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MTR Gaming Group reports results

CHESTER, West Virginia -- (PRESS RELEASE) -- MTR Gaming Group, Inc. (NasdaqGS:MNTG) today provided financial guidance for the year ending December 31, 2008 and discusses fourth quarter and year ended December 31, 2007, financial results

2008 Guidance

Management is projecting the following for 2008:

* Total revenues of at least $504 million, an increase of at least 15% over continuing operations in 2007;

* EBITDA of at least $72 million, an increase of at least 30% over continuing operations in 2007; and

* Income from continuing operations of at least $5 million, an increase of at least 179% over continuing operations in 2007.

Fourth Quarter and Year-End 2007 Results

For the fourth quarter of 2007, net revenues were $102.0 million, up 40% from $72.7 million in the same period of 2006. EBITDA from continuing operations was $8.0 million compared to $11.7 million in the fourth quarter of 2006. MTR reported a loss from continuing operations of $8.0 million or $0.29 per diluted share, versus income from continuing operations of $1.8 million or $0.07 per diluted share in the prior year's fourth quarter. The decrease in EBITDA is attributable to a decline in Mountaineer EBITDA of approximately $9.1 million that reflects a decline in net revenues of approximately $8.1 million, increased marketing and general administrative expenses and preopening expenses related to the commencement of table games operations of approximately $1.5 million, offset in part by Presque Isle Down's EBITDA contribution of $6.4 million. The decline in income from continuing operations reflects the factors impacting EBITDA and increased interest expense of approximately $6.3 million. As was the case in the third quarter of 2007, Binion's is reflected as discontinued operations and incurred a loss from discontinued operations of $0.6 million or $0.02 per diluted share, versus $1.3 million or $0.05 per diluted share in the fourth quarter of 2006. The sale of Binion's closed on March 7, 2008. MTR's overall net loss was $8.6 million or $0.31 per diluted share for the fourth quarter of 2007 compared to net income of $518,000 or $0.02 per diluted share in the fourth quarter of 2006.

Fourth quarter net revenues at Mountaineer Casino, Racetrack & Resort were $59.9 million compared to $68.0 million in the fourth quarter of 2006, and the property generated EBITDA of $6.3 million, compared to $15.4 million in the same period of 2006. The Company attributes the revenue decrease to the opening of gaming operations in Pennsylvania in 2007, however, since December 20, 2007, with the opening of table games at Mountaineer, attendance has improved, as have Mountaineer's slot revenues. From December 20, 2007 through March 31, 2008, table games have generated approximately $10.9 million in revenues, and from October 19, 2007 through March 31, 2008, poker games have generated approximately $4.0 million in revenues. Mountaineer's ancillary revenues from its restaurants, hotel, stores, and other amenities have likewise increased since the commencement of poker and table games.

Presque Isle Downs, which opened on February 28, 2007, contributed net revenues of $38.1 million and EBITDA of $5.0 million in the 2007 fourth quarter.

The Speedway Casino in North Las Vegas accounted for net revenues of $2.6 million and an EBITDA contribution of $0.1 million for the fourth quarter, compared to $3.0 million in net revenues and an EBITDA contribution of $558,000 for the 2006 fourth quarter. As announced on January 14, 2008, MTR's subsidiary, Speakeasy Gaming of Las Vegas, Inc., completed the sale of Speedway Casino's real property in North Las Vegas, NV to Ganaste, LLC for $11.4 million in cash. The second phase of the transaction, which is subject to regulatory approval, calls for the sale of the gaming assets to Lucky Lucy D, LLC, for a total of $6.775 million, comprised of $2.0 million in cash at closing and the balance of up to $4.775 million in an earn-out based on the property's gross revenues over the next four years. Pending regulatory approval and closing of the Lucky Lucy transaction, Speakeasy Gaming of Las Vegas will continue to operate the property pursuant to a short-term lease.

As previously reported, MTR Gaming completed the sale of Binion's Gambling Hall & Hotel to TLC Casino Enterprises, Inc. on March 10th. The transaction was subject to purchase price adjustments based on changes in net working capital, certain capital expenditures between execution and closing, and, due to market conditions, a $3.5 million working capital adjustment which remained with Binion's upon closing. Net cash to the Company at closing was approximately $28.5 million of which $27.6 million was utilized to reduce amounts outstanding under our credit facility.

For the year ended December 31, 2007, MTR's net revenues were $429.9 million, a 37% increase from $313.0 million in 2006, reflecting the addition of Presque Isle Downs. EBITDA was $55.4 million versus $51.7 million in the prior year, similarly due in large part to the contribution of Presque Isle Downs. Net loss from continuing operations was $6.3 million or $0.23 per diluted share, while discontinued operations produced a net loss of $5.1 million or $0.18 per diluted share, resulting in an overall net loss of $11.4 million or $0.41 per diluted share compared to net income of $4.4 million or $0.16 per diluted share in 2006, which included a $3.4 million or $0.12 per diluted share loss from discontinued operations. The factors contributing to the decline in operating results for continuing operations were the decline in margins at Mountaineer stemming from new competition in Pennsylvania, preopening expenses related to Presque Isle Downs and the commencement of poker and table gaming at Mountaineer, operating inefficiencies at Presque Isle Downs that are inherent in the commencement of a new operation, and increased interest expense.

Edson R. (Ted) Arneault, President and CEO of MTR Gaming Group, stated, "In 2007, we focused on building and strengthening MTR and its core properties. The completion of the sale of Binion's, as well as the expected sale of the Speedway Casino, will allow us to focus on growing and optimizing MTR's core assets in 2008. The opening of table games at Mountaineer has provided the Company with an exciting competitive advantage over its Pennsylvania competition. Since the commencement of table games, setting aside the extremely bad weather that Mountaineer had to contend with during March, we are seeing a significant positive trend in Mountaineer's slot machine revenue."

"With regard to Presque Isle Downs, slot win per day per machine of $231 in 2007 exceeded our expectations. As for margins, after our first full year of operation, we expect EBITDA margins going forward to average in the 17 to 20 percent range."

Regarding the Company's new property in Minnesota, Mr. Arneault stated, "We are pleased to report that the Running Aces Harness Park is on schedule to open later this month 30 miles north of downtown Minneapolis. This project is also set to open a 50 table card room in July. In June 2004, we acquired a 50% interest in the North Metro Harness Initiative, LLC, which is developing the harness racetrack and card room, and look forward to reporting on the performance of this property later this year."

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