UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K/A

Amendment No. 1

(Mark One)

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

		For the Fiscal Year Ended December 31, 2004

		or

	o	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 (NO FEE REQUIRED)

		For the transition period from to .

Commission file number 0-08962

KENILWORTH SYSTEMS CORPORATION

(Exact name of registrant as specified in its charter)

NEW YORK		84-1641415
(State of incorporation)		(IRS Employer Identification No.)

185 WILLIS AVENUE, MINEOLA, NEW YORK		11501
(Address of principal executive offices)		(zip code)

(516) 741-1352

(Registrant’s telephone number, including area code)

SECURITIES REGISTERED PURSUANT TO SECTION 12(B) OF THE ACT:

NONE

SECURITIES REGISTERED PURSUANT TO SECTION 12(G) OF THE ACT:

		(TITLE OF CLASS)
		Common Stock, par value $.01 per share

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 reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ý No o

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (Section 229.405 of this chapter) is not contained herein, and will not be contained, to the best of the 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. o

Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Act).

Yes ý No o

The aggregate market value of the registrant’s Common Stock held by non-affiliates of the registration based on the closing price as reported on the Pink Sheet Market on March 15, 2005 was $11,300,000.

As of March 15, 2005, 141,226,245 Shares of the Registrant’s Common Stock, $0.01 par value, were outstanding.

Portions of the Registrant’s Proxy Statement for its 2005 Annual Meeting of Stockholders to be filed are incorporated by reference into Part III of this Form 10-K.

At the Annual Meeting of Shareholders held on July 17, 2002 the Shareholders approved the issuance of 20,000,000 Shares of restricted Common Stock to Herbert Lindo, the President of the Company for having assigned to the Company the Patent that was granted on June 10, 2003. Titled “SYSTEM AND METHOD FOR REMOTE ROULETTE AND OTHER GAME PLAY USING GAME TABLE AT A CASINO”. Upon Mr. Lindo’s request, the Shares have not been issued. (See Part III Item 12 Beneficial Ownership (1).)

At the regular meeting of the Board of Directors of the Company held on December 1, 2004 at which all six (6) members of the Board of Directors were present, the Directors (with Herbert Lindo, the Chairman and President abstaining) unanimously voted to issue 25,000,000 shares of restricted Common Stock to Herbert Lindo for having assigned in October 2003 to the Company, the Patent which is pending titled “METHOD AND SYSTEM FOR SUPPLYING FUNDS TO A TERMINAL FOR REMOTE WAGERING” (lottery terminals). Upon Mr. Lindo’s request, the shares have not been issued (see Part III Item 12 Beneficial Ownership (1)).

TABLE OF CONTENTS

		PART 1

ITEM 1	—	Description of Business
ITEM 2	—	Properties
ITEM 3	—	Legal Proceedings
ITEM 4	—	Submission of Matters to a Vote of Security Holders

		PART II

ITEM 5	—	Market Prices of the Company’s Common Stock and Related Stock Holder Matters
ITEM 6	—	Selected Financial Data
ITEM 7	—	Management Discussions and Analysis of Financial Condition and Results of Operations (Contains Risk Factors)
ITEM 8	—	Financial Statements and Supplementary Data
ITEM 9	—	Changes and Disagreements with Accountants on Accounting and Financial Disclosure
ITEM 9A	—	Controls and Procedures

		PART III

ITEM 10	—	Directors and Executive Officers of the Registrant
ITEM 11	—	Executive Compensation
ITEM 12	—	Security Ownership of Certain Beneficial Owner and Management and Related Stockholders Matters
ITEM 13	—	Certain Relationships and Related Transactions
ITEM 14	—	Principal Accountant Fees and Services

		PART IV

ITEM 15	—	Exhibits, Financial Statement Schedules and Reports on Form 8-K
		Subsequent Events

FORWARD LOOKING STATEMENTS

In addition to historical information, this Annual Report on Form 10-K contains certain forward-looking statements and Risk Factors. We expressly disclaim any obligations on undertaking to release publicly any updates or revisions to any forward-looking statements contained herein to reflect any change in our expectations with regard thereto or to reflect any change in events, conditions or circumstances on which any such forward-looking statement is based in whole or in part.

