UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                  FORM 10-K/A
                                Amendment No. 1

                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: None

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     NONE (the Company was
of Beneficial ownership of the Company's    delisted from the NASDAQ Stock
Class A limited partnership interests       Market in January 2001)
("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 [ ] No [X]

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. [X]

Indicate  by  check  mark  whether  the  registrant  is an accelerated filer (as
defined in Rule 126-2 of the Act). Yes [ ] No [X]

The  aggregate market value of Units held by non-affiliates of the registrant on
June 30, 2004 was approximately $5.6 million.

As of October 7, 2004, there were 3,087,892 Units outstanding.

Documents Incorporated By Reference: Not Applicable


<PAGE>
<TABLE>
<CAPTION>
                                TABLE OF CONTENTS

                                                                          Page
                                     PART I


<S>                                                                       <C>
ITEM 1.  BUSINESS. . . . . . . . . . . . . . . . . . . . . . . . . . . . .   1
ITEM 2.  PROPERTIES. . . . . . . . . . . . . . . . . . . . . . . . . . . .   7
ITEM 3.  LEGAL PROCEEDINGS . . . . . . . . . . . . . . . . . . . . . . . .   8
ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS . . . . . . .  11

                                    PART II

ITEM 5.  MARKET FOR REGISTRANT'S UNITS AND RELATED UNITHOLDER MATTERS. . .  11
ITEM 6.  SELECTED FINANCIAL AND OPERATING DATA . . . . . . . . . . . . . .  12
ITEM 7.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
            RESULTS OF OPERATIONS. . . . . . . . . . . . . . . . . . . . .  14
ITEM 8.  FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA . . . . . . . . . . .  24
ITEM 9.  CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING
            AND FINANCIAL DISCLOSURE . . . . . . . . . . . . . . . . . . .  24

                                    PART III

ITEM 10.  DIRECTORS AND EXECUTIVE OFFICERS OF THE COMPANY AND EMC. . . . .  25
ITEM 11.  EXECUTIVE COMPENSATION . . . . . . . . . . . . . . . . . . . . .  27
ITEM 12.  SECURITY OWNERSHIP OF CERTAIN UNITHOLDERS AND MANAGEMENT . . . .  28
ITEM 13.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS . . . . . . . . .  29

                                    PART IV

ITEM 14.  EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8K .  30
</TABLE>


<PAGE>
                                     PART I
ITEM 1.  BUSINESS

ITEM  1.1  BANKRUPTCY  OR  RECEIVERSHIP

     On October 15, 2004, three affiliates of Equus Gaming Company, L.P.(each an
"Affiliate",  and  collectively,  the  "Affiliates")  filed  separate  voluntary
petitions  under  Chapter  11  of  the  Bankruptcy  Code  in  the  United States
Bankruptcy  Court  for  the  District  of  Delaware  (the  "Court").

     The  first  Affiliate,  El  Comandante  Management  Company  LLC, filed for
Chapter  11  protection in Case No. 04-12972-PJW.  The second Affiliate, Housing
Development  Associates,  S.E.,  filed  for  Chapter  11  protection in Case No.
04-12973-PJW.  Finally,  the third Affiliate, El Comandante Capital Corporation,
filed  for  Chapter  11  protection  in  Case  No.  04-12974-PJW.

     The  Court  assumed  jurisdiction  over each Affiliate on October 15, 2004.
Each of the Affiliates will continue to manage over its assets and business as a
"debtor  in  possession"  subject  to  the  powers  and supervision of the Court
pursuant  to  Chapter  11  of  the Bankruptcy Code. No receiver, fiscal agent or
similar  officer has been appointed over the assets or operations of each of the
Affiliates.

     As  discussed in this Item 1 below, two of these Affiliates own and operate
El  Comandante  Racetrack,  which is the primary asset and source of revenues of
the  Company. The proposed reorganization of the business of these Affiliates is
summarized  in  a  press  release that was issued on October 18, 2004, providing
information  relating, among other things, to the bankruptcy filings made by the
Affiliates  on  October  15,  2004.

     The  contents  of  the  translation  into  English of the press release are
incorporated  by  reference  into  this  Item  1. A copy of the translation into
English  of the press release is attached as Exhibit 99.1 to this Annual Report.

ITEM  1.2

     The  current business description of the Company is more fully disclosed in
Note  1  of the "Notes to Consolidated Financial Statements" for the years ended
December  31,  2001,  2000,  and 1999 which is provided as an attachment to this
filing  and  is  incorporated  by  reference  into  this  Item  1.  The business
description  contained  in  this  Item  1 should be read in conjunction with the
referenced  description  in  Note  1.

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.

     Through   its   wholly   owned   subsidiary   Equus   Entertainment   Corp.
("Entertainment")  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"). El Comandante was operated prior to
this  date  by  El  Comandante  Operating  Company,  a  non-stock  corporation.

     The  Company has a 55% interest in Galapagos, S.A. ("Galapagos"), a company
organized  under  the  laws  of  the  Dominican Republic, and 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  that  expires in April 2005.

     On  October 9, 2001, Equus Entertainment de Panama was restructured whereby
the  Company  surrendered its controlling interest 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 required 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 the year 2001, which resulted in the Company
writing  off  its  entire  investment  at  December  31,  2001.

     The  Company  also  has  a  controlling 100% interest in Satellite Services
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 networks in order to increase the level of wagering revenues
through  the  Company's  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").  Equus-Comuneros  is a corporation organized under the laws
of  the  Republic  of Colombia and is a 50% owned subsidiary of the Company. 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.


                                        1
<PAGE>
     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 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. As of June 2004, there were 639
Active  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  2001  production  was  integrated  with the racetrack's operations at a
substantial  savings.  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  broadcast  through  an  agreement  with S&E Network, Inc.
("S&E").  The  Company  is  working with the development and implementation of 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
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. The current Operating License expires December 14, 2004.


                                        2
<PAGE>
     ECMC  faces  stiff  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.  Beginning in 1995 through present day ECMC has experienced declines in
wagering  each  year  due  to  the  strong competition from government sponsored
lotteries, government sponsored slot machines and casinos as well as the rise in
illegal  gambling  operations  throughout  Puerto  Rico  in  the form of illegal
"entertainment"  machines.

The  Governor  and the Legislators of Puerto Rico recognized in 2004 the need to
provide  another  means  of  revenue to save the Horse Racing Industry in Puerto
Rico.  Therefore,  Act  139 has been signed into law whereby an Electronic Video
Gaming  System (VGS) is authorized and to be established, through which a person
may  choose  among  different  gaming  options  and  place  wagers,  solely  and
exclusively  at  the  locations  where  OTB  Racing  Agents  operate.
The  OTB  Racing Agents are exclusive agents of the Racing License Holder  of El
                            ---------
Comandante Race Track  and are licensed and approved by the Racing Administrator
(position is appointed by the Governor of Puerto Rico) to accept wagers on horse
races distributed by El Comandante. There are currently 662 contracted, licensed
and approved OTB Agencies in Puerto Rico with El Comandante. There are currently
no  limits  on  the  number  or  size  of  OTB  Agencies.


     In accordance with Act 139:


          -    The  Holder  of  the  Race  Track  License,  HOUSING  DEVELOPMENT
               ASSOCIATES,  S.E.  (H.D.A.) is empowered to negotiate and execute
               contracts with the providers for the design and implementation of
               the  Electronic  Video  Gaming  System.

                    Housing Development Associates, S.E. (H.D.A.) is a 99% owned
                    subsidiary  of  Equus  Entertainment  Corporation (itself, a
                    wholly-owned  subsidiary  of  the  Company)  and  the  sole
                    licensed  owner  /  operator  of  a  horse  racetrack  (EL
                    Comandante)  in  Puerto  Rico.

          -    The  prize payout to the player shall not be less than 83% of the
               total  of  all  wagers.

          -    There  is  no  limit  in  the  law  on the number of VGS devices.

          -    The Net Revenue from Operations or "WIN" ( gross wager less prize
               payout  to  player) shall be distributed in the following manner;



                    I.   If  the  Holder of the Race Track License also owns and
                         operates  the  Electronic  Video  Gaming  System, then:


                                        3
<PAGE>
               a)   Fifteen  (15)  percent  to  the OTB Racing Agents Commission
                    Fund.  This  OTB Commission Fund would be distributed to the
                    OTB  Racing  Agents  based  upon  Regulations  yet  to  be
                    established.

               b)   Fifteen  (15)  percent to the Horse Race Purse Account. This
                    Horse  Race  Purse Account would be distributed to the Horse
                    Owners  based  upon  Regulations  yet  to  be  established.

               c)   Seventy  (70) percent shall be retained by the Holder of the
                    Race  Track  License  (H.D.A.)


          II.  If  the  Holder  of  the  Race  Track  License  contracts  with a
               third-party  to operate the Electronic Video Gaming System, then:

               a)   Fifteen  (15)  percent  to  the OTB Racing Agents Commission
                    Fund.  This  OTB Commission Fund would be distributed to the
                    OTB  Racing  Agents  based  upon  Regulations  yet  to  be
                    established.

               b)   Fifteen  (15)  percent to the Horse Race Purse Account. This
                    Horse  Race  Purse Account would be distributed to the Horse
                    Owners  based  upon  Regulations  yet  to  be  established.

               c)   Seventy  (70) percent shall be retained by the Holder of the
                    Race Track License (H.D.A.) to be split with the Operator of
                    the  Electronic Video Gaming System as based upon a contract
                    between  the  parties.

     The  Rules  and Regulations are required to be completed within ninety (90)
days  after  signing  into  law of Act 139, however an extension is currently in
place.

     As  of  the  date  of  this  filing,  the  Company had issued a Request for
Proposal  (RFP),  met  and  interviewed  with  sixteen  (16)  interested  gaming
entities,  received  four  (4) proposals and is currently negotiating with three
(3) of the entities that have provided proposals. Two (2) of these entities have
represented  that  they  would  be willing to guarantee for a period of ten (10)
years that the annual revenue to be received by the Company would be $15 million
or  the  actual  amount  of the annual debt service to service the existing bond
principal,  interest,  refinancing  fees  and  unpaid  treasury  taxes due as of
December  31,  2004,  whichever is less.  There are no guarantees that any final
deal  can  be  negotiated  with  the  parties  as  this  relies  heavily on many
conditions  which  the  government,  in  the  very  near  future, must agree and
implement.

     EMPLOYEES. ECMC had approximately 178 employees as of December 31, 2001 and
approximately 191 employees as of June 30, 2004. 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 guard 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.


                                        4
<PAGE>
     As  of  June 30, 2004, there were 52 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  January  14,  2004  and was renewed effective
February  1,  2004 for a three-year period; 77 employees performing building and
premises  maintenance  services  covered  by  a  collective bargaining agreement
between ECMC and the General Workers Union, which expired February 28, 2003, and
was  renewed  effective  November 1, 2003 for a three year period. There were 62
employees  working  in  administrative  positions  as  of  June  30,  2004

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.

     At  December  31,  2001  there  were  approximately  232  installed and 172
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.

     In  2001  through 2004, 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.

     In  2001,  Galapagos S.A. applied and received from the Government a sports
book  license.  The  license  is  an annual license and was granted for the year
2001.  However,  a  sports  book  was  not  implemented and the license expired.

     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.
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.  See  Item  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 Galapagos pick-6 wager
represents  roughly  40%  of  the  betting  handle and is significantly impacted
whenever  the  lottery jackpot is at a high level. 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.


                                        5
<PAGE>
     EMPLOYEES.  Galapagos  had  117  employees  at  December  31, 2001  and 125
employees  as of June 30, 2004.  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
approximately  150  OTB agencies. As of June 30, 2004 approximately 125 agencies
were  in  operation.  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.  During 2001, Equus-Comuneros had 135 more
operating  days  than  in  year  2000.

     The  OTB  agency  network  is  operated by ABN, a wholly owned Puerto Rican
subsidiary  of  the  Company, and 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.  As  of  June  30,  2004 approximately 125 antennas were in place.

     In  mid  2001,  ABN applied to the Government for a sports betting license,
which  if  granted could have a material impact on future earnings. ABN received
verbal  approval  from  the city of Medellin. Sports betting was not implemented
due  to  the  high  level  of  taxation.

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

     EMPLOYEES.  At  December  31, 2001 and June 30, 2004 Equus-Comuneros had 64
employees  and  53 employees, respectively. 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  the Company, will provide satellite
up-link services and satellite time (contracted through a third party). SSI will
also  lease  video  and  data  telecommunications  equipment  to  transmit  (or
simulcast)  live races between the Company's racetracks and the OTB agencies. In
addition,  SSI  will  receive a percentage of wagering handle on races simulcast
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  being  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,  the  Dominican  Republic  and  Panama.

E.   SEGMENT  INFORMATION

     Note 14 of the Company's Certified Consolidated Financial Statements, which
are  presented  as  a  separate  attachment to this filing, contains the segment
information  related  to  the  business  operations.

                                        6
<PAGE>
     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")

     ABN  is  a  wholly  owned  subsidiary  of  the  Company which installed and
operates  an  OTB  agency  system  in  Colombia that provides satellite and data
communication facilities, intending to eventually reach and penetrate all of the
major  cities  in  Colombia.  ABN installed the current system from 2001 through
March 2003, at which time it had completed the installation of all equipment and
antennas  on hand. No new equipment acquisitions have been made since that time.

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  people  and  a total capacity in excess of
          25,000  people,  including glass-enclosed, air-conditioned dining room
          with  seating  capacity  for  over  1,400  people;

     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.

     ECMC  also  owns certain race track and telecommunication equipment used in
the  operation  of El Comandante and the off-track betting system. See Note 3 to
the  Company's  consolidated  financial  statements  for  a  description  of the
encumbrance  on  El  Comandante  properties.

     V  CENTENARIO.  Galapagos  leases  V Centenario  from the government of the
Dominican  Republic. 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  people  and  total  capacity  in excess of 10,000 people,
          including  an air-conditioned dining room with seating for 400 people;

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

     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.


                                        7
<PAGE>
     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  a  grandstand  and a clubhouse with total
          seating  capacity  of  5,500  people;

     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

     AUTOTOTE

     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 is the company that currently
provides  totalizator  (betting  system)  services  to  El Comandante.

     On  July  27  and  November  21, 2001, the 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.

          As  of June 30, 2004, El Comandante has made all the required payments
          due  under  this  settlement.

     Equus Entertainment de Panama, Panama

          1.   Equus  Entertainment  de  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  Entertainment de 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 Entertainment de
          Panama  arbitration  award.

     Equus - Comuneros, Colombia

          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.


                                        8
<PAGE>
          As of June 30, 2004, Equus-Comuneros owed approximately $440,000 under
          this  settlement.  This  balance includes $250,000 for the purchase of
          all  Autotote  equipment  at  Equus-Comuneros.

Galapagos, Dominican Republic

     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.

          Subsequently,  Galapagos entered into an agreement with Autotote dated
     July  20,  2000  for  the  right (license) to utilize their software and to
     purchase  the  Autotote  equipment  for  a total of approximately $423,000,
     including  simple  interest  at  8%  per  annum.  The  agreement called for
     Galapagos to make 20 monthly payments of $21,128 each. Galapagos was unable
     to  make  the  required  payments  and  ,  therefore,  this  agreement  was
     renegotiated  and restructured beginning effective April 1, 2004. Under the
     revised  agreement,  Galapagos agreed to pay Autotote $5,000 per month from
     April  1,  2004  through March 31, 2005 for the rights (license) to operate
     the equipment and software. After March 1, 2005, the Company has the option
     to  continue  on  a  month-to-month  basis  paying the $5,000 per month and
     operating  the  equipment  and  software. Galapagos tendered in writing the
     return  of  all  the  ownership  of  the Autotote equipment and software to
     Autotote. Galapagos also gave its express consent for Autotote to negotiate
     with  anyone  concerning early termination of the Galapagos racetrack lease
     contract  which  currently  expires  April  29,  2005.



     Each  entity  involved  in  the  arbitration  sustains  individually  the
consequences  of  the  arbiters'  final  award  and,  with  the exception of one
subsequent  and related agreement entered into between El Comandante, Galapagos,
and  Autotote, there are no performance guarantees by any other entity including
Equus  Gaming  Company  L.P.,  the  parent  company. In the subsequent agreement
between  El  Comandante, Galapagos, and Autotote, the amount owed by Autotote to
Galapagos  is to be credited directly against El Comandante's outstanding trade
payables  due  to  Autotote and, simultaneously, Galapagos is to be given credit
for this same amount against its outstanding simulcast payable balance due to El
Comandante.

     Costs  incurred  by  the  Company in pursuing the Arbitration with Autotote
totalled  $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.


                                        9
<PAGE>
MUNICIPALITY OF CANOVANAS

     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:

<TABLE>
<CAPTION>
          FISCAL               INTEREST
          TAX         TAX         AND
          YEAR    DEFICIENCY   SURCHARGES    TOTAL
          ------  -----------  -----------  --------
<S>               <C>          <C>          <C>

          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       24,898   118,265
          00/01       116,735       19,455   136,190
                  -----------  -----------  --------
          Totals  $   654,618  $   284,833  $939,451
                  ===========  ===========  ========
</TABLE>

     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,
          $559,451,  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.

