UNITED STATES

 SECURITIES AND EXCHANGE COMMISSION

Washington, D.C.   20549

FORM 20-F

 (  )

REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR (g) OF THE SECURITIES EXCHANGE ACT OF 1934

(X)

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

For the fiscal year ended     DECEMBER 31, 2006   

(  )

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

For the transition period from _______to _______

Commission file number      029718                         

 LAS VEGAS FROM HOME.COM ENTERTAINMENT INC.

Incorporated in the Province of British Columbia, Canada

Suite 100, 1255 West Pender Street   

Vancouver, British Columbia, Canada V6E 2V1

Securities registered or to be registered pursuant to

Section 12(b) of the Act.

Name of each exchange

Title of each class

on which registered

Common Shares (no par value)

TSX Venture Exchange

OTC Bulletin Board

Berlin Stock Exchange

Frankfurt Stock Exchange

Securities registered or to be registered pursuant to

Section 12(g) of the Act.

As at December 31, 2006 the authorized capital of the registrant consists of an unlimited number of common and preferred shares without par value of which 100,234,270 common shares without par value are issued and outstanding.  As of May 31, 2007, the total number of issued and outstanding shares of the Company consists of 101,950,795 common shares without par value.  There are no preferred shares outstanding.

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 [X]    No [  ]

Indicate by check mark which financial statement item the registrant has elected to follow.

[X]   Item 17

[   ]   Item 18

1

LAS VEGAS FROM HOME.COM ENTERTAINMENT INC.

TABLE OF CONTENTS

2

ITEM 1. IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISORS.

Not Applicable.

ITEM 2. OFFER STATISTICS AND EXPECTED TIMETABLE

Not Applicable.

ITEM 3. KEY INFORMATION

Item 3.A - Selected Financial Data

All financial figures presented herein and throughout this Annual Report are expressed in Canadian dollars (Cdn $) unless otherwise specified.  

The selected financial data in Table I has been derived from the audited consolidated financial statements of Las Vegas From Home.com Entertainment Inc. (hereinafter referred to as “Las Vegas”, or the “Company” or the “Registrant” or “LVFH”) which have been prepared in accordance with accounting principles generally accepted in Canada.  The information should be read in conjunction with the Registrant's audited consolidated financial statements and notes thereto included in Item 17 of this Annual Report.  All monetary data herein is stated in Canadian dollars (Cdn $).

Las Vegas From Home.com Entertainment Inc.

TABLE I

	Year Ended December 31, 2006	Year Ended December 31, 2005	Year Ended December 31, 2004	Year Ended December 31, 2003	Year Ended December 31, 2002
Revenues	$         748,425	$                    0	$                  0	$                  0	$                   0
Interest income	$         109,593	$           76,210	$           3,046	$           1,997	$            9,776
Net income (loss)	$   (4,593,428)	$      1,088,741	$   (5,346,512)	$ (2,008,775)	$  (1,825,413)
Basic earnings (loss) per share	$         * (0.05)	$           * 0.01	$       * (0.08)	$        *(0.04)	$         *(0.05)
Total assets	$      9,617,355	$   12,819,608	$   2,582,847	$       661,035	$       345,200
Capital Stock	$    29,792,819	$   27,096,835	$ 17,299,101	$  14,345,780	$  12,400,607
Number of Common Shares at year end	100,234,270	92,514,678	69,858,678	52,033,270	38,103,486
Long-term obligations	$                   0	$            2,550	$       23,190	$        20,303	$                 0
Cash dividends	$                   0	$                   0	$                0	$                 0	$                 0

*   Gain (loss) per common share in the above table is based on the number of shares outstanding at year end, and not on the weighted average number of shares outstanding for the periods (Canadian GAAP) as shown in the Audited Statements of Operations and Deficit for the years ended December 31, 2006, 2005 and 2004.

·

Effective January 2004, the Company adopted the new requirements of the Canadian Institute of Chartered Accountants (“CICA”) Handbook Section 3870, which requires all forms of stock based compensation, including stock options to be accounted for using the Fair Value based method and recorded as an expense over the vesting period.  Previously, the Company did not record any compensation cost on the granting of stock options to directors, officers, employees and consultants as the exercise price was equal to or greater than the market price at the date of the grants.  Options granted are accounted for using the Black-Scholes option pricing model.

·

As a result of this change in accounting, the 2004 opening deficit was restated on a retroactive basis to show the effect of compensation expense associated with stock option grants in 2003 of $214,024 and $83,051 in 2002.  Accordingly, contributed surplus was increased by $ 297,075 in 2004.

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Certain prior year amounts have been restated to be comparative to the current year’s presentation.

Had the financial statements of Las Vegas been prepared in accordance with accounting principles and practices generally accepted in the United States and required by the United States Securities and Exchange Commission ("SEC"), certain selected financial data would be disclosed as per Table II.

TABLE II

	Year Ended December 31, 2006	Year Ended December 31, 2005	Year Ended December 31, 2004	Year Ended December 31, 2003	Year Ended December 31, 2002
Net income (loss)	$(4,593,428)	$ 1,088,606	$ (5,352,160)	$ (1,788,968)	$  1,742,362
Basic earnings (loss) per common share	$      * (0.05)	$       * 0.01	$     * (0.08)	$      * (0.03)	$      * (0.05)
Number of Common Shares at year end	100,234,270	92,514,678	69,858,678	52,033,270	38,103,486
Total assets	$  9,617,355	$ 12,819,608	$ 2,582,982	$    666,818	$    345,200

*   Gain (loss) per common share in the above table is based on the number of shares outstanding at year end, and not on the weighted average number of shares outstanding for the periods (Canadian GAAP) as shown in the Audited Statements of Operations and Deficit for the years ended December 31, 2006, 2005 and 2004.

A discussion of the differences between accounting principles and practices generally accepted in Canada and accounting principles and practices generally accepted in the United States and required by the SEC is contained in Note 17 to the financial statements, included in Item 17 of this Annual Report.

Exchange Rates

	Monthly High ($) (1)	Monthly Low ($)(1)
December 2006	0.8581	0.8770
January 2007	0.8455	0.8594
February 2007	0.8435	0.8627
March 2007	0.8470	0.8661
April 2007	0.8624	0.9008
May 2007	0.8991	0.9349

⁽¹⁾

The high and low exchange rate in each month has been calculated using the average monthly rate of the Bank of Canada.

	Year Ended December 31, 2006	Year Ended December 31, 2005	Year Ended December 31, 2004	Year Ended December 31, 2003	Year Ended December 31, 2002
Average rate ($)(2)	0.8816	0.8254	0.7684	0.7138	0.6369
High ($)(3)	0.8641	0.7876	0.7165	0.6381	0.6202
Low ($)(3)	0.9015	0.8682	0.8504	0.7726	0.6613

⁽²⁾

The average exchange rate for the period has been calculated using the average yearly rate of the Bank of Canada.

⁽³⁾

The high and low exchange rate in each period was determined from the average yearly rate of the Bank of Canada.

All of the amounts in the Exchange rates tables above are stated in U.S. currency.  Accordingly, at the closing on December 31, 2006, the U.S. $1.00 was equal to Cdn $1.1654.  At the closing on May 31, 2007, the U.S. $1.00 was equal to Cdn $1.0696

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Item 3.D. Risk Factors

The Company, and the Securities of the Company, should be considered a highly speculative investment.  The marketplace for the Company’s business is constantly undergoing changes, is intensely competitive and is subject to changes in customer preferences.  Consequently, new products are being developed continuously by the Online Gaming Industry in order to satisfy customer demands, and new costly venues of advertising and promotion are being used by the Online Gaming Industry so as to attract new customers and retain existing ones. The following risk factors should be given special consideration when evaluating an investment in any of the Company's Securities:

General legislative risk

Although management of the Company believes that the conduct of Internet gaming related activities by its Antiguan subsidiary, MT Ventures Inc. (“MTV”), represents a lawful business, there is the risk that the legality of the Internet gaming related activities may be challenged by Canadian or other legal authorities.  If the legality of the Internet gaming related activities is challenged and the challenge is sustained, it can have a material adverse impact on the business and financial affairs of the Company.

US legislative risk

There is an ongoing effort in the U.S.A. to enact legislation for the prohibition of online gaming.  The passage of such legislation could substantially and adversely impact the business and financial affairs of the Company and its licensees. On September 29, 2006 both Houses of the U.S. Congress passed the Safe Port Act, onto which was attached the Unlawful Internet Gambling Enforcement Act of 2006 (the “UIGE Act”).  The UIGE Act prohibits the acceptance or use of any payment instrument in any financial transaction involving internet gambling.  Consequently, the Company decided that its former licensed operating subsidiary, APG, would cease taking deposits from U.S. based players as of October 13, 2006.

Competition

The marketplace for the Company’s Gaming Software is constantly undergoing changes, is intensely competitive and is subject to changes in customer preferences.  The Company’s products and services compete against those of other companies that have greater financial, marketing, technical and other resources than those of the Company.  

Internet and system infrastructure viability

Any changes in the internet’s role as the premier computer network information service or any shutdown of internet services by significant internet service providers will have an adverse material impact on the Company’s ability to generate revenues.  Furthermore, the Company can be severely and adversely affected from power failures, internet slowdowns or failures, software slowdowns or failures and hackings.  

Reliance on key personnel

The Company relies heavily on its employees, the loss of any of whom could have an adverse effect on the Company.

Customer concentration

The Company also relies on its licensees for the operation of the Company’s Gaming Software, the loss of any of which could have an adverse effect on the affairs of the Company.

Payment processing

Changes in policies of companies, financial institutions or banks, that handle credit card transactions and/or other types of financial transactions for online gaming, can have an adverse impact on the business and financial affairs of the Company.

5

Foreign exchange rates

The profitability of the Company can be affected by fluctuations in the exchange rate of the US Dollar in relation to the Canadian Dollar due to the fact that the Company’s revenues are generated in US Dollars while a major portion of the Company’s expenses are incurred in Canadian Dollars.

Share price volatility and liquidity

The market price of our common shares has experienced considerable volatility and may continue to fluctuate in the future. Factors such as the Company’s quarterly results, changes in existing legislation, new legislation, technological changes and general market conditions may adversely affect the market price of our common shares. There is a limited trading market for our common shares and the ability of investors to sell their shares or the price at which those shares may be sold cannot be assured.

Growth management

If the Company’s software gains traction in the market, rapid growth may occur which may result in certain strains on the Company. The Company will have to manage, hire and retain qualified employees and control its expenses in order to grow profitably.

Dilution

There are a number of outstanding securities and agreements pursuant to which common shares of the Company may be issued in the future. This would result in further dilution to the Company's shareholders.

Revenues and Dividends

While the Company has recently started generating meaningful revenues, the Company has not yet established a long term pattern of consistently generating meaningful revenues.  The Company intends to retain its earnings in order to finance further growth.  Furthermore, the Company has not paid any dividends in the past and does not expect to pay any dividends in the future.

U.S. Federal Income Tax Considerations

The Company is classified as a Passive Foreign Investment Company ("PFIC") for U.S. Federal Income Tax purposes. Classification as a PFIC will create U.S. Tax consequences to a U.S. shareholder of the Company that are unique to the PFIC provisions and that are not encountered in other investments.  Prospective investors are urged to consult their own tax advisors with respect to the tax consequences of an investment in the common shares of the Company.

Penny Stock  

The Company's securities are deemed to be Penny Stocks and are therefore subject to Penny Stock rules as defined in Rule 3a(51)(1) of the 1934 Exchange Act.  The Penny Stock disclosure requirements may have the effect of reducing the level of trading activity of the Company's securities in the secondary market.  Penny Stocks are low-priced shares of small companies not traded on a U.S. national exchange or quoted on Nasdaq.  The Company's securities are quoted for trading on the OTC Bulletin Board. Penny Stocks, such as the Company's securities, can be very risky.  Prices of Penny Stocks are often not available.  Investors in Penny Stocks are often unable to sell stock back to the dealer that sold them the stock. Investors may lose all their investment in Penny Stocks.  There is no guaranteed rate of return on Penny Stocks.  Before an investor purchases any Penny Stock, U.S. Federal law requires a salesperson to tell the investor the "offer" and the "bid" on the Penny Stock, and the "compensation" the salesperson and the firm receive for the trade.  The firm also must mail a confirmation of these prices to the investor after the trade.  The Investor's Broker-dealer is required to obtain the investor's signature to show that the investor has received the statement titled "Important Information on Penny Stocks" before the investor first trades in a Penny Stock.  This Statement is required by the U.S. Securities and Exchange Commission ("SEC") and contains important information on Penny Stocks.  Furthermore, under penalty of Federal Law the Investor's brokerage firm must tell the investor at two different times - before the investor agrees to buy or sell a Penny Stock, and after the trade, by written confirmation the following:  1) the bid and offer price quotes for the Penny Stock, and the number of shares to which the quoted prices apply, 2) the brokerage firm's compensation for the trade, 3) the compensation received by the brokerage firm's salesperson for the trade.  In addition, to these items listed above the investor’s brokerage firm must send the investor monthly account statements and a written statement of the investor's financial situation and investment goals as required by the Securities Enforcement and Penny Stock Reform Act of 1990.

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ITEM 4. INFORMATION ON THE COMPANY

Item 4.A. History and Development of the Company

The legal and commercial name of the company is:

LAS VEGAS FROM HOME.COM ENTERTAINMENT INC.

The Company was incorporated by Memorandum and Articles under the Company Act of the Province of British Columbia, Canada, on May 27, 1980 under the name of "Mountain Fertilizer Products Ltd." (Exhibit 3.1 - Incorporated by reference)  On June 30, 2005, the shareholders adopted a new form of articles (Exhibit 3.2* - Attached) under the New British Columbia Corporations Act at the Annual & Special General Meeting of its shareholders held June 30, 2005 (Exhibit 20.3 – Incorporated by reference).

The Directors of Mountain Fertilizer Products Ltd. resolved that the Company change its business activities and its name, and as a result of which, on August 6, 1980, the Company's name was changed to "Titleist Petroleums Ltd." ("Titleist") reflecting the business activities of the Company.  Titleist was involved in the oil and gas business in Canada and, through its U.S. subsidiary, Titleist Petroleums U.S.A. Inc. (“Titleist USA”), in the United States.  

Titleist USA was incorporated on June 24, 1981 under the laws of the State of Texas.  However, as of 1989, Titleist USA was a forfeited corporation.  Legal counsel has advised that the corporation has been forfeited due to the non-payment of franchise tax.  Although the corporation may still exist, it has lost its right to do business.  As a result, the Company has no control of the assets of Titleist USA and is not responsible for the liabilities, if any.

In 1985, Directors of Titleist resolved to merge, acquire and enter into a share exchange agreement with the shareholders of Comp-Data USA, Inc., a computer related company, and on September 5, 1986, Titleist's name was changed to "Comp-Data International Inc." ("Comp-Data") and its authorized capital was consolidated on the basis of five-old-shares for every one new share.  

In 1987, Directors of Comp-Data resolved to get out of the computer related business.  As a result of which, Comp-Data acquired all of the issued and outstanding shares of Armenian Express Canada Inc.  Pursuant to a Special Resolution passed October 5, 1987, Comp-Data changed its name to "Armenian Express Canada Inc." to reflect the change of business plan and management of the Company.  In respect to this transaction, there was no share consolidation involved.  Subsequently, the Company's hydrocarbons assets were forfeited.

For a limited period of time, the Company implemented an ethnic affinity credit card which targeted Armenians in Canada.  An agreement was signed with the National Bank of Canada ("National Bank") wherein the Company was to market in Canada a MasterCard affinity credit card under its own name "Armenian Express Canada".  The agreement was for one year and was subject to annual renewals.  For a short period of time, affinity credit cards were issued in Canada by the National Bank.  The ethnic affinity credit card program did not generate any meaningful revenues for the Company given the small number of Armenians in Canada, and as a result of which, the National Bank terminated its agreement with the Company.  

In November 1989, the Company's Directors resolved to change the business activity of the Company and to make the Registrant a natural resource company, whereby the Company would acquire, explore and, if warranted, develop mineral properties.  Consequently, the Company changed its name to "Armenex Resources Canada Inc." and on July 4, 1990 consolidated its authorized capital on the basis of five-old shares for one-new share.  

Subsequently, a re-organization was deemed necessary by the Directors of the Company.  Pursuant to the Company's Directors' resolutions, on August 31, 1994, the Company changed its name to "Ecuadorean Copperfields Inc." and consolidated its authorized capital on the basis of five-old shares for one-new share.  

In 1996, due to the large number of the then issued and outstanding common shares of the Company, Directors of the Company decided that, in order for the Company to be in a better position to attract public financings, the Company consolidate its authorized capital on the basis of three-old shares for one-new share and change its name to "Bronx Minerals Inc.".  On June 14, 1996, the Company changed its name to "Bronx Minerals Inc." and consolidated its authorized capital on the basis of three-old shares for one-new share.  

During 1998 and 1999, the Company attempted to acquire mineral projects of merit but was unsuccessful in its

7

attempts.  Due to the difficult times that mining companies were experiencing, management of the Company resolved that it would be in the best interest of the Company to get out of the mineral exploration business and become an Internet gaming and entertainment corporation.  Consequently, at the Company’s Extraordinary General Meeting of its Shareholders which was held on August 12, 1999, Shareholders approved a Special Resolution to change the name of the Company to Las Vegas From Home.com Entertainment Inc. in order to reflect the business activities of the Company.  The Company’s application of change of its business was officially approved by the Canadian Venture Exchange (“CDNX”) on January 6, 2000.

It has always been the intention of the Directors (past and present) to ensure that the Company survives.  As resolved by the Company's Directors all the reorganizations which the Company undertook were necessary for the Company's survival.  The reorganizations have been carried out in accordance with, and in full compliance of, the policies of the TSX Venture Exchange (“TSX Venture”) [formerly the CDNX and prior to that, the Vancouver Stock Exchange (“VSE”)].  All of the Company's reorganizations were approved by the Canadian Regulatory Authorities and the Company's Shareholders.

The Company's head office is located at:  Suite 100 - 1255 West Pender Street, Vancouver, British Columbia, Canada V6E 2V1.  The telephone number is (604) 681-0204 and the telefax number is (604) 681-9428.  The contact persons are Jacob H. Kalpakian or Bedo H. Kalpakian.

The Company's registered and records office is located at: P.O. Box 10068, 1600-609 Granville Street, Vancouver, British Columbia, Canada V7Y 1C3.  The telefax number is (604) 669-3877.

The Auditors of the Company are Smythe Ratcliffe, Chartered Accountants, 7^th Floor, Marine Building, 355 Burrard Street, Vancouver, British Columbia V6C 2G8.  The telefax number is (604) 688-4675.

The Registrar and Transfer Agent of the Company is Computershare Trust Company of Canada, 9^th Floor, 100 University Avenue, Toronto, Ontario M5J 2Y1.  The telefax number is (416) 981-9800.

The address of the registered office of the Company’s Antiguan subsidiary, MT Ventures Inc. (“MTV”) is:  No. 6 Temple Street, P.O. Box 2372, St. John’s, Antigua, West Indies.  The telefax number is (268) 460-6183.

The address of the registered office of the Company’s United Kingdom (“UK”) subsidiary, MT Commerce Limited., (“MTC”) isFlat 91-Building45, Hopton Rd, Royal Arsenal - off Plumstead Rd. London SE18 6TJ United Kingdom.  The telefax number is 011 44 020-8836-9079

The address of the registered office of the Company’s Cypriot subsidiary, MTO Commerce Ltd. (“MTO”) is 3, Chrysanthou Mylona Street, CY3030, PO Box 56253, Limassol, Cyprus.  The telefax number is +357 25 34 07 34.

Item 4.B. Business Overview

Summary

LVFH is an Internet Gaming and Entertainment corporation.  Previously, the Company was called Bronx Minerals Inc. and was engaged in the mineral exploration business. On September 3, 1999, the Company officially changed its name to Las Vegas From Home.com Entertainment Inc., and on January 6, 2000, the CDNX approved the Company’s application for change of business from mineral exploration to Internet gaming and entertainment.  

The Company decided and agreed to sell all of the Action Poker brands, the operating infrastructure of Action Poker Gaming Inc. (“Action”), APG Enterprises Costa Rica S.A., Action Commerce Limited, Guardian Commerce Limited and an undivided interest in the software that is used by Action to run the Action Poker Network  and the Company’s licensed online casino software (collectively referred to as the “APGN”) for a selling price of US $2,600,000 to Playsafe Holding Ltd. (“Playsafe”), a wholly owned subsidiary of Playsafe Holding AS (Norway), a public company listed in Norway.  On November 24, 2006, the Company received TSX Venture Exchange (“TSX”) approval for this transaction and as a result the Company closed the sale of APGN.  Furthermore, the Company no longer has any online gaming interests in the North American Market.

The Company is in the business of developing software for online multi-player interactive card games (the “Company’s Gaming Software”).  The Licensing of the Company’s Gaming Software to third parties and operations are carried on by the Company’s wholly owned Antiguan subsidiary, Mt Ventures Inc. (“MTV”).  The principal revenues of MTV are from collecting licensing fees and royalties from licensees whose operations are exclusively aimed at the Asian Market.

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 MTV does not license the Company’s gaming software to any parties that accept wagers from US or Canadian residents.

On September 15, 1983, the Company’s common shares were first listed and posted for trading on the Vancouver Stock Exchange (now known as the TSX Venture Exchange).  The Company’s current trading symbol on the TSX Venture Exchange is “LVH”.  Effective July, 1999, the Company’s common shares began trading in the U.S.A., on the OTC Bulletin Board under the symbol “LVFHF”.  As of September 1, 2000, the Company’s common shares are listed for trading under the symbol “LVH” on the Berlin Stock Exchange.  Effective February 27, 2006, the Company’s common shares were listed for trading under the symbol “LVH” on the Frankfurt Stock Exchange.

Item 4.C.  Organizational Structure.

The following chart sets forth the Company’s corporate structure as of December 31, 2006:

Las Vegas From Home.com Entertainment Inc.

	100%		100%		100%		100%
MT Ventures Inc. (“MTV”) (an Antiguan Corporation)		MTO Commerce Ltd. (formerly APG Enterprises Ltd.) (“MTO”) (a Cypriot Corporation)		APG Enterprises (“APG Armenia”) (an Armenian Corporation)		MT Commerce Limited (“MTC”) (a United Kingdom Corporation)

MTV licenses the Company’s online gaming Software to third parties.  However, MTV does not license the Company’s online gaming software to any party that will take USA or Canadian wagers.

On November 10, 2006, the Company incorporated MT Ventures Inc., (“MTV”) a 100% wholly owned Antiguan subsidiary which is in the business of licensing the Company’s online multi-player interactive games software.  On December 13, 2006, the Company caused to incorporate MT Commerce Limited., a United Kingdom corporation.  It is the Company’s intention that MT Commerce Limited (UK) act as payment processor for the Company and its subsidiaries.  During the year ended December 31, 2006, the Company changed the name of its Cypriot subsidiary, APG Enterprises Ltd. to MTO Commerce Ltd.  which commenced operations in Cyprus during 2005 and, as a result of the sale of the Action Poker Network (“APGN”) during 2006, MTO Commerce Ltd. no longer has any employees (December 31, 2005: 30 employees). APG Enterprises, an Armenian corporation (“APG Armenia”) provided technical and administrative support to the Company’s Cypriot subsidiary and, as a result of the sale of APGN by the Company during 2006; APG Armenia no longer has any employees (December 31, 2005: 11 employees) as operations of APG Armenia were discontinued.  The Company is in the process of winding up APG Armenia.

The Company’s Canadian Head Office employs 41 people as of May 31, 2007, (December 31, 2006: 47) (December 31, 2005: 39) consisting of staff and management.

