SecProbe.io

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      October 25, 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 October 25, 2005
and have the following additional comments.  Feel free to call us
at
the telephone numbers listed at the end of this letter.

1. We note your response to comment 1 in your letters dated July
6,
2005 and October 25, 2005.  As indicated in Exhibit E of EITF 01-
9,
consideration given by a vendor to a customer may take a variety
of
forms including equity instruments of the vendor.  Example 3 in
Exhibit B and Exhibit D provide examples of the accounting
treatment
for consideration in the form of equity instruments.  Paragraph 13
of
EITF 00-21 prescribes that any separate unit of accounting which
is
required to be recorded at fair value under GAAP should be
recorded
at fair value with the remainder of the arrangement consideration
allocated to the other units of accounting in accordance with
paragraph 12 of EITF 00-21.  Accordingly, please summarize the
impact
on your historical financial statements if you had applied EITF
01-9
and paragraph 13 of EITF 00-21 to the common stock warrants
thereby
reducing the amount attributable to your management service
agreement
and simulators prior to any relative fair value allocation under
paragraph 12.

2. We read your response to comments 3 and 2 in your letters dated
July 6, 2005 and October 25, 2005, respectively, and continue to
believe that you have not demonstrated how you meet the criteria
for
entity-specific or VSOE of fair value.  We understand that your
historical cost of providing maintenance services would be a
component of the consideration given to establishing the
standalone
price for your management service agreement; however, you have not
demonstrated why you believe this price will be accepted in the
marketplace on a standalone basis.  Since your management service
agreement is not currently being sold separately, please support
how
you determined that your historical cost to maintain your existing
simulator fleet is equal to the fair value of your management
service
agreement to a third party, which includes other deliverables in
addition to maintenance services.  Please also tell us how you
determined that it is probable that this price, which is limited
to
the historical cost for only some of the services in your
management
service agreement, will not change before the separate
introduction
of this service into the market place.  Lastly, please explain to
us
when and if you plan to introduce your management service
agreement
into the market on a standalone basis.

3. If you consider your performance obligation under the
management
service agreement to be inconsequential or perfunctory, please
explain to us how you considered each of the factors in SAB Topic
13(A)(3)(c) in reaching this conclusion.

*  *  *  *

	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 10 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.
October 25, 2005
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