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

     ECMC  fully  complied with the provisions of the Agreement, accelerated its
payments,  and  paid  the  outstanding  amount  in  full  during  November 2003.

PUERTO RICO TREASURY DEPARTMENT

     The Company is required to pay to the Treasury Department of the Government
of  Puerto Rico various taxes on wagering, as described more fully in the Puerto
Rico  Internal  Revenue  Code,  within  two days of the wagers being placed. The
Company  failed to remit these tax payments for the period from October 16, 2000
to  February  7,  2001  and,  consequently, accumulated taxes that were assessed
finally  by the Treasury Department at $11,172,450. The Company and the Treasury
Department  negotiated  a  closing  agreement  (payment  plan)  that  commenced
effective  June  1,  2001.  The Company has remained in full compliance with the
terms  and conditions of this closing agreement. See Note 7(b), "Commitments and
Contingencies",  of  the  accompanying Consolidated Financial Statements [item 8
below]  for  further  details  with  respect  to  this  matter.


                                       10
<PAGE>
     OTHER LEGAL PROCEEDINGS

     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

     No  matters  were submitted to a vote of security holders during the fourth
quarter  of  the  Company's  2001  fiscal  year.

                                     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,  were listed and traded on
Nasdaq  National  Market  System  commencing  on February 7, 1995 and, effective
December 8, 1998, on NASDAQ Small Cap Market System. In January 2001 the Company
was  delisted  from  the  Nasdaq  Stock  Market.

     Subsequent  to  being delisted from the NASDAQ Stock Market, the Units have
been  traded  in the "Pink Sheets," an electronic quotation system that displays
quotes  from  broker-dealers for many over-the-counter securities. The following
table  sets  forth  (1)  for  2000,  the  high and low sales prices per Unit, as
reported  by  the  NASDAQ  Stock Market, and (2) for 2001, the high and low sale
prices  for  the Company's Units as quoted from the Pink Sheets. Management does
not  have  knowledge of the prices paid in all transactions and has not verified
the  accuracy of those prices that have been reported. Because of the lack of an
established  market  for  the  Company's Units, these prices may not reflect the
prices  at  which  the  Units  would  trade  in  an  active  market.

<TABLE>
<CAPTION>
                                Price Range Of Units
                                --------------------
                                    High       Low
                                ------------  ------
<S>                             <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  October  7, 2004, the closing sale price of Units was $1.65 as reported
on  in  the  Pink  Sheets.  As  of  October 7, 2004, there were 15,325,381 Units
outstanding  and  approximately  185  Unitholders  of  record.  Of  the  units
outstanding,  3,082,892  have  not been registered under the Securities Exchange
Act  of  1934,  and  therefore,  there  are  restrictions on whether they can be
traded.

     The  Company did not make cash distributions to unitholders in fiscal years
2000  and  2001.  The  Company has not made any cash distributions subsequent to
2001  and  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  2004.


                                       11
<PAGE>
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,
certified  by the independent audit firm Arthur Anderson LLP up to and including
the  year 2000. As a result of the disruption within Arthur Anderson LLP, caused
by  the Government Indictment, the Company engaged a new independent audit firm,
Landa  Umpierre PSC, in May, 2003. The year 2001 historical income statement and
balance  sheet  data below have been certified by the aforementioned independent
audit  firm,  Landa Umpierre PSC. 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 (NOTES 1,8) -- IN THOUSANDS (000)   PROFORMA
                                       --------------------------------------------------
                                         2001       2000       1999      1998      1997    1997 (2)
                                       ---------  ---------  --------  --------  --------  ---------
<S>                                    <C>        <C>        <C>       <C>       <C>       <C>
EARNINGS STATEMENT DATA:
-------------------------------------
Revenues:
  Commissions on wagering              $ 51,561   $ 55,846   $57,356   $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
  Other Revenues                          6,565      4,758     5,978     2,931     1,487      3,949
                                       ---------  ---------  --------  --------  --------  ---------
                                         58,126     60,772    63,880    68,972    19,914     63,549
Payments to horseowners                  25,997     28,393    28,797    25,996     2,309     29,669
Other expenses                           35,948     33,407    27,515    27,594     6,424     23,558
                                       ---------  ---------  --------  --------  --------  ---------
                                         (3,819)    (1,028)    7,568    15,382    11,181     10,322
Financial expenses                        8,257      6,913     7,911     9,109     8,735      9,013
Depreciation and amortization             4,549      4,261     3,021     3,756     2,368      3,303
Gain from sale of assets                      -          -         -         -    (4,669)    (4,669)
Loss on exchange rates                      258        187        26        23        36          -
Loss from discontinued operations         4,601        168        10         -         -          -
Impairment loss on El Comandante
  intangible                                  -          -         -     3,136         -          -
                                       ---------  ---------  --------  --------  --------  ---------
                                        (21,484)   (12,557)   (3,400)     (642)    4,711      2,675
Provision for income taxes                  239        603       742     1,110     1,028        505
Minority interest in
    (losses) earnings (4)                  (117)    (1,315)   (1,029)     (228)      878        878
Extraordinary income (loss) (5)               -          -        23       167      (326)     1,558
Cumulative effect                             -          -         -      (403)        -          -
                                       ---------  ---------  --------  --------  --------  ---------
Net (loss) earnings                    $(21,606)  $(11,845)  $(3,090)  $(1,760)  $ 2,479   $  2,850
                                       =========  =========  ========  ========  ========  =========
Net (loss) earnings per unit (6)       $  (2.31)  $  (1.39)  $ (0.39)  $ (0.28)  $  0.39   $   0.45
</TABLE>

<TABLE>
<CAPTION>
                                                          AS OF DECEMBER 31,
                                       ---------------------------------------------------
                                           HISTORICAL (NOTES 1,8)  -- IN THOUSANDS (000)
                                       ---------------------------------------------------
                                         2001       2000       1999      1998      1997
                                       ---------  ---------  --------  --------  --------
<S>                                    <C>        <C>        <C>       <C>       <C>
BALANCE SHEET SELECTED DATA:
-------------------------------------
Cash and cash equivalents              $   1,411  $   1,249  $  2,196  $ 6,537   $    501
Race tracks property and
  equipment (7)                           51,309     54,825    54,672   42,428     44,514
Deferred costs                             3,447      1,889     2,569    2,866      3,939
Receivables from ECOC (3)                      -          -         -        -      3,106
Total assets                              60,784     65,745    62,422   56,072     53,155
First Mortgage Notes                      53,875     57,584    53,834   56,194     63,681
Notes, bonds payable and
  capital lease obligations                4,118      5,784     8,878    4,800      1,876
Total liabilities                        103,077     93,130    76,891   71,265     68,124
Partners' deficit                        (42,293)   (27,385)  (14,469) (15,193)   (14,969)
</TABLE>


                                       13
<PAGE>
(1)  Effective  March  8,  1995 the Company consolidates the accounts of Housing
     Development  Associates  S.E. ("HDA") and its subsidiaries in its financial
     statements.

(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 number
     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.

(8)  In 2001, the Company surrendered its controlling interest in the Presidente
     Remon  racetrack  in  Panama  and also lost its controlling interest in the
     Maronas racetrack in Montevideo, Uruguay after the license was cancelled by
     the government and awarded to a different, unrelated operating company. The
     Company  presented  the  results  of  these  activities  as  discontinued
     operations.

(9)  Certain  reclassifications  have  been made to the prior year's (years 1997
     through  2000)  financial  statements  to  conform  them  to  the  current
     presentation.


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 racetracks 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").  In  2001,  the  Company  surrendered its
controlling  interest  in the Presidente Remon racetrack in Panama and also lost
its  controlling  interest in the Maronas racetrack in Montevideo, Uruguay after
the  license  was  cancelled  by  the  government  and  awarded  to a different,
unrelated  operating company. In 2001, the Company recorded the results of these
activities  as  discontinued  operations.  In  addition,  the  results  of these
activities  has  been  "deconsolidated"  in  the  years  prior  to  2001.


                                       14
<PAGE>
     The  following  discussion  compares:  (i)  the  consolidated  results  of
operations of the Company for 2001 with the comparable results for 2000 and (ii)
the  Company's  consolidated  results of operations for 2000 with the comparable
results for 1999, all net of the discontinued racetrack operations in Panama and
Uruguay.


THE COMPANY'S RESULTS OF OPERATIONS

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

REVENUES

     Consolidated  Revenues decreased by approximately, $2,646,000 or (4.4%), in
2001  to $58,126,000 from $60,772,000 in 2000. The majority of this decrease was
due  to  the  decreased commissions on wagering which was partially offset by an
increase  in  other  revenues,  as  described  below.

COMMISSIONS ON WAGERING

     Commissions  on wagering decreased by approximately $4,285,000 or (7.7%) in
2001  to  $51,561,000  as  compared  to  $55,846,000  in  2000.  The decrease in
commissions  was  attributable  to  the  following  operations:  El  Comandante
($4,600,000),  which  was  offset  slightly  by  the  increased  commissions
attributable  to  Colombia  of  $274,000 and Galapagos in the amount of $41,000.

     PUERTO  RICO.  Commissions  on  wagering  at  El  Comandante  decreased
approximately $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 (total
wagering/total  betting),  which  has  been  in  decline,  and  hence,  has been
generating  a  decline  in  the  racetracks'  commissions.

     El  Comandante  experienced  significant  declines in the betting handle on
Puerto Rico races as a result of the poor racing program primarily due to "short
fields".  Wagers  placed  in  Puerto  Rico  on  live  races run at El Comandante
decreased  $10,125,000.  Substantial  increases  in  the simulcasting handle and
commissions  generated  from  wagers  placed  on  races  from  the  USA  did not
compensate  for the decline in handle and commissions experienced on Puerto Rico
races.  Effective  October 22, 2001, the Racing Board cancelled its approval for
El  Comandante  to  receive  races  simulcast  from  the  USA.

     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.

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

     COLOMBIA.  Commissions  on wagering at Los Comuneros increased by $274,000,
or  17.5%,  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 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. Net revenues
from lottery services decreased $168,000, from $168,000 in 2000 to $-0- in 2001.
See  Item  3,  "Legal  Proceedings".

OTHER REVENUES

     During  2001  other  revenues  increased  by  approximately  $1,807,000, or
38.00%,  as  compared  to 2000. The increase was primarily due to an increase of
$1,631,000  in  the  Dominican  Republic  for  three non-recurring revenue items
realized  in  2001.  These  included  $966,000  due  to  Autotote  arbitration
settlement,  $332,000  for  prior  year  (1997) tax settlement, and $333,000 for
wagering  royalty  claims.

EXPENSES

     For reasons set forth below, total operating expenses during the year ended
December,  2001 increased by $145,000 or 0.2% as compared to 2000. This includes
the  net of a decrease of $2,396,000 or (8.4%) in payments to horse owners, from
$28,393,000  in  2000  to  $25,997,000  in  2001  combined  with  an increase of
$2,541,000  in  other expenses, from $33,407,000 in 2000 to $35,948,000 in 2001.
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 $2,396,000 or (8.4%) in 2001
compared  to  2000.  The  majority  of  this  decrease was due to the decline in
wagering  commissions due to the decreased level of total betting at ECMC. Total
payments  to  horse  owners  by  property  were  as  follows:

<TABLE>
<CAPTION>
                                                 Increase
                        2001         2000       (decrease)
                     -----------  -----------  ------------
<S>                  <C>          <C>          <C>
ECMC (a)             $23,186,000  $25,467,000  $ (2,281,000)
Dominican Republic     1,678,000    1,624,000        54,000
Columbia               1,133,000    1,302,000      (169,000)
                     -----------  -----------  -------------
                     $25,997,000  $28,393,000  $ (2,396,000)
                     ===========  ===========  =============
</TABLE>

(a)  A  summary  of  the  new  horse  owners  contract provisions for ECMC is as
follows:

     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 jointly agreed to:

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


                                       16
<PAGE>
     (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  day  with  no  live  races.

     (iv) In  consideration for the above items, the contract provides that 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 for a three (3) month probationary
period  commencing  July 1, 2001 and for ECMC to place three (3) simulcast races
before  the  first  live race and three (3) simulcast races after the fifth live
race  during  that  probationary  time  period.

     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,  the  contract  provided that 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 Cup, Kentucky Derby and
the  Preakness as well as the Caribbean Classic and the Confraternity Classic is
still  permitted.

     OTHER EXPENSES

     Other  expenses increased by $2,541,000 or 7.6% from $33,407,000 in 2000 to
$35,948,000  in  2001,  attributable to the new horse owners contract, increased
racetrack  security  costs  and  expenses relating to SSI and VSAT. Professional
fees  increased  $900,000  in connection with unsuccessful financing efforts and
other  continuing  legal  and  governmental  issues.  Additional  increases were
incurred  in  host  track (simulcast) fees paid, utilities costs due to rate and
usage increases, insurance expense, and TV station time. These and other general
and  administrative  costs increased partially due to the extended length of the
operating  day for ECMC during the three month probationary simulcasting period.

     FINANCIAL EXPENSES

     Financial  expenses  increased  by  $1,344,000  or 19.4%, to a new total of
approximately  $8,257,000  from  the 2000 level of $6,913,000. This increase was
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. Ultimately, the loan terms
and  conditions  offered by the lender were not acceptable to the Company and no
loan agreement was ever executed. As a result, the interest on loans and capital
leases  increased $848,000 and the Bond interest and financing expense increased
$366,000.  Bank  charges  and  all  other  financing  expense increased a net of
$130,000.

     DEPRECIATION AND AMORTIZATION

     Depreciation  and amortization increased by a net of approximately $288,000
or  6.8%,  to $4,549,000 in 2001 from $4,261,000 in 2000. This was primarily due
to: (a) an increase of $374,000 for SSI due to additional equipment acquisition,
and  (c)  combined with increases for ABN of $65,000, for the Dominican Republic
of  $53,000, and for Equus Entertainment of $42,000, and, finally, all offset by
(c)  decreases  for  HDA  of  ($131,000)  and  Colombia  ($118,000).


                                       17
<PAGE>
     OTHER LOSSES

     In  2001,  the Company incurred foreign exchange losses of $155,000 for its
operations  in  Galapagos  and $103,000 for its operations in Colombia. In 2000,
the  Company  incurred foreign exchange losses of $187,000 for its operations in
Galapagos.

PROVISION FOR INCOME TAXES

     The provision for income tax in 2001 totalling $239,000 consists of $93,000
for Equus Entertainment, $37,000 for ABN, $80,000 for Galapagos, and $29,000 for
Equus-Comuneros. The provision for income tax in 2000 totaling $603,000 consists
of  $570,000  for  Equus  Entertainment  and  $33,000  for  Equus-Comuneros.

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.

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

REVENUES

     Consolidated  Revenues decreased by approximately $3,108,000, or (4.9%), in
2000  to  $60,772,000  from  $63,880,000  in  1999.

COMMISSIONS ON WAGERING

     Commissions  on  wagering  decreased  by  $1,510,000  (2.6%)  in  2000  to
$55,846,000  as compared to $57,356,000 in 1999. The decrease in commissions was
attributable  to  the  following  operations:  El  Comandante  ($1,106,000), and
Galapagos  ($519,000),  net  of  the  increase  in  commissions  attributable to
Colombia  by  $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 2000, 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 $1,106,000
(2.1%)  from $52,077,000 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  $9,779,000.  El  Comandante experienced significant declines in the
betting  handle  on  Puerto  Rico  races as a result of the poor racing program.

     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
$519,000  (13.5%)  from  $3,834,000 in 1999 to $3,315,000 in 2000. This decrease
was  primarily  attributable to the interruption of 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>
     COLOMBIA.  Commissions  on  wagering at Los Comuneros increased by $115,000
(8.0%)  from  $1,445,000  in  1999  to  $1,560,000  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 approximately $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
filed  suit  in  Federal  Court  in  Puerto  Rico  against  Autotote. The claims
contained  within  this  suit  were included as part of the Autotote Arbitration
Settlement.  Please  refer  to  Item  3,  Legal  Proceedings  -  Autotote.

     OTHER REVENUES

     Other  revenues  decreased  by  approximately  $1,220,000  or  (20.4%),  as
compared  to  1999, from $5,978,000 in 1999 to $4,758,000 in 2000. El Comandante
card  sales  ("impresos")  and  admissions/parking income decreased by $555,000.
Also,  ECMC  rents  and  other  income  decreased by $254,000 primarily due to a
contra-income  non-recurring  net  balance  applied  in 2001. Interest and other
income  decreased  $129,000  for  Housing  Development  Associates, $275,000 for
Galapagos,  and  $120,000  for Equus Entertainment Corp., in 2001 as compared to
2000. These decreases were offset slightly by a net of $113,000 in increases for
all  companies  in  all  other  operating  revenues  combined.


     EXPENSES


     For reasons set forth below, total operating expenses during the year ended
December,  2000  increased by $5,488,000 or 9.8% compared to 1999. This includes
the  net  of  a decrease of $404,000 or (1.4%) in payments to horse owners, from
$28,797,000  in  1999  to  $28,393,000  in  2000  combined  with  an increase of
$5,892,000  or  21.4% in other expenses, from $27,515,000 in 1999 to $33,407,000
in  2000. Some of these expenses were non-recurring and are reported below under
appropriate  categories.

