Penn National Results Up Slightly

26 Apr 2005

WYOMISSING, Pennsylvania -- (PRESS RELEASE) -- Penn National Gaming, Inc. (PENN: Nasdaq) today reported record first quarter operating results for the period ended March 31, 2005 as summarized below:

                         Summary of Q1 Results

                                       Three Months Ended March 31,
(In millions, except per share data)       2005     2005        2004
                                          Actual  Guidance(6)  Actual
                                     ---------------------------------
Net revenues                         $     289.3 $     292.8 $  285.1
EBITDA (1)                           $      72.2 $      70.1 $   69.7
Less depreciation and amortization,
 gain/loss on disposal of assets, and
 earnings from joint venture         $     (15.9)$     (16.6)$  (17.6)
Income from operations               $      56.3         N/A $   52.1
Less interest expense - net, income
 taxes, and other expenses           $     (40.0)$     (39.6)$  (31.1)
Income from continuing operations    $      16.3 $      13.9 $   21.0
(Loss) from discontinued operations -
 HCS Shreveport and Pocono Downs and
 its OTWs (net) (2)                  $      (0.5)        N/A $   (3.2)
Net income                           $      15.8         N/A $   17.8
Per share data (5)
Diluted earnings per share from
 continuing operations (3)           $      0.19 $     0.165 $   0.26
Diluted (loss) per share from
 discontinued operations (2)         $      0.00         N/A $  (0.04)
Diluted earnings per share           $      0.19         N/A $   0.22
Adjustments:
Diluted (loss) per share from
 discontinued operations (2)         $      0.00         N/A $   0.04
After tax diluted earnings per share
 effect of early extinguishment of
 debt                                $      0.12 $     0.115 $      -
Adjusted diluted earnings per share
 (4)                                 $      0.31 $      0.28 $   0.26

Commenting on the results, Peter M. Carlino, Chief Executive Officer of Penn National said, "Penn National Gaming exceeded its guidance for income from continuing operations and diluted earnings per share from continuing operations based on further EBITDA improvements at Charles Town Races & Slots(TM), Casino Rouge and the management contract at Casino Rama.

"In addition to the record operating results during the first quarter, Penn National made significant progress in improving its capital structure in anticipation of several new growth opportunities which are expected to come online over the next few years. As previously reported, in January the Company completed the sale of The Downs Racing and its subsidiaries and in February Penn National made a private offering of $250 million of 6 3/4% Senior Subordinated Notes. The proceeds from these activities were applied to the redemption of $200 million of our 11 1/8% Series B Senior Subordinated Notes and will also be applied to previously announced development projects. In total, Penn National paid down $111 million on its bank facility during the quarter and on April 4, the Company paid down an additional $160 million on its bank facility.

"Penn National also made strides during the first quarter period in advancing its broad range of growth and development opportunities. In Pennsylvania, where we are developing a new gaming and racing facility at Penn National Race Course, we secured local approvals for the project's land-development plan. We anticipate securing a license from the Pennsylvania Gaming Control Board in late 2005, commencing construction immediately thereafter and opening our new Harrisburg-area facility in early 2007.

"Our pending acquisition of Argosy Gaming Company is on schedule with an anticipated closing in the third quarter of this year. We are continuing to work with various state gaming boards and the FTC to obtain their required approvals to complete the transaction. In connection with this process we have elected to divest the Argosy Baton Rouge property to expedite securing necessary approvals. We anticipate that the sale will be effected after the merger although we will begin seeking a buyer immediately.

"Argosy brings with it several prospects for growth through both expansion and development, including the Company's recent proposal to Indiana regulators for a major expansion at Lawrenceburg which is the nearest gaming facility to the Cincinnati feeder market. This plan calls for an expansion of the nation's biggest revenue generating riverboat to accommodate up to 4,000 slot machines from the 2,800 currently being operated. We believe the Argosy development projects, which are complex and subject to regulatory approvals, adhere to our long-term desire to enhance long-term shareholder value by creating more exciting entertainment venues.

"We recently announced an agreement to acquire an off-track betting facility in Bangor, Maine and plan to temporarily operate up to 475 slots at this site in advance of our construction of a permanent facility. We anticipate a summer 2005 closing of the $3.8 million transaction, which we believe could result in the temporary facility being operational by the end of 2005, assuming all regulatory approvals are granted. We recently filed our completed slot operator license application, and are in the process of working with the city of Bangor to identify and finalize the optimal site for permanent development. We are projecting that the 475 slots at the temporary facility will generate approximately $20 million to $30 million in annual revenues.

"We are initiating 2005 second quarter guidance today based solely on our existing continuing operations and we expect to update this guidance following the completion of the Argosy transaction."

