Registration No. ______
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM S-3
Registration Statement
Under
the Securities Act of 1933
_______
Alliance Gaming Corporation
(Exact name of registrant as specified in its charter)
________
Nevada 88-0104066
(State or Other Jurisdiction of (I.R.S.
Employer Incorporation or Organization) Identification Number)
4380 Boulder Highway
Las Vegas, Nevada 89121
(702) 435-4200
(Address, Including Zip Code, and Telephone Number, Including
Area Code, of Registrant's Principal Executive Offices)
Scott D. Schweinfurth
Chief Financial Officer
Alliance Gaming Corporation
4380 Boulder Highway
Las Vegas, Nevada 89121
(702) 435-4200
(Address, Including Zip Code, and Telephone Number,
Including Area Code, of Agent For Service)
Copy to:
Lawrence Lederman, Esq.
Milbank, Tweed, Hadley & McCloy
1 Chase Manhattan Plaza
New York, New York 10005
Telephone (212) 530-5000
Approximate date of commencement of proposed sale to the public: As
soon as practicable after this Registration Statement is declared
effective.
If the only securities being registered on this form are being offered
pursuant to dividend or interest reinvestment plans, please check the
following box. o
If any of the securities being registered on this form are to be
offered on a delayed or continuous basis pursuant to Rule 415 under the
Securities Act of 1933, other than securities offered only in connection
with dividend or interest reinvestment plans, please check the following
box. x
If this form is filed to register additional securities for an
offering pursuant to Rule 462(b) under the Securities Act, please check the
following box and list the Securities Act registration statement number of
the earlier effective registration statement for the same offering. o
__________________________________
If this form is a post-effective amendment filed pursuant to Rule
462(c) under the Securities Act, check the following box and list the
Securities Act registration statement number of the earlier effective
registration statement for the same offering. o
__________________________________________________
If delivery of the prospectus is expected to be made pursuant to Rule
434, please check the following box. o
CALCULATION OF REGISTRATION FEE
Proposed Proposed
Maximum Maximum
Amount to Offering Aggregate Amount of
Title of Shares to be Regis- Price Per Offering Registra-
be Registered (1) tered Unit (2) Price (2) tion Fee
Common Stock, $.10
par value 1,020,111 $2.50 $2,550,277.50 $879.41
15% Non-Voting Senior
Special Stock, Series B,
$.10 par value 42,510 $69.25 $2,943,817.50 $1,015.11
(1) 1,020,111 shares of Common Stock (including 74,450 shares of Common
Stock issuable to the Selling Stockholders named herein upon exercise
of certain options) and 42,510 shares of Series B Special Stock
(including 24,600 shares of Series B Special Stock issuable to the
Selling Stockholders named herein upon exercise of certain options)
are being registered for resale by the Selling Stockholders named
herein.
(2) Estimated solely for the purposes of calculating the registration fee
in accordance with Rule 457(c) based on the average of the high and
low prices for the Company's Common Stock and Series B Special Stock
reported on the Nasdaq National Market System on August 8, 1996 and
August 6, 1996, respectively.
The Registrant hereby amends this Registration Statement on such
date or dates as may be necessary to delay its effective date until the
Registrant shall file a further amendment which specifically states that
this Registration Statement shall thereafter become effective in accordance
with Section 8(a) of the Securities Act of 1933, as amended, or until the
Registration Statement shall become effective on such date as the
Commission, acting pursuant to said Section 8(a), may determine.
[Red Herring Legend]
SUBJECT TO COMPLETION, DATED AUGUST 12, 1996
1,020,111 shares
of Common Stock, $.10 par value
42,510 shares of
15% Non-Voting Senior Special Stock, Series B, $.10 par value
ALLIANCE GAMING CORPORATION
This Prospectus relates to 1,020,111 shares of Common Stock, $.10
par value ("Common Stock"), and 42,510 shares of 15% Non-Voting Senior
Special Stock, Series B, $.10 par value ("Special Stock"), of Alliance
Gaming Corporation (the "Company") (such shares of Common Stock and Special
Stock being referred to as the "Shares") being offered on behalf of certain
stockholders of the Company (the "Selling Stockholders"). The Shares may be
sold from time to time by the Selling Stockholders in brokers' transactions
or in transactions directly with a market maker without soliciting or
arranging for the solicitation of orders to buy the Shares in anticipation
of or in connection with such transactions or making any payment in
connection with the offer or sale of the Shares to any person other than
the broker who executes the order to sell the Shares. See "Selling
Stockholders" and "Plan of Distribution."
None of the proceeds from the sale of the Shares will be received
by the Company. The Company has agreed to bear certain expenses (other
than selling commissions and fees and expenses of counsel and other
advisors to the Selling Stockholders) in connection with the registration
of the Shares.
The Common Stock and Special Stock of the Company are quoted on
the Nasdaq National Market System ("Nasdaq NMS") under the symbols "ALLY"
and "ALLYP," respectively. On August 9, 1996, the last reported sale price
of the Common Stock and Special Stock on the Nasdaq NMS was $2.50 and $73.00
per share, respectively.
THE SHARES INVOLVE A HIGH DEGREE OF RISK.
SEE "RISK FACTORS" BEGINNING ON PAGE 5.
THESE SHARES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION NOR HAS THE SECURITIES AND EXCHANGE COMMISSION OR ANY
STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY
OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
NEITHER THE NEVADA GAMING COMMISSION, THE NEVADA STATE
GAMING CONTROL BOARD, THE NEW JERSEY CASINO CONTROL COMMISSION
NOR THE REGULATORY AUTHORITY OF ANY OTHER STATE HAS PASSED UPON
OR CONFIRMED THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS OR THE
INVESTMENT MERITS OF THE SHARES OFFERED HEREBY. ANY
REPRESENTATION TO THE CONTRARY IS UNLAWFUL.
Information contained herein is subject to completion or
amendment. A registration statement relating to these securities has been
filed with the Securities and Exchange Commission. These securities may
not be sold nor may offers to buy be accepted prior to the time the
registration statement becomes effective. This prospectus shall not
constitute an offer to sell or the solicitation of any offer to buy nor
shall there be any sale of these securities in any State in which such
offer, solicitation or sale would be unlawful prior to registration or
qualification under the securities laws of any such State.
The date of this Prospectus is August __, 1996.
AVAILABLE INFORMATION
The Company is subject to the informational reporting
requirements of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), and in accordance therewith files reports, proxy
statements, and other information with the Securities and Exchange
Commission (the "Commission"). Such reports, proxy statements,and other
information may be inspected and copied at the Public Reference Room of the
Commission, 450 Fifth Street, N.W., Washington, D.C. 20549; and at the
Commission's regional offices in Chicago (Northwest Atrium Center, Suite
1400, 500 West Madison Street, Chicago, IL 60661), and in New York (7 World
Trade Center, 13th Floor, New York, New York 10048). Copies of such
material may be obtained from the Public Reference Section of the
Commission 450 Fifth Street, N.W., Washington, D.C. 20549, at prescribed
rates.
The Company has filed with the Commission a registration
statement on Form S-3 (the "Registration Statement") under the Securities
Act of 1933, as amended (the "Securities Act"), with respect to the Shares
offered hereby. This Prospectus does not contain all the information set
forth in the Registration Statement, certain parts of which have been
omitted in accordance with the rules and regulations of the Commission, and
the exhibits relating thereto, which have been filed with the Commission.
Copies of the Registration Statement and the exhibits are on file at the
offices of the Commission and may be obtained upon payment of the fees
prescribed by the Commission, or examined without charge at the public
reference facilities of the Commission described above.
No persons have been authorized in connection with the offering
made hereby to give any information or to make any representations not
contained or incorporated by reference in this Prospectus, and any
information or representation not contained or incorporated herein must not
be relied upon as having been authorized by the Company, the Selling
Stockholders set forth under "Selling Stockholders" or any underwriter.
This Prospectus does not constitute an offer to sell or a solicitation of
an offer to buy by any person in any jurisdiction in which it is unlawful
for such person to make such an offer or solicitation. Neither the delivery
of this Prospectus at any time nor any sale made hereunder shall under any
circumstance imply that the information herein is correct as of any date
subsequent to the date hereof.
DOCUMENTS INCORPORATED BY REFERENCE
The Company's Annual Report on Form 10-K and Form 10K/A for the
fiscal year ended June 30, 1995, its Quarterly Reports on Form 10-Q for the
periods ended September 30, 1995, December 31, 1995 and March 31, 1996, its
Current Report on Form 8-K filed with the Commission on July 3, 1996 and
the descriptions of the Common Stock contained in a registration statement
filed under the Exchange Act, which are on file with the commission, are
incorporated in this Prospectus by reference and made a part hereof.
All documents filed by the Company pursuant to Section 13(a),
13(c), 14 or 15(d) of the Exchange Act subsequent to the date of this
Prospectus and prior to the termination of this offering shall be deemed to
be incorporated by reference in this Prospectus and to be a part hereof
from the date of filing such documents. Any statement contained in a
document incorporated by reference herein shall be deemed to be modified or
superseded for purposes of this Prospectus to the extent that a statement
contained herein, or in any other subsequently filed document that also is
incorporated by reference herein, modifies or supersedes such statement.
Any such statement so modified or superseded shall not be deemed, except as
so modified or superseded, to constitute a part of this Prospectus.
