Colonial Downs Holdings, Inc. Announces Debt Refinancing.

Business Editors

NEW KENT, Va.--(BUSINESS WIRE)--June 22, 2000

Colonial Downs Holdings, Inc. (NASDAQ: SCM: CDWN) ("the Company") which holds the only license to own and operate a pari-mutuel horseracing course and satellite racing centers in Virginia, announced today that it has reached an agreement with CD Entertainment Ltd., an affiliate of Mr. Jeffrey P. Jacobs, the Chairman and CEO of the Company, to refinance the Company's $15 million loan with PNC Bank which comes due on June 30, 2000.

The refinanced former PNC debt and the Company's existing debt of $8.2 million due to affiliates of Mr. Jacobs will be consolidated into one loan which will have a term of five years at an interest rate of LIBOR plus 3%, the current interest rate payable on the PNC loan. The $23.2 million loan will have principal payments of $1 million due on each of June 30, 2001, 2002, 2003 and 2004 with the remainder due on June 30, 2005. In addition, the Company has agreed to make an additional annual principal payment contingent upon the Company's annual cash flow. The New Kent racetrack property and the racing centers located in Richmond, Hampton and Brunswick, Virginia will be pledged as collateral for the loan. The loan is convertible, at the lenders' option and subject to share availability, into shares of the Company's Class A common stock at 125% of the average closing price of the Company's common stock for the period June 23, 2000 through June 29, 2000. The Company will make efforts to authorize additional shares for such conversion rights.

Ian M. Stewart, President and CFO of Colonial Downs stated, "The refinancing of the PNC debt resolves the Company's immediate liquidity problem. In addition, as part of the refinancing, the credit enhancement fee the Company has been charged by an affiliate of Mr. Jacobs for guaranteeing the PNC debt has been eliminated. With the PNC debt removed as an issue, Colonial Downs can now concentrate on exploring all of the strategic options available to it, with a focus on those outside of pari-mutuel wagering, to increase the value of the Company."

Colonial Downs Holdings, Inc. is a Virginia corporation organized in November 1996 to pursue opportunities for pari-mutuel horse race wagering in Virginia. The Company through its subsidiaries holds the only unlimited licenses to own and operate a pari-mutuel horseracing course and satellite wagering facilities/racing centers in Virginia. Colonial Downs Holdings, Inc. became a publicly held company in March 1997 and trades on the NASDAQ Small Cap System under the symbol CDWN.

This press release contains certain forward-looking statements that inherently involve risks and uncertainties. The Company's actual results could differ materially from those anticipated in these forward-looking statements as a result of certain factors. Statements regarding strategic options available to the Company and certain other statements contained in this release are forward-looking statements and, as such, involve known and unknown risks, and uncertainties, and other factors which may cause the actual results, performance, or achievements of the Company to be materially different from any future results, performance, or achievements, expressed or implied by such forward-looking statements. Such potential risks, uncertainties, and factors include, but are not limited to, acts by parties outside the control of the Company, including the Maryland Jockey Club and the Virginia Racing Commission, political trends, the effects of adverse general economic conditions, and governmental regulation, including licensing of additional Racing Centers. The forward-looking statements contained herein speak only as of the date of this release.