
its ownership interest in HDA, the owner and operator (through its wholly owned
subsidiary ECMC) of El Comandante Race Track in Puerto Rico.   Due to certain
restrictions under HDA's indenture for the issuance of its 11.75% First Mortgage
Notes due 2003 (the "Indenture"), cash held by HDA or its consolidated
subsidiaries (including ECMC) is restricted to ensure payment of interest and
certain obligations on the First Mortgage Notes.

     The following is a discussion of the liquidity and capital resources of the
Company, including HDA and its subsidiary ECMC, as well as the Company's other
subsidiaries ABN and SSI.  Net cash flow from foreign subsidiaries of the
Company (Equus Comuneros, S.A., Equus Entertainment de Panama, S.A. and
Galapagos, S.A) did not materially affect the consolidated cash flow of the
Company in 2001 and these activities are not discussed herein.

LIQUIDITY AND CAPITAL RESOURCES OF THE COMPANY (AND ITS CONSOLIDATED
SUBSIDIARIES)

     The Company recognizes its current inability to generate sufficient cash to
support its operations.

     To overcome its financial problems, the Company must look to additional
revenue including  investment or cost savings from:

     (i)  Requesting license approval in Colombia and Dominican Republic for
          casino and/or sports book operations that could generate an additional
          $7 million in revenues annually.

     (ii) Implementing cost reductions at all properties.

     (iii)Requesting designation of the El Comandante facility as a tourist
          zone to allow the addition of slot machines and authorization for low
          interest bonds or notes.

     (iv) Expanding simulcasting in Colombia and Dominican Republic as well as
          expanding pool races.

     (v)  Obtain new bank financing or financing by the Wilson family.

     There can be no assurance that any of the above will be achieved, or if
achieved, the results will be sufficient to enable the Company to continue to
operate.


     Cash and cash equivalents of the Company, HDA and its consolidated
subsidiary decreased by approximately $ 6 million in 2001.  The Company has
historically met its liquidity needs from cash flow generated by (i) the
operations of El Comandante racetrack, (ii) short-term loans and capital leases
for acquisition of new equipment, and (iii) investment by the Wilson family.

     During 2001 principal uses of cash by the Company, HDA and its consolidated
subsidiary for financing and investing activities were payments on capital
leases for equipment at El Comandante.

     In addition to cash available to the Company at the beginning of the year
and cash flow from operations, the Company obtained additional funds from
financing and investing activities from the following sources:


                                       22
<PAGE>
     (i)  Issuance of Equus Entertainment 12%, cumulative stock.

     (ii) Loans from affiliates.


     For 2002 projected principal uses of cash, other than for operating
activities at El Comandante, are:

     (i)  Principal payments on existing capital leases.

     (ii) Additional investments in SSI, principally for the acquisition and
          installation of VSAT equipment and for payment of satellite time
          contracted from a third party.

     (iii)Capital expenditures, as needed and/or required for the various
          racing operations.

     (iv) Interest and principal payments on the outstanding First Mortgage
          Notes.

     (v)  Weekly payment of delinquent excise taxes pursuant to agreement.

     (vi) Weekly payment of delinquent volume of business taxes pursuant to
          agreement.


     INVESTMENTS  IN  TELECOMMUNICATIONS  EQUIPMENT  AND  MARKET  EXPANSION

     The Company plans to install over the next twelve (12) months 1,000 VSAT
(video and data communication) units for OTB agencies in all operations. The
communications up-link satellite control center (the "Hub") installation is
largely complete and operational. SSI will be the service provider for all
telecommunications and satellite usage by the Company's affiliates. The
estimated $12 million capital investment in the VSAT expansion for which
financing is sought is expected to be recovered over a five-year period from the
new VSAT units.

     There can be no assurance that the Company will be able to obtain the
financing required to build out the proposed video and data communication
system. The failure to do so could cause the Company not to have sufficient
financial resources to continue to operate.

     LONG-TERM  COMMITMENTS.  In  addition  to  capital  leases,  long-term cash
commitments  of  the Company (excluding foreign subsidiaries) are a $2.5 million
unsecured  note  and  the  First  Mortgage  Notes.


     In August, 2000,  the Company obtained a $2.5 million unsecured loan at 3%
over prime due on December 29, 2004.    Principal and interest is to be paid
from .25% of the wagering handle for the first four (4) years of the service
contract with United Tote as outlined in note 4 of the consolidated financial
statements, "wagering service agreement".

     HDA's First Mortgage Notes bear interest at 11.75%, payable semiannually on
June 15 and December 15, and are secured by El Comandante assets.  The First
Mortgage Notes are redeemable, at the option of HDA, in 2001 and thereafter at
100% of the principal amount, together with accrued and unpaid interest.  The
maturity dates of First Mortgage Notes, reduced by prior redemptions and by the
Notes purchased by ECMC, are as follows (in thousands):


                                       23
<PAGE>
                   YEAR ENDING           NET AMOUNT
                   DECEMBER 31,         (FACE VALUE)
                  -------------         ------------

                     2001               $      3,454
                     2002                     10,200
                     2003                     40,800
                                        ------------
                                        $     54,454
                                        ============

     As of June 30,  2001, HDA had advanced to Equus approximately $3.8 million
against allowable future distributions of profits, which is not in conformity
with the terms of the Indenture.  Management repaid these advances with the
proceeds of a private placement offering of Equus Entertainment preferred stock
on July 13, 20001, See Note 10, "Related Party Transactions".

     On December 15, 2001 and June 15, 2002 the Company failed to pay interest
of $7.2 million and principal of $10.2 million on the first Mortgage Notes (See
Note 5).  This constitutes a default under the Indenture.  In addition, defaults
have occurred in the performance or breach, of covenants and/or warranties of
HDA and/or ECC.   There have been discussions with representatives of the
Governmental Development Bank for Puerto Rico and other government officials to
explore ways to obtain funding to bring the interest and principal current on
the Notes.

     It is not expected that the Company will be able to meet the mandatory
maturity dates of the First Mortgage Notes set forth above without obtaining
additional financing from lending institutions or investors. Although the
Company has had discussions with possible lenders and investors, it has received
no commitments or other form of assurances that such financing will be
forthcoming.  Absent such financing, the Company will not be able to meet its
long-term commitments.

     Equus Comuneros, S.A. did not meet its loan payment commitments due to
financial institutions totaling $269,000 as of December 31, 2001.   The
Company's management subscribed debt restructuring agreements with these
financial institutions.  Should noncompliance continue, the lending entities
could make their guarantees effective.

     GOVERNMENT MATTERS.

     El Comandante's horse racing and pari-mutuel wagering operations are
subject to substantial government regulation.  Pursuant to the Puerto Rico Horse
Racing Industry and Sport Act (the "Racing Act"), the Racing Board and the
Puerto Rico Racing Administrator (the "Racing Administrator") exercises
regulatory control over El Comandante's racing and wagering operations.  For
example, the Racing Administrator determines the monthly racing program for El
Comandante and approves the number of annual race days in excess of the
statutory minimum of 180.  The Racing Act also apportions payments of monies
wagered that would be available as commissions to ECMC. The Racing Board
consists of three persons appointed to four-year terms by the Governor of Puerto
Rico.  The Governor also appoints the Racing Administrator for a four-year term.

     El Comandante is required to pay the Government of Puerto Rico various
taxes on the wagering placed on thoroughbred horse races held at or simulcasted
by El Comandante (Puerto Rico). The taxes on the wagering are required to be
remitted to the Department of the Treasury of Puerto Rico within two (2) days of
the wages being placed. El Comandante failed to remit tax payments totaling
$9,949,182 from October 16, 2000 to February 7, 2001 to the Department of the
Treasury of Puerto Rico.   The Company is currently in negotiations with the
Puerto Rico tax authorities on a payment plan whereby the overdue taxes will be
paid in weekly installments of $50,000.  Neither ECMC nor the Company has the
financial resources to pay currently the overdue taxes.


                                       24
<PAGE>
     On April 2, 2001, the House of Representatives of the Commonwealth of
Puerto Rico passed a resolution ordering an investigation of the operations of
El Comandante (Puerto Rico) with emphasis on the mechanisms of physical and
financial administration and the debts maintained with the Department of the
Treasury of Puerto Rico and the members of the Horse owners Confederation. As of
October 22, 2001, all requested information has been submitted by ECMC. The
investigation has been completed, but as of this a date, the House of
Representatives has not issued their report or otherwise disclosed their
findings.

     As of December 31, 2001,  Equus Comuneros, S.A. owed the Colombian Tax and
National Customs Administration approximately $939,634, including interest,  for
withholding at source tax.  Management has recently met with the Government to
settle the amount outstanding.  The plan proposed to the government is as
follows:

     1.   Five (5) year amortization of 10%, 15%, 25% and 30%, respectively.

     2.   The Government is requesting a down payment, which is currently being
          negotiated.

FORWARD-LOOKING STATEMENT

     Certain matters discussed and statements made within this Form 10-K are
forward-looking statements within the meaning of the Private Litigation Reform
Act of 1995 and as such may involve known and unknown risks, uncertainties, and
other factors that may cause the actual results, performance or achievements of
the Company to be different from any future results, performance or achievements
expressed or implied by such forward-looking statements.  Although the Company
believes the expectations reflected in such forward-looking statements are based
on reasonable assumptions, it can give no assurance that its expectations will
be attained. These risks are detailed from time to time in the Company's filing
within the Securities and Exchange Commission or other public statements.


                                       25
<PAGE>
<TABLE>
<CAPTION>
ITEM  8.  FINANCIAL  STATEMENTS  AND  SUPPLEMENTARY  DATA

                                     EQUUS GAMING COMPANY L.P.
                               CONSOLIDATED STATEMENTS OF OPERATIONS
                                 FOR THE YEARS ENDED DECEMBER 31,

                                                           2001           2000           1999
                                                       -------------  -------------  ------------
<S>                                                    <C>            <C>            <C>
REVENUES:
  Commissions on wagering                              $ 51,560,895   $ 64,386,568   $66,743,923
  Net revenues from lottery services                              -        168,493       545,568
  Gain on sale of assets                                          -        179,500             -
  Loss on valuation of investments                       (3,089,231)
  Loss on sale of investments                            (1,149,579)             -             -
  Loss on write-off of investments                       (4,422,086)             -             -
  Other revenues                                          8,441,999      3,857,475     4,035,098
                                                       -------------  -------------  ------------
                                                         51,341,998     68,592,036    71,324,589
                                                       -------------  -------------  ------------
EXPENSES:
  Payments to horseowners                                28,819,819     31,145,951    32,697,409
  Salaries, wages and employee benefits                   8,988,819     11,106,751    11,274,027
  Operating expenses                                     11,336,437     12,450,926    10,001,437
  General and administrative                              5,930,297      5,503,943     4,196,469
  Marketing, television and satellite costs               4,741,916      6,190,552     4,482,285
  Financial expenses                                      9,354,734     10,472,892     8,479,505
  Depreciation and amortization                           3,985,997      4,260,769     3,593,839
                                                       -------------  -------------  ------------
                                                         73,158,019     81,131,784    74,724,971
                                                       -------------  -------------  ------------
LOSS BEFORE INCOME TAXES, MINORITY
  INTEREST, EXTRAORDINARY ITEM AND CUMULATIVE EFFECT    (21,816,021)   (12,539,748)   (3,400,382)

PROVISION FOR INCOME TAXES                                  143,597        620,094       742,153
                                                       -------------  -------------  ------------

LOSS BEFORE MINORITY INTEREST,
  EXTRAORDINARY ITEM AND CUMULATIVE EFFECT              (21,959,618)   (13,159,842)   (4,142,535)

 MINORITY INTEREST IN LOSSES                             (1,165,933)    (1,314,872)   (1,029,458)
                                                       -------------  -------------  ------------

LOSS BEFORE EXTRAORDINARY ITEM
  AND CUMULATIVE EFFECT                                 (20,793,685)   (11,844,970)   (3,113,077)

EXTRAORDINARY ITEM, NET-
  Discount on early redemption of
  First Mortgage Notes and write-off of related
  deferred financing costs and note discount                      -              -        22,680

                                                       -------------  -------------  ------------
NET LOSS                                               $(20,793,685)  $(11,844,970)  $(3,090,397)
                                                       =============  =============  ============

                                        (continues)
</TABLE>


                                       26
<PAGE>
<TABLE>
<CAPTION>
                                 EQUUS GAMING COMPANY L.P.
                          CONSOLIDATED  STATEMENTS  OF  OPERATIONS
                             FOR THE YEARS ENDED DECEMBER 31,

                                        (CONTINUED)


                                                    2001           2000           1999
                                                -------------  -------------  ------------
<S>                                             <C>            <C>            <C>
ALLOCATION OF NET LOSS:
   General partners                             $   (207,937)  $   (118,450)  $   (30,904)
   Limited partners                              (20,585,748)   (11,726,520)   (3,059,493)
                                                -------------  -------------  ------------
                                                $(20,793,685)  $(11,844,970)  $(3,090,397)
                                                =============  =============  ============

BASIC AND DILUTED PER UNIT AMOUNTS:
   Loss before extraordinary item and
     cumulative effect of change in accounting
     principle, net                             $      (1.45)  $      (1.39)  $     (0.39)

                                                -------------  -------------  ------------
   Net loss                                     $      (1.45)  $      (1.39)  $     (0.39)
                                                =============  =============  ============


WEIGHTED AVERAGE UNITS OUTSTANDING                14,389,824      8,505,398     7,796,191
                                                =============  =============  ============
</TABLE>


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


                                       27
<PAGE>
<TABLE>
<CAPTION>
                            EQUUS GAMING COMPANY L.P.
                  CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS
                        FOR THE YEARS ENDED DECEMBER 31,


                                        2001           2000           1999
                                    -------------  -------------  ------------
<S>                                 <C>            <C>            <C>
NET LOSS                            $(20,793,685)  $(11,844,970)  $(3,090,397)

OTHER COMPREHENSIVE LOSS:

  Currency translation adjustments       (44,852)       418,506      (553,146)

                                    -------------  -------------  ------------
COMPREHENSIVE LOSS                  $(20,838,537)  $(11,426,464)  $(3,643,543)
                                    =============  =============  ============
</TABLE>


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


                                       28
<PAGE>
<TABLE>
<CAPTION>
                  EQUUS GAMING COMPANY L.P.
                 CONSOLIDATED BALANCE SHEETS

                           ASSETS

                                        DECEMBER 31,
                                  --------------------------
                                     2001          2000
                                  ------------  ------------
<S>                               <C>           <C>
CASH AND CASH EQUIVALENTS:
  Unrestricted                    $   917,731   $ 7,019,121
  Restricted                          469,886       418,180
                                  ------------  ------------
                                    1,387,617     7,437,301
                                  ------------  ------------

