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, 2007   

(  )

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 1501, 700 West Georgia Street   

Vancouver, British Columbia, Canada V7Y 1A1

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, 2007 the authorized capital of the registrant consists of an unlimited number of common and preferred shares without par value of which 102,070,795 common shares without par value are issued and outstanding.  As of May 31, 2008, the total number of issued and outstanding shares of the Company consists of 107,149,545 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

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Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.

 Yes [   ]     No [X]

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer.  See definition of “accelerated filer and large accelerated filer” in Rule 12b-2 of the Exchange Act.  (Check one):

Large accelerated filer [    ]                         Accelerated filer [   ]                   Non-accelerated filer [X]

If this is an annual report, indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act.)

Yes [    ]     No [X]

2

LAS VEGAS FROM HOME.COM ENTERTAINMENT INC.

TABLE OF CONTENTS

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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM47

Consolidated Balance Sheets48

Consolidated Statements of Operations and Deficit49

Consolidated Statements of Cash Flows51

Notes to Consolidated Financial Statements52

4

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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, 2007	Year Ended December 31, 2006	Year Ended December 31, 2005	Year Ended December 31, 2004	Year Ended December 31, 2003
Revenues	$      1,568,732	$         748,425	$                    0	$                  0	$                  0
Interest income	$         304,305	$         109,593	$           76,210	$           3,046	$           1,997
Net income (loss)	$   (3,988,276)	$   (4,593,428)	$      1,088,741	$   (5,346,512)	$ (2,008,775)
Basic earnings (loss) per share	$         * (0.04)	$         * (0.05)	$           * 0.01	$       * (0.08)	$        *(0.04)
Total assets	$      7,160,671	$      9,617,355	$   12,819,608	$   2,582,847	$       661,035
Capital Stock	$    30,253,288	$    29,792,819	$   27,096,835	$ 17,299,101	$  14,345,780
Number of Common Shares at year end	102,070,795	100,234,270	92,514,678	69,858,678	52,033,270
Long-term obligations	$                   0	$                   0	$            2,550	$       23,190	$         20,303
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, 2007, 2006 and 2005.

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.

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TABLE II

	Year Ended December 31, 2007	Year Ended December 31, 2006	Year Ended December 31, 2005	Year Ended December 31, 2004	Year Ended December 31, 2003
Net income (loss)	$(3,988,276)	$(4,593,428)	$ 1,088,741	$ (5,352,160)	$      1,788,968)
Basic earnings (loss) per common share	$      * (0.04)	$      * (0.05)	$       * 0.01	$     * (0.08)	$           * (0.03)
Number of Common Shares at year end	102,070,795	100,234,270	92,514,678	69,858,678	52,033,270
Total assets	$ 7,160,671	$  9,617,355	$ 12,819,608	$ 2,582,982	$         666,818

*   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, 2007, 2006 and 2005.

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 2007	1.0199	0.9803
January 2008	1.0092	0.9681
February 2008	1.0241	0.9832
March 2008	1.0158	0.9742
April 2008	0.9986	0.9771
May 2008	1.0162	0.9811

⁽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, 2007	Year Ended December 31, 2006	Year Ended December 31, 2005	Year Ended December 31, 2004	Year Ended December 31, 2003
Average rate ($)(2)	0.9303	0.8816	0.8254	0.7684	0.7138
High ($)(3)	1.0852	0.8641	0.7876	0.7165	0.6381
Low ($)(3)	0.8435	0.9015	0.8682	0.8504	0.7726

⁽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, 2007, the U.S. $1.00 was equal to Cdn $1.0088.  At the closing on May 31, 2008, the U.S. $1.00 was equal to Cdn $0.9930.

Item 3.D. Risk Factors

The Company, and the Securities of the Company, should be considered a highly speculative investment.  The following risk factors should be given special consideration when evaluating an investment in any of the Company's Securities:

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General legislative risk

Although management of the Company believes that the conduct of Internet gaming related activities by its Antiguan subsidiaries, MT Ventures Inc. (“MTV”) and Blue Cactus Enterprises Inc. (“Blue Cactus”), will represent 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.

Competition

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.

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.

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 the Company’s 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 the Company’s common shares. There is a limited trading market for the Company’s 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.

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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 currently generates 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.

Disruption in Trading

Trading in the common shares of the Company may be halted  for certain reasons, including the failure by the Company to submit documents to the regulatory authorities in the time periods required.  

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* -

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Incorporated by reference) 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 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.  The CDNX is now known as the TSX Venture Exchange (“TSX.V”).

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

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TSX Venture Exchange (“TSX.V”) [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.

Effective January 28, 2008, the Company's head office is located at:  Suite 1501 – 700 West Georgia Street, Vancouver, British Columbia, Canada V7Y 1A1.  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 Antiguan subsidiary, Blue Cactus Enterprises Inc. (“Blue Cactus”) 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.V approval for this transaction and as a result the Company closed the sale of APGN.  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 and which was also sold to Playsafe on November 24, 2006 as part of the APGN.  After the sale of the APGN to Playsafe, the Company no longer operates any online poker rooms or online casinos.

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

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aimed at the Asian Market.  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.V 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 are 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 May 31, 2008:

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.

On February 22, 2008, the Company caused to incorporate Blue Cactus Enterprises Inc. (“Blue Cactus”), a 100% wholly-owned Antiguan subsidiary.  It is the Company’s intention for Blue Cactus to act as a licensing and/or payment processing entity for the Company and its subsidiaries.

The Company’s Canadian Head Office employs 34 people as of May 31, 2008, (December 31, 2007: 34) (December 31, 2006: 47) 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.  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.  During the year 2007, the Company amortized $105,324 on the capitalzed portion of the software.  The Company capitalized $979,579 of computer software in 2005 and $130,976 in 2006.  During 2007, the company did not capitalize any software.

As a result of the sale of APGN to Playsafe in November 2006, software and developments costs were reduced from $2,216,060 in 2006 to $526,577 in 2007 as the capitalized portion was sold to Playsafe.

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	2007
EQUIPMENT AND				Accumulated
SOFTWARE DEVELOPMENT			Cost	Amortization		Net Book Value
Software and development costs		$	526,577	$         250,247	$	276,330
Computer equipment			987,525	441,762		545,763
Furniture			21,400	0		21,400
		$	1,535,502	$         692,009	$	843,493

	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

For equipment and software development and accumulated amortization (depreciation and depletion) thereof please refer to Schedules II and III (Exhibit 99.2* - Attached herewith).

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,

2007, 2006 and 2005 is shown in the following table:

		2007		2006		2005
Revenue	$	1,568,732	$	748,425	$	0
Interest Income		304,305		109,593		76,210
Loss before other    items		(4,326,242)		(4,839,123)		(2,765,859)

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Loss per common share before other items	*(0.04)	* (0.05)	*(0.03)
Fully diluted earnings/(loss)    per share before other       items	**n/a	**n/a	** n/a
Net Income (Loss) and Other Comprehensive Income (Loss) for the Year (1)	(3,988,276)	(4,593,428)	1,088,741
Basic net earnings/(loss)    per common share	*(0.04)	* (0.05)	* 0.01
Fully diluted net earnings/      (loss) per common share	**n/a	**n/a	0.01
Total Assets	7,160,671	9,617,355	12,819,608
Long term financial    obligations	0	0	2,550
Cash dividends	Nil	Nil	Nil

*  Earnings (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, 2007, 2006 & 2005.

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

⁽¹⁾

Comprehensive Income/(Loss) consists of Net Income/(Loss) and Other Comprehensive Income/(Loss).

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, 2007, the Company has recorded revenue of $1,568,732 (2006: $748,425) (2005: $0).  Interest income increased to $304,305 (2006: $109,593) (2005: $76,210).  The loss before other items was $(4,326,242) as compared to a loss in 2006 of $(4,839,123) as compared to a loss in 2005 of $(2,765,859) and, the basic net earnings (loss) per common share in 2007 was $(0.04) as compared to a basic net loss of $(0.05) in 2006 as compared to basic net earnings of $0.01 per common share in 2005.  

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 101,428,720 in 2007 as compared to 97,236,825 for the same period in 2006 as compared to 84,337,774 for the same period in 2005.

Results of Operations

For the years ended December 31, 2007 and December 31, 2006

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

The principal business of the Company and its subsidiary, MT Ventures Inc. (“MTV”), is the development and licensing of software for online multi-player interactive card games.

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

During 2006, the Company incorporated MTV, a 100% wholly owned Antiguan subsidiary, which is in the business of marketing and licensing the Company’s online Asian multi-player interactive card games software.  

On November 10, 2006, the Company caused to incorporate MT Commerce Limited (“MT Commerce Limited (UK)”), 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.  

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On February 22, 2008, the Company caused to incorporate Blue Cactus Enterprises Inc. (“Blue Cactus”), a 100% wholly-owned Antiguan subsidiary.  It is the Company’s intention for Blue Cactus to act as a licensing and/or payment processing entity for the Company and its subsidiaries.

Although management believes that the Internet gaming related activities of MTV and Blue Cactus will represent  lawful business, there is the risk that the legality of the Internet gaming related activities of MTV and Blue Cactus 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 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.

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.

At the Annual General Meeting of the Company’s shareholders which was held on June 22, 2007, the shareholders approved the Audited Consolidated Financial Statements for the year ended December 31, 2006 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.  

As of December 31, 2007, the Company’s Canadian operations employed 34 people (December 31, 2006: 47) consisting of staff and management.

During the early part of 2007, the Company was successful in negotiating down a marketing contract with a local advertising company which resulted in the Company having a gain on settlement in the amount of $112,369.

On December 28, 2007, the Company’s wholly-owned subsidiary, MTV, signed a Software Licensing Agreement (“SLA”) with a subsidiary of CY Foundation Group Limited (“CY Foundation”) (HKSE:1182) to provide CY Foundation and its subsidiaries with LVFH’s software gaming platform in the People’s Republic of China (“PRC”).  CY Foundation, through a controlled entity in the PRC, is licensed by the Ministry of Culture of the Government of the PRC to operate online games and tournaments across China.  In addition to entering into an SLA to provide CY Foundation with the LVFH software for the entire PRC, the Company also entered into a Definitive Agreement with CY Foundation to pay CY Foundation CDN$850,000 (paid on March 4, 2008) in order for CY Foundation to exclusively use the LVFH Software (“Exclusivity Rights”) to operate certain online games (the “Selected LVFH Software”) in the Henan Province and in the city of Beijing including its suburbs (the “Designated Territory”).  

To acquire the Exclusivity Rights for its software in the Designated Territory for $850,000, LVFH completed a private placement with Special Opportunity Limited (“SPO”).  In February 2008, the Company issued to SPO 5,000,000 units at $0.17 per unit, each unit consisting of one common share of the Company and one warrant to buy one additional share of the Company at $0.25 until February 19, 2009.  

LVFH, CY Foundation, SPO and Touchdown Capital Inc. (“TD”) executed a non-binding Letter of Intent dated December 28, 2007  (“LOI”) to effect certain transactions that would have been the proposed Qualifying Transaction of TD.  TD, a capital pool company listed on the TSX.V, is related to LVFH by certain common management and directors.  On May 8, 2008 the Company reported the termination of the LOI by the Company, TD, CY Foundation and SPO, as a result of which TD will not be proceeding with its Qualifying Transaction that was announced on January 9, 2008.  As a result of the termination of the LOI, TD will have no further interest in the LVFH/CY Foundation/SPO relationship and TD will resume its pursuit of another Qualifying Transaction.

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On May 28, 2008, the Company entered into an Amendment Agreement with CY Foundation (see Exhibit 10.15 – Attached herewith) whereby the SLA and the Definitive Agreement were terminated, and the Company received $500,000 from CY Foundation as consideration for the termination of the SLA and the Definitive Agreement.

Discontinued Operations

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

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.  

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, cease taking deposits from US 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.V 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 and which was also sold to Playsafe on November 24, 2006 as part of the APGN.

After the sale of the APGN to Playsafe, the Company no longer operates any online poker rooms or online casinos.