The Company will furnish, without charge, to any person to whom a
copy of this Prospectus is delivered, including any beneficial owner, upon
such person's written or oral request, a copy of any and all of the
information filed by the Company that has been incorporated by reference in
this Prospectus (not including exhibits to the information that is
incorporated by reference herein unless such exhibits are specifically
incorporated by reference in such information). Requests for such copies
should be directed to the Company at 4380 Boulder Highway, Las Vegas, NV
89121, Attention: Corporate Secretary (telephone number (702) 435-4200).
THE COMPANY
General
The Company is a diversified gaming company that currently
operates approximately 6,000 electronic gaming machines (primarily video
poker devices and slot machines) and also owns and operates a small casino
in each of Vicksburg, Mississippi and Sparks/Reno, Nevada. The Company is
the largest private gaming machine management operator in Nevada and is the
exclusive operator of video poker devices at the only racetrack and ten
associated off-track betting parlors ("OTBs") in the greater New Orleans
area. In addition, the Company acquired Bally Gaming International, Inc.
("BGII") on June 18, 1996, as described below.
The Company was incorporated under the name of Advanced Patent
Technology, Inc. under the law of the State of Nevada on September 26, 1968.
The Company changed its name to Gaming and Technology in 1983, to United
Gaming, Inc. in 1988, and to Alliance Gaming Corporation on December
19, 1994. The Company's principal executive offices are located at 4380
Boulder Highway, Las Vegas, Nevada 89121, and its telephone number is (702)
435-4200.
The Merger
On June 18, 1996, pursuant to an Agreement and Plan of Merger
dated October 18, 1995, as amended in January 1996 (the "Merger
Agreement"), with BGII, a wholly-owned subsidiary of the Company merged
with and into BGII, with BGII being the surviving corporation and becoming
a wholly-owned subsidiary of the Company (the "Merger"). BGII, through
subsidiaries in the United States and Germany, is a leading designer,
manufacturer and distributor of electronic gaming machines. BGII also
designs, assembles and sells computerized systems for slot and video gaming
machines which provide casino operators with on-line real time player
tracking, security and maintenance capabilities. BGII is currently the
second largest manufacturer of casino-style electronic gaming machines in
North America.
BGII's domestic subsidiary, Bally Gaming, Inc., has two business
units: first, a gaming machine business unit ("Gaming") and second, through
Bally Gaming Inc.'s Bally Systems division ("Systems"), a data system and
software and hardware support unit. Gaming designs, manufactures and
distributes a variety of electronic reel-type (or "slot") and video gaming
machines, with variations of design, payment features and coinage
acceptance. Systems designs, assembles and sells, primarily to casino
operators in the United States, computerized monitoring systems for slot
and video gaming machines which provide casino operators with data relative
to a machine's accounting, security and maintenance functions in a real
time environment. Systems markets its products and services primarily
through its own sales force. BGII's German subsidiaries, which operate
under the name Bally Wulff, design, manufacture and distribute coin-
operated, wall-mounted machines and other recreational and amusement
machines manufactured by third parties, including pool tables, dart games,
pinball machines, jukeboxes and arcade games, to operators of arcades,
taverns, hotels and restaurants, in Germany. Product sales are made
through Bally Wulff's 23 regional sales offices in Germany and through
independent distributors.
In connection with the Merger, the Selling Stockholders, all of
whom were executive officers and/or directors of BGII, received Common
Stock and Special Stock as part of the merger consideration in exchange for
shares of BGII common stock owned by them, and certain Selling Stockholders
received Common Stock pursuant to certain employment agreements (the
"Merger Shares"). In addition, immediately following the Merger all stock
options and warrants to purchase shares of BGII common stock which are held
by the Selling Stockholders will be settled or exercisable in part for
shares of Common Stock and/or Special Stock (the "Option Shares"). The
Company has agreed pursuant to Section 6.5 of the Merger Agreement to
register for resale by the Selling Stockholders all of the Merger Shares
and the Option Shares.
RISK FACTORS
An investment in the Shares offered hereby involves a high degree
of risk. Prospective investors should carefully consider the following
risk factors, in addition to other information contained in or incorporated
by reference in this Prospectus and, in particular, the following:
High Leverage and Fixed Charges after the Merger; Holding Company
Structure; Working Capital
The Company has a substantial amount of indebtedness following
the Merger. As of March 31, 1996, on a pro forma basis after giving effect
to the Merger, the Company would have had outstanding debt of approximately
$185.5 million and a long-term debt to equity ratio of 2.6 to 1. If the
Special Stock were included in debt the pro forma long-term debt to equity
ratio would be 3.3 to 1. In addition, if the maximum amount of dividends
on the Special Stock were paid in kind, as anticipated, the liquidation
value of the Special Stock would accrue to approximately $165.4 million
after seven years. The high level of indebtedness and the amount of
Special Stock of the Company outstanding following the Merger will have
important consequences, including without limitation the following: (i)
significant interest expense, cash dividend requirements (after five
years), principal repayment (primarily after seven years) and Special Stock
redemption obligations (after eight years) resulting in substantial annual
fixed charges and significant repayment and redemption obligations; (ii)
significant limitations on the Company's ability to obtain additional
financing, make capital expenditures, make acquisitions and take advantage
of other business opportunities that may arise; and (iii) increased
vulnerability to adverse general economic and industry conditions.
On a pro forma basis after giving effect to the Merger and the
use of proceeds thereof, the Company's earnings would have been inadequate
to cover fixed charges (including the imputed fixed charges for contingent
rental expense related to revenue-sharing agreements in its Nevada gaming
machine management operations of approximately $18.0 million annually) by
approximately $1.7 million for the year ended June 30, 1995 and $10.2
million for the nine-month period ended March 31, 1996. On a pro forma
basis after giving effect to the Merger, the Company would have annual
fixed charges (including the imputed fixed charges referred to in the
immediately preceding sentence) of approximately $58.8 million, plus
dividends on the Special Stock (aggregating $10.8 million in the first year
permitted to be paid in kind for the first five years after issuance and
partially in kind for the next two years) and additional dividends (payable
in kind and only payable for the first three years following issuance) on
the 11.5% Non-Voting Junior Convertible Pay-in-Kind Special Stock, Series E,
par value $.10 per share (the "Series E Special Stock") of $1.4 million.
Future operating results are subject to significant business, economic,
regulatory and competitive uncertainties and contingencies, many of which
are beyond the control of the Company. There can be no assurance that the
Company will be able to generate the cash flow necessary to permit the
Company to meet its fixed charges and repayment obligations. If the
Company is unable to generate sufficient cash flow from operations in the
future, it may be required to refinance all or a portion of its existing
debt or to obtain additional financing. There can be no assurance that any
such refinancing would be possible or that any additional financing could
be obtained on terms that are favorable or acceptable to the Company. Any
inability of the Company to service its fixed charges and repayment
obligations would have a significant adverse effect on the Company and the
market value and marketability of the Securities.
The Company is a holding company, the only material assets of
which are equity interests in its subsidiaries (including BGII and its
subsidiaries). The ability of the Company to make interest and principal
payments on its obligations, including the $154 million aggregate principal
amount of 12.875% Senior Secured Notes due 2003 (the "Senior Secured Notes"),
and to pay cash dividends on the Special Stock, will depend on the
subsidiaries' ability to generate sufficient cash flow from operations and
distribute such amounts to the Company. Such entities' ability to make
these distributions is restricted by, among other things, the indebtedness
of the Company's Video Services, Inc. subsidiary and may be restricted by
other obligations which may be incurred in the future and by restrictions
imposed by gaming authorities on licensed enterprises.
The Company believes that its working capital needs will increase
as a result of the introduction of new machines and the expected increases
in production and sales levels from recent historical levels. The Company
expects that cash flow generated by operations and other available cash
will be sufficient to satisfy the Company's normal working capital needs,
although there can be no assurance the Company will generate such available
cash. In order to be competitive in meeting the growing customer demand
for financing of gaming equipment in emerging gaming markets, the Company
also plans to continue to involve third-party finance companies to secure
additional financing; however, there can be no assurances that such
additional financing will be obtained. Failure to obtain such financing on
terms acceptable to the Company could impair the Company's operations and
ability to pursue its business strategy.
Restrictions on Certain Activities
The Indenture pursuant to which the Senior Secured Notes were
issued (the "Indenture") provides that the Senior Secured Notes are
guaranteed by subsidiaries of the Company and secured by the stock thereof
and imposes restrictions on the Company and its subsidiaries, in addition
to restrictions imposed by existing instruments. Generally, the
restrictions contained in the Indenture relate to the incurrence of
additional indebtedness, the distribution of cash and/or property to
shareholders, the repayment or repurchase of pari passu or junior
securities, investments, mergers and sales of assets and the creation of
liens. These restrictions and requirements could limit the ability of the
Company to respond to changing business and economic conditions. A failure
to comply with any of these obligations could also result in an event of
default under the Indenture, which could permit acceleration of the Senior
Secured Notes and acceleration of certain other indebtedness of the Company
under other instruments which may contain cross-acceleration or cross-
default provisions.
Operating History -Recent Losses
The Company incurred net losses of $3.7 million, $13.1 million
and $10.8 million for its fiscal years ended June 30, 1993, 1994 and 1995,
respectively, and a net loss of $14.8 million for the nine months ended
March 31, 1996, whereas BGII had net income of $5.3 million, a net loss of
$23.4 million, net income of $3.8 million and a net loss of $3.4 million
for its fiscal years ended December 31, 1992, 1993, 1994 and 1995,
respectively, and a net loss of $0.5 million for the three months ended
March 31, 1996. There can be no assurance that the Company will be
profitable in the future, that there will not be similar or other unusual
or non-recurring charges in the future, or that future results will improve
as a result of the Merger.
