SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934 (Amendment No. )

Filed by the Registrant /X/
Filed by a Party other than the Registrant / /

Check the appropriate box:

/ / Preliminary Proxy Statement
/ / Confidential, for Use of the Commission Only (as permitted by
Rule 14a-6(e)(2))
/X/ Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to 240.14a-11(c) or 240.14a-12

AMERICAN WAGERING, INC.
(Name of Registrant as Specified in Its Charter)
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(Name of Person(s) Filing Proxy Statement, if other than the Registrant)

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/X/ No fee required
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.

1) Title of each class of securities to which transaction applies:

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2) Aggregate number of securities to which transaction applies:

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3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined):

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4) Proposed maximum aggregate value of transaction:

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5) Total fee paid:

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/ / Fee paid previously with preliminary materials.
/ / Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.

1) Amount Previously Paid:

___________________________________________________________________________
2) Form, Schedule or Registration Statement No.:

___________________________________________________________________________
3) Filing Party:

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4) Date Filed:

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AMERICAN WAGERING, INC.
675 Grier Drive, Las Vegas, Nevada 89119

NOTICE AND PROXY STATEMENT

ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD 10:00 A.M., JULY 15, 1997

NOTICE IS HEREBY GIVEN that the Annual Meeting of Stockholders of American
Wagering, Inc. (the "Company") will be held on Tuesday, July 15, 1997, at 10:00
a.m., local time, at the Company's executive offices at 675 Grier Drive, Las
Vegas, Nevada, for consideration of and action by the holders of the Company's
Common Stock upon the following matters:

1. The election of a Board of five directors, with each director to serve
until the next annual meeting of Stockholders or until the election and
qualification of his respective successor;

2. To approve an amendment to the 1995 Stock Option Plan to, among other
things, increase the number of shares available in the Plan by 200,000;

3. The ratification of the appointment of Arthur Andersen LLP as the
Company's independent public accountants for the fiscal year ending
January 31, 1998; and

4. The transaction of such other business as may properly come before the
Annual Meeting and any adjournment thereof, and matters incident to the
conduct of the Annual Meeting.

The Board of Directors has fixed the close of business on June 16, 1997,
as the record date for the determination of holders of Common Stock of the
Company entitled to notice of, and to vote at, the Annual Meeting. The
Company's Annual Report to Stockholders for the year ended January 31, 1997,
accompanies this Notice and Proxy Statement.

STOCKHOLDERS (WHETHER THEY OWN ONE OR MANY SHARES AND WHETHER THEY EXPECT
TO ATTEND THE ANNUAL MEETING OR NOT) ARE REQUESTED TO VOTE, SIGN, DATE AND
RETURN PROMPTLY THE ACCOMPANYING PROXY IN THE ENCLOSED ENVELOPE, WHICH REQUIRES
NO POSTAGE IF MAILED IN THE UNITED STATES.

By Order of the Board of Directors

Michael Merillat, Secretary

June 16, 1997

AMERICAN WAGERING, INC.

675 Grier Drive, Las Vegas, Nevada 89119

PROXY STATEMENT

This Proxy Statement is furnished and is being mailed with the
accompanying proxy on approximately June 23, 1997, to each Stockholder of
record of American Wagering, Inc. (the "Company") in connection with the
solicitation of proxies by the Board of Directors of the Company, to be voted
at the Annual Meeting of Stockholders of the Company (the "Meeting") to be held
on Tuesday, July 15, 1997, at 10:00 a.m., local time, at the Company's
executive offices at 675 Grier Drive, Las Vegas, Nevada, and at any adjournment
thereof, for the purposes stated below.

Any person giving a proxy has the power to revoke it at any time before
its exercise by a later dated proxy, a written revocation sent to the Secretary
of the Company or attendance at the Meeting and voting in person. In the
absence of contrary instructions, properly executed proxies, received and
unrevoked, will be voted by the persons named in the proxy: (i) for the
election of the directors proposed by the Board of Directors; (ii) for
amendment to the 1995 Stock Option Plan to, among other things, increase the
number of shares available in the Plan by 200,000; (iii) for the ratification
of Arthur Anderson LLP as the Company's independent public accountants for the
fiscal year ending January 31, 1998; and (iv) in their discretion, on such
other business as may properly come before the Meeting and matters incident to
the conduct of the Meeting.

VOTING SECURITIES OF THE COMPANY

Only Stockholders of record at the close of business on June 16, 1997, are
entitled to notice of, and to vote at, the Meeting. On June 15, 1997, the
outstanding voting securities of the Company consisted of 7,837,500 shares of
Common Stock. Each share of Common Stock is entitled to one vote on all matters
presented to the Meeting with no right to vote cumulatively.

The Company's By-laws provide that the presence, in person or by proxy, of
two thirds of the issued and outstanding shares of the Company entitled to vote
at the Meeting will constitute a quorum. Provided that the quorum requirements
are met, the nominees for election as directors of the Company at the Meeting
who receive the greatest number of votes cast will be elected as directors.

Abstentions and broker non-votes are counted for purposes of determining
whether a quorum is present for the transaction of business at the Meeting.
Abstentions are counted as negative votes in tabulations of the votes cast on
proposals presented to Stockholders, whereas broker non-votes have no effect on
the outcome of voting.

The following table sets forth, at June 15, 1997, the number and
percentage of shares of Common Stock which, according to information supplied
to the Company, are beneficially owned by: (i) each person who is a beneficial
owner of more than 5% of the Common Stock; (ii) each of the directors, and
named executive officers of the Company individually; and (iii) all current
directors and executive officers of the Company as a group. Under rules adopted
by the Securities and Exchange Commission, a person is deemed to be a
beneficial owner of Common Stock with respect to which he has or shares voting
power (which includes the power to vote or to direct the voting of the
security), or investment power (which includes the power to dispose of, or to
direct the disposition of, the security). A person is also deemed to be the
beneficial owner of shares with respect to which he could obtain voting or
investment power within 60 days of June 15,1997, such as upon the exercise of
options or warrants.

Name and Address Number of Shares Percentage
- ------------------------------------------ ------------------ -----------

Robert Barengo ........................ 525,000(1) 6.70%
675 Grier Drive
Las Vegas, Nevada 89119

Robert D. Ciunci ........................ 105,000(2) 1.34%
675 Grier Drive
Las Vegas, Nevada 89119

Michael Merillat ........................ 210,000(3) 2.68%
675 Grier Drive
Las Vegas, Nevada 89119

Michael Roxborough ..................... 519,600(4) 6.63%
675 Grier Drive
Las Vegas, Nevada 89119

Victor J. Salerno ..................... 3,885,000 49.57%
675 Grier Drive
Las Vegas, Nevada 89119

All directors and executive officers as a
group (5 persons) ..................... 5,244,600 66.92%

- ------------
(1) Includes 525,000 shares held jointly with Mr. Barengo's wife. Does not
include 400 shares which may only be issued upon the exercise of stock
options after January 31, 1998.

(2) Does not include 50,000 shares which may only be issued upon exercise of
stock options after August 22, 1999.