The results of discontinued operations, less applicable income taxes, have been reported as a separate element of net income (loss) before other items for both current and prior periods.

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

	2007	2006	2005
Revenue	$                0	$  12,073,508	$  11,645,108
Income (loss) from    discontinued operations, net of tax	$      (78,708)	$     1,139,955	$    3,848,935
Loss on sale of subsidiary	0	884,834	0
Income (loss)  from discontinued  operations, net of tax	$      (78,708)	$        255,121	$    3,848,935

Revenue

For the twelve month period ended December 31, 2007, the Company’s revenue from continuing operations increased to $1,568,732 as compared to $748,425 in 2006 due to revenues generated from two licensees, the largest portion of which was received from one licensee.  

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Expenses

For the year ended December 31, 2007, operating expenses were $5,894,974 as compared to $5,587,548 for the year ended December 31, 2006.  The items whch contributed to the increase in operating expenses during 2007 were Consulting & Professional fees of $804,893 as compared to $380,404 for the corresponding period in 2006, Bank charges, interest and foreign exchange of $890,771 as compared to a recovery of $(46,001) in 2006 due to the strenghtening of the Canadian dollar in relation to the US dollar throughout 2007, and Shareholder communications of $7,150 as compared to $5,512 during the corresponding period in 2006.  Salaries and benefits slightly decreased to $2,612,833 as compared to $2,819,595 for the year ended December 31, 2006.  Advertising and promotion expenses decreased substantially to $39,961 from $457,204 for the same period in 2006.  Rent, office and miscellaneous expenses were $443,784 as compared to $475,534 for 2006.  Amortization expense decreased to $265,242 as compared to $561,377 for the same period in 2006.  

Interest Income

For the twelve month period ended December 31, 2007, the Company had interest income in the amount of $304,305 as compared to $109,593 during the corresponding period in 2006.

Loss from Operations before Discontinued Operations

The loss from operations before discontinued operations for 2007 was $(3,909,568) as compared to a loss of $(4,848,549) for the corresponding period in 2006.

Discontinued Operations

The Company recorded a loss from discontinued operations, net of tax, of $(78,708) as compared to an income from discontinued operations, net of tax, of $255,121 in 2006.

Net Loss

During the year ended December 31, 2007 the Company had a net loss of $(3,988,276) or $(0.04) per share (weighted average) as compared to a net loss of $(4,593,428) or $(0.05) per common share (weighted average) in the same period of 2006.  During the year ended December 31, 2007, the Company’s weighted average number of common shares was 101,428,720 as compared to 97,236,825 for the same period in 2006.

Liquidity and Capital Resources

As at December 31, 2007, the Company’s total assets were $7,160,671 as compared to $9,617,355 for the corresponding period in 2006.  The Company’s total liabilities were $258,170 as compared to $478,642 at December 31, 2006. The Company has not paid any cash dividends and does not plan to pay any cash dividends in the future.  As at December 31, 2007 the Company has no long-term debt.

As at December 31, 2007, the Company’s cash and cash equivalents were $6,166,076 as compared to $8,273,201 at December 31, 2006.  

As at December 31, 2007, the Company’s accounts receivable was $115,737 as compared to $425,611 at December 31, 2006.  Due from related parties at December 31, 2007 was $17,512 as compared to $60 at December 31, 2006.  Prepaids and lease deposits at December 31, 2007 were $13,234 as compared to $15,000 at December 31, 2006.

Operating Activities

During the period ended December 31, 2007 the Company used $2,434,822 of cash from operating activities as compared to $2,771,107 of cash from operating activities in the corresponding period of 2006.

Financing Activities

Cash provided by financing activities was $1,074,261 in 2007 which included funds received by the Company in the amount of $850,000 pursuant to a Private Placement Subscription Agreement from an investor for 5,000,000 units of

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the securities of the Company which were issued on February 19, 2008.  Cash provided by financing activities during 2006 was $170,956.

Investing Activities

The Company used cash in investing activities of $183,852 in 2007 as compared to receiving $2,500,865 from investing activities in 2006.  The Company received $2,751,774 from the sale of its Action Poker Network in 2006. Proceeds from the sale of marketable securities were  $0 in 2007 as compared to $310,317 in 2006. Additions to software development were $0 in 2007 as compared to $(511,126) in 2006.   Purchase of marketable securities were $0 in 2007 as compared to $(50,100) in 2006.

Working Capital

For the year ended December 31, 2007, the Company had a working capital of $6,054,389 as compared to a working capital of $8,235,230 in the same period in 2006.

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, 2008:

For the Quarterly Periods ended		March 31, 2008	December 31, 2007	September 30, 2007	June 30,  2007
Total Revenues	$	199,148	230,968	292,973	126,428
Loss before other items		(684,251)	(759,925)	(1,257,229)	(1,753,042)
Loss per common share before other items		(0.01)	(0.01)	(0.01)	(0.02)
Fully diluted earnings/ (loss) per common share before other items		**n/a	**n/a	**n/a	**n/a
Net loss for the period		(631,703)	(803,671)	(1,182,671)	(1,641,628)
Basic net loss per common share		(0.01)	(0.01)	(0.01)	(0.02)
Diluted net earnings/ (loss) per common share		**n/a	**n/a	**n/a	**n/a

For the Quarterly Periods ended		March 31, 2007	December 31, 2006	September 30, 2006	June 30,  2006
Total Revenues	$	918,363	748,425	0	0
Loss before other items		(556,046)	(1,097,020)	(1,336,310)	(1,317,109)
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 earnings/(loss) for the period		(360,306)	(3,028,766)	(1,026,289)	(853,501)
Basic net earnings/ (loss) per common share		(0.00)	(0.03)	(0.01)	(0.01)
Diluted net earnings/ (loss) per common share		**n/a	**n/a	**n/a	**n/a

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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, 2007 and December 31, 2006

During the three month [fourth quarter] period ended December 31, 2007, the Company had a net loss of $(803,671) or $(0.01) per share as compared to a net loss of $(3,028,766) or $(0.03) per share in the same three month [fourth quarter] period of 2006.  Total revenues were $230,968 as compared to revenues of $748,425 for the same period in 2006.  The decrease in revenue was due to the lower rate of revenue received from a licensee during the last quarter of 2007.  Operating costs have decreased significantly to $990,893 as compared to $1,845,445 for the same period in 2006.  

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

In order for the Company to further increase its revenues, the Company must dedicate more resources to marketing and to further upgrading the Company’s Gaming Software so as to have additional games and features. 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”) were exercisable into Units at $0.65 per Unit.  Each Unit consisted of one common share in the capital of the Company and one half of one share purchase warrant.  One whole share purchase warrant was required to purchase one additional common share at $1.00 per share.  All share purchase warrants expired 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.V, under the symbol LVH.WT.  During the year ended December 31, 2007, the Company issued 25 common shares as a result of the exercising of broker’s compensation warrants at the price of $1 per common share for total proceeds to the Company of $25.

During the year ended December 31, 2007, an aggregate amount of 7,942,725 warrants expired unexercised.

The Company has granted stock options to acquire common shares of the Company, at certain prices, to various parties.  Should any outstanding stock options 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 will be exercised.

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During the year ended December 31, 2007, the Company issued 1,961,500 common shares of the Company to employees and consultants as a result of exercising stock options at prices ranging from $0.12 to $0.27 per common share for total proceeds to the Company of $247,755.

During the year ended December 31, 2007, LVFH arranged with Special Opportunity Ltd. (“SPO”), an investment holding company, to enter into a private placement with the Company to subscribe for 5,000,000 units of the securities of the Company at CDN $0.17 per unit.  Each unit consists of one common share and one non-transferable warrant to buy an additional common share at CDN $0.25 per share for a period of twelve months. LVFH received the proceeds prior to the end of the year; however, all necessary regulatory approvals were not completed until subsequent to year-end and, as such, the Company did not issue the units until all necessary regulatory approvals were obtained.  The 5,000,000 units were issued on February 19, 2008 and had a hold period which expired on June 19, 2008.

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.

The Company received TSX.V approval on October 30, 2006 to commence a normal course issuer bid.  Under the bid, which was conducted pursuant to the rules of the TSX.V, the Company could have purchased up to 8,913,000 of its common shares (the "Common Shares") representing approximately 8.9% of the Company's then issued and outstanding Common Shares.  The Company had until November 3, 2007 to purchase any or all of its 8,913,000 Common Shares.  The price at which the Company could have purchased its Common Shares would have been the market price thereof at the time of acquisition. Purchases of Common Shares would have been made in the open market through the facilities of the TSX.V.  Any Common Shares acquired by the Company would be cancelled. Purchases under the bid would have been made on behalf of the Company by Wellington West Capital Markets Inc.  As of December 31, 2007, the Company returned to treasury for cancellation 125,000 common shares, which were purchased for a total cost of $22,500.  The share repurchase resulted in an increase to contributed surplus of $14,375 and reduction to capital stock of $36,875.

On November 4, 2002, the Company entered into a licensing agreement 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.  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 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, as determined by an independent valuation.  The 6,670,000 common shares of the Company, which have been issued to Zab, were restricted from trading until May 1, 2007.

During the year ended December 31, 2006, the Company issued 465,000 common shares 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.

Proceeds received by the Company from all financings, with the exception of the $850,000 received from SPO, are being utilized for general working capital purposes.  The $850,000 received from SPO was used to acquire the Exclusivity Rights from CY Foundation, however, pursuant to the Amendment Agreement dated 28^th May, 2008 between the Company and CY Foundation, the Company received $500,000 from CY Foundation as consideration for the termination of the SLA and the Definitive Agreement (please see Results of Operations on page 14).  This $500,000 shall also be utilized by the Company for general working capital purposes.

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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.  As of the fiscal year 2007, the Company no longer capitalizes its gaming software.

Capitalization of the Company’s Gaming Software

The types of expenses that were capitalized in 2007, 2006 and 2005 were:-

		2007	2006	2005
Rent	Cdn$	0	0	5,910
Amortization		0	0	7,677
Insurance		0	0	444
Interest		0	0	803
Payroll *		0	130,976	964,745
	Cdn$	0	130,976	** 979,579

*	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 were included in the Sale of APGN to Playsafe.

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.

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.

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Contractual Obligations As of January 1, 2008.	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)	n/a	n/a	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 $   150,339	Cdn $  150,339	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 $   150,339	Cdn $  150,339	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 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.

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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 2008, 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, CFO & Director of Registrant;  President of Zab Resources Inc; President & CEO of Colt Resources Inc.; President & CEO of Mountain Capital Inc. and Secretary of Touchdown Capital Inc.	Chairman: 1991 to Present Director: 1987 to Present 2006 to present 2005 to present 2005 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; Vice President of Colt Resources Inc.; President & CEO of Touchdown Capital Inc. and Secretary and CFO of Mountain Capital Inc.	1991 to Present 1991 to Present 2006 to Present 2005 to Present 2005 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 2005 to Present
Maria P. Arenas Surrey, BC, Canada	Corporate Secretary	August 23, 1962	Corporate Secretary of the Registrant and  Zab Resources Inc.	January 2008 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.

Mr. David Shore was appointed as the Company’s CFO on April 11, 2007.  Effective July 11, 2007,  Mr. David Shore resigned and Mr. Bedo H. Kalpakian has been appointed as the Company’s CFO.

23

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

For the year ended December 31, 2007, Kalpakian Bros. of B.C. Ltd. ("Kalpakian Bros.") was paid $360,000 (December 31, 2006: $360,000) (December 31, 2005:$ 270,000).  For the three month period ended March 31, 2008, Kalpakian Bros. of B.C. Ltd. was paid $90,000. (March 31, 2007: $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 agreement dated July 12, 2002 with Neil Spellman (Exhibit 10.6 - Incorporated by reference) and an Indemnity Agreement dated January 7, 2008  with Maria P. Arenas (Exhibit 10.6.2* - 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, 2007, there were no  incentive stock options exercised by any Directors and/or Officers of the Company.  Subsequent to the year ended December 31, 2007 and up to the date of this report (May 31, 2008) there have no been incentive stock options exercised by any Directors and/or Officers.

