Alpha Hospitality Corporation Reports First Quarter Pre-Tax Gain.

NEW YORK--(BUSINESS WIRE)--May 18, 1998--Alpha Hospitality Corporation (NASDAQ - ALHY; BSE - ALH; WARRANTS: NASDAQ - ALHYW; BSE - ALHW) (the "Company") today reported first quarter results for the period ended March 31, 1998.

The 1998 first quarter results reflect the operation of the Bayou Caddy's Jubilee Casino through the date of the Company's sale of its Greenville, Mississippi, assets on March 2, 1998. Accordingly, the 1998 revenues and expenses are less than that of 1997. Total consideration from the sale approximated $40,200,000 and resulted in a pre-tax gain of $6,525,000. Included in the consideration received was a 25% partnership interest in the buyer whose primary assets include an additional casino and hotel located in Greenville, Mississippi. The partnership's combined complement of gaming devices is 37 tables and 1,427 slot which represents 67% of the gaming devices in the Greenville market. The partnership's two hotels offer 56 standard rooms and 41 rooms and suites, respectively. The other consideration received was approximately $11,800,000 in cash and the assumption by the buyer of approximately $19,900,000 of liabilities, which includes $17,900,000 of pre-closing financing incurred in December 1997. -0-

            Alpha Hospitality Corporation and Subsidiaries
                      Summary Balance Sheet Data
                            March 31, 1998
                            (in thousands)
                             (unaudited)

Cash                                         $ 9,180
Total current assets                           9,486
New property and equipment                     4,999
Investment                                     8,323
Other assets                                   1,865
Total asset                                  $24,673

Total current liabilities                    $ 9,232
Total long-term liabilities                    8,303
Total shareholders' equity                     7,138
Total liabilities and equity                 $24,673
-0-

            Alpha Hospitality Corporation and Subsidiaries
            Summary Consolidated Statements of Operations
                            (in thousands)
                              (unaudited)

                                          Three Months Ended
                                               March 31,
                                          1998          1997
Total revenues                           $5,054        $8,264
Total operating expenses                  6,772         9,653
Loss from operations                     (1,688)       (1,389)
Other income, including gain on sale of
 assets of $6,525                         6,348             0
Income before deferred income taxes       4,680             0

Deferred income taxes                     6,375             0

Net loss                                $(1,695)      $(1,389)

Net income per share                      $(.12)        $(.10)

To the extent the content of this press release includes forward-looking statements, they involve risks and uncertainties that are described from time to time in the Company's reports filed with the Securities and Exchange Commission. The Company wishes to caution readers not to place undue reliance on such forward-looking statements, which statements are made pursuant to the Private Securities Litigation Reform Act of 1994, and as such, speak only as of the date made.

CONTACT: Alpha Hospitality Corporation

Thomas W. Aro, 212/750-3500