Under the revised agreement, MotorCity Casino is to be expanded into a permanent destination property that will include, by December 31, 2005, 100,000 square feet of casino space, a 400-room hotel, a theater with at least 1,200 seats, convention space, and additional restaurants, retail shops and parking. Mandalay will guarantee completion of the expanded property.

The company's affiliate (of which Mandalay owns 53.5%), Detroit Entertainment L.L.C., will pay the city $17 million in sixty days, another $10 million in four equal installments over the course of the next year, and an additional $17 million in twelve equal monthly installments beginning June 1, 2003.  Beginning January 1, 2006, Detroit Entertainment will also pay the city 1% of daily adjusted casino revenues and, if such casino revenues top $400 million in a given calendar year, the payment will be increased to 2% of all such casino revenues for that calendar year. (In 2001, MotorCity generated approximately $360 million in adjusted casino revenues.)

Previously, Mandalay Resort Group issued, and will continue to provide, letters of credit totaling $50 million to back letters of credit issued by Bank of America to secure payments of principal and interest on bonds issued by the Economic Development Corporation of the City of Detroit. The proceeds of the bonds were used to finance the city's acquisition of land located along the Detroit River where the permanent facility was originally to be located. As part of the agreement, Detroit Entertainment will forego the right to receive any of the riverfront land acquired by the city.

"This is the right step for quickening the growth of the Detroit gaming market, which has been so positive for job creation and tax revenues in the city," said Glenn Schaeffer, Mandalay's president.

Various lawsuits challenging the constitutionality of the process by which the Detroit casino developers were selected are still pending and could impact the ability of the parties to perform their obligations under the revised development agreement. It is impossible to predict the timing or outcome of those legal proceedings.

This press release contains "forward-looking statements" within the meaning of the federal securities law, including statements concerning the anticipated development of the Detroit permanent facility. 

Mandalay Resort Group owns and operates 11 properties in Nevada: Mandalay Bay, Luxor, Excalibur, Circus Circus, and Slots-A-Fun in Las Vegas; Circus Circus-Reno; Colorado Belle and Edgewater in Laughlin; Gold Strike and Nevada Landing in Jean and Railroad Pass in Henderson. The company also owns and operates Gold Strike, a hotel/casino in Tunica County, Mississippi.  The company owns a 50% interest in Silver Legacy in Reno, and owns a 50% interest in and operates Monte Carlo in Las Vegas. In addition, the company owns a 50% interest in and operates Grand Victoria, a riverboat in Elgin, Illinois, and owns a 53.5% interest in and operates MotorCity in Detroit, Michigan.