SecProbe.io

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Gerald A. Eppner
Direct Dial: (212) 504-6286
Direct Fax: (212) 504-6666
E-Mail: gerald.eppner@cwt.com

December 8, 2004

VIA EDGAR AND OVERNIGHT COURIER

Barbara C. Jacobs, Assistant Director
Division of Corporate Finance
United States Securities and Exchange Commission
450 Fifth Street, N.W.

Washington, D.C. 20549-0409

Re:   PowerHouse  Technologies  Group,  Inc.;  Amendment  No. 2 to  Registration
      Statement on Form SB-2 (File No. 333-118242)

Dear Ms. Jacobs:

On behalf of PowerHouse  Technologies  Group, Inc., a Delaware  corporation (the
"Company"),  we hereby transmit for filing Amendment No. 2 (the  "Amendment") to
the Registration Statement on Form SB-2 (the "Registration Statement") under the
Securities Act of 1933, as amended (the  "Securities  Act"),  and this letter in
response to comments of the Staff of the Securities and Exchange Commission (the
"Commission")  to the  Registration  Statement,  set forth in your letter to Jay
Elliot dated November 23, 2004. To facilitate your review, we have also provided
you with three clean copies and three blacklined copies,  which compare the most
recent  version of the  Registration  Statement  against  Amendment No. 1 of the
Registration  Statement filed on October 27, 2004. The Company,  in consultation
with its legal,  financial and accounting advisors,  have prepared the following
responses  to the  questions  and  comments  the  Staff  has  raised.  For  your
convenience,  we have set forth below in italics your numbered comments in their
entirety,  followed by the responses thereto.  Capitalized terms used herein and
not otherwise defined have the meanings ascribed to such terms in the Amendment.

The Company  registered  8,281,041 shares of common stock, par value $0.0001 per
share (the "Common  Stock"),  pursuant to the  Registration  Statement  filed on
August 13, 2004,  and  registered an additional  954,992  shares of Common Stock
pursuant to Amendment No. 1 filed on October 27, 2004.  This  Amendment does not
register any additional shares of Common Stock.

<PAGE>

Barbara C. Jacobs                     -2-                       December 8, 2004

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.

            Response:

            In  response  to the  Staff's  request,  the Company has updated its
            financial  statements  and  accountants'  consent by  including  its
            financial  statements  for the six months ended  September 30, 2004,
            and a new  accountants'  consent,  dated as of August 8,  2004.  The
            updated  financial  statements are the same as those included in the
            Company's  quarterly  report on Form 10-QSB that was filed under the
            Securities Exchange Act of 1934 (the "Exchange Act") on November 16,
            2004.

2.    Please  update  your  registration  statement  to reflect  the trial court
      findings in the Proctor Litigation.

            Response:

            In response to the Staff's request, on page 38 of the Amendment, the
            Company has updated the "Legal  Proceedings"  section of the amended
            Registration  Statement to reflect the trial court's findings in the
            Proctor Litigation. This disclosure is consistent with the Company's
            prior  disclosure  in its  Form  10-QSB  for  the six  months  ended
            September 30, 2004,  and Form 8-K that was filed with the Commission
            under the Exchange Act on November 16, 2004.

General

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 your 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.

            Response:

            In response to the Staff's  request,  the Company  wishes to clarify
            the  situation  by  noting  that  the  Registration   Statement  and
            Amendment  No. 1  register  a total of  9,236,033  shares  of Common
            Stock.  Footnote 1 to the Fee Table  states  that,  pursuant  to the
            terms of separate registration rights agreements between,  first the
            Company  and certain  purchasers  of the  Company's  Series A Senior
            Units and, second, the Company and the

<PAGE>

Barbara C. Jacobs                     -3-                       December 8, 2004

            former  stockholders  of First Person  Software,  Inc.,  the Company
            agreed to  register  1.5 times the sum of the  following  securities
            that are also included in the Registration Statement:  (i) 3,726,684
            shares of Common Stock...; (ii) 1,220,233 shares of Common Stock...;
            (iii)  68,559  shares of Common  Stock...;  (iv)  264,775  shares of
            Common  Stock...;  and (v) the  re-sale of 217,938  shares of Common
            Stock.  The  total  number of  shares  of  Common  Stock  registered
            pursuant to Footnote 1 to the Fee Table is,  therefore,  8,247,283.5
            (3,726,684 + 1,220,233 + 68,559 + 264,775 + 217,938 = 5,498,189, and
            5,498,189 * 1.5 = 8,247,283.5).