Incentive stock options held by the Company’s Directors and Officers, as of May 31, 2008, 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
Maria P. Arenas	August 14, 2007 December 21, 2007	80,000 80,000	0.185 0.115	August 14, 2010 December 21, 2010
	Total	6,170,000

# One option is required to purchase one common share.

24

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, 2007 (2006: $360,000; 2005: $270,000).  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 Shareholder’s meeting which is scheduled to take place on June 16, 2008.  The Information Circular (Exhibit 20.5 – Incorporated by reference) 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, 2007 employs 34 people (December 31, 2006: 47) consisting of staff and management.  As at May 31, 2008, the Company employs 34 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, 2008 is as follows:  

25

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	2,730,708 922,633	direct(1) indirect(2)	3.41%
Jacob H. Kalpakian, Vancouver, British Columbia, Canada	852,907 3,422,633	direct(1) indirect(2)	3.99%
Gregory T. McFarlane,  Las Vegas, Nevada, USA	513	direct(1)	0.0004787%
Neil Spellman, Carlsbad, California, USA	415,000	direct(1)	0.39%

* Based on 107,149,545issued and outstanding common shares as of May 31, 2008.

(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 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 2,500,000 shares which are held by the spouse of Jacob H. Kalpakian.

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.V.  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 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, 2008, 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
August 1, 2006	Employees (2)	75,000	0.18	August 1, 2008
September 13, 2006	Employees (1)	20,000	0.17	September 13, 2008
December 22, 2006	Employees (30)	2,067,500	0.12	December 22, 2009
April 11, 2007	Employees (1)	400,000	0.18	April 11, 2010
July 9, 2007	Employees (4)	295,000	0.205	July 9, 2010
July 17, 2007	Employees  (1)	65,000	0.20	July 17, 2010
August 26, 2007	Employees (1)	20,000	0.18	August 26, 2010
October 2, 2007	Employees (1)	50,000	0.18	October 2, 2010

26

October 17, 2007	Employees (1)	100,000	0.17	October 17, 2010
December 1, 2007	Employees (1)	20,000	0.11	December 1, 2010
December 3, 2007	Employees (1)	150,000	0.11	December 3, 2010
December 12, 2007	Employees (1)	37,500	0.10	December 12, 2010
December 21, 2007	Employees (2))	65,000	0.115	December 21, 2010
April 15, 2008	Employees (1)	20,000	0.11	April 15, 2011
May 1, 2008	Employees (1)	20,000	0.10	May 1, 2011
May 14, 2008	Employees (1)	50,000	0.11	May 14, 2011
May 15, 2008	Employees (1)	50,000	0.095	May 15, 2011
May 26, 2008	Employees (2)	80,000	0.075	May 26, 2011
Consultants
January 3, 2007	Consultants	350,000	0.13	January 3, 2010
July 17, 2007	Consultants	500,000	0.20	July 17, 2010
February 25, 2008	Consultants	200,000	0.15	February 25, 2011
	Total:	4,635,000

ITEM 7. MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS

Item 7.A - Major shareholders

7.A.1.

As of May 31, 2008, 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**	97,415,829	90.92%
Bedo Kalpakian and Jacob Kalpakian***	7,006,248	6.54%

*

Based on 107,149,545 issued and outstanding common shares as of May 31, 2008.

**

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, 2,730,708 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, 2,500,00 common shares are held by the spouse of Jacob H. Kalpakian.

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, 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 Zab Resources Inc., a public company of which Bedo H. Kalpakian and Jacob H. Kalpakian are directors and officers.

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:

27

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 Zab Resources Inc., a public company of which Bedo H. Kalpakian and Jacob H. Kalpakian are directors and officers.

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, 2007, the Company had 102,070,795 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 4,145,044 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

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

-

Zab Resources Inc. (“Zab”), a public company listed on the OTC Bulletin Board and on the CNQ Stock Exchange (“CNQ”) 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 Resources Inc. (“CRI”), a reporting issuer in the provinces of Alberta, British Columbia and Ontario the securities of which are listed on the CNQ.  CRI was incorporated in the Province of Alberta and has been continued into the Province of British Columbia;

-

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

-

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

The Company shares office space and certain expenses with Zab, MCI, TD and CRI, companies related by certain common officers and directors.  Rent for the office premises is paid by the Company.  Zab, MCI, TDCI and CRI are charged for their proportionate share of office rent and office services provided by the Company.   Effective January 1, 2008, MCI and CRI have relocated offices and terminated the services provided by the Company.

Amounts due from related parties are 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 January 7, 2005, Zab acquired 1,250,000 units of LVFH at a price of $0.20 per unit.  Each LVFH unit consisted of one LVFH common share and one-half of one warrant.  One whole warrant was required to purchase one LVFH common share at $0.25 per share for a period of 24 months.  In January 2006, Zab exercised 600,000 of its half warrants. In January 2007, the remaining 650,000 half warrants expired.

28

On November 4, 2002, the Company entered into a Licensing Agreement (Exhibit 10.8 – Incorporated by reference) with 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 were issued to Zab were 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, 2007, the Company has paid $Nil to Zab (2006: $219,160; 2005: $484,804).  

For the twelve month period ended December 31 2007, Kalpakian Bros. of B.C. Ltd. (“Kalpakian Bros.”) was paid $360,000. (2006: $360,000).  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 plus GST per month.  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 December 31, 2007, an amount of $17,512 is due from related parties which consists of the following:

	2007	2006
Receivables from MCI
Rent charged by LVFH	$           318	$               0
Office services charged by LVFH	1,272	0
	1,590	0
Receivables from TD
Rent charged by LVFH	318	0
Office services charged by LVFH	1,272	0
	1,590	0
Receivable from Zab
Rent charged by LVFH	318	0
Office expense charged by LVFH	1,272	0
Reimbursements for expenses paid by LVFH	504	0
	2,094	0
Receivables from CRI
Rent charged by LVFH	2,120	0
Office services charged by LVFH	8,480	0
Reimbursements for expenses paid by LVFH	1,638	0
	12,238	0
Receivable from directors	0	60
Receivable from related parties	$      17,512	$             60

29

As of December 31, 2007, an amount of $343 is due to related parties which consists of the following:

	2007	2006
Payable to Zab for payroll expenses charged to LVFH	$               0	$      5,196
Payable to directors	343	0
	$           343	$      5,196

As at December 31, 2007, the following amounts were paid to the Company:

The Company charged Zab for:

(a)  office expenses of $12,000 (2006 - $Nil; 2005 - $Nil);

(b)  rent expenses of $4,000 (2006 - $6,000; 2005 - $6,000); and

The Company charged CRI for:

(c)  rent of $11,500 (2006 - $Nil; 2005 - $Nil);

(d)  office expenses of $46,000 (2006 - $Nil; 2005 - $Nil); and

The Company charged MCI for:

(e)  rent of $3,000 (2006 - $Nil; 2005 - $Nil); and

(f)   office expenses of $12,000 (2006 - $Nil; 2005 - $Nil);

The Company charged TD for:

(g)   rent of $3,000 (2006 - $Nil; 2005 - $Nil); and

(h)   office expenses of $12,000 (2006 - $Nil; 2005 - $Nil).

As at December 31, 2007, the Company paid Zab the following:

Zab charged the Company for:

(a)   payroll expenses of $Nil (2006 - $322,629; 2005 - $205,608); and

(b)    other expenses of $4,061 (2006 - $Nil; 2005 - $1,455).

Item 7.C. Interests of Experts and counsel

Not Applicable

30

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, 2007 and 2006 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].

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, 2007, and up until May 31, 2008, there were no significant changes in the affairs of the Company.

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.V”) 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.V for the periods indicated.  The current trading symbol of the Company's common shares listed on the TSX.V is "LVH".  The closing market price on May 31, 2008 was Canadian $0.065 per common share on the TSX.V (May 31, 2007: $0.18).  

TSX.V

Trading Range (Canadian $)

Five Most Recent Financial Years	High $	Low $	Volume
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
2007	0.34	0.09	28,449,197

TSX .V – (Canadian)

Two Most Recent Financial Years
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

31

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
Apr 1 – Jun 30	0.275	0.16	6,576,000
Jul 1 – Sep 30	0.25	0.14	5,895,705
Oct 1 – Dec 31	0.18	0.09	2,621,997
Year 2008
Jan 1 – Mar 31
Six Most Recent Months	High $	Low $	Volume
December 2007	0.13	0.09	37,900
January 2008	0.21	0.11	4,459,075
February 2008	0.15	0.11	1,382,600
March 2008	0.135	0.10	1,024,300
April 2008	0.125	0.085	1,028,300
May 2008	0.09	0.05	11,696,640

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:-

OTC Bulletin Board Trading Range (US $)

Five Most Recent Financial Years	High $	Low $	Volume
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
2007	0.28	0.09	3,417,640

Two Most Recent Financial Years
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
Apr 1 – Jun 30	0.22	0.13	162,425
Jul 1 – Sep 30	0.24	0.14	1,105,512
Oct 1 – Dec 31	0.168	0.09	1,809,328
Six Most Recent Months	High $	Low $	Volume
December 2007	0.135	0.10	1,376,623
January 2008	0.205	0.12	72,680
February 2008	0.135	0.135	1,000
March 2008	0.091	0.091	7,500
April 2008	0.10	0.10	10,000
May 2008	0.12	0.05	96,500

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 2006	High€	Low €	Volume
Jan 1 – Mar 31	0,27	0,19	0

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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	0,19	0,12	0
Apr 1 – Jun 30	0,15	0,10	0
Jul 1 – Sep 30	0,13	0,11	0
Oct 1 – Dec 31	0,12	0,05	4,200
Year 2008
Jan 1 – Mar 31
Six Most Recent Months	High€	Low €	Volume
December 2007	0,08	0,06	0
January 2008	0.12	0.07	0
February 2008	0.09	0.06	0
March 2008	0.08	0.05	0
April 2008	0.07	0.05	0
May 2008	0.06	0.04	30,000

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	0,22	0,09	40,000
Apr 1 – Jun 30	0,15	0,10	2,000
Jul 1 – Sep 30	0,16	0,10	10,600
Oct 1 – Dec 31	0,11	0,06	3,200
Six Most Recent Months	High€	Low €	Volume
December 2007	0,08	0,06	0
January 2008	0.07	0.03	59,200
February 2008	0.09	0.06	0
March 2008	0.08	0.05	0
April 2008	0.07	0.04	0
May 2008	0.05	0.02	0

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.V”)

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pursuant to the Toronto Stock Exchange’s acquisition of the CDNX.  The current trading symbol for the Company’s common shares on the TSX.V 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 are 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 are 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 107,149,545 common shares are issued and outstanding as of May 31, 2008.  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, 2008	107,149,545	Nil	N/A	N/A
Stock Options	10,805,000	Nil	$0.075 to 0.205	August 1/08 - June 4/11
Warrants	5,000,000	Nil	N/A	February 19/09
Fully Diluted as at May 31, 2008	122,954,545

Item 10.A.4. Warrants

The following summarizes the warrants that have been issued, exercised, cancelled or expired during the years ended December 31, 2007, 2006 and 2005:

		Weighted
		Average
	Number	Exercise
	of Warrants	Price
Balance, December 31, 2004	6,645,000	$ 0.19

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Issued	8,742,750	$ 0.82
Exercised	(2,430,000)	$ 0.19
Balance, December 31, 2005	12,957,750	$ 0.59
Issued	0	N/A
Exercised	(465,000)	$ 0.21
Expired	(4,550,000)	$ 0.20
Balance, December 31, 2006	7,942,750	$ 0.84
Issued	0	N/A
Exercised	(25)	$ 1.00
Expired	(7,942,725)	$ 0.84
Balance, December 31, 2007	0	0

At December 31, 2007 and 2006, the following warrants were outstanding and exercisable.  

