As filed with the Securities and Exchange Commission on November 6, 2003.

                                                     Registration No. 333-109146
--------------------------------------------------------------------------------

                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549
                       -----------------------------------

                                 AMENDMENT NO. 1
                                       TO

                                    FORM S-4
                             REGISTRATION STATEMENT
                                      Under
                           THE SECURITIES ACT OF 1933
                       -----------------------------------
                              EMPIRE RESORTS, INC.
             (Exact name of Registrant as specified in its charter)

           Delaware                            5810                     13-4141279
(State or other jurisdiction of      (Primary Standard Industrial    (I.R.S. Employer
incorporation or organization)          Classification Number)       Identification No.)

                             c/o Monticello Raceway
                                    Route 17B
                                  P.O. Box 5013
                           Monticello, New York 12701
                       Telephone: (845) 794-4100, ext. 478
          (Address, including zip code, and telephone number, including
            area code, of Registrant's principal executive offices)

                               Scott A. Kaniewski
                             Chief Financial Officer
                              Empire Resorts, Inc.
                         707 Skokie Boulevard, Suite 600
                           Northbrook, Illinois 60062
                            Telephone: (847) 418-3804
            (Name, address, including zip code, and telephone number,
                   including area code, of agent for service)

                                 --------------

                                   COPIES TO:

            Robert H. Friedman, Esq.                     Raymond Y. Lin, Esq.
Olshan Grundman Frome Rosenzweig & Wolosky LLP           Latham & Watkins LLP
            505 Park Avenue                                885 Third Avenue
       New York, New York 10022-1170                 New York, New York 10022-4802
             (212) 753-7200                                 (212) 906-1200

            APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC:  As
soon as practicable  after this  Registration  Statement  becomes  effective and
prior  to  the  effective  time  of  the  proposed  merger   described  in  this
Registration Statement.

            If the securities being registered on this Form are being offered in
connection  with the formation of a holding company and there is compliance with
General Instruction G, check the following box. / /

            If this  Form is  filed to  register  additional  securities  for an
offering  pursuant to Rule 462(b) under the  Securities  Act of 1933, as amended
(the  "Securities  Act"),  check the following box and list the  Securities  Act
Registration  Statement number of the earlier effective  Registration  Statement
for the same offering. / /

            If this Form is a  post-effective  amendment  filed pursuant to Rule
462(d) under the Securities Act, check the following box and list the Securities
Act  registration   statement  number  of  the  earlier  effective  Registration
Statement for the same offering. / /






                         CALCULATION OF REGISTRATION FEE


========================================================================================================
                                                Proposed             Proposed
                                                 Maximum              Maximum
Title of Shares           Amount to be        Offering Price     Aggregate Offering       Amount of
to be Registered          Registered(1)        Per Share(2)            Price           Registration Fee
--------------------------------------------------------------------------------------------------------
Common Stock, $.01
par value per share        18,219,074             $0.25              $4,645,000           $375.78(3)
--------------------------------------------------------------------------------------------------------

(1)         Represents the maximum number of shares of the  Registrant's  common
            stock to be  issued in  connection  with the  transaction,  based on
            4,483,822  shares of Empire  Resorts'  common stock  estimated to be
            outstanding at the anticipated closing.

(2)         Estimated solely for the purpose of calculating the registration fee
            pursuant to Rule 457(f)(2)  under the  Securities  Act. The proposed
            maximum  aggregate  offering  price  is  based  on  $4,645,000,  the
            aggregate  book  value,  as of  November  5,  2003,  of  the  equity
            interests of Monticello Raceway Management,  Inc., Monticello Casino
            Management,  LLC,  Monticello Raceway Development  Company,  LLC and
            Mohawk Management, LLC that are being acquired by the Registrant.

(3)         A filing fee of $373.72 was paid by the  Registrant on September 26,
            2003 upon the initial filing of this Registration  Statement,  which
            proposed to register 17,016,746 shares of Common Stock.


            THE  REGISTRANT  HEREBY AMENDS THIS  REGISTRATION  STATEMENT ON SUCH
DATE OR  DATES AS MAY BE  NECESSARY  TO  DELAY  ITS  EFFECTIVE  DATE  UNTIL  THE
REGISTRANT SHALL FILE A FURTHER  AMENDMENT WHICH  SPECIFICALLY  STATES THAT THIS
REGISTRATION  STATEMENT  SHALL  THEREAFTER  BECOME  EFFECTIVE IN ACCORDANCE WITH
SECTION 8(A) OF THE SECURITIES ACT OF 1933 OR UNTIL THE  REGISTRATION  STATEMENT
SHALL BECOME  EFFECTIVE ON SUCH DATE AS THE SECURITIES AND EXCHANGE  COMMISSION,
ACTING PURSUANT TO SAID SECTION 8(A), MAY DETERMINE.





                        Information Statement/Prospectus


            This information  statement/prospectus  is being furnished to you in
connection with Empire Resorts,  Inc.'s ("EMPIRE RESORTS") proposed  acquisition
of  Monticello  Raceway  Management,  Inc.  ("MONTICELLO  RACEWAY  MANAGEMENT"),
Monticello Casino Management,  LLC ("MONTICELLO CASINO MANAGEMENT"),  Monticello
Raceway Development Company,  LLC ("MONTICELLO RACEWAY  DEVELOPMENT") and Mohawk
Management,  LLC  ("MOHAWK  MANAGEMENT")  for 80.25% of Empire  Resorts'  common
stock,  calculated  on a  post-consolidation,  fully diluted  basis.  Presently,
Monticello   Raceway  Management  is  a  wholly  owned  subsidiary  of  Catskill
Development,   L.L.C.  ("CATSKILL  DEVELOPMENT"),   each  of  Monticello  Casino
Management and Mohawk  Management is 60% owned by Catskill  Development  and 40%
owned  indirectly by Empire  Resorts and Monticello  Raceway  Development is 50%
owned by Americas Tower Partners, 41% by Robert A. Berman, Empire Resorts' chief
executive  officer,  a member of its board of directors and its former chairman,
7.65% by Scott A.  Kaniewski,  Empire  Resorts'  chief  financial  officer and a
former member of its board of directors, .05% by two affiliates of Mr. Kaniewski
and 1.3% by  Philip  B.  Berman,  Empire  Resorts'  vice  president  of  project
coordination.  Immediately  after  consummation  of the  consolidation,  each of
Monticello Raceway Management,  Monticello Casino Management, Monticello Raceway
Development  and Mohawk  Management  will become  wholly owned  subsidiaries  of
Empire  Resorts  and the members of both  Catskill  Development  and  Monticello
Raceway  Development  will,  together,  hold a  controlling  interest  in Empire
Resorts.



            On July 1, 2003,  Empire  Resorts'  board of directors  approved the
consolidation,   subject  to  a  recommendation  from  its  independent  special
committee,  consisting of a disinterested  director.  The special  committee has
evaluated the  consolidation  and has recommended  that Empire Resorts' board of
directors  proceed with the  consolidation.  In its  evaluation  of the proposed
consolidation,  the special committee was provided with independent legal advice
from the law firm of Wollmuth Maher & Deutsch,  LLP, and received an opinion
from  an  independent  valuation  consulting  firm  as to the  fairness,  from a
financial point of view, of the consolidation's  terms to Empire Resorts and its
stockholders. On November 11, 2003, the board of directors also approved:

            o    an amendment to Empire  Resorts'  certificate of  incorporation
                 that provides for a staggered board of directors;

            o    an amendment to Empire  Resorts'  certificate of  incorporation
                 that  provides  the  holders of Series E  Preferred  Stock with
                 certain voting rights; and

            o    the nomination of three Class I, three Class II and three Class
                 III directors.







            WE ARE NOT ASKING YOU FOR A PROXY AND YOU ARE  REQUESTED NOT TO SEND
US A PROXY


            By executing an  irrevocable  written  consent on November 25, 2003,
Robert A. Berman,  Philip B. Berman, Scott A. Kaniewski,  Paul A. deBary, Joseph
E. Bernstein,  Herbert F. Kozlov, Reed Smith LLP and certain of their affiliates
(collectively, the "CONTROLLING STOCKHOLDERS"), have already approved:

            o   the restated contribution agreement;

            o   an amendment to Empire  Resorts'  certificate  of  incorporation
                providing for a staggered board of directors;

            o   an amendment to Empire  Resorts'  certificate  of  incorporation
                providing  the holders of Series E Preferred  Stock with certain
                voting rights; and

            o   the  election  of three  Class I, three Class II and three Class
                III directors.


As the Controlling  Stockholders control enough shares of Empire Resorts' voting
stock to approve each of these matters,  regardless of how Empire Resorts' other
stockholders vote, no further vote of Empire Resorts'  stockholders is necessary
to consummate the consolidation or any other matter listed above . Consequently,
we are not asking you for a proxy and you are not  requested to send us a proxy.
As we explain in this information  statement/prospectus,  however, completion of
the  consolidation  remains  subject to the  satisfaction  or waiver of numerous
conditions.  We  cannot  predict  with  certainty  when  we  will  complete  the
consolidation, but we anticipate to complete it in the fourth quarter of 2003.


            PLEASE SEE "RISK  FACTORS"  BEGINNING ON PAGE 18 FOR A DISCUSSION OF
MATTERS RELATING TO AN INVESTMENT IN EMPIRE RESORTS' COMMON STOCK.


            This  information   statement/prospectus  is  also  Empire  Resorts'
prospectus  for the resale of up to  approximately  18,219,075  shares of common
stock being issued to certain  members of Catskill  Development  and  Monticello
Raceway Development  pursuant to the consolidation.  These selling  stockholders
may   reoffer   these   shares   of  common   stock   under   this   information
statement/prospectus at any of the following prices, which may reflect discounts
from the prevailing market prices at the time of sale:

            o   fixed prices that may be changed;

            o   prices related to such prevailing market prices;

            o   negotiated prices; or

            o   varying prices determined at the time of sale.


                                       2





         Empire  Resorts will not receive any proceeds  from the resale of these
shares of common stock.


         Empire Resorts'  common stock currently  trades on the Nasdaq Small Cap
Market  and  Boston  Stock   Exchange   under  the  symbols  "NYNY"  and  "NYN,"
respectively,  and the shares of common stock to be issued in the  consolidation
will also be listed on the Nasdaq Small Cap Market and Boston Stock Exchange.



     NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
   COMMISSION HAS APPROVED OF THE CONSOLIDATION OR THE SECURITIES TO BE ISSUED
  UNDER THIS INFORMATION STATEMENT/PROSPECTUS OR DETERMINED IF THIS INFORMATION
     STATEMENT/PROSPECTUS IS ACCURATE OR ADEQUATE. ANY REPRESENTATION TO THE
                         CONTRARY IS A CRIMINAL OFFENSE.


    This information statement/prospectus is dated ____________, 2003, and it
is first being mailed to Empire Resorts' stockholders on or about ________, 2003.

                                       3




                                    IMPORTANT

            This  document,  which is sometimes  referred to as the  information
statement/prospectus,  constitutes  an  information  statement of Empire Resorts
with respect to the  consolidation  and a prospectus  of Empire  Resorts for the
shares of Empire  Resorts'  common  stock that Empire  Resorts will issue to the
members of both Catskill  Development and Monticello Raceway Development as part
of the  consolidation.  As  permitted  under  the  rules of the  Securities  and
Exchange   Commission,   this  information   statement/prospectus   incorporates
important  business  and  financial  information  about  Empire  Resorts and its
affiliates that is contained in documents filed with the Securities and Exchange
Commission  and that is not  included  in or  delivered  with  this  information
statement/prospectus.  You may obtain copies of these documents, without charge,
from the  website  maintained  by the  Securities  and  Exchange  Commission  at
www.sec.gov, as well as other sources. See "Where You Can Find More Information"
beginning  on page 174. You may also obtain  copies of these documents,  without
charge, from Empire Resorts by writing or calling:

                              Empire Resorts, Inc.
                             c/o Monticello Raceway
                                    Route 17B
                                 P.O. Box 5013
                           Monticello, New York 12701
                            (845) 794-4100, ext. 478
                         Attention: Corporate Secretary

            IN ORDER TO OBTAIN  DELIVERY OF THESE  DOCUMENTS PRIOR TO COMPLETION
OF  THE  CONSOLIDATION,   YOU  SHOULD  REQUEST  SUCH  DOCUMENTS  NO  LATER  THAN
_____________________, 2003.

                                       4




                               Table of Contents
                                                                            Page
                                                                            ----

Questions and Answers about the Consolidation................................ 1
Summary...................................................................... 4
Price Range of Common Stock..................................................17
Cautionary Statement Concerning Forward Looking Statements...................18
Risk Factors.................................................................18
             Risks Related to the Consolidation..............................19
             Risks Related to the Combined Enterprise........................22
The Consolidation............................................................30
             General.........................................................30
             Background of the Consolidation.................................32
             Reasons to Combine Companies....................................36
             Recommendation of Empire Resorts' Special Committee.............42
             Opinion of Kane Reece Associates, Inc...........................46
             Interests of Certain Persons in the Consolidation...............56
             Material Federal Income Tax Consequences........................59
             Accounting Treatment............................................60
             Regulatory Approvals............................................60
             Certain Non-Voting Members Relinquish their Interests
               in Catskill Development.......................................61
The Restated Contribution Agreement..........................................61
             General Terms of the Contribution Agreement.....................61
             The Transaction.................................................61
             Representations and Warranties..................................62
             Covenants.......................................................67
             Registration Statement, Stockholder Vote, and
               Bryanston Litigation..........................................69
             Conditions to Closing...........................................70
             Survival of Representations and Warranties......................74
             Indemnification.................................................75
             Termination.....................................................76
             Miscellaneous...................................................76
Material Conditions to Closing...............................................77
             Redemption of Empire Resorts' Interest in Catskill
               Development...................................................77
             Distribution by Catskill Development of its Interests
               in Monticello Raceway Management, Monticello
               Casino Management and Mohawk Management.......................78
             Formation of Litigation Trust...................................79
             Redemption of Certain Shares of Common Stock....................81
             Listing of Common Stock on Nasdaq...............................82
Unaudited Pro Forma Consolidated Condensed Financial Statements..............83
Business.....................................................................89
             Empire Resorts..................................................89
             Monticello Raceway Management...................................90
             Monticello Casino Management....................................96





                               Table of Contents

             Monticello Raceway Development.................................103
             Mohawk Management..............................................108
Management's Discussion and Analysis of Financial Condition
  and Results of Operations.................................................113
             Empire Resorts.................................................113
             Catskill Development and Acquired Companies....................113
Recend Developments.........................................................115
             Loan and Security Agreement and Term Note......................116
             Ground Lease and Land Purchase Agreeement......................117
             Leasehold Mortgage.............................................118
             Non-Distrurbance and Attornment Agreement......................121
             Surety Agreement...............................................122
             Guarantee Agreement............................................123
             Security Agreement.............................................123
Selling Stockholders........................................................125
Plan of Distribution........................................................128
Comparison of Stockholder Rights............................................129
Amendment to Certificate of Incorporation
  to Create a Staggered Board of Directors..................................153
Amendment of Certificate of Incorporation
  to Provide the Holders of Series E Preferred Stock with Voting Rights.....155
Empire Resorts Post-Consolidation Management and Principal Stockholders.....158
Corporate Governance........................................................166
Experts.....................................................................174
Legal Matters...............................................................174
Where You Can Find More Information.........................................174
Incorporation of Documents by Reference.....................................175
Index to Financial Statements...............................................F-1

Appendix A:.Amended and Restated Securities Contribution Agreement

                                       ii





                  QUESTIONS AND ANSWERS ABOUT THE CONSOLIDATION

            Q: WHAT IS THE PROPOSED TRANSACTION?

            A: Empire  Resorts is  proposing  to acquire all of the  outstanding
membership  interests  and  capital  stock  of  Monticello  Raceway  Management,
Monticello  Casino  Management,   Monticello  Raceway   Development  and  Mohawk
Management from the members of both Catskill  Development and Monticello Raceway
Development in exchange for 80.25% of Empire Resorts'  common stock,  calculated
on a post-consolidation, fully diluted basis.

            Q: WHY IS EMPIRE RESORTS ACQUIRING  MONTICELLO  RACEWAY  MANAGEMENT,
MONTICELLO  CASINO  MANAGEMENT,   MONTICELLO  RACEWAY   DEVELOPMENT  AND  MOHAWK
MANAGEMENT?


            A:  Collectively,  Empire Resorts,  Monticello  Raceway  Management,
Monticello  Casino  Management,   Monticello  Raceway   Development  and  Mohawk
Management own all of the development and management  rights with respect to 229
acres of land in Monticello,  New York.  Currently,  the operating agreement for
the  partnership  allocaets  profits and losses  among the partners by different
percentages  according  to various  lines of business  and provides for priority
returns to certain investors (See "Background of the  Consolidation",  beginning
on page 32).  In order to improve the  existing  gaming  facilities,  to install
video lottery  terminals  and/or develop a Native  American casino on this land,
these entities will need to raise a significant amount of financing from outside
investors.  Empire  Resorts and the  members of both  Catskill  Development  and
Monticello Raceway  Development believe that combining the operations and assets
of Empire Resorts, Monticello Raceway Management,  Monticello Casino Management,
Monticello  Raceway  Development and Mohawk Management into an integrated public
company  structure  will better  align the  interests  of the various  partners,
improve  management  decision  making,  improve  administrative  efficiency  and
facilitate  raising  the  necessary  financing  and the  ability  to enter  into
strategic  relationships with other companies.  The result of this consolidation
will be a publicly  traded company owning all of the  development and management
rights for 229 acres of land in  Monticello,  New York  compared with a group of
interrelated private companies with separate rights over this land. Furthermore,
as a result of the consolidation,  Empire Resorts would immediately and directly
own an operating business, providing it with direct access to revenue streams as
opposed to relying on dividend  payments  and  distributions  from its  minority
owned   subsidiaries,   which  were  adversely   affected  by  certain  priority
obligations to other parties.  For a more detailed discussion of Empire Resorts'
reasons for the  consolidation,  as well as the acquired  companies' reasons for
the consolidation,  please see "The Consolidation--Reasons to Combine Companies"
beginning on page 36.


            Q: IS THERE ANY PRE-EXISTING RELATIONSHIP BETWEEN EMPIRE RESORTS AND
THE COMPANIES BEING ACQUIRED?

            A: Yes. Empire Resorts,  through its wholly owned subsidiary,  Alpha
Monticello,  Inc.  ("ALPHA  MONTICELLO"),  presently  owns  approximately  a 25%
economic ownership interest of Catskill Development,  which in turn owns 100% of
the equity interests of Monticello  Raceway Management and 60% of the membership
interests of both  Monticello  Casino  Management and Mohawk  Management.  Alpha
Monticello  owns the remaining  40%  membership  interest in  Monticello  Casino
Management  and Alpha  Casino  Management,  Inc.  ("ALPHA  CASINO  MANAGEMENT"),
another  wholly owned  subsidiary  of Empire  Resorts,  owns the  remaining  40%
membership  interest in Mohawk  Management.  Currently,  Empire Resorts does not
have any development  rights for the 229 acres of land in Monticello,  New York.
Certain  officers and directors of Empire Resorts also have  significant  equity
interests in Catskill  Development and the members of both Catskill  Development

                                       1





and  Monticello  Raceway  Development.  See "The  Consolidation  - Interests  of
Certain Persons in the Consolidation" beginning on page 56.

            Q: WHAT WILL I RECEIVE AS A RESULT OF THE CONSOLIDATION?

            A:  Empire  Resorts'   stockholders  will  not  receive  any  direct
consideration as part of the consolidation. However, Empire Resorts does believe
that its stockholders will receive an indirect benefit from the consolidation in
light  of the  present  and  anticipated  future  value of the  companies  being
acquired.

            Q: WHO ARE THE CONTROLLING  STOCKHOLDERS  AND WHAT WILL THEY RECEIVE
IN THE CONSOLIDATION?


            A: The Controlling  Stockholders  consist of Robert A. Berman, Scott
A. Kaniewski, Philip B. Berman, Paul A. deBary, Joseph E. Bernstein,  Herbert F.
Kozlov and Reed Smith LLP.  Pursuant to the terms of the  restated  contribution
agreement, these individuals and their affiliates, collectively, are expected to
receive  approximately  40% of the shares of Empire  Resorts' common stock being
issued  pursuant to the  consolidation.  See "The  Consolidation  - Interests of
Certain Persons in the Consolidation" beginning on page 56.


            Q: IS ANY FURTHER  VOTE OF EMPIRE  RESORTS'  STOCKHOLDERS  NEEDED TO
APPROVE THE CONSOLIDATION?

            A: No. Delaware law allows stockholders to act by written consent in
lieu of holding a meeting,  unless  prohibited by the company's  certificate  of
incorporation.  Empire Resorts'  certificate of incorporation  does not prohibit
stockholder  action  by  written  consent.  Since  Empire  Resorts'  Controlling
Stockholders,  who collectively  control a sufficient  amount of Empire Resorts'
voting stock to approve the  consolidation,  have previously  executed a written
consent  approving  it, no  further  vote by  Empire  Resorts'  stockholders  is
required.

            Q:   WILL  I  HAVE   APPRAISAL   RIGHTS  IN   CONNECTION   WITH  THE
CONSOLIDATION?

            A: No. Under Delaware law,  holders of Empire  Resorts' common stock
will not have appraisal rights in connection with the consolidation.

            Q: WHAT ARE THE TAX CONSEQUENCES OF THE TRANSACTION?


            A: The parties to the restated  contribution  agreement  intend that
neither Empire  Resorts nor any of Empire  Resorts'  stockholders  recognize any
gain   or  loss  as  a   direct   result   of  the   consolidation.   See   "The
Consolidation--Material Federal Income Tax Consequences" beginning on page 59.

            Q: WILL THE MEMBERS OF CATSKILL  DEVELOPMENT AND MONTICELLO  RACEWAY
DEVELOPMENT BE ABLE TO IMMEDIATELY  RESELL THE SHARES OF EMPIRE  RESORTS' COMMON
STOCK ISSUED TO THEM PURSUANT TO THE CONSOLIDATION?

            A: Yes. All the shares of common  stock issued by Empire  Resorts to
the members of Catskill  Development and Monticello Raceway Development pursuant

                                       2




to the  consolidation  will be freely  transferable,  except for those shares of
Empire Resorts'  common stock received by officers,  directors and certain other
affiliates of Catskill Development and Monticello Raceway Development.  However,
the registration statement of which this information  statement/prospectus  is a
part  registers the resale of those shares of common  stock,  thus allowing such
shares to also be sold into the open market after the closing.


            Q: WHAT DO I NEED TO DO NOW?

            A:  Nothing,   other  than  to  carefully   read  this   information
statement/prospectus,  as  each  of  Empire  Resorts'  board  of  directors  and
Controlling  Stockholders has already approved the consolidation and all related
matters.

            Q: WHEN DOES EMPIRE RESORTS EXPECT TO COMPLETE THE CONSOLIDATION?

            A: Empire Resorts expects to complete the  consolidation on or after
the 20th day following distribution of this information  statement/prospectus to
its stockholders,  provided all closing conditions have been either satisfied or
waived.  See "The Contribution  Agreement - Conditions to Closing"  beginning on
page 70.

            Q: WHERE CAN I FIND MORE INFORMATION?

            A: You can obtain more information from various sources, as provided
under "Where You Can Find More Information" beginning on page 174.

                                       3





                                     SUMMARY

            This summary highlights selected  information from this document and
may not  contain  all of the  information  that is  important  to you. To better
understand the  consolidation  and for a more complete  description of the legal
terms of the  consolidation,  you should carefully read this entire document and
the documents to which you have been referred.

                                  THE COMPANIES

EMPIRE RESORTS, INC.
C/O MONTICELLO RACEWAY
ROUTE 17B
P.O. BOX 5013
MONTICELLO, NEW YORK 12701
(845) 794-4100, EXT. 478
ATTENTION: INVESTOR RELATIONS


            Empire Resorts is a Delaware  corporation with no direct  operations
or meaningful  assets other than a 48.31% economic  ownership  interest,  36.88%
economic ownership interest and 25% economic ownership  interest,  respectively,
in Catskill Development's casino and wagering operations, horse racing and other
pari-mutuel  activities and real estate  ownership and  development  operations.
Catskill  Development  is the  owner  of  approximately  229  acres  of  land in
Monticello,  New York, the sole stockholder of Monticello Raceway Management and
the controlling member of Monticello Casino Management and Mohawk Management.



            Empire Resorts had no operating revenue during the fiscal year ended
December 31, 2002 and during the six months ended June 30, 2003,  and  sustained
net  operating  losses  of   approximately   $9.5  million  and  $3.14  million,
respectively,  during such periods.  Furthermore, the opinion of Friedman Alpren
&  Green LLP,  Empire Resorts'  independent  auditors with respect to Empire
Resorts' financial  statements as of December 31, 2002,  contains an explanatory
paragraph  that expresses  substantial  doubt as to Empire  Resorts'  ability to
continue as a going concern.


MONTICELLO RACEWAY MANAGEMENT, INC.
C/O MONTICELLO RACEWAY
ROUTE 17B
MONTICELLO, NEW YORK 12701
(845) 794-4100, EXT. 400
ATTENTION: INVESTOR RELATIONS

            Monticello  Raceway  Management  is  a  New  York  corporation  that
operates  Monticello  Raceway,  a  harness  horse  racing  facility  located  in
Monticello,  New York. While Monticello Raceway Management is currently a wholly
owned   subsidiary   of   Catskill   Development,   immediately   prior  to  the
consolidation's  closing,  Catskill  Development  will  distribute  all  of  its
interest in Monticello Raceway Management to Catskill Development's then current
members.

                                       4





MONTICELLO CASINO MANAGEMENT, LLC
C/O MONTICELLO RACEWAY
ROUTE 17B
MONTICELLO, NEW YORK 12701
(845) 794-4100, EXT. 400
ATTENTION: INVESTOR RELATIONS

            Monticello Casino Management is a New York limited liability company
with the exclusive right to manage,  on behalf of the Cayuga Nation of New York,
any Class III Gaming  operations and related  activities that may occur on 29 of
the 229 acres of land presently owned by Catskill Development in Monticello, New
York.  Currently,  Monticello Casino Management has no operations,  employees or
assets other than its gaming management rights. Catskill Development owns 60% of
the membership  interests of Monticello  Casino  Management and Empire  Resorts,
through a wholly  owned  subsidiary,  owns 40% of the  membership  interests  of
Monticello Casino Management.  However, immediately prior to the consolidation's
closing,  Catskill Development will distribute all of its interest in Monticello
Casino Management to Catskill Development's then current members.

