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Mohawk Tribe, Park Place Sign Agreement

NEW YORK – (Press Release) -- The new leaders of the Saint Regis Mohawk Tribe and Park Place Entertainment Corporation (NYSE: PPE) this week signed amended management and development agreements that will govern the construction and operation of the Tribe's planned $500 million Mohawk Mountain Casino Resort in Sullivan County, New York.

The agreements were signed on Monday and were presented to the Park Place Board of Directors today during a meeting in Atlantic City.

The new agreements modify the formula for calculating the management fee that Park Place will receive from the Tribe, provide for payment of a development fee to the company and reassign obligations for funding certain parts of the development. The change in the management fee formula is intended to make the new agreement consistent with federal regulations and policies established by the National Indian Gaming Commission, which must approve the company's management agreement with the Tribe.

The 750-room Mohawk Mountain resort hotel and 160,000-square foot casino is to be built on Anawana Lake in the Catskills town of Thompson, near the site of Kutsher's Resort and Country Club.

These new agreements represent another important step in making the Mohawk Mountain Casino Resort a reality and they reflect the growing relationship between Park Place

Entertainment and the Tribe,' said Saint Regis Mohawk Tribal Council Chief James W. Ransom.

'The signing of these new agreements is a major milestone in our ongoing partnership with the Tribe,'said Park Place President and Chief Executive Officer Wallace R. Barr. 'This project will deliver millions of dollars of investment and thousands of local jobs to Sullivan County, and provide significant economic benefits to members of the Tribe,'Barr added.

In addition to providing at least 2,000 construction jobs and thousands more permanent positions for casino employees, the project will generate millions of dollars in annual tax revenue for New York State and millions more in direct payments to Sullivan County, the Town of Thompson and locally impacted entities.

The casino and resort will be built on a 174-acre site, of which 66 acres will be held in trust for the Saint Regis Mohawk Tribe by the United States Department of the Interior. In addition to the hotel and casino, the project will feature 15,000 square feet of meeting space, eight restaurants and a spa.

Under the terms of the amended agreements:

-- The Tribe and Park Place will develop and construct the Mohawk Mountain Casino Resort and other related facilities on the Kutsher site.

-- Park Place will assist the Tribe in securing financing for planned development.

-- Park Place will manage the Mohawk casino and resort for an initial term of seven years, which is renewable upon the consent of both parties.

-- Park Place will receive a management fee of 30 percent of Net Total Revenue, as defined in the Management Agreement, from casino and resort operations. Net Total Revenue is analogous to the GAAP concept of pretax income. Under the previous agreement, the company was to receive 30 percent of EBITDA -- earnings before interest, taxes, depreciation and amortization.

-- Park Place will receive a one-time development fee of $15 million for its assistance in planning and building the casino resort.

-- The funding of the construction of a parking garage for the development, which was formerly an obligation of Park Place, has been assumed by the Tribe. The estimated cost of the garage is $40 million.

-- Both the Tribe and Park Place will enjoy mutual non-compete protections within a 125 mile zone from the Sullivan County casino resort.

In addition to finalizing a compact with the state, the Saint Regis Mohawk Tribe must receive the approval of the Bureau of Indian Affairs for its Land into Trust Application. The National Indian Gaming Commission must approve the new management agreement. Additionally, local approvals must be obtained for certain other improvements in connection with the project.

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