(3) Does not include 50,000 shares which may only be issued upon exercise of
stock options after August 22, 1999.

(4) Does not include 300 shares which may only be issued upon exercise of stock
options after January 31, 1998.

ELECTION OF DIRECTORS

In accordance with the Company's By-laws, a Board of five directors will
serve until the next Meeting or until successors to the directors have been
elected and have qualified. All directors are elected annually. It is the
intention of the persons named in the proxy, unless otherwise directed, to vote
all proxies in favor of the election to the Board of Directors for the nominees
listed below. The Board has no reason to believe that any of the nominees will
be unable or unwilling to be a candidate for election at the time of the
Meeting. If any nominee is unable or unwilling to serve, the persons named in
the proxy will use their best judgment in selecting and voting for a substitute
candidate.

The Board of Directors has unanimously recommended a slate of nominees for
election as directors at the Meeting. The names of the nominees for directors
of the Company, their ages and certain other information is set forth as
follows:

Name Age Position
- --------------------------- ----- ------------------------------------------------

Victor J. Salerno ...... 53 President, Chief Executive Officer and Director

Robert D. Ciunci ......... 50 Chief Operating Officer, Chief Financial
Officer, Executive Vice President and Director

Michael Merillat ......... 46 Vice President, Secretary and Director

Robert R. Barengo ......... 55 Director

Michael Roxborough ...... 46 Director

Victor J. Salerno has been President, Chief Executive Officer and a
Director of the Company since its inception. Mr. Salerno has been the
President, Chief Executive Officer and a Director of Leroy's Horse and Sports
Place ("Leroy's"), the subsidiary of the Company which operates the largest
number of sports book locations in the state of Nevada and a casino, since
September 1979. Mr. Salerno served as an Executive Vice President and Director
of Computerized Bookmaking Systems, Inc., formerly known as Autotote CBS
Corporation ("CBS"), a company that designs and installs computer systems for
the sports betting business, from April 1989 until March 1, 1996. The Company
acquired CBS on October 25, 1996. He is a past president of the Nevada
Association of Race and Sports Operators. Mr. Salerno is the brother in-law of
Mr. Merillat. Mr. Salerno is a member of the Compliance Committee of the
Company's Board of Directors.

Robert D. Ciunci has been Executive Vice President, Chief Financial
Officer and a Director of the Company since its inception and became the Chief
Operating Officer of the Company on March 7, 1997. Mr. Ciunci has been the
Chief Financial Officer of Leroy's since August 1, 1995. From 1981 to June 1995
he was employed by Autotote Corporation, a company that provides computerized
wagering systems to race tracks and off track race wagering establishments, as
its Vice President Finance, Secretary and Treasurer. He holds a master's degree
in business administration and has been a certified public accountant since
1971. Mr. Ciunci is a member of the Compliance Committee of the Company's Board
of Directors.

Michael Merillat has been Vice President, Secretary and a Director of the
Company since its inception. Mr. Merillat has been employed by Leroy's since
September 1978, currently as Vice President, Secretary, a Director and race
manager. Mr. Merillat is the brother-in-law of Mr. Salerno.

Robert R. Barengo has been a Director of the Company since its inception.
Mr. Barengo has been a Director of Leroy's since February 1992. He has been an
attorney in private practice since 1972. Mr. Barengo was Speaker Pro Tempore
and Speaker of Nevada's Assembly from 1978 to 1983. Mr. Barengo has been a
director of the Riviera Holdings Corporation and the Riviera Hotel and Casino
since 1992. Since 1993, Mr. Barengo has also been and continues to be at
present President and the sole stockholder of Silver State Disseminators
Company, a company licensed by Nevada gaming authorities to disseminate racing
information in the State of Nevada. Mr. Barengo has also been since 1993 and
continues to be at present Chairman of the Nevada Dairy Commission. Mr. Barengo
is a member of the Audit, Compensation, Compliance and Stock Option Committees
of the Company's Board of Directors.

Michael Roxborough has been a director of the Company since its inception.
Mr. Roxborough has been a director of Leroy's since September 1992. Since 1982,
he has been the president of Las Vegas Sports Consultants, Inc., a provider of
odds and point spreads to legal sports bookmaking operators including the
Company, in the United States, Canada, Mexico, England, Ireland and Australia.
Mr. Roxborough is a member of the Audit, Compensation and Stock Option
Committees of the Company's Board of Directors.

Executive Officers

The directors listed above who are executive officers of the Company in
the positions indicated, comprise all the executive officers of the Company.

CERTAIN TRANSACTIONS

Prior to May 10, 1996, Leroy's, Leroy's Hotel Corporation (the "Hotel
Operator"), the subsidiary of the Company which owns and operates a Howard
Johnson's hotel and International House of Pancakes restaurant, and B-P Gaming
Corporation ("B-P"), the former subsidiary of the Company and operator of the
casino adjacent to the hotel, were S Corporations under the Internal Revenue
Code. From inception through February 29, 1996 Leroy's made cash distributions
of approximately $4.4 million in the aggregate to Messrs. Salerno, Barengo,
Roxborough, Ciunci and Merillat (the "Original Stockholders.") On March 21,
1996 Leroy's made cash distributions to the Original Stockholders in the
aggregate amount of $3.0 million representing undistributed income through
January 31, 1996 on which such stockholders had previously paid federal income
taxes. Of the $3.0 million distributed approximately $2.4 million was loaned
back to Leroy's by the Original Stockholders and $558,000 was contributed as
capital to Leroy's by such stockholders. The loans are repayable pursuant to
restated stockholder notes maturing on May 1, 1998 and bearing interest at a
current annual rate of 8.25%. In addition, B-P made cash distributions to its
stockholders for the year ended December 31, 1995 and Leroy's, the Hotel
Operator and B-P made cash distributions for the short tax year ended May 10,
1996 for the taxable income of such companies for such periods. Such
distributions eliminated Leroy's, the Hotel Operator's and B-P's accumulated
earnings through the date of termination of the S Corporation status of such
corporations.

Leroy's, the Hotel Operator and B-P and the Original Stockholders entered
into an agreement on May 10, 1996 which provides that if Leroy's, the Hotel
Operator or B-P obtain a tax benefit to the detriment of such stockholders for
any tax period, on or prior to May 10, 1996, the affected company shall pay to
the stockholders the tax benefit actually derived up to the amount of the tax
detriment actually incurred. In addition, for up to $200,000 in the aggregate,
such companies have agreed to pay to such stockholders any increased tax
liability of such stockholders attributable to a determination by a court of
competent jurisdiction or a federal taxing authority that with respect to the
federal tax returns of such companies for taxable years prior to May 10, 1996,
the tax liability of such companies shall be increased.

The Company, through its wholly-owned subsidiary, American Wagering
Management Company, Inc., provides managerial and related services to Leroy's,
CBS and the Hotel Operator ("Operating Companies"). The Company provides
executive and administrative services in exchange for a management fee equal to
9.5% of each Operating Company's gross operating revenues (including
promotional allowances). During the year ended January 31, 1997, the Operating
Companies paid the Company an aggregate of $541,282.