Readers should amongst the other statements contained herein and future filings with the Securities and Exchange Commission, including the Quarterly Reports on Form 10-Q to be filed, carefully review in Item 7 the following: “Cautionary Statements for Purposes of the “Safe Harbor” Provisions of the Private Securities Litigation Reform Act of 1995 and Risk Factors”. All of the Risk Factors contained therein should be carefully read.

INTRODUCTORY NOTE TO PART IV

This Amendment No. 1 on FORM 10-K/A is being filed to restate certain amounts which changed as the results of having been ordered by the Securities and Exchange Commission to file the Company’s Financials as a “Development Stage Company” from the period beginning November 24, 1998 to the present at December 31, 2004, the elimination of $4,256,926, which was the amount the Company disbursed on or about September 28, 1998 to be discharged from Chapter 7 Bankruptcy Proceedings, and certain adjustments to losses sustained for the periods ended December 31, 2002, 2003 and 2004 for having discounted

Convertible Promissory Notes from between ten cents ($.10) per share and twelve cents ($.12) per share to five cents ($.05) per share. The Company also added in PART II Item 5- MARKET PRICES OF THE COMPANY’S COMMON STOCK AND RELATED STOCKHOLDER MATTERS:

d) The Company issued 48,246,656 shares of its Restricted Common Stock since December 31, 2002. All of the shares may have the restrictions lifted pursuant to Rule 144 and 144K within one (1) or two (2) years which may substantially depress the trading price of the Company’s Stock in the future.

PART I

ITEM 1—DESCRIPTION OF BUSINESS

THE COMPANY

Kenilworth Systems Corporation, hereinafter referred to as “Kenilworth”, the “Company” or “we”, was incorporated on April 25, 1968 under the laws of the State of New York. Kenilworth has been a publicly traded Company since 1968 formerly on the National NASDAQ Market, presently on the OTC Pink Sheet Market since emerging from Bankruptcy Proceedings in September 1998. Kenilworth is now being presented as a Development Stage Company.

GENERAL

Since early in the year 2000 we have been solely engaged in developing patents, markets and investigating how best to obtain Governmental approvals, by engaging lobbyists and consultants that would allow television satellite and cable subscribers throughout the industrialized world to play and wager along with live, in-progress casino table games (Roulette, Craps, Baccarat and more) from strictly regulated casinos located in the United States and other locations around the world.

Employing the latest encrypted satellite and cable technology and placing television cameras in strategic locations above the casino table games, without disrupting the normal game-monitoring activities, (a separate control room would direct the various camera angles), and transmitting the table games over the digital satellite and digital cable networks to television sets (“TV’s”), which become a platform for playing along with the casino games wherever TV’s are located.

Kenilworth titled the overall proposed project “Roulabette™”. There are 120 million TV subscribers in the United States and more than 300 million subscribers throughout the rest of the world (“The Market”). On average, households in the U.S. have 2 ½ TV’s. (It is important since the satellite and cable companies will charge a separate fee for transmitting the table games). Public gathering places can accommodate (be able to network) up to 200 TV sets with a simple satellite receiving dish or direct cable connections. With wagering possible in homes, hotel rooms, resort rooms, pubs, restaurants, race tracks and other public gathering places the Company believes will become a more than $500 billion net win Market within five (5) years throughout the industrialized world.

To best market the casino games, the Company is selecting lotteries throughout the world to manage and operate the distribution and cash handling (deposits to play and paying winnings) using the lotteries’ existing databases for the sale of lottery tickets, and paying winnings at regular lottery licensed terminal locations.

All forty one (41) lotteries in the United States are owned and operated by County and State agencies. Throughout the rest of the world lotteries are owned by government agencies or non profit charitable agencies that distribute the net earnings to benefit social and charitable programs, or by private entities that pay a percentage of their net win to designated government agencies.

These foreign lotteries also have the same databases as lotteries in the United States, except most lotteries throughout Europe pool their lotteries between countries, not unlike Mega Millions and PowerBall in the

United States, which makes the distribution simpler and very cost effective for both Kenilworth and the lotteries.