		Exercise	Number of Shares
Expiry Date		Price	2007	2006
January 7, 2007	$	0.25	0	1,700,000
May 13, 2007	$	1.00	0	6,242,750
Balance, end of year	$	0.25 and 1.00	0	7,942,750

As at May 31, 2008, there are 5,000,000 non-transferable share purchase warrants outstanding to purchase, until February 19, 2009, an additional common share in the capital of the Company at the price of $0.25 per common share.

              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, 2007, 1,961,500 stock options were exercised, 1,912,000 stock options were forfeited, 2,017,000 stock options expired unexercised and the Company granted 3,525,000 stock options to officers, consultants 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, 2007, there are 1,438,844 stock options available for granting.  

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The following summarizes the officer, director, employee and consultant stock options that have been granted, exercised, forfeited and expired during the years ended December 31, 2007 and 2006.  The options vest 25% on grant and thereafter at 25% every six months.

	Number	Weighted Average
	of Options	Exercise Price
Balance, December 31, 2005	9,971,592	$ 0.19
Granted	9,815,000	$ 0.12
Exercised	(584,592)	$ 0.16
Expired	(5,549,000)	$ 0.17
Balance, December 31, 2006	13,653,000	$ 0.15
Granted	3,525,000	$ 0.19
Forfeited	(1,912,000)	$ 0.24
Exercised	(1,961,500)	$ 0.13
Expired	(2,017,000)	$ 0.25
Balance, December 31, 2007	11,287,500	$ 0.13

At December 31, 2007 and 2006, the following stock options were 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:

	2007			2006
	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
2007	$    0.00	0	$            0	$      0.22	3,888,000	$     61,710
2008	$    0.19	107,500	0	$      0.20	265,000	0
2009	$    0.12	8,485,000	84,850	$      0.12	9,500,000	0
2010	$    0.17	2,695,000	7,675	$      0.00	0	0
	$    0.13	11,287,500	$   92,525	$      0.15	13,653,000	$    61,710

	2007			2006
	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
2007	$       0.00	0	$                0	$         0.22	3,815,500	$  3,763,000
2008	$       0.14	77,500	0	$         0.22	87,500	4,098,000
2009	$       0.12	6,316,250	63,163	$         0.12	2,375,000	0
2010	$       0.17	961,250	1,919	$         0.00	0	0
	$       0.13	7,355,000	$       65,082	$         0.18	6,278,000	$  7,861,000

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The Company applies the fair value method using the Black-Scholes option pricing model in accounting for its stock options granted.  Accordingly, for the year ended December 31, 2007 compensation expense of  $155,717 (2006: $513,392; 2005: $146,963) was recognized as salaries expense, and $521,067 (2006: $0; 2005: $182,436) was recognized as consulting expense.  

The weighted average fair value of options granted and vested during the years ended December 31, 2007 and 2006 were as follows:

2007			2006
Number of Options	Weighted Average Exercise Price	Weighted Average Fair Value Options	Number of Options	Weighted Average Exercise Price	Weighted Average Fair Value Options
1,815,000(a)	$ 0.14	$0.18	9,500,000(a)	$ 0.17	$ 0.22
555,000(b)	$ 0.51	$0.51	85,000(b)	$ 0.31	$ 0.31
1,155,000(c)	$ 1.42	$1.34	230,000(c)	$ 0.19	$ 0.17

Exercise Price:

(a)

is less than the market price of the Company’s stock on the grant date.

(b)

equals the market price of the Company’s stock on the grant date.

(c)

exceeds the market price of the Company’s stock on the grant date.

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

	2007	2006	2005
Expected life (years)	3	2	2
Interest rate	4.19%	2.89%	3.00%
Volatility	94.00%	113.43%	186.43%
Dividend yield	0.00%	0.00%	0.00%

The following summarizes the officer, director, employee and consultant stock options that have been granted, exercised, forfeited, expired and cancelled during the three months ended March 31, 2008.  The options vest 25% on grant and thereafter at 25% every six months.  As at March 31, 2008, there are 1,990,094 stock options available for granting.  

	Number	Weighted Average
	of Stock Options	Exercise Price
Balance, December 31, 2007	11,287,500	$ 0.13
Granted	220,000	0.15
Forfeited	(143,750)	0.11
Exercised	(78,750)	0.12
Cancelled	(607,500)	0.16
Balance, March 31, 2008	10,677,500	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.

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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.V approval on October 30, 2006 to commence a normal course issuer bid.  Under the bid, which was conducted pursuant to the rules of the TSX.V, the Company could have purchased up to 8,913,000 of its common shares (the "Common Shares") representing approximately 8.9% of the Company's then issued and outstanding Common Shares.  The Company had until November 3, 2007 to purchase any or all of its 8,913,000 Common Shares.  The price at which the Company could have purchased its Common Shares would have been the market price thereof at the time of acquisition. Purchases of Common Shares would have been made in the open market through the facilities of the TSX.V.  Any Common Shares acquired by the Company would be cancelled. Purchases under the bid would have been made on behalf of the Company by Wellington West Capital Markets Inc.  As of December 31, 2007, the Company returned to treasury for cancellation 125,000 common shares, which were purchased for a total cost of $22,500.  The share repurchase resulted in an increase to contributed surplus of $14,375 and reduction to capital stock of $36,875.

The numbers of shares issued are as follows:

	Number				Contributed
Common shares	of Shares	Amount			Surplus
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
Exercise of warrants for cash	25		25		0
Exercise of options for cash	1,961,500		247,755		0
Repurchase under normal

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course issuer bid	(125,000)		(36,875)		14,375
Reclassification of contributed
surplus on exercise of options	0		249,564		(249,564)
Stock-based compensation	0		0		676,784
Balance, December 31, 2007	102,070,795	$	30,253,288	$	3,159,311

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 with Zab(Exhibit 10.8 – Incorporated by reference)   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.  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 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, as determined by an independent valuation (Exhibit 10.12 – Incorporated by reference).  The 6,670,000 common shares of the Company, which were issued to Zab, were 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, 2007, the Company has paid $nil to Zab (2006: $219,160 which represented Zab’s 40% share of revenues generated from the three card games software (2005: $484,804).   

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  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.V”) 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– Incorporated by reference)

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

39

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.

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.

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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 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.

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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 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.  

42

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

The Company has designated its cash and cash equivalents as held-for-trading; accounts receivable as loans and receivable; accounts payable and accrued liabilities, other liabilities and long-term debt, including current portion, as other liabilities.

a)   Fair value

Prior to the adoption of Canadian Institute of Chartered Accountants (CICA) Handbook Section 3855, the Company disclosed the fair value of its financial instruments. The carrying values of cash, term deposits, receivables, and accounts payable and accrued liabilities approximated their fair values due to the relatively short periods to maturity of those 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 cash and cash equivalents, accounts receivable and amounts due from licensees.  Cash is placed with major financial institutions rated in the two highest grades by nationally recognized rating agencies.  Risks on accounts receivable from licensees are 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.  The Company does not utilize derivatives to manage the foreign currency risk.

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

43

Not Applicable

ITEM 15. CONTROLS AND PROCEDURES

a)

EVALUATION OF DISCLOSURE CONTROLS AND PROCEDURES.  Our Chief Executive Officer and Chief Financial Officer have evaluated the effectiveness of our 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.  Based on such evaluation, they have concluded that as of such date, our disclosure controls and procedures are effective and designed to ensure that information required to be disclosed by us in reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in applicable SEC rules and forms.

b)

MANAGEMENT’S ANNUAL REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING.  Our management, under the supervision of our Chief Executive Officer and Chief Financial Officer, is responsible for establishing and maintaining adequate internal control over financial reporting as defined in Rule 13a-15(c) and Rule 15d-15(e) of the Exchange Act.  Our internal control system was designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation and fair presentation of our consolidated financial statements for external purposes in accordance with generally accepted accounting principles.  Our Chief Executive Officer and Chief Financial Officer assessed the effectiveness of our internal control over financial reporting as of December 31, 2007.  In making this assessment, they used the criteria established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).  Based on this assessment, our Chief Executive Officer and Chief Financial Officer have conducted that, as of December 31, 2007, our internal control over financial reporting is effective based on those criteria.  Notwithstanding the foregoing, all internal control systems, no matter how well designed, have inherent limitations.  Therefore, even those systems determined to be effective may not prevent or detect misstatements and can provide only reasonable assurance with respect to financial statement preparation and presentation.  Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Management of the Company has performed evaluations of internal controls and some deficiencies have been noted.  In order to remediate the deficiencies, Management has assigned the responsibility to a member of a staff to remediate deficiencies noted.  Management will continue to monitor and evaluate the effectiveness of the internal controls over financial reporting on an ongoing basis and Management is committed to taking further action and implementing additional enhancements or improvements.

This Annual Report does not include an attestation report of the Company’s registered public accounting firm regarding internal control over financial reporting.  Management’s report was not subject to attestation by the Company’s registered public accounting firm pursuant to temporary rules of the SEC that permit the Company to provide only management’s report in this Annual Report.

c)

CHANGES IN INTERNAL CONTROLS.  There were no changes in our internal controls or in other factors that could affect these controls subsequent to the date of evaluation by our Chief Executive Officer and Chief Financial Officer.

[Exhibit *31.1 – 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.)

44

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).

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 2005	FYE 2006	FYE 2007
Audit fees for the year ended	$   92,000	$    92,531	$    78,000
Audit related fees	$     1,861	$      2,700	$      4,670
Tax fees	$  2,000(1)	$   2,000(1)	$   2,146(1)
All other fees (non-tax)	$13,400(2)	$   6,800(2)	$          0(2)
Total Fees:	$109,261	$104,031	$    84,816

⁽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 $100,000 and individual non-audit services up to a maximum cost of $15,000 per assignment.  All non-audit services that cost more than $15,000 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, 2007 and 2006 together with the report of the auditors, Smythe Ratcliffe, Chartered Accountants, are filed as part of this annual report.  The 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 46

Comment by Independent Auditors for United States Readers

on Canada/United States Reporting Conflict

page 46

Consolidated Balance Sheets as at December 31, 2007 and December 31, 2006

page 47

Consolidated Statements of Operations and Deficit for the years ended

December 31, 2007, 2006 and 2005

page 48

Consolidated Statements of Cash Flows for the years ended

December 31, 2007, 2006 and 2005

page 50

Notes to the Consolidated Financial Statements

pages 51-71

45

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

LAS VEGAS FROM HOME.COM

ENTERTAINMENT INC.

Consolidated Financial Statements

December 31, 2007 and 2006

(Canadian Dollars)

Index

	Page
Report of Independent Registered Public Accounting Firm	1
Consolidated Balance Sheets	2
Consolidated Statements of Operations	3
Consolidated Statements of Stockholders’ Equity	4
Consolidated Statements of Cash Flows	5
Notes to Consolidated Financial Statements	6 - 26

46

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, 2007 and 2006 and the consolidated statements of operations, stockholders’ equity and cash flows for the years ended December 31, 2007, 2006 and 2005. 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, 2007 and 2006 and the results of its operations and its cash flows for each of the years ended December 31, 2007, 2006 and 2005 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 and are discussed in note 17 to the consolidated financial statements.

“Smythe Ratcliffe LLP” (signed)

Chartered Accountants

Vancouver, Canada

April 29, 2008

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 2 to the financial statements. The Company sold a subsidiary in 2006, which was a major source of revenue as described in note 4 to the financial statements.  Our report to the shareholders dated April 29, 2008 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

April 29, 2008

47

LAS VEGAS FROM HOME.COM ENTERTAINMENT INC.

