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Black Hawk Gaming and Gameco, Inc. Announce Merger Agreement

27 April 2001

BLACK HAWK, Colorado –(Press Release) -- April 27, 2001 -- Black Hawk Gaming & Development Company, Inc. (Nasdaq: BHWK - news), owner and operator of the Gilpin Hotel Casino in Black Hawk, Colorado, the Gold Dust West Casino in Reno, Nevada, and 75% owner and operator of The Lodge Casino in Black Hawk, today announced the execution of a merger agreement.

Pursuant to the merger agreement, Gameco, Inc., an entity controlled by Jeffrey P. Jacobs, Chairman of the Board and Chief Executive Officer of Black Hawk, has agreed to pay $12.00 per share, in cash, for each share of common stock of Black Hawk not currently owned by Mr. Jacobs or his affiliates and Black Hawk will become a wholly-owned subsidiary of Gameco. This price represents an increase of $1.00 per share from Mr. Jacobs' original offer to acquire Black Hawk at $11.00 per share.

Consummation of the transaction is subject to various conditions, including, among other things, the approval by Black Hawk's stockholders and the obtaining of various regulatory approvals. If the transaction fails to close because of Mr. Jacobs' inability to obtain financing, Black Hawk will be entitled to liquidated damages of $2 million. The transaction is expected to be consummated early in the fourth quarter of calendar 2001 and the merger agreement provides that the transaction must be completed by December 31, 2001.

Robert D. Greenlee, former Chairman of the Board and Chief Executive Officer of Black Hawk and currently a holder of approximately 11% of its common stock, has informed Black Hawk that he has withdrawn his previously announced proposal to acquire Black Hawk for $12.00 per share in cash and has executed an agreement to vote his shares in favor of the Gameco merger.

At a meeting held April 23, 2001, the special committee of the Board of Directors of Black Hawk determined that the merger agreement is fair to and in the best interests of the public stockholders of Black Hawk and recommended that the Board of Directors of Black Hawk approve the merger and the merger agreement.

At a subsequent meeting held April 25, 2001, the members of the Board, other than Mr. Jacobs who abstained from voting in light of his personal interest in the merger, determined that the merger agreement and the transactions contemplated thereby are fair to and in the best interests of the public stockholders of Black Hawk and approved the merger and the merger agreement.

As previously reported, Mr. Jacobs and his affiliates currently own approximately one third of Black Hawk's common stock.

Robertson Stephens, Inc. is the financial advisor to the Special Committee of the Board of Directors of Black Hawk in connection with the merger. U.S. Bancorp Libra is acting as advisor to Mr. Jacobs.

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