There are no technical breakthroughs required. The technology is readily available. What is needed is to get through the maze of Local, County, State and Federal regulations in each U.S. State and foreign countries. When the first State in the United States grants the Company permission to transmit the broadcast from one of its casinos to their residents and to States that do not have any casinos, (the entire East coast of the United States), the other forty (40) States with lotteries will join expeditiously.

The lotteries will receive forty percent (40%) of the net win without costs of any kind. In addition, the States’ general fund will receive five percent (5%) of the net win, also without costs of any kind.

In States that designate exclusively lottery proceeds to schools and their teachers it is a welcome contribution. In other States it will close budget gaps.

In addition, throughout the United States there are five hundred (500) facilities that simulcast live in-progress horse/dog races. At all facilities there are several large TV screens that show the races from the different tracks with general theater type seating for patrons and at private cubicles with television sets outfitted with touch screens. The cubicles rent for additional fees. After players open an account and select pin numbers, they can watch each race offered on the different tracks on the TV and place wagers on the different races by simply changing channels. The players may also watch sporting events, the news, the Stock market reports, and in the near future Roulabette™, live, in-progress casino table games. The simulcast centers have their own databases to manage the cash deposit and pay winnings on the horse/dog races and will be able to manage the casino games, on the same methods as the lotteries will manage Roulabette™. With fifty to one hundred (50-100) private TV’s, available in simulcast centers, especially at night, when fewer tracks are operating.

When playing along with live table games from a highly regulated jurisdiction, players will be assured that the game results are exactly what they see; and, playing along with live casino table games such as Roulette, Craps and Baccarat we believe will provide interaction, fun and far more excitement than playing make believe animated (virtual) games. It is the next best thing, we believe, to actually being at the table in the casino.

To conduct the initial broadcast Kenilworth believes it will require ten million dollars ($10,000,000) and there are no assurances we will ever be able to obtain any of such money. At present, the Company does not have the funds readily available but hopes to obtain same, from investors, as soon as Kenilworth can commence broadcasting from a casino in the United States or other casinos throughout the world.

In prior years, Kenilworth completed a prototype system that allowed casino patrons to play along with live in-progress casino table games only within the confines of a casino, via closed circuit television. Also in 1990, we developed and delivered for the TAB (Totalizator Agency Board) a quasy government agency of the State of Victoria, Australia, a cashless slot machine system. Both systems required debit cards and central mainframe computers to manage the wagers. By making use of the expertise applied in the development of the aforementioned systems we plan to develop a second-generation system that will manage the wagers by the microprocessor installed in TV set-top boxes to receive satellite broadcasts. This as planned would allow a player in an interactive manner, at a remote location (outside the casino confines), to experience the actual play and excitement at the casino table game and to make wagers on the various games, without having to be physically present at the casino or casino table. There are no assurances we will be able to successfully develop any system.

The proposed “Roulabette™” system also will provide Roulabette™ terminals that may be placed in resorts, racetracks or other gathering places which consists of a personal computer (PC) with two (2) monitors. One (1) monitor will display the live in-progress casino table game play as well as advertising. The second, which will be outfitted with a touch screen, allows a player to place wagers directly over the games displayed on the first monitor. It will also have a variable denomination bill acceptor and a bar code ticket dispenser. Both monitors will be housed in an attractive enclosure. The Roulabette™ terminal will

be the size of a typical “low boy” slot machine (desk top height). Each terminal would be self-sufficient, manages wagers from $0.25 to $100.00 or the equivalent in most any currency, and receives the table game play via simulcast digital satellite TV transmissions (with dish antennas) or local digital cable connection from legally operating casinos throughout the industrialized world.

Where authorized, hotels, resorts clubs and other public gathering places will be able to offer casino table game action in their establishments without incurring the costs to operate a casino. The Roulabette™ terminal is expected to offer an alternative to slot machine players. There are now believed to be more than ten (10) million slot machines played throughout the world.

Kenilworth will seek to promote to state lotteries and foreign jurisdictions, and other state regulated entities, the ability to operate websites that will manage the wagers. The program will ask state legislatures to amend their lottery horse/dog racing and OTB legislation to include Roulabette™ wagering or promulgate new legislation. There are no assurances that the necessary approvals will be granted.

