UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                  FORM 10-K/A-1
                          Amendment No. 1 to Form 10-K

            [X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
                         SECURITIES EXCHANGE ACT OF 1934
                     For the Fiscal Year Ended June 30, 1998

          [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
                SECURITIES EXCHANGE ACT OF 1934 (No Fee Required)
                  For the transition period from _____ to _____

                          Commission File Number 0-4281
                           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 No.)

                               6601 S. Bermuda Rd
                             Las Vegas,Nevada 89119
               (Address of principal executive offices) (Zip Code)

                  Registrant's telephone number: (702) 270-7600

           Securities registered pursuant to Section 12(b) of the Act:
                                      None

           Securities registered pursuant to Section 12(g) of the Act:
                          Common Stock, $0.10 par value


Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the  preceding 12 months (or for such  shorter  period that the  registrant  was
required  to file  such  reports),  and  (2) has  been  subject  to such  filing
requirements for the past 90 days. [X] Yes [ ] No

Indicate by check mark if disclosure of delinquent  filers  pursuant to Item 405
of Regulation  S-K is not contained  herein,  and will not be contained,  to the
best of registrant's  knowledge,  in definitive proxy or information  statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. [ ]

The  aggregate  market value of the voting stock held by  non-affiliates  of the
registrant was approximately $76,697,000 as of September 21, 1998.

The  number of  shares of Common  Stock,  $0.10  par  value,  outstanding  as of
September  21, 1998  according  to the  records of  registrant's  registrar  and
transfer agent was 34,261,167.

                  Documents incorporated by reference - None





<PAGE>





                                             
GENERAL

      Alliance   Gaming   Corporation   ("Alliance",   the   "Company"   or  the
"Registrant")  hereby  amends its Annual Report on Form 10-K for the fiscal year
ended June 30, 1998 by deleting  its  responses to Items 10 through 13 contained
in its original filing and replacing such sections with the following:


<PAGE>


ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

The  name,  age and  position  with the  Company  of each of the  directors  and
executive  officers of Alliance  as of October 21, 1998 is set forth  below.  No
director or executive  officer is related by blood,  marriage or adoption to any
other director or executive officer.

         Name                 Age  Position with the Company
         ----                 ---  --------------------------
         Morris Goldstein     53   President and Chief Executive Officer
         Hans Kloss           57   Executive Vice President
         David Johnson        47   Senior Vice President, General Counsel and
                                     Secretary
         Scott Schweinfurth   44   Senior Vice President, Chief Financial 
                                     Officer and Treasurer
         Robert Miodunski     47   Senior Vice President- Route Group (Nevada)
         Robert Saxton        45   Senior Vice President- Casino Operations
         Jacques Andre        61   Director
         Anthony DiCesare     36   Director
         Michael Hirschfeld   48   Director
         Joel Kirschbaum      47   Director
         David Robbins        39   Director, Chairman of the Board of Directors
         Morton Topfer        62   Director


The Company's  By-laws  provide that the Board of Directors  shall consist of no
fewer than three nor more than nine directors, with the exact number to be fixed
by the Board of  Directors.  The  Company's  By-laws  provide  that the Board of
Directors  shall be  divided  into three  classes  as nearly  equal in number as
possible, with each class having a term of three years or until their successors
are duly qualified. The size of the Board has been fixed at seven. The Directors
are elected by a plurality  of the votes cast by the holders of shares  entitled
to vote  thereon.  The officers of the Company each serve at the pleasure of the
Board of Directors.

The  following  table  sets  forth  committee  assignments  and the terms of the
directors:

                              Director    Term
                               Since    Expires
                               -----    -------
Morris Goldstein (2)(3)         1997      2000
Jacques Andre (1)(2)            1996      1998
Anthony DiCesare (2)(3)         1994      1999
Michael Hirschfeld(1)(2)(4)     1997      1998
Joel Kirschbaum (2)(3)          1994      1999
Morton Topfer (2)(4)            1997      2000
David Robbins (1)(2)(4)         1994(a)   2000
--------------
(1) Member of the Audit Committee
(2) Member of the Executive Committee
(3) Member of the Nominating Committee
(4) Member of the Compensation Committee
(a) Member of the Board of Directors since 1994, except for months of September
    1997 to December 1997

   Morris  Goldstein  joined  the  Company in June 1997 as  President  and Chief
Executive  Officer and was elected to the Board of Directors  in December  1997.
Mr.  Goldstein  previously  was Chief  Executive  Officer of Thomson  Technology
Initiative,  a unit of Thomson  Corporation,  a global publisher and provider of
information  services.  For six months in early 1994,  Mr.  Goldstein  served as
President and Chief  Operating  Officer of ImagiNation  Network,  an interactive
computer  game  provider.  Prior to that, he had been  President of  Information
Access Company ("IAC"),  an electronic  information  publishing company owned by
Ziff  Communications,  since 1982. In late 1994, Mr.  Goldstein also assisted in
the sale of IAC by the Ziff family interests to the Thomson Corporation.