The Company and the Operating Companies entered into a consolidated income
tax return tax sharing agreement on May 10, 1996. In general, the agreement
provides that in conjunction with the filing of a consolidated federal income
tax return with the Internal Revenue Service each of the Operating Companies
will pay to the Company an amount equal to the federal income tax liability
that such company would have paid if it were filing its own separate federal
income tax return.

Pursuant to a stock purchase agreement, dated December 12, 1994, between
Victor Salerno and Robert Ciunci, Mr. Salerno sold to Mr. Ciunci shares of
stock of Leroy's constituting two percent of the outstanding shares of Leroy's
for $100,000. The payment for such shares by Mr. Ciunci was required to be made
after the receipt of the Nevada Gaming Commission's approval of such sale. The
Nevada Gaming Commission approved the sale on February 22, 1996.

In 1995, in connection with the purchase of the initial 50% interests in
the Howard Johnson's hotel and adjacent casino ("Hotel/Casino"), Leroy's made a
$200,000 deposit on behalf of Messrs. Salerno, Merillat, Barengo and
Roxborough, for the purchase of such 50% interests. Such individuals
transferred their right to purchase the interests in the Hotel/Casino to the
Hotel Operator for which the Hotel Operator assumed such individuals'
obligations to repay Leroy's.

Mr. Barengo is a director of the Riviera Hotel and Casino (the "Riviera"),
at which the Company maintains one of its satellite sports book operations
pursuant to a renewable one month lease for which the Company leases 200 square
feet. The Company paid the Riviera rent of $158,654 and $141,883 for the years
ended January 31, 1997 and 1996.

CBS leases 2,000 square feet of office space to MEGA$PORTS, Inc., a 50%
owned subsidiary of the Company, in the building owned by CBS. Lease payments
invoiced were $14,775 for the year ended January 31, 1997.

CBS leases 3,735 square feet of office space to Las Vegas Sports
Consultants, Inc., a company of which Mr. Roxborough is President, in the
building owned by CBS. Lease payments received by CBS were $16,470 for the year
ended January 31, 1997.

BOARD OF DIRECTORS AND COMMITTEES

The Company's Board of Directors held one meeting during the fiscal year
ended January 31, 1997. All other actions taken by the Board during the fiscal
year ended January 31, 1997 were taken by unanimous written consent. Each of
the then-serving directors attended or participated in at least 75% of the
aggregate of all meetings of the Board and all committees of which he was a
member during the fiscal year ended January 31, 1997.

The Company has a Compensation Committee and a Stock Option Committee,
each composed of Messrs. Barengo and Roxborough. The Stock Option Committee is
authorized to administer and grant options pursuant to the Company's 1995 Stock
Option Plan. The Compensation Committee is responsible for recommending
executive compensation programs to the Board of Directors and approving
compensation decisions with respect to the executive officers of the Company.
The Compensation and Stock Option Committees each held one meeting during the
fiscal year ended January 31, 1997, which was attended by both of the
then-serving committee members.

The Company has an Audit Committee composed of Messrs. Barengo and
Roxborough, which recommends the independent public accountants for appointment
by the Board of Directors and reviews reports submitted by the accountants. The
Audit Committee held one meeting during the fiscal year ended January 31, 1997,
which was attended by both of the then-serving Audit Committee members.

The Company has a Compliance Committee composed of Messrs. Barengo, Ciunci
and Salerno. The Compliance Committee oversees the Company's compliance with
gaming law and regulations. The Compliance Committee held one meeting during
the fiscal year ended January 31, 1997, which was attended by all of the
then-serving Compliance Committee members.

The Company's By-laws provide that Stockholders may make nominations for
election to the Company's Board of Directors if such nominations are in writing
and delivered to the Secretary of the Company not less than 60 days and not
more than 90 days before the day and month of the previous year's annual
meeting; subject to certain exceptions as set forth in the By-laws. Thus,
nominations for election to the Board of Directors at the 1998 Annual Meeting
must be delivered to the Secretary between April 16, 1998 and May 16, 1998. The
stockholder making the nomination must provide certain stock ownership and
financial information concerning such nominating stockholder. Only those
persons nominated by the Board of Directors and by Stockholders as described
above shall be voted upon at the Meeting.

EXECUTIVE COMPENSATION

The following table sets forth certain information covering the
compensation paid or accrued by the Company during the fiscal year indicated to
its Chief Executive Officer and to its most highly compensated executive
officer whose annual salary and bonus exceeded $100,000 during the fiscal year
ended January 31, 1997 ("named executive officer"):

SUMMARY COMPENSATION TABLE

Long term
Compensation
Annual Compensation Awards
--------------------
Fiscal Year
Name and Ended Number of Securities
Principal Position January 31 Salary Bonus Underlying Options(1)
- -------------------------- ------------ --------- -------- ----------------------

Victor J. Salerno ...... 1997 208,000 39,604 0
President and Chief
Executive Officer

Robert D. Ciunci ...... 1997 110,000 31,262 50,000
Chief Operating Officer,
Chief Financial Officer &
Executive Vice President

- ------------
1. Represents options granted under the Company's 1995 Stock Option Plan. Mr.
Salerno was not granted options during the fiscal year ended January 31,
1997.

The following table sets forth the number of securities underlying
options, the exercise price and the expiration date for stock options granted
to the Chief Executive Officer and the named executive officer who received
options during the fiscal year ended January 31, 1997.

Option Grants in Fiscal Year ended January 31, 1997
Individual Grants

(a) (b) (c) (d) (e)
Number of Percent of Total
Securities Options Granted Exercise
Underlying to Employees Price Expiration
Name Options Granted in Fiscal Year ($/share) Date (1)
- -------------------------- ----------------- ----------------- ----------- -----------

Victor J. Salerno ...... 0 0 N/A N/A
Robert D. Ciunci ...... 50,000 28.6% $6.875 08/22/04

- ------------
1. Options become exercisable three years after grant date, beginning on August
22, 1999, and expire on August 22, 2004.

The following table sets forth the number of exercisable and unexercisable
options as of January 31, 1997, and the value of such options for the Chief
Executive Officer and the named executive officer.

AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR END OPTIONS VALUES

Number of Securities Value of
Underlying Unexercised
Unexercised Options At In-The-Money
Shares Fiscal Year End (#) Options at FY End ($)
Acquired or Value
Name Exercised (#) Realized Exercisable/Unexercisable Exercisable/Unexercisable
- -------------------------- --------------- ---------- --------------------------- --------------------------

Victor J. Salerno ...... 0 0 0/0 0/0
Robert D. Ciunci ...... 0 0 0/50,000(1) 0/$198,100

- ------------
(1) Options become exercisable on August 22, 1999 and expire on August 22,
2004.

Director's Compensation

Directors who are not employees or consultants of the Company receive a
fee of $200 plus traveling expenses for each Board meeting they attend.

During the fiscal year ended January 31, 1997, pursuant to the Company's
Directors' Stock Option Plan, options to purchase, respectively, 400 and 300
shares of the Company's Common Stock at an exercise price of $10.75 per share
were granted to Messrs. Barengo and Roxborough. These options become fully
exercisable on January 31, 1998 and expire on January 31, 2007.

