MTR Gaming Group Announces Passage of Bill Raising Bet Limits for West Virginia Video Slots

Apr 23, 2001, 01:00 ET from MTR Gaming Group, Inc.

    CHESTER, W.Va., April 23 /PRNewswire Interactive News Release/ --
 MTR Gaming Group, Inc. (Nasdaq:   MNTG) today announced that on Saturday,
 April 21, the West Virginia Legislature passed HB 102, which raised the
 maximum wager for video slots at the Company's Mountaineer Racetrack & Gaming
 Resort from $2 to $5.  The Company believes that the Governor will sign the
 bill into law shortly, and the law will be effective as of April 21, 2001.
     State legislators estimated that in the first full year of implementation,
 the increased bet limit, together with customary revenue growth, would
 generate an increase in slot revenue of approximately $178 million from the
 State's four racetracks.  For the State's fiscal year (which began July 1,
 2000) through April 14, 2001, Mountaineer has accounted for 37.3% of the slot
 revenue from the State's racetracks.  The Company hopes to implement the
 change at Mountaineer within 60 to 90 days.
     In addition to raising the maximum wager for slots at the State's
 racetracks, HB 102 will legalize up to 9,000 video lottery terminals for use
 in adult-only sections of bars, restaurants and fraternal organizations.  The
 machines contemplated by the bill would be paper-out (as opposed to coin drop)
 terminals, would be limited to five per location (ten for fraternal
 organizations), and would have a $2 maximum wager.  The bill likewise
 precludes operators from advertising the machines.  The State legislature
 noted that officials have counted approximately 13,000 video poker or "gray"
 machines operating in the State illegally.  It is therefore expected that
 HB 102 will actually reduce the number of gaming machines operating in the
 State.
     The bill also establishes a new distribution scheme for the portion of
 each racetrack's net win in excess of that racetrack's net win for the twelve
 months ending June 30, 2001.  After deducting the State Lottery Commission's
 4% administrative fee (for which the Commission will no longer have to account
 to the tracks to the extent unused), this "Excess Net Terminal Income" -- as
 it is referred to in the bill -- will be subject to a 10% surcharge.  However,
 the bill creates a capital reinvestment fund to which the State will
 contribute 42% of the surcharge.  Generally, for each dollar a racetrack
 expends on capital improvements for the racetrack and adjacent property, the
 track will receive a dollar from the capital reinvestment fund.  Further,
 after deducting the administrative fee and the surcharge from the Excess Net
 Terminal Income, the racetracks will receive 42% (as opposed to 47%) of the
 remaining net win.
     Commenting on the legislation, Edson R. (Ted) Arneault, MTR Gaming Group's
 president and chief executive officer, stated, "We are obviously pleased with
 the increase in the maximum wager for our slots in West Virginia.  We expect
 the higher limits to generate a significant increase in slot play and net win.
 A higher maximum wager will both provide more choices for our existing patrons
 and should allow us to increase our market penetration by attracting new
 patrons who prefer the higher limits.  We believe that of all the amendments
 to the Racetrack Video Lottery Act we have urged since its passage in 1994
 (simulated spinning reels in 1996, increasing the ratio of machines in the
 lodge versus racetrack buildings from 1:1 to 2:1 in 1998 and eliminating the
 ratio in 2000, and coin drop slots in 1999), the impact of this increase on
 Mountaineer's results will be second only to the implementation of coin drop
 slots in 1999.  We wish to express our appreciation to the West Virginia
 Legislature, which worked tirelessly through the regular session and an
 extended session in order to give these issues a full hearing."
     With respect to the legalization of limited video lottery in bars,
 restaurants and fraternal organizations, Mr. Arneault added, "These machines
 and the environment in which they operate are very different from the variety
 of games and destination resort we are creating at Mountaineer.  Moreover, as
 the Legislature noted, these machines have been in operation for years.  In
 short, we do not believe that competition from these machines will have a
 material impact on our results at Mountaineer."
     Finally, Mr. Arneault commented on the surcharge and increased tax rate
 applicable to slot revenue in excess of Mountaineer's slot revenue for the
 twelve months ending June 30, 2001.  "While we certainly would have preferred
 the bill not include a surcharge -- even on so-called "excess income" -- we
 are pleased that the Legislature, by providing essentially an investment tax
 credit, recognized the value of our commitment to building infrastructure and
 a tourist attraction that can continue to grow and create new jobs.  We
 anticipate that Mountaineer's aggressive expansion plans will enable us to
 obtain the maximum payment from the capital reinvestment fund for many years
 to come."
 