     PAYMENTS TO HORSE OWNERS

     Payments  of  purses  to  horseowners  decreased  $404,000  (1.4%)  in 2000
compared  to  1999  as  noted  below:

<TABLE>
<CAPTION>
                                                Increase
                        2000         1999      (decrease)
                     -----------  -----------  -----------
<S>                  <C>          <C>          <C>
ECMC (a)             $25,467,000  $26,038,000  $ (571,000
Dominican Republic     1,623,000    1,913,000    (290,000)
Columbia               1,303,000      846,000     457,000
                     -----------  -----------  -----------
                     $28,393,000  $28,797,000  $ (404,000
                     ===========  ===========  ===========
</TABLE>


                                       19
<PAGE>
     OTHER EXPENSES

     Other expenses increased by $5,892,000 or 21.4% from $27,515,000 in 1999 to
$33,407,000 in 2000, attributable to the new horse owners contract, and expenses
relating  to  SSI  and VSAT. Satellite costs increased $1,739,000, primarily for
SSI  operations  and  its  acquisition of increased time and band width with the
vendor. Professional fees increased $252,000 in connection with continuing legal
and  governmental  issues.  Additional  increases  were  incurred  in host track
(simulcast)  fees  paid,  business  travel and entertainment expenses, utilities
costs  due  to rate and usage increases, insurance expense, and TV station time.
These  and other general and administrative costs increased partially due to the
start  up  of  simulcasting in from certain USA host tracks in November of 2000.

     FINANCIAL EXPENSES

     Financial  expenses  decreased  by  $998,000  or (12.6%), to a new total of
approximately  $6,913,000  from  the  1999  level of $7,911,000. The interest on
loans  and  capital  leases  decreased  $335,000, amortization expense decreased
$640,000,  while bank charges and all other financing expense decreased a net of
$23,000.

     DEPRECIATION AND AMORTIZATION

     Depreciation  and  amortization  increased  by  a  net  of  approximately
$1,240,000  or  41.1%,  to  $4,261,000 in 2000 from $3,021,000 in 1999. This was
primarily  due  to:  (a)  an  increase in both Housing Development Associates of
$949,000  and  Colombia  of  $132,000  due  to  additional acquisitions, and (b)
combined  with  increases  for  ECMC  of  $73,000, for the Dominican Republic of
$41,000,  and  for SSI of $38,000, and, finally (c) a net increase of $7,000 for
all  other  properties  combined. The increase in Housing Development Associates
was  primarily  due  to  leasehold capital improvements at El Comandante made in
connection  with  the  reparation  of  damages suffered as a result of Hurricane
Georges.

PROVISION FOR INCOME TAXES

     The provision for income tax in 2000 totaling $603,000 consists of $570,000
for  Equus  Entertainment  and  $33,000  for  Equus-Comuneros. The provision for
income  tax  in 1999 totalling $742,000 consists of $1,208,110 for ECMC combined
with  a  credit  of  ($465,957)  for  Equus  Entertainment.

MINORITY INTEREST

     The Company's minority interest shown represents the pro-rata share of loss
allocable  to  minority partner interests in HDA, Galapagos, Equus-Panama (until
September  30,  2001)  and  Equus-Comuneros.  Because  the 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.

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.

LIQUIDITY AND CAPITAL RESOURCES

     OVERVIEW

     The Company, through its wholly owned subsidiary Equus Entertainment Corp.,
is the owner of Housing Development Associates S.E. ("HDA") and its wholly owned
subsidiary,  El  Comandante  Management  Company  LLC  ("ECMC"),  as  well  as


                                       20
<PAGE>
the  owner  of  Agency  Betting  Network,  Inc.  ("ABN"),  Satellite  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  sources  including  investment  or  cost  savings  from:

     (i)  Implementing  cost  reductions  at  all  properties.

     (ii) Expanding  simulcasting in Colombia and the Dominican Republic as well
          as  expanding  race  pools.

     (iii)  Obtaining  new  bank  financing or financing by the Wilson family or
          other  potential  investors.

     (iv) Obtaining  approval  for  and  implementation of a Video Gaming System
          (VGS)  at  the  OTB  agencies  and  at  the  racetrack.

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

     Cash  and  cash  equivalents  of  the  Company,  HDA  and  its consolidated
subsidiaries  decreased  by  approximately  $6.0 million in 2001, primarily as a
result  of  the  decrease in wagering and increased operating costs. 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.

     The  Company  received  cash  in  the amount of $3.0 million in 1999 and an
additional  $6.0  million in 2001 from the sale of common stock shares that were
purchased  by  the  Wilson  Family.  The  funds  were  primarily used in 1999 to
purchase  Galapagos and Equus-Panama from HDA, thereby providing funds to HDA to
meet  its  debt  obligations. In January, 2001, the funds were primarily used by
the  Company  to  purchase SSI and ABN from HDA thereby, providing cash in which
HDA  could  use  to  meet  its  debt  obligations.

     On  July,  13, 2001, KEMPT Corporation, a Puerto Rico , wholly owned by the
Wilson Family Securities Corporation, an entity controlled by the Wilson family,
purchased  seven  (7)  million  shares  of  Equus  Entertainment  Class  A,  12%
cumulative, preferred stock at $1.00 par value. Equus Entertainment then applied
$3.8 million to offset the advances against dividends made to the company. Equus
Entertainment  additionally  reimbursed the El Comandante group for all advances
made  by  them. Equus entertainment also purchased the inter-company receivables
of  the  El  Comandante  group  that  were due at that time from Equus affliated
companies outside the El Comandante group. This provided $7.0 million of cash to
the  company  in  which  to  operate.


                                       21
<PAGE>
     As of December 31, 2001, related party transactions amounted to $3,877,521.
These  consisted  primarily  of notes payable to entities owned primarily by the
Wilson  family.  These  loans  were  made  to Equus entities for working capital
purposes.  The notes bear interest at 1% over prime rate (5.25% and 10.50% as of
December  31,  2001 and 2000, respectfully) and do not have a definite due date.

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

     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:

     (i)  Issuance  of  Equus  Entertainment  12%,  cumulative,  non-voting,
          redeemable  preferred  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) Capital expenditures, as needed and/or required for the various racing
          operations.

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

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

     (v)  Cash  needed  to  pay  Autotote  settlement.

     INVESTMENTS IN TELECOMMUNICATIONS EQUIPMENT AND MARKET EXPANSION

     As  of  June  30, 2004, 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.

     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 was 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.
United  Tote is not in operation in any of the facilities and this loan is still
outstanding  as  of  October  2004.

     HDA's First Mortgage Notes bear interest at 11.75%, payable semiannually on
June  15  and  December  15,  and  are  secured  by  the  property comprising El
Comandante  racetrack. 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):


                                       22
<PAGE>
<TABLE>
<CAPTION>
             YEAR ENDING     NET AMOUNT
             DECEMBER 31,   (FACE VALUE)
             -------------  ------------
<S>                         <C>
             2001           $      3,454
             2002                 10,200
             2003                 40,800
                            ------------
                                  54,454
                            ============
</TABLE>

     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,  2001.

     On  December  15,  2001,  June  15, 2002, December 15, 2002, June 15, 2003,
December  15,  2003,  and  June  15, 2004 the Company failed to pay interest and
principal  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.

     The  Company  was  unable to meet the mandatory maturity dates of the First
Mortgage  Notes  set  forth above. Although the Company has had discussions with
possible  lenders,  investors,  and  possible VGS joint venture partners, 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.  Subsequently,  in  September 2003, the Company entered into a new
14-year agreement with all of its creditors collectively for a term of 14 years.
The  Company  owed  a  total  of  approximately  $4 million ($1.5 million to non
affiliated  entities  plus  $2.5  million  to  affiliated  entities).  Under the
agreement,  the  Company  does not make any payments to any of the creditors for
the  first  7 years. After that, beginning October 2010, the Company is required
to  begin  making  monthly  payments  on  this  debt,  with  each  payment being
distributed to all the creditors on a pro-rata basis. The entire debt, including
accrued  interest,  is  to be paid in full by the end of the 14-year term of the
agreement.  Interest will be accrued at variable annual rates in accordance with
the  annual  rate  established by the Colombian Government for this type of debt
and  is  expected to average to an effective rate of approximately 12% annually.

     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 racing days.  The Racing Act also apportions payments
of  monies  wagered  that  would be available as commissions to ECMC. The Racing
Board  consists of five (5) 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  the  racetrack. 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,
exclusive of late and interest assessments, from October 16, 2000 to February 7,
2001  to  the Department of the Treasury of Puerto Rico.  The Company negotiated
with  the  Puerto  Rico  tax  authorities for 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.


                                       23
<PAGE>
     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  delivered  a  check to the
          Secretary  for  $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  was  required  to  pay  $50,000  per  week against the
          October,  2000  through  January, 2001 assessment. After the six month
          period,  the  Secretary  had  the  power  to  reevaluate the financial
          condition  of  ECMC  and  upon reasonable grounds, continue, modify or
          revoke the Agreement. The agreement has been continued and is expected
          to  remain  in  effect  until  the entire debt repayment is satisfied.

     3.   ECMC  is  obligated  to pay on a timely basis the current excise taxes
          and  commissions  due  under  Puerto  Rico  law.

     4.   ECMC  is  obligated  to  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 this Agreement, the
          Secretary  may  accelerate the balance due plus any additional amounts
          due  resulting  from  the  default,  including  waived  penalties  of
          $167,000.

     As  of October 7, 2004, all terms and conditions of the Agreement have been
     met  by  ECMC,  including payment aggregating $8,800,000 through October 7,
     2004.

     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. The
Company  has  complied  with all requests for information. The investigation has
been  completed  and  the  Company  has  no  indications  of  any significant or
detrimental  findings.

     The Company was unable to remit five (5) bi-annual payments for real estate
taxes of $365,032 each for a total unpaid balance of $1,825,160. This balance is
payable  to the C.R.I.M. in Carolina, P.R. and includes penalty assessments.  As
of  October 7, 2004, the total amount due, including interest, was approximately
$2.1 million, less $850,000 paid through October 7, 2004, or approximately $1.25
million.

     Company representatives met with C.R.I.M. in their offices in the last week
of  February,  2003.  An  agreement  was  reached  as  follows:

     1.   The  Company  will remit a minimum of $10,000 per week to the C.R.I.M.
          in  payment  on  account,  effective  beginning  February  28,  2003.

     2.   If  the Company is able to secure new financing in the near future and
          is  able to pay the principal balance outstanding in its entirety, the
          C.R.I.M.  agrees to use its best efforts to provide some relief to the
          Company  with  respect  to  the  interest  and/or  penalty  charges.

     3.   When the Company finishes paying off the outstanding patente taxes due
          to  the Municipality, the Company will review its position and attempt
          to  increase  the minimum amount being paid to the C.R.I.M. each week.

     4.   ECMC  will remit future bi-annual real estate tax payments on a timely
          basis.

     As  of  October 7, 2004, the Company has fully complied with the provisions
of  the  agreement.

     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 met with the Government to settle the
amount  outstanding.  The  plan  proposed  to  the  government  is  as  follows:

     1.   Five  (5)  year  amortization of all amounts due on 10%, 15%, 20%, 25%
          and  30%  payment  basis,  annually,  respectively.

     2.   The  Government  is  requesting  a  down payment, which has been under
          negotiation  from  2001  through  the  current date, October 14, 2004.

     By  means  of  Resolution  213  of  October  31,  2001,  of  the  Colombian
Superintendency  of  Societies,  Equus  Comuneros  was  accepted  for government
supervised  restructuring  under the provisions of Colombian Law 550 of 1999.The
negotiations  with  the  creditors  of Comuneros were successful and ended in an
agreement  more fully described in the last paragraph of the section shown above
entitled  "Long  Term  Commitments". The delinquent withholding taxes due to the
Colombian  Tax and National Customs Administration are being negotiated separate
and  apart  from  the  debt  due  to  all  other  creditors.

     Equus  Comuneros has not considered it necessary to make any adjustments to
the  financial  statements  with  respect  to  it  not  being  able  to continue
operating.

FORWARD-LOOKING STATEMENT

     Certain  matters  discussed  and  statements made within this Form 10-K are
forward-looking  statements  within  the  meaning  of  the  Private  Securities
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.  Factors that may cause action
results  to differ from these implied by such forward-looking statements include
the  following:

     -    Ability of company affiliates to successfully reorganize through their
          bankruptcy proceedings
     -    Inability to make Bond debt principal and interest payments.
     -    Inability to secure adequate financing.
     -    Impact of changes in casino and lottery laws.
     -    Impact of foreign exchange rate fluctuations.


ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

     The  Company's  certified  Consolidated  Financial Statements for the years
ended  December 31, 2001, 2000, and 1999 are presented as a separate attachment.


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

     There are no such changes or disagreements.


                                       24
<PAGE>

                                    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,
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.  The Board of Directors of EMC also
serves  as  the  Board  of  Directors of the Company. The terms of directors and
officers  is  at  the  discretion  of  the  Board  of  Directors.

     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 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 the Company as of December
31,  2001.

<TABLE>
<CAPTION>
NAME                     AGE          POSITIONS WITH THE COMPANY AND EMC
-----------------------  ---  ---------------------------------------------------
<S>                      <C>  <C>

James J. Wilson           70  Co-Chairman and Director of EMC

Thomas B. Wilson          41  Co-Chairman, President and Chief Executive
                              Officer; and Acting Chief Financial Officer of EMC

Juan M. Rivera-Gonzalez   56  Vice Chairman and Director of EMC

Donald J. Kevane          71  Director of EMC

Alberto M. Paracchini     71  Director of EMC

Barbara A. Wilson         67  Director and Secretary of EMC

Mary Pat Wilson           39  Director of EMC

Charles Cuprill           59  Director of EMC
</TABLE>


                                       25
<PAGE>
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
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  [EMC?  and]  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. Since October 15, 2001 he was serving as President and
CEO  of  El  Comandante  Management  Company  LLC.  On  October  17, 2004 he was
terminated  from  his  employment  with  the  Company.

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.


                                       26
<PAGE>
ITEM 11. EXECUTIVE COMPENSATION

SUMMARY  COMPENSATION  TABLE.  The  following  table  sets  forth  the aggregate
compensation for the years indicated with respect to the Chief Executive Officer
and  the  Company's  other  executive  officer  having compensation in excess of
$100,000  for  services  during 2001, both of whom are employed by the Company's
wholly  owned  subsidiary  EEC  effective  January  1,  1998.

<TABLE>
<CAPTION>
                                              ANNUAL COMPENSATION
                                    ----------------------------------------    SECURITIES
                                                                   OTHER        UNDERLYING  ALL OTHER
                                                                   ANNUAL        OPTIONS /   COMPEN-
NAME AND PRINCIPAL                     SALARY          BONUS    COMPENSATION       SAR'S     SATION
POSITION                  YEAR           ($)            ($)          ($)            (#)      ($) (1)
--------------------  ------------  ------------  ------------  ------------  ------------  ---------
<S>                   <C>           <C>           <C>           <C>           <C>           <C>

Thomas B. Wilson              2001       258,727             -             -             -   10,384
   President and CEO          2000       258,727             -             -             -    9,752
                              1999       249,800             -             -             -    9,527

Hernan G. Welch (3)           2001       131,614            (2)            -             -        -
   Executive Vice             2000       205,204             -             -             -        -
   President - Finance        1999        89,530             -             -             -        -
   and Administration
<FN>

(1)  Reflects  contributions  to  Retirement  Plan  discussed  below.

(2)  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  2001  salary  includes
     payment  of accrued,  unpaid  vacation  as  of  June  30,  2001.
</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.  Company
contributions  to  the Retirement Plan amounted to $26,027 in 2001. In addition,
Thomas  B.  Wilson  made a personal contribution of $5,000 to the Plan. Prior to
October  5,  1998,  EEC's  employees  participated  in  IGC's  retirement  plan.


                                       27
<PAGE>
     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.

     UNIT  APPRECIATION  RIGHTS.  As of December 31, 2001, there are 10,000 Unit
Appreciation  Rights  ("UAR")  outstanding,  fully vested and exercisable, which
will  expire  on  October 18, 2004. The UAR entitles 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, none of the 10,000 UAR
have  been  granted  nor awarded to anyone and therefore, never exercised. As of
December  31,  2001,  the  unexercised  in-the-money  UAR  had no value. The UAR
expired  on  October  18,  2004  without  being  exercised.

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 September 30, 2004 (i) by each director of EMC or
executive  officer  of  EMC or the Company, and (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 each
beneficial  owner  is  Doral  Building, 7th Floor, 650 Munoz Rivera Avenue, Hato
Rey,  PR  00918.