     Hans Kloss joined Alliance in June 1996 and served as the Managing Director
of Alliance  Automaten  GmbH & Co. KG from June 1996 to June 1998. As of July 1,
1998, Mr. Kloss became Executive Vice President of Alliance Gaming  Corporation.
Mr.  Kloss was a director of Bally  Gaming  International,  Inc.  ("BGII")  from
August 1991 to June 1996 and President and Chief Operating  Officer of BGII from
May 1993 to August 1997. Mr. Kloss was the Managing  Director of the Bally Wulff
entities  from  1981  through  June  30,  1998 and had  been  employed  by those
companies  since 1970. Mr. Kloss served on the Company's Board of Directors from
September 1997 until December 1997.

   David Johnson joined Alliance as Senior Vice  President,  General Counsel and
Secretary in April 1995. Previously,  Mr. Johnson represented a diverse group of
casino clients as a Senior Partner at Schreck Morris, a Nevada law firm where he
was employed from January 1987 to March 1995.  Prior to joining  Schreck Morris,
Mr. Johnson served as Chief Deputy  Attorney  General for the gaming division of
the Nevada Attorney General's Office. Mr. Johnson serves as Vice Chairman of the
Executive  Committee  of the Nevada  State  Bar's  Gaming Law  Section and is an
officer and founding member of the Nevada Gaming Attorneys Association.

   Scott  Schweinfurth  joined  Alliance in June 1996 as Senior Vice  President,
Chief  Financial  Officer  and  Treasurer.  Prior to joining  the  Company,  Mr.
Schweinfurth  had served as the Senior Vice President,  Chief Financial  Officer
and Treasurer of BGII since March 1995. Prior to joining BGII, Mr.  Schweinfurth
had been a partner  at the  accounting  firm of Ernst & Young  LLP from  October
1988,  having  joined  the  audit  staff  of the  firm in  September  1976.  Mr.
Schweinfurth is a Certified Public Accountant.

   Robert  Miodunski  joined  Alliance  as  Senior  Vice  President-Route  Group
(Nevada) in March 1994.  From  January  1991 to March 1994,  Mr.  Miodunski  was
President  of  Mulholland-Harper  Company,  a  sign  manufacturing  and  service
company.  From 1984 through 1990,  Mr.  Miodunski  held various  positions  with
Federal Signal Company, the last of which was Vice President and General Manager
of the Midwest Region of the Sign Group.

   Robert Saxton joined Alliance in 1982 as Corporate Controller and was elected
Vice   President-Casino   Operations   in   December   1993  and   Senior   Vice
President-Casino Operations in June 1996. Since joining Alliance, Mr. Saxton has
held various management positions with the Route Operations business unit and is
currently  responsible  for Casino  Operations.  He also serves as  President of
Alliance's Louisiana subsidiaries.

   Jacques Andre was  appointed a director in August 1996.  Mr. Andre has been a
partner with Ray Berndtson,  Inc., an international  executive search firm, from
1975 to the present. He also serves on its Board of Directors.

   Anthony  DiCesare was employed by Kirkland  Investment  Corporation  ("KIC"),
which was the sole general partner of Kirkland-Ft.  Worth  Investment  Partners,
L.P.  ("KFW"),  an  investment  partnership,  from April 1991 to July 1994.  Mr.
DiCesare served as Executive Vice President-Development of the Company from July
1994 through June 1997.  While he is currently a New York-based  employee of the
Company  his  principal  occupation  is as a  private  investor.  He has  been a
director since 1994.

   Michael Hirschfeld was appointed a director in September 1997. Mr. Hirschfeld
has been a partner of Milbank, Tweed, Hadley & McCloy, a New York law firm, from
April 1995 to the present.  From December 1990 to April 1995, Mr. Hirschfeld was
a partner of Kelly Drye & Warren, a New York law firm.

