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WYOMISSING, PA-Penn National Gaming CFO William Clifford told attendees at a recent Lehman Brothers’ small cap conference that the locally based company anticipated opening the first phase of a slot machine facility at Penn National Race Course in Grantville in early 2006. It will contain 2,000 slot machines that are projected to generate $160 million in gaming revenue with a 25% operating margin in its first year of operation.

The facility will expand to 5,000 machines “based on demand,” he said. At the property’s maturity and full build-out, he anticipates $310 million in annual gaming revenue from that location. In order to operate slots at the Grantville racetrack, Penn National sold Pocono Downs in Wilkes-Barre, because the state gaming law does not allow a company to own more than 33% of a second slot machine venue in the state, and both Pennsylvania properties were granted slot machine licenses.

Meanwhile, Penn National owns Bangor Downs in Bangor, ME, the only facility eligible to operate slot machines it that state. It can operate 1,500 machines there and expects to open in mid-2006. Clifford did not project anticipated income from the Maine facility.

It acquired the property from Bangor Historic Track Inc. approximately a year ago. Its total investment budget for that facility is $125 million, which includes the $51-million purchase price. In all, Penn National owns and operates eight casino and resort properties and four racetracks in the US along with 11 off-track betting parlors in Pennsylvania, a casino in Toronto, and a 50% interest in Freehold Raceway in New Jersey.

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