The new wall machine unit sales of BGII's Germans subsidiaries,
which operate under the name Bally Wulff (collectively, "Wulff"), decreased
by approximately 8% in the year ended December 31, 1995 as compared to the
year ended December 31, 1994 and by approximately 17% in the three months
ended March 31, 1996 as compared to the three months ended March 31, 1995.
Management believes new wall machine revenues for the last six months of
1995 and the first three months of 1996 were adversely affected by an
industry downturn caused by regulations imposed in Germany limiting the
number of wall machines per square meter in arcade locations effective
January 1, 1996, thereby reducing sales opportunities, and by increased
competition from the sale of foreign-manufactured token machines in
Germany. Management expects the adverse impact of such regulations to
continue during the second quarter of 1996; however, there can be no
assurance that this impact will only be temporary. Foreign competition may
also continue to have an adverse impact on wall machine revenues.
Implementation of the Merger
The Company's future operations and earnings will be largely
dependent upon the Company's ability to integrate the business separately
conducted by the Company and BGII prior to the Merger. Prior to the
Merger, the Company and BGII operated in different areas of the gaming
entertainment industry, with only modest overlap in their activities.
There can be no assurance that the Company will successfully integrate its
businesses with those of BGII, and a failure to do so would have a material
adverse effect on the Company's financial position, results of operations
and cash flows. Additionally, although the Company does not currently have
any specific acquisition plans other than the Merger, the need to focus
management's attention on integration of the separate businesses may limit
the Company's ability to successfully pursue acquisitions or other
opportunities related to its business for the foreseeable future. Although
the Company plans to introduce more sophisticated technology into BGII's
electronic gaming machines, there is no assurance that it will succeed in
doing so or that it will be able to enter into alliances with technology
and entertainment companies. In addition, although management cannot
precisely quantify future cost savings, the Company expects to realize cost
savings of approximately $5.0 million on an annual basis (primarily through
the reduction of duplicative costs, such as facility, legal, accounting and
compensation costs) as a result of the Merger. In order to achieve these
cost savings, the Company believes it will incur one-time costs of
approximately $1.0 million. The achievement of these savings is dependent
on, among other things, the successful integration of the businesses of the
Company and BGII. There can be no assurance, however, that such savings
will be achieved or sustained.
BGII currently supplies electronic gaming machines to certain
customers which are in competition with the Company. It is possible that,
because of such competition, certain of these customers may cease
purchasing electronic gaming machines from BGII after the Merger. The
Company does not believe that such discontinuations, if at all, will be
material. BGII sales to machine management operators have historically
been, and are likely to remain, insignificant. Nevertheless,
discontinuance of purchases by customers could adversely affect the
Company's sales.
Change of Control
Following the Merger, the Company's two largest shareholders,
Alfred Wilms and Kirkland Investment Corporation ("KIC"), who owned
approximately 38.8% and 10.3%, respectively, of the outstanding shares of
Common Stock, own approximately 15.8% and 4.2%, respectively, of the
outstanding shares of Common Stock. Accordingly, no one person or group
holds a majority interest in the Company, and it is possible that the
Company could be subject to a change in control, either pursuant to a
takeover attempt or otherwise, to a greater degree than has been the case.
Mr. Wilms is contractually obligated until September 21, 1997 to vote his
shares of Common Stock in favor of four nominees of KIC to the Company's
seven-member Board of Directors.
Competition
Gaming Machine Management Operations. The competition for
obtaining and renewing gaming machine routes in Nevada is high and
continues to intensify. Such competition has, over time, reduced the
Company's gross profit margins for such operations. In addition, such
competition has required the Company to provide substantial financial
incentives and incur financial risks to retain or obtain certain gaming
machine route locations. Such incentives include long-term lease
commitments, guarantees of leases in favor of owners of local
establishments, substantial advance deposits, payments of lease rentals in
advance and loans for buildings and tenant-improvement costs. Although the
Company believes that it now has adequate procedures for evaluating and
managing such risks, historically substantial losses have been incurred in
connection with such transactions reflecting, in part, former management's
willingness to accept higher levels of risk to further its policy of
emphasizing market share. Notwithstanding the change in the Company's
business strategy to one emphasizing profitability rather than market
share, the future success of the Company's machine management operations
will continue to be dependent to some extent on its ability and willingness
to provide such financial inducements. Although the Company has
historically generated sufficient new machine management contracts to
offset the loss of old machine management contracts, due to increased
competition, the increased sophistication and bargaining power of customers
and possibly other factors not yet known, there can be no assurance that
the Company will be able to obtain new machine management contracts or
renew or extend its current space lease or revenue-sharing arrangements
upon their expiration or termination, or that, if renewed or extended, the
terms will be favorable to the Company. In Louisiana, the Company's
racetrack and OTBs compete with various truck stops and locations with
liquor licenses throughout the New Orleans area, as well as riverboat
gaming and one land-based casino which may re-open in New Orleans.
Casino Operations. The operation of casinos is also a highly
competitive business. The principal competitive factors in the industry
include the quality and location of the facility, the nature and quality of
the amenities and customer services offered and the implementation and
success of marketing programs. In Sparks/Reno, Nevada, the principal
competition for the Company's operations comes from larger casinos focusing
on the local market. The Company's one dockside casino in Vicksburg,
Mississippi faces substantial direct competition from other dockside gaming
facilities in the region.
German Operations. Germany's wall machine manufacturing industry
is dominated by Wulff and two of its competitors. These three entities are
believed collectively to account for more than 90% of the entire market for
wall machines (which exists almost exclusively in Germany). Wulff's two
major competitors have greater resources than the Company and own and
operate a significant number of arcades, which may give them a competitive
advantage arising from a built-in market for their games and the ability to
test market new games in their own arcades. In addition, wall machines
compete for floor space in arcades with token machines, the sales of which
have expended rapidly in the last several years, in part as a result of low
price competitors from outside Germany and the popularity of these
machines. Token machines are not subject to the strict German licensing
requirements governing wall machines.
Gaming Machine Manufacturing and Systems Operations. The market
for gaming machines is extremely competitive, and there are a number of
established, well-financed and well-known companies producing machines that
compete with each of BGII's product lines in each of the markets for BGII's
gaming machine manufacturing operations. The domestic market for gaming
machines is dominated by a single competitor, International Game Technology
("IGT"), with a number of smaller competitors in the field. In addition,
certain technology-oriented companies have recently announced plans to
enter the gaming machine market. Management believes that some of these
competitors have greater capital resources than the Company. Competition
among gaming product manufacturers, particularly with respect to sales of
gaming machines into new and emerging markets, is based on competitive
customer pricing and financing terms, appeal to the player and quality of
the product, and having an extensive distribution and sales network. Sales
to established casinos in Nevada normally require completion of a
successful trial period for the machines in the casino.
The competition for the computerized monitoring systems designed
and sold by the data systems and software and hardware support service
division ("Systems") of Bally Gaming, Inc., BGII's United States
subsidiary, currently consists of IGT, Casino Data Systems, and, to a
lesser extent, Gaming Systems International, Inc. and Acres Gaming, Inc.
Competition is keen in this market due to the number of providers and the
limited number of casinos and the jurisdictions in which they operate.
Pricing, product feature and function, accuracy, and reliability are all
main factors in determining a provider's success in selling its system.
Systems believes the future success of its operations will be determined by
its ability to bring new and innovative products to the marketplace while
at the same time maintaining the base of loyal existing customers.
Product Development
The future success of the Company depends to a large extent upon
its ability to design, manufacture and market technologically sophisticated
products that achieve high levels of player acceptance. The development of
a successful new product or product design by a competitor could adversely
affect sales of the Company's products and force it to respond quickly with
its own competing products. The Company's plans with respect to the
introduction of more sophisticated technology into the electronic gaming
machine market are designed to lead to an increase in market share and
profitability for the Company. However, no products incorporating such
technology have reached the development stage, and there is no assurance
that any such products will be developed, or that if developed they will
receive necessary regulatory approvals or be commercially successful.
Customer Financing
Management believes that customer financing terms have become an
increasingly important competitive factor in certain emerging markets.
Competitive conditions sometimes require Bally Gaming, Inc's domestic-based
electronic gaming machine manufacturing unit ("Gaming") to grant extended
payment terms on electronic gaming machines and other gaming equipment.
Approximately 75% of Gaming's slot and video gaming machine customers pay
within 90 days or less. Approximately 25% of Gaming's sales, primarily in
certain emerging gaming markets such as riverboat casinos and Indian gaming
casinos, are financed over extended periods as long as 36 months and bear
interest at rates ranging from 8% to 14%. While customer financings are
normally collateralized by such equipment, the resale value of the
collateral in the event of a default may be less than the amount financed.
Accordingly, Gaming has greater exposure to the financial condition of its
customers in emerging markets than has historically been the case in
established markets like Nevada and Atlantic City. In addition, in certain
situations, Gaming has participated in the financing of other gaming-
related equipment manufactured by third parties in the emerging North
American gaming markets. International sales by Gaming are generally
consummated on a cash basis or financed over a period of one year or less.
Wulff provides customer financing for approximately 20% of its
sales, and management expects this practice to increase during the latter
half of 1996.
