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Alliance Gaming Announces Letter of Intent to Sell Its Nevada Route Subsidiary

The gross sales price is $118 million, which will consist of $112 million in cash at closing and $6 million in preferred stock with a mandatory annual redemption over a five-year period. In addition, Alliance will enter into a supply agreement, whereby United Coin will purchase a minimum of 2,500 gaming devices from Alliance's Bally Gaming, Inc. subsidiary over a five-year term after closing.

Alliance also has been granted the right, prior to the execution of the agreement, to purchase a 10% equity interest in United Coin at the time of closing. Both parties have agreed to move expeditiously towards the signing of a definitive purchase agreement, which Alliance believes may occur on or before July 31, 2000. The ultimate closing of the transaction is subject to various regulatory approvals and financing.

``This is a major step in the process of reducing our overall debt burden,'' stated Robert L. Miodunski, President and Chief Operating Officer of Alliance Gaming Corporation. ``After the payment of fees, expenses, and certain lease obligations, we will reduce our bank debt in excess of $90 million. We are very pleased with the overall structure of this transaction, and in our continuing involvement through the supply agreement and potential equity interest.''

UC Acquisition Company was formed in cooperation with Iowa based gaming investors led by Kehl. ``We are excited about the opportunity to purchase the premier gaming route operator in Nevada,'' stated Kehl. ``We believe that the Las Vegas growth trends, both in population and casino gaming, will continue to support strong growth for United Coin.''

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