Penn National Granted Unconditional Maine License

WYOMISSING, Pennsylvania -- (PRESS RELEASE) --Penn National Gaming, Inc. (Nasdaq: PENN) announced today that the Maine Harness Racing Commission has granted the company an unconditional racing license for Bangor Historic Track for the 2004 racing season. The annual license represents the completion of the first regulatory approval necessary for Penn National to proceed with its proposed $74 million development project at the track including the construction of the State's first and only gaming facility where Penn National intends to place approximately 1,500 slot machines.

The five-person Racing Commission voted 4-1 to grant the license late last week after reviewing the background investigation reports on the Pennsylvania-based public company and the company's application. Penn National is submitting its licensing application to the State's Gambling Control Board and anticipates that its application may be reviewed at the Board's October 28 meeting. Contingent on Gambling Control Board approval, renewal of the racing license, and the required licensing of machine manufacturers and distributors, Penn National expects to conduct a Spring 2005 ground breaking for the new and upgraded facilities and anticipates a mid-2006 opening.

Responding to the action taken by the Maine Harness Racing Commission, Peter M. Carlino, chief executive officer of Penn National, said, "We are delighted to move forward with this important project. With our development plans, Bangor Historic Track will provide exciting entertainment to patrons and represents an enormous opportunity for the local economy. As our 30 years of industry experience has demonstrated, our pari-mutuel and gaming facilities create important sources of revenue, jobs and other economic benefits for the regions in which they are located."

During the first quarter of 2004 Penn National was awarded a conditional harness racing license in Maine for Bangor Historic Track, Inc. which operates harness racing at the city-owned track at Bass Park in Bangor, Maine. Last fall, local voters approved a referendum allowing slot machines at the Bangor facility, and both houses of the legislature subsequently passed supplemental legislation that provides for additional regulation and taxation.

Penn National Gaming owns and operates: Hollywood Casino properties located in Aurora, Illinois, and Tunica, Mississippi; Charles Town Races & Slots(TM) in Charles Town, West Virginia; two Mississippi casinos, the Casino Magic - Bay St. Louis hotel, casino, golf resort and marina in Bay St. Louis and the Boomtown Biloxi casino in Biloxi; the Casino Rouge, a riverboat gaming facility in Baton Rouge, Louisiana and the Bullwhackers casino properties in Black Hawk, Colorado. Penn National currently operates two racetracks and eleven off-track wagering facilities in Pennsylvania; the racetrack at Charles Town Races & Slots in West Virginia; the racetrack at Bangor Raceway in Bangor, Maine, and a 50% interest in the Pennwood Racing Inc. joint venture which owns and operates Freehold Raceway in New Jersey; and operates Casino Rama, a gaming facility located approximately 90 miles north of Toronto, Canada, pursuant to a management contract.