News Release

ATTORNEY GENERAL MIKE MCGRATH
STATE OF MONTANA

FOR RELEASE: September 14, 2001

CONTACT: Judy Beck or Lynn Solomon, 444-0582

NEVADA JUDGE: CASE BETWEEN STATE, LGS SHOULD BE IN MONTANA

HELENA - In an order filed Thursday in a district court in Reno, Nevada, Judge Steven Kosach granted a motion to dismiss and ruled litigation between Lodging & Gaming Systems, Inc. and the Gambling Control Division of the State of Montana should be handled in Montana.

The dismissal is the latest phase in the termination of a contract between LGS and the Gambling Control Division. In September 2000, LGS entered into a contract with the Gambling Control Division of the Department of Justice and agreed to provide an automated accounting and reporting system for video gambling machines. On June 5, 2001, GCD terminated the contract and has since filed lawsuits in the court of District Court Judge Tom Honzel, seeking the return of equipment and the repayment of more than $900,000.

Montana Attorney General Mike McGrath said Kosach's ruling should allow the GCD to move forward with the monitoring system project.

"This decision will allow us to proceed with development of the AARS and work with alternative vendors and firms," Mike McGrath said. "I am hopeful we can now move quickly with the design and implementation of a new system.

"The Montana litigation should not preclude us from moving ahead with development of a new system," McGrath said.

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