     MTR Gaming Group, Inc., a West Virginia-based corporation, through
 subsidiaries, owns and operates the Mountaineer Racetrack & Gaming Resort in
 Chester, West Virginia, the Ramada Inn and Speedway Casino in North Las Vegas,
 and the Ramada Inn and Speakeasy Casino in Reno, Nevada.  The Mountaineer
 complex currently encompasses a thoroughbred racetrack, including off track
 betting and export simulcasting, 1,905 video lottery terminals, a 101-room
 hotel, golf course, Spa & Fitness Centre, fine dining and entertainment, the
 Speakeasy Gaming Saloon, and The Harv.
     Except for historical information, this press release contains
 forward-looking statements concerning, among other things, future plans and
 operating results and the impact of the expected increase in the maximum wager
 for slots in West Virginia.  Such statements are based on the Company's
 current plans, expectations and beliefs.  Actual results could differ
 materially based upon a number of factors, including but not limited to
 weather conditions, adverse changes in West Virginia video lottery laws or the
 rates of taxation of video lottery operations, legalization of new forms of
 gaming in the Company's target markets, which would lead to increased
 competition, competition, general economic conditions affecting the resort
 business, dependence upon key personnel, market acceptance of the Company's
 Nevada properties, maintaining the "grandfathered" status of the Nevada
 properties, and other factors described in the Company's periodic reports
 filed with the Securities and Exchange Commission.
 
     For Additional Information, Please Contact:
     MTR Gaming Group, Inc.              Investor Relations:
     Edson R. (Ted) Arneault,            The Equity Group Inc.
     President & CEO                     www.theequitygroup.com
     (304) 387-8300                      Loren G. Mortman
                                         (212) 836-9604
                                         lmortman@equityny.com
                                         Linda Latman (212) 836-9609
 
                     MAKE YOUR OPINION COUNT -  Click Here
                http://tbutton.prnewswire.com/prn/11690X84213237
 
 

