Penn National Enters into Agreement with Greenwood New Jersey

Penn National Gaming, Inc. (Nasdaq: PENN) has entered into a joint venture agreement with Greenwood New Jersey, Inc. (GNJI), which has a definitive agreement to purchase Freehold Raceway, and secure a long-term lease on Garden State Park, the principal assets of International Thoroughbred Breeders, Inc. (ITB), for $45 million and an additional $12.5 million contingent upon the expansion of the facilities.

GNJI is a wholly-owned subsidiary of Greenwood Racing, Inc., the owner of Philadelphia Park Racetrack. Pursuant to the joint venture, Penn National will acquire a 50% interest in the New Jersey entity which is purchasing the ITB assets. Greenwood New Jersey, Inc. has provided notice to the board of directors of International Thoroughbred Breeders that it has entered into the joint venture agreement with Penn National.

Under the terms of the joint venture agreement, Penn National and Philadelphia Park will acquire the International Thoroughbred Breeders, Inc. assets for up to $57.5 million in cash and notes. Penn National intends to fund its portion of the cash payment from cash on hand and available bank lines. The joint venture parties will operate Garden State Park under a lease from ITB, and will share equally in the income derived from Garden State Park and Freehold Raceway.

Greenwood New Jersey and Penn National will apply for licensing from the New Jersey Racing Commission and seek other regulatory approvals and they intend to close on the transaction immediately upon securing such approvals.

On Tuesday, November 3, 1998 New Jersey voters passed a referendum granting the state legislature decision-making power to approve off-track wagering (OTW) and telephone wagering.

"The Penn National/Philadelphia Park joint venture is attractive strategically and economically and extends our position as a leading consolidator of the pari-mutuel industry," Penn National CEO Peter M. Carlino said. "The joint venture also meets our criteria for expansion as we believe we can improve the entertainment product delivered to patrons, build purses for the horsemen, create economic stimulus and employment, and enhance Penn National's shareholder value. Upon securing the necessary approvals, the joint venture intends to bring to New Jersey high quality entertainment centers similar to the ten OTWs that we successfully operate throughout Pennsylvania."

Penn National Gaming owns, operates and conducts wagering at its Penn National Race Course and Pocono Downs Racetrack, and at its ten off-track wagering (OTW) facilities in Allentown, Erie, Reading, Chambersburg, York, Williamsport, Lancaster, Hazleton, Carbondale and Johnstown, Pennsylvania. The company's eleventh proposed OTW facility in East Stroudsburg, Pennsylvania is expected to open in 1999. Penn National also owns and operates Charles Town Races, featuring 799 slot machines and a live thoroughbred racing facility in Jefferson County, West Virginia.