SUPPLEMENT DATED MAY 23, 1996 TO PROSPECTUS
                               DATED MAY 9, 1996
 
                          ALLIANCE GAMING CORPORATION
                           OFFER FOR ALL OUTSTANDING
              7 1/2% CONVERTIBLE SUBORDINATED DEBENTURES DUE 2003
                                IN EXCHANGE FOR
           7 1/2% CONVERTIBLE SENIOR SUBORDINATED DEBENTURES DUE 2003
                         OF ALLIANCE GAMING CORPORATION
 
    This  Supplement dated  May 23,  1996 to Prospectus  dated May  9, 1996 (the
"Supplement") describes modifications  to the  offer (the  "Exchange Offer")  of
Alliance  Gaming Corporation contained in the  Prospectus dated May 9, 1996 (the
"Prospectus"). Capitalized terms  used herein  and not  otherwise defined  shall
have the respective meanings assigned to them in the Prospectus.
 
 THE EXCHANGE OFFER, AS MODIFIED HEREBY, HAS NOT BEEN EXTENDED, AND ACCORDINGLY
 WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY TIME, ON JUNE 6, 1996, UNLESS
 EXTENDED (THE "EXPIRATION DATE"). TENDERS OF OLD CONVERTIBLE DEBENTURES MAY BE
 WITHDRAWN AT ANY TIME PRIOR TO THE EXPIRATION DATE.
 
THE  SECURITIES OFFERED HEREBY HAVE NOT  BEEN APPROVED OR DISAPPROVED BY THE
 SECURITIES AND EXCHANGE COMMISSION  OR ANY STATE SECURITIES  COMMISSION.
   FURTHERMORE,  THE FOREGOING  AUTHORITIES HAVE NOT  PASSED UPON THE
    ACCURACY OR ADEQUACY OF THIS SUPPLEMENT. 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 SUPPLEMENT  OR THE INVESTMENT  MERITS OF THE
           SECURITIES OFFERED HEREBY.  ANY REPRESENTATION TO  THE
                             CONTRARY IS UNLAWFUL.
 
                            ------------------------
 
    The date on which this Supplement is first being sent to holders of Old
                    Convertible Debentures is May 23, 1996.

    The following information amends and supplements the Prospectus dated May 9,
1996  of  Alliance  Gaming  Corporation  ("Alliance").  The  Alliance  Board has
approved certain amendments to the terms of the New Convertible Debentures,  the
Series  E Preferred Stock and the Exchange  Offer as described herein. Except as
otherwise stated herein, the  terms and conditions set  forth in the  Prospectus
and  the Letter of Transmittal remain applicable in all respects to the Exchange
Offer. ALLIANCE HAS DETERMINED THAT, EXCEPT AS DESCRIBED IN THIS SUPPLEMENT,  IT
WILL  NOT MAKE FURTHER CHANGES TO THE TERMS OF THE NEW CONVERTIBLE DEBENTURES OR
SERIES E PREFERRED STOCK.
 
    Procedures for tendering  Old Convertible  Debentures are set  forth in  the
Prospectus  under the heading "The Exchange  Offer -- Procedures for Tendering".
Any holder of Old Convertible Debentures  desiring to tender all or any  portion
of his or her Old Convertible Debentures should either (1) complete and sign the
Letter   of  Transmittal  (or  a  facsimile  thereof)  in  accordance  with  the
instructions in the Letter of Transmittal and mail or deliver it, together  with
the  certificates representing tendered Old Convertible Debentures and any other
required documents, to  The Bank of  New York (the  "Exchange Agent") or  tender
such  Old  Convertible  Debentures  pursuant to  the  procedures  for book-entry
transfer set forth in  "The Exchange Offer --  Procedures for Tendering" or  (2)
request  his or her broker, dealer, commercial bank, trust company or nominee to
effect the transaction for him or her. Holders whose Old Convertible  Debentures
are  registered in the name of a  broker, dealer, commercial bank, trust company
or other nominee must  contact such person  if they desire  to tender their  Old
Convertible  Debentures. Holders who  wish to tender  Old Convertible Debentures
and whose Old Convertible Debentures are not immediately available or who cannot
comply with the procedures for book entry transfer on a timely basis may  tender
such  Old  Convertible Debentures  by  following the  procedures  for guaranteed
delivery set forth in "The Exchange Offer -- Procedures for Tendering".
 
