<PAGE>


                     U.S. SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                  FORM 10-QSB

(Mark One)
   (x)       QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
                        SECURITIES EXCHANGE ACT OF 1934

                  For the quarterly period ended July 31, 2000

            TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
                         SECURITIES EXCHANGE ACT OF 1934

              For the transition period from _________to _________

                        Commission file number: 000-20685
                        ---------------------------------

                             American Wagering, Inc.
        -----------------------------------------------------------------
        (Exact name of small business issuer 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 office)

                                 (702) 735-0101
                           ---------------------------
                           (Issuer's telephone number)

--------------------------------------------------------------------------------
(Former name, former address and former fiscal year, if changed since last year)

         Check whether the issuer (1) filed reports required to be filed by
Section 13 or 15(d) of the Exchange Act during the past 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_____

The number of shares of Common Stock outstanding as of September 10, 2000 was
7,836,846.




<PAGE>


Part I Financial Information

Item I Financial Statements

                             AMERICAN WAGERING, INC.
                      UNAUDITED CONSOLIDATED BALANCE SHEETS

<TABLE>
<CAPTION>
                                                                                July 31,        January 31
                                                                                  2000             2000
                                                                                --------        ----------
<S>                                                                            <C>               <C>
                            ASSETS
                            ------
CURRENT ASSETS:
    Cash                                                                     $  1,593,745     $  3,415,793
    Accounts receivable, net of allowance for doubtful accounts
       of $41,501 and $188,624                                                    217,844          686,418
    Inventories, net of obsolescence reserve of $295,448 and $161,370             167,385          436,947
    Prepaid expenses and other current assets                                     436,563          309,951
                                                                             ------------     ------------
TOTAL CURRENT ASSETS                                                            2,415,537        4,849,109

PROPERTY AND EQUIPMENT, net                                                     3,887,231        4,098,355
INTANGIBLE ASSETS, net                                                            969,480        1,175,637
DEPOSITS AND OTHER ASSETS                                                         615,430          605,955
                                                                             ------------     ------------
TOTAL ASSETS                                                                 $  7,887,678     $ 10,729,056
                                                                             ============     ============

                          LIABILITIES AND STOCKHOLDERS EQUITY
                          -----------------------------------


CURRENT LIABILITIES:
    Current portion of long-term debt                                         $    31,985     $     61,892
    Accounts payable                                                            1,468,292        1,703,476
    Interest payable                                                              427,002               --
    Accrued expenses                                                              757,275          988,398
    Unpaid winning tickets                                                        319,104        1,888,424
    Other current liabilities                                                   1,145,685        1,154,995
    Net liabilities of business held for sale                                     354,409               --
                                                                              -----------     ------------
TOTAL CURRENT LIABILITIES                                                       4,503,752        5,797,185
LONG-TERM DEBT, less current portion                                            1,816,517        1,816,517
MINORITY INTEREST                                                                      --         (105,801)

COMMITMENTS AND CONTINGENCIES

STOCKHOLDERS' EQUITY:
   Series A Preferred stock - 10% cumulative; $100 par value;
      authorized:  25,000,000 shares; issued and
      outstanding: 15,162 and 15,424 shares                                     1,516,200        1,542,400
    Common Stock - $.01 par value; authorized: 25,000,000 shares;
       issued and outstanding: 7,836,846 and 7,824,513 shares                      78,980           78,857
    Shares to be issued in settlement of litigation - 239,819 shares            2,549,276        3,587,625
    Additional paid-in capital                                                 11,833,240       10,709,223
    Accumulated deficit                                                       (14,082,794)     (12,369,457)
    Less: treasury stock; at cost: 61,100 shares                                 (327,493)        (327,493)
                                                                            -------------     ------------
TOTAL STOCKHOLDERS' EQUITY                                                      1,567,409        3,221,155
                                                                            -------------     ------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY                                  $   7,887,678     $ 10,729,056
                                                                            =============     ============
</TABLE>

        The accompanying notes are an integral part of these consolidated
                             financial statements.



<PAGE>


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

<TABLE>
<CAPTION>

                                                                   2000                       1999
                                                                   ----                       ----
<S>                                                          <C>                            <C>
REVENUES                                                      $   1,904,451               $   2,256,484

OPERATING COSTS AND EXPENSES:
   Direct costs                                                   2,068,185                   2,037,817
   Research and development                                         249,172                     191,862
   Selling, general and administrative                              696,616                     768,941
   Depreciation and amortization                                    206,395                     207,306
                                                              --------------              -------------
TOTAL OPERATING COSTS AND EXPENSES                                3,220,368                   3,205,926
                                                              --------------              -------------
OPERATING LOSS                                                   (1,315,917)                   (949,442)

OTHER INCOME (EXPENSE):
   Interest income                                                    8,561                       3,023
   Other income (expense)                                           (62,566)                      1,319
   Minority interest                                                 (1,495)                     (1,354)
   Interest expense                                                (465,256)                    (39,974)
                                                              -------------               -------------
TOTAL OTHER INCOME (EXPENSE)                                       (520,756)                    (36,986)
                                                              -------------               -------------

LOSS BEFORE UNUSUAL OR INFREQUENT ITEMS                          (1,836,673)                   (986,428)

UNUSUAL OR INFREQUENT ITEMS:
    LITIGATION SETTLEMENT                                           899,997                          --
                                                              -------------               -------------
LOSS FROM CONTINUING OPERATIONS                                    (936,676)                   (986,428)
                                                              -------------               -------------

DISCONTINUED OPERATIONS:

   GAIN ON SALE OF HOTEL, FOOD AND BEVERAGE OPERATIONS                   --                     341,403

   EXCESS OPERATING LOSS RESERVE                                         --                     213,465
                                                              -------------               -------------
INCOME FROM DISCONTINUED OPERATIONS                                      --                     554,868
                                                              -------------               -------------

NET LOSS                                                           (936,676)                   (431,560)

PREFERRED STOCK DIVIDEND REQUIREMENTS                               (38,747)                    (47,570)
                                                              -------------               -------------

NET LOSS APPLICABLE TO COMMON SHAREHOLDERS                    $    (975,423)              $    (479,130)
                                                              =============               =============

BASIC AND DILUTED INCOME (LOSS) PER SHARE

    Loss from continuing operations                           $       (0.12)              $       (0.13)

    Income from discontinued operations                                 --                $        0.07

    Net loss                                                  $       (0.12)              $       (0.06)

</TABLE>

        The accompanying notes are an integral part of these consolidated
                             financial statements.






