Quarterly Report (10-q)

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MTR GAMING GROUP, INC. TABLE OF CONTENTS

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

FORM 10-Q


ý		QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 2014
o		TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

COMMISSION FILE NO.: 000-20508

MTR Gaming Group, Inc.
(Exact name of registrant as specified in its charter)


DELAWARE (State or other jurisdiction of incorporation)		84-1103135 (I.R.S. Employer Identification Number)

STATE ROUTE 2 SOUTH, P.O. BOX 356, CHESTER, WEST VIRGINIA 26034
(Address of principal executive offices)

(304) 387-8000
(Registrant's telephone number, including area code)

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ý No o

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes ý No o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See definitions of "large accelerated filer", "accelerated filer" and "smaller reporting company" in Rule 12b-2 of the Exchange Act.


Large accelerated filer o		Accelerated filer o		Non-accelerated filer ý (Do not check if a smaller reporting company)		Smaller reporting company o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes o No ý

The number of shares of the Registrant's Common Stock, $0.01 par value per share, outstanding as of September 30, 2014, was 1,000 shares.

Table of Contents

MTR GAMING GROUP, INC.
TABLE OF CONTENTS


PART I—FINANCIAL INFORMATION			2
Item 1—Financial Statements			2
Consolidated Balance Sheets at September 30, 2014 (Successor) (unaudited) and December 31, 2013 (Predecessor)			2
Consolidated Statements of Operations for the period from July 1 to September 18, 2014 (Predecessor), the period from January 1 to September 18, 2014 (Predecessor), the period from September 19 to September 30, 2014 (Successor), and the Three and Nine Months Ended September 30, 2013 (Predecessor) (unaudited)			3
Consolidated Statements of Comprehensive Income (Loss) for the period from July 1 to September 18, 2014 (Predecessor), the period from January 1 to September 18, 2014 (Predecessor), the period from September 19 to September 30, 2014 (Successor), and the Three and Nine Months Ended September 30, 2013 (Predecessor) (unaudited)			5
Consolidated Statements of Cash Flows for the Period from January 1 to September 18, 2014 (Predecessor), the Period September 19 to September 30, 2014 (Successor), and the Nine Months Ended September 30, 2013 (Predecessor) (unaudited)			7
Condensed Notes to Consolidated Financial Statements (unaudited)			8
Item 2—Management's Discussion and Analysis of Financial Condition and Results of Operations			26
Item 3—Quantitative and Qualitative Disclosures about Market Risk			49
Item 4—Controls and Procedures			49
PART II—OTHER INFORMATION			50
Item 1—Legal Proceedings			50
Item 1A—Risk Factors			51
Item 2—Unregistered Sales of Equity Securities and Use of Proceeds			51
Item 3—Defaults upon Senior Securities			51
Item 4—Mine Safety Disclosures			51
Item 5—Other Information			51
Item 6—Exhibits			52
SIGNATURE PAGE			53
EXHIBIT INDEX			54

Table of Contents

PART I
FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

MTR GAMING GROUP, INC.

CONSOLIDATED BALANCE SHEETS

(dollars in thousands)

	Successor			Predecessor

	September 30 2014			December 31 2013


	(unaudited)

ASSETS
Current assets:
Cash and cash equivalents	$	62,593		$	100,124
Restricted cash		1,243			7,255
Accounts receivable, net of allowance for doubtful accounts of $172 in 2014 and $151 in 2013		3,878			4,853
Inventories		4,027			4,272
Deferred financing costs		—			1,642
Prepaid expenses and other current assets		7,437			7,850


Total current assets		79,178			125,996
Property and equipment, net		269,189			371,364
Other intangible assets		436,371			136,080
Goodwill		104,734			—
Deferred financing costs, net of current portion		—			6,766
Deposits and other		3,962			1,801
Non-operating real property		16,419			10,769
Assets of discontinued operations		—			184


Total assets	$	909,853		$	652,960




LIABILITIES AND STOCKHOLDER'S EQUITY
Current liabilities:
Accounts payable		2,813			2,998
Accrued gaming taxes and assessments		8,617			9,947
Accrued payroll and related		6,121			5,466
Interest payable		10,938			27,344
Accrued other liabilities		18,909			17,043
Construction project and equipment liabilities		708			788
Deferred income taxes		2,348			837
Liabilities of discontinued operations		116			116


Total current liabilities		50,570			64,539
Long-term debt		624,481			558,834
Other regulatory gaming assessments		4,676			4,806
Long-term compensation		—			871
Deferred income taxes		129,847			17,412
Other long-term liabilities		424			497


Total liabilities		809,998			646,959


Stockholder's equity:
Common stock		—			—
Additional paid-in capital		103,011			65,047
Accumulated deficit		(3,157	)		(59,143	)
Accumulated other comprehensive income (loss)		1			(127	)


Total stockholder's equity of MTR Gaming Group, Inc.		99,855			5,777
Non-controlling interest of discontinued operations		—			224


Total stockholder's equity		99,855			6,001


Total liabilities and stockholder's equity	$	909,853		$	652,960

See accompanying condensed notes to consolidated financial statements.

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MTR GAMING GROUP, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

(dollars in thousands)

(unaudited)

	Successor			Predecessor

	Period from September 19 to September 30			Period from July 1 to September 18			Three Months Ended September 30


	2014			2014			2013
	2014			2014			2013
Operating Revenues:
Gaming	$	14,399		$	100,760		$	115,268
Pari-mutuel commissions		446			3,391			4,133
Food and beverage		1,270			8,460			9,804
Hotel		199			1,053			1,451
Other		773			3,345			3,791


		17,087			117,009			134,447
Less—promotional allowances		(776	)		(4,860	)		(5,584	)


Net operating revenues		16,311			112,149			128,863


Operating Expenses:
Gaming		8,659			59,644			68,444
Pari-mutuel commissions		520			3,077			3,548
Food and beverage		1,031			6,810			8,170
Hotel		114			590			779
Other		475			2,015			2,618
Marketing and promotions		889			3,397			4,165
General and administrative		2,754			15,664			15,883
Depreciation and amortization		1,289			6,742			7,691


Total operating expenses		15,731			97,939			111,298
Loss on the sale or disposal of property		—			139			161
Strategic transaction costs		618			6,716			2,723


Operating (Loss) income		(38	)		7,355			14,681


Other Income (Expense):
Interest income		1			2			4
Interest expense		(1,813	)		(15,057	)		(17,393	)


Total other expense		(1,812	)		(15,055	)		(17,389	)


Loss before Income Taxes		(1,850	)		(7,700	)		(2,708	)
Provision for income taxes		(1,307	)		(687	)		(921	)


Net Loss	$	(3,157	)	$	(8,387	)	$	(3,629	)

See accompanying condensed notes to consolidated financial statements.

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MTR GAMING GROUP, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS (Continued)

(dollars in thousands)

(unaudited)

	Successor			Predecessor

	Period from September 19 to September 30			Period from January 1 to September 18			Nine Months Ended September 30


	2014			2014			2013
	2014			2014			2013
Operating Revenues:
Gaming	$	14,399		$	320,366		$	349,223
Pari-mutuel commissions		446			8,014			8,932
Food and beverage		1,270			25,319			27,452
Hotel		199			3,489			4,099
Other		773			9,619			9,582


		17,087			366,807			399,288
Less—promotional allowances		(776	)		(14,930	)		(16,321	)


Net operating revenues		16,311			351,877			382,967


Operating Expenses:
Gaming		8,659			190,305			205,533
Pari-mutuel commissions		520			8,053			8,525
Food and beverage		1,031			21,222			23,071
Hotel		114			2,087			2,307
Other		475			5,740			6,315
Marketing and promotions		889			10,467			11,882
General and administrative		2,754			47,081			47,380
Depreciation and amortization		1,289			22,231			22,782


Total operating expenses		15,731			307,186			327,795
Loss on the sale or disposal of property		—			184			68
Strategic transaction costs		618			7,620			2,723


Operating (Loss) Income		(38	)		36,887			52,381


Other Income (Expense):
Interest income		1			6			26
Interest expense		(1,813	)		(49,838	)		(52,176	)


Total other expense		(1,812	)		(49,832	)		(52,150	)


(Loss) Income before Income Taxes		(1,850	)		(12,945	)		231
Provision for income taxes		(1,307	)		(2,837	)		(2,260	)


Net Loss	$	(3,157	)	$	(15,782	)	$	(2,029	)

See accompanying condensed notes to consolidated financial statements.

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MTR GAMING GROUP, INC.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

(dollars in thousands)

(unaudited)

	Successor			Predecessor

	Period from September 19 to September 30
				Period from July 1 to September 18			Three Months Ended September 30


	2014			2014			2013
	2014			2014			2013
Net Loss	$	(3,157	)	$	(8,387	)	$	(3,629	)
Other Comprehensive Income, net of tax:
Defined benefit pension plan:
Amortization of net gain(1)		1			6			11


Other Comprehensive Income		1			6			11


Comprehensive Loss, net of tax	$	(3,156	)	$	(8,381	)	$	(3,618	)

(1): In the Predecessor periods, no tax expense or benefit was recognized on these amounts as a result of the Company's cumulative loss position.

See accompanying condensed notes to consolidated financial statements.

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MTR GAMING GROUP, INC.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (Continued)

(dollars in thousands)

(unaudited)

	Successor			Predecessor

	Period from September 19 to September 30
				Period from January 1 to September 18			Nine Months Ended September 30


	2014			2014			2013
	2014			2014			2013
Net Loss	$	(3,157	)	$	(15,782	)	$	(2,029	)
Other Comprehensive Income, net of tax:
Defined benefit pension plan:
Amortization of net gain(1)		1			21			32


Other Comprehensive Income		1			21			32


Comprehensive Loss, net of tax	$	(3,156	)	$	(15,761	)	$	(1,997	)

(1): For the Predecessor periods, no tax expense or benefit was recognized on these amounts as a result of the Company's cumulative loss position.

See accompanying condensed notes to consolidated financial statements.

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MTR GAMING GROUP, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(dollars in thousands)

(unaudited)

	Successor			Predecessor

	Period from September 19 to September 30			Period from January 1 to September 18
							Nine Months Ended September 30


	2014			2014			2013
	2014			2014			2013
Cash flows from operating activities:
Net loss	$	(3,157	)	$	(15,782	)	$	(2,029	)
Adjustments to reconcile net loss to net cash provided by operating activities:
Depreciation		1,518			22,231			22,782
Amortization of deferred financing fees and premium / discount		(396	)		2,696			2,820
Bad debt expense		—			67			64
Stock-based compensation expense		—			1,310			789
Change in fair value of acquisition related contingencies		—			37			61
Deferred income taxes		1,302			2,498			2,556
Loss on the sale or disposal of property		—			184			68
Change in operating assets and liabilities:
Accounts receivable		1,354			(446	)		(1,305	)
Other current assets		1,468			(704	)		(2,698	)
Accounts payable		1,228			(2,761	)		(1,931	)
Accrued liabilities		4,053			(17,737			(13,325	)
Other regulatory gaming assessments		94			(206	)		(570	)
Long-term compensation		—			(1,435	)		304


Net cash provided by (used in) continuing operating activities		7,464			(10,048	)		7,586
Net cash used in discontinued operating activities		—			—			(7	)


Net cash provided by (used in) operating activities		7,464			(10,048	)		7,579


Cash flows from investing activities:
Decrease in restricted cash		1,913			4,099			24
Increase in deposits and other		—			(439	)		(10	)
Payment of Ohio video lottery terminal license fee		—			—			(25,000	)
Proceeds from the sale of property and equipment		—			55			168
Reimbursement of capital expenditures from West Virginia regulatory authorities		—			628			1,828
Capital expenditures		(337	)		(11,262	)		(13,960	)


Net cash provided by (used in) investing activities		1,576			(6,919	)		(36,950	)


Cash flows from financing activities:
Proceeds from exercise of stock options		—			773			564
Purchase and retirement of treasury stock		—			(377	)		(231	)
Purchase of shares for Merger consideration		—			(30,000	)		—


Net cash (used in) provided by financing activities		—			(29,604	)		333


Net increase (decrease) in cash and cash equivalents		9,040			(46,571	)		(29,038	)
Cash and cash equivalents, beginning of period		53,553			100,124			115,113


Cash and cash equivalents, end of period	$	62,593		$	53,553		$	86,075




Supplemental disclosure of cash flow information:
Interest paid	$	25		$	65,727		$	65,727




Income taxes paid	$	—		$	88		$	175

See accompanying condensed notes to consolidated financial statements.

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MTR GAMING GROUP, INC.

CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

NOTE 1—ORGANIZATION AND BASIS OF PRESENTATION

Organization

MTR Gaming Group, Inc. (the "Company" or "we" or "MTR"), a Delaware corporation and a wholly-owned subsidiary of Eldorado Resorts, Inc. ("ERI"), is a hospitality and gaming company that owns and operates racetrack, gaming and hotel properties in West Virginia, Pennsylvania and Ohio. The common shares of ERI are listed on the Nasdaq Stock Market.

The Company, through its wholly-owned subsidiaries, owns and operates Mountaineer Casino, Racetrack & Resort in Chester, West Virginia ("Mountaineer"), Presque Isle Downs & Casino in Erie, Pennsylvania ("Presque Isle Downs"), and Scioto Downs in Columbus, Ohio. Scioto Downs, through its subsidiary RacelineBet, Inc., also operates Racelinebet.com, a national account wagering service that offers online and telephone wagering on horse races as a marketing affiliate of TwinSpires.com, an affiliate of Churchill Downs, Inc.

In September 2013, we entered into a merger agreement to facilitate a business combination with Eldorado HoldCo LLC, a Nevada limited liability company ("Eldorado"), and formed several entities to facilitate the merger: Eclair Holdings Company, a Nevada corporation and wholly owned subsidiary of the Company ("NewCo"), Ridgeline Acquisition Corp., a Delaware corporation and wholly owned subsidiary of NewCo ("Merger Sub A"), and Eclair Acquisition Company, LLC, a Nevada limited liability company and wholly owned subsidiary of NewCo ("Merger Sub B"). These entities had no assets or operations for fiscal year 2013.

On September 19, 2014 (the "Acquisition Date"), MTR merged with and into Merger Sub A, with MTR surviving the merger (the "MTR Merger"), and Eldorado merged with and into Merger Sub B, with Eldorado surviving the merger (the "Eldorado Merger" and, together with the MTR Merger, the "Mergers"). As a result of the Mergers, NewCo became the holding company for the Company and Eldorado and was renamed "Eldorado Resorts, Inc."

Basis of Presentation

The Mergers were accounted for as a reverse acquisition of the Company by Eldorado under accounting principles generally accepted in the United States. Under the acquisition method of accounting, Eldorado is treated as the accounting acquirer and the Company is treated as the legal acquirer, resulting in the Company applying fair value accounting to its assets and liabilities as of the Acquisition Date. Accordingly, the consolidated financial statements and the condensed notes to the consolidated financial statements are presented in two distinct periods, Predecessor and Successor, which relate to the accounting periods preceding and succeeding the completion of the Mergers. The Predecessor and Successor periods have been separated by a vertical line to highlight the fact that the financial information for such periods has been prepared under two different historical-cost basis of accounting and are not comparable. In addition, the accompanying consolidated financial statements for the Successor period were prepared to conform to the financial statement presentation of Eldorado. We have reclassified certain amounts for the prior year to conform to the Successor presentation. These reclassifications, as detailed below, had no impact on income from operations or net income as previously reported.

The accompanying unaudited consolidated financial statements of the Company and its subsidiaries have been prepared in accordance with U.S. generally accepted accounting principles ("U.S. GAAP")

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MTR GAMING GROUP, INC.

CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(UNAUDITED)

NOTE 1—ORGANIZATION AND BASIS OF PRESENTATION (Continued)

for interim financial information and with the instructions for Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and notes required by U.S. GAAP for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring adjustments) considered necessary for a fair presentation have been included herein. The results of operations for these interim periods are not necessarily indicative of the operating results for other quarters, for the full year or for any future period. All significant intercompany accounts and transactions have been eliminated in consolidation. We view each operating property as an operating segment and all operating segments have been aggregated into one reportable segment.

These unaudited consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in the Company's Annual Report on Form 10-K for the year ended December 31, 2013.

Earnings per share information has not been presented because the Company's stock is no longer publicly traded.

Reclassifications

Reclassifications to the Consolidated Statements of Operations for the Predecessor periods are as follows (in thousands):

	Three Months Ended

	Three Months Ended				Nine Months Ended September 30
	March 31		June 30		Nine Months Ended September 30
2014:
Hotel revenues were reclassified from Food, beverage and lodging revenues to their own financial statement line item	$	1,188	$	1,248	$	2,436
Hotel expenses were reclassified from Food, beverage and lodging expense to their own financial statement line item		377		327		704
Utility expenses were reclassified from Gaming, Pari-mutuel, Food and beverage, Hotel, Other, Marketing and promotions to General and administrative expenses		682		545		1,227
Surveillance expenses were reclassified from General and administrative expenses to Gaming expenses		610		587		1,197
Reservation expenses were reclassified from Other expenses to Hotel expenses		62		63		125
Hotel housekeeping expenses were reclassified from General and administrative expenses to Hotel expenses		504		519		1,023

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MTR GAMING GROUP, INC.

CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(UNAUDITED)

NOTE 1—ORGANIZATION AND BASIS OF PRESENTATION (Continued)

	Three Months Ended

	Three Months Ended						Nine Months Ended September 30
	March 31		June 30		September 30		Nine Months Ended September 30
2013:
Hotel revenues were reclassified from Food, beverage and lodging revenues to their own financial statement line item		1,225		1,423	$	1,451	$	4,099
Hotel expenses were reclassified from Food, beverage and lodging expense to their own financial statement line item		382		347		357		1,086
Utility expenses were reclassified from Gaming, Pari-mutuel, Food and beverage, Hotel, Other, Marketing and promotions to General and administrative expenses		644		601		661		1,906
Surveillance expenses were reclassified from General and administrative expenses to Gaming expenses		630		598		580		1,808
Reservation expenses were reclassified from Other expenses to Hotel expenses		66		64		61		191
Hotel housekeeping expenses were reclassified from General and administrative expenses to Hotel expenses		501		527		549		1,577

Recently Issued Accounting Pronouncements

In May 2014, the Financial Accounting Standards Board (the "FASB") issued Accounting Standards Update No. 2014-09, Revenue from Contracts with Customers (Topic 606) ("ASU 2014-09"). The standard requires revenue to be recognized when promised goods or services are transferred to customers in an amount that reflects the consideration that is expected to be received for those goods or services. Qualitative and quantitative disclosures are also required regarding customer contracts, significant judgments and changes in judgments, and assets recognized from the costs to obtain or fulfill a contract. ASU 2014-09 supersedes and replaces nearly all existing revenue recognition guidance under U.S. GAAP. This accounting guidance is effective for public entities for annual reporting periods beginning after December 15, 2016, including interim periods therein. Early adoption is not permitted. We are currently evaluating the method of adoption and effect that this standard will have on our consolidated financial statements and related disclosures.

NOTE 2—MERGER WITH ELDORADO

On September 19, 2014, the Company and Eldorado combined their businesses through the Mergers, as defined above, consummated pursuant to the Agreement and Plan of Merger, dated as of September 9, 2013, as amended on November 18, 2013, February 13, 2014 and May 13, 2014, by and among MTR, Eldorado, NewCo and certain affiliates of NewCo and Eldorado (the "Merger Agreement").

Pursuant to the Merger Agreement, upon completion of the MTR Merger, subject to proration, each outstanding share of the Company's common stock, par value $0.00001 per share, was converted

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MTR GAMING GROUP, INC.

CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(UNAUDITED)

NOTE 2—MERGER WITH ELDORADO (Continued)

into the right to elect to receive either $6.05 per share in cash or one share of ERI's common stock, par value $0.00001 per share. Pursuant to the proration procedures provided in the Merger Agreement, former MTR shareholders received (in the aggregate) a cash payment of $35.0 million (of which $30.0 million was funded by MTR and $5.0 million by Eldorado).

