STATE OF THE UNION - JULY 2001 Prepared by Mark Anton, and intended for partners in:

AAA Gaming, Captains Casino, Five Stars (Realmoney)

Gamblecom, and Parlaybet.

During the past several months, many of you have received a great deal of correspondence, and been involved in numerous telephone conversations with a number of parties, with a number of different agendas, regarding your participation in one or more Virtual Gaming Web Site Partnerships, that you have an interest in.

While I have refrained from name calling, and believe that I have acted in a responsible fashion to date, I now feel it necessary to speak my mind and set the record straight. I ask your indulgence in reading this report, as it may be a little confusing and perhaps somewhat upsetting in the beginning. I assure you that by the time you get to the end, you will feel better about the state of your investment, however, in order for me to fully explain what is really going on, I have no choice but to go back to the beginning, and highlight some of the events that took place during the past two years. I will try not to ramble too much, but I feel compelled to provide as much detail as possible, so that you will be able to arrive at an informed conclusion.

CHAPTER ONE.

Many of us remember watching a video that was produced by Starnet, and many of us, myself included, were not only seduced by this tape, but also enamored with the encouraging statements made by several Wall Street Brokerage Firms regarding the premier position that Starnet held in the Virtual Gaming Industry. We all watched the NBC Nightline segment that basically said the evolving industry would be huge, and we were all a little excited that it was now possible to participate in something, that although a little bit naughty, seemed to be on the up and up from business point of view.

Windows 95 didn’t come out until almost 1997, Windows 98 didn’t work until well into 1999,

Windows 2000 still doesn’t work completely and it’s 2001. I have no good excuse for why the software industry works the way it does, however, some say that Starnet (Worldgaming) is the Microsoft of the Interet Gaming Industry, and that may explain why the "Beyond 2000" software should perhaps have been renamed "Well Beyond 2000", Fortunately for the marketing effort, they have now decided to name their all new product 3.2 so as to save us all any further embarrassment regarding its delayed launch this week.

I will not dwell on the details, however for those of you who look at the Gaming Sites, the Horse Racing is up on all Atlantic West Sites, and the new Starnet/Worldgaming software is running on our test site (thisinternetcasino.com) and captainscasino.com. Pending three more weeks of testing, we will activate the new software on all Atlantic West sites.

We are still having some difficulty integrating the back-end software into our atlanticwestgaming.net site, so we are making available, a direct link to your site, through Starnet/Worldgaming. Any partner who requests these links and passwords will be sent them via e-mail. They enable you to look at the performance of your site from day one, and also work in real time so that you can keep up to the minute if you wish. You will also note that the "investorscasino" feature is beginning to function on all of our sites, and we will be adding several new lottery products of our own to the sites in the next month or so.

If any of you require assistance in utilizing the reporting functions, we will be glad to assist you in any way we can. If possible, ask your questions via e-mail to: mark@atlanticwestgaming.com, and I will make every effort to respond the same day, or forward your question to someone in our organization who is qualified to answer them. As always, I can be reached at: 268-464-5996 ( Antigua) or 954-610-5977 ( Florida )

1.

CHAPTER TWO.

I am going to make several statements, hopefully in correct chronological order, all of which are easily verifiable, and all of which I believe to be accurate.

July 20, 2000 - A distribution of $ 84.90 per unit was made to each partner in Parlay Partners LLP

July 20, 2000 - A distribution of $ 39.84 per unit was made to each partner in Gamblecom LLP

Sept. 02, 2000 - A distribution of $ 56.92 per unit was made to each partner in Parlay Partners LLP

Sept. 02, 2000 - A distribution of $ 44.64 per unit was made to each partner in Gamblecom LLP

Oct. 22, 2000 - A distribution of $ 61.55 per unit was made to each partner in Parlay Partners LLP

Oct. 22, 2000 - A distribution of $ 46.22 per unit was made to each partner in Gamblecom LLP

All of these distributions were made while I was acting as the managing partner for these two partnerships.

January 22, 2001 A meeting of the Managing Partners for Parlaybet LLP and Gamblecom LLP was held In Miami, and the following managing partners were present. George Egolf, Ron Ryan, John Harlen Williams, Gilbert Loy Cook, Stan Narusiewicz, Norman Wartman, and Andrew P. Minyo. In addition, the meeting was also attended by general partner Beverly Rayfield, and Robert Nies, not a partner.

