**FORM      10-QSB**

| [X]                | Quarterly                Report pursuant to Section 13 or 15(d) of the Securities Exchange                Act of                1934 |
|--------------------|--------------------------------------------------------------------------------------------------------------------------------------|
|               |                                                                                                                                 |
|               | For                the quarterly period ended: **April                30, 2005**                                                     |
|               |                                                                                                                                 |
| [                ] | Transition                Report pursuant to 13 or 15(d) of the Securities Exchange Act of                1934                       |
|               |                                                                                                                                 |
|               | For                the transition period ___________ to                __________                                                    |
|               |                                                                                                                                 |
|               | Commission                File Number: **000-20685**                                                                                 |

**AMERICAN      WAGERING, INC.**

| **Nevada**                                                                    | **                      88-0344658** |
|-------------------------------------------------------------------------------|--------------------------------------------------------------------|
| (State                or other jurisdiction of incorporation or organization) | (IRS                Employer Identification No.)                   |

| **675                Grier Drive, Las Vegas, Nevada 89119** |
|-------------------------------------------------------------|
| (Address                of principal executive offices)     |

| **702-735-0101**                                                                                                 |
|------------------------------------------------------------------------------------------------------------------|
| (Issuer’s                telephone number)                                                                 |
|  _______________________________________________________________                                            |
| (Former                name, former address and former fiscal year, if changed since last                report) |

**7,925,323      shares of Common Stock as of June 3, 2005**

----

***Table          of Contents***

**TABLE      OF CONTENTS**

**PART      I - FINANCIAL INFORMATION**

| **ITEM** |                                                      | **PAGE** |
|----------|-----------------------------------------------------------|----------|
|     |                                                      |     |
| 1        | Financial                Statements                       | 3        |
|     |                                                      |     |
|     | Consolidated                Balance Sheets                | 3        |
|     |                                                      |     |
|     | Consolidated                Statements of Operations      | 4        |
|     |                                                      |     |
|     | Consolidated                Statements of Cash Flows      | 5        |
|     |                                                      |     |
|     | Notes                to Consolidated Financial Statements | 6        |
|     |                                                      |     |
| 2        | Management’s                Discussion And Analysis | 12       |
|     |                                                      |     |
| 3        | Controls                and Procedures                    | 18       |

**PART      II - OTHER INFORMATION**

| **ITEM** |                                                                                      | **PAGE** |
|----------|-------------------------------------------------------------------------------------------|----------|
|     |                                                                                      |     |
| 1        | Legal                Proceedings                                                          | 20       |
|     |                                                                                      |     |
| 2        | Unregistered                Sales of Equity Securities and Use of                Proceeds | 21       |
|     |                                                                                      |     |
| 3        | Defaults                Upon Senior Securities                                            | 21       |
|     |                                                                                      |     |
| 4        | Submission                of Matters to a Vote of Security                Holders         | 21       |
|     |                                                                                      |     |
| 5        | Other                Information                                                          | 21       |
|     |                                                                                      |     |
| 6        | Exhibits                                                                                  | 22       |

