Black Hawk Gaming & Development Company Reports Second Quarter and Six Month Results.

BLACK HAWK, Colo.--(BUSINESS WIRE)--Aug. 12, 1998--Black Hawk Gaming & Development Company, Inc. (NASDAQ NMS: BHWK), owner and operator of the Gilpin Hotel Casino in Black Hawk, and 75 percent owner and operator of The Lodge Casino at Black Hawk, both located in Black Hawk, Colorado, today announced results for its second quarter and six-month period ended June 30, 1998.

Net income per diluted share for the second quarter was $449,012 or 10 cents per share, versus net income of $452,900, or 14 cents per diluted share, in the comparable quarter last year. Approximately one cent per share of the current quarter's earnings is attributable to a non-recurring gain realized from the early retirement of debt versus a three cent non-recurring gain in the second quarter of last year also from the early retirement of debt.

Second quarter net revenue, comprised of revenue from the Gilpin Hotel Casino and The Lodge Casino at Black Hawk, management fees, parking fees, and rental income, increased to $6,958,696 from $294,717 in the same quarter last year. The company's share of the equity in earnings of the Gilpin Hotel Casino joint venture amounted to $181,105 compared with $523,146 in the second quarter of 1997.

Net income for the six-month period was $854,372 or 20 cents per share, one cent of which is attributable to non-recurring gains, versus $912,850 or 29 cents per share, in the same period last year, three cents of which is attributable to a non-recurring gain.

Six-month net revenue increased to $7,250,914 from $630,726 in the corresponding period last year. Equity in earnings of the joint venture was $1,017,789 versus $1,218,702 for the first six months of 1997.

The slight decrease in net income resulted from the impact of $1,492,158 and $1,356,485 of pre-opening costs for The Lodge Casino in the six and three-month periods ended June 30, 1998, respectively, which was almost entirely offset by the additional 50 percent of operating results from the Gilpin Hotel Casino beginning April 24, 1998 and the results of operations of The Lodge beginning June 24, 1998.

The significant increases in revenues and costs and expenses in the 1998 periods compared with the 1997 periods are a result of consolidation of the Gilpin Hotel Casino and the opening of The Lodge Casino.

Earnings per share were also impacted by the additional weighted average shares outstanding for both reporting periods.

Jeffrey P. Jacobs, Chairman of the Board and Chief Executive Officer of Black Hawk Gaming, commented, "The results for the second quarter and the six months were very strong. Our operating numbers at the Gilpin were better than last year at this time even though we have had to operate without sufficient parking due to the construction of our parking garage. The Lodge Casino is also off to a great start. Soon, our construction will be finished. Our 50 hotel rooms and our additional parking will be open in mid-August and mid-September, respectively. The third quarter is when we expect to see the full economic benefit of the acquisition of the other half of the Gilpin, and of course, a full quarter of operations for The Lodge Casino."

During the quarter, the company acquired the other half of the Gilpin Hotel Casino that it did not previously own. The company also opened The Lodge Casino at Black Hawk. The Gilpin Hotel Casino, which is housed in an historic 1860's building, is a 37,000 square-foot facility offering approximately 485 gaming devices and two restaurants. The Lodge Casino at Black Hawk opened on June 24, 1998 and is an approximate 250,000 square-foot facility with 800 slot machines, 22 table games, 50 hotel rooms, three restaurants and three floors of underground parking. The company is currently constructing an additional parking garage for the Gilpin and The Lodge, which is expected to be completed in September. Once completed, the total parking availability for the Gilpin and The Lodge will be approximately 865 spaces.

This press release contains statements of a forward-looking nature regarding future events. These statements are only predictions and actual events may differ materially. Please refer to documents that Black Hawk files from time to time with the Securities and Exchange Commission for a discussion of certain factors that could cause actual results to differ materially from those contained in the forward-looking statements. -0-

                      BLACK HAWK GAMING & DEVELOPMENT COMPANY, INC.
                             Financial Highlights (Unaudited)


                           For the Three           For the Six
                           Months Ended            Months Ended
                       6/30/98    6/30/97       6/30/98       6/30/97

Net revenue          $6,958,696   $294,717    $7,250,914      $630,726

Equity in earnings
 of joint venture      $181,105   $523,146    $1,017,789    $1,218,702

Net income             $449,012   $452,900      $854,372      $912,850

Earnings per diluted
 share                     $.10       $.14          $.20          $.29

Weighted average
 shares outstanding
  (diluted)           4,316,939  3,325,675     4,241,633     3,136,712



SELECTED BALANCE SHEET DATA

                                6/30/98                 12/31/97

Total assets                    $93,979,678           $49,303,530

Total liabilities and minority
 interest                       $65,701,237           $22,712,096

Shareholders' equity            $28,278,441           $26,591,434

CONTACT: Black Hawk Gaming & Development Company, Inc.

Stan Politano

[phone]

or

Porter, LeVay & Rose, Inc.

L. B. Stauffer

Libby M. Roberge, VP-Media