Item 4.D. Property, Equipment and Software Development

I.  THE COMPANY’S COMPUTER GAMING SOFTWARE PRODUCT

The Company develops its own multi-player interactive card games software. Improvements, modifications and enhancements of the Company’s Gaming Software are ongoing on a continual basis.    Research costs are expensed as incurred.  Costs related to the development of software are expensed as incurred unless such costs meet the criteria for deferral and amortization under Canadian generally accepted accounting principles.  The criteria include identifiable costs attributable to a clearly defined product, the establishment of technical feasibility, identification of a market for the software, the Company’s intent to market the software, and the existence of adequate resources to complete the project.  Software development costs are amortized over an estimated useful life of five years or prorated over its expected revenue stream whichever is higher, commencing in the year when commercial sales of the products commence.  Capitalized software development is evaluated in each reporting period to determine whether it continues to meet the criteria for continued deferral and amortization. During 2001, the Company commenced developing its own multi-player interactive card games software.  The amount of $180,901 has been capitalized under software and development costs.  Amortization commenced in 2002 as the software was commercially released during the year.  During 2006, additional amounts of $130,976 consisting of salaries were capitalized as software development costs (2005: $979,579 consisting of salaries - $964,745 and other - $14,834), (2004: $659,979 consisting of salaries -

9

$571,600 and other - $88,379).

	2006
EQUIPMENT AND				Accumulated	Net
SOFTWARE DEVELOPMENT			Cost	Amortization	Book Value
Software and development costs		$	526,577	144,923	381,654
Computer equipment			803,674	281,845	521,829
		$	1,330,251	426,768	903,483

	2005
EQUIPMENT AND		Accumulated	Net
SOFTWARE DEVELOPMENT	Cost	Amortization	Book Value
Software and development costs	$  2,216,060	$   457,591	$  1,758,469
Computer equipment	589,101	194,048	395,053
Automobile	11,420	1,929	9,491
Office furniture	7,353	719	6,634
Computer equipment under capital lease	64,320	35,728	28,592
	$  2,888,254	$   690,015	$  2,198,239

	2004
EQUIPMENT AND		Accumulated	Net
SOFTWARE DEVELOPMENT	Cost	Amortization	Book Value
Software and development costs	$   840,880	$     174,538	$   666,342
Computer equipment	298,941	101,381	197,560
Computer equipment under capital lease	64,320	23,475	40,845
	$1,204,141	$    299,394	$   904,747

For equipment and software development and accumulated amortization (depreciation and depletion) thereof please refer to Schedules II and III (Exhibit 99.2* - Attached herewith). The Company has Capital Lease Obligations for its Computers in the amount of $1,019.  As of January 1, 2007, the Company’s total future obligations amount to $ 193,019; (Less than one year $193,019; one to three years; $ Nil.) (See Contractual Obligations on page 18, Item 5.F)

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ITEM 5. OPERATING AND FINANCIAL REVIEW AND PROSPECTS

Selected Annual Information

Selected annual information from the audited consolidated financial statements for the three years ended December, 31, 2006, 2005 and 2004 is shown in the following table:

		2006		2005		2004
Revenue	$	748,425	$	0	$	0
Interest Income		109,593		76,210		3,046
Loss before other    items		(4,729,530)		(2,689,649)		(3,858,633)
Loss per common share before other items *		* (0.05)		* (0.03)		* (0.06)
Fully diluted earnings/(loss)    per share before other       items *		n/a		n/a		n/a
Net Income/(loss) for the    period		(4,593,428)		1,088,741		(5,346,512)
Basic earnings/(loss) per    share *		* (0.05)		* 0.01		* (0.08)
Fully diluted net    earnings/(loss) per share *		** n/a		* 0.01		** n/a
Total Assets		9,617,355		12,819,608		2,582,847
financial obligations    and capital lease		1,019		22,818		43,094
Cash dividends		Nil		Nil		Nil

* Gain (loss) per common share in the above table is based on the number of shares outstanding at year end, and not on the weighted average number of shares outstanding for the periods (Canadian GAAP) as shown in the Audited Statements of Operations and Deficit for the years ended December 31, 2006, 2005 & 2004.

**The Diluted (loss) per share calculations are not reflected as the effect would have been anti-dilutive.

·

Effective January 2004, the Company adopted the new requirements of the Canadian Institute of Chartered Accountants (“CICA”) Handbook Section 3870, which requires all forms of stock based compensation, including stock options to be accounted for using the Fair Value based method and recorded as an expense over the vesting period.  Previously, the Company did not record any compensation cost on the granting of stock options to directors, officers, employees and consultants as the exercise price was equal to or greater than the market price at the date of the grants.  Options granted are accounted for using the Black-Scholes option pricing model.

·

As a result of this change in accounting, the 2004 opening deficit was restated on a retroactive basis to show the effect of compensation expense associated with stock option grants in 2003 of $214,024 and $83,051 in 2002.  Accordingly, contributed surplus was increased by $ 297,075 in 2004.

Certain prior year amounts have been restated to be comparative to the current year’s presentation.

The sale of the Company’s APGN to Playsafe Holding Ltd. on November 24, 2006 was accounted for as a discontinued operation under Canadian generally accepted accounting principles (GAAP) and therefore, the APGN results of operations have been removed from the Company's results of continuing operations for all periods presented in this document.

For the twelve month period ended December 31, 2006, the Company has recorded revenue of $748,425 (2005: $0) (2004: $0) reflecting an increase in continuing operations.  Interest income increased to $109,593 (2005:$76,210) (2004:$3,046) due to higher cash balances in the bank.  The loss before other items of $(4,729,530) as compared to a loss in 2005 of $(2,689,649) as compared to a loss in 2004 of $(3,858,633) and the Basic net earnings/(loss) per common share was $(0.05) which occurred as a result of the Company’s sale of APGN in November, 2006 as compared to earnings of $0.01 in 2005 (2004:$(0.08)).  

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The Company has never paid any cash dividends and has no plans to pay any cash dividends in the future.  The weighted average number of common shares was 97,236,825 as compared to 84,337,774 for the same period in 2005 as compared to 58,428,307 for the same period in 2004.

Results of Operations

For the years ended December 31, 2006 and December 31, 2005

All financial figures presented herein are expressed in Canadian Dollars (CDN$) unless otherwise specified.

The sale of the Company’s APGN to Playsafe Holding Ltd. on November 24, 2006 was accounted for as a discontinued operation under Canadian generally accepted accounting principles (GAAP) and therefore, the APGN results of operations have been removed from the Company's results of continuing operations for all periods presented in this document.

The principal business of the Company and its former Antiguan subsidiary, Action Poker Gaming Inc. (“Action”) was the development and marketing of software for online multi-player interactive card games.

On September 29, 2006 both Houses of the U.S. Congress passed the Safe Port Act, onto which was attached the Unlawful Internet Gambling Enforcement Act of 2006 (the “UIGE Act”).  The UIGE Act prohibits the acceptance or use of any payment instrument in any financial transaction involving Internet gambling.  Consequently, the Company decided that its licensed operating subsidiary, Action Poker Gaming Inc. (“Action”), will cease taking deposits from U.S. based players as of October 13, 2006.  Furthermore, the Company decided and agreed to sell all of the Action Poker brands, the operating infrastructure of Action, APG Enterprises Costa Rica S.A., Action Commerce Limited, Guardian Commerce Limited and an undivided interest in the software that is used by Action to run the Action Poker Network (collectively referred to as the “APGN”) for a selling price of US $2,600,000 to Playsafe Holding Ltd. (“Playsafe”), a wholly owned subsidiary of Playsafe Holding AS (Norway), a public company listed in Norway.  On November 24, 2006, the Company received TSX Venture Exchange (“TSX”) approval and closed the sale.  In respect to this arm’s length transaction, a finder’s fee of US$75,000 was paid to an arm’s length third party.  As a result of this sale, the Company no longer has any online gaming interests in the North American market.  During 2005, Action licensed from an arm’s length third party, an online Casino Software (”Online Casino”), which was operated by Action under the URL www.playvegasfromhome.com.  This was also included in the sale of the Action Poker Network.

As of December 31, 2006, the Company was not operating any card rooms, and therefore it had not sought another hosting facility for its servers.

Action’s operations were located at the facilities of Mohawk Internet Technologies Inc. ("Mohawk") which acted as its hosting facility for its servers, located on the Kahnawake Mohawk Reserve ("Kahnawake") in Canada.

The gaming and entertainment operations were carried on by Action.  The principal revenues of Action were from collecting rakes, licensing fees and royalties.  

The Company incorporated MT Ventures Inc, (“MTV”) a 100% wholly owned Antiguan subsidiary which is in the business of licensing the Company’s online multi-player interactive games software.  MTV does not license the Company’s online gaming software to any party that will accept USA or Canadian wagers.  The sale of APGN will now allow the Company to streamline its operations and focus on building upon its promising Asian Multiplayer Software Platform (“AMSP”) which now has two licensees and is already generating revenues.  

Although management believes that the conduct of Internet gaming related activities by MT Ventures will represent a lawful business, there is the risk that the legality of the Internet gaming related activities may be challenged by Canadian or other legal authorities.  If the legality of the Internet gaming related activities is challenged and the challenge is sustained, it may have a material adverse impact on the financial affairs of the Company.

The principal revenues of MT Ventures is from collecting licensing fees and royalties.

The Company is continually enhancing and upgrading the Company’s Gaming Software in order to enable the Company to retain and increase its Licensees.

The Company is presently not a party to any legal proceedings whatsoever.

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As of December 31, 2006, the Company’s Canadian operations employed 47 people (2005: 36) consisting of staff and management.

On November 10, 2006, the Company caused to incorporate MT Commerce Limited, a United Kingdom corporation.  It is the Company’s intention that MT Commerce Limited (UK) act as payment processor for the Company and its subsidiaries.  Furthermore, the Company changed the name of its Cypriot subsidiary, APG Enterprises Ltd. to MTO Commerce Ltd.  

At the  Annual General Meeting of the Company’s shareholders which was held on June 30, 2006, the shareholders approved the Audited Consolidated Financial Statements for the year ended December 31, 2005 and the Auditor’s report thereon; fixed the number of Directors for the ensuing year at four; elected Bedo H. Kalpakian, Jacob H. Kalpakian, Neil Spellman and Gregory T. McFarlane as Directors of the Company; re-appointed the Company’s Auditor, Smythe Ratcliffe, Chartered Accountants, for the ensuing year and authorized the Directors to fix the remuneration to be paid to the Auditor.  

Effective February 27, 2006, the Company’s common shares were listed for trading on the Frankfurt Stock Exchange under the trading symbol “LVH”.  The Company’s ISIN number is CA5176721010 and the German security code is WKN935277.  The listing of the Company’s common shares on the Frankfurt Stock Exchange provides the Company with increased exposure in the European investment community as well as increasing the visibility of its products in that marketplace.

Revenue

For the twelve month period ended December 31, 2006, the Company’s revenue from continuing operations increased to $748,425 compared to $0 in 2005.  One customer accounted for 100% of the Company’s revenue during 2006.  Interest income increased to $109,593 (2005:$76,210)due to higher cash balances in the bank.  

Expenses

For the year ended December 31, 2006, expenses increased by 102% to $5,587,548 compared to $2,765,859 for the year ended December 31, 2005. Salaries and benfits increased by 147% to $2,819,595 compared to $1,141,279 for the year ended December 31, 2005. The increase was due to higher staff levels during 2006 as the Company further developed its multi-player gaming software. Advertising and promotion expenses increased substantially to $457,204 for 2006 from $26,890 for 2005 as the Company ramped up the marketing for its new multi-player gaming software. Rent, office and miscellaneous expenses increased by 83% to $475,534 for 2006 compared to $259,571 for 2005. Amortization expense increased by 56% to $561,377 for 2006 compared to $359,563 for 2005. Consulting and professional fees increased by 64% to $380,404 for 2006 compared to $231,656 for 2005.

Loss from Operations before Discontinued Operations

The loss from operations before discontinued operations for 2006 was $4,848,549 compared to a loss of $2,760,194 for 2005. The increased loss was a result of higher expenses for the development and marketing of the Company’s new multi-player gaming software.

Discontinued Operations

The Company recorded a gain, net of tax, on discontinued operations of $255,121 in 2006 compared to a gain, net of tax, of $3,848,935 in 2005.

Net Loss

During the year ended December 31, 2006 the Company had a net loss of $(4,593,428) or $(0.05) per share (weighted average) as compared to a net income of $1,088,741 or $0.01 per common share (weighted average) in the same period of 2005.  During the year ended December 31, 2006, the Company’s weighted average number of common shares was 97,236,825 as compared to 84,337,774 for the same period in 2005.

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Liquidity and Capital Resources

Total assets as at December 31, 2006, were $9,617,355 as compared to $12,819,608 for the corresponding period in 2005.  The Company has equipment leases with present value of net minimum lease payments of $1,019 as compared to $22,818 for the corresponding period in 2005.  The Company’s total liabilities were $478,642 as compared to $2,194,813 at December 31, 2005. The Company has not paid any cash dividends and does not plan to pay any cash dividends in the future. As at December 31, 2006 the Company is debt-free.

Cash and cash equivalents at December 31, 2006 were $8,273,201 as compared to $8,408,620 at December 31, 2005. Marketable securities at December 31, 2006, were $0 as compared to $379,236 at December 31, 2005.

Accounts receivable at December 31, 2006, was $425,611 as compared to $1,801,274 at December 31, 2005. One customer accounted for 79.5% of the accounts receivable for 2006 compared to 4 customers accounting for 85.1% in 2005. Due from related parties at December 31, 2006, was $60 as compared to $4,740 at December 31, 2005. Prepaids and security deposits at December 31, 2006, were $15,000 as compared to $27,499 at December 31, 2005.

Operating Activities

In 2006 the Company used $2,807,240 of cash from operating activities compared to generating $2,622,834 of cash from operating activities in 2005. The primary differences were: (i) net loss of $4,593,428 in 2006 compared to net income of $1,088,741 in 2005, (ii) increased amortization of $561,377 for 2006 compared to $359,563 for 2005, (iii) use of cash from non-cash working capital of $292,434 in 2006 compared to cash flow generated of $743,817 in 2005.

Financing Activities

The Company generated $170,956 from financing activities in 2006, down from $8,037,107 in 2005. The Company completed a bought deal financing in 2005 that generated net proceeds of $7,487,689.

Investing Activities

The Company generated $2,500,865 from investing activities in 2006 compared to cash used in investing activities of $2,230,604 in 2005. The Company received $2,751,774 from the sale of its Action Poker Network in 2006. Proceeds from the sale of marketable securities were $310,317 in 2006 compared to $0 in 2005. Additions to software development decreased to $511,126 in 2006 from $979,579 in 2005.   

Working Capital

For the year ended December 31, 2006, the Company had a working capital of $8,235,230 as compared to a working capital of $8,429,106 in the same period in 2005.

The Company has not paid any cash dividends and does not plan to pay any cash dividends in the future.

These financial analyses address the results of operations in accordance with the financial statements prepared under Canadian generally accepted accounting principles.  A discussion of the differences between accounting principles and practices generally accepted in Canada and accounting principles and practices accepted in the United States and required by the S.E.C. is contained in Note 17 of the financial statements included in item 17 of this Annual Report.

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Summary of Quarterly Results

The following are the results for the eight most recent quarterly periods, starting with the three month quarterly period ended March 31, 2007:

For the Quarterly Periods ended		March 31, 2007	December 31, 2006	September 30, 2006	June 30, 2006
Total Revenues	$	1,001,734	820,711	10,375	13,826
Loss before other items		(472,675)	(1,024,734)	(1,325,935)	(1,303,283)
Loss per common share before other items		(0.005)	(0.01)	(0.01)	(0.01)
Fully diluted earnings / (loss) per common share before other items		**n/a	**n/a	**n/a	**n/a
Net income / (loss) for the period		(360,306)	(3,028,766)	(1,026,289)	(853,501)
Basic net earnings (loss) per share		(0.004)	(0.03)	(0.01)	(0.009)
Diluted net earnings (loss) per share		**n/a	**n/a	**n/a	**n/a

For the Quarterly Periods ended		March 31,  2006	December 31, 2005	September 30, 2005	June 30, 2005
Total Revenues	$	13,106	31,892	44,113	98
Income (loss) before other items		(1,075,578)	(829,503)	780,063	(626,959)
Earnings (loss) per common share before other items		(0.01)	(0.01)	(0.01)	(0.01)
Fully diluted earnings (loss) per common share before other items		**n/a	**n/a	**n/a	**n/a
Net income (loss) for the period		315,128	(177,218)	515,857	385,773
Basic net earnings (loss) per share		0.003	(0.002)	0.006	0.005
Diluted net earnings (loss) per share		0.003	**n/a	0.004	0.004

Note: Gain (loss) per common share calculations in the above tables are based on the number of shares outstanding for the periods, and not on the weighted average number of shares outstanding (Canadian GAAP) as shown in the Statements of Operations and Deficit for the above mentioned periods.

**

The Diluted (loss) per share calculations are not reflected as the effect would have been anti-dilutive.

Quarterly Results

For the three months ended December 31, 2006 and December 31, 2005

The Company’s fourth quarter revenue for the three month period ended December 31, 2006 was $820,711 a substantial increase from $31,892 for the three month period ended December 31, 2005. This reflects increased acceptance of the Company’s Gaming Software.

Operating costs increased to $1,845,445 for the three month period ended December 31, 2006 as compared to $861,395 for the same period in 2005. Salaries and benefits increased by 267% to $1,117,173 in Q4 2006 from

15

$304,208 in Q4 2005.

The Company’s net loss before other items was $1,024,734 for the three months ended December 31, 2006 compared to a loss of $829,503 for the prior period. During the three month period ended December 31, 2006, the Company had a net (loss) of $(3,028,766) or $(0.03) per share as compared to a net (loss) of $(0.002) per share or $(177,218) for the three month period ended December 31, 2005.  

The Company’s business is not of a seasonal nature.

Fluctuations in the exchange rate of the US dollar in relation to the Canadian dollar have a direct impact on the results of the Company’s operations due to the fact that the Company’s revenues are generated in US dollars while a major portion of the Company’s expenses are incurred in Canadian dollars.

Item 5.B - Liquidity and Capital Resources

During the first quarter of 2006, and the first, second, third and fourth quarters of 2005, the Company experienced meaningful increases in its total revenues, however during the second, third and fourth quarters of 2006 total revenues declined.  In order for the Company to further increase its revenues, the Company must dedicate more resources to marketing and to upgrading the Company’s Gaming Software so as to have a full suite of poker games as well as new products.  If the Company is successful in increasing its revenues, Management is of the opinion that the Company shall be able to fund its marketing and development expenditures from the Company’s increased and/or current cash flow.  

The Company entered into an agreement on April 20, 2005, with a syndicate of underwriters led by Wellington West Capital Markets Inc. and CIBC World Markets Inc. and including GMP Securities Ltd. and Sprott Securities Inc. (collectively the “Underwriters”) for a "bought-deal" underwritten private placement of Subscription Receipts (the "Brokered Offering").  The Brokered Offering closed on May 13, 2005.  As a result, 12,485,500 common shares and 6,242,750 share purchase warrants at an exercise price of $1.00 per common share were issued to various investors pursuant to the Brokered Offering.  Total net proceeds received by the Company were $7,487,689.  The Company paid the Underwriters an aggregate cash commission of $547,801 and issued a total of 842,771 Broker’s Compensation Warrants (the “Compensation Warrants”) which are exercisable into Units at $0.65 per Unit.  Each Unit consists of one common share in the capital of the Company and one half of one share purchase warrant.  One whole share purchase warrant is required to purchase one additional common share at $1.00 per share.  All share purchase warrants expire on May 13, 2007.  The shares, share purchase warrants and Compensation Warrants, which were issued by the Company on July 13, 2005, had hold periods which expired on September 14, 2005, at which time the share purchase warrants commenced trading on the TSX Venture Exchange, under the symbol LVH.WT.

Proceeds received by the Company from all financings are being utilized for general working capital purposes.

The Company has granted stock options and share purchase warrants to acquire common shares of the Company, at certain prices, to various parties.  Should any outstanding stock options or share purchase warrants be exercised by any party, then any funds received by the Company shall be used for general working capital purposes.  However, there are no assurances whatsoever that any stock options or share purchase warrants will be exercised before their respective expiry dates.

During the twelve month period ended December 31, 2006, a total of 584,592stock options were exercised at prices ranging between $0.12 and $0.19 per common share for total proceeds to the Company of $93,755.  During the twelve month period ended December 31, 2006, a total of 5,549,000 stock options exercisable at prices ranging between $0.12 and $0.46 per common share expired and 9,815,000 employee stock options exercisable at prices between $0.12 and $0.27 per common share were granted during the period.

During the twelve month period ended December 31, 2006, a total of 465,000 share purchase warrants were exercised for total proceeds to the Company of $99,000 which were comprised of 300,000 warrants at an exercise price of $0.25 per common share, 90,000 brokers’ warrants at an exercise price of $0.10 per common share and 75,000 warrants at an exercise price of $0.20 per common share.  A total of 4,550,000 warrants expired at an exercise price of $0.20 per common share.  There were no warrants issued during the year ended December 31, 2006.

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Software development costs

Research costs are expensed as incurred.  Costs related to the development of software are expensed as incurred unless such costs meet the criteria for deferral and amortization under Canadian generally accepted accounting principles.  The criteria include identifiable costs attributable to a clearly defined product, the establishment of technical feasibility, identification of a market for the software, the Company’s intent to market the software, and the existence of adequate resources to complete the project.  Software development costs are amortized over an estimated useful life of five years or prorated over its expected revenue stream whichever is higher, commencing in the year when commercial sales of the products commence.  Capitalized software development is evaluated in each reporting period to determine whether it continues to meet the criteria for continued deferral and amortization.

Capitalization of the Company’s Gaming Software

The types of expenses that were capitalized in 2006, 2005 and 2004 were:-

		2006	2005	2004
Rent	Cdn$	-	5,910	10,857
Amortization		-	7,677	11,977
Insurance		-	444	885
Interest		-	803	1,903
Payroll *		130,976	964,745	571,600
Professional and Consulting fees		-	-	62,757
	Cdn$	130,976	** 979,579	** 659,979

*●	Does not include any Stock Based Compensation Expense
●	Does not include any Salaries for Administration
●	Does not include any Salaries for Customer Service Employees
●	Payroll is directed at technically feasible programming enhancements only
**●	The Capitalized amounts for Fiscal 2005 and 2004 were included in the Sale of APGN to Playsafe.

For the three month period ended March 31, 2007, the amount of $0 has been capitalized under software and development costs.  Amortization expense of $26,331 has been applied to the costs capitalized for the three month period ended March 31, 2007.

Item 5.C - Research and development, patents and licenses

Due to the size of the Company, the Company does not have a research and development department as such, however, the Company, with its limited resources, conducts its own research and development as and when required. Furthermore, the Company does not have any patents or licenses.

Item 5.D -Trend Information

The marketplace for the Company’s business is constantly undergoing changes, is intensely competitive and is subject to changes in customer preferences.  Consequently, new products are being developed continuously by the Online Gaming Industry in order to satisfy customer demands, and new and costly venues of advertising and promotion are being used by the Online Gaming Industry so as to attract new customers and retain existing ones.

Item 5.E - Off balance sheet arrangements

The Company has no off balance sheet arrangements whatsoever and the Company’s financial information and statements, including its balance sheet and statement of operations and deficit have been fairly represented in accordance with Canadian generally accepted accounting principles.

17

Item 5.F - Tabular disclosure of contractual obligations

The Company has no Long Term Debt Obligations, Purchase Lease Obligations or Other Long Term Liabilities reflected on the Company’s Balance Sheet.  All financial figures presented herein are expressed in Canadian Dollars (Cdn $) unless otherwise specified.

