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MTR Gaming Group Announces Record Q2 2001 Results

Second Quarter Financial Highlights - versus fiscal 2000 second quarter:

Total revenues increased 29% to $54.3 million.

EBITDA was up 26% to $10.9 million.

Operating income grew 18% to $8.6 million

Net income rose 19% to $5.1 million or $.20 per diluted share.

Six-Month Financial Highlights - versus the first six months of fiscal 2000:

Total revenues were up 32% to $102.8 million

EBITDA rose 27% to $20.6 million

Operating income increased 22% to $16.3 million

Net income grew 23% to $9.4 million or $.37 per diluted share

Edson R. (Ted) Arneault, President and CEO of MTR Gaming Group, stated, ``We are very pleased with the results we are seeing from our expanded operations and aggressive marketing campaign for Mountaineer. Net win from slot operations at Mountaineer increased 29% to $44.6 million in the second quarter from the second quarter of 2000, while net win-per-day-per-machine was $261 with 1,905 machines, compared to $282 with 1,355 machines in the same period of last year. Net win-per-day-per-machine was up from $240 in the first quarter of this year.

``The current phase of Mountaineer's transformation into a destination resort and diversified entertainment complex is on schedule. On June 11th, we broke ground on our new hotel, which will house 262 well-appointed rooms and suites. On July 1st, we opened a Las Vegas-style `buffeteria' that has been well received by our customers and reduced the waiting time for patrons in the Gatsby dining room.

"Next to open will be our new 39,000 square foot gaming room scheduled for later this month, which will house 595 additional slot machines bringing our total at Mountaineer to 2,500. Also in August, we plan to open our new convention center, which will be geared toward local associations and should increase mid-week traffic.

"We are gradually implementing the increase in the maximum wager from $2.00 to $5.00 on our machines as the machine manufacturers gain Lottery Commission approval of the new chips, and expect to complete the process by the end of September.

``Export simulcasting of Mountaineer races continues to have a broader reach and increasingly contribute to the Company's revenues. During the second quarter, export simulcasting generated revenues of $784,000, an increase of 38% from $567,000 in the first quarter of this year. Our average daily live handle, including export, was $831,600 in the second quarter, an increase of 13% from $734,500 in the first quarter. We added 10 new export outlets during the quarter, bringing the total to over 220.''

Commenting on the Company's Nevada's properties, Mr. Arneault stated, ``As previously announced, last week we closed the casino and one of the restaurants at our Reno property and laid off approximately 60 employees. We expect the operating loss in Reno to be approximately $50,000 per month going forward, which compares to a total of approximately $800,000 in the first quarter of this year and $586,000 in the second quarter. We are considering various alternatives for the property, including selling the hotel to a time-share developer and retaining ownership or management of the casino, as well as an outright sale of the property.

``Total revenues at our Speedway Property in North Las Vegas were up 21% to $2.1 million from the second quarter of last year, but the property reduced the Company's earnings by $468,000 or $.02 per share. The Nevada subsidiaries overall recorded total revenues of $3.4 million, up 18% from last year's second quarter, but lowered the Company's earnings by $1.1 million or $.04 per share. We remain focused on exploring opportunities to reduce our capital investment in Reno and achieve profitability at the Speedway.''

Recent Developments:

Mr. Arneault continued, ``During the second quarter we announced that we filed an application to build a state-of-the-art thoroughbred racetrack in Erie, Pennsylvania. Construction of the track, which would be located on a parcel of approximately 135 acres, about 150 miles from Mountaineer, is subject to a number of contingencies and there is no guarantee that the plans will be executed. We look forward to reporting our progress in this regard.''

On August 1st, Mountaineer's automated player tracking system went on-line, replacing a manual system. The Company expects the automated player tracking system to generate valuable data concerning patron preferences as well as provide incentives for players to avail themselves of all of the resort's amenities. The system should therefore enable more efficient use of marketing and promotions dollars.

Also in August, the Company amended its credit facility to increase the available credit line from $60 million to $75 million. The Company plans to use the additional funds, together with cash flow from operations, to complete Phase II of the construction at Mountaineer and for the Erie project if approved by the Pennsylvania Horse Racing Commission. The amendment also increases the amount available for the repurchase of the Company's common stock from $3 million to $10 million, provided that the Company's twelve-month trailing EBITDA first reaches $50 million.

Mr. Arneault concluded, ``Due to our recent, imminent, and planned developments, we are enthusiastic about the Company's prospects for the remainder of 2001 and beyond.''

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