                                       2

CHANGES IN TERMS OF NEW CONVERTIBLE DEBENTURES AND SERIES E PREFERRED STOCK
 
    The Special  Conversion Price  of  the New  Convertible Debentures  will  be
reduced  from $5.56 (equivalent to a conversion rate of approximately 180 shares
of Common Stock per  $1,000 principal amount of  New Convertible Debentures)  to
$4.76  (equivalent to  a conversion rate  of approximately 210  shares of Common
Stock per $1,000 principal amount of New Convertible Debentures).
 
    The initial Conversion Price of the Series E Preferred Stock will be reduced
from $6.56 (equivalent to  a conversion rate of  approximately 15.244 shares  of
Common  Stock per share of  Series E Preferred Stock)  to $5.88 (equivalent to a
conversion rate of  approximately 17.007  shares of  Common Stock  per share  of
Series E Preferred Stock). In addition, the dividend rate will be increased from
10% per annum to 11 1/2% per annum, but dividends will cease to accrue after the
twelfth  Series E Dividend  Payment Date. Assuming payment  of dividends in kind
for all  dividend  periods and  no  antidilution protection  adjustment  to  the
initial  conversion price of the Series E Preferred Stock, then, at such time as
dividends cease  to  accrue,  each  holder of  Old  Convertible  Debentures  who
receives  Series E Preferred Stock in  the Automatic Conversion and retains such
Series E Preferred Stock and  all shares of Series  E Preferred Stock issued  as
in-kind   dividends  would  be   entitled  to  receive   on  conversion  thereof
approximately 239 shares of Common Stock for each $1,000 principal amount of Old
Convertible Debentures  so  exchanged by  such  holder in  the  Exchange  Offer.
Finally,  Alliance may not redeem the Series E Preferred Stock before the eighth
Series E Dividend  Payment Date,  but may redeem  the Series  E Preferred  Stock
thereafter at the liquidation value thereof plus accrued dividends.
 
LIMITATION ON RIGHT TO ELECT SERIES E PREFERRED STOCK; PRORATION
 
    Alliance  has determined  to limit the  principal amount  of Old Convertible
Debentures the holders of which may elect to receive Series E Preferred Stock in
the Automatic Conversion  to $30.0  million. If the  holders of  more than  that
principal   amount  of  validly  tendered  and  not  withdrawn  Old  Convertible
Debentures so  elect,  Alliance  will  accept the  election  for  $30.0  million
principal amount of Old Convertible Debentures as nearly as practicable on a pro
rata  basis  from among  all such  Old Convertible  Debentures, rounding  to the
nearest $1,000 principal  amount (the  smallest permitted  denomination for  the
Debentures). Old Convertible Debentures as to which the election is not accepted
will  be converted in the Automatic Conversion  into Common Stock at the Special
Conversion Price of $4.76.
 
    In the event  of proration,  because of  the difficulty  in determining  the
precise  amount of Old Convertible Debentures validly tendered and not withdrawn
as to which  the election to  receive Series  E Preferred Stock  has been  made,
Alliance  does  not expect  to be  able to  announce the  final results  of such
proration until at least five NASDAQ trading days after the Expiration Date.
 
CERTAIN FINANCIAL INFORMATION
 
    The changes described above in the  terms of the New Convertible  Debentures
and  the  Series E  Preferred Stock  will affect  certain financial  and related
information set forth in the Prospectus.
 
