Ladies and gentlemen, thank you for standing by. Welcome to the Penn National Gaming Second Quarter Earnings Call. During the presentation, all participants will be in a listen-only mode. Afterwards we will conduct a question-and-answer session. (Operator Instructions) I would now like to turn the conference over to Mr. Joe Jaffoni, Investor Relations. Please go ahead, sir.

Thank you, Nelson, and good morning to everyone, and thank you for joining Penn National Gaming's 2010 Second Quarter Conference Call. We'll get to management's presentation and comments momentarily, as well as your questions and answers, but first I'll review the Safe Harbor disclosure. In addition to historical facts or statements of current conditions, today's conference call contains forward-looking statements that involve risks and uncertainties within the meaning of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements reflect the company's current expectations and beliefs, but are not guarantees of future performance, as such actual results may vary materially from expectations. The risks and uncertainties associated with the forward-looking statements are described in today's news announcement and in the company's filings with the Securities and Exchange Commission, including the company's reports on Form 10-K and 10-Q. Penn National assumes no obligations to publicly update or revise any forward-looking statements. Today's call and webcast may also include non-GAAP financial measures within the meaning of the SEC Regulation G and, when required, a reconciliation of all non-GAAP financial measures to the most directly comparable financial measures calculated and presented in accordance with GAAP can be found in today's news press release, as well as on the company's website. With that, I'll turn the call over to Peter Carlino, the company's Chairman and CEO. Peter?

Thank you, Joe, and good morning, everyone. Sorry for the delay, a terrific number of people dialing in this morning. I can tell you that we are happy to report a solid quarter in what is still tough economic time. I guess, I could characterize our business as, well, not wonderful but it's stable, and there are some bright spots that we will highlight all through our presentation. Here at corporate, we have our usual team, all of our corporate planners are here to answer your questions. And to talk about some of the terrific growth opportunities that we have at hand, but probably a very interesting time for us. But on one hand, we are frustrated, as I suspect all of you are with the absence of clear and strong rebound in the market. On the other hand, I don't know that Penn has ever had as many fabulous opportunities at hand in our history, a lot of good stuff happening and we keep our eyes on the horizon. So with that, I will turn this over to questions and answers, and I have confidence we will have everything here you want to know. Joe Greff – JPMorgan: I have three questions. First question, I know it's early days but can you just discuss the impact of table games in Pennsylvania. If you can give us any kind of representation volumes, statistics, or table play levels or the impact on slots and maybe the impact on expenses. That's the first question. And my second question is within your guidance, you've included Beulah Park and Maryland Jockey Club, can you talk about what that EBITDA impact is? I'm presuming those are going to be losses, if you can clarify that and give us a sense of that impact, that'd be helpful. And then the third point, maybe for Bill or Peter, for all of you, I see you've been buying back some stock and is that a function of where the stock price evaluation is? Or is that, that plus a combination of maybe you're not really seeing anything in the way of meaningful acquisitions, perhaps in Las Vegas or what not, but if you can talk about that as well?

Well, those are three good questions. Why don't we ask Tim to start with the first, and maybe Bill, two and three, and maybe there are a couple of others could chime in.

Joe, as you know, Penn National just opened up table games July 13. So we're a little over a week into it. We have seen a very strong reception to the operating table games. We have 40 table games and 12 poker right now in the operation. We have seen some lift in slots, it's still very, very early given the newness of the offering. We've seen very strong demand for poker, very strong demand for table games. The other competitors on the eastern part of the state of Pennsylvania just opened up on Sunday, so we haven't had a full weekend yet to see what that effect's going to be, if any. But the early results are encouraging. I might as well move to Charles Town as well. We opened up table games in Charles Town on July 2. It's been a ramp up. We are not yet at full capacity. We're still waiting for employees to get license by the state there. We're operating around 60 table games and about 14 poker table player. Like in Pennsylvania, we have seen a lift in overall trough volumes as well. It is still very early. We have been encouraged by the amount of Asian play. We're seeing out of the Washington DC market as well, which has been very encouraging. So both are good stories for us, still way too early to give you any kind of conclusive remarks about what the overall impact is and what the expenses are associated with it as we continue to stabilize both openings.

It's kind of fun again to see four and five people standing deep in line get to try to get to the spot. Screaming to get there, it's kind of fun. A lot of energy, also a great start, too soon to say more. Bill, why don't you move on to Beulah and Ohio and then...

