AWI Makes Its Final Exit

6 June 2002

Nearly two years after being ordered to sell its online sports betting subsidiary, Las Vegas-based sports book operator American Wagering Inc. (AWI) has found a buyer. Euraust, the Perth-based company formerly known as My Casino, will purchase MegaSports, AWI's Australia-based Internet and phone betting operation for AU$300,000 plus a royalty.

Through its ownership of MegaSports, which is based in the Australian Capital Territory, American Wagering was the first Nevada-licensed operator to enter the Internet gambling space. It was only allowed by the Nevada Gaming Commission to do so, however, under the condition that it didn't accept bets from customers located in Nevada. In July 1999, the Nevada State Gaming Control Board set up a sting operation in which board members located in Nevada, claiming they were located in Canada, signed up and placed wagers using the site. The board issued a complaint in December 1999 calling for disciplinary action. As part of a settlement over 13 counts of illegal gambling activity, the company agreed in July 2000 to pay a US$10,000 fine and signed a stipulation requiring it to sell the MegaSports holding. The deadline for selling the subsidiary was extended numerous times following the settlement.

During the two years of negotiations with buyers, American Wagering CFO Tim Lockinger said, "our handle on MegaSports remained flat, but we were able to avoid serious losses."

"Although, we negotiated with other companies," Lockinger continued, "Euraust was the first company that made an acceptable offer. We are now looking forward to focusing on the Nevada land-based casino market."

In February 2001, AWI reached a deal to sell MegaSports to Forward Publishing for AU$250,000, however the deal didn't go through.

Euraust entered online gaming two years ago with the acquisition of an Internet casino operation based in Vanuatu, but the company fell victim to an Internet fraud scam, which forced it to close.

The scammers, believed to have been located in Indonesia, placed bets using stolen credit cards and had the winnings paid to other accounts.

The scam cost the company an estimated $4 million before it closed its operations. With a remaining $3 million from previous ventures, Euraust is attempting to reenter the online casino operating business. The company is trying to disavow all prior dealings with the online market so it can resume online endeavors with a clean slate and a concentrated focus.