Elixir Gaming Technologies Improves Balance Sheet and Liquidity through Multi-faceted Agreements with Elixir Group

Elixir Gaming’s Total Obligations to Elixir International Reduced by Approximately $14 Million to $12.1 Million

New Note Terms Provide Elixir Gaming Reduced Interest Expense and Strong Cash Flow Benefits

Provides Preliminary 3Q Operating Metrics

Las Vegas, Nevada – November 6, 2008 - Elixir Gaming Technologies, Inc. (AMEX:EGT) (“Elixir Gaming” or “the Company”), a provider of gaming technology solutions to the Pan-Asian gaming industry, announced today that it has entered into agreements with Elixir Group and Elixir International, a wholly-owned subsidiary of Elixir Group, which immediately benefit the Company’s balance sheet and liquidity while reducing forward operating costs and eliminating the dilutive impact of approximately 41.4 million shares potentially earned by Elixir Group.

Under the terms of the Machines Disposal Agreement (“Disposal Agreement”), the Company has sold and returned 715 electronic gaming machines, including the majority of the Company’s inventory of Stargames machines, to Elixir International at net book value in return for the elimination of an existing current trade payable of approximately $14 million resulting in an immediate improvement to its liquidity position and balance sheet.  The Disposal Agreement also significantly reduces the Company’s depreciation expense being incurred on approximately 500 of the returned units and reduces ongoing inventory-related operating costs. 

Meanwhile, the Company and Elixir Group have agreed to terminate, effective immediately, the Securities Purchase and Product Participation Agreement dated June 12, 2007 and as amended October 21, 2007.  Elixir Group ceases to have rights to identify suitable gaming venues for the Company and its exclusive rights to supply electronic gaming machines and related equipment to the Company.  As a result, Elixir Group will no longer be entitled to earn an aggregate of 41.4 million additional common shares of the Company based on the achievement of future performance milestones.

In addition, pursuant to the Amendment to Trade Credit Facility Agreement and Related Note (“Amendment to Facility Agreement”), Elixir International will reduce the fixed interest rate on the principal balance under a past unsecured promissory note issued by the Company in April 2008 (“Previous Note”) related to previously purchased electronic gaming machines from 8% per annum to 5% per annum, effective January 1, 2009.  As of September 30, 2008 the Company had a $12.1 million outstanding principal balance under the Previous Note owed to Elixir International, which it will repay in 24 equal monthly installments, beginning January 2009. Under the new payment schedule, the Company is not required to make any repayment under the Previous Note for October, November, and December of 2008 and the 24-month installment payment of the outstanding principal of $12.1 million will be reset from January 1, 2009.  This provides the Company with immediate cash flow benefits and reduces monthly payments by $148,000, or 22%, starting in January 2009 compared to the terms under the Previous Note.

Clarence Chung, Chairman and Interim Chief Executive Officer of the Company, commented, “We appreciate the efforts of our largest shareholder, Elixir Group, and its subsidiary, Elixir International, in working to effect these agreements, which we believe create immediate value for our shareholders.  Our ability to decrease our outstanding obligations by a material amount, extend the time line for the repayment of our outstanding Note Payable and reduce interest expense, and eliminate costs related to approximately 700 electronic gaming machines strengthens our balance sheet, reduces depreciation and operating expense, and provides the Company with improved financial flexibility moving forward.  Importantly, with our current inventory, capital, strategic relationships, and business plan, our target remains to reach an operating base of at least 2,500 machines by the end of 2009.”

“Having been in operation for just over a year, the Company has established a significant market presence in our focus markets and developed the key relationships necessary to internally assume all of Elixir Group’s previous responsibilities to identify and develop attractive new gaming venues while also continuing our efforts to improve our returns from our existing facilities in operation.  We believe the elimination of the potential dilution from future performance shares to be earned by Elixir Group benefits all of our shareholders.  We would like to thank Elixir Group for its critical role in helping establish the Company’s market presence and strategic direction and we appreciate its ongoing support in this regard.”

Separately, the Company today announced select preliminary operating metrics for the 2008 third quarter period ended September 30, 2008 as summarized below.  The Company will report its full financial results for the three and nine months ended September 30, 2008 on November 13, 2008, at which time the actual figures may deviate from the figures shown below.

Mr. Chung concluded, “Our preliminary third quarter financial metrics reflect some of the progress we are making in our ongoing efforts to create a strong foundation from which to generate long-term shareholder value by optimizing our existing installed base and carefully evaluating the operating agreements we have in place at all of our venues.  As a result, we made a strategic decision to close three under-performing venues in Cambodia.  We look forward to discussing in more depth our progress against this goal as well as our recent initiatives to further rationalize our cost structure when we report our 2008 third quarter results on November 13.” 

About Elixir Gaming Technologies, Inc.

Elixir Gaming Technologies, Inc. (AMEX:EGT) is a provider of gaming technology solutions.  The Company secures long-term contracts to provide comprehensive turn-key solutions to 3, 4, and 5 star hotels and other well-located venues throughout Asia that seek to offer casino gaming products.  The Company retains ownership of the gaming machines and systems and receives recurring daily fees that average in excess of 20% of the net gaming win per machine and provides on-site maintenance.  The Company has established a strategic presence in the Asia Pacific region with participation contracts with a focus on the Philippines, Cambodia, and Vietnam markets.  For more information please visit www.elixirgaming.com.

Forward Looking Statements

This press release contains forward-looking statements concerning Elixir Gaming, Elixir Group and Elixir International within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Those forward-looking statements include statements regarding expectations for the business relationship between Elixir Gaming, Elixir Group, and Elixir International, including the recurring revenue that may develop from the relationship with Elixir Group and Elixir International, and the Elixir Gaming’s expectations for future revenue.  Such statements are subject to certain risks and uncertainties, and actual circumstances, events or results may differ materially from those projected in such forward-looking statements.  Factors that could cause or contribute to differences include, but are not limited to, risks related to Elixir Gaming’s inability to place gaming machines on its own, risks related to whether the gaming machines placed generate the expected amount of net-win and risks related to the ability of Elixir Gaming to collect revenue and protect its assets and those other risks set forth in Elixir Gaming’s annual report on Form 10-K for the year ended December 31, 2007 filed with the SEC on March 31, 2008 and our Form 10-Q for the three months ended June 30, 2008 filed with the SEC on August 14, 2008. Elixir Gaming cautions readers not to place undue reliance on any forward-looking statements. Elixir Gaming does not undertake, and specifically disclaims any obligation to update or revise such statements to reflect new circumstances or unanticipated events as they occur. 

CONTACTS

Elixir Gaming:                                                                   Investors:
Traci Mangini                                                                    Richard Land, Dave Jacoby
SVP, Corporate Finance                                                   Jaffoni & Collins Incorporated
702/617-4741                                                                 212/835-8500; egt@jcir.com
                                      

Asia’s GEM
Gaming & Entertainment
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April 2 & 3, 2009
SMX Convention Center,
Seashell Drive, Mall of Asia Complex, Pasay City, Philippines

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