Right. Relative to the track, clearly the Maryland track, the second quarter is highly profitable with the treatment. And then they lose money throughout the rest of the year. But I will tell you this, what we've got in guidance for the next couple of quarters for the new track losses or share is basically around $3.5 million of loss. Joe Greff – JPMorgan: Is that for the quarter or is that in total?

That's in total, both quarters. And so obviously, when you roll in the next year, obviously you'll pickup, you'll get the benefits of treatment that we're not going to get this year. Relative to the stocks buyback, I'll let others chime in. Quite candidly, we purchased the stocks because in our view the stock price was at a compelling little value or low level. We compare free cash flow to an enterprise value calculation and compare that against our acquisitions, and quite candidly, we are highly satisfied that we would not be able to make – get an acquisition done at a better price. So, with the metrics by which we make the decision that is to use some of our surplus liquidity and to buy back the shares of loans there at levels that was highly comfortable as we are not going to be able to find an acquisition at a similar price.

Let me make one comment focus – the question was also about Ohio, it was about of 60 minutes of race track. Obviously we are not in the business to buying money losing racetracks because we like to lose money. Clearly in each case, there is a strategy surrounding those purchases and a plan that we hope will unfold overtime, get into exactly what that is. Some of it should be apparent to you, but we do plan overtime to try to turn those loses into significant profits for our shareholders. So, this is all good stuff. And we are working hard on all those things today. Joe Greff – JPMorgan: Bill, did you talk about Beulah Park, the impact there?

Well, that's included. We are not give details routed to individual property levels but that was the results for both properties combined. Joe Greff – JPMorgan: And then, I hope you can give us a balance sheet and CapEx information.

Sure. At the end of the second quarter, we a total of $398 million in cash, which represented there was roughly $244 million at (inaudible) unrestricted subsidiary. The amount outstanding in our B loans is $1.518 billion. Between capital leases and now the amount we owe the Aurora police – city of Aurora that comes in at $9.2 million. We had $375 million in bonds. Nothing outstanding on a revolver for total debt of $2.1 billion. Our CapEx for the quarter was $90.8 million consisting of roughly $67.5 million in projects and roughly $23.2 million of maintenance CapEx. Looking out for the year, CapEx, we are looking at a total project CapEx – I am sorry, total CapEx of roughly $431 million made up of $338.4 million in projects, roughly $92 million in maintenance CapEx. A big cause for the decline relative to our previous guidance on project CapEx as we had originally projected there's is a license fees, so $100 million in Ohio would be paid in 2010 or in the fourth quarter. We now think those are going to get shifted out into early next year.

Our next question comes from the line of Felicia Hendrix from Barclays Capital. Please proceed. Felicia Hendrix – Barclays Capital: Hi good morning guys. Just on the $30 million write down of the Arena District land, I was just wondering, do you really expect to have a $30 million capital loss there?

Well, obviously, I will probably leave this to the guys to better talk about how we mitigate it. On a pure financial loss on the site, yes. But there are some other considerations that I'll let others talk about in terms of how we might think we might mitigate some of that.

We are Felicia, working with the city and the community there in Central Ohio to try to get recovery of that value due to their request to relocate us to the west side of town and we are working very cooperatively with the city to do that in the business community, and we do expect that that will certainly come to be and then the other advantage of being on the west side, obviously is a better location with better access for our customers long term. And we are still very, very bullish on the overall development in Columbus having a land based casino in that market under the terms that we approved last November will be very beneficial to our shareholders. Felicia Hendrix – Barclays Capital: Really just political, do you have any sense as to how much you could get – how much mitigation could be – how successful any mitigation could be?

We don't have – right now that is too fluid to really put a number to it with any degree of accuracy. Felicia Hendrix – Barclays Capital: Okay. And then just moving back to Ohio, probably also a fluid situation, just wondering if there is any sense of timing of when you might get the judges declaratory judgment regarding the VLTs at racetracks and just Peter maybe some of your thoughts on your comfort level that you might be able to move the tracks if this does go through.

Well, it's a tough question Felicia. Look, we support what's good for the State of Ohio. And if the governor's proposal succeeds in the courts, where it surely will land, then we will step forward with great enthusiasm and make it work. On the issue of relocating, which I know has been subject to some speculation, it's really not – way too early for us to even think about such things, it's – and probably not helpful now to get into a discussion about it. So, I think we are one step – things unfold one step at a time. We are delighted that we have a stake in the horse racing business at Ohio. And we just going to have to see where it goes. We are happy if it occurs. Obviously, but we are happy as we proceed with just our four facilities in the state. So, it's all good stuff.

(R2).

Well (R2) and that's what I meant the four licensed facilities in the state.