I did not realize it at the time, however Robert Nies, who was one of the people involved in raising the money for the partnership, apparently met with the Managing Partners before the official meeting, and had made several presentations and representations to them, regarding the operation of the partnership. Having not been present for those presentations, I have no right to speculate as to what was said, however as you follow this report, I believe that you will be able to draw your own conclusions. There is more than one version of the minutes, and a really bad tape of the official meeting, however the most significant fact to come out of any of the transcripts, is that the brokerage firms received a commission equal to almost 50% of all of the money raised for the partnerships. Considering that Mr. Nies was the sales person responsible for many of the partners investing in the first place, I thought it quite curious that he would take issue with the fact that his firm and a few others got almost ½ of the money, for simply putting the investors in touch with each other, myself, and Atlantic West. As you follow this report, and as you see other evidence of his involvement in some of the proposed management schemes, please remember his early role in the development of your partnership, and please consider the wisdom of any involvement with him in your partnerships future. Although the high rate of commission is in retrospect upsetting, it is in fact allowed for in the original paperwork that was presented to you before you invested, I only find it strange that he and his new firm would ask to be considered for a management position in the proposed new partnership structure.

During the next several months, Mr. Nies and his associates, spent a great deal of effort to involve us in various legal actions. This effort on their part managed to distract me from my every day work, and ultimately, they proved unsuccessful in accomplishing anything other than disrupting our operation, and somewhat devaluating your investment.

What transpired next is best addressed by a point by point answer to several letters that were widely  distributed amongst the partnerships. I am working on the assumption that you have already received copies of these letters, and if anyone requires a copy of any specific letter, I will be glad to provide it upon request. I will try no to be redundant in answering some of the material in the letters, however since there is some repetition in their material, some of the answers may not be in exact chronological order.

2.

CHAPTER THREE.

This chapter is in response to a letter dated June 28^{th 2001, sent by general partner Charles Giannino, with the subject stated as: Partnership Fraud, No Records & Financial Information, No K-1’s and Response to Mr. Anton’s Letter Dated June 7, 2001.}

Mr. Giannino addressed this letter to All Unit Holders of AAA Gaming, Real Money Casino and Captains Casino and stated that he is a partner in Gamblecom LLP and AAA Gaming LLP.

Let me state at this time that I too am a partner in both of these partnerships and that although Mr. Giannino was fully aware of this, he failed to include me in this mailing.

In the letter, there were many innuendoes and references to first hand knowledge of failure of fiduciary responsibilities on my part, along with the statement that the probability of securities fraud, conversion and grand theft were beyond doubt at that point in time. This statement by Mr. Giannino went completely unsubstantiated as all of his accusations were based on general statements made by him, and no evidence of any facts to back up these statements was presented or even offered. Although I probably should have responded with some form of legal action regarding these statements, I chose to ignore this letter, as I was not intended to be a recipient of it in the first place. Mr. Giannino also stated that he did not have complete records of the names of the other partners. Even though I was not supposed to receive the letter, I immediately responded to Mr. Giannino, with a complete list of all of the partners known to me at the time.

Mr. Giannino made reference to my letter to all partners dated June 7th 2001 in which he implied that according to direct sources who had talked to me, the funds did not exist. I implore Mr. Giannino to reveal these sources so that we can all verify who they are. Anybody can say anything they want about another person or entity, however, considering the seriousness of the accusations in Mr. Giannino’s letter, I think it is only fair that he either produce solid evidence to support his claims, or retract them immediately.

I feel the need to clarify one serious error that was inadvertently made by me in my June 7th letter to the partners. I made a mistake in stating relative to the amounts remaining in the advertising accounts, in that as of that date, most of Captains Casino LLP was un-subscribed. The word account should have been replaced with the word budget. The unsold partnership units in Captains today equal over $ 600,000.00, and obviously, I took that figure into account when writing that letter. I apologize for that error, however I can see where people assumed that we had already collected those funds, and I can see why this probably upset Mr. Giannino.

