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Alliance Gaming Goes to the Big Top

16 December 2002

by Rod Smith

NEW YORK -- When the opening bell rang Thursday, signaling the start of the day's trading on the New York Stock Exchange, Alliance Gaming Corp. came out swinging.

With a troupe of costumed characters from its line of slot machines on hand, the Las Vegas-based slot maker and slot route operator Thursday celebrated its first day on the big board. And even though Alliance stock ended the day lower than its opening price of $17.92, analysts and company officials are optimistic about the slot machine maker's future on the NYSE.

"It was a great day in our company's history. Our move to the New York Stock Exchange was a culmination of our success in turning Alliance Gaming around," said Alliance Gaming President and Chief Executive Officer Robert Miodunski.

"The New York (Stock Exchange) market has more legitimacy and is more prestigious. Being listed is a coming of age for a company and a hallmark most American companies strive for," agreed Bear, Stearns & Co. Jason Ader said.

Alliance shares previously were traded on the Nasdaq Stock Market, closing at $17.70 on Wednesday, the company's final day of trading under the ALLY symbol.

"We started looking at making the shift when it looked like we'd have positive equity and the process took us about six to nine months," Miodunski said.

"It's the most widely recognized exchange in the world today. It's certainly less volatile (than the Nasdaq) and the most visible in the world," Miodunski said.

Being traded on the New York exchange, with the new ticker symbol AGI, also offers prospects of greater price stability and investor interest from some institutional traders who are precluded by their own rules from investing in shares traded on other markets.

"Any time a company can jump to the largest trading exchange in the world, it's a good thing for the company," said Brian Gordon, spokesman for Applied Analysis, a Las Vegas-based financial consulting firm.

The requirements for being NYSE-listed are not markedly different from the Nasdaq, Miodunski said. The principle hurdle for Alliance was that shareholder equity has to be positive.

Founded in 1792, the NYSE is the world's leading, largest and most technologically advanced equities market.

The exchange lists about 2,800 companies whose total global market capitalization is about $15 trillion. NYSE-listed companies range from "blue chip," to many of the world's leading technology companies, and new, high-growth enterprises.

On an average day, more than 1.3 billion shares, whose value exceeds $42 billion, trade on the NYSE.

"Alliance's stock price had been on an up-and-down-and-up roller coaster in the last 12 months," Gordon said. "It hit $16 early in the year, hit a low of $12 in mid-year, and now is back in the $17 range, an all-time high for the company."

Alliance closed its first day on the New York Stock Exchange trading at $17.77, down 1.3 percent for the day on a volume of 650,000.

As noted by Miodunski, Alliance's listing on the NYSE marks the end of a turnaround for the company, which had been struggling financially since it entered the slot machine business with its purchase of Bally Gaming International for $200 million in 1996.

Prior to that, Alliance - founded in 1968 - had mainly operated slot routes and small casinos in Nevada.

Fiscal 2001 marked a turnaround with new management, and Miodunski attributed the company's success in large part to its manufacturing operation.

Its Bally Gaming Systems unit manufactures and distributes gaming machines and supplies computerized monitoring systems for gaming machines at casinos, and accounted for 37 percent of fiscal 2002 revenues.

The Wall Machines and Amusement Games unit manufactures and distributes wall-mounted gaming machines and amusement games in Germany under the name of Bally Wulff, accounting for 13 percent of revenues.

The route operations unit installs, operates and maintains video poker devices, slot machines and other machines in taverns, restaurants, supermarkets and similar commercial spots in Nevada and Louisiana, accounting for 38 percent of revenue.

And the casino unit owns and operates the Rainbow Hotel Casino at Vicksburg, Miss., and the Rail City Casino near Reno, accounting for 12 percent of revenues.

Ringing the bell is an honor accorded to heads of state and senior executives of listed companies, among others.

Others honored so far this year have included top executives of Con Edison, DuPont, Estée Lauder and Martha Stewart.

Alliance Gaming celebrated 20 years of trading on the Nasdaq by participating in a ceremony to open trading on March 4, 2002, and now becomes one of only a handful of companies to officially open trading in the same calendar year on the two biggest stock markets in the world.

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