Elsinore Receives Notice From Paulson's Company Regarding Merger.

LAS VEGAS--(BUSINESS WIRE)--Feb. 25, 1998--Elsinore Corp. has been notified by R&E Gaming Corp., through its president, Allen E. Paulson, that R&E Gaming is reserving the right not to proceed with its acquisition of Elsinore and is demanding a return of payments previously made in respect of the acquisition agreements.

As the grounds for its position, R&E Gaming has alleged that Elsinore's controlling shareholder made misrepresentations to R&E Gaming in connection with an Option and Voting Agreement which the two parties entered into relating to the acquisition of Elsinore.

Elsinore has been informed that its controlling shareholder has responded to R&E gaming with a specific rejection of those allegations. Elsinore intends to seek clarification of R&E Gaming's position regarding the Elsinore merger agreement and the basis for R&E Gaming's allegations, and Elsinore is reserving all of its rights with respect to R&E Gaming's legal obligations.

CONTACT: Elsinore Corp., Las Vegas, 702/385-4011