Consideration Transferred

The purchase consideration in a reverse acquisition is determined with reference to the value of equity that the accounting acquirer, Eldorado, would have had to issue to the owners of the accounting acquiree, MTR, to give them the same percentage interest in the combined entity. However, in reverse acquisitions that occur between a public company as the legal acquirer and a private company as the accounting acquirer, the fair value of the legal acquirer's publicly traded stock generally is a more reliable determination of the fair value than the fair value of the accounting acquirer's untraded equity securities, and, as such, is generally used in calculating the purchase consideration. Accordingly, the following table provides the calculation of the purchase price, which was calculated using the fair value of the Company's common stock, based on the closing stock price of $4.43 on the Acquisition Date, as well as a reconciliation of the total shares outstanding as of the Acquisition Date.



*ERI Outstanding Share Calculation*
Shares Issued to Eldorado(i)		23,311,492
Number of MTR shares outstanding at the Acquisition Date(ii)		28,386,084
MTR RSUs that vested upon closing of the Mergers(iii)		499,179


Total ERI shares outstanding—before share repurchase		52,196,755
MTR shares acquired at $6.05 per share based on $35.0 million cash election		(5,785,123	)
Total ERI shares outstanding at Acquisition Date		46,411,632




Eldorado % ownership		50.23	%
MTR % ownership		49.77	%
*Consideration Transferred (dollars in thousands, except stock price)*
Number of MTR shares outstanding at the Acquisition Date		28,386,084
MTR RSUs that vested upon closing of the Mergers		499,179
MTR shares acquired at $6.05 per share based on $35.0 million cash election		(5,785,123	)


Total net MTR shares		23,100,140
FMV of MTR common stock at Acquisition Date	$	4.43


Fair Value of MTR shares	$	102,334
Fair Value of MTR stock options		677




Total consideration transferred	$	103,011

(i): The number of shares issued to members of Eldorado in the Merger as merger consideration was determined pursuant to the terms of the Merger Agreement.

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MTR GAMING GROUP, INC.

CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(UNAUDITED)

NOTE 2—MERGER WITH ELDORADO (Continued)

(ii): Number of shares of MTR common stock issued and outstanding immediately prior to closing.
(iii): Pursuant to the MTR 2010 Long-Term Incentive Plan, immediately prior to closing, all outstanding stock options and MTR RSUs vested and became immediately exercisable. All vested MTR RSUs were exchanged for one share of ERI common stock. All outstanding stock options became exercisable for shares of ERI common stock with the same terms as the previous awards.

Preliminary Purchase Price Allocation

The following table summarizes the preliminary allocation of the purchase price to the tangible and identifiable intangible assets acquired and liabilities assumed based on their estimated fair values on the Acquisition Date. The fair value estimates are based on management's analysis, including preliminary work performed by third-party valuation specialists, and is subject to change within the measurement period as the valuations are finalized. The final fair value determinations are expected to be completed no later than the third quarter of 2015. The final fair value determinations may be significantly different than those reflected in the consolidated financial statements.

Goodwill, the excess of the purchase price over the fair market value of the net assets acquired, in the amount of $104.7 million, was recorded as of the Acquisition Date. The Company considers the goodwill to represent benefits that are expected to be realized as a result of the Mergers, including, but not limited to, the expected synergies and the assembled workforce. None of the goodwill is expected to be deductible for tax purposes.

The following table summarizes the preliminary purchase price allocation of the acquired assets and assumed liabilities as recorded at fair value on the Acquisition Date (dollars in thousands):


Current and other assets	$	74,873
Property and equipment		270,172
Goodwill		104,734
Intangible assets(1)		436,600
Other noncurrent assets		20,381


Total assets		906,760
Current liabilities		45,316
Long term debt(2)		624,877
Deferred income taxes(3)		128,545
Other noncurrent liabilities		5,011


Total liabilities		803,749


Net assets acquired	$	103,011

(1): Intangible assets consist of gaming licenses, trade names, and customer loyalty programs.
(2): Long term debt was comprised of MTR Gaming's $570.7 million 11.5% Senior Secure Second Lien Notes due August 2019.

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MTR GAMING GROUP, INC.

CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(UNAUDITED)

NOTE 2—MERGER WITH ELDORADO (Continued)

(3): Deferred tax liabilities were derived based on fair value adjustments for property and equipment, identified intangibles, deferred financing costs, certain long term liabilities and long term debt.

Trade receivables and payable, inventory as well as other current and non-current assets and liabilities were valued at the existing carrying values as they represented the fair value of those items at the Acquisition Date, based on management's judgments and estimates.

The fair value of property and equipment utilized a combination of the cost and market approaches, depending on the characteristics of the asset classification. The fair value of land was determined using the market approach, which considers sales of comparable assets and applies compensating factors for any differences specific to the particular assets. With respect to personal property components of the assets (gaming equipment, furniture, fixtures and equipment, computers, and vehicles) the cost approach was used, which is based on replacement or reproduction costs of the asset. Building and site improvements were valued using the cost approach using a direct cost model built on estimates of replacement cost.

The fair value of non-operating real property was determined utilizing a sales comparison approach.

The gaming and racing licenses of each property were valued in aggregate for each respective property, as these licenses are considered to be the most significant asset of the Company and the gaming licenses could not be obtained without holding the racing licenses. Therefore, a market participant would value the licenses in aggregate. The fair value of the licenses was determined using the excess earnings methodology, which is an income approach methodology that allocates the projected cash flows of the business to the gaming license intangible assets less charges for the use of other identifiable assets of MTR including working capital, fixed assets and other intangible assets. This methodology was considered appropriate as the gaming licenses are the primary asset of MTR and the licenses are linked to each respective facility. Under the gaming legislation applicable to our properties, licenses are property specific and can only be acquired if a buyer acquires the existing facility. Because existing licenses may not be acquired and transferred for use at a different facility, the estimated future cash flows of each of our properties was the primary assumption in the valuation of such property.

Management has preliminarily assigned an indefinite useful life to the gaming licenses, in accordance with its review of the applicable guidance of Accounting Standards Codification ("ASC") 350. The standard required management to consider, among other things, the expected use of the asset, the expected useful life of other related asset or asset group, any legal, regulatory, or contractual provisions that may limit the useful life, the Company's own historical experience in renewing similar arrangements, the effects of obsolescence, demand and other economic factors, and the maintenance expenditures required to obtain the expected cash flows. In that analysis, management determined that no legal, regulatory, contractual, competitive, economic or other factors limit the useful lives of these intangible assets. The Company has licenses in Pennsylvania, West Virginia and Ohio. The renewal of each state's gaming license depends on a number of factors, including payment of certain fees and taxes, providing certain information to the state's gaming regulator, and meeting certain inspection requirements. However, the Company's historical experience has not indicated, nor does management expect, any limitations regarding its ability to continue to renew each license. No other competitive,

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MTR GAMING GROUP, INC.

CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(UNAUDITED)

NOTE 2—MERGER WITH ELDORADO (Continued)

contractual, or economic factor limits the useful lives of these assets. Accordingly, the Company has preliminarily concluded that the useful lives of these licenses are indefinite.

Trade names were valued using the relief-from-royalty method. The customer loyalty program was valued using a combination of a replacement cost and lost profits analysis. Trade names are being amortized on a straight-line basis over a five year useful life and the customer loyalty program is being amortized on a straight-line basis over a one year useful life. The weighted average useful life of all amortizing intangible assets related to the Mergers is approximately three years.

Existing long term debt assumed on the Acquisition Date was fair valued based on quoted market prices.

Deferred income tax assets and liabilities as of the Acquisition Date represent the expected future tax consequences of temporary differences between the fair values of the assets acquired and liabilities assumed and their tax bases.

Unaudited Pro Forma Information

The following table includes the unaudited pro forma results for the three and nine months ended September 30, 2014 and 2013, which gives effect to the Mergers as if they had occurred on January 1, 2013 and reflect pro forma adjustments that are expected to have a continuing impact on the results of operations and are directly attributable to the acquisition.

	Three Months Ended September 30,					Nine Months Ended September 30,

	2014			2013		2014			2013
	(in thousands)
Net revenues	$	128,460		$	128,863	$	368,188		$	382,967
Net (loss) income	$	(3,254	)	$	741	$	(1,093	)	$	1,170

NOTE 3—FAIR VALUE MEASUREMENTS

ASC 820, Fair Value Measurements and Disclosures, provides guidance for measuring the fair value of assets and liabilities and requires expanded disclosures about fair value measurements. ASC 820 indicates that fair value should be determined based on the assumptions marketplace participants would use in pricing the asset or liability and provides additional guidelines to consider in determining the market-based measurement.

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MTR GAMING GROUP, INC.

CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(UNAUDITED)

NOTE 3—FAIR VALUE MEASUREMENTS (Continued)

ASC 820 requires fair value measurements be classified and disclosed in one of the following categories:


Level 1:		Unadjusted quoted market prices for identical assets and liabilities.
Level 2:		Inputs other than Level 1 that are observable, either directly or indirectly, for the asset or liability through corroboration with market data for substantially the full term of the asset or liability.
Level 3:		Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities (management's own assumptions about what market participants would use in pricing the asset or liability at the measurement date).

Cash equivalents: Cash equivalents include investments in money market funds. Investments in this category can be redeemed immediately at the current net asset value per share. A money market fund is a mutual fund whose investments are primarily in short-term debt securities designed to maximize current income with liquidity and capital preservation, usually maintaining per share net asset value at a constant amount, such as one dollar. The carrying amounts approximate fair value because of the short maturity of these instruments.

Acquisition-related contingent considerations: Contingent consideration related to the July 2003 acquisition of Scioto Downs represents the estimate of amounts to be paid to former shareholders of Scioto Downs under certain earn-out provisions. We consider the acquisition related contingency's fair value measurement, which includes forecast assumptions, to be Level 3 within the fair value hierarchy.

The following table presents assets and liabilities measured at fair value on a recurring basis at September 30, 2014 and December 31, 2013:

	Successor

	September 30, 2014
Description	(Level 1)		(Level 2)		(Level 3)		Total
	(in thousands)
Assets
Cash equivalents	$	10,679	$	—	$	—	$	10,679


Total assets	$	10,679	$	—	$	—	$	10,679




Liabilities
Acquisition-related contingent considerations	$	—	$	—	$	508	$	508


Total liabilities	$	—	$	—	$	508	$	508

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MTR GAMING GROUP, INC.

CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(UNAUDITED)

NOTE 3—FAIR VALUE MEASUREMENTS (Continued)

	Predecessor

	December 31, 2013
Description	(Level 1)		(Level 2)		(Level 3)		Total
	(in thousands)
Assets
Cash equivalents	$	33,524	$	—	$	—	$	33,524


Total assets	$	33,524	$	—	$	—	$	33,524




Liabilities
Acquisition-related contingent considerations	$	—	$	—	$	586	$	586


Total liabilities	$	—	$	—	$	586	$	586

The following table represents the change in acquisition-related contingent consideration liabilities during the nine months ended September 30, 2014 (in thousands):


Balance as of December 31, 2013 (Predecessor)	$	586
Amortization of present value discount(1)		56
Fair value adjustment for change in consideration expected to be paid(2)		(56	)
Settlements		(78	)


Balance as of September 30, 2014 (Successor)	$	508

(1): Changes in present value are included as a component of interest expense in the consolidated statement of operations. Amortization of the present value discount resulted in interest expense of $37,000 and $19,000 during the Predecessor period and Successor period, respectively.
(2): Prior to the Mergers, fair value adjustments for changes in earn-out estimates of $37,000 were recorded to indefinite-lived intangibles in the consolidated balance sheet in the Predecessor period. Due to purchase accounting as a result of the Mergers, fair value adjustments for changes in earn-out estimates of $19,000 in the Successor period were recorded to general and administrative expense in the consolidated statement of operations.

The carrying amounts as of September 30, 2014, for cash, trade accounts receivable, and trade accounts payable approximate their respective fair values based on the short-term nature of these instruments. The fair value of the Notes (see Note 7) was $626.3 million at September 30, 2014 compared to a carrying value of $624.5 million at September 30, 2014. The fair value of the Notes was $634.8 million at December 31, 2013 compared to a carrying value of $558.8 million at December 31, 2013. The fair values of our Notes were determined based on Level 2 inputs including quoted market prices and bond terms and conditions.

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MTR GAMING GROUP, INC.

CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(UNAUDITED)

NOTE 4—NON-OPERATING REAL PROPERTY

We have designated certain assets, consisting principally of land and undeveloped properties, as non-operating real property and declared our intent to sell those assets. No less than annually, we obtain independent appraisals of the fair value of these assets. In connection with the Mergers, as discussed in Note 2, the non-operating real properties were adjusted to fair value on the Acquisition Date.

Although we continue to actively market these properties for sale, we do not anticipate that we will be able to sell the majority of the assets within the next twelve months. As such, these properties are not classified as held-for-sale as of September 30, 2014. These properties are included in non-operating real properties in our consolidated balance sheets as of September 30, 2014 and December 31, 2013.

NOTE 5—GOODWILL AND OTHER INTANGIBLES ASSETS

The components of goodwill and intangible assets are as follows:

	Successor

	September 30, 2014
	Gross Carrying value		Accumulated Amortization			Net Carrying Value		Weighted Average Amortization Period
	(in thousands)							(in years)
Goodwill	$	104,734	$	—		$	104,734		N/A
Gaming licenses (indefinite-lived)		424,900		—			424,900		N/A
Trade names		6,600		(47	)		6,553		5
Customer loyalty programs		5,100		(182	)		4,918		1


Total goodwill and other intangible assets	$	541,334	$	(229	)	$	541,105

	Predecessor

	December 31, 2013
	Gross Carrying Value		Accumulated Impairment		Net Carrying Value		Weighted Average Amortization Period
	(in thousands)
Goodwill	$	494	$	494	$	—		N/A
Gaming licenses (indefinite-lived)		136,080		—		136,080		N/A


Total goodwill and other intangible assets	$	136,574	$	494	$	136,080

The increase in intangible assets, and related amortization expense, as compared to December 31, 2013 is due to purchase accounting adjustments as a result of the Mergers. The Company incurred amortization expense of $0.2 million during the Successor period, and is included as a component of marketing and promotions expense in the consolidated statement of operations. We did not have any amortization expense during the Predecessor period.

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MTR GAMING GROUP, INC.

CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(UNAUDITED)

NOTE 6—EQUITY AWARDS AND OTHER INCENTIVE COMPENSATION

We account for stock-based compensation in accordance with ASC 718, Compensation—Stock Compensation, and the amounts are included in General and administrative expenses in our consolidated statements of operations.

The total incentive-based compensation expense for the three months ended September 30, 2014 is as follows (in thousands):

	Successor		Predecessor

	Period from September 19 to September 30		Period from July 1 to September 18
					Three Months Ended September 30
					Three Months Ended September 30
	2014		2014		2013
Stock-based compensation expense		—		748		168
Performance award compensation expense		—		886		178

The total incentive-based compensation expense for the nine months ended September 30, 2014 is as follows (in thousands):

	Successor		Predecessor

	Period from September 19 to September 30		Period from January 1 to September 18
					Nine Months Ended September 30
					Nine Months Ended September 30
	2014		2014		2013
Stock-based compensation expense		—		1,310		789
Performance award compensation expense		—		760		329

Nonqualified stock options ("Stock Options"), restricted stock units ("RSUs") and cash-based performance awards ("Performance Awards") as approved by the Compensation Committee of the Board of Directors ("BOD") and are granted to executive officers, certain key employees and non-employee members of the BOD as permitted under the 2010 Long-Term Incentive Plan ("2010 Plan").

Stock Options primarily vest ratably over three years and RSUs granted to employees and executive officers primarily vest and become non-forfeitable upon the third anniversary of the date of grant. RSUs granted to non-employee directors vest immediately and are delivered upon the date that is the earlier of termination of service on the Board of Directors or the consummation of a change of control of the Company. The Performance Awards relate to the achievement of defined levels of performance and are generally measured by the level of the Company's Corporate Free Cash Flow (as defined) over a one or two-year Performance Period depending upon the award agreement. If the Performance Award levels are achieved, the awards earned will vest and become payable at the end of the Vesting Period, defined as either a one or two calendar year period following the Performance Period.

In connection with the Mergers, any unvested awards granted pursuant to the 2010 Plan vested upon the Acquisition Date, and both vested and unvested equity awards granted under the 2010 Plan

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MTR GAMING GROUP, INC.

CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(UNAUDITED)

NOTE 6—EQUITY AWARDS AND OTHER INCENTIVE COMPENSATION (Continued)

were converted into the right to receive shares of ERI common stock, or were exchanged for, or settled in, shares of ERI common stock.

Specifically, each Stock Option or other right to acquire common stock granted under the 2010 Plan outstanding immediately prior to the completion of the Mergers, whether vested or unvested, automatically became, after the completion of the Mergers, an option or right to purchase the same number of shares of ERI common stock as the number of shares of common stock that were subject to such Stock Option immediately prior to the completion of the Mergers. The exercise price per share of ERI common stock subject to any such Stock Option at and after the completion of the Mergers is equal to the exercise price per share of common stock subject to such Stock Option immediately prior to the completion of the Mergers. All other terms, except vesting requirements, applicable to such Stock Option will remain the same.

Each RSU in respect of a share of MTR common stock that was outstanding under the 2010 Plan immediately prior to the completion of the Mergers was, as of the completion of the Mergers, settled in the same number of shares of common stock of ERI (without any right to make a cash/stock election), subject to shares withheld to satisfy tax withholding, as the number of shares of MTR common stock that were subject to such RSU immediately prior to the completion of the Mergers. Upon consummation of the Mergers, all outstanding RSUs became fully vested and, as a result, are no longer subject to vesting requirements, lapse, or other restrictions.

All Performance Awards granted under the terms of the 2010 Plan vested and were paid by the Company upon the closing of the Mergers. The payment was recognized as a pre-acquisition expense of the Company. There are no remaining Performance Award obligations.

NOTE 7—INCOME TAXES

The Company estimates an annual effective income tax rate based on projected results for the year and applies this rate to income before taxes to calculate income tax expense. Any refinements made due to subsequent information that affects the estimated annual effective income tax rate are reflected as adjustments in the current period.

The income tax provision results in an effective tax rate that has an unusual relationship to the Company's pretax income (loss). This is due to the federal and state valuation allowances on the Company's deferred tax assets as discussed below.

For income tax purposes we amortize or depreciate certain assets that have been assigned an indefinite life for book purposes. The incremental amortization or depreciation deductions for income tax purposes result in an increase in certain deferred tax liabilities that cannot be used as a source of future taxable income for purposes of measuring our need for a valuation allowance against the net

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MTR GAMING GROUP, INC.

CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(UNAUDITED)

NOTE 7—INCOME TAXES (Continued)

deferred tax assets. Therefore, we expect to record non cash deferred tax expense as we amortize these assets for tax purposes.

During the three months ended September 30, 2014, our tax expense was $0.7 million for the Predecessor period July 1 to September 18, 2014 and $1.3 million for the Successor period September 19 to September 30, 2014. The third quarter of 2014 provision reflects the recording of additional naked credit amortization in the amount of $1.4 million and a local income tax provision of $0.6 million. During the three months ended September 30, 2013, our tax expense was $0.9 million. The third quarter of 2013 provision reflects the recording of additional naked credit amortization in the amount of $0.8 million and a local income tax provision of $0.1 million.

During the nine months ended September 30, 2014, our tax expense was $2.8 million for the Predecessor period January 1 to September 18, 2014 and $1.3 million for the Successor period September 19 to September 30, 2014. The nine months ended September 30, 2014 provision reflects the recording of additional naked credit amortization in the amount of $3.2 million and a local income tax provision of $0.9 million. For the nine months ended September 30, 2013, our tax expense was $2.3 million. The nine months ended September 30, 2013 provision reflects the recording of additional naked credit amortization in the amount of $2.6 million and a local income tax provision of $0.3 million. Additionally, during the nine months ended September 30, 2013, the Company released unrecognized tax benefits of $0.6 million, which included $0.2 million of accrued interest, as a result of the lapse in the statute of limitations for the original tax return years and subsequent loss carryback periods. As of September 30, 2014, there are no unrecognized tax benefits and we do not expect a significant increase or decrease to the total amounts of unrecognized tax benefits within the next twelve months.

The Company and its subsidiaries file a US federal income tax return, and various state and local income tax returns. With few exceptions, the Company is no longer subject to US federal or state and local tax examinations by tax authorities for years before 2011.

