<PAGE>

                                 UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                            WASHINGTON, D.C. 20549
                            ----------------------
                                  FORM 10-QSB

               [X]QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE
                         SECURITIES EXCHANGE ACT OF 1934

                                       OR

              [   ]TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE
                         SECURITIES EXCHANGE ACT OF 1934

                     FOR THE QUARTERLY PERIOD ENDED APRIL 30, 2001

                           COMMISSION FILE NO. 000-20685


                              AMERICAN WAGERING, INC.
                              -----------------------
                (Exact name of Registrant as specified in its charter)


                   Nevada                              88-0344658
                   --------                            -------------
         (State or other Jurisdiction of             (I.R.S. Employer
          Incorporation or Organization)            Identification No.)

                      675 Grier Drive, Las Vegas, Nevada 89119
                      ----------------------------------------
                      (Address of Principal Executive Offices)

                                  (702) 735-0101
                                  ---------------
                   (Issuer's Telephone Number, Including Area Code)

Indicate by check mark whether the registrant (1) filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange
Act of 1934 during the preceding 12 months (or for such shorter period
that the Registrant was required to file such reports), and (2) has
been subject to such filing requirements for the past 90 days.

Yes     X    No
      ----       ----
Indicate the number of shares outstanding of each of the issuer's
classes of common stock, as of the last practicable date:

            Class                   Outstanding as of April 30, 2001
            -----                   ---------------------------------
  Common Stock, $.01 par value                 8,076,665


<PAGE>


                      AMERICAN WAGERING, INC. AND SUBSIDIARIES

INDEX

PART I FINANCIAL INFORMATION

Item 1.Financial Statements:                                    Page
                                                                -----
Consolidated Balance Sheets - April 30, 2001 (Unaudited) and
January 31, 2001                                                  2
Consolidated Statements of Operations -Three Months Ended
April 30, 2001 and 2000 (Unaudited)                               3
Consolidated Statements of Cash Flows - Three Months Ended
April 30, 2001 and 2000 (Unaudited)                               4
Notes to Consolidated Financial Statements (Unaudited)          5-8

Item 2.Management's Discussion and Analysis of Financial
Condition and Results of Operations                             9-10

PART II    OTHER INFORMATION

Item 1.    Legal Proceedings                                   11-13

Item 2.    Changes in Securities                                  13

Item 3.    Defaults upon Senior Securities                        13

Item 4.    Submission of Matters to a Vote of Security Holders    13

Item 5.    Other Information                                      13

Item 6.    Exhibits and Reports on Form 8-K                       14


                                        1


<PAGE>


PART I   FINANCIAL INFORMATION
ITEM 1.  FINANCIAL STATEMENTS

                             AMERICAN WAGERING, INC.
                           CONSOLIDATED BALANCE SHEETS

                                       April 30, 2001
                                         (Unaudited)   January 31, 2001
                                         -----------   ----------------
ASSETS

CURRENT ASSETS
   Cash                                  $ 2,084,519      $ 2,200,759
   Restricted deposits                       238,002          236,416
   Accounts receivable, net of allowance
   for doubtful accounts of  $31,983         274,318           583,193
   Inventories                               403,547           405,340
   Prepaid expenses and other current
   assets                                    279,290           279,904
                                           ---------        ----------
                                           3,279,676         3,705,612

PROPERTY AND EQUIPMENT, net                3,632,181         3,613,678

GOODWILL                                     192,170           221,651

OTHER INTANGIBLES                            482,875           525,316

OTHER ASSETS                                 340,816           317,034
                                           ---------         ---------
                                         $ 7,927,718       $ 8,383,291
                                           =========         =========

LIABILITIES AND STOCKHOLDERS' EQUITY

CURRENT LIABILITIES
   Current portion of long-term debt     $    69,293       $    67,925
   Accounts payable                          424,110           401,729
   Accrued expenses                        1,064,262         1,047,851
   Unpaid winning tickets                    393,754           910,207
   Customer deposits and other
   current liabilities                       678,769           488,201
   Net liabilities of business held
   for sale                                  188,230           176,411
                                           ---------         ---------
                                           2,818,418         3,092,324
                                           ---------         ---------

LONG-TERM DEBT, less current portion       1,730,747         1,748,592
                                           ---------         ---------

REDEEMABLE PREFERRED STOCK - 2,738  SHARES   273,800           273,800
                                           ---------         ---------

STOCKHOLDERS' EQUITY
  Series A preferred stock -10%
    cumulative; $.01 par value;
    authorized: 25,000,000 shares;
    issued and outstanding: 11,924
    shares                                 1,192,400         1,192,400
  Common stock - $.01 par value;
    authorized: 25,000,000 shares;
    issued: 8,137,765 shares, including
    239,819 shares issued in settlement
    of litigation                             81,378            81,378
  Additional paid-in capital              14,380,117        14,380,117
  Accumulated deficit                    (12,221,649)      (12,057,827)
  Less 61,100 common shares in
    treasury, at cost                       (327,493)         (327,493)
                                         ------------      ------------
                                           3,104,753         3,268,575
                                         ------------      ------------
                                       $   7,927,718     $   8,383,291
                                         ===========       ============
See notes to consolidated financial statements.