<PAGE>


                             AMERICAN WAGERING, INC.
                      CONSOLIDATED STATEMENTS OF OPERATIONS
                 FOR THE SIX MONTHS ENDED JULY 31, 2000 AND 1999

<TABLE>
<CAPTION>

                                                                   2000                       1999
                                                                   ----                       ----
<S>                                                          <C>                            <C>
REVENUES                                                      $   4,917,322               $   5,266,607

OPERATING COSTS AND EXPENSES:
   Direct costs                                                   4,462,562                   3,803,402
   Research and development                                         554,470                     343,242
   Selling, general and administrative                            1,436,995                   1,395,606
   Depreciation and amortization                                    434,829                     395,451
                                                              -------------               -------------
TOTAL OPERATING COSTS AND EXPENSES                                6,888,856                   5,937,701
                                                              -------------               -------------
OPERATING LOSS                                                   (1,971,534)                   (671,094)

OTHER INCOME (EXPENSE):
   Interest income                                                   14,975                      10,543
   Other income (expense)                                           (59,491)                      1,319
   Minority interest                                                 (5,624)                      3,669
   Interest expense                                                (514,797)                    (79,453)
                                                              -------------               -------------
TOTAL OTHER INCOME (EXPENSE)                                       (564,937)                    (63,922)
                                                              -------------               -------------

LOSS BEFORE UNUSUAL OR INFREQUENT ITEMS                          (2,536,471)                   (735,016)

UNUSUAL OR INFREQUENT ITEMS:
    LITIGATION SETTLEMENT                                           899,997                          --
                                                              -------------               -------------
LOSS FROM CONTINUING OPERATIONS                                  (1,636,474)                   (735,016)
                                                              -------------               -------------

DISCONTINUED OPERATIONS:

   GAIN ON SALE OF HOTEL, FOOD AND BEVERAGE OPERATIONS                   --                     341,403

   EXCESS OPERATING LOSS RESERVE                                         --                     213,465
                                                              -------------               -------------
INCOME FROM DISCONTINUED OPERATIONS                                      --                     554,868
                                                              --------------              -------------

NET LOSS                                                         (1,636,474)                   (180,148)

PREFERRED STOCK DIVIDEND REQUIREMENTS                               (76,863)                    (94,354)
                                                              -------------               -------------

NET LOSS APPLICABLE TO COMMON SHAREHOLDERS                    $  (1,713,337)              $    (274,502)
                                                              =============               =============

BASIC AND DILUTED INCOME (LOSS) PER SHARE

    Loss from continuing operations                           $       (0.21)              $       (0.10)

    Income from discontinued operations                                 --                $        0.07

    Net loss                                                  $       (0.22)              $       (0.03)

</TABLE>

        The accompanying notes are an integral part of these consolidated
                             financial statements.






<PAGE>


                             AMERICAN WAGERING, INC.
                 UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS
                 FOR THE SIX MONTHS ENDED JULY 31, 2000 AND 1999

<TABLE>
<CAPTION>
                                                                                          2000                      1999
                                                                                          ----                      ----
<S>                                                                                        <C>                       <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
    Net Loss                                                                          $(1,636,474)               $(274,502)
    Adjustments to reconcile net loss to net cash used in operating activities:
    Depreciation and amortization                                                         434,829                  474,633
    Gain on sale of discontinued operations                                                    --                 (341,403)
    Discontinued operations                                                                    --                 (342,482)
    Minority interest                                                                       5,624                   (3,669)
    Loss on contract termination                                                           67,897                       --
    Decrease (increase) in assets:
      Accounts receivable, net                                                            468,574                 (564,828)
      Inventories                                                                         269,562                  194,396
      Prepaid expenses and other current assets                                          (126,612)                 (80,329)
    Increase (decrease) in liabilities:
      Accounts payable                                                                   (235,184)                 336,287
      Interest payable                                                                    427,002                       --
      Accrued expenses                                                                   (231,123)                 313,399
      Unpaid winning tickets                                                           (1,569,320)              (2,171,343)
      Other current liabilities                                                            85,147                   53,613
      Net liabilities of business held for sale                                           354,409                       --
                                                                                       ----------               ----------
   Total adjustments                                                                      (49,195)              (2,131,726)
                                                                                       ----------               ----------
   Net cash used in operating activities                                               (1,685,669)              (2,406,228)
                                                                                       ----------               ----------

CASH FLOWS FROM INVESTING ACTIVITIES:
    Net proceeds from sale of assets                                                           --                3,809,392
    Capital expenditures                                                                 (212,465)                (143,083)
    Deposits and other assets                                                             123,265                    2,374
    Decrease in short-term investments                                                         --                  207,243
                                                                                       ----------               ----------
    Net cash (used in) provided by investing activities                                   (89,200)               3,875,926
                                                                                       ----------               ----------

CASH FLOWS FROM FINANCING ACTIVITIES:
    Stock option exercise                                                                  85,791                       --
    Repayment of long-term debt                                                           (29,907)              (2,412,408)
    Redemption of preferred stock                                                         (26,200)                (150,000)
    Preferred stock dividends                                                             (76,863)                (107,736)
                                                                                       ----------               ----------
   Net cash used in financing activities                                                  (47,179)              (2,670,144)
                                                                                       ----------               ----------

NET DECREASE IN CASH AND CASH EQUIVALENTS                                              (1,822,048)              (1,200,446)
CASH, beginning of period                                                               3,415,793                3,076,563
                                                                                       ----------               ----------
CASH, end of period                                                                     1,593,745                1,876,117
                                                                                       ==========               ==========

SUPPLEMENTAL CASH FLOW DISCLOSURE:
    Cash paid for interest                                                             $   87,795               $  200,825
                                                                                       ==========               ==========


</TABLE>



              The accompanying notes are an integral part of these
                       consolidated financial statements.