----

***Table          of Contents***

**Part      I - Financial Information **

**Item      1. Financial Statements**

**AMERICAN      WAGERING, INC. AND SUBSIDIARIES**

**CONSOLIDATED      BALANCE SHEETS**

|                                                                                                                                           |   | **April                30, 2005 (Unaudited)** |          |                **January                31, 2005** |        |
|------------------------------------------------------------------------------------------------------------------------------------------------|--------|-----------------------------------------------|---------------|---------------------------------------------------------|--------|
| **ASSETS**                                                                                                                                     |   |                                          |          |                                                    |   |
| Cash                and Cash Equivalents                                                                                                       |   | $                                             | 2,827,571     |                                                    | $      | 3,998,851 |
| Restricted                Cash                                                                                                                 |   |                                          | 1,177,341     |                                                    |   | 1,238,159 |
| Accounts                Receivable, net of doubtful accounts allowance                                                                         |   |                                          | 555,716       |                                                    |   | 108,720 |
| Notes                Receivable                                                                                                                |   |                                          |          |                                                    |   | 620,000 |
| Inventories                                                                                                                                    |   |                                          | 322,688       |                                                    |   | 348,755 |
| Deferred                Tax Assets, net                                                                                                        |   |                                          | 433,918       |                                                    |   | 440,481 |
| Prepaid                Expenses and Other Current Assets                                                                                       |   |                                          | 424,585       |                                                    |   | 419,434 |
| **TOTAL                CURRENT ASSETS**                                                                                                        |   |                                          | **5,741,819** |                                                    |   | **7,174,400** |
| Property                and Equipment, net                                                                                                     |   |                                          | 1,696,207     |                                                    |   | 1,685,932 |
| Goodwill                                                                                                                                       |   |                                          | 103,725       |                                                    |   | 103,725 |
| Other                Assets                                                                                                                    |   |                                          | 332,069       |                                                    |   | 322,209 |
| **TOTAL                ASSETS**                                                                                                                |   | **$**                                         | **7,873,820** |                                                    | **$**  | **9,286,266** |
|                                                                                                                                           |   |                                          |          |                                                    |   |   |
| **LIABILITIES                AND STOCKHOLDERS’ EQUITY**                                                                                  |   |                                          |          |                                                    |   |   |
| CURRENT                LIABILITIES                                                                                                             |   |                                          |          |                                                    |   |   |
| Current                Portion of Long-Term Debt                                                                                               |   | $                                             | 162,185       |                                                    | $      | 35,473 |
| Accounts                Payable                                                                                                                |   |                                          | 652,464       |                                                    |   | 676,232 |
| Accrued                Expenses                                                                                                                |   |                                          | 903,336       |                                                    |   | 1,035,750 |
| Accrued                Preferred Stock Dividends                                                                                               |   |                                          |          |                                                    |   | 213,400 |
| Unpaid                Winning Tickets                                                                                                          |   |                                          | 610,462       |                                                    |   | 801,074 |
| Customer                Deposits and Other Current Liabilities                                                                                 |   |                                          | 768,702       |                                                    |   | 1,036,786 |
| **TOTAL                CURRENT LIABILITIES**                                                                                                   |   |                                          | **3,097,149** |                                                    |   | **3,798,715** |
|                                                                                                                                           |   |                                          |          |                                                    |   |   |
| LONG-TERM                DEBT, less current portion                                                                                            |   |                                          | 282,988       |                                                    |   | 93,766 |
| LVGI                LITIGATION PAYABLE                                                                                                         |   |                                          |          |                                                    |   | 788,061 |
| RACUSIN                LITIGATION PAYABLE                                                                                                      |   |                                          | 1,672,249     |                                                    |   | 1,972,249 |
| OTHER                LONG-TERM LIABILITIES                                                                                                     |   |                                          | 1,561,521     |                                                    |   | 1,643,385 |
| **TOTAL                LONG-TERM LIABILIITES**                                                                                                 |   |                                          | **3,516,758** |                                                    |   | **4,497,461** |
|                                                                                                                                           |   |                                          |          |                                                    |   |   |
| Redeemable                Series A Preferred Stock (3,238 shares)                                                                              |   |                                          | 323,800       |                                                    |   | 323,800 |
|                                                                                                                                           |   |                                          |          |                                                    |   |   |
| **TOTAL                LIABILITIES**                                                                                                           |   |                                          | **6,937,707** |                                                    |   | **8,619,976** |
|                                                                                                                                           |   |                                          |          |                                                    |   |   |
| **STOCKHOLDERS’                EQUITY**                                                                                                  |   |                                          |          |                                                    |   |   |
| Series                A Preferred Stock - 10% cumulative; $100.00 par value; 18,924shares                authorized; 10,924 shares outstanding |   |                                          | 1,092,400     |                                                    |   | 1,092,400 |
| Common                Stock - $0.01 par value; 25,000,000 share authorized; 7,908,376                and 7,897,946 shares issued               |   |                                          | 79,083        |                                                    |   | 78,979 |
| Additional                Paid-In Capital                                                                                                      |   |                                          | 12,744,740    |                                                    |   | 12,738,889 |
| Deficit                                                                                                                                        |   |                                          | (12,652,617   | )                                                       |   | (12,916,485 |
| Treasure                Stock, at cost (61,100 shares)                                                                                         |   |                                          | (327,493      | )                                                       |   | (327,493 |
| **TOTAL                STOCKHOLDERS’ EQUITY**                                                                                            |   |                                          | **936,113**   |                                                    |   | **666,290** |
|                                                                                                                                           |   |                                          |          |                                                    |   |   |
| **TOTAL                LIABILITIES AND STOCKHOLDERS’ EQUITY**                                                                            |   | **$**                                         | **7,873,820** |                                                    | **$**  | **9,286,266** |
|                                                                                                                                           |   |                                          |          |                                                    |   |   |
|                                                                                                                                                |