Contractual Obligations As of January 1, 2007.	Payments due by period
	Total	Less than 1 Year	1-3 years	3-5 years	More than 5 years
Long Term Debt Obligations	n/a	n/a	n/a	n/a	n/a
Capital Lease Obligations (Computers)	Cdn $      1,019	Cdn $      1,019	n/a	n/a	n/a
Purchase Lease Obligations	n/a	n/a	n/a	n/a	n/a
Operating Lease Obligations    Office Space	Cdn $   192,000	Cdn $  192,000	n/a	n/a	n/a
Other Long Term Liabilities Reflected on the Company’s Balance Sheet under the GAAP of the primary financial statements	n/a	n/a	n/a	n/a	n/a
US $ Total	US $             n/a	US $           n/a	n/a	n/a	n/a
Cdn $ Total	Cdn $   193,019	Cdn $  193,019	n/a	n/a	n/a

In respect to information covered by items 5.E and 5.F, all financial information and statements have been fairly represented in accordance with Canadian generally accepted accounting principles.  

Item 5.G - Safe Harbour

Special Note regarding Forward-Looking Statements

We make certain forward looking-statements in this Form 20-F within the meaning of Section 27A of the Securities Act 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, relating to our financial condition, profitability, liquidity, resources, business outlook, proposed acquisitions, market forces, corporate strategies, contractual commitments, capital requirements and other matters.  The Private Securities Litigation Reform Act of 1995 provides a safe harbour for forward-looking statements.  To comply with the terms of the safe harbour, we note that a variety of factors could cause our actual results and experience to differ substantially from the anticipated results or other expectations expressed in our forward-looking statements.  When words and expressions such as: “believes,” “expects,” “anticipates,” “estimates,” “plans,”  “intends,” “objectives,” “goals,” “aims,” “projects,” “forecasts,” “possible,” “seeks,” “may,” “could,” “should,” “might,” “likely,” “enable” or similar words or expressions are used in this Form 20-F, as well as statements containing phrases such as “in our view,” “there can be no assurance,” “although no assurance can be given,” or “there is no way to anticipate with certainty,” forward-looking statements are being made,  these forward-looking statements speak as of the date of this Form 20-F.

The forward-looking statements are not guarantees of future performance and involve risks and uncertainties.  These risks and uncertainties may affect the operation, performance, development and results of our business and could cause future outcomes to differ materially from those set forth in our forward-looking statements.  These statements are based on our current beliefs as to the outcome projected or implied in the forward-looking statements.  Further, some forward-looking statements are based upon assumptions of future events which may not prove to be accurate.  The forward-looking statements involve risks and uncertainties including, but not limited to, the risks and uncertainties

18

referred to in “Item 3.D. Risk Factors”, and elsewhere within the document, and in other of our filings with the Securities and Exchange Commission.

We undertake no obligation to publicly update or revise any forward-looking statements as a result of future developments, events and conditions outside of our control.  New risk factors emerge from time to time and it is not possible for us to predict all such risk factors, nor can we assess the impact of all such risk factors on our business or the extent to which any factor, or combination of factors, may cause actual results to differ significantly from those forecast in any forward-looking statements.  Given these risks and uncertainties, investors should not overly rely or attach undue weight to forward-looking statements as an indication of our actual future results.

ITEM 6. DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES

Item 6.A - Directors and Senior Management

As of May 31 2007, the name, municipality of residence and the principal occupation of the Directors and Officers of the Company are the following:

Name and municipality of residence of Director or Officer	Position	Date of Birth	Principal Occupation	Term of Office
Bedo H. Kalpakian* Richmond, BC, Canada	Chairman and Director	May 14, 1946	Chairman & Director of Registrant; President of Zab Resources Inc. (formerly Bronx Ventures Inc.); Chairman & Director of Colt Capital Corp.; Director of Mountain Capital Inc. and Touchdown Capital Inc.	Chairman: 1991 to Present Director: 1987 to Present
Jacob H. Kalpakian Vancouver, BC, Canada	President and Director	October 18, 1968	President, Director & CEO of Registrant;  Vice President of Zab Resources Inc. (formerly Bronx Ventures Inc.); Director of Touchdown Capital Inc. and Mountain Capital Inc.	1991 to Present
Gregory T. McFarlane,* Las Vegas, NV, USA	Director	November 13, 1968	Advertising Copywriter; Director of Zab Resources Inc.	1992 to Present
Neil Spellman* Carlsbad, CA, USA	Director	January 24, 1953	Senior Vice President of DB Financial Management, Inc. Director of Touchdown Capital Inc.	2002 to Present
David A. Shore Thornhill, ON, Canada	Chief Financial Officer	January 15, 1970	Chief Financial Officer of the Registrant	April 11, 2007 to Present
Penilla Klomp Richmond, BC, Canada	Corporate Secretary	August 23, 1962	Corporate Secretary of the Registrant;  Zab Resources Inc. (formerly Bronx Ventures Inc.); and of Colt Capital Corp.	2003 to present

*Members of the Audit Committee.

Jacob H. Kalpakian is the nephew of Bedo H. Kalpakian.  All Directors serve for a term of one year until the next annual general meeting or until the date of their resignation, whichever occurs first.

There are no arrangements or understandings whatsoever with major shareholders, customers, suppliers or others pursuant to which any person referred to above was selected as a director or member of senior management.

Item 6.B - Compensation

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For the year ended December 31, 2006, Kalpakian Bros. of B.C. Ltd. ("Kalpakian Bros.") was paid $360,000 (December 31, 2005:$ 270,000) (2004: $180,000).  For the three month period ended March 31, 2007, Kalpakian Bros. of B.C. Ltd. was paid $90,000. (March 31, 2006:$90,000).   The principals of Kalpakian Bros. are Bedo H. Kalpakian and Jacob H. Kalpakian, both Company directors and officers.  Pursuant to a Management Services Agreement (the "Agreement") effective July 1, 2005, (Exhibit 10.9 – Incorporated by Reference) the remuneration payable to Kalpakian Bros. is $30,000 per month plus GST.  Kalpakian Bros. is also entitled to reimbursement for all traveling and other expenses incurred by it in connection with performing its services.  The term of the Agreement is for five years and the term automatically extends for additional one-year periods on each anniversary date of the Agreement, unless the Company, not less than 180 days prior to any such anniversary, gives written notice to Kalpakian Bros. that it does not wish to further extend the Agreement.  If the Agreement is terminated by the Company other than for just cause, or is terminated by Kalpakian Bros. for good reason, then Kalpakian Bros. is entitled to be paid the annual remuneration for the unexpired term of the Agreement and is also entitled to immediate vesting of all unvested stock options.  Kalpakian Bros. may terminate the Agreement on giving four months notice.

In addition, the President of LVFH is entitled to the use of a company-leased automobile and, certain directors of the Company are compensated for automobile expenditures.  Presently there exists no plan regarding Directors' and Officers' pension, retirement or other similar benefits.  Furthermore, there are no amounts set aside or accrued by the Company or its subsidiaries to provide pension, retirement or similar benefits.

The Company does not have any Stock Appreciation Rights Plans and does not have any Long Term Incentive Plans.

Pursuant to indemnity agreements dated April 1, 1993, with Bedo H. Kalpakian, Jacob H. Kalpakian and Gregory T. McFarlane (which have already been filed in previous years as Exhibits to the Form 20F) and indemnity agreements dated July 12, 2002, and May 1, 2003, with Neil Spellman and Penilla Klomp (Exhibit 10.6 - Incorporated by reference) and an Indemnity Agreement dated April 11, 2007 with David A. Shore (Exhibit 10.6.1* - Attached herewith) collectively "the Directors and Officers", the Company has agreed to indemnify and save the Directors and Officers, their heirs and personal representatives harmless from and against all costs, charges and expenses arising out of their association with the Company.  These costs, charges and expenses include any amounts paid to settle an action or to satisfy a judgement brought or found against the Directors and Officers and any amounts paid to settle an administrative action or proceeding providing the indemnified party has acted in good faith and in the best interests of the Company.  To date the Company has not made any payments whatsoever under the Indemnity Agreements.

During the twelve month period ended December 31, 2006, a total of 40,000 incentive stock options were exercised by one Officer of the Company for total proceeds to the Company of $6,400.  There were no incentive stock options exercised by any Directors and/or Officers subsequent to the year ended December 31, 2006 and up to and until the date of this report, May 31, 2007.

20

Incentive stock options held by the Company’s Directors and Officers, as of May 31, 2007, are as follows:

Name	Date of Grant	Securities Under Options Granted (#)	Exercise or Base Price ($/Security)	Expiration Date
Bedo H. Kalpakian	December 22, 2006	2,830,000	0.12	December 22, 2009
Jacob H. Kalpakian	December 22, 2006	2,830,000	0.12	November 3, 2006
Gregory T. McFarlane	December 22, 2006	100,000	0.12	November 3, 2006
Neil Spellman	December 22, 2006	250,000	0.12	November 3, 2006
David A. Shore	April 11, 2007	800,000	0.24	April 11, 2010
Penilla Klomp	December 22, 2006	100,000	0.12	November 3, 2006
	Total	6,910,000

# One option is required to purchase one common share.

Item 6.C - Board Practices

6.C.1. Directors’ Terms of Service

Each Director of the Company is elected annually and holds office until the next Annual General Meeting of Shareholders, or until his successor is duly elected, or until his resignation as a Director.  Bedo H. Kalpakian has served as a Director of the Company since 1987.  Jacob H. Kalpakian has served as a Director since 1991.  Gregory T. McFarlane has served as a Director since 1992.  Neil Spellman has served as a Director since 2002.

6.C.2. Details of Directors’ service contracts with the Company or any of its subsidiaries are as follows:

The Company has paid Kalpakian Bros. of B.C. Ltd. (“Kalpakian Bros.”) a total remuneration of $360,000 for the year ended December 31, 2006 (2005: $270,000; 2004: $180,000).  The principals of Kalpakian Bros. are Bedo H. Kalpakian and Jacob H. Kalpakian, both Company Directors and Officers.  Pursuant to a Management Services Agreement (the "Agreement") effective July 1, 2005, the remuneration payable to Kalpakian Bros. is $30,000 per month plus GST.  Kalpakian Bros. is also entitled to reimbursement for all traveling and other expenses incurred by it in connection with performing its services.  The term of the Agreement is for five years and the term automatically extends for additional one-year periods on each anniversary date of the Agreement, unless the Company, not less than 180 days prior to any such anniversary, gives written notice to Kalpakian Bros. that it does not wish to further extend the Agreement.  If the Agreement is terminated by the Company other than for just cause, or is terminated by Kalpakian Bros. for good reason, then Kalpakian Bros. is entitled to be paid the annual remuneration for the unexpired term of the Agreement and is also entitled to immediate vesting of all unvested stock options.  Kalpakian Bros. may terminate the Agreement on giving four months notice.   (Exhibit 10.9 – Incorporated by reference ).

The Company pays a monthly director’s fee of Cdn $500 to the director of MT Ventures Inc.

6.C.3. Details relating to the company’s audit committee and remuneration committee

All Directors are elected annually by the Company’s shareholders to act as Directors of the Company for a term of one year.  The Company’s audit committee is appointed on an annual basis by the Company’s Directors.  The Company’s present audit committee consists of the following Directors; Bedo H. Kalpakian, Gregory T. McFarlane and Neil Spellman.  The majority of the members of the audit committee must be made up of directors who are not officers of the Company.  The audit committee is also responsible for monitoring compliance to the Company’s Code of Ethics (Exhibit 14.1 – Incorporated by reference or see Item 16.B herein).

Pursuant to Canadian National Policy (52-110) with respect to Audit Committee Disclosure, the charter of the Company’s Audit Committee and other related information required to be disclosed have been disclosed in the Company’s Annual Information Circular with respect to the Company’s upcoming Annual & Special Shareholder’s meeting which is scheduled to take place on June 22, 2007.  The Information Circular (Exhibit 20.4 – Attached

21

herewith) includes the Company’s Audit Committee Disclosure under Form 52-110F2.

The Company does not have a remuneration committee or an executive committee largely due to its size.   

Item 6.D - Employees

The Company’s Canadian Head Office, as of December 31, 2006 employs 47 people (December 31, 2005: 36) consisting of staff and management.  During the year ended December 31, 2006, the Company reduced its work force pursuant to the sale of the APGN and the closure of the Company’s Armenian operations.  As at May 31, 2007, the Company employs 41 people.

The Company’s employees are not represented by a union or other collective bargaining organization and the Company has never experienced a work stoppage by its employees.  The Company believes that its employee relations are good.

Item 6.E - Share Ownership

The number of common shares without par value beneficially (indirectly or directly) owned by Directors and Officers of the Company as of May 31, 2007 is as follows:  

Name of Director/Officer and Municipality of Residence	Number of Issued Capital		Percentage of the Total Issued Share Capital*
Bedo H. Kalpakian, Richmond, British Columbia, Canada	230,708 4,498,319	direct(1) indirect(2)	4.63 %
Jacob H. Kalpakian, Vancouver, British Columbia, Canada	852,907 4,498,319	direct(1) indirect(2)	5.25%
Gregory T. McFarlane,  Las Vegas, Nevada, USA	513	direct(1)	0.0005031%
Neil Spellman, Carlsbad, California, USA	415,000	direct(1)	0.41%
David A. Shore Thornhill, Ontario, Canada	0	direct(1)	0.0%
Penilla Klomp, Richmond, British Columbia, Canada	36,500	direct(1)	0.0358%

* Based on 101,950,795issued and outstanding common shares as of May 31, 2007.

(1)

Common shares beneficially owned by Directors and Officers (directly) are based on information furnished to the Company by the Directors and Officers.

(2)

Represents 50% of 8,996,639 common shares beneficially owned by Directors and Officers (indirectly) or over which control or direction is exercised is based on information furnished to the Company by the Directors and Officers and which comprises:- 922,633 common shares which are held by Kalpakian Bros. of B.C. Ltd., a private company of which Bedo H. Kalpakian and Jacob H. Kalpakian are the principal shareholders and  8,074,006 shares which are held by Zab Resources Inc. (formerly Bronx Ventures Inc.), a public company of which Bedo H. Kalpakian and Jacob H. Kalpakian are directors and officers.

6.E.(2) Stock Options for Employees

From time to time, the Company grants incentive stock options to its directors, officers, employees and consultants on terms and conditions acceptable to the TSX Venture Exchange.  The incentive stock options entitle the holders to acquire common shares of the Company from treasury.  The incentive stock options are a means of rewarding future services provided to the Company and are not intended as a substitute for salaries or wages, or as a means of compensation for past services rendered.

At the Annual & Special General Meeting of the Company’s shareholders which was held on June 30, 2005, (Exhibit 20.3 – Incorporated by reference) the shareholders approved the Audited Consolidated Financial Statements for the year ended December 31, 2004 and the Auditor’s report thereon; fixed the number of Directors for the ensuing year at

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four; elected Bedo H. Kalpakian, Jacob H. Kalpakian, Neil Spellman and Gregory T. McFarlane as Directors of the Company; re-appointed the Company’s Auditor, Smythe Ratcliffe, Chartered Accountants, for the ensuing year and authorized the Directors to fix the remuneration to be paid to the Auditor.  The shareholders also approved: (a) the deletion of the pre-existing Company Provisions in the Notice of Articles of the Company and in substitution, the adoption of a new form of Articles for the Company pursuant to The Business Corporations Act (British Columbia) (Exhibit 3.2– Incorporated by reference); (b) the increase of the Company’s authorized share capital to an unlimited number of common shares and an unlimited number of preferred shares, issuable in series, in each case without nominal or par value; and (c) the amendment to the Company’s 2004 Stock Option Plan by increasing the maximum number of common shares which may be reserved for issuance pursuant to the Stock Option Plan to 15,866,936 common shares (the “Company’s Amended 2004 Stock Option Plan”) (Exhibit 10.13 - Incorporated by Reference).

As of May 31, 2007, the following incentive stock options to purchase common shares in the capital of the Company were held by employees and consultants of the Company:

Agreement Date	Optionees	Number of Common shares	Exercise price per Share $	Expiry Date
Employees
September 13, 2005	Employees (2)	100,000	0.38	September 13, 2007
June 1, 2006	Employees (2)	12,500	0.27	June 1, 2008
July 5, 2005	Employees (2)	70,000	0.46	July 5, 2007
July 20, 2006	Employees (1)	30,000	0.18	July 20, 2008
August 1, 2006	Employees (2)	75,000	0.18	August 1, 2008
September 13, 2006	Employees (1)	20,000	0.17	September 13, 2008
September 27, 2006	Employees (1)	30,000	0.17	September 27, 2008
December 22, 2006	Employees (30)	3,260,000	0.12	December 22, 2009
April 11, 2007	Employees (1)	800,000	0.18	April 11, 2010
April 11, 2007	Employees (1)	800,000	0.24	April 11, 2010
Consultants
January 3, 2007	Consultants	350,000	0.13	January 3, 2010
	Total:	5,547,500

ITEM 7. MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS

Item 7.A - Major shareholders

7.A.1.

As of May 31, 2007, the following persons or corporations beneficially owned, directly or indirectly, or exercised control over shares carrying more than 5% of the issued and outstanding shares of the Company:

Name of Shareholder and Municipality	Number of Issued Capital	Percentage of the       Total Issued        Share Capital*
CDS & Co., Toronto, Ontario, Canada**	90,013,804	88.29%
Bedo Kalpakian and Jacob Kalpakian***	10,080,254	9.89%

*

Based on 101,950,795 issued and outstanding common shares as of May 31, 2007.

**

CDS & Co. is a depository trust which holds shares on behalf of others and the beneficial holders of these shares are not within the knowledge of the Company.

*** Of these shares, 230,708 common shares are held by Bedo H. Kalpakian directly, 852,907 common shares are held by Jacob H. Kalpakian directly, 922,633 common shares are held by Kalpakian Bros. of B.C. Ltd., a private company of which Bedo H. Kalpakian and Jacob H. Kalpakian are the principal shareholders, 2,540 common shares are held by the mother or Jacob H. Kalpakian and 8,074,006 common shares are owned by Bronx Ventures Inc., a public company of which Bedo H. Kalpakian and Jacob H. Kalpakian are directors and officers.

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7.A.1(b). The following discloses the percentage change in ownership held by any major shareholders during the past 2 (two) years.  The current year is stated above in item 7.A.1.

As of May 31, 2006, the following persons or corporations beneficially owned, directly or indirectly, or exercised control over shares carrying more than 5% of the issued and outstanding shares of the Company:

Name of Shareholder and Municipality	Number of Issued Capital	Percentage of the       Total Issued        Share Capital*
CDS & Co., Toronto, Ontario, Canada**	86,400,554	86.36%
Bedo Kalpakian and Jacob Kalpakian***	10,621,460	10.62%

*

Based on 100,041,270 issued and outstanding common shares as of May 31, 2006.

**

CDS & Co. is a depository trust which holds shares on behalf of others and the beneficial holders of these shares are not within the knowledge of the Company.

*** Of these shares, 269,204 common shares are held by Bedo H. Kalpakian directly, 853,577 common shares are held by Jacob H. Kalpakian directly, 922,633 common shares are held by Kalpakian Bros. of B.C. Ltd., a private company of which Bedo H. Kalpakian and Jacob H. Kalpakian are the principal shareholders, 2,540 common shares are held by the mother or Jacob H. Kalpakian and 8,573,506 common shares are owned by Bronx Ventures Inc., a public company of which Bedo H. Kalpakian and Jacob H. Kalpakian are directors and officers.

As of May 31, 2005, the following persons or corporations beneficially owned, directly or indirectly, or exercised control over shares carrying more than 5% of the issued and outstanding shares of the Company:

Name of Shareholder and Municipality	Number of Issued Capital	Percentage of the       Total Issued        Share Capital*
CDS & Co., Toronto, Ontario, Canada**	70,947,462	89.43%

*

Based on 79,334,678 issued and outstanding common shares as of May 31, 2005.

**

Depository trust which holds shares on behalf of others and the beneficial holders of these shares are not within the knowledge of the Company.

7.A.1.(c) All shareholders of the Company have equal voting rights.  Holders of common shares of the Company are entitled to one vote per share at all meetings of shareholders, to receive dividends as and when declared by the Directors, and to receive a pro-rata share of the assets of the Company available for distribution to common shareholders in the event of the liquidation, dissolution or winding up of the Company.  There are no pre-emptive, conversion or surrender rights attached to the common shares of the Company.

7.A.2. As of December 31, 2006, the Company had 100,234,270 issued and outstanding common shares.  The portion of outstanding securities of the Company held in the United States and the number of recorded holders thereof was 4,178,728 and 36 respectively.

7.A.3. To the best of the Company’s knowledge, the Company is not controlled directly or indirectly by another corporation or by any foreign government or by any other natural or legal person severally or jointly.

7.A.4.  To the best of the Company’s knowledge, there are no known arrangements which may at a subsequent date result in a change of control.

Item 7.B - Related Party Transactions

On November 4, 2002, the Company entered into a Licensing Agreement (Exhibit 10.8 – Incorporated by reference) with Zab Resources Inc. (formerly Bronx Ventures Inc.), (“Zab”) a related company, for the joint development of certain gaming software consisting of three card games (the “three card games software”), as a result of which, the three card games software was equally owned by the Company and Zab.  The Company was the operator of the three card games software and marketed the three card games.  Prior to May 6, 2006, the Company received 60% of all revenues that were generated from the operation of the three card games software and Zab received 40%.  On May 5, 2006, Zab sold its interest in the three card games software to the Company for a consideration of 6,670,000 fully paid and non-assessable common shares in the capital of LVFH at a deemed price of $0.36 per share for a total acquisition cost of $2,401,200 determined by an independent evaluation.  (Exhibit 10.12 – Incorporated by reference) The 6,670,000 common shares of the Company, which have been issued to Zab are restricted from trading until May 1, 2007.  As a result of this sale, Zab will no longer receive any revenues from the Company with respect to the three card games software.  Furthermore, the Company no longer has any online gaming interests in the North American market.  For the twelve month period ended December 31, 2006, the Company has paid to Zab $219,160 which represents Zab’s 40% share of revenues generated from the three card games software (2005: $484,804) (2004: $292,372).  

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For the twelve month period ended December 31, 2006, Kalpakian Bros. of B.C. Ltd. was paid $360,000. (2005:$270,000) (2004: $180,000).  The principals of Kalpakian Bros. of B.C. Ltd. are Bedo H. Kalpakian and Jacob H. Kalpakian, both Company directors and officers.  Pursuant to a Management Services Agreement (the "Agreement") (Exhibit 10.9 - Incorporated by reference) effective July 1, 2005, the remuneration payable to Kalpakian Bros. is $30,000 per month plus GST.  Kalpakian Bros. is also entitled to reimbursement for all traveling and other expenses incurred by it in connection with performing its services.  The term of the Agreement is for five years and the term automatically extends for additional one-year periods on each anniversary date of the Agreement, unless the Company, not less than 180 days prior to any such anniversary, gives written notice to Kalpakian Bros. that it does not wish to further extend the Agreement.  If the Agreement is terminated by the Company other than for just cause, or is terminated by Kalpakian Bros. for good reason, then Kalpakian Bros. is entitled to be paid the annual remuneration for the unexpired term of the Agreement and is also entitled to immediate vesting of all unvested stock options.  Kalpakian Bros. may terminate the Agreement on giving four months notice.

As of January 7, 2005, Zab, a related company, has acquired for investment purposes, 1,250,000 units of the Company at a price of $0.20 per unit.  Each unit consists of one common share and one-half of one warrant.  One whole warrant is required to purchase one common share at $0.25 per share expiring on January 7, 2007 of which a total of 300,000 share purchase warrants were exercised at $0.25 per common share for total proceeds to the Company of $75,000.

As of December 31, 2006, an amount of $60 is due from a Director.

The Director’s loan outstanding at December 31, 2005 of $4,740 was repaid to the Company on February 9, 2006.

The Company shares office space and certain expenses with Zab, a company related by common management, officers and certain directors.  Rent for the office premises is paid by the Company and Zab is charged for its proportionate share.  As at December 31, 2006, rent received from Zab for shared offices was in the amount of $6,000 (2005: $6,000) (2004: $6,032).  As at March 31, 2007, rent received from Zab for shared offices was in the amount of $2,500 (March 31, 2006: $1,500).

As of January 1, 2005, the Company and Zab no longer have any related party transactions with regards to office expenses, loans, benefits and rent.

