The Company acquired its 50% interest for a purchase price of approximately $38.75 million and has also entered into a long-term management and development agreement. The acquisition was funded by the Company through a combination of cash on hand and senior bank debt.      Butch Kerzner commented, "The Los Cabos market has positioned itself at the high-end of the resort market for western North America and several properties are achieving excellent room rates. The Palmilla Resort is one of the Mexican tourism industry's original "Grand Dames" and we believe that with some creative redevelopment it has enormous future potential." The property is located on

The Palmilla area, perched high atop a promontory overlooking the azure waters of the Sea of Cortez, was designed and built in 1956 by Abelardo Rodriguez, son of a former president of Mexico. Accessible then only by private plane or yacht, Palmilla became a retreat for dignitaries and celebrities.

Kerzner International Limited is a leading developer and operator of premier casinos, resorts and luxury hotels. The Company's flagship destination is Atlantis, a 2,317-room, ocean-themed resort located on Paradise Island, The Bahamas. Atlantis is a unique destination casino resort featuring three interconnected hotel towers built around a 7-acre lagoon and a 34-acre marine environment that includes the world's largest open-air marine habitat. The Company also developed and receives certain revenues from Mohegan Sun in Uncasville, Connecticut. Following the completion of a $1 billion expansion, the Native American-themed Mohegan Sun has become one of the premier casino resort destinations in the United States. In the luxury resort hotel business, the Company operates ten luxury resorts in The Bahamas, Mauritius, Dubai, the Maldives and Mexico.
    
Certain statements and information included in this release constitute "forward looking statements" within the meaning of the Federal Private Securities Litigation Reform Act of 1995.