In the year ended January 31, 1997, the Company paid $16,800 and
MEGA$PORTS, INC. paid $1,275 to Las Vegas Sports Consultants, Inc. for certain,
independent consulting services. Mr. Roxborough is the President of Las Vegas
Sports Consultants, Inc.

Employment Agreements

On August 1, 1995, the Company entered into employment agreements with
Victor J. Salerno and Robert D. Ciunci. Each agreement has a five-year initial
term and shall automatically renew for one-year periods unless either party
gives the other sixty (60) days written notice to terminate prior to the
expiration of the current term.

Pursuant to his employment agreement, Mr. Salerno is employed as the
President and Chief Executive Officer of the Company for a base salary of
$200,000 per year ("Base Salary"). In addition, Mr. Salerno will be entitled to
receive a performance bonus each calendar year ("Performance Bonus") equal to
5% of the Company's Pre-Tax Earnings (as defined in the agreement) for the
prior fiscal year. In the event the agreement is terminated by the Company in
violation thereof, the Company has agreed to pay as termination benefits to Mr.
Salerno a continuation of his Base Salary, Performance Bonus and all other
benefits under the agreement for the remainder of the then outstanding term. In
the event Mr. Salerno dies or becomes disabled (as defined in the agreement),
the Company has agreed to pay the termination benefits for up to one year. Mr.
Salerno is entitled to participate in the Company's benefit plans available to
the Company's officers and employees generally.

Pursuant to his employment agreement, Mr. Ciunci is employed as the Chief
Financial Officer and Executive Vice President of the Company for a base salary
("Base Salary") of $110,000 per year plus a performance bonus ("Performance
Bonus") each calendar year equal to 3% of the Company's Pre-Tax Earnings (as
defined in the agreement) for the prior fiscal year. In the event the agreement
is terminated by the Company in violation thereof or there is a "Change of
Control" or "Constructive Termination," the Company has agreed to pay to Mr.
Ciunci, as termination benefits, a continuation of his Base Salary, Performance
Bonus and all other benefits under the agreement for the remainder of the then
outstanding term. A Change of Control occurs when a substantial portion of the
assets of the Company is transferred, exchanged or sold to a non-affiliated
third party or any person other than Mr. Salerno becomes the owner of
securities of the Company representing 35% or more of the combined voting power
of the Company's securities then outstanding. A Constructive Termination occurs
when Mr. Ciunci is not re-appointed or re-elected to the position of Executive
Vice President and Chief Financial Officer or if there is a change of his
duties inconsistent with such offices. In the event Mr. Ciunci dies or becomes
disabled (as defined in the agreement), the Company has agreed to pay the
termination benefits for up to one year. Mr. Ciunci is entitled to participate
in the Company's benefit plans available to the Company's officers and
employees generally.

APPROVAL OF AMENDMENT TO 1995 STOCK OPTION PLAN
Summary of the 1995 Stock Option Plan

The Company's Board of Directors adopted the 1995 Stock Option Plan (the
"1995 Plan") on November 1, 1995, and the Company's stockholders approved the
1995 Plan on May 9, 1996. As of June 15, 1997, 174,200 shares of Common Stock
were reserved for issuance upon exercise of options previously granted under
the 1995 Plan and 180,800 shares were reserved for the grant of future options.

At the meeting of the Board of Directors on May 8, 1997, the Board
approved an amendment to the 1995 Plan, subject to stockholder approval, to
increase by 200,000 shares the number of shares of Common Stock available for
issuance upon exercise of options granted under the 1995 Plan, thereby
increasing the number of shares issuable under the 1995 Plan to 555,000 shares
of Common Stock. The Board adopted this amendment to ensure that the Company
will be able to grant stock options to officers and key employees, consultants
and advisors of the Company.

In addition the amendment to the 1995 Plan would permit (a) the Board of
Directors to modify the 1995 Plan in certain respects without the necessity of
stockholder approval, (b) all actions taken by the Company's Stock Option
Committee to be subject to review by the Board and (c) the Company's Stock
Option Committee to grant options to key consultants and advisors to the
Company. The amendment would delete the stockholder approval requirement for
changes in the plan that increase the benefits accruing to participants.
However, stockholder approval would still be required for increasing the number
of shares issuable or changing the eligibility requirements for participation.
The Board adopted this amendment to the 1995 Plan in order to afford more
flexibility in adapting the 1995 Plan as necessary to best carry out its
purposes of increasing the stakes of participants in the Company's continued
success and progress and attracting and retaining key employees, consultants
and advisors.

At the Annual Meeting, the stockholders are being requested to consider
and approve the amendment to the 1995 Plan. The affirmative vote of the holders
of a majority of the outstanding shares of Common Stock present in person or by
proxy will be required to approve the amendment.

The purpose of the 1995 Plan is to enable the Company and its subsidiaries
to obtain and retain the services of key employees, consultants and advisors
and to provide them with increased motivation and incentive to exert their best
efforts on behalf of the Company by enlarging their personal stake in its
success.

The 1995 Plan is administered by the Company's Stock Option Committee (the
"Committee") composed of at least two directors of the Company. A member of the
Committee may not be granted or awarded stock, stock options, or stock
appreciation rights under any plan at any time he is serving as a member of the
Committee or within one year prior thereto, unless the plan provides for
formula grants or awards. The Committee members act as administrators of the
1995 Plan, and the Committee has authority, subject to the terms of the 1995
Plan, to determine the persons to whom options will be granted, whether the
options will be incentive stock options or nonqualified stock options, the
number of shares subject to each option, and the terms and provisions of each
option.

The Plan provides that no member of the Committee will be liable for any
action or determination made by him in good faith relating to the Plan. The
plan also provides that the Company will indemnify and hold harmless each
member of the Committee and each other director or employee of the Company to
whom any duty or power relating to the administration or interpretation of the
Plan has been delegated against any cost or expense (including counsel fees) or
liability (including any sum paid in settlement of a claim with the approval of
the Committee) arising out of any act or omission in connection with the Plan,
unless arising out of such person s own fault or bad faith.

Officers and key employees, consultants and advisors of the Company are
eligible to receive options under the 1995 Plan, as amended. The Company
estimates that there are currently approximately 50 officers and other key
employees, consultants and advisors of the Company who are eligible to receive
options under the 1995 Plan.

Subject to the usual antidilution provisions for stock dividends, stock
splits or other subdivisions or reclassifications of the Common Stock, options
may be granted under the 1995 Plan, as amended, to purchase not more than
555,000 shares of Common Stock. If any option expires or terminates without
being fully exercised and before the 1995 Plan terminates, the unpurchased
shares subject thereto will again be available for purposes of the 1995 Plan.

The 1995 Plan permits the grant of incentive stock options within the
meaning of Section 422 of the Internal Revenue Code (the "Code"), and of
nonqualified stock options. An option may be granted under the 1995 Plan for a
term of up to ten years (five years in the case of incentive stock options
granted to an optionee who is a stockholder of the Company owning more than ten
percent of the voting power of the Company), and may be exercised at any time
during its term unless the Committee fixes a specific vesting period or periods
for exercise of any option. If any proposed transaction may result in a change
in control of the Company, in connection therewith, the Committee, with the
approval of the majority of the members of the Board who are not then holding
options, may accelerate the exercise periods of any options.