During the year ended December 31, 2004, the Company entered into Non-Brokered Private Placement Financing Agreements with Zab, a related company.  The Company has issued to Zab a total of 4,000,000 common shares of the Company at $0.30 and $0.32 per common share for total net proceeds to the Company of $1,225,000.  These shares were restricted from trading until June 20, 2004.

During the year ended December 31, 2004, 2 directors of the Company participated in the Company’s Non-Brokered Private Placement financing dated October 25, 2004, by purchasing an aggregate of 300,000 units at $0.10 per unit.  (For details, please see Item 5.b; Liquidity and Capital Resources)

On January 7, 2005, Zab acquired for investment purposes, 1,250,000 units of the Company at a price of $0.20 per unit.  Each unit consists of one common share and one-half of one warrant.  One whole warrant is required to purchase one common share at $0.25 per share expiring on January 7, 2007.  During the year ended December 321, 2006, Zab exercised 300,000 share purchase warrants at $0.25 per common share to acquire 300,000 common shares of Las Vegas for total proceeds to the Company of $75,000.

LVFH provides office space, telephone and photocopy services, office supplies, reception, accounting, secretarial and other miscellaneous services (the “Services”) to Zab Resources Inc., Colt Capital Corp., Touchdown Capital Inc., and Mountain Capital Inc., respectively and which are all related by common management, officers and directors.  Effective as of March 1, 2007, LVFH invoices each of the aforementioned companies $1,500 per month plus G.S.T. for as long as the Services are required by each of the aforementioned companies.  

LVFH is related to the following companies by common management and/or Directors and/or Officers:

-

Zab Resources Inc. (formerly Bronx Ventures Inc.) (“Zab”), a public company listed on the OTC Bulletin Board of which Jacob H, Kalpakian, Bedo H. Kalpakian and Gregory T. McFarlane are officers and directors;  

-

Kalpakian Bros. of B.C. Ltd., a private company incorporated under the laws of the Province of British Columbia, the principal shareholders of which are Jacob H. Kalpakian and Bedo H. Kalpakian, directors of the Company;

-

Colt Capital Corp., a reporting issuer in the provinces of Alberta, British Columbia and Ontario the securities of

25

which have been recently listed on the CNQ Stock Exchange.  Colt Capital Corp. was incorporated in the Province of Alberta and has been continued into the Province of British Columbia;

-

Mountain Capital Inc. (“Mountain”) a public company listed on the TSX Venture Exchange of which Jacob H. Kalpakian and Bedo H. Kalpakian are officers, directors and principal shareholders;

-

Touchdown Capital Inc. (“Touchdown”) a public company listed on the TSX Venture Exchange of which Jacob H. Kalpakian, Bedo H. Kalpakian and Neil Spellman are directors and principal shareholders.

Item 7.C. Interests of Experts and counsel

Not Applicable

ITEM 8. FINANCIAL INFORMATION

Item 8.A. Consolidated Statements and Other Financial Information

The Company’s Audited Consolidated Financial Statements for the year ended December 31, 2006 and 2005 are included in Item 17 of this report.

Item 8.A. 7. Legal Proceedings

The Company's corporate legal counsel is Anfield, Sujir, Kennedy & Durno, Barristers and Solicitors, Attn: Michael Kennedy, 1600 – 609 Granville Street, Vancouver, BC, Canada V7Y 1C5 [telefax number: (604) 669-3877].

During the year ended December 31, 2004, the Company was involved in a lawsuit with an arm’s length third party (“Third Party”) for patent infringement.  Even though Management of the Company was of the opinion that the lawsuit was frivolous and of no merit, nevertheless Management decided that it would be more prudent and cost effective to have an amicable out-of-court settlement.  The Company reached an out-of-court settlement, by entering into a License and Settlement Agreement dated February 17, 2005, (the “License and Settlement Agreement”) (Exhibit 10.1- Incorporated by reference) whereby the Company had agreed to pay to the Third Party a series of royalty payments, not to exceed the sum of US$200,000 which was payable as follows:

(a)

Four equal instalments of US$25,000 until November 2, 2005;,

(b)

Quarterly payments of US$10,000 for every US$1,000,000 of Las Vegas’ cumulative rake income commencing January 1, 2005, for up to US$5,000,000 of Las Vegas’ cumulative rake revenues; and,

(c)

A single payment of US$50,000 for the first subsequent US$5,000,000 of Las Vegas’ cumulative rake revenues after the above mentioned US$5,000,000 would have been reached.

On May 6^th, 2005, the Company and the Third Party entered into a Modification to “License & Settlement Agreement dated February 17, 2005” (Exhibit 10.2 - Incorporated by reference) whereby the Company paid one final payment of US$90,000 as full and final settlement, and complete release of all the Company’s royalty obligations.  As a result, the Company recorded a gain of Cdn $97,382 in its statement of operations and deficit for the year ended December 31, 2005.   Prior to May 6, 2005, the Company had paid US $25,000 to the Third Party.

The Company is presently not a party to any legal proceeding of any kind.

Dividends

The Company has never paid and does not intend to pay any dividends in the future.

Item 8.B. Significant Changes.

During the year ended December 31, 2006 the Company sold its Action Poker Network as a result of the Unlawful Internet Gambling Enforcement Act of 2006 (the “UIGE Act”).As of December 31, 2006, and up until May 31, 2007, there were no significant changes in the affairs of the Company.

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ITEM 9. THE OFFER AND LISTING

Item 9.A. (4) Listing Details

The common shares of the Company were listed on the Vancouver Stock Exchange, British Columbia, on September 15, 1983.  Effective on November 29, 1999, the Vancouver Stock Exchange became known as the Canadian Venture Exchange (“CDNX”) as a result of the merger between the Vancouver Stock Exchange and the Alberta Stock Exchange.  During 2002, the CDNX changed its name to the TSX Venture Exchange (referred to as “TSX Venture”) pursuant to the Toronto Stock Exchange’s acquisition of the CDNX.  The following table sets forth the market price (Canadian dollar), range and trading volume of the common shares on the TSX Venture for the periods indicated.  The current trading symbol of the Company's common shares listed on the TSX Venture is "LVH".  The closing market price on May 31, 2007 was Canadian $0.18 per common share on the TSX Venture (May 31, 2006: $0.28).  

TSX Venture Exchange (“TSX Venture”)

(formerly known as the Canadian Venture Exchange)

Trading Range (Canadian $)

Five Most Recent Financial Years	High $	Low $	Volume
2002	0.20	0.04	9,597,550
2003	0.495	0.01	50,031,230
2004	0.40	0.09	56,935,312
2005	0.83	0.235	130,789,270
2006	0.435	0.075	56,663,566

TSX Venture Exchange – (Canadian)

Two Most Recent Financial Years
Year 2005	High $	Low $	Volume
Jan 1 – Mar 31	0.68	0.235	38,836,100
Apr 1 – Jun 30	0.83	0.51	48,401,700
Jul 1 – Sep 30	0.63	0.36	29,229,070
Oct 1 – Dec 31	0.45	0.335	14,322,400
Year 2006	High $	Low $	Volume
Jan 1 – Mar 31	0.435	0.27	13,935,850
Apr 1 – Jun 30	0.375	0.205	17,148,047
Jul 1 – Sep 30	0.225	0.13	8,171,793
Oct 1 – Dec 31	0.23	0.075	17,407,876
Year 2007	High $	Low $	Volume
Jan 1 – Mar 31	0.34	0.16	13,355,495
Six Most Recent Months	High $	Low $	Volume
December 2006	0.205	0.15	4,474,061
January 2007	0.34	0.16	5,790,900
February 2007	0.315	0.24	5,230,700
March 2007	0.27	0.18	2,333,895
April 2007	0.275	0.21	3,054,640
May 2007	0.215	0.18	1,848,490

Effective July, 1999 the Company’s common shares commenced trading in the U.S.A. on the OTC Bulletin Board under the symbol "LVFHF".  The following table sets forth the market price (US$), range and trading volumes of the common shares of the Company on the OTC Bulletin Board for the periods indicated:-

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OTC Bulletin Board Trading Range (US $)

Five Most Recent Financial Years	High $	Low $	Volume
2002	0.15	0.02	2,224,700
2003	0.37	0.02	4,964,163
2004	0.30	0.075	2,048,186
2005	0.685	0.17	8,986,600
2006	0.41	0.068	3,096,571

Two Most Recent Financial Years
Year 2005	High $	Low $	Volume
Jan 1 – Mar 31	0.55	0.17	4,672,700
Apr 1 – Jun 30	0.685	0.42	2,160,100
Jul 1 – Sep 30	0.53	0.31	1,294,300
Oct 1 – Dec 31	0.44	0.30	859,500
Year 2006	High $	Low $	Volume
Jan 1 – Mar 31	0.41	0.24	889,239
Apr 1 – Jun 30	0.335	0.164	513,743
Jul 1 – Sep 30	0.20	0.137	761,387
Oct 1 – Dec 31	0.195	0.068	932,202
Year 2007	High $	Low $	Volume
Jan 1 – Mar 31	0.28	0.135	340,375
Six Most Recent Months	High $	Low $	Volume
December 2006	0.195	0.133	167,762
January 2007	0.27	0.135	130,205
February 2007	0.28	0.18	179,400
March 2007	0.24	0.17	30,770
April 2007	0.22	0.187	113,125
May 2007	0.19	0.153	26,100

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Effective September 1, 2000, the Company’s common shares were listed for trading on the Third Market Segment of the Berlin Stock Exchange under the symbol "LVH".  The following table sets forth the market price (Euro €), range and trading volumes of the common shares of the Company on the Berlin Stock Exchange for the periods indicated:-

Berlin Stock Exchange (Third Market Segment)– (Euro €)

Two Most Recent Financial Years
Year 2005	High€	Low €	Volume
Jan 1 – Mar 31	0,36	0,11	8,000
Apr 1 – Jun 30	0,5	0,31	703,320
Jul 1 – Sep 30	0,43	0,24	233,400
Oct 1 – Dec 31	0,34	0,22	30,000
Year 2006	High€	Low €	Volume
Jan 1 – Mar 31	0,27	0,19	0
Apr 1 – Jun 30	0,26	0,14	22,800
Jul 1 – Sep 30	0,15	0,07	30,000
Oct 1 – Dec 31	0,12	0,02	0
Year 2007	High€	Low €	Volume
Jan 1 – Mar 31	0,18	0,09	0
Six Most Recent Months	High€	Low €	Volume
December 2006	0,11	0,82	0
January 2007	0,18	0,09	0
February 2007	0,18	0,14	0
March 2007	0,15	0,11	0
April 2007	0,15	0,13	0
May 2007	0,14	0,10	0

Effective February 27, 2006, the Company’s common shares were listed for trading on the Frankfurt Stock Exchange under the symbol "LVH".  The following table sets forth the market price (Euro €), range and trading volumes of the common shares of the Company on the Frankfurt Stock Exchange for the periods indicated:-

Frankfurt Stock Exchange – (Euro €)

Year 2006	High€	Low €	Volume
Jan 1 – Mar 31	0,31	0,24	93,500
Apr 1 – Jun 30	0,26	0,14	6,901,780
Jul 1 – Sep 30	0,15	0,07	342,970
Oct 1 – Dec 31	0,12	0,03	335,640
Year 2007	High €	Low €	Volume
Jan 1 – Mar 31	0,19	0,09	318,750
Six Most Recent Months	High€	Low €	Volume
December 2006	0,11	0,08	32,256
January 2007	0,19	0,09	178,750
February 2007	0,18	0,14	0
March 2007	0,15	0,11	140,000
April 2007	0,15	0,13	10,000
May 2007	0,13	0,11	12,000

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Item 9.C. Markets

The common shares of the Company were listed on the Vancouver Stock Exchange, British Columbia, on September 15, 1983.  Effective on November 29, 1999, the Vancouver Stock Exchange became known as the Canadian Venture Exchange (“CDNX”) as a result of the merger between the Vancouver Stock Exchange and the Alberta Stock Exchange.  During 2002, the CDNX changed its name to the TSX Venture Exchange (referred to as “TSX Venture”) pursuant to the Toronto Stock Exchange’s acquisition of the CDNX.  The current trading symbol for the Company’s common shares on the TSX Venture is “LVH”.

Effective July, 1999 the Company’s common shares commenced trading in the U.S.A. on the OTC Bulletin Board under the symbol "LVFHF".

Effective September 1, 2000, the Company’s common shares were listed for trading on the Third Market Segment of the Berlin Stock Exchange in Germany.  The trading symbol for the Company’s common shares is “LVH”, and the German Securities Code is WKN 935277, (ISIN Number CA 517 672 1010).  

Effective February 27, 2006, the Company’s common shares were listed for trading on the Frankfurt Stock Exchange in Germany.  The trading symbol for the Company’s common shares is “LVH”, and the German Securities Code is WKN 935277, (ISIN Number CA 517 672 1010)  

ITEM 10. ADDITIONAL INFORMATION

Item 10.A.1.  Share Capital.

The authorized capital of the Company consists of an unlimited number of common and preferred shares without par value of which 101,950,795 common shares are issued and outstanding as of May 31, 2007.  There are no preferred shares outstanding.  

Holders of common shares of the Company are entitled to one vote per share at all meetings of shareholders, to receive dividends as and when declared by the Directors, and to receive a pro-rata share of the assets of the Company available for distribution to common shareholders in the event of the liquidation, dissolution or winding up of the Company.  There are no pre-emptive, conversion or surrender rights attached to the common shares of the Company.

Capital Stock

Unlimited number of common shares without par value

Unlimited number of preferred shares without par value

Outstanding Share Data	Number of Common Shares	Number of Preferred Shares	Exercise ($) Price per common share	Expiry Dates
Issued and Outstanding as at May 31, 2007	101,950,795	Nil	N/A	N/A
Stock Options	11,557,500	Nil	$0.12 to 0.46	July 5/07 - April 11/10
Fully Diluted as at May 31, 2007	113,508,295	Nil	N/A	N/A

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Item 10.A.4. Warrants

During the year ended December 31, 2006, the Company issued 465,000 common shares of the Company to various warrant holders as a result of the exercising of warrants at prices ranging from $0.10 to $0.25 per common share for total proceeds to the Company of $99,000.

The following summarizes the warrants that have been granted, exercised, cancelled or expired during the years ended December 31, 2006 and 2005:

		Weighted
		Average
	Number	Exercise
	of Warrants	Price
Balance, December 31, 2004		$ 0.19
Granted	8,742,750	$ 0.82
Exercised	(2,430,000)	$ 0.19
Balance, December 31, 2005		$ 0.59
Granted	0	N/A
Exercised	(465,000)	$ 0.10 - 0.25
Expired	(4,550,000)	$ 0.20
Balance, December 31, 2006	7,942,750	$ 0.84

At December 31, 2006 and 2005, the following warrants are exercisable and outstanding. Each warrant entitles the holder to purchase one common share of the Company at the exercise price per common share with the following expiry dates:

	Exercise	Number of Warrants
Expiry Date	Price	2006	2005
October 31, 2006	$ 0.20	0	3,775,000
October 31, 2006	$ 0.10	0	90,000
November 8, 2006	$ 0.20	0	850,000
January 7, 2007 (expired    subsequent to year end)	$ 0.25	1,700,000	2,000,000
May 13, 2007 (expired    subsequent to year end)	$ 1.00	6,242,750	6,242,750
Total warrants outstanding and
exercisable	$ 0.10 to $ 1.00	7,942,750	12,957,750

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The following summarizes the officer, director, employee and consultant stock options that have been granted, exercised, cancelled and expired during the three month period ended March 31, 2007.  The options vest 25% on grant and thereafter 25% every six months.

	Number	Weighted Average
	of Options	Exercise Price
Balance, December 31, 2006	13,653,000	$ 0.15
Granted	350,000	$ 0.12
Cancelled	0	N/A
Exercised	(266,500)	$0.13
Expired	(2,182,000)	$0.27
Balance, March 31, 2007	11,554,500	$0.13

All warrants have been issued pursuant to resolutions of the Board of Directors of the Company.

Item 10.A.5. Stock Options

From time to time the Company grants stock options to employees, officers, directors and consultants pursuant to the rules and regulations of the Venture Exchange (“TSX Venture”).  During the year ended December 31, 2006, 5,549,000 stock options expired unexercised and as a result the Company granted 9,815,000 stock options to directors, officers and employees.  

During 2004, the Company’s shareholders adopted and approved the Company’s 2004 Stock Option Plan (the “2004 Plan”).  The 2004 Plan, which has received the approval of the TSX Venture, reserved 11,290,154 common shares for issuance representing 20% of the Company’s issued and outstanding common shares on April 12, 2004.  At the Annual and Special General Meeting of the Company’s shareholders, which was held on June 30, 2005, the shareholders approved the amendment to the Company’s 2004 Plan by increasing the maximum number of common shares that may be reserved for issuance pursuant to the Stock Option Plan to 15,866,936 common shares (the “Company’s Amended 2004 Stock Option Plan”).  (See Exhibit 10.13 - Incorporated by reference)  Pursuant to the Company’s Amended 2004 Stock Option Plan that has received TSX Venture approval, the Company grants stock options to employees, directors, officers and consultants.  As at December 31, 2006, there are 1,034,844 stock options available for granting.  The number available for granting is based on the difference between the reserved number of options available for issuance (15,866,936) less outstanding stock options (December 31, 2006: 13,653,000) less the number of stock options exercised since May 12, 2005 up to and including December 31, 2006 (1,179,092) (15,866,936 - 13,653,000 - 1,179,092 = 1,034,844).

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The following summarizes the officer, director, employee and consultant stock options that have been granted, exercised, cancelled and expired during the years ended December 31, 2006 and 2005.  The options vest 25% on grant and thereafter 25% every six months.

	Number	Weighted Average
	of Options	Exercise Price
Balance, December 31, 2004		$ 0.16
Granted	1,825,000	$ 0.35
Cancelled	0	N/A
Exercised	(2,740,500)	$ 0.17
Expired	(278,500)	$ 0.21
Balance, December 31, 2005		$ 0.19
Granted	9,815,000	$ 0.12
Cancelled	0	N/A
Exercised	(584,592)	$ 0.16
Expired	(5,549,000)	$ 0.17
Balance, December 31, 2006	13,653,000	$ 0.15

At December 31, 2006 and 2005, the following stock options are outstanding.  The options entitle the holders to purchase the stated number of common shares at the exercise price per common share with the following expiry dates:

	2006			2005
	Options Outstanding			Options Outstanding
	Weighted			Weighted
	Average	Number of	Aggregate	Average	Number of	Aggregate
Expiry	Exercise	Shares Under	Intrinsic	Exercise	Shares Under	Intrinsic
Date	Price	Option	Value	Price	Option	Value
2006	$     0.00	0	$             0	$       0.16	5,765,592	$ 115,394
2007	$     0.22	3,888,000	61,710	$       0.22	4,206,000	64,230
2008	$     0.20	265,000	0	$       0.00	0	0
2009	$     0.12	9,500,000	0	$       0.00	0	0
	$     0.15	13,653,000	$    61,710	$       0.19	9,971,592	$ 179,624

	2006			2005
	Options Exercisable			Options Exercisable
	Weighted			Weighted
	Average	Number of	Aggregate	Average	Number of	Aggregate
Expiry	Exercise	Shares Under	Intrinsic	Exercise	Shares Under	Intrinsic
Date	Price	Option	Value	Price	Option	Value
2006	$    0.00	0	$              0	$       0.16	4,444,030	$   87,914
2007	$    0.22	3,815,500	3,763,000	$       0.20	2,776,375	47,049
2008	$    0.22	87,500	4,098,000	$            0	0	0
2009	$    0.12	2,375,000	0	$            0	0	0
	$    0.18	6,278,000	$7,861,000	$       0.18	7,220,405	$ 134,963

As at March 31, 2007, there are 2,866,844 stock options available for granting.  The number available for granting is

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based on the difference between the reserved number of options available for issuance (15,866,936) less outstanding stock options at March 31, 2007 (11,554,500) less the number of stock options exercised since May 12, 2005 up to and including March 31, 2007 (1,445,592); (15,866,936 less 11,554,500 less 1,445,592 equals 2,866,844).

The following summarizes the officer, director, employee and consultant stock options that have been granted, exercised, cancelled and expired during the three month period ended March 31, 2007.  The options vest 25% on grant and thereafter 25% every six months.

	Number	Weighted Average
	of Options	Exercise Price
Balance, December 31, 2006	13,653,000	$ 0.15
Granted	350,000	$ 0.12
Cancelled	0	N/A
Exercised	(266,500)	$0.13
Expired	(2,182,000)	$0.27
Balance, March 31, 2007	11,554,500	$0.13

Item 10.A.6. History of Share Capital

There are no special voting rights attached to any of the Company’s issued and outstanding common shares which were all issued for cash or in the case of Finder’s Fees, or agent’s warrants or member sponsorship fees or broker’s compensation warrants for services rendered.

CAPITAL STOCK

At the Annual and Special General Meeting of the Company’s shareholders, which was held on June 30, 2005, the shareholders approved the deletion of the pre-existing Company Provisions in the Notice of Articles of the Company and, in substitution, the shareholders approved the adoption of a new form of Articles for the Company pursuant to The Business Corporations Act (British Columbia) (Exhibit 3.2 – Incorporated by reference).  Furthermore, the shareholders approved the increase of the Company’s authorized capital stock to an unlimited number of common shares and an unlimited number of preferred shares, issuable in series, in each case without nominal or par value.

Authorized:

Preferred shares without par value – unlimited (none issued)

Common shares without par value – unlimited

The Company received TSX Venture approval on October 30, 2006 to commence a normal course issuer bid.  Under the bid, which would be conducted pursuant to the rules of the TSX Venture, the Company may purchase up to 8,913,000 of its common shares (the "Common Shares") representing approximately 8.9% of the Company's issued and outstanding Common Shares.  The Company has until November 3, 2007 to purchase any or all its Common Shares.  The price at which the Company may purchase its Common Shares will be the market price thereof at the time of acquisition. Purchases of Common Shares will be made in the open market through the facilities of the TSX Venture.  Any Common Shares acquired by the Company will be cancelled.  Purchases under the bid will be made on behalf of the Company by Scotia McLeod. As of May 31, 2007, the Company has not commenced acquiring any of its Common Shares.

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The numbers of shares issued are as follows:

	Number				Contributed
Common shares	of Shares	Amount			Surplus
Balance, December 31, 2003	52,033,270		14,345,780		379,297
Exercise of stock options for cash	2,375,408		424,318		0
Reclassification of contributed
surplus on exercise of options	0		251,003		(251,003)
Private placements
Net proceeds	15,450,000		2,278,000
Stock-based compensation	0		0		2,323,004
Balance, December 31, 2004	69,858,678		17,299,101		2,451,298
Exercise of stock options for cash	2,740,500		463,360		0
Exercise of warrants for cash	2,430,000		428,000		0
Reclassification of contributed
surplus on exercise of options	0		474,343		(474,343)
Private placements,
net of proceeds	17,485,500		8,432,031		0
Stock-based compensation	0		0		329,399
Balance, December 31, 2005	92,514,678		27,096,835		2,306,354
Exercise of stock options for cash	584,592		93,755		0
Exercise of warrants for cash	465,000		99,000		0
Reclassification of contributed
surplus on exercise of options	0		102,029		(102,029)
Acquisition of three card games
software	6,670,000		2,401,200		0
Stock-based compensation	0		0		513,391
Balance, December 31, 2006	100,234,270	$	29,792,819	$	2,717,716

Item 10.B. Memorandum and Articles of Association. This information has been reported previously. [Exhibit 3.1 - Incorporated by reference and Exhibit 3.2 – Incorporated by reference.]