<PAGE>


                             AMERICAN WAGERING, INC.
                 UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS
                 FOR THE SIX MONTHS ENDED JULY 31, 2000 AND 1999

                                   (Continued)


SUPPLEMENTAL DISCLOSURES OF NON-CASH FINANCING ACTIVITIES:

Six months ended July 31, 2000 Transactions--

On July 28, 2000 the Company exchanged the assets of AWIHSI for the minority
interest of AWIHSI and AWISSI of $100,177.

Six months ended July 31, 1999 Transactions--

On February 1, 1999 the Company terminated the Mega$ports U.S. joint venture
agreement with IGT. The termination agreement allows the Company to receive
IGT's 50% interest in the joint venture and the Mega$ports(R) trademark. The
Company has agreed under the terms of the agreement to indemnify IGT for all
presently due and future obligations of Mega$ports U.S. The assets acquired and
the assumption of debt were as follows:


                      Cash                     $   4,262
                      Other current assets       168,463
                      Property and equipment      70,290
                      Current liabilities       (243,015)
                                               ---------
                                               $      --
                                               =========




              The accompanying notes are an integral part of these
                       consolidated financial statements.
<PAGE>
                             AMERICAN WAGERING, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                     FOR THE SIX MONTHS ENDED JULY 31, 2000


1.       Summary of Business and Significant Accounting Policies

         Summary of Business

         In August 1995, American Wagering, Inc., a Nevada Corporation, (the
         "Company") was formed as the holding Company for Leroy's Horse and
         Sports Place ("Leroy's") and Leroy's Hotel Corporation ("LHC").
         Immediately prior to the closing of the initial public offering by the
         Company, the stockholders of Leroy's and LHC exchanged their shares in
         those companies for shares of the Company. These transactions are
         referred to as the "Reorganization".

         On August 3, 2000 the Company was notified that it was not in
         compliance with all requirements for continued listing on the NASDAQ
         National Market Systems. Effective August 4, 2000 the Company's
         securities began trading on the OTC Bulletin Board (OTCBB).

         Leroy's was incorporated under the laws of the State of Nevada on
         November 14, 1977. Through a central computer system located at its Las
         Vegas headquarters, Leroy's operates a statewide network of race and
         sports wagering facilities in 46 casinos. Leroy's leases the square
         footage necessary to conduct its operations at the non-Company owned
         gaming establishments. Leroy's operates its main race and sports book
         and a 5,600 square foot casino with approximately 65 electronic gaming
         devices including slot machines, video poker machines and multi-game
         video machines at the Howard Johnson Hotel on 3111 West Tropicana
         Boulevard in Las Vegas, Nevada.

         The Company also owns and operates Mega$ports (ACT) Pty Ltd.
         ("Mega$ports (ACT)") located in Canberra, Australia. Mega$ports (ACT)
         is the Company's international wagering hub licensed to accept fixed
         odds and pari-mutuel interactive wagers on the Internet from patrons
         around the world except patrons located in the United States. In
         November 1998, Mega$ports (ACT) was issued a fifteen-year sports
         betting license from the Bookmakers Licensing Committee in the
         Australian Capital Territory ("ACT"). Mega$ports (ACT) began accepting
         wagers from non-Internet patrons within Australia in January 1999.
         Mega$ports (ACT) received regulatory approval for its Internet
         operations from the ACT and began accepting wagers on the Internet in
         March 1999. The Company's Internet operations were the subject of a
         Nevada Gaming Commission inquiry. On July 27, 2000 the Company reached
         a settlement with the Nevada Gaming Commission regarding the
         disciplinary complaint filed against the Company. The Company agreed to
         pay a fine of $10,000 and has agreed to divest itself of any and all
         interests and rights pertaining to the Australian operation. The
         divestiture may be accomplished by the sale, spin-off or terminating
         the operations of the subsidiary. The divestiture has to be
         accomplished by January 27, 2001. The Company has the right to request
         not more than three 60-day extensions to complete the divestiture. See
         "Legal Proceedings".

         The Company owns AWI Keno, Inc. ("AWIK") which designs, installs,
         operates and maintains computerized keno systems currently at four
         locations.

         The Company also owns and operates Computerized Bookmaking Systems,
         Inc. ("CBS"). CBS designs, installs and maintains sports and race book
         equipment, software and computer systems for the sports betting - North
         America industry. In 1994, CBS signed a joint venture agreement with
         IGT for the purpose of developing and marketing a pari-mutuel sports
         system, known as MEGA$PORTS(R). MEGA$PORTS(R) offered opportunities to
         wager on the outcome of individual sports contests, events occurring
         within or during the contests, and outcomes of groups of sports
         contests. On February 1, 1999, the Mega$ports joint venture agreement
         was terminated. In March 2000, the Company ceased ongoing operations of
         Mega$ports, U.S. The Mega$ports, U.S. gaming license expired in July
         2000.

