Penn National Recalculates Notes

WYOMISSING, Pennsylvania -- (PRESS RELEASE) -- Penn National Gaming, Inc. (PENN: Nasdaq) ("Penn") announced today the recalculated pricing terms of the previously announced cash tender offers commenced by its wholly owned subsidiary Thoroughbred Acquisition Corp. ("TAC") for any and all of the $200 million aggregate outstanding principal amount of Argosy Gaming Company's ("Argosy") 9% senior subordinated notes due 2011 (CUSIP No. 040228-AJ-7) (the "9% Argosy notes") and any and all of the $350 million aggregate outstanding principal amount of Argosy's 7% senior subordinated notes due 2014 (CUSIP No. 040228-AL-2) (the "7% Argosy notes").

The Total Consideration for each $1,000 principal amount of 9% Argosy notes validly tendered and not withdrawn prior to 5:00 p.m. New York City time, on August 3, 2005 (the "Consent Date") is $1,085.07 and for 7% Argosy notes validly tendered and not withdrawn prior to 5:00 p.m. New York City time, on the Consent Date is $1,109.39, each of which includes a consent payment of $10.00. The Total Consideration for the notes were determined by reference to a fixed spread of 50 basis points over the yield, based on the bid price, on the 2.375% U.S. Treasury Notes due August 31, 2006 for the 9% Argosy notes and the 3.25% U.S. Treasury Notes due January 15, 2009 for the 7% Argosy notes, each of which was calculated at 2:00 p.m., New York City time, on September 14, 2005. The reference yield and the tender offer yield for the 9% Argosy notes are 3.832% and 4.332%, respectively. The reference yield and the tender offer yield for the 7% Argosy notes are 3.895% and 4.395%, respectively.

Holders tendering their notes after the Consent Date, but on or prior to 12:00 midnight, on September 27, 2005 (the "Expiration Date") will receive the tender offer consideration of $1,075.07 per $1,000 principal amount of 9% Argosy notes tendered and $1,099.39 per $1,000 principal amount of 7% Argosy notes tendered, but will not receive the consent payment.

The offers remain open and are each scheduled to expire at 12:00 midnight, New York City time, on September 27, 2005, unless extended or earlier terminated. If the Expiration Date of the offers is extended by more than three business days then the Total Consideration and the Tender Offer Consideration will be recalculated as of the tenth business day prior to such Expiration Date. The tender offers and the consent solicitations are being conducted in connection with Penn's pending acquisition of Argosy. The closing of the acquisition of Argosy remains subject to certain conditions, including the receipt of gaming approvals in Illinois. Penn has been informed that the Illinois Gaming Board ("IGB") will place the proposed Argosy transaction on each upcoming public meeting agenda to ensure that the matter can legally be discussed and decided (pursuant to IGB regulations) by the IGB at the earliest possible opportunity. The IGB staff also confirmed to Penn that being placed on the agenda and then tabled is not prejudicial to Penn, but rather a result of the IGB's workload. Penn continues to expect that if the IGB's approval is secured that it will be able to complete the transaction shortly thereafter.