________________________________________________________________________________

<TABLE>
<CAPTION>
                                                       BENEFICIAL OWNERSHIP (1)&(3)
                                                      -----------------------------
                                                      NUMBER AND
                                                      NATURE OF
                                                      BENEFICIAL
NAME OF BENEFICIAL OWNERS                             OWNERSHIP   PERCENT OF CLASS
----------------------------------------------------  ----------  -----------------
<S>                                                   <C>         <C>
MANAGEMENT AND DIRECTORS
  Barbara A. Wilson                                           50              0.00%
  Mary Pat Wilson                                         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%


                                       28
<PAGE>
  All executive officers and directors of EMC and
  the Company, as a group  (6 persons)                   208,844              1.45%

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

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

     (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

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"), El Monte Properties ("EMP"), and Interstate General
Company  L.P.  ("IGC") during the years ended December 31, 2001, 2000, and 1999:

<TABLE>
<CAPTION>
                                                FOR THE YEAR ENDED DECEMBER 31,
                                                -------------------------------
ENTITY                NATURE OF SERVICE            2001      2000      1999
------------  ---------------------------------  --------  --------  --------
<S>           <C>                                <C>       <C>       <C>

RENDERED BY:
    ACPT      Support agreement                  $    800  $ 52,600  $ 40,400

    ACPT      Rent office space                    14,000    42,000    42,000

    EMP       Rent office space                       ---     6,516     4,887

    EMC       Director fees                        86,200   124,800    88,800

    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
</TABLE>


                                       29
<PAGE>
BONDS AND NOTES PAYABLE AND CAPITAL LEASES

     The  Bonds, Notes Payable, and Capital Leases of the Company are more fully
disclosed  in  Notes  3  through  6  of  the  "Notes  to  Consolidated Financial
Statements"  for  the  years  ended  December  31, 2001, 2000, and 1999 which is
provided  as  a  attachment.

OTHER

     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  $414,370.

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

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

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  Balance  Sheets  as  of  December  31,  2001  and  2000
         Consolidated  Statements  of  Operations  for  the  years
           ended  December  31,  2001,  2000  and  1999
         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


                                       30
<PAGE>
<TABLE>
<CAPTION>
EXHIBITS.
 EXHIBIT                                                              INCORPORATED BY REFERENCE
 NUMBER    EXHIBIT DESCRIPTION                                        TO THE EXHIBITS INDICATED
---------  ---------------------------------------------  --------------------------------------------------
<C>        <S>                                            <C>

      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")

      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 31,
                                                            1997 ("1997 10-K")

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

     10.2  Indenture dated December 15, 1993,             Exhibit 4.1 to Registration
           among El Comandante Capital Corp.                Statement on Form S-4
           ("ECCC"), as Issuer, Banco Popular               yNo. 33-75284 of HAD,
           de Puerto Rico as Trustee ("Banco                ECCC and El Comandante
           Popular") and HAD as Guarantor                   Operating Company, Inc.
           (the "Indenture")                                ("ECOC") ("Form S-4")

     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 HAD

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


                                       31
<PAGE>
    10.12  Pledge Agreement (Mortgage Notes)              Exhibit 10.13 to Form S-4
           dated December 15, 1993 between HAD
           and Banco Popular

    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 HAD            Exhibit 10.18 to Form S-4

    10.18  Mortgage Note of $26,000,000 of HAD            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
           December 31, 1994 ("1994                         HDA for the year ended
                                                            and Galapagos, S.A.("Galapagos")
                                                            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


                                       32
<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 HAD
           dated December 30, 1997

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


                                       33
<PAGE>
    10.68  First Amendment to Ninth Amended               Exhibit 10.68 to Annual Report on
           and Restated Partnership Agreement               Form 10-K of the Company for the
           of HDA dated October 2, 1998                     year ended December 31, 1998
                                                            ("1998 10-K")

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

       31  Certification of Principal Executive Officer   Filed herewith
           and Principal Financial Officer

       32  Certification pursuant to 906 of the           Filed herewith
           Surbanes-Oxley Act of 2002

     99.1  Press Release -                                Filed herewith
           ECMC; HDA & ECCC File
           Reorganization under Chapter 11
           of Bankruptcy Act
</TABLE>


REPORTS ON FORM 8-K. None


                                       34
<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

October 14, 2004                           /s/ Thomas B. Wilson
                                           -----------------------
                                           Thomas B. Wilson
                                           Co-Chairman, President
                                           Chief Executive Officer, Acting Chief
                                           Financial Officer and Director

October 14, 2004                           /s/ James J. Wilson
                                           ----------------------
                                           Co-Chairman

Pursuant to the requirements of the Securities Exchange Act of 1934, this Annual
Report  on  Form  10-K  has  been  signed  below by the following persons in the
capacities  indicated  as  of  October  14,  2004.

TITLE                                    SIGNATURE
-----                                    ---------

Co-Chairman                              /s/ James J. Wilson
                                         ----------------------
                                         James J. Wilson

Co-Chairman, President,                  /s/Thomas B. Wilson
                                         ---------------------
Chief Executive Officer                  Thomas B. Wilson
and Director, Acting Chief
Financial Officer

Director                                 /s/ Donald J. Kevane
                                         -----------------------
                                         Donald  J. Kevane

Director                                 /s/ Alberto M. Paracchini
                                         ----------------------------
                                         Alberto M. Paracchini

Director                                 /s/ Charles A. Cuprill
                                         -------------------------
                                         Charles A. Cuprill


                                       35
<PAGE>
[GRAPHIC OMITTED]
LANDA UMPIERRE PSC
Certified Public Accountants & Consultants




                            EQUUS GAMING COMPANY L.P.

                        Consolidated Financial Statements

                        December 31, 2001, 2000 and 1999

                  (With Independent Auditors' Report Thereon)


<PAGE>
[GRAPHIC OMITTED]
LANDA UMPIERRE PSC
Certified Public
Accountants & Consultants         ----------------------------------------------
                                  PO Box 363642              TEL.:(787) 765-4644
                                  San Juan, PR 00936-3642    FAX  (787) 763-5504
                                  www.landaumpierre.com

                          INDEPENDENT AUDITORS' REPORT


To the Partners and Board of Directors of
Equus Gaming Company L.P.:

We  have  audited  the  accompanying  consolidated balance sheet of Equus Gaming
Company L.P. (the Company) as of December 31, 2001, and the related consolidated
statements  of  operations,  changes in partner's deficit and cash flows for the
year  then  ended.  These  financial  statements  are  the responsibility of the
Company's  management.  Our  responsibility  is  to  express an opinion on these
financial  statements  based  on  our  audit.  We  did  not  audit the financial
statements  of Galapagos S.A., a majority owned subsidiary of the Company, which
statements  reflect  total  assets  of  approximately  $3,700,000 (6%) and total
revenues of approximately $5,700,000 (10%) as of and for the year ended December
31,  2001. Those statements were audited by other auditors whose report has been
furnished  to us, and our opinion, insofar as it relates to the amounts included
for  Galapagos  S.A.,  is  based solely on the report of the other auditors. The
accompanying  consolidated  balance sheets, statements of operations, changes in
partner's deficit and cash flows as of and for the years ended December 31, 2000
and  1999  were  audited  by  other  auditors  who have ceased operations. Those
auditors  expressed  an  unqualified  opinion  on  those  consolidated financial
statements  in  their  report  dated  March  31,  2001, including an explanatory
paragraph  to  express  those  auditors'  substantial  doubt about the Company's
ability  to  continue  as  a  going  concern.

Except  as  discussed  in  the  following  paragraph,  we conducted our audit in
accordance  with  the standards of the Public Company Accounting Oversight Board
(United  States).  Those standards require that we plan and perform the audit to
obtain  reasonable  assurance about whether the financial statements are free of
material  misstatement.  An  audit includes examining, on a test basis, evidence
supporting  the  amounts  and  disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made  by  management,  as  well  as  evaluating  the overall financial statement
presentation.  We  believe  that  our audit and the report of the other auditors
provide  a  reasonable  basis  for  our  opinion.

We  were  unable  to  obtain from the independent auditors of Equus Comuneros, a
majority  owned subsidiary of the Company, and Agency Betting Network - Sucursal
de  Colombia, a branch of the Company, response to our inquiries regarding their
independence  under  the  requirements  of  the  American Institute of Certified
Public  Accountants and the Securities and Exchange Commission of the Government
of  the  United States of America, nor we were able to obtain response from such
auditors  regarding  their  familiarity  with accounting principles and auditing
standards  generally accepted in the United States of America for the year ended
December  31,  2001.  These  subsidiaries  reflect total assets of approximately
$5,200,000  (9%)  and total revenues of $2,100,000 (3%) for the year then ended,
respectively.


      Member firm of CPA Associates international (CPAAl) with offices in
                           principal cities worldwide


<PAGE>
[GRAPHIC OMITTED]
LANDA UMPIERRE PSC
Certified Public Accountants & Consultants

Page 2

In  our opinion, based on our audit and the report of the other auditors, except
for the effects of such adjustments, if any, as might have been determined to be
necessary  had  we been able to examine evidence regarding the accounts of Equus
Comuneros  and  Agency  Betting Network - Sucursal de Colombia, the consolidated
financial  statements  referred to in the first paragraph present fairly, in all
material  respects,  the  financial  position of Equus Gaming Company L.P. as of
December  31, 2001, and the results of its operations and its cash flows for the
year  then ended, in conformity with accounting principles generally accepted in
the  United  States  of  America,

The  accompanying  consolidated financial statements have been prepared assuming
that the Company will continue as a going concern. As discussed in Note 1 to the
consolidated  financial  statements,  the  Company  has  experienced significant
losses  from  operations  during  the  last  four  years of operations and as of
December  31,  2001  has  a  Partners'  deficit  amounting  to  approximately
$42,300,000.  The  Company  is  also  in  default  for payments of principal and
interest  on  bonds  guaranteed with property used in the main operations of the
Company (whose total balance amounts to approximately $58,200,000 as of December
31,  2001),  and  has not been able to comply with the reporting requirements of
the Securities and Exchange Commission of the Government of the United States of
America.  These  factors,  among  others  more  fully described in Note 1 to the
consolidated  financial  statements, raise substantial doubt about the Company's
ability  to  continue  as a going concern. Management's plans in regard to these
matters  are  also described in Note 1 to the consolidated financial statements.
The  accompanying  consolidated  financial  statements  do  not  include  any
adjustments  that  might  result  from  the  outcome  of  these  uncertainties.


/s/ Landa Umpierre PSC
April 24, 2004
San Juan, Puerto Rico

Stamp No 1958932 of the Puerto Rico society of CPAs was affixed to
  the record copy of this report.


<PAGE>
<TABLE>
<CAPTION>
                            EQUUS GAMING COMPANY L.P.

                          Consolidated Balance Sheets

                           December 31, 2001 and 2000


                     Assets
                                                      2001           2000
                                                  -------------  ------------
<S>                                               <C>            <C>
Cash on hand and in banks                         $    738,923     7,221,040
Restricted cash (note 2)                               671,875       216,261
                                                  -------------  ------------

      Total cash                                     1,410,798     7,437,301

Accounts receivable (note 2)                         4,076,631     4,328,918
Due from affiliates (note 6)                           378,307       358,356
Prepaid expenses and other                           3,447,488     5,490,333
Notes receivable (note 2)                              162,200     2,960,074
Property and equipment, net (notes 2 and 5)         51,308,607    59,754,751
                                                  -------------  ------------
                                                  $ 60,784,031    80,129,733
                                                  =============  ============

         Liabilities and Partners' Deficit

Bonds payable (note 3)                            $ 53,874,751    53,667,739
Notes payable (note 4)                               2,824,043    10,549,961
Accounts payable and accrued liabilities            28,288,686    27,892,023
Outstanding winning tickets and refunds (note 2)     2,948,679     1,552,128
Capital lease obligations (note 5)                   1,293,462     2,232,559
 Due to affiliates (note 6)                          3,877,521             -
Deferred income taxes (note 9)                       3,088,059     3,693,792
Preferred stock (note 10)                            6,882,037             -
Minority interest                                            -       753,288
                                                  -------------  ------------
        Total liabilities                         $103,077,238   100,341,490
                                                  -------------  ------------
Partners' Deficit:
    Minority interest (note 2)                        (284,585)            -
    Cumulative translation adjustments (note 2)       (720,892)     (245,036)
    Net capita! distributions                       (5,359,608)   (5,359,608)
    Accumulated deficit                            (35,928,122)  (14,607,113)
                                                  -------------  ------------
                                                   (42,293,207)  (20,211,757)
    Commitments and contingencies (note 7)                   -             -
                                                  -------------  ------------
                                                  $ 60,784,031    80,129,733
                                                  =============  ============
</TABLE>

See accompanying notes to consolidated financial statements.


                                       3
<PAGE>
<TABLE>
<CAPTION>
                                  EQUUS GAMING COMPANY L.P.

                            Consolidated Statements of Operations

                         Years ended December 31, 2001, 2000 and 1999


                                                          2001           2000         1999
                                                      -------------  ------------  -----------
<S>                                                   <C>            <C>           <C>
Revenues:
    Commissions on wagering (note 2)                  $ 51,560,896    55,846,307   57,356,199
    Other revenues                                       6,565,637     4,926,165    6,278,436
                                                      -------------  ------------  -----------

                                                        58,126,533    60,772,472   63,634,635
                                                      -------------  ------------  -----------

Expenses:
    Purses paid to horsemen                             25,996,921    28,393,091   28,797,409
    Salaries, wages and employee benefits                9,109,549     9,134,034    9,410,527
    Other operating costs and expenses (note 2)         26,837,170    24,272,866   18,360,619
    Depreciation and amortization                        4,549,367     4,261,472    3,561,646
    Interest expense                                     8,257,133     6,913,066    6,645,050
    Loss in foreign currency transactions (note 2)         258,355       186,561       25,701
    Minority interest (note 2)                            (116,768)   (1,314,872)  (1,029,458)
                                                      -------------  ------------  -----------
                                                        74,891,727    71,846,218   65,771,494
                                                      -------------  ------------  -----------
Loss from continuing operations before income taxes    (16,765,194)  (11,073,746)  (2,136,859)

Income taxes                                              (239,099)     (603,310)    (745,153)
                                                      -------------  ------------  -----------

Loss from continuing operations                        (17,004,293)  (11,677,056)  (2,879,012)

Loss from discontinued operations (note 12)             (4,601,301)     (167,914)    (234,065)
                                                      -------------  ------------  -----------

Net loss before extraordinary item                     (21,605,594)  (11,844,970)  (3,113,077)
Extraordinary item-discount on early
  redemption of bonds payable                                    -             -       22,680
                                                      -------------  ------------  -----------

Net loss                                              $(21,605,594)  (11,844,970)  (3,090,397)
                                                      =============  ============  ===========

Weighted average units outstanding                       9,325,381     8,505,398    7,796,191
                                                      =============  ============  ===========
Basic and diluted per unit amounts;
  Loss from continuing operations                     $      (1.83)        (1.37)       (0.37)
  Loss from discontinued operations                          (0.49)        (0.02)       (0.03)
                                                      -------------  ------------  -----------

    Net loss per unit                                 $      (2.32)        (1.39)       (0.40)
                                                      =============  ============  ===========
</TABLE>

See accompanying notes to consolidated financial statements.


                                       4
<PAGE>
<TABLE>
<CAPTION>
                            EQUUS GAMING COMPANY L.P.

                  Consolidated Statements of Partners' Deficit

                  Years ended December 31, 2001, 2000 and 1999


                                                General       Limited
                                                Partners      Partners       Total
                                              ------------  ------------  ------------
<S>                                           <C>           <C>           <C>
Balance as of 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 distributions to minority partners of
    Housing Development Associates                      -       (20,368)      (20,368)
  Issuance of units, net of costs                       -     2,945,029     2,945,029
                                              ------------  ------------  ------------

Balance as of December 31, 1999                  (781,879)  (14,003,414)  (14,785,293)
                                              ------------  ------------  ------------

  Net loss for the year                          (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
                                              ------------  ------------  ------------

Balance as of December 31, 2000                  (896,144)  (19,315,613)  (20,211,757)
                                              ------------  ------------  ------------

  Net loss for the year                          (216,056)  (21,389,538)  (21,605,594)
  Currency translation adjustments                 (4,759)     (471,097)     (475,856)
                                              ------------  ------------  ------------

Balance as of December 31, 2001               $(1,116,959)  (41,176,248)  (42,293,207)
                                              ------------  ------------  ------------
</TABLE>

See accompanying notes to consolidated financial statements.


                                       5
<PAGE>
<TABLE>
<CAPTION>
                                             EQUUS GAMING COMPANY L.P.