     Joel  Kirschbaum  was  appointed  a  director  in July  1994 and  served as
Chairman of the Board of  Directors of the Company from July 1994 to March 1995.
Mr.  Kirschbaum  is the sole  stockholder,  director  and  officer  of  Kirkland
Investment  Corporation ("KIC"). He has been engaged in operating the businesses
of KIC and Kirkland-Ft.  Worth Investment  Partners,  L.P. ("KFW") since January
1991 when KIC and KFW were established,  and of GSA, Inc.  ("GSI"),  the general
partner of Gaming Systems Advisors, L.P. ("GSA"), since June 1993. Prior to that
time,  he worked at  Goldman,  Sachs & Co. for 13 years,  during the last six of
which he was a General Partner.  When he established KIC and KFW, Mr. Kirschbaum
resigned his general partnership  interest in Goldman,  Sachs & Co. and became a
limited partner.  Mr. Kirschbaum  resigned his limited  partnership  interest in
Goldman,  Sachs & Co. in November 1993. While Mr.  Kirschbaum is currently a New
York-based  employee of the Company his principal  occupation is as President of
KIC.

   David Robbins  served as a director  from July 1994 to September  1997 and as
Chairman  of the  Board  of  Directors  of the  Company  from  February  1997 to
September  1997. In December 1997 he was again elected to the Board of Directors
and since that time has served as Chairman of the Board.  Mr. Robbins has been a
practicing attorney since 1984; he was formerly an attorney with Kramer,  Levin,
Naftalis,  Kamin & Frankel from May 1993 to  September  1995,  with  O'Sullivan,
Graev & Karabell,  LLP from  September 1995 to February 1997, and since February
1997 he has been a member of Brock Silverstein & McAuliffe,  LLC. Mr. Robbins is
also a private investor and managing member of a private investment fund.

   Morton Topfer has been Vice Chairman of Dell Computer  Corporation  since May
1994.  Mr.  Topfer  shares the office of the Chief  Executive  Officer  with the
Chairman and Chief  Executive  Officer of Dell Computer.  From 1971 to May 1994,
Mr. Topfer held various  positions  with  Motorola,  Inc., the last of which was
Executive Vice President and President of Motorola's Land Mobile Products Sector
where he managed the mobile, portable and data systems businesses. Mr. Topfer is
also a director of Autodesk Inc.


Section 16(a) Beneficial Ownership Reporting Compliance

   Section 16(a) of the  Securities  Exchange Act of 1934 requires the Company's
directors and executive officers,  and persons who own more than 10 percent of a
registered class of Alliance's equity securities ("Insiders"),  to file with the
Securities and Exchange  Commission  initial reports of ownership and reports of
changes in ownership of the Company's Common Stock. Insiders are required by the
Commission's regulations to furnish the Company with copies of all Section 16(a)
reports filed by such persons. To the Company's  knowledge,  based on its review
of the copies of such reports  furnished  to the Company  during the fiscal year
ended June 30,  1998,  all  Section  16(a)  filing  requirements  applicable  to
Insiders were complied with,  except that Mr. Andre filed two Form 4's which did
not meet the filing deadline; Mr. Goldstein,  Mr. Miodunski and Mr. Robbins each
filed a Form 4 which did not meet the filing  deadline;  and Mr.  Topfer filed a
Form 3 which did not meet the filing deadline.




<PAGE>


ITEM 11. EXECUTIVE COMPENSATION

The  following  table  sets  forth  the  compensation  paid or to be paid by the
Company to the Company's chief executive  officer and its four other most highly
compensated  executive  officers  receiving  over  $100,000 per year (the "Named
Executive  Officers")  for services  rendered in all  capacities  to the Company
during the fiscal year ended June 30, 1998:

Summary Compensation Table *

<TABLE>
<CAPTION>

                            Fiscal        Annual Compensation         Long-Term
                            Year         --------------------       Compensation
   Name and                 Ended                      Other Annual   Awards       All Other
   Principal Position       June 30,  Salary    Bonus  Compensation   Options    Compensation (1) 
   ------------------       -------   ------    -----  ------------   -------    ------------
<S>                         <C>     <C>         <C>        <C>        <C>         <C>    
Morris Goldstein (2)        1998    $450,000    $  -       (3)           -        $90,000
 President and              1997      17,300       -                  500,000        -
   Chief Executive Officer  

Hans Kloss (4)              1998    $234,000   $477,500    (3)         25,000     $  -
  Executive Vice President  1997     406,300  1,682,400                  -           -
                            1996       8,450       -                     -           -
         
David Johnson               1998    $250,000    $  -       (3)         27,902      $2,019
  Senior Vice President,    1997     250,000    185,000                  -          5,351
  General Counsel           1996     200,000    350,000                  -          6,277

  and Secretary             
Scott Schweinfurth (5)      1998    $250,000    $  -     $53,245(6)   101,998      $1,710
  Senior Vice President,    1997     235,000    400,000               120,000       4,300
  Treasurer and Chief       1996       6,538       -                     -           -
  Financial Officer     

Robert Miodunski            1998    $235,000    $55,000     (3)        45,461      $1,778
 Senior Vice President-     1997     212,400     96,750                  -          1,700
 Route Group (Nevada)       1996     194,800     70,000                  -          2,375
</TABLE>


----------------
*    As used in the tables provided under the caption "Executive  Compensation,"
     the character " - " is used to represent "zero."