**See        notes to consolidated financial        statements.**

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***Table          of Contents***

**AMERICAN      WAGERING, INC. AND SUBSIDIARIES**

**CONSOLIDATED      STATEMENTS OF OPERATIONS **

**(UNAUDITED)**

|                                                                                    |   | **For                the Three Months Ended April 30,** |          |
|-----------------------------------------------------------------------------------------|--------|---------------------------------------------------------|---------------|
|                                                                                    |   | **2005**                                                |          | **2004** |   |
|                                                                                    |   |                                                    |          |   |   |
| **Revenues**                                                                            |   |                                                    |          |   |   |   |   |
| Wagering                                                                                |   | $                                                       | 2,188,813     |   | $ | 1,615,507 |   |
| Systems                                                                                 |   |                                                    | 1,117,482     |   |   | 888,546 |   |
|                                                                                    |   |                                                    | **3,306,295** |   |   | **2,504,053** |   |
|                                                                                    |   |                                                    |          |   |   |   |   |
| **Direct                Costs**                                                         |   |                                                    |          |   |   |   |   |
| Wagering                                                                                |   |                                                    | 1,464,196     |   |   | 1,175,460 |   |
| Systems                                                                                 |   |                                                    | 641,064       |   |   | 444,653 |   |
|                                                                                    |   |                                                    | **2,105,260** |   |   | **1,620,113** |   |
|                                                                                    |   |                                                    |          |   |   |   |   |
| **Administrative                Costs and Expenses**                                    |   |                                                    |          |   |   |   |   |
| Research                and Development                                                 |   |                                                    | 242,179       |   |   | 228,108 |   |
| Selling,                General and Administrative                                      |   |                                                    | 676,167       |   |   | 525,650 |   |
| Depreciation                and Amortization                                            |   |                                                    | 91,790        |   |   | 89,735 |   |
|                                                                                    |   |                                                    | **1,010,136** |   |   | **843,493** |   |
|                                                                                    |   |                                                    |          |   |   |   |   |
| **TOTAL                OPERATING EXPENSES**                                             |   |                                                    | **3,115,396** |   |   | **2,463,606** |   |
|                                                                                    |   |                                                    |          |   |   |   |   |
| **OPERATING                INCOME**                                                     |   |                                                    | **190,899**   |   |   | **40,447** |   |
|                                                                                    |   |                                                    |          |   |   |   |   |
| **Other                Income (Expense)**                                               |   |                                                    |          |   |   |   |   |
| Interest                Income                                                          |   |                                                    | 13,929        |   |   | 4,062 |   |
| Interest                Expense                                                         |   |                                                    | (7,001        | ) |   | (35,458 | ) |
| Reorganization                Expense                                                   |   |                                                    | (14,631       | ) |   | (8,250 | ) |
| Other,                net                                                               |   |                                                    | 152,085       |   |   | 25,505 |   |
|                                                                                    |   |                                                    | **144,382**   |   |   | **(14,141** | **)** |
|                                                                                    |   |                                                    |          |   |   |   |   |
| **INCOME                BEFORE INCOME TAX**                                             |   |                                                    | **335,281**   |   |   | **26,306** |   |
|                                                                                    |   |                                                    |          |   |   |   |   |
| INCOME                TAX                                                               |   |                                                    | 36,881        |   |   | 3,000 |   |
|                                                                                    |   |                                                    |          |   |   |   |   |
| **NET                INCOME**                                                           |   | **$**                                                   | **298,400**   |   | **$** | **23,306** |   |
|                                                                                    |   |                                                    |          |   |   |   |   |
|                                                                                    |   |                                                    |          |   |   |   |   |
|                                                                                    |   |                                                    |          |   |   |   |   |
| **BASIC                AND DILUTED EARNINGS PER SHARE**                                 |   | $                                                       | 0.03          |   | $ | 0.01 |   |
|                                                                                    |   |                                                    |          |   |   |   |   |
|                                                                                    |   |                                                    |          |   |   |   |   |
|  **See                notes to consolidated financial                statements.** |

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***Table          of Contents***