MONTICELLO RACEWAY DEVELOPMENT COMPANY, LLC
C/O MONTICELLO RACEWAY
ROUTE 17B
MONTICELLO, NEW YORK 12701
(845) 794-4100, EXT. 400
ATTENTION: INVESTOR RELATIONS


            Monticello  Raceway  Development  is a New  York  limited  liability
company with the exclusive right to design,  engineer,  develop,  construct, and
furnish a Class III Gaming  facility that is developed on 29 of the 229 acres of
land presently owned by Catskill Development in Monticello, New York. Monticello
Raceway  Development  also has the exclusive  right to develop the remaining 200
acres of land to provide for activities  supportive of gaming,  such as lodging,
food  service and  retail.  Currently,  Monticello  Raceway  Development  has no
operations,  employees or assets other than its development  rights.  Monticello
Raceway  Development's  membership  interests  are owned 50% by  Americas  Tower
Partners, an affiliate of Catskill Development and partially owned indirectly by
Morad Tahbaz,  Empire Resorts' president and a member of its board of directors,
41% by Robert A. Berman,  Empire Resorts' chief executive  officer,  a member of
its board of directors  and its former  chairman,  7.65% by Scott A.  Kaniewski,
Empire  Resorts'  chief  financial  officer and a former  member of its board of
directors, .05% by two affiliates of Mr. Kaniewski and 1.3% by Philip B. Berman,
Empire Resorts' vice president of project coordination.

                                       5





MOHAWK MANAGEMENT, LLC
C/O MONTICELLO RACEWAY
ROUTE 17B
MONTICELLO, NEW YORK 12701
(845) 794-4100, EXT. 400
ATTENTION: INVESTOR RELATIONS

            Mohawk Management is a New York limited liability company originally
formed to operate,  in conjunction  with the St. Regis Mohawk Tribe, a Class III
Gaming  facility  on 29 of the 229  acres of land  presently  owned by  Catskill
Development  in  Monticello,  New  York.  Currently,  Mohawk  Management  has no
operations,   employees  or  assets   other  than  claims   against  Park  Place
Entertainment  Corporation,  Gary  Melius,  Ivan  Kaufman  and  Walter  Horn for
tortious  interference  with  contractual  and  business  relations  and  fraud.
Catskill  Development owns 60% of the membership  interests of Mohawk Management
and  Empire  Resorts,  through  a  wholly  owned  subsidiary,  owns  40%  of the
membership  interests of Mohawk  Management.  However,  immediately prior to the
consolidation's  closing,  Catskill  Development  will  distribute  all  of  its
interest in Mohawk Management to Catskill Development's then current members.

            A diagram  summarizing  the current  ownership  structure  of Empire
Resorts, Monticello Raceway Management, Monticello Casino Management, Monticello
Raceway  Development and Mohawk  Management,  both before and after the proposed
consolidation, is provided on the following page.

                                       6




                               [GRAPHIC OMITTED]



------------

(1)  Includes a .025%  membership  interest  held by  Kaniewski  Family  Limited
Partnership, with respect to which Mr. Kaniewski is the general partner and a 1%
limited partner (with sole voting and disposition rights) and a .025% membership
interest  held by KFP  Trust,  with  respect  to  which  Stacey  Kaniewski,  Mr.
Kaniewski's  wife,  is  the  sole  trustee,  and  with  respect  to  which,  Mr.

                                       7





Kaniewski's  children  are  its  sole  beneficiaries.  Mr.  Kaniewski  disclaims
beneficial ownership of all interests held by KFP Trust.


(2) The  diagram  shows only those  partners  of  Americas  Tower  Partners  and
Watertone  Holdings,  L.P.  ("WATERTONE  HOLDINGS")  that  served as officers or
directors of Empire Resorts at the time the consolidation's principal terms were
negotiated and approved by Empire Resorts' board of directors.


(3) Certain members of Catskill  Development,  owning in the aggregate less than
2.5% of the membership interests of Catskill Development,  are not shown in this
diagram.

(4) Catskill Development has three classes of economic ownership interests, with
each class  corresponding  to one of Catskill  Development's  three  businesses.
Class  A  economic   ownership   interests   represent   the  right  to  receive
distributions  and allocations from Catskill  Development's  casino and wagering
operations;  Class B economic ownership interests represent the right to receive
distributions and allocations from Catskill Development's  horseracing and other
pari-mutuel  activities;  and Class C economic ownership interests represent the
right to receive distributions and allocations from Catskill  Development's real
estate ownership and development  operations.  Of Catskill  Development's  eight
members,  the vast majority of these  economic  ownership  interests are held by
Alpha  Monticello,  Watertone  Holdings,  Americas Tower Partners and Monticello
Realty L.L.C. ("MONTICELLO REALTY").  Specifically, Alpha Monticello, which is a
wholly owned subsidiary of Empire Resorts, holds approximately 48%, 37% and 25%,
respectively,  of Catskill  Development's  Class A, Class B and Class C economic
ownership  interests;  Watertone Holdings holds  approximately 15%, 13% and 25%,
respectively,  of Catskill  Development's  Class A, Class B and Class C economic
ownership  interests;  Americas Tower Partners holds  approximately 33%, 25% and
25%,  respectively,  of  Catskill  Development's  Class A,  Class B and  Class C
economic  ownership  interests and Monticello  Realty holds  approximately  33%,
22.5% and 22.5%,  respectively,  of Catskill  Development's Class A, Class B and
Class C economic ownership interests. In addition,  under Catskill Development's
operating  agreement,  Alpha  Monticello,  Watertone  Holdings,  Americas  Tower
Partners and Monticello Realty are the only members of Catskill Development with
voting  rights,  with each of these  four  members  entitled  to one vote on all
matters submitted to members for a vote.

                                       8





                              Post-Consolidation(1)
                               ------------------




                               [GRAPHIC OMITTED]






(1)  As  Catskill  Development  will  be  redeeming  all of  Alpha  Monticello's
interests in Catskill  Development and then distributing all of its interests in
Monticello   Raceway   Management,   Monticello  Casino  Management  and  Mohawk
Management  to  Catskill   Development's  then  current  members  prior  to  the
consolidation's  closing,   Catskill  Development  has  been  omitted  from  the
post-consolidation   ownership  diagram.  Americas  Tower  Partners,   Watertone
Holdings and Monticello Realty have been listed as the owners of Empire Resorts,
as these  entities  will  receive  the vast  majority  of the  shares  of Empire
Resorts'  common  stock being  issued to Catskill  Development's  members at the

                                       9





consolidation's  closing in exchange for such  members'  interests in Monticello
Raceway Management, Monticello Casino Management and Mohawk Management.

                                       10





                          REASONS FOR THE CONSOLIDATION

            Collectively,   Empire  Resorts,   Monticello  Raceway   Management,
Monticello  Casino  Management,   Monticello  Raceway   Development  and  Mohawk
Management own all of the development and management  rights with respect to 229
acres of land in Monticello,  New York. In order to improve the existing  gaming
facilities,  to install video lottery terminals and/or develop a Native American
casino on this land,  the entities  will need to raise a  significant  amount of
financing  from  outside  investors.  Empire  Resorts  and the  members  of both
Catskill  Development and Monticello Raceway  Development believe that combining
the  operations and assets of Empire  Resorts,  Monticello  Raceway  Management,
Monticello  Casino  Management,   Monticello  Raceway   Development  and  Mohawk
Management  into  an  integrated   public  company  structure  would  facilitate
accessing the required financing sources and raising the necessary capital.  The
result of this consolidation will be a publicly traded company owning all of the
development and management rights for 229 acres of land in Monticello,  New York
compared with a group of  interrelated  private  companies with separate  rights
over  this  land  prior to the  consolidation.  Furthermore,  as a result of the
consolidation,   Empire  Resorts  would  directly  own  an  operating  business,
providing  it with  direct  access to  revenue  streams as opposed to relying on
dividend payments and distributions from its minority owned subsidiaries.  For a
more detailed  discussion of Empire Resorts' reasons for the  consolidation,  as
well as the acquired  companies' reasons for the consolidation,  please see "The
Consolidation--Reasons to Combine Companies" beginning on page 36.

                            THE PROPOSED TRANSACTION

            In  the  proposed  consolidation,   the  members  of  both  Catskill
Development and Monticello  Raceway  Development  shall  contribute all of their
respective  ownership  interests in Monticello  Raceway  Management,  Monticello
Casino  Management,   Monticello  Raceway  Development  and  Mohawk  Management,
together  with all of their right,  title and interest in and to the business of
Monticello  Raceway,  including  all of the assets and  liabilities  of Catskill
Development,  except for its  interest in 229 acres of land in  Monticello,  New
York and its right to certain  litigation  claims, to Empire Resorts in exchange
for, in the aggregate,  80.25% of Empire Resorts' common stock,  calculated on a
post-consolidation,  fully diluted basis. As a result of the consolidation, each
of Monticello  Raceway  Management,  Monticello  Casino  Management,  Monticello
Raceway  Development and Mohawk Management will become wholly owned subsidiaries
of Empire  Resorts and the members of both Catskill  Development  and Monticello
Raceway   Development,   together,   will  become  Empire  Resorts'  controlling
stockholders.

     NO FURTHER STOCKHOLDER APPROVAL REQUIRED; EMPIRE RESORTS BOARD APPROVAL


            We are not asking you to vote on the consolidation.  On November 25,
2003, Empire Resorts' Controlling Stockholders,  who collectively control 51% of
Empire Resorts' voting stock, executed a written consent:

            o   adopting the restated contribution  agreement,  which sets forth
                the legal terms and structure of the consolidation;

            o   approving the consolidation;

                                       11





            o   amending Empire Resorts' certificate of incorporation to provide
                for a  staggered  board of  directors,  pursuant to which only a
                portion of Empire  Resorts' board of directors  would be elected
                each year rather than all at once;

            o   amending Empire Resorts' certificate of incorporation to provide
                the holders of Series E Preferred  Stock with one vote for every
                four  shares of  Series E  Preferred  Stock  held by them on all
                matters submitted to a vote of stockholders; and

            o   electing  three  Class I,  three  Class II and  three  Class III
                directors,  with the  members of each  class  serving an initial
                term of  one,  two  and  three  years,  respectively,  and  each
                subsequent term for all classes being three years.

Except for amending Empire Resorts'  certificate of incorporation to provide the
holders of its Series E Preferred Stock with certain voting rights,  approval of
each of the above listed items is a condition  to the  consolidation's  closing.
Moreover,  the written  consent that  approved  these five items  satisfied  all
applicable stockholder approval requirements under Delaware law, Empire Resorts'
certificate of incorporation and Empire Resorts' bylaws.


            Empire Resorts' board of directors  believes that the  consolidation
is advisable and in Empire  Resorts' best  interest.  The board of directors has
unanimously approved:


            o   the restated contribution agreement;

            o   the consolidation;

            o   an amendment to Empire  Resorts'  certificate  of  incorporation
                providing for a staggered board of directors;

            o   an amendment to Empire  Resorts'  certificate  of  incorporation
                providing  the holders of Series E Preferred  Stock with certain
                voting rights; and

            o   the  nomination  of those  persons  elected  by Empire  Resorts'
                Controlling  Stockholders  as Class I,  Class II and  Class  III
                directors.

            A special  committee  of the board of  directors,  consisting  of an
independent director and advised by an independent counsel and by an independent
financial  advisor  retained for the purpose of delivering a fairness opinion to
the special committee, has reviewed the transaction and has recommended that the
board of directors proceed with the consolidation.


            Empire  Resorts  will  pay  all of the  costs  associated  with  the
printing, handling and mailing of this information  statement/prospectus,  which
costs are estimated to be approximately $40,000.  Empire Resorts will also, upon
request,  reimburse  brokers,  banks and similar  organizations  for  reasonable
out-of-pocket    expenses    incurred    in    forwarding    this    information
statement/prospectus to their clients.


                                       12





                                FAIRNESS OPINION

            Empire Resorts'  special  committee  received a written opinion from
Kane Reece Associates, Inc. ("KANE REECE ASSOCIATES"),  an independent valuation
consulting  firm,  attesting  to the  fairness of the  consolidation's  terms to
Empire  Resorts and its  stockholders  from a financial  point of view. The full
text of the opinion is available for inspection  and copying at Empire  Resorts'
principal  executive  offices  during  regular  business hours by any interested
stockholder of Empire Resorts or any  representative  who has been so designated
in  writing.  PLEASE  NOTE,  HOWEVER,  THAT KANE  REECE  ASSOCIATES'  OPINION IS
DIRECTED TO THE SPECIAL  COMMITTEE AND DOES NOT CONSTITUTE A  RECOMMENDATION  TO
ANY STOCKHOLDER AS TO ANY MATTERS RELATING TO THE CONSOLIDATION.

                                THE CONSOLIDATION

THE RESTATED CONTRIBUTION AGREEMENT (SEE PAGE 61)

            The  restated  contribution  agreement  is the legal  document  that
governs   the    consolidation.    It   is   attached   to   this    information
statement/prospectus  as Appendix A, and you are urged to  carefully  read it in
its  entirety.  The  following  is a summary  of its  terms  and omits  numerous
details.


WHAT EMPIRE RESORTS IS RECEIVING (SEE PAGE 61)

            Under the terms of the  consolidation,  in exchange for issuing that
number  of  shares of common  stock  equal to 80.25% of Empire  Resorts'  common
stock,  calculated on a post-consolidation,  fully diluted basis, Empire Resorts
will receive:

            o   all  of the  issued  and  outstanding  membership  interests  in
                Monticello Casino Management that it does not already own;

            o   all of the issued and outstanding membership interests in Mohawk
                Management that it does not already own;

            o   all  of the  issued  and  outstanding  membership  interests  in
                Monticello Raceway Development;


            o   all of the issued and  outstanding  capital  stock of Monticello
                Raceway Management and Monticello Raceway Management's leasehold
                interest  in 200  acres of land in  Monticello,  New York and an
                option to purchase such land; and

            o   all of the rights in and to the business of Monticello  Raceway,
                including  all  of  the  assets  and   liabilities  of  Catskill
                Development,  except  for its  interest  in 229 acres of land in
                Monticello, New York and its right to certain litigation claims.



                                       13



CONDITIONS TO THE CONSOLIDATION (SEE PAGE 70)

            The completion of the consolidation depends upon meeting a number of
conditions, including:

            o   approval  for listing on the Nasdaq  Small Cap Market and Boston
                Stock  Exchange of the shares of Empire  Resorts'  common  stock
                being issued in the consolidation;

            o   no outstanding statute,  rule, law,  injunction,  order or other
                legal restraint preventing the consolidation;

            o   approvals and consents from various  third  parties,  as well as
                other material regulatory approvals and consents;

            o   receipt of a legal opinion about certain tax consequences of the
                consolidation;

            o   representations  and  warranties  of  Empire  Resorts,  Catskill
                Development  and the members of both  Catskill  Development  and
                Monticello  Raceway   Development   contained  in  the  restated
                contribution   agreement  remaining  true  and  correct  at  the
                consolidation's closing;

            o   due  execution by  Monticello  Raceway  Management  and Catskill
                Development  of an  amendment  to that  certain  48 year  ground
                lease, dated October 29, 2003, with respect to those certain 200
                acres of land in  Monticello,  New York  now  owned by  Catskill
                Development  (i)  increasing  the amount of land  subject to the
                purchase  option  under the lease  from 200 acres to 229  acres,
                without any  increase in the  purchase  option  price,  and (ii)
                reducing  the purchase  option  price by any amount  received by
                Catskill Development (or its successor) if the adjacent 29 acres
                now owned by  Catskill  Development  are sold  pursuant  to that
                certain Land Purchase Agreement between Catskill Development and
                the Cayuga Nation of New York dated April 7, 2003;

            o   Catskill  Development  having  redeemed  all of Empire  Resorts'
                interest, whether direct or indirect, in Catskill Development;


            o   the creation of a litigation  trust and the  assignment to it by
                each of Catskill  Development,  Mohawk Management and Monticello
                Raceway  Development  of its  right  to any  proceeds  from  the
                ongoing litigation against Park Place Entertainment Corporation,
                Gary Melius, Ivan Kaufman and Walter Horn;

            o   subsequent  to (1) the  redemption  by Catskill  Development  of
                Empire  Resorts'  interests in Catskill  Development and (2) the
                creation of a litigation  trust and the assignment to such trust
                by Catskill  Development,  Monticello  Raceway  Development  and
                Mohawk  Management  of all of their rights to the proceeds  from
                their claims against Park Place Entertainment Corporation,  Gary
                Melius,  Ivan  Kaufman  and Walter  Horn,  Catskill  Development
                having contributed all of its rights,  title and interest in and
                to the  business  of  Monticello  Raceway  and all of its  other

                                       14




                assets  and  liabilities,   except  for  Catskill  Development's
                interest  in 229  acres  of land in  Monticello,  New  York,  to
                Monticello  Casino  Management and Catskill  Development  having
                subsequently  distributed  all of its  interests  in  Monticello
                Raceway  Management,  Monticello  Casino  Management  and Mohawk
                Management to Catskill Development's then current members;

            o   Empire Resorts having redeemed Empire Resorts' common stock held
                by  The  Bryanston  Group,  Inc.  ("THE  BRYANSTON  GROUP")  and
                Beatrice Tollman;

            o   adoption of certain amendments to Empire Resorts' certificate of
                incorporation  and bylaws  that  provide  for the  creation of a
                staggered board of directors; and

            o   each of Empire Resorts,  Catskill Development and the members of
                both Catskill  Development  and Monticello  Raceway  Development
                having  complied in all  material  respects  with its  covenants
                under the restated contribution agreement.


REGULATORY APPROVALS (SEE PAGE 60)

            Empire Resorts and Monticello  Raceway  Management are both required
to  make  filings  with  or  obtain  approvals  from  certain  state  regulatory
authorities in connection with the  consolidation,  including the New York State
Racing  and  Wagering   Board.   Empire  Resorts   believes  that  all  material
notifications, filings and approvals have been made or obtained, or will be made
or  obtained  prior  to  the  date  of  the  consolidation's   closing  (or,  if
appropriate, after the consolidation is effective).

CERTAIN FEDERAL INCOME TAX CONSEQUENCES (SEE PAGE 59)


            Each of the parties to the restated  contribution  agreement intends
that the  consolidation  be a tax free  transaction  for Empire  Resorts and its
stockholders.  Moreover,  it is a condition to the consolidation's  closing that
the  parties to the  restated  contribution  agreement  receive a legal  opinion
stating that the  consolidation  will be treated as a transfer of property under
Section  351(a) of the Internal  Revenue Code, and that no party to the restated
contribution  agreement  will  recognize any gain or loss for federal income tax
purposes as a result of the consolidation.


ACCOUNTING TREATMENT (SEE PAGE 60)

            The consolidation will be accounted for as a "reverse merger" and an
"affiliated  transaction"  for  accounting  and  financial  reporting  purposes.
Accordingly,  Empire Resorts will book Catskill Development's current assets and
liabilities  and its  ownership  interests  in  Monticello  Raceway  Management,
Monticello Casino Management and Mohawk Management according to their cost basis
at the closing.

                                       15



TERMINATION (SEE PAGE 76)


            The  restated  contribution  agreement  may be  terminated,  and the
consolidation  abandoned,  in only  a  very  limited  number  of  circumstances,
including:

            o   if the consolidation is not completed by January 31, 2004;

            o   by Empire Resorts, on the one hand, or Catskill  Development and
                the members of both Catskill  Development and Monticello Raceway
                Development,  on the other  hand,  if the  other is in  material
                breach  of  its   representations,   warranties,   covenants  or
                agreements;

            o   if any governmental  entity issues an order, decree or ruling or
                takes any action permanently  enjoining or otherwise prohibiting
                the  consolidation,  and such order,  ruling or other action has
                become final and nonappealable; or

            o   if  the  parties   mutually  agree  to  terminate  the  restated
                contribution agreement.

INTERESTS OF CERTAIN PERSONS IN THE CONSOLIDATION (SEE PAGE 56)


            You should be aware that a number of Empire Resorts'  principals had
a  significant  interest in each of  Catskill  Development,  Monticello  Raceway
Development  and  Americas  Tower  Partners  at  the  time  the  consolidation's
principal  terms  were  negotiated  and  approved  by Empire  Resorts'  board of
directors.  Such  interests  may have led  Empire  Resorts'  to  receive  a less
favorable  result  than  it  would  have  if the  acquired  companies  had  been
contributed by an independent third party following arm's length negotiations.


VOTING CONTROL (SEE PAGE 31)


            At the time Empire Resorts'  Controlling  Stockholders  approved the
consolidation,  there were 6,024,151  shares of Empire Resorts' common stock and
44,258  shares of its  Series B  Preferred  Stock  issued  and  outstanding  and
entitled to vote. Each share of common stock entitles its holder to one vote and
each share of Series B  Preferred  Stock  entitles  its  holder to  eight-tenths
(8/10)  of one  vote.  At the time the  Controlling  Stockholders  approved  the
consolidation,  Empire Resorts' directors and executive officers,  together with
their affiliates,  controlled  2,964,203 shares of Empire Resorts' common stock,
representing  51% of Empire Resorts' voting stock.  The affirmative  vote of the
holders  of a  majority  of  Empire  Resorts'  voting  stock on the date  Empire
Resorts'  Controlling  Stockholders  approved the  consolidation was required to
approve  the   consolidation,   the  proposed   amendments  to  Empire  Resorts'
certificate of  incorporation  and the election of three Class I, three Class II
and three Class III directors.

            Pursuant to Catskill Development's operating agreement, only four of
its seven  members,  Americas Tower  Partners,  Watertone  Holdings,  Monticello
Realty and Alpha Monticello,  have voting rights,  with each voting member being
entitled to one vote.  However,  on February 3, 2003,  Americas Tower  Partners,
Watertone Holdings,  Monticello Realty and Alpha Monticello unanimously voted to
allow Catskill Development's non-voting members to vote on whether to approve

                                       16





the  consolidation,  and gave each non-voting member one vote for this occasion.
Soon thereafter,  Catskill  Development's seven members unanimously approved the
consolidation.  On June __, 2003, Catskill Development's directors and executive
officers,   together  with  their   affiliates,   controlled  100%  of  Catskill
Development's voting members, but had no interest in its non-voting members. The
affirmative  vote of at least four of Catskill  Development's  seven members was
required to approve the consolidation.

            On __________  __, 2003,  each of Americas Tower  Partners'  general
partners, [Americas Towers Limited Partners Limited Partnership, NYL Development
Corporation  and  NYL  Limited  Partners  Limited  Partnership],   approved  the
consolidation.  Pursuant to Americas Tower Partners'  partnership  agreement,  a
[unanimous]  vote of its  [three]  general  partners  was  required  in order to
approve the consolidation.]

NO DISSENTERS' RIGHTS (SEE PAGE 31)

            Delaware  law does not  provide  for any  dissenters'  rights  to an
appraisal for Empire Resorts stockholders in connection with the consolidation.


SELLING STOCKHOLDERS; PLAN OF DISTRIBUTION (SEE PAGE 125)

            This  document  also  relates  to the  offer and  resale by  certain
affiliates of Catskill  Development and Monticello Raceway  Development of up to
approximately  18,219,075 shares of Empire Resorts' common stock being issued to
them in  connection  with the  consolidation.  Furthermore,  Empire  Resorts has
agreed to maintain the effectiveness of the resale  registration  statement,  of
which this  information  statement/prospectus  forms a part, for up to two years
after  the   consolidation,   thus  permitting   these  affiliates  of  Catskill
Development and Monticello Raceway  Development to immediately resell the shares
of Empire Resorts' common stock they receive in the consolidation. These selling
stockholders  have not  advised  Empire  Resorts of any  specific  plans for the
distribution of these shares. It is anticipated that the sale or distribution of
all or any portion of the shares  offered  hereby will be effected  from time to
time by the selling stockholders  directly,  indirectly to or through brokers or
dealers,  or in a distribution by one or more  underwriters on a firm commitment
or best  efforts  basis,  on The  Nasdaq  Small Cap  Market,  The  Boston  Stock
Exchange, in the over-the-counter market, on any national securities exchange on
which the shares are listed or traded, in privately negotiated transactions,  or
otherwise, at market prices prevailing at the time of sale, at prices related to
such prevailing market prices or at negotiated prices.

                           PRICE RANGE OF COMMON STOCK

            Empire  Resorts'  common  stock has been trading on The Nasdaq Small
Cap Market and the Boston  Stock  Exchange  under the symbols  "NYNY" and "NYN,"
respectively,  since 1993. None of Monticello Raceway  Management's,  Monticello
Casino  Management's,  Monticello Raceway  Development's nor Mohawk Management's
equity  interests  are traded in any  established  market.  The table below sets
forth, for the calendar quarters indicated,  the range of high and low per share
sales  prices for Empire  Resorts'  common  stock as reported  by Nasdaq.  These
quotations reflect the inter-dealer prices, without retail markups, markdowns or
commissions and may not necessarily represent actual transactions. No equivalent

                                       17




market price data is available for  Monticello  Raceway  Management,  Monticello
Casino Management, Monticello Raceway Development or Mohawk Management.

                              FIRST          SECOND      THIRD       FOURTH
                              QUARTER        QUARTER     QUARTER     QUARTER
Fiscal 2003
     HIGH                     $ 10.97        $ 11.23     $ 18.00     N/A
     LOW                      $  1.77        $  7.05     $  9.15     N/A
Fiscal 2002
     HIGH                     $ 13.74        $ 13.20     $  8.47     $ 2.33
     LOW                      $ 10.50        $  5.40     $  0.95     $ 1.17
Fiscal 2001
     HIGH                     $ 12.18        $ 10.40     $ 11.39     $21.00
     LOW                      $  6.87        $  6.20     $  4.31     $ 6.11


            On February 3, 2003,  the last trading day before the  consolidation
was  announced,  Empire  Resorts'  common  stock  closed at $7.49 per share.  On
___________,  2003,  the  last  practicable  day  before  the  printing  of this
information  statement/prospectus,   Empire  Resorts'  common  stock  closed  at
$_____________  per share.  You may obtain more recent  stock price  quotes from
most newspapers or other financial sources and you are encouraged to do so.


