MTR Gaming reports Q2 results

9 August 2007

CHESTER, West Virginia -- (PRESS RELEASE) -- MTR Gaming Group, Inc. (NasdaqGS:MNTG ) today announced financial results for the second quarter and six months ended June 30, 2007.

For the second quarter, MTR's total net revenues increased 40% to $132.8 million, from $94.9 million in the same period of 2006. EBITDA grew 44% to $16.0 million, from $11.2 million in the second quarter of 2006. The Company reported a net loss of $502,000 or $0.02 per diluted share, compared to net income of $472,000 or $0.02 per diluted share in the second quarter of last year. During the second quarter of 2007, the Company incurred higher net interest expense of $4.7 million associated with increased borrowings for the development of Presque Isle Downs.

Net revenues at The Mountaineer Race Track & Gaming Resort were $68.0 million, compared to $74.0 million in the second quarter of 2006. The Company attributes the revenue decrease to the impact on Mountaineer's market from the opening of gaming operations in Pennsylvania. Mountaineer generated EBITDA of $12.1 million, versus $15.5 million in the comparable quarter of 2006. The property's profitability was impacted by the decrease in revenues as well as costs incurred to support the local referendum to allow table gaming at Mountaineer ($400,000) and increased marketing and promotions costs ($400,000).

Presque Isle Downs, which opened on February 28, 2007, generated gaming revenues of $43.9 million and EBITDA of $8.5 million during the second quarter.

Binion's accounted for $15.5 million of net revenues in the second quarter of 2007, versus $15.1 million in the comparable period of 2006. The property experienced an EBITDA loss of $949,000 in the 2007 quarter that included $660,000 in costs related to an unemployment tax assessment due to revisions to prior year rates provided by the State of Nevada, versus an EBITDA loss of $523,000 in the second quarter of 2006. The Company's Speedway Casino in North Las Vegas accounted for net revenues of $2.8 million, versus $3.0 million in the comparable period last year, and an EBITDA contribution of $363,000, compared to $568,000 in last year's second quarter. As previously announced, MTR has entered into definitive agreements to sell Binion's and Speedway for $32,000,000 and $18,175,000 in cash, respectively. The transactions are subject to customary conditions, completion of due diligence and licensing. Because the outcome of these matters cannot be determined at this time, the Company has not reflected the operations of Binion's or Speedway as discontinued operations.

For the first half of 2007, MTR's total net revenues rose 28% to $239.9 million from $187.9 million in the first six months of 2006. EBITDA increased 10% to $28.5 million from $25.8 million in the same period last year. During the first half of 2007, the Company incurred $3.0 million in pre-opening costs associated with Presque Isle Downs, versus $559,000 in the first half of 2006 and increased net interest expense of $7.5 million. Net income was $57,000 or $0.00 per diluted share compared to $3.8 million or $0.14 per diluted share in the first half of 2006.

Edson R. (Ted) Arneault, President and CEO of MTR Gaming Group, stated, "We continue to be very pleased with attendance levels and operating performance at Presque Isle. Additionally, the racetrack remains on-track to open in September of this year, which should draw new customers and increase slot play."

Mr. Arneault continued, "As the second quarter came to a close, the people of Hancock County voted in favor of table games through the local referendum, which allows us to add table games at Mountaineer. Initially, the tables will be situated within the existing facility, allowing a relatively fast start-up. We now expect to introduce 37 poker tables at Mountaineer during the fourth quarter of 2007, rather than the third quarter, due to the timing of implementation of state regulations. In addition, we are moving forward with 50 table games during the fourth quarter of 2007, as planned. While Mountaineer's recent revenues and EBITDA have been lower than past quarters, we believe that table games will enhance the property's competitive position by drawing new customers and driving increased play from our existing customers."

Mr. Arneault concluded, "We remain focused on enhancing the operations at each of our properties as well as developing the growth opportunities we have created."