Item 10.C. Material Contracts

On November 4, 2002, the Company entered into a Licensing Agreement (Exhibit 10.8 – Incorporated by reference) with Zab Resources Inc. (formerly Bronx Ventures Inc.), (“Zab”) a related company, for the joint development of certain gaming software consisting of three card games (the “three card games software”), as a result of which, the three card games software was equally owned by the Company and Zab.  The Company was the operator of the three card games software and marketed the three card games.  Prior to May 6, 2006, the Company received 60% of all revenues that were generated from the operation of the three card games software and Zab received 40%.  On May 5, 2006, Zab sold its interest in the three card games software to the Company for a consideration of 6,670,000 fully paid and non-assessable common shares in the capital of LVFH at a deemed price of $0.36 per share for a total acquisition cost of $2,401,200 determined by an independent valuation (Exhibit 10.12 – Incorporated by reference). The 6,670,000 common shares of the Company, which have been issued to Zab are restricted from trading until May 1, 2007.  As a result of this sale, Zab will no longer receive any revenues from the Company with respect to the three card games software.  Furthermore, the Company no longer has any online gaming interests in the North American market.  For the twelve month period ended December 31, 2006, the Company has paid to Zab $219,160 which represents Zab’s 40% share of revenues generated from the three card games software (2005: $484,804) (2004: $292,372).   

On September 29, 2006, both Houses of the U.S. Congress passed the Safe Port Act, onto which was attached the

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Unlawful Internet Gambling Enforcement Act of 2006 (the “UIGE Act”).  The UIGE Act prohibits the acceptance or use of any payment instrument in any financial transaction involving Internet gambling.  Consequently, the Company decided that its licensed operating Antiguan subsidiary, Action Poker Gaming Inc. (“Action”), cease taking deposits from U.S. based players as of October 13, 2006 and sold Action, which included all of the Action Poker brands, the operating infrastructure of Action, APG Enterprises Costa Rica S.A., Action Commerce Limited, Guardian Commerce Limited and an undivided interest in the software that is used by Action to run the Action Poker Network  and the Company’s licensed online casino software (collectively referred to as the “APGN”) for a selling price of US$2,600,000 to Playsafe Holding Ltd. (“Playsafe”), a wholly owned subsidiary of Playsafe Holding AS (Norway), a public company listed in Norway.  On November 24, 2006, the Company received TSX Venture Exchange (“TSX”) approval and closed the sale.  In respect to this arm’s length transaction, a finder’s fee of US$75,000 was paid to an arm’s length third party.  As a result of this sale, the Company no longer has any online gaming interests in the North American market. (See Exhibits 10.14* and 10.14.1*– Attached Herewith)

Item 10.D. Exchange Controls

(a)

No governmental laws, decrees or regulations in the Province of British Columbia, Canada, restrict export or import of capital, including, but not limited to, foreign exchange controls, or affect the remittance of dividends, interest or other payments to non-resident holders of the Registrant's securities.

(b)

There are no limitations on the right of non-resident or foreign owners to hold or vote such securities imposed by foreign law or by the charter or other constituent document of the Registrant.

Item 10.E. Taxation

General

The following comments summarize the material Canadian and U.S. Federal Income Tax consequences for a shareholder of the Registrant who is a non-resident of Canada and who is a resident of the United States subject to taxation under the laws of the United States.  

The following is based upon the current provisions of the Income Tax Act (Canada) (the "Tax Act") and regulations there under, the U.S. Internal Revenue Code of 1986 (the "Code") and regulations thereunder, the Canada-United States Income Tax Convention, 1980 (the "Convention"), the current administrative policies and practices published by Revenue Canada or by the U.S. Internal Revenue Service and all specific proposals to amend the Tax Act and regulations there under that have been publicly announced by the Minister of Finance (Canada) prior to the date hereof, and judicial decisions, all of which are subject to change.  The following does not take into account the tax laws of the various provinces or territories of Canada or the tax laws of the various state and local jurisdictions of the United States or foreign jurisdictions.

The following does not address consequences peculiar to any holder subject to special provision of Canadian or U.S. income tax law.  Therefore, prospective holders are urged to consult their own tax advisors with respect to the tax consequences of an investment in the common shares of Las Vegas From Home.com Entertainment Inc.

CANADIAN FEDERAL INCOME TAX CONSIDERATIONS

Dividends on Common Stock

Under the Tax Act, a non-resident of Canada is subject to withholding tax at the rate of 25% on dividends from a corporation resident in Canada.  The Convention reduces this rate to 15% for a shareholder resident in the United States.  Withholding tax is further reduced to 5% if the United States resident shareholder is a corporation that beneficially owns at least 10% of the voting stock of the corporation paying the dividend.                 

Exemptions from Withholding Tax

The Convention provides exemption from Canadian income tax on dividends paid to religious, scientific, literary, educational or charitable organizations or to an organization constituted and operated exclusively to administer or provide benefits under one or more pension, retirement or employee benefit funds or plans.  To qualify for exemption such organizations must be resident in the United States and be exempt from income tax under the laws of the United States.

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Dispositions of Common Stock

The following comments apply only to a shareholder whose Common stock constitutes capital property to him for purposes of the Income Tax Act.

Common stock will generally constitute capital property unless the holder is a trader or dealer in securities or is engaged in a venture in the nature of trade in respect of Common Stock.

Common stock of a resident public corporation will constitute taxable Canadian property of a shareholder at a particular time if at any time in the preceding five (5) years, 25% or more of the issued shares of any class of the capital stock of the Registrant belonged to the non-resident shareholder, persons with whom the non-resident did not deal at arm's length, or to the non-resident shareholder and persons with whom the non-resident shareholder did not deal at arm's length.  A proposed amendment will change the resident public company criteria to shares of resident corporations listed on a prescribed stock exchange.

Under the Tax Act, a non-resident of Canada is subject to Canadian tax on taxable capital gains from dispositions of taxable Canadian property and may deduct allowable capital losses from dispositions of taxable Canadian property.  If the shares are considered taxable Canadian property, the vendor may be required to withhold tax pursuant to section 116 of the Tax Act.

Upon disposal of capital property the amount, if any, by which a taxpayer's proceeds of disposition exceed or are exceeded by the adjusted cost base of the capital property (including expenses of disposition) represent the capital gain (or loss) on disposition of the capital property.  Three-fourths of the gain (the "taxable capital gain") is included in income and taxed at normal rates.  Three-fourths of the loss (the "allowable capital loss") can be deducted from taxable capital gains realized in the same year.  Pursuant to the Federal Budget which was announced on February 28, 2000, the taxable capital gain and allowable capital loss inclusion rate is to be reduced from three-fourths to two-thirds for dispositions after February 27, 2000. On October 18, 2000 the Federal Budget further reduced the inclusion rate from two-thirds to one-half for dispositions after October 17, 2000.  For dispositions of taxable Canadian property any excess of allowable capital losses over taxable capital gains becomes a "net capital loss" which can be carried to other years to reduce taxable capital gains from the disposition of such property.

The Convention gives protection to United States residents from Canadian tax on certain gains derived from the alienation of property.  There is no protection for a gain on a disposition of shares the value of which is derived principally from real property in Canada.  Protection under the Convention will be available as long as the Registrant remains a Canadian public corporation or its shares continue to be listed on a prescribed stock exchange.

Revenue Canada has indicated that it considers the protection of the Convention with respect to capital gains extend to a "deemed disposition" under the Tax Act, including the "deemed disposition" arising upon the death of a taxpayer.

U.S. FEDERAL INCOME TAX CONSIDERATIONS

Las Vegas From Home.com Entertainment Inc. is classified as a Passive Foreign Investment company (PFIC) for U.S. federal income tax purposes since the following conditions have applied for at least one taxable year since 1986:

1)  75% or more of its gross income has been passive;

2)  the average percentage of its assets producing passive income is at least 50%.

The following is intended to be a general description of the U.S. Federal income tax considerations material to a purchase of the common shares and is not intended to be, nor should it be construed to be, legal or tax advice to any prospective holders.  Prospective holders are urged to consult their own tax advisors with respect to the tax consequences of an investment in the common shares of Las Vegas From Home.com Entertainment Inc.

Since Las Vegas From Home.com Entertainment Inc. has satisfied the PFIC criteria for at least one taxable year since 1986, while a shareholder holds shares in Las Vegas From Home.com Entertainment Inc., it remains a PFIC as to that shareholder even if it no longer meets the income or asset test.  Classification as a PFIC will create U.S. Tax consequences to a U.S. Shareholder that are unique to the PFIC provisions and that are not encountered in other investments.

Generally, a U.S. shareholder will realize ordinary income on the receipt of cash dividends or property distributions from an investment in the shares of a foreign corporation to the extent such dividends are paid out of the foreign

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company's current accumulated earnings and profits.  To the extent of any withholding taxes, both individual and corporate investors must include such taxes in income and, in turn, claim a foreign tax credit.  Certain corporate investors are also entitled to gross up the underlying foreign corporate income taxes and claim a foreign tax credit.

Thus, under the general rule, no U.S. federal income tax consequences occur until an actual dividend is paid.  Although this general rule can apply in a PFIC investment, there are significant deviations from this general rule and many elections available to a U.S. shareholder that can alter the U.S. federal income tax consequences.  Such consequences will be unique to each U.S. shareholder.

In the absence of any PFIC elections, a U.S. shareholder of a PFIC, will be taxed under the excess distribution method.  Under this method, where a current year dividend exceeds 125% of the average of dividends during the preceding three taxable years, the excess must be allocated rateably to each day in the taxpayer's holding period.

The amount of the excess allocated to the current year and to years when the corporation was not a PFIC is included in the shareholder's gross income for the year of the distribution.  The remainder of the excess is not included in gross income, but the U.S. shareholder must pay a deferred tax amount by allocating the remaining excess to all PFIC years, re-computing the tax for each PFIC year and computing and paying the resultant interest on the recomputed tax for each PFIC year.  As indicated above, foreign tax credit relief is available for withholding taxes for both individual and corporate investors.  Relief for underlying corporate tax is only available for certain corporate investors.

Under the excess distribution method, gain on the disposition of PFIC shares results in the same allocation process; gross income inclusion; tax re-computation; and interest charge as an excess distribution.

In lieu of the excess distribution method, a U.S. shareholder may elect to treat a PFIC as a Qualified Electing Fund ("QEF") and be taxed under the QEF method.  If that election is made, the U.S. shareholder will be taxed currently on its pro-rata share of the earnings of the QEF.  The current income inclusion eliminates the interest charge under the excess distribution method.  Thus, unlike the excess distribution method that requires the receipt of cash from an actual dividend or sale, the QEF method invokes taxation without the receipt of cash.

A shareholder that makes a QEF election may, or may not, remain subject to tax under the excess distribution method.  If the U.S. shareholder makes the QEF election for the foreign corporation's first tax year as a PFIC that is included in the shareholder's holding period, the excess distribution will not apply to the shareholder.  Thus, this type of shareholder will include its pro-rata share of PFIC earnings as a dividend, claim the appropriate foreign tax credit, and not face any interest charge.

If the shareholder makes the QEF election at a later time, in the absence of any other PFIC election, current taxation under the QEF method will apply prospectively.  However, the excess distribution method continues to apply prior to the effective date of the QEF election.

If the shareholder makes the QEF election at a later time, the shareholder has an additional option to make a purging election.  If a purging election is made, the PFIC stock would be treated as if it were sold and the gain treated as an excess distribution requiring:  a gross income inclusion; allocation to PFIC years in the shareholder's holding period, a tax recomputation for PFIC years in the shareholder's holding period; and an interest charge payment.  As a result of the purging election, thereafter the excess distribution method would not apply to that shareholder.

Under the QEF method, the U.S. shareholder has another option.  In lieu of paying the tax on its pro-rata share of PFIC earnings, the U.S. shareholder in a QEF on the last day of the QEF's tax year may elect to extend the time for payment of any of its undistributed PFIC earnings tax liability for the tax year.  If the election is made, the election is treated as an extension of time to pay tax and, thus, the U.S. shareholder is liable for interest.

In lieu of any of the above-described methods, since Las Vegas From Home.com Entertainment Inc. is regularly traded on a national securities exchange, U.S. shareholders may wish to make an election to mark to market.

A U.S. shareholder of a PFIC may make a mark to market election for marketable PFIC stock.  If the election is made, the shareholder includes in income each year an amount equal to the excess, if any, of the fair market value of the PFIC stock as of the close of the tax year over the shareholder's adjusted basis in the stock.  Decreases in market value are allowed as deductions, within certain prescribed limits.

Generally, under the mark to market election, the general PFIC rules under the excess distribution method and QEF method do not apply.  However, if the mark to market election is made after a U.S. shareholder has maintained its

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investment, there are provisions that ensure that the interest charge on amounts attributable to periods before the election is not avoided.

PERSONS CONSIDERING THE PURCHASE OF COMMON SHARES OF THE COMPANY SHOULD CONSULT THEIR TAX ADVISORS WITH REGARD TO THE APPLICATION OF CANADIAN, U.S. AND OTHER TAX LAWS TO THEIR PARTICULAR SITUATION.

Item 10. F. Dividends and Paying Agents  

Not Applicable.

Item 10. G. Statement by Experts

Not Applicable

Item 10. H. Documents on Display

We have filed this Annual Report on Form 20-F with the Securities and Exchange Commission under the Securities Exchange Act of 1934. Statements made in this annual report as to the contents of any contract, agreement or other document referred to are not necessarily complete.  With respect to each such contract, agreement or other document filed as an exhibit to this annual report, reference is made to the exhibit for a more complete description of the matter involved, and each such statement shall be deemed qualified in its entirety by such reference.

We are subject to the informational requirements of the Securities Exchange Act and file reports and other information with the Securities and Exchange Commission.  Reports and other information which we file with the Securities and Exchange Commission, including this Annual Report on Form 20-F, may be inspected at the public reference facilities of the Securities and Exchange Commission at: 450 Fifth Street N.W., Room 1024, Washington, D.C. 20549.  Additionally, copies of this material may also be obtained from the Securities and Exchange Commission’s Internet Site at http:/www.sec.gov.  The Commission’s telephone number is 1-800-SEC-0330.

Item 10. I   Subsidiary Information

Not Applicable.

ITEM 11. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Financial Instruments

(i)

Fair value

The carrying value of cash and term deposits, accounts receivable, accounts payable and accrued liabilities, amounts due to and from related parties and obligation under capital lease approximate their fair value because of the short maturity of these financial instruments.

(ii)

Interest rate risk

The Company is not exposed to significant interest rate risk due to the short-term maturity of its monetary current assets and liabilities.

(iii)

Credit risk

The Company is exposed to credit risk with respect to its accounts receivable and amounts due from Licensees.  Risks on accounts receivable from major Internet payment processors were minimal.

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(iv)

Foreign currencies

The Company considers the Canadian dollar to be its functional currency and translates the results of foreign operations into Canadian currency using approximately the average exchange rate for the year.  The exchange rate may vary from time to time.  This risk is minimized to the extent that all non-Canadian source revenues and expenses are in US dollars.

(v)

Market risk

The Company is exposed to market risk with respect to its investment in marketable securities from adverse fluctuations in their market value and in the event the marketable securities are delisted from public trading.

ITEM 12. DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES

Not Applicable

ITEM 13. DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIES

The Company is not in default in the payment of principal, interest, sinking fund instalment or any other default with respect to any indebtedness of the Company.

ITEM 14. MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF PROCEEDS

There have been no changes in the constituent instruments defining the rights of holders of common stock and no issuance of any other securities that has modified the rights of holders of common stock.

Use of Proceeds from Offering

Not Applicable

ITEM 15. CONTROLS AND PROCEDURES

II.

Evaluation of internal controls

(a)

EVALUATION OF DISCLOSURE CONTROLS AND PROCEDURES.  The Company’s Chief Executive Officer and Chief Financial Officer have evaluated the effectiveness of the Company’s disclosure controls and procedures [(as defined in Rules 13a-14(c) and 15d -14(c) under the Securities Exchange Act of 1934 (“Exchange Act”)] as of the end of the period covered by this Annual Report on Form 20-F.  Under the supervision and with the participations of our management, including the Chief Executive Officer and the Chief Financial Officer, we have evaluated the effectiveness of the design and operation of our disclosure controls and procedures as of the end of the period covered by this report.  Based on that evaluation, the Chief Executive Officer and the Chief Financial Officer have concluded that, except as discussed below, these disclosure controls and procedures are effective to provide reasonable assurance that information required to be disclosed by us in reports that we file under the Securities and Exchange Act of 1934 is recorded, processed, summarized, and reported within the time periods specified in Securities and Exchange Commission rules and forms.  It should be noted that in designing and evaluating the disclosure controls and procedures, management recognized that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives, and management necessarily is required to apply its judgment in evaluating the cost-benefit relationship of possible controls and procedures.  We have designed our disclosure controls and procedures to reach a level of reasonable assurance of achieving desired control objectives and, based on the evaluation described below, our Chief Executive Officer and Chief Financial Officer have concluded that our disclosure controls and procedures were effective at reaching that level of reasonable assurance, except as discussed below.

In connection with the audit of our consolidated financial statements for the fiscal year ended December 31, 2006, our independent auditors informed us that although all transactions were diligently and accurately accounted for, they had discovered deficiencies with respect to appropriate controls over Corporate Governance and which may lead to non-compliance with the policies of the Canadian Securities Administration and the regulations and

40

requirements of the B.C.Securities Commission.  We have initiated corrective actions to address these internal control deficiencies, and will continue to evaluate the effectiveness of our disclosure controls and procedures on an ongoing basis, taking corrective actions as appropriate.

.

(b)

CHANGES IN INTERNAL CONTROLS.  Please see Item 15 II (a) Evaluation of internal controls.

(Exhibits 31.1* and 31.2*- Attached herewith)

ITEM 16. AUDIT COMMITTEE, CODE OF ETHICS, ACCOUNTANT FEES

16.A. Audit Committee Financial Expert

The financial experience of Bedo H. Kalpakian, including his experience serving as Chief Financial Officer of other public companies and a private company, and his experience in actively supervising principal financial officers, principal accounting officers, accountants, controllers and auditors determines that he is an audit committee financial expert within the meaning of the U.S. Sarbanes-Oxley Act of 2002.  (See Item 6.C.3. in this report for further details on the Audit Committee.)

16.B. Code of Ethics

On May 31, 2004, the Company’s Board of Directors adopted a Code of Ethics (the “Code”) for the Company’s Chief Executive Officer and Chief Financial Officer and its principal accounting officer or controller, or persons performing similar function (the “Senior Financial Officers”) to deter wrongdoing and promote honest and ethical conduct in the practice of financial management, full, fair, accurate, timely and understandable disclosure; and compliance with all applicable laws and regulations.  These Senior Financial Officers are expected to abide by this Code as well as by all of the Company’s other applicable business policies, standards and guidelines. (Exhibit 14.1 – Incorporated by reference)

The Code of Ethics can be accessed electronically at http://www.LVFH.com .

Item 16.C. Auditor’s Fees & Services

The aggregate fees charged to the Company by the external auditor in each of the last three fiscal years is as follows:

	FYE 2004	FYE 2005	FYE 2006
Audit fees for the year ended	$31,500	$   92,000	$    92,531
Audit related fees	$5,317	$     1,861	$      2,700
Tax fees	$1,400(1)	$  2,000(1)	$    2,000(1)
All other fees (non-tax)	-	$13,400(2)	$    6,800(2)
Total Fees:	$38,217	$109,261	$104,031

⁽¹⁾

These fees are for preparation and filing of the Company's tax return.

⁽²⁾

These fees are for the review of 2005 quarterly filings, compilation of forecasts, research related to Scientific Research and Experimental Development (SR&ED) qualifications and calculation of stock based compensation.  

The Audit Committee’s pre-approval policies and procedures: The Audit Committee has adopted procedures to pre-approve audit services and all non-audit services to be rendered by the Company’s external auditors. The Chairman of the Audit Committee has been delegated authority to pre-approve audit services up to a maximum cost of $25,000 and individual non-audit services up to a maximum cost of $10,000 per assignment.  All non-audit services that cost more than $10,000 per assignment must be pre-approved by the Audit Committee.  All amounts which exceed the authorized amounts require further approval from the Audit Committee.

ITEM 17.  FINANCIAL STATEMENTS

The Company’s Consolidated Audited Financial Statements for the year ended December 31, 2006 and 2005 together with the report of the auditors, Smythe Ratcliffe, Chartered Accountants, are filed as part of this annual report.  The

41

Company's consolidated audited financial statements are stated in Canadian dollars (Cdn$) and are prepared in accordance with Canadian generally accepted accounting principles.

Report of Independent Registered Public Accounting Firm

page 44

Comment by Independent Auditors for United States Readers

on Canada/United States Reporting Conflict

page 44

Consolidated Balance Sheets as at December 31, 2006 and December 31, 2005

page 45

Consolidated Statements of Operations and Deficit for the years ended

December 31, 2006, 2005 and 2004

page 46

Consolidated Statements of Cash Flows for the years ended

December 31, 2006, 2005 and 2004

page 47

Notes to the Consolidated Financial Statements

pages 48 - 73

All schedules are omitted because they are not applicable or the required information is shown in the financial statements or notes thereto.

42

LAS VEGAS FROM HOME.COM

ENTERTAINMENT INC.

Consolidated Financial Statements

December 31, 2006

(Canadian Dollars)

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM ……	44
Consolidated Balance Sheets …………………………………………………………	45
Consolidated Statements of Operations and Deficit ……………………………...	46
Consolidated Statements of Cash Flows …………………………………………...	47
Notes to Consolidated Financial Statements ………………………………………	48 - 73

43

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

TO THE STOCKHOLDERS OF LAS VEGAS FROM HOME.COM ENTERTAINMENT INC.

We have audited the consolidated balance sheets of Las Vegas from Home.com Entertainment Inc. as at December 31, 2006 and 2005 and the consolidated statements of operations and deficit and cash flows for the years ended December 31, 2006, 2005 and 2004. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audits.

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

In our opinion, these consolidated financial statements present fairly, in all material respects, the financial position of the Company as at December 31, 2006 and 2005 and the results of its operations and its cash flows for each of the years ended December 31, 2006, 2005 and 2004 in accordance with Canadian generally accepted accounting principles.  Accounting principles generally accepted in Canada differ in certain significant respects from accounting principles generally accepted in the United States of America and are discussed in note 18 to the consolidated financial statements.

“Smythe Ratcliffe LLP” (signed)

Chartered Accountants

Vancouver, Canada

March 14, 2007

COMMENTS BY AUDITORS FOR US READERS ON CANADA-US REPORTING DIFFERENCES

In the United States, reporting standards of the Public Company Accounting Oversight Board for auditors require the addition of an explanatory paragraph (following the opinion paragraph) when the financial statements are affected by conditions and events that cast substantial doubt on the Company’s ability to continue as a going-concern, such as those described in note 1 to the financial statements. The Company sold a subsidiary, which was a major source of revenue as described in note 4 to the financial statements.  Our report to the shareholders dated March 14, 2007 is expressed in accordance with Canadian reporting standards, which do not permit a reference to such events and conditions in the auditors’ report when these are adequately disclosed in the financial statements.

“Smythe Ratcliffe LLP” (signed)

Chartered Accountants

Vancouver, Canada

March 14, 2007

44

LAS VEGAS FROM HOME.COM ENTERTAINMENT INC.

Consolidated Balance Sheets

December 31

(Canadian Dollars)

		2006		2005
Assets
Current
Cash and cash equivalents	$	8,273,201	$	8,408,620
Marketable securities (note 7)		0		379,236
Accounts receivable (note 8)		425,611		1,801,274
Due from related parties (note 14)		60		4,740
Prepaids and security deposits		15,000		27,499
		8,713,872		10,621,369
Equipment and Software Development (note 9)		903,483		2,198,239
Total Assets	$	9,617,355	$	12,819,608
Liabilities
Current
Accounts payable and accrued liabilities (note 10)	$	472,427		2,111,066
Obligation under capital lease (note 12)		1,019		20,268
Due to related parties (note 14(b))		5,196		60,929
		478,642		2,192,263
Obligation Under Capital Lease (note 12)		0		2,550
Total Liabilities		478,642		2,194,813
Stockholders' Equity
Capital Stock (note 13)		29,792,819		27,096,835
Contributed Surplus (note 13)		2,717,716		2,306,354
Deficit		(23,371,822)		(18,778,394)
		9,138,713		10,624,795
Total Liabilities and Stockholders' Equity	$	9,617,355	$	12,819,608

Commitments and Subsequent Events (notes 17 and 19)

“Bedo H. Kalpakian”

.....................................................................  Director

Bedo H. Kalpakian

“Neil Spellman”

.....................................................................  Director

Neil Spellman

45

See notes to financial statements

LAS VEGAS FROM HOME.COM ENTERTAINMENT INC.

