Colonial Downs Holdings Inc. Reports Third Quarter Profit.

NEW KENT, Va.--(BUSINESS WIRE)--Nov. 14, 1997--Colonial Downs Holdings Inc. (NASDAQ NMS: CDWN) which holds the only unlimited licenses to own and operate a pari-mutuel horse racing course and satellite wagering facilities in Virginia, Friday reported results of operations for the third quarter of 1997.

Net earnings for the third quarter ended Sept. 30, 1997 were $80,000, or $0.01 per share, compared with a net loss of $279,000, or $0.09 per share for the third quarter of 1996. Revenues for the third quarter were $7,153,000 compared with $ 3,367,000 in the third quarter of 1996. Net earnings for the nine months ended Sept. 30, 1997 improved by $1,390,000 to $982,000, or $0.16 per share, compared with a loss of $408,000, or a loss of $0.14 per share in 1996.

Revenues for the first nine months of 1997 were $17,614,000, up from $5,704,000 in 1996. Per share calculations are based upon the weighted average of common shares outstanding as of the end of each quarter. Prior to its initial public offering, the Company had an equivalent of 3,000,000 shares. At the end of the third quarter of 1997, the Company had 7,250,000 common shares outstanding as a result of its initial public offering of 4,250,000 shares effective March 17, 1997.

The increase in revenue and earnings during these periods as compared with the same periods a year ago results from the operation of two racing centers for the entire first nine months of 1997 and one month of operation of live thoroughbred horse racing at the Colonial Downs Race Track compared to only operating the Chesapeake Racing Center, which opened on Feb. 17, 1996, during the corresponding period in 1996.

Commenting on the results, Chairman and Chief Executive Officer Jeff Jacobs said: "We had several positive occurrences in the third quarter. First of all, we successfully operated our first live thoroughbred meet; secondly, we made a profit after substantial initial startup and operating race meet expenses; and lastly, our attendance and fan base grew steadily throughout the meet. Our fans are becoming more sophisticated in regards to this new sport.

"The last week of the meet our daily attendance averaged 4,300 with a per capita handle of approximately $70. We look forward to a productive fourth quarter as we open two more satellite wagering centers and begin to prepare for our first live harness meet in April 1998."

In 1998, the harness season will begin on April 24 and run through the July 4th weekend.

Other significant matters affecting the Company are:

Colonial Downs, in conjunction with The Virginia Tourism Council, will host the prestigious harness racing event, The Breeders Crown, in November 1998. This series of races is the standardbred horse industry's equivalent to thoroughbred racing's Breeders' Cup.

President Jim Peterson said: "This is quite significant given that we have not run a single harness race or hosted a harness meet at this facility. This is a great vote of confidence for our organization and our race track."

Construction of the Hampton and Brunswick satellite facilities is well underway and scheduled for completion in the 4th quarter of 1997. The Hampton facility will open first and is in the inspection and acceptance phase with local officials. The Brunswick opening will follow and will be in operation in December.

Colonial Downs plans to file on Nov. 14, 1997 a demand for arbitration with Norglass Inc., the general contractor that managed the construction of the track and grandstand, in response to mechanic's liens filed by Norglass. The contract between Colonial Downs and Norglass is a fixed price contract for $29.5 million, and Norglass' claim exceeds the amount remaining to be paid under the contract. Colonial Downs disputes the amounts claimed under the liens. The contract with Norglass provides for disputes to be resolved by arbitration by the American Arbitration Association (AAA).

Efforts to expand the satellite wagering network suffered a setback as a result of the November referendums in Roanoke, Fredericksburg, and Martinsville. Voters in these cities rejected the Company's request to build facilities in these localities.