**AMERICAN      WAGERING, INC. AND SUBSIDIARIES**

**CONSOLIDATED      STATEMENTS OF CASH FLOWS**

**(UNAUDITED)**

|                                                                                  |   | **For                the Three Months Ended April 30,** |           |
|---------------------------------------------------------------------------------------|--------|---------------------------------------------------------|----------------|
|                                                                                  |   | **2005**                                                |           | **2004** |   |
|                                                                                  |   |                                                    |           |   |   |
|                                                                                  |   |                                                    |           |   |   |
| **CASH                AND CASH EQUIVALENTS****AT                BEGINNING OF PERIOD** |   | **$**                                                   | **3,998,851**  |   | **$** | **4,113,196** |   |
|                                                                                  |   |                                                    |           |   |   |   |   |
|                                                                                  |   |                                                    |           |   |   |   |   |
| **Net                cash used in operating activities**                              |   |                                                    | **(1,184,492** | **)** |   | **(757,649** | **)** |
|                                                                                  |   |                                                    |           |   |   |   |   |
| **INVESTING                ACTIVITIES**                                               |   |                                                    |           |   |   |   |   |
| Increase                in restricted cash                                            |   |                                                    |           |   |   | (75,217 | ) |
| Withdrawals                of restricted cash                                         |   |                                                    | 60,818         |   |   |   |   |
| Notes                Receivable                                                       |   |                                                    | 320,000        |   |   | (320,000 | ) |
| Purchase                of property and equipment                                     |   |                                                    | (101,562       | ) |   | (137,231 | ) |
| **Net                cash provided by (used in) investing activities**                |   |                                                    | **279,256**    |   |   | **(532,448** | **)** |
|                                                                                  |   |                                                    |           |   |   |   |   |
| **FINANCING                ACTIVITIES**                                               |   |                                                    |           |   |   |   |   |
| Sale                of Stock                                                          |   |                                                    | 5,954          |   |   |   |   |
| Repayment                of borrowings                                                |   |                                                    | (24,066        | ) |   | (67,063 | ) |
| Dividends                                                                             |   |                                                    | (247,932       | ) |   |   |   |
| Proceeds                from Borrowing                                                |   |                                                    |           |   |   | 24,821 |   |
| **Net                cash used in financing activities**                              |   |                                                    | **(266,044**   | **)** |   | **(42,242** | **)** |
|                                                                                  |   |                                                    |           |   |   |   |   |
| **NET                DECREASE IN CASH AND CASH EQUIVALENTS**                          |   |                                                    | **(1,171,280** | **)** |   | **(1,332,339** | **)** |
|                                                                                  |   |                                                    |           |   |   |   |   |
|                                                                                  |   |                                                    |           |   |   |   |   |
| **CASH                AND CASH EQUIVALENTS****AT                END OF PERIOD**       |   | **$**                                                   | **2,827,571**  |   | **$** | **2,780,857** |   |

**See      notes to consolidated financial statements.**

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***Table          of Contents***

**AMERICAN      WAGERING, INC. AND SUBSIDIARIES **

**NOTES      TO CONSOLIDATED FINANCIAL STATEMENTS**

**(UNAUDITED)**

**1.      Basis of Presentation**

**2.      Chapter 11 Filing**

|          | **AMOUNT** | **REASON**                                                                                                                                                                                                                                              |
|---------------|------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| AWI           | $65,664    | Disputed                because the claim amount has already been paid, the claim amount                is not                owed, or the claim should be subordinated pursuant to Section 510(b)                of                the Bankruptcy Code |
| Leroy’s | $258,064   | Disputed                because the claim amount has already been paid, the claim amount                is not                owed, or the claim amount is in                error                                                                      |

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***Table          of Contents***

**3.      Reorganization Expenses**

|                                                  |   | **Three                Months Ended April 30,** |       |
|-------------------------------------------------------|--------|-------------------------------------------------|------------|
|                                                  |   | **2005**                                        |       | **2004** |   |
| United                States Trustee (Bankruptcy Tax) |   | $                                               | 6,250      |   | $ | 8,250 |   |
| Legal                Counsel for Company (Bankruptcy) |   |                                            | 8,381      |   |   |   |   |
| **TOTAL**                                             |   | **$**                                           | **14,631** |   | **$** | **8,250** |   |