                                        2

<PAGE>


                            AMERICAN WAGERING, INC.
                    CONSOLIDATED STATEMENTS OF OPERATIONS
                     FOR THE THREE MONTHS ENDED APRIL 30,
                                  (UNAUDITED)


                                           2001               2000
                                           ----               ----

REVENUES
                                       $ 2,301,523        $ 2,863,850
                                         ---------          ---------

OPERATING COSTS AND EXPENSES:
   Direct costs                          1,577,671          2,249,492
   Research and development                198,185            305,298
   Selling, general and
     administrative                        490,230            787,158
   Depreciation and amortization           154,944            226,351
                                         ---------          ---------
                                         2,421,030          3,568,299
                                         ---------          ---------

OPERATING LOSS                            (119,507)          (704,449)

OTHER INCOME (EXPENSE):
   Interest income                          21,838              6,069
   Interest expense                        (37,843)           (49,541)
   Other, net                                7,938             (2,819)
                                         ----------          ---------
LOSS FROM CONTINUING OPERATIONS           (127,574)          (750,740)

INCOME FROM DISCONTINUED OPERATIONS           --               50,942

NET LOSS                               $  (127,574)       $  (699,798)
                                        ===========        ===========

BASIC AND DILUTED INCOME (LOSS) PER SHARE
   Loss from continuing operations     $   (  0.02)       $     (0.09)
                                        ===========        ===========

   Income from discontinued operations $      ----        $      ----
                                        ===========        ===========

   Net Loss                            $     (0.02)       $     (0.09)
                                        ===========        ===========

See notes to consolidated financial statements.


                                        3

<PAGE>


                            AMERICAN WAGERING, INC.
                     CONSOLIDATED STATEMENTS OF CASH FLOWS
                      FOR THE THREE MONTHS ENDED APRIL 30,

                                           2001               2000
                                           ----               ----
OPERATING ACTIVITIES
   Net cash provided by (used in)
     operating activities              $   107,996        $(1,185,279)

                                        ----------         -----------
INVESTING ACTIVITIES
   Investment in restricted deposits        (1,586)             --
   Purchase of property and equipment     (181,905)          (186,528)
   Proceeds from sale of assets             13,348              --
   Deposits and other assets                  --               (8,620)
                                        -----------        -----------
   Net cash used in investing activities  (170,143)          (195,148)
                                        -----------        -----------

FINANCING ACTIVITIES
   Repayment of long-term debt             (17,845)           (14,387)
   Stock option exercise                      --               85,791
   Dividends                               (36,248)           (38,116)
   Redemption of Preferred Stock              --              (26,200)
                                        -----------        -----------
   Net cash provided by (used in)
     financing activities                  (54,093)             7,088
                                        -----------         ----------

CHANGE IN CASH
   Net decrease in cash                   (116,240)        (1,373,339)
   Cash at beginning of period           2,200,759          3,415,793
                                        -----------        -----------
   Cash at end of period               $ 2,084,519        $ 2,042,454
                                       ============       ============

See notes to consolidated financial statements.


                                       4


<PAGE>


                            AMERICAN WAGERING, INC
                 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                 (UNAUDITED)

1.  Basis of Presentation

     The accompanying unaudited consolidated financial statements have
been prepared in accordance with generally accepted accounting
principles for interim financial information and the instructions to
Form 10-QSB and Rule 10-01 of Regulation S-X.  Accordingly, they do not
include all of the information and disclosures required by generally
accepted accounting principles for annual financial statements.  In the
opinion of management, all adjustments considered necessary for a fair
presentation have been included.  The results of operations for any
interim period are not necessarily indicative of results for the full
year.  For further information, please refer to the consolidated
financial statements of American Wagering, Inc. (the "Company"), and
the related notes, included within the Company's Annual Report on Form
10-KSB for the fiscal year ended January 31, 2001, previously filed
with the Securities and Exchange Commission.  The consolidated balance
sheet at January 31, 2001, was derived from the audited financial
statements included therein.  All significant inter-company accounts
and transactions have been eliminated in the consolidation.

     Certain amounts in the consolidated financial statements of prior
periods have been reclassified to conform to the current period
presentation.

