CHESTER, W.Va.--(BUSINESS WIRE)--03/11/2004--MTR Gaming Group, Inc. (Nasdaq National Market:MNTG) today announced that its wholly owned subsidiary, Speakeasy Gaming of Fremont, Inc., completed its purchase of the assets of Binion's Horseshoe Hotel & Casino in downtown Las Vegas and entered into a Joint Operating License Agreement with an affiliate of Harrah's Entertainment, Inc. (NYSE:HET) pursuant to which Harrah's will serve as the primary day-to-day operator of the property on an interim basis.

   The purchase price of the property is $20 million, free and clear of all debts, subject to increase by $5 million if, at the termination of the Joint Operating Agreement, Harrah's has achieved certain operational milestones. Separately, the Company purchased for $1.8 million a parcel previously ground leased for $232,500 per year.

   The Joint Operating Agreement will have an initial term of one year, which Harrah's may extend for up to an additional two years. During the term of the agreement, MTR will receive the following payments from Harrah's: (i) $2.4 million for the initial one-year term; (ii) if Harrah's extends for the second year, the greater of $4.8 million or 50% of EBITDA; (iii) if Harrah's extends for another six months, the greater of $2.7 million or 50% of EBITDA; and (iv) if Harrah's extends for the final six-month period, the greater of $2.7 million or 50% of EBITDA. MTR will seek to hire a majority of the approximately 900 employees displaced by the January closing of the property, but during the term of the Joint Operating Agreement, Harrah's will be responsible for all of the property's operating expenses, including payroll and insurance, approximately $6 million per year in rent for parcels that are ground leased, and for funding the necessary operating capital.

   While Harrah's will be the day-to-day operator of the property, the operations and capital expenditures are subject to certain oversight and review by a joint committee of the two companies.

   Pursuant to an Intellectual Property License Agreement, Harrah's will retain the rights to certain intellectual property, including the names "Horseshoe" and "World Series of Poker," while MTR will retain the right to use the name "Binion's" in Clark County, Nevada. Harrah's has agreed, however, to hold the World Series of Poker at the property in 2004 and at least the final two rounds of the tournament in 2005, irrespective of whether it elects to extend the Joint Operating Agreement for a second year. Upon termination of the Joint Operating License Agreement, MTR will take over operation of the property and will re-brand the property in accordance with the Intellectual Property License Agreement.

   Binion's Horseshoe Hotel & Casino is located in the heart of downtown Las Vegas, and generated over $70 million in revenues (unaudited) in 2003. The property has approximately 80,000 square feet of gaming space, 360 hotel rooms, restaurants, and a rooftop swimming pool.

   Edson R. (Ted) Arneault, President and CEO of MTR Gaming Group, stated, "While our primary external growth strategy remains the pursuit of racetrack and racino opportunities, we believe the Binion's transaction complements and enhances our existing business for a number of reasons: 

   --  We feel strongly that this is a property we can manage well after the joint operating agreement ends as it attracts a similar type of customer as Mountaineer. 

   --  Binion's is a Las Vegas landmark and is situated in what we consider to be the best location in downtown Las Vegas. 

   --  It will enable us to leverage our management team and provide critical mass within the Nevada market, thus improving overall financial performance. 

   --  "Binion's" is an internationally known brand name. 

   --  We anticipate that the acquisition will be immediately accretive to EBITDA and earnings per share. 

   Mr. Arneault continued, "We are pleased to be working with Harrah's, and are enthusiastic about re-opening the property on or about April 1st and hosting the 35th Annual World Series of Poker beginning April 22nd. While our primary growth strategy continues to be building or acquiring other middle-market gaming and/or parimutuel businesses, we are very optimistic about the Binion's opportunity and look forward to reporting on its developments. Apart from the business opportunity, we are proud to be part of a transaction that reemploys so many people and restores an important landmark. We wish to express our appreciation to the City of Las Vegas, the Nevada State Gaming Control Board and Nevada State Gaming Commission whose expedited consideration allowed the transaction to proceed. 

   Reconciliation of Non-GAAP Measures to GAAP  - EBITDA or earnings before interest, taxes, depreciation and amortization is not a measure of performance or liquidity calculated in accordance with generally accepted accounting principles ("GAAP"), is unaudited and should not be considered an alternative to, or more meaningful than, net income or income from operations, as an indicator of our operating performance, or cash flows from operating activities, as a measure of liquidity. We have included EBITDA in our discussion because it is a widely used measure of performance and basis for valuation of companies in our industry. Uses of our cash flows that are not reflected in EBITDA include capital expenditures (which may be significant), interest payments, income taxes, and debt principal repayments. Moreover, other companies that provide EBITDA information may calculate and define EBITDA differently than we do.  

   About MTR Gaming Group 

   MTR Gaming Group, Inc., through subsidiaries, owns and operates the Mountaineer Race Track & Gaming Resort in Chester, West Virginia; Scioto Downs in Columbus, Ohio; the Ramada Inn and Speedway Casino in North Las Vegas, Nevada; Binion's Horseshoe Hotel & Casino in Las Vegas, Nevada, which the Company operates jointly with Harrah's; and holds a license to build Presque Isle Downs, a thoroughbred racetrack with pari-mutuel racing in Erie, Pennsylvania. The Mountaineer facility, the Company's primary source of revenues, currently encompasses a thoroughbred racetrack with off-track betting and export simulcasting, 3,200 slot machines, 359 hotel rooms, golf course, spa & fitness center, theater and events center, convention center and fine dining and entertainment. MTR is included on the Russell 2000(R) and Russell(R) 3000 Indexes. For more information, please visit www.mtrgaming.com.