**4.      Net Income (Loss) per Share**

|                                                      |   | **Three                Months Ended April 30,** |        |
|-----------------------------------------------------------|--------|-------------------------------------------------|-------------|
|                                                      |   | **2005**                                        |        | **2004** |   |
|                                                      |   |                                            |        |   |   |
| Net                Income                                 |   | $                                               | 298,400     |   | $ | 23,306 |   |
| Preferred                stock dividends                  |   |                                            | (34,532     | ) |   | (35,405 | ) |
| **Net                income (loss), as adjusted**         |   | **$**                                           | **263,868** |   | **$** | **(12,099** | **)** |
|                                                      |   |                                            |        |   |   |   |   |
| Basic                weighted average sharesoutstanding   |   |                                            | 7,838,572   |   |   | 7,836,846 |   |
| Diluted                weighted average sharesoutstanding |   |                                            | 7,981,923   |   |   | 7,836,846 |   |

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***Table          of Contents***

**5.      Stock Options**

**2001      Stock Option Plan.**

|                                         |   | **OPTIONS** |        |
|----------------------------------------------|--------|-------------|-------------|
|                                         |   |        |        |
| Balance                at January 31, 2005   |   |        | 253,242     |   |
| Issued                                       |   |        |        |   |
| Exercised                                    |   |        | (10,430     | ) |
| Cancelled                                    |   |        | (8,751      | ) |
| **Balance                at April 30, 2005** |   |        | **234,061** |   |

| §   | 234,061                options are exercisable. |
|--------------------|-------------------------------------------------|

| §   | Prices                range from $0.40 to $0.70, with an average price of                $0.61. |
|--------------------|-------------------------------------------------------------------------------------------------|

| §   | Expiration                dates range from August 9, 2006 to November 1,                2006. |
|--------------------|-----------------------------------------------------------------------------------------------|

| §   | 905,509                options are available for grant under the                plan. |
|--------------------|---------------------------------------------------------------------------------------|

**Director’s      Stock Option Plan.**

|                                         |   | **OPTIONS** |      |
|----------------------------------------------|--------|-------------|-----------|
|                                         |   |        |      |
| Balance                at January 31, 2005   |   |        | 2,400     |   |
| Issued                                       |   |        |      |   |
| Exercised                                    |   |        |      |   |
| Cancelled                                    |   |        |      |   |
| **Balance                at April 30, 2005** |   |        | **2,400** |   |

| §   | 1,600                options are exercisable. |
|--------------------|-----------------------------------------------|

| §   | Prices                range from $0.12 to $0.55, with an average price of                $0.31. |
|--------------------|-------------------------------------------------------------------------------------------------|

| §   | Expiration                dates range from January 31, 2012 to January 31,                2015. |
|--------------------|-------------------------------------------------------------------------------------------------|

| §   | 17,600                options are available for grant under the                plan. |
|--------------------|--------------------------------------------------------------------------------------|

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***Table          of Contents***

**Fair      value method.**

|                                                                                                                                                                                                                                  |   | **Three                Months Ended April 30,** |    |
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|-------------------------------------------------|---------|
|                                                                                                                                                                                                                                  |   | **2005**                                        |    | **2004** |   |
|                                                                                                                                                                                                                                  |   |                                            |    |   |   |
| Net                Income as Reported                                                                                                                                                                                                 |   | $                                               | 298,400 |   | $ | 23,306 |   |
| Less:                Total Stock Based Employee Compensation                Expense                Determined                          Under                Fair-Value Based Method |   |                                            |    |   |   |   |   |
| Proforma                Net Income                                                                                                                                                                                                    |   | $                                               | 298,400 |   | $ | 23,306 |   |
|                                                                                                                                                                                                                                  |   |                                            |    |   |   |   |   |
| Net                Income Per Share:                                                                                                                                                                                                  |   |                                            |    |   |   |   |   |
| As                reported                                                                                                                                                                                                            |   | $                                               | 0.03    |   | $ | 0.01 |   |
| Proforma                                                                                                                                                                                                                              |   | $                                               | 0.03    |   | $ | 0.01 |   |

**6.      Business Segments**

**Wagering.**

**Systems.**

**Results      of operations.**

|                                |   | **Three                Months Ended April 30,** |          |
|-------------------------------------|--------|-------------------------------------------------|---------------|
|                                |   | **2005**                                        |          | **2004** |   |
|                                |   |                                            |          |   |   |
| **Wagering                Revenue** |   |                                            |          |   |   |   |   |
| Leroy’s                       |   | $                                               | 2,188,813     |   | $ | 1,615,507 |   |
| AWIM                                |   |                                            |          |   |   | 8,700 |   |
|                                |   |                                            | 2,188,813     |   |   | 1,624,207 |   |
| **Systems                Revenue**  |   |                                            |          |   |   |   |   |
| CBS                                 |   |                                            | 1,117,482     |   |   | 879,846 |   |
|                                |   |                                            |          |   |   |   |   |
| **Total                Revenue**    |   | **$**                                           | **3,306,295** |   | **$** | **2,504,053** |   |