NOTE 8—LONG-TERM DEBT

Long-term debt obligations are summarized as follows:

	Successor		Predecessor

	September 30, 2014		December 31, 2013
	(in thousands)
11.5% Senior Secured Second Lien Notes	$	570,664	$	570,664
Unamortized premium / (discount)		53,817		(11,830	)


	$	624,481	$	558,834

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MTR GAMING GROUP, INC.

CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(UNAUDITED)

NOTE 8—LONG-TERM DEBT (Continued)

Senior Secured Second Lien Notes

On August 1, 2011, we completed the offering of $565.0 million 11.5% Senior Secured Second Lien Notes (the "Notes") due August 1, 2019 at an issue price equal to 97% of the aggregate principal amount of the Notes. The Notes mature on August 1, 2019, with interest payable semi-annually in arrears on February 1 and August 1 of each year. The Notes were issued pursuant to an indenture, dated as of August 1, 2011 (the "Indenture"), among the Company, Mountaineer Park, Inc., Presque Isle Downs, Inc., Scioto Downs, Inc. (each, a wholly-owned subsidiary of the Company and as a guarantor, the "Guarantors") and Wilmington Trust, National Association, as Trustee and as Collateral Agent.

The Notes and the guarantees thereof are senior secured obligations and are jointly and severally, fully, and unconditionally guaranteed by the Company's current and future domestic restricted subsidiaries, other than the Company's immaterial subsidiaries. The Notes are secured by a second priority lien on substantially all of the assets of the Company and the Guarantors, other than excluded property, as defined in the Indenture. The Notes and the guarantees are effectively junior to any of the Company's and the Guarantors' existing and future debt that is secured by senior or prior liens on the collateral, including indebtedness under the Company's senior secured revolving credit facility, as discussed below, to the extent of the value of the collateral securing such obligations.

The Indenture contains a number of customary covenants, including limitations on restricted payments and investments, additional liens, transactions with affiliates, additional debt, dispositions of property, mergers and similar transactions, and events of default. In addition, if the consolidated total debt ratio of the Company is equal to or greater than 4.0 to 1.0 and such offer is permitted pursuant to the terms of the Company's credit facilities, the Company is required to repay debt under its credit facility or make an offer to purchase Notes with the excess cash flow amounts (as such term is defined in the). As of September 30, 2014, the Company was in compliance with the covenants under the Indenture.

The Company may redeem some or all of the Notes prior to August 1, 2015 at a redemption price of 100% of the principal amount thereof plus a "make whole premium" together with accrued and unpaid interest thereon. On or after August 1, 2015, the Company may redeem the Notes at the following redemption prices (expressed as a percentage of principal amount) plus any accrued and unpaid interest thereon:

Year beginning August 1,

2015	106.000	%
2016	103.000	%
2017 and thereafter	100.000	%

Credit Facility

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MTR GAMING GROUP, INC.

CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(UNAUDITED)

NOTE 8—LONG-TERM DEBT (Continued)

The Credit Facility is secured by substantially the same assets securing the Notes (and including securities of the Company's subsidiaries to the extent permitted by law). Borrowings under the Credit Facility are guaranteed by all of our existing and future domestic restricted subsidiaries. The security interest in the collateral that secures the Credit Facility is senior to the security interest in the collateral that secures the Notes.

The Credit Facility contains a number of customary covenants, including limitations on restricted payments and investments, additional liens, transactions with affiliates, additional debt, dispositions of property, mergers and similar transactions, and events of default. The Credit Facility also contains certain financial covenants, including maximum capital expenditures, maximum consolidated leverage ratios, minimum consolidated interest coverage ratios and minimum consolidated EBITDA amounts. As of September 30, 2014, the Company was in compliance with the required covenants.

NOTE 9—ACCUMULATED OTHER COMPREHENSIVE LOSS

The Company's accumulated other comprehensive loss is related to the Scioto Downs defined benefit pension plan. A summary of the change in accumulated other comprehensive loss during the Predecessor and Successor periods is as follows (in thousands):


Balance as of December 31, 2013 (Predecessor)	$	(127	)
Other comprehensive loss before reclassifications		—
Amounts reclassified from accumulated other comprehensive loss(1)		21


Net current-period other comprehensive income		21


Balance as of September 18, 2014 (Predecessor)	$	(106	)


Balance as of September 19, 2014 (Successor)	$	—
Other comprehensive loss before reclassifications		—
Amounts reclassified from accumulated other comprehensive loss(1)		1


Net current-period other comprehensive income		1


Balance as of September 30, 2014 (Successor)	$	1

(1): Amounts are presented after income tax, including consideration of related valuation allowance. No net tax benefit was recognized in 2014.

Amounts reclassified from accumulated other comprehensive loss are limited to the amortization of actuarial losses, which are a component of net periodic benefit cost. These reclassifications are included as a component of general and administrative expense in the accompanying consolidated statement of operations.

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MTR GAMING GROUP, INC.

CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(UNAUDITED)

NOTE 10—COMMITMENTS AND CONTINGENCIES

Litigation

We are a party to various lawsuits, which have arisen in the normal course of our business. Estimated losses are accrued for these lawsuits and claims when the loss is probable and can be estimated. The current liability for the estimated losses associated with those lawsuits is not material to our consolidated financial condition and those estimated losses are not expected to have a material impact on our results of operations.

In connection with the Mergers, three putative class action lawsuits were filed by purported stockholders of the Company challenging the Mergers. All three cases were filed in the Delaware Court of Chancery. By order of the Court of Chancery, the cases were consolidated for all purposes and a consolidated amended complaint was filed. This consolidated case, which purported to be brought as a class action on behalf of all of the Company's stockholders, excluding the members of the board of directors, alleged, among other things, that the consideration to be received by MTR stockholders will receive in connection with the Mergers is inadequate and that the Company's directors and current President breached their fiduciary duties to stockholders in negotiating and approving the Merger Agreement. On August 25, September 17, and October 9, 2014 Plaintiffs separately moved to voluntarily dismiss their claims.

On October 21, 2011, a complaint was filed challenging certain aspects of the casino referendum and the Ohio Governor's and legislature's approval of legislation authorizing VLTs at Ohio's seven horse racetracks. Scioto Downs, in order to protect its right to VLT gaming, filed a motion to intervene on February 2, 2012. Dispositive motions were filed by the Ohio Attorney General, Scioto Downs, Inc. and others on February 20, 2012, and, on May 30, 2012, the litigation was dismissed. On March 13, 2013, the appeals court affirmed the lower court decision. On April 26, 2013, the plaintiffs filed a Notice of Appeal to the Ohio Supreme Court. On July 24, 2013, the Ohio Supreme Court agreed to hear the matter upon the outcome of another case with comparable legal issues that was before the court. On June 10, 2014, the Ohio Supreme Court affirmed the dismissal of the appeal of the matter involving the comparable legal issues. In light of the decision on the comparable matter, Scioto Downs and the other parties filed a joint motion to dismiss the appeal of this matter on July 2, 2014, which is still pending before the court.

Environmental Remediation

In October 2004, we acquired 229 acres of real property, known as the International Paper site, as an alternative site to build Presque Isle Downs. In connection with our acquisition of the International Paper site, we entered into a consent order and decree (the "Consent Order") with the PaDEP and International Paper insulating us from liability for certain pre-existing contamination, subject to compliance with the Consent Order, which included a proposed environmental remediation plan for the site, which was tied specifically to the use of the property as a racetrack. The proposed environmental remediation plan in the Consent Order was based upon a "baseline environmental report" and management estimated that such remediation would be subsumed within the cost of developing the property as a racetrack. The racetrack was never developed at this site. In October 2005, we sold approximately 205 acres to GEIDC who assumed primary responsibility for the remediation obligations under the Consent Order relating to the property they acquired. However, we were advised by the PaDEP that we were not released from our liability and responsibility under the Consent Order. We

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MTR GAMING GROUP, INC.

CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(UNAUDITED)

NOTE 10—COMMITMENTS AND CONTINGENCIES (Continued)

also purchased an Environmental Risk Insurance Policy in the amount of $10.0 million with respect to the property, which expires in October 2015. We believe the insurance coverage is in excess of any exposure that we may have in this matter.

Regulatory Gaming Assessments

The Pennsylvania Gaming Control Board (the "PGCB"), the Pennsylvania Department of Revenue and the Pennsylvania State Police (collectively "the Borrowers"), were required to fund the costs they incurred in connection with the initial development of the infrastructure to support gaming operations in Pennsylvania as well as the initial ongoing costs of the Borrowers. The initial funding of these costs was provided from a loan from the Pennsylvania General Fund in the amount of approximately $36.1 million, and further funding was provided from additional loans from the Pennsylvania Property Tax Reserve Fund in the aggregate amount of approximately $63.8 million.

The Pennsylvania Department of Revenue will assess all licensees, including Presque Isle Downs, their proportionate share of amounts represented by the borrowings, which are in the aggregate amount of $99.9 million, once the designated number of Pennsylvania's slot machine licensees is operational. On July 11, 2011, the PGCB issued an administrative order which established that payments associated with the $63.8 million that was borrowed from the Property Tax Reserve Fund would commence on January 1, 2012. The repayment allocation between all current licensees is based upon equal weighting of (i) cumulative gross slot revenue since inception in relation to the combined cumulative gross slot revenue for all licensees and (ii) single year gross slot revenue (during the state's fiscal year ending June 30) in relation to the combined single year gross slot revenue for all licensees; and amounts paid each year will be adjusted annually based upon changes in the licensee's proportionate share of gross slot revenue. We have estimated that our total proportionate share of the aggregate $63.8 million to be assessed to the gaming facilities will be approximately $4.2 million and will be paid quarterly over a ten-year period, which began effective January 1, 2012. For the $36.1 million that was borrowed from the General Fund, payment is scheduled to begin after all fourteen licensees are operational. Although we cannot determine when payment will begin, we have considered a similar repayment model for the General Fund borrowings and estimated that our total proportionate share of the aggregate $36.1 million to all fourteen gaming facilities will approximate $2.2 million, which has been accrued in our consolidated balance sheet at September 30, 2014.

The recorded estimate is subject to revision based upon future changes in the revenue assumptions utilized to develop the estimate. Our estimated total obligation at September 30, 2014 (Successor) and December 31, 2013 (Predecessor) was $5.1 million and $5.2 million, respectively, and is accrued in the respective accompanying consolidated balance sheets. As of and during the nine months ended September 30, 2014, our total estimated liability increased as a result of changes in the forecasted assumptions utilized in the model by $0.2 million and was recognized in gaming operating expenses. The Company paid approximately $0.3 million during the nine months ended September 30, 2014.

NOTE 11—SEGMENT INFORMATION

The Company, through our wholly owned subsidiaries, owns and operates Mountaineer Casino, Racetrack & Resort in Chester, West Virginia, Presque Isle Downs & Casino in Erie, Pennsylvania, and Scioto Downs in Columbus, Ohio. Scioto Downs, through its subsidiary RacelineBet, Inc., also operates

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MTR GAMING GROUP, INC.

CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(UNAUDITED)

NOTE 11—SEGMENT INFORMATION (Continued)

Racelinebet.com. Management reviews our operations on a property-by-property basis. Therefore we believe that each property is an operating segment. Based on the similar geographic and economic characteristics of our properties, we believe it is appropriate to aggregate Mountaineer, Presque Isle Downs and Scioto Downs into one reportable segment.

NOTE 12—SUBSEQUENT EVENTS

In October 2014, the Company repurchased $10.0 million in aggregate principle amount of our 11.25% Senior Secured Second Lien Notes, at a price of $110.25 per $100 in principal amount of the purchased notes, which approximated their carrying value as of September 30, 2014.

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ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.

Overview

We were incorporated in March 1988 in Delaware under the name "Secamur Corporation," a wholly-owned subsidiary of Buffalo Equities, Inc. In 1996, we were renamed MTR Gaming Group, Inc. and, since 1998, we have operated only in the racing, gaming and entertainment businesses.

Through our wholly-owned subsidiaries, we own and operate Mountaineer Casino, Racetrack & Resort in Chester, West Virginia ("Mountaineer"), Presque Isle Downs & Casino in Erie, Pennsylvania ("Presque Isle Downs"), and Scioto Downs in Columbus, Ohio. We consider these three properties, which are located in contiguous states, to be our core assets. Scioto Downs, through its subsidiary RacelineBet, Inc., also operates Racelinebet.com, a national account wagering service that offers online and telephone wagering on horse races as a marketing affiliate of TwinSpires.com, an affiliate of Churchill Downs, Inc.

Our Properties:

We operate racino properties, all of which include gaming and dining facilities, and some of which include hotel, retail and other amenities. The majority of our revenue is gaming revenue, derived primarily from gaming on slot machines and, to a lesser extent, table games. Other revenues are derived from our racing operations, hotel, dining, retail and entertainment offerings. Our gaming operations are highly dependent on the volume and spending levels of our customers, which, in turn, may affect the prices we can charge for our hotel, dining and other amenities. Our properties generate significant operating cash flow, which is essential to debt service and to funding maintenance capital expenditures.

Mountaineer currently operates 2,107 slot machines, 12 poker tables and 39 casino table games and offers live thoroughbred horse racing during the months of March through December, operating 210 live race days with on-site pari-mutuel wagering year-round.

Presque Isle Downs currently operates 1,720 slot machines, 9 poker tables and 37 casino table games. In addition, Presque Isle Downs offers live thoroughbred horse racing during the months of May through September, operating 100 live race days with pari-mutuel wagering year-round.

Scioto Downs currently operates 2,112 VLTs and offers live harness horse racing from May through September, operating 90 live racing days and year- round pari-mutuel wagering.

Merger with Eldorado:

In September 2013, we entered into a merger agreement to facilitate a business combination with Eldorado HoldCo LLC, a Nevada limited liability company ("Eldorado") ,and formed several entities to facilitate the merger: Eclair Holdings Company, a Nevada corporation and wholly owned subsidiary of the Company ("NewCo"), Ridgeline Acquisition Corp., a Delaware corporation and wholly owned subsidiary of NewCo ("Merger Sub A"), and Eclair Acquisition Company, LLC, a Nevada limited liability company and wholly owned subsidiary of NewCo ("Merger Sub B"). These entities had no assets or operations for fiscal year 2013.

On September 19, 2014 (the "Acquisition Date"), MTR merged with and into Merger Sub A, with MTR surviving the merger (the "MTR Merger"), and Eldorado merged with and into Merger Sub B, with Eldorado surviving the merger (the "Eldorado Merger and, together with the MTR Merger, the "Mergers"). As a result of the Mergers, NewCo became the holding company for the Company and Eldorado and was renamed Eldorado Resorts, Inc. ("ERI").

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In accordance with U.S. GAAP, we have separated our historical financial results for the Successor period and the Predecessor period. To facilitate discussion of our operating performance compared to the prior year period, the Company presents certain financial information for the Successor and Predecessor periods on an aggregated basis for the three and nine months ended September 30, 2014 including the effects of purchase accounting. We believe that the aggregated results are useful to investors to assist in their evaluation of our results for the three and nine months ended September 30, 2014 compared to the prior year periods. The aggregated financial information does not comply with U.S. GAAP and should not be considered an alternative to net income or cash flow from operations, as determined in accordance with U.S. GAAP.

Significant Factors Impacting Operating Trends

Key Performance Metrics:

Our operating results are highly dependent on the volume of customers visiting and staying at our properties. Key performance indicators such as table game drop and slot handle refer to amounts wagered by our customers. The amount of volume we retain, which is not fully controlled by us, is recognized as gaming revenues and is referred to as our win or hold. In addition, average daily room rate ("ADR") and revenue per available room ("RevPAR") are used to measure our hotel volume and efficiency. ADR is calculated by dividing total room revenue, including the retail value of promotional allowances (less service charges, if any) by total rooms occupied including complimentary rooms. We calculate ADR with and without the impact of complimentary rooms. RevPAR is calculated by dividing total room revenue including the retail value of promotional allowances (less service charges, if any) by total rooms available. Occupancy is calculated by dividing total occupied rooms, including complimentary rooms, by the total rooms available. The primary drivers in changes to our ADR and RevPAR calculations include: room inventory, which from time to time is impacted by renovations and maintenance; retail room rates, which are reviewed periodically and may fluctuate based on day of the week, group utilization, etc.; and the mix of cash and complimentary patron volumes which impact our occupancy levels. For the nine months ended September 30, 2014 and 2013, our ADR was $79 and $82, respectively, excluding complimentary rooms and $45 and $47, respectively, including complimentary rooms. Room inventory and room revenue decreased in 2014 compared to 2013 due to hotel renovations. RevPAR for the nine months ended September 30, 2014 and 2013 was approximately $38 and $42, respectively, including complimentary rooms.

Expansion of Regional Gaming

All of our properties experience varying competitive pressures, from casinos in western Pennsylvania, western New York, northern West Virginia and eastern Ohio. We believe the expansion of gaming in Ohio, which includes casinos that opened in Cleveland in May 2012 and Columbus in October 2012 and additional casinos in Cincinnati and Toledo, as well as the installation of VLTs at existing horse race tracks near Cleveland, one of which opened in April 2013 and the other in December 2013 and the relocation of a racetrack to Austintown, Ohio, which opened in September 2014, will have a negative impact on our results of operations at all our properties and such impact may be material. In order to sustain our market share in the increased competitive environment, we continuously reevaluate our advertising strategies and promotional offers to our guests to ensure our reinvestment levels reflect the appropriate level of offerings to sustain our margins. In addition, we believe economic uncertainty, gaming market saturation and slower than anticipated economic recovery continues to impact overall gaming results in our regional markets.

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Other Matters:

On August 26, 2014, the Board of Health of Hancock County, West Virginia (the "Board of Health") adopted and approved the Clean Air Regulation Act of 2014 ("Regulation"), which will be effective July 1, 2015. The Regulation, as currently adopted, will ban smoking in public places in Hancock County including at Mountaineer. We are continuing to evaluate the Regulation, its impact on our Mountaineer facility, which we anticipate could have a significant negative impact on our business and results of operations, and steps to become compliant with the Regulation upon its effective date.

Results of Operations

Financial results for the three months ended September 30, 2014 (aggregated Successor and Predecessor periods) compared to the three months ended September 30, 2013.

The results of continuing operations for the Period September 19 through September 30, 2014 (Successor) and July 1 through September 18, 2014 (Predecessor) compared to the three months ended September 30, 2013 are summarized below (unaudited, in thousands):

	Successor			Predecessor			Aggregated			Predecessor

	Successor			Predecessor			Aggregated			Predecessor
	(a) Period from September 19 to September 30			(b) Period from July 1 to September 18			(a) + (b) Three Months Ended September 30			Three Months Ended September 30



	2014			2014			2014			2013
	2014			2014			2014			2013
Operating Revenues:
Gaming	$	14,399		$	100,760		$	115,159		$	115,268
Pari-mutuel commissions		446			3,391			3,837			4,133
Food and beverage		1,270			8,460			9,730			9,804
Hotel		199			1,053			1,252			1,451
Other		773			3,345			4,118			3,791


		17,087			117,009			134,096			134,447
Less—promotional allowances		(776	)		(4,860	)		(5,636	)		(5,584	)


Net operating revenues		16,311			112,149			128,460			128,863


Operating expenses:
Gaming		8,659			59,644			68,303			68,444
Pari-mutuel commissions		520			3,077			3,597			3,548
Food and beverage		1,031			6,810			7,841			8,170
Hotel		114			590			704			779
Other		475			2,015			2,490			2,618
Marketing and promotions		889			3,397			4,286			4,165
General and administrative		2,754			15,664			18,418			15,883
Depreciation and amortization		1,289			6,742			8,031			7,691


Total operating expenses		15,731			97,939			113,670			111,298


Strategic transaction costs		618			6,716			7,334			2,723
Loss on the sale or disposal of property		—			139			139			161


Operating (loss) income		(38	)		7,355			7,317			14,681


Interest expense, net		(1,812	)		(15,055	)		(16,867	)		(17,389	)
Provision for income taxes		(1,307	)		(687	)		(1,994	)		(921	)


Loss	$	(3,157	)	$	(8,387	)	$	(11,544	)	$	(3,629	)

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Net Operating Revenues

Net operating revenues for the three months ended September 30, 2014, comprised of $119.0 million in gaming and pari-mutuel revenues (92% of total net revenues), $15.1 million of non-gaming revenues (12% of total net revenues) less $5.6 million of promotional allowances (-4% of total net revenues), decreased $0.4 million, or 0.3%, compared to net operating revenues for the three months ended September 30, 2013, comprised of $119.4 million in gaming and pari-mutuel revenues (92% of total net revenues), $15.0 million of non-gaming revenues (12% of total net revenues) less $5.6 million of promotional allowances (-4% of total net revenues). The decrease was primarily attributable to the factors detailed below.

