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AWI takes $2 million hit!

Nov 19, 2002 7:46 AM

It’s business as usual for sports books this week, but a $2 million judgment against American Wagering could change that.

A U.S. District Court slapped the Las Vegas firm with a $2.16 million verdict last week in a case involving Michael Racusin. Racusin charged American Wagering ”” owner of Leroy’s sports books and Computerized Bookmaking Systems ”” with breach of contract.

Racusin and American Wagering clashed over fees he was owed for introducing underwriters to the company in connection with a public stock offering.

Neither American Wagering boss Vic Salerno nor chief financial officer Tim Lockinger returned phone calls as of press time. But in a statement, officials acknowledged that the judgment could affect "the financial viability of the company.

"At the present time, management is considering the options available to the company.’’

A court order dictating terms of payment is due within 30 days.

Meantime, business continues at the books, where Computerized Bookmaking Systems supplies autotote ticket machines to 85 percent of Nevada’s sports and race outlets. AWI’s Leroy’s subsidiary also operates 47 race and sports books, the most in the state.

"I haven’t heard a thing,’’ said Patty Jones of the Nevada Pari-Mutuel Association. "It’s been quiet out there.’’ Other bookmakers echoed that sentiment.

The court action is the latest blow to American Wagering. In the quarter ending June 30, the company reported operating income of just $163,423 versus operating costs and expenses of $2.14 million ”” a figure that almost matches the amount of the Racusin judgment. Net income was a paltry penny a share.

Mega$ports has been a drag on the company. Amid legal concerns over online wagering, AWI has been trying to sell the unit, but with no success so far. The Nevada Gaming Commission has extended the sale deadline to next February.

AWI’s stock was steady at 20 cents per share on Monday ”” 26 percent below its 52-week high.