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***Table          of Contents***

|                                                          |   | **Three                Months Ended April 30,** |          |
|---------------------------------------------------------------|--------|-------------------------------------------------|---------------|
|                                                          |   | **2005**                                        |          | **2004** |   |
|                                                          |   |                                            |          |   |   |
| **Wagering                Administrative Costs and Expenses** |   |                                            |          |   |   |   |   |
| Selling,                General and Administrative            |   | $                                               | 282,436       |   | $ | 239,530 |   |
| Depreciation/Amortization                                     |   |                                            | 56,885        |   |   | 47,126 |   |
|                                                          |   |                                            | 339,321       |   |   | 286,656 |   |
|                                                          |   |                                            |          |   |   |   |   |
| **Systems                Administrative Costs and Expenses**  |   |                                            |          |   |   |   |   |
| Research                and Development                       |   |                                            | 242,179       |   |   | 228,108 |   |
| Selling,                General and Administrative            |   |                                            | 393,731       |   |   | 286,120 |   |
| Depreciation/Amortization                                     |   |                                            | 34,905        |   |   | 42,609 |   |
|                                                          |   |                                            | 670,815       |   |   | 556,837 |   |
|                                                          |   |                                            |          |   |   |   |   |
| **Total                Administrative Costs and Expenses**    |   | **$**                                           | **1,010,136** |   | **$** | **843,493** |   |

|                                       |   | **Three                Months Ended April 30,** |        |
|--------------------------------------------|--------|-------------------------------------------------|-------------|
|                                       |   | **2005**                                        |        | **2004** |   |
|                                       |   |                                            |        |   |   |
| **Operating                Income (Loss)** |   |                                            |        |   |   |   |   |
| Wagering                                   |   | $                                               | 385,296     |   | $ | 148,260 |   |
| Systems                                    |   |                                            | (194,397    | ) |   | (107,812 | ) |
| **Total                Operating Income**  |   | **$**                                           | **190,899** |   | **$** | **40,448** |   |

|                                                |   | **Three                Months Ended April 30,** |        |
|-----------------------------------------------------|--------|-------------------------------------------------|-------------|
|                                                |   | **2005**                                        |        | **2004** |   |
|                                                |   |                                            |        |   |   |
| **Income                Before Income Tax**         |   |                                            |        |   |   |
| Wagering                Operating Income            |   | $                                               | 385,296     |   | $ | 148,260 |   |
| Systems                Operating (Loss)             |   |                                            | (194,397    | ) |   | (107,812 | ) |
| Other                Income (Expense) - Unallocated |   |                                            | 144,382     |   |   | (14,141 | ) |
| **Total                Income Before Income Tax**   |   | **$**                                           | **335,281** |   | **$** | **26,307** |   |

|                                |   | **Three                Months Ended April 30,** |       |
|-------------------------------------|--------|-------------------------------------------------|------------|
|                                |   | **2005**                                        |       | **2004** |   |
|                                |   |                                            |       |   |   |
| **Income                Tax**       |   |                                            |       |   |   |
| Wagering                            |   | $                                               | 42,383     |   | $ | 16,907 |   |
| Systems                             |   |                                            | (21,384    | ) |   | (12,294 | ) |
| Unallocated                         |   |                                            | 15,882     |   |   | (1,613 | ) |
| **Total                Income Tax** |   | **$**                                           | **36,881** |   | **$** | **3,000** |   |

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***Table          of Contents***

|                                 |   | **Three                Months Ended April 30,** |        |
|--------------------------------------|--------|-------------------------------------------------|-------------|
|                                 |   | **2005**                                        |        | **2004** |   |
|                                 |   |                                            |        |   |   |
| **Net                Income (Loss)** |   |                                            |        |   |   |   |   |
| Wagering                             |   | $                                               | 342,913     |   | $ | 131,353 |   |
| Systems                              |   |                                            | (173,013    | ) |   | (95,518 | ) |
| Unallocated                          |   |                                            | 128,500     |   |   | (12,528 | ) |
| **Net                Income**        |   | **$**                                           | **298,400** |   | **$** | **23,307** |   |

