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American Casino Closes Acquisition

27 May 2004

MOUNT KISCO, New York – (PRESS RELEASE) -- American Real Estate Partners, L.P. (NYSE: ACP - News; "AREP") announced today that American Casino & Entertainment Properties LLC ("American Casino"), an indirect wholly-owned subsidiary, has closed its previously announced acquisition of 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 an aggregate consideration of $125,900,000. In addition, American Real Estate Holdings Limited Partnership ("AREH"), a subsidiary of AREP, has transferred 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 now owns and operates three gaming and entertainment properties in the Las Vegas metropolitan area.

In connection with the closing, the net proceeds of American Casino's previously announced offering of senior secured notes due 2012 in the aggregate principal amount of $215 million were released from escrow. American Casino has used the funds released from the escrow account to pay the acquisition purchase price and to repay certain indebtedness of Stratosphere Corporation to AREH, and will use the remaining funds to fund distributions to its direct parent, American Entertainment Properties Corp., a wholly-owned subsidiary of AREH.

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