Gaming

Gaming revenues are comprised of the net win from our slot operations, table games and poker. Gaming revenues for the three months ended September 30, 2014 of $115.2 million represents a $0.1 million, or 0.1%, decrease compared to the prior year period. The decrease of $0.1 million is comprised of a decrease in slot revenue of $0.3 million, offset an increase in table gaming and poker revenue of $0.2 million. The decrease in gaming revenues was primarily due to continued competitive pressures principally from a new racino near Cleveland, which opened in December 2013, and to a lesser extent, a new racino in Austintown, Ohio, which opened in September 2014.

Gaming revenue at Mountaineer decreased slightly to $44.1 million for the three months ended September 30, 2014, compared to the prior year period. The decrease is comprised of a decrease in slot and table gaming revenue of $0.1 million each, offset by an increase in poker revenue of $0.1 million

Gaming revenue at Presque Isle Downs decreased by $2.5 million, or 6.5%, to $35.8 million for the three months ended September 30, 2014, compared to the prior year period. The decrease is comprised of a decrease in slot and poker revenue of $2.6 million and $0.1 million, respectively, offset by an increase in table gaming revenue of $0.1 million.

Gaming revenue at Scioto Downs increased by $2.5 million, or 7.6%, to $35.3 million for the three months ended September 30, 2014, compared to the prior year period. The increase is comprised entirely of an increase in slot revenue.

Pari-Mutuel Commissions

Pari-mutuel commissions consist of commissions earned from thoroughbred and harness racing and importing/exporting of simulcast signals from/to other race tracks. Pari-mutuel commissions for the three months ended September 30, 2014 of $3.8 million represents a $0.3 million, or 7.1%, decrease compared to the prior year period.

Pari-mutuel commissions at Mountaineer decreased by $0.3 million, or 16.6%, to $1.6 million for the three months ended September 30, 2014, compared to prior year period. The decrease is primarily due to a reduction in the number of races during the third quarter of 2014 as a result of a decrease in the number of races held per live race day.

Pari-mutuel commissions at Presque Isle Downs decreased by $0.1 million, or 4.0%, to $1.3 for the three months ended September 30, 2014 compared to the prior year period primarily due to decrease in wagering on live racing compared to the prior year period.

Pari-mutuel commissions at Scioto Downs increased by $0.1 million, or 7.9%, to $1.0 for the three months ended September 30, 2014 compared to the prior year period. The increase is primarily attributable to an increase in the number of live race days and a greater number races per day during the third quarter of 2014 compared to the prior year period.

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Food and Beverage

Revenue from our food and beverage operations for the three months ended September 30, 2014 of $9.7 million represents a $0.1 million, or 0.8%, decrease compared to the prior year period.

Food and beverage revenue at Mountaineer decreased by $0.1 million, or 16.6%, to $3.7 million for the three months ended September 30, 2014, compared to the prior year period. The decrease is consistent with the decrease in gaming revenue and overall decline in patron traffic.

Food and beverage revenue at Presque Isle Downs was relatively flat at $3.2 million for the three months ended September 30, 2014, compared to the prior year period. Although there was a decrease in gaming revenue and a decline in patron traffic compared to the prior year period, food and beverage revenue was flat primarily due to an increase in promotional offerings during the third quarter of 2014.

Food and beverage revenue at Scioto Downs was relatively flat at $2.8 million for the three months ended September 30, 2014, compared to the prior year period.

Hotel

Revenue from hotel operations at Mountaineer for the three months ended September 30, 2014 of $1.3 million represents a $0.2 million, or 13.7%, decrease compared to the prior year period. The decrease is primarily attributable to a decrease in ADR and RevPAR. Room inventory and room revenue decreased in 2014 compared to 2013 due to hotel renovations.

Other Revenues

Other revenues are primarily derived from operations of Mountaineer's Spa, Fitness Center, retail outlets and golf course; from the sale of programs, admission fees, and lottery tickets; from check cashing and ATM services and from special events at our entertainment and convention centers. Other revenues for the three months ended September 30, 2014 of $4.1 million represent a $0.3 million, or 8.6%, increase compared to the prior year period. The increase is primarily due to a $0.2 million increase at our Scioto Downs property from increased commissions earned from check cashing and ATM services and an increase in entertainment revenue, and a $0.1 million increase at Presque Isle Downs from an increase in racing program sales and commissions earned from ATM services.

Promotional Allowances

Promotional allowances of $5.6 million for the three months ended September 30, 2014 increased slightly compared to the prior year period. The increase in promotional allowances is comprised of an increase of $0.1 million at Mountaineer, offset by a decrease at Presque Isle Downs and Scioto Down of $0.1 million and $45,000, respectively.

Operating Expenses

Gaming

Gaming expense for the three months ended September 30, 2014 of $68.1 million represents a $0.3 million, or 0.4%, decrease compared to the prior year period. The decrease of $0.3 million is comprised of a decrease in other gaming operating costs of $0.4 million, offset by an increase in gaming taxes and assessments of $0.1 million.

Gaming taxes and assessments as a percentage of gaming revenues varies by the states in which our properties operate. On a blended basis, our gaming taxes (excluding charges for other gaming assessment costs) as a percentage of gaming revenue increased to 52.2% for the three months ended September 30, 2014, compared to 51.5% for the prior year period. The increase is primarily due to an increase in the effective tax rate at Presque Isle Downs and Scioto Downs of 1.3% and 1.7%,

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respectively. The increase of 1.3% in the effective tax rate at Presque Isle Downs to 57.5% for the three months ended September 30, 2014 is largely due to impact of the fixed annual $10 million local share assessment to slot revenue on a smaller revenue base. The increase of 1.7% in the effective tax rate at Scioto Downs to 44.3% for the three months ended September 30, 2014, is due the requirement, effective July 1, 2013, to remit 0.3% of its gross VLT revenue to provide funding support for programs that provide for gaming addiction and other related addiction services. Additionally, effective January 1, 2014, the amounts contributed to the Ohio horsemen for racing purses increased by 1.5% to 10.5% of gross VLT revenue. Mountaineer's gaming taxes as a percentage of gaming revenue at 54.3% for the three months ended September 30, 2014 was consistent with the prior year period.

The decrease in other gaming operating costs of $0.3 million is primarily due to the reduction of compensation related costs at all of our properties.

Pari-Mutuel

Pari-mutuel expense was relatively flat at $3.6 million for the three months ended September 30, 2014, compared to the prior year period. Our gross profit margin for the three months ended September 30, 2014 decreased to 7.0% from 14.2% in the prior year period primarily attributable to our Scioto Downs property which had an increase in compensation related costs in excess of revenue increases due to a greater number of live race days and races per day during the third quarter of 2014 compared to the prior year period.

Food and Beverage

Food and beverage expense decreased by $0.3 million, or 4.0%, to $7.8 million for the three months ended September 30, 2014, compared to the prior year period. Our gross profit margin for the three months ended September 30, 2014 increased to 19.4% from 16.7% in the prior year period primarily due to decreased food and compensation related costs in excess of revenue changes that were flat or declined slightly.

Hotel

Hotel expense decreased by $0.1 million, or 9.7%, to $0.7 million for the three months ended September 30, 2014, compared to the prior year period. The decrease was consistent with the decline in hotel revenues primarily attributable to a decrease in room inventory during 2014 compared to 2013 due to hotel renovations. Our gross profit margin for the three months ended September 30, 2014 decreased to 43.8% from 46.3% in the prior year period because a significant portion of our hotel expenses are fixed and cannot be proportionately reduced to offset decreases in hotel revenue.

Other

Other expense decreased by $0.1 million, or 4.9%, to $2.5 million for the three months ended September 30, 2014, compared to the prior year period attributable primarily to a decrease in entertainment and valet parking expenses at Presque Isle Downs and a reduction in golf course operating expenses at Mountaineer.

Marketing and Promotions

Marketing and promotions expense decreased by $0.1 million, or 2.9%, to $4.3 million for the three months ended September 30, 2014, compared to the prior year period. The decrease was primarily attributable to a decrease of $0.2 million in direct and incentive compensation and related benefits due to the effective control of variable compensation, and a decrease of $0.2 million in consulting expenses due to cost containment initiatives as current year operating results declined. The

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decreases were offset by an increase of $0.5 million in advertising costs for direct mail promotions and sponsorships.

General and Administrative

General and administrative expense increased by $2.5 million, or 16.0%, to $18.4 million for the three months ended September 30, 2014, compared to the period year period. Significant factors contributing to the increase in general and administrative expense, as compared to the prior year period, were:

•: an increase in long term incentive compensation of $1.3 million. In connection with the Mergers, any unvested RSUs, Stock Options, and Performance awards granted pursuant to the 2010 Plan fully vested upon the Acquisition Date;
•: an increase in severance cost of $1.1 million primarily due to the departure of our Chief Financial Officer in September 2014;
•: an increase in repairs and maintenance costs of $0.3 million at our Mountaineer and Scioto Downs properties and;
•: a decrease in general operating expenses of $0.2 million due to cost containment efforts as operating results declined.

Strategic transaction costs

As a result of the strategic business combination with Eldorado entered into on September 9, 2013, we incurred costs of $7.3 million and $2.7 million during the three months ended September 30, 2014 and 2013, respectively. These costs were comprised primarily of legal, financial advisory, accounting and consulting costs.

Depreciation and amortization

Depreciation expense increased by $0.3 million, or 4.4%, to $8.0 million for the three months ended September 30, 2014, compared to the prior year period. The increase was primarily attributable to an increase at Presque Isle Downs and Mountaineer of $0.2 million and $0.1 million, respectively, due to an increase in capital expenditures placed in service during 2013. During 2013, the additions at Presque Isle Downs predominately consisted of new slot machines and the construction of barns, while the additions at Mountaineer primarily included new slot machines and casino renovations.

Interest Expense, net

Interest expense, net decreased by $0.5 million, or 3.0%, to $16.7 million for the three months ended September 30, 2014, compared to the prior year period. The decrease was attributable to the fair value accounting in connection with the Mergers. The long term debt assumed on the Acquisition Date was fair valued based on quoted market prices, resulting in the elimination of deferred financing costs and the amortization of a premium on the fair value adjustment during the Successor period.

Income Taxes

The income tax provision results in an effective tax rate that has an unusual relationship to the Company's pretax income (loss). This is due to an increase in the federal and state valuation allowances on the Company's deferred tax assets as discussed below.

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The difference between the effective rate and the statutory rate is attributed primarily to the federal and state valuation allowances on the Company's deferred tax assets as discussed below. As a result of our net operating losses and the net deferred tax asset position (after exclusion of certain deferred tax liabilities that generally cannot be offset against deferred tax assets, known as "Naked Credits"), we expect to continue to provide for a full valuation allowance against all of our net federal and our net state deferred tax assets. During the three months ended September 30, 2014, our tax expense was $2.0 million. The third quarter of 2014 provision reflects the recording of additional naked credit amortization in the amount of $1.4 million and a local income tax provision of $0.6 million. During the three months ended September 30, 2013, our tax expense was $0.9 million. The third quarter of 2013 provision reflects the recording of additional naked credit amortization in the amount of $0.8 million and a local income tax provision of $0.1 million.

Financial results for the nine months ended September 30, 2014 (aggregated Successor and Predecessor periods) compared to the nine months ended September 30, 2013.

The results of continuing operations for the Period September 19 through September 30, 2014 (Successor) and January 1 through September 18, 2014 (Predecessor) compared to the nine months ended September 30, 2013 are summarized below (unaudited, in thousands):

	Successor			Predecessor			Aggregated			Predecessor

	(a) Period from September 19 to September 30			(b) Period from January 1 to September 18			(a) + (b) Nine Months Ended September 30			Nine Months Ended September 30
	2014			2014			2014			2013
Operating Revenues:
Gaming	$	14,399		$	320,366		$	334,765		$	349,223
Pari-mutuel commissions		446			8,014			8,460			8,932
Food and beverage		1,270			25,319			26,589			27,452
Hotel		199			3,489			3,688			4,099
Other		773			9,619			10,392			9,582

		17,087			366,801			383,894			399,288
Less—promotional allowances		(776	)		(14,930	)		(15,706	)		(16,321	)

Net operating revenues		16,311			351,877			368,188			382,967

Operating expenses:
Gaming		8,659			190,305			198,964			205,533
Pari-mutuel commissions		520			8,053			8,573			8,525
Food and beverage		1,031			21,222			22,253			23,071
Hotel		114			2,087			2,201			2,307
Other		475			5,740			6,215			6,315
Marketing and promotions		889			10,467			11,356			11,882
General and administrative		2,754			47,081			49,835			47,380
Depreciation and amortization		1,289			22,231			23,520			22,782

Total operating expenses		15,731			307,186			322,917			327,795

Strategic transaction costs		618			7,620			8,238			2,723
Loss (gain) on the sale or disposal of property		—			184			184			68

Operating (loss) income		(38	)		36,887			36,849			52,381

Interest expense, net		(1,812	)		(49,832	)		(51,644	)		(52,150	)
Provision for income taxes		(1,307	)		(2,837	)		(4,144	)		(2,260	)

(Loss) Income	$	(3,157	)	$	(15,782	)	$	(18,939	)	$	(2,029	)

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Net Operating Revenues

Net operating revenues for the nine months ended September 30, 2014, comprised of $343.2 million in gaming and pari-mutuel revenues (93% of total net revenues), $40.7 million of non-gaming revenues (11% of total net revenues) less $15.7 million of promotional allowances (-4% of total net revenues), decreased $14.8 million, or 3.9%, compared to net operating revenues for the nine months ended September 30, 2013, comprised of $358.2 million in gaming and pari-mutuel revenues (93% of total net revenues), $41.1 million of non-gaming revenues (11% of total net revenues) less $16.3 million of promotional allowances (-4% of total net revenues). The decrease in net operating revenues was primarily attributable to the factors described below.

Gaming

Gaming revenues for the nine months ended September 30, 2014 of $334.8 million represents a $14.5 million, or 4.1%, decrease compared to the prior year period. The decrease of $14.5 million is comprised of a decrease in slot, table gaming and poker revenue of $12.8 million, $1.6 million and $0.1 million, respectively. The decrease in gaming revenues was primarily due to continued competitive pressures principally from the two new racinos near Cleveland, which opened in April 2013 and December 2013, and to a lesser extent, a new racino in Austintown, Ohio, which opened in September 2014.

Gaming revenues at Mountaineer decreased by $6.2 million, or 4.6%, to $129.1 million for the nine months ended September 30, 2014, compared to the prior year period. The decrease is comprised of a decrease in slot and table gaming revenue of $5.4 million and $0.9 million, respectively, offset by an increase in poker revenue of $0.1 million.

Gaming revenues at Presque Isle Downs decreased by $11.2 million, or 9.9%, to $101.9 million for the nine months ended September 30, 2014, compared to the prior year period. The decrease is comprised of a decrease in slot, table gaming and poker revenue of $10.3 million, $0.7 million and $0.2 million, respectively.

Gaming revenues at Scioto Downs increased by $2.9 million, or 2.9%, to $103.8 million for the nine months ended September 30, 2014, compared to the prior year period. The increase in gaming revenue was primarily a result of an increase in our share of the Columbus slot market between the two periods, as well as overall growth in the Columbus slot market.

Pari-Mutuel Commissions

Pari-mutuel commissions for the nine months ended September 30, 2013 of $8.5 million represent a $0.5 million, or 5.3%, decrease compared to the prior year period.

Pari-mutuel commissions at Mountaineer decreased by $0.5 million, or 10.4%, to $3.9 million for the nine months ended September 30, 2014, compared to prior year. The decrease is due to a reduction in the number of races related to weather conditions during 2014 and a reduction in the number of races per live race day, and to a lesser extent, an overall decline in import and export simulcast handle from depressed racing conditions nationwide. According to Equibase, national wagering on races has decreased by 2.53% for the nine months ended September 30, 2014, compared to the prior year period.

Pari-mutuel commissions at Presque Isle Downs and Scioto Downs were relatively flat for the nine months ended September 30, 2014 compared to the prior year period.

Food and Beverage

Revenue from our food and beverage operations for the nine months ended September 30, 2014 of $26.6 million represents a $0.9 million, or 3.1%, decrease compared to the prior year period.

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Food and beverage revenue at Mountaineer decreased by $0.3 million, or 2.3%, to $10.7 million for the nine months ended September 30, 2014, compared to the prior year period. The decrease was consistent with the decrease in gaming revenue and overall decline in patron traffic.

Food and beverage revenue at Presque Isle Downs decreased by $0.5 million, or 6.0%, to $8.1 million for the nine months ended September 30, 2014, compared to the prior year period. The decrease was consistent with the decrease in gaming revenue and overall decline in patron traffic.

Food and beverage revenue at Scioto Downs decreased by $0.1 million, or 1.2%, to $7.8 million for the nine months ended September 30, 2014, compared to the prior year period. The decrease was primarily attributable to changes in the promotional buffet offerings for certain card levels.

Hotel

Revenue from hotel operations at Mountaineer for the nine months ended September 30, 2014 of $3.7 million represents a $0.4 million, or 10.0%, decrease compared to the prior year period. The decrease is primarily attributable to a decrease in ADR and RevPAR. Room inventory and room revenue decreased in 2014 compared to 2013 due to hotel renovations.

Other Revenues

Other revenues for the nine months ended September 30, 2014 of $10.4 million represent a $0.8 million, or 8.4%, increase compared to the prior year period. The increase is comprised of a $0.5 million increase at Scioto Downs which is primarily attributed to increased entertainment revenue from an expanded summer concert series in 2014 and commissions earned from check cashing and ATM services, a $0.2 million increase at Mountaineer primarily attributed to increased convention center revenue, and $0.1 million increase at Presque Isle Downs mostly from retail sales.

Promotional Allowances

Promotional allowances decreased by $0.6 million, or 3.8%, to $15.7 million for the nine months ended September 30, 2014, compared to the prior year period. The decrease in promotional allowances is comprised of a decrease at Mountaineer and Presque Isle Downs of $0.4 million and $0.2 million, respectively. Decreases in promotional allowances over the prior year are due to changes in the promotional offerings of our frequent player program for certain card levels, as well as, a decrease in overall redemption as revenues have declined.

Operating Expenses

Gaming

Gaming expense for the nine months ended September 30, 2014 of $199.0 million represents a $6.6 million, or 3.2%, decrease compared to the prior year period. The decrease of $6.6 million is comprised of a decrease in gaming taxes and assessments of $5.1 million and other gaming operating costs of $1.5 million.

The decrease in gaming taxes during the third quarter of 2014 is consistent with the decrease in gaming revenues at Mountaineer and Presque Isle Downs. Gaming taxes and assessments as a percentage of gaming revenues varies by the states in which our properties operate. On a blended basis, our gaming taxes (excluding charges for other gaming assessment costs) as a percentage of gaming revenue increased to 52.2% for the nine months ended September 30, 2014, compared to 51.5% for the prior year period, primarily due to an increase in the effective tax rate at Presque Isle Downs and Scioto Downs of 1.2% and 1.7%, respectively. The increase of 1.2% in the effective tax rate at Presque Isle Downs to 57.4% for the nine months ended September 30, 2014 is largely due to impact of the fixed annual $10 million local share assessment to slot revenue on a smaller revenue base, as well as the forgiveness of the 1.5% administration fee on slot and table games for Pennsylvania

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gaming facilities due to budget surplus for two months during the second quarter of 2013. The increase of 1.7% in the effective tax rate at Scioto Downs to 44.3% is due the requirement, effective July 1, 2013, to remit 0.3% of its gross VLT revenue to provide funding support for programs that provide for gaming addiction and other related addiction services. Additionally, effective January 1, 2014, the amounts contributed to the Ohio horsemen for racing purses increased by 1.5% to 10.5% of gross VLT revenue. Mountaineer's gaming taxes as a percentage of gaming revenue was 54.4% for the three months ended September 30, 2014 compared to 54.3% in the prior year period.