         On July 28, 1998, the Company acquired certain assets from Advanced
         Computer Services, Inc. ("ACS"). Two new subsidiaries, AWI Sports
         Systems, Inc. ("AWISSI") and AWI Hotel Systems, Inc. ("AWIHSI") were
         formed to hold the assets acquired from ACS. On June 8, 2000 in
         conjunction with the termination of a consulting agreement, the Company
         sold the assets of AWIHSI and acquired the remaining 49% and 20%,
         respectively of the shares of AWISSI and AWIHSI that it did not already
         own.
<PAGE>

         In November 1999, the Company formed Secured Telephone Operating
         Platform, Inc. ("STOP") which designs, installs, and operates a
         telephone call identification system for its customers. The system
         determines the origin of a telephone call and accepts or rejects a call
         based on its origination. The system is used in conjunction with
         telephone account wagering within the State of Nevada.

         On April 22, 1998, the Company determined it would concentrate its
         business efforts on its core competency, sports wagering, and began
         seeking a qualified buyer for the hotel, food and beverage segment of
         the Company. On June 30, 1999, the Company finalized the sale of these
         operations and entered into a lease with the new owner to continue to
         operate the casino for up to two years. The casino serves as the
         Company's principal gaming location.
<PAGE>

         Period Results Not Indicative of the Full Year

         The results of operations for the Three and Six Months ended July 31,
         2000 and 1999 are not necessarily indicative of the results to be
         expected for the full fiscal year.

         The accompanying unaudited consolidated financial statements do not
         include all information and disclosures required under generally
         accepted accounting principles. However, in the opinion of management,
         the accompanying financial statements contain all adjustments
         (consisting only of normal recurring adjustments) considered necessary
         to present fairly the financial position, results of operations and
         cash flows, of the Company for the periods presented. The financial
         statements as of and for the years ended January 31, 2000 and 1999 and
         the notes thereto included in the Company's Annual Report on Form
         10-KSB should be read in conjunction with these interim financial
         statements.

         Earnings per Share

         The Financial Accounting Standards Board issued Statement of Financial
         Accounting Standards No. 128 -"Earnings Per Share" ("SFAS No. 128")
         which became effective for periods ending after December 15, 1997 and
         replaces historically reported earnings per share with "basic" and
         "diluted" earnings per share. Basic earnings per share is computed by
         dividing net income by the weighted average number of shares
         outstanding during the period, while diluted earnings per share
         reflects the additional dilution for all potentially dilutive
         securities, such as stock options.

         In accordance with SFAS No. 128, if potential shares outstanding would
         have an anti-dilutive effect on the diluted earnings per share
         calculation, then the shares are not included in the diluted earnings
         per share calculation. Options outstanding during the Three and Six
         Months ending July 31, 2000 under the Company's Employee Stock Option
         Plan and its Directors Stock Option Plan were not included in the
         computation of diluted earnings per share because they were
         anti-dilutive with regard to the losses incurred by the Company for the
         three and six months then ended.

         There were no dilutive securities for the period ended July 31, 1999.

         The weighted-average number of common and common equivalent shares used
         in the calculation of basic and diluted earnings per share consisted of
         the following:
<TABLE>
<CAPTION>
                                                                                     Three months              Six months
                                                                                     ended July 31,           ended July 31,
                                                                                 ---------------------    ---------------------
                                                                                   2000        1999         2000        1999
                                                                                 --------    ---------    --------    ---------
            <S>                                                                     <C>          <C>         <C>          <C>
            Weighted-average common shares outstanding (used in the
            computation of basic earnings per share)                             7,836,846   7,824,513    7,834,940   7,824,513
</TABLE>

         Principles of Consolidation

         The consolidated financial statements include the accounts of the
         Company and its subsidiaries. All significant intercompany balances
         and transactions have been eliminated. The financial results for
         acquisitions are included in the consolidated financial statements from
         the date of acquisition. Investments in 50% or less owned joint
         ventures are accounted for under the equity method.

         Reclassifications

         Certain amounts in the 1999 consolidated financial statements have
         been reclassified to conform with the 2000 presentation. These
         reclassifications had no effect on the Company's net income.


         Concentration of Risk

         The Company derives a substantial portion of its revenues from a
         limited number of licensed race and sports books in the State of
         Nevada. Limitations on the scope of operations at such licensed race
         and sports books due to statutory or regulatory changes or
         deterioration in the general economic conditions which impact the
         gaming industry in Nevada could adversely affect the Company's
         operating results. The Company also derives a portion of its revenues
         from its Internet operations in Australia, which is susceptible to
         regulatory or economic changes, which may impact the Internet or the
         gaming industry outside of the United States.

<PAGE>
         Revenues of the Company wagering segment is seasonal with approximately
         59% of its revenues derived between September and January. The Company
         is currently entering its most active wagering season. The Company
         takes financial risks on the outcome of various sporting events. There
         is no assurance that the outcome of the sporting events will be
         favorable and that the Company can derive sufficient cash flow during
         its most active wagering season or from its other segments to sustain
         operations during its lower activity period.

         The Company has expanded its sports wagering activities to Australia
         and is exploring other jurisdictions outside of the United States to
         expand its keno business line. The level of customer acceptance for the
         Company's keno products in these new jurisdictions is undetermined.
         Establishing these operations may require initial investments of
         several hundred thousand dollars.

         If the Company cannot generate sufficient cash flow from operations to
         meet its operating requirements and/or the required investments, the
         Company would have to obtain additional debt or equity funding. There
         can be no assurance that the Company would be able to complete such
         debt or equity funding or do so on terms satisfactory to the Company.

         The ownership and operation of casino gaming facilities, including race
         and sports books, in Nevada are subject to extensive state and local
         regulation. The Company's gaming operations are subject to the Nevada
         Gaming Control Act and the regulations promulgated thereunder,
         (hereinafter collectively referred to as the "Nevada Act") and various
         local regulations. If it were determined that the Nevada Act was
         violated by the Company or its subsidiaries the gaming licenses or
         registration held by the Company and it subsidiaries could be limited,
         conditioned, suspended or revoked subject to compliance with certain
         statutory and regulatory procedures. Limitation, conditioning or
         suspension or revocation of any gaming license may have a material
         effect on the Company's gaming operations.

