Penn National, MTGA Amend Purchase Agreement

WYOMISSING, Pennsylvania -- (PRESS RELEASE) -- Penn National Gaming, Inc. (Nasdaq: PENN) announced today that it has agreed with the Mohegan Tribal Gaming Authority (MTGA) to amend its October 14, 2004 Purchase Agreement (Purchase Agreement), under which the MTGA will irrevocably waive any post-closing termination rights under the Purchase Agreement and will release Penn National from substantially all liability arising out of the Purchase Agreement (including ordinary course claims alleged by the MTGA after the sale). Pursuant to the amended agreement, Penn National will make payments to the MTGA totaling $30 million over a five-year period beginning with the one year anniversary of the commencement of slot operations at Pocono Downs.

Peter M. Carlino, Chief Executive Officer of Penn National commented, "The amended purchase agreement finalizes the Pocono Downs sale and eliminates potential disputes related to the transaction. We look forward to directing our full energies and resources in Pennsylvania to the development of Hollywood Casino at Penn National."