2.  Internet Wagering Disciplinary Action

     In December 1999, the Nevada Gaming Control Board filed a
complaint against the Company alleging the Company accepted a series of
wagers over the Internet from a patron who was physically located in
Las Vegas, Nevada and that such action violated both Federal and Nevada
law.  In July 2000, without admitting or denying the allegations, the
Company entered into a settlement and paid a $10,000 fine and agreed to
divest of all of its interests in its Internet wagering operations by
January 27, 2001, subject, if necessary, to three possible 60-day
extensions.  In January 2001, the Company entered into an agreement to
sell its Internet wagering operation to an Australia company for
$2,500,000 (AUD). The prospective purchaser has since been approved by
Australian regulators to acquire the business but has been unable to
meet the payment schedule called for in the agreement.  The Company and
the prospective purchaser are attempting to negotiate mutually
acceptable revised terms, although there is no assurance that an
agreement can be reached.  In the event the parties cannot agree, the
prospective purchaser would forfeit approximately $125,000 (AUD) of
earnest money.

     The Chairman of the State Gaming Control Board has issued all three
(3) of the possible 60-day extensions, with the current extension due to
expire on July 23, 2001.  In the event the divestiture cannot be
completed by that date, management intends to petition the Nevada Gaming
commission for an additional time extension.  There is no assurance that
the Nevada Gaming Commission will grant additional time extensions.
Management does not believe a failure to receive additional time
extensions from the Nevada Gaming Commission will have a material adverse
effect on the Company's future financial position or operations.  However,
failure to receive additional time extensions could have a significant
negative impact on the marketability and negotiated sale price of the
Internet operation.

3.   Discontinued operations

     In November 2000, the Company decided to discontinue its casino
gaming operations, consisting of 65 electronic gaming devices and slot
machines and recorded a $68,811 provision for anticipated operating
losses through December 22, 2000, the closing date of the casino.  The
Company also recorded an asset valuation allowance of $65,518 in the
quarter ended January 31, 2001.  The assets and liabilities of the
discontinued segment are not material.    At April 30, 2000, the net
income of the Casino was $50,942  consisting revenues of $169,422 and
expenses of $118,480.

                                        5

<PAGE>

4.  Net Loss per Share

     Basic net loss per share is computed by dividing net loss by the
weighted average number of common shares outstanding during the year.
Diluted earnings per share considers potentially dilutive securities
(options) as outstanding and net loss is adjusted for preferred stock
dividends.  For the operating periods presented, the tables below
reconcile net loss and weighted average shares outstanding used to
calculate basic loss per share to those used to calculate diluted loss
per share:

Effect of adjustments to net loss          Three months ended April 30,
                                           2001                 2000
                                           ----                 ----
Net loss                            $   (127,574)         $   (699,798)
Preferred stock dividends               ( 36,248)         $   ( 38,116)
                                        ---------             ---------
Net loss applicable to common
shareholders                        $   (163,822)         $   (737,914)
                                        =========             =========
Basic and diluted weighted average
shares outstanding                     7,932,067              7,832,891
                                       =========              =========

5.  Business Segments

     The Company conducts business with customers through 3 business
segments, "Wagering", "Systems", and "Keno".  The Wagering segment
operates 42 race and sports books throughout Nevada, and an Internet
and telephone betting operation located in Canberra, Australia, that it
has agreed to divest of by January 27, 2001 (extended to July 23, 2001
by approval of the Chairman of the State Gaming Control Board). The
Systems segment designs, markets, installs and maintains sports and
race book wagering systems for the sports betting industry.  The Keno
segment operates keno games in 3 locations in Nevada.

     Amounts presented below for prior periods have been reclassified
to conform to the current period presentation, including the
elimination of the discontinued casino segment.  Financial performance
measurements for Wagering, Systems, Keno, and SG&A (certain unallocated
selling, general, and administrative costs) are set forth below.

                                         Three months ended April 30,
                                          2001                  2000
                                          ----                  ----
Revenues
   Wagering                          $  1,464,204         $  1,401,149
   Systems                                791,623            1,386,243
   Keno                                    45,696               76,458
                                        ---------            ----------
                                     $  2,301,523         $  2,863,850
                                        =========            ==========

Research and Development             $    198,185         $    305,298
                                        =========             =========

Depreciation and Amortization
   Wagering                          $     37,783         $     70,261
   Systems                                 72,419               87,338
   Keno                                    32,337               61,290
   SG&A                                    12,405                7,462
                                         --------              --------
                                     $    154,944         $    226,351
                                         ========              ========

