Penn National Gaming Enters Into Joint Venture to Own and Operate Three Texas Pari-Mutuel Facilities

HOUSTON and WYOMISSING, Pa., Sept. 22 /PRNewswire-FirstCall/ -- Penn National Gaming, Inc. (Nasdaq: PENN) and Sam Houston Race Park (www.shrp.com), through its parent company, announced today a joint venture that will own and operate the Sam Houston Race Park ('SHRP') in Houston, Texas, the Valley Race Park in Harlingen, Texas and a planned racetrack in Laredo, Texas. The new venture is subject to final approval by the Texas Racing Commission and the satisfaction of certain other customary closing conditions.

Shawn Hurwitz, Chief Executive Officer of Sam Houston Race Park, said, "This partnership allows us to work towards a brighter future for Texas horse racing and we look forward to working with Penn National, an industry leader, to make Texas racing competitive again. Over the past decade, the ability of Texas racing to remain competitive has been severely impacted as horse owners and horsemen have left to race in neighboring states where slot machines at pari-mutuel facilities have generated larger purses. Penn National's racing and gaming expertise, financial resources and track record of successfully developing integrated racing and gaming facilities provides us the opportunity to bring those horses and tens of thousands of jobs back to Texas quickly, provided gaming at race tracks is authorized."

Under the terms of the joint venture, Penn National will secure a 50% interest in the joint venture, which will have sole ownership of the above entities including interests in 323 acres at Sam Houston Race Park, 80 acres at Valley Race Park and an option to purchase 135 acres for the planned racetrack in Laredo, Texas. Penn National and SHRP will work collaboratively to strengthen and enhance the operations at the existing pari-mutuel facilities and pursue other opportunities, including the potential for gaming at Texas pari-mutuel facilities, to maximize the overall value of the business.

Peter M. Carlino, Chief Executive Officer of Penn National commented, "This transaction is another step in Penn National's long-term strategy to diversify its pari-mutuel operations and grow its presence in key markets by acquiring or investing in assets that can benefit from the placement of gaming devices. As the nation's largest owner, operator and investor in pari-mutuel racing operations, we believe there are opportunities to strengthen these existing operations, particularly given the demographics of Houston, Sam Houston Race Park's host community. We intend to work closely with SHRP to optimize the use and value of these assets, including the real estate, to maximize Penn National's return from this transaction.

"We also look forward to working with local community and state leaders to advance efforts to bring gaming to existing pari-mutuel facilities in Texas. Penn National has a strong track record of transitioning racing facilities into successful racing and gaming entertainment operations, which benefit local horsemen, local communities and all state residents through economic development leading to the creation of new jobs and new tax revenues. Given the state of the economy, we are eager to begin work with state and local stakeholders on establishing legislation that will quickly reinvigorate racing operations throughout Texas and provide recurring tax revenue needed to fund local and state-wide projects."

About Penn National Gaming

Penn National Gaming owns, operates or has ownership interests in gaming and racing facilities with a focus on slot machine entertainment. The Company presently operates twenty-two facilities in sixteen jurisdictions, including Colorado, Florida, Illinois, Indiana, Iowa, Louisiana, Maine, Maryland, Mississippi, Missouri, New Jersey, New Mexico, Ohio, Pennsylvania, West Virginia, and Ontario. In aggregate, Penn National's operated facilities feature over 26,300 gaming machines, over 500 table games, over 2,000 hotel rooms and approximately 980,000 square feet of gaming floor space. Penn National is the nation's largest owner and operator of pari-mutuel racing facilities in North America, including a joint venture interest in Pimlico, home to the Preakness Stakes.

Penn National Gaming recently added table games to its facilities in West Virginia and Pennsylvania and expects to open the first video lottery terminal facility in the state of Maryland in Cecil County late in the third quarter. Through a joint venture, Penn National is developing a full casino at Kansas Speedway in Kansas City, which is anticipated to open in the first half of 2012, and is also developing casinos in Toledo and Columbus, Ohio, with openings targeted for 2012.

About Sam Houston Race Park

Sam Houston Race Park opened in April 1994 as Houston's first and only live horse racing facility. The Class I horse track, located in the nation's fourth largest city, hosts thoroughbred and quarter horse racing and offers daily simulcast operations. Home to internationally-acclaimed racing surfaces and a 226,000 square foot Grandstand and Pavilion Centre, Sam Houston Race Park is located in Northwest Houston along Beltway 8 near the intersection of Highway 249. The facility also hosts various special events, private parties and meetings, as well as concerts and national touring festivals throughout the year.

About Valley Race Park

Valley Race Park, which was opened in 1990 and acquired by Sam Houston Race Park in 2000, is a 91,000 square foot dog racing and simulcasting facility located in Harlingen, Texas.

This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Actual results may vary materially from expectations. Although Penn National Gaming, Inc. and its subsidiaries (collectively "Penn National") believe that our expectations are based on reasonable assumptions within the bounds of our knowledge of our business and operations, there can be no assurance that actual results will not differ materially from our expectations. Meaningful factors that could cause Penn National's actual results to differ from expectations include, but are not limited to, delays in obtaining regulatory approvals required to complete, or other delays or impediments to completing, the proposed transaction, including relative to satisfaction of certain conditions to closing; risks related to the following: our ability to maintain regulatory approvals for our existing businesses and to receive regulatory approvals for our new businesses; the passage of state, federal or local legislation that would expand, restrict, further tax, prevent or negatively impact operations (such as a smoking ban at any of our facilities) in the jurisdictions in which we do business or seek to do business; the activities of our competitors and the emergence of new competitors; construction factors, including delays, unexpected remediation costs, local opposition and increased cost of labor and materials; the costs and risks involved in the pursuit of those development opportunities; the availability and cost of financing; the effects of local and national economic, credit, capital market, housing, energy conditions on the economy in general and on the gaming and lodging industries in particular; and other factors as discussed in Penn National's Annual Report on Form 10-K for the year ended December 31, 2009, subsequent Quarterly Reports on Form 10-Q and Current Reports on Form 8-K as filed with the SEC. Penn National does not intend to update publicly any forward-looking statements except as required by law.

SOURCE Penn National Gaming, Inc.; Sam Houston Race Park; Valley Race Park