                                       Consolidated Statements of Cash Flows

                                          December 31, 2001, 2000 and 1999



                                                                           2001           2000          1999
                                                                       -------------  ------------  ------------
<S>                                                                    <C>            <C>           <C>
Cash flows from operating activities of
  continuing operations:
  Net loss                                                             $(21,605,594)  (11,844,970)  (3,090,397}
  Loss from discontinued operations                                       4,601,301       167,914       234,065
  Extraordinary item                                                              -             -       (22,680)
                                                                       -------------  ------------  ------------

  Net loss from continuing operations                                   (17,004,293)  (11,677,056)   (2,879,012)
    Adjustments to reconcile net loss from
      continuing operations to net cash provided by/
      (used in) operating activities:
        Depreciation and amortization                                     4,170,006     5,015,350     4,296,160
        Deferred taxes                                                     (605,733)      620,094       537,261
        Minority interest                                                  (753,288)   (1,314,872)   (1,029,458)
        Gain in safe of assets                                                    -      (179,500)
        Foreign currency translation adjustments                           (475,856)       11,855       (28,920)
        Changes in assets and liabilities:
          Decrease/(increase) in accounts receivable                        252,286    (2,914,678)     (206,749)
          Increase in due from affiliates                                  (219,951)
          Decrease/( increase) in prepaid expenses and other              2,042,845      (946,811)      356,892
          Increase in accounts payable
            and accrued liabilities                                         396,664    18,378,234     1,658,363
          Increase in outstanding winning tickets and refunds             1,396,551       421,739       610,905
          Increase in due to affiliates                                   3,877,521             .             -
                                                                       -------------  ------------  ------------

            Total adjustments                                            10,081,045    19,091,411     6,194,454
                                                                       -------------  ------------  ------------

            Net cash provided by/(used in) operating activities          (6,923,248)    7,414,355     3,315,442
                                                                       -------------  ------------  ------------

Cash flows from investing activities:
  Net receipts from notes receivable                                      2,797,874                     201,612
  Payment of financing costs                                                      -             -      (389,544)
  Additions to property and equipment                                      (118,151)   (3,370,752)  (10,113,509)
                                                                       -------------  ------------  ------------

            Net cash (used in)/provided by
              investing activities                                        2,679,723    (3,370,752)  (10,301,441)
                                                                       -------------  ------------  ------------

Cash flows from financing activities:
  Redemption of bonds payable and other financing payments                        -             -    (3,308,899)
  Net proceeds/(payments) of notes payable                               (7,725,918)    3,401,732     6,515,000
  Proceeds from issuance of preferred stock                               6,882,037             -             -
  Proceeds from issuance of partnership units and other contributions             -     6,000,000     3,083,743
  Payments of capital lease obligations                                    (939,097)   (6,796,499)   (3,612,813)
  Capital distributions                                                           -    (1,519,468)      (20,366)
                                                                       -------------  ------------  ------------

            Net cash (used in)/provided by financing activities          (1,782,978)    1,085,765     2,656,665
                                                                       -------------  ------------  ------------

Net increase/(decrease) in cash                                          (6,026,503)    5,129,368    (4,329,334)

Cash at beginning of year                                                 7,437,301     2,307,933     6,637,267
                                                                       -------------  ------------  ------------

Cash at end of year                                                    $  1,410,798    7,437,301_     2,307,933
                                                                       =============  ============  ============

Supplemental Disclosure of Cash Flow Information:
  Interest paid                                                        $  8,500,033     5,399,672     8,572,220
                                                                       =============  ============  ============
</TABLE>

See accompanying notes to consolidated financial statements.


                                       6
<PAGE>
                            EQUUS GAMING COMPANY L.P.

                   Notes to Consolidated Financial Statements

                        December 31, 2001, 2000 and 1999



(1)  ORGANIZATION, LIQUIDITY AND CAPITAL RESOURCES

     Equus  Gaming  Company L.P. (the Company) is a Virginia Limited Partnership
     organized  on  December  16,  1997  as  permitted  by the State of Virginia
     Revised  Uniform  Limited  Partnership  Act.  The  Partnership's activities
     encompass  mainly the management of horse racetracks in the Caribbean basin
     and other Latin American countries, together with their respective on-track
     and  off-track betting systems and related communication links. The primary
     source  of income of the Company is related to the management and operation
     of  the  El  Comandante  racetrack  located  at Canovanas, Puerto Rico. The
     Company  is  the  sole  owner  of  Equus Entertainment Corp., a corporation
     organized under the laws of the Commonwealth of Puerto Rico, which controls
     operations  of  the  racetrack  through  its  99%  ownership  of  Housing
     Development  Associates  SE  (HDA).  HDA is the sole owner of El Comandante
     Management  Company  LLC  (a Delaware Limited Liability Corporation and the
     entity  that  operates the racetrack) and of the land and related racetrack
     properties.

     El  Comandante  is  the  only  thoroughbred  racetrack  in  Puerto Rico and
     operates  on  a  year-round  schedule  basis.  The  operation  includes the
     administration  and  management of an on-track and off-track betting system
     that has approximately 600 off-track betting agencies throughout the island
     of  Puerto  Rico. These agencies provide the betting public with live video
     images  of the races held at the racetrack and are connected to the betting
     operating  system  at the racetrack to accept pari-mutuel and other wagers.

     The Company also has a 55% interest in Galapagos S.A. (Galapagos), which is
     the  operator  since  1995  of  the V Centenario Racetrack in the Dominican
     Republic,  and  a controlling 50% interest in Equus Comuneros, which is the
     operator  of  the  Los  Comuneros  racetrack  in Colombia, The Company also
     manages the agency betting operation in Colombia through the branch in that
     country  of  Agency  Betting  Network  (ABN),  a  wholly-owned  corporation
     organized  under the laws of the Commonwealth of Puerto Rico to install and
     operate  betting  operations.

     The  Company  held  controlling  interests  in  entities  that operated the
     Presidente  Remon  racetrack  in  Panama  and  the  Maronas  racetrack  in
     Montevideo,  Uruguay.  The  Panama  operation was surrendered in September,
     2001  as  part  of  a  reorganization  of  the racetrack operations and the
     Uruguay  operation  was  liquidated  in  March,  2001 after the license was
     canceled  by the government and awarded to a different, unrelated operating
     company.  The  Company  recorded  the  results  of  these  activities  as
     discontinued  operations  in  the  accompanying  financial  statements.

     The  Company  also  offers  satellite  up-link  services  to  some  of  its
     subsidiaries  through  Satellite  Services  International,  Inc.  (SSI),  a
     wholly-owned  subsidiary  organized  under


                                       7
<PAGE>
                            EQUUS GAMING COMPANY L.P.

                   Notes to Consolidated Financial Statements

                        December 31, 2001, 2000 and 1999


     the  laws  of the Commonwealth of Puerto Rico. SSI also provides leasing of
     video  and data telecommunication equipment to transmit live races from and
     to  the  racetrack  operations.  As  part  of  these  services, the Company
     provides  simulcasting-in  and  simulcasting-out  of  the races held on the
     racetracks and in some cases, from other third party operated racetracks in
     the  United  States,

     The  Company  also  is a 100% owner of El Comandante Capital Corporation, a
     special purpose corporation organized under the laws of the Commonwealth of
     Puerto  Rico that was created to issue bonds under a first mortgage note on
     the  El  Comandante  racetrack  facilities  and  real  estate.

     Horse racing is highly regulated by the respective governments in which the
     Company  operates.  Based on these regulations, the Company has to provide,
     among  other  things, space to government personnel that oversee the racing
     operations,  reports  and  space to treasury department personnel, and also
     reports,  space  and  other  facilities  for  other  related personnel that
     supervise  all  aspects  of  horseracing  and  the management of all monies
     wagered  and  their  corresponding  payment to all entities involved in the
     racing  business.

     The  accompanying financial statements have been prepared assuming that the
     Company  will  continue  as  a going concern. However, certain matters have
     affected  the  Company's operations during the most recent past years which
     create  substantial doubt about the entity's ability to continue as a going
     concern,  as  explained  more  fully  below:

     (a)  PUERTO RICO

          The  Company has incurred significant losses from operations in Puerto
          Rico  during  the  last  four  years.  The  horse  racing industry has
          suffered  stiff  competition from other gambling games approved by the
          government  during  the  last  ten  years,  which  has  caused a sharp
          decrease in the amount of money bet on horse races during such period.
          Management  does not believe that the total amount of money bet at the
          racetrack  will  increase  unless  the  government  either changes the
          fiscal  structure  of  the  wagering  distribution  or  revises  the
          regulations  in  order  to  permit  the  Company  to  enter into other
          gambling  activities  that  could  increase  the amount of commissions
          earned  and,  thus,  increase  the financial stability of the Company.

          Due  to  the  results  of  operations  as  discussed  in  the previous
          paragraph,  the  Company  has  also been unable to satisfy payments of
          principal  and  interest  on  bonds  that  are guaranteed with a first
          mortgage  note  amounting  to $68,000,000 issued by HDA and guaranteed
          ultimately  with  the  land  and  racetrack  properties  comprising El
          Comandante  racetrack.  Payments  of  principal  and  interest  on the


                                       8
<PAGE>
                            EQUUS GAMING COMPANY L.P.

                   Notes to Consolidated Financial Statements

                        December 31, 2001, 2000 and 1999


          bonds  have  not been made since December, 2001, which is a default to
          the  bond agreement. Due to this situation, the bondholders have filed
          an  action for collection of monies and foreclosure of property at the
          United  States  District  Court  for  the District of Puerto Rico. The
          final  outcome  of  these  proceedings  cannot presently be determined
          since  they  are  in  a  preliminary  stage.

          The  Company  also did not comply with certain provisions set forth in
          the  Puerto Rico Internal Revenue Code during the period from October,
          2000  through  February,  2001.  These  provisions  establish  the
          requirement  to the Company of withholding and remitting to the Puerto
          Rico  Treasury  Department  certain  amounts  from the wagers, prizes,
          winnings  and  betting  taking  place  at  the  racetrack. The Company
          reached  an  agreement  with the Treasury Department whereas a payment
          plan  was  established  for  the  amounts  unpaid  during  the  period
          indicated  above,  plus  payment  of all current amounts due under the
          applicable  sections  of  the Code, as described above. Non-compliance
          with  this  agreement  could  adversely  affect  the operations of the
          racetrack.

     (b)  COLOMBIA

          The  Company  has  suffered  significant  losses  from  the  Colombia
          operations,  which  has resulted in the Superintendent of Partnerships
          of  Colombia  requiring  implementation  of a restructuring process in
          which  the  Company  can  either  reach  agreements  with  debtors  to
          restructure  its  debts,  or reorganize its operations and its related
          management.  If  this  process is not completed in accordance with the
          plan  submitted, then the Superintendent will force the liquidation of
          the  Colombia  operations.

          The  Colombia  operations  also  include  a  branch  of Agency Betting
          Network, which has also been unable to establish a successful business
          plan  since  all  operations  provided  by  the branch in Colombia are
          related  to Los Comuneros racetrack. The branch has experienced losses
          from  its  operations since its inception and as such, has been unable
          to  satisfy  payments  to  the  National  Tax  Authority  of  Colombia
          amounting  to  approximately  $242,000.  This  situation may force the
          government  of  Colombia to seize assets of the branch and, therefore,
          significantly  affect  its  future  operations.

     (c)  DOMINICAN REPUBLIC

          The  Company  has  also  experienced  significant  losses  since  the
          beginning  of  operations  in  the  Dominican  Republic  (V Centenario
          Racetrack),  and  management has not been able to increase the amounts
          of  wagers  placed  on  races.


                                       9
<PAGE>
                            EQUUS GAMING COMPANY L.P.

                   Notes to Consolidated Financial Statements

                        December 31, 2001, 2000 and 1999


          This situation creates concern regarding the operations of the Company
          in  that  country.

     (d)  SEC FILINGS

          The  abrupt  and  unexpected closure of Arthur Andersen's LLP offices,
          the  previous  audit firm for the Company, has negatively impacted the
          Company's  ability  to  properly  meet  the SEC filing guidelines. The
          Company  has  continued  to  file  quarterly and annual extensions and
          reports  but  these  reports  had  to  be  filed  including  unaudited
          information,  pending  engagement of a new independent audit firm. The
          entire  process  of  beating,  engaging,  and  performing the required
          audits has proved to be difficult and time consuming. The actual audit
          for  year  ended  December  31,  2001  was  further complicated by the
          Company's  inability  to  communicate  with  former  Arthur  Andersen
          personnel  to  start a smooth transition process to the new accounting
          firm.

          With  the  completion of the audited financial statements, the Company
          intends  to  file  amended  quarterly  and annual SEC reports with the
          audited  financial  information.  Any related fines, penalties, and/or
          other  remedies  that the Company and/or its management may be subject
          to  can  not  be  presently  determined.

     These  factors  raise  substantial  doubt  about  the  Company's ability to
     continue as a going concern. The racing industry has declined over the last
     few  years,  the  Company  faces  competition from other forms of legalized
     gambling  in  the  countries  in which it has operations, and it also faces
     competition from illegal gambling. The Company also needs the approval from
     the  corresponding  governmental entities to make changes in the race cards
     and  the  schedule  of  transmission  of live races, both to and from other
     racetracks,  due  to  the  racing  regulations.

     Management's  planned  actions  in  order to overcome the substantial doubt
     about  the  Company's  ability  to  continue  as  a  going  concern are the
     following:

     -    The  Company has already requested from the Puerto Rico Government the
          necessary changes in the racing regulations that would let the Company
          install  an  Electronic  Video  Gaming System. It is important to note
          that the Electronic Video Gaming System is not related to or connected
          to  the Puerto Rican Lottery in any manner. This would let the Company
          expand  its  revenue  base,  provide additional resources for both the
          racetrack  operations  and  the  horse  owners, and thus, increase the
          quality  of  races  with  the new resources available for investing in
          horses. Management also believes that the increase in horses will also
          create  additional  interest in the horse racing fans which would also
          translate  to  additional  money  bet  at  the  horse  races.


                                       10
<PAGE>
                            EQUUS GAMING COMPANY L.P.

                   Notes to Consolidated Financial Statements

                        December 31, 2001, 2000 and 1999


     -    After obtaining from the government these changes in the regulations,
          management  and  the stockholders will make either a stand-still offer
          agreement  to  the  bondholders,  whereby  their  investment  would be
          guaranteed  during  the  stand-still  period,  or  would bring another
          related  company  that  would  provide  the  necessary  resources  to
          refinance  the  debt  and  pay  back  the  old  bondholders.

     -    Management   also   contemplates   the   approval   of   additional
          presentations  of  simulcasting  races  from  selected  United  States
          racetracks,  including  during  the days there are no live races. This
          would  also  increase the amount of commissions earned by the Company,
          increasing  its  profitability  and  financial  position.


     -    Regarding Dominican Republic and Colombia operations, management is
          now  under plans to request from the government a restructuring of the
          distribution  of  money wagered, including tax amounts assessed by the
          government on wagers. After this restructuring process, there would be
          an  increase  in  the  money  distributed  to  horseowners.  It  is
          management's opinion that this will increase both the amount of horses
          and  quality  of  races,  which  in turn, would increase the amount of
          money  wagered  at  the  racetrack,

     -    The Company may also change its main operation in Puerto Rico and
          develop  the  racetrack  property  as  a  real  estate  business. This
          alternative  requires  the change in classification of the property by
          the  government  in order to obtain the permits necessary to start the
          development  phase, and also will require approval from the government
          of  moving the racetrack facilities to a new property. Therefore, this
          scenario  is  a last resource given the timeframe and approvals needed
          to  achieve  these  preliminary  steps.

     -    Management has also started a process that will lead to the complete
          filing  of  all  required reports with the SEC and expects to complete
          the  process before the end of the year 2004. As part of this process,
          management  also  will  consider  the  possibility  of  converting the
          Company  to  a  privately-owned  entity  in  order  to eliminate these
          requirements,  however, this process is in a preliminary consideration
          stage and no formal decision or management actions have taken place at
          this  point  in  time.

     There  is no assurance that management plans can be achieved. The 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.


                                       11
<PAGE>
                            EQUUS GAMING COMPANY L.P.

                   Notes to Consolidated Financial Statements

                        December 31, 2001, 2000 and 1999


(2)  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND PRACTICES

     The following is a summary of the most significant accounting policies and
     practices  followed  in  the  preparation  of  the  accompanying  financial
     statements:

     (a)  BASIS OF CONSOLIDATION

          The  accompanying  consolidated  financial  statements include all the
          accounts  of the Company and its subsidiaries, as described more fully
          in  note  1,  All  intercompany  accounts  and  transactions have been
          eliminated  in  the  preparation  of  the  accompanying  consolidated
          financial  statements.

     (b)  RESTRICTED CASH

          The Company has to maintain savings accounts to satisfy the payment of
          the  "poolpote"  wager,  as  required  by the Puerto Rico Racing Board
          Regulations.  These  accounts  must  be  interest  bearing  and  their
          balances  including interest earned thereon are restricted to payments
          of  this wager. Balances are increased by: (i) accumulated cash in the
          "poolpote",  which  is  funded  by 8% (4% before June 26, 2002) of the
          total amount played daily in the wager less commissions and taxes, and
          (ii)  a bonus dividend that consists of undistributed amounts of other
          wagers  ("breakage")  based  on  the  prizes calculation formulas. The
          balance  of  the  account  becomes payable when there is a sole Pick 6
          ticket  winner, as defined in the racing regulations. The total amount
          accumulated  is  also presented as part of outstanding winning tickets
          and  refunds  in  the  accompanying  consolidated  balance  sheets.


                                       12
<PAGE>
                            EQUUS GAMING COMPANY L.P.