Operating Loss
   Wagering                          $    142,171         $   (122,341)
   Systems                                101,637              298,258
   Keno                                  (159,266)            (314,776)
   SG&A                                  (204,049)            (565,590)
                                         ---------            ---------
                                     $   (119,507)        $   (704,449)
                                         =========            =========

Capital Expenditures
   Wagering                          $     57,108         $     28,317
   Systems                                 87,607               12,734
   Keno                                    10,190              146,063
   SG&A                                    27,000                 (586)
                                         --------             ---------
                                     $    181,905         $     186,528
                                         ========             =========


                                        6

<PAGE>


Discontinued Operations
   Revenues                          $        --          $    169,422
   Operating Income                           --                50,942
   Depreciation                               --                 2,083

                                     April 30, 2001    January 31, 2001
Identifiable Assets
   Wagering                          $  1,357,619        $  2,301,438
   Systems                              4,089,713           4,296,418
   Keno                                   525,275             715,131
   SG&A                                 1,955,111           1,070,304
                                        ---------           ---------
                                     $  7,927,718        $  8,383,291
                                        =========           =========



6.  Litigation

     In 1998, the Company filed a complaint against Autotote
Corporation and Autotote Systems, Inc. for infringement of copyrights.
In July 2000, a settlement was reached where the Company received
$540,000 in cash and was relieved of an obligation to pay accrued
royalties of approximately $350,000.  In a related settlement with a
customer of Autotote Systems, the Company granted, subject to Nevada
regulatory approval, a perpetual, nonexclusive license to the customer
and received a one-time fee of $600,000.

     Since 1995, the Company has been in litigation with Michael
Racusin who introduced certain underwriters to the Company in
connection with the Company's initial public offering.  The Company
disputed Mr. Racusin's claim for compensation under agreements that the
Company believed were unenforceable.  In February 2000, a verdict was
rendered in favor of Mr. Racusin and in July 2000, a judgment was
entered. In addition to $756,340 paid by the Company to the individual
in September of 1997, the judgment required the Company to issue him
239,819 common shares, currently held by the Court.  At January 31,
2000, the Company had reserved 337,500 shares for issuance in this
matter.  The judgment applied a portion of the amount previously paid
to reduce the number shares to be issued to 239,819. The trial court
valued the award at $2,025,000 based upon an assumed stock price of $6
per share.  Mr. Racusin has appealed claiming that only a cash remedy
at a higher price per share ($9) is appropriate.  The Company has
cross-appealed believing that the award was excessive for a variety of
reasons.

     In addition, the Company has been involved in litigation with
Imagineering Systems, Inc. since March 1998.  In October 2000, a
verdict was rendered and later a judgment entered in favor of
Imagineering totaling $1,397,000 plus attorney fees and costs.
Imagineering subsequently agreed to a Court directed alternative to
reduce this amount to $897,000 plus attorney fees and costs.  The
Company has bonded an appeal.

     The ultimate disposition of certain issues involved in the Racusin
and Imagineering matters cannot be determined at this time.  In
accordance with Statement of Financial Accounting Standard No. 5,
"Accounting for Contingencies," the Company has recorded an allowance
for probable losses equal to the lower end of the estimated probable
loss range and periodically revises these estimates as facts and
circumstances change.

     The Company is also currently a defendant in certain other legal
matters arising in the ordinary course of business.  In the opinion of
management, based on the advice of counsel, the outcome of these
actions will not have a material effect on the financial position,
results of operations or cash flows of the Company.

7.  Other Contingencies

Management Plans

     The Company has incurred net losses for the past several years and
as of April 30, 2001, has working capital of approximately $461,258.
The Company's ability to continue as a going concern is dependent upon
attaining and sustaining profitable operations until operating cash
flows are sufficient to satisfy its current obligations.  The Company
has implemented cost cutting measures in all of its activities,
including the elimination


                                        7

<PAGE>


of immature business activities that appear to lack short-term profit
potential.  In addition, historically, the Company derives seasonally
high results from its licensed race and sports books in the State of
Nevada between September and January.  However, the Company takes
certain financial risks on the outcome of various sporting events, and,
although these risks are managed, there is no assurance that the
outcome will be favorable and that sufficient cash flow can be
generated to sustain operations during periods of lower activity.

Regulatory Matters

     The scope of the Company's licensed race and sports books
operation in the State of Nevada is limited by regulation and statute.
On March 22, 2000, federal legislation entitled the "Amateur Sports
Integrity Act" was introduced in Congress.  The general purpose of the
proposed legislation is to prohibit wagering on games and performances
at the Summer and Winter Olympics and on high school and college games.
On September 13, 2000, the House Judiciary Committee voted 19-9 in
favor of banning wagering on college games.  In order for the proposal
to become law it will have to be voted on and passed by the full House
and Senate and forwarded to the President for signature.  The Company's
currently accepts wagering on Olympic and college games.  The Company
estimates that wagering on college sports represents approximately 26%
of its Nevada race and sports book revenues.  The passage of such
legislation will have a material adverse affect upon the Company's
wagering operations.