PROPERTY AND EQUIPMENT:
  Land                              8,773,596     8,879,113
  Building and improvements        51,404,903    55,404,357
  Equipment                        16,564,768    17,753,880
                                  ------------  ------------
                                   76,743,267    82,037,350
  Accumulated depreciation        (24,947,693)  (22,282,599)
                                  ------------  ------------
                                   51,795,574    59,754,751
                                  ------------  ------------

DEFERRED COSTS, NET:
  Financing                         1,133,065     1,933,361
  Costs of Panama contract          1,565,365     1,870,000
  Other                                27,254       206,714
                                  ------------  ------------
                                    2,725,684     4,010,075
                                  ------------  ------------

OTHER ASSETS:
  Accounts receivable, net          3,535,264     4,492,311
  Notes receivable                    160,301     2,960,074
  Prepayments and other assets      1,002,257     1,480,258
                                  ------------  ------------
                                    4,697,822     8,932,643
                                  ------------  ------------

                                  $60,606,697   $80,134,770
                                  ============  ============

                       (continues)
</TABLE>


                                       29
<PAGE>
<TABLE>
<CAPTION>
                                EQUUS GAMING COMPANY L.P.
                               CONSOLIDATED BALANCE SHEETS

                                       (continued)

                            LIABILITIES AND PARTNERS' DEFICIT

                                                               DECEMBER 31,
                                                        ----------------------------
                                                            2001           2000
                                                        -------------  -------------
<S>                                                     <C>            <C>
FIRST MORTGAGE NOTES:
  Principal, net of note discount of
    $538,169 and $786,261                               $ 53,915,831   $ 53,667,739
  Accrued interest                                         3,492,926      3,916,669
                                                        -------------  -------------
                                                          57,408,757     57,584,408
                                                        -------------  -------------

OTHER LIABILITIES:
  Accounts payable and accrued liabilities                26,018,511     26,241,039
  Outstanding winning tickets and refunds                  1,693,721      1,552,128
  Notes payable                                            6,100,182      4,049,961
  Bonds payable                                                    -      4,000,000
  Capital lease obligations                                1,321,100      2,232,559
                                                        -------------  -------------
                                                          35,133,514     38,075,687
                                                        -------------  -------------

DEFERRED INCOME TAXES                                      3,741,411      3,933,144
                                                        -------------  -------------

MINORITY INTEREST                                         (1,508,728)       753,288
                                                        -------------  -------------

COMMITMENTS AND CONTINGENCIES, see Note 1 and 4

PARTNERS' DEFICIT
  General Partner                                         (1,104,530)      (896,144)
  Limited Partners - 20,000,000 and 10,383,617 units
    authorized in 2000 and 1999, respectively;
    14,389,824 and 8,389,824 units issued and
    outstanding in 2000 and 1999, respectively           (33,063,727)   (19,315,613)
                                                        -------------  -------------
                                                         (34,168,257)   (20,211,757)
                                                        -------------  -------------

                                                        $ 60,606,697   $ 80,134,770
                                                        =============  =============

  The accompanying notes are an integral part of these consolidated statements.
</TABLE>


                                       30
<PAGE>
<TABLE>
<CAPTION>
                                  EQUUS GAMING COMPANY L.P.
                    CONSOLIDATED STATEMENT OF CHANGES IN PARTNERS' DEFICIT
                       FOR EACH OF THE THREE YEARS IN THE PERIOD ENDED
                                      DECEMBER 31, 2001


                                                     GENERAL        LIMITED
                                                     PARTNERS      PARTNERS         TOTAL
                                                   ------------  -------------  -------------
<S>                                                <C>           <C>            <C>
BALANCES, DECEMBER 31, 1998                        $  (745,444)  $(13,320,967)  $(14,066,411)

  Net loss for the year                                (30,904)    (3,059,493)    (3,090,397)

  Currency translation adjustments                      (5,531)      (547,615)      (553,146)

  Cash distribution to minority partners of H D A                     (20,368)       (20,368)

  Issuance of Units                                          -      2,945,029      2,945,029
                                                   ------------  -------------  -------------

BALANCES, DECEMBER 31, 1999                           (781,879)   (14,003,414)   (14,785,293)

  Net loss                                            (118,450)   (11,726,520)   (11,844,970)

  Currency translation adjustments                       4,185        414,321        418,506

  Issuance of Units, net of costs                            -      6,000,000      6,000,000
                                                   ------------  -------------  -------------

BALANCES, DECEMBER 31, 2000                           (896,144)   (19,315,613)   (20,211,757)

  Net loss                                            (207,937)   (20,585,748)   (20,793,685)

  Currency translation adjustments                        (449)       (44,403)       (44,852)

  Issuance of stock, net of costs                            -      6,882,037      6,882,037
                                                   ------------  -------------  -------------

BALANCES, DECEMBER 31, 2001                        $(1,104,530)  $(33,063,727)  $(34,168,257)
                                                   ============  =============  =============


   The accompanying notes are an integral part of this consolidated financial statement.
</TABLE>


                                       31
<PAGE>
<TABLE>
<CAPTION>
                                   EQUUS GAMING COMPANY L.P.
                             CONSOLIDATED STATEMENTS OF CASH FLOWS
                               FOR THE YEARS ENDED DECEMBER 31,


                                                       2001           2000           1999
                                                   -------------  -------------  -------------
<S>                                                <C>            <C>            <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
  Net loss                                         $(20,793,685)  $(11,844,970)  $ (3,090,397)
                                                   -------------  -------------  -------------
  Adjustments to reconcile net earnings (loss) to
    net cash provided by operating activities-
      Gain on sale of assets                                  -       (179,500)             -
      Loss on valuation of investments                3,089,231
      Loss on sale of investments                     1,149,579              -
      Loss on write-off of investments                4,422,086              -
      Depreciation and amortization                   4,783,498      5,015,350      4,296,160
      Impairment loss on El Comandante intangible             -              -              -
      Deferred income tax provision                      38,429        620,094        537,261
      Minority interest                              (1,165,933)    (1,314,872)    (1,029,458)
      Extraordinary item                                      -              -         22,680
      Currency translation adjustments                  521,080         11,855        (28,920)
  (Increase) decrease ) in assets-
      Accounts receivable                               489,213     (2,914,678)      (206,749)
      Prepayments and other assets                      295,514       (778,897)       545,597
  Increase (decrease) in liabilities-
      Accounts payable and accrued liabilities        6,380,276     18,378,234      1,658,363
      Outstanding winning tickets and refunds           531,013        421,739        610,905
                                                   -------------  -------------  -------------
       Total adjustments                             20,533,986     19,259,326      6,405,839
                                                   -------------  -------------  -------------

Net cash provided by operating activities              (259,699)     7,414,355      3,315,442
                                                   -------------  -------------  -------------

CASH FLOWS FROM INVESTING ACTIVITIES:
  Capital expenditures                               (1,504,506)    (3,370,752)   (10,113,509)
  Deferred costs                                     (1,395,151)       (65,993)      (389,544)
  (Increase) decrease in notes receivable, net          367,658     (1,453,475)       201,612
  Panama and Uruguay deconsolidation                 (6,188,211)             -              -
  Purchase of Panama Preferred Stocks                (3,089,231)             -              -
                                                   -------------  -------------  -------------
Net cash used in investing activities               (11,809,441)    (4,890,220)   (10,301,441)
                                                   -------------  -------------  -------------

                                         (continues)
</TABLE>


                                       32
<PAGE>
<TABLE>
<CAPTION>
                                   EQUUS GAMING COMPANY L.P.
                             CONSOLIDATED STATEMENTS OF CASH FLOWS
                                FOR THE YEAR ENDED DECEMBER 31,

                                          (continued)


                                                           2001          2000          1999
                                                       ------------  ------------  ------------
<S>                                                    <C>           <C>           <C>
CASH FLOWS FROM FINANCING ACTIVITIES:
  Redemption of First Mortgage Notes                   $         -   $         -   $(3,048,320)
  Payments (to) from affiliates                                  -             -      (200,000)
  Payment of financing costs                                     -       (78,268)      (60,579)
  Loan proceeds from financial institutions              3,358,454       980,000     6,515,000
  Proceeds from working capital loan from United Tote            -     2,500,000
  Payments on notes payable and capital
    lease obligations                                   (4,221,035)   (6,796,499)   (3,612,813)
  Contributions by minority partners                             -             -        32,143
  Issuance of stocks, net of costs                       6,882,037     6,000,000     3,051,600
  Cash distributions to minority partners of HDA                 -             -       (20,366)
                                                       ------------  ------------  ------------
Net cash provided by (used in) financing activities      6,019,456     2,605,233     2,656,665
                                                       ------------  ------------  ------------

NET INCREASE (DECREASE) IN CASH AND
 CASH EQUIVALENTS                                       (6,049,684)    5,129,368    (4,329,334)

CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR             7,437,301     2,307,933     6,637,267

                                                       ------------  ------------  ------------
CASH AND CASH EQUIVALENTS, END OF YEAR                 $ 1,387,617   $ 7,437,301   $ 2,307,933
                                                       ============  ============  ============

SUPPLEMENTAL INFORMATION:
  Interest paid                                        $ 8,439,083   $ 5,399,672   $ 8,572,220
                                                       ============  ============  ============

NON-CASH TRANSACTIONS:
  Equipment acquired through capital leases            $         -   $   137,430   $ 1,668,529
                                                       ============  ============  ============

   The accompanying notes are an integral part of this consolidated financial statement.
</TABLE>


                                       33
<PAGE>
                            EQUUS GAMING COMPANY L.P.

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


1.  BASIS  OF  PRESENTATION  AND  SIGNIFICANT  ACCOUNTING  POLICIES:

     Equus Gaming Company L.P. (the "Company"), a Virginia limited partnership,
is engaged in thoroughbred racing, wagering and other gaming businesses in the
Caribbean and South America. Through its subsidiaries, the Company operates
three racetracks and manages an extensive off-track betting ("OTB") system in
the various countries where the Company operates.

     The Company has a 99% interest in Housing Development Associates S.E.
("HDA"), the owner of El Comandante Race Track ("El Comandante"), the only
licensed thoroughbred racing facility in Puerto Rico. El Comandante has operated
since January 1, 1998 as a wholly owned subsidiary of HDA, El Comandante
Management Company, LLC ("ECMC").    Satellites Services International, Inc.
("SSI") and Agency Betting Network, Inc. ("ABN") are wholly owned subsidiaries
of the Company.     SSI will provide up-link services, satellite time
(contracted from a third party), and leasing of video and data telecommunication
equipment to transmit (or simulcast) live races from and to the Company's
racetracks and OTB agencies, including live races from outside the Company's
operational territories to the Company's agency distribution network in order to
increase the level of wagering revenues through the OTB systems.   ABN is
establishing and operating an OTB agency system in Colombia in conjunction with
Los Comuneros Race Track in Medellin, Colombia ("Los Comuneros"), owned and
operated by Equus Comuneros S.A. ("Equus-Comuneros").  The Colombia OTB system
is expected to operate in Bogota, Medellin and other major cities.

     In 1999 the Company initiated a vertical integration process to consolidate
its telecommunications needs into a centralized hub-and-spoke system based at El
Comandante racetrack in Puerto Rico.  During 2000 and 2001 the development of
this system encountered significant technical obstacles which necessitated the
redesigning of its architecture, reallocation of the equipment and ultimately, a
strategic revision of the objectives for the system.

     The vertical integration process began with the development of a C-Band
satellite uplink facility in Panama in the fall of 1999 to fulfill the
broadcasting needs of this jurisdiction which, at the time, belonged to the
Company's international network of pari-mutuel operations.  By December of that
year the consolidation process had identified VSAT technology via the Ku-Band
medium as the application necessary to address the Company's needs for video and
data transmission throughout its proprietary agency-betting network in Puerto
Rico, Panama, Colombia and the Dominican Republic.

     The significant investment made by the Company during 1999-2000 in the
satellite telecommunications equipment required to implement the VSAT system
included the development of a main uplink Hub in Puerto Rico, and of supporting
Ku-Band uplinks to service the markets of Panama and Colombia. Initial steps
were also taken to establish a supporting uplink in the Dominican Republic
although the facility has not been completed at this time.

     Several factors altered the course of the VSAT project, and namely, the
incompatibility of this technology with the Autotote system currently in use
throughout the Company's pari-mutuel operations hindered its deployment as the
primary means of transmission for the agency-betting network's wagering data.
Consequently, the Company is in the process of evaluating several alternate
commercial applications for this equipment both in Colombia and Puerto Rico.

     Conversely, the aforementioned satellite uplink facilities continue to
provide video broadcasting services for the Company's pari-mutuel operations in
Puerto Rico, Colombia and the Dominican Republic.    In addition to the


                                       34
<PAGE>
alternate commercial uses being sought for the VSAT equipment, the Company's
uplink facilities are uniquely positioned to provide satellite broadcast
services to prospective clients in Puerto Rico, Colombia, and potentially in the
Dominican Republic.

     The Company has a 55% interest in Galapagos, S.A. ("Galapagos"), the
operator since April 1995 of the V Centenario Race Track in the Dominican
Republic ("V Centenario"). The racetrack is government owned and operated by the
subsidiary under a long-term contract.

     The Company had a 51% interest in Equus Entertainment de Panama, S.A., the
operator since January, 1998 of the Presidente Remon Race Track in the Republic
of Panama.

     On October 9, 2001 the Company entered into the following restructuring
with its minority shareholder of Equus Entertainment de Panama, Wall Street
Securities Trading Group, Inc. effective September 30, 2001:

     1)   The Company entered into a stock purchase agreement whereby the
          Company sold its 204,000 shares of common stock, representing 51% of
          the total issued and outstanding shares of Equus Entertainment de
          Panama, for release from any obligations resulting from the Panama
          operation. The Company recorded a net loss of $1,149,579 on the
          transaction.

          a.   The Company has been released of all prior, present and future
               obligations, known or unknown from October 9, 2001, until the
               "Termination and Mutual Release" document is signed.

          b.   The issuer has committed to using its best efforts to release the
               Company from any obligations the Company may have assumed under
               its concession from the Government of Panama in operating and
               managing Hipodromo Presidente Remon. Until such time as the
               aforementioned release is received by the Company, the purchase
               has drafted an "Undertaking and Indemnity" documents indemnifying
               the Company from any claims by the Government of Panama under the
               Concession Agreement.

     2)   The Company then purchased 3,000 shares of $1,000 par value, preferred
          stock in exchange for net claims due the Company. The number of shares
          issued will be reduced if the net claims are less than $2,859,680. The
          final net claims on the Company's books amount to $3,294,391 and the
          investment and recorded at that amount as of September 30, 2001. Terms
          and conditions of the preferred stock issue are as follows:

          a.   The shares will be redeemed by the issuer upon the race track's
               concession agreement being terminated or October 31, 2021,
               whichever comes first.

          b.   The issuer has the option to redeem the shares at par at anytime.

          c.   No dividends will accumulate up to October 2006; thereafter, the
               shares will earn an annual cumulative dividend of 12%, payable
               quarterly.

          d.   The shares have no voting rights except that no change in the
               terms can occur without the consent of the preferred
               shareholders.

          e.   No other preferred shares can be issued with priority over these
               shares, and in liquidation these shares have the same priority as
               common shares now existing.