Sales to Non-Traditional Gaming Markets
The continued growth of the non-traditional markets outside of
Nevada and Atlantic City for electronic gaming machines is contingent upon
the public's acceptance of these markets and an ongoing regulatory approval
process by Federal, state and local governmental authorities. The Company
cannot predict which new jurisdictions or markets, if any, will approve the
operation of electronic gaming machines, the timing of any such approval or
the level of the Company's participation in any such markets or that
jurisdictions currently permitting gaming will continue to do so in the
future.
Foreign Operations
The Company's business in foreign markets is subject to the risks
customarily associated with such activities. These risks include
fluctuations in foreign currency exchange rates and controls,
expropriation, nationalization and other economic, tax and regulatory
policies of local governments as well as the laws and policies of the
United States affecting foreign trade and investment. BGII does not
generally enter into foreign exchange contracts to hedge its exposure to
foreign exchange rate fluctuations.
Key Personnel
The success of the Company will be dependent, to a significant
extent, upon the continued services of a relatively small group of
executive personnel. The loss or unavailability of one or more of such
executive officers or the inability to attract or retain key employees in
the future could have an adverse effect upon the Company's operations.
Strict Regulation by Gaming Authorities
The manufacture and distribution of gaming machines and the
conduct of gaming operations is subject to extensive Federal, state, local
and foreign regulation by various gaming authorities (each, a "Gaming
Authority"). Although the laws and regulations of the various
jurisdictions in which the Company operates vary in their technical
requirements and are subject to amendment from time to time, virtually all
of these jurisdictions require licenses, permits, documentation of the
qualification, including evidence of integrity and financial stability, and
other forms of approval for companies engaged in the manufacture and
distribution of gaming machines and gaming operations as well as for the
officers, directors, major stockholders and key personnel of such
companies. The Company and its key personnel have obtained, or applied
for, all government licenses, registrations, findings of suitability,
permits and approvals necessary for the manufacture and distribution, and
operation where permitted, of its gaming machines in the jurisdictions in
which it currently does business. However, there can be no assurance that
such licenses, registrations, findings of suitability, permits or approvals
will be given or renewed in the future or that the Company will obtain the
licenses necessary to operate in emerging markets.
BGII was pursuing a permanent manufacturer's license for Gaming
as it relates to the land-based casino in New Orleans. However, in
November 1995, the operator of the land-based casino in New Orleans filed
for bankruptcy reorganization and ceased operations. That action resulted
in the termination of funding for the regulatory operations of the
Louisiana Economic Development Gaming Corporation and, shortly thereafter,
the Attorney General of Louisiana took control of the agency and
effectively closed its operations and dismissed its President and
employees. The Louisiana legislature recently passed a bill which created
a single gaming control board for the regulation of gaming in Louisiana who
will issue all licensing after May 1, 1996 for video draw poker devices.
The foregoing occurred prior to completion of review of Gaming's pending
application. In addition, BGII's application for renewal of gaming's
license as a gaming-related casino service industry in New Jersey is
pending before the New Jersey Casino Control Commission (the "New Jersey
Commission").
The Company currently has an agreement with Fair Grounds
Corporation, Jefferson Downs Corporation and Finish Line Management
Corporation to be the exclusive operator of video poker machines at the
only racetrack and ten associated OTBs in the greater New Orleans area.
The Louisiana legislature has recently passed a bill which will result in
an election to be held in November 1996 which will allow each parish to
decide whether to disallow video poker devices, riverboat casinos and, in
Orleans Parish, land-based casinos. If any parish in which the Company
operates elects to disallow video poker devices, the Company would have to
cease its video poker operations there by June 30, 1999. The Company
cannot predict which parishes will so elect; however, if Orleans Parish or
certain other parishes in which the Company operates so elect, the
cessation of the Company's video poker operations would have a material
adverse effect on the operations of the Company. The Company's operations
also depend on the financial viability of the racetrack, which is beyond
the control of the Company.
Ownership Limitations on Securities of the Company
The Gaming Authorities may, at their discretion, require the
holder of any security of the Company, such as the Common Stock or Special
Stock, to file applications, be investigated and be found suitable to own
such security of the Company. If a record or beneficial owner of the
Common Stock or Special Stock is required by a Gaming Authority to be found
suitable, such owner will be required to apply for a finding of suitability
within 30 days after request by such Gaming Authority, or within such
earlier time as required by such Gaming Authority. As a general matter,
assuming a passive investment intent, only owners of specified percentages
of the Company's voting securities are required to be found suitable,
absent unusual circumstances, which percentage is typically between 10% to
15% of any class of such securities. In the event that there is a default
in the payment of dividends for six consecutive dividend payment dates, the
Special Stock will qualify as a voting security and will be considered as a
separate class of voting securities for purposes of determining beneficial
ownership. The applicant for a finding of suitability generally must pay
all costs of the investigation for such finding of suitability and in
Nevada must provide an initial deposit as determined by the Nevada State
Gaming Control Board to pay the anticipated costs and charges incurred in
the investigation and deposit such additional sums as are required by the
Nevada State Gaming Control Board to pay final costs and charges. If a
Gaming Authority determines that a holder is unsuitable to own the Common
Stock or Special Stock or to have any other relationship with the Company,
then the Company can be sanctioned, including by the loss of its approvals,
if without the prior approval of the Gaming Authorities, it: (i) pays to
the unsuitable person any dividend, interest, or any distribution
whatsoever; (ii) recognizes any voting right by such person in connection
with such securities; (iii) pays the unsuitable person remuneration in any
form; (iv) makes any payment to the unsuitable person by way of principal,
redemption, conversion, exchange, liquidation, or similar transaction; or
(v) fails to pursue all lawful efforts to require such person to relinquish
his voting securities including, if necessary, the immediate purchase of
such voting securities for cash at fair market value.
Any person who fails or refuses to apply for a finding of
suitability within the period of time required or prescribed by a Gaming
Authority may be found unsuitable. The same restrictions apply to a record
owner if the record owner, after request, fails to identify the beneficial
owner. Any holder of the Shares found unsuitable and who holds, directly
or indirectly, any beneficial ownership of the Shares beyond such period of
time prescribed by a Gaming Authority may be guilty of a criminal offense.
Ongoing BGII Regulatory Investigations
In May 1994, an investigation of BGII's former video lottery
terminals ("VLT") Louisiana distributor resulted in the indictment by a
United States grand jury and subsequent conviction in New Orleans of 18
individuals including certain of the former distributor's officers,
directors, employees and others. In addition, Alan Maiss, a former
director and president of BGII, pled guilty to misprision of a felony in
connection with such investigation. BGII, its subsidiaries and its current
employees were not subject to such investigation. BGII's activities with
regard to its former VLT distributor in Louisiana have been the subject of
current inquiries by gaming regulators. The gaming authorities in Ontario,
Canada, who have investigated the matter, issued a gaming registration to
Bally Gaming, Inc. on February 8, 1996. The New Jersey Commission is
currently reviewing such proceedings in connection with Gaming's
application for a license renewal. An adverse determination by a Gaming
Authority in any jurisdiction could result in the loss of the Company's
ability to do business in that jurisdiction and could have the effect of
discouraging gaming operators from doing business with the Company. In
addition, further regulatory scrutiny in other jurisdictions may follow any
such adverse determination.
Certain Litigation
WMS Industries, Inc. ("WMS") has instituted a lawsuit in New York
State Court against BGII alleging, among other things, that $4.8 million is
due and payable from BGII to WMS as a result of the termination of BGII's
merger agreement with WMS.
Gaming Taxes and Value Added Taxes
Gaming operators are typically subject to significant taxes and
fees in addition to corporate income taxes, and such taxes and fees are
subject to increase at any time. Any material increase in these taxes or
fees, which could occur prospectively or retroactively, would adversely
affect the Company. Sales of Wulff's products in Germany are generally
subject to value added taxes ("V.A.T"). The operations of Wulff had
benefitted from a special tax rebate that was phased out from January 1,
1992 to January 1, 1994. In addition, during 1995, Wulff increased the
amount of V.A.T. reserves by $1.0 million as a result of developments to
date in an ongoing quadrennial audit of Wulff's tax returns for the years
1988 through 1991. While no written claim or assessment has been issued,
the German tax authorities have orally proposed preliminary adjustments
which range from $1.4 million (which has been accrued) to $5.0 million.
The Company pays and expects to continue to pay substantial taxes and fees
in Nevada, Louisiana and Mississippi and expects to pay substantial taxes
and fees in any other jurisdiction in which it conducts gaming operations.
The Louisiana legislature has recently considered several proposals to
increase taxes on video poker operations. No action was taken in the most
recent legislative session, which ended on June 12, 1996. However, there
can be no assurance as to future increases in taxation on video poker
operations in Louisiana.
Potential Volatility of Market Prices
There can be no assurance with respect to the prices at which the
Common Stock and Special Stock will trade after the date hereof. The
trading price of the Common Stock and Special Stock could be subject to
wide fluctuations in response to quarter-to-quarter variations in operating
results and other events or factors, including the success of the Company's
development activities, legislation approving or defeating gaming, other
governmental actions, developments in the gaming industry generally and
announcements by the Company or by competitors. In addition, the stock
market, and the gaming industry in particular, have experienced extreme
price and volume fluctuations in a manner which has often been unrelated to
the operating performance of the companies within the gaming industry.
These broad market fluctuations may adversely affect the market price of
the Common Stock and Special Stock. A shift away from investor interest in
gaming in general could adversely affect the trading price of the Common
Stock and Special Stock.