We believe there are powerful arguments for state legislatures to amend their Lottery Acts to include “Play Along with Roulabette™ Live”. Lottery revenue is gradually decreasing in every state. Thirty-two (32) states and the District of Columbia are pooling their lottery prizes with the “PowerBall” and “Big Game” national lotteries. In most of these states, the state lottery finds it difficult to obtain sufficient numbers of players to make up a minimum weekly lottery prize of one million dollars ($1,000,000). In most states, the revenue from lottery play benefits education. States need something more attractive to restore revenue. With “Play Along with Roulabette™ Live”, there is interaction, excitement and fun. All which we believe may be at much better odds than may be offered by the lotteries. The lotteries can establish maximum wagers daily, weekly and monthly limits, and monitor compulsive gamblers, and almost prevent 100% of the underaged from wagering on Roulabette™ by use of lottery terminals to make deposits in cash to wager along.

Project Roulabette™ is a concept intended to be built and there can be no assurances that it will ever be built. The Patented microprocessors to be installed in the TV set top boxes have not been designed. We have as at December 31, 2004, no agreement, customers except for proposals submitted for future business and there can be no assurances that we will ever have same.

Features Archive

This following feature has been prepared by the groupe of Sorbonne University’s DESS
Communication Audiovisuelle in Paris, France under the direction of Julien Favre.

FOCUS
Casino table game broadcast live on TV, and interactive!
by Julien Favre, Chief Editor, iTVi

Subscribers to digital satellite and cable programs will soon be able to bet as they watch live, in-progress casino table game action, thanks to a new (a patented) system developed by Kenilworth Systems Corporation that will involve States lotteries...

Bet As You Watch Casino

The “Bet As You Watch Casino” service will be deployed in conjunction with States Lotteries. Digital TV subscribers will go to their local lottery agents and buy an “admission ticket”. The ticket will allow them to access the interactive service.

The service will consist of television simulcast broadcasts of live in-progress casino table game action. Viewers will be able to bet exactly as they were in the casino playing at the table.

The program will include Hollywood entertainment and commentators (much like commentators of sporting events) in order to assist players with the rules and strategies of the games.

Distribution

The first viewers to access the service will probably be Asians. Kenilworth is presently actively exploring casino broadcast sites to the Asian market, which has twice as many digital satellite subscribers than the U.S. and U.K. combined.

A highly regulated initiative

Exclusively licensing lotteries and their operators for the cash deposits required for wagering on the programs will assist Kenilworth in its efforts to make sure the under aged won’t participate in the casino action. Lottery Terminal Operators must observe the minimum age laws under criminal penalty.

A special effort will also be made to identify compulsive gamblers. By monitoring all wagering action, the system will be able to identify problematic gamblers and limit or shut down their obsessive gambling habits.

Business model

Revenues from the admission tickets will be split between Kenilworth and the State lotteries, OTB offices and Race track owners.

Technology

Kenilworth has been granted a U.S. Patent for the interactive television wagering system in June 2003, which Patent has also been filed in forty-nine (49) countries including China and Russia.

The Patent was assigned to the Company when it was pending in 2000 by its inventor Herbert Lindo.

A second Patent which is pending titled “Method and Systems for Supplying Funds to a Terminal for Remote Wagering” which Patents the use of lottery terminals to manage Roulabette™ wagers, also invented by Herbert Lindo and assigned to Kenilworth in 2003.

Kenilworth’s technology involves a microprocessor that is incorporated in the TV set top box used by the viewer to receive the digital satellite broadcasts. The microprocessor manages the wagers.

Once play along in homes and other public gathering places has started, we intend to introduce casino games such as “limited tournament play”. For twenty-five dollars ($25.00), players would be able to sign up with their respective lottery operators and make up to thirty (30) wagers on any table game. The individual that wins the most money during a specific tournament game period may win as much as a million dollars ($1,000,000) in addition to their game play win. As more interactive play along with casino games develops throughout the world, the prizes can be increased and multiplied. The limited tournament play games can be scheduled more than once a day, during specific hours of the day, on specific days or nights of the week or once or twice a month. Actual live experience will determine scheduling.

