[Silicon Letterhead]

FOR INFORMATION CONTACT:
Andrew Pascal, CEO (Analysts)               (Investor Relations)
(650) 842-9000                              (650) 842-9000

FOR IMMEDIATE RELEASE

        SILICON GAMING ANNOUNCES EXPIRATION AND RESULTS OF EXCHANGE OFFER

     PALO ALTO,  California,  July 5, 2000 -- Silicon Gaming, Inc. (OTC Bulletin
Board:  SGIC.OB) announced today the results of its exchange offer. The exchange
offer  expired at 5:00 P.M. New York City time on June 30, 2000.  At the time of
expiration,  the  Company's  exchange  agent had received  541 Election  Notices
representing  11,585,457  shares of common stock  participating  in the exchange
offer. As a result, the Company will issue up to 11,585,457 Exchange Warrants to
participating shareholders.

     Each Exchange  Warrant may be exercised for 3.59662  shares of common stock
at an exercise  price of $.1528 per share of common stock.  Upon  issuance,  the
11,585,457  Exchange  Warrants  would  be  exercisable,  in the  aggregate,  for
approximately  41,668,486  shares of common  stock.  Exchange  Warrants  are not
exercisable  for the first twelve  months  following  their date of issuance and
will expire, if not earlier exercised or terminated,  on the fourth  anniversary
date following  their date of issuance.  In addition,  if the share price of the
Company's  common stock, as reported on the Nasdaq National Market or a national
securities  exchange,  exceeds $0.2346 per share for twenty consecutive  trading
days,  the holders of the Exchange  Warrants would have 180 days to exercise the
Exchange  Warrants or they would  automatically  expire.  This  provision is not
effective  while the common stock is trading on the OTC Bulletin Board or during
the first two years  following  issuance of the  Exchange  Warrants.  Currently,
there is no market for the Exchange  Warrants and the Company does not intend to
register the Exchange  Warrants or file an application for the Exchange Warrants
on any securities exchange.

     Silicon  Gaming,  Inc.  designs and  manufactures a full line of innovative
wagering  products,  including  the  Family  Feud  Wagering  Attraction,  and an
extensive  library of game applications  including  Phantom Belle,  Banana-Rama,
Eureka,  Cash  Cruise,  TopHat 21 and Hot  Reels.  Headquartered  in Palo  Alto,
California,  the  Company  is traded  on the OTC  Electronic  Bulletin  Board as
SGIC.OB.

                           FORWARD-LOOKING STATEMENTS

     This press  release may contain  certain  forward-looking  statements  that
involve  risks and  uncertainties.  These are  statements  about future  events,
results of operation,  business  plans and other matters.  The Company's  actual
results may differ materially from the results discussed in the  forward-looking
statements based on various factors and risks, including those identified in the
Company's  Form  10-K  for the year  ended  December  31,  1999.  Words  such as
"expect",  "anticipate",  "intend" or other  similar  words are used to identify
forward looking statements.  These statements are made based on Silicon Gaming's
current knowledge and understanding.  However,  there can be no assurances as to
whether or not actual results will be consistent with these statements.  Silicon
Gaming has no obligation to update the  forward-looking  statements made in this
press release.

  For more information on Silicon Gaming, Inc., visit the Company's website at
                          http://www.silicongaming.com