     In December 1999 the Australian government released its
Productivity Commissions report on Australia's Gambling Industries.
The Report made certain recommendations including regulation of online
casinos.  Following this report, the Senate Select Committee on
Information Technologies issued a report entitled "NETBETS", a review
of online gambling in Australia.  The Committee made a series of
proposals to cut online gambling including a proposal to limit the
expansion of online casinos with a moratorium on the issuance of online
gaming licenses until consumer protection policies were implemented.
This moratorium ended on May 19, 2001.  The federal government is
pursuing a total ban on Internet gambling.  However, the States and
Territories within Australia are opposed to any limitations on issuing
new online gaming licenses.

     In March 2001, Australia's conservative government has said it
will seek to prohibit betting by Australian citizens via the Internet,
interactive television and mobile phones.  The laws to be introduced
will bar gaming and wagering services offered to Australian citizens
over the Internet.  The Labor party is in opposition to the ban.  The
legislative ban would not stop Australian firms from offering Internet
gaming overseas.

     At this time the Company is unable to determine the effect, if
any, of the outcome of the implementation of the recommendations made
in the "NETBETS" report or whether the government will be successful in
banning online gaming by Australian citizens. If the federal government
is successful in banning online gaming by Australian citizens, such ban
may have a material adverse effect on the subsidiary's operations if
passed as proposed.

     All jurisdictions that have legalized gaming require various
licenses, permits and approvals for manufacturers and distributors of
gaming devices and equipment.  In general, such requirements involve
restrictions similar to those of Nevada.

                                        8


<PAGE>


ITEM 2.    MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
           AND RESULTS OF OPERATIONS

Results of Operations

Three months ended April 30, 2001 and 2000

     Revenues.  Revenues for the current quarter were $2,301,523, a
decrease of $562,327, or 19.6%, from the same quarter of the prior
year.  The primary reasons for the reduced revenues are a decrease in
Systems sales as System sales vary significantly from period to period
due to the timing of individual sales and a decrease in Keno revenues
as there were fewer number of operating  Keno locations.


     Operating costs and expenses.  Comparative operating costs and
expenses for the quarter decreased $1,147,269 over the prior quarter as
follows:

                                           Three months ended April 30,
                                           ----------------------------
                                Decrease          2001          2000
                                --------          ----          ----
Direct costs and expenses
   Wagering                 $   (278,154)     $ 1,085,770   $ 1,363,924
   System                       (249,570)         350,945       600,515
   Keno                         (144,097)         140,956       285,053
Research and development        (107,113)         198,185       305,298
Selling, general and
administrative                  (296,928)         490,230       787,158
Depreciation and amortization    (71,407)         154,944       226,351
                              -----------       ---------      --------
                             $(1,147,269)     $ 2,421,030   $ 3,568,299
                              ===========       =========     =========


     The decrease in expenses is principally due to a $296,928
reduction in selling, general and administrative costs, a direct result
of the Company's efforts to reduce spending, a $278,154 reduction in
wagering operating costs due to a reduction of communication charges
such as telephones and radios, costs associated with outside services
and closure of Mega$ports (U.S.), a $249,570 decrease in cost of goods
sold associated with a reduction of equipment sales, a $144,097
reduction in Keno operating costs due to a reduced number of operating
locations, and a $107,113 reduction in research and development expense
due to the decision to narrow business focus to the Company's core
activities.

     Operating loss.   Operating loss for the quarter decreased
$584,942, or 83%,  to a loss of $127,574 over the same quarter of the
prior year, as a result of management efforts to reduce operating costs
and expenses for all segments.

Internet Wagering Disciplinary Action

     In December 1999, the Nevada Gaming Control Board filed a
complaint against the Company alleging the Company accepted a series of
wagers over the Internet from a patron who was physically located in
Las Vegas, Nevada and that such action violated both Federal and Nevada
law.  In July 2000, without admitting or denying the allegations, the
Company entered into a settlement and paid a $10,000 fine and agreed to
divest of all of its interests in its Internet wagering operations by
January 27, 2001, subject, if necessary, to three possible 60-day
extensions.  In January 2001, the Company entered into an agreement to
sell its Internet wagering operation to an Australia company for
$2,500,000 (AUD). The prospective purchaser has since been approved by
Australian regulators to acquire the business but has been unable to
meet the payment schedule called for in the agreement.  The Company and
the prospective purchaser are attempting to negotiate mutually
acceptable revised terms, although there is no assurance that an
agreement can be reached.  In the event the parties cannot agree, the
prospective purchaser would forfeit approximately $125,000 (AUD) of
earnest money.


