American Gaming announces sale of Keno Operations.

ATLANTIC CITY, N.J.--(BUSINESS WIRE)--April 1, 1996--American Gaming & Entertainment Ltd. (the "Company") announced that on March 29, 1996, the Company entered into an assignment and transfer agreement (the "Keno Agreement") pursuant to which the Company, American Heartland ("AHC"), and Big Red Keno Ltd., a licensed Keno operator in Omaha, Nebraska, ("BRK") agreed to the following, subject to, as discussed below, AHC submitting licensing applications to the appropriate governmental authorities for the temporary licenses, permanent licenses or other gaming approvals or authorizations or other evidence of non-disapproval (the "Required Licenses") necessary to fulfill the obligations assumed by AHC under the Keno Maintenance Agreements (as defined below) and obtaining such Required Licenses:

(i) the Company assigned, and AHC assumed, all of the Company's rights and obligations under that certain financing agreement dated October 15, 1991 with BRK to provide equipment, services and financing for the operation of a multiple parlor keno game in the City of Omaha in exchange for a revenue participation equal to 50% of the cash net income of Big Red after full repayment by Big Red of (a) all advances from its stockholders prior to October 15, 1991, and (b) certain other debt of Big Red,

(ii) the Company transferred and assigned to AHC all of the Company's right, title and interest to all of the assets utilized by the Company in the conduct of its keno gaming activities (the "Keno Assets"), including, without limitation, all maintenance and servicing agreements with the licensed operators for stations and locations at which the Company's computerized keno system is utilized (the "Keno Maintenance Agreements") and the Company's computerized keno system,

(iii) the Company agreed not to compete, directly or indirectly, with AHC or BRK as a distributor, manufacturer or maintainer of keno equipment or software, other than in the normal course of any casino operations of the Company for a period of five years,

(iv) AHC paid the Company $500,000 on March 29, 1996,

(v) AHC made payments to the Company during the first quarter of 1996 aggregating an additional $132,000, which payments reduced the total amount of the Keno Note (as defined below) pursuant to a letter of intent between the Company and BRK which was superceded by the Keno Agreement, and

(vi) AHC issued and delivered its promissory note to the Company in the principal amount of approximately $1,112,000 (the "Keno Note"). The Keno Note requires principal and interest payments, at an interest rate of 8% per annum, based on a fifty-three month amortization with payments commencing on April 28, 1996.

The Keno Note is secured by the Keno Assets and is guaranteed by BRK, which guarantee is secured by the keno equipment previously provided to BRK by the company.

AHC has agreed to submit licensing applications to the appropriate governmental authorities for the Required Licenses. Pending the issuance of Required Licenses, the company shall perform its obligations under the Keno Maintenance Agreements for the benefit of AHC and shall be reimbursed by AHC for any net cash operating expenses incurred by the company in connection with the performance of such obligations.

If the arrangement described above is not permitted by applicable laws or regulations, then, pending the issuance of the Required Licenses, the company shall continue to perform its obligations under the Keno Maintenance Agreements for its own benefit and at its own expense. If AHC does not submit the required licensing applications or obtain the Required Licenses within specified time frames set forth in the Keno Agreement, AHC and BRK, jointly and severally, shall (i) indemnify the company for any damages relating to the termination of the Keno Maintenance Agreements, and (ii) except with respect to a failure to submit or obtain licenses required by the State of Nebraska, pay the company liquidated damages in the amount of $100,000 as compensation for damages relating to the termination of the Keno Maintenance Agreements.

If AHC does not obtain the Required Licenses within specified time frames set forth in the Keno Agreement, the company has the right, but not the obligation, to retain certain Keno Maintenance Agreements and the Keno Assets located in the company's Billerica, Mass., facility. AHC's obligations under the Keno Note are not contingent upon AHC submitting appropriate licensing applications or obtaining the Required Licenses.

The company's acting chief executive officer stated that the closing of this transaction furthers the company's strategy of owning equity interests in gaming ventures by reducing its operational and developmental activities and is anticipated to result in significant savings to the company based upon the reduction of payroll and overhead related to the company's keno business.

The company's common stock symbol is traded over the OTC Bulletin Board under the symbol "AGEL".

CONTACT: William I. Fasy, Acting Chief

Executive Officer

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