Special Stock
The Special Stock dividend may be paid in kind in whole or in
part through and including the first dividend payment date occurring after
the seventh anniversary of the Effective Time of the Merger. The Special
Stock is mandatorily redeemable on the eighth anniversary of the Effective
Time; however, if the Company fails to so redeem all outstanding shares of
the Special Stock by such date, the remedies of holders are limited to the
right to elect two directors to the Board of Directors, and to prohibit the
payment of dividends or other distributions on, or the purchase or
redemption of, any other stock of the Company ranking junior to or pari
passu with the Special Stock. The Special Stock will be callable for cash
at any time at the Company's option at the Liquidation Value. The Special
Stock does not limit the Company's right to issue other series of special
stock ranking on a parity with the Special Stock as to receipt of dividends
or distributions. In addition, in the event of a bankruptcy of the
Company, the amount to which a holder of Special Stock is entitled may be
deemed to be the issue price thereof, plus accrued and unpaid dividends,
which amount is less than the Liquidation Value. These factors may
adversely affect the market price and marketability of the Special Stock.
Limitations on Net Operating Losses; Discharge of Debt Income
The Company had net operating loss carryforwards ("NOLs") of
approximately $46.0 million, which the Company believes are not currently
subject to an annual limitation on their utilization under Section 382 of
the Internal Revenue Code of 1986, as amended (the "Code"). There is a
material risk that the Merger resulted in an "ownership change" under
Section 382 of the Code, in which event the use of these NOLs will likely
be subject to an annual limitation on their utilization. For tax purposes,
the exchange of $83.6 million aggregate principal amount of the Company's
7.5% Convertible Senior Subordinated Debentures due 2003 for a like
principal amount of its 7.5% Convertible Subordinated Debentures due 2003,
which occurred on June 6, 1996, and which New Convertible Debentures, upon
consummation of the Merger, converted into 15,133,000 shares of Common
Stock and 113,160 shares of Series E Special Stock, may have resulted in an
extinguishment of debt gain. However, it is anticipated that this tax gain
would be entirely offset by the Company's NOLs, based on current Common
Stock prices.
DEFICIT OF EARNINGS TO COMBINED FIXED
CHARGES AND PREFERRED STOCK DIVIDENDS
For the fiscal years ended June 30, 1991, 1992, 1993, 1994 and
1995, and as of and for the nine months ended March 31, 1995 and 1996, the
Company had a deficit of earnings to combined fixed charges of $21.8
million, $4.7 million, $3.7 million, $12.9 million, $10.5 million, $6.4
million and $14.2 million respectively. No preferred stock dividends were
paid by the Company during this period.
THE SELLING STOCKHOLDERS
The following table sets forth the name and the number of shares
of Common Stock and Special Stock that will be beneficially owned by each
of the Selling Stockholders immediately following the Effective Time of the
Merger, the number of Shares to be offered by such Selling Stockholder and
the number of Shares to be owned beneficially by such Selling Stockholder
if all of the Shares offered hereby by such Selling Stockholder are sold as
described herein.
Shares of Common
Stock Beneficially Shares of Special Stock
Name of Selling Owned Before Offering Beneficially Owned Before
Stockholders and Offered Hereby Offering and Offered Hereby
Richard Gillman 25,723 16,040.4
Hans Kloss 720,675 9,225.0
Neil E. Jenkins 126,136 6,027.0
Robert Conover 131,797 1,377.6
Charles C. Carella 3,945 2,460.0
Kenneth D. McPherson 3,945 2,460.0
James J. Florio 3,945 2,460.0
Lewis Katz 3,945 2,460.0
Because the Selling Stockholders may offer all or some of the
shares of Common Stock which they hold pursuant to the offering
contemplated by this Prospectus, and because the offering is not being
underwritten on a firm commitment basis, no estimate can be given as to the
number of shares that will be held by the Selling Stockholders after
completion of the offering.
PLAN OF DISTRIBUTION
The Shares covered hereby may be offered and sold by the Selling
Stockholders from time to time in brokers' transactions or in transactions
directly with a market maker without soliciting or arranging for the
solicitation of orders to buy the Shares in anticipation of or in
connection with such transactions or making any payment in connection with
the offer or sale of the Shares to any person other than the broker who
executes the order to sell the Shares. The Selling Stockholders are acting
independently of the Company in making decisions with respect to the timing
and size of each sale. The Company will not receive any of the proceeds
from the sale by the Selling Stockholders of the Common Stock or Special
Stock offered hereby.
In order to comply with the securities laws of certain states, if
required, the Shares will be sold in such jurisdictions only through
registered or licensed brokers or dealers. In addition, in certain states
the Shares may not be sold unless they have been registered or qualified
for sale in the applicable state or any exemption from the registration or
qualification requirement is available and is complied with.
Under applicable rules and regulations under the Exchange Act,
any person engaged in the distribution of the Shares may not simultaneously
engage in market making activities with respect to the Common Stock for a
period of nine business days prior to the commencement of such
distribution. In addition and without limiting the foregoing, each Selling
Stockholder will be subject to applicable provisions of the Exchange Act
and the rules and regulations thereunder, including, without limitation,
Rules 10b-6 and 10b-7, which provisions may limit the timing of purchases
and sales of shares of the Common Stock by the Selling Stockholders.
VALIDITY OF SHARES
The validity of the shares offered hereby is being passed upon
for the Company by Schreck, Jones, Bernhard, Woloson & Godfrey.
EXPERTS
The consolidated financial statements of Alliance Gaming
Corporation and subsidiaries as of June 30, 1994 and 1995, and for each of
the years in the three-year period ended June 30, 1995 have been
incorporated by reference herein and in the registration statement in
reliance upon the report of KPMG Peat Marwick LLP, independent certified
public accountants, incorporated by reference herein, and upon the
authority of said firm as experts in accounting and auditing.
The consolidated balance sheets of BGII as of December 31, 1994
and 1995, and the consolidated statements of operations, stockholders'
equity and cash flows for each of the three years in the period ended
December 31, 1995 have been incorporated by reference herein and in the
registration statement in reliance upon the report of Coopers & Lybrand
L.L.P., independent accountants, appearing elsewhere herein, and upon on
the authority of said firm as experts in accounting and auditing.
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution
The expenses in connection with the issuance and distribution of
the securities covered hereby, other than underwriting commissions, are,
subject to further contingencies, estimated as follows:
Securities and Exchange Commission
registration fee $ 1,894.52
Legal fees and expenses $ 10,000
Accounting fee and expenses $ 10,000
Miscellaneous $ 5,000
Total $ 26,894.52
These expenses will be borne by the Company.
Item 15. Indemnification of Directors and Officers.
Article VI of the Company's Articles of Incorporation limits the
liability of the Company's directors and officers. It provides that a
director or officer of the Company will not be personally liable to the
Company or its stockholders for monetary damages for breach of fiduciary
duty as a director or officer, except for liability (i) for acts or
omissions which involve intentional misconduct, fraud or a knowing
violation of law or (ii) for the payment of dividends in violation of
Section 78.300 of the Nevada General Corporation Law. It also provides
that any repeal or modification of the foregoing provision of the
stockholders of the Company will be prospective only, and will not
adversely affect any limitation on the personal liability of a director or
officer of the Company existing at the time of such repeal or modification.
Section 78.300 of the Nevada General Corporation Law provides:
1. The directors of a corporation shall not make dividends or
other distributions to stockholders except as provided by such
section.
2. In case of any willful or grossly negligent violation of the
provisions of such section, the directors under whose administration
the violation occurred, except those who caused their dissent to be
entered upon the minutes of the meeting of the directors at the time,
or who not then being present caused their dissent to be entered on
learning of such action, are jointly and severally liable, at any time
within 3 years after each violation, to the corporation, and, in the
event of its dissolution or insolvency, to its creditors at the time
of the violation, or any of them, to the lesser of the full amount of
the dividend made or of any loss sustained by the corporation by
reason of the dividend or other distribution to stockholders.
However, Section 78.751 of the Nevada General Corporation Law
permits the Registrant to indemnify its directors and officers as follows:
1. A corporation may indemnify any person who was or is a party
or is threatened to be made a party to any threatened, pending or
completed action, suit or proceeding, whether civil, criminal,
administrative or investigative, except any action by or in the right
of the corporation, by reason of the fact that he is or was a
director, officer, employee or agent of the corporation, or is or was
serving at the request of the corporation as a director, officer,
employee or agent of another corporation, partnership, joint venture,
trust or other enterprise, against expenses, including attorneys'
fees, judgments, fines and amounts paid in settlement actually and
reasonably incurred by him in connection with the action, suit or
proceeding if he acted in good faith and in a manner which he
reasonably believed to be in or not opposed to the best interests of
the corporation, and, with respect to any criminal action or
proceeding, has no reasonable cause to believe his conduct was
unlawful. The termination of any action, suit or proceeding by
judgment, order, settlement, conviction, or upon a plea of nolo
contendere or its equivalent, does not, of itself, create a
presumption that the person did not act in good faith and in a manner
which he reasonably believed to be in or not opposed to the best
interests of the corporation, and that, with respect to any criminal
action or proceeding, he had reasonable cause to believe that his
conduct was unlawful.
