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American Wagering Returns to Profitability

Revenues for the quarter ended October 31, 2000 were $3,212,000 compared to $3,685,000 in the year ago period. Operating income for the current quarter rose to $337,000 compared to a loss of $207,000 for the quarter ended October 31, 1999.

The Company experienced a decline in both total wagers (handle) and win percentage in the current quarter principally due to increased competition. Operating income improvement was a result of management efforts in implementing cost reduction measures.

Net Income for the current quarter was $545,000 or $0.06 per share compared to a loss of $261,000 or ($0.04) per share a year ago. Net income for the current quarter included a gain from litigation of $415,000 and a net loss on the closure of the casino operations of $174,000.

For the 9 months ended October 31, 2000, revenues were $7,812,000 versus $8,584,000 in the year ago period. Revenues from wagering operations were affected by a decline in total wagers and in win percentage. Also, revenues from the systems segment declined due to lower equipment sales to new race and sports book installations. Operating loss for the current 9 months was $1,602,000 compared to a loss of $1,000,000 last year. In addition to the decline in revenues, the Company continues to experience operating losses in its keno segment.

The net loss for the 9 months ended October 31, 2000 was $1,092,000 or $0.15 per share versus a loss of $441,000 or $0.07 per share a year ago. Net loss for the current year period includes gains from litigation of $1,315,000 and a net loss of $201,000 from the closure of the Company's casino segment. The year ago period included a gain of $575,000 from the closure of the Company's hotel operation.

Commenting on the results, American Wagering Inc. Chairman and CEO Victor Salerno said, ``This most recent quarter accomplished quite a few things for the Company. We returned to profitability by focusing on our core business competency, implementing cost saving measures and eliminating unprofitable operations. We plan to continue the progress we made this quarter throughout the rest of the year and will keep the investment community abreast of our progress.''

American Wagering, Inc. owns and operates Leroy's Horse and Sports Place, the licensed bookmaker with the largest number of sports book locations (47) in the state of Nevada; CBS, the dominant supplier of sports equipment and software in Nevada and creator and operator of Mega$ports; and AWI Keno, Inc., which is the systems operator for interlinked Keno games. The Company also owns and operates an Australian subsidiary which operates Mega$ports on the Internet.

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