                                       35
<PAGE>
          f.   No dividends will be paid to common shares while accumulated
               dividends are payable to the preferred shares.


          As of June 12, 2002, the Company has not received copies of the fully
     executed documents mentioned above, nor received the 3,000 shares of
     preferred stock.

          In addition, all attempts to obtain certified financial statements
     from Equus Entertainment de Panama as of September 30, 2001 have failed;
     therefore, Panama has been "deconsolidated" for year 2001.

      The Company also has since 1999 a controlling 50% interest in Equus
Comuneros S.A. ("Equus-Comuneros"), the owner and operator of Los Comuneros
which it acquired for approximately $2.1 million.  In 1999 Equus-Comuneros
received as a capital contribution from the minority stockholder, Los Comuneros
S.A., all assets and liabilities that were employed by the prior operator of Los
Comuneros.  The assets mainly consisted of land, buildings and equipment for
approximately $4.7 million and liabilities of approximately $2.6 million.  The
liabilities included mainly accounts payable to vendors and horse owners and
certain financial obligations with various maturities through 2004.  Equus
Comuneros, S.A. did not meet its loan payment commitments due to financial
institutions totaling $269,000 as of December 31, 2001.   The Company's
management requested debt restructuring agreements with these financial
institutions.  Should noncompliance continue, the lending entities could make
their guarantees effective.

     In 2000, the Company was awarded exclusive rights by the Government of
Uruguay to operate the Maronas racetrack in Montevideo and an off-track betting
agency network together with the right to operate up to 1,500 slot machines in 5
locations.

     The necessary restoration of the racetrack would, in management's opinion,
require an initial investment of $12 million.  Efforts to raise the $12 million
by the due date were unsuccessful.  Consequently, the concession expired on
March 31, 2001, and the Company's bid bond in the amount of $450,000 was
forfeited and thus, expensed during the fiscal year 2001.  Subsequently, the
concession was awarded to another operator in the fourth quarter of 2001, which
resulted in the Company writing off its entire investment as of December 31,
2001.

     As noted in the accompanying consolidated financial statements, the Company
has incurred recurring losses from operations, has a partners' deficit of
$34,301,432 and projects a negative cash flow for 2002.  These factors, among
others, raise substantial doubt about the Company's ability to continue as a
going concern and to meet its obligations during 2002.  The accompanying
financial statements do not include any adjustments relating to the
recoverability and classification of asset carrying amounts or the amount and
classification of liabilities that might result should the Company be unable to
continue as a going concern.

     Management has plans to overcome the Company's problems as follows:

     (i)  Request license approval in Colombia and Dominican Republic for casino
          and/or sports book operations.

     (ii) Continue to Implement cost reductions at all properties.

     (iii)Request designation of the El Comandante facility as a tourist zone,
          which would allow the addition of slot machines and authorization for
          low interest bonds or notes. As of June 12, 2002, such approvals have
          not been obtained.


                                       36
<PAGE>
     (iv) Expand simulcasting in Colombia and Dominican Republic as well as
          expand betting pool races.

     (v)  Obtain new bank financing or financing by the Wilson family.

     There can be no assurance that any of the above will be achieved, or if
achieved, the results will be sufficient to enable the Company to continue to
operate.

     On December 15, 2000 and June 15, 2002, the Company failed to pay interest
of $7.2 million and principal of $10.2 million on the First Mortgage Notes (See
Note 5).  This constituted a default under the Indenture.  In addition, defaults
have occurred in the performance or breach, of covenants and/or warranties of
HDA and/or ECC.  There have been discussions with representatives of the
Government Development Bank for Puerto Rico and other government officials to
explore ways to obtain funds to bring the interest and principal current on the
Notes.

     There can be no assurance that the Company will obtain the required funding
to bring the delinquent interest and principal current, in which case the note
holders have indicated they intend to exercise their remedies under the
Indenture to declare the principal on the Notes to be due and immediately
payable and to seek a judgment or decree for payment of all money due.

     GOVERNMENT MATTERS

     El Comandante is required to pay the Government of Puerto Rico various
taxes on wagering placed on thoroughbred horse races held at or simulcasted by
El Comandante (Puerto Rico).  The taxes on  wagering are required to be remitted
to the Department of the Treasury of Puerto Rico within two (2) days of the date
wagers are placed.   From October 16, 2000 to February 7, 2001, El Comandante
failed to remit tax payments totaling $9,949,182.

     On May 24, 2001, ECMC executed a Closing Agreement (the "Agreement") with
the Secretary of the Treasury of Puerto Rico (the "Secretary") whereby ECMC will
settle its assessed debt of unpaid excise taxes and commissions for the period
October, 2000 through February, 2001, in the amount of $11,172,450 (including
interest and late charges), plus an additional assessment of $60,141 (including
interest) for unpaid commissions for the period February 2, 2001 through
February 7, 2001 as follows:

     1.   Upon execution of the Agreement, ECMC paid $60,141 in full payment of
          the February, 2001 assessment.

     2.   For a six-month period commencing June 1, 2001 and ending November 30,
          2001, ECMC will pay $50,000 per week against the October, 2000 through
          January, 2001 assessment. After the six-month period, the Secretary
          will reevaluate the financial condition of ECMC, and may, upon
          reasonable grounds, continue, modify or revoke the Agreement.

     3.   ECMC will continue to pay on a timely basis current excise taxes and
          commissions.

     4.   ECMC will provide and maintain a bond in favor of the Secretary in the
          amount of $500,000.

     5.   In the event ECMC defaults during the term of the Agreement, the
          Secretary may accelerate the balance due plus any additional amounts
          due as a result of the default.

     As of June 12, 2002, ECMC had fully complied with  the terms and provisions
of the Agreement.


                                       37
<PAGE>
     As of December 31, 2001,  Equus Comuneros, S.A. owed the Colombian Tax and
National Customs Administration approximately $939,634, including interest,  for
withholding at source tax.  Management has recently met with the Government to
settle the amount outstanding.  The plan proposed to the government is as
follows:

     1.   Five (5) year amortization of 10%, 15%, 25% and 30%, respectively.

     2.   The Government is requesting a down payment, which is currently being
          negotiated.

     The Agreement is expected to be finalized by June, 2002.

     On August 18, 2001, ECMC executed a Closing Agreement (the "Agreement")
with the Municipality of Canovanas whereby ECMC settled a longstanding dispute
over the payment of the Volume of Business Tax assessed by the municipality.

     The following schedule lists the deficiencies by fiscal year with the
corresponding interest and surcharges:

          FISCAL                INTEREST
          TAX      TAX          AND
          YEAR     DEFICIENCY   SURCHARGES   TOTAL
          -------  -----------  -----------  --------

          93/94    $    74,087  $    67,913  $142,000
          96/97        120,397       68,224   188,621
          97/98        126,666       59,110   185,776
          98/99        123,366       45,233   168,599
          99/00         93,367       24,897   118,264
          00/01        116,735       19,455   136,190
                   -----------  -----------  --------

           Totals  $   654,618  $   284,832  $939,450
                   -----------  -----------  --------

     Prior to settlement, the Company as of June 30, 2001 had accrued a total
liability of $838,396 due for municipal taxes and other charges. On June 30,
2001, the Company recorded additional penalties and interest of $101,054.

     The terms of the Agreement are as follows:

     1.   For period August 1, 2001 through January 31, 2003, ECMC will pay the
          Municipality of Canovanas $5,000 per week.

     2.   At the end of this eighteen (18) month period, the Municipality can
          request full payment of the remaining balance, $559,450, or
          renegotiate a final twelve (12) month payoff of the balance.

     3.   Should ECMC default at any time on the agreed payment terms, the
          Municipality may declare the entire remaining balance due.

     4.   To guarantee the timely payments of the amounts due, ECMC has provided
          to the Municipality two (2) payments bonds in the amount of $503,732
          and $94,886, respectively.

     As of June 12, 2002, ECMC was in compliance with the provisions of the
agreement.


                                       38
<PAGE>
     On April 2, 2001, the House of Representatives of the Commonwealth of
Puerto Rico presented a resolution ordering an investigation of the operations
of ECMC with emphasis on the fiscal and financial administration of El
Comandante and its tax delinquency. As of October 22, 2001, all requested
information had been submitted by ECMC. The investigation has been completed,
but as of this date the House of Representatives has not issued their report or
otherwise disclosed their findings.

     As of December 31, 2001, Equus Comuneros owed the Tax and National Customs
Administration approximately $939,634, including interest, for withholding at
source tax. Management has recently met with the Government to settle the amount
outstanding. The plan proposed to the Government is as follows:

     1.   Five (5) year amortization of 10%, 15%, 25% and 30%, respectively.

     2.   The government is requesting a down payment which is currently being
          negotiated.


     CONSOLIDATION  AND  PRESENTATION

     The Company consolidates the entities in which it has a controlling
interest. The accompanying consolidated financial statements include the
accounts of the Company and its subsidiaries after eliminating all significant
intercompany transactions.  All of the entities included in the consolidated
financial statements are hereinafter referred to collectively, when practicable,
as the "Company".

     The Company has minority partners in HDA, Galapagos, Equus-Panama and
Equus-Comuneros.  Therefore, the Company recorded minority interest based on the
income and (losses) of these consolidated subsidiaries that are attributable to
the minority partners, as follows:

                               FOR THE YEAR ENDED DECEMBER 31,
                         ----------------------------------------
                             2001          2000          1999
                         ------------  ------------  ------------
    SUBSIDIARY:
        HDA              $   (89,180)  $   (74,620)  $       650
        Galapagos                  -             -             -
        Equus-Panama                        46,572      (114,688)
        Equus-Comuneros   (1,076,753)   (1,286,824)     (915,420)
                         ------------  ------------  ------------
                         $(1,165,933)  $(1,314,872)  $(1,029,458)
                         ============  ============  ============

      In general, the minority interest is calculated based on the ownership
interest of the minority partners.  HDA's minority partners had an 18% interest
until August 20, 1997, when HDA redeemed the 17% interest owned by Supra &
Company S.E. ("Supra").   Following the redemption, HDA has a minority partner
owning a 1% interest.   Galapagos' minority partners own a 45% interest.
However, during the years ended December 31, 2001, 2000, and 1999, the Company
did not recognize minority interest in Galapagos' losses amounting to  $459,149,
$759,719, and $312,217, respectively, because the minority partners have no
legal obligation to fund such losses in excess of their investment. On October
9, 2001, Equus Entertainment de Panama was restructured whereby the Company sold
its majority interest to the minority stockholders as of September 30, 2001. See
"Notes to Consolidated Financial Statements".


     OUTSTANDING UNITS

     The units of the Company represent an assignment of beneficial ownership of
Class A limited partnership interest (the "Units").  On December 15, 1998, the
Company acquired in treasury 935,557 of its Units in connection with the


                                       39
<PAGE>
repurchase of Warrants issued by HDA Management Corporation ("HDAMC") (see Note
7).  In December 31, 2000 the Company issued 6,000,000 units to Wilson
Securities Corporation, a major unitholder of the Company, for $6,000,000
pursuant to the terms of a Private Offering that commenced on November 2000 and
was consummated on December 28, 2000.  During 1999 the Company issued 2,991,764
Units to The Wilson Family Limited Partnership for $3,051,600 pursuant to the
terms of a private offering that commenced in December 1998 and expired in April
1999.   Net loss per Unit is calculated based on the weighted average of Units
outstanding.

     During 2000, the Company issued new Units and Amended the Company's
Certificate of Limited Partnership to increase the number of units the Company
is authorized to issue from 10,383,617 to 20,000,000.

     PERVASIVENESS OF ESTIMATES

     The preparation of financial statements in conformity with accounting
principles generally accepted in the United States ("GAAP") requires management
to make estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities, if any, at the
date of the financial statements and the reported amounts of revenues and
expenses during the reporting period.  Actual results could differ from those
estimates.  A significant assumption is that the Company can recover the
carrying amounts of its assets through future operations.

     COMPREHENSIVE INCOME (LOSS)

     Comprehensive income (loss) is defined as the changes in partners' interest
(deficit) during a period from transactions and other events and circumstances
from non-owner sources.  The Company recognizes as a component of comprehensive
income (losses) currency translation adjustments and changes in exchange rates
of unsettled long-term intercompany transactions of foreign subsidiaries.

     COMMISSIONS ON WAGERING

     Commissions on wagering represent income earned by the Company on bets
placed on thoroughbred horse races held at El Comandante (Puerto Rico), V
Centenario (Dominican Republic)  and Los Comuneros (Colombia) principally
through wagering facilities located at independently owned off track betting
("OTB") agencies throughout these countries.  Commissions are based on
percentages of wagers established by law that vary by country and are based on
the different types of wagers.  Commissions are presented in the accompanying
consolidated financial statements net of applicable taxes on wagers, amounts
payable to winning bettors, commissions to OTB agencies and other miscellaneous
deductions established by law.  Commissions on wagering are recognized upon
completion of the races.


     NET REVENUES FROM LOTTERY SERVICES

     Galapagos had a five-year contract with a private operator to provide the
wagering distribution system for a government-sponsored electronic lottery,
which commenced on November 1, 1997.  Lottery games are sold at OTB agencies
selected by Galapagos and at lottery agencies selected by the lottery operator.
Galapagos' commissions are 3% of gross lottery sales.  In addition, the lottery
operator paid Galapagos a monthly fee for each OTB agency that sells lottery
games as reimbursement for a 50% share of telephone line costs. Revenues from
lottery sales are presented in the accompanying consolidated statement of
operations for 1999 and 1998 net of fees paid to the company providing wagering
services (see Note 4). This was in arbitration with Autotote as discussed in
Note 11.


                                       40
<PAGE>
     ADVERTISING EXPENSE

     During the years ended December 31, 2001, 2000, and 1999, the Company
incurred advertising costs of $235,604, $1,189,000, and $1,594,000,
respectively.


     CASH AND CASH EQUIVALENTS

     The Company considers as cash equivalents certificates of deposit with an
original issuance to maturity term of three months or less.  Restricted cash
represents accumulated cash in the "Pool Pote" and a bonus amount that is added
to the Pick 6 pool payout for predetermined race days.  The "Pool Pote" is paid
out when there is a sole pool winner.   The corresponding payables are recorded
as part of the liability for outstanding winning tickets and refunds.

     PROPERTY AND EQUIPMENT

     Land, buildings and improvements, and equipment are stated at cost plus a
step-up of $5,650,000 of El Comandante's assets as of March 8, 1995, resulting
from the issuance of Units to HDAMC for a 15% interest in HDA.  A portion of the
step-up was written off in 1998, as a result of damage caused by Hurricane
Georges.  Depreciation is calculated using the straight-line method over the
estimated useful lives of the property: 5 to 10 years for equipment, 35 years
for buildings, and 10 to 15 years for land improvements. Major replacements and
improvements are capitalized and depreciated over their estimated useful lives.
Repairs and maintenance are charged to expense when incurred.