            Footnote  2 to the Fee  Table  states  that  the  Company  also  is,
            therefore, registering 988,689 additional shares of Common Stock, in
            order that the total  number of  registered  shares  would  properly
            reflect the above calculation.  Then, the aggregate number of shares
            of Common Stock registered is, therefore, 9,235,972.5 (8,247,283.5 +
            988,689 = 9,235,972.5).  The cover page of the prospectus  discloses
            that the Company is  registering  9,236,033,  computed as aforesaid,
            and the registration fee was calculated based upon this number.  The
            Company  inadvertently  registered 60.5 additional  shares of Common
            Stock.

            Additionally,  the  Company has  indicated  in Footnote 4 of the Fee
            Table that it has relied on  paragraph  (a) of Rule 457 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  paragraphs  after the first three sentences should be deleted
      or you should  supplementally  explain why the  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.

            Response:

            In  response  to the  Staff's  request,  the Company has limited the
            cover page to a brief  description  of the  information  required by
            Item 501 of Regulation S-B and other  information  that is key to an
            investment  decision.  The  information  that  had  previously  been
            included  on the  cover  page of the  Prospectus  has been  moved to
            appropriate parts of the Prospectus.

5.    We refer to the final  sentence of the first  paragraph.  Your  disclosure
      references  the use of a  "supplemental  prospectus"  that you  intend  to
      provide

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Barbara C. Jacobs                     -4-                       December 8, 2004

      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.

            Response:

            In response  to the  Staff's  request,  the  Company  confirms  that
            pursuant to Rule 416 of the Securities  Act, it would be required to
            file  a new  registration  statement,  rather  than  a  supplemented
            prospectus,  in the event that its good faith estimate of the number
            of shares of Common  Stock  issuable  to the  Selling  Stockholders,
            should it elect to pay to them certain  dividends on its outstanding
            Series A Senior  Convertible  Preferred  Stock in "kind" rather than
            cash,  is  insufficient  to have the  shares  so  issued to pay such
            dividends in "kind" convertible fully registered securities.

6.    We refer you to the reference to the Proctor  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.

            Response:

            In  response  to the  Staff's  request,  the Company has removed any
            reference  to the  Proctor  Litigation  from the  cover  page of the
            Prospectus.

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.

<PAGE>

Barbara C. Jacobs                     -5-                       December 8, 2004

            Response:

            In response to the Staff's request, on page 10 of the Amendment, the
            Company  has  provided  a  new  risk  factor  with  respect  to  the
            defendants' appeal rights in the Proctor Litigation and has provided
            a materially  complete  description  of the  potential  impact of an
            adverse result therein.

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-dealer or other financial
      institutions remain unclear. Please revise to more completely describe the
      types of hedging  transactions  that your selling  stockholders  may enter
      into.

            Response:

            In response to the Staff's request,  the Company has been advised by
            the Selling Stockholders that the following paragraph,  contained on
            page 17 of the Amendment,  fully and accurately sets forth the types
            of hedging  transactions  which the Selling  Stockholders  may enter
            into with respect to the common stock being registered:

            "In connection  with the sale of Common Stock or interests  therein,
            we have been advised by the Selling Stockholders that they may enter
            into hedging  transactions  with  broker-dealers  or other financial
            institutions,  who may in turn  engage in short  sales of the Common
            Stock in the  course of  hedging  the  positions  they  assume.  The
            Selling  Stockholders may also sell shares of Common Stock short and
            deliver the Common  Stock  covered by this  Prospectus  to close out
            their  short  positions,  or loan or  pledge  the  Common  Stock  to
            broker-dealers  who in turn may sell these  securities.  The Selling
            Stockholders may also enter into option or other  transactions  with
            broker-dealers  or other  financial  institutions or the creation of
            one or more derivative  securities that require the delivery to such
            broker-dealer  or other  financial  institution of shares offered by
            this Prospectus,  which shares such broker-dealer or other financial
            institution may resell pursuant to this Prospectus (as  supplemented
            or amended to reflect such transaction)."

            Based on our second  discussion  with Mr.  Werbitt of the Staff,  we
            believe no further revisions are necessary to respond to the Staff's
            comments.

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 to Instruction 3 to
      Item 201 of Regulation S-K.

            Response:

<PAGE>

Barbara C. Jacobs                     -6-                       December 8, 2004

            In response to the Staff's  request,  as indicated on page 19 of the
            Amendment,  the  Company  has  amended  the table to  properly  give
            retroactive  effect to the 1:122 reverse stock split for all periods
            presented.

Descriptions of Securities, page 36

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 whether counsel has
      rendered a legal  opinion.  If counsel  rendered an opinion,  it should be
      references 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 consent of counsel
      is not necessary with respect to those references.

            Response:

            In response to the Staff's request, on page 38 of the Amendment, the
            Company has removed the reference to the Company's consultation with
            counsel  with  respect to the  Proctor  Litigation.  This  became an
            academic question once the trial court's judgment was rendered.

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 Designation or
      supplementally  advice. If revision to your di