Consolidated Balance Sheets

December 31

(Canadian Dollars) (note 2)

	2007		2006
Assets
Current
Cash and cash equivalents (note 7)	$	6,166,076	$	8,273,201
Accounts receivable (note 8)		115,737		425,611
Due from related parties (note 13(a))		17,512		60
Prepaids and lease deposits		13,234		15,000
		6,312,559		8,713,872
Lease Deposit		4,619		0
Equipment and Software Development (note 9)		843,493		903,483
Total Assets	$	7,160,671	$	9,617,355
Liabilities
Current
Accounts payable and accrued liabilities	$	257,827	$	472,427
Obligation under capital lease (note 10)		0		1,019
Due to related parties (note 13(b))		343		5,196
Total Liabilities		258,170		478,642
Stockholders' Equity
Capital Stock (note 11)		30,253,288		29,792,819
Share Subscriptions		850,000		0
Contributed Surplus		3,159,311		2,717,716
Deficit		(27,360,098)		(23,371,822)
Total Stockholders’ Equity		6,902,501		9,138,713
Total Liabilities and Stockholders' Equity	$	7,160,671	$	9,617,355

Commitments and Subsequent Events (notes 16 and 18)

“Bedo H. Kalpakian”

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

Bedo H. Kalpakian

“Neil Spellman”

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

Neil Spellman

48

See notes to consolidated financial statements.

LAS VEGAS FROM HOME.COM ENTERTAINMENT INC.

Consolidated Statements of Operations

Years Ended December 31

(Canadian Dollars) (note 4)

	2007		2006		2005
Revenues	$	1,568,732	$	748,425	$	0
Expenses
Advertising and promotion		39,961		457,204		26,890
Amortization		265,242		561,377		359,563
Salaries and benefits		2,612,833		2,819,595		1,141,279
Rent, office and miscellaneous		443,784		475,534		259,571
Consulting and professional fees		804,893		380,404		231,656
Travel, meals and entertainment		256,016		271,258		280,686
Management fees		360,000		360,000		270,000
Bank charges, interest and foreign exchange
(recovery)		890,771		(46,001)		(42,346)
Legal, accounting and audit		202,177		264,246		131,122
Donations		0		16,000		51,500
Regulatory and transfer agent fees		12,147		22,419		38,822
Shareholder communication		7,150		5,512		17,116
		5,894,974		5,587,548		2,765,859
Loss Before Other Items		(4,326,242)		(4,839,123)		(2,765,859)
Other Items
Interest income		304,305		109,593		76,210
Loss on marketable securities		0		(119,019)		(167,927)
Gain on settlement of debt (note 14)		112,369		0		0
Gain on settlement of lawsuit		0		0		97,382
		416,674		(9,426)		5,665
Loss after Other Items		(3,909,568)		(4,848,549)		(2,760,194)
Income (Loss) from Discontinued Operations,   net of tax
Discontinued operations (note 4)		(78,708)		1,139,955		3,848,935
Loss on sale of subsidiary (note 4)		0		(884,834)		0
Income (Loss) from Discontinued Operations,   net of tax		(78,708)		255,121		3,848,935
Net Income (Loss) and Other Comprehensive Income (Loss) for the Year	$	(3,988,276)	$	(4,593,428)	$	1,088,741
Basic Loss Per Share,   Before Discontinued Operations	$	(0.04)	$	(0.05)	$	(0.03)
Basic Earnings Per Share,   Effect of Discontinued Operations	$	0.00	$	0.00	$	0.05
Basic Earnings (Loss) Per Share	$	(0.04)	$	(0.05)	$	0.01
Diluted Earnings Per Share	$	N/A	$	N/A	$	0.01
Weighted Average Number of Common Shares Outstanding – Basic		101,428,720		97,236,825		84,337,774

49

See notes to consolidated financial statements.

LAS VEGAS FROM HOME.COM ENTERTAINMENT INC.

Consolidated Statements of Stockholders’ Equity

Years Ended December 31

(Canadian Dollars)

	Share Capital							Contributed		Share	Total Stockholders’ Equity
		Shares		Amount		Deficit		Surplus		Subscriptions
Balance, December 31, 2004		69,858,678	$	17,299,101	$	(19,867,135)	$	$ 2,451,298	$	750,000	$       633,264
Net income for the year		0		0		1,088,741		0		0	1,088,741
Shares issued for cash
Exercise of warrants		2,430,000		428,000		0		0		0	428,000
Exercise of options		2,740,500		463,360		0		0		0	463,360
Private placement		17,485,500		8,432,031		0		0		(750,000)	7,682,031
Reclassification of contributed surplus on exercise of options		0		474,343		0		(474,343)		0	0
Stock-based compensation		0		0		0		329,399		0	329,399
Balance, December 31, 2005		92,514,678		27,096,835		(18,778,394)		2,306,354		0	10,624,795
Net loss for the year		0		0		(4,593,428)		0		0	(4,593,428)
Shares issued for cash
Exercise of warrants		465,000		99,000		0		0		0	99,000
Exercise of options		584,592		93,755		0		0		0	93,755
Shares issued for non-cash
Acquisition of three card games software		6,670,000		2,401,200		0		0		0	2,401,200
Reclassification of contributed surplus on exercise of options		0		102,029		0		(102,029)		0	0
Stock-based compensation		0		0		0		513,391		0	513,391
Balance, December 31, 2006		100,234,270		29,792,819		(23,371,822)		2,717,716		0	9,138,713
Net loss for the year		0		0		(3,988,276)		0		0	(3,988,276)
Shares issued for cash
Exercise of warrants		25		25		0		0		0	25
Exercise of options		1,961,500		247,755		0		0		0	247,755
Repurchase under normal course issuer bid (note 11(b))		(125,000)		(36,875)		0		14,375		0	(22,500)
Share subscriptions		0		0		0		0		850,000	850,000
Reclassification of contributed surplus on exercise of options		0		249,564		0		(249,564)		0	0
Stock-based compensation		0		0		0		676,784		0	676,784
Balance, December 31, 2007		102,070,795	$	30,253,288	$	(27,360,098)	$	3,159,311	$	850,000	$    6,902,501

50

See notes to consolidated financial statements.

LAS VEGAS FROM HOME.COM ENTERTAINMENT INC.

Consolidated Statements of Cash Flows

Years Ended December 31

(Canadian Dollars)

	2007		2006		2005
Operating Activities
Net income (loss)	$	(3,988,276)	$	(4,593,428)	$	1,088,741
Items not involving cash
Amortization		265,242		561,377		382,655
Capitalization of deferred amortization
on software development		0		0		7,677
Effect of foreign currency on cash		562,712		36,133		132,052
Stock-based compensation		676,784		513,392		329,399
Loss on sale of subsidiary		0		884,834		0
Write-off of discontinued operations accounts payable		(43,077)		0		0
Loss on sale of marketable securities		0		119,019		0
Write-down of marketable securities		0		0		167,927
Loss on settlement of lawsuit		0		0		(97,382)
Gain on debt settlement		(112,369)		0		0
		(2,638,984)		(2,478,673)		2,011,069
Changes in non-cash working capital
Accounts receivable		309,874		410,204		(602,543)
Prepaids and security deposits		(2,853)		(4,942)		75,400
Due from related party		(17,452)		4,680		371,347
Accounts payable and accrued liabilities		(80,554)		(646,643)		847,209
Due to related parties		(4,853)		(55,733)		52,404
		204,162		(292,434)		743,817
Cash Provided by (Used in) Operating Activities		(2,434,822)		(2,771,107)		2,754,886
Financing Activities
Common shares issued, net of issue costs		247,780		192,755		8,573,391
Share repurchase		(22,500)		0		0
Subscriptions received		850,000		0		0
Other obligations		0		0		(516,008)
Capital lease payments		(1,019)		(21,799)		(20,276)
Cash Provided by Financing Activities		1,074,261		170,956		8,037,107
Investing Activities
Proceeds on sale of marketable securities		0		310,317		0
Purchase of marketable securities		0		(50,100)		(546,780)
Purchase of equipment		(183,852)		0		(704,245)
Proceeds from sale of subsidiary (note 4)		0		2,751,774		0
Additions to software development		0		(511,126)		(979,579)
Cash Provided by (Used in) Investing Activities		(183,852)		2,500,865		(2,230,604)
Effect of Foreign Currency on Cash		(562,712)		(36,133)		(132,052)
Inflow (Outflow) of Cash		(2,107,125)		(135,419)		8,429,337
Cash and Cash Equivalents (Cheques Issued in Excess of Funds on Deposit), Beginning of Year		8,273,201		8,408,620		(20,717)
Cash and Cash Equivalents, End of Year	$	6,166,076	$	8,273,201	$	8,408,620

Supplemental Information (note 12)

51

See notes to consolidated financial statements.

LAS VEGAS FROM HOME.COM ENTERTAINMENT INC.

Notes to Consolidated Financial Statements

Years Ended December 31, 2007 and 2006

(Canadian Dollars)

1.

Nature of Operations

The principal business of Las Vegas From Home.com Entertainment Inc., (the “Company” or “LVFH”) and its subsidiary, MT Ventures Inc. (“MTV”), is the development and licensing of software for online multi-player interactive card games.

During 2006, the Company incorporated MTV a 100% wholly owned Antiguan subsidiary, which is in the business of marketing and licensing the Company’s online Asian multi-player interactive card games software.  

On November 10, 2006, the Company caused to incorporate MT Commerce Limited (“MT Commerce Limited (UK)”), 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.

2.

Going-Concern

These financial statements have been prepared on the basis of accounting principles applicable to a "going-concern" basis, which assumes that the Company 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

These financial statements have been prepared in accordance with Canadian generally accepted accounting principles 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 (note 17).

The sale of the Company’s Action Poker Gaming Network (“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 these consolidated financial statements (note 4).

52

LAS VEGAS FROM HOME.COM ENTERTAINMENT INC.

Notes to Consolidated Financial Statements

Years Ended December 31, 2007 and 2006

(Canadian Dollars)

4.

Discontinued Operations

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

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.  

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, cease taking deposits from US 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.V”) 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 and which was also sold to Playsafe on November 24, 2006 as part of the APGN.

After the sale of the APGN to Playsafe, the Company no longer operates any online poker rooms or online casinos.

The results of discontinued operations, less applicable income taxes, have been reported as a separate element of net income (loss) before other items for both current and prior periods.

53

LAS VEGAS FROM HOME.COM ENTERTAINMENT INC.

Notes to Consolidated Financial Statements

Years Ended December 31, 2007 and 2006

(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; 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:

	2007	2006	2005
Revenue	$                0	$  12,073,508	$  11,645,108
Income (loss) from    discontinued operations, net of tax	$     (78,708)	$     1,139,955	$    3,848,935
Loss on sale of subsidiary	0	884,834	0
Income (loss)  from discontinued  operations, net of tax	$     (78,708)	$        255,121	$    3,848,935

5.

Significant Accounting Policies

a)

Principles of consolidation

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

b)

Financial instruments

Effective January 1, 2007, the Company adopted the Canadian Institute of Chartered Accountants’ (CICA) Handbook Section 3855, “financial instruments – recognition and measurement”, which establishes standards for recognizing and measuring financial assets, financial liabilities and non-financial derivatives. The Company classifies its debt and marketable equity securities into held-to-maturity, trading or available-for-sale categories. Debt securities are classified as held-to-maturity when the Company has the positive intent and ability to hold the securities to maturity. Debt securities for which the Company does not have the intent or ability to hold to maturity are classified as available–for-sale. Held-to-maturity securities are recorded as either short-term or long-term on the balance sheet based on contractual maturity date and are stated at amortized cost. Marketable securities that are bought and held principally for the purpose of selling them in the near term are classified as trading securities and are reported at fair value, with unrealized gains and losses recognized in net income (loss). Debt and marketable equity securities not classified as held-to-maturity or as trading are classified as available-for-sale and are carried at fair market value, with the unrealized gains and losses, net of tax, included in the determination of comprehensive income and reported in stockholders’ equity.

The adoption of the new standard had no effect on the Company’s consolidated financial statements.

54

LAS VEGAS FROM HOME.COM ENTERTAINMENT INC.

Notes to Consolidated Financial Statements

Years Ended December 31, 2007 and 2006

(Canadian Dollars)

5.

Significant Accounting Policies (Continued)

c)

Comprehensive Income

Effective January 1, 2007, the Company adopted the CICA Handbook Section 1530, “Comprehensive Income”, which establishes standards for presentation and disclosure of comprehensive income. Comprehensive income is the overall change in the net assets of the Company for a period, other than changes attributable to transactions with stockholders. It is made up of net income and other comprehensive income.  The historical make-up of net income has not changed.  Other comprehensive income consists of gains and losses affecting stockholders’ equity that, under generally accepted accounting principles are excluded from net income.