    Under the assumptions made in  preparing the pro forma financial  statements
included in the Prospectus that $50.0 million of Old Convertible Debentures will
be  exchanged, with no election of Series E Preferred Stock, the decrease in the
Special Conversion  Price referred  to above  would result  in the  issuance  of
approximately  1.5 million  additional shares of  Common Stock  in the Automatic
Conversion, resulting in an increase in pro forma total outstanding shares  from
25.4  million to  26.9 million (25.2  million and 26.1  million weighted average
shares outstanding for the year  and nine months ended  June 30, 1995 and  March
31,  1996, respectively).  In addition,  the non-cash  charge for  inducement of
early conversion would increase  by $6.0 million to  $24.5 million. There is  no
change  to the total assets, total  liabilities or total stockholders' equity as
presented in  the pro  forma balance  sheet, although  there is  a $6.0  million
increase to both paid-in-capital and accumulated deficit. Pro forma net loss per
common  share for the year  ended June 30, 1995 and  the nine months ended March
31, 1996 would decrease from $0.50 and $0.70, respectively, to $0.47 and  $0.66.
Forecasted  net loss  applicable to Common  Shares for the  twelve months ending
December 31,  1996 would  increase from  $35.978 million  ($1.42 per  share)  to
$41.978  million ($1.56 per share), which includes depreciation and amortization
of $23.2 million (or $0.86
 
                                       3

per share), direct Merger costs of $12.8  million (or $0.48 per share), loss  on
assumed  conversion of New Convertible Debentures of $24.5 million (or $0.91 per
share) and Preferred Stock dividends of $8.0 million (or $0.30 per share).
 
    For each  $1.0  million  of  New Convertible  Debentures  converted  in  the
Automatic  Conversion into  Series E  Preferred Stock  instead of  Common Stock,
there would be an increase in the pay-in-kind preferred stock dividends for  the
first year of $120,055, an increase in the loss per common share of $.01 for the
year  ended June 30, 1995, and a  decrease in the non-cash charge for inducement
of early conversion referred to in the preceding paragraph of $0.5 million.
 
DILUTION
 
    The decrease in the Special Conversion Price from $5.56 to $4.76 would  have
the  following effects on the net tangible  book value per share of Common Stock
and on the dilution to holders acquiring Common Stock pursuant to the  Automatic
Conversion:  excluding shares issuable  pursuant to stock  options and warrants,
the increase in  net tangible book  value per share  attributable solely to  the
Automatic  Conversion  would decline  from  $2.84 to  $2.76,  the pro  forma net
tangible book value per share after the Automatic Conversion and the Transaction
would increase from $(1.20) to $(1.13),  and dilution in pro forma net  tangible
book  value per share to converting  holders of Old Convertible Debentures would
decrease from $(6.76) to $(5.89).
 
CERTAIN FEDERAL INCOME TAX CONSIDERATIONS
 
    The following discussion refers to  that section of the Prospectus  entitled
"Certain  Federal Income Tax Consequences -- Common Stock and Series E Preferred
Stock" and  should be  read in  conjunction therewith.  If a  distribution  with
respect  to the  Series E Preferred  Stock is  a taxable dividend,  the Series E
Preferred Stock is  "disqualified preferred  stock" within the  meaning of  Code
section  1059(f)(2) because dividends on the Series E Preferred Stock will cease
to accrue after the  twelfth Series E Dividend  Payment Date. Thus, any  taxable
dividend received by a corporate holder from Alliance with respect to the Series
E Preferred Stock would be treated as an "extraordinary dividend" without regard
to  the period  the holder  held the  Series E  Preferred Stock.  Accordingly, a
corporate holder's basis in the Series  E Preferred Stock would be reduced  (but
not below zero) by the portion of the dividend payment that is not taxed because
of  the dividends received deduction (i.e., the amount of the dividends received
deduction available to the holder by reason of the dividend). Any amount of  the
non-taxed  portion of the extraordinary dividend that otherwise would be applied
to reduce basis below zero would not further reduce basis, but would be  treated
as  gain from  the sale or  exchange of the  Series E Preferred  Stock when such
stock is  disposed of.  President  Clinton's Fiscal  Year 1997  Balanced  Budget
Proposal,  released  on  March  19, 1996,  and  The  Seven-Year  Balanced Budget
Reconciliation Act of 1995, vetoed by President Clinton, both contain provisions
that would require a corporate holder to recognize gain for the taxable year  in
which  extraordinary dividends are received to  the extent the non-taxed portion
of such dividends (i.e., the portion of the dividends eligible for the dividends
received deduction) exceeds the corporate holder's  basis in the stock on  which
such  dividends are paid, effective  generally for distributions after September
13, 1995,  although  in certain  cases  for  distributions after  May  3,  1995.
Potential holders are urged to consult their tax advisors about these proposals.
No  assurance can  be given  as to  whether or  when legislation  containing the
above-mentioned or similar provisions will be enacted, and if enacted, when such
provisions will be effective.
 