                                        9

<PAGE>


     The Chairman of the State Gaming Control Board has issued all
three (3) of the possible 60-day extensions, with the current extension
due to expire on July 23, 2001.  In the event the divestiture cannot be
completed by that date, management intends to petition the Nevada
Gaming commission for an additional time extension.  There is no
assurance that the Nevada Gaming Commission will grant additional time
extensions.  Management does not believe a failure to receive
additional time extensions from the Nevada Gaming Commission will have
a material adverse effect on the Company's future financial position or
operations.  However, failure to receive additional time extensions
could have a significant negative impact on the marketability and
negotiated sale price of the Internet operation.

Liquidity and Capital Resources

     Cash provided by operating activities was $107,996 for the three
months ended April 30, 2001 compared to cash used in operating
activities of $1,185,279 for the three months ended April 30, 2000.
This was primarily due to the Company's concentrated effort to reduce
expenditures in fiscal year 2002, payment of current liabilities and
closure of Mega$ports (U.S.).  Net cash used in investing activities
was $170,143 for the three months ended April 30, 2001 compared to cash
used in investing activities of $195,148 for the three months ended
April 30, 2000.  Net cash used in financing activities amounted to
$54,093 for the three months ended April 30, 2001 compared to net cash
provided by financing activities of $7,088 for the three months ended
April 30, 2000.

     Management believes that the Company will be able to satisfy its
operating cash requirements for at least the next 12 months from
existing cash balances and anticipated cash flows.  The Company
initiated various programs in fiscal year 2002 aimed at building cash
liquidity to fund possible effects of seasonality of sports betting,
timing of system sales, and the possible effects of the proposed
legislation to ban wagering on amateur athletic events. However, the
Company takes certain financial risks on the outcome of various
sporting events, and, although these risks are managed, there is no
assurance that the outcome will be favorable and that sufficient cash
flow can be generated to sustain operations during periods of lower
activity.  In addition, the Company has negative cash flow exposures
due to potential litigation judgments (chiefly Racusin and Imagineering
Systems, Inc.; see "Legal Proceedings"); loss of the appeal on either
or both of these matters could have a significant negative impact on
the Company's existing cash balances and anticipated cash flows.

Currency Risk

     Except for the Company's wagering operation in Australia, the
Company's transactions are conducted and accounts are denominated in
United States dollars.  As of April 20, 2001, approximately $151,000
was denominated in Australian dollars.

Forward-Looking Statements

     Certain information included in this report and other materials
filed or to be filed by the Company with the Securities and Exchange
Commission (as well as information included in oral statements or
written statements made or to be made by the Company) contains
statements that are forward looking within the meaning of Section 27A
of the Securities Act of 1933, as amended, and Section 21E of the
Securities Exchange Act of 1934.  Such statements include information
relating to current expansion projects, plans for future expansion
projects and other business development activities as well as other
capital spending, financing sources and the effects of regulations
(including gaming and tax regulations) and competition.  Such forward-
looking information involves important risks and uncertainties that
could significantly affect anticipated results in the future and,
accordingly, such results may differ from those expressed in any
forward-looking statements made by or on behalf of the Company.  These
risks and uncertainties include, but are not limited to, those relating
to the Company taking financial risks on the outcome of sports events
as a principal betting against its patrons, domestic or global economic
conditions, changes in federal or state tax laws or the administration
of such laws, changes in gaming laws or regulations (including the
legalization of gaming in certain jurisdictions) and applications for
licenses and approvals under applicable laws and regulations (including
gaming laws and regulations).


                                       10

<PAGE>


PART II OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

Racusin

     On August 23, 1995, Leroy's filed a complaint for Declaratory
Relief in the District Court of Clark County, Nevada, requesting that
the court declare that 2 written agreements between Leroy's and Michael
Racusin, d.b.a. M. Racusin & Company ("Racusin"), are vague, ambiguous
and unenforceable contracts.  Racusin had introduced certain
underwriters, including Equity Securities Trading Co., Inc. (one of the
underwriters of the Company's initial public offering) to Leroy's and
provided Leroy's certain advisory services for a fee.

     In February 2000, a jury verdict was rendered.  The jury found
that (i) Leroy's breached its contract with Racusin;  (ii) as a result
of that breach, Racusin was entitled to receive stock in Leroy's in the
amount equal to 4.5% of $45,000,000 plus $150,000 in cash; and (iii)
the Company is the alter ego of Leroy's.

