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American Wagering, Inc. Announces Year End Results

21 April 2000

LAS VEGAS, Nevada, April 20 (Press Release) - American Wagering, Inc. (Nasdaq: BETM) today yesterday financial results for the fiscal year ended January 31, 2000.

Revenues increased 35.3% to $13,379,000 versus revenues of $9,892,000 in the year ago period. The increase in revenues was primarily attributed to additional revenues of $1,772,000 from the Company's Systems segment and additional Wagering revenues of $1,644,000. Net loss decreased 48.1% to a loss of $815,000 or $.13 per share for the fiscal year ended January 31, 2000 as compared with a net loss of $1,571,000 or $.21 per share in the year ago period.

Revenues from wagering operations rose 27% to $7,734,000 for the fiscal year ended January 31, 2000 as compared with $6,090,000 for the year ago period. The increase was primarily due to an 11% increase in handle (the total amount wagered at the Company's sports and race books) to $120,305,000 from $108,412,000 in the year ago period. The Company's net win percentage was 6.1% in fiscal 2000 as compared with 5.4% in fiscal 1999.

The increase in handle was primarily attributed to MegaSports Australia which was in operation for the full year of Fiscal 2000 and increased its customer base. Operating profits in wagering operations were negatively affected by a negative net win percentage at Megasports Australia.

Revenues from U.S. wagering operations were $8,140,000 for the year ended January 31, 2000, an increase of 33.7% from revenues of $6,086,000 in the year ago period.

Revenues from System operations were $4,930,000 for fiscal 2000, an increase of 56.1% from $3,158,000 in the year ago period. The increase was primarily generated by a 57.8% increase in CBS operations revenues to $4,624,000 due to increased equipment and ticket paper sales related to new casino openings.

The net loss of $815,000, after a net gain from discontinued operations of $555,000 and a charge of $45,000 for the cumulative effect of an accounting change, was primarily a result of the start up of Keno operations and continuing research and development costs for future product developments. The Company's Keno operations began in August of 1999. For the year ended January 31, 2000, Keno incurred net start up costs of $832,000.

Research and development costs increased by 44.9% in the fiscal year ended January 31, 2000 to $833,000. The increase in research and development costs was attributed to new product development. Also contributing to the net loss was $677,000 in losses in the Company's MegaSports U.S. pari-mutuel operations.

The Company elected to discontinue MegaSports U.S. operations in March of 2000 to focus more on broader market penetrating operating ventures.

Commenting on the fiscal 2000 earnings report, American Wagering CEO Victor Salerno said, "The Company continued the strong revenue growth of the past few years, led by our core U.S. wagering operations. The Company will initiate various programs in fiscal year 2001 aimed at building cash liquidity which can be used to fund new product developments efforts. The uncertainty created by the proposed legislation which could ban wagering on amateur athletic events requires the Company to reassess the sources of its future revenue growth. We will increase our research and development efforts in an attempt to create new and different products as new revenue sources. Our recent announcement of the Company's approval as a supplier to the casino industry in Atlantic City, allowing the Company to market its keno product in that market, is an example of this. We hope to update the investment community in the near future on other approvals and new contracts."

American Wagering, Inc. owns and operates Leroy's Horse and Sports Place, the licensed bookmaker with the largest number of sports book locations (49) in the state of Nevada; CBS, the dominant supplier of sports equipment and software in Nevada and creator and operator of Mega$ports; and AWI Keno, Inc. which is the systems operator for interlinked Casino games. The Company also owns and operates an Australian subsidiary which operate Mega$ports on the Internet.

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