PRIVATE PLACEMENT
 
    The terms of  the Private Placement  have been revised  to provide that  the
$5.0  million of Common Stock issued in  the Private Placement will be purchased
at a price equal to the lower of (a) $4.56 per share or (b) 91% of the lowest of
the average last sales prices of  Common Stock during any consecutive period  of
five trading days ended on any date in the period occurring between May 20, 1996
and the effective time of the Merger.
 
                                       4

RECENT DEVELOPMENTS
 
    GAMING  REGULATION.  On May 23,  1996, the Nevada Gaming Commission approved
Alliance's application  for approval  to merge  with BGII  and the  Transaction,
including the Exchange Offer.
 
    BEC  LITIGATION.  Alliance and BEC have  settled the Alliance Action and the
BEC Action by  entering into an  amendment to the  License Agreement. Under  the
terms  of the settlement (which takes effect on consummation of the Merger), BEC
will consent to  the continued use  by BGII  of the "Bally"  name following  the
Merger.  The  amendment also  provides that  for five  years beginning  with the
effective time of  the Merger, Gaming  will pay BEC  a royalty of  $35 for  each
gaming  machine  sold  or leased  which  is  an increase  from  the  $25 royalty
currently paid pursuant to the License Agreement. The minimum royalty under  the
License Agreement for each of the first five twelve-month periods beginning with
the effective time of the Merger will increase to $1.0 million (from the current
$0.5  million), and for each such period thereafter will return to $0.5 million.
The Forecast  included in  the  Prospectus had  assumed  the settlement  of  the
Alliance  Action and BEC Action on substantially  the same terms as are provided
for in  this amendment  to the  License Agreement.  In addition,  the  amendment
provides that sales and pledges of the stock and/or assets of Gaming or a parent
company,  other than those to competitors of  BEC, will generally not be treated
as assignments requiring BEC's consent under the License Agreement.
 
                                       5

    Facsimile  copies of the Letter of  Transmittal will be accepted. Letters of
Transmittal, certificates  for  the Old  Convertible  Debentures and  any  other
required documents should be sent by each debentureholder or his broker, dealer,
commercial  bank, trust company  or other nominee  to the Exchange  Agent at the
address set forth below:
 
                             THE EXCHANGE AGENT IS:
 
                              The Bank of New York
 
                              BY MAIL OR BY HAND:
 
                              The Bank of New York
               101 Barclay Street, Corporate Trust Operations, 7E
                            New York, New York 10286
                            Attention: Enrique Lopez
                           Telephone: (212) 815-2742
                                 BY FACSIMILE:
                                 (212) 571-3080
                               TOLL FREE NUMBER:
                                 (800) 254-2826
 
    Any questions  or  requests for  assistance  or additional  copies  of  this
Supplement,  the  Prospectus, the  Letter of  Transmittal  and/or the  Notice of
Guaranteed Delivery may be  directed to the Information  Agent at its  telephone
number  and address set forth  below. You may also  contact your broker, dealer,
commercial bank or trust company or other nominee for assistance concerning  the
Exchange Offer.
 
                           THE INFORMATION AGENT IS:
 
                                     [LOGO]
 
                               Wall Street Plaza
                               New York, NY 10005
 
                               TOLL FREE NUMBER:
                                 (800) 223-2064
 
                           Banks and Brokerage Firms
                              please call collect:
                                 (212) 440-9800
 
                THE DEALER MANAGERS FOR THE EXCHANGE OFFER ARE:
 
DEUTSCHE MORGAN GRENFELL    JEFFERIES & COMPANY, INC.  LADENBURG, THALMANN & CO.
INC.