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                   CASINOVATIONS INCORPORATED


Thursday, August 19, 1999


Dear Stockholders:

     Please  find  the enclosed Quarterly Report on Form  10-QSB,
recently  filed  with the Securities and Exchange  Commission  on
August  31,  1999.   The  financial  information  and  management
discussion contained in the Form 10-QSB will give you  a  current
update on our Company.

     A  SPECIAL NOTE - Last week we finally received approval for
installation  of  the SecureDrop(TM) products  subject  to  field
trials   by   the   State   of  Nevada  Gaming   Control   Board.
Specifically,  the  SecureDrop(TM) 2000 System  is  approved  for
sale,  and the SecureDrop(TM) 3000 and Secure Mobile Count System
are  approved for sale subject to a 30-day field trial in Nevada.
We  expect  customer installations to begin within  the  next  30
days.

     A  topic  of discussion among many of you and our management
is  the  issue  of  Casinovations common stock  and  its  trading
opportunities.   As discussed in my previous letter  and  in  the
enclosed  Form  10-QSB,  we  have  had  opportunities  to  pursue
relationships with market makers who, in our opinion, do not have
the  strength  or quality to help us achieve our  goals  for  the
Company  and our stockholders.  Therefore, we have continued  the
process  of  putting several things in place, such as the  recent
private  investment  of  $5.2 million  in  our  Company  and  the
SecureDrop(TM) approvals, to improve the financial  condition  of
our  Company and to allow us to continue to execute our  business
strategy.

     In  September, the World Gaming Show brings casino operators
from  all  over  the  world to Las Vegas to view  various  gaming
products  available  to  the industry.  In  addition,  securities
firms,  investment bankers, market makers and  investors  in  the
gaming  industry will also attend.  Our focus has been to prepare
the  best  presentation  at  this renowned  trade  show,  and  to
establish  the  best possible relationships for our  Company  and
stockholders.

     Enclosed  you  will  find  an  artist's  rendering  of   the
Casinovations  booth and display for the World Gaming  Show.   We
have  also  provided you with a pass in hopes that you will  take
the opportunity to visit our booth at the show and our management
team.   Following the World Gaming Show, we plan to  provide  you
with  a  further  update regarding the trading opportunities  for
Casinovations  common  stock.  As we have  previously  said,  the
delays  that have occurred in the trading of our stock are merely
incidental  to  locating the appropriate market makers  who  will
reflect positively on the Company and its common stock.




PAGE TWO
Stockholder Letter dated August 18, 1999

      We  hope  you  find the enclosed informative  and  we  look
forward to seeing you at the World Gaming Show.

Sincerely,


/s/ Steven J. Blad
Steven J. Blad
President and Chief Execute Officer



THIS  LETTER CONTAINS STATEMENTS THAT MAY BE CONSIDERED  FORWARD-
LOOKING  STATEMENTS  WITHIN THE MEANING OF  SECTION  27A  OF  THE
SECURITIES  ACT  OF  1933, AS AMENDED, AND  SECTION  21E  OF  THE
SECURITIES  ACT OF 1934, AS AMENDED, SUCH AS STATEMENTS  RELATING
TO  THE  CONTINUED DEVELOPMENT OF THE COMPANY'S PRODUCTS,  FUTURE
SALES  OF  THE  COMPANY'S PRODUCTS, MARKET MAKER  ACTIVITIES  AND
OTHER  STATEMENTS REGARDING EVENTS OR CONDITIONS WHICH  HAVE  NOT
YET  TAKEN  PLACE.   SUCH  FORWARD-LOOKING  INFORMATION  INVOLVES
IMPORTANT RISKS AND UNCERTAINTIES THAT COULD SIGNIFICANTLY AFFECT
ANTICIPATED RESULTS IN THE FUTURE AND, ACCORDINGLY, SUCH  RESULTS
MAY DIFFER FROM THOSE EXPRESSED IN ANY FORWARD-LOOKING STATEMENTS
MADE HEREIN.