     DEFERRED COSTS

     Deferred financing costs are being amortized over the life of the
corresponding debt, using the effective interest method.

     IMPAIRMENT OF LONG-LIVED ASSETS

     Statement of Financial Accounting Standards ("SFAS") No. 121, "Accounting
for the Impairment of Long-Lived Assets and for Long-Lived Assets to be Disposed
Of", requires that long-lived assets and certain identifiable intangibles to be
held and used or disposed of by an entity be reviewed for impairment whenever
events or changes in circumstances indicate that the carrying amount of an asset
may not be recoverable. Under such circumstances, SFAS No. 121 requires that the
carrying amount of an asset may not be recoverable. Under such circumstances,
SFAS No. 121 requires that such assets be reported at the lower of their
carrying amount or fair value less cost to sell. Accordingly, when event or
circumstances indicate that long-lived assets may be impaired, the Company
estimates the asset's future cash flows expected to result from the use of the
asset and its eventual disposition. If the sum of the expected future
undiscounted cash flows is less than the carrying amount of the asset, an
impairment loss is recognized based on the excess of the carrying amount over
the fair value of the asset. The Company determined that no impairment loss need
be recognized for applicable assets at December 31, 2001 and 2000.


     ACCOUNTS RECEIVABLE


     Accounts receivable principally consists of amounts due from OTB agencies
on thoroughbred races and from the operator of the electronic lottery in the
Dominican Republic.    As of December 31, 2001 and 2000, allowance for doubtful
accounts amounted to $179,764 and  $161,230,  respectively.


                                       41
<PAGE>
     NOTES RECEIVABLE

     Notes receivable consist of short-term loans to horse owners to purchase
horses as a means to improve the quality of racing.

     CURRENCIES

     The Company consolidates its accounts with Galapagos and Equus-Comuneros
whose functional currencies are the Dominican Republic peso and the Colombian
peso, respectively.  The United States dollars ("US$") are also a recording
currency in these countries.  US$ are exchanged into these foreign currencies
("FC$") and vice versa through commercial banks and/or the central banks of the
respective countries.  The Company remeasures the monetary assets and
liabilities of the foreign subsidiaries that were recorded in US$ into the FC$
using the exchange rates in effect at the balance sheet date (the "current
rate") and all other assets and liabilities and capital accounts, at the
historical rates.  The Company then translates the financial statements of the
foreign subsidiaries from FC$ into US$ using the current rates, for all assets
and liabilities, and the average exchange rates during the year, for revenues
and expenses.

     For the years ended December 31, 2001, 2000, and 1999, net exchange losses
resulting from remeasurement of accounts, together with losses from foreign
currency transactions, amounted to $288,147, $58,256, and $25,701, respectively,
which amounts are included as operating expenses.   Accumulated net losses from
changes in exchange rates due to the translation of assets and liabilities of
the foreign subsidiaries are included in partners' deficit and at December 31,
2001, 2000 and 1999 amounted to $282,847, $237,995 and $656,501,  respectively.

     The exchange rates in Dominican Republic as of December 31, 2001, 2000 and
1999 were US$1.00 to FC$16.97, US$1.00 to FC$16.75 and US$1.00 to FC$16.00,
respectively.  The average exchange rates in Dominican Republic prevailing
during the years ended December 31, 2001, 2000, and 1999, were US$1.00 to
FC$16.69, US$1.00 to FC$16.53, and US$1.00 to FC$16.10, respectively.  The
exchange rates in Colombia as of December 31, 2001, 2000 and 1999, were US $1.00
to FC$2,372 , US$1.00 to FC$2,229 and US$1.00 to FC$1,874, respectively.  The
average exchange rates in Colombia prevailing during the years ended December
31, 2001, 2000 and 1999 were US$1.00 to FC$2,324, US$1.00 to FC$2,105 and
US$1.00 to FC$1,733, respectively.


2.   EL COMANDANTE RACE TRACK:

     OPERATING LICENSE

     El Comandante is owned by HDA.  It is currently operated by HDA's wholly
owned subsidiary, ECMC, pursuant to an operating license granted by the Puerto
Rico Racing Board, which expires on December 14, 2004. The license provides ECMC
the exclusive right to operate a racetrack in the San Juan Region, which
encompasses the northern half of Puerto Rico, and to conduct all types of
authorized betting, throughout the island of Puerto Rico, based on races held at
El Comandante.  The Company and HDA are primarily responsible to ensure that
ECMC complies with all terms and provisions of the license and applicable
regulations and orders of the Puerto Rico Racing Board.  Upon its expiration in
December 2004, there can be no assurance that a new operating license will be
issued.  However, ECMC and its predecessors have continuously operated the only
thoroughbred racing facility in Puerto Rico since 1957.

     El Comandante's horse racing and pari-mutuel wagering operations are
subject to substantial government regulation.  Pursuant to the Puerto Rico Horse
Racing Industry and Sport Act (the "Racing Act"), the Puerto Rico Racing Board
and the Puerto Rico Racing Administrator (the "Racing Administrator") exercise


                                       42
<PAGE>
significant regulatory control over El Comandante's racing and wagering
operations.  For example, the Racing Administrator determines the monthly racing
program and approves the number of annual race days in excess of the statutory
minimum of 180.  The Racing Act also apportions payments of the wagering handle
and thus the Racing Act could be amended through legislation to reduce the share
of monies wagered that would be available as commissions.

     EL COMANDANTE LEASE AND INTANGIBLE

     Until December 31, 1997, HDA leased El Comandante to El Comandante
Operating Company, Inc. ("ECOC") under a lease agreement (the "El Comandante
Lease") that required payments by ECOC to HDA of rent consisting of 25% of the
annual commissions on wagering earned by ECOC.  ECOC was required to pay all
expenses of El Comandante except for real property taxes and the annual
operating license fee (paid in 1997 by HDA).

     On January 1, 1998, upon termination of the El Comandante lease (i) ECOC
transferred to ECMC, at book value, all assets employed in the racing business,
(ii) ECMC assumed all agreements of ECOC and its liabilities and (iii) ECMC
commenced operating El Comandante.  Net liabilities assumed by ECMC amounted to
$3,658,332, including $3.1 million due to HDA at December 31, 1997.  Management
made an internal valuation of the tangible assets acquired from ECOC and
concluded that book value approximated its fair
value.



3.  RACE TRACK LEASES:

     V CENTENARIO LEASE

     Galapagos leases and operates V Centenario in Santo Domingo, Dominican
Republic, from the Government pursuant to a 10-year agreement ending in April
2005.   The contract may be renewed for additional ten-year periods by mutual
agreement of the parties.  The contract also provides Galapagos with the right
to develop off-track betting in the Dominican Republic and the exclusive right
to simulcast horse races, into the Dominican Republic.  Galapagos pays rent to
the Government based on a percentage of the annual wagering on races run at V
Centenario ("V Centenario Wagering"), as follows: .25% of the first RD$240
million (approximately US$15 million), .5% of the next RD$240 million, .75% of
the next RD$240 million and 1% over RD$720 million (approximately US$43
million).

     The Government agreed to invest a portion of its tax receipts on
simulcasting wagering to improve horse racing in the Dominican Republic to be
distributed between Galapagos and horse owners.  Galapagos' share of these tax
receipts, which is received as reimbursement for repairs and maintenance of the
Government-owned facility at V Centenario, marketing and television costs and
certain other items, is based on the following percentages:  75% effective July
1997, 65% effective July 1998, and 50% effective July 1999.  Horse owners are
entitled to the balance as additional purses.  The agreement expired in January
2000.  The assistance provided by the Government is included in other revenues
and for the year ended December 31, 1999 amounted to $321,358, excluding amounts
paid to horse owners as additional purses.  Management is currently negotiating
an extension of this agreement.


4.   COMMITMENTS AND CONTINGENCIES:

     HORSE OWNERS' AGREEMENTS

     The Company has separate agreements with the horse owners confederation of
each country that establishes the amount payable to horse owners as purses in


                                       43
<PAGE>
exchange for the availability of thoroughbred horses for races.   Payments to
horse owners are, in general, based on a percentage of wagering.

     The Dominican Republic contract expires in December 2005.  The Colombia
contract expires on December 31, 2009.  It provides for certain minimum
guaranteed payments to horse owners during the first three years ($1.2 million
in 2000, increased in 2001 and 2002 in accordance with an inflation factor).

     The Puerto Rico horse owners contract expires in July 2010.   Under the
contract, the horse owners are guaranteed  minimum earnings of $25,0032,000 for
years 2002 and 2001.   ECMC is obligated among other things to pay the horse
owners $90,000 annually for administrative costs and 50% of the principal and
interest owed on an outstanding Confederation loan with a principal balance due
of $526,000, plus accrued interest. ECMC also must invest $3,000,000 in
improvements to the racetrack during the 10-year term of the contract, as well
as provide up to $2,000 of financing for 2001 related to the new horse owners'
contract are included in other expenses.   Additional costs incurred for the
year ended December 31, 2001 related to the new horse owners contract are
included in other expenses.

     On March 16, 2001 an "Addendum to Contract" was executed by the Horse
Owners' Confederation and the Company, whereby the parties jointly agreed to:

     (i)  Increase the number of simulcast races each live race day from three
          (3) to six (6).

     (ii) Place three (3) of the simulcast races before the first live race and
          place three (3) intermingled races after the fifth live race;.

     (iii)Include simulcasting of nine (9) to twelve (12) races on Thursdays of
          each week, a day that currently holds no live races.

     (iv) In consideration for the above items, ECMC will pay an additional
          $1,000,000 to the Horse Owners' Confederation if approved by the
          Racing Board.

     On June 28, 2001, the Puerto Rico Racing Board granted ECMC the right to
increase the number of simulcast races from the United States from three (3) to
six (6) per live race day. The Order allowed a three (3) month probationary
period commencing July 1, 2001, for ECMC to place three (3) simulcast races
before the first live race and three (3) after the fifth live race.

     The Racing Board declined the simulcasting of races during the probationary
period on Thursday's, a day that currently holds no live races.

     Pending final approval by the Racing Board, ECMC was obligated to pay the
Horse Owners' Confederation $1,000,000.

     On October 16, 2001 following a hearing, the Racing Board suspended
effective October 22, all simulcasting temporarily allowed during the
probationary period.   Since no final approval was obtained from the Racing
Board for the simulcasting of races, ECMC is no longer obligated to pay the
additional $1,000,000 to the Horse Owners' Confederation.

     The Racing Board will allow simulcasting of special events such as the
Breeders' Cup, Kentucky Derby and the Preakness as well as the Caribbean Classic
and the Confraternity Classic from the host country if these races are not held
in Puerto Rico.    ECMC is currently doing a cost/benefit analysis to determine
if the limited simulcasting will be economically worthwhile.


                                       44
<PAGE>
     WAGERING SERVICES AGREEMENTS

     The Company has separate agreements with Autotote Systems, Inc.
("Autotote") and United Tote Company ("United Tote")  for providing wagering
services, software and equipment to each racetrack, necessary for the operation
of the off-track betting system.  Payments under these contracts are summarized
as follows:

1.   AUTOTOTE
     --------

                          EL COMANDANTE    V CENTENARIO         LOS COMUNEROS
                         ---------------  -------------------  ---------------
Expiration date            March 2005         March 2005             (b)
Cost of services, as a
 percentage of wagering           0.65%          0.65%  (a)             1.20%
Minimum amount per year  $      800,800   $      200,000       $           -

     (a) Fees to Autotote are 2% of gross sales at lottery agencies and 1% of
     gross sales at OTB agencies.

     (b) On August 1, 2000 the Company discontinued using Autotote for failure
     to comply under the terms of the contract. United Tote commenced operations
     30 days later. See "Legal Proceedings".


2.  UNITED TOTE
    -----------

     In August 2000 the Company obtained a $2.5 million unsecured loan at 3%
over prime due in December 29, 2004. Principal and interest is to be paid from
..25% of the wagering handle for the first four (4) years of the service contract
with United Tote.

                             EL COMANDANTE    V CENTENARIO   LOS COMUNEROS
                             --------------  --------------  --------------
Commencement date (a)         March 2004      March 2004      August 2000
Expiration date              December 2010   December 2010   December 2010
Cost of services, as a
 percentage of wagering                 (b)             (b)             (b)
Minimum amount per year(c)              n/a             n/a             n/a
Additional fees (d)                     n/a             n/a             n/a



     a)   The services agreement with United Tote specifies that the
          commencement date shall be the earlier of the date that the agreement
          with Autotote expires or the date the agreement is properly
          terminated.


                                       45
<PAGE>
(b) Total Handle in a contract year   % of Total Handle received by United Tote
------------------------------------  -----------------------------------------

$ 350,000,000                         0.95% in the first four (4) years and .7%
                                      thereafter, see note (e) below.

$ 350,000,001 to $500,000,000         0.5% of Total Handle

$ 500,000,001 and over                0.4% of Total Handle


     (c)  Pursuant to the service contract, there are minimum annual guaranteed
          wagering handles as to the twelve months from the date that
          totalizator service is first initiated by United Tote at two or more
          existing or new racetracks, and continues in twelve months intervals
          subsequent to that date for the remaining term of the contract.

     (d)  The Company will also pay United Tote a weekly fee of $2,625 as a
          "central hub allocation fee" until service by United Tote is furnished
          to two or more existing or new racetracks.

     (e)  During the first four (4) years, a fee of 0.25% of handle will be
          applied to principal and interest on unsecured note of $2.5 million
          due in December 29, 2004.

     The service contract with United Tote has been cancelled effective July 1,
     2002, or the date another totalisator service commences.

     Effective April 1, 2002, the Company and United Tote amended and restated
the prior promissory note dated August 11, 2000, for $2,500,000, due December
29, 2004, as follows:

          1.   The principal balance was revised to $3,431,955 which includes
               all sums remaining due under the prior note, installation costs
               incurred by United Tote and totalisator fees due from Comuneros.
          2.   Interest on the unpaid principal balance at the rate of "prime"
               interest plus three (3) percent.
          3.   The note shall become due and payable on July 1, 2003.
          4.   If the Company obtains substantial financing for video gaming
               activity at its racetrack in Puerto Rico, then the terms of the
               note will be renegotiated to include an amortization schedule
               mutually agreed upon by both parties.