                              CAUTIONARY STATEMENT
                      CONCERNING FORWARD-LOOKING STATEMENTS

            Certain  information  included or  incorporated by reference in this
information   statement/prospectus   may  be  deemed  to  be  "forward   looking
statements"  within the meaning of Section 27A of the Securities Act of 1933, as
amended, and Section 21E of the Securities Exchange Act of 1934, as amended. All
statements,  other than statements of historical facts, that address activities,
events or developments that Empire Resorts,  Catskill Development or the members
of both Catskill Development and Monticello Raceway Development intend,  expect,
project,  believe or  anticipate  will or may occur in the  future  are  forward
looking  statements.  Such statement are  characterized  by terminology  such as
"believe," "hope,"  "anticipate,"  "should," "intend," "plan," "will," "expect,"
"estimate," "project," "positioned," "strategy," and similar expressions.  These
statements are based on assumptions and assessments made by management of Empire
Resorts,  Catskill  Development,  and Monticello Raceway Development in light of
their experience and their perception of historical trends,  current conditions,
expected future  developments  and other factors they believe to be appropriate.
These  forward  looking  statements  are  subject  to  a  number  of  risks  and
uncertainties, including, but not limited to, those set forth below.

                                  RISK FACTORS

            As a result of the  consolidation,  Empire Resorts' business will be
subject to the  following new or increased  risks  related to the  consolidation
and/or the  businesses  of  Monticello  Raceway  Management,  Monticello  Casino
Management, Monticello Raceway Development and Mohawk Management. In addition to
the risks described below,  the combined  enterprise will continue to be subject
to the risks described in the documents that Empire Resorts has previously filed
with the  Securities  and  Exchange  Commission  and that  are  incorporated  by
reference  into  this  information  statement/prospectus.  If any  of the  risks


                                       18




described  below  or in  the  documents  incorporated  by  reference  into  this
information   statement/prospectus   actually  occur,  the  business,  financial
condition,  results of operations or cash flow of the combined  enterprise could
be materially  adversely  affected.  The risks below should be considered  along
with the other  information  included or  incorporated  by  reference  into this
information statement/prospectus.


RISKS RELATED TO THE CONSOLIDATION

            VARIOUS  CONFLICTS  OF  INTEREST  EXISTED  WHILE  THE  TERMS  OF THE
CONSOLIDATION WERE NEGOTIATED.


            While the terms of the consolidation were being negotiated,  each of
Empire  Resorts,  Catskill  Development,   Monticello  Raceway  Development  and
Americas Tower Partners were under some level of common  control.  Specifically,
Catskill  Development has three classes of economic  ownership  interests,  with
each class  corresponding  to one of Catskill  Development's  three  businesses.
Class  A  economic   ownership   interests   represent   the  right  to  receive
distributions  and allocations from Catskill  Development's  casino and wagering
operations;  Class B economic ownership interests represent the right to receive
distributions and allocations from Catskill Development's  horseracing and other
pari-mutuel  activities;  and Class C economic ownership interests represent the
right to receive distributions and allocations from Catskill  Development's real
estate  ownership and development  operations.  At the time the  consolidation's
principal  terms  were  negotiated  and  approved  by Empire  Resorts'  board of
directors,  Empire  Resorts  indirectly  held  approximately  48%,  37% and 25%,
respectively,  of Catskill  Development's  Class A, Class B and Class C economic
ownership  interests.  Watertone  Holdings,  which is  controlled  by  Robert A.
Berman,  Empire  Resorts'  chief  executive  officer,  a member  of its board of
directors  and its former  chairman (at the time the  consolidation's  principal
terms were negotiated and approved by Empire  Resorts' board of directors),  and
Scott A. Kaniewski,  Empire Resorts' chief financial officer and a former member
of its board of directors (at the time the consolidation's  principal terms were
negotiated  and  approved  by  Empire   Resorts'   board  of  directors),   held
approximately 15%, 13% and 25%, respectively, of Catskill Development's Class A,
Class B and Class C economic  ownership  interests.  Furthermore,  Morad Tahbaz,
Catskill  Development's  president,  Empire  Resorts'  president and a member of
Empire  Resorts'  board of  directors,  held a 20%  interest in  Americas  Tower
Partners,  a general  partnership  that  held  approximately  33%,  25% and 25%,
respectively, of Catskill Development's outstanding Class A, Class B and Class C
economic  ownership  interests at the time the  consolidation's  principal terms
were negotiated and approved by Empire Resorts' board of directors. Furthermore,
Monticello Raceway Development was owned 50% by Americas Tower Partners,  41% by
Robert A. Berman,  7.65% by Scott A.  Kaniewski,  .05% by two  affiliates of Mr.
Kaniewski  and 1.3% by Philip B.  Berman,  Empire  Resorts'  vice  president  of
project  coordination,  at the time the  consolidation's  principal  terms  were
negotiated and approved by Empire Resorts' board of directors.


            Given these facts,  Empire  Resorts'  principals that negotiated the
consolidation  were subject to various  conflicts of interest,  possibly causing
them to advocate  different  positions  from what they would have  advocated  if
Empire  Resorts  had been their only  interest in the  consolidation.  Moreover,
since a number of these  individuals also had various personal  interests in the
consideration  being  paid to the  members  of  both  Catskill  Development  and
Monticello  Raceway  Development,  they may have refrained from  negotiating the
best deal possible for Empire Resorts. The terms of the consolidation were

                                       19




reviewed by a special  committee  of the board of  directors  of Empire  Resorts
consisting of an independent  director,  and that special committee  retained an
independent  counsel  and  retained  an  independent  financial  advisor for the
purpose  of  delivering  a  fairness  opinion  relating  to the  consolidation's
fairness from a financial point of view. The special committee did not, however,
negotiate  the terms of the  consolidation,  which had been  negotiated  and set
forth in a letter  of intent  before  the  special  committee  was  constituted.
Therefore,   while  the  special   committee   reviewed   the  fairness  of  the
consolidation's  terms,  that review does not  eliminate  the  possibility  that
Empire  Resorts'  is  receiving  a less  favorable  deal  than  if the  acquired
companies had been  contributed by an independent  third party  following  arm's
length negotiations.

            FOLLOWING THE  CONSOLIDATION,  EMPIRE RESORTS' COMMON STOCK COULD BE
EXCLUDED FROM THE NASDAQ SMALL CAP MARKET.


            Empire Resorts'  common stock  presently  trades on the Nasdaq Small
Cap Market and Boston Stock Exchange.  Under the Nasdaq Stock Market Marketplace
Rules, in certain  circumstances  Nasdaq requires its issuers to comply with the
initial inclusion  requirements (rather than continued inclusion) when an issuer
merges  with a  non-Nasdaq  entity  that  results  in a change in control of the
issuer.  As the  proposed  consolidation  with  Monticello  Raceway  Management,
Monticello  Casino  Management,   Monticello  Raceway   Development  and  Mohawk
Management  will  result in a change in  control of Empire  Resorts,  for Empire
Resorts'  common stock to continue  being listed on the Nasdaq Small Cap Market,
Empire Resorts may be required to satisfy the following  requirements  after the
consolidation:


            o   net tangible  assets (total assets,  excluding  goodwill,  minus
                total  liabilities)  must be at  least  $5  million,  or  market
                capitalization  must be at least $50  million,  or net income in
                the latest  fiscal  year or two of the last three  fiscal  years
                must be at least $750,000;

            o   "public  float" must be at least 1 million  shares not including
                shares held  directly or  indirectly by officers or directors or
                by any other person who beneficially  owns more than ten percent
                of Empire Resorts' total outstanding shares;

            o   the  market  value of Empire  Resorts'  public  float must be at
                least $5 million;

            o   the minimum bid price of Empire Resorts' common stock must be at
                least $4 per share;

            o   there must be at least three market  makers for Empire  Resorts'
                common stock;

            o   there  must be at least  300  stockholders  of  Empire  Resorts'
                common  stock  with each such  stockholder  holding at least 100
                shares of common stock;

            o   Empire  Resorts must have an  operating  history of at least one
                year; and

            o   Empire  Resorts must meet specific  corporate  governance  tests
                promulgated by Nasdaq.

                                       20



            There can be no  assurance  that  Empire  Resorts  will  meet  these
requirements following the consolidation.  Moreover, even if Empire Resorts does
satisfy these  requirements,  Nasdaq may  nevertheless,  in its sole discretion,
still  preclude  Empire  Resorts'  common  stock from being listed on the Nasdaq
Small Cap  Market or apply  additional  or more  stringent  listing  conditions.
Accordingly,  there can be no assurance that Empire  Resorts'  common stock will
continue to be reported on the Nasdaq Small Cap Market after the  consolidation.
Should  Empire  Resorts fail to maintain its Nasdaq Small Cap listing,  it would
become more difficult to obtain accurate quotes for Empire Resorts' common stock
and to locate  interested  buyers and  sellers.  Consequently,  Empire  Resorts'
stockholders  may not be able to readily  liquidate their Empire Resorts' common
stock in the future at desired times and prices.

            THE PRICE OF EMPIRE RESORTS' COMMON STOCK IS VOLATILE AND THERE WILL
BE NO  ADJUSTMENTS  TO THE  NUMBER OF SHARES  RECEIVED  BY THE  MEMBERS  OF BOTH
CATSKILL  DEVELOPMENT AND MONTICELLO RACEWAY  DEVELOPMENT IF THE MARKET PRICE OF
EMPIRE RESORTS' COMMON STOCK CHANGES.


            In connection with the closing of the consolidation,  the members of
both Catskill  Development and Monticello Raceway  Development will receive,  in
the aggregate,  that number of shares of Empire  Resorts'  common stock equal to
80.25% of Empire  Resorts'  common stock,  calculated  on a  post-consolidation,
fully  diluted  basis.  No adjustment to this figure will be made as a result of
changes in the market price of Empire  Resorts'  common stock.  In addition,  no
party to the restated  contribution  agreement may terminate or renegotiate  its
terms solely because of a change in the common stock's market price.  Therefore,
if the price of Empire  Resorts'  common  stock  increases,  the members of both
Catskill  Development and Monticello Raceway  Development may receive more value
at the completion of the  consolidation  than the parties intended or than would
otherwise be fair.


            FOLLOWING THE CONSOLIDATION,  EMPIRE RESORTS' USE FOR FEDERAL INCOME
TAX PURPOSES OF ITS  ACCUMULATED  NET  OPERATING  LOSSES TO OFFSET FUTURE INCOME
WILL BE LIMITED.


            As  of  June  30,  2003,  Empire  Resorts  had  net  operating  loss
carryforwards of approximately  $66,500,000 set to expire between 2008 and 2022.
The  consolidation,  however,  will trigger  certain  provisions of the Internal
Revenue  Code that will  limit the future  utilization  of Empire  Resorts'  net
operating  loss  carryforwards  to offset its  future  federal  taxable  income.
Generally  speaking,  following the  consolidation,  Empire Resorts will only be
permitted to utilize that portion of its net operating  loss  carryforwards  per
year (subject to certain  carryforward  rules) equal to the fair market value of
its stock  immediately  prior to the  consolidation,  multiplied  by the federal
long-term  tax  exempt  rate on such  date  (currently  4.74%  for the  month of
November 2003).

            FUTURE SALES OF EMPIRE RESORTS'  COMMON STOCK MAY NEGATIVELY  AFFECT
ITS MARKET PRICE.


            The approximately  18,219,075 shares of Empire Resorts' common stock
that are to be issued pursuant to the consolidation will be immediately eligible
for  resale by the  members  of  Catskill  Development  and  Monticello  Raceway
Development.  If  the  holders  of  these  shares  were  to  attempt  to  sell a
substantial  amount  of their  holdings  at once,  the  market  price of  Empire
Resorts' common stock would likely decline.  Empire Resorts also has outstanding
options  to  purchase  an  aggregate  of  840,528  shares of common  stock at an



                                       21



exercise price of $2.66 per share.  As these exercise  prices are well below the
current market price of Empire Resorts'  common stock,  these options are likely
to  be  exercised,  causing  existing  stockholders  to  experience  substantial
dilution,  and, most likely,  a consequential  drop in the common stock's market
price.  Moreover,  the perceived  risk of this  potential  dilution  could cause
stockholders to attempt to sell their shares and investors to "short" the stock,
a practice  in which an  investor  sells  shares  that he or she does not own at
prevailing  market prices,  hoping to purchase  shares later at a lower price to
cover the sale.  As each of these  events  would  cause the  number of shares of
Empire  Resorts'  common stock being  offered for sale to  increase,  the common
stock's  market price would likely  further  decline.  All of these events could
combine  to make  it very  difficult  for  Empire  Resorts  to  sell  equity  or
equity-related  securities  in the  future  at a time  and  price  that it deems
appropriate.


            AS PART OF THE CONSOLIDATION,  EMPIRE RESORTS IS OBLIGATED TO REDEEM
2,392,857  SHARES OF ITS  COMMON  STOCK,  CAUSING  THE  POSSIBLE  ASSUMPTION  OF
LIABILITIES.

            One of the conditions to the  consolidation's  closing is for Empire
Resorts to redeem from The Bryanston Group and Beatrice  Tollman an aggregate of
2,392,857  shares of common  stock at $2.12 per  share.  The total  cost of this
redemption  is  $5,072,284,  which Empire  Resorts can pay in cash, by issuing a
note,  or any  combination  of the  two.  As  Empire  Resorts  does  not  have a
significant  amount of cash on hand, to redeem these shares Empire  Resorts will
likely  need to issue a note for the full  $5,072,284.  The  terms of this  note
would  require  approximately  13% of the  principal  to be  paid  on the  first
anniversary  of issuance and for the whole note to be repaid within three years.
No assurance can be given that Empire  Resorts will have enough  revenue or cash
on hand to repay this indebtedness when it becomes due.

            A SUBSTANTIAL  NUMBER OF SHARES OF EMPIRE RESORTS' COMMON STOCK WILL
BE ISSUED  PURSUANT TO THE TERMS OF THE  CONTRIBUTION  AGREEMENT,  SUBSTANTIALLY
DILUTING EMPIRE RESORTS' CURRENT STOCKHOLDERS' OWNERSHIP POSITION.

            Under the terms of the contribution  agreement,  Empire Resorts will
issue that  number of shares of common  stock to the  members  of both  Catskill
Development  and  Monticello  Raceway  Development  equal to, in the  aggregate,
80.25%  of  Empire   Resorts'   outstanding   common  stock,   calculated  on  a
post-consolidation,  fully diluted basis.  As a result of this issuance,  Empire
Resorts'  existing  stockholders  will go from controlling  approximately 60% of
Empire  Resorts'  outstanding  common  stock  prior  to  the  redemption  of The
Bryanston  Group's and Beatrice  Tollman's  Empire  Resorts'  common  stock,  as
described in the preceding risk factor,  to holding just 19.75% after completion
of the consolidation. Thus, Empire Resorts' existing stockholders will remain as
minority  stockholders,  but with less power or influence  over Empire  Resorts'
future direction.

RISKS RELATED TO THE COMBINED ENTERPRISE

            EMPIRE RESORTS CURRENTLY FACES A LIQUIDITY SHORTFALL.

            Empire  Resorts  had no revenue  in 2002,  and at August 1, 2003 its
current liabilities exceed current assets by $1,169,967.  In addition,  to begin
the development of a Native American  casino,  Empire Resorts will need to raise
substantial  capital from outside  investors.  Empire  Resorts  expects to raise

                                       22



these needed funds  through  either debt or equity  financing.  Empire  Resorts'
ability to secure debt financing,  however,  is questionable,  as it will likely
have over $5 million in  subordinated  debt at closing due to the  redemption of
the common  stock held by The  Bryanston  Group and  Beatrice  Tollman,  and its
assets will consist almost entirely of Monticello Raceway, a small harness horse
racing facility located in Monticello,  New York, and various contractual rights
related  to the  development  of a tribal  casino,  which  contracts  may not be
directly  financeable  until  some of them have been  approved  by the  National
Indian Gaming Commission and/or the Bureau of Indian Affairs.  See "Risk Factors
- Risks Related to the Combined  Enterprise - Monticello  Casino  Management and
Monticello  Raceway  Development  have entered into  agreements  with the Cayuga
Nation of New York which may not be financeable  until some of them are approved
by the National Indian Gaming Commission and/or the Bureau of Indian Affairs,  a
process that could take years" beginning on page 27. Nevertheless, should Empire
Resorts  be  able  obtain  debt   financing,   such  debt  will  likely  contain
restrictions that may limit or prohibit future actions,  and allow the lender to
accelerate  the loan upon a default.  Empire  Resorts'  ability to secure equity
financing is also highly uncertain, given current market conditions and the fact
that neither Empire Resorts nor its subsidiaries have significant  casino gaming
experience.  In addition,  any future  equity  financing  will dilute the equity
position of Empire  Resorts'  stockholders  and no  assurance  can be given that
equity financing can be obtained on reasonable terms or at all.

            EMPIRE  RESORTS  HAS  RECEIVED  AN OPINION  FROM ITS  AUDITORS  THAT
EXPRESSES DOUBT ABOUT EMPIRE RESORTS' ABILITY TO CONTINUE AS A GOING CONCERN.

            The  opinion  of  Friedman  Alpren  &  Green  LLP,  Empire  Resorts'
independent  auditors with respect to Empire Resorts' financial statements as of
December 31, 2001 and 2002,  contains an  explanatory  paragraph  that expresses
substantial  doubt as to Empire Resorts' ability to continue as a going concern.
This opinion  indicates that substantial  doubt exists regarding Empire Resorts'
ability to  continue  to remain in business  as  currently  structured.  Such an
opinion may adversely  affect Empire Resorts' ability to obtain new financing on
reasonable terms or at all.

            FOLLOWING THE CONSOLIDATION,  EMPIRE RESORTS WILL BE STRUCTURED AS A
HOLDING COMPANY,  DEPENDENT ON THE OPERATIONS OF MONTICELLO RACEWAY  MANAGEMENT,
MONTICELLO  CASINO  MANAGEMENT,   MONTICELLO  RACEWAY   DEVELOPMENT  AND  MOHAWK
MANAGEMENT,  AND THEIR ABILITY TO PAY DIVIDENDS OR MAKE DISTRIBUTIONS,  IN ORDER
TO GENERATE INTERNAL CASH FLOW.

            Following  the  consolidation,  Empire  Resorts  will  be a  holding
company,  owning  all  the  capital  stock  of  Monticello  Raceway  Management,
Monticello  Casino  Management,   Monticello  Raceway   Development  and  Mohawk
Management. Empire Resorts will therefore be dependent on these companies to pay
dividends or make  distributions in order to generate  internal cash flow and to
satisfy  its  obligations.  There  can  be no  assurance,  however,  that  these
subsidiaries  will generate  enough  revenue to pay cash  dividends or make cash
distributions.  In addition,  these  subsidiaries  may enter into contracts that
limit or prohibit their ability to pay dividends or make distributions.

                                       23



            THE ABILITY OF EMPIRE RESORTS TO  SUCCESSFULLY  MANAGE AND DEVELOP A
NATIVE  AMERICAN  CASINO IS UNCERTAIN  GIVEN EMPIRE  RESORTS' LACK OF EXPERIENCE
WITH NATIVE AMERICAN CASINOS.

            Empire  Resorts has no experience  in managing or developing  Native
American  casinos.  Native  American  casinos are unique  gaming  ventures  that
require  highly  skilled and  knowledgeable  managers  given the  complexity  of
regulation governing their operation.  In addition,  as the respective interests
of the Native American tribe and the casino's  management company are not always
aligned,  avoiding disputes can sometimes prove difficult.  As a result of these
special  features,  several  companies with gaming experience that have tried to
become involved in the management and/or  development of Native American casinos
have been unsuccessful. No assurance can be given that Empire Resorts, given its
lack of Native  American gaming  experience,  will be able to avoid the pitfalls
that  have  befallen  other  companies  in order to create a  successful  gaming
enterprise in conjunction with the Cayuga Nation of New York.

            THE  CONTINUING  DECLINE  IN THE  POPULARITY  OF  HORSE  RACING  AND
INCREASING  COMPETITION IN SIMULCASTING  COULD ADVERSELY  IMPACT THE BUSINESS OF
THE COMBINED ENTERPRISE.



            There has been a general  decline in the number of people  attending
and wagering at live horse races at North American racetracks due to a number of
factors,   including   increased   competition   from  other  forms  of  gaming,
unwillingness  of customers to travel a significant  distance to racetracks  and
the increasing  availability of off-track wagering.  The declining attendance at
live horse  racing  events  has  prompted  racetracks  to rely  increasingly  on
revenues  from  inter-track,   off-track  and  account  wagering  markets.   The
industry-wide  focus on inter-track,  off-track and account wagering markets has
increased  competition  among  racetracks  for outlets to  simulcast  their live
races.  A  continued  decrease  in  attendance  at live  events and in  on-track
wagering,  as well as increased  competition in the  inter-track,  off-track and
account  wagering  markets,  could lead to a decrease  in the amount  wagered at
Monticello Raceway. Empire Resorts' post-consolidation business plan anticipates
the  possibility  of Monticello  Raceway  attracting new customers due to casino
development  or video  lottery  terminal  operations.  However,  there can be no
assurances that new customers will be attracted to Monticello Raceway, and, even
if the numerous  arrangements,  approvals and legislative  changes necessary for
casino development or video lottery operations occur, Monticello Raceway may not
be able to maintain profitable  operations.  Public tastes are unpredictable and
subject to change.  Any  decline in  interest  in horse  racing or any change in
public tastes may adversely affect Monticello Raceway's revenues and, therefore,
limit its  ability to make a positive  contribution  to Empire  Resorts'  future
results.


            GAMING  ACTIVITIES  ARE  DEPENDENT ON  GOVERNMENTAL  REGULATION  AND
APPROVALS.  CHANGES IN SUCH REGULATION OR THE FAILURE TO OBTAIN OR MAINTAIN SUCH
APPROVALS COULD ADVERSELY AFFECT EMPIRE RESORTS.



            The current or future gaming  operations  of Empire  Resorts and its
subsidiaries  are highly  regulated and contingent  upon continued  governmental
approval as forms of legalized  gaming.  Empire Resorts and/or its  subsidiaries


                                       24





may be unable to obtain, maintain or renew governmental licenses, registrations,
permits and approvals necessary for the operation of their pari-mutuel  wagering
and other gaming activities. For example, a license to conduct live horse racing
and  simulcast   wagering  must  be  obtained  annually  by  Monticello  Raceway
Management  from the State of New York. A significant  change to current  racing
law,  or the loss,  or  non-renewal,  of  licenses,  registrations,  permits  or
approvals could materially impact Monticello Raceway Management's revenue, limit
the number of races it can conduct or the form or types of pari-mutuel  wagering
it  offers,  and  could  have a  material  adverse  effect on its  business.  In
addition,  Monticello Raceway Management currently devotes significant financial
and management resources to complying with the various governmental  regulations
to which its operations are subject.  Any  significant  increase in governmental
regulation  would increase the amount of its resources  devoted to  governmental
compliance,  substantially restrict its business, and, consequently,  materially
adversely affect its results.


            THE GAMING  INDUSTRY  IN THE  NORTHEASTERN  UNITED  STATES IS HIGHLY
COMPETITIVE,   WITH  MANY  OF  EMPIRE  RESORTS'  COMPETITORS  BETTER  KNOWN  AND
FINANCIALLY STRONGER.

            The gaming  industry  in the  Northeastern  United  States is highly
competitive  and  increasingly  run by  multinational  corporations  that  enjoy
widespread  name  recognition,  established  brand  loyalty,  decades  of casino
operation experience and a diverse portfolio of gaming assets.  Atlantic City is
only two  hours  away and Park  Place  Entertainment  Corporation,  the  world's
largest gaming conglomerate,  and Trading Cove Associates, the developers of the
Mohegan  Sun casino in  Connecticut,  are  currently  trying to develop a Native
American casino on properties  that neighbor  Monticello  Raceway.  In contrast,
Empire Resorts has limited financial resources and, following the consolidation,
will initially be limited to the operation of a harness horse racing facility in
Monticello, New York. No assurance can be given that Empire Resorts will be able
to compete  successfully  with the  established  Atlantic City  casinos,  or the
casinos  proposed to be developed by Park Place  Entertainment  Corporation  and
Trading Cove Associates in the Catskills region, for local gaming customers.

            IF  EMPIRE  RESORTS  DOES NOT MEET  CERTAIN  REGULATORY  SUITABILITY
REQUIREMENTS,  IT MAY BE FORCED TO SELL ITS OWNERSHIP INTEREST IN CERTAIN GAMING
ACTIVITIES AT A DISCOUNT.

            Empire  Resorts is required to be licensed or otherwise  approved in
each  jurisdiction  where  a  gaming  entity  in  which  Empire  Resorts  has  a
significant  ownership  interest  operates.  Obtaining  such a license  normally
involves   Empire   Resorts   receiving  a   determination   of   "suitability."
Consequently,  should Empire Resorts ever be found to be unsuitable by the State
of New York to participate in gaming operations,  Empire Resorts would be forced
to liquidate all of its interests in Monticello Raceway  Management,  Monticello
Casino Management and Monticello  Raceway  Development in a prescribed period of
time, as each of these  entities is either  involved in, or plans to be involved
in, gaming activities in the State of New York. Moreover,  should Empire Resorts
ever be  ordered  by the  State  of New  York to sell  all of its  interests  in
Monticello  Raceway  Management,  Monticello  Casino  Management  and Monticello
Raceway  Development  within a relatively  short period of time,  Empire Resorts
would likely be forced to sell these  interests at a discount,  thus causing the
value of its stock to diminish.

                                       25





            SEVERAL OF EMPIRE  RESORTS'  FORMER OFFICERS AND DIRECTORS HAVE BEEN
INDICTED ON FRAUD CHARGES,  AND EMPIRE  RESORTS'  SUITABILITY  DETERMINATION  TO
PARTICIPATE IN GAMING ACTIVITIES COULD ACCORDINGLY BE ADVERSELY AFFECTED.