         On March 22, 2000 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. Leroy's currently accepts
         wagers on the Olympic and college games. Leroy's estimates that
         wagering on college sports represents approximately 26% of its
         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
         reduce online gambling. One such proposal was to limit the expansion of
         online casinos with a moratorium on the issuance of online gaming
         licenses until consumer protection policies are implemented. The
         federal government is pursuing a total ban on Internet gambling.
         However, the states and territories in Australia are opposed to any
         limitations on issuing new online gaming licenses.

         At this time, the Company is unable to determine the effect, if any, of
         the outcome of the implementation of the recommendations made in these
         reports or whether the government will be successful in banning online
         gaming. If the federal government is successful in banning online
         gaming, such ban may have a material adverse effect on the operations
         of Mega$ports (ACT).

         On December 16, 1999, the Nevada State Gaming Control Board ("Board")
         filed a complaint for disciplinary action against American Wagering,
         Inc. relating to the operation of Mega$ports (ACT). The complaint
         alleges the Company, as a company registered with the Nevada Gaming
         Commission, engaged in an unsuitable method of operation due to the
         fact that Mega$ports (ACT) accepted a series of wagers from a patron
         who was physically located in Las Vegas, Nevada. The Board further
         alleges that the acceptance of these wagers is a violation of both
         federal and Nevada State laws that prohibit Internet sports wagering.
         On July 27, 2000 the Company reached a settlement with the Nevada
         Gaming Commission regarding the disciplinary complaint filed against
         the Company. The Company in the settlement neither admitted nor denied
         the allegations. The Company agreed to pay a fine of $10,000 and has
         agreed to divest itself of any and all interests and rights pertaining
         to the Australian operation. The divestiture may be accomplished by the
         sale, spin-off or terminating the operations of the subsidiary. The
         divestiture has to be accomplished by January 27, 2001. The Company has
         the right to request not more than three 60-day extensions to complete
         the divestiture. "See Legal Proceedings."

<PAGE>

2.       Net Liabilities of Business Held for Sale

         On July 27, 2000 the Company reached a settlement with the Nevada
         Gaming Commission regarding a disciplinary complaint filed against the
         Company. The Company agreed to pay a fine of $10,000 and divest itself
         of any and all interests and rights pertaining to Mega$ports (ACT). The
         Company is currently soliciting offers for the sale of Mega$ports
         (ACT). As such, the Company has classified the net liabilities of
         Mega$ports (ACT) as held for sale. The divestiture is required to be
         accomplished by January 27, 2001.

         Included in the net loss for the three and six months ended July 31,
         2000 were net losses of $198,391 and $385,333, respectively which were
         incurred by Mega$ports (ACT) operations. Additionally, the net loss
         included for the three and six months ended July 31, 1999 of Mega$ports
         (ACT) operations were net losses of $333,439 and $402,007,
         respectively.

         The components of the Net Liabilities of Business Held for Sale are:


                     Cash                              $ 225,113
                     Property and Equipment, net          94,457
                     Future Bets and Patron Deposits    (616,997)
                     Other Liabilities                   (56,982)
                                                       ---------
                     Net Liabilities                   $(354,409)
                                                       =========

3.       Business Segments

         The Company's primary operations are reported in the following four
         segments: wagering, casino, systems, and keno.

         The wagering segment consists of Leroy's, the licensed bookmaking
         operations with the largest number of sports books in the State of
         Nevada. As of July 31, 2000, in addition to its main location, the
         Company operated 45 race and sports books located within licensed
         gaming establishments owned by other companies throughout the State of
         Nevada. Leroy's leases the square footage necessary to conduct its
         operations at non-Company owned establishments. Additionally, the
         wagering segment consists of Mega$ports U.S. and Mega$ports (ACT)
         operations. Mega$ports (ACT) is the Company's international wagering
         hub for Internet sports wagering. The financial records of Mega$ports
         (ACT) are maintained in Australia. Mega$ports U.S. which offered a
         pari-mutuel sports wagering system in the State of Nevada ceased
         operations in March 2000. The Mega$ports, U.S. gaming license expired
         in July 2000.


<PAGE>

         The casino segment includes a 5,600 square foot casino within the
         Howard Johnson Hotel containing approximately 65 electronic gaming
         devices including slot machines, video poker machines and multi-game
         video machines.

         The systems segment, consisting of CBS, AWISSI and AWIHSI and STOP,
         designs, sells, installs and maintains equipment, software and computer
         systems to the sports betting and hotel industries. In June, 2000 the
         Company sold the assets of AWIHSI and acquired the remaining 49% and
         20%, respectively of the shares of AWISSI and AWIHSI that it did not
         already own.

         The keno segment develops, sells, operates and services stand alone
         linked progressive keno games using state-of-the-art graphical
         interfaces.