     OTHER LONG-TERM AGREEMENTS

     The Company has also entered in other long-term contracts that are
essential for the operation of its racetracks such as to guarantee television
coverage in Puerto Rico.  ECMC has an agreement with S&E Network, Inc. ("S&E")
that requires the purchase of television time for a minimum of 910 hours at the
rate of $725 (effective February 1997) per hour, adjusted annually by CPI, or at
the rate of $900 per hour, also subject to CPI adjustments, if television time
after 7:00 PM is needed.  The contract is non-cancelable by either party during
the initial term, which expires on December 2006.  The term is automatically
extended for successive 5 years periods by request of ECMC.  During this
extended term, the contract can be canceled by S&E, upon payment of liquidating
damages of $2 million plus CPI after January 1997.

     On August 1, 2001, El Comandante entered into a five (5) year contract with
Satelites Mexicanos, S.A. de C.V. ("Satmex"), to provide 18MHz of Ku Band
satellite time for the broadcast of its live racing program and potential
resale.  The contract also provided for the payment of overtime charges of
$287,364, including interest, incurred in the previous C Band contract.


                                       46
<PAGE>
     As of June 12, 2002 El Comandante has failed to pay a total $961,739,
excluding interest due under the contract.  If it is deemed that El Comandante
has terminated the contract, El Comandante is liable for a termination fee of
$1,063,740.   At this time neither El Comandante nor the Company have the
resources to pay the ongoing service charges or the termination fee.

     CONTRIBUTIONS

     In connection with the termination of the lease agreement of El Comandante,
ECMC assumed certain commitments made by ECOC to make contributions (subject to
availability of funds) to several charitable and educational institutions during
a four-year period ending in 2001.  These obligations are included in accounts
payable and, at December 31, 2001 and 2000 amounted to  $290,000.  Due to the
lack of available funds no contributions were made in 2001, and there being no
further obligation, the balance was written off at December 31, 2001.


OTHER CONTINGENCIES

     During 1999 and 2000, Equus Comuneros, received transfers from the Company
amounting to $1,307,000.  According to Colombian law there are certain
limitations on transfers of foreign currency into Colombian entities. There is
the possibility that a regulatory investigation will result in fines and/or
penalties to Equus Comuneros.  Equus Comuneros legal counsel is in process of
correcting any violations under Colombian law resulting from these transfers.



5.   FIRST MORTGAGE NOTES:

     On December 15, 1993, pursuant to a private offering, (i) El Comandante
Capital Corp. ("ECCC"), a single-purpose wholly owned subsidiary of HDA, issued
first mortgage notes in the aggregate principal amount of $68 million (the
"First Mortgage Notes") under an indenture (the "Indenture") between ECCC, HDA
and Banco Popular de Puerto Rico, as trustee  (the  "Trustee"), and (ii) HDAMC
issued Warrants to purchase 68,000 shares of Class A Common Stock of HDAMC.  In
March 1995, the Warrants automatically became exercisable to purchase an
aggregate of 1,205,232 units of the Company from HDAMC (see Note 6).  Upon
issuance of the Warrants, HDA recorded note discount of $2,040,000 equal to the
fair value of the Warrants.  Such note discount was being amortized using the
interest method over the term of the First Mortgage Notes.

     The First Mortgage Notes mature on December 15, 2003 and bear interest at
11.75% payable semiannually.  Payment of the First Mortgage Notes is guaranteed
by HDA.  The First Mortgage Notes are secured by a first mortgage on El
Comandante and by certain other collateral which together encompass a lien on
(i) the fee interests of HDA in the land and fixtures comprising El Comandante,
(ii) all related equipment, structures, machinery and other property, including
intangible property, ancillary to the operations of El Comandante, and (iii)
substantially all of the other assets and property of HDA, including the capital
stock of ECCC owned by HDA.

     During the past years HDA has made early redemptions of First Mortgage
Notes in connection with certain transactions.  The Company has also purchased
in the open market First Mortgage Notes which the Company intends to hold until
maturity in cancellation of required partial redemptions in 2000 and 2001, as
explained below.  Following is a summary of these transactions:


                                       47
<PAGE>
<TABLE>
<CAPTION>
                                                                         HELD BY THE
                                                 FACE       (PREMIUM)    COMPANY AT
TYPE OF TRANSACTION                DATE         VALUE        DISCOUNT     31-DEC-01
------------------------------  -----------  ------------  ------------  ------------
<S>                             <C>          <C>           <C>           <C>
Redemption                      Mar-97       $    737,000  $         -   $         -
Redemption                      Sep-97          2,500,000     (250,000)            -
Purchase in open market         Dec-98          7,500,000    1,000,000     7,500,000
Redemption, reduced by amount
  of notes held by the Company  Jan-99          2,620,000    (262,000)(a)   (380,000)
Purchase in open market         May-99            189,000       22,680       189,000
Redemption reduced by amount
  of notes held by the Company  Jan-01            563,000                   (563,000)
                                             ------------  ------------  ------------
                                             $ 14,109,000  $   510,680   $ 6,746,000
                                             ============  ============  ============

<FN>
(a)  Recorded as an expense by the Company in 1998.
</TABLE>


     In connection with these transactions, the Company wrote-off a portion of
the note discount and deferred financing costs. The net effect is included in
the accompanying consolidated statements of operations as extraordinary items,
net of provision for income taxes, as follows:

                                        FOR THE YEAR ENDED DECEMBER 31,
                                       ----------------------------------
                                          2001         2000       1999
                                       ----------  ----------  ----------
          Discount (premium)           $        -  $        -  $   22,680
          Write-offs                            -           -           -
          Provision for income taxes            -           -           -
                                       ----------  ----------  ----------
                                       $        -  $        -  $   22,680
                                       ==========  ==========  ==========


     ECCC is required to partially redeem First Mortgage Notes commencing on
December 15, 2000. The stated future maturities of the First Mortgage Notes at
December 31, 2001, reduced by prior redemptions, are as follows (in thousands):

          DUE DURING THE YEAR   GROSS    PURCHASED IN      NET
          ENDING DECEMBER 31,   AMOUNT    OPEN MARKET    AMOUNT
          -------------------  --------  -------------  ---------
                  2001          10,200           6,746     3,454
                  2002          10,200               -    10,200
                  2003          40,800               -    40,800
                               --------  -------------  ---------
                                61,200           6,746    54,454
            Less - discount       (444)             94      (538)
                               --------  -------------  ---------
                               $60,756         $ 6,840  $ 53,916
                               ========  =============  =========


     HDA may also redeem First Mortgage Notes at the following redemption prices
(expressed as percentages of principal amount), in each case together with
accrued and unpaid interest:


                                       48
<PAGE>
     DURING THE 12 MONTH PERIOD
     BEGINNING ON DECEMBER 15,
     --------------------------
               2000                       101.00%
               2001                       100.00%

     On December 15, 2001 and June 15, 2002  the Company failed to pay interest
of $7.2 million and principal of $10.2 million on the First Mortgage Notes.
This constitutes a default under the Indenture.  In addition, defaults have
occurred in the performance or breach, of covenants and/or warranties of HDA
and/or ECCC.  There have been discussions with representatives of the Government
Bank for Puerto Rico and other government officials to explore ways to obtain
funding to bring the interest and principal current on the Notes.

     It is not expected that the Company will be able to meet the mandatory
maturity dates of the First Mortgage Notes as set forth above without obtaining
additional financial from lending institutions or investors.  Although the
Company has had discussions with possible lenders and investors, it has received
no commitment or other form of assurance that such financing will be
forthcoming.  Absent such financing, the Company will  not be able to meet its
long-term commitments.    The Trustee of the First Mortgage Notes had advised
the Company's legal counsel that the bondholders will demand payment in full of
the First Mortgage Notes, as provided by the Indenture.

     HDA is required to purchase First Mortgage Notes, at face value, to the
extent that HDA has accumulated excess cash flow, asset sales with net proceeds
in excess of $5 million (to the extent these proceeds are not invested in HDA's
racing business within a year), or a total taking or casualty, or in the event
of a change of control of HDA.

     The Indenture contains certain covenants, one of which restricts the amount
of distributions by HDA to its partners, including the Company.  Permitted
distributions are limited to approximately 48% of HDA's consolidated net
earnings.  In connection with certain approvals required from note holders, HDA
agreed to temporarily reduce these distributions by 17%.  HDA is permitted to
make additional cash distributions to partners and other Restricted Payments, as
defined under the Indenture, equal to 44.25% of the excess of HDA's cumulative
consolidated net income after December 31, 1993 over the cumulative amount of
the 48% Distributions, provided that HDA meets a certain minimum debt coverage
ratio.  HDA has not met this debt coverage ratio.  As of June 30, 2001, HDA has
advanced to the Company approximately $3.8 million against its allowable future
distributions of profits, which is not in conformity with the terms of the
Indenture.

     Management repaid these advances with the proceeds of a private placement
offering of Equus Entertainment preferred stock on July 13, 2001.  See Note 10,
"Related Party Transactions".


6.   HDAMC WARRANTS

     Under the Warrant Agreement, the Company was not a "qualified public
company" and therefore HDA, as guarantor of the obligation, made the offer to
purchase 68,000 outstanding Warrants for cash, at a repurchase price of $15.49
per Warrant.  The repurchase offer expired on December 15, 1998 when 48,127
Warrants were tendered for a total purchase price of $745,487.  This payment,
together with transaction costs, was charged to partners' deficit.  Of the
remaining Warrants, 15,216 were exercised in exchange for 269,688 Units of the
Company and, 4,657 Warrants, neither tendered nor exercised, expired. Therefore,
935,557 of the Units previously held by HDAMC were distributed to the Company
and are currently held in treasury.


                                       49
<PAGE>
7.   BONDS AND NOTES PAYABLE AND CAPITAL LEASES:

     The Company's outstanding notes payable consist of the followin

<TABLE>
<CAPTION>
                                                                           BALANCE AT
                                               MATURITY  INTEREST    DECEMBER 31  DECEMBER 31,
BORROWER                 DESCRIPTION            DATE       RATE         2001          2000
---------------------  ---------------       ----------  --------  -------------  -------------
<S>                    <C>                   <C>         <C>       <C>            <C>
H D A                  Note payable     (a)  15-Dec-01    P+1.00%  $          -   $  3,000,000
H D A                  Line of credit   (b)  15-Dec-01    P+1.00%             -        500,000
Equus-Comuneros        Term loans       (c)    various   variable       187,978        269,612
Equus Entertainment    Note payable     (d)  29-Dec-04    P+3.00%     2,500,000      2,500,000
Equus Entertainment    Promissory Note  (e)  On Demand    P+1.00%       100,000              -
Equus Entertainment    Promissory Note  (f)  On Demand    P+1.00%        50,000              -
Equus Entertainment    Promissory Note  (g)  On Demand    P+1.00%       120,000              -
Equus Entertainment    Promissory Note  (h)  On Demand    P+1.00%       250,025              -
Equus Entertainment    Promissory Note  (i)  On Demand    P+1.00%       300,000              -
Equus Entertainment    Promissory Note  (j)  On Demand    P+1.00%       205,000              -
Equus Entertainment    Promissory Note  (k)  On Demand    P+1.00%     1,300,000              -
Satellite Service Int  Promissory Note  (l)  On Demand    P+1.00%        53,750              -
Equus Entertainment    Promissory Note  (m)  On Demand    P+1.00%       563,429
Equus Entertainment    Promissory Note  (n)  On Demand    P+1.00%       330,000
Equus Entertainment    Promissory Note  (o)  On Demand    P+1.00%        70,000
Equus Entertainment    Promissory Note  (p)  On Demand    P+1.00%        70,000
                                                                   -------------  -------------
                                                                   $  6,100,182   $  6,269,612
                                                                   -------------  -------------
<FN>

     At December 30, 2001 and December 31, 2000, the prime rate (P) was 4.75%
and 9.5%, respectively.

     (a)  Considered Refinancing Indebtedness under the terms of the Indenture.
          Collateralized by First Mortgage Notes purchased in the open market
          (see Note 3). Payable in quarterly installments commencing on March
          31, 2000. Paid in full July 13, 2001. See Note 10, "Related Party
          Transactions".

     (b)  Revolving line of credit available until December 15, 2001, for its
          operational needs. Interest is calculated on balances outstanding at a
          rate equivalent to one point over prime rate. Principal is due upon
          maturity on December 15, 2001. Paid in full July 13, 2001. See Note
          10, "Related Party Transactions".

     (c)  Management is in the process of renegotiating the terms of these
          financial obligations. Interest rates range from 7% to 14.01% over
          Colombia Fixed Term Deposit (FTD) rate. FTD at December 31, 2001 was
          11.51%

     (d)  In August 2000 the Company obtained a $2.5 million unsecured loan at
          3% over prime due December 29, 2004. Principal and interest payments
          are to be paid from .25% of the wagering handle for the first four (4)
          years of the service contract with United Tote as outlined in Note 2
          of the consolidated financial statements, "Wagering Service
          Agreements".

     (e)  On March 21, 2001, the Company received $100,000 from El Monte
          Properties, an entity controlled by the Wilson family which also owns
          a controlling interest in the Company under an unsecured promissory
          note payable on demand with interest accruing at 1% over prime. The
          proceeds were used to purchase El Comandante receivable from
          non-Puerto Rico affiliates and working capital.


                                       50
<PAGE>
     (f)  On March 21, 2001, the Company received $50,000 from Santa Maria
          Associates, an entity controlled by the Wilson family which also owns
          a controlling interest in the Company under an unsecured promissory
          note payable on demand with interest accruing at 1% over prime. The
          proceeds were used to purchase El Comandante receivable due from
          non-Puerto Rico affiliates and working capital.

     (g)  On April 6, 2001, the Company received $120,000 from El Monte
          Properties, an entity controlled by the Wilson family which also owns
          a controlling interest in the Company, under an unsecured promissory
          note payable on demand with interest accruing at 1% over prime,
          payable on demand by El Monte Properties, controlled by the Wilson
          family which also owns a controlling interest in the Company. The
          proceeds were used to purchase El Comandante receivables due from
          non-Puerto Rico affiliates and working capital.

     (h)  On April 26, 2001, the Company received $250,025 from Insular
          Properties, an entity controlled by the Wilson family which also owns
          a controlling interest in the Company, under an unsecured promissory
          note payable on demand with interest accruing at 1% over prime. The
          proceeds were used to purchase El Comandante receivables due from
          non-Puerto Rico affiliates and working capital.

     (i)  On April 30, 2001, the Company received $300,000 from Insular
          Properties, an entity controlled by the Wilson family which also owns
          a controlling interest in the Company, under an unsecured promissory
          note payable on demand with interest accruing at 1% over prime. The
          proceeds were used to purchase El Comandante receivables due from
          non-Puerto Rico affiliates and working capital.

     (j)  On May 11, 2001, the Company received $205,000 from Insular
          Properties, an entity controlled by the Wilson family which also owns
          a controlling interest in the Company under an unsecured promissory
          note payable on demand with interest accruing at 1% over prime. The
          proceeds were used to purchase El Comandante receivables due from
          non-Puerto Rico affiliates and working capital.