Other gaming operating costs decreased by $1.5 million to $22.9 million for the nine months ended September 30, 2014 compared to the prior year period, primarily due to the reduction of compensation related costs at all of our properties as well as a reduction of slot lease expense at Presque Isle Downs.

Pari-Mutuel

Pari-mutuel expense increased by $48,000, or 0.6%, to $8.6 million for the nine months ended September 30, 2014, compared to the prior year period. The increase is primarily attributable to an increase in compensation related costs at Scioto Downs as a result of a greater number of live race days during the year compared to the prior year period. The increase at Scioto Downs was offset by a decrease in expenses at Mountaineer primarily attributable to due to a reduction in the number of races related to weather conditions during 2014 and a reduction in the number of races per live race day compared to the prior year period.

Food and Beverage

Food and beverage expense increased by $0.3 million, or 1.2%, to $22.3 million for the nine months ended September 30, 2013, compared to the prior year period. Our gross profit margin decreased to 16.3% for the nine months ended September 30, 2014 from 19.9% in the prior year period. The overall gross profit margin percentage decline was primarily related to our Mountaineer and Presque Isle Downs facility due to increased food and compensation costs related to the buffet that was renovated during the fourth quarter of 2014, coupled with a decline in food and beverage revenue due to a reduction in patron traffic. Our Mountaineer and Scioto Downs facilities reported increased gross profit margins over the prior year period due to food and compensation related costs declining in excess of revenue declines.

Hotel

Expense from the hotel operations at Mountaineer for the nine months ended September 30, 2014 of $2.2 million represents a $0.1 million, or 4.6%, decrease compared to the prior year period. The decrease is primarily attributable to a decrease in room inventory during 2014 compared to 2013 due to hotel renovations.

Other

Other expense of $6.2 million for the nine months ended September 30, 2014 represents a $0.1 million, or 1.6%, decrease compared to the prior year period. The decrease is primarily due to a reduction in entertainment costs at Presque Isle Downs and Mountaineer, a decrease in valet parking expenses at Presque Isle Downs, and a decrease in golf course operating expenses at Mountaineer. The decreases were offset by an increase in entertainment costs at Scioto Downs and an increase in retail expenses at Presque Isle Downs.

Marketing and Promotions

Marketing and promotions expense decreased by $0.5 million, or 4.4%, to $11.4 million for the nine months ended September 30, 2014, compared to the prior year period. The decrease was primarily due to a decrease of $1.1 million at Presque Isle Downs related to a reduction in the redemption of

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certain promotional offerings from reduced patron volume, reduced advertising costs in response to managing costs on declining revenue and a reduction in the cost of complimentary soft drinks provided in our self-serve beverage stations. In addition, we saw a decrease of $0.4 million at our corporate office as a result of the departure of our Chief Marketing Officer in January 2014; partially offset by an increase at Mountaineer and Scioto Downs of $0.5 million and $0.4 million, respectively, primarily attributed to increased promotions and advertising expense during 2014.

General and Administrative

General and administrative expense increased by $2.5 million, or 5.2%, to $49.8 million for the nine months ended September 30, 2014, compared to the period year period. Significant factors contributing to the increase in general and administrative expense, as compared to the prior year period, were:

•: an increase in long term incentive compensation of $1.3 million. In connection with the Mergers, any unvested RSUs, Stock Options, and Performance awards granted pursuant to the 2010 Plan vested upon the Acquisition Date;
•: an increase in severance costs of $2.1 primarily due to the departure of certain executive offers at our corporate office and key employees at our properties in January 2014 and the departure of our Chief Financial Officer in September 2014;
•: an increase in repairs and maintenance costs of $0.4 million attributable to the first quarter of 2014 harsh weather conditions and aging maintenance equipment;
•: an increase in legal costs and insurance related claims of $0.2 million; offset by
•: a decrease in direct and incentive compensation and related benefits of $0.6 due to continued cost containment measures and the departure of certain executive offers at our corporate office and key employees at our properties in January 2014 and our former Chief Executive Officer in May 2013;
•: a decrease in consulting and general operating expenses of $0.9 million due to cost containment efforts as operating results declined.

Strategic transaction costs

As a result of the strategic business combination with Eldorado entered into on September 9, 2013, we incurred costs of $8.2 million and $2.7 million during the nine months ended September 30, 2014 and 2013, respectively. These costs were comprised primarily of legal, financial advisory, accounting and consulting costs.

Depreciation and amortization

Depreciation expense increased by $0.7 million, or 3.2%, to $23.5 million for the nine months ended September 30, 2014 compared to the prior year period. The increase was primarily attributable to an increase at Presque Isle Downs and Mountaineer of $0.4 million and $0.3 million, respectively, due to an increase in capital expenditures placed in service during 2013. During 2013, the additions at Presque Isle Downs primarily included new slot machines and the construction of barns, while the additions at Mountaineer primarily included new slot machines and casino renovations.

Interest Expense, net

Interest expense, net decreased by $0.5 million, or 1.0%, to $51.6 million for the nine months ended September 30, 2014, compared to the prior year period. The decrease was attributable to the fair value accounting in connection with the Mergers. The long term debt assumed on the Acquisition Date

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was fair valued based on quoted market prices, resulting in the elimination of deferred financing costs and the amortization of a premium on the fair value adjustment during the Successor period.

Income Taxes

The difference between the effective rate and the statutory rate is attributed primarily to the federal and state valuation allowances on the Company's deferred tax assets as discussed below. As a result of our net operating losses and the net deferred tax asset position (after exclusion of certain deferred tax liabilities that generally cannot be offset against deferred tax assets, known as "Naked Credits"), we expect to continue to provide for a full valuation allowance against all of our net federal and our net state deferred tax assets. During the nine months ended September 30, 2014, our tax expense was $4.1 million. The nine months ended September 30, 2014 provision reflects the recording of additional naked credit amortization in the amount of $3.4 million and a local income tax provision of $0.9 million. For the nine months ended September 30, 2013, our tax expense was $2.3 million. The nine months ended September 30, 2013 provision reflects the recording of additional naked credit amortization in the amount of $2.6 million and a local income tax provision of $0.3 million. Additionally, during the nine months ended September 30, 2013, the Company released unrecognized tax benefits of $0.6 million, which included $0.2 million of accrued interest, as a result of the lapse in the statute of limitations for the original tax return years and subsequent loss carryback periods.

Adjusted EBITDA

Adjusted EBITDA (defined below), a non GAAP financial measure, has been presented as a supplemental disclosure because it is a widely used measure of performance and basis for valuation of companies in our industry and we believe that this non GAAP supplemental information will be helpful in understanding the Company's ongoing operating results. Adjusted EBITDA represents (losses) earnings before interest expense (income), income tax expense (benefit), depreciation and amortization, (loss) gain on the sale or disposal of property, other regulatory gaming assessment costs, loss on asset impairment, project opening costs, strategic transaction costs, loss (gain) on debt modification and extinguishment and equity in loss on unconsolidated joint venture, to the extent that such items existed in the periods presented. Adjusted EBITDA is not a measure of performance or liquidity calculated in accordance with GAAP, is unaudited and should not be considered an alternative to, or more meaningful than, net income (loss) as an indicator of our operating performance. Uses of cash flows that are not reflected in Adjusted EBITDA include capital expenditures, interest payments, income taxes, debt principal repayments and certain regulatory gaming assessments, which can be significant. As a result, Adjusted EBITDA should not be considered as a measure of our liquidity. Other companies that provide EBITDA information may calculate EBITDA differently than we do. The definition of Adjusted EBITDA may not be the same as the definitions used in any of our debt agreements.

The following table summarizes our net revenues by property, our Consolidated Adjusted EBITDA, and Adjusted EBITDA by property for the Successor and Predecessor Periods compared to

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the three months ended September 30, 2014 , in addition to reconciling Adjusted EBITDA to net income (loss) in accordance with U.S. GAAP (unaudited, in thousands):

	Successor			Predecessor			Aggregated			Predecessor

	(a)			(b)			(c)
	Period from September 19 to September 30			Period from July 1 to September 18			Three Months ended September 30			Three Months ended September 30
	2014			2014			2014			2013
Net Revenues:
Mountaineer Casino, Racetrack & Resort	$	6,106		$	43,973		$	50,079		$	50,606
Presque Isle Downs & Casino		4,927			34,502			39,429			42,038
Scioto Downs		5,278			33,674			38,952			36,219
Corporate		—			—			—			—

Net revenues	$	16,311		$	112,149		$	128,460		$	128,863

Adjusted EBITDA from continuing operations:
Mountaineer Casino, Racetrack & Resort	$	1,032		$	8,114		$	9,146		$	9,682
Presque Isle Downs & Casino		344			5,413			5,757			6,199
Scioto Downs		1,615			11,187			12,802			11,641
Corporate expenses		(799	)		(3,762	)		(4,561	)		(2,282	)

Consolidated Adjusted EBITDA	$	2,192		$	20,952		$	23,144		$	25,240

Mountaineer Casino, Racetrack & Resort:
Net income	$	508		$	5,756		$	6,264		$	7,452
Interest income		—			—			—			—
(Benefit) provision for income taxes		(60	)		413			353			—
Depreciation and amortization		585			1,970		$	2,555			2,251
Gain on the sale or disposal of property		(1	)		(25	)		(26	)		(21	)

Adjusted EBITDA	$	1,032		$	8,114		$	9,146		$	9,682

Presque Isle Downs & Casino:
Net (loss) income	$	(879	)	$	2,175		$	1,296		$	3,373
Interest income		—			(1	)		(1	)		(1	)
Provision for income taxes		676			1,273			1,949			621
Depreciation and amortization		453			1,803			2,256			2,040
Other regulatory gaming assessments		94			—			94			(16	)
Loss on the sale or disposal of property		—			163			163			182

Adjusted EBITDA	$	344		$	5,413		$	5,757		$	6,199

Scioto Downs:
Net income	$	349		$	7,777		$	8,126		$	7,942
Interest expense		18			1			19			22
Provision for income taxes		769			447			1,216			287
Depreciation and amortization		479			2,961			3,440			3,390
Loss on disposal of property		—			1			1			—

Adjusted EBITDA	$	1,615		$	11,187		$	12,802		$	11,641

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	Successor			Predecessor			Aggregated			Predecessor

	(a)			(b)			(c)
	Period from September 19 to September 30			Period from July 1 to September 18			Three Months ended September 30			Three Months ended September 30


	2014			2014			2014			2013
	2014			2014			2014			2013
Corporate:
Net loss	$	(3,135	)	$	(24,095	)	$	(27,230	)	$	(22,396	)
Interest expense, net of interest income		1,794			15,055			16,849			17,368
(Benefit) provision for income taxes		(78	)		(1,446	)		(1,524	)		13
Depreciation		1			8			9			10
Loss on the sale or disposal of property		1			—			1			—
Strategic transaction costs		618			6,716			7,334			2,723

Adjusted EBITDA	$	(799	)	$	(3,762	)	$	(4,561	)	$	(2,282	)

MTR Gaming Group, Inc. (consolidated)
Net loss	$	(3,157	)	$	(8,387	)	$	(11,544	)	$	(3,629	)
Interest expense, net of interest income		1,812			15,055			16,867			17,389
Provision for income taxes		1,307			687			1,994			921
Depreciation and amortization		1,518			6,742			8,260			7,691
Other regulatory gaming assessments		94			—			94			(16	)
Loss on the sale or disposal of property		—			139			139			161
Strategic transaction costs		618			6,716			7,334			2,723

Consolidated Adjusted EBITDA	$	2,192		$	20,952		$	23,144		$	25,240

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The following table summarizes our net revenues by property, our Consolidated Adjusted EBITDA, and Adjusted EBITDA by property for the Successor and Predecessor Periods compared to the nine months ended September 30, 2014, in addition to reconciling Adjusted EBITDA to net income (loss) in accordance with U.S. GAAP (unaudited, in thousands):

	Successor			Predecessor			Aggregated			Predecessor

	(a)			(b)			(c)
	(a)			(b)			(c)
	Period from September 19 to September 30			Period from January 1 to September 18
							Nine Months ended September 30			Nine Months ended September 30


	2014			2014			2014			2013
	2014			2014			2014			2013
Net Revenues:
Mountaineer Casino, Racetrack & Resort	$	6,106		$	138,685		$	144,791		$	151,507
Presque Isle Downs & Casino		4,927			105,319			110,246			121,706
Scioto Downs		5,278			107,873			113,151			109,754
Corporate		—			—			—			—


Net revenues	$	16,311		$	351,877		$	368,188		$	382,967




Adjusted EBITDA from continuing operations:
Mountaineer Casino, Racetrack & Resort	$	1,032		$	24,140		$	25,172		$	27,858
Presque Isle Downs & Casino		344			15,401			15,745			19,857
Scioto Downs		1,615			36,179			37,794			37,218
Corporate expenses		(799	)		(8,715	)		(9,514	)		(7,258	)


Consolidated Adjusted EBITDA	$	2,192		$	67,005		$	69,197		$	77,675




Mountaineer Casino, Racetrack & Resort:
Net income	$	508		$	17,234		$	17,742		$	21,210
Interest income		—			—			—			(2	)
(Benefit) provision for income taxes		(60	)		413			353			—
Depreciation and amortization		585			6,527			7,112			6,701
Gain on the sale or disposal of property		(1	)		(34	)		(35	)		(51	)


Adjusted EBITDA	$	1,032		$	24,140		$	25,172		$	27,858




Presque Isle Downs & Casino:
Net (loss) income	$	(879	)	$	6,700		$	5,821		$	12,294
Interest income		—			(2	)		(2	)		(2	)
Provision for income taxes		676			2,514			3,190			1,862
Depreciation and amortization		453			5,898			6,351			5,863
Other regulatory gaming assessments		94			83			177			(279	)
Loss on the sale or disposal of property		—			208			208			119


Adjusted EBITDA	$	344		$	15,401		$	15,745		$	19,857




Scioto Downs:
Net income	$	349		$	24,997		$	25,346		$	25,968
Interest expense		18			38			56			61
Provision for income taxes		769			1,356			2,125			997
Depreciation and amortization		479			9,779			10,258			10,192
Loss on disposal of property		—			9			9			—


Adjusted EBITDA	$	1,615		$	36,179		$	37,794		$	37,218

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	Successor			Predecessor			Aggregated			Predecessor

	(a)			(b)			(c)
	(a)			(b)			(c)
	Period from September 19 to September 30			Period from January 1 to September 18
							Nine Months ended September 30			Nine Months ended September 30


	2014			2014			2014			2013
	2014			2014			2014			2013
Corporate:
Net loss	$	(3,135	)	$	(64,713	)	$	(67,848	)	$	(61,501	)
Interest expense, net of interest income		1,794			49,796			51,590			52,093
Benefit for income taxes		(78	)		(1,446	)		(1,524	)		(599	)
Depreciation		1			27			28			—
Loss on the sale or disposal of property		1			1			2			26
Strategic transaction costs		618			7,620			8,238			2,723


Adjusted EBITDA	$	(799	)	$	(8,715	)	$	(9,514	)	$	(7,258	)




MTR Gaming Group, Inc. (consolidated)
Net loss	$	(3,157	)	$	(15,782	)	$	(18,939	)	$	(2,029	)
Interest expense, net of interest income		1,812			49,832			51,644			52,150
Provision for income taxes		1,307			2,837			4,144			2,260
Depreciation and amortization		1,518			22,231			23,749			22,782
Other regulatory gaming assessments		94			83			177			(279	)
Loss on the sale or disposal of property		—			184			184			68
Strategic transaction costs		618			7,620			8,238			2,723


Consolidated Adjusted EBITDA	$	2,192		$	67,005		$	69,197		$	77,675

Liquidity and Capital Resources

The primary sources of liquidity and capital resources have been existing cash, cash flow from operations, borrowings from banks and proceeds from the issuance of debt securities.

At September 30, 2014, our cash and cash equivalents, excluding restricted cash, totaled $62.6 million. As of September 30, 2014, Mountaineer has contributed funds for racing purses, which exceed our purse payment obligations by $2.2 million. This amount is available for payment of future purse obligations at our discretion, and is held in bank accounts owned by the horsemen's association.

At September 30, 2014, we had total debt in the aggregate principal amount of $624.5 million, net of premiums, all of which was secured, and cash collateralized letters of credit of approximately $1.1 million. At September 30, 2014, there were no borrowings under the $20 million senior secured revolving credit facility.

We believe that our cash balances on hand, cash flow from operations, availability under the credit facility and any proceeds from the sale of non-core assets will be sufficient to fund our liquidity needs, including debt service of our Senior Secured Second Lien Notes and any other contemplated capital expenditures and short-term funding requirements for the next twelve months.

We cannot assure you that estimates of our liquidity needs are accurate or that any new business developments or other unforeseen events will not occur. If any of these events occur, it may require additional liquidity to continue to execute our business strategy. We anticipate that, to the extent that we require additional liquidity, it will be funded through the incurrence of indebtedness, capital contributions from the proceeds of equity offerings by ERI or a combination of potential sources of liquidity, although no assurance can be given that such forms of capital will be available to us or available to us on terms which are acceptable, at such time.

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Cash Flow

A summary of cash flows from operating, investing and financing activities for the periods indicated are shown in the following table (unaudited, in thousands):

	Successor		Predecessor

	Period from September 19 to September 30		Period from January 1 to September 18
						Nine Months Ended September 30
						Nine Months Ended September 30
	2014		2014			2013
Cash flow summary
Net cash provided by (used in) operating activities	$	7,464	$	(10,048	)	$	7,579
Net cash provided by (used in) investing activities		1,576		(6,919	)		(36,950	)
Net cash (used in) provided by financing activities		—		(29,604	)		333


Net increase (decrease) in cash and cash equivalents	$	9,040	$	(46,571	)	$	(29,038	)

Operating Cash Flow

Our operating cash inflows are used for operating expenses, debt service, working capital needs and capital expenditures in the normal course of business.

Net cash provided by operating activities approximated $7.5 million during the Successor period and net cash used in operating activities approximated $10.0 during the Predecessor period, compared to net cash provided by operating activities of $7.6 million during the nine months ended September 30, 2013. Current period non-cash expenses included in operating activities of $31.9 million consist primarily of $26.0 million of depreciation and amortization. In 2013, non-cash expenses of $29.1 million included depreciation and amortization of $25.6 million. Additionally, net cash used in operating activities included changes in operating assets and liabilities of approximately $15.1 million and $19.5 million during the nine months ended September 30, 2014 and 2013, respectively.

Investing Cash Flow

Net cash provided by investing activities was $1.6 million during the Successor period and net cash used in investing activities was $6.9 million during the Predecessor period, compared to net cash used in investing activities of $37.0 million during the nine months ended September 30, 2013. During the Successor period, net cash used in investing activities comprised primarily of a decrease in restricted cash of $1.9 million due to a decrease in funds related to horsemen's fines and simulcasting funds that are restricted to payments for improving horsemen's facilities and racing purses at Scioto Downs, offset by capital expenditures of $0.3 million. During the Predecessor period, net cash used in investing activities comprised primarily of capital expenditures (net of reimbursements) of $10.6 million, an increase in deposits and other of $0.4 million, offset by a decrease in restricted cash of $4.1 million due to a decrease in funds related to horsemen's fines and simulcasting funds that are restricted to payments for improving horsemen's facilities and racing purses at Scioto Downs. During the nine months ended September 30, 2013, net cash used in investing activities was $37.0 million, comprised primarily of the $25.0 million payment of the Ohio VLT license fee and capital expenditures (net of reimbursements) of $12.1 million, offset by proceeds from the sale of property and equipment of $0.2 million.

Financing Cash Flow

No cash was provided by or used in financing activities during the Successor period. Cash used in financing activities during the Predecessor period was $29.6 million, compared to $0.3 million cash

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provided by financing activities during the nine months ended September 30, 2013. Cash provided by financing activities during the Predecessor period comprised of $30.0 million due to repurchasing shares of MTR common stock in connection with the Mergers, $0.4 million for the purchase and retirement of treasury stock, partially offset by $0.8 million in proceeds from the exercise of stock options. Cash provided by financing activities was $0.3 million during the nine months ended September 30, 2013, comprised of $0.5 million in proceeds from the exercise of stock options, partially offset by $0.2 million due to the purchase and retirement of treasury stock.