                   Notes to Consolidated Financial Statements

                        December 31, 2001, 2000 and 1999


     (c)  ACCOUNTS RECEIVABLE

          Accounts receivable as of December 31, 2001 and 2000 consist of the
          following:

<TABLE>
<CAPTION>
                                         2001         2000
                                      -----------  ----------
<S>                                   <C>          <C>
Due from OTB agencies                 $1,512,242   1,906,343
Food service agreement                   294,222     194,086
Due from horseowners and jockeys         631,071     311,859
Autotote Systems, Inc.                   961,805       4,436
Due from racing industry funds           712,363           -
Other                                    484,057   2,157,424
                                      -----------  ----------
                                       4,595,760   4,574,148
Less allowance for doubtful accounts    (519,129)   (245,230)
                                      -----------  ----------
                                      $4,076,631   4,328,918
                                      ===========  ==========
</TABLE>

          Amounts  due  from  OTB  agencies  consist  of betting balances net of
          commissions  and  do not represent complete resources available to the
          Company.  The  Company  has  to make payments to both horse owners and
          fiscal  agencies  on  all  betting activity and these amounts are also
          included  in  the  balances  due  from  the  OTB  agencies.  Accounts
          receivable from the food service agreement is related to the rental of
          the  restaurant  and  bar  facilities  at the El Comandante racetrack.

          Due  from  horseowners  and  jockeys  represent  advances  made  under
          agreements  in  Dominican Republic to promote the racing activity. Due
          from  Autotote  Systems,  Inc.  represents  the  amount  pending to be
          received  under a settlement of litigation. The allowance for doubtful
          accounts  is  the  Company's  best  estimate of the amount of probable
          credit  losses  in  the  Company's  existing  accounts receivable. The
          Company  provides  for  an  estimate  of  bad  debts  and  adjusts the
          allowance  balance  at  the  end  of  each  year based on the specific
          identification of balances that present potential collection problems.
          Account balances are charged off against the allowance after all means
          of  collection  have  been exhausted and the potential for recovery is
          considered  remote.  The  Company  does not have any off-balance-sheet
          credit  exposure  related  to  its  customers.


                                       13
<PAGE>
                            EQUUS GAMING COMPANY L.P.

                   Notes to Consolidated Financial Statements

                        December 31, 2001, 2000 and 1999


          The  Company  also  has the right to request to the Puerto Rico Racing
          Administrator  reimbursement  of  past  due  balances from agencies in
          Puerto  Rico  in.  certain  cases,  as  established  in  the  racing
          regulations.  The  Administrator  has been trusted with a bank account
          funded  with  amounts assessed to agencies each racing day in order to
          provide  funds  for  this purpose. The total cash balance is available
          for  reimbursement  to  the  Company  up  to $15,000 per agency. Total
          amount  in  the  account trusted with the Administrator as of December
          31,  2001  and  2000  amounted to $408,880 and $303,555, respectively.

     (d)  NOTES RECEIVABLE

          Notes  receivable  consists  of  unsecured  short-term  loans to horse
          owners  with  fixed interest rates that range from 11% to 11.5%. These
          loans  provide financing to horse owners to purchase horses as a means
          to  improve  the  quality  of  racing.

          The current agreement between the Company and the Confederacion Hipica
          de  Puerto  Rico  (the  Confederacion),  a  horse  owners association,
          provides  that  credit lines to all members of the Confederacion, as a
          group,  will  not  exceed $2,000,000 in the aggregate and $ 100,000 to
          any single owner, nor will it lend more than 80% of the purchase price
          of  any  horse.

     (e)  PROPERTY AND EQUIPMENT

          Property  and  equipment  at December 31, 2001 and 2000 consist of the
          following:

<TABLE>
<CAPTION>
                                                    2001           2000
                                                -------------  ------------
<S>                                             <C>            <C>
Land and land improvements                      $ 18,096,418    17,336,995
Buldings and buildings improvements               41,819,904    46,946,475
Equipment and furniture                           16,330,629    17,753,880
                                                -------------  ------------
                                                  76,246,951    82,037,350
Less accumulated depreciation and amortization   (24,938,344)  (22,282,599)
                                                -------------  ------------
                                                $ 51,308,607    59,754,751
                                                =============  ============
</TABLE>

          Property  and  equipment  is  stated  at  cost  and  depreciated  on a
          straight-line  basis over the estimated useful lives of the respective
          assets,  which  vary  from  5  to  20  years, approximately. Leasehold
          improvements  are  amortized  over their estimated useful lives or the
          lease  term, whichever is shorter. Major replacements and improvements
          are  capitalized  and  depreciated  over  their  estimated  useful

                                       14
<PAGE>
                            EQUUS GAMING COMPANY L.P.

                   Notes to Consolidated Financial Statements

                        December 31, 2001, 2000 and 1999


          lives.  Repairs  and  maintenance  expenditures are charged to expense
          when  incurred.

     (f)  COMMISSIONS ON WAGERING

          The  Company  earns  commissions  on  bets  placed  on the racetracks'
          thoroughbred  horse  races  through  wagering  facilities  at both the
          racetrack  and  wagering  facilities  (known  as  Off-track  agencies)
          located at independently owned premises through the countries in which
          the  Company  does  business.  Commissions are based on percentages of
          wagers  established  by law and vary for the different types of wagers
          in  each  jurisdiction.  Similar percentages have been established for
          simulcasting  races  at  corresponding  racetracks.  Commissions  are
          recorded  as  earned,  after  the  end  of  each  racing  day.

     (g)  ADVERTISING AND MARKETING EXPENSES

          During  the  years ended December 31, 2001, 2000 and 1999, the Company
          incurred  advertising costs of approximately $318,000, $1,189,000, and
          $1,600,000,  respectively.

     (h)  INCOME TAXES

          Income  taxes  are accounted for under the asset and liability method.
          Deferred  tax assets and liabilities are recognized for the future tax
          consequences  attributable  to  differences  between  the  financial
          statement  carrying  amounts  of  existing  assets and liabilities and
          their  respective  tax  bases  and operating loss and tax credit carry
          forwards.  Deferred  tax  assets  and  liabilities  are measured using
          enacted  tax rates expected to apply to taxable income in the years in
          which  those  temporary  differences  are  expected to be recovered or
          settled. The effect on deferred tax assets and liabilities of a change
          in  tax  rates is recognized in income in the period that includes the
          enactment  date.

     (i)  IMPAIRMENT OF LONG-LIVED ASSETS

          Long-lived  assets,  such  as property and equipment, are reviewed for
          impairment  whenever  events or changes in circumstances indicate that
          the carrying amount of an asset may not be recoverable. Recoverability
          of  assets  to  be  held  and  used is measured by a comparison of the
          carrying  amount  of  an  asset  to estimated undiscounted future cash
          flows expected to be generated by the asset. If the carrying amount of
          an asset exceeds its estimated future cash flows, an impairment charge
          is  recognized by the amount by which the carrying amount of the asset
          exceeds  the  fair  value  of  the asset. Assets to be disposed of are
          reported


                                       15
<PAGE>
                            EQUUS GAMING COMPANY L.P.

                   Notes to Consolidated Financial Statements

                        December 31, 2001, 2000 and 1999


          at  the  lower of the carrying amount or fair value less costs to sell
          and  depreciation  ceases,

     (j)  RECENTLY ISSUED ACCOUNTING STANDARDS

          In  June, 2002, the Financial Accounting Standards Board (FASB) issued
          Statement  of  Financial  Accounting Standard (SFAS) #146. "Accounting
          for  Costs Associated with Exit or Disposal Activities". The Statement
          requires companies to recognize costs associated with exit or disposal
          activities  when  they  are  incurred  rather  than  at  the date of a
          commitment  to  an exit or disposal plan. Examples of costs covered by
          the  Statement  are  lease  termination  costs  and  certain  employee
          severance costs that are associated with a restructuring, discontinued
          operation,  plant  closing  or  other  exit  or  disposal  activity.

          In  October, 2002, the FASB issued SFAS #147, "Acquisitions of Certain
          Financial Institutions", which establishes new standards of accounting
          for  certain  acquisitions  of  financial institutions and establishes
          standards  for  transactions  between  two or more mutual enterprises.

          In  December,  2002,  the  FASB  issued  SFAS #148, "Interim Financial
          Reporting",  which  provides  alternative  methods of transition for a
          voluntary  change  to  the  fair  value based method of accounting for
          stock-based  employee  compensation,  and  requires more prominent and
          more  frequent disclosure in financial statements about the effects of
          stock-based  compensation.

          Also,  in  April,  2003  the  FASB  issued  SFAS  #149,  "Amendment of
          Statement  133  on Derivative Instruments and Hedging Activities", and
          in May, 2003, SFAS #150, "Accounting for Certain Financial Instruments
          with Characteristics of both Liabilities and Equity". SFAS #149 amends
          and clarifies accounting for derivative instruments, including certain
          derivative instruments embedded in other contracts. SFAS #150 improves
          the  accounting  for certain financial instruments that under previous
          guidance, issuers could account for as equity. This Statement requires
          that  those  instruments be classified as liabilities in statements of
          financial  position.

          The  FASB has also issued Interpretations #45 (November, 2002) and #46
          (January,  2003),  which  deal  with  accounting  and  disclosure
          requirements  for  guarantees,  including  indirect  guarantees  of
          indebtedness  of  others,  and  with  the  consolidation  of  variable
          interest  entities.

          None  of these new accounting standards, in management's opinion, will
          have  a  material  effect  on  the  financial  position  or results of
          operations  of  the  Company.


                                       16
<PAGE>
                            EQUUS GAMING COMPANY L.P.

                   Notes to Consolidated Financial Statements

                        December 31, 2001, 2000 and 1999


     (k)  FOREIGN CURRENCY TRANSLATION

          Assets  and  liabilities denominated in non-U.S. dollar currencies are
          translated  into  U.S.  dollar equivalents using year-end spot foreign
          exchange  rates.  Revenues and expenses are translated at amounts that
          approximate  weighted average exchange rates, with resulting gains and
          losses  included in income. The effects of translating operations with
          a  functional  currency  other  than  the  U.S. dollar are included in
          partners'  capital.  The  effects of translating transactions with the
          U.S.  dollar  as  the  functional  currency, including those in highly
          inflationary  environments,  are  included  in  other  income.

     (l)  MINORITY INTEREST

          Minority  interest  in  the accompanying balance sheets represents the
          percentage  of  ownership held by partners in Galapagos S.A. and Equus
          Comuneros  S.A.  Under  current  partnership  agreements,  the Company
          agreed  to assume all operating losses in these partnerships in excess
          of  the  initial  investment  of  the  minority  partners.  Changes in
          minority  interest  during  the  last  year  are mainly related to the
          change  in  value  of  the  currencies  in  the countries in which the
          partnerships  operate.

     (m)  USE OF ESTIMATES

          The  preparation of financial statements in conformity with accounting
          principles generally accepted in the United States of America requires
          management  to make estimates and assumptions that affect the reported
          amounts  of assets and liabilities and disclosure of contingent assets
          and  liabilities  at  the  date  of  the  financial statements and the
          reported amounts of revenues and expenses during the reporting period.
          Actual  results  could  differ  from  those  estimates,

     (n)  RECLASSIFICATWNS

          Certain  reclassifications  have  been  made  to  the  2000  and  1999
          financial  statements  to  conform  them  to the current presentation.


                                       17
<PAGE>
                            EQUUS GAMING COMPANY L.P.

                   Notes to Consolidated Financial Statements

                        December 31, 2001, 2000 and 1999


(3)  BONDS PAYABLE

     On  December  15,  1993,  the  Company issued through El Comandante Capita!
     Corp. bonds payable in the amount of $68,000,000 to finance the acquisition
     costs of the racetrack. These bonds were initially due on December 31, 2003
     and paid interest semiannually at 11.75%. Due to the financial condition of
     the  Company, no payments of principal and interest on bonds have been paid
     since  December, 2001. which constitutes an event of default under the bond
     indenture agreement. Additionally, the Partnership has made certain capital
     distributions  to  partners  that technically, also constitute instances of
     default  to  the  bond  agreement.  In  December  31,  1998,  El Comandante
     Management Company LLC purchased in the open market units of these bonds in
     the amount of $7,500,000, at a $1,000,000 discount. The unamortized portion
     of  this  investment amounts to $6,051,495 and 6,614,495 as of December 31,
     2001  and  2000,  respectively,  and  has been recorded in the accompanying
     consolidated financial statements as a debt retirement, and the discount on
     bond  retirement  has  been  netted  to  the  discount on bonds payable for
     financial  statement purposes. Based on these facts, the total consolidated
     amount  due  and  payable under the bond indenture agreement as of December
     31,  2001,  amounts  to  $54,704,817 of principal and $3,492,926 of accrued
     interest, for a total amount due of $58,197,743. The bonds are secured by a
     first  mortgage  on  the racetrack premises and by certain other collateral
     which together encompass a lien on (i) the fee interests of the Partnership
     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 the Partnership,
     including  the  capital stock of El Comandante Capital Corporation owned by
     the  Partnership.

     Based  on  the  default  status  of  the  bonds, the investors have filed a
     petition for foreclosure of the property in the United States Court for the
     District of Puerto Rico. The petition is still in its preliminary stage and
     management  is still in negotiations with the bondholders in order to reach
     a  tentative stand-still offer that would permit the Partnership re-finance
     the  bonds  or  to  make  other debt restructuring procedure. The financial
     statements  do  not  reflect  any  adjustments  regarding  these  matters.


                                       18
<PAGE>
                            EQUUS GAMING COMPANY L.P.

                   Notes to Consolidated Financial Statements

                        December 31, 2001, 2000 and 1999


     (4)  NOTES PAYABLE

          Notes  payable  as  of  December  31,  2001  and  2000  consist of the
          following:

<TABLE>
<CAPTION>
                                 2001        2000
                              ----------  ----------
<S>                           <C>         <C>
Note payable to bank          $        -   3,000,000
Unsecured bonds payable                -   4,000,000
Note payable to United Tote    2,500,000   2,500,000
Other notes payable to banks     324,043   1,049,961
                              ----------  ----------
                              $2,824,043  10,549,961
                              ==========  ==========
</TABLE>

     Note  payable  to  bank  consisted  of a refinancing of debt under the bond
     indenture  agreement  collateralized  with  the bonds purchased in the open
     market  (note  3).  This note paid interest at prime rate plus 1% (10.5% at
     December  31,  2000)  and  was  due  December  15,  2001.

     The  unsecured  bonds  payable  were  issued by Equus- Panama pursuant to a
     public  offering  with  interest payable at 11% and were due June 15, 2001.

     These two notes were paid with proceeds for the issuance of preferred stock
     to  a  related party during the year ended December 31, 2001 (see note 10).

     The  note  payable to United Tote consists of an unsecured advance received
     in connection with a pre-arrangement reached with United Tote to become the
     totalisator  service  provider  in all the racetracks owned by the Company.
     The  note  was  scheduled to be paid with a predetermined percentage of the
     total  handle  managed  at  the  racetracks and accrues interest at 3% over
     prime  rate.  The  note  was increased in 2002 by $931,956 to include other
     advances  made  for  working capital purposes during the year and is due on
     December  31, 2004. Since the Company has not been able to formally appoint
     United  Tote  as  its sole provider, no principal or interest payments have
     been  made.

     Other  notes  payable  to  banks  consist  of  unsecured  loans  made  to
     subsidiaries  from  financial  institutions  bearing interest at rates that
     fluctuate  from  7%  to  11%.


(5)  CAPITAL LEASE OBLIGATIONS

     The  Company  is obligated under capital leases covering motor vehicles and
     equipment  that  expire  at  various dates during the next three years, and
     which  are  included  within  equipment  and  furniture in the accompanying
     financial  statements.  At  December  31,


                                       19
<PAGE>
                            EQUUS GAMING COMPANY L.P.

                   Notes to Consolidated Financial Statements

                        December 31, 2001, 2000 and 1999


     2001 and 2000, the gross amount of property and equipment and related
     accumulated  amortization  recorded  under  capital leases were as follows:

<TABLE>
<CAPTION>
                                   2001         2000
                               ------------  ----------
<S>                            <C>           <C>
Motor vehicles                 $   579,779     658,397
Equipment                        1,911,353   1,911,353
                               ------------  ----------
                                 2,491,132   2,569,750
Less accumulated amortization   (1,264,255)   (811,328)
                               ------------  ----------
                               $ 1,226,877   1,758,422
                               ============  ==========
</TABLE>

     Amortization of assets held under capital leases is included within
     depreciation  and  amortization  expense.

     Future minimum capital lease payments as of December 31, 2001 are:

<TABLE>
<CAPTION>
         Year ending December 31,            Amount
-----------------------------------------  -----------
<S>                                        <C>
               2002                        $  664,300
               2003                           488,232
               2004                           312,731
               2005                            13,096
                                           -----------
Total minimum lease payments                1,478,359
Less amount representing interest (rates
  vary from 6% to 11 %)                      (184,897)
                                           -----------
Capital lease obligations                  $1,293,462
                                           ===========
</TABLE>

(6)  RELATED PARTY TRANSACTIONS

     Accounts  payable to related parties is composed mainly of notes payable to
     entities under common ownership that have provided such funds for financing
     purposes.  The  notes bear interest at 1% over prime rate {5.25% and 10.50%
     as of December 31, 2001, and 2000, respectively) and do not have a definite
     due  date.


                                       20
<PAGE>
                            EQUUS GAMING COMPANY L.P.