     (k)  On June 14, 2001, the Company received $1,300,000 from El Monte
          Properties, an entity controlled by the Wilson family which also owns
          a controlling interest in the Company, under an unsecured promissory
          note payable on demand with interest accruing at 1% over prime. The
          proceeds were used to purchase El Comandante receivables due from
          non-Puerto Rico affiliates and working capital.

     (l)  The Company also guarantees a $250,000 loan by the operator of the
          restaurant at Presidente Remon. The proceeds of this loan were used by
          Equus-Panama to finance improvements to the restaurant. On October 9,
          2001, the Company entered into a stock purchase agreement whereby in
          exchange for release from all liabilities related to the operation of
          Equus Entertainment de Panama, the Company gave to its minority
          partner, Wall Street Securities, its 204,000 shares of common stock
          which represented 51% of the total issued and outstanding shares of
          Equus Entertainment de Panama. At the same time, the Company was
          released from any further liability under this loan guarantee.

     (m)  On October 1998, Equus-Panama issued $4 million in unsecured bonds
          pursuant to a public offering. Interest is payable quarterly at the
          rate of 11% per annum. The bonds may be redeemed by Equus-Panama prior
          to June 30, 2001 at a redemption price of 102% of the principal amount
          and thereafter at par. Under the loan documents there are certain
          restrictions that limit the capacity of Equus-Panama to incur
          indebtedness and pay dividends to shareholders. On October 9, 2001,


                                       51
<PAGE>
          the Company entered into a stock purchase agreement whereby in
          exchange for release from all liabilities related to the operation of
          Equus Entertainment de Panama, the Company gave to its minority
          partner, Wall Street Securities, its 204,000 shares of common stock
          which represented 51% of the total issued and outstanding shares of
          Equus Entertainment de Panama. At the same time, the Company was
          released from any further liability under this Bond Indenture.
</TABLE>


     The following table summarizes future minimum payments on capital leases,
notes payable and bonds of the Company and its consolidated subsidiaries:


DUE DURING THE YEAR    CAPITAL       NOTES
ENDING DECEMBER 31,    LEASES       PAYABLE
-------------------  -----------  -----------
       2002          $  700,114   $3,761,243
       2003             507,171       31,288
       2004             257,929    2,517,245
       2005               3,147            -
                     -----------  -----------
                      1,468,361    6,309,776
  Imputed interest     (147,261)    (209,594)
                     -----------  -----------
                     $1,321,100   $6,100,182
                     ===========  ===========


8.   RETIREMENT PLAN AND PENSION PLAN:

     RETIREMENT PLAN

     In 1998, the Company established a retirement plan for employees of its
subsidiary, Equus Entertainment Corporation ("EEC").  Employees are eligible to
participate in the retirement plan when they have completed a minimum of 1,000
hours of service.  The Retirement Plan is a defined contribution plan which
provides for contributions by the Company for the accounts of eligible employees
in amounts equal to 4% of base salaries and wages not in excess of the U.S.
Social Security taxable wage base, and 8% of salaries (limited to $160,000) that
exceed that wage base.  Eligible employees may also make voluntary contributions
to their accounts and self direct the investment of their account balances in
various investment funds offered under the plan.   Contributions to the
Retirement Plan amounted to $26,027, $33,824, and $49,975 in 2001, 2000 and
1999, respectively.  Prior to October 5, 1998, EEC's employees participated in
the retirement plan of Interstate General Company L.P. ("IGC"), a former general
partner of the Company.


     PENSION PLAN

     ECMC has a non-contributory defined benefit pension plan covering
substantially all of its nonunion employees.  As a result of the transfer of
ECOC assets, liabilities and commitments, HDA is now the sponsor of the nonunion
employees pension plan.  Benefits are based on the employee's years of service
and highest average earnings over five consecutive years during the last 15
years of employment.  ECMC's policy is to fund an amount not less than the ERISA
minimum funding requirement or more than the maximum deductible under the Puerto
Rico tax law.   Pertinent information on this pension plan as of and for the
years ended December 31, 2001, 2000 and 1999, is as follows:


                                       52
<PAGE>
<TABLE>
<CAPTION>
                                                   2001         2000        1999
                                                -----------  ----------  -----------
<S>                                             <C>          <C>         <C>
CHANGE IN BENEFIT OBLIGATION:
  Benefit obligation at beginning of year       $  721,750   $ 594,882   $1,152,797
  Service cost                                     144,970     128,225      118,891
  Interest cost                                     65,523      55,616       68,073
  Actuarial gain (loss)                            160,049     117,436     (339,600)
  Benefit paid                                     (16,324)   (174,409)    (405,279)
                                                -----------  ----------  -----------
  Benefit obligation at end of year             $1,075,968   $ 721,750   $  594,882
                                                ===========  ==========  ===========

CHANGE IN PLAN ASSETS:
  Fair value of plan assets beginning of year   $  409,328   $ 428,391   $  623,532
  Asset gain                                             -       6,247            -
  Actual return on plan assets                      61,930     (28,559)      53,692
  Employer contribution                            258,348     227,658      206,446
  Benefits paid                                   (426,131)   (174,409)    (405,279)
  Administrative expenses                          (28,203)    (50,000)     (50,000)
                                                -----------  ----------  -----------
  Fair value of plan assets end of year         $  275,272   $ 409,328   $  428,391
                                                ===========  ==========  ===========

  Funded status                                 $ (384,840)  $(312,422)  $ (166,491)
  Unrecognized net actuarial loss                   39,191     262,935       42,584
  Unrecognized transition obligation                45,992      52,255       65,319
                                                -----------  ----------  -----------
  Prepaid (accrued) benefit cost                $ (299,657)  $   2,768   $  (58,588)
                                                ===========  ==========  ===========

WEIGHTED-AVERAGE ASSUMPTION:
  Discount rate                                       7.50%       7.50%        7.90%
  Expected return on plan assets                      7.50%       7.50%        7.50%
  Rate of compensation increase                       4.00%       4.00%        4.00%

COMPONENTS OF NET PERIODIC BENEFIT COST:
  Service Cost                                  $  144,970   $ 128,225   $  118,891
  Interest cost                                     65,523      55,616       68,073
  Expected return on plan assets                   (39,776)    (38,270)     (54,902)
  Amortization of transition obligations            13,064      13,064       13,064
  Recognized net actuarial loss                     31,343       7,667       10,153
                                                -----------  ----------  -----------
  Net periodic benefit cost                     $  215,124   $ 166,302   $  155,279
                                                ===========  ==========  ===========
</TABLE>


9.   INCOME TAXES:

     The Company is organized as a partnership, which is not a taxable entity
for United States tax purposes and incurs no federal income tax liability. As a
result, each partner is required to take into account in computing its income
tax liability such partner's allocable share of the Company's net taxable
income. As a result of certain changes in the Company's corporate structure
effective January 1, 1998, the partner's allocable share of the Company's net
taxable income will be approximately equal to cash received during the year.

     The provision for income taxes included in the accompanying consolidated
financial statements is attributable to (i) Puerto Rico income taxes on the
results of operations of its Puerto Rico subsidiaries, EEC, HDA and ECMC and
(ii) withholding taxes imposed by foreign countries on income earned by EEC, for
which no foreign tax credit will be available in Puerto Rico, summarized as
follows:


                                       53
<PAGE>
                                  FOR THE YEAR ENDED DECEMBER 31,
                                  -------------------------------
                                     2001      2000      1999
                                   --------  --------  --------
     Puerto Rico income taxes-
        Deferred                   $ 93,056  $570,056  $375,928
        Current                           -         -   204,892
     Foreign income tax, deferred    50,541    50,038   161,333
                                   --------  --------  --------
                                   $143,597  $620,094  $742,153
                                   ========  ========  ========

     The deferred income tax asset is mainly attributable to net operating
losses carried-forward, for which a valuation allowance has been recorded. The
deferred income tax liability as of December 31, 2001, 2000 and 1999 has the
following components of deferred tax liabilities (assets), net of corresponding
valuation allowance:

                                                     DECEMBER 31,
                                        -------------------------------------
                                           2001         2000         1999
                                        -----------  -----------  -----------
     Puerto Rico income taxes-
        Depreciation                    $         -  $2,333,767   $1,536,640
        Gain on involuntary conversion            -   1,421,523    1,513,569
        Net operating losses of ECMC              -           -            -
        Contingency reserves                      -           -            -
        Other                                     -     (78,790)     (75,083)
     Foreign withholding income taxes             -     256,644      190,674
                                        -----------  -----------  -----------
                                        $         -  $3,933,144   $3,165,800
                                        ===========  ===========  ===========



10.  RELATED PARTY TRANSACTIONS:


     SERVICES AMONG RELATED PARTIES

     The following represents a summary of amounts accrued for services rendered
by or from certain related parties, namely, EMC, IBC, American Community
Properties Trust ("ACPT") and Interstate General Company L.P. ("IGC") during the
years ended December 31, 2001, 2000, and 1999:


                                       54
<PAGE>
                                               FOR THE YEAR ENDED DECEMBER 31,
                                               -------------------------------
ENTITY        NATURE OF SERVICE                    2000      2000      1999
------------  ---------------------------------  --------  --------  --------
RENDERED BY:
  ACPT        Support agreement                  $    800  $ 52,600  $ 40,400
  ACPT        Rent office space                    14,000    42,000    42,000
  EMC         Director fees                        86,200   124,800    88,800
  IBC         Accounting services                       -         -         -
  IGC         Services of James J. Wilson         452,789   192,703   135,000
  IGC         Services of Wilson Nazario                -    12,833         -
  IGC         Other services on Virginia racing         -         -    18,041

     During the year 2001, the Company executed various unsecured promissory
notes with several of its affiliates. See Note 7, "Bonds and Notes Payable and
Capital Leases".

     On July 13, 2001, Kempt Corporation, a Puerto Rico corporation wholly owned
by Wilson Securities Corporation, an entity controlled by the Wilson family,
purchased seven (7) million shares of Equus Entertainment Class A, 12%
cumulative preferred stock, $1.00 par value.

     Equus Entertainment then applied $3.8 million to offset the advances
against dividends made to the Company.

     Equus Entertainment reimbursed the El Comandante Group (consisting of
Housing Development Associates S.E., El Comandante Capital Corporation and El
Comandante Management Company LLC) for all advances made by the El Comandante
Group to affiliate companies. Equus Entertainment also purchased the
inter-company receivables of the El Comandante Group that were due from
affiliate companies.

     The Net proceeds of $6,882,037 were used to pay the following:

     1)   The June 14, 2001 interest payment on the First Mortgage Notes of
          $3,595,500 plus $32,408 of penalty interest for the period June 15,
          2001 through July 13, 2001.

     2)   Payoff of $2,604,747 HDA Note payable to FirstBank together with
          interest accrued through July 13, 2001, of $14,370.

     3)   Payoff of $500,000 HDA line of credit with FirstBank together with
          interest accrued through July 13, 2001, of $2,903.

     4)   Advances to consolidated affiliates of $132,108 to cover operational
          expenses.


11.  LEGAL PROCEEDINGS:

     Certain of the Company's subsidiaries are presently named as defendants in
various lawsuits and might be subject to certain other claims arising out of its
normal business operations.  Management, based in part upon advice from legal
counsel, believes that the results of such actions will not have a material
adverse impact on the Company's financial position or results of operations.


                                       55
<PAGE>
     The Company had a case in arbitration at the American Arbitration
Association in defense of and against Autotote, involving all the racetracks in
which Equus has an ownership interest.   Autotote filed a claim against El
Comandante for unpaid service fees of $186,415 plus interest.   El Comandante
agreed to pay this amount but filed a counterclaim against Autotote.

     On July 27 and November 21, 2001, American Arbitration Association rendered
its award decisions. The following is a summary of the awards by racetrack:

     EL COMANDANTE, PUERTO RICO

          1.   El Comandante is to pay Autotote the principal amount of $355,496
               in unpaid service fees together with interest of $32,051, accrued
               through April 1, 2001.

          2.   El Comandante shall reimburse Autotote for costs incurred of
               $132,500.

          3.   As of December 31, 2001, the outstanding principal balance was
               $761,415 and accrued interest was $501.

     EQUUS - PANAMA

          3.   Equus - Panama is to pay Autotote the principal amount of
               $250,474 in unpaid service fees together with interest of $45,233
               accrued through June 30, 2001.

          4.   Equus-Panama shall reimburse Autotote for costs incurred of
               $25,000.

          On October 9, 2001, the Company sold its common stock and purchased
          3,000 shares of preferred stock and at the same time was released from
          any further liability under the Autotote Equus-Panama Arbitration
          Award.

     EQUUS - COMUNEROS

          1.   Equus-Comuneros is to pay Autotote the principal amount of
               $584,262 in unpaid service fees as of April 23, 2001, together
               with interest of $218,059.

          2.   Equus-Comuneros shall reimburse Autotote costs incurred of
               $132,500.


     GALAPAGOS

          1.   Galapagos owes Autotote the principal amount of $230,578 as of
               April 23, 2001, together with interest of $120,308 through
               November 21, 2001, the date of the award.

          2.   For breach of good faith and fair dealings, Autotote owes
               Galapagos $800,000, plus interest at the rate of seven (7)
               percent per annum from November 21, 2001 to the date of payment.

          3.   The parties have no further obligations to one another with
               respect to lottery operations in the Dominican Republic.

          4.   The parties shall bear equally the costs of arbitration which
               amount to $44,903 each. Any excess funds on deposit shall be
               reimbursed to the paying parties in equal amounts.

          5.   Autotote shall pay Galapagos $150,000 in reimbursement fees
               incurred in the proceedings.


                                       56
<PAGE>
          6.   Awards will be offset and the net amount owed to Galapagos of
               approximately $600,000 will accrue interest at the rate of seven
               (7) percent until paid.

     As of June 12, 2002, the parties are negotiating a settlement within the
terms of the arbitration awards.

     Each entity involved in the arbitration sustains individually the
consequences of the arbiters' final award and there are no performance
guarantees by any other entity including Equus Gaming Company L.P., the parent
company.

     Costs incurred by the Company in pursuing the Arbitration with Autotote to
date total $574,042 and have been allocated to each participating entity in the
same proportion that the arbiters awarded the costs incurred by Autotote to each
entity.

     On August 18, 2001, ECMC executed a Closing Agreement (the "Agreement")
with the Municipality of Canovanas whereby ECMC settled its longstanding dispute
over the payment of the Volume of Business Tax assessed by the municipality.

     The following schedule lists the deficiencies by fiscal year with the
corresponding interest and surcharges:

              FISCAL               INTEREST
              TAX     TAX          AND
              YEAR    DEFICIENCY   SURCHARGES    TOTAL
              ------  -----------  -----------  --------

              93/94   $    74,087  $    67,913  $142,000
              96/97       120,397       68,224   188,621
              97/98       126,666       59,110   185,776
              98/99       123,366       45,233   168,599
              99/00        93,367       45,233   118,264
              00/01       116,735       19,455   136,190
                      -----------  -----------  --------

              Totals  $   654,618  $   284,832  $939,450
                      ===========  ===========  ========

     Prior to settlement, the Company had accrued as of June 30, 2001 as a
liability a total of $838,396 due for municipal taxes and other charges. On June
30, 2001, the Company recorded additional penalties and interest of $101,054.

