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Ameristar Casinos, Inc. Reports Q2 2000 Financial Results

11 August 2000

LAS VEGAS, Nevada –(Press Release)--Aug. 11, 2000 -- Ameristar Casinos, Inc. reported today that the Company had record net revenues of $84.1 million in the second quarter of 2000.

This represents $7.9 million in revenue growth, or 10.4 percent, over net revenues of $76.2 million for the second quarter of 1999. Net revenues for the six months ended June 30, 2000 were also a record, at $165.8 million, compared to $146.3 million for the corresponding period in 1999.

The strong revenue performance resulted in improved market share at three of the Company's properties. Ameristar Council Bluffs became the leading producer of gaming revenue among all Iowa riverboats in the second quarter of 2000, and Ameristar Vicksburg remained the gaming revenue market leader for the 21st consecutive quarter.

The growth in revenues is primarily the result of casino and parking expansions at the Company's Iowa and Mississippi properties, the company-wide introduction of new technology slot machines and the strategic implementation of enhanced marketing programs.

Property improvements at Ameristar Council Bluffs include the third level of the riverboat, which opened in November 1999, and the 1,000-space parking garage, which opened in April 2000. At Ameristar Vicksburg, the Company expanded the casino and increased the total number of slot machines by 300, added 600 parking spaces in late 1999, introduced a new signature steakhouse and renovated the 24-hour casual restaurant.

The Company reported $6 million in income from operations for the quarter ended June 30, 2000 compared to $7.4 million for the same period in 1999.

The decrease in income from operations resulted primarily from costs associated with the Company's unsuccessful bid for a gaming license in St. Louis County, Missouri, increased depreciation related to property improvements and new gaming equipment and increased marketing costs.

The increased marketing costs resulted from the Company's implementation of an aggressive marketing strategy at three of its properties using a variety of concurrent marketing campaigns as part of the successful effort to increase revenues and market share.

For the six months ended June 30, 2000, income from operations reached an all time high of $17.3 million compared to $13.6 million for the same period in 1999.

The Company had a loss per share for the three months ended June 30, 2000 of $0.02 compared to earnings per share of $0.04 in the second quarter of 1999. For the six months ended June 30, 2000, earnings per share was $0.11 compared to earnings per share of $0.03 for the six months ended June 30, 1999.

On a company-wide basis, earnings before interest, taxes, depreciation and amortization (EBITDA) for the three months ended June 30, 2000 and June 30, 1999 was generally flat at $13.2 million and $13.3 million, respectively. EBITDA for the six months ended June 30, 2000 was $31.4 million compared to $25.8 million for the six months ended June 30, 1999.

The Company's EBITDA margin (EBITDA as a percentage of net revenues) for the three months ended June 30, 2000 was 15.6 percent compared to 17.4 percent for the same period in 1999. The Company's EBITDA margin for the six months ended June 30, 2000 was 19.0 percent compared to 17.6 percent for the same period in 1999.(1)

The Company's operating income margin (operating income as a percentage of net revenues) declined to 7.1 percent for the three months ended June 30, 2000 compared to 9.7 percent for the same period in 1999.

For the six-month period ended June 30, 2000, the operating income margin was 10.5 percent compared to 9.3 percent in the prior year period. The EBITDA and operating income margins were lower in the second quarter of 2000 compared to the second quarter of 1999 for the reasons discussed above.

Development costs for the St. Louis County project were $1.4 million for the three months ended June 30, 2000 and $1.9 million for the six months ended June 30, 2000 and had the effect of reducing both EBITDA and income from operations by these amounts for the respective periods.

These expenditures also had the effect of reducing earnings per share (net of tax benefits) by $0.04 and $0.06 for the three- and six-month periods ended June 30, 2000, respectively. The St. Louis County expenses reduced each of the EBITDA margin and the operating income margin by 1.7 percent and 1.1 percent for the three- and six-month periods, respectively.

``Although we are disappointed that the Missouri Gaming Commission did not select Ameristar's Lemay project, we are pleased with the strong performance of our portfolio of properties in the first half of 2000,'' says Craig H. Neilsen, President and Chief Executive Officer of the Company.