     On July 12, 2000, the court entered a judgment as follows:

          1.  Racusin should receive $150,000 plus interest totaling
              $170,251.  This sum shall be set off against the $756,340
              previously paid by the Company on September 5, 1997.

          2.  Racusin shall receive 239,819 shares of common stock in
              the Company.  The shares are net of 97,681 shares, which
              the Company is entitled to set off for the amount of
              $589,089 previously paid to Racusin.  Racusin shall
              receive pre- judgment interest on the 239,819 shares.

          3.  Racusin shall recover his costs of the suit.

     Racusin filed an appeal of the District Courts decision to enter
judgment asserting that the proper remedy is an all cash award based on
the value of the stock on the day the IPO was completed ($9.00), not
$2,025,000 at $6.00 used by the District Court.

     The Company filed a cross-appeal which challenges the jury's
determination that the Company is the alter-ego of Leroy's; asserts the
District Court erred by not including interest on $589,089 {previously
paid by the Company to Racusin} in the set-off, and asserts the
exclusion of testimony that Racusin received $756,350 in September,
1997 constitutes prejudicial error.

     The Company has issued 239,819 shares of Common Stock (held by the
Court) and has accrued $329,000 in interest awarded in the judgment.

Autotote Systems, Inc.

     On March 3, 1998, the Company and CBS filed a complaint in the
United States District Court for the District of Nevada, against
Autotote Corporation and Autotote Systems, Inc. (collectively
"Autotote") seeking to enjoin certain actions of Autotote and asking
for monetary damages for the alleged breach by Autotote of certain
provisions of a Stock Transfer Agreement, a Technology Cross License
Agreement, a Distributorship Agreement, and the International
Cooperation Agreement, all of which were executed by the parties on
October 25, 1996 (collectively the "Agreements"), and for the
infringement by Autotote of CBS copyright interest in, and the
misappropriation and conversion of, CBS race and sports book software.

     On April 15, 1998, Autotote filed a counterclaim against the
Company and CBS with the United States District Court for the District
of Nevada, asking that the agreements be rescinded and for an award of
compensatory damages in excess of $75,000 plus interest, and punitive
damages.

     On July 18, 2000, the parties executed a settlement agreement
under which the Company and CBS received $540,000 and was relieved of
its obligation to pay accrued royalty payments of $349,997, in
settlement of their claims against Autotote and the counterclaims of
Autotote were dismissed with prejudice.


                                       11

<PAGE>

     In connection with the Autotote Corporation and Autotote Systems
Inc. settlement, the Company and CBS entered into a settlement
agreement on March 31, 1999, with Hipodromo De Agua Caliente, S.A. De
C.V. a Mexican Corporation ("Caliente").  Caliente is a customer of
Autotote Systems Inc. that uses the CBS race and sports book software
system.  The company and CBS claimed that the use of the CBS race and
sports book software by Caliente outside of Mexico breached the
agreement.  The settlement with Caliente provided for a license to
Caliente to use the race and sports book software upon terms set forth
in the license agreement.  The license agreement grants Caliente a
perpetual, nonexclusive nontransferable worldwide right and license for
the sole purpose of operating the International Risk Management
Business.  Caliente agreed to pay a license fee of the $600,000 payable
in four equal installments of $150,000 starting on October 31, 2000.
The settlement agreement was subject to Nevada Gaming commission
approval of a one-time waiver of a condition on the Company's Nevada
gaming license prohibiting the expansion of the relationship with
Caliente.  On November 20, 2000, the Company received approval from the
Nevada Gaming Commission of the one time waiver of the condition
permitting the Company to receive the license fee payments from
Caliente. Through February 6, 2001, CBS received $600,000 in license
fee payments from Caliente.   In fiscal year ended January 31, 2001,
the Company recorded a gain of $600,000 as litigation settlement.

Imagineering Systems, Inc.

     On October 21, 1998, Imagineering Systems, Inc. ("ISI") filed a
civil complaint against the Company claiming, among other things breach
of contract and implied covenant of good faith and fair dealing.  On
November 8, 1998 the Company brought an action to recover on loans it
made to ISI.

     On October 2, 2000, the Company's Notice for Summary Judgment for
the claim of relief for breach of Promissory Note was granted.  The
Company was awarded $76,583 plus interest.  The execution of the
judgment was stayed until the outcome of the ISI civil complaint is
known.

     On October 17, 2000, a trial by jury was held and on October 30,
2000 the jury rendered a verdict in favor of ISI in the amount of
$1,397,500 plus interest for breach of contract and breach of its
implied covenant of good faith and fair dealing.