Consolidated Statements of Operations and Deficit

Years Ended December 31

(Canadian Dollars) (note 4)

		2006		2005		2004
Revenues	$	748,425	$	0	$	0
Interest Income		109,593		76,210		3,046
		858,018		76,210		3,046
Expenses
Advertising and promotion		457,204		26,890		3,945
Amortization		561,377		359,563		150,086
Salaries and benefits		2,819,595		1,141,279		2,130,777
Rent, office and miscellaneous		475,534		259,571		198,197
Consulting and professional fees		380,404		231,656		994,550
Travel, meals and entertainment		271,258		280,686		172,233
Management fees		360,000		270,000		180,000
Bank charges, interest and foreign exchange
recovery		(46,001)		(42,346)		(9,944)
Legal, accounting and audit		264,246		131,122		22,054
Donations		16,000		51,500		0
Regulatory and transfer agent fees		22,419		38,822		10,357
Shareholder communication		5,512		17,116		9,424
		5,587,548		2,765,859		3,861,679
Loss Before Other Items		(4,729,530)		(2,689,649)		(3,858,633)
Other Items
Loss on marketable securities		(119,019)		(167,927)		(39,301)
Loss on sale of investments		0		0		(35,830)
Gain (loss) on settlement of lawsuit		0		97,382		(240,400)
		(119,019)		(70,545)		(315,531)
Net Loss after Other Items		(4,848,549)		(2,760,194)		(4,174,164)
Income(loss) from Discontinued Operations,   net of taxes (note 4)
Discontinued operations		1,139,955		3,848,935		(1,172,348)
Loss on sale of Action Poker		(884,834)		0		0
Gain (loss) from discontinued operations,   net of tax		255,121		3,848,935		(1,172,348)
Net Income (loss)		(4,593,428)		1,088,741		(5,346,512)
Deficit, Beginning of Year		(18,778,394)		(19,867,135)		(14,520,623)
Deficit, End of Year	$	(23,371,822)	$	(18,778,394)	$	(19,867,135)
Basic Loss Per Share,   Before Discontinued Operations		$ (0.05)		$  (0.03)		$ (0.07)
Basic Earnings (Loss) Per Share,   Effect of Discontinued Operations		$   0.00		$    0.05		$ (0.02)
Basic Earnings (Loss) Per Share		$ (0.05)		$    0.01		$ (0.09)
Diluted Earnings Per Share		N/A		$    0.01		N/A
Weighted Average Number of Common Shares
Outstanding – Basic		97,236,825		84,337,774		58,428,307

46

See notes to financial statements

LAS VEGAS FROM HOME.COM ENTERTAINMENT INC.

Consolidated Statements of Cash Flows

Years Ended December 31

(Canadian Dollars)

		2006		2005		2004
Operating Activities
Net income (loss)	$	(4,593,428)	$	1,088,741	$	(5,346,512)
Items not involving cash
Amortization		561,377		382,655		168,108
Capitalization of deferred amortization
on software development		0		7,677		11,977
Stock-based compensation		513,392		329,399		2,323,004
Gain on sale of equipment and investments		0		0		42,011
Loss on sale of subsidiary		884,834		0		0
Loss on sale of marketable securities		119,019		0		0
Write-down of marketable securities		0		167,927		39,301
License fee from settlement		0		0		240,400
Loss on settlement of lawsuit		0		(97,382)		0
		(2,514,806)		1,879,017		(2,521,711)
Changes in Non-Cash Working Capital
Accounts receivable		410,204		(602,543)		(1,024,338)
Prepaids and security deposits		(4,942)		75,400		(17,858)
Due from related party		4,680		371,347		(230,515)
Customer deposits, accounts payable and
accrued liabilities		(646,643)		847,209		955,631
Due to related parties		(55,733)		52,404		544
		(292,434)		743,817		(316,536)
Cash Provided by (Used in) Operating
Financing Activities
Common shares issued, net of issue costs		192,755		8,573,391		2,702,318
Subscriptions received		0		0		750,000
Other obligations		0		(516,008)		275,608
Capital lease payments		(21,799)		(20,276)		(14,282)
Cash Provided by Financing Activities		170,956		8,037,107		3,713,644
Investing Activities
Proceeds on sale of marketable securities		310,317		0		173,839
Purchase of marketable securities		(50,100)		(546,780)		(238,160)
Purchase of equipment		0		(704,245)		(168,514)
Proceeds from sale of subsidiary (note 4)		2,751,774		0		0
Additions to software development		(511,126)		(979,579)		(659,979)
Cash Provided by (Used in) Investing Activities		2,500,865		(2,230,604)		(892,814)
Inflow (Outflow) of Cash		(135,419)		8,429,337		(17,417)
Cash and Cash Equivalents (Cheques Issued in
Excess of Funds on Deposit), Beginning of Year		8,408,620		(20,717)		(3,300)
Cash and Cash Equivalents (Cheques Issued in
Excess of Funds on Deposit), End of Year	$	8,273,201	$	8,408,620	$	(20,717)
Supplementary Information
Shares issued for acquisition of three card         games software	$	2,401,200	$	0	$	0
Interest paid	$	2,721	$	6,864	$	34,545

47

See notes to financial statements

LAS VEGAS FROM HOME.COM ENTERTAINMENT INC.

Notes to Consolidated Financial Statements

Years Ended December 31, 2006 and 2005

(Canadian Dollars)

Notes to Consolidated Financial Statements

1.

Nature of Operations

The principal business of the Company and its Antiguan subsidiary, Action Poker Gaming Inc. (“Action”) was the development and marketing of software for online multi-player interactive card games.

On September 29, 2006, both Houses of the U.S. Congress passed the Safe Port Act, onto which was attached the Unlawful Internet Gambling Enforcement Act of 2006 (the “UIGE Act”).  The UIGE Act prohibits the acceptance or use of any payment instrument in any financial transaction involving Internet gambling.  Consequently, the Company decided that its licensed operating Antiguan subsidiary, Action Poker Gaming Inc. (“Action”), cease taking deposits from U.S. based players as of October 13, 2006 and sold Action, which included all of the Action Poker brands, the operating infrastructure of Action, APG Enterprises Costa Rica S.A., Action Commerce Limited, Guardian Commerce Limited and an undivided interest in the software that is used by Action to run the Action Poker Network (collectively referred to as the “APGN”) for a selling price of US$2,600,000 to Playsafe Holding Ltd. (“Playsafe”), a wholly owned subsidiary of Playsafe Holding AS (Norway), a public company listed in Norway.  On November 24, 2006, the Company received TSX Venture Exchange (“TSX”) approval and closed the sale.  In respect to this arm’s length transaction, a finder’s fee of US$75,000 was paid to an arm’s length third party.  As a result of this sale, the Company no longer has any online gaming interests in the North American market.

As of December 31, 2006, the Company was not operating any card rooms, and therefore it had not sought another hosting facility for its servers.

Action’s operations were located at the facilities of Mohawk Internet Technologies Inc. ("Mohawk"), which acted as its hosting facility for its servers, located on the Kahnawake Mohawk Reserve ("Kahnawake") in Canada.

The gaming and entertainment operations were carried on by Action.  The principal revenues of Action were from collecting rakes, licensing fees and royalties.  

During 2005, Action licensed from an arm’s length third party, an online Casino Software (”Online Casino”), which was operated by Action under the URL www.playvegasfromhome.com and which was sold to Playsafe as part of the APGN.

During 2006, the Company incorporated MT Ventures Inc. (“MTV”) a 100% wholly owned Antiguan subsidiary, which is in the business of developing and licensing its online Asian multi-player interactive card games software.  

On November 10, 2006, the Company caused to incorporate MT Commerce Limited, a United Kingdom corporation.  It is the Company’s intention that MT Commerce Limited (UK) act as payment processor for the Company and its subsidiaries.  Furthermore, the Company changed the name of its Cypriot subsidiary, APG Enterprises Ltd. to MTO Commerce Ltd.  

Although management believes that the Internet gaming related activities of MTV will represent a lawful business, there is the risk that the legality of the Internet gaming related activities of MTV may be challenged by Canadian or other legal authorities.  If the legality of the Internet gaming related activities is challenged and the challenge is sustained, it may have a material adverse impact on the financial affairs of the Company.

48

LAS VEGAS FROM HOME.COM ENTERTAINMENT INC.

Notes to Consolidated Financial Statements

Years Ended December 31, 2006 and 2005

(Canadian Dollars)

2.

Going-Concern

These financial statements have been prepared on the basis of accounting principles applicable to a "going-concern" basis, which assumes that Las Vegas From Home.com Entertainment Inc., (the “Company” or “LVFH”) will continue to be in operation for the foreseeable future and will be able to realize its assets and discharge its liabilities in the normal course of operations.

These financial statements do not reflect adjustments that would be necessary if the "going concern" assumption were not appropriate because management believes that the actions already taken or planned will mitigate the adverse conditions and events, which raise doubts about the validity of the "going-concern" assumption used in preparing these financial statements.

If the "going concern" assumption were not appropriate for these financial statements, then adjustments would be necessary in the carrying values of assets and liabilities, the reported revenues and expenses, and the balance sheet classifications used.

3.

Basis of Presentation

The financial statements have been prepared in accordance with accounting principles generally accepted in Canada and all amounts are expressed in Canadian dollars.  These principles differ in certain respects from those that the Company would have followed had its financial statements been prepared in accordance with accounting principles generally accepted in the United States of America. (note 18).

The sale of the Company’s APGN to Playsafe Holding Ltd. on November 24, 2006 was accounted for as a discontinued operation under Canadian generally accepted accounting principles (GAAP) and therefore, the APGN results of operations have been removed from the Company's results of continuing operations for all periods presented in this document.

4.

Discontinued Operations

On November 24, 2006, the Company sold all of the Action Poker brands, the operating infrastructure of Action, APG Enterprises Costa Rica S.A., Action Commerce Limited, Guardian Commerce Limited, the Online Casino and an undivided interest in the software that is used by Action to run the APGN for a selling price of US $2,600,000 to Playsafe, a wholly owned subsidiary of Playsafe Holding AS (Norway), a public company listed in Norway.  In respect to this arm’s length transaction, a finder’s fee of US$75,000 was paid to an arm’s length third party.  As a result of this sale, the Company no longer has any online gaming interests in the North American market.  The results of discontinued operations, less applicable income taxes, have been reported as a separate element of net gain (loss) before extraordinary items for both current and prior periods.

49

LAS VEGAS FROM HOME.COM ENTERTAINMENT INC.

Notes to Consolidated Financial Statements

Years Ended December 31, 2006 and 2005

(Canadian Dollars)

4.

Discontinued Operations (Continued)

The operations and cash flows of the component have been eliminated from the ongoing operations of the enterprise as a result of the disposal transaction; and the enterprise will not have any significant continuing involvement in the operations of the component after the disposal transaction.  

Summarized selected financial information for the discontinued operations is as follows:

	2006	2005	2004
Revenue	$  12,073,508	$  11,645,108	$     1,980,918
Earnings from    discontinued      operations, net of tax	$    1,139,955	$    3,848,935	$   (1,172,348)
Loss on disposal of    APGN	$       884,834	$                  0	$                   0
Earnings from discontinued    operations	$       255,121	$    3,848,935	$   (1,172,348)

Cash received from sale of Action Poker Network
Decrease in accounts receivable	$	965,459
Decrease in prepaids		17,441
Decrease in equipment & software		3,645,704
Decrease in accounts payable		(991,996)
Loss on sale of Action Poker Network		(884,834)
Cash received from sale of Action Poker Network	$	2,751,774

5.

Significant Accounting Policies

a)

Principles of consolidation

These consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries, APG Enterprises Limited (Cyprus), MT Ventures Inc. (Antigua), MT Commerce Limited (UK) and APG Enterprises (Armenia).  All intercompany balances and transactions have been eliminated.

b)

Cash and cash equivalents

Cash and cash equivalents consist of cash on hand and Government of Canada Bonds with maturities of less than one year at the date of acquisition.

c)

Marketable securities

Marketable securities are valued at the lower of cost and market at the balance sheet date.

50

LAS VEGAS FROM HOME.COM ENTERTAINMENT INC.

Notes to Consolidated Financial Statements

Years Ended December 31, 2006 and 2005

(Canadian Dollars)

5.

Significant Accounting Policies (Continued)

d)

Amortization

Amortization of software and development costs and equipment is calculated on the following bases and annual rates:

Software and development costs

- 5 years straight-line

Computer equipment

- 30% declining-balance

Automobile

- 30% declining-balance

Office furniture

- 20% declining-balance

e)

Software development costs

Research costs are expensed as incurred.  Costs related to the development of software are expensed as incurred unless such costs meet the criteria for deferral and amortization under Canadian generally accepted accounting principles.  The criteria include identifiable costs attributable to a clearly defined product, the establishment of technical feasibility, identification of a market for the software, the Company’s intent to market the software, and the existence of adequate resources to complete the project.  Software development costs are amortized over an estimated useful life of five years or prorated over its expected revenue stream whichever is higher, commencing in the year when commercial sales of the products commence.  Capitalized software development is evaluated in each reporting period to determine whether it continues to meet the criteria for continued deferral and amortization.

f)

Stock-based compensation

Effective January 2004, the Company adopted the requirements of the Canadian Institute of Chartered Accountants (“CICA”) Handbook Section 3870, which requires an expense to be recognized in the financial statements for all forms of stock-based compensation including stock options.  Previously, the Company did not record any compensation cost on the granting of stock options, as the exercise price was equal to or greater than the market price at the date of the grants.  Options granted are accounted for using the fair value method where compensation expense is calculated using the Black-Scholes option pricing model.

g)

Revenue recognition

The Company recognizes revenues from licensees and customers on an accrual basis according to the terms and conditions of each individual license agreement.  Allowances for non-collection of revenues are made when collectibility becomes uncertain.

Prior to the sale of Action Poker, recognition of revenue for each type of revenue was as follows:

(i)

License fees for all licensees

License fees were one-time non-refundable fees, which were for entering into the license agreements.  License fees were recognized when received.

51

LAS VEGAS FROM HOME.COM ENTERTAINMENT INC.

Notes to Consolidated Financial Statements

Years Ended December 31, 2006 and 2005

(Canadian Dollars)

5.

Significant Accounting Policies (Continued)

g)

Revenue recognition (Continued)

(ii)

Rake percentages from licensees

Rake revenue earned by the Company was based on negotiated percentages of gross rake revenue as specified in the agreements with licensees, which varied from agreement to agreement.  The Company recognized its percentage of rake revenue at the end of the month based on the rake collected on behalf of the licensees; the balance was then paid out to the licensees in the subsequent month.

(iii)

Administration fees

Administration fees revenue earned by the Company was based on negotiated percentages as specified in the agreements with certain licensees, which varied from agreement to agreement.  The fees charged were for administrative services provided by the Company.  The Company recognized these fees as a percentage of the rake collected on behalf of the licensee on a monthly basis.

(iv)

Rake revenue

Rake revenue from customers coming through the websites of the Company’s subsidiary was collected when a player joined a table, and was non-refundable.  As such, revenue was recognized when a player joined a table.

(v)

The Company had an agreement with Bronx Ventures Inc. (“Bronx”), a related company, whereby Bronx received 40% of the revenue from certain card games.  LVFH reduced its revenue by these amounts (see notes 13(b)(ii) and 14(b)).

(vi)

The Company recognized revenues/losses from its subsidiary’s Online Casino once a player lost or won a wager.

h)

Income taxes

The Company follows the asset and liability method based on the accounting recommendations for income taxes issued by CICA.  Under the asset and liability method future income tax assets and liabilities are computed based on differences between the carrying amounts of assets and liabilities on the balance sheet and their corresponding tax values, using the enacted income tax rates at each balance sheet date.  Future income tax assets can also result by applying unused loss carry-forwards and other deductions.  The valuation of any future income tax assets is reviewed annually and adjusted, if necessary, by use of a valuation allowance to reflect the estimated realizable amount.

i)

Player deposits

Player deposits were included in the Company’s accounts payables, and represented funds deposited by the players.

52

LAS VEGAS FROM HOME.COM ENTERTAINMENT INC.

Notes to Consolidated Financial Statements

Years Ended December 31, 2006 and 2005

(Canadian Dollars)

5.

Significant Accounting Policies (Continued)

j)

Foreign currency translation

The Company’s functional currency is the Canadian dollar; therefore, amounts recorded in foreign currency are translated into Canadian dollars as follows:

(i)

Monetary assets, liabilities and long-term monetary assets and liabilities, at the rate of exchange in effect as at the balance sheet date;

(ii)

Non-monetary assets and liabilities, at the exchange rates prevailing at the time of the acquisition of the assets or assumption of the liabilities; and

(iii)

Revenues and expenses (excluding amortization, which is translated at the same rate as the related asset), at the rates in effect at the time of the transaction.

Gains and losses arising from this translation of foreign currency are included in net income.

k)

Earnings (loss) per share

Earnings (loss) per share is calculated using the weighted average number of common shares outstanding during the year.

Diluted earnings per share amounts are calculated giving effect to the potential dilution that would occur if securities or other contracts to issue common shares were exercised or converted to common shares.  The treasury stock method is used to determine the dilutive effect of stock options and other instruments.  The treasury stock method assumes that proceeds received from the exercise of stock options and warrants are used to repurchase common shares at the prevailing market rates.  Stock options and warrants that are anti-dilutive are not included in the calculation.

The dilutive effect of options and warrants was not reflected in loss per share for 2006 and 2004 as the effect would have been anti-dilutive.

l)

Use of estimates

The preparation of financial statements in conformity with Canadian generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period. Significant estimates made in the preparation of these financial statements include accrued liabilities, assumptions of the determination of fair value of stock-based compensation expense, rates of amortization for equipment and software development and determination of valuation allowance for future income tax assets. Management believes the estimates are reasonable; however, actual results could differ from those estimates and would impact future results of operations and cash flows.

m)

Consolidation of variable interest entities

The Company has adopted Accounting Guideline 15, “Consolidation of Variable Interest Entities”, issued by the CICA for annual and interim periods beginning on or after November 1, 2004.  This guideline addresses the application of consolidation principles to entities that are subject to control on a basis other than ownership of voting interests.  The adoption of this guideline did not have any impact on the Company’s consolidated financial statements.

53

LAS VEGAS FROM HOME.COM ENTERTAINMENT INC.

Notes to Consolidated Financial Statements

Years Ended December 31, 2006 and 2005

(Canadian Dollars)

5.

Significant Accounting Policies (Continued)

n)

Intangible assets

The Company has registered and regularly renews several hundred domain names.  These amounts are insignificant and are expensed when incurred.

6.

Financial Instruments

a)

Fair value

The carrying values of cash and cash equivalents, marketable securities, accounts receivable, customers deposits, accounts payable and accrued liabilities, amounts due to and from related parties, and obligation under capital lease approximate their fair values because of the short-term maturity of these financial instruments.

b)

Interest rate risk

The Company is not exposed to significant interest rate risk due to the short-term maturity of its monetary current assets and liabilities.

c)

Credit risk

The Company is exposed to credit risk with respect to its accounts receivable and amounts due from Licensees.  Risks on accounts receivable from major Internet payment processors were minimal.

d)

Foreign currencies

The Company considers the Canadian dollar to be its functional currency and translates the results of foreign operations into Canadian currency using approximately the average exchange rate for the year.  The exchange rate may vary from time to time.  This risk is minimized to the extent that all non-Canadian source revenues and expenses are in US dollars.  

e)

Market risk

The Company is exposed to market risk with respect to marketable securities from adverse fluctuations in their market value and in the event the marketable securities are delisted from public trading.

7.

Marketable Securities

		2006		2005
Marketable securities (market value $0; 2005 - $379,236)	$	0	$	379,236

54

LAS VEGAS FROM HOME.COM ENTERTAINMENT INC.

Notes to Consolidated Financial Statements

Years Ended December 31, 2006 and 2005

(Canadian Dollars)

8.

Accounts Receivable

Accounts receivable is comprised of the following:

		2006		2005
Due from licensees	$	338,374	$	121,054
Accounts receivable		87,237		117,690
Due from payment processors		0		1,532,292
Security deposits		0		30,238
	$	425,611	$	1,801,274

9.

Equipment and Software Development

	2006
				Accumulated
		Cost		Amortization		Net
Software and development costs	$	526,577	$	144,923	$	381,654
Computer equipment		803,674		281,845		521,829
	$	1,330,251	$	426,768	$	903,483

	2005
				Accumulated
		Cost		Amortization		Net
Software and development costs	$	2,216,060	$	457,591	$	1,758,469
Computer equipment		589,101		194,048		395,053
Automobile		11,420		1,929		9,491
Office furniture		7,353		719		6,634
Computer equipment under capital lease		64,320		35,728		28,592
	$	2,888,254	$	690,015	$	2,198,239

During 2001, the Company commenced developing its own multi-player interactive card games software.  The amount of $180,901 has been capitalized under software and development costs.  Amortization commenced in 2002 as the software was commercially released during the year.  During 2006, additional amounts of $130,976 consisting of salaries were capitalized as software development costs (2005: $979,579 consisting of salaries - $964,745 and other - $14,834), (2004: $659,979 consisting of salaries - $571,600 and other - $88,379).

55

LAS VEGAS FROM HOME.COM ENTERTAINMENT INC.

Notes to Consolidated Financial Statements

Years Ended December 31, 2006 and 2005

(Canadian Dollars)

10.

Customer Deposits, Accounts Payable and Accrued Liabilities

Customer deposits, accounts payable and accrued liabilities are comprised of the following:

		2006		2005
Accounts payable and accrued liabilities	$	472,427	$	172,139
Customer deposits		0		1,806,436
Payable to licensees		0		132,491
	$	472,427	$	2,111,066

11.

Other Obligations

Loan from Interactive

Pursuant to a loan agreement, the loan from Interactive of US $250,000 (Cdn $275,608) was obtained in June 2004, and was payable in monthly instalments equal to 5% of Action’s revenues for the first twelve months and 10% of Action’s revenues thereafter until the repayment of the loan.  The entire amount was fully repaid by the Company on March 15, 2005.  In lieu of interest, the Company was obliged to make monthly bonus payments to Interactive equal to 5% of Action’s revenues for a period of twelve months.  Bonus payments totalling US $20,709 were made up to October 2004.  On April 15, 2005, as consideration for the early repayment of the loan by the Company, Interactive cancelled the loan agreement and has forever forgiven all outstanding and future bonus payments that were payable pursuant to the loan agreement.

The license fee from settlement of US $200,000 (Cdn $240,400) was the maximum amount of a series of royalty payments that were payable to an arm’s length third party (the “Third Party”) as follows:

(i)

four equal instalments of US $25,000 until November 2, 2005;

(ii)

quarterly payments of US $10,000 for every US $1,000,000 of the Company’s cumulative rake income commencing January 1, 2005 for up to US $5,000,000 of the Company’s cumulative rake revenues; and

(iii)

a single payment of US $50,000 for the first subsequent US $5,000,000 of the Company’s cumulative rake revenues after the above-mentioned US $5,000,000 would have been reached.

On May 6, 2005, the Company and the Third Party entered into a modification to “License and Settlement Agreement” of February 17, 2005, whereby the Company paid one final payment of US $90,000 as full and final settlement, and complete release of all the Company’s royalty obligations.  As a result, the Company recorded a gain of Cdn $97,382 in its statements of operations and deficit for the year ended December 31, 2005.

Prior to May 6, 2005, the Company had paid US $25,000 to the Third Party.