In terms of timing, as you know, the governor has expressed the desire to seek the declaratory judgment. We don't have a sense of timing and whether or not that's going to start a level court or go to straight to the say, Supreme Court, that's still getting worked out by the governor's office. I will note that there has been threatened challenge from other parties as well, potentially legal challenges, though it's still pretty fluid on the legal front right now.

(Inaudible) by supreme court rule. I mean I think the Governor has done the wise thing. Just put it straight to the court. Ask him, if it works (inaudible). Exactly lose the question. Felicia Hendrix – Barclays Capital: Okay, and is there any political risk that he doesn't find that executive order. I mean obviously the politics play a role on everything but also he has signed it before. So, I was just wondering if you thought if there was any risk there.

You know Felicia, anything can happen. I mean the state is facing an $8 billion deficit and the Governor has expressed his desire for VLTs tracks to be a part of that. But there is an election in November. And obviously we don't know what the outcome of that election is going to be or what his opponent feels about VLTs at the tracks, he's sort of (inaudible) on the issue. So, the whole question is still rather fluid but as far as this Governor is concerned he has expressed a desire to move forward on it.

Well, but in any case, whatever he did, Eric, he's going to end up in the court. So, you would agree he is going to end up in the court one way or the other. I think when he started preemptively decide, I know what's going there, let's send it there right away and get an answer, and I think that's what you should expect.

Absolutely. Felicia Hendrix – Barclays Capital: And then, my follow-up question is on the buyback. I just thought if you – or if I don't know if this is a Board decision, have ever thought of putting in place a (10b5) bond program to repurchase shares, just if I could have taken advantage of some lower stock prices in the quarter that was in place.

We are – well actually relative to when we can buy shares and when not is obviously guided by when we have an open window. But we also have the discussion, the other way the open window is we believe that there is really no material non-public information in the market. I guess (inaudible) kind of have (inaudible) a little different approach. Felicia Hendrix – Barclays Capital: Right, you have the window, but then you have this opportunity. Okay, that's good enough. Okay, thank you.

Our next question comes from the line of Larry Klatzkin with Chapdelaine. Larry Klatzkin – Chapdelaine: Hey guys. Couple of questions. One, the Lottery Commission actually published, proposed the rules for the slots at track which I guess a little early for them since it hasn't happened yet. But in that they are proposing a couple things like that the track owners they pay for the slot machines (inaudible) different couple of other rules. Do you guys have any opinions on how that will look for you guys and the structure they are proposing now.

Eric, you would opine or Tim?

Larry, it's really just starting the process. I don't if that's where they are going to end up. We've been asked to participate in the drafting of these rules and regulations. As Eric said before, there are still a lot of unanswered legal questions that have to get resolved. And I clearly believe the rules and regulations that may be out there floating around may not be what happen in final form. So, I wouldn't want to speculate on any other details yet. Larry Klatzkin – Chapdelaine: All right. I was just (encouraging) when they go ahead and – that they are going to petition in Supreme Court too, and they are proposing rules saying it's going to happen. As you know, Christie has proposed major changes to Atlantic City, I know it's a place you guys had looked in the past. If Christie goes ahead what he is doing in part of encouraged companies like (inaudible) coming to town, any opinion on that at this point, too early, are you still not Atlantic City favorable?

Obviously table games just opened in Pennsylvania, there is still more casinos in Philadelphia, two open (inaudible) hopefully in our lifetime will get VLPs. There is still I believe a lot of more pressure on Atlantic City. I was encouraged by what was proposed. I think they are the right steps to make Atlantic City more viable but from our perspective, it's still years away from looking at a new world in that market given the pressures that continue to exist that will only dampen volumes down there.

Yes, those volumes are never coming back, never. Larry Klatzkin – Chapdelaine: I agree with you 100%.

But you have to wait and see kind of how it levels out and as Tim aptly pointed out, there is a whole lot more to come here in Pennsylvania. I think the results of tables in Philadelphia parts, for example, and we are seeing a lot of activity up at the – say in Bethlehem. It's going to be stunning and that can't be good news. Larry Klatzkin – Chapdelaine: I do agree with you Peter and you are right. I mean things may get a little cheap than in the market even if you were interested.

You have got shooter (ph) house opening in the fall and where has it that the former (inaudible) site is going to open with a new group. So it's going to be a big time facilities obviously. So we will have to see how it plays. So we are years away from being able to judge where Atlantic City is going to level out. Larry Klatzkin – Chapdelaine: Okay, that's fair and I don't disagree with you. And now, station auctions in August 6 still something you are thinking about at least, they are not going to say definitely yes but is this something that's still in your radar screen?

