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Debt Holders of Hollywood Casino Shreveport and Shreveport Capital Corporation Fail to Provide Consents

3/3/2003

WYOMISSING, Pa.--March 3, 2003--Penn National Gaming, Inc. (NASDAQ:PENN) announced today that the holders of record as of February 21, 2003 of the 13% Senior Secured Notes due 2006 and the 13% First Mortgage Notes due 2006 issued by Hollywood Casino Shrev

WYOMISSING, Pa.--March 3, 2003--Penn National Gaming, Inc. (NASDAQ:PENN) announced today that the holders of record as of February 21, 2003 of the 13% Senior Secured Notes due 2006 and the 13% First Mortgage Notes due 2006 issued by Hollywood Casino Shreveport and Shreveport Capital Corporation failed to provide the required majority to consent to proposed waivers requested by one of its wholly owned subsidiaries (the "Company") with respect to the notes.

As previously announced, the principal purpose of the proposed waivers was to eliminate the risk of a default under the indentures governing the notes that could occur as a result of the recently completed merger of the Company with and into Hollywood Casino Corporation. While the notes are non-recourse to Hollywood Casino Corporation, a default would occur in the event that the issuers of the notes or any other person fails to make or consummate an offer to purchase the notes at 101% of the principal amount thereof following the merger as required under the indentures and the notes due to the change of control resulting from the merger. Penn National Gaming previously announced it does not intend to provide, nor to permit any of its subsidiaries to provide, financing or credit support to Hollywood Casino Shreveport and Shreveport Capital Corporation to fund a change of control offer to repurchase the notes.

In addition, Hollywood Casino Shreveport and Shreveport Capital Corporation have recently reported that they have limited liquidity. In the Independent Auditors' Report, included with the recently filed Hollywood Casino Shreveport and Shreveport Capital Corporation Annual Report on Form 10-K for fiscal year 2002, their independent auditors have expressed substantial doubt about their ability to continue as a going concern.

In connection with the acquisition, Penn National Gaming expects to reduce the carrying value of the Shreveport asset based on its estimate of fair market value at the time of the merger. Among the factors that will be considered in this analysis will be the property's performance, single property asset sale multiples on property cash flow, anticipated future cash flows, overall conditions in the Shreveport market and independent appraisal.

Penn National Gaming owns and operates: three Hollywood Casino properties located in Aurora, Illinois, Tunica, Mississippi and Shreveport, Louisiana; Charles Town Races & Slots in Charles Town, West Virginia; two Mississippi casinos, the Casino Magic hotel, casino, golf resort and marina in Bay St. Louis and the Boomtown Biloxi casino in Biloxi; the Casino Rouge, a riverboat gaming facility in Baton Rouge, Louisiana and the Bullwhackers casino properties in Black Hawk, Colorado. Penn National also owns two racetracks and eleven off-track wagering facilities in Pennsylvania; the racetrack at Charles Town Races & Slots in West Virginia; a 50% interest in the Pennwood Racing Inc. joint venture which owns and operates Freehold Raceway in New Jersey; and operates Casino Rama, a gaming facility located approximately 90 miles north of Toronto, Canada, pursuant to a management contract.

In addition to historical facts or statements of current condition, this press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Some of these statements include those regarding the financial and operational effects and prospects of our acquisition of Hollywood Casino Corporation, our expectations of favorable regulatory developments in certain jurisdictions in which we operate, our prospects for future growth and our optimism in light of current economic conditions. These statements are subject to a number of risks and uncertainties that could cause the statements made to be incorrect and the actual results to differ materially. The Company describes certain of these risks and uncertainties in its filings with the Securities and Exchange Commission, including its Annual Report on Form 10-K for the year ended December 31, 2001. Some of these risks include those relating to the ability of the Company to integrate and manage facilities it acquires, risks relating to the development and expansion of properties, risks of increased competition and risks relating to the fact that we are heavily regulated by gaming authorities. The Company does not intend to update publicly any forward-looking statements except as required by law. The cautionary advice in this paragraph is permitted by the Private Securities Litigation Reform Act of 1995.

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