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American Wagering Reports Improved Results

18 December 2001

LAS VEGAS –- (Press Release) -- American Wagering, Inc. (OTC Bulletin Board: BETM) today announced the financial results through the third quarter. In the third quarter, the Company reported a net income of $114,842, or $0.01 per share, thereby increasing the total net income for the nine months ending October 31, 2001 to $234,996, or $0.02 per share. This is compared to a net loss of ($1,091,663), or ($0.15) per share, for the nine months ending October 31, 2000.

Revenue: Revenues for the nine months ended October 31, 2001 were $8,401,258; this is an increase of $526,085, or 6.7%, from the nine months ended October 31, 2000. The increase is attributed to an increase of $486,842, or 13.9%, in CBS revenue from sales of the newly designed T-3 wagering terminal and an increase of $179,939, or 4.2%, from the Leroy's wagering operations.

The increases from CBS and Leroy's revenues were offset by decreased revenues from the Mega$ports (Australia) and Keno operations.

Operating Costs and Expenses: Operating costs and expenses for the nine months ended October 31, 2001 were $8,143,353; this is a decrease of ($1,436,855), or (15.0%), from the nine months ended October 31, 2000.

The decrease in operating costs and expenses is a result of the Company's continuing efforts to focus on its core competencies and businesses.

Other Income and Expenses: Other income and expenses for the nine months ended October 31, 2001 resulted in a net expense of ($9,937) primarily from interest payments on long term debt.

For the nine months ended October 31, 2000, other income and expenses resulted in a net income of $813,936 primarily from one-time litigation judgements and settlements.

Discontinued Operations: During the nine months ended October 31, 2000, the Company recorded a net loss of ($200,564) from discontinued operations. During the nine months ended October 31, 2001, the Company did not have any discontinued operations.

September 11, 2001: On September 11, 2001, the United States was subjected to extensive terrorist attacks likely to have far-reaching effects on economic activity in the country for an indeterminate period.

The near-term economic impact of these tragic events on the Company resulted in lower than anticipated revenues during the third quarter due to the cancellation of numerous racing and sporting events after the terrorist attacks.

In addition, the professional football championship game will not be played until February of 2002. As such, results from wagering activities on this sporting event will be reported in the fiscal year ending January 31, 2003 rather than the current fiscal year ending January 31, 2002; this is likely to have the effect of reducing projected revenues for the current fiscal year. The long-term economic impact on the southern Nevada economy and the Company's business cannot be predicted at this time but may be substantial.

Commenting on the results, Victor Salerno, CEO/COO and Chairman of the Board of American Wagering said, ``The terrible events of the past few months have proven the unity and spirit of the American people. We here at American Wagering are proud to embrace these ideals and do our part to provide a sense of security to our employees and our stockholders.

"Although the cancellation of sporting events during September resulted in lower than expected revenues, the Company maintained its full work force while strengthening our resolve to meet our long-term business plan and return the Company to profitability. As a result of these efforts and the dedication of our staff, the Company was able to increase its revenues and reduce its expenses. The overall growth and performance of the Company during these difficult economic times proves the viability of American Wagering as a company and validates our business plan.''

American Wagering, Inc. owns and operates a number of subsidiaries including:

Leroy's Horse and Sports Place: Leroy's owns and operates 43 sports books licensed by the Nevada Gaming Commission, giving it the largest number of books in the state.

Computerized Bookmaking Systems: CBS is the dominant supplier of computerized sports wagering systems in the state of Nevada and is the creator of Mega$ports, a pari-mutuel sports system.

AWI Keno: AWI Keno is licensed by the Nevada Gaming Commission as an operator of an inter-casino linked keno game. AWI Keno currently operates the keno game at three locations in the state of Nevada.

Secured Telephone Operating Platform: STOP is the creator and operator of a system designed to ensure that telephone calls for account wagering originate from within the state of Nevada. STOP currently has four sports book operations, including Leroy's, utilizing the system.

Mega$ports (ACT): Mega$ports (ACT) operates a sports book on the Internet and via telephone from its headquarters in Canberra, ACT, Australia.

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