**7.      Litigation**

*“Accounting      for Contingencies,”*

**8.      Regulatory Matters**

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***Table          of Contents***

**Item      2. Management’s Discussion and      Analysis**

**Forward      Looking Statements.**

**Definitions.**

**Overview.**

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***Table          of Contents***

**Key      developments.**

| §   | AWI                and Leroy’s formally emerged from the Chapter 11 bankruptcy process on                March 11, 2005. |
|--------------------|--------------------------------------------------------------------------------------------------------------------------------|

| §   | The                Bankruptcy Appellate Panel (the “BAP”) ruled in the Company’s favor and                determined that the Racusin claim should be subordinated pursuant                to                Section 510(b) of the Bankruptcy Code. As a result of this ruling                and the                settlement agreement with Racusin, the Racusin claim will be paid                via the                issuance of 250,000 shares of the Company’s common stock rather than $2.8                million in cash. This result is subject to change as Racusin has                filed                notice of his intent to appeal the BAP decision to the 9th                Circuit. Consequently, a final decision regarding this matter could                be                delayed by 12 to 36 months. |
|--------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| §   | Formed                a new division, AWI Gaming, Inc. The purpose of AWIG is to initially                explore opportunities in the rural Nevada hotel and casino market,                however                any well-regulated casino market world-wide is of interest providing                that                the property meets the Company’s key criteria of local demographics,                projected Return on Invested Capital, total capital expenditures,                location, size of project, etc. AWIG’s mission is to become the market                leader in operating smaller hotel/casino properties serving the needs                of                local residents. |
|--------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| §   | Leroy’s                experienced its best first quarter in its history. Sports handle                (the                total amount wagered) increased $766,000 (+3.6%) from the first quarter                of                last year, while sports win increased $502,000 (+33.2%) from the                first                quarter of last year. These figures include the professional football                championship game, held in February of 2005, where handle increased                $163,000 (+6.0%) and win increased $85,000 (+22.5%) over the previous                professional football championship                game. |
|--------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| §   | On                January 28, 2005, Leroy’s increased from 3 pari-mutuel race books to 6                with the addition of pari-mutuel operations at the Avi Hotel & Casino                in Laughlin, Nevada, the Silver Club Hotel & Casino in Sparks, Nevada                and the Silver Nugget Casino in North Las Vegas, Nevada. As a result                of                operating these new books for the full quarter, pari-mutuel race                handle                increased $333,000 (+61.88%) and pari-mutuel race win increased $66,000                (+59.0%) over the first quarter of last                year. |
|--------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| §   | In                March, we installed the first 64-bit Hewlett-Packard Alpha race/sports                system at the Aladdin Hotel & Casino in Las Vegas, Nevada. |
|--------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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| §   | In                April, we installed a new race/sports system at Wynn Las Vegas in                Las                Vegas, Nevada (also based on the 64-bit Hewlett-Packard Alpha). |
|--------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| §   | In                February, we installed a new race/sports system at Jerry’s Nugget Casino                in North Las Vegas, Nevada. |
|--------------------|---------------------------------------------------------------------------------------------------------------------------------------------|

| §   | In                March and April, we installed new handicapping software and oversaw                contests at Harrah’s Hotel and Casino in Reno, Nevada and at various Coast                Casino properties in Las Vegas, Nevada. |
|--------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

**Liquidity      and capital resources.**

| **CATEGORY**                                   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      | **GROSS**      |   | **INTEREST** |   | **TOTAL**      |   | **BALANCE**  |   |
|------------------------------------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|----------------|--------|--------------|--------|----------------|--------|--------------|--------|
| AWI                General Creditors           |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      | $90,201        |   | $1,664       |   | $91,865        |   |         |   |
| Leroy’s                General Creditors |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      | 69,815         |   | 1,288        |   | 71,103         |   |         |   |
| Las                Vegas Gaming, Inc.          |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      | 660,000        |   |         |   | 660,000        |   | $340,000     | *      |
| Preferred                Shareholders          |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      | 224,264        |   | 1,977        |   | 226,241        |   |         |   |
| **Total                Payments**              |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      | **$1,044,280** |   | **$4,929**   |   | **$1,049,209** |   | **$340,000** |   |
|  _________                                |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |           |
| *                | The                remaining balance due to Las Vegas Gaming, Inc. has been converted                to a                long-term note payable (reported on the Consolidated Balance Sheets                as                “Long-Term Debt”). The balance is payable in 24 equal monthly payments,                plus interest at 6% per annum, beginning April 1, 2005. The Company                is                current with all payments due pursuant to this                note. |

