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Hollywood Casino Shreveport on Sale

FORT WORTH, Texas – (Press Release) -- HCS I, Inc., the managing general partner of Hollywood Casino Shreveport ("HCS"), announced today that its Board of Directors (the "Board") has initiated a process that it hopes will result in the sale or other disposition of the riverboat casino/hotel complex of HCS located in Shreveport, Louisiana.

HCS, an indirect subsidiary of Penn National Gaming, Inc. (Nasdaq: PENN - News), was acquired by Penn National in March 2003 as part of its acquisition of Hollywood Casino Corporation. The announcement followed action by the Board authorizing HCS's financial advisor, Libra Securities LLC, to begin contacting potential acquirors. The Board also authorized the creation of an independent committee to oversee the sale process, consisting of the director who is not employed directly by Penn National Gaming. The Board created the independent committee in the event that Penn National seeks to participate as a bidder in the sale process.

The Board took action after consultation with an ad hoc committee of holders of the $150 million First Mortgage Notes due 2006 and the $39 million Senior Secured Notes due 2006 (the "Notes") issued by HCS and its subsidiary Shreveport Capital Corporation. Although no formal agreement has been reached with the ad hoc committee regarding the sale process, HCS anticipates that it will consult with the ad hoc committee throughout the process.

There can be no assurance that the process will result in the sale or other disposition of the riverboat casino/hotel complex or that, if it does, the sale proceeds will be adequate to pay the Notes in full. HCS currently anticipates that any transaction would be effected through a federal bankruptcy proceeding.

The Board also determined not to authorize HCS to make the February 1, 2004 interest payments, aggregating $12.3 million, due on the Notes. As previously reported by HCS, the Notes have been in default under the terms of their respective note indentures since March 2003.

HCS I is a wholly owned, indirect subsidiary of Penn National Gaming, Inc. and the Notes are non-recourse to Penn National Gaming, Inc.

Hollywood Casino Shreveport is a riverboat casino/hotel complex located on the Red River in Shreveport, Louisiana.

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