Equus Gaming Co.: Earnings News Release EQUUS GAMING COMPANY L.P. EXECUTIVE OFFICES 222 Smallwood Village Center, St. Charles, Maryland 20602 (301) 843-8600 FAX (301) 870-5487 News Release FOR IMMEDIATE RELEASE CONTACT April 14, 1998 J. Manuel Rivera (787) 753-0676 EQUUS REPORTS 1997 OPERATING RESULTS ST. CHARLES, Md._ Equus Gaming Company L.P. (Nasdaq: EQUUS), a publicly traded partnership with horse racing and gaming interests in the Caribbean, today announced operating results for the year ended December 31, 1997. Through its ownership of a 99 percent interest in Housing Development Associates S.E. (HDA), Equus operating results are primarily attributed to El Comandante race track in Puerto Rico, V Centenario race track in the Dominican Republic, and effective January 1, 1998, Presidente Remon race track in Panama. For the year, Equus had generated net income of $2,479,000 or $.39 per Unit, on revenues of $24,298,000 compared with net income of $827,000 or $.13 per Unit, on revenues of $21,896,000 for 1996. These results include gains of $4,669,000 in 1997 and $581,000 in 1996 from the sale to a subsidiary of Paxson Communications Corporation (AMEX: PXN) of Telenet, a three-station television network that was originally acquired for the purpose of ensuring the availability of live television coverage of El Comandante races throughout Puerto Rico. In connection with these transactions, Paxson agreed to provide broadcast time under a long-term contract for continued live racing telecasts of El Comandante races. The 1997 results include expenses of $320,000 related to the cancellation of certain indebtedness payable by the operator of El Comandante race track. It also includes an extraordinary expenses of $459,000 for 10 percent premium paid on early redemption of $2.5 million in principal amount of HDA's 11 3/4 percent first mortgage notes due December 15, 2003, and write-off of related deferred financing costs and note discount. The early redemption of notes was a condition to the approval obtained from the noteholders for the redemption by HDA of the 17 percent interest owned by a minority partner which increased Equus' ownership in HDA from 82% to 99%. Thomas B. Wilson, President of Equus, said that the 99% limited partnership interest in HDA was transferred to Equus Entertainment Corporation, a Puerto Rico company, which transaction is pending final approval from the Puerto Rico Racing Board. This is an interim step in the process of converting Equus to a corporation rather than a partnership. Operating results from HDA's lease of El Comandante were affected by a decline in wagering, attributable in part to additional gaming opportunities that are available to the public in Puerto Rico, particularly slot machines. This resulted in a decrease in rental income of $601,000 (4.2%) from $14,321,000 in 1996 to $13,720,000 in 1997. However, due to certain defaults by the operator of El Comandante under its lease with HDA, the lease was terminated effective December 31, 1997. El Comandante is now operated by a wholly-owned subsidiary of HDA. Mr. Wilson said, "This consolidation of ownership and operations under Equus simplifies the structure of the business and will permit overhead cost savings. The eventual conversion of Equus to a corporation will further simplify the structure so that the business can be better managed and better understood by investors." Operating revenues of V Centenario in the Dominican Republic improved by $452,000 (9%) from $5,036,000 in 1996 to $5,488,000 in 1997, while operating costs in 1997 remained at the same level as in 1996. The increase in revenues was partly attributed to net fees earned under a contract for the distribution system of an electronic lottery that commenced in November 1997. Also, the Government agreed to invest from July 1997 to January 1998 a portion of its tax receipts to improve racing in the Dominican Republic and is currently evaluating the extension of this economic assistance beyond January 1998. Nevertheless, V Centenario had net losses of $1,100,000 in 1997 and $1,494,000 in 1996. Although HDA's interest in these losses is 55%, for 1997 generally accepted accounting principles required HDA to record $309,000 of minority stockholders' losses in excess of their investment. Mr. Wilson indicated that the racing program of V Centenario has been expanded via television throughout the Dominican Republic and that the agency network has been expanded from 220 in 1996 to 302 in 1997, with a planned increase to 450 agencies by the end of 1999. Also, it is planned that a telephone betting system in the Dominican Republic will be installed during 1998 to capture the upper income market. EQUUS GAMING COMPANY L.P. COMPARABLE RESULTS Twelve months Ended December 31, 1997 1996 Revenues 24,298,000 $ 21,896,000 Expenses 19,587,000 $20,796,000 Income before income taxes, minority interests 4,711,000 1,110,000 Provision for Income Taxes Current 2,000 263,000 Deferred 893,000 137,000 Income (Loss) before minority interest, extraordinary item 3,816,000 700,000 Minority interest 878,000 (127,000) Income before extraordinary item 2,938,000 827,000 Extraordinary item - early redemption of debt 459,000 -- Net Income $2,479,000 $827,000 Extraordinary item per Unit $(.07) -- Net Income per Unit $.39 $.13 Weighted Average Units Outstanding 6,334,000 6,334,000 Ends.