Share Repurchase Program in Conjunction with Shareholder Approval of 2007 Equity Compensation Plans

WYOMISSING, Penn.--(BUSINESS WIRE)--April 30, 2007 Penn National Gaming, Inc. (PENN: Nasdaq) announced today that its Board of Directors has authorized the repurchase of up to $200 million of the Company's common stock assuming shareholder approval of the 2007 Employees Long Term Incentive Compensation Plan and the 2007 Long Term Incentive Compensation Plan for Non-Employee Directors of the Company ("the 2007 Equity Compensation Plans"). Details of both plans are included in the Company's Notice of Annual Meeting of Shareholders and Proxy Statement, which began being mailed today to shareholders of record on April 9, 2007 and which can be accessed through the Company's web site, www.pngaming.com. Penn National Gaming's Annual Meeting of Shareholders will take place on June 6, 2007.

The repurchase program will authorize the Company to purchase in open market or privately negotiated transactions Penn National Gaming shares in amounts equivalent to options or other equity awards settled in stock issued pursuant to the 2007 Equity Compensation Plans within 120 days of such option or other award issuance, subject to applicable legal requirements and appropriate market conditions, as required by the 2007 Equity Compensation Plans. Further, in conjunction with shareholder approval of the 2007 Equity Compensation Plans, any future grants of options and other equity awards settled in stock under previously approved long-term incentive plans will also be subject to this repurchase program. Penn National Gaming has approximately 87.5 million diluted weighted average shares outstanding.

In September 2006 lenders in Penn National Gaming's $2.725 billion senior secured credit facility approved modifications to certain covenants which enabled the Company to repurchase up to $200 million of its equity or debt securities. The Company may seek additional amendments to its senior secured credit facility to modify applicable covenants to enable the Company to repurchase more than $200 million of its equity or debt securities.

Peter M. Carlino, Chief Executive Officer of Penn National commented, "The Company's Board of Directors has authorized a common stock repurchase program that will enable the Company to incentivize employees and directors through equity compensation without the dilution related to the issuance of options. In addition, the Company believes that the structure of this repurchase program will reflect the true cost of equity grants since the interest expense associated with the repurchases will be included in the income statement. Pursuant to GAAP and FAS 123R, the Company will continue to be required to record equity compensation expense. However the Company believes that such expense should be excluded when evaluating the true operating performance of the Company."

About Penn National Gaming

Penn National Gaming owns and operates casino and horse racing facilities with a focus on slot machine entertainment. The Company presently operates eighteen facilities in fourteen jurisdictions including Colorado, Illinois, Indiana, Iowa, Louisiana, Maine, Mississippi, Missouri, New Jersey, New Mexico, Ohio, Pennsylvania, West Virginia, and Ontario. In aggregate, Penn National's operated facilities feature nearly 23,000 slot machines, over 400 table games, approximately 1,731 hotel rooms and approximately 808,000 square feet of gaming floor space.

This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Actual results may vary materially from expectations. Penn describes certain of these risks and uncertainties in its filings with the Securities and Exchange Commission, including its Annual Report on Form 10-K for the year ended December 31, 2006. Meaningful factors which could cause actual results to differ from expectations described in this press release include, but are not limited to, the outcome of the shareholder vote at the Annual Meeting of Shareholders, the amount and type of equity compensation to be issued by the Company and the timing and amount of share repurchases executed in connection therewith. Furthermore, the Company does not intend to update publicly any forward-looking statements except as required by law. The cautionary advice in this paragraph is permitted by the Private Securities Litigation Reform Act of 1995.

CONTACT: Penn National Gaming, Inc. William J. Clifford Chief Financial Officer 610-373-2400 or Jaffoni & Collins Incorporated Joseph N. Jaffoni, Richard Land 212-835-8500 penn@jcir.com

Last Updated: April 30, 2007 15:42 EDT