Colonial Downs Reports Unusual Market Activity to Virginia Racing Commission.

NEW KENT, Va.--(BUSINESS WIRE)--Sept. 24, 1998--Colonial Downs, L.P. which holds the only license to own and operate a pari-mutuel horseracing course and satellite racing centers in Virginia, reported to the Virginia Racing Commission on Wednesday, Sept. 16, 1998, that there had been unusually large trading volume in the first weeks of September in the shares of Colonial Downs Holdings, Inc. (Nasdaq NMS:CDWN) (hereafter the "company"), its parent and the parent of Stansley Racing Corp.

Specifically, Colonial Downs informed the Virginia Racing Commission of Nasdaq-reported company share trading volume of approximately 1.5 million shares on Wednesday, Sept. 9, 1998, and approximately 1.1 million shares on Monday, Sept. 14, 1998. In response to this activity, Colonial Downs requested that the Virginia Racing Commission investigate whether there had been a violation of the provisions of the Virginia Horse Racing and Pari-Mutuel Wagering Act that require the Commission's prior approval of any person's, or group of related persons', acquisition of more than 5% of the outstanding shares of Colonial Downs Holdings, Inc. (250,000 Class A shares represents 5% of the outstanding Class A shares and 362,500 shares represent 5% of all outstanding Class A and Class B shares.)

Average share volume in August, 1998 was approximately 14,000 shares per day. During the first week of September, volume increased and reached 215,000 shares on Sept. 8, 1998. Once CD Entertainment Ltd., the company's largest shareholder, became aware of the increase in trading volume and the possibility that a third party may be accumulating the company's stock, it elected to purchase more stock in the open market as a defensive measure. On Sept. 9, 1998, it acquired 650,000 shares of Class A stock in the open market (resulting in trading volume of 1.3 million shares to reflect the purchase of 650,000 shares by a market maker and the sale of such shares by the market maker to CD Entertainment). On Sept. 14, 1998, it acquired an additional 490,000 shares in the open market (accounting for trading volume of 980,000 shares). After these acquisitions, CD Entertainment's holdings of the company's stock represents voting power of approximately 53.2% of the company's outstanding shares assuming five votes per share of Class B stock. (Class B shares have only one vote per share for matters relating to a merger or similar transaction or amendment of the company's charter documents). The Virginia Racing Commission previously approved CD Entertainment's ownership of more than 5% of the company's stock.

Based upon the trading volume of the company's stock in September, there is the possibility that a third party, other than CD Entertainment, has acquired more than 5 percent of the company's stock. The company is assisting the Virginia Racing Commission in its investigation of the matter.

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.