SOURCE MTR Gaming Group, Inc.
    CHESTER, W.Va., April 23 /PRNewswire Interactive News Release/ --
 MTR Gaming Group, Inc. (Nasdaq:   MNTG) today announced that on Saturday,
 April 21, the West Virginia Legislature passed HB 102, which raised the
 maximum wager for video slots at the Company's Mountaineer Racetrack & Gaming
 Resort from $2 to $5.  The Company believes that the Governor will sign the
 bill into law shortly, and the law will be effective as of April 21, 2001.
     State legislators estimated that in the first full year of implementation,
 the increased bet limit, together with customary revenue growth, would
 generate an increase in slot revenue of approximately $178 million from the
 State's four racetracks.  For the State's fiscal year (which began July 1,
 2000) through April 14, 2001, Mountaineer has accounted for 37.3% of the slot
 revenue from the State's racetracks.  The Company hopes to implement the
 change at Mountaineer within 60 to 90 days.
     In addition to raising the maximum wager for slots at the State's
 racetracks, HB 102 will legalize up to 9,000 video lottery terminals for use
 in adult-only sections of bars, restaurants and fraternal organizations.  The
 machines contemplated by the bill would be paper-out (as opposed to coin drop)
 terminals, would be limited to five per location (ten for fraternal
 organizations), and would have a $2 maximum wager.  The bill likewise
 precludes operators from advertising the machines.  The State legislature
 noted that officials have counted approximately 13,000 video poker or "gray"
 machines operating in the State illegally.  It is therefore expected that
 HB 102 will actually reduce the number of gaming machines operating in the
 State.
     The bill also establishes a new distribution scheme for the portion of
 each racetrack's net win in excess of that racetrack's net win for the twelve
 months ending June 30, 2001.  After deducting the State Lottery Commission's
 4% administrative fee (for which the Commission will no longer have to account
 to the tracks to the extent unused), this "Excess Net Terminal Income" -- as
 it is referred to in the bill -- will be subject to a 10% surcharge.  However,
 the bill creates a capital reinvestment fund to which the State will
 contribute 42% of the surcharge.  Generally, for each dollar a racetrack
 expends on capital improvements for the racetrack and adjacent property, the
 track will receive a dollar from the capital reinvestment fund.  Further,
 after deducting the administrative fee and the surcharge from the Excess Net
 Terminal Income, the racetracks will receive 42% (as opposed to 47%) of the
 remaining net win.
     Commenting on the legislation, Edson R. (Ted) Arneault, MTR Gaming Group's
 president and chief executive officer, stated, "We are obviously pleased with
 the increase in the maximum wager for our slots in West Virginia.  We expect
 the higher limits to generate a significant increase in slot play and net win.
 A higher maximum wager will both provide more choices for our existing patrons
 and should allow us to increase our market penetration by attracting new
 patrons who prefer the higher limits.  We believe that of all the amendments
 to the Racetrack Video Lottery Act we have urged since its passage in 1994
 (simulated spinning reels in 1996, increasing the ratio of machines in the
 lodge versus racetrack buildings from 1:1 to 2:1 in 1998 and eliminating the
 ratio in 2000, and coin drop slots in 1999), the impact of this increase on
 Mountaineer's results will be second only to the implementation of coin drop
 slots in 1999.  We wish to express our appreciation to the West Virginia
 Legislature, which worked tirelessly through the regular session and an
 extended session in order to give these issues a full hearing."
     With respect to the legalization of limited video lottery in bars,
 restaurants and fraternal organizations, Mr. Arneault added, "These machines
 and the environment in which they operate are very different from the variety
 of games and destination resort we are creating at Mountaineer.  Moreover, as
 the Legislature noted, these machines have been in operation for years.  In
 short, we do not believe that competition from these machines will have a
 material impact on our results at Mountaineer."
     Finally, Mr. Arneault commented on the surcharge and increased tax rate
 applicable to slot revenue in excess of Mountaineer's slot revenue for the
 twelve months ending June 30, 2001.  "While we certainly would have preferred
 the bill not include a surcharge -- even on so-called "excess income" -- we
 are pleased that the Legislature, by providing essentially an investment tax
 credit, recognized the value of our commitment to building infrastructure and
 a tourist attraction that can continue to grow and create new jobs.  We
 anticipate that Mountaineer's aggressive expansion plans will enable us to
 obtain the maximum payment from the capital reinvestment fund for many years
 to come."
 
     MTR Gaming Group, Inc., a West Virginia-based corporation, through
 subsidiaries, owns and operates the Mountaineer Racetrack & Gaming Resort in
 Chester, West Virginia, the Ramada Inn and Speedway Casino in North Las Vegas,
 and the Ramada Inn and Speakeasy Casino in Reno, Nevada.  The Mountaineer
 complex currently encompasses a thoroughbred racetrack, including off track
 betting and export simulcasting, 1,905 video lottery terminals, a 101-room
 hotel, golf course, Spa & Fitness Centre, fine dining and entertainment, the
 Speakeasy Gaming Saloon, and The Harv.
     Except for historical information, this press release contains
 forward-looking statements concerning, among other things, future plans and
 operating results and the impact of the expected increase in the maximum wager
 for slots in West Virginia.  Such statements are based on the Company's
 current plans, expectations and beliefs.  Actual results could differ
 materially based upon a number of factors, including but not limited to
 weather conditions, adverse changes in West Virginia video lottery laws or the
 rates of taxation of video lottery operations, legalization of new forms of
 gaming in the Company's target markets, which would lead to increased
 competition, competition, general economic conditions affecting the resort
 business, dependence upon key personnel, market acceptance of the Company's
 Nevada properties, maintaining the "grandfathered" status of the Nevada
 properties, and other factors described in the Company's periodic reports
 filed with the Securities and Exchange Commission.
 
     For Additional Information, Please Contact:
     MTR Gaming Group, Inc.              Investor Relations:
     Edson R. (Ted) Arneault,            The Equity Group Inc.
     President & CEO                     www.theequitygroup.com
     (304) 387-8300                      Loren G. Mortman
                                         (212) 836-9604
                                         lmortman@equityny.com
                                         Linda Latman (212) 836-9609
 
                     MAKE YOUR OPINION COUNT -  Click Here
                http://tbutton.prnewswire.com/prn/11690X84213237
 
 SOURCE  MTR Gaming Group, Inc.