The gaming industry is comprised primarily of five (5) service industries: (1) traditional pari-mutuel wagering on horse and dog racing; (2) casino, Indian Reservations, and riverboat gambling; (3) lotteries; (4) charitable organization gambling (Bingo and Las Vegas Nights); and (5) Sports book.

Kenilworth intends to operate primarily in the casino segment.

KENILWORTH MANIFEST

(The Manifest contains forward-looking statements which is based upon our beliefs
and expectations of which there can be no assurances. See “Risk Factors” contained in Item 7)

Casino gambling throughout the world, in every form, is on the increase. Most jurisdictions need the revenue from gambling to balance their budgets or increase their tax collection. Recently a newspaper report published in the Wall Street Journal in March 2004 indicated that nineteen (19) states are exploring to use gambling to raise funding needed for schools and other tax relief.

Kenilworth Systems Corporation expects to be able to provide, of which there can be no assurances, simulcast gaming worldwide, giving everyone the opportunity of playing a casino table game as if they were on the floor of a major casinos. This project would provide all of the benefits and actual excitement of playing in a casino as actually being at the casino. Gaming enthusiasts will welcome the chance to place wagers on live in-progress casino table games, whether they are at a local tavern, hotel, resort, racetrack or other public gathering place, or at home. Kenilworth hopes to be able to lead the industry in this arena, and its Patent and Patent pending and its technology we believe would allow all of this to happen of which there can be no assurances.

Our proposed system has the potential to replace the existing one thousand (1,000) foreign virtual gambling websites now in play, which garnished more than eight (8) billion dollars from U.S. citizens in 2004 and is expected to increase to ten to twelve (10-12) billion dollars in 2005, violating the 1961 Wire Act without paying any U.S. taxes. We expect that players will prefer to “Play Along with a Live Casino Game” versus a virtual make believe game, assisting the U.S. Attorney General’s Office curbing illegal wagering in the United States by foreign website operators that entice the public into wagering illegally.

Initially, the proposed broadcasts will be of Roulette, Craps and Baccarat games.

We may franchise the simulcast which may allow broadcasts to jurisdictions that have approved gaming regulations.

Kenilworth will offer to share a percentage of its worldwide net winnings with the state, and other foreign jurisdictions, and the appropriate sponsoring casinos.

All franchisees will be required to make the broadcasts available to digital satellite and digital cable subscribers in their jurisdictions. Kenilworth, as part of its marketing plan, will supply the appropriate TV, cable, and interactive equipment (for betting terminals) to the franchisee.

The various Regulatory Authorities will monitor all franchisees of the Kenilworth System. A violation of their regulations by a franchisee may result in a termination of the franchise.

For “Play Along With Roulabette™, Live” a franchisee will be required to provide the at home player with the ability to deposit funds into their pre-paid gambling accounts anytime, and on the spur of the moment.

We hope to provide Licensed Betting Offices (bookmakers) in Europe, lottery operators and OTB offices in the U.S., to manage the wagering accounts for at home players. They will be able to accept last minute deposits. In jurisdictions, which have lottery terminals in place, arrangements will be made with the lottery to accept instant deposits and pay winners, using the lottery terminals as the managing device.

A player will simply mark a ticket with his/her Set Top Box and TV set Identification Number, together with the amount to be deposited. From that point on, the procedure is the same as selecting lottery numbers. A winner can be paid using the reverse procedure.

Betting offices and lottery terminal providers will either share in the net win managed by each, or be paid a fixed commission for the amount deposited.

Where authorized, hotels, resorts, clubs, pubs, racetracks and other public gathering places (the “site”) will be able to offer casino table game action in their establishments without incurring casino operating costs. At our expense, we will place Roulabette™ terminals and/or advanced PDA’s at the site, enabling wagering via the site’s television sets.

It may be that in order for hotels not to be required to obtain casino licenses to offer “Roulabette”™, they may have to limit the wagering to minimal amounts, so as to qualify the games as entertainment for registered hotel guests. Resort gaming we believe will establish a trend for the entire hotel industry.

In the event a substantial amount is won by a player, Kenilworth will make payment to the winner, via money wire transfer to the establishment within twenty-four (24) hours. Kenilworth will establish a worldwide cash cage for winning payments; or, a guarantee of payment by a well-recognized international bank.