(1)  "All Other  Compensation"  for fiscal year 1998  includes (i) payments made
     for relocation costs for Mr. Goldstein of $90,000,  and (ii)  contributions
     made by the Company to the Company's  Profit Sharing 401(k) Plan in amounts
     of $0,  $0,  $2,019,  $1,710,  and $1,778 on behalf of Mr.  Goldstein,  Mr.
     Kloss, Mr. Johnson, Mr. Schweinfurth and Mr. Miodunski, respectively.
(2)  Mr.  Goldstein  joined  the  Company  in June 1997 as  President  and Chief
     Executive Officer.
(3)  The aggregate  amount of such  compensation  to be reported  herein is less
     than the lesser of $50,000  or 10  percent of the total  annual  salary and
     bonus reported for the Named Executive Officer.
(4)  Mr. Kloss joined the Company in June 1996,  having previously been employed
     by Bally Gaming International, Inc. ("BGII").
(5)  Mr.  Schweinfurth  joined the Company in June 1996,  having previously been
     employed by BGII. Mr. Schweinfurth's bonus for the fiscal year 1997 was for
     an 18-month period.
(6)  Includes  amounts paid for club initiation fees and quarterly dues totaling
     $34,140 plus  reimbursement  for quarterly dues totaling $4,140 and related
     tax reimbursement payments of $19,105.


<PAGE>


Option/SAR Grants in Last Fiscal Year

The following table reflects options granted to Named Executive  Officers during
the fiscal year ended June 30, 1998:
<TABLE>
<CAPTION>

                                                                      Potential Realizable
                               Individual Grants                            Value at
                               -----------------                      Assumed Annual Rates
                                 % of Total                                 of Stock
                                   Granted                           Price Appreciation for
                     Options   to Employees in  Exercise  Expiration       Option Term   
      Name           Granted     Fiscal Year     Price       Date          5%       10%
      ----           -------     -----------     -----       ----       ------    ------  
<S>                  <C>             <C>        <C>         <C>         <C>       <C>    
Hans Kloss           25,000 (a)      1.70%      $4.1250     9/02/02     $28,000   $63,000
Scott Schweinfurth   60,000 (a)      4.09%       4.1250     9/02/02      68,000   151,000
Scott Schweinfurth    1,075 (b)(c)    .07%       4.6875     1/14/03       1,000     3,000
Robert Miodunski     25,000 (a)(c)   1.70%       4.1250     9/02/02      28,000    63,000
</TABLE>
------------
(a)Options  will vest one third on each of the next  three  anniversary  dates
   thereof.  
(b)Of the options, 537 vested on grant date and 269 will vest on each
   of the next two anniversary dates thereof.
(c)Excludes  40,923 options and 20,461 options granted to Mr.  Schweinfurth  and
   Mr.  Miodunski,  respectively,  in September 1998 in lieu of cash bonuses for
   fiscal year 1998.

Aggregate Fiscal Year-End Option/SAR Values

The  following  table  reflects  outstanding  options  held by  Named  Executive
Officers at June 30, 1998:

                          Number of Unexercised          Value of Unexercised
                                Options at             In-the-Money Options at
                              June 30, 1998               June 30, 1998 (a)   
                       ---------------------------    --------------------------
      Name             Exercisable   Unexercisable    Exercisable  Unexercisable

Morris Goldstein         125,000        375,000         $16,000       $16,000
Hans Kloss                 5,918         25,000          22,000          -
David Johnson            200,000           -            113,000          -
Scott Schweinfurth        50,600        130,500          22,000        27,000
Robert Miodunski         113,250         37,750          64,000         4,000

---------

 (a) Represents the amount by which the market value of the underlying  stock at
   June 30, 1998 ($4.00 per share) exceeds the aggregate  exercise prices of the
   options.