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	Penn National Results Up Slightly 26 Apr 2005 WYOMISSING, Pennsylvania -- (PRESS RELEASE) -- Penn National Gaming, Inc. (PENN: Nasdaq) today reported record first quarter operating results for the period ended March 31, 2005 as summarized below: Summary of Q1 Results Three Months Ended March 31, (In millions, except per share data) 2005 2005 2004 Actual Guidance(6) Actual --------------------------------- Net revenues $ 289.3 $ 292.8 $ 285.1 EBITDA (1) $ 72.2 $ 70.1 $ 69.7 Less depreciation and amortization, gain/loss on disposal of assets, and earnings from joint venture $ (15.9)$ (16.6)$ (17.6) Income from operations $ 56.3 N/A $ 52.1 Less interest expense - net, income taxes, and other expenses $ (40.0)$ (39.6)$ (31.1) Income from continuing operations $ 16.3 $ 13.9 $ 21.0 (Loss) from discontinued operations - HCS Shreveport and Pocono Downs and its OTWs (net) (2) $ (0.5) N/A $ (3.2) Net income $ 15.8 N/A $ 17.8 Per share data (5) Diluted earnings per share from continuing operations (3) $ 0.19 $ 0.165 $ 0.26 Diluted (loss) per share from discontinued operations (2) $ 0.00 N/A $ (0.04) Diluted earnings per share $ 0.19 N/A $ 0.22 Adjustments: Diluted (loss) per share from discontinued operations (2) $ 0.00 N/A $ 0.04 After tax diluted earnings per share effect of early extinguishment of debt $ 0.12 $ 0.115 $ - Adjusted diluted earnings per share (4) $ 0.31 $ 0.28 $ 0.26 Commenting on the results, Peter M. Carlino, Chief Executive Officer of Penn National said, "Penn National Gaming exceeded its guidance for income from continuing operations and diluted earnings per share from continuing operations based on further EBITDA improvements at Charles Town Races & Slots(TM), Casino Rouge and the management contract at Casino Rama. "In addition to the record operating results during the first quarter, Penn National made significant progress in improving its capital structure in anticipation of several new growth opportunities which are expected to come online over the next few years. As previously reported, in January the Company completed the sale of The Downs Racing and its subsidiaries and in February Penn National made a private offering of $250 million of 6 3/4% Senior Subordinated Notes. The proceeds from these activities were applied to the redemption of $200 million of our 11 1/8% Series B Senior Subordinated Notes and will also be applied to previously announced development projects. In total, Penn National paid down $111 million on its bank facility during the quarter and on April 4, the Company paid down an additional $160 million on its bank facility. "Penn National also made strides during the first quarter period in advancing its broad range of growth and development opportunities. In Pennsylvania, where we are developing a new gaming and racing facility at Penn National Race Course, we secured local approvals for the project's land-development plan. We anticipate securing a license from the Pennsylvania Gaming Control Board in late 2005, commencing construction immediately thereafter and opening our new Harrisburg-area facility in early 2007. "Our pending acquisition of Argosy Gaming Company is on schedule with an anticipated closing in the third quarter of this year. We are continuing to work with various state gaming boards and the FTC to obtain their required approvals to complete the transaction. In connection with this process we have elected to divest the Argosy Baton Rouge property to expedite securing necessary approvals. We anticipate that the sale will be effected after the merger although we will begin seeking a buyer immediately. "Argosy brings with it several prospects for growth through both expansion and development, including the Company's recent proposal to Indiana regulators for a major expansion at Lawrenceburg which is the nearest gaming facility to the Cincinnati feeder market. This plan calls for an expansion of the nation's biggest revenue generating riverboat to accommodate up to 4,000 slot machines from the 2,800 currently being operated. We believe the Argosy development projects, which are complex and subject to regulatory approvals, adhere to our long-term desire to enhance long-term shareholder value by creating more exciting entertainment venues. "We recently announced an agreement to acquire an off-track betting facility in Bangor, Maine and plan to temporarily operate up to 475 slots at this site in advance of our construction of a permanent facility. We anticipate a summer 2005 closing of the $3.8 million transaction, which we believe could result in the temporary facility being operational by the end of 2005, assuming all regulatory approvals are granted. We recently filed our completed slot operator license application, and are in the process of working with the city of Bangor to identify and finalize the optimal site for permanent development. We are projecting that the 475 slots at the temporary facility will generate approximately $20 million to $30 million in annual revenues. "We are initiating 2005 second quarter guidance today based solely on our existing continuing operations and we expect to update this guidance following the completion of the Argosy transaction."