Capital Expenditures

During the nine months ended September 30, 2014, additions to property and equipment and other capital projects aggregated $10.9 million, net of reimbursements, which included $4.3 million for hotel renovations at Mountaineer; $4.1 million for new slot machines and conversions primarily at Mountaineer and Presque Isle Downs; $0.3 million in grandstand clubhouse renovations at Scioto Downs; and other maintenance related expenditures of $2.1 million between all of our properties. The renovations to the hotel at Mountaineer were completed during October 2014.

Under legislation approved by West Virginia in July 2011, Mountaineer participates in a modernization fund which provides for reimbursement from amounts paid to the West Virginia Lottery Commission in an amount equal to $1 for each $2 expended for certain qualifying capital expenditures having a useful life of more than three years and placed into service after July 1, 2011. Qualifying capital expenditures include the purchase of slot machines and related equipment to the extent such slot machines are retained by Mountaineer at its West Virginia location for not less than five years. Any unexpended balance from a given fiscal year will be available for one additional fiscal year, after which time the remaining unused balance carried forward will be forfeited. During the nine months ended September 30, 2014, Mountaineer was reimbursed $0.6 million on qualified capital expenditures. As of September 30, 2014, Mountaineer remains eligible for approximately $3.7 million under annual modernization fund grants that expire in varying dates through June 30, 2016. Additionally, we have received notification from the West Virginia Lottery Commission that Mountaineer is eligible for another estimated $3.6 million of reimbursement from the modernization fund, which will be effective for the period July 1, 2014 through June 30, 2016. We can make no assurances we will be able to make qualifying capital expenditures purchases sufficient to receive reimbursement of the available funds prior to their expiration.

We anticipate spending up to a total of approximately $3.9 million, exclusive of $3.0 million that has been allotted for potential development at Scioto Downs, or $0.5 million after anticipated reimbursements from West Virginia, on capital expenditures during the remainder of 2014.

Debt

Credit Facility

On August 1, 2011, we entered into a senior secured revolving credit facility (the "Credit Facility") with a borrowing availability of $20.0 million and a maturity date of August 1, 2016. The interest rate per annum applicable to loans under the Credit Facility will be, at the Company's option, either (i) LIBOR plus a spread of 4.0%, or (ii) base rate, which will be the "prime rate" of interest in effect on the day of the borrowing request as published in the Wall Street Journal, plus a spread of 3.0%. There were no borrowings outstanding at September 30, 2014.

The Credit Facility is secured by substantially the same assets securing the 11.5% Senior Secured Second Lien Notes due August 1, 2019 (the "Notes"), discussed below (and including securities of the Company's subsidiaries to the extent permitted by law). Borrowings under the Credit Facility are guaranteed by all of our existing and future domestic restricted subsidiaries. The security interest in the

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collateral that secures the Credit Facility is senior to the security interest in the collateral that secures the Notes.

The Credit Facility contains a number of customary covenants and certain financial covenants, including (i) a maximum leverage ratio of 6.75:1.00 for the fiscal quarters ending September 30, 2014 through March 31, 2015 and 7.00:1.00 for fiscal quarters ending June 30, 2015 through December 31, 2015 and thereafter and (ii) a minimum interest coverage ratio of 1.25:1.00 for the fiscal quarters ending September 30, 2014 and thereafter and (iii) a minimum consolidated EBITDA requirement of $80.0 million for the four quarters ending on September 2014 and thereafter. Capital expenditures are also limited to $25.0 million per annum, with carryover provisions (as defined), throughout the term of the Credit Facility.

Permitted indebtedness under the Credit Facility includes furniture and equipment financing provided that the aggregate principal amounts of such indebtedness outstanding at any time shall not exceed the greater of $20.0 million and 4.5% of consolidated net tangible assets, as defined; other unsecured indebtedness at any time not to exceed $5.0 million; and other indebtedness to finance the acquisition, development or construction of any future gaming property provided that (i) such indebtedness shall be unsecured and subordinated to the Credit Facility, (ii) no part of the principal or interest of such indebtedness is required to be paid prior to six months after the maturity date of the Credit Facility and (iii) upon the incurrence of such indebtedness and after giving pro forma effect thereto there shall be no default or event of default and that we shall be in pro forma compliance with the financial covenants.

Senior Secured Second Lien Notes

On August 1, 2011, we completed the offering of $565.0 million in aggregate principal amount of the Notes at an issue price equal to 97% of the aggregate principal amount of the Notes. The Notes will mature on August 1, 2019, with interest payable semi-annually in arrears on February 1 and August 1 of each year.

In October 2014, the Company repurchased $10 million in aggregate principle amount of our 11.25% Senior Secured Second Lien Notes, at a price of $110.25 per $100 in principal amount of the purchased notes, which approximated their carrying value as of September 30, 2014. The repurchase resulted in a $1.2 million annual savings in interest expense.

After giving effect to the repurchase of the bonds in October 2014, the annual interest expense on the Notes approximates $64.5 million. Additionally, annual amortization of the premium on the Notes approximates $10.9 million.

Contractual Obligations

There have been no material changes during the nine months ended September 30, 2014 to our contractual obligations as disclosed in our Annual Report on Form 10-K for the year ended December 31, 2013.

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Other Liquidity Matters

We are faced with certain contingencies involving litigation and environmental remediation and compliance. These commitments and contingencies are discussed in greater detail in "Part II, Item 1. "Legal Proceedings" and Note 10 to our consolidated financial statements, both of which are included elsewhere in this report. In addition, new competition may have a material adverse effect on our revenues, and could have a similar adverse effect on our liquidity. See "Part I, Item 1A. Risk Factors—Risks Related to Our Business" which is included in our Annual Report on Form 10-K for the year ended December 31, 2013.

Critical Accounting Policies

Our critical accounting policies disclosures are included in our Annual Report on Form 10-K for the year ended December 31, 2013. Management believes that there have been no material changes since December 31, 2013. We have not substantively changed the application of our policies and there have been no material changes in assumptions or estimation techniques used as compared to prior periods, except as discussed below.

Business Combinations

We apply the provisions of ASC 805, Business Combinations, in the accounting for our acquisition. It requires us to recognize, the assets acquired and the liabilities assumed at their acquisition date fair values, separately from goodwill. Goodwill as of the acquisition date is measured as the excess of

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consideration transferred over the net of the acquisition date fair values of the assets acquired and the liabilities assumed. While we use our best estimates and assumptions to accurately value assets acquired and liabilities assumed at the acquisition date, our estimates are inherently uncertain and subject to refinement. As a result, during the measurement, period, which may be up to one year from the acquisition date, we record adjustments to the assets acquired and liabilities assumed with the corresponding offset to goodwill. Upon the conclusion of the measurement period or final determination of the values of assets acquired or liabilities assumed, whichever comes first, any subsequent adjustments are recorded to our consolidated statements of operations.

Accounting for business combinations requires our management to make significant estimates and assumptions, especially at the acquisition date including our estimate of intangible assets, which include gaming licenses, trade names and customer loyalty programs. Although we believe the assumptions and estimates we have made have been reasonable and appropriate, they are inherently uncertain. For our gaming license valuation, our properties estimated future cash flows are the primary assumption in the respective intangible valuations. Cash flow estimates include assumptions regarding factors such as recent and budgeted operating performance, net win per unit (revenue), patron visits, growth percentages which were developed considering general macroeconomic conditions as well as competitive impacts from current and anticipated competition through a review of customer market data, operating margins, and current regulatory, social and economic climates. The most significant of the assumptions used in the valuations include: (1) revenue growth/decline percentages; (2) discount rates; (3) effective income tax rates; (4) future terminal values and (5) capital expenditure assumptions. These assumptions are developed for each of our properties based on historical trends in the current competitive markets in which they operate, and projections of future performance and competitions. The primary assumptions with respect to our trade names and customer loyalty program intangibles are selecting the appropriate royalty rates and cost estimates for replacement cost analyses.

In addition, uncertain tax positions and tax related valuation allowances assumed in connection with a business combination are initially estimated as of the acquisition date. We reevaluate these items quarterly based upon facts and circumstances that existed as of the acquisition date with any adjustments to our preliminary estimates being recorded to goodwill if identified within the measurement period. Subsequent to the measurement period or our final determination of the tax allowance's or contingency's estimated value, whichever comes first, changes to these uncertain tax positions and tax related valuation allowances will affect our provision for income taxes in our consolidated statement of operations and could have material impact on our results of operations and financial position.

Off-Balance Sheet Arrangements

We are not a party to any off-balance sheet arrangements.

Cautionary Statement Regarding Forward-Looking Information

This report includes "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements include statements regarding our strategies, objectives and plans for future development or acquisitions of properties or operations, as well as expectations, future operating results and other information that is not historical information. When used in this report, the terms or phrases such as "anticipates", "believes", "projects", "plans", "intends", "expects", "might", "may", "estimates", "could", "should", "would", "will likely continue", and variations of such words or similar expressions are intended to identify forward-looking statements. Although our expectations, beliefs and projections are expressed in good faith and are based on assumptions that we believe are reasonable, there can be no assurance that these expectations, beliefs and projections will be realized.

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There are a number of risks and uncertainties that could cause our actual results to differ materially from those expressed in the forward-looking statements which are included elsewhere in this report. Such risks, uncertainties and other important factors include, but are not limited to:

•: our dependence on our West Virginia, Pennsylvania and Ohio casinos for the majority of our revenues and cash flows;
•: the successful operation of our video lottery terminals ("VLTs") gaming facility at Scioto Downs, our racetrack in Columbus, Ohio;
•: competitive and general economic conditions in our markets, including the location of our competitors (traditional and internet-based);
•: the ability to realize expense reductions and operating efficiencies, including reductions and efficiencies resulting from the Mergers;
•: our ability to integrate with Eldorado and realize the benefit of the Mergers;
•: the effect of economic, credit and capital market conditions on the economy and the gaming and entertainment industry;
•: weather or road conditions limiting access to our properties;
•: volatility and disruption of the capital and credit markets;
•: changes in, or failure to comply with, laws, regulations or the conditions of our West Virginia, Pennsylvania and Ohio gaming and racing licenses (or the failure to obtain renewals thereof), accounting standards or environmental laws (including adverse changes in the rates of taxation on gaming revenues) and delays in regulatory licensing processes;
•: construction factors relating to maintenance and expansion of operations;
•: the outcome of legal proceedings;
•: dependence upon key personnel and the ability to attract new personnel;
•: the ability to retain and attract customers;
•: the effect of war, terrorism, natural disasters and other catastrophic events;
•: the effect of disruptions to our systems and infrastructure;
•: our level of indebtedness and terms thereof;
•: the ability to refinance existing debt, or obtain additional financing, if and when needed, the cost of refinancing, and the impact of leverage and debt service requirements;
•: our ability to comply with certain covenants in our debt documents;
•: the other factors set forth in Part I, Items 1A. "Risk Factors" included in our Annual Report on Form 10-K for the year ended December 31, 2013.

In light of these and other risks, uncertainties and assumptions, the forward-looking events discussed in this report might not occur. Any forward-looking statement speaks only as of the date on which that statement is made. We do not intend to update publicly any forward-looking statement to reflect events or circumstances that occur after the date on which the statement is made, except as may be required by law.

The following discussion and analysis should be read in conjunction with our consolidated financial statements and related notes which are contained elsewhere in this report.

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ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

We are exposed to changes in interest rates primarily from our variable rate long-term debt arrangements. However, with the issuance of the Notes on August 1, 2011, our exposure to interest rate changes will be limited to amounts which may be outstanding under our Credit Facility. There were no amounts outstanding under our Credit Facility as of September 30, 2014. (See Liquidity and Capital Resources included elsewhere within this report and "Part II, Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Sources of Capital" which is included in our Annual Report on Form 10-K for the year ended December 31, 2013).

Assuming that the entire amount of borrowings permitted under the Credit Facility was outstanding, a hypothetical 100 basis point (1%) change in interest rates would result in an annual interest expense change of up to approximately $0.2 million.

At September 30, 2014, the fair value of amounts outstanding under our Credit Facility and other long-term debt approximates the carrying value, except for our Notes, for which the fair value was determined based upon Level 2 inputs (as defined by ASC 820, Fair Value Measurements and Disclosures) including quoted market prices and bond terms and conditions. The aggregate fair value of the Notes was $624.5 million at September 30, 2014.

ITEM 4. CONTROLS AND PROCEDURES.

(a): Evaluation of Disclosure Controls and Procedures

We have established and maintain disclosure controls and procedures that are designed to ensure that information required to be disclosed in our reports that we file under the Securities Exchange Act of 1934, as amended (the "Exchange Act"), is recorded, processed, summarized, evaluated and reported within the time periods specified in the rules and forms of the Securities and Exchange Commission ("SEC"), and that such information is accumulated and communicated to management, including our Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure.

In designing and evaluating the disclosure controls and procedures, management recognized that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives, and management necessarily was required to apply its judgment in evaluating the cost-benefit relationship of possible controls and procedures.

Our Chief Executive Officer and Chief Financial Officer evaluated the effectiveness of our disclosure controls and procedures (as defined in Exchange Act Rules 13a- 15(e) and 15d-15(e)) as of the end of the period covered by this Form 10-Q Quarterly Report (the "Evaluation Date"). They have concluded that our disclosure controls and procedures are effective to ensure that the information required to be disclosed by us in the reports that we file under the Exchange Act is recorded, processed, summarized, evaluated and reported within the time periods specified in SEC rules and forms.

(b): Changes in Internal Controls

There were no significant changes in our internal control over financial reporting identified in connection with the above evaluation that occurred during the period covered by this Form 10-Q Quarterly Report that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

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PART II
OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS.

In Re: MTR Gaming Group, Inc. Stockholder Litigation. In connection with the Mergers, three putative class action lawsuits were filed by purported stockholders of the Company challenging the Mergers. All three cases were filed in the Delaware Court of Chancery. The first case was filed on September 23, 2013 and is captioned Harris v. MTR Gaming Group, Inc., et al., Case No. 8937-VCG (the "Harris Case"); the second case was filed on September 27, 2013 and is captioned Julian v. MTR Gaming Group, Inc., et al., Case No. 8950-VCG (the "Julian Case"); and the third case was filed on October 14, 2013 and is captioned Morse v. MTR Gaming, Inc., et al., Case No. 9001 (the "Morse Case"). All three cases have been consolidated into In Re: MTR Gaming Group, Inc. Stockholder Litigation Consol. C.A.No. 8937—VCP. This consolidated case, which purported to be brought as class actions on behalf of all of the Company's stockholders, excluding the members of the board of directors, alleged, among other things, that the consideration to be received by the MTR stockholders in connection with the Mergers was inadequate and that the MTR's directors breached their fiduciary duties to stockholders in negotiating and approving the Merger Agreement. The complaint in the Harris Case also alleges that MTR and the Company aided and abetted the alleged breaches by MTR's directors. The complaints in the Julian and Morse Cases allege that MTR, NewCo, Merger Sub A, Merger Sub B, HoldCo, Gary Carano, Thomas Reeg and Robert T. Jones aided and abetted the alleged breaches by MTR's directors. On August 25, September 17, and October 9, 2014 Plaintiffs separately moved to voluntarily dismiss their claims.

State ex rel. Walgate v. Kasich; Case No. 11 CV 10 13126; Court of Common Pleas of Franklin County, Ohio. On October 21, 2011, a complaint was filed by a public policy group in Ohio challenging certain aspects of the casino referendum and the Ohio Governor's and legislature's approval of legislation authorizing VLTs at Ohio's seven horse racetracks. Relators, the plaintiffs, among other claims against Ohio's casinos, allege that VLTs were not contemplated by Ohio's constitutional amendment permitting casinos in Ohio. Scioto Downs, in order to protect its right to VLT gaming, pursuant to its conditional License granted by the Ohio Lottery Commission, filed a motion to intervene on February 2, 2012. Dispositive Motions were filed by the Ohio Attorney General, Scioto Downs, Inc. and others on February 20, 2012, and, on May 30, 2012, the litigation was dismissed. On March 13, 2013, the appeals court affirmed the lower court decision. On April 26, 2013, the plaintiffs filed a notice of Appeal to the Ohio Supreme Court. On July 24, 2013 The Ohio Supreme Court granted allocatur, agreeing to hear this matter upon the outcome of another case with comparable legal issues that was before the court. On June 10, 2014, the Ohio Supreme Court affirmed the dismissal of the appeal of the matter involving the comparable legal issues. In light of the decision on the comparable matter, Scioto Downs and the other parties, on July 2, 2014, filed a joint motion to dismiss the appeal of this matter, which is still pending before the Court.

Legal matters are discussed in greater detail in "Part I, Item 3. Legal Proceedings" and Note 16 to our Consolidated Financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2013.

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ITEM 1A. RISK FACTORS.

A description of our risk factors can be found in "Part I, Item 1A. Risk Factors" included in our Annual Report on Form 10-K for the year ended December 31, 2013, and the registration statement on Form S-4 filed by Eclair Holdings Company and available on the Securities and Exchange Commission's website (www.sec.gov). Other than changes resulting from the consummation of the Mergers, which eliminated the risks related to the possibility that the Mergers would not be consummated, there were no material changes to those risk factors during the nine months ended September 30, 2014.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS.

None.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES.

None.

ITEM 4. MINE SAFETY DISCLOSURES.

Not Applicable.

ITEM 5. OTHER INFORMATION.

In connection with the consummation of the Mergers, MTR's certificate of incorporation and bylaws were amended and restated on September 19, 2014. Copies of the amended and restated certificate of incorporation and bylaws are attached hereto as Exhibit 3.1 and 3.2.

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ITEM 6. EXHIBITS

	Description of Exhibit	Method of Filing

3.1	Amended and Restated Certificate of Incorporation of MTR Gaming Group, Inc.	Filed herewith.
3.2	Amended and Restated Bylaws of MTR Gaming Group, Inc.	Filed herewith.
31.1	Certification of Gary L. Carano pursuant to Section 906 of the Sarbanes-Oxley Act of 2002	Filed herewith.
31.2	Certification of Robert M. Jones pursuant to Section 906 of the Sarbanes-Oxley Act of 2002	Filed herewith.
32.1	Certification of Gary L. Carano in accordance with 18 U.S.C. Section 1350	Filed herewith.
32.2	Certification of Robert M. Jones in accordance with 18 U.S.C. Section 1350	Filed herewith.
101.1	XBRL Instance Document
101.2	XBRL Taxonomy Extension Schema Document
101.3	XBRL Taxonomy Extension Calculation Linkbase Document
101.4	XBRL Taxonomy Extension Definition Linkbase Document
101.5	XBRL Taxonomy Extension Label Linkbase Document
101.6	XBRL Taxonomy Extension Presentation Linkbase Document

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SIGNATURES

Pursuant to the requirements of the Securities and Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.


Date: November 14, 2014	MTR GAMING GROUP, INC.
	By:	/s/ GARY L. CARANO Gary L. Carano CHIEF EXECUTIVE OFFICER AND CHAIRMAN OF THE BOARD
	By:	/s/ ROBERT M. JONES Robert M. Jones EXECUTIVE VICE PRESIDENT AND CHIEF FINANCIAL OFFICER (PRINCIPAL FINANCIAL AND ACCOUNTING OFFICER)

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EXHIBIT INDEX

	Description of Exhibit	Method of Filing

3.1	Amended and Restated Certificate of Incorporation of MTR Gaming Group, Inc.	Filed herewith.
3.2	Amended and Restated Bylaws of MTR Gaming Group, Inc.	Filed herewith.
31.1	Certification of Gary L. Carano pursuant to Section 906 of the Sarbanes-Oxley Act of 2002	Filed herewith.
31.2	Certification of Robert M. Jones pursuant to Section 906 of the Sarbanes-Oxley Act of 2002	Filed herewith.
32.1	Certification of Gary L. Carano in accordance with 18 U.S.C. Section 1350	Filed herewith.
32.2	Certification of Robert M. Jones in accordance with 18 U.S.C. Section 1350	Filed herewith.
101.1	XBRL Instance Document
101.2	XBRL Taxonomy Extension Schema Document
101.3	XBRL Taxonomy Extension Calculation Linkbase Document
101.4	XBRL Taxonomy Extension Definition Linkbase Document
101.5	XBRL Taxonomy Extension Label Linkbase Document
101.6	XBRL Taxonomy Extension Presentation Linkbase Document

Exhibit 3.1

Amended and Restated

Certificate of Incorporation
of
MTR Gaming Group, Inc.

