The following discussion and analysis ("MD&A") should be read in conjunction with our Consolidated Financial Statements and Notes thereto included in Item 1 of this Quarterly Report and with Management's Discussion and Analysis of Financial Condition and Results of Operations contained in our Annual Report for the year ended April 30, 2009 filed on Form 10-K with the Securities and Exchange Commission.

Critical Accounting Policies

Our discussion and analysis of our financial condition and results of operations is based upon our consolidated financial statements. We prepare these financial statements in conformity with U.S. generally accepted accounting principles. As such, we are required to make certain estimates, judgments and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the periods presented. We base our estimates on historical experience and on various other assumptions that we believe are reasonable under the circumstances, the results of which form the basis for making judgments. On an on-going basis, we evaluate our estimates; however, actual results may differ from these estimates under different assumptions or conditions. There have been no material changes or developments in our evaluation of the accounting estimates and the underlying assumptions or methodologies that we believe to be Critical Accounting Policies and Estimates as disclosed in our Annual Report for the year ended April 30, 2009 filed on Form 10-K with the Securities and Exchange Commission.

Executive Overview

We were formed in 1977 and since 1994, have primarily been a gaming company involved in financing, developing, owning and operating commercial gaming projects and financing and developing Native American owned gaming projects. Our gaming facility operations are located in the United States of America ("U.S."), specifically in the states of Colorado, Washington, and Florida. Our business strategy will continue to focus on owning and operating gaming establishments. If we are successful, our future revenues, costs and profitability can be expected to increase. Our net revenues were $5.1 million and $1.6 million for the three months ended July 31, 2009 and July 31, 2008, respectively.

When compared to the three months ended July 31, 2008, the three month period ended July 31, 2009 was impacted by the following items:

- Addition of three mini casinos in Washington state;

- Addition of table games at Colorado Grande Casino;

- Addition of management fees from Oceans Casino Cruises, Inc., ("SunCruz"); and

- Reduced interest income and expense.

COMPARISON OF THE THREE MONTHS ENDED JULY 31, 2009 AND JULY 31, 2008

Net revenues. Net revenues increased 212.2%, or $3.4 million, for the three month period ended July 31, 2009 compared to the period ended July 31, 2008. Casino revenues increased $2.6 million with the addition of the three mini casinos in Washington and the addition of table games at the Colorado Grande. Food and beverage revenues increased $667,000 with the three restaurants in the Washington casinos, and other revenues increased $170,000 with the addition of Pull Tab revenue from the Washington casinos. The Company had no management fees in July 2008 compared to $250,000 during the three months ended July 31, 2009 due to the signing of a management agreement with SunCruz effective November 2008, and slot revenues from the Colorado Grande decreased approximately $168,000 due to Colorado implementing a smoking ban effective January 1, 2008. Our promotional allowances increased $278,000 for the three month period ended July 31, 2009 compared to the period ended July 31, 2008 in proportion to the additions in revenue.

Total operating expenses. Total operating expenses increased 100.2% or $3.0 million, for the three month period ended July 31, 2009 compared to the period ended July 31, 2008. Of the increase, $2.0 million is the result of increased casino and food and beverage operating expenses, $572,000 increased marketing and administration expenses, $194,000 increased corporate expenses due to an increase of stock option expenses of $414,000 offset by decreased audit fees of $235,000.

Earnings from unconsolidated affiliates. Earnings from unconsolidated affiliates were $0, compared to a loss of $3,600 for the three month period ended July 31, 2008. As of December, 2008, we have no unconsolidated affiliates.

Interest income (expense), net. Interest income (expense), net, consists of a net balance of interest expense and amortization of loan issue cost, offset by interest income from our various notes receivable and investments. Interest expense decreased 62.4%, or $253,000, for the three month period ended July 31, 2009 compared to the three month period ended July 31, 2008. The decrease is primarily due to a significantly lower weighted average debt balance. Interest income decreased 87.8%, or $421,000, for the three month period ended July 31, 2009 compared to the three month period ended July 31, 2008. The decrease is primarily due to repayment of notes receivable. Amortization of loan issue cost was $32,209 and $31,639 for the three month periods ended July 31, 2009 and July 31, 2008, respectively.