I think we can say we are definitely not interested. Under other circumstances we might have been and we are going to imagine we – like everything else spend a lot of time with that, but the quick answer is no. Larry Klatzkin – Chapdelaine: Okay, I actually don't disagree with you again but that's good news to hear. Kentucky, I know that would be something (inaudible) there has been some movement there, I don't think anything real but do you have any opinion on that?

Well, they just moved towards instant racing machines and it's going to be interesting to see how well that gets factored in to a broader push towards a lot of things. Some are going to believe that, well, let's see how this plays out now with these historic racing machines. And so it may have actually set back the efforts to push towards expanding gaming for maybe a couple of years.

No, I think that's true. The racing commission, as you know, approved rules authorizing instant racing games and I think that puts – as Eric pointed out, was puts these games in the legislative efforts to help the racing for the time being.

And I think there was the acknowledgement if they just weren't able to get over the hurdle with full-blown slot machines. So this was somewhat of a comprise between the industry and the (inaudible). Larry Klatzkin – Chapdelaine: And they haven't started yet, have they?

We couldn't hear the question. Larry Klatzkin – Chapdelaine: I said that hasn't started yet, I mean you don't have any experience yet what it means. I don't think it means a lot to you (inaudible)?

No, it has not.

As Steve said, they have just started with the rules and regulations and trying to figure out how the game should be played. Larry Klatzkin – Chapdelaine: And then last question, Rio for sale, couple of other things, are you still looking around on this trip for Vegas, if that's something attractive, realizing that it may be a little early?

We are not really aware that Rio is for sale. I mean we see what we see or heard what we heard but there is certainly no active process that involves us in any way and I think more broadly on the horizon, there is nothing really kind of out there.

Yes, I mean, quite candidly I don't see – I mean there are some other assets that play in Las Vegas obviously and we have certainly got – we are actively involved in those. Obviously there is a (inaudible), sort of the biggies. But at this point I think we are pretty realistic that the valuation that people are expecting are probably not going to fit within our criteria or there is a potential that they are just not really going to trade and they are going to remain with their existing and some former restructure debt situation remains existing.

Our next question comes from the line of Mark Strong, Morgan Stanley. Mark Strong – Morgan Stanley: I look at the implied margins in the back half of the year guidance, seems like there is a slight sequential downtick there. I would assume that that's more seasonal fluctuations as opposed to any other issues perhaps, margin dilution from tables at West Virginia or Pennsylvania.

Probably the single biggest factor is the race tracks with the negative EBITDA impact with some revenues associated with tracks obviously as well as Perryville comes on in the fourth quarter, which we think is going to very successful to more than 6% to 7% tax rate. That probably is not – is going to operate below the company average operating margin. Mark Strong – Morgan Stanley: Okay, one quick follow-up Stanford (ph), is it levels of – you just look across the portfolio right now, are you kind of seeing those levels kind of trend along the bottom here, any improvements in any markets whatsoever at this point?

No, we are still seeing the same kind of consumer trends that we saw in prior quarters. It hasn't gotten any better, it hasn't gotten any worse. As you look at the unemployment levels around the markets we operate in and you look at the housing prices, I mean we are still seeing softness on both of those macroeconomic fronts and it's reflective in our consumer. So really no major changes as you see it you look at the April, May, June number that gets reported by the status. It's still very much status quo and very sluggish.

Our next question comes from the line of Chris Woronka with Deutsche Bank. Chris Woronka – Deutsche Bank: At Aurora for the quarter, I know you had the police charge, the security charge, is there anything else that might have impacted margins, I know you had some more precipitous fall in revenue or is that just it?

Well, last year, if you recall, Joliet was closed for the second quarter and we moved a lot of that business over to our Aurora while we were closed for about 90 days. So that's really the big change in revenue year-over-year. Other than the one time payments of the city, the only other thing in the numbers, we did have a $300,000 worth of severance in the second quarter, sorry, that was in the number but other than that, it was mostly affected by the year-over-year changes in the competitive environment with Empress, Joliet being closed. Chris Woronka – Deutsche Bank: On the full year guidance, it's obviously up by, I think about 26 million when you adjust for the second quarter results. How much of that is – is any of that due to Perryville opening a month earlier. I know it wouldn't be a real big number but is that at least a small part of it?

It is. It's also, on the revenue side, we are factoring in the – one month earlier opening and also Charlestown and national table games. Again those are not going to be enormous numbers and also some racing.

