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Caesars Entertainment Sells Reno Hilton

LAS VEGAS -- (PRESS RELEASE) -- Caesars Entertainment, Inc. (NYSE: CZR) today announced that it has entered into a definitive agreement to sell its Reno Hilton casino resort to Grand Sierra Resort Corp., a Nevada-based hotel and resort developer, for approximately $150 million.

The transaction is expected to close by the end of the fourth quarter of 2005 and is subject to customary regulatory approvals and closing conditions outlined in the purchase agreement.

With nearly 2,000 rooms, ten restaurants, 200,000 square feet of convention space, a world-class dinner theater and 107,000 square feet of gaming space with more than 1,300 slot machines, the Reno Hilton is one of the premier casino resorts in Northern Nevada. Grand Sierra Resort Corp. plans to reconstruct the property to create the quintessential entertainment destination, which will include one of the world's largest indoor water parks. Upon approval of the Nevada Gaming Control Board and the Nevada Gaming Commission, Larry Woolf, former chief executive officer and chairman of MGM Grand Hotel, Las Vegas, will lease the property's gaming operations from Grand Sierra Resort Corp.

"We have some very exciting plans for the Reno Hilton, which I believe is one of the most exceptional properties in Nevada," said Thomas J. Schrade, president of Grand Sierra Resort Corp. "We will disclose further details of those plans as we move forward. Right now, we simply want to say that we are looking forward to working very closely with the people and public officials of Reno to develop an extraordinary resort that will create significant economic benefits for the community."

Under the terms of the agreement, Grand Sierra Resort Corp. will purchase certain assets of the Reno Hilton and will assume certain related current liabilities. In addition, a subsidiary of the Navegante Group will purchase certain of the gaming assets of the Reno Hilton from Caesars Entertainment and will assume certain gaming-related current liabilities.

Pending regulatory approval, the Navegante Group will operate the casino at the Reno Hilton pursuant to a casino lease agreement with Grand Sierra. The aggregate consideration may be adjusted for changes in net working capital. Oppenheimer & Company is the exclusive financial advisor to Grand Sierra Resort Corp. Caesars Entertainment was represented by CB Richard Ellis on the transaction.

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