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Analyst Predicts Strong Results in 2000

6 January 2000

Harry Curtis, a gaming and lodging analyst at Robertson Stephens, said the traditional gaming industry should have another good year in 2000. Curtis was quoted in a statement issued by the company this week.

``We saw the average appreciation for gaming stocks with market capitalizations in excess of $1.5 billion increase 66 percent in 1999, versus approximately 20 percent for the S&P 500,'' Curtis said. ``We expect 2000 to be another strong year for the gaming industry.''

The analyst added: ``We expect demand growth of 7 percent in first quarter 2000 to taper off to 2.5 to 3 percent by fourth quarter 2000, which continues to outpace supply growth and should give casino operators modest pricing power throughout 2000.

``In our view, companies with the greatest potential for upside surprises are Mandalay Resort Group, Harrah's, Hollywood Park and IGT. In addition, we estimate that Mirage, MGM Grand and Park Place could also deliver upside surprises.

``As a group, we estimate that large-cap casinos will generate approximately $885 million of free cash flow, versus a negative cash flow of $460 million in 1999, as capital investment slows dramatically. Unlike 1999, we expect most companies including Mandalay Resort, Harrah's, MGM Grand, Park Place and Mirage will commit at least 50 percent of free cash flow towards repurchasing stock.''

Robertson Stephens is an investment bank based in San Francisco and owned by FleetBoston Financial Corp.

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