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Analyst Optimistic On Probe Involving Station Casinos

22 August 2000

LAS VEGAS, Nevada –Aug. 22, 2000 --The stock of Station Casinos Inc. of Las Vegas advanced 31 cents this morning, reversing a decline of the same amount on Monday.

Investors today apparently were reacting to a report by Lehman Brothers analyst Stuart Linde, who reitterated his buy rating on Station stock with a price target of $21. The stock traded this morning at $14.81.

Linde said he's optimistic Station will weather investigations in Missouri over bonus payments to its former outside attorney there. The attorney, Michael Lazaroff, pleaded guilty to multiple felonies including misappropriating funds belonging to his St. Louis law firm.

Lazaroff has agreed to cooperate with the Missouri Gaming Commission and federal prosecutors, who have convened a federal grand jury in Kansas City.

Linde noted there has been very little news on the probes leaked to the press over the past month and that Station reported the bonus payment to the Internal Revenue Service.

"If there was illegal activity, why leave a paper trail?" Linde wrote.

Even if Station is found to have committed wrongdoing in Missouri, Linde said that would not necessarily be disastrous as it would likely face a fine it could afford or see executives lose their gaming licenses.

"While we find this unlikely, even if this is the case, managerial expertise remains strong in the organization," Linde said.

And there would likely be a long line of suitors if Station was forced to sell assets, which Linde called irreplaceable.

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