Options are not transferable by the optionee except by will or the laws of
descent and distribution. During the lifetime of the optionee, options are
exercisable only by the optionee or to the extent such exercise would not
prevent an option from qualifying as an incentive stock option, by his or her
guardian or legal representative.

An optionee's rights under any option terminate upon the termination of
employment for any reason except (a) death, (b) disability, (c) retirement or
(d) pursuant to or in violation of a written employment agreement with the
Company originally executed prior to August 2, 1995. The Committee may elect to
permit exercise of such option for a period ending on the earlier of the
expiration date of the option and a date thirty days after the termination of
employment as to the total number of shares purchasable under the option as of
the date of termination. Whether a leave of absence, or absence in military or
government service constitutes termination will be decided by the Committee.
The Plan provides that in the event of termination of an optionee's employment
by reason of such optionee's death, disability, or retirement, or pursuant to
or in violation of a written employment agreement with the Company originally
executed prior to August 2, 1995, any outstanding option held by such optionee
will immediately become exercisable as to the total number of shares
purchasable thereunder and will remain so exercisable at any time prior to its
expiration date or, if earlier, the first anniversary of termination of the
optionee's employment. Neither the Plan nor any options confer any rights to
employment with the Company nor have any effect on the terms or continuation of
any employment relationship with the Company.

The purchase price per share of Common Stock deliverable upon the exercise
of an option is determined by the Committee at the time of grant. However, the
purchase price per share under an option may not be less than 100% (110% in the
case of incentive stock options granted to optionees who own more than ten
percent of the voting power of the Company) of the fair market value per share
on the date the option is granted. The fair market value of the Company's
Common Stock on June 13, 1997 was $10.75, based on the average of the high and
low prices on that date as reported on the NASDAQ National Market. The purchase
price may be paid in cash or by certified or cashier's check or, to the extent
permitted by the Committee, in shares of the Company's Common Stock.

The 1995 Plan will continue in effect until October 31, 2005, unless
earlier suspended or discontinued. The 1995 Plan, as amended, may be modified,
terminated or amended at any time by the Board of Directors except that,
without stockholder approval, the Board may not increase the number of shares
which may be issued under the 1995 Plan or modify the requirements as to
eligibility for participation. The modification, amendment or termination of
the 1995 Plan will not affect the rights of an optionee under any option
previously granted to the optionee unless the optionee consents thereto.

As stated above, the 1995 Plan permits the grant both of options that
qualify as incentive stock options under Section 422 of the Code and of
nonqualified options. Options which qualify as incentive stock options are
entitled to special tax treatment if shares purchased pursuant to the exercise
of such an option are not disposed of by the optionee within two years from the
date of granting of the incentive stock option and within one year after the
issue of the shares to the optionee upon exercise of the incentive stock
option. If this condition is satisfied neither the grant nor the exercise of
incentive stock options will result in taxable income to the recipient or in a
deduction to the Company. If cash is used to exercise, the optionee receives a
tax basis in the stock purchased under an incentive stock option equal to the
option price. The optionee realizes, upon subsequent sale or other disposition
of stock purchased pursuant to an incentive stock option, capital gain (or
loss) equal to the excess (or deficiency) of the amount realized upon
disposition over such tax basis. The difference between the option price and
the fair market value of the shares acquired upon exercise of an incentive
stock option will be treated as an "item of tax preference" for purposes of the
alternative minimum tax.

An optionee who transfers shares purchased under an incentive stock option
within the one- or two-year holding period, subject to certain exceptions, will
realize, in the year of such disposition, (a) ordinary income equal to the
excess of (i) the fair market value of the shares on the date of exercise over
(ii) the option price and (b) capital gain equal to the excess, if any, of the
amount realized upon disposition over the fair market value of the shares on
the date of exercise. If the amount realized on disposition is less than the
fair market value of the shares on the date of exercise and the disposition
occurs in a sale or exchange with respect to which a loss (if sustained) would
be recognized, then the ordinary income realized by the optionee will, in most
cases, be limited to the excess of the amount realized over the option price.
Upon such a disposition, the Company will be entitled to deduct an amount equal
to the ordinary income realized by the optionee.

If an incentive stock option is exercised and the optionee uses previously
owned shares of Common Stock to pay the option price, the optionee's tax basis
will carry over to an equal number of shares purchased. The remaining Common
Stock received upon exercise of the option will receive a zero tax basis. The
optionee will realize no gain or loss as a result of the disposition of the
previously-owned shares, provided, if the shares were purchased under an
incentive stock option, the holding period requirement was satisfied.

The grant of nonqualified stock options will not result in any taxable
income to the recipient or in a deduction by the Company. However, upon
exercise of a nonqualified option, the optionee will realize ordinary income
equal to the excess of the fair market value of the shares on the date of
exercise over the purchase price, and the Company will be entitled to a
deduction equal to the amount the employee is required to treat as ordinary
income. If cash is used to exercise the option, the optionee will receive a tax
basis in stock purchased under a nonqualified option equal to its fair market
value at the time of exercise. On subsequent disposition of the shares, the
optionee will realize capital gain (or loss) equal to the excess (or
deficiency) of the amount realized over such tax basis. The gain or loss will
be long- or short-term depending on the optionee's holding period for the
shares.

If a nonqualified option is exercised and the optionee uses
previously-owned shares of Common Stock to pay the purchase price, the optionee
will realize ordinary income as described above, but will realize no gain or
loss as a result of the disposition of the previously-owned shares, provided,
if the shares were purchased under an incentive stock option, the holding
period requirement was satisfied. The optionee's tax basis will carry over to
an equal number of shares purchased. The remaining shares of Common Stock will
take a tax basis equal to their fair market value.

THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT YOU VOTE FOR THE PROPOSAL TO
APPROVE THE AMENDMENT TO THE 1995 STOCK OPTION PLAN.

RATIFICATION OF APPOINTMENT OF
INDEPENDENT PUBLIC ACCOUNTANTS

The Board of Directors has appointed the Company's present independent
public accountants, Arthur Andersen LLP, for the fiscal year ending January 31,
1998. This appointment will be submitted to the Stockholders for ratification
at the Meeting.

The submission of the appointment of Arthur Anderson LLP for ratification
by the Stockholders is not required by law or by the By-laws of the Company.
The Board of Directors is nevertheless submitting it to the Stockholders to
ascertain their views. If the Stockholders do not ratify the appointment, the
selection of other independent public accountants will be considered by the
Board of Directors.

Representatives of Arthur Anderson LLP are expected to be present at the
Meeting to respond to appropriate questions and will have the opportunity to
make a statement if they so desire.

OTHER MATTERS

No other matters requiring a vote of the stockholders are expected to come
before the Meeting. However, if other matters should properly come before the
Meeting, it is the intention of the persons named in the enclosed proxy to vote
in accordance with their best judgement on such matters.

