Depreciation and Amortization.     Amortization expense increased $50,073 for both the three and six month periods which reflects the amortization of the Gaming Rights acquired in the GTECH acquisition transaction which is described in Notes 3 and 4 of the condensed consolidated financial statements.  Goodwill amortization was $126,567 and $253,134 for the respective three and six month periods.  The remaining goodwill balance of $126,579 will be expensed in the third quarter of 2001.

             Interest Expense.  Interest expense increased by $7,946 for the three month period and decreased by $5,622 for the six month period.  These changes are a result of changes in the amounts outstanding under our bank line, coupled with a decrease in interest rates.

             Interest and Other Income.  Interest and other income was comparable in both the three and six  month periods and is primarily due to earnings on invested cash balances.

             Income Tax Provision.   Income tax expense increased by $147,277 and $141,954 for the respective three and six month periods.  These increases are primarily due to increased earnings.  The effective tax rate reflects a combination of state taxes on  joint venture earnings combined with the tax effect of non-deductible amortization expenses.  For federal tax purposes we have net operating loss carryforwards of approximately $1,335,000 which may be carried forward to offset future taxable income.  The loss carryforwards expire in 2010 through 2019.  The availability of the loss carryforwards may be limited in the event of a significant change in ownership of the Company or that of our subsidiaries.

             Liquidity and Capital Resources

             At June 30, 2001, we had cash and cash equivalents of $484,778.  For the six months ended June 30, 2001, cash of $559,635 was provided by operating activities, as compared to $175,499 in the prior year period.  The increase is primarily due to increased earnings.  Net cash used in investing activities was $1,880,000, primarily for the GTECH acquisition transaction.  In the prior year period, $121,393 was used in investing activities, for options and deposits related to the Biloxi project as well as joint venture activities in Michigan.  Financing activities consisted of draws and repayments on our credit line.   A draw of $1,800,000 was used to fund the GTECH acquisition transaction.  As a result of these factors, there was a net increase in cash and cash equivalents of $29,635 during the first six months of 2001.

             On March 30, 2001, we acquired GTECH’s 50% interest in three joint venture projects that had been equally owned by the two companies: Gaming Entertainment, LLC, owner of an agreement continuing through August 2002, with the Coquille Tribe, which conducts gaming at The Mill Casino in Oregon; Gaming Entertainment Michigan, LLC, owner of a Management Agreement with the Nottawaseppi Huron Band of Potawatomi to develop and manage a gaming facility near Battle Creek; and Gaming Entertainment California, LLC owner of a Management Agreement with the Torres-Martinez Band of Desert Cahuilla Indians to develop and manage a gaming facility near Palm Springs.

             The purchase price was $1,800,000, and was funded through our existing credit facility.  As part of this transaction, GTECH has extended the due date of our $3,000,000 promissory note from January 25, 2001 until January 25, 2002, with interest at prime.  Also as part of this transaction, GTECH is no longer required to provide the necessary financing for the two development projects (Michigan and California) that we acquired.  Since we do not have the financial resources to fund these projects alone, we are actively pursuing alternative means of financing these developments.