2. A corporation may indemnify any person who was or is a party
or is threatened to be made a party to any threatened, pending or
completed action or suit by or in the right of the corporation to
procure a judgment in its favor by reason of the fact that he is or
was a director, officer, employee or agent of the corporation, or is
or was serving at the request of the corporation as a director,
officer, employee or agent of another corporation, partnership, joint
venture, trust or other enterprise against expenses, including amounts
paid in settlement and attorneys' fees actually and reasonably
incurred by him in connection with the defense or settlement of the
action or suit if he acted in good faith and in a manner which he
reasonably believed to be in or not opposed to the best interests of
the corporation. Indemnification may not be made for any claim, issue
or matter as to which such a person has been adjudged by a court of
competent jurisdiction, after exhaustion of all appeals therefrom, to
be liable to the corporation or for amounts paid in settlement to the
corporation, unless and only to the extent that the court in which the
action or suit was brought or other court of competent jurisdiction
determines, upon application, that in view of all the circumstances of
the case, the person is fairly and reasonably entitled to indemnity
for such expenses as the court deems proper.
3. To the extent that a director, officer, employee or agent of
a corporation has been successful on the merits or otherwise in
defense of any action, suit or proceeding referred to in subsections 1
and 2, or in defense of any claim, issue or matter herein, he must be
indemnified by the corporation against expenses, including attorneys'
fees, actually and reasonably incurred by him in connection with the
defense.
4. Any indemnification under subsections 1 and 2, unless
offered by a court or advanced pursuant to subsection 5, must be made
by the corporation only as authorized in the specific case upon a
determination that indemnification of the director, officer, employee
or agent is proper in the circumstances. The determination must be
made:
(a) By the stockholders;
(b) By the board of directors by majority vote of a
quorum consisting of directors who were not parties to the act,
suit or proceeding;
(c) If a majority vote of a quorum consisting of
directors who were not parties to the act, suit or proceeding so
orders, by independent legal counsel in a written opinion; or
(d) If a quorum of directors who were not parties to
the act, suit or proceeding so orders, by independent legal
counsel in a written opinion.
5. The articles of incorporation, the bylaws or an agreement
made by the corporation may provide that the expenses of officers and
directors incurred in defending a civil or criminal action, suit or
proceeding must be paid by the corporation as they are incurred and in
advance of the final disposition of the action, suit or proceeding,
upon receipt of an undertaking by or on behalf of the director or
officer to repay the amount if it is ultimately determined by a court
of competent jurisdiction that he is not entitled to be indemnified by
the corporation. The provisions of this subsection do not affect any
rights to advancement of expenses to which corporate personnel other
than directors or officers may be entitled under any contract or
otherwise by law.
Item 16. Exhibits and Financial Statement Schedules.
Exhibit 2.1 - Amended and Restated Agreement and Plan of Merger
among Alliance Gaming Corporation, BGII Acquisition Corp. and
Bally Gaming International, Inc.(1)
2.2 - Mutual Waiver to Agreement and Plan of Merger dated
as of April 17, 1996.(2)
*4.1 - Certificate of Designations, Preferences and Relative,
Participating, Optional and Other Special Rights of Special
Stock and Qualifications, Limitations and Restrictions thereof
of 15% Non-Voting Special Stock, Series B, $.10 par value, of
Alliance Gaming Corporation.
*5.1 - Opinion of Schreck, Jones, Bernhard, Woloson & Godfrey.
12. - Ratio of Earnings to Combined Fixed Charges.(3)
21.1- Consent of Schreck, Jones, Bernhard, Woloson & Godfrey
(included in Exhibit 5.1).
*23.1 - Consent of KPMG Peat Marwick LLP.
*23.2 - Consent of Coopers & Lybrand L.L.P.
24- Power of Attorney (included on signature page).
_________________________
(1) Incorporated by reference to Registrant's Form S-4 Reg. No.
333-01527.
(2) Incorporated by reference to Registrant's Form S-4 Reg. No.
333-2799.
(3) Incorporated by reference to Registrant's Form S-2 Reg. No.
333-02147.
* Filed herewith.
Item 17. Undertakings.
The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are
being made, a post-effective amendment to this registration statement:
(i) To include any prospectus required by Section 10(a)(3) of
the Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising
after the effective date of the registration statement (or the
most recent post-effective amendment thereof) which, individually
or in the aggregate, represent a fundamental change in the
information set forth in the registration statement.
Notwithstanding the foregoing, any increase or decrease in volume
of securities offered (if the total dollar value of securities
offered would not exceed that which was registered) and any
deviation from the low or high and of the estimated maximum
offering range may be reflected in the form of prospectus filed
with the Commission pursuant to Rule 424(b) if, in the aggregate,
the changes in volume and price represent no more than 20 percent
change in the maximum aggregate offering price set forth in the
"Calculation of Registration Fee" table in the effective
registration statement;
(iii) To include any material information with respect to the
plan of distribution not previously disclosed in the registration
statement or any material change to such information in the
registration statement;
provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) do not
apply if the registration statement is on Form S-3, Form S-8, or Form
F-3 and the information required to be included in a post-effective
amendment by those paragraphs is contained in periodic reports filed
with or furnished to the Securities and Exchange Commission by the
registrant pursuant to Section 13 or 15(d) of the Securities Exchange
Act of 1934 that are incorporated by reference in the registration
statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be
deemed to be a new registration statement relating to the securities
offered therein, and the offering of such securities at that time
shall be deemed to be the initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold
at the termination of the offering.
The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of
the registrant's annual report pursuant to Section 13(a) or Section 15(d)
of the Securities Exchange Act of 1934 (and, where applicable, each filing
of an employee benefit plan's annual report pursuant to Section 15(d) of
the Securities Exchange Act of 1934) that is incorporated by reference in
the registration statement shall be deemed to be a new registration
statement relating to the securities offered therein, and the offering of
such securities at that time shall be deemed to be the initial bona fide
offering thereof.
Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and
controlling persons of the Registrant pursuant to the provisions set forth
in response to Item 15, or otherwise, the Registrant has been advised that
in the opinion of the Securities and Exchange Commission such
indemnification is against public policy as expressed in the Act and is,
therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the Registrant of
expenses incurred or paid by a director, officer or controlling person of
the Registrant in the successful defense of any action, suit or proceeding)
is asserted by such director, officer or controlling person in connection
with the securities being registered, the Registrant will, unless in the
opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question
whether such indemnification by it is against public policy as expressed in
the Act and will be governed by the final adjudication of such issue.
The Registrant and each person whose signature appears below hereby
authorizes Scott D. Schweinfurth, David D. Johnson, and Steve Greathouse
(the "Agents") to file one or more amendments (including post-effective
amendments) to the Registration Statement, which amendments may make such
changes in the registration statement as such Agent deems appropriate, and
the registrant and each such person hereby appoints each such Agent as
attorney-in-fact to execute in the name and on behalf of the registrant and
each such person, individually and in each capacity stated below, any such
amendments to the Registration Statement.
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, Alliance
Gaming Corporation certifies that it has reasonable grounds to believe that
it meets all the requirements for filing on Form S-3 and has duly caused
this registration statement to be signed on its behalf by the undersigned,
thereunto duly authorized, in the City of Las Vegas, State of Nevada, on
August 12, 1996.
ALLIANCE GAMING CORPORATION
By: /s/ Scott D. Scheinfurth
Scott D. Schweinfurth
Chief Financial Officer
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons in the
capacities and on the dates indicated.
Signature Title Date
/s/Steve Greathouse
Steve Greathouse Chairman of the Board of August 12, 1996
Directors, President and
Chief Executive Officer
(Principal Executive Officer)
/s/Scott D Schweinfurth
Scott D. Scheinfurth Chief Financial Officer August 12, 1996
Principal Accounting Officer
and Principal Financial Officer
/s/Anthony DiCesare
Anthony DiCesare Director and Executive August 12, 1996
Vice President
/s/Dr. Craig Fields
Dr. Craig Fields Director (Vice Chairman August 12, 1996
of the Board)
/s/Joel Kirschbaum
Joel Kirschbaum Director August 12, 1996
/s/Alfred H. Wilms
Alfred H. Wilms Director August 12, 1996
/s/David Robbins
David Robbins Director August 12, 1996
EXHIBIT 4.1
CERTIFICATE OF DESIGNATIONS, PREFERENCES
AND RELATIVE, PARTICIPATING, OPTIONAL AND
OTHER SPECIAL RIGHTS OF SPECIAL
STOCK AND QUALIFICATIONS, LIMITATIONS
AND RESTRICTIONS THEREOF
OF
15% NON-VOTING SENIOR PAY-IN-KIND
SPECIAL STOCK, SERIES B
OF
ALLIANCE GAMING CORPORATION
a Nevada corporation,
Pursuant to Section 78.1955 of the
Nevada Revised Statutes
ALLIANCE GAMING CORPORATION, a Nevada corporation (the
"Corporation"), certifies that, pursuant to the authority contained in
Article IV of its Amended Articles of Incorporation (the "Articles of
Incorporation") and in accordance with the provisions of Section 78.1955 of
the Nevada Revised Statutes, the Board of Directors of the Corporation by a
unanimous written consent dated June 12, 1996, adopted the following
resolutions which resolutions remain in full force and effect on the date
hereof:
WHEREAS, the Articles of Incorporation have authorized 10,000,000
shares of special stock, par value $.10 per share, of which 10,000,000
remain unissued; and
WHEREAS, it is necessary to set forth the designation, preferences
and relative, participating, optional and other special rights and
qualifications, limitations and restrictions of 2,000,000 shares of such
non-voting special stock; and
RESOLVED, that there is hereby established a series of authorized
special stock having a par value of $.10 per share, which series shall be
designated as "15% Non-Voting Senior Pay-in-Kind Special Stock, Series B"
(herein the "Series B Special Stock"), shall consist of 2,000,000 shares
and shall have the following voting powers, preferences and relative,
participating, optional and other special rights, and qualifications,
limitations and restrictions thereof as follows:
ARTICLE I
Certain Definitions
Unless the context otherwise requires, the terms defined in this
Article I shall have, for all purposes of this resolution, the meanings
herein specified:
Common Stock. The term "Common Stock" shall mean the common
stock, par value $.10 per share, of the Corporation.
