Progressive Gaming International Reports Results

3 April 2006

LAS VEGAS -- (PRESS RELEASE) -- Progressive Gaming International Corporation (NASDAQ: PGIC), a leading provider of diversified technology and content products and services used in the gaming industry worldwide, announced today that it reported a net loss of $3.9 million, or $.13 per share, for the three months ended December 31, 2005, as compared to a net income of $1.8 million, or $.08 per share in the same period in 2004. Fourth quarter 2005 operating results exclude one-time charges resulting from the early retirement of a portion of the Company's high yield debt of $3.0 million or $.09 per share.

Earnings before interest, taxes, depreciation and amortization (EBITDA) were ($.5) million in the fourth quarter of fiscal 2005 as compared to $5.6 million in the same period in 2004. The decrease was primarily due to $4.2 million of revenue from two licensing contracts that were recorded as deferred revenue, higher investments in R&D and SG&A expenses during the 2005 fiscal year compared to 2004, and nonrecurring expenses incurred in the fourth quarter of 2005 of approximately $1.3 million. Additionally, several licensing contracts were delayed and are expected to be completed in 2006 totaling approximately $2.0 million.

Revenues for the three months ended December 31, 2005 decreased to $19.2 million from $21.7 million in the same period a year ago primarily due to the $4.2 million of revenue from the two licensing contracts that were recorded as deferred revenue.

The Company recorded a net loss for the fiscal year ended December 31, 2005 of $3.0 million or $.12 per share compared to a net loss of $2.6 million or a loss of $.12 per share in the same period in 2004. Fiscal 2005 operating results exclude one-time charges resulting from the early retirement of a portion of the Company's high yield debt of $3.0 million or $.12 per share.

Including the one-time charges resulting from the early retirement of a portion of the high yield debt, the Company recorded a net loss of $6.8 million, or $.22 per share, and a net loss of $6.0 million or $.24 per share for the three and twelve months ended December 31, 2005, respectively.

Earnings before interest, taxes, depreciation and amortization (EBITDA) of $10.3 million for the fiscal year ended December 31, 2005 was lower than the same period in 2004 of $15.2 million primarily due to the items in the fourth quarter mentioned above.

Revenues for the fiscal year ended December 31, 2005 decreased to $73.0 million from $76.4 million as compared to the same period in 2004 primarily due to the fourth quarter revenue transactions that were recorded as deferred revenue, partially offset by an increase in the Company's system revenues.

President and Chief Executive Officer Russel McMeekin stated: "This past year our management team focused on continuing to transition our business model to a pure content and technology company while simultaneously moving another step forward in the restructuring of the balance sheet and executing on a series of key acquisition and business development initiatives. We divested the remaining lower-margin manufacturing style businesses, acquired and invested in new technologies, strategic intellectual property, R&D, and human capital throughout the organization. We established partnerships with the best gaming operators and suppliers in the world. We believe we are well positioned strategically, along with our partners, in key growth markets to be leaders in innovation in table management systems, server-based wagering, table game content and progressives for both slots and tables. We believe these innovations have incremental revenue generating opportunities for casino operators worldwide, as evidenced in the better than expected demand we have been experiencing over the last 3-4 months."

McMeekin continued: "2005 was a year of investment and transition, with the primary objective of establishing a platform for long-term value creation and growth. 2006 is a year where we expect to begin to convert the investments of 2005 into the foundation for what we expect to be higher levels of recurring revenue in 2007 and beyond."

Financial Outlook

Chief Financial Officer Michael A. Sicuro stated: "Customer demand has been better than expected for the new technologies and content surrounding the Intelligent Table System and server-based wagering since we presented these initiatives at last year's Global Gaming Expo. Achieving full commercial rollout of these products in the next 12 months is paramount to our long-term success. As a result, we will be investing more in R&D in 2006 and deemphasizing certain activities that generate short-term, nonrecurring revenues to increase the intensity in the execution of our growth initiatives which have exciting long-term, higher margin, recurring revenue potential. The less predictable nature of our nonrecurring licensing transactions, as illustrated by the effects of the past several quarters, will continue to result in lumpy revenues each quarter. These revenues will continue to be a significant contributor to our top line for the next 12 months directly impacting the bottom line as these revenues usually have the highest margins. As a result, until our recurring revenues increase to a more comfortable level around 80% or more of total revenues, we will be temporarily suspending providing financial estimates on a quarterly basis, and are adjusting our estimates for the 2006 fiscal year for revenues and EBITDA to $90 - $95 million and $20 - $25 million, respectively. Our new estimate for earnings per share for fiscal 2006 is $.20 - $.25, adjusted for the impact of the lower EBITDA estimate, plus the impact of slightly higher interest costs. These estimates do not include any one-time charges from any debt retirement or refinancing activities, or the effect, if any, from expensing stock options. We expect to continuously evaluate the appropriate time and method to retire the remainder of our high yield debt."

All financial information discussed above is presented excluding the results of the interior sign division which was sold in May 2005.