Ameristar Council Bluffs continued its excellent performance with record revenues for the third quarter in a row. The property experienced a 13.8 percent growth in net revenues for the three months ended June 30, 2000, reporting $32.2 million in net revenues compared to $28.3 million for the three months ended June 30, 1999.

For the six-month period ended June 30, 2000, net revenues were $64.3 million, a 20 percent increase over the $53.6 million of net revenues in the prior year period.

Council Bluffs' EBITDA for the second quarter of 2000 increased by 6.6 percent from the second quarter of 1999. EBITDA growth did not match revenue growth due to increased operational costs associated with the third deck expansion and the strategic marketing programs discussed above.

Income from operations declined slightly from $5.4 million for the second quarter of 1999 to $5.3 million for the second quarter of 2000 due primarily to higher depreciation expense and other operational costs as noted. Ameristar Council Bluffs' operating income for the six-month period ended June 30, 2000 was $12.8 million compared to $10.0 million in 1999, a 28 percent increase.

Due to the property expansion, slot machine upgrades and increased marketing efforts, Ameristar Council Bluffs increased its market share for the quarter ended June 30, 2000 by 2.5 points to 32.9 percent compared to the same period in the prior year. In addition, the Council Bluffs gaming market experienced a 6.7 percent growth in gaming revenues from the second quarter in 1999 to the second quarter in 2000.

Ameristar Vicksburg's net revenues for the three months ended June 30, 2000 rose to $20.4 million. This reflects an increase of 5.7 percent compared to $19.3 million for the three months ended June 30, 1999.

For the six-month period ended June 30, net revenues increased 7 percent to $41.1 million in 2000 from $38.4 million in 1999. Income from operations for the three months ended June 30, 2000 declined slightly (by $0.3 million) from the corresponding 1999 period due to increased marketing and depreciation costs as discussed above.

For the six months ended June 30, 2000, income from operations increased 19.7 percent to $9.1 million compared to $7.6 million in the corresponding 1999 period.

These improvements were primarily attributable to increased casino revenues from the casino expansion in the fall of 1999, the upgraded slot product and improved marketing strategies, combined with first quarter decreases in operating expenses.

The Company's slot upgrade program has introduced 600 new technology slot machines at Ameristar Vicksburg since November 1999, and the casino expansion has resulted in an increase in the total slot machine count by 300, or 35 percent.

The Company's Jackpot Properties, Cactus Petes Resort Casino and The Horseshu Hotel & Casino, increased net revenues 4.2 percent to $15.8 million in the three months ended June 30, 2000 as compared to $15.2 million in the same period in 1999.

Net revenues for the six months ended June 30, 2000 were $30.4 million, representing a 7.2 percent increase from net revenues of $28.3 million in the corresponding period in 1999. The improvement in revenue is attributable primarily to the Company's new slot technology upgrades and strategic advertising campaign.

Due to rising costs (largely in payroll/benefits and marketing), operating income for the Jackpot properties decreased $1.1 million or 31.6 percent for the three months ended June 30, 2000 compared to the corresponding period in 1999.

The Jackpot Properties had operating income of $2.4 million and $5.0 million, respectively, for the three and six months ended June 30, 2000, compared to $3.5 million and $5.9 million, respectively, for the corresponding periods in 1999.

The Reserve Hotel Casino experienced significant improvement in operating results during the three months ended June 30, 2000 compared to the three months ended June 30, 1999. During the first half of 2000, management continued to implement strategies to drive revenues and capture market share.

Primarily as a result of these efforts, net revenues increased 16 percent for the three months ended June 30, 2000 compared to the second quarter of 1999 and 15.8 percent for the six months ended June 30, 2000, compared to the same period in 1999.

The increased revenues reduced the property's operating loss for the three months ended June 30, 2000 to $0.2 million compared to its operating loss of $2.1 million for the three months ended June 30, 1999. The operating loss for the six months ended June 30, 2000 was $0.7 million compared to a $4.0 million loss for the corresponding period in 1999. The Company continues to seek further operational improvements at The Reserve through enhanced revenues and cost controls.

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