In August 2002, the Attorney General of the United States Office informed the Nevada Gaming Control Board (Chairman and Commissioner Dennis Neilander, Esq.) that Internet wagering is in violation of the 1961 Wire Act and, therefore, cannot be permitted in the United States or transmitted from the United States to other countries in the world. Previously, the Nevada State Legislature had approved Internet gambling (February 2001) subject to the approval by the U.S. Attorney General’s office. Nevada is the only state that approved Internet gambling. Most states have outlawed Internet gambling. Others have taken no action.

Our proposed simulcast, via digital satellites, will not use a wire transmission and communication facility. We are not within the constraints of the Internet gambling interdiction. Our broadcast is similar to horseracing and sporting events, where the simulcast is transmitted via satellites to the various satellite dish subscribers, and then downloaded to cable companies. Licensed Betting Offices, OTB offices and racetracks that offer out of state horse racing would pick up the satellite broadcasts with their own dish antennas. We believe broadcasting casino play action via satellite transmission within state boundaries does not violate the Federal 1961 Wire Act. We further believe it will be permitted by the Interstate Horseracing Act of 1978, USC 300, Et. Seq. There can be no assurances of the foregoing.

In prior years, the House of Representatives voted and passed the Internet Gambling Enforcement Act, which bans credit and debit cards, checks, “Western Union type” wire transmission and all other means of transferring money for use in connection with Internet Wagering. Since the Senate did not approve a companion Bill, the House and Senate must pass the legislation again in 2004/5. We believe there appears to be an anti-Internet gambling sentiment in Congress and passage by both houses appears certain. Our method is distinct, as players using our system, unlike the Internet, will be subject to state casino regulations and will not be permitted to use credit or debit cards. We believe there are no U.S. prohibitions to simulcast live action of casino games as long as the wagers are placed and wagered within the state.

In our proposed worldwide plans, wagers would be placed with Licensed Betting Offices and lottery terminal operators. They would be only permitted to accept cash at their offices or lottery terminal locations. Currently, they would be obliged to make sure that no one underage places or collects wagers on horseracing, sporting events or the lottery. The same would apply when they accept wagers or pay winnings on our live simulcast broadcasts. We believe, although there can be no assurances, that our system is simple and almost 100% foolproof.

Initially our proposed simulcast will be for entertainment purposes only and will start with broadcast emanating from casinos in the United States and delivered to foreign jurisdictions that permit our type of casino gambling. Our proposed broadcasts may actually contain live entertainment produced in Hollywood. Thirty (30) minutes of gambling, then thirty (30) minutes of entertainment, then thirty (30) minutes of gambling and then back to entertainment. The entertainment would be inserted the same as commercials are presented on TV shows. Kenilworth has been able to engage CenterStaging Musical Productions, Inc. of Burbank, California to provide the entertainment content for Roulabette™ broadcasts.

We believe the proposed broadcast does not require any sophisticated electronics; only the acceptance by the satellite and cable operators and the approval of the Federal Communications Commission. We have been unofficially advised that, for entertainment only (no wagering), our broadcasts will be classified the same as any program now being broadcast via the networks. For gambling, we will require an FCC license, which we would have to obtain (simulcasting of horse racing requires an FCC license).

LOGICAL QUESTIONS:

(The following is a series of some questions, and what we believe,
without assurances, are our answers to them.)

(1.) Why aren’t major casinos in Nevada and Atlantic City that have substantial resources, and the casino table games, competing with us?

The answer is simple. They are casino operators. If they, even by accident, have a minor playing along with their broadcasts, or commit any other violation, they could lose their Nevada or Atlantic City and other state Casino or foreign licenses. Establishing a subsidiary for their transmissions does not absolve them from the violation. Kenilworth is not a licensed casino operator. Kenilworth holds the U.S. Patents for remote casino wagering and depositing cash funds to and they would only be able to operate under our license. Sharing profits with non-licensees is a violation of the Nevada Gaming Control Act.

Further, if we ever commence broadcasting from Las Vegas or Atlantic City, we plan to broadcast from casinos in rotation, in order that each casino will have the opportunity, on certain days, to broadcast during prime time. When we manage the broadcast in their casino, we will make use of the same crew in the communication room (4 technicians, 24 hours a day, 7 days a week).