     The terms of the Agreement are as follows:

     1.   For period August 1, 2001 through January 31, 2003, ECMC will pay the
          Municipality of Canovanas $5,000 per week.

     2.   At the end of this eighteen (18) month period, the Municipality can
          decide whether to request full payment of the remaining balance,
          $559,450, or renegotiate a final twelve (12) month payoff of said
          balance.

     3.   Should ECMC default at any time on the agreed to payment terms, the
          Municipality may declare the entire remaining balance due.


                                       57
<PAGE>
     4.   To guarantee timely payments of the amounts due, ECMC has provided to
          the Municipality two (2) payments bonds in the amount of $503,732 and
          $94,886, respectively.


          As of June 12, 2002, ECMC has fully complied with the provisions of
the Agreement.


12.  FAIR VALUE OF FINANCIAL INSTRUMENTS:

     As of December 31, 2001, and 2000, the fair value of the First Mortgage
Notes was approximately $38,117,800, and $24,504,300 respectively, (as compared
with its carrying value of $53,915,831 in 2001 and $53,667,739 in 2000) based on
the market price quoted by a brokerage firm that trades the First Mortgage
Notes. The carrying value of notes payable, capital leases and notes receivable
approximates fair value because these obligations bear interest at variable
rates. The carrying value of accounts receivable and accounts payable
approximates fair value due to the short-term maturity thereof.


13.  SEGMENT  INFORMATION:

     The Company has identified three reportable segments, based on geographical
considerations:  Puerto Rico, Dominican Republic and Colombia.  The accounting
policies of the segments are the same as those described in the summary of
accounting policies.  The Company evaluates performance based on profit or loss
before income taxes, not including nonrecurring gains and losses and foreign
exchange gains and losses.  The following presents the segment information for
the years ended December 31, 2001, 2000 and 1999 (in thousands):


                                       58
<PAGE>
<TABLE>
<CAPTION>
                                PUERTO     DOMINICAN
2001:                            RICO      REPUBLIC     COLOMBIA    PANAMA    URUGUAY     TOTAL
                               ---------  -----------  ----------  --------  ---------  ---------
<S>                            <C>        <C>          <C>         <C>       <C>        <C>
Commissions on wagering        $ 46,371   $    3,356   $   1,834   $     -   $      -   $ 51,561
Total revenues                   44,619        4,635       2,088         -          -     51,342
Financial expenses                8,961           19         375         -          -      9,355
Depreciation and amortization     3,236          414         337         -          -      3,987
Loss before income
  taxes, minority interest
  and extraordinary item        (18,671)      (1,020)     (2,124)        -          -    (21,815)
Capital improvements              1,143          308          54         -          -      1,505
Total assets                     55,251        2,233       3,123         -          -     60,607


2000:
Commissions on wagering        $ 50,972   $    3,315   $   1,560   $ 8,540   $      -   $ 64,387
Total revenues                   53,403        4,265       1,839     9,081          4     68,592
Financial expenses                9,523           33         274       638          5     10,473
Depreciation and amortization     2,951          361         324       625          -      4,261
Earnings (loss) before income
  taxes, minority interest,
  extraordinary item and                                                            -
  cumulative effect              (8,096)      (1,688)     (2,540)      112       (328)   (12,540)
Capital improvements              4,140          139      (1,168)      259          -      3,370
Total assets                     57,769        2,036       4,009    10,217      6,104     80,135


1999:
Commission on Wagering         $ 52,076   $    3,835   $   1,445   $ 9,388   $      -   $ 66,744
Total revenues                   54,681        5,316       1,646     9,682          -     71,325
Financial expenses                7,602           48         262       568          -      8,480
Depreciation and amortization     2,508          320         192       573          -      3,593
Earnings (loss) before income
  taxes, minority interest
  and extraordinary item           (641)        (694)     (1,831)     (234)         -     (3,400)
Capital improvements              8,671          183         904       356          -     10,114
Total assets                     54,792        1,842       5,120     9,189          -     70,943
</TABLE>



     Effective January 1, 1998 EEC, which is based in Puerto Rico, provides
management services to the foreign countries in connection with the operation of
the racetracks and the off-track betting system. Fees for these services
represent intersegment revenue. For the years ended December 31, 2001, 2000 and
1999, Puerto Rico recognized revenue of $172,260, $167,964 and $186,021,
respectively, attributable to Dominican Republic.


                                       59
<PAGE>
14.  QUARTERLY REPORTS
(UNAUDITED)

     The following table reflects the unaudtied quarterly results of the Company
during the years ended December 31, 2001, 2000 and 1999.

<TABLE>
<CAPTION>
                                                       ALLOCATION OF NET
                                                       (LOSSES) EARNINGS
                                                   -------------------------       BASIC AND
                        TOTAL        NET (LOSS)     GENERAL       LIMITED      DILUTED PER UNIT
QUARTER ENDED          REVENUES      EARNINGS       PARTNERS      PARTNERS      (LOSS) EARNINGS
-------------------------------------------------------------------------------------------------
<S>                 <C>             <C>            <C>         <C>            <C>

2001 FISCAL YEAR

March 31, 2001      $   17,013,957  $ (4,032,859)  $ (40,329)  $ (3,992,530)  $           (0.28)
June 30,2001            10,797,573    (5,086,908)    (50,869)    (5,036,039)              (0.35)
September 30, 2001      12,987,648    (4,406,924)    (44,069)    (4,362,855)              (0.31)
December 31, 2001       10,542,820    (7,266,994)    (72,670)    (7,194,324)              (0.51)
                    ----------------------------------------------------------------------------
                    $   50,631,229  $(20,793,685)  $(207,937)  $(20,585,748)  $           (1.45)
                    ============================================================================

2000 FISCAL YEAR

March 31, 2000      $   17,622,745  $   (640,304)  $  (6,403)  $   (633,901)  $           (0.08)
June 30, 2000           16,814,964    (2,205,665)    (22,057)    (2,183,608)              (0.26)
September 30, 2000      16,448,512    (2,960,563)    (29,606)    (2,930,957)              (0.35)
December 31, 2000       17,705,815    (6,038,438)    (60,384)    (5,978,054)              (0.70)
                    ----------------------------------------------------------------------------
                    $   68,592,036  $(11,844,970)  $(118,450)  $(11,726,520)  $           (1.39)
                    ============================================================================

1999 FISCAL YEAR

March 31, 1999      $   18,985,686  $    579,958   $   5,800   $    574,158   $            0.10
June 30, 1999           16,691,717      (489,878)     (4,899)      (484,979)              (0.06)
September 30, 1999      17,258,051      (428,015)     (4,280)      (423,735)              (0.05)
December 31, 1999       18,389,135    (2,752,462)    (27,525)    (2,724,937)              (0.38)
                    ----------------------------------------------------------------------------
                    $   71,324,589  $ (3,090,397)  $ (30,904)  $ (3,059,493)  $           (0.39)
                    ============================================================================
</TABLE>

ITEM  9.  CHANGES  IN  AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
          FINANCIAL  DISCLOSURE


     Not  applicable.

                                    PART III


ITEM  10.  DIRECTORS  AND  EXECUTIVE  OFFICERS  OF  THE  COMPANY  AND  EMC

MANAGING  PARTNER  OF  THE  COMPANY

     Equus Management Company ("EMC") is the managing general partner of the
Company and, as such, has full and exclusive responsibility and authority to
manage the Company, including declaring and authorizing cash distributions,


                                       60
<PAGE>
making employment decisions, determining executive compensation and making
investment decisions and other decisions normally made by executive officers and
directors of a corporation.

     EMC does not engage in any activities other than managing the business of
the Company.  EMC is governed by its Board of Directors, which currently
consists of eight persons.  Directors will be elected in the future either by
Interstate Business Corporation ("IBC"), as the parent company of EMC, or by the
directors then holding office subject to certain limitations, including that at
least two of the directors be independent of the Company, IBC and Interstate
General Company L.P. ("IGC").  Thus, Unitholders do not have the power to elect
EMC's directors.  The officers of EMC are elected by its Board of Directors.
All officers of EMC are employees of Equus Entertainment Corporation ("EEC"), a
wholly owned subsidiary of the Company.

     At present, two of EMC's directors are directors and officers of IGC's
managing general partner and two of EMC's directors are directors and officers
of IBC.  Also, one EMC's director is a trustee of American Community Property
Trust ("ACPT").  The adult children of James J. and Barbara A. Wilson own
approximately 99.4% of IBC and 100% of The Wilson Family Limited Partnership
("WFLP") and 100% of Wilson Securities Corporation ("WSC").  The Wilson family
and companies controlled by them, including IBC, WFLP and WSC hold approximately
a 77% interest in the Company, a 54.25% interest in IGC and a 50.89% interest in
ACPT.

DIRECTORS AND EXECUTIVE OFFICERS OF THE COMPANY AND EMC

     The table below sets forth the name, age and positions with the Company and
EMC of each director and executive officer of EMC and each executive officer of
the Company.

<TABLE>
<CAPTION>
NAME                          AGE  POSITIONS WITH THE COMPANY AND EMC
----------------------------  ---  ----------------------------------
<S>                           <C>  <C>
James J. Wilson                69  Co-Chairman and Director of EMC Director of EMC

Thomas B. Wilson               40  Co-Chairman, President and Chief Executive
                                   Officer; Director of EMC

Juan M. Rivera-Gonzalez        54  Vice Chairman and Director of EMC

Donald J. Kevane               71  Director of EMC

Alberto M. Paracchini          70  Director of EMC

Barbara A. Wilson              65  Director and Secretary of EMC

Mary Pat Wilson                38  Director of EMC

Charles Cuprill                58  Director of EMC
</TABLE>


RELATIONSHIPS.   James J. Wilson and Barbara A. Wilson are the parents of Thomas
B.  Wilson  and  Mary  Pat  Wilson.

Certain  additional information concerning the above persons is set forth below.

James J. Wilson was Chairman and President of EMC from its formation in 1994
---------------
until February 1996 when he resigned.  He was reelected Chairman of the Board of
Directors of EMC in October 1998.  He has been Chairman of the Board and Chief
Executive Officer of the general partner of IGC, since 1986.  He is the founder


                                       61
<PAGE>
of IGC and has been Chief Executive Officer of IGC and its predecessors since
1957.  He is the founder of IBC and its predecessors.

Thomas B. Wilson has been President and Chief Executive Officer of EMC and the
----------------
Company since January 1998 and Director of EMC since February 1998.  He has been
a Director of IGMC since December 1995 a Director of IBC since 1994 and a Vice
President of IBC since September 1994.  From 1994 to December 1997 he was
President of El Comandante Operating Company, Inc. ("ECOC").

Juan M. Rivera-Gonzalez was Executive Vice President and Chief Operating Officer
-----------------------
of EMC and the Company since January 1998 and Director of EMC since February
1998, until he resigned in September 1999 to practice law and serve as legal
counsel of the Company.   From January 1996 to December 1997 he was Executive
Vice President of the Company.  From September 1995 to December 1995 he served
as Vice President of the Company and was also Vice President of IGC from 1994 to
April 1996.  From April 1991 to December 1993 he was President and General
Manager of ECOC.    As of October 15, 2001 he is serving as President and CEO of
El Comandante Management Company LLC.

Donald J. Kevane has been a Director of EMC since its formation in 1994.  He is
----------------
a Certified Public Accountant and Senior Partner in the Puerto Rico accounting
firm of Kevane Soto Pasarell Grant Thornton,  which he founded in 1975.  He is
also a director since 1990 of Venture Capital Fund, Inc., a Puerto Rico-based
venture capital firm and a director since 1992 of the Autoridad de Energia
Electrica (the Puerto Rico Electric Power Authority), and, since 1975, a
director of GM Group, Inc., a wholly owned subsidiary of Banco Popular de Puerto
Rico.

Alberto M. Paracchini has been a Director of EMC since its formation in 1994.
---------------------
He has been a director of BanPonce Corporation, now Popular Inc., and Banco
Popular de Puerto Rico since January 1991, and was Chairman of the Board from
January 1991 to April 1993.   He is Vice Chairman of the Board of Puerto Rican
Cement Company, Inc. and a director of Venture Capital Fund, Inc., a Puerto
Rico-based venture capital firm.

Barbara A. Wilson has been a Director of EMC since January 1996 and Secretary of
-----------------
EMC since August 1996. She served as Director of IGMC from December 1995 to
1996.   She has been a Director of IBC since 1987, Chairman of the Board since
March 1996, Secretary since 1990 and Treasurer since 1993.

Mary Pat Wilson has been a Director of EMC since March 2000. She is the Managing
---------------
Director of Dresden Farm and is also on the Board of Trustees of Hill School in
Virginia and is Director of the Virginia Thoroughbred Association ("VTA").

Charles A. Cuprill has been a Director of EMC since December 1999.  Mr. Cuprill
------------------
has been practicing civil law in Puerto Rico since 1972.


ITEM  11.   EXECUTIVE  COMPENSATION

SUMMARY  COMPENSATION  TABLE.  The  following  table  sets  forth  the aggregate
compensation  with  respect to the Chief Executive Officer and each of the other
two  most  highly  compensated  executive  officers  of the Company during 2001,
employed  by  its  wholly  owned  subsidiary  EEC  effective  January  1,  1998.


                                       62
<PAGE>
<TABLE>
<CAPTION>
                                                                                LONG-TERM
                                                                              COMPENSATION
                                                     ANNUAL COMPENSATION         AWARDS
                                                   --------------------------  SECURITIES
                                                      OTHER       UNDERLYING    ALL OTHER
                                                      ANNUAL       OPTIONS/      COMPEN-
NAME AND PRINCIPAL           SALARY        BONUS   COMPENSATION      SAR'S       SATION
POSITION              YEAR    ($)           ($)         ($)         (#) (1)      ($)(2)
--------------------  ----  --------       ------  -------------  -----------  ----------
<S>                   <C>   <C>            <C>     <C>            <C>          <C>
Thomas B. Wilson      2001   258,727            -              -           -           -
  President and CEO   2000   258,727            -              -           -       9,752
                      1999   249,800  (3)       -              -           -       9,527

Hernan G. Welch (4)   2001   131,614  (4)       -              -           -           -
  Executive Vice      2000   205,204            -              -           -           -
  President-Finance   1999    89,530            -              -           -           -
  and Administration

Gretchen Gronau (5)   2001         -            -              -           -           -
  VicePresident       2000    70,237            -              -           -       2,912
  and CFO             1999   130,400            -              -           -       7,354

<FN>
     (1)  Represents Unit Appreciation Rights assumed by the Company, as
          discussed below.

     (2)  Reflects contributions to Retirement Plan discussed below.