1. The name of the corporation is MTR Gaming Group, Inc.

2. The address of its registered office in the State of Delaware is 2711 Centerville Road, Suite 400, Wilmington, County of New Castle, Delaware 19808. The name of the registered agent at such address is Corporation Service Company.

3. The purpose of the corporation is to engage in any lawful act or activity for which corporations may be organized under the General Corporation Law of the State of Delaware (the “GCL”).

4. The total number of shares of stock which the corporation shall have authority to issue is one thousand (1,000) shares of common stock, with par value of ($0.01) per share.

5. The corporation is to have perpetual existence.

6. The corporation shall indemnify its directors, officers, employees, agents and former directors, officers, employees and agents, and any other persons serving at the request of the corporation as a director, officer, employee or agent of another corporation, association, partnership, joint venture, trust or other enterprise, against expenses (including attorneys’ fees, judgments, fines and amounts paid in settlement) incurred in connection with any pending or threatened action, suit or proceeding, whether civil, criminal, administrative or investigative, with respect to which such director, officer, employee, agent or other person is a party, or is threatened to be made a party, to the full extent permitted by the GCL, provided, however, that the corporation shall not be liable for any amounts which may be due to any person in connection with a settlement of any action, suit or proceeding effected without its prior written consent or any action, suit or proceeding initiated by any person seeking indemnification hereunder without its prior written consent. The indemnification provided herein (i) shall not be deemed exclusive of any other right to which any person seeking indemnification may be entitled under any bylaw, agreement or vote of stockholders or disinterested directors or otherwise, both as to action in his or her official capacity and as to action in any other capacity, and (ii) shall inure to the benefit of the heirs, executors and administrators of any such person. The corporation shall have the power, but shall not be obligated, to purchase and maintain insurance on behalf of any person or persons enumerated above against any liability asserted against or incurred by them or any of them arising out of their status as corporate directors, officers, employees, or agents whether or not the corporation would have the power to indemnify them against such liability under the provisions of this Article 6.

7. To the fullest extent permitted by the GCL, as it now exists or may hereafter be amended, a director of the corporation shall not be personally liable to the corporation or its stockholders for monetary damages for breach of fiduciary duty as a director except for liability (i) for any breach of the director’s duty of loyalty to the corporation or its stockholders, (ii) for acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of law, (iii) under Section 174 of the Delaware General Corporation Law, or (iv) for any transaction from which the director derived any improper personal benefit.

8. The Board of Directors of the corporation shall have the power and authority to adopt, repeal, amend, or restate the Bylaws of the corporation, in whole or in part, from time to time.

Exhibit 3.2

MTR GAMING GROUP, INC.

- A Delaware Corporation -

AMENDED AND RESTATED BYLAWS

ARTICLE I.

MEETINGS OF STOCKHOLDERS

Section 1.1 Annual Meetings. The annual meeting of the stockholders for the election of directors and for the transaction of such other business as may properly come before such meeting shall be held each year on such date and at such time and place, within or outside the State of Delaware, as may be designated by the Board of Directors.

Section 1.2 Special Meetings. Special Meetings of the stockholders may be called by the Board of Directors, the Chairman of the Board, if any, the Vice Chairman, if any, the President, any Vice President, or the holders of a majority of the shares of the Corporation then issued and outstanding and entitled to vote at such meeting. Any such meeting shall be held on such date and such time and place, within or outside the State of Delaware, as may be designated by the person or persons calling such meeting.

Section 1.3 Notice of Meetings; Waiver of Notice.

(a) Notice of Meetings. Whenever stockholders are required or permitted to take any action at a meeting, a written notice of the meeting shall be given by mail, facsimile, telegram, cable or personal delivery by or at the direction of the Chairman of the Board, if any, the Vice Chairman, if any, the President, any Vice President, the Secretary, any Assistant Secretary or other persons calling the meeting, and shall state the place, date and hour of the meeting and, in the case of a special meeting, the purpose or purposes for which the meeting is called. Unless otherwise provided by law, the written notice of any meeting shall be given not less than five (5) nor more than sixty (60) days before the date of the meeting to each stockholder entitled to vote at such meeting. If mailed, such notice shall be directed to each stockholder at his address as it appears on the records of the Corporation.

(b) Waiver of Notice. Whenever notice is required to be given to the stockholders under any provision of law, the Certificate of Incorporation of the Corporation or these Bylaws, a written waiver signed by a stockholder entitled to notice, whether before or after the time stated therein, shall be deemed equivalent to notice. Attendance of a stockholder at a meeting shall constitute a waiver of notice of such meeting, except when the stockholder attends such meeting for the express purpose of objecting, at the beginning of the meeting, to the transaction of business because the meeting is not lawfully called or convened. Neither the business to be transacted at, nor the purpose of, any regular or special meeting of the stockholders need be specified in any written waiver of notice unless so required by the Certificate of Incorporation of the Corporation.

Section 1.4 Quorum. The presence at any meeting, in person or by proxy, of the holders of record of a majority of the shares then issued and outstanding and entitled to vote shall

be necessary and sufficient to constitute a quorum for the transaction of business, except as otherwise provided by law or the Certificate of Incorporation of the Corporation.

Section 1.5 Adjournments. In the absence of a quorum, a majority in interest of the stockholders entitled to vote, present in person or by proxy at a meeting, or, if no stockholder entitled to vote is present in person or by proxy, any officer entitled to act as chairman or secretary of such meeting, may adjourn the meeting to another time or place.

When a meeting is adjourned to another time or place, notice need not be given of the adjourned meeting if the time and place thereof are announced at the meeting at which the adjournment is taken. At the adjourned meeting, the Corporation may transact any business which might have been transacted at the original meeting. If the adjournment is for more than thirty (30) days, or if after the adjournment a new record date is fixed for the adjourned meeting, a notice of the adjourned meeting shall be given to each stockholder of record entitled to vote at the meeting.

Section 1.6 Organization. The Chairman of the Board, or, if there is no Chairman or in his absence or disability, the Vice Chairman, if any, or the President or any Vice President, or, in the absence of all of them, a chairman appointed by the stockholders, shall act as chairman of all meetings of stockholders. The Secretary or, in his absence or disability, any Assistant Secretary, or, in the absence of both of them, a secretary appointed by the chairman of the meeting, shall act as secretary at all meetings of stockholders.

Section 1.7 Voting. Unless otherwise provided in the Certificate of Incorporation of the Corporation or required by law, each stockholder shall be entitled to one (1) vote for each share of capital stock held by such stockholder which is registered in his name on the record date for the meeting. Unless otherwise provided in the Certificate of Incorporation, directors shall be elected by a plurality of the votes of the shares present in person or represented by proxy at the meeting and entitled to vote on the election of directors. Except as otherwise provided by law, in all other matters the affirmative vote of a majority of the shares present in person or represented by proxy at the meeting and entitled to vote on the subject matter shall be the act of the stockholders. Voting, including voting for the election of directors, need not be by written ballot.

Section 1.8 Proxies. Each stockholder entitled to vote at a meeting of stockholders or to express consent or dissent to corporate actions in writing may authorize another person or persons to act for him by proxy, but no such proxy shall be voted or acted upon after three (3) years from its date, unless the proxy provides for a longer period. A duly executed proxy shall be irrevocable if it states that it is irrevocable and if, and only as long as, it is coupled with an interest sufficient in law to support an irrevocable power.

Section 1.9 Stockholder List. The officer who has charge of the stock ledger of the Corporation shall prepare and make, at least ten (10) days before every meeting of stockholders, a complete list of the stockholders entitled to vote at the meeting, arranged in alphabetical order, and showing the address and number of shares registered in the name of each stockholder. Such list shall be open to the examination of any stockholder, for any purpose germane to the meeting, during ordinary business hours for a period of at least ten (10) days prior

to the meeting, either at a place within the city where the meeting is to be held, which place shall be specified in the notice of the meeting, or, if not so specified, at the place where the meeting is to be held. The list shall also be produced and kept at the time and place of the meeting during the entire time thereof, and may be inspected by any stockholder who is present.

Section 1.10 Inspectors of Election. In advance of any stockholders’ meeting, the Board of Directors may appoint one (1) or more inspectors to act at the meeting and make a written report thereof. The Board of Directors may designate one (1) or more persons as alternate inspectors to replace any inspector who fails to act. If no inspector or alternate is able to act at a meeting of stockholders, the person presiding at the meeting shall appoint one (1) or more inspectors to act at the meeting. Each inspector, before entering upon the discharge of his duties, shall take and sign an oath faithfully to execute the duties of inspector with strict impartiality and according to the best of his ability.

Section 1.11 Fixing the Record Date. So that the Corporation may determine the stockholders entitled to notice of or to vote at any meeting of stockholders or any adjournment thereof, or to express consent to corporate action in writing without a meeting, or to receive payment of any dividend or other distribution or allotment of any rights, or to exercise any rights in respect of any change, conversion or exchange of stock or for the purpose of any other lawful action, the Board of Directors may fix in advance a record date, which shall not precede the date upon which the resolution fixing the record date is adopted by the Board, and (a) in the case of a meeting, shall not be more than sixty (60) nor less than ten (10) days before the date of such meeting, or (b) in the case of a written consent, shall not exceed by more than ten (10) days the date upon which the resolution fixing the record date is adopted by the Board, or (c) in the case of any other action, shall not be more than sixty (60) days prior to such action. Only those stockholders of record on the date so fixed shall be entitled to any of the foregoing rights, notwithstanding the transfer of any stock on the books of the Corporation after any such record date fixed by the Board of Directors.

ARTICLE II.

CONSENT OF STOCKHOLDER IN LIEU OF MEETING

Unless otherwise provided in the Certificate of Incorporation, any action required by law or these Bylaws to be taken at any annual or special meeting of stockholders of the Corporation may be taken without a meeting, without prior notice and without a vote if a consent or consents in writing, setting forth the action so taken, shall be signed by the holders of outstanding stock having not less than the minimum number of votes that would be necessary to authorize or take such action at a meeting at which all shares entitled to vote thereon were present and voted and shall be delivered to the Corporation as required by law. Prompt notice of the taking of the corporate action without a meeting by less than unanimous written consent shall be given to those stockholders who have not so consented in writing.

ARTICLE III.

BOARD OF DIRECTORS

Section 3.1 Number. The Board of Directors shall consist of such directors, not less than one (1), but not more than seven (7), in number as may be fixed from time to time by resolution of either the Board of Directors or the stockholders in accordance with applicable law (each being subject to any subsequent resolutions of either of them).

Section 3.2 Election and Term of Office. Directors shall be elected at the annual meeting of the stockholders, except as provided in Sections 3.3 or 3.11 of these Bylaws. Each director (whether elected at an annual meeting or to fill a vacancy or otherwise) shall hold office until his successor shall have been duly elected and qualified or until his earlier death, resignation or removal in the manner hereinafter provided.

Section 3.3 Vacancies and Additional Directorships. Unless otherwise provided in the Certificate of Incorporation of the Corporation, vacancies and newly created directorships resulting from any increase in the authorized number of directors may be filled by a majority of the directors in office, although less than a quorum, or by a sole remaining director. Unless otherwise provided in the Certificate of Incorporation of the Corporation, when one (1) or more directors shall resign from the Board, effective at a future date, a majority of the directors then in office, including those who have so resigned, shall have power to fill such vacancy or vacancies, the vote thereon to be effective upon the effectiveness of such resignation or resignations.

Section 3.4 Meetings.

(a) Regular Meetings. The Board of Directors may by resolution provide for the holding of regular meetings for the organization of the Corporation, for the election of officers and for the transaction of such other business as may properly come before the meeting, and may fix the times and places at which such meetings shall be held. Notice of regular meetings shall not be required to be given, provided that whenever the time or place of regular meetings shall be fixed or changed, notice of such action shall be given promptly by mail, electronic mail, facsimile, telegram, radio, cable, telephone or personal delivery to each director who shall not have been present at the meeting at which such action was taken, addressed, sent, delivered or communicated to him at his residence or usual place of business.

(b) Special Meetings. Special meetings of the Board of Directors may be called by or at the direction of the Chairman of the Board, if any, the Vice Chairman, if any, the President, any Vice President or one-third (1/3) or more of the directors then in office, except that when the Board of Directors consists of one (1) director, then such director may call a special meeting. Except as otherwise required by law, notice of each special meeting shall be mailed to each director, addressed to him at his residence or usual place of business, at least five (5) days before the day on which such meeting is to be held, or shall be sent to him at such place by facsimile, telegram, radio or cable, or telephoned or delivered to him personally, not later than twenty-four (24) hours before the day on which such meeting is to be held. Such notice shall state the time and place of such meeting, but need not state the purpose thereof, unless otherwise required by law, the Certificate of Incorporation of the Corporation or these Bylaws.

(c) Waiver of Notice. Whenever notice is required to be given to the directors under any provision of law, the Certificate of Incorporation of the Corporation or these Bylaws, a written waiver, signed by the director entitled to notice, whether before or after the time stated therein, shall be deemed equivalent to notice. Attendance of a director at a meeting shall constitute a waiver of notice of such meeting, except when a director attends a meeting for the express purpose of objecting at the beginning of the meeting to the transaction of business because the meeting is not lawfully called or convened. Neither the business to be transacted at, nor the purpose of, any regular or special meeting of the directors need be specified in any written waiver of notice unless so required by the Certificate of Incorporation of the Corporation.

(d) Participation by Conference Call. Members of the Board of Directors may participate in any meeting of the Board by means of conference telephone or similar communications equipment by means of which all persons participating in the meeting can hear each other, and such participation shall constitute presence in person at the meeting.

Section 3.5 Quorum; Voting. Unless the Certificate of Incorporation of the Corporation provides otherwise, at each meeting of the Board of Directors a majority of the total number of members of the Board of Directors shall constitute a quorum for the transaction of business, except that when the Board consists of only one (1) director, then one (1) director shall constitute a quorum. Unless otherwise required by the Certificate of Incorporation of the Corporation or these Bylaws, a vote of the majority of the directors present at any meeting at which a quorum is present shall be the act of the Board

Section 3.6 Adjournments. A majority of the directors present, whether or not a quorum is present, may adjourn any meeting to another time and place. Notice of any adjournment of a meeting of the Board of Directors to another time or place shall be given to the directors who were not present at the time of the adjournment and, unless such time and place are announced at such meeting, to the directors who were present.

Section 3.7 Organization. The Chairman of the Board, or if there is no Chairman or in his absence or disability, the Vice Chairman, if any, the President, or any Vice President, or in the absence of all of them, a chairman appointed by the directors present at such meeting, shall act as chairman at meetings of directors. The Secretary, or in his absence or disability, any Assistant Secretary, or in the absence of all of them, a secretary appointed by the chairman of the meeting, shall act as secretary at all meetings of the Board of Directors.

Section 3.8 Action of Board Without Meeting. Any action required or permitted to be taken at any meeting of the Board of Directors may be taken without a meeting if all members of the Board consent thereto in writing and such writing or writings are filed with the minutes of proceedings of the Board.

Section 3.9 Manner of Acting. A member of the Board of Directors shall, in the performance of his duties, be fully protected in relying in good faith upon the records of the Corporation and upon such information, opinions, reports or statements presented to the Corporation by any of the Corporation’s officers or employees, or committees of the Board, or by any other person as to matters the director reasonably believes are within such other person’s

professional or expert competence and who has been selected with reasonable care by or on behalf of the Corporation.

Section 3.10 Resignation of Directors. Any director may resign at any time upon giving written notice of such resignation to the Board of Directors, the Chairman of the Board, if any, the Vice Chairman, if any, the President, any Vice President or the Secretary. Unless otherwise specified in such notice, such resignation shall take effect upon receipt thereof by the Board of Directors or any such officer, and acceptance of such resignation shall not be necessary to make it effective.

Section 3.11 Removal of Directors. Any director or directors may be removed from office, either with or without cause, as provided by law. At such meeting, a successor or successors may be elected by a plurality of the votes cast, or if any such vacancy is not so filled, it may be filled by the directors as provided in Section 3.3 of these Bylaws.

Section 3.12 Compensation of Directors. Directors may receive such reasonable compensation for their services as directors, whether in the form of salary or a fixed fee for attendance at meetings, with expenses, if any, as the Board of Directors may from time to time determine. Nothing contained herein shall be construed to preclude any director from serving the Corporation in any other capacity and receiving compensation therefor.

ARTICLE IV.

COMMITTEES OF THE BOARD

Section 4.1 Designation and Powers. The Board of Directors may, by a resolution passed by a majority of the Board of Directors in attendance at any meeting, designate one (1) or more committees, each committee to consist of one (1) or more of the directors of the Corporation. Any such committee, to the extent provided in such resolution and permitted by law, shall have and may exercise all the powers and authority of the Board of Directors in the management of the business and affairs of the Corporation, and may authorize the seal of the Corporation to be affixed to all papers which may require it; provided, however, that no such committee shall have the power or authority to (a) amend the Certificate of Incorporation of the Corporation, except as permitted by law, (b) adopt an agreement of merger or consolidation, (c) recommend to the stockholders the sale, lease or exchange of all or substantially all of the Corporation’s property or assets, (d) recommend to the stockholders a dissolution of the Corporation, or a revocation of a dissolution, or (e) amend the Bylaws of the Corporation. Any such committee, to the extent provided in such resolution, shall have the power and authority to (i) declare a dividend, (ii) authorize the issuance of stock, or (iii) adopt a certificate of ownership and merger as permitted by law.

Section 4.2 Term of Office. The term of office of the members of each committee shall be as fixed from time to time by the Board of Directors, subject to these Bylaws; provided, however, that any committee member who ceases to be a member of the Board of Directors shall automatically and immediately cease to be a member of any committee thereof.

Section 4.3 Alternate Members and Vacancies. The Board of Directors may designate one (1) or more directors as alternate members of any committee who, in the order specified by the Board of Directors, may replace any absent or disqualified member at any meeting of the committee. If at a meeting of any committee one (1) or more of the members thereof should be absent or disqualified, and if either the Board of Directors has not so designated any alternate member or members or the number of absent or disqualified members exceeds the number of alternate members who are present at such meeting, then the member or members of such committee (including alternates) present at any meeting and not disqualified from voting, whether or not they constitute a quorum, may unanimously appoint another director to act at the meeting in the place of any such absent or disqualified member. If any vacancy shall occur in any committee by reason of death, resignation, disqualification, removal or otherwise, the remaining member or members of such committee, so long as a quorum is present, may continue to act until such vacancy is filled by the Board of Directors.

Section 4.4 Meetings. Each committee shall fix its own rules of procedure, and shall meet where and as and upon such notice as provided by such rules or by resolution of the Board of Directors. Each committee shall keep regular minutes of its proceedings and all actions by each committee shall be reported to the Board of Directors at its next regular meeting succeeding any such action. Members of any committee designated by the Board may participate in the meeting of the committee by means of conference telephone or similar communications equipment by means of which all persons participating in the meeting can hear each other, and such participation shall constitute presence in person at the meeting.

Section 4.5 Quorum; Voting. At each meeting of any committee the presence of a majority of the total number of its members then in office shall constitute a quorum for the transaction of business; except that when a committee consists of one (1) member, then one (1) member shall constitute a quorum. A vote of the majority of committee members present at a meeting of a committee at which a quorum is present shall be the act of such committee.

Section 4.6 Adjournments. A majority of the members of a committee present, whether or not a quorum is present, may adjourn any meeting of such committee to another place and time.

Section 4.7 Action of Committee Without Meeting. Any action required or permitted to be taken at any meeting of any committee designated by the Board of Directors may be taken without a meeting if all members of such committee consent thereto in writing and such writing or writings are filed with the minutes of the proceedings of such committee.

Section 4.8 Manner of Acting. A member of any committee designated by the Board of Directors shall, in the performance of his duties, be fully protected in relying in good faith upon the records of the Corporation and upon such information, opinions, reports or statements presented to the Corporation by any of the Corporation’s officers or employees, or other committees of the Board of Directors, or by any other person as to matters the member reasonably believes are within such other person’s professional or expert competence and who has been selected with reasonable care by or on behalf of the Corporation.

Section 4.9 Resignation of Committee Members. Any member of a committee may resign at any time by giving written notice of such resignation to the Board of Directors, the Chairman of the Board, if any, the Vice Chairman, if any, the President, any Vice President or the Secretary. Unless otherwise specified in such notice, such resignation shall take effect upon receipt thereof by the Board of Directors or any such officer, and acceptance of such resignation shall not be necessary to make it effective.