         In accordance with Statement of Financial Accounting Standards No. 131
         "Disclosures about Segments of an Enterprise and Related Information",
         the following summarizes the segment information for the Company:
<TABLE>
<CAPTION>
                 Three Months
                    Ended
                   July 31       Wagering        Casino        Systems            Keno      Corporate         Total
                  ----------     ----------      --------      ----------       ---------    ---------      ----------
<S>                   <C>             <C>           <C>             <C>             <C>        <C>             <C>
Revenues            2000         $1,069,247      $148,151     $   623,070       $  63,983      $  --        $1,904,451
                    1999            726,817       167,884       1,361,783              --         --         2,256,484

Research and        2000                --             --         249,172              --         --           249,172
Development         1999                --             --         191,862              --         --           191,862

Operating           2000          (115,262)       (81,795)       (295,723)       (267,047)    (556,090)     (1,315,917)
Income (Loss)*      1999          (662,621)        48,107         205,009         (95,578)    (444,359)       (949,442)

Capital             2000             1,680             --           5,743          17,083        1,429          25,935
Expenditures        1999            94,190          2,712         (15,250)         42,480       10,000         134,132

Depreciation        2000            70,406          2,082          86,254          40,130        7,523         206,395
and Amortization    1999            95,300           (433)        104,525              --        7,914         207,306

Identifiable        2000         1,582,034        291,481       4,322,263       1,006,307      685,593       7,887,678
Assets January 31,  2000         3,943,317        277,607       5,070,162         931,046      506,924      10,729,056
</TABLE>

<TABLE>
<CAPTION>
                  Six Months
                    Ended
                   July 31       Wagering        Casino        Systems            Keno      Corporate         Total
                  ----------     ----------      --------      ----------       ---------    ---------      ----------
<S>                   <C>             <C>           <C>             <C>             <C>        <C>             <C>
Revenues            2000         $2,470,398     $ 317,573      $1,988,911       $ 140,440         --       $ 4,917,322
                    1999          2,524,079       366,964       2,375,564              --  $      --         5,266,607

Research and        2000                --             --         554,470              --         --           554,470
Development         1999                --             --         343,242              --         --           343,242

Operating           2000          (193,560)       (32,964)        (41,509)       (581,822)  (1,121,679)     (1,971,534)
Income (Loss)*      1999          (178,162)       125,093         401,462        (162,502)    (856,985)       (671,094)

Capital             2000            29,999             --          18,477         163,146          843         212,465
Expenditures        1999            98,715          2,712         (13,927)         42,480       13,103         143,083

Depreciation        2000           140,667          4,165         173,592         101,420       14,985         434,829
and Amortization    1999           163,558          3,643         202,239              --       26,011         395,451

Identifiable        2000         1,582,034        291,481       4,322,263       1,006,307      685,593       7,887,678
Assets January 31,  2000         3,943,317        277,607       5,070,162         931,046      506,924      10,729,056
</TABLE>

* Operating income (loss) does not include the allocation of corporate
management fees. The management fees are equal to 9.5% of each operating
Company's net operating income.




<PAGE>

Item 2.  Management's Discussion and Analysis or Plan of Operation

Results of Operations

Fiscal Quarter ended July 31, 2000 compared to the Fiscal Quarter ended July 31,
1999.

         Revenues for the Fiscal Quarter ended July 31, 2000, Second Quarter of
Fiscal 2001, were $1,904,451, a decrease of $352,033 or 15.6% from revenues of
$2,256,484 for the Fiscal Quarter ended July 31, 1999, Second Quarter of Fiscal
2000. The decrease was principally attributed to a decrease in Systems revenues
of $738,713 and Casino revenue of $19,733 which were offset by an increase in
wagering revenues of $342,430 and Keno revenues of $63,983. Operating loss of
$1,315,917 for the Second Quarter of Fiscal 2001 increased by $366,475 or 38.6%
compared to operating loss of $949,442 for the Second Quarter of Fiscal 2000.
The increase was principally attributed to increased costs for operating Keno
and Mega$ports (ACT) for the entire year and increased operating costs at the
Casino. Offsetting the operating loss was the absence of losses associated with
the ceased operations of Mega$ports U.S.

Wagering operations

         Revenues from wagering operations were $1,069,247 for the Second
Quarter of Fiscal 2001, an increase of $342,430 or 47.1% from revenues of
$726,817 for the Second Quarter of Fiscal 2000. The increase was due to a 63.3%
increase in net win percentage (handle less paid-outs, divided by handle)
between quarters. The net win percentage was 4.9% for the Second Quarter of
Fiscal 2001 compared to 3.0% for the Second Quarter of Fiscal 2000. Handle of
$21,400,303 for the Second Quarter of Fiscal 2001 decreased by $2,828,947 from
handle of $24,229,250 for the Second Quarter of Fiscal 2000. An increase or
decrease in handle is not necessarily indicative of an increase or decrease in
revenues or profits. Operating costs of $1,184,509 for the Second Quarter of
Fiscal 2001 decreased by $204,929 from operating costs of $1,389,438 for the
Second Quarter of Fiscal 2000 primarily due to the absence of costs associated
with the ceased operations of Mega$ports U.S. during the Second Quarter of
Fiscal 2001.


Casino Operations

         Revenues from Casino operations were $148,151 for the Second Quarter of
Fiscal 2001, a decrease of $19,733 or 11.8% from revenues of $167,884 for the
Second Quarter of Fiscal 2000. The decrease was principally attributed to
decreased slot play of local customers. Operating costs of $229,946 increased
$110,169 or 92.0% from operating costs of $119,777 for the Second Quarter of
Fiscal 2000. The increase is primarily due to increased rent which was
previously allocated to the wagering segment.


System Operations

         Revenues from Systems operations were $623,070 for the Second Quarter
of Fiscal 2001, a decrease of $738,713 or 54.2% from revenues of $1,361,783 for
the Second Quarter of Fiscal 2000. Decreased revenues of $739,411 from CBS
operations were attributed to decreased equipment sales. AWISSI and AWIHSI,
which began operations in July 1998 generated revenues of $54,751 primarily from
recurring maintenance billings for the Second Quarter of Fiscal 2001. Operating
costs of $918,793 for the Second Quarter of Fiscal 2001 decreased by $237,981 or
20.6% from operating costs of $1,156,774 for the Second Quarter of Fiscal 2000
mainly due to lower equipment sales.

