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American Casino & Entertainment Properties Acquires Vegas Casinos

6 January 2004

MOUNT KISCO, New York – (Press Release) -- American Real Estate Partners, L.P. (NYSE: ACP), announced today that American Casino & Entertainment Properties LLC ("American Casino"), an indirect wholly-owned subsidiary of AREP, has agreed to acquire Arizona Charlie's Decatur and Arizona Charlie's Boulder, two casinos in Las Vegas, from Carl C. Icahn and an entity affiliated with Mr. Icahn, for aggregate consideration of $125,900,000. Mr. Icahn is the chairman of the board of directors of the general partner of AREP. The closing of the acquisition is subject to certain conditions, including, among other things, obtaining all approvals necessary under gaming laws, but is not subject to financing. Upon the closing of the acquisition and upon receiving all approvals necessary under gaming laws, American Real Estate Holdings Limited Partnership, a subsidiary of AREP, will transfer 100% of the common stock of Stratosphere Corporation, the entity that owns the Stratosphere Casino Hotel & Tower, to American Casino. As a result, following the acquisition and the contribution, American Casino will own and operate three gaming and entertainment properties in the Las Vegas metropolitan area.

In connection with the transaction, American Casino intends to seek to raise $200,000,000 pursuant to an offering of senior secured notes due 2012. The notes will not be and have not been registered under the Securities Act of 1933, as amended, and may not be offered or sold in the United States absent registration or an applicable exemption from registration requirements.

Stratosphere

The Stratosphere, which offers the tallest free-standing observation tower in the United States, is situated on approximately 31 acres of land located at the northern end of the Las Vegas Strip. The facility is a tourist-oriented gaming and entertainment destination property, which has approximately 80,000 square feet of gaming space, 2,444 hotel rooms, eight restaurants and approximately 110,000 square feet of developed retail space. The Stratosphere features three of the most visited amusement rides in Las Vegas: the Big Shot, a 16-seat ride that catapults passengers up a 160-foot mast in approximately 2.5 seconds with the force of approximately four G's; the High Roller, a 28-seat roller coaster that takes passengers on a 34-mile-per-hour ride around the Stratosphere at a height of more than 900 feet; and the recently launched X Scream, an eight-seat thrill ride which launches passengers approximately 30 feet over the side of the Stratosphere, giving riders the sensation that they are about to fall off the top of the building.

Arizona Charlie's Decatur

Arizona Charlie's Decatur is located on approximately 17 acres of land, four miles west of the Las Vegas strip. An estimated 500,000 people live within a five-mile radius of the property. The property is easily accessible from Route 95, a major highway in Las Vegas. Arizona Charlie's Decatur contains approximately 52,000 square feet of gaming space, 258 hotel rooms, four restaurants and three bars. The property targets repeat customers from the surrounding communities.

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