For the record, as of today, the partnership subscribed unit breakdown is as follows:

AAA Gaming LLP - 97 Partners - 249 Units Sold

Captains Casino LLP - 20 Partners - 123 Units Sold - 126 Units Available

Five Stars LLP (Realmoney) - 82 Partners - 249 Units Sold

Gamblecom LLP - 96 Partners - 249 Units Sold

Parlaybet LLP - 106 Partners - 249 Units Sold

In his last paragraph, Mr. Giannino states that a proxy will be mailed to you. I will cover that proxy on a point by point basis in Chapter Five of this letter, however I do wish to address his implication that cash flow and clients have been stolen from your partnership.

A number of people have claimed that both Starnet/Worldgaming and Atlantic West Gaming are able to divert traffic from the signup page on your site. As you will see in the final chapter of this report, this is in fact complete nonsense and again, just another innuendo designed to upset the partners.

3.

CHAPTER FOUR.

At this point, I would like to give a little insight into the operation and finances of Atlantic West Gaming Ltd. Along with a statement as to my employment and participation in the company.

I got a phone call the other day informing me that I had been seen getting out of my High Priced Sports Car

and entering my 14 room mansion located in Antigua. I receive several such calls each week, and really enjoy the humor of the situation as I commute from my rented efficiency condo, in my stick shift Nissan Sentra, to my luxurious 2 room office, I am sorry for the light hearted approach, however if I were to take even 15% of the accusations made against me in a serious fashion, I would have no choice but to fire myself immediately.

Atlantic West Gaming Entertainment Ltd. Is a full service Internet Service Provider, located at Woods Centre, St. John’s, Antigua, W.I. It has a Virtual Gaming License granted by the country of Antigua. I am the president and chief operating officer of the company. In addition to hosting the gaming sites of the five partnership, Atlantic West hosts five of its own gaming sites, nine gaming sites for other companies. And Twelve other non-gaming sites for local businesses and other companies.

The company has been in business since July of 1999 and to date has had a total revenue of $ 992,000.00 of which $ 692,000 came from software and ISP services provided to Non-Partnership Related Business. Of the $ 300,000.00 in net gaming revenues to date, $ 66,814.00 was distributed to the partners of Parlaybet and Gamblecom, and another $ 120,000.00 was distributed to owners of some of the other sites served, and to the various resellers associated with the gaming sites. During the same period, Atlantic West paid in access of $290,000.00 in Licensing fees and taxes relating to the gaming operations. In addition, an additional $ 94,000.00 of the money remains as unusable by Atlantic West, as it is held by the credit card companies as rolling reserve. This leaves 421,186.00 to cover the operating cost for the past twenty four months. Or around $ 17,500 per month to cove the salaries of our four full time and two part time employees, the office rent, vehicle expense, and our bandwidth and telephone charges.

I receive a weekly salary of $ 500.00, and in addition am given use of a company vehicle, along with  $ 150.00 per week in expenses. I work in Antigua three weeks out of the month, and the company also pays for my airfare (average 425.00) and airport transportation. In consideration of my employment, I have also been given stock in Atlantic West representing a 10% ownership in the company.

Who Is Consolidated Casino Management Corporation (CCMC)?

At this point I choose to reveal what is in fact public information as to the ownership and directorship if CCMC.

Please keep this information in mind as you read the next chapter of this report, as I believe that you will realize that there may be some hidden agenda behind their request to be appointed in connection with your partnership.

According to the Florida Department of State Database, on 07/17/2001;

Consolidated Casino Management Corp. is located at: 3216 Kenmore Drive, Sarasota Florida 34231

With the following Officer/Directors, also at that address, being:

Robert Neis

James Lane

Harlan Williams

Jans Felix

Nick Trufyn

Charles Giannino

4.

CHAPTER FIVE.

This chapter is a point by point response to the July 10, 2001 Proxy and Letter that many of you received.

If you don’t have a copy, I will be glad to forward one to you upon request.