Keno Operations

         Keno began operations in August 1999. During the Second Quarter of
Fiscal 2001 Keno generated revenue from commissions of $63,983 and incurred
costs of $331,030 which included location operating costs, labor, marketing and
professional services.

Direct Costs

         Direct costs of $2,068,185 for the Second Quarter of Fiscal 2001
increased by $30,368 or 1.5% from direct costs of $2,037,817 for the Second
Quarter of Fiscal 2000 principally due to costs associated with Keno which was
fully operational for the Second Quarter of Fiscal 2001.


<PAGE>

Research and Development Costs

         Research and development costs of $249,172 for the Second Quarter of
Fiscal 2001 increased by $57,310 or 29.9% from research and development costs
of $191,862 for the Second Quarter of Fiscal 2000 due principally to increased
labor costs associated with new product development.


Selling, General and Administrative Costs

         Selling, general and administrative costs of $696,616 for the Second
Quarter of Fiscal 2001 decreased $72,535 or 9.4% from $768,941 for the Second
Quarter of Fiscal 2000 primarily due to the Company's effort to reduce
expenditures.

Unusual or Infrequent Items

         In July, 2000 the Company settled it's litigation with Autotote
Corporation. As a result of the settlement the Company received proceeds of
$540,000 and was relieved of it's obligation to pay accrued royalties of
$359,997.

Net Loss

         Net loss for the Second Quarter of Fiscal 2001 of $936,676 increased
$505,116 or 117.0% from a net loss of $431,560 for the Second Quarter of Fiscal
2000. The unfavorable variance was principally due to the interest accrual on
the Racusin settlement. See "Legal Proceedings".
<PAGE>


Six Months ended July 31, 2000 compared to the Six Months ended July 31,
1999.

         Revenues for the Six Months ended July 31, 2000, were $4,917,322, a
decrease of $349,285 or 6.6% from revenues of $5,266,607 for the Six Months
ended July 31, 1999. The decrease was attributed to a decrease in Systems
revenues of $386,653 and Casino revenue of $49,391 and Wagering revenues of
$53,681 which were offset by an increase due to the addition of Keno revenues of
$140,440. Operating loss of $1,971,534 for the Six Months ended July 31, 2000
increased by $1,300,440 or 193.8% compared to operating loss of $671,094 for the
Six Months ended July 31, 1999. This increase was primarily attributed to the
loss incurred by Keno operations and Mega$ports (ACT) which were fully
operational for the Six Months ended July 31, 2000.

Wagering operations

         Revenues from wagering operations were $2,470,398 for the Six Months
ended July 31, 2000, a decrease of $53,681 or 2.1% from revenues of $2,524,079
for the Six Months ended July 31, 1999. The decrease was due to a 1.9% decrease
in net win percentage (handle less paid-outs, divided by handle) between
quarters. The net win percentage was 5.1% for the Six Months ended July 31, 2000
compared to 5.2% for the Six Months ended July 31, 1999. Handle of $47,308,454
for the Six Months ended July 31, 2000 increased by $285,864 from handle of
$47,022,590 for the Six Months ended July 31, 1999. An increase or decrease in
handle is not necessarily indicative of an increase or decrease in revenues or
profits. Operating costs of $2,663,958 for the Six Months ended July 31, 2000
decreased by $38,283 from operating costs of $2,702,241 for the Six Months ended
July 31, 1999 primarily due to the reduction of costs associated with the ceased
operations of Mega$ports U.S. for the Six Months ended July 31, 2000.

Casino Operations

         Revenues from Casino operations were $317,573 for the Six Months ended
July 31, 2000, a decrease of $49,391 or 13.5% from revenues of $366,964 for the
Six Months ended July 31, 1999. The decrease was principally attributed to
decreased slot play of local customers. Operating costs of $350,537 for the Six
Months ended July 31, 2000 increased $108,666 or 44.9% from operating costs of
$241,871 for the Six Months ended July 31, 1999. The increase is primarily
attributable to rent expense which was previously allocated to the Wagering
Segment.

System Operations

         Revenues from Systems operations were $1,988,911 for the Six Months
ended July 31, 2000, a decrease of $386,653 or 16.3% from revenues of $2,375,564
for the Six Months ended July 31, 1999. Decreased revenues of $360,297 from CBS
operations were attributed to decreased equipment sales. AWISSI and AWIHSI,
which began operations in July 1998 and are partly owned, generated revenues of
$110,364 primarily from recurring maintenance billings for the Six Months ended
July 31, 2000. Operating costs of $2,030,420 for the Six Months ended July 31,
2000 increased by $56,318 or 2.9% from operating costs of $1,974,102 for the Six
Months ended July 31, 1999 mainly due to costs associated with STOP which was
fully operational for the Six Months ended July 31, 2000.

Keno Operations

         Keno began operations in August 1999. During the Six Months ended July
31, 2000 Keno generated revenue from commissions of $140,440 and incurred costs
of $722,262 which includes location operating costs, labor, marketing and
professional services.

Direct Costs

         Direct costs of $4,462,562 for the Six Months ended July 31, 2000
increased by $659,160 or 17.3% from direct costs of $3,803,402 for the Six
Months ended July 31, 1999 principally due to costs associated with Keno and
MegaSports (ACT) which were fully operational for the Six Months ended July 31,
2000.


<PAGE>
Research and Development Costs

         Research and development costs of $554,470 for the Six Months ended
July 31, 2000 increased by $211,228 or 61.5% from research and development
costs of $343,242 for the Six Months ended July 31, 1999 due principally to
increased labor costs associated with new product development.


Selling, General and Administrative Costs

         Selling, general and administrative costs of $1,436,995 for the Six
Months ended July 31, 2000 increased $41,389 or 3.0% from $1,395,606 for the Six
Months ended July 31, 1999 primarily due to increased legal costs incurred in
the corporate segment.