                   Notes to Consolidated Financial Statements

                        December 31, 2001, 2000 and 1999


(7)  COMMITMENTS AND CONTINGENCIES

     (a)  HORSE OWNER'S AGREEMENTS

          The  Company  maintains horseowners agreements in the jurisdictions of
          the racetracks, which are based on the distributions of wagers between
          the  horseowners  and  the  respective  operating  company  based  on
          percentages  of  wagering  established by the horse racing regulations
          applicable  in  each  country.

          PUERTO RICO
          The  current  agreement  between  the  Company  and  the Horse Owner's
          Association  (the Association) covers a period from July, 2000 through
          July,  2010.  The  agreement provides for the distribution on an equal
          basis  (50%)  of  the  commissions  on wagering earned by the Company,

          In  the  event  that  the  horse  owner's  share is less than the base
          minimum  of  $25,032,256 established in the contract, the Company will
          contribute  to  the  Association the amount of $1,000,000 reduced on a
          dollar for dollar basis for the excess of the horse owners' share over
          the  base  minimum.  Pursuant  to  the agreement, the Company was also
          required  to  pay  50%  of the Association's long-term debt (including
          interest) outstanding as of June 30, 2000, which amounted to $582,314.

          Consequently,  the Association is required to supply sufficient horses
          to  conduct  racing operations at El Comandante in accordance with the
          racing  program  approved  by  the  Puerto  Rico  Racing  Board, which
          stipulates a minimum of thirty eight (38) races per week. The contract
          obligates the Company to provide stables and related facilities and to
          pay for other commitments with the industry such as funding the annual
          budgets  (as approved by both parties on each year) of the Association
          and  its  veterinary  clinic.  In  addition,  the  Company  agreed  to
          contribute  50%  of  the  Association's  premiums  of  certain  health
          insurance  benefits  for  jockeys and trainers. During the years ended
          December  31,  2001,  and  2000,  the  Company  recognized  as expense
          approximately,  $765,000  and $1,161,000, respectively, related to the
          funding  of  these  activities.

          The  current  agreement  was  amended  in March, 2001 to, among other;
          establish the distribution of commissions earned on simulcasted races,
          and  to provide for penalties to the Association for non-compliance of
          providing  sufficient  horses,  as  established  in the amendment. The
          amendment  provided  for  a  probation  period  of  six months for the
          transmission  of  simulcasted  races  and  after  final  approval  of
          permanent  transmission  of  those  races,  the  Company would pay the
          Association


                                       21
<PAGE>
                            EQUUS GAMING COMPANY L.P.

                   Notes to Consolidated Financial Statements

                        December 31, 2001, 2000 and 1999


          $1,000,000  each  of  the first two years after such approval.  During
          the  probation  period,  the  Racing  Board  declined  to continue the
          transmission of simulcasting races. The Association has claimed to the
          Board  that the Company must pay the additional amounts related to the
          amendment,  which  in  summary amount to $2,000,000. The Company, with
          the  advisory  of  its  legal  counsel,  believes  that no amounts are
          payable  due  to the cancellation of the simulcasting races before the
          end  of  the  probation  period.

          DOMINICAN REPUBLIC
          On February 27, 1995, the Company agreed with the National Association
          of  Horseowners  to  share  on  a  50% basis all commissions earned on
          wagers  placed  at  the  racetrack,  including  the  transmission  of
          simulcasted  races  from  Puerto Rico, net of commissions paid for the
          simulcasting  agreement.  This  contract  expires  in  March 31, 2005.

     (b)  CLOSING AGREEMENT WITH PUERTO RICO TREASURY DEPARTMENT

          The  Company  is  required  to  pay  to the Treasury Department of the
          Government of Puerto Rico various taxes on wagering, as described more
          fully in the Puerto Rico Internal Revenue Code, within two days of the
          wagers  being  placed.  The Company failed to remit these tax payments
          for  the  period  from  October  16,  2000  to  February  7,  2001.
          Consequently, the Company accumulated taxes that were assessed finally
          by  the  Treasury  Department  at  $11,172,450.  The  Company  and the
          Treasury  Department  negotiated  a  closing  agreement under which an
          interim payment plan was established whereby the Company agreed to pay
          $50,000  weekly  to  satisfy the assessed amount, plus a commitment to
          stay  current  on  all  payments  of  taxes incurred during subsequent
          racing  days.  This  payment  plan  had an initial term of six months,
          after  which the Secretary of the Treasury would negotiate a different
          plan  or  continue the interim payment agreement. The Company also has
          to  maintain  a bond in the amount of $500,000 at all times during the
          agreement,  and  the  Secretary has the authority to revoke or to call
          the total amount of the debt in case of non-compliance with any of the
          provisions  agreed  on. The Company believes it has complied w;ith the
          agreement  because  it  has  continued  to  pay  the  weekly amount as
          established, and has provided the Treasury Department with both a bond
          in  the  amount  of $250,000 and with a certificate of deposit pledged
          with  the  Department  in  the  same amount, which is presented within
          prepaid  expenses and other assets in the accompanying balance sheets.
          The  Company  has  also continued to pay all taxes incurred related to
          the  wagering  activity at the racetrack. Total debt outstanding as of
          December  31,  2001  and  2000  related  to this agreement amounted to
          $9,622,450  and  9,935,784,  respectively. If the Company continues to
          comply  with  the  agreement and the Secretary continues to agree with
          the  weekly  payment  schedule,  total  amount


                                       22
<PAGE>
                            EQUUS GAMING COMPANY L.P.

                   Notes to Consolidated Financial Statements

                        December 31, 2001, 2000 and 1999


          payable during each of the next three years will amount to $2,600,000,
          and  to  $1,822,450  for  the  year  ending  December  31,  2005.

          The Company has also been notified of additional assessments regarding
          prior  years'  income tax returns. The Company has vigorously objected
          these  assessments.  No adjustments have been made to the accompanying
          financial  statements  regarding  these  issues.

     (c)  MUNICIPAL TAX PAYMENT PLAN

          The Company disputed various cases since 1992 related to the volume of
          business  tax  as  assessed  by  the Municipality of Canovanas, Puerto
          Rico,  in  which the El Comandante racetrack is located. The Company's
          basis  for  the  dispute  related  to  the  fact that the municipality
          assessed  as  volume  of business, the sales commissions earned by the
          Off-track  betting  agencies,  located throughout the island of Puerto
          Rico.  The  Company claimed this was a case of double taxation but the
          court  ruled against the Company. Total amount assessed under the case
          amounted  to  $939,451.  Consequently,  the  Company reached a payment
          agreement  with  the  municipality whereby weekly payments of at least
          $5,000  were to be remitted for an eighteen (18) month interim period,
          starting  on  August  1, 2001. After this period, the Company has been
          complying  with  the  weekly  payments  and  has  also  submitted  its
          municipal  tax  returns  in  time, which was an additional requirement
          under  the  agreement.  Total  amount  due  under this agreement as of
          December  31,  2001  amounted  to  $829,451. Subsequently, the Company
          accelerated  payments  on  this  agreement  and  paid  in  full  the
          outstanding  amount  during  November,  2003.

          The  Municipality  has also notified the Company of the possibility of
          assessing  additional  municipal taxes due related to the construction
          projects  held  at  the  racetrack  after  hurricane  Georges  in 1998
          totaling  $683,769, including late penalties and interest. The Company
          is  currently  reviewing  the additional tax assessment with its legal
          and  tax  advisors.

     (d)  WAGERING SERVICES AGREEMENTS

          The  Company  has contracted with Autotote Systems, Inc. (Autotote) to
          provide  wagering  totalisator services, software and equipment to the
          racetracks,  necessary  for  the  operation  of  the off-track betting
          system. In Puerto Rico, the agreement was renewed in March, 2002 for a
          period  of ten years. Wagering service payments are equivalent to .65%
          of  total  wagers  placed  with  a  minimum  annual  fee  amounting to
          $800,800.  During  the  renewal  process  of  this agreement, Autotote
          agreed  to  credit  approximately $550,000 that the Company owed under


                                       23
<PAGE>
                            EQUUS GAMING COMPANY L.P.

                   Notes to Consolidated Financial Statements

                        December 31, 2001, 2000 and 1999


          the  previous contract. This amount has been reclassified from accrued
          expenses to deferred revenue and is being amortized into income during
          the  ten  year  period  of  the  contract.

          In Dominican Republic, a similar agreement was entered into in January
          1,  1995  for  a period of ten years expiring on March 15, 2005. Under
          this  agreement,  the  Company  had to pay fees based on .65% of total
          wagers placed, with a minimum fee of $200,000. Management subsequently
          alleged that this agreement was prepared with the intention of harming
          the  business  operations of the Company and in December 31, 2001, the
          court  gave  a  favorable  ruling to the Company which stipulated that
          Autotote  shall reimburse the Company for approximately $962,000. As a
          result  of  this  ruling, the contract was terminated in July 19, 2002
          when the Company bought all the equipment from Autotote for the unpaid
          amount  as  determined  by  the  court.

          Total  expense under these agreements for the years ended December 31,
          2001,  2000  and  1999,  amounted  to  $1,644,295  and  $1,670,361 and
          $1,838,345,  respectively.

     (e)  LEASE OF PHONE LINES

          The  Company  has  an agreement with the Puerto Rico Telephone Company
          for  the  lease  of dedicated transmission lines used in the Off-track
          betting  agencies.  These  lines  are  used  to  transfer all wagering
          information from the agencies to the totalisator system located at the
          racetrack.  The  agreement  provides for monthly payments based on the
          total  amount of capacity used by the agencies. Total expense incurred
          during  the  years  ended  December 31, 2001, 2000 and 1999 related to
          this  agreement  amounted  to  $1,340,655,  $1,110,055 and $1,146,975,
          respectively.

     (f)  V CENTENARIO LEASE AGREEMENT

          The  Company  operates  the  V  Centenario  Racetrack in the Dominican
          Republic  under  a ten year lease agreement expiring in April 2, 2005.
          The  agreement  provides  for  rent payments based on the total amount
          wagered  at  the  racetrack, not to exceed 1% of total amount wagered.
          The  contract  requires  the Company to provide maintenance, security,
          proper insurance coverage, among other administrative requirements, to
          the  racetrack  facilities.  Total  rent incurred under this agreement
          amounted  to  approximately $86,000, $83,000 and $93,000 for the years
          ended  December  31,  2001,  2000  and  1999,  respectively.


                                       24
<PAGE>
                            EQUUS GAMING COMPANY L.P.

                   Notes to Consolidated Financial Statements

                        December 31, 2001, 2000 and 1999


     (g)  LEGAL PROCEEDINGS

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

     (h)  SEC FILINGS

          The  Company  has  not  been  able  to  comply  with  the  reporting
          requirements  of  the  SEC. Any related fines, penalties, and/or other
          remedies  that the Company and/or its management may be subject to can
          not  be  presently  determined.

(8)  RETIREMENT AND PENSION PLANS

     RETIREMENT PLAN

     The  Company  has  established  a  defined contribution retirement plan for
     qualified  employees  of  one  of  its  subsidiaries  (Equus  Entertainment
     Corporation)  which  were  previously  covered under the retirement plan of
     Interstate  General Company L.P. (a former general partner of the Company).
     Employees are eligible to participate in the retirement plan when they have
     completed  a  minimum  of  1,000  hours  of  services  and  provides  for
     contributions  by  the  Company 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  $200,000)  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  S49,975 for the years ended December 31, 2001. 2000
     and  1999,  respectively.

     PENSION PLAN

     The  Company  has  a non-contributory defined benefit pension plan covering
     substantially  all  of  the  nonunion employees of El Comandante Management
     Company,  L.L.C.  Benefits are based on the employee's years of service and
     highest  average  earnings  over five (5) consecutive years during the last
     fifteen (15) years of employment. The Company's policy is to fund an amount
     not  less  than the ER1SA minimum funding requirement and not more than the
     maximum  deductible  under  the  Puerto  Rico  tax law. The Company has not
     recorded  the  minimum  pension  liability  of  $250,655 and $138,879 as of
     December  31,  2001  and  2000,  respectively. Management believes that the
     effect  of


                                       25
<PAGE>
                            EQUUS GAMING COMPANY L.P.

                   Notes to Consolidated Financial Statements

                        December 31, 2001, 2000 and 1999


     such  adjustment  has  no  material effect on the financial position and/or
results of operations of the Company. The information of this pension plan as of
and  for  the  years  ended  December  31,  2001,  2000 and 1999 are as follows:

<TABLE>
<CAPTION>
                                                          2001       2000        1999
                                                       ----------  ---------  ----------
<S>                                                    <C>         <C>        <C>
Change in Prepaid/(Accrued) Benefit Cost

  Prepaid/( accrued) benefit cost at fiscal year
    beginning                                          $   2,768    (58,588)   (109,255)
  Net periodic benefit income/(cost) for fiscal
    year                                                (215,124)  (166,302)   (155,279)
  Immediate recognition of benefit income/(cost)
    occuring this fiscal year                           (147,081)         -           -
  Employer contributions paid during fiscal year         258,348    227,658     206,446
                                                       ----------  ---------  ----------
      Accrued benefit cost
        at fiscal year end                             $(101,089)     2,768     (58,088)
                                                       ==========  =========  ==========

Change in Projected Benefit Obligation (PBO)

  PBO at prior measurement date                        $ 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                                  332,600    167,436    (289,600)
  Benefits paid                                          (16,324)  (174,409)   (405,279)
  Administrative expenses expected                       (50,000)   (50,000)    (50,000)
  Curtailments                                          (102,507)         -           -
  Settlements                                           (279,382)         -           -
                                                       ----------  ---------  ----------

    PBO at current measurement date                    $ 816,630    721,750     594,882
                                                       ==========  =========  ==========

Change in Plan Assets

  Fair value of assets at prior measurement date       $ 409,328    428,391     623,532
  Actual return on assets                                 33,815    (28,559)     53,692
  Unrecognized transition obligation                     258,348     52,255      65,319
  Administrative expenses paid                           (28,337)   (50,000)    (50,000)
  Settlement                                            (397,882)     7,241    (264,152)
                                                       ----------  ---------  ----------

    Fair value of assets at current measurement date   $ 275,272    409,328     428,391
                                                       ==========  =========  ==========
</TABLE>


                                       26
<PAGE>
                            EQUUS GAMING COMPANY L.P.

                   Notes to Consolidated Financial Statements

                        December 31, 2001, 2000 and 1999


<TABLE>
<CAPTION>
Reconciliation of Funded Status                       2001         2000         1999
                                                  ------------  -----------  -----------
<S>                                               <C>           <C>          <C>
  Accumulated benefit obligation (ABO)            $  (627,016)    (545,439)    (434,282)
                                                  ============  ===========  ===========
  Projected benefit obligation (PBO)              $  (816,630)    (721,750)    (594,882)
  Fair value of assets (FVA)                          275,272      409,328      428,391
                                                  ------------  -----------  -----------
    Funded status                                    (541,358)    (312,422)    (166,491)
  Unrecognized net transition obligation/(asset)       31,840       52,255       65,319
  Unrecognized net loss/(gain)                        408,429      262,935       42,584
                                                  ------------  -----------  -----------
Accrued benefit cost                              $  (101,089)       2,768      (58,588)
                                                  ============  ===========  ===========
Additional minimum liability                      $  (250,655)    (138,879)           -
                                                  ============  ===========  ===========
Intangible assets                                 $    31,840       52,255       65,319
                                                  ============  ===========  ===========
Accumulated other comprehensive
    income adjustment                             $   218,815       86,624            -
                                                  ============  ===========  ===========
Assumptions and Dates
  Discount rate                                          7.50%        7.50%        7.90%
  Compensation increase rate                             4.00%        4.00%        4.00%
  Measurement date                                 12/31/2001   12/31/2000   12/31/1999
  Census date                                        1/1/2001     1/1/2000     1/1/1999
</TABLE>

(9)  INCOME TAXES

     The  Company is a non-taxable entity for United States income tax purposes,
     as it has been organized as a partnership. Instead, each partner takes into
     account  the operational result of the Company in its individual income tax
     return based on its allocable share of participation. Income taxes expenses
     presented in these financial statements are related to taxes imposed in the
     foreign countries in which the Company has operations and are based on both
     the  results  of  operations  or  business  volume,  depending  on  the
     jurisdiction.

     The  Company  uses  the  asset  and  liability method to account for income
     taxes,  which  requires  the  recognition  of  deferred  tax  assets  and
     liabilities  for  the  expected future tax consequences of events that have
     been  recognized  in  the  financial statements or tax returns. A valuation
     allowance  is  recognized  for  any  deferred  tax  asset  which,  based on
     management's  evaluation,  it  is more likely than not that some portion or
     the entire deferred tax asset will not be realized. As of December 31, 2002
     and  2001,  a  valuation


                                       27
<PAGE>
                            EQUUS GAMING COMPANY L.P.

