SecProbe.io

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      June 20, 2005

Mail Stop 4561

VIA U.S. MAIL AND FAX (317) 298-8924

Mr. William R. Donaldson
Chief Executive Officer and
   Chief Financial Officer
Interactive Motorsports and Entertainment Corp.
5624 West 73rd Street
Indianapolis, IN  46278

Re:	Interactive Motorsports and Entertainment Corp.
Form 10-K for the year ended December 31, 2004
      Filed March 29, 2005
      File No. 000-30771

Dear Mr. Donaldson:

      We have reviewed your response letter dated June 10, 2005
and
have the following 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 look forward to working
with
you in these respects.  We welcome any questions you may have
about
our comments or any other aspect of our review.  Feel free to call
us
at the telephone numbers listed at the end of this letter.

1. We read your response to comment 1 and note that you recorded
the
warrant transaction as a sale of warrants to Dolphin by allocating
a
portion of the transaction proceeds toward the purchase of the
warrants.  The consideration given by you to Dolphin in the form
of
common stock warrants appears to fall in the scope of EITF 01-9 as
contemplated in paragraph 10 and Exhibit 01-9B, Example 3 and
Exhibit
01-9D.  Accordingly, please tell us the following:

a. The fair value and assumptions used to estimate the fair value
of
your common stock warrants;

b. How you recorded the allocation of cash received to common
stock
warrants, your management agreement, and simulators in your
financial
statements;

c. The impact on your historical financial statements if you had
applied EITF 01-9 to reduce the amount attributed to your
management
service agreement and simulators prior to any allocation under
paragraphs 12 and 13 of EITF 00-21.

2. Notwithstanding your response to the above comment, please
explain
your basis for recognizing income on the sale of an equity
instrument.  Also, tell us how you are accounting for these
warrants
on the balance sheet under EITF 00-19 with the relevant support
for
that accounting treatment.

3. We read your response to comment 3 and note that your objective
and reliable evidence of fair value of your management service
agreement is based on your historical cost to maintain your
existing
fleet.  Since this does not meet the criteria for entity-specific
or
vendor specific objective evidence of fair value, we reissue our
prior comment 3.  We wish to remind you that VSOE of fair value is
limited to (a) the price charged for the deliverable when it is
sold
separately or (b), for a deliverable not yet being sold
separately,
the price established by management having the relevant authority
(it
must be probable that the price, once established, will not change
before the separate introduction of the deliverable into the
marketplace).  Please tell us how you meet the criteria in
paragraph
9(b) in determining that the delivered item meets the criteria as
a
separate unit of accounting.  In addition, please show us how you
allocated the arrangement consideration between the delivered item
and the undelivered item.  Refer to paragraph 16 of EITF 00-21 and
paragraph 10 of SOP 97-2.

4. We note that you did not record any expense associated with the
guarantees provided by your principal shareholders.  Please
explain
to us in sufficient detail how you determined that these
guarantees
have no value.  For example, would you have been able to obtain
this
financing under the same terms without your principal shareholder
guarantees?

*  *  *  *

	We urge all persons who are responsible for the accuracy and
adequacy of the disclosure in the filings reviewed by the staff to
be
certain that they have provided all information investors require
for
an informed decision.  Since the company and its management are in
possession of all facts relating to a company`s disclosure, they
are
responsible for the accuracy and adequacy of the disclosures they
have made.

	In connection with responding to our comments, please
provide,
in writing, a statement from the company acknowledging that

* the company is responsible for the adequacy and accuracy of the
disclosure in the filings;

* staff comments or changes to disclosure in response to staff
comments do not foreclose the Commission from taking any action
with
respect to the filings; and

* the company may not assert staff comments as a defense in any
proceeding initiated by the Commission or any person under the
federal securities laws of the United States.
      In addition, please be advised that the Division of
Enforcement
has access to all information you provide to the staff of the
Division of Corporation Finance in our review of your filings or
in
response to our comments on your filings.

	You may contact Josh Forgione, at (202) 551-3431, or me, at
(202) 551-3403, if you have questions. Please respond to the
comments
included in this letter within ten business days or tell us when
you
will provide us with a response.  Please file your response on
EDGAR.

								Sincerely,

      Steven Jacobs
      Accounting Branch Chief
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Mr. William R. Donaldson
Interactive Motorsports and Entertainment Corp.
June 20, 2005
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