Penn National Gaming has today reported its second quarter operating results for the period ended 30 June 2007. After-tax merger-related costs of US$2.2 million were related to the previously announced merger with certain funds managed by affiliates of Fortress Investment Group and Centerbridge Partners. Canadian currency fluctuations in the three months to 30 June caused the company to record a non-cash pre-tax currency translation loss of US$3.8 million.

Commenting on the results, Chairman and CEO Peter Carlino said, "Penn National's record second quarter EBITDA reflects positive operating trends at many of our existing properties -- some of which are benefiting from recent capital investments, contributions from our two Gulf Coast facilities, which were closed or provided minimal EBITDA a year ago, and a partial quarter's contribution from Zia Park Racetrack and its Black Gold Casino, which we acquired in mid-April."

He added, “The overall strength of our portfolio of regionally diversified gaming properties offset competitive pressures in Joliet, which were amplified by the incremental Illinois tax on our Chicagoland facilities, negative year-over-year comparisons in Baton Rouge, as this market continues to experience post-hurricane stabilization, the impact of increased insurance costs, expenses related to our support of local referenda in Kansas and West Virginia and costs associated with the previously announced merger with certain funds managed by affiliates of Fortress Investment Group LLC and Centerbridge Partners, L.P.”

Argosy Casino Riverside, just a few minutes from downtown Kansas City, is said to be ramping up and attracting corporate business and private parties. Meaningful increases in slots revenue have been obtained at Penn National Gaming’s latest expansion at Charles Town in West Virginia, where there are now around 5,000 slot machines. Following a rejection by the local community of table games at Charles Town, the company will have to wait at least two years for another referendum.

"In terms of new acquisitions for the Company, early in the second quarter, Penn National was delighted to add Zia Park Racetrack and its Black Gold Casino to its diverse portfolio of gaming and racing assets. This property, with 750 slot machines, represents the Company's fourth integrated racing and gaming facility and contributed approximately $6.5 million of EBITDA to our 2007 second quarter results. In addition, the Company recently announced the purchase of the Sanford-Orlando Kennel Club, which is situated on 26 acres in Orlando, Florida, and offers year-round greyhound racing. Sanford is a relatively small pari-mutuel operation, which we believe may have future opportunities for expanded gaming.”

Penn National Gaming also has plans to develop a casino resort in Cherokee County in southeastern Kansas. In 2008, the company expects to complete three significant projects, including the Hollywood Casino racing and gaming facility at Penn National Race Course, the permanent Hollywood Slots at Bangor facility, which will be called the Hollywood Slots Hotel and Raceway, and ‘much needed’ additional parking at Lawrenceburg. With the exception of the postponement of further gaming floor space expansion at Charles Town, all of development and expansion projects are said to remain on track with the company’s previously disclosed timetables and budgets. (E-07.27.07)

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