            During 2002,  certain  affiliates  of The  Bryanston  Group,  Empire
Resorts'  largest  stockholder,  and six of Empire  Resorts' former officers and
directors were indicted for various counts of tax and bank fraud.  Moreover,  on
September 5, 2003, one of these former directors who is also an affiliate of The
Bryanston Group, Brett Tollman,  pleaded guilty to felony tax fraud. In December
2002,  Empire  Resorts  entered into an agreement  with The Bryanston  Group and
certain of these  individuals  pursuant to which Empire Resorts acquired a three
year option to repurchase  most of their  interests in Empire Resorts and Robert
A. Berman,  Empire Resorts' chief executive officer,  acquired the voting rights
to these  shares  for  three  years.  See  "Material  Conditions  to  Closing  -
Redemption of Certain  Shares of Common Stock"  beginning on page 81. While none
of the acts these  individuals  have been  charged  with relate to their  former
positions  with or  ownership  interests  in  Empire  Resorts,  there  can be no
assurance  that none of the various  governmental  agencies  that now, or in the
future may, regulate and license Empire Resorts' gaming related  activities will
factor in these indictments in evaluating Empire Resorts' suitability.  Should a
regulatory  agency fail to acknowledge that these indictments are not related to
Empire Resorts' operations,  Empire Resorts could lose its gaming licenses or be
forced to liquidate certain or all of its gaming interests.  See "Risk Factors -
Risks  Related to the  Combined  Enterprise  - If Empire  Resorts  does not meet
certain  regulatory  suitability  requirements,  it may be  forced  to sell  its
ownership interest in certain gaming activities at a discount" beginning on page
25.


            EACH  OF  MONTICELLO  CASINO   MANAGEMENT  AND  MONTICELLO   RACEWAY
DEVELOPMENT  HAS ENTERED INTO  AGREEMENTS WITH THE CAYUGA NATION OF NEW YORK FOR
THE  PURPOSE  OF  JOINTLY  DEVELOPING  A CASINO IN  MONTICELLO,  NEW  YORK.  THE
ENFORCEMENT OF THESE  CONTRACTUAL  RIGHTS AGAINST THE CAYUGA NATION OF NEW YORK,
HOWEVER, MAY BE DIFFICULT.

            Federally   recognized   Native   American  tribes  are  independent
governments,  subordinate to the United States, with sovereign powers, except as
those powers may have been limited by treaty or the United States Congress. Such
tribes  maintain  their own  governmental  systems and often their own  judicial
systems and have the right to tax,  and to require  licenses and to impose other
forms of regulation and regulatory fees, on persons and businesses  operating on
their lands. As sovereign nations,  federally  recognized Native American tribes
are  generally  subject  only to  federal  regulation.  States  do not  have the
authority to regulate them, unless such authority has been specifically  granted
by  Congress,  and state laws  generally  do not  directly  apply to them and to
activities taking place on their lands, unless they have a specific agreement or
compact with the state or federal  government  allowing for the  application  of
state  law.  Each  of  the  contracts  that  Monticello  Casino  Management  and
Monticello  Raceway  Development  has entered into with the Cayuga Nation of New
York for the joint development of a casino provides that the law of the State of
New York will be the  governing  law of such  contract.  Empire  Resorts  cannot
guarantee,  however,  that  these  choice of law  clauses  will be  enforceable,
causing  Monticello  Casino  Management's and Monticello  Raceway  Development's
rights and remedies under such contracts to be uncertain.

                                       26





            Federally  recognized  Native  American  tribes also generally enjoy
sovereign  immunity  from  lawsuit  similar to that of the states and the United
States federal government. In order to sue a Native American tribe (or an agency
or  instrumentality  of a Native American tribe), the Native American tribe must
have  effectively  waived its  sovereign  immunity with respect to the matter in
dispute.  Moreover,  even if a Native  American  tribe  effectively  waives  its
sovereign immunity, there exists an issue as to the forum in which a lawsuit can
be brought against the tribe.  Federal courts are courts of limited jurisdiction
and generally do not have  jurisdiction  to hear civil cases relating to matters
concerning  Native  American  lands or the internal  affairs of Native  American
governments.  Federal  courts may have  jurisdiction  if a federal  question  is
raised by the  lawsuit,  but that is  unlikely  in a typical  contract  dispute.
Diversity of citizenship,  another common basis for federal court  jurisdiction,
is not  generally  present in a suit against a tribe  because a Native  American
tribe is not considered a citizen of any state. Accordingly,  in most commercial
disputes with tribes, the jurisdiction of the federal courts may be difficult or
impossible to obtain. Therefore,  while the Cayuga Nation of New York has waived
its right to sovereign  immunity and consented to the  jurisdiction of state and
federal courts located in the State of New York, and arbitration with respect to
certain disputes, there can be no assurance that any of these provisions and the
contractual rights under these agreements will be enforceable.

            MONTICELLO CASINO MANAGEMENT AND MONTICELLO RACEWAY DEVELOPMENT HAVE
ENTERED  INTO  AGREEMENTS  WITH THE  CAYUGA  NATION OF NEW YORK WHICH MAY NOT BE
FINANCEABLE  UNTIL  SOME OF THEM ARE  APPROVED  BY THE  NATIONAL  INDIAN  GAMING
COMMISSION AND/OR THE BUREAU OF INDIAN AFFAIRS, A PROCESS THAT COULD TAKE YEARS.

            Monticello Casino Management and Monticello Raceway Development have
entered into a management  and  development  agreement with the Cayuga Nation of
New York, giving Monticello Casino Management and Monticello Raceway Development
exclusive  management and  development  rights over any gaming  enterprise on 29
acres of land adjacent to Monticello  Raceway.  In order for  Monticello  Casino
Management and  Monticello  Raceway  Development to carry out their  obligations
under these agreements,  Empire Resorts will likely need to raise financing from
outside  investors.  However,  such  financing  is not likely to be available on
reasonable terms, or at all, until the management agreement has been approved by
the  National  Indian  Gaming  Commission  and the Bureau of Indian  Affairs has
approved the transfer of those 29 acres of land to the United  States of America
in trust for the Cayuga Nation of New York.  See "The  Consolidation  - General"
beginning on page 30. Obtaining such approvals,  however, can take several years
and no  assurance  can be given that these  approvals  will be  obtained at all.
While Empire  Resorts  expects these  agreements to receive an expedited  review
from the National Indian Gaming Commission and Bureau of Indian Affairs,  as the
Bureau of Indian  Affairs has  previously  approved a similar  arrangement  with
respect to the same site, prompt approval cannot be assured.


            CATSKILL DEVELOPMENT AND/OR MONTICELLO RACEWAY MANAGEMENT MAY NOT BE
ABLE TO  TRANSFER  LAND TO THE UNITED  STATES OF AMERICA IN TRUST FOR THE CAYUGA
NATION OF NEW YORK FOR THE PURPOSE OF DEVELOPING A NATIVE AMERICAN CASINO.

            The Indian Gaming Regulatory Act provides that all "off-reservation"
gambling  projects  on lands to be  transferred  and held in trust by the United
States of America for the benefit of a Native  American  tribe must be expressly
authorized by the Bureau of Indian  Affairs.  Specifically,  the statute  states

                                       27





that  gaming may not be  conducted  on lands  acquired  by the United  States of
America in trust for the benefit of a Native  American  tribe after  October 17,
1988, unless the Bureau of Indian Affairs, after consultation with the tribe and
appropriate state and local officials, determines that a gaming establishment on
newly acquired lands would be in the best interest of the tribe and its members,
would not be detrimental to the surrounding  community,  and the governor of the
state in which the gaming activity is to be conducted concurs with the Bureau of
Indian  Affair's  determination.  While in 2000,  the  Bureau of Indian  Affairs
approved an  application  to transfer  the same 29 acres of land  subject to the
Land  Purchase  Agreement (see  "Recent  Developments  - Ground  Lease  and Land
Purchase  Agreement" beginning  on page 117) to the United  States of America in
trust for the benefit of the St. Regis Mohawk  Tribe,  no assurance can be given
that the Bureau of Indian  Affairs will again  approve  such a transfer.  Absent
this  approval,  it would be very  difficult  for Empire  Resorts to execute its
current  business plan of jointly  developing a Native  American casino with the
Cayuga Nation of New York.

            PENDING  LAWSUITS  COULD  THREATEN  THE  VIABILITY  EMPIRE  RESORTS'
POST-CONSOLIDATION BUSINESS PLAN.

            Empire Resorts' ability to help develop and manage a Native American
casino in  conjunction  with the Cayuga  Nation of New York could be hampered by
the  outcome of two pending  lawsuits  that seek to enjoin the State of New York
from permitting the  construction of any new Native American  casinos within the
State of New York's  borders.  While the trial court recently  dismissed both of
these cases, the plaintiffs have announced that they intend to appeal. Should an
appellate  court  overrule the trial court and  reinstate  these  lawsuits,  and
should the plaintiffs  ultimately  prevail,  Empire  Resorts'  business would be
restricted to the operation of Monticello  Raceway and video lottery  terminals.
Moreover,  a reinstatement of these lawsuits,  even prior to a definitive ruling
on the merits of the cases,  would  hamper  fundraising  efforts  and  adversely
affect the implementation of Empire Resorts' business plan, as the Cayuga Nation
of New  York and  investors  might  abandon  the  tribal  casino  project  or be
reluctant to invest given the uncertainty that such a holding would create.

            EMPIRE  RESORTS  DEPENDS ON ITS KEY  PERSONNEL AND THE LOSS OF THEIR
SERVICES COULD ADVERSELY AFFECT ITS OPERATIONS.

            If Empire  Resorts  is  unable to  maintain  its key  personnel  and
attract new  employees  following  the  consolidation,  the  execution of Empire
Resorts'  business  strategy may be hindered and its growth  limited.  If one or
more of these  individuals were unable or unwilling to continue in their present
positions,  Empire Resorts' and/or its subsidiaries' business could be seriously
harmed.

            THE  MARKET  PRICE OF  EMPIRE  RESORTS'  COMMON  STOCK IS  VOLATILE,
LEADING  TO THE  POSSIBILITY  OF  ITS  VALUE  BEING  DEPRESSED  AT A  TIME  WHEN
STOCKHOLDERS WANT TO SELL THEIR HOLDINGS.

            The market  price of Empire  Resorts'  common  stock has in the past
been, and may in the future  continue to be,  volatile.  Between January 1, 2001
and September 25, 2003,  the closing price of Empire  Resorts'  common stock has
ranged between $.95 and $20.00. A variety of events can cause

                                       28





the market price of Empire  Resorts'  common  stock to fluctuate  significantly,
including, but not necessarily limited to:

            o   quarter to quarter variations in operating results;

            o   adverse news announcements; and

            o   changes in market conditions in the gaming industry.

            In  addition,  the  stock  market in  recent  years has  experienced
significant  price and volume  fluctuations  for reasons  unrelated to operating
performance.  These market fluctuations may adversely affect the price of Empire
Resorts' common stock at a time when an investor wants to sell its interest.


            CERTAIN  PROVISIONS OF EMPIRE RESORTS'  CERTIFICATE OF INCORPORATION
AND BYLAWS DISCOURAGE  UNSOLICITED TAKEOVER PROPOSALS AND COULD PREVENT YOU FROM
REALIZING A PREMIUM RETURN ON YOUR INVESTMENT IN EMPIRE RESORTS' COMMON STOCK.


            Concurrently with the closing of the  consolidation,  Empire Resorts
is amending its certificate of  incorporation  and bylaws in order to divide its
board of directors into three classes of directors, with each class constituting
one-third of the total number of directors and the members of each class serving
staggered  three-year  terms. The  classification of the board of directors will
make it more difficult for  stockholders  to change the composition of the board
of directors  because only a minority of the  directors  can be elected at once.
The  classification   provisions  could  also  discourage  a  third  party  from
accumulating  Empire  Resorts'  stock or attempting to obtain  control of Empire
Resorts,  even though this attempt  might be  beneficial  to Empire  Resorts and
some,  or  a  majority,   of  its  stockholders.   Accordingly,   under  certain
circumstances Empire Resorts' stockholders could be deprived of opportunities to
sell their  shares of common  stock at a higher  price than might  otherwise  be
available.


            In   addition,   pursuant   to  Empire   Resorts'   certificate   of
incorporation,  Empire  Resorts' board of directors has the  authority,  without
further action by the stockholders, to issue up to 3,269,304 shares of preferred
stock  on such  terms  and  with  such  rights,  preferences  and  designations,
including,  without limitation,  restricting dividends on Empire Resorts' common
stock, dilution of the common stock's voting power and impairing the liquidation
rights of the holders of Empire Resorts' common stock, as its board of directors
may  determine.  Issuance of such  preferred  stock,  depending upon its rights,
preferences and designations may also have the effect of delaying,  deterring or
preventing a change in control


                                       29





            FOLLOWING  THE  CLOSING OF THE  CONSOLIDATION,  THE  MEMBERS OF BOTH
CATSKILL DEVELOPMENT AND MONTICELLO RACEWAY DEVELOPMENT,  TOGETHER, WILL BE ABLE
TO CONTROL THE OUTCOME OF ALL MATTERS REQUIRING STOCKHOLDER APPROVAL.

            Following  the  closing of the  consolidation,  the  members of both
Catskill  Development and Monticello Raceway  Development will,  together,  hold
more than 80% of Empire Resorts'  outstanding common stock. These  stockholders,
when acting  together,  will  therefore be able to determine  the outcome of all
matters requiring stockholder approval,  including the election of directors and
the approval of  significant  corporate  transactions,  such as mergers or other
business combinations. This concentration of ownership may lead to actions being
taken by Empire  Resorts that are  inconsistent  with the best  interests of the
public   stockholders  such  as  lax  corporate   governance  or  resistance  to
acquisition offers.

                                THE CONSOLIDATION

GENERAL

            This information  statement/prospectus  is being furnished to you in
connection  with Empire  Resorts'  proposed  acquisition  of Monticello  Raceway
Management,  Monticello Casino Management,  Monticello  Raceway  Development and
Mohawk  Management for 80.25% of Empire Resorts'  common stock,  calculated on a
post-consolidation,   fully  diluted  basis.   Presently,   Monticello   Raceway
Management  is a  wholly  owned  subsidiary  of  Catskill  Development.  Each of
Monticello  Casino  Management  and Mohawk  Management  is 60% owned by Catskill
Development  and 40% owned  indirectly  by Empire  Resorts.  Monticello  Raceway
Development  is 50% owned by Americas Tower  Partners,  41% by Robert A. Berman,
Empire Resorts' chief executive  officer, a member of its board of directors and
its  former  chairman,  7.65% by  Scott  A.  Kaniewski,  Empire  Resorts'  chief
financial  officer and a former  member of its board of  directors,  .05% by two
affiliates of Mr.  Kaniewski and 1.3% by Philip B. Berman,  Empire Resorts' vice
president of project coordination. Upon completion of the consolidation, each of
Monticello Raceway Management,  Monticello Casino Management, Monticello Raceway
Development  and Mohawk  Management  will become  wholly owned  subsidiaries  of
Empire  Resorts,  and the members of both Catskill  Development  and  Monticello
Raceway  Development,  together,  will  hold a  controlling  interest  in Empire
Resorts.

            The mechanics of the  consolidation  will be carried out as provided
in the amended  and  restated  securities  contribution  agreement,  dated as of
November __, 2003, by and among Empire  Resorts,  Catskill  Development  and the

                                       30





members of both Catskill Development and Monticello Raceway Development.  A copy
of  the  restated  contribution   agreement  is  attached  to  this  information
statement/prospectus  as Appendix A and is  incorporated  by reference into this
information statement/prospectus.

            EMPIRE  RESORTS'  STOCKHOLDERS  WILL NOT BE  ENTITLED  TO  STATUTORY
DISSENTERS' APPRAISAL RIGHTS IN CONNECTION WITH THE CONSOLIDATION.

            The purpose of this  information  statement/prospectus  is to inform
you of the consolidation. Your vote is not required to approve the consolidation
or any related matter, as Empire Resorts' Controlling  Stockholders have already
executed a written consent:

            o   adopting the restated contribution agreement;

            o   approving the consolidation;

            o   amending Empire Resorts' certificate of incorporation to provide
                for a staggered board of directors;

            o   amending Empire Resorts' certificate of incorporation to provide
                the  holders of Series E  Preferred  Stock with  certain  voting
                rights; and

            o   electing  three  Class I,  three  Class II and  three  Class III
                directors.

            At the time  Empire  Resorts'  Controlling  Stockholders  signed the
written consent,  they  controlled,  collectively,  approximately  51% of Empire
Resorts' voting stock,  which represented  enough votes to have approved each of
these  items at a  meeting  of Empire  Resorts'  stockholders.  As a result,  no
meeting or further  approval of Empire  Resorts'  stockholders  is  necessary to
effect  these  matters,  which will  become  effective  on or after the 20th day
following  distribution  of  this  information  statement/prospectus  to  Empire
Resorts'  stockholders,   provided  all  closing  conditions  have  been  either
satisfied or waived.


            This information  statement/prospectus also constitutes a prospectus
of Empire  Resorts,  which is a part of the  registration  statement on Form S-4
filed by Empire Resorts with the Securities  and Exchange  Commission  under the
Securities  Act of 1933,  as amended,  in order to register the shares of Empire
Resorts'  common stock to be issued to the members of both Catskill  Development
and Monticello Raceway Development pursuant to the consolidation.

            Pursuant   to  the   consolidation,   Empire   Resorts   will  issue
approximately  18,219,074  shares of its  common  stock to the  members  of both
Catskill Development and Monticello Raceway Development.  The aggregate value of
such  shares,  based on the closing  price per share of Empire  Resorts'  common
stock on November 4, 2003 of $13.00, is approximately $236,847,962.


                                       31





            This information  statement/prospectus  has been sent to you because
on November 25, 2003, the day Empire Resorts' Controlling  Stockholders executed
the written consent:

            o   adopting the restated contribution agreement;

            o   approving the consolidation;

            o   amending Empire Resorts' certificate of incorporation to provide
                for a staggered board of directors;

            o   amending Empire Resorts' certificate of incorporation to provide
                the  holders of Series E  Preferred  Stock with  certain  voting
                rights; and

            o   electing  three  Class I,  three  Class II and  three  Class III
                directors,

you were a holder of record of Empire Resorts' common stock.

            To the extent  that  certain  holders  may be  required to deliver a
prospectus  in  connection  with the  reoffering  and resale of shares of Empire
Resorts' common stock issued in the consolidation, the registration statement of
which  this  information  statement/prospectus  forms a part will also cover any
such reoffering and resale.

BACKGROUND OF THE CONSOLIDATION

            EMPIRE  RESORTS'  AND CATSKILL  DEVELOPMENT'S  JOINT EFFORT TO BRING
CASINO GAMBLING TO NEW YORK STATE

            Casino  gambling  is illegal in New York State.  However,  a federal
statute,  the Indian Gaming  Regulatory Act, permits  different types of gaming,
including casino gambling,  on Native American land under specified  conditions.
The  Indian  Gaming  Regulatory  Act  classifies  gaming  activities  into three
different  categories.  Native American tribes have exclusive  jurisdiction over
Class I gaming,  which  includes  social games and  traditional  forms of Indian
gaming connected to tribal  ceremonies.  Class II gaming,  defined by the Indian
Gaming  Regulatory  Act to include "the game of chance  commonly  known as bingo
(whether  or not  electronic,  computer  or other  technologic  aids are used in
connection  therewith) ... including (if played in the same location) pull-tabs,
lotto,  punch boards,  tip jars, instant bingo, and other games similar to bingo
...," is regulated by the National Indian Gaming Commission ("CLASS II GAMING").
All  other  gaming  activity  (including  both  electronic  gaming  devices  and
traditional  casino  games,  such as card  tables,  craps,  roulette,  and  slot
machines) is Class III gaming ("CLASS III GAMING").

            The Indian Gaming  Regulatory Act permits Native  American tribes to
petition the governor of their host state for a so-called  "compact"  that would
allow Class III Gaming on  reservation  lands and/or on lands to be acquired and
held in trust by the  United  States of  America  for the  benefit of the tribe.
These compacts define which types of Class III Gaming  activities the tribes can
conduct,  and usually  provide that a portion of the gaming  revenues will go to
the state.  Any compact  between the state and the tribe must be approved by the
Bureau  of  Indian  Affairs.  To  date,  only  three  tribes  in New  York  have

                                       32





successfully  petitioned  the governor for compacts:  the Oneida Nation in 1992,
the St.  Regis  Mohawk  Tribe in 1993 and the Seneca  Nation of Indians in 2002.
Following  the signing of these  compacts,  the Oneida Nation opened a casino in
western New York,  near Syracuse,  the St. Regis Mohawk Tribe opened a casino on
their Akwesasne  Reservation near the Canadian  border,  and on January 1, 2003,
the Seneca  Nation of Indians  opened an 82,500  square  foot  casino in Niagara
Falls.

            In 1995,  leaders of the St. Regis  Mohawk Tribe opened  discussions
with Empire Resorts and a group of Sullivan  County,  New York  businessmen  who
were  looking  to  develop a gaming  enterprise,  using  Monticello  Raceway  in
Monticello,  New York as a cornerstone for the operation. In October 1995, these
businessmen  and  Empire  Resorts  formed a  coalition  which  created  Catskill
Development  to pursue this  project  and seek  federal  approval  for the plan.
Catskill  Development  planned to sell 29 acres of land to the St.  Regis Mohawk
Tribe,  which would transfer the land to the United States of America to hold in
trust for the St. Regis Mohawk Tribe.  Catskill  Development would then help the
St.  Regis Mohawk  Tribe  operate the casino,  and in return take a share of the
revenues.

            Catskill Development acquired Monticello Raceway and its surrounding
land for $10 million on June 3, 1996. Of the real property  purchased,  29 acres
adjacent to Monticello  Raceway were set aside for the casino. At the same time,
Catskill  Development  and Empire Resorts  created Mohawk  Management to provide
technical  and  financial  expertise  to assist the St.  Regis  Mohawk  Tribe in
obtaining financing and to manage, operate, and maintain the casino. The parties
also created Monticello Raceway Development to develop the casino property,  and
to  assist  the St.  Regis  Mohawk  Tribe in  obtaining  a loan to  finance  the
construction,  equipping,  and  operation  of the  casino.  As the  coordinating
entity,  Catskill  Development  acted for both Mohawk  Management and Monticello
Raceway  Development in seeking the necessary local, state and federal approvals
needed to build and operate the casino.

            On July 31, 1996, the St. Regis Mohawk Tribe,  Catskill Development,
Mohawk Management and Monticello  Raceway  Development  entered into a number of
agreements, which were last amended in 1999. The agreements were as follows:

            o   a land purchase agreement between the St. Regis Mohawk Tribe and
                Catskill  Development  pursuant to which,  in  exchange  for $10
                million, Catskill Development would transfer of 29 acres of land
                adjacent to  Monticello  Raceway to the United States of America
                in trust for the St. Regis Mohawk Tribe;

            o   a  gaming   facility   management   agreement   granting  Mohawk
                Management   the  exclusive   right  to  manage  the  day-to-day
                operations of the contemplated casino;

            o   a shared facilities agreement between the St. Regis Mohawk Tribe
                and Catskill Development, under which the St. Regis Mohawk Tribe
                agreed to develop and build the casino, and Catskill Development
                agreed to improve and operate the racetrack; and

            o   a development and construction  agreement  between the St. Regis
                Mohawk Tribe and Monticello  Raceway  Development,  in which the
                St. Regis Mohawk Tribe granted  Monticello  Raceway  Development

                                       33





                the  right to plan  and to  build  the  casino,  and  Monticello
                Raceway  Development  agreed to help the St.  Regis Mohawk Tribe
                obtain financing for the construction.

            RECEIPT OF REGULATORY APPROVALS

            Before work could begin under any of these agreements,  however, the
parties  needed to receive a number of state and federal  regulatory  approvals.
Specifically,  pursuant to the Indian Gaming  Regulatory Act, gaming  management
contracts for Class III Gaming, and all collateral  arrangements,  must first be
approved by the National  Indian  Gaming  Commission.  In  addition,  the Indian
Gaming Regulatory Act provides that off-reservation  gaming projects on lands to
be transferred and held in trust by the United States of America for the benefit
of a Native American tribe must be expressly  authorized by the Bureau of Indian
Affairs  and the  governor  of the state in which the gaming  activity  is to be
conducted.


            On August 2, 1996,  Catskill  Development  and the St.  Regis Mohawk
Tribe  applied to the  National  Indian  Gaming  Commission  for approval of the
gaming  facility  management  agreement  and to the Bureau of Indian  Affairs to
transfer the land adjacent to Monticello Raceway to the United States of America
in trust for the benefit of the St. Regis Mohawk  Tribe.  After  reviewing  this
application for 3 1/2 years,  the Bureau of Indian Affairs  approved it on April
6, 2000 and requested that New York State Governor George Pataki concur with its
findings.  However,  before  Governor  Pataki had time to concur or the National
Indian  Gaming  Commission  had  a  chance  to  approve  the  casino  management
agreement,  Park Place  Entertainment  Corporation induced the leadership of the
St.  Regis Mohawk  Tribe to enter into an  exclusive  agreement  with Park Place
Entertainment   Corporation  (the  "PARK  PLACE  AGREEMENT")  concerning  casino
development  in New York.  The  terms of the Park  Place  Agreement  effectively
terminated  all of  the  St.  Regis  Mohawk  Tribe's  agreements  with  Catskill
Development,  Mohawk Management and Monticello  Raceway  Development.  Following
these events,  Catskill  Development,  Mohawk Management and Monticello  Raceway
Development each began searching for a new Native American partner and sued Park
Place  Entertainment  Corporation,  and  certain  individuals,  for  intentional
interference   with  contractual   relations  and  interference   with  business
relations.  See "Material Conditions to Closing - Formation of Litigation Trust"
beginning on page 79 for a more detailed discussion of this litigation.


                                       34



            DISCUSSIONS  WITH  CAYUGA  NATION OF NEW YORK AND  APPROVAL OF VIDEO
LOTTERY TERMINALS

            The status of the agreements signed by Catskill  Development and its
affiliates with the St. Regis Mohawk Tribe were  complicated by a dispute within
the Tribe over which of two factions was entitled to federal  recognition as the
government of the Tribe.  These  agreements had originally  been committed to by
both  factions in the  dispute,  however,  only one faction  had  abandoned  the
agreements and the issue of recognition  had not yet been finally  determined by
the Bureau of Indian  Affairs.  While renewed  discussions  were undertaken with
several Native  American  tribes  following the Park Place  Agreement,  Catskill
Development ultimately decided, pending the final determination of the Bureau of
Indian Affairs,  to maintain its relationship  with the faction of the St. Regis
Mohawk  Tribe that  opposed  the Park  Place  Agreement.  A final  determination
adverse to this faction was made in July of 2002 and Catskill  Development  then
renewed its  discussions  with other  Native  American  tribes for  developing a
casino in Monticello, New York.

            While there are a number of Native  American  tribes with historical
ties to New York that expressed  interest in the casino project,  the principals
of Catskill  Development and Empire Resorts  believed that the State of New York
was most  interested  in  awarding  gaming  compacts  to  tribes  that  actually
maintained  a presence  in the State of New York.  Of such  tribes,  several had
previously  expressed no interest in conducting gaming activities.  Discussions,
however,  were held with three interested  tribes, two of which had proceeded or
were proceeding with plans to develop unrelated casinos in western New York.

