Alliance Gaming Corporation today announced earnings for its first fiscal
quarter ending September 30, 2003. First quarter income from continuing
operations totaled $0.05 per diluted share, or $0.20 per diluted share
excluding a $0.15 per share charge resulting from the Company`s bank
refinancing and early retirement of its subordinated notes. Excluding the
refinancing charge, earnings increased 54% compared to the $0.13 per
diluted share for the prior year quarter.

Consolidated results for the September 2003 quarter include:—Revenues
from continuing operations of $106.6 million, an increase of 31% from the
$81.3 million in the prior year quarter, led by a 39% increase in revenues
at the Bally Gaming and Systems business unit.—Operating income from
continuing operations of $23.1 million, an increase of 33% from the $17.4
million in the prior year quarter.—EBITDA from continuing operations of
$29.4 million, an increase of 34% from the $21.9 million in the prior year
quarter, led by a 42% increase at Bally Gaming and Systems.—Total net
income including discontinued operations and the refinancing charge of
$0.12 per diluted share, or $0.20 per diluted share on a continuing basis
excluding the refinancing charge, an increase of 54%.

Earnings before interest, taxes, depreciation, amortization and
refinancing charge (EBITDA) and EPS excluding the refinancing charge are
not Generally Accepted Accounting Principles (GAAP) measurements. EBITDA
may not be comparable to similarly titled measures reported by other
companies. A reconciliation of EBITDA to income from continuing operations
and a reconciliation of EPS excluding the refinancing charge to GAAP EPS
are attached to this press release.

Cash and Capital Expenditures:—As of September 30, 2003, cash and cash
equivalents for our continuing operations totaled $44.6 million, which
included approximately $3.7 million held for operational purposes in
vaults, cages and change banks and $13.4 million held in jackpot reserve
accounts. These amounts exclude cash and cash equivalents of the
discontinued operations, which are now included in assets held for sale.
—For the quarter ended September 30, 2003, consolidated capital
expenditures for our continuing operations, including costs to produce
proprietary games, totaled $7.3 million compared to $7.5 million for the
prior year quarter. The current period capital expenditures were driven by
the continued deployment of wide-area progressive and daily- fee games. We
also incurred $2.2 million for capital expenditures for our discontinued
operations. Other financial highlights:—Consolidated net interest
expense for the current quarter totaled $5.7 million compared to $6.6
million in the prior year period. As we have previously reported, on
September 5, 2003 we completed a refinancing transaction whereby we
entered into a new senior bank facility consisting of a $275 million term
loan with an initial interest rate of LIBOR plus 2.75% (currently 3.96%)
and a $125 million revolving credit facility with an initial interest rate
of LIBOR plus 2.50% (currently 3.71%) of which we have borrowed $70.0
million, and redemption of our $150 million 10% Subordinated Notes and our
existing bank term loan of approximately $187 million.—We recorded a
$12.3 million refinancing charge in the current quarter consisting
primarily of a $5.0 million prepayment penalty for the redemption of our
Subordinated Notes, a non-cash charge of $7.0 million to write off the
deferred financing costs, and $0.3 million of fees and expenses. We
recorded a tax benefit from these charges totaling approximately $4.8
million.
The Company will hold its conference call on Wednesday, October 15th at 10
a.m. PDT (1 p.m. EDT). Participants may access the call by dialing (719)
457-2644. The Company will also broadcast the conference call over the
Internet. Interested parties are asked to log on to the call at
http://www.alliancegaming.com/ using the Investor Relations tab 10 minutes
prior to the start of the call.

The disclosures herein include 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 Act of 1934, as amended, and
are subject to the safe harbor created thereby. Such forward looking
information involves important risks and uncertainties that could
significantly affect 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. Future operating results may be adversely
affected as a result of a number of factors enumerated in the Company`s
public reports and prospectuses such as the impact of competition,
uncertainties concerning such matters as the Company`s ability to service
debt, product development, customer financing, sales to non- traditional
gaming markets, foreign operations, dependence on key personnel, strict
regulation by gaming authorities, gaming taxes and value added taxes, and
other risk factors listed from time to time in the Company`s SEC reports,
including but not limited to the most recent reports on Form 10-K and 10-Q.

Alliance Gaming Corporation is a diversified gaming company headquartered
in Las Vegas, Nevada. The Company is engaged in the design, manufacture,
operation and distribution of advanced gaming devices and systems
worldwide and is currently the nation`s largest gaming machine route
operator and operates two casinos. Additional information about the
Company can be found on the Alliance Gaming web site at:
http://www.alliancegaming.com/ .

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