Carlino Chairman and Chief ExecutiveOfficer of Penn National Gaming said Our first quarter results are impressivewhen considering the current macro-economic

Carlino, Chairman and Chief ExecutiveOfficer of Penn National Gaming said, “Our first quarter results are impressivewhen considering the current macro-economic environment and they highlight thestrength and diversity of our gaming operations, the resilience of many of themarkets where we operate and the dedication and focus of our managers andemployees. “Overall, first quarter 2009 property level EBITDA margins of approximately28.6% remained consistent with 2008 levels, reflecting the success of therevenue enhancement and cost containment strategies undertaken by our localmanagement teams to preserve margins in the current environment. “Last month, Penn National`s Empress Casino Hotel in Joliet, Illinois, which wasundergoing a $55 million renovation, was closed following a fire that started inthe land-based pavilion. As a result, we recognized approximately $5 million ofexpense on a pre-tax basis which includes the insurance deductibles for propertydamage, business interruption and employee lost wages, as well as a write-off ofconstruction fees related to the renovation that are not recoverable under ourinsurance policies. Fortunately, all customers and employees were successfullyevacuated, and the fire did not spread to the adjacent casino barge or thefacility`s 100-room hotel.

The completely renovated casino barge will re-openearly this summer with new interior finishes, 1,100 slots, 20 table games andseveral additional upgrades and amenities including a 250-seat buffet and highlimit and VIP areas. Since the fire, we have been working closely with theinsurance carriers and adjusters and we expect to rebuild the land-basedpavilion with the proceeds from our insurance claims. “Following more than three years of planning and construction, at the end of thesecond quarter of 2009, we expect to open our new two-story Hollywood-themedgaming vessel in Lawrenceburg. The new, completely updated facility is expectedto significantly strengthen our competitive position in the market and willfeature almost 3,700 slots, including 1,100 new gaming positions, better overallamenities, a floor layout that improves customer flow and significantly expandedparking capacity, which opened in mid 2008.

With these upgrades and last year`sappointment of a proven gaming industry executive as the General Manager, weexpect to rebuild market share and improve the operating efficiencies andfinancial performance of this property. “Our corporate development, finance, legal and government affairs teams areaggressively pursuing potential growth opportunities in Maryland, Ohio andKansas, where we plan to leverage the strength of our balance sheet, successfuldevelopment track record and significant operating expertise in competing fornew gaming licenses. “During the first quarter, we filed a license application with the MarylandVideo Lottery Facility Location Commission to be considered for a Video LotteryOperation License in Cecil County, Maryland, along Interstate 95, approximately30 miles northeast from the Baltimore Beltway. Our proposed $75 million facilityin Cecil County would include a 150-seat buffet, a coffee shop and parking forover 1,600 vehicles and be readily scaleable to accommodate up to 1,500 gamingdevices.