Net income (loss). Net loss was ($700,709) and ($826,104) for the three month periods ended July 31, 2009 and July 31, 2008, respectively. The improvement of $125,000 is primarily related to the addition of the Washington casinos revenue and the SunCruz management fees, offset by $414,000 of additional stock option expense and the decrease of $168,000 of slot revenues at our Colorado casino, reduced interest expense of $253,000 and reduced tax benefit of $165,000. The effective tax rate for the three month periods ended July 31, 2009 and July 31, 2008 was a benefit of (32.6%) and a benefit of (37.9%), respectively. The decrease in the effective tax rate is due primarily to the non-deductible stock option expense recorded during the three months ended July 31, 2009.

Liquidity and Capital Resources

Historical Cash Flows

The following table sets forth our consolidated net cash provided by (used in)
operating, investing and financing activities for the three month periods ended
July 31, 2009 and July 31, 2008:

                                               July 31,        July 31,
                                                 2009            2008
            Net cash provided by (used in):
            Operating activities              $     102,603     $ 466,955
            Investing activities                (10,429,905 )     940,477
            Financing activities                    145,675        (2,872 )

Operating activities. Net cash provided by operating activities during the three month period ended July 31, 2009 decreased to $0.1 million compared to net cash provided of $0.5 million during the three month period ended July 31, 2008. The $0.4 million decrease in cash flow is mainly due to an increase in stock option expense of $0.4 million, an increase of $0.5 million of our deferred income tax benefit, offset by a net decrease of $1.3 million in operating assets and liabilities.

Investing activities. Net cash used in investing activities during the three month period ended July 31, 2009 increased to $10.4 million compared to net cash provided of $0.9 million for the three month period ended July 31, 2008. The increase of funds used is primarily due to the purchase of the Washington mini casinos and the Colorado Grande Casino expansion, offset by our collection of $1.1 million of notes receivable related to our sale of American Racing in June 2007.

Financing activities. Net cash provided by financing activities during the three month period ended July 31, 2009 increased to $0.1 million compared to cash used of $2,900 for the three month period ended July 31, 2008. The increase of funds provided is the result of obtaining a $150,000 line of credit for the Crazy Moose Casino Pasco.

Future Sources and Uses of Cash

We expect that our future liquidity and capital requirements will be affected by:

- capital requirements related to future acquisitions;
- cash flow from acquisitions;
- management contracts;
- working capital requirements;
- obtaining funds via long-term subordinated debt instruments;
- debt service requirements; and
- disposition of non-gaming related assets.

At July 31, 2009, outstanding indebtedness was $10.0 million, of which $6.0 million is due June 30, 2013 and $4.0 million is due May 12, 2012. In addition to cash flow expected to be generated from the Colorado Grande Casino and existing management contracts, we anticipate that cash flow from the recently acquired mini-casinos in Washington State will generate sufficient cash flow to pay for corporate overhead, net interest expense and anticipated capital expenditures.

We have continued to examine our corporate overhead. As a result, we have implemented several cost saving measures that have saved approximately $2.5 million of general and administrative expenses annually. These measures included the elimination of several senior level positions and a number of corporate staff positions which resulted in a 60% reduction in our corporate full time equivalents. These cost savings have continued during fiscal year 2010.

We have listed the 270 acres in Black Hawk, CO with a real estate broker. If the acreage is sold we will use the proceeds to pay operating expenses or debt or, reinvest the funds into acquisition opportunities.

On July 31, 2009, excluding restricted cash of $6.0 million, we had cash and cash equivalents of $3.7 million.

Our Consolidated Financial Statements have been prepared assuming we will have adequate availability of cash resources to satisfy our liabilities in the normal course of business. We have made, and are in the process of making, arrangements to ensure that we have sufficient working capital to fund our obligations as they come due. These potential funding transactions include divesting of non-core assets and obtaining long-term financing. We believe that some or all of these sources of funds will be funded in a timely manner and will provide sufficient working capital for us to meet our obligations as they come due; however, there can be no assurance that we will be successful in divesting our non-core assets or achieving the desired level of working capital at terms that are favorable to us. Should cash resources not be sufficient to meet our current obligations as they come due, if we are unable to repay or refinance our long-term debts due on May 12, 2012, and June 30, 2013 and, if we are unable to acquire operations that generate positive cash flow, we would be required to curtail our activities and grow at a pace that cash resources could support which may require a restructuring of our debt or selling core assets of the Company.

Off-Balance Sheet Arrangements

None.