                   Notes to Consolidated Financial Statements

                        December 31, 2001, 2000 and 1999


     allowance  equivalent to the deferred tax assets has been established since
     there  is  substantial  doubt  as  to  their  realization.  The Company has
     available  net  operating loss carryforwards of approximately $7,565,000 to
     offset  future  taxable  income  in  Puerto  Rico,  through  2007,

     The  components of the deferred tax liability presented in the accompanying
     financial  statements  are  related  to  the  following:

<TABLE>
<CAPTION>
<S>                                        <C>
Flexible depreciation used in prior years
  for income tax purposes                  $2,333,767
Deterred gain on involuntary conversion       754,292
                                           ----------
                                           $3,088,059
                                           ==========
</TABLE>

(10) PREFERRED STOCK

     During  the  month  of  July, 2001, Equus Entertainment Corp. issued severs
     million shares of Class A Preferred Stock that were fully paid by a related
     party, KEMBT Corporation. The shares issued are non-voting, non-convertible
     and accrue dividends at an annual rate of 12%. The shares are redeemable at
     any  time  as  determined  by  the  board  of  directors.


(11) FAIR VALUE OF FINANCIAL INSTRUMENTS

     As of December 31, 2001 and 2000, the fair value of the first mortgage note
     was  approximately  $38,118,000 and $24,504,300, respectively. These values
     were estimated based on the market price as quoted by a brokerage firm that
     trades  the  First Mortgage Notes. The carrying value of notes and accounts
     receivable,  capital  leases  and  accounts payable approximates fair value
     because  of  their short term nature and/or because they bear interest at a
     variable  rate.


(12) NON - CASH FINANCING TRANSACTIONS

     During  the  year  ended  December  1, 1999, the Company acquired equipment
     through  capital  leases  amounting  to  $  1,668,529.


                                       28
<PAGE>
                            EQUUS GAMING COMPANY L.P.

                   Notes to Consolidated Financial Statements

                        December 31, 2001, 2000 and 1999


(13) DISCONTINUED OPERATIONS

     The  Company  surrendered  its  interest in the Panama operation during the
     year  ended  December  31,  2001  and  recorded  the  transaction as of the
     beginning of the year following an agreement with the minority holders. The
     agreement  was  entered into on October 9, 2001 and required the Company to
     sell  its  shares of the Company in exchange for shares of preferred stock.
     The  value of the transaction was accounted for using the net book value of
     the  Company  as  of the date of the agreement. Simultaneously, the Company
     wrote-off from books the value of the preferred stock and recognized a loss
     in  the  transaction  that  has  been  presented  as loss from discontinued
     operations  in  the  accompanying  financial  statements.

     The  Company also surrendered its participation in Equus Uruguay, which was
     basically  related  to  the right to operate the Maronas racetrack after an
     investment  of  approximately  $12,000,000  that  was expected to be raised
     before  the expiration of the license granted by government. The efforts to
     raise the financing were unsuccessful and the license was revoked. As such,
     the  Company  liquidated  the  subsidiary  and  its operation has been also
     presented  as  discontinued  operations  in  the  accompanying  financial
     statements-Summarized  financial information for discontinued operations is
     presented  below:

<TABLE>
<CAPTION>
                                       2001          2000         1999
                                   ------------  ------------  -----------
<S>                                <C>           <C>           <C>
Total revenues                     $         -     9,085,000    9,682,000
Expenses                                     -    (9,252,914)  (9,916,065)
                                   ------------  ------------  -----------
Loss from discontinued operations  $(4,601,301)     (167,914)    (234,065)
                                   ============  ============  ===========
Total assets                                     $ 8,630,515    9,189,000
Total liabilities                                 (6,376,441)  (6,362,000)
                                                 ------------  -----------
Net assets                                       $ 2,254,074    2,827,000
                                                 ============  ===========
</TABLE>

(14) SEGMENT INFORMATION

     The  Company  is  mainly  an  operator  of  racetracks  and  their  related
     operations  in  different  countries.  Therefore,  management believes that
     segments  of  the  business  are  best  monitored  and  evaluated  based on
     geographical considerations and as such, has identified three segments. The
     basic  monitoring  measure  used  by  management  to evaluate the operating
     segments  is  profitability  from operations, excluding non-recurring gains
     and


                                       29
<PAGE>
                            EQUUS GAMING COMPANY L.P.

                   Notes to Consolidated Financial Statements

                        December 31, 2001, 2000 and 1999


     losses.  The  following  table  presents  information  about  the Company's
     continuing  operations  by  segment  (in  thousands  of  dollars):

<TABLE>
<CAPTION>
                            Total Revenues         Loss Before Income Tax     Total Assets
                    -----------------------      ---------------------------  --------------------
                     2001     2000    1999     2001       2000      1999     2001    2000    1999
                    -------  ------  ------  --------  ----------  -------  ------  ------  ------
<S>                 <C>      <C>     <C>     <C>       <C>         <C>      <C>     <C>     <C>
Puerto Rico         $50,703  54,668  56,699  (12,594)     (6,846)     388   49,694  55,367  54,817
Dominican Republic    5,659   4,265   5,289   (1,391)     (1,688)    (694)   3,678   2,037   1,842
Colombia              1,765   1,839   1,647   (2,780)     (2,540)  (1,831)   7,412   6,406   5,125
Uruguay                   -       -       -        -           -        -        -   6,104       -
Panama                    -       -       -        -           -        -        -  10,216   9,189
                    -------  ------  ------  --------  ----------  -------  ------  ------  ------
        Total       $58,127  60,772  63,635  (16,765)    (11,074)  (2,137)  60,784  80,130  70,973
                    =======  ======  ======  ========  ==========  =======  ======  ======  ======
</TABLE>

(15) SELECTED QUARTERLY FINANCIAL INFORMATION (UNAUDITED)

     The  following  table  summarizes  selected  financial  information  from
     quarterly  reports  as  submitted  by  management.  The submitted quarterly
     reports  have not been reviewed by the independent auditors and do not have
     all  the  adjustments  that  resulted  from  the  audits  of  the financial
     statements  for  the  years  ended  December  31,  2001  and  2000.

<TABLE>
<CAPTION>
(in 000 's, except per share data)     First Quarter     Second Quarter      Third Quarter     Fourth Quarter
                                    ------------------  -----------------  -----------------  -----------------
                                      2001      2000     2001      2000     2001      2000     2001      2000
                                    ---------  -------  -------  --------  -------  --------  -------  --------
<S>                                 <C>        <C>      <C>      <C>       <C>      <C>       <C>      <C>
Total Revenues                      $ 17,014   17,623   10,798    16,815   12,988    16,449   10,543    17,706
Net loss                              (4,033)    (607)  (5,087)   (2,206)  (4,407)   (3,000)  (7,267)   (6,032)
Basic and Diluted Loss per Share       (0.28)   (0.07)   (0.35)    (0.26)   (0.31)    (0.36)   (0.51)    (0.73)
</TABLE>

     As  discussed more fully in note 1, the Company has not filed reports since
     the  quarter ended December 31, 2002 pending the completion of the audit of
     the financial statements. Management intends to complete its filings in the
     near  future  upon  completion  of  the  audits.


                                       30
<PAGE>
                                                                     Translation

PRICEWATERHOUSE COOPERS


                         REPORT OF INDEPENDENT AUDITORS

June 30, 2003

To the Council of Directors and
Stockholders of
Gal pagos, S.A.

We have audited the attached general ledgers of Gal pagos, S.A. as of December
31, 2002 and 2001, and the corresponding statements of loss and accrued deficit
and cash flow for the years ended on those dates.  These financial statements
are the responsibility of the management of Gal pagos, S.A.  Our responsibility
is to give an opinion on these financial statements based on our audits.

Our audits of these statements were made in accordance to auditing standards
generally accepted in the Dominican Republic.  These standards require that we
plan and conduct the audit in order to obtain reasonable guarantee that the
financial statements do not contain important errors or omissions.  An audit
includes the examination, on a random basis, of the evidence supporting the
amounts and disclosures included in the financial statements, it also includes
evaluating the accounting principles used and the principal estimates made by
management, as well as an evaluation of the global presentation of the financial
statements.  We consider that our audits provide a reasonable basis for our
opinion.

In our opinion, the attached financial statements audited by us, reasonably
present, in all its important aspects, the financial situation of Gal pagos,
S.A., as of December 31, 2002 and 2001, and the results of its operations and
its cash flow for the years ended on those dates, in accordance with accounting
principles generally accepted in the Dominican Republic.


<PAGE>
                                                                     Translation

PRICEWATERHOUSE COOPERS


To the Council of Directors and
Stockholders of
Gal pagos, S.A.
Page 2
June 30, 2003


The attached financial statements have been prepared considering that the
Company shall continue as an ongoing business.  As indicated in Note 14 to the
attached financial statements, the company has experienced significant losses
from the commencement of its operations, having accrued a deficit of
RD$190,140,135 and RD$124,851,436 as of December 31, 2002 and 2001,
respectively, and a negative capital of RD$141,339,017 and RD$76,049,718 on the
mentioned dates.  In addition, the Company maintains a working capital relation
of RD$.02 to RD$1.00 and of RD$0.39 to RD$100 in 2002 and 2001, respectively.
These factors create significant doubts on the company's ability to continue as
an ongoing business.  Management's plans in relation to these matters are
described in Note 14 to the attached financial statements.  The attached
financial statements have been prepared in accordance to accounting principles
for ongoing businesses, for which reason they do not include adjustments that
might be required in the event the company cannot comply with the projected
plans.

(Signed) PricewaterhouseCoopers


<PAGE>
                                                                     Translation

                                                                        DELOITTE
                                                                        & TOUCHE


REPORT OF THE FISCAL REVIEWER


To the stockholders of
SOCIETY OF EQUUS COMUNEROS, S.A. - SECSA (UNDER REORGANIZATION)


1.   I have audited the general ledgers of Society Equus Comuneros S.A. (Under
     Reorganization) as of December 31, 2002 and 2001 and the corresponding
     statements of results, of changes in capital, of changes in the financial
     situation and of cash flow for the years ended on those dates. Said
     financial statements are the responsibility of the Company's Management.
     Among my functions is that of auditing and giving an opinion on these
     financial statements based on my audits.

2.   Except for what is mentioned in number 4, I obtained the information
     necessary to comply with my functions and perform my work in accordance
     with auditing standards generally accepted in Colombia. Said standards
     require me to plan and perform the audit in order to obtain a reasonable
     guarantee on whether the financial statements are free from significant
     errors. An audit of these financial statements includes examining, on a
     random basis, the evidence supporting the amounts and disclosures in the
     financial statements. An audit also includes, the evaluation of the
     accounting principles used and the significant accounting estimates made by
     Management, as well as evaluating the general appearance of the financial
     statements. I consider that my audits have provided a reasonable basis to
     state my opinion.

3.   In my examination I have observed the following uncertainties:

     a.   Just as is mentioned in Note 4, as of December 31, 2002 and 2001 the
          Company has an Account Receivable with its affiliated Company AGENCY
          BETTING NETWORK, Colombia Branch, for $8.268 millions and $6.671
          millions, respectively. Due to AGENCY BETTING NETWORK, Colombia
          Branch's, difficult financial


<PAGE>
                                                                     Translation

          situation, recovery of this account receivable is uncertain and
          subject to the future success of this entity's operations.

     b.   As of December 31, 2002 withholdings at source payable and other taxes
          payable in the amount of $2.961 millions (includes interests for
          delay), practiced to third parties during 1999, 2000, 2001 and 2002
          and in favor of the National Tax and Customs Bureau (NTCB). Management
          is in the process of negotiating a payment plan. In the event the
          mentioned agreement is not reached, the NTCB could embargo the
          Company's goods and move forward with legal proceedings.

4.   During my examination I have had the following limitations in the scope of
     my work:

     a.   As of December 31, 2002 and 2001, the balance of appraisals in the
          assets and surplus due to appraisals in capital amounts to $371
          millions. Because the property, plant and equipment appraisals were
          not updated to December 31, 2002 and 2001, as is required by article
          number 64 of Decree 2649 of 1993, it was not possible to obtain
          sufficient evidence with respect to the reasonableness of the balance
          of appraisals and the surplus due to appraisals.

     b.   As of the date of this report the company was in the process of
          conciliating the account payable to Equus Entertainment Corporation,
          which, as of December 31, 2002, amounted to $1.592 millions. As a
          consequence, it was not possible to obtain sufficient evidence with
          respect to the reasonableness of the expense and the liability related
          to this account payable.

     c.   In the year 2001 Equus Comuneros S.A. entered into a contract with
          Agency Betting Network where it is in charge of operating the betting
          system of Equus Comuneros S.A., for which Equus Comuneros S.A. agrees
          to pay to Agency Betting Network as counter-payment for the operation
          of the betting system, a rate equal to the greater of 5% over the
          total handle of Equus Comuneros or 5% of the adjusted commission of
          Equus Comuneros. During the year 2002 amendments to the agreement were
          made, which we did not observe, and therefore we were not able to get
          satisfaction as to the account payable of Equus Comuneros to Agency
          Betting Network for


<PAGE>
                                                                     Translation

          $118 millions and for other effects they might have on the company's
          financial statements.

     d.   Just as is mentioned in note 14, as of December 31, 2002 and 2001 the
          Company has registered an account payable to ETESA for $637 millions
          and $290 millions related to the values liquidated for the
          exploitation rights of chance games. As per confirmation received from
          ETESA as of December 31, 2002 and 2001, the Company owes $1.639
          millions and $1.056 millions, for the concept of exploitation rights.
          Because the difference between $1.002 millions and $766 millions is
          presently in the process of discussion between the Company's
          Management and ETESA, it was not possible to verify the sufficiency fo
          the liabilities and the expense registered for this concept as of
          December 31, 2002 and 2001.

5.   In the report of the fiscal reviewer, dated March 4, 2002, the opinion on
     the financial statements as of December 31, 2001 contained an uncertainty,
     because on August 24, 2001 the Superintendency of Societies issued a
     request formulating charges against the Company for the incorrect filing of
     some statements of change. On August 8, 2002, the Superintendency of
     Societies issued the resolution as filed 2002-01-104478, in which it
     imposed a fine on Society Equus Comuneros, S.A. (Under Reorganization) for
     $5.000.000, which was registered and paid by the Company. In view of the
     foregoing, my present opinion as of December 31, 2001 in relation to this
     matter, as presented herein, is without reservations.

6.   In my opinion, except for the effect of the adjustments I could have
     determined if I had been able to apply auditing procedures to the matters
     mentioned in number four, and subject to the effect of the adjustments, if
     any, that might have been required if the final result of the matters
     mentioned in number three had been known, the financial statements
     previously mentioned, taken from the accounting books, reasonably present,
     in all significant aspects, the financial situation of SOCIETY EQUUS
     COMUNEROS S.A. - SECSA (under reorganization) as of December 31, 2002 and
     2001, the results of its operations, the changes in its capital, the
     changes in its financial situation, and its cash flow for the years ended
     on those dates, in accordance with accounting principles generally accepted
     in Colombia, applied over uniform bases.


<PAGE>
                                                                     Translation

7.   As of December 31, 2002 and 2001, the Company presents accrued losses for
     $7.045 millions and $4.601 millions, which correspond to those occurred
     from the date of its establishment. As of those same dates it presents some
     balances of capital of $1.470 millions and $3.680 millions, negative
     working capital of $9.068 millions and $6.455 millions and net loss for the
     period of twelve months ended on December 31, 2002 and 2001 of $2.445
     millions and $787 millions, the previous results not taking into account
     the effect of the Translation matters mentioned in number 5 and the effect,
     if any, of the matters mentioned in number four of this report. By means of
     Resolution 213 of October 31, 2001 of the Superintendency of Societies, the
     Company was accepted for promotion of a reorganization agreement, in the
     terms and with the formalities established in Law 550 of 1999. At present
     it is in the process of negotiating with external and internal creditors of
     the Company and as a result of this negotiation two situations could be
     reached: (1) that the negotiation can be culminated with the external and
     internal creditors since they consider the Company to be feasible or (2)
     that they decide to end the negotiation, in which case the promoter will
     notify the pertinent authority in order to transact the obligatory
     liquidation or the equivalent procedure, according to the Law. The attached
     financial statements have been prepared by the administration assuming that
     the Company will continue as an ongoing business. According to what has
     been stated by Management they are taking measures conducive to their
     reorganization, as explained in note 3, wherefore the Company has not
     considered it necessary to make any adjustment to the financial statements,
     in relation to the possibility that the Company cannot continue operating.

8.   Also, I inform that during said years the Company's accounting was made
     pursuant to the legal standards and accounting techniques; the operations
     registered in the accounting books and the acts of the administrators were
     adjusted to the statutes and to the decisions of the Board of Partners; the
     correspondence, account vouchers and books of minutes and registry of
     stocks are properly kept and maintained; the management report of the
     administrators keeps the proper concordance with the basic financial
     statements, and contributions to the Integral Social Security System, in
     all significant aspects, have been correctly made. On the date of issuance
     of my report, the society is not in arrears for the concept of
     contributions to the system. My evaluation of internal control, made with
     the purpose of establishing the scope of my auditing tests, did not show
     that the company has not followed adequate measures of internal control and
     conservation


<PAGE>
                                                                     Translation

     and custody over its assets and that of third parties in its possession. I
     have informed my recommendations on matters of internal control in letters
     addressed to the Company's management.


(Signed)
LINA MAR A VELASQUEZ ALVAREZ
Fiscal Reviewer
Professional Card No. 61321-T


March 11, 2003


<PAGE>