Colonial Downs Holdings Reports Profit for 1st Quarter 1999.

NEW KENT, Va. --(BUSINESS WIRE)--April 19, 1999--

Colonial Downs Holdings, Inc. (NASDAQ/NMS: CDWN) which through its subsidiaries holds the only license to own and operate a pari-mutuel horseracing course and satellite racing centers in Virginia, today reported results of operations for the first quarter ended March 31, 1999.

The Company reported earnings for the first quarter of 1999 of $515,000 or $0.07 per share compared to a net loss of $952,000 or $.13 per share for the same period in 1998. Total revenue in the first quarter of 1999 was $7,024,000 compared to $6,772,000 in the first quarter of 1998, an increase of 4%.

The dramatically improved results for the first quarter are the direct result of management and marketing initiatives implemented during 1998 and carried through into 1999 as well as reduction in the accrual of thoroughbred purses from wagering at the Company's racing centers. The management initiative is a strategy developed in the spring of 1998 to put Colonial Downs on a profitable basis by January 1999 even though the Company only has four satellite racing centers operating. The basis of the plan included re-negotiating several large contracts and implementing numerous operating efficiencies.

As a result of this strategy, net income before purse expenses for the racing centers improved by approximately $900,000 over the first quarter of 1998. All of the racing centers were profitable in the first quarter of 1999. The new contract with the Maryland Jockey Club accounted for approximately $200,000 of this improvement while other operating efficiencies and cost savings resulted in a $700,000 improvement. Some of the areas that contributed to the $700,000 improvement were reductions in personnel costs, printing costs and making food and beverage operations profitable. Overall, the net expenses relating to the track and corporate overhead increased by approximately $125,000. This was largely due to an increase of approximately $285,000 in professional fees, primarily relating to the Norglass construction arbitration, being offset by other cost savings achieved. On an overall company basis, personnel costs were reduced by 25% from the prior year and utilities and facility operating expenses were reduced by 29%. Net interest expense increased approximately $160,000 as the Company is carrying more debt in the first quarter of 1999 than it did in the first quarter of 1998.

The Company guaranteed minimum thoroughbred purses of $4.5 million for each of the first two thoroughbred meets to ensure that Colonial Downs would begin racing with quality thoroughbred racing. To satisfy this obligation, Colonial Downs contributed 5.25% of handle wagered on thoroughbred races at its racing centers to the thoroughbred purse account. Colonial Downs' contract with the thoroughbred horsemen expired on December 31, 1998. Although negotiations are on-going, no new agreement has been reached. For 1999, Colonial Downs has budgeted a total of $3.1 million for live racing related expenses. Of this amount, $2.1 million will be expensed in 1999 and the remaining $1.0 million will come from funds already on deposit and the repayment of a loan from the thoroughbred purse account. Therefore, purse expenses for the first quarter of 1999 of $550,000 are approximately $860,000 less than the prior year. If thoroughbred purse expense in the first quarter of 1999 had been accounted for in accordance with the previous thoroughbred contract which expired December 31, 1998, as was done in the first quarter of 1998, the Company would have reported a net loss of $0.05 per share. The Company contributed 5% of all standardbred handle generated at the racing centers to the standardbred purse account and will continue to do so through August 4, 1999, the expiration date of the standardbred agreement.

Colonial Downs is committed to growing live racing in Virginia. However, live racing can only grow if Colonial Downs, the track operator, can operate profitably. Therefore, until additional racing centers can be opened, the track is limited in what it can spend on live racing by what is generated from the racing centers.

The marketing initiative focused initially on the Richmond market and included a comprehensive targeted mass marketing campaign utilizing outdoor advertising, radio, print, and promotions at the racing center. This initiative concentrated on cultivating new customers and focusing on the core business. Handle in the Richmond racing center for the first quarter was up 4.25% compared to the same period in 1998. The Company intends to expand this marketing initiative to the Hampton and Chesapeake markets in the second quarter of 1999.

Jeffrey P. Jacobs, Chairman and Chief Executive Officer of the Company, said, "I am quite pleased with our first quarter results. They demonstrate that management has seized the initiative and acted aggressively to turn the company around. We will continue to search for ways to improve profitability both within the current structure and in new markets. We have done everything that we can to generate funds for live racing given the limitations of having only four racing centers. We stand ready to work with all parties interested in the success of this native industry during its start up years to grow racing; however, we can only do this to the extent that Colonial Downs can operate profitably. I am hopeful that this fundamental business truth will be recognized and respected."

Colonial Downs' second harness meet will commence on May 31 and conclude on August 4, 1999. The Company will host races on Monday, Tuesday, and Wednesday afternoons.

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 National Market System under the symbol CDWN.

This earnings 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 results of operations, opening of additional racing centers, 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 success of marketing initiatives, 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. -0-

                Colonial Downs Holdings, Inc. and Subsidiaries


Consolidated Statements of Earnings
Dollars in thousands, except per          Three months ended March 31
share amounts (unaudited)                    1999           1998
                                             ----           ----

Revenues:                                  $7,024         $6,772

Expenses:
   Direct operating expenses                4,344         6,301
   General and administrative expenses      1,521           979
                                         -------------- --------------
Total expenses                              5,865         7,280
                                         -------------- --------------

Earnings (loss) from operations             1,159          (508)

Interest expense                             (649)          (465)
Interest income                                 5             21
                                         -------------- --------------
Earnings (loss) before income taxes           515           (952)
                                         -------------- --------------

Taxes on income                                -             -
                                         -------------- --------------
                                         -------------- --------------
Net earnings (loss)                          $515         $ (952)
                                         -------------- --------------

Earnings (loss) per common share
  Basic and diluted earnings
   (loss) per share                         $0.07         $(0.13)
  Weighted avg. number of
   shares outstanding                       7,250          7,250
                                         ============== ==============



Consolidated Balance Sheets:               March 31      December 31
                                          -------------   -----------
Dollars in thousands, except per             1999           1998
 share amounts (unaudited)

Assets:
Current assets:
         Cash and equivalents              $1,498         $1,155
         Other current assets               1,477          1,123
                                       -------------- ----------------
Total current assets                        2,975          2,278

Property, plant and equipment, net         65,033         65,324
Other assets, net                           1,121            979
                                       -------------- ----------------

Total Assets                              $69,129        $68,581
                                       ============== ================

Liabilities and Stockholders' Equity

Current liabilities
         Accounts payable                  $5,715         $6,417
         Accrued expenses and other         1,022            730
         Purses due horsemen                1,144            608
         Long-term debt, current
          position                          9,207          9,184
                                       -------------- ----------------
Total current liabilities                  17,088         16,939

         Long-term debt                     8,393          8,508
         Notes payable - stockholders       6,500          6,500
                                       -------------- ----------------
Total long-term liabilities                14,893         15,008

Total liabilities                          31,981         31,947

Stockholders' equity                       37,148         36,634
                                       -------------- ----------------

Total Liabilities &
 Stockholders' Equity                     $69,129        $68,581
                                       ============== ================