            Negotiations  proceeded  furthest  with a third  tribe,  the  Cayuga
Nation of New York.  Catskill  Development  considered  the Cayuga Nation of New
York as its preferred partner for several reasons.  First,  Catskill Development
had  previously  engaged in cordial and productive  discussions  with the Cayuga
Nation of New York prior to deciding to proceed with the St. Regis Mohawk Tribe.
Second, although its government is federally recognized and has significant land
claims  in New  York,  the  Cayuga  Nation  of New  York  does  not have its own
reservation  lands and thus could be  expected  to have some  degree of priority
with respect to a land to trust application. In addition, it was agreed that the
framework for the venture and the application  materials could be  substantially
similar to those used in  connection  with the St.  Regis  Mohawk  Tribe.  These
materials  included  an  agreement  to purchase 29 acres of land for $10 million
following its approval as a site on which a Native  American  owned casino could
be operated,  a seven year management agreement providing for management fees of
up to 35% of net revenues and a development agreement with respect to the casino
providing for  development  fees equal to 5% of  development  costs.  The Cayuga
Nation of New York,  which was also granted  300,000  shares of Empire  Resorts'
common stock,  payable in installments while the applications were pending,  has
agreed to designate a hotel to be acquired or developed by Empire Resorts in the
future as a "preferred  provider" to the casino and has the right to participate
as an  equity  investor  at cost in  certain  potential  commercial  development
projects by Empire Resorts and its affiliates in the five mile area  surrounding
the casino site.

            Accordingly,  in  October  of 2002,  Catskill  Development  signed a
confidential,  non-binding  letter of intent with the Cayuga  Nation of New York
(the "CAYUGA LETTER OF INTENT") to develop a Class III Gaming  enterprise  under
the same basic terms and  conditions as were agreed to with the St. Regis Mohawk
Tribe.  Empire  Resorts was  subsequently  made a party to the Cayuga  Letter of
Intent, and on April 3, 2003, Catskill Development,  Empire Resorts,  Monticello
Casino  Management,  a newly formed entity jointly held by Catskill  Development

                                       35




and Empire Resorts,  Monticello Raceway Development and the Cayuga Nation of New
York  entered  into a  series  of  agreements  virtually  identical  to the ones
previously  entered into with the St. Regis Mohawk Tribe.  As with the St. Regis
Mohawk Tribe,  Catskill  Development  agreed to transfer 29 acres of land to the
United  States of  America  in trust for the  Cayuga  Nation of New York for $10
million and Monticello Casino Management (whose ownership is identical to Mohawk
Management) and Monticello Raceway Development were granted exclusive management
and  development  rights for the casino and agreed to help the Cayuga  Nation of
New York secure any required financing. On April 10, 2003, all of the agreements
that require  approval were once again submitted to the Bureau of Indian Affairs
and National Indian Gaming Commission.

REASONS TO COMBINE COMPANIES


            EVALUATION OF BUSINESS ALTERNATIVES

            Empire  Resorts'   efforts  to  restructure  its  capital  base  and
ownership  and realign its business  interests  allowed it to consider  taking a
different  role with  respect  to its  participation  in  Catskill  Development.
Although  steps  had been  taken to  reduce  Empire  Resorts'  debt  burden  and
expenses,  Empire Resorts had no operations which could produce recurrent income
to meet its current  obligations.  Although its interest in Catskill Development
had proved to be Empire Resorts' only  significant  valuable asset, the existing
structure of Catskill Development and the nature of Empire Resorts' interests in
Catskill  Development  made  it  unlikely  that  Empire  Resorts  would  receive
distributions  from Catskill  Development in the near future sufficient to cover
its operating costs.

            Under   Catskill   Development's   operating   agreement,    amounts
contributed  by certain  members,  including  Empire  Resorts,  to purchase  the
Monticello  Raceway  property and pay certain  development  costs are treated as
preferred  contributions that accrue interest and are entitled to be returned on
a priority basis at 10% compounded annually.  In addition,  under the terms of a
settlement  in an  arbitration  proceeding  that  Empire  Resorts  had  filed in
September,  1999, two members of Catskill  Development,  Americas Tower Partners
and  Monticello  Realty,  were granted a $5,000,000  mortgage on the  Monticello
Raceway property with interest  compounded annually at 10%. This senior mortgage
obligation, together with the preferred capital contributions,  and the interest
thereon,  are to be repaid no later than  September 15, 2004, and must be repaid
before any earnings from any of Catskill  Development's  lines of business would
be  available  for  distribution  to Empire  Resorts.  By September  2003,  such
obligations  exceeded  $45  million.  As a result,  Empire  Resorts'  ability to
generate  near term cash flow from its  interest  in  Catskill  Development  was
limited  to the  return  of its  own  preferred  capital  contributions  and the
interest  thereon,  while amounts being generated by the operation of Monticello
Raceway were being retained by Catskill Development for working capital purposes
and to fund  litigation  and  development  expenses  in  conjunction  with other
potential gaming operations at the track.

            As a result,  Empire  Resorts  encouraged  Catskill  Development  to
review its strategic alternatives and consider a broad restructuring of Catskill
Development's  interests. In October of 2002, Catskill Development retained CIBC
World Markets  ("CIBC") to act as Catskill  Development's  financial  advisor in
connection  with a  possible  sale or  merger of all or a  portion  of  Catskill
Development's  assets,  and a possible  joint venture,  management  agreement or
similar agreement  between Catskill  Development and a third party to own and/or
operate a tribal gaming facility at Monticello.  CIBC examined what it viewed as
the  full  range  of  options  available  to  Catskill  Development,   including

                                       36





alternative  ways of using the existing  racetrack  asset and/or the  additional
real estate, either by contributing the asset to a joint venture,  entering into
a  recapitalization  transaction,  or an  outright  sale,  as well as the use of
project  finance  techniques  in  structuring  financing  arrangements  for  the
project.

            After the  signing of the Cayuga  Letter of Intent,  CIBC's  efforts
increasingly focused on potential partnership  arrangements with existing casino
gaming  operators.  From November  2002 through  January  2003,  Empire  Resorts
participated with Catskill  Development in discussions with several  established
gaming companies,  including five that performed some level of due diligence and
two that made specific  proposals to Empire Resorts.  These proposals,  although
preliminary  in  nature,   were  highly   unsatisfactory  from  Empire  Resorts'
perspective.  Although these companies offered to provide brand name recognition
and management expertise to the venture,  they requested a substantial stake in,
and control over, the venture immediately,  while conditioning any investment of
their own funds on further  development  efforts by  Catskill  Development  that
would require substantial  additional investment by Catskill  Development.  As a
result,  the  dilution in Empire  Resorts' and  Catskill  Development's  overall
interest could be expected to be substantially in excess of 50%. Furthermore, in
its efforts to fashion  counter-proposals to these offers,  Catskill Development
found that the differing interests of its voting members in the various lines of
business of Catskill  Development  made it difficult  for the voting  members to
agree on a common response.

            Another major impediment to moving forward with any of the strategic
alternatives  proposed  by CIBC was the  indictment  on April 17, 2002 of six of
Empire  Resorts' former  officers and directors,  including  Stanley Tollman and
Monty Hundley, for various counts of tax and bank fraud. Each of Stanley Tollman
and Monty Tollman is a direct affiliate of The Bryanston Group,  which is Empire
Resorts' largest stockholder and was, at the time, one of Catskill Development's
four voting members. As these indictments directly affected major equity holders
of both Empire Resorts and Catskill  Development,  the parties  recognized  that
under  their  current  structure  it would be very  difficult  for enter  Empire
Resorts or Catskill  Development to operate in a highly  regulated field such as
gaming  industry  or to find a third  party  interested  in some sort of sale or
joint venture.

            In an attempt to remove The Bryanston  Group and its affiliates from
any position of control over either Empire Resorts or Catskill  Development,  in
December  2002  pursuant  to  a   recapitalization   agreement  (the  "BRYANSTON
RECAPITALIZATION"),  Empire  Resorts (i) issued an aggregate  336,496  shares of
non-voting  Series E preferred  stock to each of The  Bryanston  Group,  Stanley
Tollman and Monty Hundley in full  satisfaction  of an  outstanding  note and as
deferred  compensation,  (ii) issued  1,394,200  shares of  non-voting  Series E
Preferred  Stock to The Bryanston  Group in exchange for The  Bryanston  Group's
voting   membership   interest  and  preferred   capital   account  in  Catskill
Development,  (iii) received a three year option to redeem all or any portion of
(a) the Series E preferred stock issued to The Bryanston Group,  Stanley Tollman
and Monty Hundley,  as described above, at its liquidation value ($10 per share)
plus all accrued and unpaid  dividends and (b) subject to stockholder  approval,
which was obtained on January 31, 2003, The Bryanston  Group's  2,326,857 shares
and 66,000 of Beatrice  Tollman's shares of common stock at a price of $2.12 per
share.  During  this three  year  redemption  period,  The  Bryanston  Group and
Beatrice  Tollman  granted  Robert A. Berman  irrevocable  proxies to vote their
shares of common stock, with full powers of substitution and revocation.


                                       37





            During CIBC's evaluation period and while the terms of the Bryanston
Recapitalization were being negotiated,  Robert A. Berman, Empire Resorts' chief
executive officer and Joseph E. Bernstein, a managing director of Americas Tower
Partners, conducted initial discussions to improve the alignment of the business
interests  and  improve  the  management   structure  of  the  enterprise.   The
discussions resulted in a proposed redraft of Catskill  Development's  operating
agreement,  but was  conditioned  upon the  satisfactory  resolution  of  Empire
Resorts'  restructuring with The Bryanston Group.  Ultimately,  the proposal was
abandoned because of the unwillingness of The Bryanston Group and Americas Tower
Partners/Monticello Realty to give mutual releases of potential claims under the
existing operating agreement.

            During December 2002 and January 2004, CIBC continued its efforts to
arrange for a potential joint venture  arrangement on terms acceptable to Empire
Resorts.  These  efforts  resulted  in a meeting in New York City on January 29,
2003 with a potential  joint  venture  partners,  its  attorneys  and  financial
advisors.  However,  this meeting  ended  without an  agreement  and the parties
thereafter terminated their discussions.

            Later that afternoon, Robert A. Berman called Joseph E. Bernstein to
suggest a possible  restructuring  of Catskill  Development  and Empire  Resorts
and/or  consolidation of interests.  Soon thereafter,  each of Robert A. Berman,
Scott A. Kaniewski,  Paul A. deBary and Thomas W. Aro, for Empire  Resorts,  and
Joseph  E.  Bernstein,   Ralph  J.  Bernstein  and  Morad  Tahbaz,  on  Catskill
Development's  behalf,  returned to Empire Resorts' offices in New York City for
further negotiations. By the end of the day a general agreement was reached that
a corporate  structure would be a more effective vehicle for the venture to move
forward,  and that  Empire  Resorts  could  assume  primary  responsibility  for
managing the various operations and projects of Catskill  Development if (1) the
members of Catskill Development could be represented on Empire Resorts' board of
directors,  (2) outside directors with relevant experience could be recruited to
sit on Empire  Resorts' board of directors and (3) Empire  Resorts  relinquished
its direct ownership interest in Catskill Development's real estate holdings.

            Accordingly,  the members of Catskill Development  commenced intense
negotiations  from January 30, 2003 to February 2, 2003 designed to accomplish a
new corporate structure.  These negotiations were attended or participated in by
telephone by Robert A. Berman,  Paul A. deBary and Scott A.  Kaniewski on behalf
of Empire Resorts and Joseph E. Bernstein,  Ralph J. Bernstein, Morad Tahbaz and
Maurice Dabbah on behalf of Americas Tower Partners and Monticello Realty. There
was broad agreement among the members regarding several areas. These included:

            o   replacing  the various  separate  percentage  interests  of each
                member in the  proposed  venture's  different  lines of business
                with a  single  percentage  held  by each  member  in all of the
                combined businesses. The percentages proposed in connection with
                the discontinued negotiations for an amended operating agreement
                were used as a basis for determining the appropriate  percentage
                share  interests  to be given to the  other  members  by  Empire
                Resorts in exchange for the operating and development  assets to
                be acquired in connection with the consolidation. However, these
                percentages  were  adjusted  to  account  for the  proportionate
                assumption  by the other  members of the debt to be  incurred by
                Empire  Resorts to buy out the interests of The Bryanston  Group
                and the relinquishment by Empire Resorts of its direct ownership
                interests in the underlying real estate,


                                       38





            o   the need to develop a more unified  corporate  style  management
                structure  and  to  attract  the  participation  of  experienced
                corporate  managers  in both the  existing  racing and  wagering
                operations and the development efforts of the venture,

            o   the  confidence  of the members of Catskill  Development  in the
                ability of the current  management  of Empire  Resorts in moving
                forward with the most  important  projects  that the venture was
                involved in,

            o   the  importance  of  securing  Catskill  Development's  existing
                investment in the real estate  through a long term ground lease,
                with a purchase  option at a price that  Catskill  Development's
                members  believed was fair in view of the risks of entering into
                the consolidation.  The parties,  however,  settled on a 48 year
                ground  lease in order to avoid the real estate  transfer  taxes
                that  would  have been  imposed  had the lease  been 49 years or
                longer,

            o   the need for  common  equity  interests  among  the  members  of
                Catskill  Development  with  respect  to future  operations  and
                development efforts,

            o   the importance of structuring  the  consolidation  as a tax free
                transaction,

            o   the need to complete the buy out of the equity  interests of The
                Bryanston  Group and  related  entities  as a  condition  of the
                consolidation, and

            o   the  value of  transferring  Catskill  Development's  litigation
                claims  against  Park  Place  Entertainment   Corporation  to  a
                liquidating  trust in order to allow Empire Resorts to focus its
                energies on its operations and future development activities.

            Over the  weekend of January  31,  2003  through  February  2, 2003,
numerous  drafts  of  a  memorandum   describing  this  proposed  approach  were
circulated and discussed.  By late afternoon on February 2, 2003, it appeared an
agreement was within reach, and therefore Robert A. Berman, then Empire Resorts'
chairman of the board,  called a telephonic  meeting of Empire Resorts' board of
directors.  The  proposal  was  reviewed  with  CIBC and the  members  of Empire
Resorts'  board of  directors  were given an oral  presentation  of the proposed
consolidation. Empire Resorts' board members were polled on their willingness to
proceed and additional points for negotiations were raised. This lead to further
negotiations,  the drafting of a Letter of Intent and its subsequent approval by
Empire Resorts' board of directors and Catskill Development's members. The final
Letter of Intent was signed on Tuesday, February 3, 2003.

            While the final  Letter of Intent was being  negotiated  by Catskill
Development  and  Empire  Resorts,  simultaneous  negotiations  were  being held
between the voting and non-voting  members of Catskill  Development over whether
the non-voting members,  whose interests were subject to the priority return and
senior obligations discussed above, should receive any shares of Empire Resorts'
common stock.  Under the structure then in effect,  the non-voting members would
not have been  entitled  to any shares of Empire  Resorts'  common  stock due to
their subordinated  membership interests in Catskill Development.  Nevertheless,
an agreement was soon reached among the parties pursuant to which the non-voting


                                       39





members of Catskill  Development  agreed to surrender all of their  interests in
Catskill Development at the consolidation's  closing in exchange for that number
of shares of Empire  Resorts'  common stock they would have been entitled to had
their interests not been subordinated.



            Following   the   signing  of  the   Letter  of  Intent,   extensive
negotiations were undertaken by Empire Resorts and the other members of Catskill
Development.  Considerable  attention  was given to  domestic  and  foreign  tax
considerations,   the  specific   terms  and  conditions  of  the  ground  lease
arrangement  concerning  leasehold  mortgages and other interests and the rights
and  obligations of the lessee with respect to maintenance  and  improvements to
the property,  and the mechanics for the creation of the liquidating  trust with
respect to the ongoing litigation against Park Place Entertainment  Corporation.
These  negotiations  resulted in the  execution of  definitive  agreements  with
respect to the consolidation on July 3, 2003.

            OTHER REASONS FOR THE CONSOLIDATION

            In addition to  allowing  Catskill  Development  to  streamline  its
management structure and better align the economic interests of its members, the
board of Empire Resorts considered the proposed consolidation advantageous for a
number of other  reasons.  Specifically,  the board of  Empire  Resorts  and the
members of Catskill Development believed that should Empire Resorts,  Monticello
Casino  Management and Monticello  Raceway  Management be combined into a single
public company,  it would expedite the review of its casino  management and land
purchase  agreements by the Bureau of Indian Affairs and/or the National  Indian
Gaming Commission, because much of the information required by these agencies is
already  contained  within  Empire  Resorts'  required  Securities  and Exchange
Commission filings.  Moreover, each of Catskill Development,  Monticello Raceway
Development  and  Empire  Resorts  believed  that the  review  of  their  casino
management and land purchase  agreements would be expedited since they and their
affiliates  had  previously  entered  into a series  of  similar  tribal  gaming
agreements with the St. Regis Mohawk Tribe that were previously  reviewed by the
Bureau of Indian Affairs and the National Indian Gaming Commission.

            If,  as   anticipated,   quick  approvals  of  their  tribal  gaming
agreements were received,  the members of Catskill  Development and the board of
Empire Resorts recognized that they would soon need to raise significant amounts
of  financing  from  investors  to  begin  the  actual   development  of  gaming
facilities.  Moreover,  these  parties  believe  that it would be much easier to
raise this financing by selling  publicly  traded  securities in a single public
company that owned all of the management and development  rights with respect to
the  proposed  tribal  casino,  rather than  securities from either  the private
partnership or a public company with no operating  business or assets other than



                                       40



a minority interest in a number of interrelated closely held companies that held
these  management and development  rights  separately.  The enhanced  ability to
raise money in a single integrated public company,  coupled with the belief that
a single  integrated public company would expedite the federal gaming regulatory
review  process,  encouraged  Empire  Resorts and the  members of both  Catskill
Development and Monticello Raceway Development supporting the consolidation.


            The reasons to combine became more  compelling on May 15, 2003, when
the New York State  legislature  enacted a bill  enhancing  the  incentives  for
racetracks to  participate in New York State's video lottery  terminal  program.
While New York State had  approved  in 2001 the  installation  of video  lottery
terminals at certain racetracks,  including  Monticello  Raceway,  the operating
conditions  imposed  on those  racetracks  by the state  made  installing  video
lottery terminals financially impractical.  However, the new incentives now make
the  implementation of a video lottery terminal program at Monticello  Raceway a
potentially lucrative endeavor. Catskill Development and Empire Resorts estimate
that it will cost about $20 million to develop the  infrastructure at Monticello
Raceway to begin a video lottery  terminal  program.  Catskill  Development  and
Empire  Resorts  believe  that the best way to raise this  needed  financing  is
through  the sale to the public of equity  securities  in an  integrated  public
company that operates both Monticello Raceway and the neighboring casino.

            SPECIFIC EMPIRE RESORTS' REASONS FOR THE CONSOLIDATION

            While it is believed  that the proposed  consolidation  will benefit
all the members of Catskill  Development by making it easier to secure financing
for the effort to develop a Native American casino and participate in New York's
video  lottery  program,  the  consolidation  is expected to provide  additional
specific advantages to Empire Resorts. In particular, it will alleviate concerns
about Empire  Resorts'  ability to continue as a going concern,  because it will
allow  Empire  Resorts to obtain 100% direct  ownership  of  Monticello  Raceway
Management,  an existing  company with profitable  operations and the ability to
achieve substantial growth through its participation in New York's video lottery
program.  In  addition,  it will give Empire  Resorts  100% direct  ownership of
Monticello Casino Management and Monticello Raceway  Development,  two companies
that  Empire  Resorts  anticipates  will be highly  profitable  if the  required
federal and state  approvals to begin  development  of the  proposed  casino are
received.

            Empire  Resorts  currently has no direct  operations or  significant
assets other than its  ownership  interest in Catskill  Development,  Monticello
Casino  Management  and  Mohawk  Management,  and  therefore  its only  existing
potential source of revenue is distributions from Catskill Development. However,
as Empire  Resorts  has only a minority  interest in  Catskill  Development,  it
cannot  compel  Catskill  Development  to  make  distributions  to its  members.
Moreover,  as discussed above, any distributions by Catskill  Development to its

                                       41





members  under its  current  operating  agreement  are subject to the payment of
priority  obligations.  Therefore,  even assuming  reasonably  prompt success in
implementing  the video lottery and casino  projects,  Empire Resorts  estimates
that,  absent the  consolidation,  it is not likely to have a positive cash flow
until at least  2009.  In  connection  with the  consolidation,  however,  these
priority obligations will be effectively  financed   through  a  48  year  lease
obligation and Empire Resorts will have access to any net operating  income from
Monticello Raceway,  subject to the Security Agreement (as described in page __)
and the  potential  returns from the video  lottery and casino  development  and
management operations.


RECOMMENDATION OF EMPIRE RESORTS' SPECIAL COMMITTEE



            When the Letter of Intent for the consolidation was submitted to the
board of directors,  several of the directors  requested  that the delivery of a
fairness  opinion be made a conditon  of closing  the  transaction.  Many of the
directors of Empire Resorts at that time were either current  officers of Empire
Resorts  or had  provided  professional  services  to Empire  Resorts or related
parties directly or indirectly in the past. One member of the board of directors
had been recently  selected who had both a background in investment  banking and
corporate  restructurings and had no prior or current  relationships with Empire
Resorts  other than as an  independent  director.  Accordingly,  he was asked to
serve as a special  committee  of the board for  purposes  of the  consolidation
transaction  and was  authorized to hire a financial  advisory firm to provide a
fariness  opinion  and  separate  outside  counsel  to  represent  such  special
committee.

            On March 25, 2003,  Empire  Resorts'  board of  directors  adopted a
resolution,  that was subsequently  amended on April 17, 2003, to form a special
committee to (1) review and evaluate the terms and conditions, and determine the
advisability of the  consolidation,  (2) determine  whether the consolidation is
fair to, and in the best interests of, Empire Resorts and its stockholders,  and
(3)  recommend to the full board of directors  what  action,  if any,  should be
taken by Empire  Resorts with respect to the  consolidation.  These  authorizing
resolutions  were further amended on July 1, 2003 to provide that Empire Resorts
would  proceed to sign the initial  contribution  agreement  and  certain  other
documents in connection with the consolidation  without the special  committee's
review  having  been  completed,  with the  provision  that the  closing  of the
consolidation  would be subject to receiving a favorable report from the special
committee with respect to its original mandate.


                                       42




            On September 9, 2003, the special committee, comprised solely of Jay
Holt,  who the board of directors  considered to be the only truly  "independent
director",  delivered a report to Empire Resorts' board of directors in which it
concluded  that the  consolidation  is fair and in the best  interests of Empire
Resorts and its  stockholders  and  recommended  that Empire  Resorts'  board of
directors instruct Empire Resorts' management to complete the consolidation.

            In its report,  the  special  committee  noted that  Empire  Resorts
presently  faced a liquidity  crises and had no sources of revenue,  and that of
the realistic  alternatives  available to  management,  the  consolidation  gave
Empire Resorts' stockholders the best chance to realize any value. Specifically,
the special committee cited,  among other things,  that Empire Resorts sustained
net losses in 2002, that its current liabilities  exceeded its current assets by
more  than  $7,500,000,  and  that at the end of  2002,  Empire  Resorts  had an
accumulated  deficit of  $110,445,000.  The  special  committee  also noted that
Empire  Resorts' only  meaningful  asset is its 25% voting  interest in Catskill
Development  and its  48.31%,  36.88%  and  25%  economic  ownership  interests,
respectively,  in Catskill  Development's casino and wagering operations,  horse
racing  and  other   pari-mutuel   activities  and  real  estate  ownership  and
development operations.  In the special committee's opinion, however, this asset
currently  has little value since  Catskill  Development's  operating  agreement
provides that  approximately  $47 million in returns needs to be paid to certain
of Catskill  Development's members other than Empire Resorts before any of those
other  members can receive  distributions.  In  addition,  according to Catskill
Development's operating agreement, Empire Resorts' may not transfer its interest
in Catskill Development (except to an affiliate) without the consent of Catskill
Development's other three voting members.

            As a result of this  liquidity  crisis,  Empire  Resorts'  dearth of
liquid or revenue producing assets,  and the fact that Empire Resorts' founders,
and much of its prior senior management,  had been indicted on various counts of
tax and bank fraud in 2002, the special committee indicated its view that Empire
Resorts'  management  was presently  faced with very few "real world" options to
satisfy its creditors and create value for its stockholders. Specifically, given
Empire  Resorts'  lack of any  credit and the taint  created  by the  previously
mentioned  indictments,  the special  committee stated in its report that Empire
Resorts' had no other  realistic  alternatives to the  consolidation  other than
attempting a Chapter 11 reorganization or liquidating. Absent the consolidation,
Empire Resorts would not have sufficient access to the public or private debt or
equity markets to secure financing for a new business or the creditworthiness or
reputation to find a well  capitalized  gaming partner to engage in some sort of
joint venture. The special committee,  however, quickly dismissed the Chapter 11
and  liquidation  alternatives,  as it did not believe that Empire Resorts could
afford to sustain itself through the Chapter 11 process, and even if it did, the
value of its assets would be  insufficient to satisfy its creditors and preserve
some stockholder  value. The same analysis also caused the special  committee to
reject the idea of a liquidation.

