Alpha Hospitality Subsidiary Finalizes Settlement Discussions.

NEW YORK--(BUSINESS WIRE)--Sept. 15, 1999--

- Receives Additional Real Estate Equity,

Development Fee and Parimutuel Interests

Alpha Hospitality Corporation (NASDAQ - ALHY; BSE - ALH; WARRANTS: OTC BB - ALHYW; BSE ALHW) ("Alpha") announced today that its wholly-owned subsidiary, Alpha Monticello, Inc. ("Alpha Monticello"), has reached an agreement to settle certain matters regarding the respective rights and obligations of the members of Mohawk Management, LLC ("Mohawk Management").

Mohawk Management is the entity jointly formed by Alpha Monticello and Catskill Development LLC ("Catskill") to provide management and services for the prospective St. Regis Mohawk Casino at the Monticello Raceway.

As part of this settlement, Alpha Monticello will be entitled to receive 40 percent of Mohawk Management's basic management fee income and 50 percent of the service fee income accruing to Mohawk Management for professional services rendered. The net result of the settlement entitles Alpha Monticello to receive approximately 45 percent of all management fee and service income derived from the underlying management contract. Prior to the agreement, Alpha's share of the income was to be approximately 50 percent. As additional consideration, Alpha will also receive 25 percent of all development fees earned by Catskill during the development and construction phases of the project. Despite such settlement, Alpha Monticello will not be entitled to any fees under this arrangement unless a casino is in fact opened and operated, and there can be no assurance that any casino will be opened or operated.

An Alpha spokesman stated that Alpha was gratified that the parties involved were able to resolve this matter amicably. In light of the recent comments made by Governor Pataki concerning his desire to negotiate in good faith with the St. Regis Mohawk Tribe with regard to a casino at Monticello Raceway, this settlement bodes well for the Tribe, as well as the citizens of Sullivan County.

In a separate transaction, Bryanston Group, Inc. ("Bryanston"), Alpha's largest shareholder, has agreed, subject to Mohawk Management obtaining the requisite casino approvals, to transfer to Alpha Monticello 5 percent of its ownership interest in its real property holdings in the Monticello Raceway. That holding includes the Raceway's building and equipment and approximately 200 acres of land.

"It is significant that Bryanston has seen fit to transfer a portion of its real estate holdings to Alpha Monticello, as the ultimate value of the remaining 200 acres at the Raceway could be considerable," stated the Alpha spokesman. Additionally, subject to approval by the New York State Racing and Wagering Board, Bryanston has agreed to transfer its 25 percent ownership in the Raceway's parimutuel operations to Alpha Monticello. "The proposed transfer to Alpha Monticello of Bryanston's interest in the real estate and the parimutuel operations should mean significant asset value and cash flow benefits to the shareholders if the casino opens." Under the previous agreement, Alpha did not participate in either of these undertakings nor the previously discussed development fee arrangement.

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.

This release, and prior releases are available on the KCSA Public Relations Worldwide Website at www.kcsa.com