We believe that casino centers would fare better in accepting a percentage of our net win, which they would receive without any operating costs.

Net win is determined before deduction of expenses. It’s a term used to collect taxes on gambling revenue (table drop) before operating expenses. In Europe, and now in some states in the U.S., this tax amounts to an average of twenty percent (20%), with minimum annual taxes of up to one hundred million dollars ($100,000,000).

We propose to offer a percentage of our net win to any state. On a worldwide basis revenue could reach, in the not too distant future, in the five hundred billion dollar range ($500 billion). That could earn billions of dollars annually to participating jurisdictions. Law enforcement agencies estimate that Americans wagered $380 billion in 2001 on sporting events (mostly illegally). Our proposed system can be regulated and controlled (unlike Internet sites).

(2.) Why wouldn’t the U.S. Congress also prevent simulcasting of live casino table games, like it has with Internet gambling?

The Interstate Horse Racing Act of 1978 permits simulcasts of races via satellite transmission between states, which are then downloaded to cable systems. Horse and sporting club owners are traditional and substantial contributors to House and Senate campaigns. It is big business that we believe would have to be abolished if our proposed simulcasts are outlawed. The probability of its abolition is remote.

(3.) What will happen if non-casino or casino operators attempt to compete with us?

If they do, they run the risk of an injunction and incurring triple damages. The U.S. Patent titled “SYSTEM AND METHOD FOR REMOTE ROULETTE AND OTHER GAME PLAY USING GAME

TABLE AT A CASINO” for remote live in-progress casino play was issued on June 10, 2003 to Kenilworth and has been filed for approval in forty-nine (49) industrialized countries including Russia and China.

(4.) Will there be opposition by Nevada casino operators?

The past has proven to the Nevada casino industry that as more casinos are built in the United States (we believe there are now more than nine hundred [900] casinos outside of Nevada), more visitors come to Nevada. Our worldwide broadcasts would substantially enhance the overall demand to visit Las Vegas or any other state or jurisdiction that permits our broadcasts, and to other casinos from which we will broadcast.

SUMMARY:

(1.) Kenilworth’s business presently is solely in the planning stage. We plan to engage in the development, manufacturing, marketing of an operation entitled Roulabette™. Roulabette™ would allow casino patrons and other players to play along with live in-progress casino table games such as Roulette, Craps and Baccarat and more via digital satellite and digital cable television broadcasts (simulcasts) emanating from strictly regulated casinos located in the United States and other locations around the world, to self-sufficient computer terminals dubbed “Roulabette™” and digital satellite and cable TV set top boxes. The Roulabette™ terminal is a proposal intended to be built and there can be no assurances that it will ever be built. The microprocessors to be installed in the TV set top boxes have not been designed. We have as at December 31, 2004, no agreements, customers or proposals for any future business and there can be no assurances that we will ever have same. Reference is also made to each of the “Risk Factors” that are set forth in Item 7.

(2.) Our Roulabette™ terminals, wherever they would be placed in bars, resorts, hotels, racetracks, etc. will only be leased to the operators by the leasing company, which we will engage for that purpose. If a terminal cannot meet the minimum revenue necessary to pay the monthly leasing charges, it will be moved to another location. By placing Roulabette™ terminals at horse race tracks, which also offer slot machines, we will be transforming them into complete casinos, without the inherent start up and operating costs.

(3.) We believe the thousand virtual casino websites via the Internet obtain sixty percent (60%) of their annual revenue from customers in the U.S.

Although Internet gambling is outlawed, we believe it is presently not very well enforced by the U.S. Justice Department. Much of the opposition in Congress against Internet gambling stems from the fact that the websites are not legitimate, and may even be used for money laundering. Further, the websites do not effectively prevent minors and underage college students from wagering. Approximately one hundred (100) entities control the thousand websites. When one site experiences losses, it is shut down and another site is created. We expect that a majority of these sites will shut down because of our simulcasts, thus directly reducing the number of sites, which need to be policed.