Effective Time. The term "Effective Time" shall mean the
effective time of the consummation of the merger contemplated by the
Agreement and Plan of Merger, dated October 18, 1995, as amended, among the
Corporation, BGII Acquisition Corp. and Bally Gaming International, Inc.
Initial Issue Date. The term "Initial Issue Date" shall mean the
date that shares of Series B Special Stock are first issued by the
Corporation, which date shall not precede the date this Certificate is
filed with the Nevada Secretary of State.
Junior Stock. The term "Junior Stock" shall mean the Common Stock
and any class or series of stock of the Corporation authorized after the
Initial Issue Date ranking junior to the Series B Special Stock in respect
of the right to receive dividends or in respect of the right to participate
in any distribution upon liquidation, dissolution or winding up of the
affairs of the Corporation.
Liquidation Value. The term "Liquidation Value" shall mean
$100.00 per share of Series B Special Stock.
Person. The term "Person" shall mean an individual, partnership,
joint venture, corporation, trust or unincorporated organization, a
government or any department, agency or political subdivision thereof or
other entity.
Senior Stock. The term "Senior Stock" shall mean any class or
series of stock of the Corporation authorized after the Initial Issue Date
ranking senior to the Series B Special Stock in respect of the right to
receive dividends or in respect of the right to participate in any
distribution upon liquidation, dissolution or winding up of the affairs of
the Corporation.
ARTICLE II
Dividends or Other Distributions of Property
2.1 General. The holders of the outstanding Series B Special
Stock shall be entitled to receive quarterly dividends, as and when
declared by the Board of Directors out of funds legally available therefor.
Each quarterly dividend shall be an amount per share equal to $3.75 and
shall be payable in cash, except that the Corporation may at its sole
option pay such dividend accruing through the first Dividend Payment Date
(as defined below) occurring next after the seventh anniversary of the
Effective Time in whole or in part in additional shares of Series B Special
Stock (or fractions thereof) in an amount equal to such dividend, valued at
the Liquidation Value, provided that after the first Dividend Payment Date
(as defined below) occurring next after the fifth anniversary of the
Effective Time the portion of any such dividend that may be so paid is
limited to $2.00, valued at the Liquidation Value. Each such dividend
shall be payable on or about March 30, June 30, September 30 and December
30 in each year as fixed by the Board of Directors beginning on September
30, 1996 or such other dates as are fixed by the Board of Directors (each a
"Dividend Payment Date"), to the holders of record of Series B Special
Stock at the close of business on the 15th day of the month next preceding
such Dividend Payment Date, as the case may be, as fixed by the Board of
Directors (each a "Record Date"). Such dividends shall be cumulative and
shall accrue on each share whether or not earned, from and after the
Dividend Payment Date coincident with or next preceding the issuance of
such share; provided, however, that dividends payable on the first Dividend
Payment Date shall so accrue from and after the date immediately succeeding
the Initial Issue Date. Dividends payable for any partial dividend period
(including the period from the Initial Issue Date to the first day of the
month next following the month in which the Initial Issue Date occurs)
shall be computed on the basis of the actual days elapsed in such period
over a year of 365 or 366 days. All calculations provided for in this
Section 5.1 shall be rounded to the nearest 1/1000 share and the nearest
cent.
2.2 Limitations. Except as hereinafter provided in this Section
2.2, unless all dividends on the outstanding shares of Series B Special
Stock that shall have accrued and are payable as of any date shall have
been paid, or declared and additional shares or funds, as appropriate, set
apart for payment thereof, or if a Redemption Default (as defined in
Section 5.2) has occurred and is continuing, no dividend or other
distribution shall be paid to the holders of Junior Stock and no shares of
Junior Stock shall be purchased or redeemed by the Corporation. Holders of
shares of Series B Special Stock shall not be entitled to any dividends,
whether payable in cash, property or stock, in excess of full cumulative
dividends, as herein provided, on the Series B Special Stock. Any dividend
that is not declared and paid (or set apart for payment) on the requisite
Dividend Payment Date shall accrue additional dividends at the per annum
rate of 15%, compounded on a semi-annual basis and payable on succeeding
Dividend Payment Dates.
ARTICLE III
Distributions Upon Liquidation, Dissolution or Winding Up
3.1 Preference on Liquidation, Etc. In the event of any
voluntary or involuntary liquidation, dissolution or other winding up of
the affairs of the Corporation, subject to the prior preferences and other
rights of any Senior Stock as to liquidation preferences, the holders of
Series B Special Stock shall be entitled to be paid out of the assets of
the Corporation in cash or property at its fair market value as determined,
in good faith, by the Board of Directors of the Corporation the Liquidation
Value per share plus an amount equal to all accrued and unpaid dividends
and distributions thereon, to the date of such payment prior to any payment
to the holders of Junior Stock. After payment in full of the Liquidation
Value per share of the Series B Special Stock and other preferential
amounts provided for in this Section 3.1, the holders of the Series B
Special Stock as such shall have no right or claim to any of the remaining
assets of the Corporation. Except as provided in this Section 3.1, holders
of Series B Special Stock shall not be entitled to any distribution in the
event of liquidation, dissolution or winding up of the affairs of the
Corporation.
3.2 Liquidation Pro-Rata If Assets Inadequate. If, upon any such
liquidation, dissolution or other winding up of the affairs of the
Corporation, the assets of the Corporation shall be insufficient to permit
the payment in full of the Liquidation Value per share of Series B Special
Stock, then the assets of the Corporation remaining after the distributions
to holders of any Senior Stock of the full amounts to which they may be
entitled shall be ratably distributed among the holders of Series B Special
Stock and any other stock ranking on a parity with the Series B Special
Stock with respect to distributions upon liquidation, dissolution or
winding up of the affairs of the Corporation in proportion to the full
amounts to which they would otherwise be respectively entitled if all
amounts thereon were paid in full. Neither the consolidation or merger of
the Corporation into or with another corporation or corporations nor the
sale, lease, transfer or conveyance of all or substantially all of the
assets of the Corporation to another corporation or any other entity shall
be deemed a liquidation, dissolution or winding up of the affairs of the
Corporation within the meaning of this resolution.
ARTICLE IV
Voting Rights
4.1 Voting Rights of Holders of Series B Special Stock. The
shares of Series B Special Stock shall have no voting rights except as
required by law or as set forth below or in Section 5.2 hereof:
(a) If and whenever at any time or times dividends payable on
shares of Series B Special Stock shall have been in arrears and
unpaid for three consecutive Dividend Payment Dates, then the
number of directors constituting the Board of Directors of the
Corporation shall be increased by two and the holders of shares
of Series B Special Stock shall have the exclusive right, voting
separately as a class, to elect two directors of the Corporation.
(b) Such voting right may be exercised initially at a special
meeting of the holders of Series B Special Stock having such
voting right, called as hereinafter provided, or at any annual
meeting of stockholders held for the purpose of electing
directors, and thereafter at each such annual meeting until such
time as all dividends accumulated on the shares of Series B
Special Stock shall have been paid or set apart for payment in
full at which time such voting right and the term of the
directors elected pursuant to Section 4.1(a) shall terminate.
(c) At any time when such voting right shall have vested in
holders of shares of Series B Special Stock described in Section
4.1(a), a proper officer of the Corporation may call, and, upon
the written request, addressed to the Secretary of the
Corporation, of the record holders of shares representing 25% of
the voting power of the shares then outstanding of Series B
Special Stock, shall call, a special meeting of the holders of
Series B Special Stock. Such meeting shall be held at the
earliest practicable date upon the notice required for annual
meetings of stockholders at the place for holding annual meetings
of stockholders of the Corporation, or, if none, at a place
designated by the Board of Directors. Notwithstanding the
provisions of this Section 4.1(c), no such special meeting shall
be called during a period within 60 days immediately preceding
the date fixed for the next annual meeting of stockholders.
(d) At any meeting held for the purpose of electing directors at
which the holders of Series B Special Stock shall have the right
to elect directors as provided herein, the presence in person or
by proxy of the holders of shares representing a majority of the
then outstanding shares of Series B Special Stock shall be
required and shall be sufficient to constitute a quorum of such
class for the election of directors by the holders of Series B
Special Stock.
(e) Whatever directors are to be elected pursuant to paragraph
(a) of this Section 4.1 or Section 5.2 hereof, they shall be
elected by a plurality of the votes cast by the holders of Series
B Special Stock entitled to vote.
(f) Any directors elected pursuant to paragraph (a) of this
Section 4.1 or Section 5.2 hereof may be removed at any time,
with or without cause, only by the majority vote of the holders
of Series B Special Stock.
(g) Any director elected by holders of Series B Special Stock
pursuant to the voting right created under this Section 4.1 shall
hold office until the next annual meeting of stockholders (unless
such term has previously terminated pursuant to Section 4.1(b))
and any vacancy in respect of any such director shall be filled
only by vote of the remaining director so elected, or if there be
no such remaining director, by the holders of Series B Special
Stock entitled to elect such director or directors at a special
meeting called in accordance with the procedures set forth in
Section 4.1(c), or, if no such special meeting is called, at the
next annual meeting of stockholders. Upon any termination of
such voting right, subject to applicable law, the term of office
of all directors elected by holders of Series B Special Stock
voting separately as a class pursuant to this Section 4.1 shall
terminate.