Our next question comes from the line of Dennis Forst with Keybanc. Dennis Forst – Keybanc: I wanted to get more clarifications on previous and then have a question of my own. Bill, the Beulah and Maryland loss, you said $3.5 million in the second half combined. What does it look like next year with the (inaudible) factored in next year, can those two together be close to breakeven?

Well, that's the goal. I think we are going to be working like the (inaudible) to figure out how to improve the racing results. And our partner – the largest loss is obviously within Maryland Jockey Club and including our partner, we are equally focused on improving the operating results there as well, they are just coming out of a bankruptcy. So I think they clearly don't understand that they can't continue to exactly the same way they have always been operating. I mean Beulah without plus is going to be an incredibly tough track to get the breakeven. I think Maryland has the (inaudible) to help mitigate the offering cost (ph) throughout the rest of the year. Dennis Forst – Keybanc: And then on couple of other items, the Arena District, what is that written down to the land you own there? You wrote off 30 million, but what's the current book value?

Ten million. Dennis Forst – Keybanc: And any timeframe on the disposing of that?

I don't think we are in a huge – Bill and I had a discussion, I think in the group earlier about how to characterize that. Well, this is an accounting issue that Bill and I might even disagree a bit about that. It's clear that we bought this as a gaming property, so the value is one thing. You are going to sell it tomorrow for some other purpose, it's worth less. But that loss isn't realized and we actually take it period, I mean that's the case. Accounting rules today require you to mark these things to market and if we had to sell it tomorrow, that's probably our assessment of what you can sell it for. But we are not in the race to do that, we are looking at mitigating that loss to the best extent possible but we just put it behind us, do what accounting requires and say, it's $10 million. And Steve, you can talk about the process now.

If I might add, as Tim had mentioned, we have been engaged in some very constructive discussions with the City of Columbus on both our needs and development of the new site as well as the disposition of the old site and we were encouraged as to where those discussions and those dialogs has gone. But it is a very fluid situation, it is global as we look at Central Ohio. And to Peter's point, I mean we made switch for a number of reasons and I think by making that switch, we have bought some goodwill and that will be reflected in the outcome of these current negotiations. Dennis Forst – Keybanc: Then on one of your tables early on in the press release, it reconciled the net income that you reported with the adjusted net income got ended up to $0.29. There was an item just called property results that lower net income by $3.88 million, what was that? It was right after the Aurora add back of $4 million net?

It's just a sign issue. It's basically the is positive property results of basically $7.4 million, which is where – the properties actually did better than our guidance – than what we are expecting. Just to reconcile, as we reported relative to where we are at. Dennis Forst – Keybanc: To your guidance, just get it at to your guidance?

Right. Dennis Forst – Keybanc: I got it. And then where is preopening charges, is it in corporate expense?

Preopening is to extent that it's in a – we have preopening expenses at Penn National and Charlestown are reflected in the property results. The preopening for the entities that aren't ongoing entities are reflected in corporate. Dennis Forst – Keybanc: Okay, what was capitalized interest in the quarter?

Cap interest in the second quarter was $1.7 million. Dennis Forst – Keybanc: Okay, and so it is going up as you start putting capital to work on the new projects?

It is. It's roughly $2.1 million in both the third and fourth quarter. Dennis Forst – Keybanc: On Maryland, am I right that the ballot measure is going to go forward in Anne Arundel?

You are exactly right. Eric, why don't you talk a little bit about that?

Sure, that was court decision just yesterday, two days ago that – will now (inaudible) for the voter's of Anne Arundel county question of shall zoning be approved for a slot parlor Arundel Mills mall and it's a very controversial issue there. Most votes we believe in that area when they originally voted on gaming expansion in Maryland thought that the gaming would occur at Laurel Park. And when Laurel Park unfortunately didn't proceed in the process and Arundel Mills popped up, it created a firestorm there. And the most of the people in the community we have talked to are just thrilled to have an opportunity to get their voice heard on this subject yet again. Dennis Forst – Keybanc: Okay. And will the vote be binding or will courtish – take it through the courts further?

Well, as far as this being on the ballot, it's a done deal, it's going to be on the ballot in November. If there is a successful outcome, in other words of returning the zoning authorization, it would reset the process of bidding out the opportunity for that zone in Maryland.

And obviously, the Anne Arundel mall will disappear.

To your question, the ballot question has not yet been drafted but the initiative would be to a citizen's vote of zoning ordinance authorizing slots at the mall. So that would certainly be binding, there would be obviously a citizen's vote is not an appeal (inaudible).

