FOR IMMEDIATE RELEASE
MTR GAMING GROUP REPURCHASES ADDITIONAL STOCK,
PROVIDES STATUS REPORT ON OPERATIONS AND EXPANSION,
AND REITERATES POSITIVE OUTLOOK
CHESTER, WV - September 26,
2001 - MTR Gaming Group, Inc. (Nasdaq National Market:MNTG)
today announced that it repurchased
127,600 shares of the Company's Common Stock on September
19 and 20, 2001 in accordance with the Securities and Exchange
Commission's September 14, 2001 emergency order under Section
12(k) (2) of the Securities Exchange Act of 1934. The transactions
were made in the open market at prevailing market prices
for a total of $1,053,599. Since announcing its repurchase
program in April of 2000, the Company has repurchased a
total of 405,600 shares for $2.9 million. Additionally, due
to
management's positive outlook, the Company has asked its
bankers to permit the Company to increase the amount of
funds available for the repurchase program from $3 million
to $10
million immediately, notwithstanding that the Company's
credit agreement conditions the increase on the Company having
achieved
twelve months trailing EBITDA of $50 million.
Responding to inquiries from shareholders and institutional
investors concerning the impact of the tragic events of September
11 on the Company's operations and prospects, Edson R. (Ted)
Arneault, President and CEO of MTR Gaming Group, stated, "We
cannot predict the effect that terrorism and war will have
on our nation's economy and the gaming and entertainment industry.
However, we do not expect Mountaineer to be affected by the
recent reduction in air travel, since historically nearly all
of Mountaineer customers travel by car or bus from Ohio, Pennsylvania
and West Virginia. Mountaineer's location within a two-hour
drive of approximately 10 million people thus distinguishes
us from gaming destinations such as the Las Vegas Strip or
the Caribbean, which rely heavily on air travel."
Mr. Arneault continued, "Gaming revenues at Mountaineer
for the weeks ended September 15 and September 22, 2001 were
$3.4 million and $3.6 million, respectively. While these numbers
represent double-digit increases (13% and 20%, respectively)
compared to the same weeks last year, they are approximately
20% below what we would have expected based on the pre-September
11 trend, which included August's all-time slot revenue record
of $18.6 million. Based upon the incremental increase from
this week over last, we are hopeful that our results will soon
return to the pre-September 11 trend. Handle for export simulcasting
compared favorably with the preceding weeks. Though slot results
were below our expectations, in these difficult times for our
nation, we nevertheless view the overall results at Mountaineer
as confirmation of the strength of our Mountaineer brand. We
are likewise seeing results from our Nevada properties approximately
20% below our expectations over the last couple of weeks."
MTR noted that slot results do not reflect all of the 595
additional machines approved by the Lottery Commission on July
31 or the full impact of conversion of Mountaineer's slot machines
to accept the increased bet limit of $5.00. Slot machine suppliers
will not obtain regulatory approval by the September 30 date
the Company had anticipated. As of this date, Mountaineer operates
2,347 machines, of which 474 accept the new maximum bet. The
Company now expects to convert the majority of the slots by
November 30.
Looking forward, Mr. Arneault further stated, "The downturn
in the economy may impact Mountaineer to some extent, but we
expect to achieve steady growth due to our unique offerings,
the increase in the number of slot machines, implementation
of the increased bet limit, lack of reliance on air travel,
and our core customer base of retirees who use disposable income
for entertainment. Accordingly, our strategy for growth and
expansion remains unaltered: our new hotel, which will house
262 well-appointed rooms and suites, should open in the second
quarter of 2002 and enable us to accommodate demand at peak
times and traffic from our new convention center; we continue
to pursue regulatory approval to build Presque Isle Downs in
Erie, Pennsylvania; and we continue to seek out other racing
and parimutuel businesses in neighboring states."
As reported in the Schedule 13D filed on July 10, 2001, 437,000
shares were sold of MTR's Common Stock that were indirectly
owned by Mr. Arneault through ten limited partnerships over
which he exercised sole voting and investment power. In most
instances, Mr. Arneault had a 1% interest; in others he had
a 10% interest. The shares were sold in open market transactions
in connection with the planned orderly liquidation of the partnerships,
which were founded in the early to mid-1980s and have held
no assets except these shares of the Company's stock since
1992. Mr. Arneault has not effected any other sales of the
Company's Common Stock in the last year and has never sold
any shares that he owns directly.
About MTR Gaming Group
MTR Gaming Group owns and operates the Mountaineer Casino Racetrack and Resort in Chester, West Virginia, which currently encompasses
a thoroughbred racetrack with off-track betting and export
simulcasting, 3,200 slot machines, 359 hotel rooms, golf course,
spa & fitness center, theater and events center, convention
center and fine dining and entertainment. The Company also
owns and operates the Ramada Inn and Speedway Casino in North
Las Vegas, and holds a license to build a new thoroughbred
racetrack with parimutuel wagering in Erie, Pennsylvania. MTR
is included on the Russell 2000® and Russell® 3000
Indexes. For more information, please visit www.mtrgaming.com.
Except for historical information, this
press release contains forward-looking statements concerning,
among other things, the acquisition of Scioto Downs, Inc.
Such statements are based on MTR’s current plans and
expectations. Such statements are subject to a number of
risks and uncertainties that could cause the statements made
to be incorrect and/or for actual results to differ materially.
Those risks and uncertainties are described in the Company’s
periodic reports filed with the Securities and Exchange Commission,
and with respect to the Scioto Downs acquisition are described
in the Merger Agreement, as amended, which is attached as
exhibits to the Company’s reports on Forms 8-K filed
December 24, 2002,
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