     (3)  During 1998 a subsidiary of IGC engaged in the development of solid
          waste treatment facilities reimbursed the Company approximately
          $46,800 for actual payroll costs attributed to time spent by Mr.
          Wilson on waste technology matters.

     (4)  Mr. Welch was hired as an executive of the Company effective July 1999
          with an annual base salary of $200,000. He left the Company on
          February, 2001. His salary includes payment of accrued, unpaid
          vacation as of June 30, 2001.

     (5)  Ms. Gretchen Gronau was an employee of the Company through April 30,
          2000. Her salary includes payment of accrued, unpaid vacation as of
          April 30, 2000.
</TABLE>

     RETIREMENT  PLAN.  In 1998, the Company established its own retirement plan
for  employees  of  its subsidiary EEC. Employees are eligible to participate in
the  retirement  plan  when  they  have completed a minimum employment period of
1,000  hours.  The Retirement Plan is a defined contribution plan which provides
for  contributions  by  the  Company  for  the accounts of eligible employees in
amounts  equal to 4% of base salaries and wages not in excess of the U.S. Social
Security  taxable  wage  base,  and  8%  of  salaries (limited to $160,000) that
exceeded  that  wage  base.  Eligible  employees  may  also  make  voluntary
contributions  to their accounts and self direct the investment of their account
balances  in  various  investment funds offered under the plan. Contributions to
the Retirement Plan amounted to $26,027 in 2001. Prior to October 5, 1998, EEC's
employees  participated  in  IGC's  retirement  plan.

     DIRECTORS.  Directors of EMC who are not employees of the Company or any of
its  subsidiaries  receive directors' fees established by the Board of Directors
of  EMC. These Directors are compensated at a rate of $3,750 per quarter, $1,000
per  meeting  and  out-of-pocket  expenses for meetings. In 2001, the directors'
fees  totaled  $124,800 of which $54,600 was unpaid as of December 31, 2001. Mr.
James  Wilson  does not receive director's fees; instead, the Company pays a fee
to  IGC  who,  in  turn,  pays  Mr.  Wilson's  compensation.


                                       63
<PAGE>
     UNIT  APPRECIATION  RIGHTS.  As of December 31, 1999, there are 10,000 Unit
Appreciation  Rights  ("UAR")  outstanding corresponding to one executive, fully
vested  and  exercisable, which will expire on October 18, 2004. The UAR entitle
the  holder  to  receive, upon exercise, an amount payable in cash, Units of the
Company,  securities  in  another  company  or  some  combination  thereof,  as
determined  by  EMC's  Board  of Directors. The amount received upon exercise is
based on the excess of the fair market value of the UAR over a fixed base price.
During  2001,  there  were no UAR exercised or granted. As of December 31, 2001,
the  unexercised  in-the-money  UAR had no value. The Company intends to adopt a
Share  Incentive  Plan  to  provide  for  unit-based  incentive compensation for
officers,  Key  employees  and  Directors.


ITEM  12.  SECURITY  OWNERSHIP  OF  CERTAIN  UNITHOLDERS  AND  MANAGEMENT

     The following table sets forth certain information regarding the Units that
are  beneficially  owned  as  of  June  12,  2002 (i) by each director of EMC or
executive  officer  of  EMC  or  the  Company,  (ii) by all directors of EMC and
executive  officers  of EMC or the Company, as a group, and (iii) by each person
who  is  known  by  EMC  or  the Company to beneficially own more than 5% of the
outstanding  Units  of  the  Company.  Except  where  noted, the address for the
beneficial  owner  is  Doral  Building, 7th Floor, 650 Munoz Rivera Avenue, Hato
Rey,  PR  00918.

                                                    BENEFICIAL OWNERSHIP (1)
                                                    ------------------------
                                                      NUMBER OF
NAME OF BENEFICIAL OWNERSHIP                            UNITS    PERCENT
----------------------------------------------------  ---------  --------
MANAGEMENT AND DIRECTORS
  Barbara A. Wilson(2)                                       50     0.00%
  Kevin Wilson(2)                                        86,397     0.60%
  Thomas B. Wilson(2)                                    86,397     0.60%
  Donald J. Kevane                                        1,000     0.01%
  Alberto Paracchini                                     25,000     0.17%
  Charles A. Cupril                                      10,000     0.07%


  All executive officers of EMC and the
  Company and directors of EMC,
  as a group (7 persons)                                208,844     1.45%

OTHER UNITHOLDERS
  The Wilson Family Limited Partnership ("WFLP")(2)
  222  Smallwood Village Center
  St. Charles, Maryland  20602                        5,093,088    35.41%

  Wilson Security Corporation ("WCS")(3)
  222  Smallwood Village Center                       6,000,000    41.71%
  St. Charles, Maryland  20602


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     (1)  The beneficial ownership of Units was determined on the basis of Units
          directly and indirectly owned by executive officers and directors of
          EMC and Units to be issued under options that are exercisable within
          the next 60 days.

     (2)  WFLP is owned by the adult children of James J. and Barbara A. Wilson,
          including Kevin Wilson and Thomas Wilson. However, because neither
          Kevin Wilson nor Thomas Wilson is a general partner in WFLP, the Units
          of the Company owned by WFLP are not considered beneficially owned by
          them.

     (3)  WSC is owned by the Wilson Family, the members of the Board of
          Directors have the power to control or vote all the shares, but each
          member can not do it unilaterally, without the consent of the other
          members, therefore none of the units owned by such corporation can be
          attributed to a single director.

ITEM  13.  CERTAIN  RELATIONSHIPS  AND  RELATED  TRANSACTIONS

     The information responding to this item appears in Note 10 to the Company's
consolidated  financial  statements  included  in  Item  8  of  this  report.


ITEM  14.  EXHIBITS,  FINANCIAL  STATEMENT  SCHEDULES  AND  REPORTS  ON  FORM 8K

INDEX TO FINANCIAL STATEMENTS.

     (i)  Financial Statements (included in Item 8)

          Equus Gaming Company L.P.
               Consolidated Statements of Operations for the years
                    ended December 31, 2001, 2000 and 1999
               Consolidated Statements of Comprehensive Income (Loss) for the
               years
                    ended December 31, 2001, 2000 and
               Consolidated Balance Sheets as of December 31, 2001 and 2000
               Consolidated Statements of Changes in Partners' Deficit for
                    each of the three years in the period ended December 31,
                    2001
               Consolidated Statements of Cash Flows for the years ended
                    December 31, 2001, 2000 and 1999
               Notes to Consolidated Financial Statements

EXHIBITS.

EXHIBIT
 NUMBER   EXHIBIT DESCRIPTION                               REFERENCE
--------  ----------------------------------------  ----------------------------
3.1       First Amended and Restated Limited        Exhibit 3.1 to Registration
          Partnership Agreement of Equus            Statement on Form S-11
          Gaming Company L.P. (the "Company")       No. 33-90982 of the Company
          ("Second Form S-11")


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<PAGE>
3.2       Certificate of Limited Partnership        Exhibit 3.1 to Registration
          of the Company                            Statement on Form S-11
                                                    No. 33-82750 of the Company

          ("Form S-11")

3.3       First Amendment to Certificate of         Exhibit 3.2 to Form S-11
          Limited Partnership of the Company

3.4       Second Amendment to Certificate of        Exhibit 3.3 to Form S-11
          Limited Partnership of the Company

3.5       Third Amendment to Certificate of         Exhibit 3.5 to Form S-11
          Limited Partnership of the Company

3.6       Fourth Amendment to Certificate of        Exhibit 3.6 to Annual
                                                    Report

          Limited Partnership of the Company        on Form 10-K of the Company
                                                    for the year ended December
                                                    1, 1997 ("1997 10-K")

5.1       Form of Unit Certificate                  Exhibit 5.1 to Form S-11


10.2      Indenture dated December 15, 1993,        Exhibit 5.1 to Registration
          among El Comandante Capital Corp.         Statement on Form S-5
          ("ECCC"), as Issuer, Banco Popular        yNo. 33-75285 of HDA,
          de Puerto Rico as Trustee ("Banco         ECCC and El Comandante
          Popular") and HDA as Guarantor            Operating Company, Inc.
          (the "Indenture")                         ("ECOC") ("Form S-5")

10.3      First Supplemental Indenture dated        Exhibit 10.27 to Form S-11
          December 22, 1994 to the Indenture

10.4      Second Supplemental Indenture dated       Exhibit 10.28 to Form S-11
          December 22, 1994 to the Indenture

10.7      Amended and Restated Management           Exhibit 10.6 to Form S-4
          Agreement dated December 15, 1993,
          between Interstate General Properties
          Limited Partnership S.E. ("IGP")
          and HDA

10.11     Stock Pledge Agreement dated              Exhibit 10.12 to Form S-4
          December 15, 1993, between HDA and
          Banco Popular


10.12     Pledge Agreement (Mortgage Notes)         Exhibit 10.13 to Form S-4
          dated December 15, 1993 between HDA
          and Banco Popular


                                       66
<PAGE>
10.13     Chattel Mortgage dated December           Exhibit 10.15 to Form S-4
          15, 1993, between ECOC and HDA

10.15     Assignment Agreement (General             Exhibit 10.16 to Form S-4
          Intangibles) dated December 15, 1993,
          between HDA and Banco Popular

10.16     Pledge Agreement between ECCC and         Exhibit 10.17 to Form S-4
          Banco Popular

10.17     Mortgage Note of $52,000,000 of HDA       Exhibit 10.18 to Form S-4

10.18     Mortgage Note of $26,000,000 of HDA       Exhibit 10.19 to Form S-4

10.19     Deed of Modification and Extension        Exhibit 10.20 to Form S-4
          of First Mortgage to Secure
          Additional Mortgage Note, No. 43,
          dated December 15, 1993


10.20     HDA Note in the amount of                 Exhibit 10.21 to Form S-4
          68,000,000 to ECCC dated December
          15, 1993

10.22     Consulting Agreement dated December       Exhibit 10.21 to Form S-11
          15, 1993 between ECOC and IGP


10.26     Lease Agreement dated September 28,       Exhibit 10.21 of the Annual
          1994 between the Dominican Republic       Report on Form 10-K of
          and Galapagos, S.A.("Galapagos")          HDA for the year ended
                                                    December 31, 1994 ("1994
                                                    HDA 10-K")

10.27     Founders' Agreement among                 Exhibit 10.22 to 1994
          Galapagos, HDA and Minority               HDA 10-K
          Stockholders

10.28     Management Agreement dated September      Exhibit 10.23 to 1994
          28, 1994, between Galapagos and           HDA 10-K
          ECOC

10.34     Third Supplemental Indenture dated        Exhibit 10.34 to Annual
          February 27, 1996 to the Indenture        Report on Form 10-K of the
                                                    Company for the year ended
                                                    December 31, 1995 ("1995
                                                    10-K")

10.35     Fourth Supplemental Indenture dated       Exhibit 10.35 to 1995 10-K
          February 27, 1996 to the Indenture


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<PAGE>
10.44     Assignment and Assumption of              Exhibit 10.44 to 1995
          Consulting Agreement dated April          10-K/A
          22, 1996

10.49     Closing Agreement by and among S&E,       Exhibit 10.49 to 1996 10-K
          Paxson, Equus and HDA dated January
          21, 1997

10.50     Control Transfer Agreement by and         Exhibit 10.50 to 1996 10-K
          among IBC, IGC, IGP, HDA, EMC and
          the Company dated December 31, 1996

10.51     Amendment to Control Transfer             Exhibit 10.51 to 1996 10-K
          Agreement by and among IBC, IGC,
          IGP, HDA, EMC and the Company
          dated March 25, 1997


10.52     Broadcast Agreement among S&E,            Exhibit 10.52 to 1996 10-K
          HDA and Paxson dated January
          21, 1997

10.57     Fifth Supplemental Indenture dated        Exhibit 10.2 on Quarterly
          November 14, 1997 to the Indenture        Report on Form 10-Q of the
                                                    Company for the Quarter
                                                    ended September 30, 1997

10.58     Asset Purchase and Sale Agreement         Exhibit 10.58 to 1997
          by and between El Comandante              10-K
          Management Company LLC ("ECMC") and
          ECOC dated December 19, 1997

10.59     Second Amendment to Control               Exhibit 10.59 to 1997
          Transfer Agreement by and among           10-K
          IBC, IGC, IGP, HDA, EMC and the
          Company dated December 19, 1997

10.60     Guaranty Agreement by and between         Exhibit 10.60 to 1997
          EMC and IGC dated December 30, 1997       10-K

10.61     Agreement to Retire Partnership           Exhibit 10.61 to 1997
          Interest of Interstate General            10-K
          Company, L.P. in Equus Gaming
          Company, L.P. by and among the
          Company, IGC, EMC, EMTC and HDA
          dated December 30, 1997

10.62     Ninth Amended and Restated                Exhibit 10.62 to 1997
          Partnership Agreement of HDA              10-K
          dated December 31, 1997


                                       68
<PAGE>
10.68     First Amendment to Ninth Amended          Exhibit 10.68 to Annual
          and Restated Partnership Agreement        Report on Form 10-K of the
          of HDA dated October 2, 1998              Company for the year ended
          ("1998 10-K")                             December 31, 1998

10.69     Stock Purchase Agreement dated
          as of March 1, 1999                       Exhibit 10.69 to 1998 10-K


21        Subsidiaries of the Company               Filed herewith


REPORTS ON FORM 8-K.   None


                                       69
<PAGE>
                                   SIGNATURES

Pursuant to the requirements of Section 13 or 15 (d) of the Securities and
Exchange Act of 1934, the Registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.

                                         Equus Gaming Company L.P.
                                         -------------------------
                                         (Registrant)

                                         By:  Equus Management Company
                                              Managing General Partner

July 12, 2002                               /s/  Thomas B. Wilson
-------------                               ------------------------------------
                                            Thomas B. Wilson
                                            Co-Chairman, President,
                                            Chief Executive Officer and Director


July 12, 2002                               /s/  James J. Wilson
-------------                               ------------------------------------
                                            Co-Chairman



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

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

July 12, 2002     Co-Chairman                 /s/  James J. Wilson
-------------                                 --------------------
                                              James J. Wilson

July 12, 2002     Co-Chairman, President,     /s/  Thomas B. Wilson
-------------     Chief Executive Officer     ---------------------
                  and Director                Thomas B. Wilson

July 12, 2002     Vice Chairman and Director  /s/  Juan M. Rivera
-------------                                 -------------------
                                              Juan M. Rivera

July 12, 2002      Director                   /s/  Donald J. Kevane
-------------                                 ---------------------
                                              Donald J. Kevane

July 12, 2002      Director                   /s/  Alberto M. Paracchini
-------------                                 --------------------------
                                              Alberto M. Paracchini

July 12, 2002     Director                    /s/  Charles A. Cuprill
-------------                                 -----------------------
                                              Charles A. Cuprill


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