            The special committee,  however, believes that the consolidation has
the best chance of reversing Empire Resorts' economic situation, as it will have
the following positive effects:


                                       43





            o   Empire Resorts will own 100% of Monticello  Raceway  Management,
                the  manager  of  Monticello   Raceway,   and  all  of  Catskill
                Development's  other rights with respect to Monticello  Raceway,
                giving  Empire  Resorts an  immediate  source of cash  flow.  In
                addition,  as Empire Resorts will own this asset directly,  such
                cash flow will not be subject to any priority returns.

            o   Empire Resort's wholly-owned subsidiary,  Alpha Monticello, will
                increase its ownership of Monticello  Casino Management from 40%
                to 100%,  allowing it to earn a  management  fee of up to 35% of
                the net  revenues  for up to seven years of any casino  built on
                Catskill  Development's land with the Cayuga Nation of New York.
                In addition,  as Empire will also own this asset directly,  none
                of  these  management  fees  will  be  subject  to the  priority
                returns.

            o   Empire Resorts will own 100% of Monticello Raceway  Development,
                which has the exclusive right to develop Catskill  Development's
                229  acres of land in  Monticello,  New  York  for 25 years  and
                receive  a  developer's  fee of 5% of  total  project  costs,  a
                monthly  property  management  fee,  and  leasing   commissions.
                Moreover, Monticello Raceway Development has the exclusive right
                to develop a tribal casino on this land for the Cayuga Nation of
                New York in exchange for 5% of the first $505 million of project
                costs. Presently, Empire Resorts holds no interest in Monticello
                Raceway Development.

            o   Empire Resorts, through Monticello Raceway Management,  will get
                the right to lease  200 of the 229 acres of land in  Monticello,
                New  York  owned  by  Catskill   Development  for  48  years  at
                approximately  $1,800,000 per annum.

            o   Empire Resorts will receive the right to receive a percentage of
                the revenue  generated from up to 1,800 video lottery  terminals
                that the  State of New York has  permitted  to be  installed  at
                Monticello Raceway.

            o   The damage done by the indictments of Empire  Resorts'  founders
                and prior management will be significantly mitigated by the fact
                that, in terms of both economic substance and corporate control,
                the consolidation  is, in essence,  a takeover of Empire Resorts
                by the members of Catskill  Development  and Monticello  Raceway
                Development.

            Notwithstanding  each of the positive  outcomes of the consolidation
highlighted  above, the special committee does not believe that this endeavor is
without risk. Specifically:

            o   Monticello  Raceway  Management  might  be  unable  to meet  its
                payment  obligations to Catskill  Development  under the 48 year
                ground lease if appropriate  state and federal approvals are not
                promptly  received for the development of a tribal casino and/or
                the  implementation of a video lottery terminal  program,  or if
                such operations fail to produce the anticipated revenue.


                                       44





            o   Following  the  receipt  of all  regulatory  approvals  for  the
                development  of a tribal  casino  and a video  lottery  terminal
                program,   Empire  Resorts  will  have   substantial   financing
                requirements,  both in the immediate  future and as  development
                progresses.  There can be no assurance  that Empire Resorts will
                be able to meet these financing  requirements,  possibly leading
                to a default  under the lease with Catskill  Development  and/or
                management and development  agreements with the Cayuga Nation of
                New York.

            o   In connection with the closing of the consolidation, the members
                of both Catskill  Development and Monticello Raceway Development
                will receive, in the aggregate,  that number of shares of Empire
                Resorts'  common stock equal to 80.25% of Empire Resorts' common
                stock, calculated on a post-consolidation,  fully diluted basis.
                No adjustment to this figure will be made as a result of changes
                in  the  market  price  of  Empire  Resorts'  common  stock.  In
                addition,  no party to the contribution  agreement may terminate
                or  renegotiate  its  terms  solely  because  of a change in the
                common stock's market price.  Therefore,  if the price of Empire
                Resorts'  common stock  increases,  the members of both Catskill
                Development and Monticello Raceway  Development may receive more
                value at the  completion of the  consolidation  than the parties
                intended or than would otherwise be fair.

            o   As of June 30,  2003,  Empire  Resorts  had net  operating  loss
                carryforwards of approximately $66,500,000 set to expire between
                2008 and 2022. The consolidation,  however, will trigger certain
                provisions  of the  Internal  Revenue  Code that will  limit the
                future   utilization  of  Empire  Resorts'  net  operating  loss
                carryforwards  to offset  its  future  federal  taxable  income.
                Generally speaking, following the consolidation,  Empire Resorts
                will  only be  permitted  to  utilize  that  portion  of its net
                operating  loss  carryforwards  per  year  (subject  to  certain
                carryforward  rules) equal to the fair market value of its stock
                immediately  prior  to  the  consolidation,  multiplied  by  the
                federal long-term tax exempt rate on such date.

            After considering all of the above described factors and alternative
scenarios, the special committee concluded that absent the consolidation, Empire
Resorts  would not be able to realize upon the  potential  value of its economic
interests in Catskill Development because of the adverse combination of:

            o   Empire Resorts' overall financial  condition,  liquidity  crisis
                and the  effects of the  indictments  of its former  executives,
                albeit in  relation to business  matters  not  involving  Empire
                Resorts;

            o   Empire   Resorts'   minority   voting   interest   in   Catskill
                Development; and

                                       45





            o   the  likelihood  that any  disposition  by Empire Resorts of its
                interests  in  Catskill  Development  would be at a  substantial
                minority  interest  discount  even though  Empire  Resorts would
                retain the risks  associated  with the  development  of a Native
                American gaming enterprise in Monticello,  New York (through its
                minority  interest  in  Monticello  Casino  Management)  and the
                installation of video lottery terminals at Monticello Raceway.

            Furthermore,  based on the above  discussion,  the special committee
believes that the consolidation will, among other advantages:


            o   enhance  the  ability  of Empire  Resorts  to  realize  upon the
                potential  value of the  development of a Native American gaming
                enterprise in Monticello, New York and the installation of video
                lottery  terminals at  Monticello  Raceway to an extent  greater
                than a sale of its interests in Catskill Development;

            o   provide  Empire  Resorts with a measure of liquidity to meet its
                present liquidity crisis;

            o   provide Empire  Resorts with a basis for financing  arrangements
                that should enable it to proceed with the video lottery terminal
                project and, in due course,  the casino  project with the Cayuga
                Nation of New York or another  Native  American tribe or nation;
                and

            o   provide  Empire  Resorts'  creditors  with  the  only  realistic
                prospect of having  their debts  satisfactorily  paid or settled
                within a reasonable period of time, or at all.


OPINION OF KANE REECE ASSOCIATES, INC.

            Empire Resorts' special  committee  engaged Kane Reece Associates to
act as its financial advisor in connection with the proposed  consolidation.  In
connection with its engagement,  the special committee requested that Kane Reece
Associates  evaluate  the  fairness of the  consolidation's  principal  terms to
Empire Resorts and its stockholders from a financial point of view. On September
8, 2003,  Kane Reece  Associates  delivered a written opinion to Empire Resorts'
special  committee stating that, as of that date and based on and subject to the
matters described in its opinion,  the  consolidation's  terms were fair, from a
financial point of view, to the holders of Empire Resorts' common stock.

            In arriving at its opinion, Kane Reece Associates:

            o   reviewed the contribution agreement and related documents;

            o   held  discussions  with  senior  officers,  directors  and other
                representatives  and  advisors  of  Empire  Resorts  and  senior
                officers,  representatives and advisors of Catskill  Development

                                       46





                concerning  the  businesses,  operations and prospects of Empire
                Resorts and Catskill Development;

            o   examined publicly available  business and financial  information
                relating to Empire Resorts;

            o   examined  financial  forecasts and other information and data of
                Empire Resorts and Catskill  Development  which were provided to
                or  otherwise  discussed  with  Kane  Reece  Associates  by  the
                management of both Empire Resorts and Catskill Development;

            o   considered  the financial  terms of certain  recently  completed
                transactions   that  it  deemed   relevant  in  evaluating   the
                consolidation,  which  transactions are further  discussed below
                under   the   subheading   "Analysis   of   Selected   Precedent
                Transactions";

            o   analyzed  financial,  stock market and other publicly  available
                information  relating to the businesses of other companies whose
                operations it considered  relevant in evaluating those of Empire
                Resorts and Catskill Development;

            o   reviewed the 10-year  financial  projections  provided by Empire
                Resorts; and


            o   conducted other analyses and  examinations  and considered other
                financial, economic and market criteria it deemed appropriate in
                arriving at its opinion.

            In rendering its opinion,  Kane Reece Associates assumed and relied,
without  independent  verification,  on the  accuracy  and  completeness  of all
financial and other  information  and data that it reviewed or considered.  With
respect to the financial  forecasts and projections  that were made available to
Kane Reece Associates and used in its analyses,  Kane Reece  Associates  assumed
that  they were  reasonably  prepared  on bases  reflecting  the best  currently
available  estimates and judgments of Empire  Resorts and Catskill  Development.
Kane  Reece  Associates'  opinion  was  based  on  economic,  market  and  other
conditions  existing  on,  and the  information  made  available  to Kane  Reece
Associates as of, the date of its opinion.



            The  financial  projections  referred to above that were provided to
Kane Reese Associates were the product of the following:

            o   Projected  gaming revenues  provided by consultants  retained by
                Catskill  Development to assess the overall gaming market in the
                Catskills and the site specific  market for the planned  casino.
                The Innovation  Group (f/k/a Urban  Systems),  a highly regarded
                consulting  firm in the gaming  industry,  conducted an in depth
                study of the market including demographic analyses by zip codes,
                road arteries  leading to the site and distances to  competitive
                facilities.  The  Innovation  Group  maintains an extensive data
                base on gaming  operations  around the country and  continuously
                updates it as relevant  data becomes  available.  From this data
                base trends and specific  results are readily  discernable  that
                are  relevant to the study at hand.  Among other  factors,  from
                this data base they determine the number of adults in the study

                                       47





                area and then refine this raw statistic by stratifying it by age
                groups  and then  applying  "propensity  to  gamble  rates"  and
                "frequency  of  visits  rates"  culminating  in the  anticipated
                number  of  gaming   visits  they  expect  the   facility   will
                experience.  The  visitation  numbers are then  assigned a value
                based  on the  further  analyses  of  household  and  individual
                incomes in the target area.  Projected results are then compared
                to actual results experienced in other like jurisdictions.

            o   Revenue  sharing  expenses with the State of New York  estimated
                from the recent  compact rates between the State of New York and
                the Seneca Nation in the Seneca  Nation's  Niagara Falls casino.
                Local  impact fees were based on the  negotiated  memorandum  of
                understanding with the Village of Monticello.

            o   Payroll  expenses  compiled by establishing  staffing guides for
                the various  departments  and  sub-departments.  Individual  job
                classifications  from  janitor to chief  executive  officer were
                quantified in this exercise and assigned a rate of compensation.

            o   Projected   costs  of  food  and  beverages  based  on  industry
                averages.

            o   Other  major   operating   expenses   identified  and  projected
                accordingly.


            In  connection  with its  opinion,  Kane  Reece  Associates  was not
requested to, and did not,  participate in the negotiation or structuring of the
consolidation,  and Kane Reece  Associates  was not  authorized to, and did not,
solicit  interest from any party with respect to the  acquisition of all or part
of Empire  Resorts.  Kane  Reece  Associates  expressed  no view as to,  and its
opinion does not address,  the relative merits of the  consolidation as compared
to any  alternative  business  strategies that might exist for Empire Resorts or
the effect of any other transaction in which Empire Resorts might engage.


            In preparing its opinion,  Kane Reece  Associates  used  traditional
valuation  methodologies  in valuing  the  various  operations  of the  combined
enterprise.  These methodologies included the income approach or discounted cash
flow approach and the market approach (the analysis of precedent  transactions).
Both of these methods are generally accepted valuation  techniques and ones that
Kane  Reece  Associates  has  a  significant  amount  of  experience  utilizing.
Furthermore, Kane Reece Associates believes that these are the two most accurate
techniques or methodologies for valuing businesses.

            The summary of Kane Reece Associates'  analyses which follows is not
a  complete  description  of the  analyses  underlying  Kane  Reece  Associates'
opinion.  The preparation of a fairness opinion is a complex  analytical process
involving various determinations as to the most appropriate and relevant methods
of financial  analysis and the  application  of those methods to the  particular
circumstances and,  therefore,  a fairness opinion is not readily susceptible to
summary  description.  Accordingly,  Kane  Reece  Associates  believes  that its
analyses  must be  considered  as a whole  and that  selecting  portions  of its
analyses and factors, without considering all analyses and factors, could create
a misleading or incomplete  view of the  processes  underlying  its analyses and
opinion.


                                       48





            In  its  analyses,   Kane  Reece  Associates   considered   industry
performance,  general business,  economic,  market and financial  conditions and
other matters  existing as of the date of its opinion,  many of which are beyond
the control of Empire Resorts and Catskill Development. No company,  transaction
or  business  used in those  analyses as a  comparison  is  identical  to Empire
Resorts,  Catskill  Development  or  the  proposed  consolidation,   nor  is  an
evaluation of those analyses entirely mathematical; rather, the analyses involve
complex   considerations  and  judgments   concerning  financial  and  operating
characteristics  and other  factors  that could affect the  acquisition,  public
trading or other  values of the  companies,  business  segments or  transactions
being analyzed.

            The estimates  contained in Kane Reece Associates'  analyses and the
valuation  ranges  resulting  from any particular  analysis are not  necessarily
indicative of actual values or predictive of future results or values, which may
be significantly more or less favorable than those suggested by the analyses. In
addition,  analyses  relating to the value of  businesses  or  securities do not
purport  to be  appraisals  or to  reflect  the  prices at which  businesses  or
securities actually may be sold.  Accordingly,  Kane Reece Associates'  analyses
and estimates are inherently subject to substantial uncertainty.

            Kane Reece  Associates'  opinion and analyses  were only one of many
factors considered by Empire Resorts' special committee in its evaluation of the
consolidation  and should not be viewed as  determinative of the views of Empire
Resorts' special committee with respect to the proposed consolidation.

            The  full  text of Kane  Reece  Associates'  written  opinion  dated
September 8, 2003, which describes the assumptions made,  matters considered and
limitations of the review undertaken, is available for inspection and copying at
Empire Resorts' principal executive offices during regular business hours by any
interested  stockholder of Empire Resorts or any  representative who has been so
designated in writing. PLEASE NOTE, HOWEVER, THAT KANE REECE ASSOCIATES' OPINION
IS DIRECTED TO THE SPECIAL COMMITTEE AND DOES NOT CONSTITUTE A RECOMMENDATION TO
ANY STOCKHOLDER AS TO ANY MATTERS RELATING TO THE CONSOLIDATION.  The summary of
Kane Reece  Associates'  opinion described below is qualified in its entirety by
reference to the full text of its opinion.

            The  following  is a  summary  of the  material  financial  analyses
performed by Kane Reece Associates in connection with its opinion to the special
committee:

            DISCOUNTED CASH FLOW ANALYSIS.

            Kane Reece  Associates  considered the results of a discounted  cash
flow analysis of the following discrete businesses:

            o   video lottery terminals at Monticello Raceway,

            o   Monticello Raceway's racetrack operations; and

            o   Management  of a Native  American  casino  owned  by the  Cayuga
                Nation of New York.

                                       49





            Kane Reece Associates  calculated the net present value of the video
lottery  terminals'  projected  ten-year stream of unlevered free cash flows and
projected a continuing  value  multiple of year ten (2014)  debt-free  cash flow
based on the  financial  projections  provided to Kane Reece  Associates  by the
management of both Empire Resorts and Catskill Development. A ten year model was
used by Kane Reece Associates,  as management had provided Kane Reece Associates
with 10-year  forecasts,  and Kane Reece  Associates  was informed by management
that this 10-year model had also been  submitted to the video  lottery  terminal
regulatory  authorities.  Two scenarios were contemplated;  the first being that
the casino venture is  successful,  i.e., the Cayuga Nation of New York's casino
opens for business,  thus  entitling the Cayuga Nation of New York to purchase a
1/3 interest in the video lottery terminal  operations of Monticello  Raceway at
cost  (estimated  at $5 million).  The second  scenario  assumed that the casino
never opens,  and Empire  Resorts is entitled to 100% of the cash flows from the
video lottery terminal operations at Monticello  Raceway.  Kane Reece Associates
applied a discount rate of 20% and a continuing value multiple of 7.3 times year
eleven after-tax cash flow. This analysis  resulted in a fair market  enterprise
value of the video lottery  terminal  operations of $37.9 million under scenario
one and $48.3 million under  scenario two.  Assuming a debt level of $15 million
under both scenarios,  the equity value of the video lottery terminal operations
are $22.8 million and $33.3 million under scenarios one and two, respectively.

            With  respect  to its  discounted  cash flow  analysis  of the video
lottery terminal operations,  Kane Reece Associates examined four scenarios. The
first,  or base case, was  management's  10-year plan. The other three scenarios
were:  revenues  being 10% higher than base case  revenues;  revenues  being 10%
lower than base case revenues; and revenues remaining static upon the opening of
the Cayuga Nation Casino.  With respect to its discounted  cash flow analysis of
the Monticello Raceway's operations,  Kane Reece Associates did not consider any
hypothetical scenarios, given Monticello Raceway's long history of operations.

            The  financial  projections  used in this  analysis  were  based  on
management's  survey of the  impact  on  revenue  that  video  lottery  terminal
programs have had at similarly situated  racetracks in other states.  Kane Reece
Associates elected to utilize these management provided financial projections as
its  "base  case"  after  verifying  their  reasonableness  through  independent
analysis and extensive discussions with management.

            CAPITALIZATION OF INCOME

            Monticello  Raceway's existing  operations were valued by Kane Reece
Associates under a  capitalization  of income model.  Cash flow,  defined as net
income less capital expenditures plus depreciation, was calculated from the 2001
and 2002  financial  statements.  A discount rate of 12% was applied as was a 3%
long term growth rate,  yielding a  capitalization  multiple of 11.4x.  The fair
market value of Monticello  Raceway's  operations  under the  capitalization  of
income approach was calculated by Kane Reece Associates to be $11.4 million.

            NET PRESENT VALUE


            Kane Reece  Associates  calculated  the net present  value of Empire
Resorts' prospective casino management  operations,  post-closing,  based on the
financial  projections  provided by the  management  of both Empire  Resorts and
Catskill  Development and the term of the seven year Gaming Facility Management

                                       50





Agreement.  See  "Business -  Monticello  Casino  Management  - Gaming  Facility
Management  Agreement"  beginning  on  page  96.  In its  analysis,  Kane  Reece
Associates  adjusted the  management  fee  projected  under the Gaming  Facility
Management Agreement for a 2% expense factor, tax effected the cash flow stream,
and  applied a 20%  discount  rate.  Kane Reece  Associates  also  assumed a 40%
probability  of the casino  successfully  opening  with a  commencement  date of
January 1, 2006. This 40% probability figure relating to the eventual opening of
the Cayuga Nation Casino was developed through  interviews of management by Kane
Reece  Associates.  These  interviews and  conversations  related to a series of
sequential  events,  each of which had their own set of probabilities.  This led
Kane Reece Associates to apply a probability lower than management's  estimates,
understanding that a higher probability  estimate would yield a greater expected
value to stockholders. Such 40% probability figure, however, should in no way be
interpreted as Kane Reece  Associates'  opinion of the actual  likelihood that a
Native  American  casino  will  ever  open on the land  adjacent  to  Monticello
Raceway.

            In reaching this  conclusion,  Kane Reece  Associates ran a total of
three  scenarios,  each with a set of four  probabilities of the casino opening,
centered on the 40% figure  discussed  above.  The first  scenario  was based on
management's  projections,  which became Kane Reece  Associates'  base case. The
second model assumed the base case revenue,  reduced by 10%. The third  scenario
assumed  the base  case,  with the  opening  delayed  by one year.  Under  these
scenarios,  the values of the Gaming Facility Management Agreement ranged from a
high of $146.3  million  to a low of $103.9  million,  with the base case  being
$140.0 million.  Kane Reece Associates  then,  based on its analyses,  concluded
that  the fair  market  value  of the  seven  year  Gaming  Facility  Management
Agreement was $140.0 million. In reaching this conclusion, the fair market value
of the Gaming  Facility  Management  Agreement was weighted  heavily towards the
base case, as management's  projections (which are the base case) were very much
in line with the revenue  being  generated  by table games and slot  machines at
comparable casinos in Connecticut, New Jersey and New York.


            Based on these assumptions, Kane Reece Associates concluded that the
current fair market value of the Gaming Facility Management Agreement,  based on
the financial projections provided by the managements of both Empire Resorts and
Catskill Development, was $146.3 million.

            ANALYSIS OF SELECTED PRECEDENT TRANSACTIONS

            Kane  Reece  Associates  also  analyzed  the  consideration  paid in
several merger and acquisition  transactions  which Kane Reece Associates deemed
to be reasonably similar to the operations of Monticello  Raceway.  In selecting
these transactions,  Kane Reece Associates searched for comparable  transactions
on  BVMarketData.com  and in the 2002  and 2003  print  versions  of  Mergerstat
Review.   In   researching   transactions   from  the  databases   available  at
BVMarketData.com, Kane Reece Associates utilized the following criteria:


                                       51





            o   the   acquired   company   was  in   North   American   Industry
                Classification  System  (NAICS)  code  711212  (Racetracks)  and
                derived  the  majority of its  revenue  specifically  from horse
                racetrack operations,

            o   the  acquired  company's  operations  were located in the United
                States, and

            o   the transaction  occurred  between January 1, 2001 and September
                8, 2003 (the date of the fairness opinion); and

in  researching  transactions  from  Mergerstat  Review,  Kane Reece  Associates
utilized the following criteria:

            o   the  acquired  company  was in  the  Leisure  and  Entertainment
                industry   group  and  derived  the   majority  of  its  revenue
                specifically from horse racetrack operations,

            o   the  acquired  company's  operations  were located in the United
                States, and

            o   the transaction  occurred  between January 1, 2001 and September
                8, 2003.

            Only three transactions met the above criteria; information on these
transactions is presented in the following tables.


Date             Buyer                             Seller                   Seller Business Description
----             -----                             ------                   ---------------------------
12/24/2002       MTR Gaming Group Inc.             Scioto Downs Inc.        Operates horse racetracks
06/11/2001       Gameco Inc.                       Colonial Holdings Inc.   Operates horse racetracks
04/05/2001       Magna Entertainment Corp.         Ladbroke Racing          Involved in racetrack and related
                                                   Corporation              operations involving harness racing
                                                                            events

                                                                            Total Invested
                                                                            Capital
                                                                            Price                              Net
                                                                            (TIC)      Sales   EBITDA   EBIT   Income
Date             Buyer                             Seller                   ($mil)     ($mil)  ($mil)   ($mil) ($mil)
----             -----                             ------                   ------     ------  ------   ------ ------
12/24/2002       MTR Gaming Group Inc.             Scioto Downs Inc.        $22.7      $14.1    NEG     NEG     NEG
06/11/2001       Gameco Inc.                       Colonial Holdings Inc.   $35.0      $29.7    $1.7    $(0.0)  $(2.8)
04/05/2001       Magna Entertainment Corp.         Ladbroke Racing          $53.0      $70.6    $10.4   $8.2    $4.9
                                                   Corporation
                                                                                                                TIC/Net
Date             Buyer                             Seller                   TIC/Sales  TIC/EBITDA  TIC/EBIT     Income
----             -----                             ------                   ---------  ----------  --------     -------
12/24/2002       MTR Gaming Group Inc.             Scioto Downs Inc.        1.6         n/a          n/a          n/a
06/11/2001       Gameco Inc.                       Colonial Holdings Inc.   1.2         20.9         n/a          n/a
04/05/2001       Magna Entertainment Corp.         Ladbroke Racing          0.8         5.1          6.5         10.9
                                                   Corporation
                                                           Average          1.2         13.0         6.5         10.9

                                       52




Note: NEG indicates the number was negative; a specific number was not reported.

Sources:  BVMarketData.com,  Mergerstat Review 2003 and 2002, public company SEC
filings.


            Kane  Reece  Associates  noted  that,  while  all three of the above
acquired  companies had more revenue than Monticello  Raceway,  none had revenue
greater than $70.6 million.  Therefore,  Kane Reece  Associates did not consider
these  size  discrepancies  sufficient  to  eliminate  these  transactions  from
consideration.

            In its review of the comparable transactions,  Kane Reece Associates
considered  multiples that compare the transactions' entity value to the subject
company's  revenue and EBITDA.  The comparable  transactions  yielded an average
total  invested  capital to sales multiple of 1.2x and an average total invested
capital to EBITDA  multiple of 13.0x.  These  multiples were applied to the 2001
and 2002 average  Monticello Raceway revenue and EBITDA to yield values of $14.5
million and $22.2 million, respectively. Kane Reece Associates then weighted the
revenue  multiple  higher,  yielding a fair  market  value of $17.0  million for
Monticello Raceway under the comparable transaction method.

            For each  transaction,  wherever  possible,  Kane  Reece  Associates
calculated  multiples of Total Invested  Capital  ("TIC") to Sales (or revenue),
earnings before  interest,  taxes,  depreciation  and  amortization  ("EBITDA"),
earnings  before  interest  and  taxes  ("EBIT"),  and Net  Income.  Only in one
transaction  were all  four  multiples  able to be  calculated.  Since  only one
transaction  had positive  EBIT and Net Income,  Kane Reece  Associates  did not
utilize these multiples in its value indication for Monticello Raceway under the
market transactions  method. Kane Reece Associates did utilize the TIC/Sales and
TIC/EBITDA.

            Kane Reece  weighted  the revenue  multiple  higher for two reasons.
First,  only two  transactions  involved  companies  with positive  EBITDA,  and
correspondingly enabled calculation of EBITDA multiples, while revenue multiples
could be generated for all three  transactions.  Second,  the revenue  multiples
were in a  relatively  tight  range  (specifically,  0.8x to 1.6x),  whereas the
EBITDA multiples were quite disparate (specifically, 5.1x to 20.9x).