Unusual or Infrequent Items

         In July, 2000 the Company settled it's litigation with Autotote
Corporation. As a result of the settlement the Company received proceeds of
$540,000 and was relieved of it's obligation to pay accrued royalties of
$359,997.

Net Loss

         Net loss for the Six Months ended July 31, 2000 of $1,636,474 increased
$1,456,326 or 808.4% from $180,148 for the Six Months ended July 31, 1999. The
unfavorable variance was due to the additional costs associated with operating
Keno and Mega$ports (ACT) which were fully operational for the Six Months ended
July 31, 2000 and the interest accrued on the Racusin settlement. "See Legal
Proceedings".

Liquidity and Capital Resources

         Working capital decreased $1,140,139 from January 31, 2000. Cash used
in operating activities was $1,685,669 for the Six Months ended July 31, 2000
compared to cash used in operating activities of $2,406,228 for the Six Months
ended July 31, 1999. Net cash used in investing activities was $89,200 for the
Six Months ended July 31, 2000 compared to cash provided by investing activities
of $3,875,926 for the Six Months ended July 31, 1999. Net cash used in financing
activities amounted to $47,179 for the Six Months ended July 31, 2000 compared
to net cash used in financing activities of $2,670,144 for the Six Months ended
July 31, 1999.

         Revenues of the Company wagering segment is seasonal with approximately
59% of its revenues derived between September and January. The Company is
currently entering its most active wagering season. The Company takes financial
risks on the outcome of various sporting events. There is no assurance that the
outcome of the sporting events will be favorable and that the Company can derive
sufficient cash flow during its most active wagering season or from its other
segments to sustain operations during its lower activity period.

         While 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, this requirement may necessitate
curtailment of certain capital expenditures and reduction in staffing levels.
The uncertainty created by proposed legislation, which could ban wagering on
amateur athletic events may require the Company to research the source of its
future revenue growth. As described in the Company's annual report on Form
10-KSB for the year ended January 31, 2000, the Company continues to review
various programs in fiscal year 2001 aimed at building cash liquidity which can
be used to fund working capital requirements.

         The Company is exploring other jurisdictions to expand its keno
business lines. The level of customer acceptance for the Company's Keno products
in these new jurisdictions is undetermined. Establishing these operations may
require initial investments of several hundred thousand dollars.

         If the Company cannot generate sufficient cash flow from its operations
to meet its operating requirements and/or the required investments, the Company
would have to obtain additional debt or equity funding. There can be no
assurance that the Company would be able to complete such debt or equity funding
or do so on terms satisfactory to the Company.


<PAGE>

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, as amended. 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, Year 2000 compliance and the effects of regulation
(including gaming and tax regulation) 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).


<PAGE>
PART II        OTHER INFORMATION

Item 1.        LEGAL PROCEEDINGS - In addition to the descriptions set forth
               below please see the description of these legal proceedings set
               forth in the Registrant's Form 10-KSB for the year ended January
               31, 2000.

               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"),
               were 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. The specific language of the alleged
               unenforceable agreements provided that Leroy's would pay to
               Racusin (i) a commission equal to 5% of the purchase price of
               Leroy's in the event Racusin brings in a buyer for Leroy's; and
               (ii) compensation equal to 4.5% of the "final evaluation in the
               form of Leroy's Common Stock plus $150,000 in cash upon
               completion of common offering or IPO".

               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) American Wagering is the later ego of Leroy's.

               On July 12, 2000 a judgement was entered by the Court 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
                   judgement interest on the 239,819 shares.
               3.  Racusin shall recover his costs of the suit.

               The Company has filed an appeal of the judgement.

               The Company has reserved 229,819 shares of Common Stock and has
               accrued $427,000 in interest awarded in the Judgement.

               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. 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 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 in settlement
               of their claims against Autotote and was relieved of its
               obligation to pay accrued royalty payments of $359,997, and the
               counterclaims of Autotote were dismissed with prejudice.

               Internet Operation 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$ports Pty, Ltd. Case
               No. 99-27 ("complaint"), related to the operation of Mega$sports
               Pty, Ltd., ("Mega$ports (ACT)"). The complaint contained 13
               separate counts against the Company. The complaint alleged the
               Company, as a Company registered with the Nevada Gaming
               Commission, engaged in an unsuitable method of operation due to
               the fact that Mega$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.
<PAGE>
               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 $10,000 and has
               agreed to divest itself of any and all interests and rights
               pertaining to Mega$ports (ACT). The divestiture may be
               accomplished by sale, spin off or termination of the operations
               of Mega$ports (ACT). The divestiture is to be accomplished by
               January 27, 2001. The Company has the right to request not more
               than three 60-day extension periods to complete the divestiture.

               The Company is soliciting offers for the sale of Mega$ports (ACT)
               and has received inquires from interested parties. The Company is
               evaluating its various alternatives.


<PAGE>

Item 2.        CHANGES IN SECURITIES - NON APPLICABLE

Item 3.        DEFAULTS UPON SENIOR SECURITIES - NON APPLICABLE

Item 4.        SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS -
               NON APPLICABLE

Item 5.        OTHER INFORMATION - NON APPLICABLE

Item 6.        EXHIBITS AND REPORTS ON FORM 8-K

               Exhibits - Financial Data Schedule

Number                       Description                       Method of Filing
------                       -----------                       ----------------

  27                   Financial Data Schedule                  Filed Herewith

(b) The following report on Form 8-K was filed during the quarter ended July
    31, 2000:
               NONE



                                   SIGNATURES


Pursuant to the requirements of the Securities and Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.

                                                    AMERICAN WAGERING, INC.


                                                            (Registrant)

Date:  September 14, 2000                           By: /s/ Robert D. Ciunci
                                                    ----------------------------
                                                    Robert D. Ciunci
                                                    Executive Vice President and
                                                    Chief Financial Officer