The adoption of the new standard had no effect on the Company’s consolidated financial statements.

d)

Cash and cash equivalents

Cash and cash equivalents include cash and highly liquid investments that on demand are readily convertible to known amounts of cash and which are subject to an insignificant risk of change in value. Cash equivalents are held for the purpose of meeting short-term cash commitments rather than for investing or other purposes. The Company places its cash and cash equivalents with institutions of high credit worthiness.

e)

Amortization

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

Software and development costs

- 5 years straight-line

Computer equipment

- 30% declining-balance

Office furniture

- 20% declining-balance

f)

Software development costs

The Company capitalized its software development costs.  Research costs are expensed as incurred.  Costs related to the development of software are expensed as incurred unless such costs met the criteria for deferral and amortization under Canadian generally accepted accounting principles.  The criteria included 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 was higher, commencing in the year when commercial sales of the products commenced.  

g)

Stock-based compensation

The Company accounts for stock-based compensation using the fair value based method with respect to all stock-based payments to directors, employees and consultants, including awards that are direct awards of stock and call for settlement in cash or other assets or stock appreciation rights that call for settlement by issuance of equity instruments.

Under this method, stock-based payments are recorded as an expense over the vesting period or on the grant date if they vest immediately, with a corresponding increase to contributed surplus under stockholders’ equity. When stock options are exercised, the corresponding fair value is transferred from contributed surplus to capital stock.

55

LAS VEGAS FROM HOME.COM ENTERTAINMENT INC.

Notes to Consolidated Financial Statements

Years Ended December 31, 2007 and 2006

(Canadian Dollars)

5.

Significant Accounting Policies (Continued)

h)

Revenue recognition

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

i)

Income taxes

The Company follows the asset and liability method of accounting for income taxes.  Under this method, future tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax basis, and losses carried forward.  Future tax assets and liabilities are measured using substantively enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled.  The effect on future tax assets and liabilities of a change in tax rates is recognized in operations in the period in which the change is enacted or substantially assured.  The amount of future income tax assets is limited to the amount of the benefit that is more likely than not to be realized (note 15).

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 (loss).

k)

Earnings (loss) per share

Basic earnings (loss) per share is calculated using the weighted average number of common shares outstanding during the year. The Company uses the treasury stock method for calculating diluted earnings (loss) per share. Under this method the dilutive effect on earnings per share is recognized on the use of the proceeds that could be obtained upon exercise of options, warrants and similar instruments. It assumes that the proceeds would be used to purchase common shares at the average market price during the period.

However, diluted earnings (loss) per share is not presented where the effects of various conversions and exercise of options and warrants would be anti-dilutive. Shares held in escrow, other than where their release is subject to the passage of time, are not included in the calculation of the weighted average number of common shares outstanding.

56

LAS VEGAS FROM HOME.COM ENTERTAINMENT INC.

Notes to Consolidated Financial Statements

Years Ended December 31, 2007 and 2006

(Canadian Dollars)

5.

Significant Accounting Policies (Continued)

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 in the determination of fair value of stock-based compensation, 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 could impact future results of operations and cash flows.

m)

Intangible assets

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

n)

Future accounting changes

(i)

Capital disclosures

In February 2007, the CICA issued Handbook Section 1535, “Capital Disclosures”, which requires the disclosure of both qualitative and quantitative information that provides users of financial statements with information to evaluate the entity’s objectives, policies and procedures for managing capital. The new section is effective for years beginning on or after October 1, 2007. The Company is in the process of assessing the impact of this new section on its consolidated financial statements.

(ii)

Financial instruments

In February 2007, CICA issued two new standards, Section 3862, “Financial Instruments Disclosures”, and Section 3863, “Financial Instruments Presentation”. These sections will replace the existing Section 3861, “Financial Instruments Disclosure and Presentation”. Section 3862 provides users with information to evaluate the significance of the financial instruments of the entity’s financial position and performances, nature and extent of risks arising from financial instrument, and how the entity manages those risks. Section 3863 deals with the classification of financial instruments, related interest, dividends, losses and gains, and the circumstances in which financial assets and financial liabilities are offset. The new sections are effective for years beginning on or after October 1, 2007. The Company is in the process of assessing the impact of these new sections on its consolidated financial statements.

(iii)

Goodwill and intangible assets

In February 2008, the CICA issued Handbook Section 3064, “Goodwill and Intangible Assets”, replacing Section 3062, “Goodwill and Other Intangible Assets”, and Section 3450, “Research and Development Costs”. This section establishes standards for the recognition, measurement, presentation and disclosure of goodwill subsequent to its initial recognition and of intangible assets by profit-oriented enterprises. Standards concerning goodwill are unchanged from the standards included in the previous Section 3062. The new section is effective for years beginning on or after October 1, 2008. The Company is in the process of assessing the impact of this new section on its consolidated financial statements.

57

LAS VEGAS FROM HOME.COM ENTERTAINMENT INC.

Notes to Consolidated Financial Statements

Years Ended December 31, 2007 and 2006

(Canadian Dollars)

5.

Significant Accounting Policies (Continued)

(n)

Future accounting changes (Continued)

(iv)

International Financial Reporting Standards ("IFRS")

In 2006, the Canadian Accounting Standards Board ("AcSB") published a new strategic plan that will significantly affect financial reporting requirements for Canadian companies. The AcSB strategic plan outlines the convergence of Canadian generally accepted accounting principles with IFRS over an expected five year transitional period.  In February 2008, the AcSB announced that 2011 is the changeover date for publicly-listed companies to use IFRS, replacing Canada's own generally accepted accounting principles. The date is for interim and annual financial statements relating to fiscal years beginning on or after January 1, 2011. The transition date of January 1, 2011 will require the restatement for comparative purposes of amounts reported by the Company for the year ended December 31, 2010. While the Company has begun assessing the adoption of IFRS for 2011, the financial reporting impact of the transition to IFRS cannot be reasonably estimated at this time.

(v)

Going concern

In June 2007, the CICA amended Handbook Section 1400, “General Standards of Financial Statement Presentation”, which requires management to make an assessment of a company’s ability to continue as a going-concern.  When financial statements are not prepared on a going-concern basis that fact shall be disclosed together with the basis on which the financial statements are prepared and the reason why the company is not considered a going-concern. The new section is effective for years beginning on or after January 1, 2008.  The Company is in the process of assessing the impact of this new section on its consolidated financial statements.

6.

Financial Instruments

The Company has designated its cash and cash equivalents as held-for-trading; accounts receivable as loans and receivable; accounts payable and accrued liabilities, other liabilities and long-term debt, including current portion, as other liabilities.

a)   

Fair value

Prior to the adoption of CICA Handbook Section 3855, the Company disclosed the fair value of its financial instruments. The carrying values of cash, term deposits, receivables, and accounts payable and accrued liabilities approximated their fair values due to the relatively short periods to maturity of those 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 cash and cash equivalents, accounts receivable and amounts due from licensees.  Cash is placed with major financial institutions rated in the two highest grades by  nationally recognized rating agencies.  Risks on accounts receivable from licensees are minimal.

58

LAS VEGAS FROM HOME.COM ENTERTAINMENT INC.

Notes to Consolidated Financial Statements

Years Ended December 31, 2007 and 2006

(Canadian Dollars)

6.

Financial Instruments (Continued)

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.  The Company does not utilize derivatives to manage the foreign currency risk.

Of the Company’s cash and cash equivalents 77% are in US dollars. The Company’s reported earnings include gain/losses on foreign exchange, which largely reflect revaluation of approximately US$4,804,000 (CDN $4,762,200) of US dollar denominated cash and cash equivalents.

7.

Term Deposits

               The following term deposits were held by the Company at December 31, 2007 and 2006:

Interest Rate                                    Maturity                                               Value

       3.93%                                                 January 7, 2008                                                  $     400,000

       4.68%                                                    March 4, 2008                                                  $  4,800,000*

               *Term deposit in US dollars.

8.

Accounts Receivable

Accounts receivable is comprised of the following:

		2007		2006
Due from licensees	$	68,383	$	338,374
Accounts receivable		47,354		87,237
	$	115,737	$	425,611

9.

Equipment and Software Development

				Accumulated		2007
		Cost		Amortization		Net Book Value
Software and development costs	$	526,577	$	250,247	$	276,330
Computer equipment		987,525		441,762		545,763
Furniture		21,400		0		21,400
	$	1,535,502	$	692,009	$	843,493

59

LAS VEGAS FROM HOME.COM ENTERTAINMENT INC.

Notes to Consolidated Financial Statements

Years Ended December 31, 2007 and 2006

(Canadian Dollars)

9.

Equipment and Software Development (Continued)

				Accumulated		2006
		Cost		Amortization		Net Book Value
Software and development costs	$	526,577	$	144,923	$	381,654
Computer equipment		803,673		281,844		521,829
	$	1,330,250	$	426,767	$	903,483

During the year 2007, the amount of $Nil (2006: $130,976)consisting of salaries was capitalized as software development costs.  

10.

Obligation Under Capital Lease

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

		2007		2006
2007	$	0	$	2,469
Total minimum lease payments		0		2,469
Less:  Amount representing interest and executory costs		0		1,450
Present value of net minimum lease payments		0		1,019
Less:  Current portion		0		1,019
Obligation under capital lease	$	0	$	0

11.

Capital Stock

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.

b)

Issued:

During the year ended December 31, 2007, the Company issued 1,961,500 common shares of the Company to employees and consultants as a result of exercising stock options at prices ranging from $0.12 to $0.27 per common share for total proceeds to the Company of $247,755.

During the year ended December 31, 2007, LVFH arranged with Special Opportunity Ltd. (“SPO”), an investment holding company, to enter into a private placement with the Company to subscribe for 5,000,000 units of the securities of the Company at CDN $0.17 per unit with one whole warrant to buy an additional share at CDN $0.25 for a period of twelve months. LVFH received the proceeds prior to the end of the year; however, all necessary regulatory approvals were not completed until subsequent to year-end and, as such, the Company did not issue the shares until all necessary regulatory approvals were obtained.

60

LAS VEGAS FROM HOME.COM ENTERTAINMENT INC.

Notes to Consolidated Financial Statements

Years Ended December 31, 2007 and 2006

(Canadian Dollars)

11.

Capital Stock (Continued)

b)   Issued (Continued)

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.

The Company received TSX.V approval on October 30, 2006 to commence a normal course issuer bid.  Under the bid, which was conducted pursuant to the rules of the TSX.V, the Company could have purchased up to 8,913,000 of its common shares (the "Common Shares") representing approximately 8.9% of the Company's then issued and outstanding Common Shares.  The Company had until November 3, 2007 to purchase any or all of its 8,913,000 Common Shares.  The price at which the Company could have purchased its Common Shares would have been the market price thereof at the time of acquisition. Purchases of Common Shares would have been made in the open market through the facilities of the TSX.V.  Any Common Shares acquired by the Company would be cancelled. Purchases under the bid would have been made on behalf of the Company by Wellington West Capital Markets Inc.  As of December 31, 2007, the Company returned to treasury for cancellation 125,000 common shares, which were purchased for a total cost of $22,500.  The share repurchase resulted in an increase to contributed surplus of $14,375 and reduction to capital stock of $36,875.

On November 4, 2002, the Company entered into a licensing agreement 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.  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 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, as determined by an independent valuation.  The 6,670,000 common shares of the Company, which have been issued to Zab, were restricted from trading until May 1, 2007.

c)

Warrants:

During the year ended December 31, 2007, the Company issued 25 common shares of the Company as a result of the exercising of broker’s compensation warrants at the price of $1 per common share for total proceeds to the Company of $25.

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.

61

LAS VEGAS FROM HOME.COM ENTERTAINMENT INC.

Notes to Consolidated Financial Statements

Years Ended December 31, 2007 and 2006

(Canadian Dollars)

11.

