SecProbe.io

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MAIL STOP 4-6

November 23, 2004

Jay Elliot
Powerhouse Technologies Group, Inc.
2694 Bishop Drive, Suite 270
San Ramon, California 94583

Re:	Powerhouse Technologies Group, Inc.
	Registration Statement on Form SB-2/A
	File No. 333-118242
	Filed on October 27, 2004

Dear Mr. Elliot,

This is to advise you that we limited our review of the above
captioned registration statement to the matters identified below and
have the following comments.  If you disagree, we will consider your
explanation as to why our comments are inapplicable or why revisions
are unnecessary.  Please be as detailed as necessary in your
explanation.  Please file a supplemental response.  After reviewing
this information, we may or may not raise additional comments.

	Please understand that the purpose of our review process is to
assist you in your compliance with the applicable disclosure
requirements and to enhance the overall disclosure in your filing.
We welcome any questions you may have about our comments or on any
other aspect of our review and look forward to working with you.
Feel free to call us at the telephone numbers listed at the end of
this letter.

Form SB-2

General
1. Please update your financial statements and accountants` consent
pursuant to Item 310(g) of Regulation S-B and Item 302 of Regulation
S-T, respectively.
2. Please update your registration statement to reflect the trial
court findings in the Proctor Litigation.

Fee Table
3. We note that according to the footnotes to your fee table it
appears that you are registering 6,487,878 shares of common stock.
However, the cover page of your prospectus discloses that you are
registering 9,236,033 shares.  Please revise to reconcile or
supplementally advise.  Additionally, in footnotes to the fee table
please clarify the paragraph of Rule 457 you are relying upon in
computing the filing fee.
Prospectus Cover Page, page 1
4. Please revise your cover page to only include information that is
required by Item 501 and/or is "key" to an investment decision.  For
example, all of the initial paragraph after the first three sentences
should be deleted or you should supplementally explain why that
additional information is "key" to an investment decision.  Also,
delete the first two sentences of the fourth paragraph or
supplementally explain why those sentences must be retained as "key"
to an investment decision.  In this regard, supplementally tell us
why the fact that the company may or may not receive proceeds from
warrant exercises in the future is significant information that has
to be presented on the cover page.  Alternatively, it appears that
you may adequately disclose this information in the summary, with
further details in the body of the prospectus.
5. We refer you to the final sentence of the first paragraph.  Your
disclosure references the use of a "supplemental prospectus" that you
intend to provide in the event the number of shares needed to
discharge PIK dividend obligations exceeds the number included in the
fee table for PIK dividend issuances.  Be advised that a new
registration statement would generally be required with respect to
the issuance of any such additional shares.  In what circumstances do
you believe a "supplemented prospectus" could be used for this
purpose?  Please revise your cover page and supplementally confirm
your understanding.
6. We refer you to the reference to the Procter litigation.  If you
continue to include a reference to the litigation on your cover page,
supplementally advise of the basis for your belief that it is "key"
to investors.  Also, if you continue to refer to this litigation,
describe in concise terms the nature of this litigation and include
information on the cover page that will alert potential investors to
what is truly "key" to an investment decision concerning the shares
with respect to this litigation.

Risk Factors, page 5

Litigation Risks, page 9
7. In light of the fact that the defendant`s appeal rights have not
yet expired, please revise the risk factor addressing the Proctor
Litigation to include its own subheading that specifically discloses
the risk to investors if the defendants successfully appeal the
judgment of November 16, 2004.  Also, your risk factor should include
a brief description of the litigation and a materially complete
description of its potential "adverse impact" on the market for your
securities, your ability to raise funds and the specific impact on
your shareholders.  If you choose not to include a risk factor
addressing the Proctor litigation in your amendment, supplementally
advise of the basis for your decision.

Plan of Distribution, page 15
8. We reissue prior comment 8.  The types of hedging transactions
that your selling stockholders may enter into with broker-dealers or
other financial institutions remain unclear.  Please revise to more
completely describe the types of hedging transactions that your
selling stockholders may enter into.
Market for Common Equity and Related Stockholder Matters, page 18
9. Please revise table to give retroactive effect to the 1:122 share
reverse stock split for all periods presented.  You may refer you to
Instruction 3 to Item 201 of Regulation S-K.
Description of Securities, page 39
10. We note that with respect to the Proctor litigation, you disclose
that the company`s conclusion as to the illegality and invalidity of
67% of the outstanding shares was reached "after consulting with
counsel".  If you intend to retain references to counsel, please
expand your disclosure to explain whether counsel has rendered a
legal opinion.   If counsel rendered an opinion, it should be
referenced as such and filed as an exhibit.  Alternatively, if
counsel did not render an opinion, disclose the nature and certitude
of the assurances received from counsel.  Also, supplementally advise
why a consent of counsel is not necessary with respect to these
references.
11. You disclose that the Senior A Preferred Stock shall be initially
converted at the rate of one share of common stock for each share of
Senior A Preferred Stock.  Please reconcile this disclosure with the
conversion formula from Section 4 of your Certificate of Designations
or supplementally advise.  If revision to your disclosure is
necessary, your disclosure should clearly present the manner in which
the number of shares of common stock underlying the Senior A
Preferred Stock shall be determined and your disclosure should also
explain the potential fluctuations in the number of shares of common
stock that may be issued upon conversion.  Further, revise to
disclose the conversion price.
12. Please revise to provide a materially complete description of the
five-year warrants discussed on page 11 of your prospectus.  This
description should disclose the exercise price and an explanation of
the formula used to derive the number of shares of common stock
underlying the warrants.  In this regard, your disclosure should
clearly explain how the number of shares of common stock to be
received by your selling stockholders might fluctuate.
Form 10-QSB for the Period Ended September 30, 2004

Item 3:  Controls and Procedures, page 15
13. We note that you disclose that your Chief Executive Officer and
Principal Financial and Accounting Officer concluded that
Powerhouse`s "disclosure controls and procedures will become
effective."  Are your controls and procedures not effective?  If so,
please revise to disclose the material weaknesses in your controls
and procedures.  In this regard, describe the events that led to the
material weakness in your controls and procedures.  Your revision
should address when the event(s) occurred, when the event(s) was
discovered and the circumstances that led to the discovery of the
event(s).  Further, is Powerhouse taking steps to correct the
material weakness in its controls and procedures so that they will
become effective?  Alternatively, supplementally advise why your
disclosure states that your "disclosure controls and procedures will
become effective."
Closing Comments

Any requests for acceleration should be submitted after resolution of
substantially all outstanding comments and should be provided
approximately 48 hours before the desired time of effectiveness.

 	File a pre-effective amendment in response to these comments.
Provide a cover letter keying your responses to the comments, and
provide any requested supplemental information.  If you believe
complying with these comments is not appropriate, tell us
why in your letter.  We may have comments after reviewing your
revised materials and your responses.

 	Please contact Jeffrey B. Werbitt at (202) 942-1957 or Mark P.
Shuman at (202) 942-1818 with any questions.

								Sincerely,

								Barbara C. Jacobs
								Assistant Director

cc:	Via facsimile: (212) 504-6666
	Gerald A. Eppner, Esquire
	Cadwalader, Wickersham & Taft LLP
	100 Maiden Lane
	New York, New York

Powerhouse Technologies Group, Inc.
Form SB-2
November 23, 2004
Page 1 of 5

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