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Ameristar Casinos, Inc. Reports Record Revenues for Fourth Straight Quarter

9 March 2001

LAS VEGAS, Nevada – (Press Release) --March 9 /PRNewswire/ -- Ameristar Casinos, Inc. (Nasdaq: ASCA) announced today its fourth straight quarter of record revenues, with $89.6 million of net revenues for the fourth quarter of 2000, an increase of $13.2 million or 17.3 percent over the Company's net revenues of $76.4 million for the same period in 1999.

Most of the increase in net revenues was due to the acquisition of the Kansas City and St. Charles properties on December 20, 2000, which generated $12.4 million of net revenues during the 11-day period in 2000 that the Company owned them. For the quarter ended December 31, 2000, Ameristar reported income from operations of $9.6 million, up 81.1 percent from $5.3 million for the same period in 1999, and basic earnings per share (before extraordinary loss) of $0.04 compared to a loss per share of $0.04 for the corresponding period in 1999. The fourth quarter earnings were in line with analysts' consensus expectations.

Net revenues for the year ended December 31, 2000 were $342.0 million compared to $300.3 million for the year ended December 31, 1999, which represents an increase of $41.7 million, or 13.9 percent. This growth is primarily the result of casino and parking expansions at the Company's Iowa and Mississippi properties, the introduction of new generation multi-coin slot machines throughout the Company's properties, the strategic implementation of enhanced marketing programs and the additional revenues provided by the two new Missouri properties.

The Company's philosophy of reinvesting in its properties is continuing with ongoing renovation and enhancement projects at Ameristar Council Bluffs and Ameristar Vicksburg as well as the mobilization of construction for the permanent St. Charles facility. The new casino and entertainment facility will include at least 70,000 square feet of casino space, a 550-seat buffet, a steakhouse and an entertainment lounge.

In connection with the Company's acquisition of the two Missouri properties, the Company obtained a new senior bank credit facility and an interim senior subordinated credit facility that has since been refinanced with a portion of the proceeds from the issuance of the Company's 103/4% Senior Subordinated Notes due 2009.

The two credit facilities were used to pay the purchase price for the Missouri properties and to refinance $245.0 million of existing long-term debt. The refinancing resulted in an extraordinary loss of $10.0 million ($6.6 million net of the associated tax benefit) and reduced the Company's basic earnings per share for 2000 by $0.33.

At December 31, 2000 the Company had cash of $36.2 million and total debt of $796.5 million. Subsequent to December 31, 2000, the Company sold The Reserve and issued $380.0 million in bonds, using the proceeds of both transactions to reduce debt by a net of approximately $51 million.

In January 2001, the Company completed its sale of The Reserve Hotel & Casino in Henderson, Nevada for $71.8 million in cash. The sale resulted in an impairment loss on assets held for sale of $57.2 million in the third quarter of 2000.

Net of the associated income tax benefit of $20.0 million, the impairment loss reduced the Company's earnings per share for 2000 by $1.82. Excluding the impairment loss resulting from the sale of The Reserve, income from operations for the year-ended December 31, 2000 would have been $34.5 million compared to income from operations of $25.5 million for 1999.

The Company's EBITDA for the quarter- and year-ended December 31, 2000 was $15.7 million and $62.3 million, respectively, compared to $11.6 million and $50.0 million, respectively, for the same periods in 1999. The Company's EBITDA margin for the three months-ended December 31, 2000 increased to 17.6 percent, compared to 15.2 percent for the same period in 1999.

The Company's EBITDA margin for the year ended December 31, 2000 increased to 18.2 percent, compared to 16.7 percent for the same period in 1999. The Company's EBITDA growth in 2000 is primarily attributable to casino expansions in Council Bluffs and Vicksburg, improved slot product company wide, growth in the Company's gaming markets and the inclusion of 11 days of operations at the two new Missouri properties in Kansas City and St. Charles.

These growth factors to EBITDA were partially offset by $1.9 million in development costs related to the Company's unsuccessful bid for a gaming license in South St. Louis County, Missouri.

``After reaching record levels for both net revenues and EBITDA during 2000, our recent entrance into the dynamic Kansas City and St. Louis markets has us poised for further growth in the coming years,'' said Ameristar President and Chief Executive Officer Craig H. Neilsen. ``We are particularly excited about plans to complete construction on the facility at St. Charles which will bring an expanded, first-class gaming and entertainment facility to the St. Louis market.''

Net revenues at Ameristar Council Bluffs for the year-ended December 31, 2000 were $124.6 million, which represents an 11.2 percent increase over the $112.0 million of net revenues in the prior year. Ameristar Council Bluffs' EBITDA for the year-ended December 31, 2000 was $32.1 million, up 13 percent from $28.4 million in 1999.

The increased revenue and EBITDA are primarily attributable to the addition of the third deck of the boat in late 1999, to having the largest number of new generation multi-coin slot machines in the market, and to an aggressive new cash-back program.

Due to the casino expansion and slot machine upgrades, Ameristar Council Bluffs' market share increased 1.4 percentage points to 32.1 percent for the year ended December 31, 2000, compared to 30.7 percent in 1999. The Council Bluffs gaming market experienced a 6.9 percent growth in gaming revenues in 2000 compared to 1999.

Ameristar Council Bluffs' revenues in the fourth quarter of 2000 were $28.2 million, off 5.0 percent from $29.7 million in the corresponding period in 1999. This decrease is primarily attributable to construction disruption associated with the $7.4 million renovation and enhancement project for the casino floor and restaurants that began in the fourth quarter of 2000 (and is expected to continue through the first quarter of 2001) as well as severe adverse weather conditions.

Ameristar Vicksburg's net revenues for 2000 rose to $82.6 million, an increase of 7.4 percent compared to $76.9 million in 1999. The increase in net revenues is largely due to the casino expansion in the fall of 1999, the implementation of new generation multi-coin slot machines, an increase in slot machine count and improved marketing strategies.

Revenue growth slowed to a 5.1 percent increase in the fourth quarter of 2000 due to the adverse impact of construction disruption associated with the $10 million renovation and enhancement project for the casino and restaurants that began in the fourth quarter and is expected to continue into the second quarter of 2001. For the year ended December 31, 2000, EBITDA grew 8.5 percent to $22.9 million from $21.1 million in 1999. EBITDA for the three months-ended December 31, 2000 was $5.3 million, which is flat with the corresponding 1999 period.

The Company's Jackpot properties, Cactus Petes Resort Casino and The Horseshu Hotel & Casino, reported net revenues of $60.3 million for the twelve months-ended December 31, 2000 compared to $58.3 million for 1999. EBITDA for the Jackpot properties for the year ended December 31, 2000 was $14.2 million, which is an increase of $0.5 million from the prior year.

The increased revenues are primarily attributable to slot machine upgrades and improved marketing programs with flat operating income resulting from revenues being offset by increases to payroll and benefits. Net revenues for the fourth quarter of 2000 were $13.5 million compared to $14.0 million in the same period in 1999. The decline in revenues in the fourth quarter was primarily due to adverse weather conditions. EBITDA increased to $3.0 million for the three months ended December 31, 2000 compared to $2.5 million for the same 1999 period.

The Reserve had net revenues for 2000 of $62.0 million, an improvement of $9.2 million over 1999. This improvement is primarily attributable to the implementation of various strategies to drive revenues and gain market share. The Reserve's EBITDA for 2000 was $6.1 million compared to an EBITDA of $0.4 million in 1999. On January 29, 2001, the Company completed its sale of The Reserve to Station Casinos for $71.8 million in cash, or approximately 12 times its 2000 EBITDA.

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