In the introductory letter, once again Mr. Giannino makes many unsubstantiated accusations, most of which I answered in a previous chapter. I am presently having this letter reviewed by my legal council to determine if I have recourse in the court system for any of the damage that may have been done to me as a result of this letter. Basically my answer to the introductory letter is simple. Either produce the evidence that justifies the accusations, or retract them immediately. I am not saying that I have done a perfect job, and I am not saying that I have not made any mistakes. I am however stating that I spend the majority of my time trying to make an imperfect product work better, and that I have continually operated in the best interest of the partnerships and their web sites. I insist that this type of slander stop immediately, and I will forgive the statements made by Mr. Giannino, if an immediate retraction is published.

I will now address the proxy with the following understanding: As the current managing partner of AAA, Captains, and Five Stars, I do not accept this proxy in any official capacity, and as the previous managing partner of Parlaybet and Gamblecom I am now uncertain as to the validity of similar proxies that were completed by those partnerships. I intend to confer with legal council to determine if in fact those proxies should be allowed to stand, as I genuinely believe that the assets of Parlaybet and Gamblecom may have been compromised as a result of that non-authorized election.

On Proposition #1: I believe that although he doesn’t seem to like me, Mr. Giannino may be a good choice. I do believe that he should explain his involvement with CCMC before also being considered as the Managing Partner. I believe that Scott Erickson is an excellent choice as the managing partner for Five Stars LLP as there is no such partnership as Real Money Casino LLP.

On Proposition #2. I would have to know more about who this person is and as to how wise it is at this point in time to create this expense.

On Proposition#3. My answer is similar to the above proposition. Keep in mind that as a Virtual Business, all of the accounting for the site is already done electronically. And as the data is always available, anyone with a minimal knowledge of computing can easily migrate the data into any one of a dozen commercially available accounting programs.

On Proposition #4. My answer is a resounding NO WAY, why would you want to allow a person who already received a major portion of your investment, as a commission, to have control over what is left. Additionally, as indicated previously in this report, some of your partners have an interest in this company, and should certainly state their true agenda before asking to be in charge of any more of your resources.

On Proposition #5. Definitely No. You invested you money based on the operation of a Starnet/World Gaming Site. One of the advantages of this type of site is that it is operated by the Largest Most Successful Company in the Virtual Gaming Industry. The other advantage of the way your site operates is that it operates in a jurisdiction that not only licenses Virtual Gaming, but also regulates it in much the same way the land based Casinos are regulated. When the industry matures, it is the sites that are operating in this fashion that will succeed.

5.

On Proposition #6. Maybe yes, maybe no. I have no objection in a reasonable provision of

whatever records the managing partners want access to, my major concern would be the costs involved. As explained before, most of the records are available electronically, and when you read the conclusion portion of this report, I believe that you will be satisfied that all of the figures can and will be properly verified.

I think it interesting that this proposition assumes that you voted yes on Propositions 2,3,4 and 5. What ever happened to democracy?

On Proposition #7. Absolutely No. We earned those units and are fully entitled to them. As you will read in the conclusion section, we may be willing under certain circumstances to donate them to the cause, additionally, unless some of the statements made in this proposition can be backed up with evidence, I suggest that they be retracted immediately.

This concludes my response to the unofficial proxy, and since I was never mailed one, I will allow the originators to consider this part of my report as a submission of my votes.

 

 

CHAPTER SIX.

I will now discuss the topic of ceasarsonlinegaming.com, Net Site Gaming Group Ltd., Mr. German,

and what they are proposing to you. Ceasarsonlinegaming.com is not a partnership that was originally affiliated

with Atlantic West Gaming Entertainment. This group came to us after they had already developed their own

web page, and asked us to build an internet casino and sportsbook for them. They signed an agreement with us

for a period of one year, and during that year, we provided gaming web site services to them, and also helped

them to understand the Virtual Gaming Industry. For reasons that I don’t understand, they genuinely believed

that we and Starnet/Worldgaming were "Cloning" their site and diverting clients (players) to other sites.

Without going into a complete explanation of internet technology, we asked them to provide us with the proof

that they claimed to have regarding this. They never submitted such proof, but rather, decided to move their site

to a Costa Rican provider. This was their choice, and they had every right to make it.