Capital Stock (Continued)

c)  Warrants (Continued)

The following summarizes the warrants that have been issued, exercised, cancelled or expired during the years ended December 31, 2007, 2006 and 2005:

		Weighted
		Average
	Number	Exercise
	of Warrants	Price
Balance, December 31, 2004	6,645,000	$ 0.19
Issued	8,742,750	$ 0.82
Exercised	(2,430,000)	$ 0.19
Balance, December 31, 2005	12,957,750	$ 0.59
Issued	0	N/A
Exercised	(465,000)	$ 0.21
Expired	(4,550,000)	$ 0.20
Balance, December 31, 2006	7,942,750	$ 0.84
Issued	0	N/A
Exercised	(25)	$ 1.00
Expired	(7,942,725)	$ 0.84
Balance, December 31, 2007	0	0

At December 31, 2007 and 2006, the following warrants were outstanding and exercisable.  

		Exercise	Number of Shares
Expiry Date		Price	2007	2006
January 7, 2007	$	0.25	0	1,700,000
May 13, 2007	$	1.00	0	6,242,750
Balance, end of year	$	0.25 and 1.00	0	7,942,750

d)

Stock options:

During 2004, the Company’s stockholders adopted and approved the Company’s 2004 Stock Option Plan (the “2004 Plan”).  The 2004 Plan, which has received the approval of the TSX.V, 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 stockholders, which was held on June 30, 2005, the stockholders 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.V approval, the Company grants stock options to employees, directors, officers and consultants.  As at December 31, 2007, there are 1,438,844 stock options available for granting.  

62

LAS VEGAS FROM HOME.COM ENTERTAINMENT INC.

Notes to Consolidated Financial Statements

Years Ended December 31, 2007 and 2006

(Canadian Dollars)

11.

Capital Stock (Continued)

d)

Stock options: (Continued)

From time to time the Company grants stock options to employees, officers, directors and consultants pursuant to the rules and regulations of the TSX.V.  During the year ended December 31, 2007, 1,912,000 stock options were forfeited, 2,017,000 stock options expired unexercised and, as a result, the Company granted 3,525,000 stock options to officers, consultants and employees.  

The following summarizes the officer, director, employee and consultant stock options that have been granted, exercised, forfeited and expired during the years ended December 31, 2007 and 2006.  The options vest 25% on grant and thereafter at 25% every six months.

	Number	Weighted Average
	of Options	Exercise Price
Balance, December 31, 2005	9,971,592	$ 0.19
Granted	9,815,000	$ 0.12
Exercised	(584,592)	$ 0.16
Expired	(5,549,000)	$ 0.17
Balance, December 31, 2006	13,653,000	$ 0.15
Granted	3,525,000	$ 0.19
Forfeited	(1,912,000)	$ 0.24
Exercised	(1,961,500)	$ 0.13
Expired	(2,017,000)	$ 0.25
Balance, December 31, 2007	11,287,500	$ 0.13

At December 31, 2007 and 2006, the following stock options were 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:

	2007			2006
	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
2007	$    0.00	0	$            0	$      0.22	3,888,000	$     61,710
2008	$    0.19	107,500	0	$      0.20	265,000	0
2009	$    0.12	8,485,000	84,850	$      0.12	9,500,000	0
2010	$    0.17	2,695,000	7,675	$      0.00	0	0
	$    0.13	11,287,500	$   92,525	$      0.15	13,653,000	$    61,710

63

LAS VEGAS FROM HOME.COM ENTERTAINMENT INC.

Notes to Consolidated Financial Statements

Years Ended December 31, 2007 and 2006

(Canadian Dollars)

11.

Capital Stock (Continued)

d)

Stock options: (Continued)

	2007			2006
	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
2007	$       0.00	0	$                0	$         0.22	3,815,500	$  3,763,000
2008	$       0.14	77,500	0	$         0.22	87,500	4,098,000
2009	$       0.12	6,316,250	63,163	$         0.12	2,375,000	0
2010	$       0.17	961,250	1,919	$         0.00	0	0
	$       0.13	7,355,000	$       65,082	$         0.18	6,278,000	$  7,861,000

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  $155,717 (2006: $513,392; 2005: $146,963) was recognized as salaries expense, and $521,067 (2006: $0; 2005: $182,436) was recognized as consulting expense.  

The weighted average fair value of options granted and vested during the years ended December 31, 2007 and 2006 were as follows:

2007			2006
Number 0f Options	Weighted Average Exercise Price	Weighted Average Fair Value Options	Number of Options	Weighted Average Exercise Price	Weighted Average Fair Value Options
1,815,000(a)	$ 0.14	$0.18	9,500,000(a)	$ 0.17	$ 0.22
555,000(b)	$ 0.51	$0.51	85,000(b)	$ 0.31	$ 0.31
1,155,000(c)	$ 1.42	$1.34	230,000(c)	$ 0.19	$ 0.17

Exercise Price:

(a)

is less than the market price of the Company’s stock on the grant date.

(b)

equals the market price of the Company’s stock on the grant date.

(c)

exceeds the market price of the Company’s stock on the grant date.

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

	2007	2006	2005
Expected life (years)	3	2	2
Interest rate	4.19%	2.89%	3.00%
Volatility	94.00%	113.43%	186.43%
Dividend yield	0.00%	0.00%	0.00%

64

LAS VEGAS FROM HOME.COM ENTERTAINMENT INC.

Notes to Consolidated Financial Statements

Years Ended December 31, 2007 and 2006

(Canadian Dollars)

11.

Capital Stock (Continued)

e)

Earnings (loss) per share:

	2007	2006	2005
Weighted average number of shares    outstanding - Basic	101,428,720	97,236,825	84,337,774
Pro-rated dilutive warrants	N/A	N/A	5,384,605
Pro-rated dilutive options	N/A	N/A	3,084,620
Weighted average number of shares    outstanding - Diluted	101,428,720	97,236,825	92,806,999

12. 

Supplemental Information to Consolidated Statements of Cash Flows

Supplementary Information		2007		2006		2005
Shares issued for acquisition of three           card games software	$	0	$	2,401,200	$	0
Furniture        (included in accounts payable)	$	21,400	$	0	$	0
Interest paid	$	84	$	2,721	$	6,864

13.  

Related Party Transactions

The Company shares office space and certain expenses with Zab, Mountain Capital Inc. (“MCI”), Touchdown Capital Inc. (“TDCI”) and Colt Resources Inc. (“CRI”), companies related by  certain common officers and directors.  Rent for the office premises is paid by the Company.  Zab, MCI, TDCI and CRI are charged for their proportionate share of office rent and office services provided by the Company.   Effective January 1, 2008, MCI and CRI have relocated offices and terminated the services provided by the Company.

Amounts due from related parties are 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 January 7, 2005, Zab acquired 1,250,000 units of LVFH at a price of $0.20 per unit.  Each LVFH unit consisted of one LVFH common share and one-half of one warrant.  One whole warrant was required to purchase one LVFH common share at $0.25 per share for a period of 24 months.  In January 2006, Zab exercised 600,000 of its half warrants. In January 2007, the remaining 650,000 half warrants expired.

On May 5, 2006, Zab 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 4, 11 and 13(c)(ii)).

65

LAS VEGAS FROM HOME.COM ENTERTAINMENT INC.

Notes to Consolidated Financial Statements

Years Ended December 31, 2007 and 2006

(Canadian Dollars)

13.

Related Party Transactions (Continued)

a)

  Due from related parties

	2007	2006
Receivables from MCI
Rent charged by LVFH	$           318	$               0
Office services charged by LVFH	1,272	0
	1,590	0
Receivables from TDCI
Rent charged by LVFH	318	0
Office services charged by LVFH	1,272	0
	1,590	0
Receivable from Zab
Rent charged by LVFH	318	0
Office expense charged by LVFH	1,272	0
Reimbursements for expenses paid by LVFH	504	0
	2,094	0
Receivables from CRI
Rent charged by LVFH	2,120	0
Office services charged by LVFH	8,480	0
Reimbursements for expenses paid by LVFH	1,638	0
	12,238	0
Receivable from directors	0	60
Receivable from related parties	$      17,512	$             60

b)  Due to related parties

	2007	2006
Payable to Zab
Payroll expenses charged to LVFH	$                0	$      5,196
Payable to directors	343	0
	$           343	$      5,196

c)  Related party transactions are measured at the exchange amount and comprised of the

following:

(i)

management fees paid to a company owned by two directors in the amount of $360,000 (2006: $360,000; 2005: $270,000);

(ii)

the Company paid $Nil (2006: $219,160; 2005: $484,804) to Zab for its share of gaming royalties generated from its investment in the three card games software.

66

LAS VEGAS FROM HOME.COM ENTERTAINMENT INC.

Notes to Consolidated Financial Statements

Years Ended December 31, 2007 and 2006

(Canadian Dollars)

13.

Related Party Transactions (Continued)

(c) (Continued)

(iii)

paid to the Company:

The Company charged Zab for:

(a)  office expenses of $12,000 (2006 - $Nil; 2005 - $Nil);

(b)  rent expenses of $4,000 (2006 - $6,000; 2005 - $6,000); and

The Company charged CRI for:

(c)  rent of $11,500 (2006 - $Nil; 2005 - $Nil);

(d)  office expenses of $46,000 (2006 - $Nil; 2005 - $Nil); and

The Company charged MCI for:

(e)  rent of $3,000 (2006 - $Nil; 2005 - $Nil); and

(f)   office expenses of $12,000 (2006 - $Nil; 2005 - $Nil);

The Company charged TDCI for:

(g)   rent of $3,000 (2006 - $Nil; 2005 - $Nil); and

(h)   office expenses of $12,000 (2006 - $Nil; 2005 - $Nil).

(iv)

paid to related parties:

Zab charged the Company for:

(a)   payroll expenses of $Nil (2006 - $322,629; 2005 - $205,608); and

(b)    other expenses of $4,061 (2006 - $Nil; 2005 - $1,455).

67

LAS VEGAS FROM HOME.COM ENTERTAINMENT INC.

Notes to Consolidated Financial Statements

Years Ended December 31, 2007 and 2006

(Canadian Dollars)

14.

Gain on Settlement of Debt

During the early part of 2007, the Company was successful in negotiating down a marketing contract with a local advertising company which resulted in the Company having a gain on settlement in the amount of $112,369.

15.

Income Taxes

	2007	2006
Future income tax assets	28.70%	34.12%
Excess of undepreciated capital cost over net book
value of fixed assets	$             527,000	$              518,000
Share issuance costs tax value	84,000	153,000
Excess of unused exploration expenditures for
Canadian tax purposes over net book value	77,000	92,000
Non-capital losses	3,005,000	2,464,000
Capital losses	174,000	206,000
Future income tax assets	3,867,000	3,433,000
Valuation allowance for future income tax assets	(3,867,000)	(3,433,000)
Future income tax assets, net	$                         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.

The Company has available non-capital losses of $10,563,000 that may be carried forward to apply against future income for Canadian tax purposes.  The losses expire as follows:

Year		Amount
2008	$	1,049,000
2009		1,578,000
2010		2,316,000
2014		965,000
2026		687,000
2027		3,968,000
	$	10,563,000

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

68

LAS VEGAS FROM HOME.COM ENTERTAINMENT INC.

Notes to Consolidated Financial Statements

Years Ended December 31, 2007 and 2006

(Canadian Dollars)

15.

Income Taxes (Continued)

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

	2007	2006	2005
Income tax expense (benefit) computed at Canadian statutory rates	$   (1,361,000)	$  (1,567,000)	$     388,000
Temporary tax differences	198,000	1,888,000	188,000
Permanent tax differences	194,000	124,000	(32,000)
Reduction of income taxes resulting from statutory tax rate reduction	(545,000)	0	0
Differences attributable to income taxes of          other countries	(353,000)	(685,000)	(64,000)
Unrecognized (utilized) tax losses	1,867,000	240,000	(480,000)
Future income tax benefit	$                  0	$                0	$               0

16.