Section 4.10 Removal of Committee Members. Any member of any committee may be removed with or without cause at any time by the Board of Directors.

Section 4.11 Compensation of Committee Members. Committee members may receive such reasonable compensation for their services as committee members, whether in the form of salary or a fixed fee for attendance at meetings, with expenses, if any, as the Board of Directors may from time to time determine. Nothing contained herein shall be construed to preclude any committee member from serving the Corporation in any other capacity and receiving compensation therefor.

ARTICLE V.

OFFICERS

Section 5.1 Officers. The officers of the Corporation shall be a Chairman of the Board (if elected by the Board of Directors), a Vice Chairman of the Board (if elected by the Board of Directors), a President, one (1) or more Vice Presidents (if elected by the Board of Directors), a Secretary, a Treasurer, and such other officers as may be appointed in accordance with the provisions of Section 5.3 of these Bylaws.

Section 5.2 Election, Term of Office and Qualifications. Each officer (except such officers as may be appointed in accordance with the provisions of Section 5.3 of these Bylaws) shall be elected or appointed by a majority of the Board of Directors present at any meeting at which such election is held. Unless otherwise provided in the resolution of election, each officer (whether elected at the first meeting of the Board of Directors after the annual meeting of stockholders or to fill a vacancy or otherwise) shall hold his office until the first meeting of the Board of Directors after the next annual meeting of stockholders and until his successor shall have been elected and qualified, or until his earlier death, resignation or removal.

Section 5.3 Subordinate Officers and Agents. The Board of Directors may from time to time appoint other officers or agents (including, without limitation, one (1) or more Assistant Vice Presidents, one or more Assistant Secretaries and one or more Assistant Treasurers), to hold office for such periods, have such authority and perform such duties as are provided in these Bylaws or as may be provided in the resolutions appointing them. The Board of Directors may delegate to any officer or agent the power to appoint any such subordinate officers or agents and to prescribe their respective terms of office, authority and duties.

Section 5.4 The Chairman of the Board. The Chairman of the Board shall be elected by the Board of Directors. He shall preside at all meetings of the Board of Directors and stockholders and shall see that all orders and resolutions of the Board of Directors are carried

into effect. Subject to the direction of the Board of Directors, he shall have general charge of the business, affairs and property of the Corporation and general supervision over its officers and agents. He may sign (which signature may be a facsimile signature), with any other officer thereunto duly authorized, certificates representing stock of the Corporation, the issuance of which shall have been duly authorized, and may sign (which signature may be a facsimile signature) and execute, in the name and on behalf of the Corporation, deeds, mortgages, bonds, contracts, agreements and other instruments and documents duly authorized by the Board of Directors, except where the signing and execution thereof shall be expressly delegated by the Board of Directors to another officer or agent. From time to time the Chairman shall report to the Board of Directors all matters within his knowledge which the interests of the Corporation may require to be brought to the attention of the directors. He shall also have such other powers and perform such other duties as may from time to time be prescribed by the Board of Directors or these Bylaws.

Section 5.5 The Vice Chairman. At the request of the Chairman of the Board, if any, or in his absence or disability, the Vice Chairman, if any, shall perform all the duties of the Chairman of the Board and, when so acting, shall have all the powers of and be subject to all the restrictions of the Chairman of the Board. The Vice Chairman may sign (which signature may be a facsimile signature), with any other officer thereunto duly authorized, certificates representing stock of the Corporation, the issuance of which shall have been duly authorized, and may sign (which signature may be a facsimile signature) and execute, in the name and on behalf of the Corporation, deeds, mortgages, bonds, contracts, agreements and other instruments and documents duly authorized by the Board of Directors, except where the signing and execution thereof shall be expressly delegated by the Board of Directors to another officer or agent. The Vice Chairman shall also have such other powers and perform such other duties as may from time to time be prescribed by the Board of Directors, the Chairman of the Board or these Bylaws.

Section 5.6 The President. If there is no Chairman of the Board or Vice Chairman, or at the request of the Chairman of the Board or the Vice Chairman, or, in the absence or disability of the Chairman of the Board and the Vice Chairman, the President shall be the chief executive officer of the Corporation. Subject to the authority and direction of the Chairman of the Board and the Vice Chairman, if any, and the Board of Directors, the President shall have all the powers of and be subject to all the restrictions of the Chairman of the Board, and shall have charge of the day to day supervision of the business, affairs and property of the Corporation. The President may sign (which signature may be a facsimile signature), with any other officer thereunto duly authorized, certificates representing stock of the Corporation, the issuance of which shall have been duly authorized, and may sign (which signature may be a facsimile signature) and execute, in the name and on behalf of the Corporation, deeds, mortgages, bonds, contracts, agreements and other instruments and documents duly authorized by the Board of Directors, except where the signing and execution thereof shall be expressly delegated by the Board of Directors to another officer or agent. The President shall also have such other powers and perform such other duties as may from time to time be prescribed by the Board of Directors, the Chairman of the Board, the Vice Chairman or these Bylaws.

Section 5.7 Vice President. At the request of the President, or in his absence or disability, the Vice President designated by the Board of Directors shall perform all the duties of the President and, when so acting, shall have all the powers of and be subject to all the

restrictions on the President. Any Vice President may also sign (which signature may be a facsimile signature), with any other officer thereunto duly authorized, certificates representing stock of the Corporation, the issuance of which shall have been duly authorized, and may sign (which signature may be a facsimile signature) and execute, in the name and on behalf of the Corporation, deeds, mortgages, bonds, contracts, agreements and other instruments and documents duly authorized by the Board of Directors, except where the signing and execution thereof shall be expressly delegated by the Board of Directors to another officer or agent. Each Vice President shall have such other powers and perform such other duties as may from time to time be prescribed by the Board of Directors, the Chairman of the Board, the Vice Chairman, the President or these Bylaws.

Section 5.8 The Secretary. The Secretary shall:

(a) record all the proceedings of meetings of the stockholders, the Board of Directors, and any committees thereof in a book or books to be kept for that purpose;

(b) cause all notices to be duly given in accordance with the provisions of these Bylaws and as required by law;

(c) whenever any committee shall be appointed pursuant to a resolution of the Board of Directors, furnish the chairman of such committee with a copy of such resolution;

(d) be custodian of the records and the seal of the Corporation, and cause such seal to be affixed to (or a facsimile to be reproduced on) all certificates representing stock of the Corporation prior to the issuance thereof and all instruments the execution of which in the name and on behalf of the Corporation and under its seal shall have been duly authorized;

(e) see that the lists, books, reports, statements, certificates and other documents and records required by law are properly kept and filed;

(f) have charge of the stock and transfer books of the Corporation, and exhibit such books at all reasonable times to such persons as are entitled by law to have access thereto;

(g) sign (which signature may be a facsimile signature), with any other officer thereunto duly authorized, certificates representing stock of the Corporation, the issuance of which shall have been duly authorized, and sign (which signature may be a facsimile signature) and execute, in the name and on behalf of the Corporation, instruments and documents duly authorized by the Board of Directors, except where the signing and execution thereof shall be expressly delegated by the Board of Directors to another officer of agent; and

(h) in general, perform all duties incident to the office of Secretary and have such other powers and perform such other duties as may from time to time be prescribed by the Board of Directors, the Chairman of the Board, the Vice Chairman, the President or these Bylaws.

Section 5.9 Assistant Secretaries. At the request of the Secretary, or in his absence or disability, the Assistant Secretary designated by the Secretary, the Board of Directors, the Chairman of the Board, the Vice Chairman, or the President, shall perform all the duties of the Secretary, and, when so acting, shall have all the powers of and be subject to all the restrictions on the Secretary. Each Assistant Secretary shall have such other powers and perform such other duties as may from time to time be prescribed by the Board of Directors, the Chairman of the Board, the Vice Chairman, the President, the Secretary or these Bylaws.

Section 5.10 The Treasurer. The Treasurer shall

(a) have charge of and supervision over and be responsible for the funds, securities, receipts and disbursements of the Corporation;

(b) cause the moneys and other valuable effects of the Corporation to be deposited in the name and to the credit of the Corporation in such banks or trust companies, or with such bankers or other depositories, as shall be selected in accordance with Section 7.3 of these Bylaws, or to be otherwise dealt with in such manner as the Board of Directors may direct from time to time;

(c) cause the funds of the Corporation to be disbursed by checks or drafts upon the authorized depositories of the Corporation, and cause to be taken and preserved proper vouchers for all moneys disbursed;

(d) render to the Board of Directors, the Chairman of the Board, if any, the Vice Chairman, if any, or the President, whenever requested, a statement of the financial condition of the Corporation and of all of his transactions as Treasurer;

(e) cause to be kept at the Corporation’s principal office correct books of account of all of the Corporation’s business and transactions and such duplicate books of account as he shall determine and, upon application, cause such books or duplicates thereof to be exhibited to any director;

(f) be empowered, from time to time, to require from the officers or agents of the Corporation reports or statements giving such information as he may desire or deem appropriate with respect to any or all financial transactions of the Corporation;

(h) in general, perform all duties incident to the office of Treasurer and have such other powers and perform such other duties as may from time to time be prescribed by the Board of Directors, the Chairman of the Board, the Vice Chairman, the President or these Bylaws.

Section 5.11 Assistant Treasurer. At the request of the Treasurer, or in his absence or disability, the Assistant Treasurer designated by the Treasurer, the Board of Directors, the Chairman of the Board, if any, the Vice Chairman, if any, or the President shall perform all the duties of the Treasurer, and, when so acting, shall have all the powers of and be subject to all the restrictions on the Treasurer. Each Assistant Treasurer shall have such other powers and perform such other duties as may from time to time be prescribed by the Board of Directors, the Chairman of the Board, the Vice Chairman, the President, the Treasurer or these Bylaws.

Section 5.12 Resignations. Any officer may resign at any time by giving written notice of such resignation to the Board of Directors, the Chairman of the Board, the Vice Chairman, the President, any Vice President or the Secretary. Unless otherwise specified in such written notice, such resignation shall take effect upon receipt thereof by the Board of Directors or any such officer, and the acceptance of such resignation shall not be necessary for it to be effective.

Section 5.13 Removal. Any officer specifically designated in Section 5.1 of these Bylaws may be removed with or without cause at any meeting of the Board of Directors by the affirmative vote of a majority of the directors then in office. Any officer or agent appointed pursuant to the provisions of Section 5.3 of these Bylaws may be removed with or without cause at any meeting of the Board of Directors by the affirmative vote of a majority of the directors present at such meeting or at any time by any superior officer or agent upon whom such power of removal shall have been conferred by the Board of Directors.

Section 5.14 Vacancies. Any vacancy in any office (whether by reason of death, resignation, removal, disqualification or otherwise) shall be filled for the unexpired portion of the term in the manner prescribed by these Bylaws for regular elections or appointments to such office.

Section 5.15 Compensation. The salaries of the officers of the Corporation shall be fixed from time to time by the Board of Directors, except that the Board of Directors may delegate to any person the power to fix the salaries or other compensation of any officers or agents appointed pursuant to the provisions of Section 5.3 of these Bylaws. No officer shall be prevented from receiving such salary by reason of the fact that he is also a director of the Corporation.

Section 5.16 Bonding. The Corporation may secure the fidelity of any or all of its officers or agents by bond or otherwise.

ARTICLE VI.

INDEMNIFICATION

The Corporation shall have the power to indemnify, in the manner and to the fullest extent permitted by applicable law, any person (or the estate of any person) who was or is a party to, or is threatened to be made a party to, any threatened, pending or completed action, suit or proceeding, whether or not by or in the right of the Corporation, and whether civil, criminal, administrative, investigative or otherwise, by reason of the fact that such person is or

was a director, officer, employee, fiduciary or agent of the Corporation, or is or was serving at the request of the Corporation as a director, officer, trustee, fiduciary, employee or agent of another corporation, partnership, joint venture, trust or other enterprise, against expenses (including attorneys’ fees), judgments, fines and amounts paid in settlement actually and reasonably incurred by such person in connection with such action, suit or proceeding. To the extent and in the manner provided by applicable law, any such expenses may be paid by the Corporation in advance of the final disposition of such action, suit or proceeding. Unless otherwise permitted by applicable law, the indemnification provided for herein shall be made only as authorized in the specific case upon a determination, made in the manner provided by applicable law, that indemnification of such director, officer, employee or agent is proper in the circumstances. The Corporation may, to the fullest extent permitted by applicable law, purchase and maintain insurance on behalf of any person who is or was a director, officer, employee or agent of the Corporation, or is or was serving at the request of the Corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise against any liability which may be asserted against him and incurred by him in any such capacity, or arising out of his status as such, whether or not the Corporation would have the power to indemnify or make advances to any other person for any expenses (including attorneys’ fees), judgments, fines or other amounts to the fullest extent permitted by applicable law, nor shall they be deemed exclusive of any other rights to which any person seeking indemnification or advancement of expenses may be entitled under any agreement, vote of stockholders or disinterested directors or otherwise, both as to action in his official capacity and as to action in another capacity while holding such office.

ARTICLE VII.

EXECUTION OF INSTRUMENTS AND
DEPOSIT OF CORPORATE FUNDS

Section 7.1 Execution of Instruments Generally. Subject to the approval of the Board of Directors, the Chairman of the Board, the Vice Chairman, the President or any Vice President, the Secretary or the Treasurer may enter into any contract or execute and deliver any instrument in the name and on behalf of the Corporation. The Board of Directors may authorize any officer or officers or agent or agents to enter into any contract or execute and deliver any instrument in the name and on behalf of the Corporation, and such authorization may be general or confined to specific instances.

Section 7.2 Borrowing. No loans or advances shall be obtained or contracted for by or on behalf of the Corporation, and no negotiable paper shall be issued in the name of the Corporation, unless and except as authorized by the Board of Directors. Such authorization may be general or confined to specific instances. Any officer or agent of the Corporation thereunto so authorized may obtain loans and advances for the Corporation, and in connection with such loans and advances may make, execute and deliver promissory notes, bonds or other evidences of indebtedness of the Corporation.

Section 7.3 Deposits. All funds of the Corporation not otherwise employed shall be deposited from time to time to its credit in such banks or trust companies or with such bankers or other depositories as the Board of Directors may select, or as may be selected by any

officer or officers or agent or agents authorized to do so by the Board of Directors. Endorsements for deposit to the credit of the Corporation in any of its duly authorized depositories shall be made in such manner as the Board of Directors may from time to time determine.

Section 7.4 Checks, Drafts, Etc. All checks, drafts or other orders for the payment of money, and all notes or other evidences of indebtedness issued in the name of the Corporation, shall be signed by such officer or officers or agent or agents of the Corporation, and in such manner, as from time to time shall be determined by the Board of Directors.

Section 7.5 Proxies. Proxies to vote with respect to shares of stock of other corporations owned by or standing in the name of the Corporation may be executed and delivered from time to time on behalf of the Corporation by the Chairman of the Board, the Vice Chairman, the President, or any Vice President, or by any other person or persons so authorized by the Board of Directors.

ARTICLE VIII.

STOCK

Section 8.1 Form and Execution of Certificates. The shares of capital stock of the Corporation shall be represented by certificates in the form approved by the Board of Directors from time to time. The certificates shall be signed by, or in the name of the Corporation by, the Chairman of the Board, the Vice Chairman, the President or any Vice President, and by the Secretary or an Assistant Secretary or the Treasurer or an Assistant Treasurer. Any or all of the signatures on the certificates may be facsimile signatures. In case any officer, transfer agent or registrar who has signed or whose facsimile signature has been placed upon such certificate shall have ceased to be such officer, transfer agent or registrar before such certificate is issued, it may be issued by the Corporation with the same effect as if he were such officer, transfer agent or registrar at the date of issue.

Section 8.2 Regulations. The Board of Directors may make such rules and regulations consistent with any governing statute as it may deem expedient concerning the issue, transfer and registration of certificates of stock and concerning certificates of stock issued, transferred or registered in lieu or replacement of any lost, stolen, destroyed or mutilated certificates of stock.

Section 8.3 Transfer Agent and Registrar. The Board of Directors may appoint a transfer agent or transfer agents and a registrar or registrars of transfers for any or all classes of the capital stock of the Corporation, and may require stock certificates of any or all classes to bear the signature of either or both.

ARTICLE IX.

CORPORATE SEAL

The corporate seal shall be circular in form, shall bear the name of the Corporation and words denoting the Corporation’s organization under the laws of the State of

Delaware and the year thereof, and otherwise shall be in such form as shall be approved from time to time by the Board of Directors.

ARTICLE X.

FISCAL YEAR

The fiscal year of the Corporation shall begin on the first day of January in each year or such other day as the Board of Directors may determine by resolution.

ARTICLE XI.

AMENDMENTS

In addition to the provisions, if any, in the Certificate of Incorporation of the Corporation relating to amendment of the Corporation’s Bylaws, the Bylaws of the Corporation may be amended or repealed, and new Bylaws may be made and adopted, by a majority of the votes cast at any annual or special stockholders’ meeting by holders of outstanding shares of stock of the Corporation entitled to vote thereon.

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Exhibit 31.1

CERTIFICATION PURSUANT TO RULE 13a-14(a) AND 15d-14(a)
OF THE SECURITIES EXCHANGE ACT OF 1934

I, Gary L. Carano, certify that:

1.

I have reviewed this Quarterly Report on Form 10-Q of MTR Gaming Group, Inc.;

2.

Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.

Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.

The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a): designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
(b): designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
(c): evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures as of the end of the period covered by this report based on such evaluation; and
(d): disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5.

The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of registrant's board of directors (or persons performing the equivalent functions):

(a): all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
(b): any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date: November 14, 2014


		/s/ GARY L. CARANO Gary L. Carano Chief Executive Officer and Chairman of the Board

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Exhibit 31.1

CERTIFICATION PURSUANT TO RULE 13a-14(a) AND 15d-14(a) OF THE SECURITIES EXCHANGE ACT OF 1934

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Exhibit 31.2

CERTIFICATION PURSUANT TO RULE 13a-14(a) AND 15d-14(a)
OF THE SECURITIES EXCHANGE ACT OF 1934

I, Robert M. Jones, certify that:

1.

I have reviewed this Quarterly Report on Form 10-Q of MTR Gaming Group, Inc.;

2.

3.

4.

(a): designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
(b): designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
(c): evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures as of the end of the period covered by this report based on such evaluation; and
(d): disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5.

(a): all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
(b): any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date: November 14, 2014


		/s/ ROBERT M. JONES Robert M. Jones Executive Vice President and Chief Financial Officer (Principal Financial and Accounting Officer)

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Exhibit 31.2

CERTIFICATION PURSUANT TO RULE 13a-14(a) AND 15d-14(a) OF THE SECURITIES EXCHANGE ACT OF 1934

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Exhibit 32.1

CERTIFICATION
of
Gary L. Carano
Chief Executive Officer and Chairman of the Board

I, Gary L. Carano, Chief Executive Officer and Chairman of the Board of MTR Gaming Group, Inc. (the "Company"), do hereby certify in accordance with 18 U.S.C. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to my knowledge:

1.: The Quarterly Report on Form 10-Q of the Company for the period ended September 30, 2014 (the "Periodic Report") fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. 78m or 78o(d)); and
2.: The information contained in the Periodic Report fairly represents, in all material respects, the financial condition and results of operations of the Company.

Date: November 14, 2014


		/s/ GARY L. CARANO Gary L. Carano Chief Executive Officer and Chairman of the Board

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Exhibit 32.1

CERTIFICATION of Gary L. Carano Chief Executive Officer and Chairman of the Board

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Exhibit 32.2

CERTIFICATION
of
Robert M. Jones
Executive Vice President and Chief Financial Officer

I, Robert M. Jones, Executive Vice President and Chief Financial Officer of MTR Gaming Group, Inc. (the "Company"), do hereby certify in accordance with 18 U.S.C. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to my knowledge:

1.: The Quarterly Report on Form 10-Q of the Company for the period ended September 30, 2014 (the "Periodic Report") fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. 78m or 78o(d)); and
2.: The information contained in the Periodic Report fairly represents, in all material respects, the financial condition and results of operations of the Company.

Date: November 14, 2014