While it is not easy to explain to someone who does not understand TCP/IP and some of the other Internet network protocol, it is almost impossible for their claims to have validity. In an effort to check the honesty of Starnet/Worldgaming, we routinely sign up and play on our own sites, and have certain players whos action we track on a daily basis. If anyone were stealing our signups, we certainly would have lost at leaset one of these to such fraud. While I admit that there may be a fantastic hacker somewhere who could make this happen, I formally challenge anyone to provide me with the evidence that it has happened, even once, on any Atlantic West Operated Site. Again, it is easy to create doubt by innuendo, but if there is no evidence, than these claims must be retracted.

I have attempted to outline the ceasarsonlinegaming experience to point out to you that perhaps this group has a hidden agenda in wanting to be your new provider.

The move of the Parlaybet site and the proposed move of the other sires will dramatically reduce the value of your investment, and you should seek competent technical and legal council before you allow this to happen.

6.

CHAPTER 7.

Let me take this time to thank you for your endurance, as I know this hasn’t been easy to read so far, however, we are almost at the end. At this point I will list the current list of Managing Partners as I know them to be. It is possible that there are some errors in this list, and I apologize in advance if I have made any mistakes.

Basil Dixon, Alternate

I do not mean to exclude Beverly Rayfield because even if we decide that the previous proxies are in fact invalid , I still consider her to be the Managing Partner of both Gamblecom and Parlaybet. She has dedicated herself far beyond the call of duty and is in fact one of the most valuable assets that this group of partners has.

I would like to thank her for the personal sacrifice that she has made as well as the personal expenses that she has incurred in an effort to protect all of our interests. I hope that she will always play an important role in our organization, and I look forward to working with her.

I will now conclude this report with the following statement, followed by a recommendation as to how we should proceed if we want to make this thing work.

Even though some of the partnerships voted for my corporate proposal, I now realize that it is not practical to attempt it at this time. I therefore retract the proposal and make the following replacement proposal, in an effort to once again have unity amongst the partnerships.

7.

PROPOSAL:

I propose that a committee of Five individuals from the existing managing partners be formed to properly review the entire situation as it exists today.

I will meet with this committee in Antigua between August 10th and August 20th, and spend as much time with them as they require, going over as many records as they wish to review. I will introduce them to Starnet/Worldgaming and make certain that they are given a complete tour and understanding as to how all of the operation works. I will also give them access to how the security and transaction software works, and if they wish, they may bring along their own expert regarding internet technology.

I ask the following:

1. - No more sites be moved anywhere until such a committee has met.

2. - That this committee entertain a plan to combine all five web sites into one marketing effort so that we can actually make this operation the success it is supposed to be.

If we can arrive at some workable plan, Atlantic West will allow the 200+ units that it currently owns to be sold amongst the existing partners, with no money going to Atlantic West, and no commissions paid to anyone. That money will be placed into a separate account, fully under the control of the new management committee, and fully dedicated to site promotion. We will also agree to add any unused portion of the remaining advertising budgets to this fund as well.

Atlantic West will additionally build and operate two more gaming sites for the new group, at no charge.

Atlantic West will effective immediately, agree to operate the seven sites with no annual fee, other than actual bandwidth charges, and increase the partnership (group) profit share to 85% of the first $ 100,000.00 of monthly net site revenue and 90% of net monthly site revenues above $ 100,000.00.

Atlantic West will provide two Advertising Portal sites to the group at no charge, except for actual bandwidth consumption costs.

Atlantic West will provide other internet services, e-mail etc. and marketing services to the group at cost.

I sincerely hope that we can develop an operating plan that will allow us to continue into the future.

You invested in your partnership with the idea that you would have access to income from a Quality Site operating out of a fully Licensed and Regulated Jurisdiction. These features give your site the "Credibility " that it needs in order to succeed in the internet of tomorrow.

Please remember this when you make your decision as to where we should go from here.

Sincerely,

Mark Anton

President - Atlantic West Gaming Entertainment Ltd.

Opinions of some of the partners regarding the above letter

----- Original Message -----

From: Guy Abbey

To: Daniel Verkerke

Sent: Wednesday, July 25, 2001 10:35 PM

Subject: Re: Advance Copy of Next Report to Partners

Fellow Investors,

I have just had a long conversation with John German. If you haven't talked with Mr. German I strongly encourage you to do so!!!!!!!!!

After much consideration and talking with Mr. German, I am now withdrawing my support for continuing with Mr. Anton at the helm as I had committed to in a previous E-mail.