Directors' Compensation

Directors of the Company who are also employees are not  separately  compensated
for their services as directors.  Fee  arrangements  with other directors of the
Company are as follows:  (i) Mr. Andre, Mr.  Hirschfeld and Mr. Topfer,  $30,000
each per year for all  services as a director  and member of various  committees
and (ii) Mr.  Robbins,  $135,000  for all  services as Chairman of the Board and
member of various committees. Directors are also reimbursed for their reasonable
out-of-pocket expenses incurred on Company business.

During  fiscal  year  1998,  the  following  stock  option  grants  were made to
directors: (i) Mr. Andre received 15,000 stock options with an exercise price of
$4.125 and 2,079  stock  options  with an exercise  price of  $4.6875;  (ii) Mr.
Hirschfeld  received  30,000 stock  options  with an exercise  price of $4.1875;
(iii) Mr. Robbins received 15,000 stock options with an exercise price of $4.125
and 7,751 stock options with an exercise  price of $4.6875;  and (iv) Mr. Topfer
received  30,000 stock options with an exercise price of $4.4375.  Under current
policy,  non-employee directors receive grants of 30,000 shares upon appointment
to the Board of Directors  and 15,000 shares on each  anniversary  date of their
original appointment to the Board of Directors. All of these options are granted
at fair market value on grant date, vest immediately and have a five-year term.

During  fiscal  1997,  the  Board of  Directors  granted  Mr.  DiCesare  and Mr.
Kirschbaum bonuses to be paid upon achievement of specified objectives. Of these
bonuses, $75,000 and $150,000, respectively, were paid in fiscal 1998 based upon
achievement of the last of such specified objectives.

Effective  July 1, 1997, the Company  entered into  employment  agreements  (the
"Agreements")  with Mr.  DiCesare and Mr.  Kirschbaum  (each an  "Employee"  and
collectively  the  "Employees")  pursuant to which each  Employee  will be a New
York-based employee and will work on major strategic  transactions involving the
Company or its affiliates, including mergers, acquisitions,  divestitures, joint
ventures, the negotiation of strategic alliances or relationships and financings
and  refinancings.  The  Employees  are  not  expected  to be  involved  in  the
day-to-day  operations of the Company,  are not expected to devote  full-time to
the business of the Company and may engage in outside activities,  although they
may not directly compete with the Company. The Agreements, which have an initial
term  extending  through  July  1,  2002  (the  "Term")  and  may be  terminated
thereafter  by either  party on notice,  provide for each  Employee to receive a
base  salary of  $150,000  (with  inflation  increases  each  year)  and  annual
performance  bonuses  (each a  "Bonus")  based  upon  annual  performance  goals
determined  by the  Board  of  Directors  and the  Employee  (which  goals  will
generally relate without  limitation to transactions of the type mentioned above
involving the Company (and/or one or more of its affiliates)) and a target Bonus
amount (and/or an appropriate  minimum amount).  More than one Bonus may be paid
with respect to each employment year. If the Board of Directors and the Employee
cannot agree upon reasonable annual  performance goals and minimum and/or target
Bonuses with respect to such goals for any year, the performance goals and Bonus
amounts set forth in clauses  (ii) and (iii) of the next  paragraph  will be the
goals and Bonus for such year.  If a goal is only  partially  achieved  within a
year, the Board of Directors will determine what amount, if any, will be paid to
the Employee with respect to such goal. If a goal is achieved,  the Bonuses will
be  payable  regardless  of the  level  of  the  Employee's  involvement  in the
transaction.  Upon  termination  of any  Employee's  Agreement  for  any  reason
(including for "cause" (as such term is defined in the Agreements)), the Company
may be required to pay Bonuses to such Employee  following such termination upon
achievement of performance goals within specified periods ending up to 21 months
after the Term.  In  addition,  if the Company  terminates  an Employee  without
"cause",  or an Employee leaves the Company's employ for "good reason" (as these
terms are defined in the  Agreements),  the Employee will be entitled to receive
for each  remaining  year of the Term an amount  equal to the highest  aggregate
Bonuses  paid  in any  previous  year  as  well as the  base  salary  and  other
compensation provided for by the Agreements.