Commitments

a)

The Company has a management services agreement with Kalpakian Bros. of B.C. Ltd., a private company owned by two directors of LVFH.  The remuneration for the services provided is $30,000, plus GST per month.  The agreement expires in June 2010 and is renewable.

b)

The Company has entered into a sub-lease agreement expiring on December 31, 2008 with an arm’s length third party in respect to approximately 6,414 square feet of office space.  Monthly payments for the sub-lease consist of $3,475 plus GST for rent and, $9,759 plus GST for the Company’s proportionate share of the building property taxes and operating expenses.  Subsequent to year-end, the amount charged for the Company’s proportionate share of the building property taxes and operating expenses have increased reflecting the increase in property taxes and operating expenses.

69

LAS VEGAS FROM HOME.COM ENTERTAINMENT INC.

Notes to Consolidated Financial Statements

Years Ended December 31, 2007 and 2006

(Canadian Dollars)

17.

Differences Between Canadian and US Generally Accepted Accounting Principles and Practices

a)

Recent US accounting pronouncements

(i)

SFAS 154 requires that a voluntary change in accounting principle be applied retrospectively with all prior period financial statements presented on the new accounting principle, unless it is impracticable to do so. SFAS 154 also provides that (1) a change in method of depreciating or amortizing a long-lived non-financial asset be accounted for as a change in estimate (prospectively) that was affected by a change in accounting principle, and (2) correction of errors in previously issued financial statements should be termed a "restatement." The new standard is effective for accounting changes and correction of errors made in fiscal years beginning after December 15, 2005. There is no impact on the Company’s consolidated financial statements.

(ii)

SFAS 157, Fair Value Measurements. This new standard provides guidance for using fair value to measure assets and liabilities and 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 provisions of this Statement are effective for financial statements issued for fiscal years beginning after November 15, 2007, and interim periods within those fiscal years. There is no impact on the Company’s consolidated financial statements.

(iii)

SFAS 159, Fair Value Option for Financial Assets and Financial Liabilities. The fair value option established by this Statement permits all entities to choose to measure eligible items at fair value at specified election dates. Most of the provisions of this Statement apply only to entities that elect the fair value option. However, the amendment to FASB Statement No. 115, Accounting for Certain Investments in Debt and Equity Securities, applies to all entities with available-for-sale and trading securities. This Statement is effective as of the beginning of an entity’s first fiscal year that begins after November 15, 2007. There is no impact on the Company’s consolidated financial statements.

(iv)

FIN 48, Accounting for Uncertainty in Income Taxes, prescribes a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. The provisions of FIN 48 are effective for fiscal years beginning after December 15, 2006. The provisions of FIN 48 are to be applied to all tax positions upon initial adoption of this standard. There is no impact on the Company’s consolidated financial statements.

(v)

In December 2007, the FASB issued SFAS No. 141(R), Business Combinations (SFAS 141(R)), which replaces SFAS 141. SFAF 141(R) requires assets and liabilities acquired in a business combination, contingent consideration, and certain acquired contingencies to be measured at their fair values as of the date of acquisition. SFAS 141(R) also requires that acquisition-related costs and restructuring costs be recognized separately from the business combination. SFAS 141(R) is effective for fiscal years beginning after December 15, 2008 and will be effective for business combinations entered into after January 1, 2009.

(vi)

In December 2007, the FASB issued SFAS No. 160, Non-Controlling Interests in Consolidated Financial Statements, an Amendment of ARB No. 51 (SFAS 160). SFAS 160 clarifies the accounting for non-controlling interests and establishes accounting and reporting standards for the non-controlling interest in a subsidiary, including classification as a component of equity. SFAS 160 is effective for fiscal years beginning after December 15, 2008. The Company does not currently have any minority interests.

70

LAS VEGAS FROM HOME.COM ENTERTAINMENT INC.

Notes to Consolidated Financial Statements

Years Ended December 31, 2007 and 2006

(Canadian Dollars)

17.

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

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 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.

	2007	2006
Total Stockholders' Equity per Canadian GAAP	$         6,902,501	$       9,138,713
Total common shares and additional paid-in capital    per Canadian GAAP	$       31,103,288	$     29,792,819
Adjustments for issue and exercise of stock options    per US GAAP	3,159,311	2,717,716
Total common shares and additional paid-in capital    per US GAAP	34,262,599	32,510,535
Total contributed surplus per Canadian GAAP	3,159,311	2,717,716
Adjustments for issue and exercise of stock options    per US GAAP	(3,159,311)	(2,717,716)
Total contributed surplus per US GAAP	0	0
Total deficit per Canadian GAAP	(27,360,098)	(23,371,822)
Adjustments per US GAAP	0	0
Total deficit per US GAAP	(27,360,098)	(23,371,822)
Total Stockholders' Equity per US GAAP	$         6,902,501	$      9,138,713

71

LAS VEGAS FROM HOME.COM ENTERTAINMENT INC.

Notes to Consolidated Financial Statements

Years Ended December 31, 2007 and 2006

(Canadian Dollars)

18.

Subsequent Events

a)

The Company’s wholly-owned subsidiary has signed a Software Licensing Agreement (“SLA”) with a subsidiary of CY Foundation Group Limited (“CYF”) (HKSE:1182) to provide CYF and its subsidiaries (the “CYF Group”) with LVFH’s software gaming platform in the People’s Republic of China (“PRC”).  CYF, through a controlled entity in the PRC, is licensed by the Ministry of Culture of the Government of the PRC to operate online games and tournaments across China.  In addition to entering into an SLA to provide the CYF Group with the LVFH software for the entire PRC in which the CYF Group shall pay LVFH a standard licensing royalty, the Company has also entered into a Definitive Agreement to pay CYF CDN$850,000 (paid on March 4, 2008) in order for the CYF Group to exclusively use the LVFH Software (“Exclusivity Rights”) to operate certain online games (the “Selected LVFH Software”) in the Henan Province and in the city of Beijing including its suburbs (the “Designated Territory”).  The CYF Group shall pay royalty payments to LVFH the greater of either 10% (ten percent) of all tournament fees collected by the CYF Group less the tournament prizes paid to the players or 1% (one percent) of all tournament collection fees collected by the CYF Group without any deductions for prizes paid to the players that are generated from the operations of the Selected LVFH Software and/or any other similar software that the CYF Group uses in the Designated Territory.

b)

Subsequent to the year ended 2007, a total of 78,750 employee stock options were exercised at prices ranging from $0.10 to $0.12 per common share for total proceeds to the Company of $9,200; 143,750 employee stock options at exercise prices ranging from $0.11 to $0.18 per common share were forfeited, 607,500 employee stock options at exercise prices ranging from $0.12 to $0.18 per common share were cancelled and 220,000 stock options were granted to consultants and an employee at exercise prices ranging from $0.11 to $0.15 per common share.

c)

Subsequent to the year ended 2007, the Company completed the private placement entered into with SPO, a foreign investment company and has issued 5,000,000 units in the securities of the Company at the purchase price of CDN $0.17 per unit for total proceeds to the Company of CDN $850,000.  The units, which have been issued, have a hold period that expires on June 19, 2008.  Each unit consists of one common share and one non-transferable share purchase warrant to purchase, until February 19, 2009, an additional common share in the capital of the Company at the price of Cdn $0.25 per common share.

d)

On February 22, 2008, the Company caused to incorporate Blue Cactus Enterprises Inc. (“Blue Cactus”), a 100% wholly-owned Antiguan subsidiary.  It is the Company’s intention for Blue Cactus to act as a licensing and/or payment processing entity for the Company and its subsidiaries.

72

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   

10.6

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;

 http://www.sec.gov/Archives/edgar/data/1061612/000113717107000907/ex1006.htm

10.6.2*  Officer’s Indemnity Agreement with Maria P. Arenas [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.);

http://www.sec.gov/Archives/edgar/data/1061612/000113717107000907/ex1014.htm

10.14.1

Ancilliary Agreement to the Final Purchase Agreement October 20, 2006 (Playsafe Holding Ltd.) http://www.sec.gov/Archives/edgar/data/1061612/000113717107000907/ex1014a.htm;

10.41.2

Amendment Agreement (November 23, 2006) to the Final Purchase Agreement (Playsafe Holding Ltd.) http://www.sec.gov/Archives/edgar/data/1061612/000113717107000907/ex1014b.htm;

10.15

Amendment Agreement dated May 28, 2008 with CY Foundation [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

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 ;

73

http://www.sec.gov/Archives/edgar/data/1061612/000113717107000907/ex2004.htm

20.5

Notice of AGM, Information Circular & Management Proxy Material, 2008

http://www.sec.gov/Archives/edgar/data/1061612/000113717108000578/0001137171-08-000578-

    index.htm

21.*

List of the Company’s subsidiaries;

31.1*

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

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 Bedo H. Kalpakian, 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)

74

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 31^st day of May, 2008.

75

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.

76

Exhibit 21*

The following chart sets forth the Company’s corporate structure as of May 31, 2008:

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.

On February 22, 2008, the Company caused to incorporate Blue Cactus Enterprises Inc. (“Blue Cactus”), a 100% wholly-owned Antiguan subsidiary.  It is the Company’s intention for Blue Cactus to act as a licensing and/or payment processing entity for the Company and its subsidiaries.

The Company’s Canadian Head Office employs 34 people as of May 31, 2008, (December 31, 2007: 34) (December 31, 2006: 47) consisting of staff and management.

77

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, Bedo H. Kalpakian, certify that:

1.

I have reviewed this annual report on Form 20-F (2007) 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, 2008

   “Bedo H. Kalpakian”

Bedo H. Kalpakian

Chief Financial Officer

78

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 (2007) 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, 2008

   “Jacob H. Kalpakian”

Jacob H. Kalpakian

Chief Executive Officer

79

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, 2007 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 Bedo H. Kalpakian, 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                                                 Bedo H. Kalpakian

“Jacob H.Kalpakian”

                       “Bedo H. Kalpakian”

____________________

                       _____________________

President & C.E.O.                                                 Chief Financial Officer

May 31, 2008.

80

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)
2007
Mountain Capital Inc.*	$                     0	$            1,590	$                     0	$                  0	$          1,590
Colt Resources Inc.*	0	12,238	0	0	12,238
Touchdown Capital Inc.*	0	1,590	0	0	1,590
Zab Resources Inc.*	(5,196)	2,094	5,196	0	2,094
2006
J. Kalpakian	$           (2,101)	$                   0	$              2,101	$                  0	$                  0
B. Kalpakian	517	0	(517)	0	0
Zab Resources Inc.*	(59,345)	0	54,149	0	(5,196)
2005
J. Kalpakian	$         (10,256)	$                    0	$              8,155	$                   0	$         (2,101)
B. Kalpakian	1,731	0	(1,241)	0	517
Zab Resources Inc.*	371,347	0	(430,692)	0	(59,345)

*Companies related to LVFH by certain common directors and officers.

81

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
2007 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	$       526,577 739,354 0 0 64,320 (144,923) (238,626) 0 0 (43,219) 381,654 500,728 0 0 21,101	$                 0 248,171 0 0 0 (105,324) (203,136) 0 0 0 (105,324) 45,035 0 21,400 0	$                   0 0 0 0 (64,320) 0 0 0 0 43,219 0 0 0 0 (21,101)	$                  0 0 0 0 0 0 0 0 0 0 0 0 0 0 0	$        526,577 987,525 0 0 0 (250,247) (441,762) 0 0 0 276,330 545,763 0 21,400 0
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 0 (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) 0 730,124 151,325 7,747 8,198 0 (1,221,311) (482,883) (16,376) (93,439) 0	$                 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0	$       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 0 0 64,320 (174,538) (101,381) 0 0 (23,475) 666,342 197,560 0 0 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)	$                0 0 0 0 0 0 0 0 0 0 0 0 0 0	$                0 0 0 0 0 0 0 0 0 0 0 0 0 0	$   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

82

Exhibit 99.3*

LAS VEGAS FROM HOME.COM ENTERTAINMENT INC.

MARKETABLE SECURITIES - OTHER INVESTMENTS

Schedule IV

 December 31, 2007

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, 2007:

Total Investments

=   $ 0

83