I am now returning my "PROXY" voting FOR all portions which apply to AAA GAMING.

It is imperative that we get someone working on turning this situation around and time is of the essence!

Sincerely,

Guy Abbey

Dear Mr. Abbey:

I share your disapointment and wish I had a clear solution.  I have read Mark Anton's report to partners, and under the circumstances find it hugely unsatifying.  I encouraged Mark before he wrote this letter to concentrate on solutions to the business problem that he co-created with the other leadership at AWG/softnet.  Lodging even the most legitimate attacks on others such as Bob Nies or Charles Giannino (and I am not dealing with those attacks one way or the other at this time) does nothing to directly deal with the issues at hand.  In fact the outrageous commisions earned by the independent sales organisations were the design of AWG/softnet, not the sales people that took advantage of a attractive, high commision opportunity.  Mark never takes responsibility for really anything - and until he does - he is simply not creditable.  It is specifically his fault that most of the following things are wrong:  1  Even after 45% sales commisions and hugely inflated start up costs our casinos have not performed, while others have thrived.  Ceasars just got paid for their first month with Luck's in Costa Rica and made $4200 with no advertising budget!  Imagine what they could do with a year and $200k!  Mark can criticise John German's claim that AWG is diverting traffic from us with all sorts of techno-talk  - but the performance or lack of it speaks for itself!  With all of the experience in casino advertising and operation - the efficiency that normally comes with volume - we should have performed 10 times better than German / Lucky's - but look at the results.  Show me result.  I have a hard time hearing your accusations and diversions - the lack of performance kills your voice.  Truth always includes action.  AWG has none!  Now here are some facts that Mark Anton has confirmed with me on a nearly daily basis for months:  OUR ADVERTISING MONEY IS GONE.  IT WAS NOT ESCROWED IN A SECURE ACCOUNT, BUT WAS SPENT ALONG WITH EVERBODY ELSE'S ON AWG operations.  I am not happy about that.  Until he takes responsibility for that and the many other wrongs and works with us to correct them - we will not move forward.  And then there are the accounting issues, the IRS issues, the creditability issues.  Another pathetic example of diversions and taking responsibility is in chapter 4 where he paints a gloomy financial picture of only $300k in net gaming revenues, $290k licensing fees, $68k paid out, $120k paid out to unmentioned owners, $94K rolling reserve - leaving $421k to cover operating costs for 24 months........  low salary.... etc   So what happened to the $1.1 million raised?  Even with 45% going to Outside Sales Organisations - that leaves $6,000,000.00 (six million dollars)  I simply cannot buy anymore poor me crap about where the money went.  When this guy is ready to take responsibility for what he did and did not do, I am ready to listen and work out a tough solution with him.  It will keep him out of jail, strip AWG of all assets and give those assets to the people that they were taken from, and maybe give Mark Anton/AWG a chance to contribute to a new begining and share in the sucess of our new creation.  But one thing is for sure - bullshit does not work, never has, and never will.  And we are still getting it!

I also find the hard luck story a bit off. It seems like Mr. Anton is only including the monies from one casino. He also forgot to mention the $10'000.00 hit he received for managing partner of each of the casinos he managed. If you check out the link at "FINANCES" There is a break down with questions regarding funds. This is only in account for one casino. For Mr. Anton to state " AWG total revenue of $ 992,000.00 of which $ 692,000.00 came from software and ISP services provided to Non-Partnership Related Business." is really odd. Where is all the monies the partners invested in combination to all the casinos?
Sometimes the Casinos appear to be seperated businesses, other times they are presented as AWG. If AWG has it's own entity apart from all the casinos then it is their revenues that pay Mr. Anton's wages. The only revenues Mr. Anton should receive from the Casinos is the $10'000.00. After all, as Mr .Anton has stated everything is done with software.

----- Original Message -----

From: Devilleco@aol.com

To: mark@atlanticwestgaming.con

Cc: Stan ; soke@bushido.org

Sent: Tuesday, July 24, 2001 4:27 PM

Subject: Re: Advance Copy of Next Report to Partners

Mark;

I happen to agree with Stan Narusiewicz. If you can prove your worthiness,
you do deserve the opportunity to slavage our casinos. However, you HAVE GOT
TO SHOW US THAT NOW !!!!!!