For the year  beginning July 1, 1997,  the  performance  goals for each Employee
were: (i) the completion by the Company  (and/or one or more of its  affiliates)
of a refinancing  transaction or  substantially  similar  transaction,  (ii) the
closing of a "significant merger" with a value of at least $60 million and (iii)
the closing of a "significant  financing"  with a value of at least $50 million.
Upon the achievement of the performance goal set forth in clause (i), which goal
was met on August 8, 1997, each Employee received a Bonus of $950,000.  Upon the
achievement of the performance  goal set forth in clause (ii), each Employee was
to receive a minimum Bonus of $200,000.  Upon the achievement of the performance
goal set forth in clause (iii),  each Employee was to receive a minimum Bonus of
at least  $125,000.  No bonuses  were paid in  respect to clause  (ii) or clause
(iii) for the fiscal year 1998. The Board has carried over the goals from fiscal
1998 to fiscal 1999. In addition to the Bonuses, the Agreements provide that the
Board of Directors,  in its sole  discretion,  may grant  further  discretionary
bonuses to the  Employees.  No  discretionary  bonuses were earned during fiscal
1998.

Pursuant  to  the  Agreements,  each  Employee  may  elect  to  restructure  his
relationship with the Company into that of a financial consultant or independent
advisor,   with  compensation   arrangements   reflecting  the  nature  of  such
relationship  and the services to be provided in amounts  reasonably  consistent
with the  compensation  and Bonuses  payable  over the term of the  Agreement as
contemplated therein, as determined reasonably and in good faith by the Board of
Directors,  but  calculated  and  payable in a manner  customary  for  financial
consultant  or  independent  advisor  arrangements.  If the Employee  makes such
election, the Company and the Employee will negotiate in good faith to establish
a restructured agreement with respect to the services to be provided hereunder.

At any time prior to January 1, 1999,  an Employee may elect to pay in cash,  or
opt to forgo any Bonuses to which the Employee may  thereafter  become  entitled
and in lieu thereof to extend the expiration date of certain warrants  currently
beneficially owned by such Employee from September 21, 1999 to June 18, 2002. In
September 1998, with Mr. DiCesare and Mr.  Kirschbaum  abstaining,  the Board of
Directors,  upon reviewing a valuation study performed by an investment  banking
firm,  voted  unanimously  to fix the number of warrants to be extended for each
dollar of cash paid,  or Bonuses  forgone.  Prior to  September  21,  1999,  Mr.
DiCesare and Mr. Kirschbaum would be required to pay approximately  $0.2 million
and $0.8 million, respectively, in cash or forgo cash Bonuses of an equal amount
in order to extend the warrants  held of  approximately  314,700 and  1,085,000,
respectively.

In addition,  the Company has agreed to pay KIC over the term of the  Agreements
$950,000  (subject  to annual  inflation  increases)  annually  plus the cost of
reasonable  employee benefits to its support staff and reasonable  out-of-pocket
expenses  incurred by KIC and its officers and  employees to the extent  related
directly to the Company's  business or potential business (the "KIC Agreement").
The Company will have the right to terminate the KIC  Agreement  upon 12 months'
notice if Mr. Kirschbaum's  employment under his Agreement is terminated for any
reason other than by the Company  without  "cause" or by the Employee  "for good
reason" (as such terms are defined in the Agreements).

Employment and Severance Arrangements

The  Company  is party to an  employment  agreement  with  Mr.  Goldstein  which
generally  provides for a base salary of $450,000 per year through and including
June 2000,  participation in the Company's  compensation  programs for corporate
officers,   participation  in  the  Company's  cash  bonus  program  at  amounts
determined by the Board of  Directors,  receipt of 250,000 stock options to vest
25% on date of grant with the balance over a three-year period and 250,000 stock
options to vest 25% on date of grant with the  balance  over a three year period
but which  become  exercisable  in equal  portions  only when the  common  stock
reaches  prices of $11, $13, and $15, and severance  benefits of one year's base
salary if Mr. Goldstein is terminated prior to June 2000 without cause.

The Company is party to an employment  agreement with Mr. Kloss which  generally
provides for a base salary of DM954,600 (or approximately $525,000 using current
exchange rates) per year through and including  December 2000, and participation
in the  Company's  cash  bonus  program at  amounts  determined  by the Board of
Directors,  and severance benefits of one year's base salary and benefits if Mr.
Kloss is terminated prior to December 31, 2000 without cause.

The Company is party to an  employment  agreement  with Mr.  Schweinfurth  which
generally  provides for a base salary of $250,000 per year through and including
June 1999,  participation in the Company's  compensation  programs for corporate
officers,   participation  in  the  Company's  cash  bonus  program  at  amounts
determined by the Board of Directors,  and severance benefits of one year's base
salary if Mr. Schweinfurth is terminated prior to June 1999 without cause.

The  Company  is party to an  employment  agreement  with  Mr.  Miodunski  which
generally  provides for a base salary of $235,000 per year through and including
December  2000,   participation  in  the  Company's  compensation  programs  for
corporate officers, participation in the Company's cash bonus program at amounts
determined by the Board of Directors,  and severance benefits of one year's base
salary if Mr. Miodunski is terminated prior to December 2000 without cause.



