AMERICAN WAGERING, INC
                    CONSOLIDATED STATEMENTS OF OPERATIONS
             FOR THE THREE MONTHS ENDED OCTOBER 31, 2000 AND 1999

    (UNAUDITED)                                         2000           1999

    REVENUES                                      $3,211,857     $3,684,758

    COSTS AND EXPENSES

    DIRECT COSTS AND EXPENSES                      1,933,087      2,495,495
    RESEARCH AND DEVELOPMENT                         165,999        277,776
    SELLING, GENERAL AND ADMINISTRATIVE              584,303        905,566
    DEPRECIATION AND AMORTIZATION                    191,703        212,910

                                                   2,875,092      3,891,747

    OPERATING INCOME (LOSS)                          336,765      (206,989)

    OTHER INCOME (EXPENSE)
    INTEREST INCOME                                    3,858         13,730
    OTHER EXPENSE                                      (293)       (38,722)
    INTEREST EXPENSE                                (36,908)       (39,296)
                                                    (33,343)       (64,288)

    INCOME (LOSS) BEFORE UNUSUAL
     OR INFREQUENT ITEMS                             303,422      (271,277)

    LITIGATION JUDGEMENT AND SETTLEMENTS             415,210             --

    INCOME (LOSS) FROM CONTINUING OPERATIONS         718,632      (271,277)

    DISCONTINUED OPERATIONS

    INCOME (LOSS) FROM OPERATIONS                   (39,492)          9,938
    LOSS ON DISPOSAL                               (134,329)             --


                                                   (173,821)          9,938

    NET INCOME (LOSS)                                544,811      (261,339)

    PREFERRED STOCK DIVIDEND REQUIREMENTS           (38,067)       (42,417)

    NET INCOME (LOSS) AVAILABLE TO
     COMMON SHAREHOLDERS                            $506,744     $(303,756)

     PER SHARE AMOUNTS
      BASIC:
    INCOME (LOSS) FROM CONTINUING OPERATIONS            0.09         (0.04)
    LOSS FROM DISCONTINUED OPERATIONS                 (0.02)             --

    NET INCOME (LOSS) APPLICABLE TO
     COMMON SHAREHOLDERS                                0.06         (0.04)
      DILUTED:
    INCOME (LOSS) FROM CONTINUING OPERATIONS            0.09         (0.04)
    LOSS FROM DISCONTINUED OPERATIONS                 (0.02)             --

    NET INCOME (LOSS) APPLICABLE TO
     COMMON SHAREHOLDERS                                0.06         (0.04)

                            AMERICAN WAGERING, INC
                    CONSOLIDATED STATEMENTS OF OPERATIONS
             FOR THE NINE MONTHS ENDED OCTOBER 31, 2000 AND 1999

    (UNAUDITED)                                         2000           1999

    REVENUES                                      $7,811,606     $8,584,400

    COSTS AND EXPENSES

    DIRECT COSTS AND EXPENSES                      6,049,491      6,057,002
    RESEARCH AND DEVELOPMENT                         720,469        621,018
    SELLING, GENERAL AND ADMINISTRATIVE            2,021,084      2,301,170
    DEPRECIATION AND AMORTIZATION                    622,367        604,719

                                                   9,413,411      9,583,909

    OPERATING LOSS                               (1,601,805)      (999,509)

    OTHER INCOME (EXPENSE)
    INTEREST INCOME                                   17,983         24,273
    OTHER EXPENSE                                   (70,782)         77,018
    INTEREST EXPENSE                               (551,705)      (118,749)
                                                   (604,504)       (17,458)

    LOSS BEFORE UNUSUAL OR INFREQUENT ITEMS      (2,206,309)    (1,016,967)

    LITIGATION JUDGEMENT AND SETTLEMENTS           1,315,210             --

    INCOME (LOSS) FROM CONTINUING OPERATIONS       (891,099)    (1,016,967)

    DISCONTINUED OPERATIONS:

    INCOME (LOSS) FROM OPERATIONS                   (66,235)        234,076
    GAIN (LOSS) ON DISPOSAL                        (134,329)        341,403
                                                   (200,564)        575,479

    NET LOSS                                     (1,091,663)      (441,488)

    PREFERRED STOCK DIVIDEND REQUIREMENTS          (114,930)      (136,771)

    NET INCOME AVAILABLE TO
     COMMON SHAREHOLDERS                        $(1,206,593)     $(578,259)

     PER SHARE BASIC AND DILUTED AMOUNTS

    LOSS FROM CONTINUING OPERATIONS                   (0.11)         (0.13)
    INCOME (LOSS) FROM DISCONTINUED OPERATIONS        (0.03)           0.07
    NET LOSS APPLICABLE TO COMMON SHAREHOLDERS        (0.15)         (0.07)

SOURCE: American Wagering, Inc.