ALSO, UNLESS YOU CAN PRODUCE A CONTRACTURAL DOCUMENT, I am suggesting and
will institute if necesary, a lawsuit against the >> brokerage firms that
took 50% of the investors money

This is CLEARLY against SEC regulations and laws. If there is a contract then
we are screwed. Otherwise, i want the name of the companies involved, and the
licenses holders and proncipals.

Today is the 24th of July. I don't need a letter mailed. it can be sent on
here to most of us who care.

The ball is clearly in your court. Perform while you still have the support
of most investors.

Jack Daley

----- Original Message -----

From: Stan

To: Mark Anton ; Daniel Verkerke

Sent: Monday, July 23, 2001 9:08 PM

Subject: Re: Advance Copy of Next Report to Partners

To Mark Anton

From Stan Narusiewicz

I have reviewed your State Of The Union message and am responding as requested.

In general, this whole issue is a classic example of human nature played to its fullest.

Lots of needless arguments and inaccurate statements with very little genuine, constructive, solution oriented suggestions and comments.

I will start by listing what I understand you said and did not say:

    1.  The Horse Racing and Casino Games are now up and running and will be in production in three weeks.  If that is true, then we need to concentrate on obtaining customers.

    2.  The reporting software is being made available.  Good.

    3.  Two of the five partnerships have separated but you leave us hanging when you say you are not sure if you are going along with the separation. 

    4.  You say the brokerage firms took 50% of the investors money.  Why did  you wait until now to tell us that?  You  should have told us that within 90 days of inception.  Never-the-less you make no statement about the impact of this or any other expense in your State of the Union message.

    5.  You say that some legal action was taken against you but no details about it or no statement about whether or not the issues were resolved or not.  You wrote an eight page memo without telling the investing partners what they need to know.

    6.  You did not say how much money was available for each partnership to resume its advertising.  Nor did you say how much of the $94,000 held in reserve for bad credit cards was available or when it would be available.

    7.  Based on some of your comments, it appears you have already consolidated the accounting and promotion expenses of the five partnerships with all your other clients.

    8.  You have not resolved the Cyber squatting issue.  You say it cannot happen, others say it has happen.  What are the investors to believe or do we have a choice.  There can only be one choice but we do not know which it is.  Eight pages but no answer to this issue.

    9.  You make proposals about consolidation and selling equity units without any specifics regarding price or equity adjustments.  If ever there was an example of absolute specifics, it is demonstrated by the legal culture involved with securities investment letters and registration.

    10. Your comments about Proposition 4 are purely speculative, meaningless and inconclusive.  Your comments are innuendoes which you promised to avoid at the outset.  You cannot imply what you are with your comments about Robert Neis, James Lang, Harland Williams, Jans Felix, Nick Trufyn and Charles Giannino.  These people have nothing to do with the state of the union that you  are trying to describe.  They are the victims not creaters of a bad investment.

    11. I commend you for your Proposal.  Your proposal is very good in concept but it is like asking how long is a piece of string.  No one can decide yes or no unless  you define the proposal in a series of pro-forma equity and income statements. 

    12.  Overall, your natural inclinations to exhibit human nature overtook the mission embodied by a State of the Union message.  I got very little of the State of the Union and I still know very little of the status of our Casinos.  When will all this unnecessary talk end and when will we see some honest to goodness business progress.

In conclusion, I am on record to give you, Mark Anton, a second chance to put things back to gather and go forward with good business ethics because it seemed most expedient to me.  Our other choice is to take our Casinos to another Manager and go forward from there.  We need to find a way to determine what to do because all this letter writing is not getting us anywhere.

Best personal regards,

Stan

PS  Mark, maybe you should use any small company quarterly report as a guide and redo your State of the Union Message in a financial format with supporting notes.  The current letter is far too subjective and it did not accomplish the goals you intended for it.  If you want to sell your proposal, show us you have the managerial skills to execute it.  I hate to say it but you current message will probably cause most partners to look for a new manager.  For expediency, I would think you would be the right choice but now I don't know.  Maybe you can show us you have what it takes and if so I recommend you show us.