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**Results      of Operations - Three Months Ended April 30, 2005 and 2004.**

|                                          |   | **Three                Months Ended April 30,** |        |     |   |                        |   |
|-----------------------------------------------|--------|-------------------------------------------------|-------------|----------|--------|-----------------------------|--------|
|                                          |   | **2005**                                        |        | **2004** |   | **$                CHANGE** |   | **%                CHANGE** |   |
|                                          |   |                                            |        |     |   |                        |   |   |   |
| Revenue                                       |   | $                                               | 3,306,295   |     | $      | 2,504,052                   |   |   | +802,243 |   |   | +32 | % |
| Costs                and Expenses             |   |                                            | 3,115,396   |     |   | 2,463,606                   |   |   | +651,790 |   |   | +26 | % |
| **Operating                Income**           |   |                                            | **190,900** |     |   | **40,447**                  |   |   | **+150,453** |   |   | **+372** | **%** |
| Other                Income (Expense)         |   |                                            | 144,381     |     |   | (14,141                     | )      |   | +158,522 |   |   | +1,121 | % |
| **Income                Before Income Taxes** |   |                                            | **335,281** |     |   | **26,306**                  |   |   | **+308,975** |   |   | **+1,175** | **%** |
| Income                Tax Expense             |   |                                            | 36,881      |     |   | 3,000                       |   |   | +33,881 |   |   | +1,129 | % |
| **Net                Income**                 |   | **$**                                           | **298,400** |     | **$**  | **23,306**                  |   |   | **+275,094** |   |   | **+1,180** | **%** |

**Critical      accounting estimates and policies.**

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***Table          of Contents***

*Software      Revenue Recognition*
*Software      Revenue Recognition, With Respect to Certain Transactions*

*Accounting      for the Impairment or Disposal of Long-Lived Assets*

*Accounting      for Income Taxes*

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***Table          of Contents***

**Recently      issued accounting pronouncements. **
*Accounting      for Share-Based Payment *

*Exchanges      of Nonmonetary Assets, an Amendment of APB Opinion No. 29, Accounting for      Nonmonetary Transactions*

**Item      3. Controls and Procedures**

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***Table          of Contents***

**PART      II - OTHER INFORMATION**

**Item      1. Legal Proceedings**

**Racusin**

**Las      Vegas Gaming, Inc. (previously Imagineering Systems,      Inc.)**

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***Table          of Contents***

**Jean      Development Co., **
***et.al.***

**Other**

**Item      2. Unregistered Sales of Equity Securities and Use of      Proceeds**

**Item      3. Defaults Upon Senior Securities**

**Item      4. Submission of Matters to a Vote of Security      Holders**

**Item      5. Other Information**

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***Table          of Contents***

**Item6.      Exhibits**

| **EXHIBIT                NUMBER** | **DESCRIPTION**                                                                                                                                                                                                                                          |
|-----------------------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                              |                                                                                                                                                                                                                                                     |
| 14.1                              | Code                of Business Conduct and Ethics for financial                executives as required by Sections 406 and 407 of the Sarbanes-Oxley                Act                of 2002                                                           |
|                              |                                                                                                                                                                                                                                                     |
| 31.1                              | Certification                of Chief Executive Officer pursuant                to Securities Exchange Act Rule 13a-14(a)/15d-14(a), as adopted pursuant                to Section 302 of the Sarbanes-Oxley Act of 2002                                 |
|                              |                                                                                                                                                                                                                                                     |
| 31.2                              | Certification                of Chief Financial Officer pursuant                to Securities Exchange Act Rule 13a-14(a)/15d-14(a), as adopted pursuant                to Section 302 of the Sarbanes-Oxley Act of 2002                                 |
|                              |                                                                                                                                                                                                                                                     |
| 32.1                              | Certification                of Chief Executive Officer and Chief                Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted                pursuant                to Section 906 of the Sarbanes-Oxley Act of                2002 |

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**SIGNATURES**

**AMERICAN      WAGERING, INC.**

| /s/               Timothy F.              Lockinger                                           |
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                       Timothy F. Lockinger                      Chief Financial Officer, Secretary and Treasurer                      (Principal Accounting Officer)                                                       |

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