Progressive Gaming, Shuffle Master sign deal

AS VEGAS, Nevada -- (PRESS RELEASE) -- Progressive Gaming International Corporation (NASDAQ: PGIC) ("Progressive" or "the Company") announced today that it has executed a purchase agreement with Shuffle Master Inc. (NASDAQ Global Select Market: SHFL) ("Shuffle Master") whereby Shuffle Master will acquire Progressive's worldwide Table Game Division ("TGD") assets. Additionally, the parties have agreed to enter into a 5-year "Technology License" to integrate Progressive's Casinolink® Jackpot System™ ("CJS") progressive jackpot system module for use with Shuffle Master's progressive specialty table games. Under these arrangements, Progressive will receive upfront payments of approximately $23.4 million, of which $20.4 million (subject to working capital adjustments) is to be paid at closing and $3.0 million to be paid upon the initial integration of Progressive's CJS system with Shuffle Master's tables, which the parties expect to complete in the 2007 fourth quarter.

The Purchase Agreement also provides for earn-out payments based on the installed base growth of the TGD assets through 2016 (subject to certain conditions), including $3.5 million in guaranteed minimum payments. Progressive will also receive recurring monthly royalty payments for the placement of Progressive's CJS on Shuffle Master's specialty table games. Roth Capital Partners, LLC has provided a fairness opinion and analysis to the Board of Directors of the Company. The analysis provided estimated that the net present value of the consideration expected by the management of the Company to be received in the Transaction is between $37.4 million and $46.5 million.

Upon completion of the acquisition of Progressive's worldwide TGD assets, Shuffle Master, the world's leading provider of specialty table games, will own the worldwide rights and contracts for all of Progressive's specialty table game titles including Caribbean Stud® and Texas Hold 'Em® Bonus Poker.

Under the Technology License, the parties will immediately integrate Progressive's CJS progressive jackpot system module for use with certain versions of Shuffle Master's specialty table games. The CJS module generates jackpot awards and heightened player awareness and play levels in a similar manner as slot machine progressive systems.

Russel McMeekin, President and Chief Executive Officer of Progressive Gaming International Corporation, commented, "The sale of our Table Game Division will complete our transition to a company that is solely focused on achieving sustainable revenue growth from high-margin recurring systems' placements. We intend to use the upfront cash proceeds from this transaction as well as the majority of proceeds from the strategic financing that was completed last month to repay a significant portion of our outstanding debt. The effect of this debt reduction will be a significant decline in our interest expense which will be immediately accretive to our cash flows and earnings. We are also actively reviewing opportunities to restructure our remaining outstanding debt in a manner that will further strengthen our balance sheet.

"Importantly, the sale of our Table Game assets to Shuffle Master places our flagship brands in the hands of the premier worldwide supplier of specialty table games which we believe will ensure the continued growth of these assets on a global basis. Since its introduction in late 2005, Texas Hold 'Em Bonus Poker has consistently achieved strong installed base growth in the U.S., and Caribbean Stud is enjoying similar success in international markets. Accordingly, we believe these agreements provide a meaningful long-term opportunity to our shareholders to benefit from fixed and earned payments. Further, pursuant to the new Technology License, the integration of Progressive's CJS module with Shuffle Master's progressive versions of its specialty table games is expected to create a potentially meaningful new long-term recurring revenue stream."