Compensation   Committee  Interlocks  and  Insider  Participation  in  
Compensation Decisions

During the fiscal year ended June 30, 1998,  the  Compensation  Committee of the
Board of Directors of the Company met two times. The  Compensation  Committee is
currently  comprised  of Messrs.  Hirschfeld,  Robbins and  Topfer.  During such
fiscal  year,  the  entire  Board  of  Directors   generally   participated   in
deliberations  concerning the compensation of the Company's  executive officers.
Other than current  positions  previously  described  elsewhere herein, no other
member of the  Company's  Board of  Directors  was an officer or employee of the
Company or any subsidiary  during fiscal year ended June 30, 1998 or is a former
officer of the Company or any subsidiary.

The Company has hired Ray & Berndtson,  Inc., an international  executive search
firm, of which Mr. Andre is a partner,  to perform certain  personnel  searches.
The Company paid fees totaling $195,000 during fiscal year 1998 for the searches
conducted  by this  firm.  The  final  fee for the  searches  will be based on a
percentage of the first-year  compensation paid to certain personnel if and when
hired.

The Company paid fees to Milbank,  Tweed,  Hadley & McCloy,  a law firm in which
Mr. Hirschfeld is a partner, for services rendered during fiscal year 1998.

The Company paid fees to Brock  Silverstein  McAuliffe  LLC, a law firm in which
Mr. Robbins is a member, for services during fiscal year 1998.


Since July 1, 1997 certain directors have been involved in transactions in which
Alliance  was a party and in which the amount  involved  exceeded  $60,000.  See
"Certain Relationships and Related Transactions" and "Directors' Compensation".




<PAGE>


ITEM 12 .   SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

The following table sets forth certain information as of October [21], 1998 with
respect to the beneficial  ownership of the Common Stock,  which constitutes the
Company's only outstanding class of voting  securities,  by (i) each person who,
to the knowledge of the Company,  beneficially  owned more than 5% of the Common
Stock, (ii) each director of the Company,  (iii) the Named Executive Officers of
the Company as listed in the compensation  table and (iv) all executive officers
and  directors  of the  Company  as a group.  Except  as  indicated,  beneficial
ownership  includes the sole power to vote and to dispose of the  securities  in
question.  Except as indicated  below,  no director or executive  officer of the
Company beneficially owned any other equity securities of the Company.

                                                        Amount of    Percent of
      Name                                             Shares (1)     Class (1)
    Alfred H. Wilms                                   7,034,082 (2)     20.5%
    FMR Corp.                                         3,390,438 (3)      9.9%
      82 Devonshire Street Boston, MA 02109
    Jacques Andre                                        75,000 (4)         *
    Anthony DiCesare                                    596,787 (5)      1.7%
    Michael Hirschfeld                                   45,000 (6)         *
    Joel Kirschbaum                                   1,229,568 (7)      3.5%
    David Robbins                                       217,751 (8)         *
    Morton Topfer                                       138,043 (9)         *
    Morris Goldstein                                    190,808 (10)        *
    Hans Kloss                                          830,986 (11)     2.4%
    David Johnson                                       209,301 (12)        *
    Scott Schweinfurth                                  136,582 (13)        *
    Robert Miodunski                                    141,820 (14)        *
    All executive officers and directors as a group   4,095,843 (15)    11.2%
     ----------
      *     Less than 1%.