Peterson said: "This is a setback in locating our remaining facilities. We will evaluate our efforts in these localities, regroup, and explore the options in 1998. We have a great company and several cities and counties throughout the state have contacted us and expressed strong interest in having a satellite wagering center in their locality." -0-

Statements regarding additional satellite wagering facilities' opening dates, referendums and certain other statements contained in this news release are forward-looking statements and, as such, involve known and unknown risks, uncertainties and other factors which may cause the actual results 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 the risk of construction delays including unforeseen environmental, engineering or geological problems, permitting, governmental regulations, including licensing of additional satellite wagering centers and, approvals by the Virginia Racing Commission, competition from other sporting events and forms of entertainment, and the success of planned marketing and promotional efforts. Investors are also directed to consider other risks and uncertainties discussed in documents filed by the company with the Securities and Exchange Commission.

Colonial Downs Holdings is a Virginia corporation organized in November 1996 to pursue opportunities for horse racing wagering in Virginia. The company holds the only unlimited licenses to own and operate a pari-mutuel horse racing course and satellite wagering facilities/racing centers in Virginia. Colonial Downs Holdings became a publicly-held company in March 1997 and trades on the NASDAQ National Market System under the symbol CDWN. -0-

                     COLONIAL DOWNS HOLDINGS INC.
                Dollars in Thousands, Except Per Share Data

Consolidated Statements of Earnings

                                      Quarter Ended
                                         Sept. 30,
                                     1997        1996

Revenues                          $ 7,153     $ 3,367

Expenses
   Operating                        6,643       2,828
   General and administrative         625         734
Total expenses                      7,268       3,562

Earning (loss) from operations       (115)       (195)

Other income (expense):
Interest expense                      (32)        (87)
Interest income                       268           3
Total other income (expense)          236         (84)

Earnings (loss) before income taxes   121        (279)
 Taxes on income                      (41)         -

Net earnings (loss)                 $  80      $ (279)

Earnings (loss) per common share    $0.01       $(0.09)

Weighted average number of
 shares outstanding                 7,250       3,000

-0-

                                    Nine Months Ended
                                         Sept. 30,
                                     1997        1996

Revenues                          $17,614      $5,704

Expenses
   Operating                       15,506       4,801
   General and administrative       1,350       1,223
Total expenses                     16,856       6,024

Earning (loss) from operations        758        (320)

Other income (expense):
Interest expense                     (116)        (94)
Interest income                       707           6
Total other income (expense)          591         (88)

Earnings (loss) before income taxes 1,349        (408)
 Taxes on income                     (367)         -

Net earnings (loss)                 $ 982      $ (408)

Earnings (loss) per common share    $0.16       $(0.14)

Weighted average number of
 shares outstanding                 6,051       3,000

-0-

                    Colonial Downs Holdings, Inc.
                     Consolidated Balance Sheets

                                    Sept. 30,             December 31,
                                       1997                   1996
Assets:
  Current:
  Cash and cash equivalents        $  9,036                $ 1,380
  Other Assets                        6,501                    386
Total Current Assets                 15,537                  1,766


Property and equipment, net          57,741                  9,238
Other assets, net                       876                  1,172

Total Assets                       $ 74,154               $ 12,176


Liabilities and Stockholders' Equity
Current Liabilities:
  Accounts payable                  $13,372                $ 3,566
  Notes Payable - stockholders           --                  1,638
  Accrued liabilities                 1,221                    480
  Current maturities of long-term
   debt                               1,407                     48
  Purses due horsemen                 5,205                  1,957
  Income taxes payable                  367                    -
Total Current Liabilities            21,572                  7,689

Long term liabilities
   Long-term debt                     4,244                     42
   Refundable advance - land          5,000                     -
  Notes payable - stockholders        5,500                  3,449
                                      -----                  -----
Total Long-term Liabilities          14,744                  3,491
Total Liabilities                    36,316                 11,180

Stockholders Equity                  37,838                    996
Total Liabilities and
 Stockholders' Equity              $ 74,154               $ 12,176

CONTACT: Colonial Downs Holdings Inc.

Herb Jones, 804/966-7223