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Argosy Gaming Results Up

28 April 2005

ALTON, Illinois – (PRESS RELEASE) -- Argosy Gaming Company (NYSE: AGY) today announced first quarter results for the period ended March 31, 2005. Earnings per diluted share ("EPS") were $0.71 on net income of $21.3 million, as compared to $0.13 per diluted share on net income of $4.0 million for the first quarter of 2004. Included in the results of the first quarter of 2004 are $25.3 million of expenses, or $0.50 per share, associated with the February 2004 refinancing of the Company's outstanding 10 3/4% notes due 2009. Included in the first quarter results of 2005 are $2.7 million of expenses, or $0.05 per share, associated with the proposed merger with Penn National Gaming.

Net revenues were $271.0 million for the first quarter of 2005, up $6.9 million from $264.1 million in the first quarter of 2004. Of note, net revenues at Argosy's Baton Rouge property were up 18.0%, from first quarter results of $22.4 million in 2004 to $26.4 million in 2005, in part due to visitors to the city for a bowling congress that runs from February 12th through July 4th of this year. At Argosy Casino - Sioux City, net revenues for the first quarter were up 16.7%, from $11.3 million in 2004 to $13.2 million in 2005, following the addition of the renovated boat formerly used at the Company's Riverside property.

Argosy's EBITDA (earnings before interest, taxes, depreciation and amortization) for the quarter was $68.6 million for the first quarter 2005, including the expenses related to the Penn merger, compared to $42.0 million for the first quarter 2004, including the expenses for the refinancing mentioned above. Excluding the merger and financing costs, EBITDA increased 6.0%, primarily due to improved performance at the Company's Baton Rouge and Alton properties.

The Company's EBITDA margin (EBITDA as a percent of net revenues) for the quarter was 26.3%, up from 25.5% the same quarter last year, excluding merger and refinancing costs. At the property level, the EBITDA margin improved at every Argosy location except for Empress Casino Joliet. The Company is currently accruing for gaming taxes at its Illinois properties using the existing graduated tax tables. Current legislation calls for a rollback to lower rates beginning July 1, 2005. Had the Company accrued the Illinois gaming taxes based on a rollback occurring, EPS for the quarter would have been approximately $0.05 higher.

Argosy reported that debt decreased from $814.1 million as of December 31, 2004 to $803.2 million as of March 31, 2005. The Company spent $8.3 million in maintenance capital during the first quarter of 2005. Project capital for the quarter, which was primarily for work on the new $75 million hotel and garage project in Riverside and an expansion at the Company's Lawrenceburg property, was $8.5 million.

Based on analysis of the potential for the Cincinnati market, the Company has initiated the approval process to complete a major capital expansion project in Lawrenceburg. The project would include the replacement of the existing three-level boat with a larger single-level boat that would add approximately 1,200 gaming positions to the existing 2,875. The expansion plan would also provide a substantial increase in parking by adding a new, 1,500-space garage as well as surface parking for an additional 350 cars. This nearly doubles the available on-site parking. The total cost of the project is estimated to be approximately $250 million, and would be partially offset by a 10-year, $50 million incentive credit from the City of Lawrenceburg. Pending regulatory approval, the Company expects to begin construction later this year, with completion of the garage near the end of 2006 and of the casino in late 2007.

The transaction with Penn National Gaming is on schedule, with an anticipated closing in the third quarter of this year. The Company is assisting Penn in their efforts to divest Argosy's Baton Rouge property to expedite securing necessary approvals. Any agreement between Penn and a potential purchaser of the property would be subject to the closing of the Argosy/Penn merger. Pursuant to the merger agreement between Argosy and Penn, Argosy has agreed not to provide any guidance concerning its expected earnings or other performance.

Argosy Gaming Company is a leading owner and operator of casinos and related entertainment and hotel facilities in the midwestern and southern United States. Argosy owns and operates the Argosy Casino-Alton in Illinois, serving the St. Louis metropolitan market; the Argosy Casino-Riverside in Missouri, serving the greater Kansas City metropolitan market; the Argosy Casino-Baton Rouge in Louisiana; the Argosy Casino-Sioux City in Iowa; the Argosy Casino-Lawrenceburg in Indiana, serving the Cincinnati and Dayton metropolitan markets; and the Empress Casino Joliet in Illinois serving the greater Chicagoland market.

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