And as you might guess, we and our partners are full committed to doing what's necessary to tell that story, to give the voters the opportunity to set this right. So you can imagine that we are highly focused there. Dennis Forst – Keybanc: I am just taking a wild guess and assuming that that was at least a little bit of the reason to be involved with Maryland's MI development.

I think I made the comment earlier that we are not in the business of buying money (inaudible). It's a very challenged business but mostly we filled our careers, if you will on figuring out how to make racing profitable and how to mix it effectively with gaming.

Our next question comes from the line of Larry Havarti (ph) with Damco. Larry Havarti – Damco: I was just curious, I think you guys took out the minority interest in those Ohio casinos were $25 million during the quarter whether it was in the numbers or not, but kind of interested in how you arrived at the $25 million rather than $30 million or $20 million or $10 million or whatever.

It was obviously a negotiated process between ourselves and Lakes and it represented – they contributed – let me go back, they contributed money toward the issue to re-campaign (ph) in 2009, which gave them the right to 10% interest in our development's in Toledo and Columbus. And obviously, we looked at what that represented to us and Lakes looked at it and obviously, Lakes had an obligation. If they were going to proceed with us for funding and being a minority partner, we just reached an agreement fairly quickly that this was a value that worked for us, it worked for them and this is a win win for I think both the parties, that I mean we are happy to be now in total control, 100% owners of Toledo and Columbus and I think there are very happy with their return on their investment as well. Larry Havarti – Damco: So if you had to guess when those would open, what would your guess be?

Right now we are making very good progress in Toledo, we are looking now at the first half of 2012 for an opening of the Hollywood casino in Toledo. We are working in Columbus on remediation on the Delphi plant site. That's going to take a little bit longer and we believe Columbus will be a second half 2012 opening. But we are encouraged by both projects and we are working hard on those developments to deliver the Hollywood casino experience both in Toledo and Columbus in 2012. Larry Havarti – Damco: So you think that the minorities worth 25 now for that future stream, that means that asset is probably well north of $250 million on your subjective balance sheet even though it's contributing no cash flow for a couple of years.

We are not going to comment. But you can kind of –

You can do the math. Larry Havarti – Damco: Okay, and then I am just interested, are you participating in the Massachusetts circus or studying it, you are watching it from hopefully far, far away?

I give the answer I have been giving probably for 16 years and that is, even it's happening out there, we are there. So you can assume that anything that kind of moves it in the gaming world, we look at it. Sometimes not very long, all the major new opportunities clearly, we have to be there. Eric probably spends more time and our team, Steve and others in Massachusetts than we would like but you want to speak to that?

Yes. We have been heavily involved in looking at the Massachusetts legislative process as it unfolds this year and has unfolded in your (inaudible). We've had (to sit) at the table so to speak and has testified in the past, but frankly all of that involvement does not give us a good shot here at predicting what's going to happen in this conference committee because it is come down to only a matter of days before the legislative session and which is July 31st and the big blockage, the impact is over the question of slots at the race track and both sides seem pretty dug in on their positions. We get reports that there are deals in the works and then they fall apart a matter of hours later. So, suffice it to say both sides are taking. PENN has spent a lot of time introducing our self, our track record due to powers that be in the legislature with the hope that there'll be an opportunity for us to participate down the road.

We did (inaudible) ladies and gentlemen definitively and quite frankly in this case we have lagged because we don't know where plant it. This is likely going to get to be a flat out bid process in some mix that is yet to be identified. So I think we look at it every single day and we like you are going to wait and see what happens. Larry Havarti – Damco: It's hard to figure.

It's not a pretty process.

Our next question comes from the line of Ryan Worst with Brean Murray. Ryan Worst – Brean Murray: Good morning guys, thanks. Just a couple of questions. One, could you guys provide what pre-opening was in the second quarter for each of those properties PENN National in Charlestown.

You know I probably have to get back to you on that one. Ryan Worst – Brean Murray: What about a total amount?

About a million and a half. Ryan Worst – Brean Murray: Then I was wondering if you guys could talk about what you're seeing on the Gulf Coast maybe in terms of either tourism or just the general economy relating to the events down there.

You know Ryan we haven't seen any real major shift in visitation due to the oil spill. It really hasn't had a material effect in our businesses down there. We certainly see that clean up people on the beach in Hazmat suits looking for oil. It hasn't materialized. You know, there are certainly more people working down there around this BP issue but really it hasn't had any material effect on our business. Baton Rouge is more inland, less affected, but St. Louis (inaudible) really I wouldn't say it has any effect to our business volumes at all. Ryan Worst – Brean Murray: Okay and you're not seeing a drop off in the economy or maybe a pickup because of the relief workers?