56

LAS VEGAS FROM HOME.COM ENTERTAINMENT INC.

Notes to Consolidated Financial Statements

Years Ended December 31, 2006 and 2005

(Canadian Dollars)

12.

Obligation Under Capital Lease

The following is the schedule of future minimum lease payments under capital lease:

		2006		2005
2006	$	0	$	22,811
2007		2,469		2,556
Total minimum lease payments		2,469
Less:  Amount representing interest and executory costs		1,450		2,549
Present value of net minimum lease payments		1,019
Less:  Current portion		1,019		20,268
Obligation under capital lease	$	0	$	2,550

13.

Capital Stock

At the Annual and Special General Meeting of the Company’s shareholders, which was held on June 30, 2005, the shareholders approved the deletion of the pre-existing Company Provisions in the Notice of Articles of the Company and, in substitution, the shareholders approved the adoption of a new form of Articles for the Company pursuant to the Business Corporations Act (British Columbia).  Furthermore, the shareholders approved the increase of the Company’s authorized capital stock to an unlimited number of common shares and an unlimited number of preferred shares, issuable in series, in each case without nominal or par value.

a)

Authorized:  Unlimited number of common shares and an unlimited number of preferred shares, in each case without par value.  There are no preferred shares issued.

57

LAS VEGAS FROM HOME.COM ENTERTAINMENT INC.

Notes to Consolidated Financial Statements

Years Ended December 31, 2006 and 2005

(Canadian Dollars)

13.

Capital Stock (Continued)

b)

Issued:

(i)

The number of shares issued is as follows:

	Number				Contributed
Common shares	of Shares	Amount			Surplus
Balance, December 31, 2003	52,033,270		14,345,780		379,297
Exercise of stock options for cash	2,375,408		424,318		0
Reclassification of contributed
surplus on exercise of options	0		251,003		(251,003)
Private placements
Net proceeds	15,450,000		2,278,000
Stock-based compensation	0		0		2,323,004
Balance, December 31, 2004	69,858,678		17,299,101		2,451,298
Exercise of stock options for cash	2,740,500		463,360		0
Exercise of warrants for cash	2,430,000		428,000		0
Reclassification of contributed
surplus on exercise of options	0		474,343		(474,343)
Private placements,
net of proceeds	17,485,500		8,432,031		0
Stock-based compensation	0		0		329,399
Balance, December 31, 2005	92,514,678		27,096,835		2,306,354
Exercise of stock options for cash	584,592		93,755		0
Exercise of warrants for cash	465,000		99,000		0
Reclassification of contributed
surplus on exercise of options	0		102,029		(102,029)
Acquisition of three card games
software	6,670,000		2,401,200		0
Stock-based compensation	0		0		513,391
Balance, December 31, 2006	100,234,270	$	29,792,819	$	2,717,716

(ii)

On November 4, 2002, the Company entered into a licensing Agreement with Bronx Ventures Inc., a related company, for the joint development of certain gaming software consisting of three card games (the “three card games software”), as a result of which, the three card games software was equally owned by the Company and Bronx.  On May 5, 2006, Bronx sold its interest in the three card games software to the Company for a consideration of 6,670,000 fully paid and non-assessable common shares of the Company at a deemed price of $0.36 per share determined by the market value of the Company’s common shares, for a total acquisition cost of $2,401,200, determined by an independent valuation.  The 6,670,000 common shares of the Company, which have been issued to Bronx, are restricted from trading until May 1, 2007.

58

LAS VEGAS FROM HOME.COM ENTERTAINMENT INC.

Notes to Consolidated Financial Statements

Years Ended December 31, 2006 and 2005

(Canadian Dollars)

13.

Capital Stock (Continued)

b)

Issued (Continued)

(iii)

The Company entered into an agreement on April 20, 2005 with a syndicate of underwriters led by Wellington West Capital Markets Inc. and CIBC World Markets Inc. and including GMP Securities Ltd. and Sprott Securities Inc. (collectively, the “Underwriters”) for a "bought-deal" underwritten private placement of subscription receipts (the "Brokered Offering").  The Brokered Offering closed on May 13, 2005 and on June 30, 2005 at the Company’s Annual and Special General Meeting, the Company’s shareholders approved the increase of the authorized capital stock of the Company to an unlimited number of common shares and an unlimited number of preferred shares, in each case without nominal or par value.  As a result, the Company issued 12,485,500 common shares and 6,242,750 share purchase warrants to various investors for net proceeds of $7,487,689.  Each whole warrant is exercisable for $1 into one common share.  The Company paid the Underwriters an aggregate cash commission of $547,801 and issued a total of 842,771 Broker’s Compensation Warrants (the “Compensation Warrants”), which are exercisable into units at $0.65 per unit.  Each unit consists of one common share in the capital of the Company and one-half of one share purchase warrant.  One whole share purchase warrant is required to purchase one additional common share at $1 per share for a period of two years.  All share purchase warrants expire on May 13, 2007.  The shares, share purchase warrants and compensation warrants, which were issued by the Company on July 13, 2005, had hold periods that expired on September 14, 2005, at which time the share purchase warrants commenced trading on the TSX under the symbol “LVH.WT”.

(iv)

On December 13, 2004, the Company entered into non-brokered private placements to issue 5,000,000 units at $0.20 per unit, each unit consisting of one common share and one-half of one share purchase warrant.  Each whole warrant entitles the holder to purchase one common share at $0.25 per common share for a period of 24 months up to January 7, 2007.

As of December 31, 2004, the Company received subscriptions of $750,000 for 3,700,000 of the 5,000,000 above-mentioned units, which had not yet been issued.  As of January 7, 2005, all 5,000,000 units were issued.

(v)

During 2004, the Company closed private placements with Bronx, a related company, for a total of 4,000,000 common shares at prices of $0.30 and $0.32 per common share for net proceeds of $1,225,000.

(vi)

The Company closed brokered and non-brokered private placements dated October 25, 2004 with various investors and two directors for a total of 11,450,000 units at $0.10 per unit consisting of one common share and one-half of one warrant for net proceeds of $1,053,000.  A 10% cash commission of $92,000 and 920,000 broker warrants were issued to the agent in relation to the brokered private placement. Each whole warrant is exercisable at $0.20 per common share for a period of 24 months.

59

LAS VEGAS FROM HOME.COM ENTERTAINMENT INC.

Notes to Consolidated Financial Statements

Years Ended December 31, 2006 and 2005

(Canadian Dollars)

13.

Capital Stock (Continued)

b)

Issued (Continued)

(vii)

The Company received TSX approval on October 30, 2006 to commence a normal course issuer bid.  Under the bid, which would be conducted pursuant to the rules of the TSX, the Company may purchase up to 8,913,000 of its common shares (the "Common Shares") representing approximately 8.9% of the Company's issued and outstanding Common Shares.  The Company has until November 3, 2007 to purchase any or all its Common Shares.  The price at which the Company may purchase its Common Shares will be the market price thereof at the time of acquisition. Purchases of Common Shares will be made in the open market through the facilities of the TSX.  Any Common Shares acquired by the Company will be cancelled.  Purchases under the bid will be made on behalf of the Company by Scotia McLeod. As of December 31, 2006, the Company has not commenced acquiring any of its Common Shares.

(viii)

During the year ended December 31, 2006, the Company issued 584,592 common shares of the Company to directors, employees and consultants as a result of exercising stock options at prices ranging from $0.12 to $0.19 per common share for total proceeds to the Company of $93,755.

(ix)

During the year ended December 31, 2005, the Company issued 2,740,500 common shares of the Company to directors, employees and consultants as a result of exercising stock options at prices ranging from $0.12 to $0.20 per common share for total proceeds to the Company of $463,360.  

c)

Warrants

During the year ended December 31, 2006, the Company issued 465,000 common shares of the Company to various warrant holders as a result of the exercising of warrants at prices ranging from $0.10 to $0.25 per common share for total proceeds to the Company of $99,000.

The following summarizes the warrants that have been granted, exercised, cancelled or expired during the years ended December 31, 2006 and 2005:

		Weighted
		Average
	Number	Exercise
	of Warrants	Price
Balance, December 31, 2004	6,645,000	$ 0.19
Granted	8,742,750	$ 0.82
Exercised	(2,430,000)	$ 0.19
Balance, December 31, 2005	12,957,750	$ 0.59
Granted	0	N/A
Exercised	(465,000)	$ 0.10 - 0.25
Expired	(4,550,000)	$ 0.20
Balance, December 31, 2006	7,942,750	$ 0.84

60

LAS VEGAS FROM HOME.COM ENTERTAINMENT INC.

Notes to Consolidated Financial Statements

Years Ended December 31, 2006 and 2005

(Canadian Dollars)

13.

Capital Stock (Continued)

c)

Warrants (Continued)

At December 31, 2006 and 2005, the following warrants are exercisable and outstanding. Each warrant entitles the holder to purchase one common share of the Company at the exercise price per common share with the following expiry dates:

	Exercise	Number of Warrants
Expiry Date	Price	2006	2005
October 31, 2006	$ 0.20	0	3,775,000
October 31, 2006	$ 0.10	0	90,000
November 8, 2006	$ 0.20	0	850,000
January 7, 2007 (expired    subsequent to year end))	$ 0.25	1,700,000	2,000,000
May 13, 2007	$ 1.00	6,242,750	6,242,750
Total warrants outstanding and
exercisable	$ 0.10 to $ 1.00	7,942,750	12,957,750

d)

Stock options

From time to time the Company grants stock options to employees, officers, directors and consultants pursuant to the rules and regulations of the TSX.  During the year ended December 31, 2006, 5,549,000 stock options expired unexercised and as a result the Company granted 9,815,000 stock options to directors, officers and employees.  

During 2004, the Company’s shareholders adopted and approved the Company’s 2004 Stock Option Plan (the “2004 Plan”).  The 2004 Plan, which has received the approval of the TSX, reserved 11,290,154 common shares for issuance representing 20% of the Company’s issued and outstanding common shares on April 12, 2004.  At the Annual and Special General Meeting of the Company’s shareholders, which was held on June 30, 2005, the shareholders approved the amendment to the Company’s 2004 Plan by increasing the maximum number of common shares that may be reserved for issuance pursuant to the Stock Option Plan to 15,866,936 common shares (the “Company’s Amended 2004 Stock Option Plan”).  Pursuant to the Company’s Amended 2004 Stock Option Plan that has received TSX approval, the Company grants stock options to employees, directors, officers and consultants.  As at December 31, 2006, there are 1,034,844 stock options available for granting.  The number available for granting is based on the difference between the reserved number of options available for issuance (15,866,936) less outstanding stock options (December 31, 2006: 13,653,000) less the number of stock options exercised since May 12, 2005 up to and including December 31, 2006 (1,179,092) (15,866,936 - 13,653,000 - 1,179,092 = 1,034,844).

61

LAS VEGAS FROM HOME.COM ENTERTAINMENT INC.

Notes to Consolidated Financial Statements

Years Ended December 31, 2006 and 2005

(Canadian Dollars)

13.

Capital Stock (Continued)

d)

Stock Options (Continued)

The following summarizes the officer, director, employee and consultant stock options that have been granted, exercised, cancelled and expired during the years ended December 31, 2006 and 2005.  The options vest 25% on grant and thereafter 25% every six months.

	Number	Weighted Average
	of Options	Exercise Price
Balance, December 31, 2004	11,165,592	$ 0.16
Granted	1,825,000	$ 0.35
Cancelled	0	N/A
Exercised	(2,740,500)	$ 0.17
Expired	(278,500)	$ 0.21
Balance, December 31, 2005		$ 0.19
Granted	9,815,000	$ 0.12
Cancelled	0	N/A
Exercised	(584,592)	$ 0.16
Expired	(5,549,000)	$ 0.17
Balance, December 31, 2006	13,653,000	$ 0.15

62

LAS VEGAS FROM HOME.COM ENTERTAINMENT INC.

Notes to Consolidated Financial Statements

Years Ended December 31, 2006 and 2005

(Canadian Dollars)

13.

Capital Stock (Continued)

d)

Stock options (Continued)

At December 31, 2006 and 2005, the following stock options are outstanding.  The options entitle the holders to purchase the stated number of common shares at the exercise price per common share with the following expiry dates:

	2006			2005
	Options Outstanding			Options Outstanding
	Weighted			Weighted
	Average	Number of	Aggregate	Average	Number of	Aggregate
Expiry	Exercise	Shares Under	Intrinsic	Exercise	Shares Under	Intrinsic
Date	Price	Option	Value	Price	Option	Value
2006	$     0.00	0	$             0	$       0.16	5,765,592	$ 115,394
2007	$     0.22	3,888,000	61,710	$       0.22	4,206,000	64,230
2008	$     0.20	265,000	0	$       0.00	0	0
2009	$     0.12	9,500,000	0	$       0.00	0	0
	$     0.15	13,653,000	$    61,710	$       0.19	9,971,592	$ 179,624

	2006			2005
	Options Exercisable			Options Exercisable
	Weighted			Weighted
	Average	Number of	Aggregate	Average	Number of	Aggregate
Expiry	Exercise	Shares Under	Intrinsic	Exercise	Shares Under	Intrinsic
Date	Price	Option	Value	Price	Option	Value
2006	$    0.00	0	$              0	$       0.16	4,444,030	$   87,914
2007	$    0.22	3,815,500	3,763,000	$       0.20	2,776,375	47,049
2008	$    0.22	87,500	4,098,000	$            0	0	0
2009	$    0.12	2,375,000	0	$            0	0	0
	$    0.18	6,278,000	$7,861,000	$       0.18	7,220,405	$ 134,963

63

LAS VEGAS FROM HOME.COM ENTERTAINMENT INC.

Notes to Consolidated Financial Statements

Years Ended December 31, 2006 and 2005

(Canadian Dollars)

13.

Capital Stock (Continued)

e)

Stock option compensation

The Company applies the fair value method using the Black-Scholes option pricing model in accounting for its stock options granted.  Accordingly, compensation expense of $513,392 (2005 - $146,963; 2004 - $1,489,526) was recognized as salaries expense, and $0 (2005 - $182,436; 2004 - $833,478) was recognized as consulting expense in 2006.  These amounts are credited to contributed surplus and then subsequently transferred to capital stock on exercise of the options.

The fair value of each option grant was calculated using the following weighted average assumptions:

	2006	2005	2004
Expected life (years)	2	2	1 to 3
Interest rate	2.89%	3.00%	3.00%
Volatility	113.43%	186.43%	145.97%
Dividend yield	0.00%	0.00%	0.00%

f)

Earnings (loss) per share

	2006	2005	2004
Weighted average number of shares    outstanding - Basic	97,236,825	84,337,774	58,428,307
Pro-rated dilutive warrants	N/A	5,384,605	N/A
Pro-rated dilutive options	N/A	3,084,620	N/A
Weighted average number of shares    outstanding - Diluted	97,236,825	92,806,999	58,428,307

64

LAS VEGAS FROM HOME.COM ENTERTAINMENT INC.

Notes to Consolidated Financial Statements

Years Ended December 31, 2006 and 2005

(Canadian Dollars)

14.

Related Party Transactions

a)

Due from related parties

		2006		2005
Loan receivable from a director on demand with no    interest	$	60	$	4,740

b)

Due to related parties

		2006		2005
Bronx Ventures Inc.	$	5,196	$	59,345
Directors		0		1,584
	$	5,196	$	60,929

The Company shares office space and certain expenses with Bronx, a company related by common management, officers and certain directors.  Rent for the office premises is paid by the Company and Bronx is charged for its proportionate share.

The current year amount due to Bronx is payable on demand without interest.  The prior year amount due from Bronx was due on demand with certain amounts bearing interest at prime plus 1%.

Amounts payable to directors are for expenses incurred on behalf of the Company and are payable on demand with no interest.

On May 5, 2006 Bronx sold its interest in the three card games software to the Company for consideration of 6,670,000 fully paid and non-assessable common shares in the capital of the Company at a deemed price of $0.36 per share for a total acquisition cost of $2,401,200 (see notes 3, 5(g)(v) and 13(b)(ii)).

c)

Related party transactions are measured at the exchange amount and comprised of the following:

(i)

interest paid to directors in the amount of $0 (2005 - $0; 2004 - $2,419);

(ii)

management fees paid to a company related by common management and directors in the amount of $360,000 (2005 - $270,000; 2004 - $180,000);

(iii)

interest income received from Bronx for loans in the amount of $0 (2005 - $0; 2004 - $513);

(iv)

the Company paid $219,160 (2005 - $484,804; 2004 - $292,372) to Bronx for its share of revenues generated from its investment in the three card games software;

(v)

rent received from Bronx for shared offices in the amount of $6,000 (2005 - $6,000; 2004 - $6,032);

65

LAS VEGAS FROM HOME.COM ENTERTAINMENT INC.

Notes to Consolidated Financial Statements

Years Ended December 31, 2006 and 2005

(Canadian Dollars)

14.

Related Party Transactions (Continued)

c) (Continued)

(vi)

reimbursed Bronx for payroll in the amount of $322,629 (2005 - $205,608; 2004 - $185,450);

(vii)

reimbursed Bronx for other office expenses in the amount of $0 (2005 - $1,455; 2004 - $14,139); and

(viii)

interest was charged for funds loaned to the Company by Bronx in the amount of $0 (2005 - $0; 2004 - $378).

15.

Purchase of Net Revenue Sharing

During 2004, the Company’s former subsidiary, Action entered into an agreement with Atlantis Casino (“Atlantis”) (the “Purchase Back Agreement”) whereby Action purchased back the 35%-interest in Action’s monthly net revenues from Atlantis for US $1,000,000, which was fully paid as of March 8, 2005.  The Company and Action have no further obligations whatsoever to Atlantis.

16.

Income Taxes

		2006		2005
Future income tax assets
Excess of undepreciated capital cost over net book
value of fixed assets	$	518,000	$	211,000
Excess of marketable securities tax value over
carrying value		0		60,000
Share issuance costs tax value		153,000		214,000
Excess of unused exploration expenditures for
Canadian tax purposes over net book value		92,000		96,000
Non-capital loss carry-forwards for Canadian income
tax purposes		2,464,000		2,328,000
Capital losses		412,000		349,000
		3,639,000
Valuation allowance for future income tax assets		(3,639,000)		(3,258,000)
	$	0	$	0

The valuation allowance reflects the Company's estimate that the tax assets will likely not be realized and, consequently, have not been recorded in these financial statements.

For Canadian income tax purposes, the Company has exploration and development expenses of $269,000, which can be carried forward indefinitely.

The Company has net capital losses for income tax purposes of $1,209,000 that can be carried forward indefinitely.

66

LAS VEGAS FROM HOME.COM ENTERTAINMENT INC.

Notes to Consolidated Financial Statements

Years Ended December 31, 2006 and 2005

(Canadian Dollars)

16.

Income Taxes (Continued)

The Company has available non-capital losses of $7,221,000 that may be carried forward to apply against future income for Canadian tax purposes.  The losses expire as follows:

2007	$	626,000
2008		1,049,000
2009		1,578,000
2010		2,316,000
2014		965,000
2026		687,000
	$	7,221,000

The benefit of these losses has not been recorded in these financial statements.

Future income tax assets and liabilities are recognized for temporary differences between the carrying amounts of the balance sheet items and their corresponding tax values as well as for the benefit of losses available to be carried forward to future years for tax purposes that are likely to be realized.

The reconciliation of income tax attributable to continuing operations computed at the statutory tax rates to income tax expense is:

		2006		2005
Income tax expense (benefit) computed at Canadian statutory rates	$	(1,567,000)	$	388,000
Amortization in excess of capital cost allowance		283,000		128,000
Terminal loss		(236,000)		0
Non-deductible loss on disposal of assets		1,841,000		60,000
Share issuance and financing costs		(53,000)		(66,000)
Lawsuit settlement		0		(86,000)
Other		2,000		2,000
Non-deductible stock-based compensation		175,000		118,000
Differences attributable to income taxes of other countries		(685,000)		(64,000)
Unrecognized (utilized) tax losses		240,000		(480,000)
	$	0	$	0

67

LAS VEGAS FROM HOME.COM ENTERTAINMENT INC.

Notes to Consolidated Financial Statements

Years Ended December 31, 2006 and 2005

(Canadian Dollars)

17.

Commitments

Pursuant to agreements entered into with various parties, the Company was required to make the following payments:  The following are no longer considered commitments as these belonged to Action and comprise discontinued operations (see note 4).

a)

Interactive gaming license

Annual license fee of US $10,000.

b)

Kahnawake server park rent

Monthly user fee of US $10,000.

c)

Financial transaction fees

Minimum monthly fee of US $2,000 for credit card transactions, plus bank surcharges and other charges or fees imposed by banks or clearing houses for handling credit card transactions.

d)

Casino software licensing fees

License fees calculated based on monthly casino results on a sliding scale basis.  Monthly hosting and support fee of US $2,660.

68

LAS VEGAS FROM HOME.COM ENTERTAINMENT INC.

Notes to Consolidated Financial Statements

Years Ended December 31, 2006 and 2005

(Canadian Dollars)

18.

Differences Between Canadian and US Generally Accepted Accounting Principles and Practices

a)

Recent US accounting pronouncements

(i)

FAS 153, “Exchanges of Non-Monetary Assets”.  The provisions of this statement are effective for non-monetary asset exchanges occurring in fiscal periods beginning after June 15, 2005.  Earlier application is permitted for non-monetary asset exchanges occurring in fiscal periods beginning after December 16, 2004.  The provisions of this statement should be applied prospectively.  There is no impact on the Company’s financial statements.

(ii)

In March 2005, Financial Accounting Standards Board (“FASB”) issued Interpretation No. 47 (“FIN 47”), “Accounting for Conditional Asset Retirement Obligations”.  FIN 47 clarifies that the term “Conditional Asset Retirement Obligation” as used in FASB Statement No. 143, “Accounting for Asset Retirement Obligations”, refers to a legal obligation to perform an asset retirement activity in which the timing and/or method of settlement are conditional on a future event that may or may not be within the control of the entity.  Accordingly, an entity is required to recognize a liability for the fair value of a conditional asset retirement obligation, if the fair value of the liability can be reasonably estimated.  FIN 47 is effective no later than the end of fiscal years ending after December 15, 2005.  Management does not believe the adoption of FIN 47 will have a material affect on the Company’s financial position, results of operations or cash flows.

(iii)

In May 2005, the FASB issued SFAS No. 154, “Accounting Changes and Error Corrections” (“SFAS No. 154”), which replaced Accounting Principles Board (“APB”) Opinion No. 20, “Accounting Changes” ,and SFAS No. 3, “Reporting Accounting Changes in Interim Financial Statements”.  SFAS No. 154 changes the requirements for the accounting for and reporting of a change in accounting principles.  It requires retrospective application to prior periods’ financial statements of changes in accounting principles, unless it is impracticable to determine either the period-specific effects or the cumulative effect of the change.  This statement is effective for accounting changes and corrections of errors made in fiscal years beginning after December 15, 2005.  The impact of the Company’s operations will depend on future accounting pronouncements or changes in accounting principles.

(iv)

In 2006, FASB issued Statement No. 157, “Fair Value Measurements”.  This new pronouncement provides guidance for using fair value to measure assets and liabilities.  FASB believes the pronouncement also responds to investors’ requests for expanded information about the extent to which corporations measure assets and liabilities at fair value, the information used to measure fair value, and the effect of fair value measurements on earnings.  Statement 157 applies whenever other standards require (or permit) assets or liabilities to be measured at fair value but does not expand the use of fair value in any new circumstances.  The standard clarifies that for items that are not actively traded, such as certain kinds of derivatives, fair value should reflect the price in a transaction with a market participant, including an adjustment for risk, not just the company’s mark-to-market value.  Statement 157 also requires expanded disclosure of the effect on earnings for items measured using unobservable data. The Company does not believe adoption of Statement 157 will have a material effect on its consolidated balance sheet, results of operations or cash flows.

69

LAS VEGAS FROM HOME.COM ENTERTAINMENT INC.