(1)  Excludes the effect of the issuance of up to (i) 2,750,000  shares  subject
     to warrants  originally  issued to KFW and (ii) 1,250,000 shares subject to
     warrants  originally  issued  to GSA  pursuant  to an  agreement  ("the GSA
     Advisory  Agreement")  on  September  21, 1993 and (iii)  2,500,000  shares
     subject to additional  warrants  originally issued to GSA upon consummation
     of the BGII acquisition pursuant to the GSA Advisory Agreement. All of such
     warrants have an exercise  price of $1.50 per share and become  exercisable
     in equal  one-third  tranches only when the Common Stock price reaches $11,
     $13 and $15,  respectively  for a  designated  period of time.  Pursuant to
     information  provided by Mr.  Kirschbauman,  as part of a  distribution  of
     assets  from  KFW and GSA to KIC and GSI on the one  hand  and to  Kirkland
     Investors,  L.P. on the other hand,  approximately 600,000 and 1,867,000 of
     such  warrants  were  distributed  to  Mr.  DiCesare  and  Mr.  Kirschbaum,
     respectively.  As a  result,  Mr.  DiCesare  and  Mr.  Kirschbaum  disclaim
     beneficial ownership of any other of these warrants.
(2)  Mr.  Wilms'  mailing  address  is 2, St.  Jansvliet,  bus  6-2000  Antwerp,
     Belgium.
(3)  Information  provided by a representative  of FMR Corp. (4) Includes 15,000
     shares  owned and  60,000  shares  subject to  options  that are  currently
     exercisable or will become exercisable within 60 days.
(5)  Includes  221,787  shares owned and 375,000  shares subject to options that
     are currently  exercisable or will become  exercisable  within 60 days, but
     excludes certain  additional  shares underlying the warrants referred to in
     Note (1) above.
(6)  Represents shares subject to options that are currently exercisable or will
     become exercisable within 60 days.
(7)  Includes  679,568  shares owned and 550,000  shares subject to options that
     are currently  exercisable or will become  exercisable  within 60 days, but
     excludes certain  additional  shares underlying the warrants referred to in
     Note (1) above.  This disclosure is based upon information  provided by Mr.
     Kirschbaum. Mr. Kirschbaum has advised that of such shares, certain amounts
     may be sold or distributed to other persons.
(8)  Includes 64,000 shares owned and 127,751 shares subject to options that are
     currently  exercisable  or will  become  exercisable  within 60 days;  also
     includes  26,000 shares subject to options granted to Mr. Robbins by KFW or
     KIC, based upon information provided by Mr. Kirschbaum.
(9)  Includes 108,043 shares owned and 30,000 shares subject to options that are
     currently exercisable or will become exercisable within 60 days.
(10) Includes 65,808 shares owned and 125,000 shares subject to options that are
     currently  exercisable  or will  become  exercisable  within  60 days,  but
     excludes  options  exercisable at $3.875 per share for 250,000 shares (only
     125,000 of which are vested) which become  exercisable  in equal  one-third
     tranches  only  when the  Common  Stock  price  reaches  $11,  $13 and $15,
     respectively.
(11) Includes 816,736 shares owned and 14,250 shares subject to options that are
     currently exercisable or will become exercisable within 60 days.
(12) Represents shares subject to options that are currently exercisable or will
     become exercisable within 60 days.
(13) Includes 12,403 shares owned and 124,179 shares subject to options that are
     currently exercisable or will become exercisable within 60 days.
(14) Includes  4,000 shares owned and 137,820 shares subject to options that are
     currently exercisable or will become exercisable within 60 days.
(15) Includes 2,082,498 shares subject to options that are currently exercisable
     or will become exercisable within 60 days.


ITEM 13 .             CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

Pursuant to a stockholders  agreement dated as of September 21, 1993, as amended
on October 20, 1994,  by and among the Company,  KIC, GSA, KFW and the Company's
largest   shareholder,   Mr.  Alfred  Wilms  (as  amended,   the   "Stockholders
Agreement"),  KIC is required to vote all of its shares of Common Stock to cause
Mr. Wilms to be elected a director of the Company if so nominated for so long as
Mr. Wilms owns shares of Common Stock of the Company. The Stockholders Agreement
contains  certain  registration  rights  running in favor of KFW,  KIC,  GSA and
certain of their respective affiliates and transferees and Mr. Wilms,  including
up to four demand registration rights each (and additional demand rights for Mr.
Wilms under certain  circumstances),  at the Company's  expense,  and provisions
granting Mr. Wilms the right to participate  in certain  offerings of securities
by the Company and by KIC and its transferees.

Mr. Alfred Wilms serves as a consultant  to the Company and received  consulting
fees which  totaled  $164,000  during the fiscal year ended June 30,  1998,  and
$41,000 for the three months ended September 30, 1998.

See also "Directors'  Compensation" and "Compensation  Committee  Interlocks and
Insider Participation in Compensation Decisions".


<PAGE>




                                     SIGNATURE

Pursuant  to the  requirements  of the  Securities  Exchange  Act of  1934,  the
Registrant has duly caused this Amendment No. 1 to Form 10-K to be signed on its
behalf by the undersigned, thereunto duly authorized.


                                    ALLIANCE GAMING CORPORATION





Date: October 28  , 1998            By    /s/ Scott D. Schweinfurth     
                                          ------------------------------
                                    Name: Scott D. Schweinfurth
                                    Title:Senior Vice President, Chief Financial
                                          Officer and Treasurer
                                          (Principal Financial and Accounting
                                          Officer)