EXPENSES OF SOLICITATION

The solicitation of proxies being on behalf of the Board of Directors, all
expenses in connection therewith will be paid by the Company. Request will be
made of brokerage houses and other custodians, nominees and fiduciaries to
forward the solicitation material at the expense of the Company to the
beneficial owners of stock held of record by such persons.

STOCKHOLDER PROPOSALS

Proposals by Stockholders intended to be presented at the next annual
meeting of Stockholders of the Company must be received by the Company at its
executive offices at 675 Grier Drive, Las Vegas, Nevada 89119,

between April 16, 1998 and May 16, 1998 to be included in the Company's proxy
statement and form of proxy for the 1998 annual meeting. THE COMPANY WILL
PROVIDE TO EACH PERSON SOLICITED, WITHOUT CHARGE EXCEPT FOR EXHIBITS, UPON
REQUEST IN WRITING, A COPY OF ITS ANNUAL REPORT ON FORM 10-KSB, INCLUDING THE
FINANCIAL STATEMENTS AND FINANCIAL STATEMENT SCHEDULES, AS FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION FOR THE FISCAL YEAR ENDED JANUARY 31, 1997.
REQUESTS SHOULD BE DIRECTED TO MR. ROBERT D. CIUNCI, CHIEF FINANCIAL OFFICER,
AMERICAN WAGERING, INC., 675 GRIER DRIVE, LAS VEGAS, NEVADA 89119.

By Order of the Board of Directors

Michael Merillat, Secretary

APPENDIX

AMERICAN WAGERING, INC.

1995 STOCK OPTION PLAN
(as amended through May 8, 1997)

1. Definitions.

As used in this Plan, the following definitions apply to the terms
indicated below:

A. "Board" means the Board of Directors of the Company.

B. "Committee" means the Stock Option Committee appointed by the Board
from time to time to administer the Plan. The Committee shall consist of at
least two persons, who shall be directors of the Company and who shall not be
or have been granted or awarded, while serving on the Committee or within one
year prior thereto, stock, stock options, or stock appreciation rights pursuant
to any plan of the Company or any of its affiliates except a plan that provides
for formula grants or awards.

C. "Company" means American Wagering, Inc., a Nevada corporation.

D. "Fair Market Value" of a Share on a given day means, if the Shares
are traded in a public market, the mean between the highest and lowest quoted
selling prices of a Share as reported on the principal securities exchange on
which the Shares are then listed or admitted to trading, or if not so reported,
the mean between the highest and lowest quoted trading prices of a Share if
traded on a national market system, or the mean between the highest asked price
and the lowest bid price as the case may be, as reported on the National
Association of Securities Dealers Automated Quotation System. If the Shares
shall not be so traded, the Fair Market Value shall be determined by the
Committee taking into account all relevant facts and circumstances.

E. "Grantee" means a person who is either an Optionee or an
Optionee-Stockholder.

F. "Incentive Stock Option" means an option, whether granted under this
Plan or otherwise, that qualifies as an incentive stock option within the
meaning of Section 422 of the Internal Revenue Code.

G. "Option" means a right to purchase Shares under the terms and
conditions of this Plan as evidenced by an option certificate or agreement for
Shares in such form, not inconsistent with this Plan, as the Committee may
adopt for general use or for specific cases from time to time.

H. "Optionee" means a person other than an Optionee-Stockholder to whom
an option is granted under this Plan.

I. "Optionee-Stockholder" means a person to whom an option is granted
under this Plan and who at the time such option is granted owns, actually or
constructively, stock of the Company or of a Parent or Subsidiary possessing
more than ten percent (10%) of the total combined voting power of all classes
of stock of the Company or of such Parent or Subsidiary.

J. "Nonqualified Option" means an Option that is not an Incentive Stock
Option.

K. "Parent" means any corporation (other than the Company) in an
unbroken chain of corporations ending with the Company if, at the time of
granting an Option, each of the corporations in the unbroken chain (other than
the Company) owns stock possessing fifty percent (50%) or more of the total
combined voting power of all classes of stock in one of the other corporations
in the chain.

L. "Plan" means this American Wagering, Inc. 1995 Stock Option Plan,
including any amendments to the Plan.

M. "Share" means a share of the Company's common stock, par value $.01
per share, either now or hereafter owned by the Company as treasury stock or
authorized but unissued.

A-1

N. "Subsidiary" means any corporation (other than the Company) in an
unbroken chain of corporations beginning with the Company if, at the time of
granting an Option, each of the corporations in the unbroken chain (other than
the last corporation in the chain) owns stock possessing fifty percent (50%) or
more of the total combined voting power of all classes of stock in one of the
other corporations in the chain.

O. Options shall be deemed "granted" under this Plan on the date on
which the Committee, by appropriate action, approves the grant of an Option
hereunder or on such subsequent date as the Committee may designate.

P. As used herein, the masculine includes the feminine, the plural
includes the singular, and the singular includes the plural.

2. Purpose.

The purposes of the Plan are as follows:

A. To secure for the Company and its stockholders the benefits arising
from share ownership by those officers and key employees, consultants and
advisors of the Company and its Subsidiaries who will be responsible for the
Company's future growth and continued success. The Plan is intended to provide
an incentive to officers and key employees, consultants and advisors by
providing them with an opportunity to acquire an equity interest or increase an
existing equity interest in the Company, thereby increasing their personal
stake in its continued success and progress.

B. To enable the Company and its Subsidiaries to obtain and retain the
services of key employees, consultants and advisors by providing such key
employees, consultants and advisors with an opportunity to acquire Shares under
the terms and conditions and in the manner contemplated by this Plan.

3. Plan Adoption and Term.

A. This Plan shall become effective upon its adoption by the Board, and
Options may be issued upon such adoption and from time to time thereafter;
provided, however, that the Plan shall be submitted to the Company's
stockholders for their approval at the next annual meeting of Stockholders, or
prior thereto at a special meeting of stockholders expressly called for such
purpose; and provided further, that the approval of the Company's stockholders
shall be obtained within 12 months of the date of adoption of the Plan. If the
Plan is not approved by the affirmative vote of the holders of a majority of
all shares present in person or by proxy, at a duly called stockholders'
meeting at which a quorum representing a majority of all voting stock is
present in person or by proxy and voting on this Plan or by the unanimous
written consent of all Stockholders of the Company, then this Plan and all
Options then outstanding under it shall forthwith automatically terminate and
be of no force and effect.

B. Subject to the provisions hereinafter contained relating to amendment
or discontinuance, this Plan shall continue to be in effect for ten (10) years
from the date of adoption of this Plan by the Board. No Options may be granted
hereunder except within such period of ten (10) years.