Neither. Still very similar to what we saw at pre-spill. Ryan Worst – Brean Murray: Then Tim I think you talked a little bit about the feeling of the voters in Maryland but has there been any polling out indicating any direction whatsoever that that vote might go?

Well, we've obviously been studying this issue closely. I haven't seen any public polls on this question other than to say what has been publicly reported is that there is a tremendous amount of support for slots at the race track and there has been a lot of controversy over slots at the mall. So we like our chances in the upcoming election and we're going to do and be very active with our partner in seeking a successful outcome and spend what it takes to achieve that. Ryan Worst – Brean Murray: Okay and just to clarify, that license if it's not for that specific location it automatically goes back to the state?

It hasn't been granted.

No Ryan, that license is for any location within two miles of the Baltimore Washington Expressway in Arundel County. It just so happens that this applicant who is the mall site fits those parameters and of course the proportions of what a race track that fits those parameters.

Look, they made a bad choice with this site from a lot of points of view in the sense that very congested area that just does not accommodate kind traffic that they're going to handle, that's why residents are really, really unhappy. I think clearly this support in the county for a facility but they didn't still want it there and that's the problem that these folks have. Ryan Worst – Brean Murray: Okay, so the applicant doesn't really have a right to the license it was the location.

Absolutely. Ryan Worst – Brean Murray: Okay.

The applicant has been granted a designation for a license with the condition. The condition is local zoning, that is what the referendum is all about whether or not they will be able to satisfy that condition. Failing that obviously as we have mentioned earlier it goes back to a process, that process would designate some location inside the parameters I mentioned. It has been publicly stated that he believes that the slot (inaudible) at the race track.

Yes that must be – I mean that's what the original (sense) of legislation was all about, putting slots at the race tracks and helping to revitalize race and so the governor has been pretty clear on that as have legislative leaders.

Our next question comes from the line of David Hargrave (ph) with Sterne, Agee. David Hargrave – Sterne, Agee: Hi. I understand that one of your competitors in Ohio is planning to have a temporary operation and if I'm not mistaken you've opted not to have a temporary operation. I was wondering if you have anything you could volunteer as to your opinion on whether that's allowable and maybe why you didn't do it.

Well I mean our co-partners on the issue three referendum have a very difficult site in Cleveland that they're trying to develop long term and I know they've talked about a temporary facility in the old Higbee Building in Cleveland to get up and running sooner. Our issues and our sites are not as encumbered as that is and we believe the best way is proceed is to get up and running with permanent casinos in both Toledo and Columbus. Both sites would not facilitate the opening of temporary locations on those designated – constitutionally designated location.

We have looked at it in the past. By the time you go through the process of – it's not a matter of law you could do it but it's just not, we don't gain enough. It's a little difficult to recapture. That county, it's just very difficult to recapture the preopening capital cost in the amount of time that's different between having a preopening facility and having a permanent facility. So on a cash on cash basis, although it sounds very compelling to have a temporary facility opening by the time you could track up your operating results for the interim period less the amount of incremental spend, you're really not doing a whole lot more than spreading water unless, you want to leave the temporary facility open for an extended period of time, which is not what we think the right answer is. David Hargrave – Sterne, Agee: Got you and then one last thing, if I was to go visit your emerging competitor down in Baton Rouge today, I'm wondering how far along are they?

Well, the last I heard they're moving dirt but that's all I've heard from down at Rouge. I do not have any new time table on when the expected opening is going to be there I would ask them.

Our next question comes from Anthony Powell with Barclays Capital. Anthony Powell – Barclays Capital: Hi guys, a quick follow-up on just Spencer (ph) for visitor trends, have you seen any change in July at all or are they're being similar to second quarter.

Right now July is looking very much like we saw in the second quarter really no material changes. The only thing different in the third quarter as we've already talked about is the changing environment in West Virginia and Pennsylvania with the introduction of table games.

Our next question comes from the line of Dennis Forst with Keybanc. Dennis Forst – Keybanc: Bill, I just wanted to get a clarification on the debt number you gave, did you say $2.1 billion of total debt at the end of the quarter?

Yes. Dennis Forst – Keybanc: Okay, it was $2.3 billion at the end of the previous quarter. Did you just use some of your cash to pay down the debt?

Right we paid down the revolver. Again, third quarter revolver was $205 million. Dennis Forst – Keybanc: Okay, so the B term is 1.52, the bonds are 3.75 and what's the remainder of the current debt?