Notes to Consolidated Financial Statements

Years Ended December 31, 2006 and 2005

(Canadian Dollars)

18.

Differences Between Canadian and US Generally Accepted Accounting Principles and Practices (Continued)

a)

Recent US accounting pronouncements (Continued)

(v)

FIN 46(R), “Consolidation of Variable Interest Entities”, applies at different dates to different types of enterprises and entities, and special provisions apply to enterprises that have fully or partially applied Interpretation 46 prior to issuance of Interpretation 46(R).  Application of Interpretation 46 or Interpretation 46(R) is required in financial statements of public entities that have interests in variable interest entities or potential variable interest entities commonly referred to as special-purpose entities for periods ending after December 15, 2003.  Application by public entities (other than small business issuers) for all other types of entities is required in financial statements for periods ending after March 15, 2004.  Application by small business issuers to entities other than special-purpose entities and by non-public entities to all types of entities is required at various dates in 2004 and 2005.  In some instances, enterprises have the option of applying or continuing to apply Interpretation 46 for a short period of time before applying Interpretation 46(R).  There is no impact on the Company’s financial statements.

(vi)

On July 13, 2006, FASB issued Interpretation No. 48, “Accounting for Uncertainty in Income Taxes—an interpretation of FASB Statement No. 109”.  Interpretation 48 clarifies the accounting for uncertainty in income taxes recognized in an entity’s financial statements in accordance with Statement 109 and prescribes a recognition threshold and measurement attribute for financial statement disclosure of tax positions taken or expected to be taken on a tax return.  Additionally, Interpretation 48 provides guidance on derecognition, classification, interest and penalties, accounting in interim periods, disclosure and transition.  Interpretation 48 is effective for fiscal years beginning after December 15, 2006, with early adoption permitted. The Company does not believe adoption of Interpretation 48 will have a material effect on its consolidated financial position, results of operations or cash flows.

(vii)

In 2004, FASB issued a revision of FASB Statement No. 123, “Accounting for Stock-Based Compensation”.  This statement supersedes APB Opinion No. 25, “Accounting for Stock Issued to Employees”, and its related implementation guidance.  This revised pronouncement requires that all stock options and warrants be accounted for using the fair value method.  This pronouncement had no impact on the Company, as the Company accounts for all options using the fair value method, under Canadian GAAP.

b)

The financial statements have been prepared in accordance with accounting principles and practices generally accepted in Canada (“Canadian GAAP”), which differ in certain respects from those principles and practices that the Company would have followed had its financial statements been prepared in accordance with principles and practices generally accepted in the United States of America (“US GAAP”).

Under US GAAP, the accounting treatment would differ as follows:

(i)

Under US GAAP, marketable securities are recorded at fair market value.  The value recorded under Canadian GAAP is the lower of cost and market.

For US GAAP purposes, unrealized gains and losses on marketable securities, which are classified as trading securities, are recognized in earnings in the period they occur.  For Canadian GAAP, gains and losses are only recognized in the income statements when realized.

70

LAS VEGAS FROM HOME.COM ENTERTAINMENT INC.

Notes to Consolidated Financial Statements

Years Ended December 31, 2006 and 2005

(Canadian Dollars)

18.

Differences between Canadian and US generally accepted accounting principles and practices (Continued)

b)  (Continued)

(ii)

Under US GAAP, comprehensive income must be reported, which is defined as all changes in equity other than those resulting from investments by owners and distributions to owners.

Other comprehensive income includes the unrealized holding gains and losses on the available-for-sale securities.

(iii)

Under Canadian GAAP, the Company did not meet the criteria to adopt prospectively the fair value method of accounting for stock-based compensation, and therefore, had to adopt the change retroactively.  Under US GAAP, the Company has the option to adopt the change either prospectively or retroactively.  For US GAAP, the Company adopted the change prospectively.

	2006	2005
Total Assets for Canadian GAAP	$ 9,617,355	$12,819,608
Adjustments increasing total assets	0	0
Total Assets for US GAAP	$ 9,617,355	$
Total Liabilities for Canadian GAAP	$    478,642	$  2,194,813
Adjustments increasing total liabilities	0	0
Total Liabilities for US GAAP	478,642
Total Equity for Canadian GAAP	9,138,713	10,624,795
Accumulated adjustment for marketable
securities	0	135
Current change in marketable securities	0	(135)
Total Equity for US GAAP	9,138,713	10,624,795
Total Liabilities and Equity for US GAAP	$ 9,617,355	$12,819,608

71

LAS VEGAS FROM HOME.COM ENTERTAINMENT INC.

Notes to Consolidated Financial Statements

Years Ended December 31, 2006 and 2005

(Canadian Dollars)

18.

Differences Between Canadian and US Generally Accepted Accounting Principles and Practices (Continued)

b) (iii) (Continued)

	2006	2005	2004
Total Net Income (Loss) for Canadian    GAAP	$(4,593,428)	$ 1,088,741	$(5,346,512)
Adjustments increasing (decreasing)
total net income (loss)
Unrealized gain on marketable securities	0	0	135
Reversal of gains reported in
prior years’ US income and
current year Canadian income	0	(135)	(5,783)
Total Net Income (Loss) for US GAAP	$(4,593,428)	$1,088,606	$(5,352,160)

	2006	2005	2004
Earnings (Loss) per Common Share
Canadian and US GAAP Loss Per    Common Share Before Discontinued        Operations - Basic	$  (0.05)	$   (0.03)	$   (0.07)
Canadian and US GAAP Discontinued    Operations - Basic	$     0.00	$      0.05	$   (0.02)
Canadian and US GAAP Earnings (Loss) Per    Common Share - Basic	$  (0.05)	$      0.01	$   (0.09)
Canadian and US GAAP Earnings Per    Common Share
Before Discontinued Operations - Diluted	N/A	N/A	N/A
Canadian and US GAAP Discontinued    Operations - Diluted	N/A	$      0.01	N/A
Canadian and US GAAP Earnings Per    Common Share – Diluted	N/A	$      0.01	N/A

72

LAS VEGAS FROM HOME.COM ENTERTAINMENT INC.

Notes to Consolidated Financial Statements

Years Ended December 31, 2006 and 2005

(Canadian Dollars)

18.

Differences Between Canadian and US Generally Accepted Accounting Principles and Practices (Continued)

b) (iii) (Continued)

Under Canadian GAAP, stock-based compensation is credited to contributed surplus and transferred to capital stock once the option is exercised.  Under US GAAP, stock-based compensation is credited directly to additional paid-in capital.

	2006	2005
Total Stockholders' Equity per Canadian GAAP	$9,138,713	$10,624,795
Total common shares and additional paid-in capital    per Canadian GAAP	$29,792,819	$7,096,835
Adjustments for issue and exercise of stock options    per US GAAP	2,717,716	2,306,354
Total common shares and additional paid-in capital    per US GAAP	32,510,535	29,403,189
Total contributed surplus per Canadian GAAP	2,717,716	2,306,354
Adjustments for issue and exercise of stock options    per US GAAP	(2,717,716)	(2,306,354)
Total contributed surplus per US GAAP	0	0
Total deficit per Canadian GAAP	(23,371,822)	(18,778,394)
Adjustments per US GAAP	0	0
Total deficit per US GAAP	(23,371,822)	(18,778,394)
Total Stockholders' Equity US GAAP	$9,138,713	$10,624,795

19.

Subsequent Events

Subsequent to December 31, 2006, a total of 221,500 employee stock options were exercised at prices between $0.12 and $0.27 per common share for total proceeds to the Company of $29,955, 1,795,000 employee stock options at exercise prices between $0.12 and $0.46 per common share have expired and 350,000 stock options were granted to consultants at an exercise price of $0.12 per common share.

The Company’s Antiguan subsidiary, MTV and Dynasty Gaming Inc. have signed a licensing agreement that will enable both companies to cross-license each other’s online gaming software. Under terms of this agreement, both companies will participate in a revenue-sharing formula.

73

ITEM 18. FINANCIAL STATEMENTS

The Company’s Consolidated Audited Financial Statements and schedules which are required to be filed hereunder are listed in Item 17 and are specifically incorporated by this reference.  The Company’s financial statements are stated in Canadian dollars (Cdn $) and are prepared in accordance with Canadian generally accepted accounting principles.

ITEM 19. EXHIBITS

1.1

Agency Agreement with Wellington West Capital Markets for a Private Placement Financing – April 21, 2005 [Incorporated by reference]; http://www.sec.gov/Archives/edgar/data/1061612/000094523405000486/o17221exv1w1.htm

3.1

Articles and Memorandum -

[Incorporated by reference - previously filed Form 20-F/A, (March 8, 1999)]

3.2

New Corporation’s Act (British Columbia) Articles adopted at the AGM June 30 2005 [Incorporated by Reference – previously filed on Form 20F (2005)]; http://www.sec.gov/Archives/edgar/data/1061612/000113717106001526/ex032.htm

10.1

License and Settlement Agreement dated February 17, 2005 [Incorporated by reference];http://www.sec.gov/Archives/edgar/data/1061612/000094523405000486/o17221exv10w1.htm

10.2

Modification to “License and Settlement Agreement dated February 17, 2005” dated May 6^th, 2005 [Incorporated by reference]; http://www.sec.gov/Archives/edgar/data/1061612/000094523405000486/o17221exv10w2.htm

10.3

Loan Agreement dated June 15, 2004 with International Interactive Ventures [Incorporated by reference]; http://www.sec.gov/Archives/edgar/data/1061612/000094523405000486/o17221exv10w3.htm

10.4

Letter Agreement dated February April 15, 2005 [Incorporated by reference]; http://www.sec.gov/Archives/edgar/data/1061612/000094523405000486/o17221exv10w4.htm

10.5

Net Revenue Sharing Agreement –

[Incorporated by reference – previously filed Form 20F/A (2003)]; http://www.sec.gov/Archives/edgar/data/1061612/000113717104000926/shareagreement.htm

10.5.1

Purchase/Sale Agreement for the Termination of the Net Revenue Sharing Agreement – (“Purchase Back Agreement”) [Incorporated by reference – previously filed Form 20F/A (2003)]; http://www.sec.gov/Archives/edgar/data/1061612/000113717104000926/purchaseagreement.htm

10.6

Indemnity Agreements with two Directors and an Officer -

[Incorporated by reference – previously filed on Form 20-F/A (2002)];

http://www.sec.gov/Archives/edgar/data/1061612/000113717103000251/lvfh20fa2002.htm

10.6.1*

Officer’s Indemnity Agreement with David A. Shore, CFO (Attached herewith)

10.8

Licensing Agreement Dated November 4, 2002 with Bronx Ventures Inc. –

[Incorporated by reference -previously filed on Form 20-F/A (2002)] http://www.sec.gov/Archives/edgar/data/1061612/000113717103000251/lvfh20fa2002.htm

10.9

Management Services Agreement – July 1, 2005 – [Incorporated by Reference – previously filed on Form 20F 2005)]; http://www.sec.gov/Archives/edgar/data/1061612/000113717106001526/ex109.htm

10.11

2004 Stock Option Plan – [Incorporated by reference – previously filed Form 20F/A (2003)];http://www.sec.gov/Archives/edgar/data/1061612/000113717104000926/stockoptionplan.htm

10.12

Purchase and Novation Agreement - [Incorporated by Reference – previously filed on Form 20F (2005)];

http://www.sec.gov/Archives/edgar/data/1061612/000113717106001526/ex1012.htm

10.13

2004 Amended Stock Option Plan – [(Incorporated by Reference – previously filed on Form 20F (2005)];

http://www.sec.gov/Archives/edgar/data/1061612/000113717106001526/ex1013.htm

10.14*

Final Purchase Agreement dated October 20 2006 (Playsafe Holding Ltd.) [Attached herewith];

10.14.1* Ancilliary Agreement to the Final Purchase Agreement October 20, 2006 (Playsafe Holding Ltd.) [Attached herewith];

10.14.2* Amendment Agreement (November 23, 2006) to the Final Purchase Agreement (Playsafe Holding Ltd.) [Attached herewith];

10.15*     Employment Agreement with David Shore [Attached herewith];

11.*

Statement explaining in reasonable detail how earnings/loss per share is calculated [Attached herewith];

14.1

Code of Ethics (May 31, 2004) – [Incorporated by reference – previously filed Form 20F/A (2003)]; http://www.sec.gov/Archives/edgar/data/1061612/000113717104000926/codeofethics.htm

74

20.3

Notice of AGM, Information Circular & Management Proxy Material, 2006 – [Incorporated by reference – previously filed on Form 6K – May, 2006]; http://www.sec.gov/Archives/edgar/data/1061612/000130901406000411/0001309014-06-000411-index.htm

20.4*

Notice of AGM, Information Circular & Management Proxy Material, 2007 – [Attached herewith];

21.*

List of the Company’s subsidiaries;

31.1*

Sarbanes Oxley Act, S302 Certified by Bedo H. Kalpakian, Chairman

31.2*

Sarbanes Oxley Act, S302- Certified by Jacob H. Kalpakian, President & CEO

32.1*

Sarbanes Oxley Act S906 Certifications by Jacob H. Kalpakian, President & CEO

and David A. Shore, CFO

99.1*

Schedule I - Amounts Receivable (Payable) from Related Parties

and Underwriters, Promoters and Employees other than Related Parties

99.2*

Schedules II & III – Property,Equipment and Software Development and Accumulated Depreciation, Depletion and Amortization of Property, Equipment and Software Development

99.3*

Schedule IV – Marketable Securities

* Filed herewith (Attached)

75

SIGNATURE

Pursuant to the requirements of Section 12 of the Securities Exchange Act of 1934, the Registrant certifies that it meets all of the requirements for filing on Form 20-F and has duly caused this Annual Report to be signed on its behalf by the undersigned, thereunto duly authorized.

LAS VEGAS FROM HOME.COM ENTERTANMENT INC.

“Bedo H. Kalpakian”

 _______________________________ 

Bedo H. Kalpakian

Chairman

Dated this 31st day of May, 2007

76

Exhibit 11*

Explanation of how earnings/loss per (weighted average) share is calculated

Earnings and Loss per share are calculated by dividing the net loss or profit by the total weighted average number of common shares outstanding.  The weighted average number of common shares outstanding is obtained as follows:-

Whenever the Company issues shares from its treasury during a specific reporting period, the number of common shares issued is pro-rated over the remaining months of the year, and such number is added to the December 31^st closing balance of the previous year.

77

Exhibit 21*

The following chart sets forth the Company’s corporate structure as of December 31, 2006:

Las Vegas From Home.com Entertainment Inc.

	100%		100%		100%		100%
MT Ventures Inc. (“MTV”) (an Antiguan Corporation)		MTO Commerce Ltd. (formerly APG Enterprises Ltd.) (“MTO”) (a Cypriot Corporation)		APG Enterprises (“APG Armenia”) (an Armenian Corporation)		MT Commerce Limited (“MTC”) (a United Kingdom Corporation)

MTV licenses the Company’s online gaming Software to third parties.  However, MTV does not license the Company’s online gaming software to any party that will take USA or Canadian wagers.

On November 10, 2006, the Company incorporated MT Ventures Inc., (“MTV”) a 100% wholly owned Antiguan subsidiary which is in the business of licensing the Company’s online multi-player interactive games software.  On December 13, 2006, the Company caused to incorporate MT Commerce Limited., a United Kingdom corporation.  It is the Company’s intention that MT Commerce Limited (UK) act as payment processor for the Company and its subsidiaries.  During the year ended December 31, 2006, the Company changed the name of its Cypriot subsidiary, APG Enterprises Ltd. to MTO Commerce Ltd.  which commenced operations in Cyprus during 2005 and, as a result of the sale of the Action Poker Network (“APGN”) during 2006, MTO Commerce Ltd. no longer has any employees (December 31, 2005: 30 employees). APG Enterprises, an Armenian corporation (“APG Armenia”) provided technical and administrative support to the Company’s Cypriot subsidiary and, as a result of the sale of APGN by the Company during 2006; APG Armenia no longer has any employees (December 31, 2005: 11 employees) as operations of APG Armenia were discontinued.  The Company is in the process of winding up APG Armenia.

The Company’s Canadian Head Office employs 41 people as of May 31, 2007, (December 31, 2006: 47) (December 31, 2005: 39) consisting of staff and management.

78

Exhibit 31.1* Certification pursuant to the Sarbanes-Oxley Act (2002) Section 302

CERTIFICATION PURSUANT TO

Rule 13a-14(b) and Section 1350 of Chapter 63

of Title18 of the United States Code (18 U.S.C. 1350).

I, David A. Shore, certify that:

1.

I have reviewed this annual report on Form 20-F (2006) of Las Vegas From Home.com Entertainment Inc.

2.

Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.

Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the company as of, and for, the periods presented in this report;

4.

The company’s other certifying officer(s) and I, ,are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the company and have:

a)

Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the company, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b)

Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide a reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c)

Evaluated the effectiveness of the company’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d)

Disclosed in this report any change in the company’s internal control over financial reporting that occurred during the period covered by the annual report that has materially affected, or is reasonably likely to materially affect, the company’s internal control over financial reporting; and

5.

The company’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, , to the company’s auditors and the audit committee of the company’s board of directors (or persons performing the equivalent functions):

a)

All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the company’s ability to record, process, summarize and report financial information; and

b)

Any fraud, whether or not material, that involves management or other employees who have a significant role in the company’s internal control over financial reporting.

Date:  May 31, 2007

   “David A. Shore”

David A. Shore

Chief Financial Officer

79

Exhibit 31.2* Certification pursuant to the Sarbanes-Oxley Act (2002) Section 302

CERTIFICATION PURSUANT TO

Rule 13a-14(b) and Section 1350 of Chapter 63

of Title18 of the United States Code (18 U.S.C. 1350).

I, Jacob H. Kalpakian, certify that:

1.

I have reviewed this annual report on Form 20-F (2006) of Las Vegas From Home.com Entertainment Inc.

2.

Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.

Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the company as of, and for, the periods presented in this report;

4.

The company’s other certifying officer(s) and I, ,are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the company and have:

a)

Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the company, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b)

Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide a reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c)

Evaluated the effectiveness of the company’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d)

Disclosed in this report any change in the company’s internal control over financial reporting that occurred during the period covered by the annual report that has materially affected, or is reasonably likely to materially affect, the company’s internal control over financial reporting; and

5.

The company’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, , to the company’s auditors and the audit committee of the company’s board of directors (or persons performing the equivalent functions):

a)

All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the company’s ability to record, process, summarize and report financial information; and

b)

Any fraud, whether or not material, that involves management or other employees who have a significant role in the company’s internal control over financial reporting.

Date:  May 31, 2007

   “Jacob H. Kalpakian”

Jacob H. Kalpakian

Chief Executive Officer

80

Exhibit 32.1* Certification pursuant to the Sarbanes-Oxley Act (2002) Section 906

CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Annual Report of Las Vegas From Home.com Entertainment Inc., (the "Company") on Form 20F for the period ended December 31, 2006 as filed with the Securities and Exchange Commission on the date hereof (the "Report"), We, Jacob H. Kalpakian, the President and C.E.O. of the Company, and David A. Shore, C.F.O. of the Company certify, pursuant to 18 U.S.C. section 1350, as adopted pursuant to section 906 of the Sarbanes-Oxley Act of 2002, that to our knowledge:

(1)

the Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2)

the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Jacob H. Kalpakian

David A. Shore

“Jacob H.Kalpakian”

“David A. Shore”

President & C.E.O.                                                                    Chief Financial Officer

May 31, 2007.

81

Exhibit 99.1*

LAS VEGAS FROM HOME.COM ENTERTAINMENT INC.

AMOUNTS RECEIVABLE/(PAYABLE) TO/FROM RELATED PARTIES AND UNDERWRITERS

PROMOTERS AND EMPLOYEES OTHER THAN RELATED PARTIES

Schedule I

Name of Debtor	Balance, Beginning of Period	Additions	(Collected)/Paid	Amount Written off	Balance, End of period Receivable (Payable)
2006
J. Kalpakian	$           (2,101)	-	2,101	-	$                   -
B. Kalpakian	517	-	(517)	-	-
Zab Resources Inc.	(59,345)	-	54,149	-	(5,196)
2005
J. Kalpakian	$         (10,256)		8,155		$         (2,101)
B. Kalpakian	1,731		(1,241)		517
Zab Resources Inc.	371,347		(430,692)		(59,345)
2004
J. Kalpakian	$         (13,631)	-	3,375	-	$       (10,256)
B. Kalpakian	5,650	-	(3,919)	-	1,731
Zab Resources Inc.	140,832	230,515	-	-	371,347
Webscape/David Neale **	(54)	-	54	-	-

** David Neale, a Director of Webscape, resigned as a Director of LVFH during June 2002, and is no longer a related party to the Company.

82

Exhibit 99.2*

LAS VEGAS FROM HOME.COM ENTERTAINMENT INC.

PROPERTY, EQUIPMENT AND SOFTWARE DEVELOPMENT AND

ACCUMULATED DEPRECIATION AND DEPLETION THEREOF  

Schedules II and III

	Balance beginning of Period	Additions	Disposals and retirements	Other charges	Balance end of period
2006 Software development costs     Capitalized     Computer equipment     Automobile     Office furniture     Computer under capital lease Accumulated Amortization     Software development     Computer equipment     Automobile     Office furniture     Computer under capital lease Net book value     Software development         Costs capitalized     Computer equipment     Automobile     Office furniture     Computer under capital lease	$   2,216,060 589,101 11,420 7,353 64,320 (457,591) (194,048) (1,929) (719) (35,728) 1,758,469 395,053 9,491 6,634 28,592	$    261,952 784,461 12,703 94,284 - (417,456) (195,903) (5,818) (7,479) (7,491) (155,504) 588,558 6,885 86,805 (7,491)	$   (1,951,435) (634,208) (24,123) (101,637) - 730,124 151,325 7,747 8,198 - (1,221,311) (482,883) (16,376) (93,439) -	$                   - - - - - - - - - - - - - - -	$       526,577 739,354 - - 64,320 (144,923) (238,626) - - (43,219) 381,654 500,728 - - 21,101
2005 Software development costs     Capitalized     Computer equipment     Automobile     Office furniture     Computer under capital lease Accumulated Amortization     Software development     Computer equipment     Automobile     Office furniture     Computer under capital lease Net book value     Software development         Costs capitalized     Computer equipment     Automobile     Office furniture     Computer under capital lease	$         840,880 298,941 - - 64,320 (174,538) (101,381) - - (23,475) 666,342 197,560 - - 40,845	$  1,375,180 290,160 11,420 7,353 35,728 (283,053) (92,667) (1,929) (719) (12,253) 197,493 9,491 6,634 (12,253)	$                  - - - - - - - - - - - - - -	$                - - - - - - - - - - - - - -	$   2,216,060 589,101 11,420 7,353 64,320 (457,591) (194,048) (1,929) (719) (35,728) 1,758,469 395,053 9,491 6,634 28,592
2004 Software development costs     Capitalized Computer equipment Computer under capital lease Accumulated Amortization     Software development     Computer equipment     Computer under capital lease Net book value     Software development         Costs capitalized     Computer equipment     Computer under capital lease	$     180,901 130,970 46,092 (72,360) (40,034) (6,914) 108,541 90,936 39,178	$    659,979 167,971 18,228 (102,178) (61,347) (16,561) 557,801 106,624 1,667	$                  - - - - - - - - -	$                 - - - - - - - - -	$     840,880 298,941 64,320 (174,538) (101,381) (23,475) 666,342 197,560 40,845

83

Exhibit 99.3*

LAS VEGAS FROM HOME.COM ENTERTAINMENT INC.

MARKETABLE SECURITIES - OTHER INVESTMENTS

Schedule IV

 December 31, 2006

Name of Issuer and Title of Issuer	Number of Shares/Principal Amount of Bonds	Costs	Market Value	Amount at Which The Portfolio is Carried in the Books
N/A	N/A	N/A	N/A	N/A

As per the attached financial statements, the Company held no marketable securities at the end of December 31, 2006:

Total Investments

=   $ 0

84