Notes

Outline

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Safe Harbor Disclosure

Transaction Overview Transaction value of $2.2 billion $47.00 per share in cash 16.4% premium to closing price of $40.38 (11/02/04) 30% premium to average closing price over the last 90 days Aggregate $1.4 billion in total equity consideration Repay $805 million of Argosy’s outstanding indebtedness TTM transaction EBITDA multiple of 8.5x Fully committed financing Expected closing:  2H ’05 Expected to be immediately accretive to EPS upon closing

Transaction Rationale Will create the nation’s third largest casino operator In excess of $2 billion in pro forma annual revenues In excess of $550 million in LTM EBITDA (includes $20 million in corporate synergies) Significant near-term growth prospects at both entities Expansion into three new jurisdictions – Indiana, Missouri, Iowa Complimentary geographic asset base Further diversifies cash flows Combined company will be broadly diversified by property and region No single property will account for more than 20% of revenue No single property will account for more than 25% of EBIDTA Consistent with Penn National’s successful long-term growth strategy Regional properties operationally similar to PENN’s existing portfolio

Combined Portfolio Overview

Historical Record of Delivering Strong, Stable Growth

Revenue Diversification – by Region

EBITDA Diversification – by Region

EBITDA Diversification – by Property

Sources and Uses of Funds

Capitalization

Pro Forma Credit Statistics

Value Investor/ Growth Operator Rapidly growing operator of regional gaming properties Expanding into new markets Capitalizing on jurisdictional growth opportunities “Slot focus” in strong regional drive-to markets Growing cash flow, well-diversified by market and property Proven, disciplined acquisition strategy Successfully integrated three acquisitions in last four years In each case, reduced total transaction value as multiple of EBITDA in first twelve months of operations Experienced management team with 10-year track record of building shareholder value 36% compound annual growth in share price since May ‘94 IPO Significant near-term growth prospects at Penn National and Argosy Gaming

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