FOR IMMEDIATE RELEASE
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         Riviera Holdings Corporation Reaches Settlement with Allen Paulson

         LAS VEGAS, NV -- Friday, August 2, 1999 -- Riviera Holdings Corporation
("RHC")  announced today (July 2, 1999) that it had agreed with Allen Paulson to
settle  the action  brought  by Mr.  Paulson  against  RHC,  pending in the U.S.
District  Court in Los Angeles.  Such  settlement is subject to court  approval.
Such action will continue against the other defendants.

         If the  settlement  is  approved,  Paulson  would  receive  $5  million
consisting  of (i)  $3,477,000  ($7.50 per share) for the 463,655  shares of RHC
common stock owned by Paulson and (ii) $1,523,000 out of the funds being held in
escrow for the benefit of holders of RHC Contingent Value Rights ("CVR's").  The
remainder of the escrow (about  $4,350,000 at May 31, 1999) would be distributed
to the holders o the CVR's. Each CVR would receive about $2.46 per CVR.

About Riviera Holdings:

         Riviera  Holdings  Corporation  owns and operates the Riviera Hotel and
Casino on the Las Vegas Strip, operates the Four Queens Hotel/Casino in downtown
Las Vegas and is developing a casino in Black Hawk, Colorado.  Riviera is traded
on the American Stock Exchange under symbol, RIV.

         The  forward-looking  statements  included in this news release,  which
reflect  management's  best judgment based on factors  currently known,  involve
risks and uncertainties including expansion timetables,  hotel and casino market
conditions  and other  risks  detailed  from time to time in the  Company's  SEC
reports,  including  the Report on Form 10-K for December 31, 1998 and Form 10-Q
for March 31, 1999. Actual results may differ.

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        For more information on Riviera, dial 800-PRO-INFO, symbol RIV.