Capital leases and then now they announced the old city of Aurora, 10-year bond so it's 250 million (inaudible) from three quarters, 3.25.

Our next question comes from the line of Neil Courtis (ph) with Goldman Sachs. Please proceed. Neil Courtis – Goldman Sachs: Hi, thanks. Which markets have been more promotional than others and where are we able to pare back marketing spend this quarter? I guess, I'm looking to see how sustainable some cuts might be if markets heat up in the second half of the year? Thanks.

Neil, the markets that are most competitive right now are characterized as Kansas City in St. Louis with increased promotional activity in both of those markets by the other larger – large competitors there. Southern Mississippi continues to be very promotional or that hasn't changed, that's been ongoing for many, many quarters. Our reaction to all this has been to look at on a customer-by-customer basis where we've been able to pullback our promotional spending. And we're going to stay the course, we don't believe what the others are doing, it's sustainable and accretive to operating cash flows and I don't see any change in our strategy of trying to rationalize our marketing spend and we're not going to be reactive to the threats we're seeing in the markets where we have recently seen increased promotional spending. Neil Courtis – Goldman Sachs: Were you able to pare back spend this quarter? Which markets did you successfully do that?

I think in almost entirely across the board. I'd say 75% to 80% of our businesses were able to see reduced promotional spending as we proceeded quarter-to-quarter. There are very few where we didn't have opportunities to continue to be smarter with our marketing dollar. Neil Courtis – Goldman Sachs: Great, thanks.

Tim, I think you said that very well. We're not skimping in any market. We are not being stupid which is a frame of mind that seems to characterize this industry from time-to-time. We'll let these guys to blow their brains out. They'll do these for a while until they don't and we'll just continue to be rational.

And as we said in previous quarters, we've seen lower spend per visits by customers. And, really, we're just reacting to the change in consumer behavior that we're seeing with our customers and just trying to rationalize our marketing dollars against reduced spending level. Neil?

I think he –

All right, operator.

Thank you. Our next question –

We'll just take – I think we'll take maybe just another call. Okay, our next question comes from the line of John Maxwell with Jefferies & Co. Please proceed. John Maxwell – Jefferies & Co.: Hi, good morning, thanks. Just a quick question; when – on Ohio, if I look at what you're planning now with the amount of gaming capacity, it seems to be less than what you were talking about in the past. Is that – is that just fine tuning the development or is that a possible response to the potential for the VLTs at the tracks?

Well, there – I mean, I think we've actually reduced it. There's a recognition that that you open up a new market, there is a continual growth in that market is obviously much better than inflationary levels, because if you penetrate the market, you can – your (inaudible) grow. We haven't – to my knowledge actually downsized any of our proposals. John Maxwell – Jefferies & Co.: Well, I guess, Bill, when I'm looking at the first quarter, you were talking about 3,000 slots in Toledo and now you have 2000. And in Columbus you were talking about 4000 and now you've listed 3000. So I was just wondering – I didn't – don't know what?

The CapEx hasn't changed from quarter-to-quarter. And what we're doing is and you said it we're fine tuning John, our development plans. We're going to open with those numbers 2000 and 3000 in Toledo and Columbus respective, but we want to have the ability as Bill was alluding to as the market continues to grow early on in the first couple of years, to be able to grow into those higher numbers. John Maxwell – Jefferies & Co.: Okay.

But we are – we are just fine tuning our development and it has – it just has a reflection on – we know year one will be lower than what we'll see at year three and year four levels. John Maxwell – Jefferies & Co.: Sure, okay. And then, just finally on the Delphi site, I apologize if I missed it, but are you passed, I guess there was some talk about remediation efforts maybe being a little bit more than expected. Are you passed any of those point at this time and that $400 million budget is you're pretty comfortable with, there wouldn't be any surprises?

Yes, John, the entity with whom we've contracted in Columbus as a Delphi site we entered into a turnkey product on the remediation and demolition, so we are very comfortable that there will be no cost increases that are associated with the remediation. John Maxwell – Jefferies & Co.: Okay. Great, that's all I had. Thank you.

Thank you. I think that's it. Okay, we thank you. We're at I guess (inaudible) and we thank you for your time this morning. We look forward into the next quarter, some pretty exciting stuff and I hope you walk away from this call with the sense that there is a lot of strong and very positive feelings here. And so, see you next quarter.

Ladies and gentlemen, that does conclude the conference call for today. We thank you for your participation and ask you to please disconnect your line.