4. Administration of Plan.

A. This Plan shall be administered by the Committee. Except as otherwise
expressly provided in this Plan, the Committee shall have authority to
interpret the provisions of the Plan, to construe the terms of any Option, to
prescribe, amend and rescind rules and regulations relating to the Plan, to
determine the terms and provisions of Options granted hereunder, and to make
all other determinations in the judgment of the Committee necessary or
desirable for the administration of the Plan. Without limiting the foregoing,
the Committee shall, to the extent and in the manner contemplated herein,
exercise the discretion granted to it to determine to whom Incentive Stock
Options and Non-qualified Options shall be granted, how many Shares shall be
subject to each such Option, whether a Grantee shall be required to surrender
for cancellation an outstanding Option as a condition to the grant of a new
Option, and the prices at which Shares shall be sold to Grantees. The Committee
may correct any defect or supply any omission or reconcile any inconsistency in
the Plan or in any Option in the manner and to the extent it shall deem
expedient to carry the Plan into effect and shall be the sole and final judge
of such expediency.

A-2

B. No member of the Committee shall be liable for any action taken or
omitted or any determination made by him in good faith relating to the Plan,
and the Company shall indemnify and hold harmless each member of the Committee
and each other director or employee of the Company to whom any duty or power
relating to the administration or interpretation of the Plan has been delegated
against any cost or expense (including counsel fees) or liability (including
any sum paid in settlement of a claim with the approval of the Committee)
arising out of any act or omission in connection with the Plan, unless arising
out of such person's own fault or bad faith.

C. Any power granted to the Committee either in this Plan or by the
Board may at any time be exercised by the Board and any determination by the
Committee shall be subject to review and reversal or modification by the Board
on its own motion.

5. Eligibility. Officers and key employees, consultants and advisors of
the Company and its Subsidiaries shall be eligible for selection by the
Committee to be granted Options. An employee, consultant or advisor who has
been granted an Option may, if he or she is otherwise eligible, be granted an
additional Option or Options if the Committee shall so determine.

6. Options.

A. Subject to adjustment as provided in Paragraph 13 hereof, Options may
be granted pursuant to the Plan for the purchase of not more than an aggregate
of 555,000 Shares; provided, however, that if prior to the termination of the
Plan, an Option shall expire or terminate for any reason without having been
exercised in full, the unpurchased Shares subject thereto shall again be
available for the purposes of the Plan.

B. The aggregate fair market value (determined as of the time Options
are granted) of the stock with respect to which Incentive Stock Options may be
or become exercisable for the first time by a Grantee during any calendar year
(whether granted under this Plan or any other plan of the Company or any Parent
or Subsidiary corporation) shall not exceed $100,000. To the extent an
Incentive Stock Option may be or become exercisable in violation of this
limitation, it shall be deemed to be a Nonqualified Option.

7. Option Price. The purchase price per Share deliverable upon the
exercise of an Option shall be determined by the Committee, but shall not be
less than 100% of the Fair Market Value of such Share on the date the Option is
granted (110% of the Fair Market Value of such Share on the date an Incentive
Stock Option is granted to an Optionee-Stockholder).

8. Duration of Options. Each Option and all rights thereunder shall expire
and the Option shall no longer be exercisable on a date not later than ten (10)
years (five (5) years in the case of an Incentive Stock Option granted to an
Optionee-Stockholder) from the date on which the Option was granted, or such
lesser period of time as the Committee designates at the time of the grant of
an Option. Options may expire and cease to be exercisable on such earlier date
as the Committee may determine at the time of grant. Options shall be subject
to termination before their expiration date as provided herein.

9. Conditions Relating to Exercise of Options.

A. The Shares subject to any Option may be purchased at any time during
the term of the Option, unless, at the time an Option is granted, the Committee
shall have fixed a specific period or periods in which exercise must take
place. To the extent an Option is not exercised when it becomes initially
exercisable, or is exercised only in part, the Option or remaining part thereof
shall not expire but shall be carried forward and shall be exercisable until
the expiration or termination of the Option. Partial exercise as to whole
Shares is permitted from time to time, provided that no partial exercise of an
Option shall be for a number of Shares having a purchase price of less than
$100.

B. No Option shall be transferable by the Grantee thereof other than by
will or by the laws of descent and distribution, and Options shall be
exercisable during the lifetime of a Grantee only by such Grantee or, to the
extent that such exercise would not prevent an Option from qualifying as an
Incentive Stock Option under the Internal Revenue Code, by his or her guardian
or legal representative.

C. Certificates for Shares purchased upon exercise of Options shall be
issued either in the name of the Grantee or in the name of the Grantee and
another person jointly with the right of survivorship. Such certificates shall
be delivered as soon as practical following the date the Option is exercised.

A-3

D. An Option shall be exercised by the delivery to the Company at its
principal office, to the attention of its Secretary, of written notice of the
number of Shares with respect to which the Option is being exercised, and of
the name or names in which the certificate for the Shares is to be issued, and
by paying the purchase price for the Shares. The purchase price shall be paid
in cash or by certified check or bank cashier's check or by delivering to the
Company:

(1) Shares (in proper form for transfer and accompanied by all requisite
stock transfer tax stamps or cash in lieu thereof) owned by the Grantee
having a Fair Market Value equal to the purchase price; or

(2) a notarized statement attesting to ownership of the number of Shares
which are intended to be used at Fair Market Value to pay the purchase
price, with the certificate number(s) thereof, and requesting that only the
incremental number of Shares as to which the Option is being exercised be
issued by the Company.

E. Notwithstanding any other provision in this Plan, no Option may be
exercised unless and until (i) this Plan has been approved by the stockholders
of the Company, and (ii) the Shares to be issued upon the exercise thereof have
been registered under the Securities Act of 1933 and applicable state
securities laws, or are, in the opinion of counsel to the Company, exempt from
such registration. The Company shall not be under any obligation to register
under applicable Federal or state securities laws any Shares to be issued upon
the exercise of an Option granted hereunder, or to comply with an appropriate
exemption from registration under such laws in order to permit the exercise of
an Option or the issuance and sale of Shares subject to such Option. If the
Company chooses to comply with such an exemption from registration, the
certificates for Shares issued under the Plan, may, at the direction of the
Committee, bear an appropriate restrictive legend restricting the transfer or
pledge of the Shares represented thereby, and the Committee may also give
appropriate stop-transfer instructions to the transfer agent of the Company.

F. Any person exercising an Option or transferring or receiving Shares
shall comply with all regulations and requirements of any governmental
authority having jurisdiction over the issuance, transfer or sale of securities
of the Company or over the extension of credit for the purposes of purchasing
or carrying any margin securities, or the requirements of any stock exchange or
national market or automated quotation system on which the Shares may be
listed, and as a condition to receiving any Shares, shall execute all such
instruments as the Committee in its sole discretion may deem necessary or
advisable.

G. Each Option shall be subject to the requirement that if the Committee
shall determine that the listing, registration or qualification of the Shares
subject to such Option upon any securities exchange, national market or
automated quotation system or under any state or Federal law, or the consent or
approval of any governmental or regulatory body, is necessary or desirable as a
condition of, or in connection with, the granting of such Option or the
issuance or purchase of Shares thereunder, such Option may not be exercised in
whole or in part unless such listing, registration, qualification, consent or
approval shall have been effective or obtained free of any conditions not
acceptable to the Committee.