Simulcast broadcasts of digital satellite and digital cable transmissions around the world must meet, and will be supervised by, the regulations by the gaming authorities of the broadcasting casino and the jurisdiction, which receives the broadcast. We believe the supervision will not be difficult to enforce, because all simulcast wagering is “cash only”, from regulated, supervised betting sites. There are no wire money transfers with banks and no credit or debit cards permitted. We believe this fact should ease any opposition from concerned citizens and anti-gambling groups, as regulation and enforcement responsibility will be vested in each individual state (or foreign jurisdiction).

We believe Kenilworth was the first to use color personal computers (PC’s) to replace electromechanical slot machines (1988). We provided the software for the first Tabaret located at the Menzie at the Rialto in Melbourne, Australia, which opened in November 1990. This consisted of cashless, variable denomination and multiple game virtual PAT’s (“Player Activated Terminals”). Prior thereto Kenilworth sponsored,

with the assistance of three Nevada casino operators, legislation to permit cashless wagering in the state of Nevada. The legislation, which is in the form of an amendment to existing casino control statutes, permits the use of account cards (debit cards) and was signed into law by Governor Richard H. Bryan on June 13, 1985.

Kenilworth has been a publicly traded Company since 1968. Prior to commencing its endeavors into its proposed business in 1988, it provided security systems to Nuclear Electric Generating Plants in the U.S. and foreign countries, as well as time/attendance systems at a major department store chain.

MARKETING STRATEGY/SALES PLAN

Our marketing strategy consists of developing the Roulabette™ terminal and the Roulabette™ broadcasts. We estimate at this time, that we will need at least approximately ten million dollars ($10,000,000) for promoting the Roulabette™ concept. We do not have this money nor do we have any agreements or understanding to procure this money. We may never get this money. If we do obtain this money, it may not be sufficient. Further, should such monies be available it may not be available on terms satisfactory to Kenilworth or it may be available on such terms that substantially dilute the interest of existing shareholders. If we obtain this money, we will need substantial additional funds for the proposed marketing plan and there can be no assurances that such funds will ever be available to allow Kenilworth to engage in business on a profitable basis.

At the present time, we do not have any technically oriented employees who will be able to develop Roulabette™. It will be necessary for us to obtain personnel qualified and with the expertise to develop Roulabette™. We would require six (6) additional employees and several consultants and there can be no assurances of our being able to obtain any necessary personnel. There can be no assurances of the availability of any such employees and consultants. The Company will outsource the development of Roulabette™ and the microprocessors for the TV set top boxes.

In the United States Kenilworth hopes to refrain from using the Worldwide Web (WWW) Internet to manage wagers from individuals outside of the casino confines. Legislators have voiced strong objections to having their constituents’ gamble one-on-one against computers located in Europe, Russia and on Caribbean islands, totally unregulated. In Roulabette™, the play-along broadcast emanates from casinos that are regulated by strict and comprehensive rules and state and jurisdiction regulations, enforced by gaming control regulators and everybody plays along with the same live table game. There is a world of difference between playing in a virtual make believe casino compared with an actual casino.

For the reasons stated, Kenilworth will ask state lotteries, Off-Track Betting (OTB) corporations, pari-mutuel race tracks, and other state and federal regulated agencies to manage the wagers from individuals playing along on their PC’s and their television sets using interactive TV set top boxes that convert regular television sets into minicomputers within their state or jurisdiction. There can be no assurances that we will be able to obtain any arrangement with any of these entities or that they would be on suitable terms.

The individuals would have to pre-deposit funds into an account with the wager management company and then place wagers with their credit balance. The wagers and running balances will be transmitted to the Roulabette™ player’s PC and/or television sets with telephone lines not crossing any state lines, similar in principle to telephone accounts wagering offered by the New York State Off-Track Betting Corporation and the state of Nevada casino sports book and recently with remote purchase of lottery tickets in many states within the United States.

After we obtain permission to play Roulabette™ of which there can be no assurances, in a given state and engages a wager management organization in order to promote digital satellite and interactive television to the state’s residents, Kenilworth would install the eighteen (18) inch dish antenna and converter box required to receive digital TV programming and interactive TV at its own cost, if the subscriber opens a Roulabette™ wagering account for two hundred dollars ($200). In addition, Kenilworth would pay the monthly subscription fees to view all digital TV programming offered and the Internet service provider