     The Company brought a post-trial motion asking the court to either
disregard the jury verdict, order a new trial or reduce the amount of
the judgment.  On February 1, 2001, the Court filed its decision which
refused to set aside the jury's award of $397,000 on the breach of
contract claim, but granted a new trial on the issue of damages awarded
on the claim for breach of the covenant of good faith and fair dealing,
unless Imagineering agreed to reduce the judgment for $1,000,000 to
$500,000, which they did.  The Company bonded an appeal to the decision
and, based upon the advise of counsel, has accrued $233,000 plus
interest net of $76,503 plus interest with respect to this litigation.

Internet Operations Investigation

     On December 16, 1999, the Nevada State Gaming Control Board
("Board") filed a complaint for disciplinary action against American
Wagering, Inc., referred to as State Gaming Control Board v. American
Wagering, Inc., d.b.a. Mega$ports (ACT), ("complaint"), related to the
operation of Mega$ports Pty, Ltd., ("Mega$ports (ACT)").  The complaint
contains 13 separate counts against the Company.  The complaint alleges
the Company, as a company registered with the Nevada Gaming Commission,
engaged in an unsuitable method of operation due to the fact that
Mega$ports (ACT) accepted a series of wagers from a patron who was
physically located in Las Vegas, Nevada.   The Board further alleged
that the acceptance of these wagers was a violation of both federal and
Nevada State laws that prohibit Internet sports wagering.

     On July 27, 2000, the Company entered into a settlement of the
complaint with the Board which was approved by the Nevada Gaming
Commission.  The Company neither admitted nor denied the allegations.
The Company agreed to pay a fine of $10,000 and to divest itself of any
and all interests and rights pertaining to Mega$ports (ACT). The
divestiture was to be completed by January 27, 2001.  The Company was
granted the right to request not more than three 60-day extension
periods to complete the divestiture.


                                       12

<PAGE>


     On January 18, 2001, the Company executed an agreement to sell
Mega$ports (ACT) to Forward Publishing Pty. Ltd. ("Forward"), an
Australian company, for $1,039,348 Australian dollars (AUD) and the
assumption of Mega$ports (ACT) debt in the amount of $1,460,652
Australian dollars (AUD).  Forward completed its due diligence review
of Mega$ports (ACT) on January 31, 2001 and made a $125,000 (AUD)
deposit to remain in trust until completion of the sale or a default
under the agreement.  The Chairman of the State Gaming Control Board
issued all three of the 60-day extensions, with the current extension
due to expire on July 23, 2001.  The time extensions are intended to
allow Mega$ports (ACT) to remain in full operation while the purchaser
completed the probity and gaming license process.  On April 12, 2001,
the Company was notified by the ACT Gambling and Racing Commission that
Forward had received regulatory approval to complete the sale.  On
April 13, 2001, Forward notified the Company that it would be unable to
meet the payment schedule required in the contract.  The parties agreed
to revised terms giving Forward until May 7, 2001 to secure financing
and complete the sale.  Due to the inability of Forward to obtain
financing, the Company notified Forward on May 8, 2001 that Forward was
in default on the agreement, that Forward would forfeit the $125,000
(AUD) deposit, and that Mega$ports (ACT) would begin the search for
another qualified buyer.  The Company intends to petition the Nevada
Gaming Commission for an additional time extension in order to complete
the divestiture.  There is no assurance that the Nevada Gaming
Commission will grant additional time extensions.  The Company does not
believe a failure to receive additional time extensions from the Nevada
Gaming Commission will have a material adverse effect on the Company's
operations; however, failure to receive additional time extensions
could have a significant negative impact on the marketability and
negotiated sale price of the Mega$ports (ACT) operation.

Other

     The Company or any subsidiary is not a party to any other material
pending legal proceeding, nor, to the Company's knowledge, is any other
material legal proceeding threatened against it or any of its
subsidiaries.  The Company maintains insurance coverage, including
property, workers compensation and general liability insurance which it
considers adequate for the size of the Company and the nature of its
business.  Management does not believe the outcome of the above-
described proceedings will have a material adverse effect on the
Company's financial position or results of operations.

ITEM 2. CHANGES IN SECURITIES

     None

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

     None

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

     None

ITEM 5. OTHER INFORMATION

     None


                                       13

<PAGE>


ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K

a)  None
b)  A report on Form 8K was filed on February 14, 2001 with respect to
    an Item 5 matter.


                                       14

<PAGE>


Signature

In accordance with the requirements of the Securities Exchange Act of
1934, the registrant caused this report to be signed on its behalf by
the undersigned, thereunto duly authorized.

AMERICAN WAGERING, INC.

Dated:  June 14, 2001

By: /s/  Timothy F. Lockinger
----------------------------
Timothy F. Lockinger
Chief Financial Officer, Secretary, Treasurer, Director