(h) In exercising the voting rights set forth in this Section
4.1, each holder of Series B Special Stock shall be entitled to
one vote for each share of such stock held by such holder. The
holders of Series B Special Stock shall in no event be entitled
to elect more than two directors in total under the provisions of
this Certificate. The voting rights granted in this Certificate
are subject to applicable regulatory approvals and limitations.
ARTICLE V
Redemption
5.1 Optional Redemption. (a) The Corporation at any time and
from time to time may at its option redeem all, or any number less than
all, of the outstanding shares of Series B Special Stock. Any redemption
of shares of Series B Special Stock shall be effected at a price per share
in cash equal to the Liquidation Value per share plus an amount equal to
all accrued and unpaid dividends and distributions thereon to the date of
redemption. Except as provided in this subparagraph (a) or in the
Corporation's Articles of Incorporation, the Corporation shall have no
right or obligation to redeem any shares of Series B Special Stock.
(b)(i) Notice of any redemption of shares of Series B Special
Stock pursuant to this Section 5 shall be mailed not less than 30, but not
more than 60, days prior to the date fixed for redemption to each holder of
shares of Series B Special Stock to be redeemed, at such holder's address
as it appears on the transfer books of the Corporation. In order to
facilitate the redemption of shares of Series B Special Stock, the Board of
Directors may fix a record date for the determination of shares of Series B
Special Stock to be redeemed, not more than 60 days or less than 30 days
prior to the date fixed for such redemption.
(ii) Notice having been given pursuant to paragraph (b)(i) of
this Section 5.1, from and after the date specified therein as the date of
redemption, unless default shall be made by the Corporation in providing
for the payment of the applicable redemption price, all dividends on the
Series B Special Stock thereby called for redemption shall cease to accrue
and all rights of the holders thereof as stockholders of the Corporation,
except the right to receive the applicable redemption price (but without
interest) plus an amount equal to all accrued and unpaid dividends and
distributions thereon to the date of redemption shall cease and terminate.
5.2 Mandatory Redemption. The Corporation shall redeem, at the
redemption price set forth in paragraph (a) of Section 5.1, all of the
outstanding Series B Special Stock by ___________, 2004 [eight years after
the Initial Issue Date]. If the Corporation has not redeemed all of the
outstanding Series B Special Stock by that date (a "Redemption Default"),
then the number of directors constituting the Board of Directors of the
Corporation shall be increased by two and the holders of the Series B
Special Stock shall have the exclusive right, voting separately as a class,
to elect two directors of the Corporation in accordance with the procedures
set forth in paragraphs (c) through (h) of Section 4.1 hereof. Such voting
right may be exercised initially at a special meeting of the holders of
Series B Special Stock having such voting right, called as hereinbefore
provided, or at any annual meeting of stockholders held for the purpose of
electing directors, and thereafter at each such annual meeting until such
time as all shares of Series B Special Stock have been redeemed by the
Corporation at which time such voting right and the term of the directors
elected pursuant to this Section 5.2 shall terminate. The holders of the
Series B Special Stock shall have no rights or remedies with respect to a
Redemption Default except as provided in this Section 5.2 and in
Section 2.2 hereof.
ARTICLE VI
Miscellaneous
6.1 Exclusion of Other Rights. Except as may otherwise be
required by law, the shares of Series B Special Stock shall not have any
powers, preferences and relative, participating, optional or other special
rights, other than those specifically set forth in this Certificate and in
the Articles of Incorporation.
6.2 Headings of Subdivisions. The headings of the various
subdivisions hereof are for convenience of reference only and shall not
affect the interpretation of any of the provisions hereof.
6.3 Severability of Provisions. If any voting powers,
preferences and relative, participating, optional and other special rights
of the Series B Special Stock and qualifications, limitations and
restrictions thereof set forth in this resolution is invalid, unlawful or
incapable of being enforced by reason of any rule of law or public policy,
all other voting powers, preferences and relative, participating, optional
and other special rights of the Series B Special Stock and qualifications,
limitations and restrictions thereof set forth in this resolution (as so
amended) which can be given effect without the invalid, unlawful or
unenforceable voting powers, preferences and relative, participating,
optional and other special rights of the Series B Special Stock and
qualifications, limitations and restrictions thereof shall, nevertheless,
remain in full force and effect, and no voting powers, preferences and
relative, participating, optional or other special rights of the Series B
Special Stock and qualifications, limitations and restrictions thereof
herein set forth shall be deemed dependent upon any other such voting
powers, preferences and relative, participating, optional or other special
rights of the Series B Special Stock and qualifications, limitations and
restrictions thereof unless so expressed herein.
6.4 Fractional Shares. Fractional shares of Series B Special
Stock shall entitle the holder to receive dividends and distributions and
to exercise voting rights in proportion to the fractional holding.
/s/ John W. Alderfer
John W. Alderfer, Vice President
ATTEST:
/s/ David D. Johnson
David D. Johnson, Secretary
Acknowledgment in a representative capacity
STATE OF NEVADA)
) ss.
COUNTY OF CLARK)
This instrument was acknowledged before me on June 14, 1996, by
John W. Alderfer as Vice President of Alliance Gaming Corporation.
Signature of Notarial Officer
My Commission expires on:
EXHIBIT 5.1
August 2, 1996
Alliance Gaming Corporation
4380 Boulder Highway
Las Vegas, Nevada 89121
Re: Alliance Gaming Corporation
Registration Statement on Form S-3
Dear Ladies and Gentlemen:
We refer to the Registration Statement and all amendments thereto
(the "Registration Statement") of Alliance Gaming Corporation, a Nevada
corporation (the "Company"), on Form S-3, filed by Alliance with the
Securities and Exchange Commission (the "Commission") in order to register
under the Securities Act of 1933, as amended (the "Act"), 1,020,111 shares
of Common Stock, $.10 par value (the "Common Stock") and 42,510 shares of
15% Non-Voting Senior Special Stock, Series B, $.10 par value ("Special
Stock" and, together with the Common Stock, the "Shares") being offered on
behalf of certain stockholders of the Company.
In rendering the opinions hereinafter expressed, we have made such
legal and factual examinations and inquiries, including an examination of
originals or copies certified or otherwise identified to our satisfaction
as being true reproductions of originals, of all such records, agreements
and other instruments, certificates of public officials, certificates of
officers and representatives of the Company, and such other documents as we
have deemed necessary, as a basis for the opinions expressed below,
including without limitation the Registration Statement. Capitalized terms
used but not defined herein shall have the meaning ascribed thereto in the
Prospectus contained in the Registration Statement.
Without limiting the generality of the foregoing, in our
examination, we have assumed without independent verification, that (i)
each of the parties thereto has duly and validly executed and delivered
each instrument, document, and agreement to which such party is a
signatory, and such party's obligations set forth therein are its legal,
valid, and binding obligations, enforceable in accordance with their
respective terms, (ii) each natural person executing any such instrument,
document, or agreement is legally competent to do so, (iii) all documents
submitted to us as originals are authentic, the signatures on all documents
that we examined are genuine, and all documents submitted to us as
certified, conformed, photostatic or facsimile copies conform to the
original document, and (iv) all corporate records made available to us by
the Company and all public records reviewed are accurate and complete. As
to various questions of fact material to such opinions, we have, when
relevant facts were not independently established, relied upon certificates
of officers of the Company and other appropriate persons.
Based upon the foregoing, and having regard to legal
considerations and other information we deem relevant under the
circumstances, we are of the opinion that the Shares have been duly
authorized and validly issued, and are fully paid and non-assessable.
We are qualified to practice law in the State of Nevada. The
opinions set forth herein are expressly limited to the laws of the State of
Nevada and we do not purport to be experts on, or to express any opinion
herein concerning, or to assume any responsibility as to the applicability
to or the effect on any of the matters covered herein of, any laws other
than the laws of the State of Nevada. We express no opinion concerning,
and we assume no responsibility as to laws or judicial decisions related
to, or any orders, consents or other authorizations or approvals as may be
required by, any federal law, including any federal securities law, or any
state securities or blue sky laws.
We hereby consent to this filing of this opinion as an exhibit to
the Registration Statement and the reference to this firm therein. In
giving this consent, we do not admit that we are in the category of persons
whose consent is required under Section 7 of the Act or the rules and
regulations of the Commission promulgated thereunder.
Yours very truly,
SCHRECK, JONES, BERNHARD,
WOLOSON & GODFREY
EXHIBIT 23.1
CONSENT OF INDEPENDENT AUDITORS
The Board of Directors
Alliance Gaming Corporation:
We consent to the use of our report incorporated herein by
reference and to the reference to our firm under the heading "Experts" in
the prospectus.
KPMG PEAT MARWICK LLP
Las Vegas, Nevada
August 12, 1996
EXHIBIT 23.2
CONSENT OF INDEPENDENT AUDITORS
The Board of Directors
Alliance Gaming Corporation:
We consent to the incorporation by reference in this registration
statement of Alliance Gaming Corporation on Form S-3 of our report dated
February 13, 1996, on our audits of the consolidated financial statements
of Bally Gaming International, Inc. We also consent to the reference to
our firm under the caption "Experts".
COOPERS & LYBRAND L.L.P.
Las Vegas, Nevada
August 12, 1996