            DISCOUNT RATES, GROWTH RATES AND MULTIPLES USED

            In the above  analyses,  discount  rates were  determined  through a
weighted  average  cost of capital  analysis,  at  September  8,  2003.  See the
schedules on the following pages:


                                       53





                            Empire Resorts Racetrack
            Weighted Average Cost of Capital as of September 8, 2003

COST OF EQUITY

       Risk Free Rate (20-year Treasury Notes on September 8, 2003)        5.33%
           (Source: Federal Reserve Statistical Release)

       Equity Risk Premium Intermediate Term (S&P 500)           7.4%
           (Source: Ibbotson Associates, 2003 Yearbook)

       Market Beta
                                                                    0.59
                                                                    ----
           (Source: Ibbotson Associates Cost of Capital
           Quarterly Supplement, June 2003)

       Adjusted Equity Risk Premium                                        4.37%

       Small Stock Premium (Low-Capitalization)                            3.53%
           (Source: Ibbotson Associates, 2003 Yearbook)

       Unsystematic Company Risk                                           1.00%
                                                                          -----
       Cost of Equity                                                     14.23%
                                                                          ======
COST OF DEBT

       Prime Rate plus 300 basis points                                    7.00%
           (At September 8, 2003-- Source:  Federal Reserve Statistical Release)

       Less Tax Effect at 40.00%                                           2.80%
                                                                           -----

       After-Tax Cost of Debt                                              4.20%
                                                                           =====

WEIGHTING
                                                         %         % of Capital       Weighted Average
                                                       Return        Structure        Cost of Capital
                                                       ------        ---------        ---------------

       Equity                                          14.23%        78.4%               11.15%

       Debt                                             4.20%        21.6%                0.91%
                                                                                         -----

       WEIGHTED AVERAGE COST OF CAPITAL                                                  12.06%
                                                                                         ======

       WEIGHTED AVERAGE COST OF CAPITAL (ROUNDED)                                        12.00%
                                                                                         ======

                                       54






                              Empire Resorts Casino
            Weighted Average Cost of Capital as of September 8, 2003

COST OF EQUITY

       Risk Free Rate (20-year Treasury Notes on September 8, 2003)        5.33%
           (Source: Federal Reserve Statistical Release)

       Equity Risk Premium Intermediate Term (S&P 500)            7.4%
           (Source: Ibbotson Associates, 2003 Yearbook)

       Market Beta
                                                                     0.79
                                                                     ----
           (Source: Ibbotson Associates Cost of Capital
           Quarterly Supplement, June 2003)

       Adjusted Equity Risk Premium                                        5.85%

       Small Stock Premium (Low-Capitalization)                            3.53%
           (Source: Ibbotson Associates, 2003 Yearbook)

       Unsystematic Company Risk                                          20.00%
                                                                          ------

       Cost of Equity                                                     34.71%
                                                                          ======

COST OF DEBT

       Prime Rate plus 300 basis points                                   10.00%
           (At September 8, 2003-- Source:  Federal Reserve
           Statistical Release)

       Less Tax Effect at 40.00%                                           4.00%
                                                                           -----

       After-Tax Cost of Debt                                              6.00%
                                                                           =====

WEIGHTING
                                                         %         % of Capital       Weighted Average
                                                       Return        Structure        Cost of Capital
                                                       ------        ---------        ---------------

       Equity                                           34.71%         44.9%               15.58%

       Debt                                              6.00%         55.1%                3.31%
                                                                                            -----

       WEIGHTED AVERAGE COST OF CAPITAL                                                    18.89%
                                                                                           ======

       WEIGHTED AVERAGE COST OF CAPITAL (ROUNDED)                                          20.00%
                                                                                           ======

Discount rates utilized ranged from 12% for the operations of Monticello Raceway
to 20% for both the video lottery terminal and casino  operations.  Growth rates
were based on an analysis of historical operations and industry expectations for
the operations of Monticello  Raceway and an analysis of  management's  prepared
projections and industry expectations for the video lottery terminal operations.



                                       55




Growth rates were not calculated for the casino operations beyond the projection
period,  as Kane Reece  Associates was only valuing a seven year Gaming Facility
Management  Agreement.  Multiples  used in valuing the  operations of Monticello
Raceway  and the  video  lottery  terminal  operations  were  derived  from  the
"Dividend Discount Model" which calculates the continuing value multiples as the
inverse of the difference between discount rates and long-term growth rates.

            CONCLUSION

            Based  on  the  results  of  its  valuation  analyses,   Kane  Reece
Associates   concluded  that  the   consolidation   provided   Empire   Resorts'
stockholders  with the  potential  to realize  increased  value in their  Empire
Resorts'  equity  holdings  that  would  otherwise  not be  possible  absent the
consolidation, thereby supporting the fairness of the consolidation.


            Kane Reece  Associates is a very active  financial  consulting  firm
engaged in the valuation of businesses and their  securities in connection  with
merger  and  acquisition   transactions,   and  has  substantial  experience  in
transactions  similar  to the  proposed  consolidation.  The  special  committee
selected Kane Reece Associates to deliver a fairness opinion based on Kane Reece
Associates' reputation and expertise.


            Under the terms of Kane Reece Associates' engagement, Empire Resorts
agreed to pay Kane Reece  Associates an aggregate fee of $75,000 for its opinion
and an additional $8,000 to respond to the Securities and Exchange  Commission's
comments  to the initial  filing of this  information  statement/prospectus.  In
addition,  Empire  Resorts  agreed to reimburse  Kane Reece  Associates  for its
reasonable travel and other out-of-pocket  expenses, and to indemnify Kane Reece
Associates  against  liabilities,   including   liabilities  under  the  federal
securities  laws,  relating  to,  or  arising  out of,  Kane  Reece  Associates'
engagement.

INTERESTS OF CERTAIN PERSONS IN THE CONSOLIDATION


            You  should  be  aware  of  the  interests  that  certain  executive
officers,   directors   and   stockholders   of  Empire   Resorts  have  in  the
consolidation,  as these interests, in certain respects, are different from your
interests  as  stockholders.  Specifically,  at  the  time  the  consolidation's
principal  terms  were  negotiated  and  approved  by Empire  Resorts'  board of
directors,  each of Empire Resorts,  Catskill  Development,  Monticello  Raceway
Development and Americas Tower Partners were under some level of common control.
As discussed above, Catskill Development has three classes of economic ownership
interests,  with each class corresponding to one of Catskill Development's three
businesses.  Class A economic ownership interests represent the right to receive
distributions  and allocations from Catskill  Development's  casino and wagering
operations;  Class B economic ownership interests represent the right to receive
distributions and allocations from Catskill Development's  horseracing and other
pari-mutuel  activities;  and Class C economic ownership interests represent the
right to receive distributions and allocations from Catskill  Development's real
estate  ownership and development  operations.  At the time the  consolidation's
principal  terms  were  negotiated  and  approved  by Empire  Resorts'  board of
directors, Empire Resorts held approximately 48%, 37% and 25%, respectively,  of

                                       56





Catskill  Development's  Class  A,  Class  B  and  Class  C  economic  ownership
interests.  Watertone Holdings,  which is controlled by Robert A. Berman, Empire
Resorts'  chief  executive  officer,  a member of its board of directors and its
former chairman (at the time the consolidation's principal terms were negotiated
and approved by Empire  Resorts'  board of directors),  and Scott A.  Kaniewski,
Empire  Resorts'  chief  financial  officer and a former  member of its board of
directors (at the time the  consolidation's  principal terms were negotiated and
approved by Empire Resorts' board of directors), held approximately 15%, 13% and
25%,  respectively,  of  Catskill  Development's  Class A,  Class B and  Class C
economic   ownership   interests,   which   interests  shall  each  increase  to
approximately   33%   immediately   before  closing  as  a  result  of  Catskill
Development's  redemption of Empire  Resorts'  economic  ownership  interests in
Catskill  Development.   Furthermore,   Morad  Tahbaz,   Catskill  Development's
president and Empire Resorts'  president,  was a member of Empire Resorts' board
of directors and held a 20% partnership  interest in Americas Tower Partners,  a
general partnership that held approximately 33%, 25% and 25%,  respectively,  of
Catskill Development's Class A, Class B and Class C economic ownership interests
at the time the consolidation's  principal terms were negotiated and approved by
Empire  Resorts'  board of  directors  which  interests  shall each  increase to
approximately   33%   immediately   before  closing  as  a  result  of  Catskill
Development's  redemption of Empire  Resorts'  economic  ownership  interests in
Catskill Development.  Furthermore, Monticello Raceway Development was owned 50%
by  Americas  Tower  Partners,  41% by  Robert  A.  Berman,  7.65%  by  Scott A.
Kaniewski, .05% by two affiliates of Mr. Kaniewski and 1.3% by Philip B. Berman,
Empire  Resorts'  vice  president  of  project  coordination,  at the  time  the
consolidation's  basic terms were  negotiated  and  approved by Empire  Resorts'
board of directors.  Finally,  Thomas W. Aro,  Empire  Resorts'  executive  vice
president,  secretary and a former member of its board of directors (at the time
the  consolidation's  principal  terms were  negotiated  and  approved by Empire
Resorts' board of directors),  was a member of Monticello  Raceway  Management's
board of  directors  and both Robert A. Berman and Thomas W. Aro were members of
Monticello Casino  Management's and Mohawk Management's board of managers at the
time the consolidation's  principal terms were negotiated and approved by Empire
Resorts' board of directors.

            Moreover,  it is expected that each of these interested  individuals
will  beneficially  own the following number of shares of Empire Resorts' common
stock after the consolidation:


                       Common Stock Beneficially Owned (1)
                       -----------------------------------
                           Shares              Percentage
                           ------              ----------
Robert A. Berman         4,577,477(2)             19.92%

Scott A. Kaniewski         682,456(3)              2.97%

Thomas W. Aro               43,500(4)               *

Paul A. deBary             186,328                  *

Morad Tahbaz             1,319,859(5)              5.81%

Philip B. Berman           247,437                 1.09%


                                       57





-----------
* less than 1%

(1)         A person is deemed to be the beneficial  owner of voting  securities
            that can be acquired by such person  within 60 days after the record
            date upon the exercise of options and warrants and the conversion of
            convertible  securities.   Each  beneficial  owner's  percentage  of
            ownership is determined  by assuming  that all options,  warrants or
            convertible  securities  held by such  person (but not those held by
            any other  person) that are  currently  exercisable  or  convertible
            (i.e., that are exercisable or convertible  within 60 days after the
            record date) have been exercised or converted.

(2)         Includes  3,228,217  shares of common stock owned directly by Robert
            A.  Berman,  options  that are  currently  exercisable  into 279,189
            shares of common  stock and  1,070,071  shares of common  stock held
            directly by the Berman  Family  Trust.  Debbie N. Berman,  Robert A.
            Berman's wife, and Philip B. Berman, Robert A. Berman's brother, are
            co-trustees  of the Berman  Family  Trust and have joint  voting and
            dispositive  power with respect to its  holdings.  The Berman Family
            Trust is 88% owned by Robert A.  Berman,  3% by Debbie N. Berman and
            9% by Robert  A.  Berman's  children.  Robert  A.  Berman  disclaims
            beneficial  ownership  of all  shares  of common  stock  held by the
            Berman Family Trust.

(3)         Includes  134,096  shares of common stock owned directly by Scott A.
            Kaniewski,  252,671  shares of common  stock owned by the  Kaniewski
            Family Limited Partnership, with respect to which Mr. Kaniewski is a
            1% limited  partner  and the  general  partner  with sole voting and
            disposition  power and options that are currently  exercisable  into
            295,689  shares  of  common  stock.  Scott  A.  Kaniewski  disclaims
            beneficial  ownership of the 252,671 shares of common stock owned by
            the Kaniewski Family Limited  Partnership for any purpose other than
            voting and  dispositive  powers.  Does not include 306,171 shares of
            common  stock owned by the KFP Trust whose sole trustee is Stacey B.
            Kaniewski,   the  wife  of  Scott  A.  Kaniewski,   and  whose  sole
            beneficiaries are Scott A. Kaniewski's children. Stacey B. Kaniewski
            has sole voting and  dispositive  power over these  shares of common
            stock.  Scott A.  Kaniewski  disclaims  beneficial  ownership of the
            shares owned by the KFP Trust.

(4)         Represents options that are currently exercisable into 43,500 shares
            of common stock.

(5)         Represents  1,319,859 shares of common stock owned directly by Morad
            Tahbaz and options that are currently exercisable into 17,500 shares
            of common stock.


            Given  these  facts,  a number of Empire  Resorts'  principals  that
negotiated  the  consolidation's  terms were  subject to  various  conflicts  of
interest,  possibly causing them to advocate different  positions from what they
would have otherwise advocated had they been truly independent.  Moreover, since
a number of these  individuals also had a personal interest in the consideration
being paid to the members of both Catskill  Development  and Monticello  Raceway
Development, they may have refrained from negotiating the best deal possible for
Empire  Resorts.   The  special   committee's  review  of  the  results  of  the
negotiations does not eliminate the possibility that Empire Resorts is receiving
a less favorable deal than if the acquired  companies had been contributed by an
independent third party following arm's length negotiations.

                                       58





MATERIAL FEDERAL INCOME TAX CONSEQUENCES

            The  following  discussion,  which is based on the opinion of Olshan
Grundman Frome Rosenzweig & Wolosky LLP,  counsel to Empire Resorts,  summarizes
the material U.S. federal income tax consequences of the consolidation to Empire
Resorts,  Catskill  Development's  members and Monticello Raceway  Development's
members.  Except as is  specifically  set forth below,  this discussion does not
address  all  aspects of  taxation  that may be  relevant to the members of both
Catskill  Development  and  Monticello  Raceway  Development  in  light of their
personal  investment  or tax  circumstances  or to persons  that are  subject to
special  treatment  under  the  federal  income  tax  laws.  Furthermore,   this
discussion does not address any state, local or foreign tax considerations.  The
members of both Catskill  Development  and Monticello  Raceway  Development  are
urged to consult their own tax advisors as to the specific tax  consequences  of
the consolidation,  including the applicable  federal,  state, local and foreign
tax consequences of the consolidation.

            This  discussion is based on the Internal  Revenue Code,  applicable
Department  of Treasury  regulations,  judicial  authority,  and  administrative
rulings   and   practice,   all   as   of   the   date   of   this   information
statement/prospectus,  as well as representations as to factual matters made by,
among others,  Empire Resorts.  Future legislative,  judicial, or administrative
changes or interpretations, or the failure of any such factual representation to
be true, correct and complete in all material respects, may adversely affect the
accuracy of the statements and conclusions described in this document.  Any such
changes or interpretations  could be applied  retroactively and could affect the
tax consequences of the consolidation.  Empire Resorts is currently not aware of
any facts or circumstances  that would cause any  representations  made by it to
Olshan Grundman Frome  Rosenzweig & Wolosky LLP to be untrue or incorrect in any
material respect.

            The material  federal income tax  consequences of the  consolidation
are as follows:

            o   the  consolidation  will  constitute a tax-free  exchange  under
                Section 351(a) of the Internal Revenue Code;

            o   no gain or loss will be recognized by Empire Resorts as a result
                of the consolidation; and

            o   no gain or loss  will be  recognized  by the  members  of either
                Catskill  Development  or Monticello  Raceway  Development  as a
                result of the consolidation.

            The obligation to complete the  consolidation  is conditioned  upon,
among other things,  receipt of an opinion from Olshan Grundman Frome Rosenzweig
& Wolosky LLP that the  consolidation  will constitute a tax-free exchange under
Section  351(a) of the  Internal  Revenue  Code.  The opinion of counsel will be
based  in  part  upon  representations,  made  as of the  effective  time of the
consolidation,  by Empire Resorts, which counsel will assume to be true, correct
and complete.  If the  representations  are  inaccurate,  the opinion of counsel
could be  adversely  affected.  Empire  Resorts  has not  requested  nor will it
request a private letter ruling from the Internal  Revenue Service as to whether
the  consolidation  qualifies as a tax-free  transaction under Section 351(a) of
the Internal  Revenue Code.  The opinion of counsel will not be binding upon the
Internal Revenue Service or any court.

                                       59





ACCOUNTING TREATMENT

            The  consolidation  will be accounted for as a "reverse  merger" for
accounting  and financial  reporting  purposes.  Although  Empire Resorts is the
legal acquirer and will survive as the legal post consolidation entity, Catskill
Development   is  considered   the  acquirer  for   accounting   purposes.   The
consolidation  is also considered a "related party  transaction"  for accounting
and  financial  reporting  purposes.  Accordingly,  the  transfer  of certain of
Catskill   Development's  current  assets  and  liabilities  and  its  ownership
interests in Monticello  Raceway  Management,  Monticello  Casino Management and
Mohawk  Management,  first to its  members and then to Empire  Resorts,  will be
recorded at Catskill  Development's  historical  costs  basis  determined  under
generally accepted accounting principles.

REGULATORY APPROVALS

            Section  303  of the  New  York  Racing,  Pari-Mutuel  Wagering  and
Breeding Law provides that upon the transfer of the stock of any entity licensed
to  conduct  harness  horse  race  meetings  at  which  pari-mutuel  betting  is
conducted,  the issuer  must  submit to the New York State  Racing and  Wagering
Board an affidavit from the  transferee  stating that the transferee is the sole
beneficial owner of the transferred stock, and whether or not the transferee:

            o   has been convicted of a crime involving moral turpitude;

            o   has  been  engaged  in  bookmaking  or other  forms  of  illegal
                gambling;

            o   has been  found  guilty  of any  fraud or  misrepresentation  in
                connection with racing or breeding;

            o   has been found guilty of any violation or attempt to violate any
                law,  rule or regulation  of any racing  jurisdiction  for which
                suspension from racing might be imposed in such jurisdiction; or

            o   has violated any rule, regulation or order of the New York State
                Racing and Wagering Board.

            While  the  transferee  does not need to  subsequently  wait for any
formal  ruling  by the New  York  State  Racing  and  Wagering  Board  as to its
suitability to complete a transfer, the New York State Racing and Wagering Board
is empowered, if the board so determines that it is inconsistent with the public
interest,  convenience  or  necessity,  or with the  best  interests  of  racing
generally,  that any  transferee  continue to be a stockholder  of record or the
beneficial  owner of any association or corporation  licensed to conduct harness
horse  racing  in New  York,  or  which  owns  25% or more of the  stock of such
licensee,  to order or direct such transferee or beneficial owner,  irrespective
of the time when such  transferee or  beneficial  owner  acquired its stock,  to
dispose  of such  stock.  As  Monticello  Raceway  Management  is a  corporation
licensed  to conduct  harness  horse race  meetings  in the State of New York at
which  pari-mutuel  betting is conducted,  Empire Resorts will have to submit an
affidavit as described  above and will be subject to a ruling that its ownership
of Monticello  Raceway  Management is  inconsistent  with the public interest or
racing in  general.  While  Empire  Resorts  is not  required  to, it intends to
attempt  to obtain an  informal,  non-binding,  opinion  from the New York State

                                       60





Racing and Wagering Board prior to consummating the  consolidation  that the New
York State Racing and Wagering Board will not object to Empire Resorts  becoming
the sole stockholder of Monticello Raceway Management.

CERTAIN NON-VOTING MEMBERS RELINQUISH THEIR INTERESTS IN CATSKILL DEVELOPMENT

            In connection with the closing of the consolidation, and in exchange
for shares of Empire  Resorts'  common  stock  received in  connection  with the
consolidation,  Clifford A. Ehrlich,  Shamrock  Strategies,  Inc. and Fox-Hollow
Lane,  L.L.C.,  the three  non-voting  members  of  Catskill  Development,  will
relinquish their membership interests in Catskill Development.


                           THE RESTATED CONTRIBUTION AGREEMENT

            The following summary  highlights  selected  information and may not
contain  all of the  information  contained  within  the  restated  contribution
agreement.  The  following  description  does not purport to be complete  and is
qualified in its entirety by reference to the contribution agreement,  which has
been incorporated into this document by reference.


GENERAL TERMS OF THE CONTRIBUTION AGREEMENT


            On November __, 2003, Empire Resorts,  Catskill  Development and the
members of both Catskill Development and Monticello Raceway Development, entered
into an amended and restated securities contribution agreement pursuant to which
the members of both Catskill  Development  and  Monticello  Raceway  Development
agreed to contribute  all of their  respective  interests in Monticello  Raceway
Management,  Monticello Casino Management,  Monticello  Raceway  Development and
Mohawk  Management,  together with all of their right, title and interest in and
to  the  business  of  Monticello  Raceway,  including  all of  the  assets  and
liabilities  of Catskill  Development,  except for its  interest in 229 acres of
land in  Monticello,  New York and its right to certain  litigation  claims,  to
Empire  Resorts in exchange  for, in the  aggregate,  80.25% of Empire  Resorts'
common  stock,   calculated  on  a   post-consolidation,   fully-diluted  basis.
Immediately  after   consummating   this   consolidation,   Monticello   Raceway
Management,  Monticello Casino Management,  Monticello  Raceway  Development and
Mohawk  Management  will become wholly owned  subsidiaries of Empire Resorts and
the members of both Catskill  Development  and Monticello  Raceway  Development,
together, will become Empire Resorts' controlling stockholders.


THE TRANSACTION

            At the closing time,  the members of both Catskill  Development  and
Monticello  Raceway  Development  shall deliver their  respective  interests (by
delivery of stock certificates,  limited liability company interest  assignments
or other  evidence of ownership) in Monticello  Raceway  Management,  Monticello
Casino  Management,  Monticello  Raceway  Development  and Mohawk  Management to
Empire Resorts, and Empire Resorts shall deliver to the members of both Catskill
Development and Monticello  Raceway  Development  registered stock  certificates

                                       61





representing,  in  the  aggregate,  80.25%  of  Empire  Resorts'  common  stock,
calculated on a post-consolidation, fully-diluted basis.

REPRESENTATIONS AND WARRANTIES


            In  the   restated   contribution   agreement,   the  parties   made
representations and warranties to each other about their respective companies.


            Catskill  Development,  and  each of its  members,  represented  and
warranted to the following:

            o   capital structure of Monticello Raceway  Management,  Monticello
                Casino Management and Mohawk Management;

            o   interests to be contributed  being validly  issued,  fully paid,
                nonassessable and not subject to any preemptive rights;

            o   no declared or unpaid  dividends  with respect to the  interests
                being contributed;

            o   interests being contributed by Catskill Development's members on
                the closing  date  representing  all of  Catskill  Development's
                interests in Monticello  Raceway  Management,  Monticello Casino
                Management  and  Mohawk  Management  on the  date  the  restated
                contribution agreement was executed; and

            o   ownership  of and power to transfer  free and clear title to the
                interests being contributed.

            Catskill  Development  further  represented  and  warranted  to  its
knowledge,  without  any  obligation  to  inquire  as to the  accuracy  of  such
representations and warranties, to the following:

            o   corporate existence of Monticello Raceway Management, Monticello
                Casino Management and Mohawk Management and their  qualification
                to do current and proposed business;

            o   power and  authority  to enter  into and  carry out  obligations
                under the restated contribution agreement;

            o   with   respect  to  itself  and  each  of   Monticello   Raceway
                Management,  Monticello Casino Management and Mohawk Management,
                absence of conflict or breach of any laws, contracts,  leases or
                other   material   agreements,   including  any   organizational
                documents, as a result of execution of the restated contribution
                agreement or the  contribution  of interests in accordance  with
                the restated contribution agreement;


                                       62





            o   required  governmental or third party consents and approvals for
                the  execution   and  delivery  of  the  restated   contribution
                agreement and related  agreements or for the consummation of the
                transactions contemplated therein;

            o   absence  of  subsidiaries  of  Catskill  Development  other than
                Monticello Raceway Management,  Monticello Casino Management and
                Mohawk Management;

            o   accuracy of information supplied in the financial statements for
                the year ending  December  31,  2002 and for the quarter  ending
                March 31, 2003;

            o   with respect to Monticello Raceway Management, Monticello Casino
                Management and Mohawk  Management,  absence of material  changes
                since March 31, 2003;

            o   absence of undisclosed  material contracts of Monticello Raceway
                Management, Monticello Casino Management and Mohawk Management;

            o   Monticello Raceway Management's,  Monticello Casino Management's
                and Mohawk  Management's  full ownership or adequate  license to
                use, without payment, all proprietary rights;

            o   absence   of   material   undisclosed   liabilities,   debts  or
                obligations of Monticello Raceway Management,  Monticello Casino
                Management or Mohawk Management;

            o   absence of any event that has  resulted in a material  breach or
                default of a material contract of Monticello Raceway Management,
                Monticello Casino Management or Mohawk Management;

            o   substantial   compliance  by  Monticello   Raceway   Management,
                Monticello  Casino  Management  and Mohawk  Management  with any
                relevant laws,  and absence of any notices  regarding the breach
                of any relevant laws;

            o   absence of pending or threatened  litigation  or any  reasonable
                basis therefor against Monticello Raceway Management, Monticello
                Casino Management and Mohawk Management;

            o   material  taxes of  Monticello  Raceway  Management,  Monticello
                Casino Management and Mohawk Management having been paid, filed,
                reported,  withheld,  collected and accounted for,  except those
                being contested in good faith;

            o   no finder,  broker,  or investment  banker being entitled to any
                fee or commission in connection  with the restated  contribution
                agreement or related transactions;

            o   valid  title  or   leasehold   rights  of   Monticello   Raceway
                Management,  Monticello  Casino Management and Mohawk Management
                with respect to any real, personal or leased property;

                                       63





            o   material compliance by Monticello Raceway Management, Monticello
                Casino  Management and Mohawk Management with all relevant laws;
                and

            o   absence of material  employment  issues or labor  activities and
                practices that would adversely  affect the business or financial
                conditions of Monticello Raceway  Management,  Monticello Casino
                Management or Mohawk Management.

            Each  member  of  Monticello  Raceway  Development  represented  and
warranted, severally and not jointly, on an individual basis, to the following:

            o   Monticello Raceway Development's capital structure;

            o   interests to be contributed  being validly  issued,  fully paid,
                nonassessable and not subject to any preemptive rights;

            o   no declared or unpaid  dividends  with respect to the  interests
                being contributed; and

            o   ownership  of and power to transfer  free and clear title to the
                interests being contributed.

            Each  member  of  Monticello  Raceway  Management   represented  and
warranted to its or his  knowledge,  without any obligation to inquire as to the
accuracy of such  representations and warranties,  severally and not jointly, on
an individual basis, to the following:

            o   corporate  existence of Monticello  Raceway  Development and its
                qualification to do current and proposed business;

            o   power and authority to enter into and carry out its  obligations
                under the restated contribution agreement and the enforceability
                of the restated contribution agreement;

            o   with  respect  to itself  and  Monticello  Raceway  Development,
                absence of conflict or breach of any laws, contracts,  leases or
                other   material   agreements,   including  its   organizational
                documents, as a result of execution of the restated contribution
                agreement or the  contribution  of interests  under the restated
                contribution agreement;

            o   required  governmental or third party consents and approvals for
                the  execution   and  delivery  of  the  restated   contribution
                agreement and related  agreements or for the consummation of the
                transactions contemplated therein;

            o   absence of ownership or control of any other business entity;

                                       64





            o   Monticello Raceway Development's absence of employees,  material
                operations,  assets or other contractual rights,  other than the
                right to develop a 229 acre  parcel of land in  Monticello,  New
                York;

            o   absence of undisclosed  material contracts of Monticello Raceway
                Development;

            o   Monticello  Raceway  Development's  full  ownership  or adequate
                license to use, without payment, all proprietary rights;

            o   absence   of   material   undisclosed   liabilities,   debts  or
                obligations of any kind of Monticello Raceway Development;

            o   absence of any event that has  resulted in a material  breach or
                default   of  a  material   contract   of   Monticello   Raceway
                Development;

            o   substantial  compliance of Monticello  Raceway  Development with
                any  relevant  laws,  and absence of any notices  regarding  the
                breach of any relevant laws;

            o   absence of pending or threatened  litigation  or any  reasonable
                basis therefor against Monticello Raceway Development;

            o   material  taxes of Monticello  Raceway  Development  having been
                paid, filed,  reported,  withheld,  collected and accounted for,
                except those being contested in good faith;

            o   no finder,  broker,  or investment  banker being entitled to any
                fee or commission in connection  with the restated  contribution
                agreement or related transactions; and

            o   material  compliance by Monticello Raceway  Development with all
                relevant laws.

