Alliance Gaming Announces Reverse Stock Split; Also Announces $10.7 Million of New Business for Bally SDS System.

LAS VEGAS--(BUSINESS WIRE)--Jan. 21, 1999--Alliance Gaming Corp. (Nasdaq/NM:ALLY) Thursday announced that its board of directors has approved a one for 3.5 reverse split of its common stock effective Feb. 1, 1999.

The reverse split is being effected to maintain continued listing on the Nasdaq National Market System. The Nasdaq rules require the company to maintain a $5.00 minimum closing bid price.

After the reverse split, the company will have 50 million common shares authorized and approximately 9.8 million shares outstanding. In connection with the reverse split, the share number, exercise price and the trigger market prices, as applicable, for the company's stock options and warrants will be proportionately adjusted.

The par value of $0.10 per common share will not change. For the company's Series E special stock, the conversion ratio changes from 17.007 common shares for one Series E share to 4.85914 common shares for one Series E share.

The anticipated increase in market price resulting from the reverse split should enhance the ability of institutional investors to own the stock and facilitate margin purchases for retail customers. The company expects that its shares will trade on a when-issued basis beginning on the effective date, Feb. 1, 1999.

The company's transfer agent will send materials to the company's shareholders enabling them to surrender their existing stock certificates in exchange for new certificates. Fractional shares that result from the reverse split will be bundled and sold by the transfer agent, and the cash proceeds will be distributed proportionately to the holders of fractional interests.

The company also announced that its Bally Gaming and Systems business unit had signed contracts or letters of intent valued at $10.7 million to install its SDS computerized monitoring system in more than 10,000 gaming machines at seven customers' casinos. Upon completion of these installations, the installed base of gaming units utilizing the SDS system will exceed 100,000 gaming units for the first time.

Three customers are replacing existing systems that had been provided by two of the company's competitors. Four customers who previously have not used a computerized monitoring system selected the SDS system to help better manage their business.

Three of the seven customers operate Native American casinos (Grand Casino Mille Lacs and Grand Casino Hinckley in Minnesota, one casino in Arizona and one in New Mexico); two are at riverboat casino locations (Harrah's Showboat casino in East Chicago, Ind., and Player's casino in Lake Charles, La.); one is an off-strip Las Vegas casino (Maxim Hotel and Casino); and the last operates small- to medium-size locations worldwide. The installations are scheduled to be complete by Sept. 30, 1999.

"Our SDS system continues to expand its customer base," stated Morry Goldstein, president and chief executive officer. "Reaching a 100,000-unit installed base is a significant achievement. We are proud of our Systems team, but we are not resting on our accomplishments. We believe that our reputation for reliability and accuracy in a secure environment will continue the trend of winning new business."

Alliance Gaming is a diversified gaming company with headquarters in Las Vegas. The company is engaged primarily in the design, manufacture and distribution of advanced gaming devices and systems worldwide, is the nation's largest gaming machine route operator and operates two regional casinos.

Additional information about the company can be found on the Alliance Gaming Web site at: http://www.ally.com.

This news release may contain "forward-looking" statements within the meaning of the Securities Act of 1933, as amended, and is subject to the safe harbor created thereby. Such information involves important risks and uncertainties that could significantly affect the results in the future and, accordingly, such results may differ from those expressed in any forward-looking statements. Future operating results may be adversely affected as a result of a number of risks detailed from time to time in the company's filings with the Securities and Exchange Commission.