10. Effect of Termination of Employment or Death.

A. In the event of termination of a Grantee's employment by reason of
such Grantee's death, disability or retirement with the consent of the Board or
in accordance with an applicable retirement plan, or pursuant to a written
employment agreement between the Company and Grantee originally executed prior
to August 2, 1995 (i) the Grantee s employment with the Company is terminated
by the Company at any time in violation of such agreement or (ii) Grantee
unilaterally terminates such agreement by the terms of such agreement within
six months after a Constructive Termination (as defined in such agreement) or a
Change of Control (as defined in such agreement) any outstanding Option held by
such Grantee shall, notwithstanding the extent to which such Option was
exercisable prior to termination of employment, immediately become exercisable
as to the total number of Shares purchasable thereunder. Any such Option shall
remain so exercisable at any time prior to its expiration date or, if earlier,
the first anniversary of termination of the Grantee's employment.

B. In the event of termination of a Grantee's employment for any reason
other than as set forth in Paragraph 10A hereof, all rights of any kind under
any outstanding Option held by such Grantee shall

A-4

immediately lapse and terminate, except that the Committee may, in its
discretion, elect to permit exercise for a period ending on the earlier of the
expiration date of the Option and a date thirty days after the termination of
employment as to the total number of Shares purchasable under the Option as of
the date of the termination.

C. Whether an authorized leave of absence or absence in military or
government service shall constitute termination of employment shall be
determined by the Committee. Transfer of employment between the Company and a
Subsidiary corporation or between one Subsidiary corporation and another shall
not constitute termination of employment.

11. No Special Employment Rights. Nothing contained in the Plan or in any
Option shall confer upon any Grantee any right with respect to the continuation
of his or her employment by the Company or a Subsidiary or interfere in any way
with the right of the Company or a Subsidiary, subject to the terms of any
separate employment agreement to the contrary, at any time to terminate such
employment or to increase or decrease the compensation of the Grantee from the
rate in existence at the time of the grant of an Option.

12. Rights as a Stockholder. The Grantee of an Option shall have no rights
as a stockholder with respect to any Shares covered by an Option until the date
of issuance of a certificate to him for such Shares. Except as otherwise
expressly provided in the Plan, no adjustment shall be made for dividends or
other rights for which the record date occurs prior to the date of issuance of
such certificate.

13. Anti-dilution Provision.

A. In case the Company shall (i) declare a dividend or dividends on its
Shares payable in shares of its capital stock, (ii) subdivide its outstanding
Shares, (iii) combine its outstanding Shares into a smaller number of Shares,
or (iv) issue any shares of capital stock by reclassification of its Shares
(including any such reclassification in connection with a consolidation or
merger in which the Company is the continuing corporation), the number of
Shares authorized under the Plan will be adjusted proportionately. Similarly,
in any such event, there will be a proportionate adjustment in the number of
Shares subject to unexercised Options (but without adjustment to the aggregate
option price).

B. In the event of any kind of transaction which may constitute a change
in control of the Company, the Committee, with the approval of the majority of
the members of the Board who are not then holding Options (or for Grantees who
are neither Optionee-Stockholders nor directors of the Company, with the
approval of a majority of the members of the Board), may modify any and all
outstanding Options so as to accelerate, as a consequence of or in connection
with such transaction, a Grantee's right to exercise any such Option.
Notwithstanding the foregoing, if the operation of this Paragraph 13B would
cause an Option to become exercisable in such a way as to violate Paragraph 6B
hereof, the exercisability of such Option shall be delayed as necessary to
avoid such a violation.

14. Withholding Taxes. Whenever an Option is to be exercised under the
Plan, the Company shall have the right to require the Grantee, as a condition
of exercise of the Option, to remit to the Company an amount sufficient to
satisfy the Company's (or a Subsidiary's) Federal, state and local withholding
tax obligation, if any, that will, in the sole opinion of the Committee, result
from the exercise. In addition, the Company shall have the right, at the sole
discretion of the Committee, to satisfy any such withholding tax obligation by
retention of Shares issuable upon such exercise having a Fair Market Value on
the date of exercise equal to the amount to be withheld.

15. Amendment of the Plan. The Board may at any time and from time to time
terminate or modify or amend the Plan in any respect, except that, without
stockholder approval, the Board may not (a) increase the number of Shares which
may be issued under the Plan, or (b) modify the requirements as to eligibility
for participation under the Plan. The termination or modification or amendment
of the Plan shall not, without the consent of a Grantee, affect his rights
under an Option previously granted to him or her. With the consent of the
Grantee, the Board may amend outstanding Options in a manner not inconsistent
with the Plan.

16. Miscellaneous.

A. It is expressly understood that this Plan grants powers to the
Committee but does not require their exercise; nor shall any person, by reason
of the adoption of this Plan, be deemed to be entitled to the grant of any
Option; nor shall any rights begin to accrue under the Plan except as Options
may be granted hereunder.

A-5

B. All expenses of the Plan, including the cost of maintaining records,
shall be borne by Company.

17. Governing Law. This Plan and all rights hereunder shall be governed by
and interpreted in accordance with the laws of the State of Nevada.

A-6

AMERICAN WAGERING, INC.
PROXY SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS

The undersigned hereby appoints Victor J. Salerno, Robert D. Ciunci,
Michael Merillat, Robert R. Barengo and Michael Roxborough, or any of them with
full power of substitution, proxies to vote at the Annual Meeting of
Stockholders of American Wagering, Inc. (the "Company") to be held on July 15,
1997 at 10:00 A.M., local time and at any adjournment or adjournments thereof,
hereby revoking any proxies heretofore given, to vote all shares of common
stock of the Company held or owned by the undersigned as directed on the
reverse, and in their discretion upon such other matters as may come before the
meeting.

/X/ Please mark your votes as in this example

1. Election of Directors
Nominees: Victor J. Salerno Robert D. Ciunci Michael Merillat
Robert R. Barengo Michael Roxborough

/ / FOR / / WITHHELD

For except vote withheld from the following nominee(s):

- --------------------------------------------------------------------------------

2. Amendment to the 1995 Stock Option Plan to, among other things, increase the
number of shares available in the Plan by 200,000.

/ / FOR / / AGAINST / / ABSTAIN

3. Ratification of the appointment of Arthur Andersen LLP as the Company's
independent accountants for the fiscal year ending January 31, 1998.

/ / FOR / / AGAINST / / ABSTAIN

(To Be Continued And Signed On The Reverse Side)

IF NO DIRECTION IS MADE, THIS PROXY WILL BE VOTED FOR THE ELECTION OF THE
NOMINEES FOR DIRECTORS AND FOR PROPOSALS 2 AND 3, THIS PROXY WILL ALSO BE VOTED
ON SUCH OTHER MATTERS AS MAY PROPERLY COME BEFORE THE MEETING.

PLEASE VOTE, SIGN, DATE AND RETURN THIS PROXY CARD PROMPTLY USING THE ENCLOSED
ENVELOPE.

SIGNATURE_____________________________________________________ DATE___________

NOTE: Please sign exactly as name
appears hereon. Joint owners should each
sign. When signing as attorney,
executor, administrator, trustee or
guardian, please give full title as
such.