            Empire  Resorts  (on  behalf of itself  and any  subsidiaries  where
relevant) represented and warranted to the following:

            o   corporate existence and qualification to do current and proposed
                business;

            o   power and authority to enter into and carry out its  obligations
                under the restated contribution agreement and the enforceability
                of the restated contribution agreement;

            o   absence of conflict or breach of any laws, contracts,  leases or
                other   material   agreements,   including  its   organizational
                documents, as a result of execution of the restated contribution
                agreement  or the  issuance  of its  shares  under the  restated
                contribution agreement;

            o   required governmental or third party consents and approvals;

                                       65





            o   no finder,  broker,  or investment  banker being entitled to any
                fee or commission in connection  with the restated  contribution
                agreement or related transactions;

            o   material  compliance of all Securities  and Exchange  Commission
                filings;

            o   absence of material changes since March 31, 2003;

            o   capital structure;

            o   shares of common  stock to be issued  pursuant  to the  restated
                contribution  agreement  being  validly  authorized,  issued and
                fully paid;

            o   shares of common  stock to be issued  pursuant  to the  restated
                contribution  agreement  representing  80.25% of Empire Resorts'
                outstanding common stock as of the closing date;

            o   to the best of its knowledge and belief,  without any obligation
                to  inquire  as to  the  accuracy  of  such  representation  and
                warranty, the absence of undisclosed material obligations;

            o   to the best of its knowledge and belief,  without any obligation
                to  inquire  as to  the  accuracy  of  such  representation  and
                warranty,  absence of any undisclosed outstanding civil judgment
                or court  order  (past,  current  or  pending)  against  Stanley
                Tollman, Beatrice Tollman, Monty Hundley or The Bryanston Group,
                in favor of the U.S. Attorney, S.D.N.Y.;

            o   recapitalization   agreement   between  Empire  Resorts,   Alpha
                Monticello,  The  Bryanston  Group,  Stanley  Tollman,  Beatrice
                Tollman and Monty Hundley being duly authorized and executed;

            o   to the best of its knowledge and belief,  material  taxes having
                been paid, filed,  reported,  withheld,  collected and accounted
                for, except for those being contested in good faith;

            o   absence of any action,  agreement,  plan or  circumstances  that
                would   prevent  the   consolidation   from   qualifying   as  a
                contribution  and exchange  under Section 351(a) of the Internal
                Revenue Code;

            o   not being an investment company;

            o   material compliance with all relevant laws;

            o   disclosure of all reasonably related available information;

            o   absence of any omissions, untrue, or misleading statements by it
                in the restated contribution agreement; and

                                       66





            o   investigation  or the  opportunity to investigate and understand
                the consolidation and associated risks.

COVENANTS


            Each of the  parties  to the  restated  contribution  agreement  has
agreed that from the date of the  restated  contribution  agreement  through the
consolidation's closing or restated contribution  agreement's  termination,  to,
among other things:


            o   provide each other with access to information;

            o   notify each other of current or potential  material  breaches to
                the representations, warranties and covenants;

            o   use   commercially   reasonable   efforts  to   consummate   the
                consolidation;

            o   obtain all  consents or  approvals  necessary  to  complete  the
                consolidation  and  other   transactions   contemplated  by  the
                restated contribution agreement;

            o   cooperate with the valuation firm in preparation of the fairness
                opinion;

            o   assign,  or  cause  to be  assigned,  to  the  extent  it or its
                subsidiaries  is a plaintiff in the ongoing  litigation  against
                Park Place Entertainment Corporation,  Gary Melius, Ivan Kaufman
                and Walter Horn,  all claims  against  Park Place  Entertainment
                Corporation,  Gary  Melius,  Ivan  Kaufman and Walter  Horn, its
                rights to the proceeds  from any  settlement or judgment in such
                litigation to a grantor trust; and

            o   take no actions to jeopardize the  transactions  contemplated in
                the restated contribution  agreement to qualify as a transaction
                described in Section 351(a) of the Internal Revenue Code.


            Empire  Resorts  further  covenants  in  the  restated  contribution
agreement to, among other things:


            o   nominate certain directors; and

            o   amend certain employment agreements.


            Except as contemplated by the restated contribution agreement,  from
the date of the  restated  contribution  agreement  through the  consolidation's
closing or restated contribution agreement's termination, Empire Resorts further
covenants  that it will not,  and Catskill  Development  and the members of both
Catskill  Development and Monticello Raceway  Development  further covenant that
they will cause Monticello  Raceway  Management,  Monticello Casino  Management,
Monticello  Raceway  Development and Mohawk Management not to, without the other
party's consent:


                                       67





            o   take any action that would  reasonably  be expected to result in
                any of the conditions to closing not being satisfied;

            o   amend any organizational document;

            o   declare or pay any dividends or distribute  any capital stock or
                equity interests;

            o   alter any  capital  stock or equity  interests,  through,  among
                other things, stock splits, combinations, and issuances;

            o   repurchase,  redeem or  otherwise  acquire any capital  stock or
                equity interests;

            o   merge or consolidate with another business organization;

            o   acquire the assets,  an equity  interest or the capital stock of
                another business organization;

            o   incur, issue or guarantee any indebtedness;

            o   amend any material contract or agreement;

            o   authorize  any capital  expenditures  or fixed  asset  purchases
                exceeding $100,000 in the aggregate;

            o   grant  any  additional   compensation  or  termination  pay  for
                officers or employees, except in the ordinary course of business
                in accordance with past practice;

            o   enter into  additional  employment  agreements,  transactions or
                policies  benefiting  past and  present  directors,  officers or
                employees, other than as required by law;

            o   pay  or  discharge  any  material   obligations  or  liabilities
                inconsistent with past business practices;

            o   adopt any plan of reorganization;

            o   settle or compromise any material litigation;

            o   make any material tax election;

            o   take any action that would limit the ability to acquire  shares,
                vote shares or restrict business combinations; or

            o   agree or take any action to do any of the foregoing.

                                       68





            Empire Resorts  further  agrees that,  from the date of the restated
contribution   agreement  through  the   consolidation's   closing  or  restated
contribution  agreement's  termination,  except as  contemplated by the restated
contribution  agreement,  it will conduct its  business in the  ordinary  course
consistent  with past practice.  In addition,  among other things and subject to
certain exceptions,  Empire Resorts will not, without the consent of the members
of both Catskill Development and Monticello Raceway Development:

            o   issue, deliver, sell, pledge or dispose of any shares of capital
                stock, including options or warrants (other than the issuance of
                shares of common  stock  upon the  exercise  of  employee  stock
                option  outstanding  on  the  date  the  restated   contribution
                agreement  was  executed); or

            o   dispose, sell or pledge any material asset.


            Catskill  Development  and the members of both Catskill  Development
and Monticello  Raceway  Development  have further agreed that, from the date of
the  restated  contribution  agreement  through the  consolidation's  closing or
restated  contribution  agreement's  termination,  except as contemplated by the
restated  contribution  agreement,  they will cause each of  Monticello  Raceway
Management,  Monticello Casino Management,  Monticello  Raceway  Development and
Mohawk Management to conduct its business in the ordinary course consistent with
past  practice.  In  addition,   among  other  things  and  subject  to  certain
exceptions,  Catskill  Development and the members of both Catskill  Development
and  Monticello  Raceway  Development  will  cause  each of  Monticello  Raceway
Management,  Monticello Casino Management,  Monticello  Raceway  Development and
Mohawk Management not to, without Empire Resorts' prior consent:


            o   issue, deliver, pledge, dispose of, encumber or sell any capital
                stock, or options,  warrants,  convertible securities,  or other
                capital interests; or

            o   dispose, sell or pledge any material asset.

REGISTRATION STATEMENT, STOCKHOLDER VOTE, AND BRYANSTON LITIGATION


            The parties to the restated  contribution  agreement  have agreed to
provide one another with any information reasonably requested in connection with
the S-4 registration statement.

            Empire Resorts will further:

            o   promptly take any action  required to file the S-4  registration
                statement and have it declared effective as soon as possible;

            o   make  any  modifications  to  the  S-4  registration   statement
                reasonably   requested   by  the  members  of  either   Catskill
                Development or Monticello Raceway Development prior to filing it
                with the Securities and Exchange Commission;

                                       69





            o   notify  the  other   parties  of  comments   received  from  the
                Securities   and   Exchange   Commission   concerning   the  S-4
                registration statement;

            o   cause the S-4  registration  statement to remain effective until
                the earlier of (i) the date on which all of the shares of common
                stock being issued pursuant to the consolidation  have been sold
                to the  public or (ii) the date on which all of such  shares can
                be  freely  sold  to the  public  pursuant  to  Rule  144 of the
                Securities   Act  of  1933,  as  amended,   without  any  volume
                limitations;

            o   prepare and file with the  Securities  and  Exchange  Commission
                such  amendments  (including   post-effective   amendments)  and
                supplements to the S-4 registration statement and the prospectus
                used in connection with the S-4 registration statement as may be
                necessary to keep the S-4 registration  statement  effective and
                to comply with the  provisions of the Securities Act of 1933, as
                amended, with respect to the disposition of all of the shares of
                common stock being issued pursuant to the  consolidation  at all
                times during the period for which Empire  Resorts is required to
                maintain the effectiveness of the S-4 registration statement;

            o   cause the shares of common  stock  being  issued to be listed on
                the Nasdaq Small Cap Market and Boston Stock Exchange;

            o   take all action necessary to obtain stockholder  approval of the
                consolidation; and

            o   redeem the shares of common  stock held by The  Bryanston  Group
                and certain shares of common stock held by Beatrice Tollman.

            Catskill  Development  and the members of both Catskill  Development
and Monticello  Raceway  Development  will further provide Empire Resorts with a
list  of   Catskill   Development's   and   Monticello   Raceway   Development's
"affiliates,"  including  any  changes  to the  list,  prior  to  completion  of
consolidation. Empire Resorts will receive from each "affiliate" an agreement to
comply with the  restrictions  of Rule 145 under the  Securities Act of 1933, as
amended.

CONDITIONS TO CLOSING

            The  obligations  of each party to complete  the  consolidation  are
subject to the satisfaction or waiver of various  conditions,  which include, in
addition to other closing conditions, the following:

            o   Empire  Resorts  shall have  obtained all  required  consents or
                approvals;

            o   all  required  authorizations,  consents  or  approvals  of,  or
                registrations  with,  any  governmental  entity  shall have been
                obtained or made;

            o   no  statute,   rule,  regulation,   order,   judgment,   decree,
                injunction,  or ruling  shall be in effect  that  prohibits  the
                consolidation;

                                       70





            o   the parties  shall have  received an opinion of Olshan  Grundman
                Frome  Rosenzweig  & Wolosky LLP that none of the  parties  will
                recognize any income,  gain or loss for tax purposes as a result
                of the consolidation;


            o   Monticello  Raceway  Management and Catskill  Development  shall
                have executed an amendment to that certain 48 year ground lease,
                dated October 29, 2003,  with respect to those certain 200 acres
                of  land  in   Monticello,   New  York  now  owned  by  Catskill
                Development  (i)  increasing  the amount of land  subject to the
                purchase  option  under the lease  from 200 acres to 229  acres,
                without any  increase in the  purchase  option  price,  and (ii)
                reducing  the purchase  option  price by any amount  received by
                Catskill Development (or its successor) if the adjacent 29 acres
                now owned by  Catskill  Development  are sold  pursuant  to that
                certain Land Purchase Agreement between Catskill Development and
                the Cayuga Nation of New York dated April 7, 2003.

            o   Empire  Resorts  shall have  redeemed the shares of common stock
                held by The Bryanston  Group and certain  shares of common stock
                held by Beatrice Tollman;

            o   New York Gaming,  LLC shall have distributed all its interest in
                Catskill  Development  to  Alpha  Monticello,   a  wholly  owned
                subsidiary of Empire Resorts;

            o   subsequent  to  New  York  Gaming,  LLC's  distribution  of  its
                interests in Catskill Development to Alpha Monticello,  a wholly
                owned subsidiary of Empire Resorts,  Catskill  Development shall
                have redeemed all interests in itself held by Alpha  Monticello,
                a wholly owned subsidiary of Empire Resorts;

            o   a  grantor   trust  shall  have  been   created   and   Catskill
                Development,   Monticello   Raceway   Development   and   Mohawk
                Management shall have assigned to such trust their rights to the
                proceeds from any settlement or judgment related to their claims
                against Park Place Entertainment Corporation,  Gary Melius, Ivan
                Kaufman and Walter Horn;

            o   amendments to the  certificate  of  incorporation  and bylaws of
                Empire  Resorts  providing  for a staggered  board of  directors
                shall have been approved;

            o   the  S-4   registration   statement  shall  have  been  declared
                effective and shall not be the subject of any stop order, and no
                proceedings  shall have been brought or, to the knowledge of the
                parties, threatened for that purpose;

            o   consummation  of  the  consolidation   shall  have  been  deemed
                consistent  with the Cayuga Nation of New York's prior  approval
                of the Gaming Facility Management Agreement; and

                                       71





            o   all material  agreements and covenants  required to be performed
                before closing shall have been performed.

            Except as may be waived in writing by Empire Resorts, the obligation
of  Empire  Resorts  to effect  the  consolidation  is  further  subject  to the
satisfaction of the following conditions:


            o   representations  and warranties of Catskill  Development and its
                members in the restated contribution agreement shall be true and
                correct  in  all  material  respects,  and  not  subject  to any
                knowledge qualification,  and Empire Resorts shall have received
                a certificate executed by an officer of Catskill Development and
                each member of Catskill Development to such effect;

            o   representations    and   warranties   of   Monticello    Raceway
                Development's  members  contained in the  restated  contribution
                agreement  shall be true and correct in all  material  respects,
                and Empire Resorts shall have received a certificate executed by
                each member of Monticello Raceway Development to such effect;

            o   each  affiliate  shall have  executed  and  delivered  to Empire
                Resorts an affiliate agreement;


            o   the  special  committee  of the  board of  directors  of  Empire
                Resorts   shall  have   received  an  opinion  from  Kane  Reece
                Associates  opining  that the  consolidation  is fair to  Empire
                Resorts and its stockholders from a financial point of view;


            o   Empire  Resorts'  special  committee  shall  have  approved  the
                consolidation;

            o   subsequent  to  (1)  Catskill  Development's  redemption  of all
                interests  in itself held by Alpha  Monticello,  a wholly  owned
                subsidiary  of  Empire   Resorts  and  (2)  the  creation  of  a
                litigation  trust and the  assignment  to such trust by Catskill
                Development,   Monticello   Raceway   Development   and   Mohawk
                Management  of all of their  rights to the  proceeds  from their
                claims  against  Park  Place  Entertainment  Corporation,   Gary
                Melius, Ivan Kaufman and Walter Horn, Catskill Development shall
                have contributed all of its rights, title and interest in and to
                the business of  Monticello  Raceway and all of its other assets
                and liabilities,  except for Catskill  Development's interest in
                229 acres of land in Monticello,  New York, to Monticello Casino
                Management and then shall have  distributed all of its interests
                in Monticello Raceway  Management,  Monticello Casino Management
                and Mohawk  Management  to Catskill  Development's  then current
                members;

            o   Catskill   Development   and  the   members  of  both   Catskill
                Development  and  Monticello  Raceway   Development  shall  have
                provided  Empire Resorts with all audited  financial  statements
                required to be included in the S-4 registration statement;

                                       72





            o   Empire  Resorts  shall have  received an opinion from a law firm
                reasonably acceptable to it as to certain legal matters;

            o   Empire  Resorts shall have received a certificate  from Catskill
                Development, dated the closing date, as to the capitalization of
                Monticello Raceway Management,  Monticello Casino Management and
                Mohawk Management; and

            o   to the knowledge of the members of both Catskill Development and
                Monticello Raceway Development,  since July 3, 2003, there shall
                not have  been any  change  in or any  potential  change  in the
                business,   operations  or  financial  condition  of  Monticello
                Raceway  Management,  Monticello Casino  Management,  Monticello
                Raceway  Development or Mohawk Management,  having or reasonably
                likely to have a material  adverse effect on Monticello  Raceway
                Management,  Monticello Casino  Management,  Monticello  Raceway
                Development or Mohawk Management.

            Except as may be waived in writing by Catskill  Development  and the
members of both Catskill  Development and Monticello  Raceway  Development,  the
obligation of Catskill  Development and the members of both Catskill Development
and  Monticello  Raceway  Development  to effect  the  consolidation  is further
subject to the satisfaction of the following conditions:

            o   representations  and warranties of Empire  Resorts  contained in
                the restated contribution agreement shall be true and correct in
                all material respects,  and Catskill Development and the members
                of both Catskill  Development and Monticello Raceway Development
                shall have  received  a  certificate  executed  by an officer of
                Empire Resorts to such effect;

            o   Catskill Development and its members shall have received a legal
                opinion from Olshan Grundman Frome Rosenzweig & Wolosky LLP;

            o   the shares of common stock being issued by Empire  Resorts shall
                have been  approved  for listing on the Nasdaq  Small Cap Market
                and Boston Stock Exchange;

            o   there shall be no outstanding or pending civil judgment or court
                order against Stanley Tollman,  Beatrice Tollman,  Monty Hundley
                or The Bryanston Group in favor of the U.S.  Attorney  affecting
                consummation of the consolidation;

            o   since July 3, 2003,  there  shall have been no change in, or the
                knowledge of a potential  change in, the business,  operation or
                financial  condition  of Empire  Resorts  having  or  reasonably
                likely to have a material adverse effect on Empire Resorts;

                                       73





            o   Catskill  Development  and its  members  shall  have  received a
                certificate  from  Empire  Resorts   verifying  Empire  Resorts'
                capitalization;

            o   Catskill  Development  shall have  received  an  assignment  and
                assumption  agreement  from  Empire  Resorts  reflecting  Empire
                Resorts' assumption of certain liabilities; and

            o   certain employment agreements shall have been amended.

SURVIVAL OF REPRESENTATION AND WARRANTIES

            The  representations  and  warranties  made by Empire Resorts in the
restated  contribution  agreement  will not survive the closing  date except for
Empire Resorts'  representation  and warranty about its capital structure (which
will terminate on the first  anniversary of the closing date),  but the accuracy
of all of Empire Resorts'  representations  and warranties  forms the basis of a
condition to closing  regarding the obligations of Catskill  Development and the
members of both Catskill Development and Monticello Raceway Development.

            The representations and warranties made by Catskill  Development and
its members in the restated contribution  agreement will not survive the closing
date except for the  representations  and warranties with respect to the matters
below (which will terminate on the first  anniversary of the closing date),  but
the accuracy of all of Catskill  Development's and its members'  representations
and  warranties  forms  the  basis  of a  condition  to  closing  regarding  the
obligations of Empire Resorts:

            o   capital structure of Monticello Raceway  Management,  Monticello
                Casino Management and Mohawk Management;

            o   interests to be contributed  being validly  issued,  fully paid,
                nonassessable and not subject to any preemptive rights;

            o   no declared or unpaid  dividends  with respect to the  interests
                being contributed;

            o   ownership  of and power to transfer  free and clear title to the
                interests being contributed;

            o   power  and   authority   to  enter  into  and  carry  out  their
                obligations under the restated contribution agreement;

            o   with  respect  to  themselves  and  each of  Monticello  Raceway
                Management,  Monticello Casino Management and Mohawk Management,
                absence of conflict or breach of any laws, contracts,  leases or
                other   material   agreements,   including  any   organizational
                documents, as a result of execution of the restated contribution
                agreement or the  contribution  of interests in accordance  with
                the restated contribution agreement;

                                       74





            o   required  governmental or third party consents and approvals for
                the  execution   and  delivery  of  the  restated   contribution
                agreement and related  agreements or for the consummation of the
                transactions contemplated therein; and


            o   absence  of  subsidiaries  of  Catskill  Development  other than
                Monticello Raceway Management,  Monticello Casino Management and
                Mohawk Management.

            The representations and warranties made by the members of Monticello
Raceway Development in the restated contribution  agreement will not survive the
closing date except for the  representations  and warranties with respect to the
matters  below  (which will  terminate on the first  anniversary  of the closing
date), but the accuracy of all of the  representations  and warranties forms the
basis of a condition to closing regarding the obligations of Empire Resorts:


            o   capital structure of Monticello Raceway Development;

            o   interests to be contributed  being validly  issued,  fully paid,
                nonassessable and not subject to any preemptive rights;

            o   no declared or unpaid  dividends  with respect to the  interests
                being contributed;

            o   ownership  of and power to transfer  free and clear title to the
                interests being contributed; o power and authority to enter into
                and carry out their obligations under the restated  contribution
                agreement;

            o   with respect to themselves and Monticello  Raceway  Development,
                absence of conflict or breach of any laws, contracts,  leases or
                other   material   agreements,   including  any   organizational
                documents, as a result of execution of the restated contribution
                agreement or the  contribution  of interests in accordance  with
                the restated contribution agreement; and

            o   required  governmental or third party consents and approvals for
                the  execution   and  delivery  of  the  restated   contribution
                agreement and related  agreements or for the consummation of the
                transactions contemplated therein.


INDEMNIFICATION


            o   the members of both Catskill  Development and Monticello Raceway
                Development will, severally and not jointly,  indemnify and hold
                harmless Empire Resorts from any losses, liabilities and damages
                (financial or otherwise, including reasonable attorneys fees and
                other costs) due to  inaccuracies or the breach of any surviving
                representation  or warranty of  Catskill  Development,  Catskill
                Development's   members  or  Monticello  Raceway   Development's
                members,  or  the   non-performance  by  Catskill   Development,
                Catskill    Development's    members   or   Monticello   Raceway
                Development's  members of any covenant or  obligation  under the
                restated  contribution  agreement;  provided  that  none  of the

                                       75





                members  of  Catskill   Development   nor   Monticello   Raceway
                Development  shall be required to indemnify  Empire  Resorts for
                any  losses in excess of the value (as of  closing  time) of the
                shares of Empire Resorts' common stock issued to it at closing.

            o   Empire  Resorts  will  indemnify  and  hold  harmless   Catskill
                Development and each of the members of both Catskill Development
                and Monticello Raceway  Development for any losses,  liabilities
                and  damages  (financial  or  otherwise,   including  reasonable
                attorney fees and other costs) due to inaccuracies or the breach
                of any surviving representation or warranty of Empire Resorts or
                the  non-performance  by  Empire  Resorts  of  any  covenant  or
                obligation under the restated contribution  agreement,  provided
                that Empire Resorts shall not be required to indemnify  Catskill
                Development  and the members of both  Catskill  Development  and
                Monticello  Raceway  Development  for any losses that exceed the
                value (as of closing  time) of the shares to be issued by Empire
                Resorts at closing.


TERMINATION


            The restated  contribution  agreement  can be terminated at any time
prior to the closing time by:

            o   mutual written consent;

            o   by  any  of  the  parties  if the  consolidation  has  not  been
                completed  by January 31,  2004,  provided  that a party  cannot
                terminate  the restated  contribution  agreement if such party's
                actions or failure to act caused or  resulted  in the failure of
                the consolidation's timely closing;

            o   by any party not in breach if another party materially  breaches
                any of its representations,  warranties, covenants or agreements
                contained in the restated contribution agreement; or

            o   by any of the parties if a court of  competent  jurisdiction  or
                other  governmental  entity  issues an  order,  decree or ruling
                (which is final and  nonappealable),  or takes any other action,
                having  the  effect of  permanently  restraining,  enjoining  or
                otherwise prohibiting the consolidation.


            If the  restated  contribution  agreement  is  terminated  by mutual
consent or the failure to close by January 31, 2004,  then the agreement is void
and there will be no liability or cause of action as a result of terminating the
agreement.   If  the  restated   contribution   agreement  is  terminated  by  a
non-breaching  party following a material breach,  however,  the parties reserve
their right to take legal action.


MISCELLANEOUS


            Other provisions of the restated contribution  agreement include the
following:


                                       76





            o   the  parties  have  the  right to seek a  temporary  restraining
                order, injunction or other equitable remedy due to the nature of
                the agreement;


            o   there   shall  be  no  public   announcements   related  to  the
                consolidation  and  other   transactions   contemplated  by  the
                restated contribution agreement prior to the closing;

            o   the  restated   contribution   agreement  supersedes  all  prior
                agreements, whether written or oral;

            o   the restated contribution agreement will inure to the benefit of
                and be binding upon the parties and their respective  successors
                and assigns;

            o   the restated contribution  agreement may not be assigned without
                the prior written consent of the other parties;

            o   the restated contribution agreement shall be subject to New York
                law and the jurisdiction of New York courts (state and federal);

            o   sections in the restated contribution agreement are severable if
                a court of competent jurisdiction declares a section to be void,
                illegal or unenforceable, with the remainder of the agreement in
                full force. The parties agree to replace such severed provisions
                with a valid provision; and

            o   the parties may not  interpret the  ambiguities  in the restated
                contribution  agreement  against  the  party  that  drafted  the
                agreement.


                         MATERIAL CONDITIONS TO CLOSING


            As indicated above, the restated contribution agreement provides for
various actions that must occur before the consolidation  can be effectuated.  A
number of these actions will have a material  impact on Empire Resorts  existing
business  structure,  the rights of its stockholders and its  post-consolidation
objectives. These closing conditions,  therefore, are described below in greater
detail.


REDEMPTION OF EMPIRE RESORTS' INTEREST IN CATSKILL DEVELOPMENT

            Alpha  Monticello,  a wholly owned subsidiary of Empire Resorts,  is
currently a member of Catskill Development and holds a 48.31% economic ownership
interest in its casino and  wagering  operations,  a 36.88%  economic  ownership
interest in its horseracing and other pari-mutuel  activities and a 25% economic
ownership  interest in its real estate  ownership  and  development  operations.
Immediately prior to the consolidation's closing, but following New York Gaming,
LLC's contribution of its interests in Catskill Development to Alpha Monticello,
a wholly owned  subsidiary of Empire Resorts,  Catskill  Development will redeem
all of Empire Resorts' indirect membership  interests in Catskill Development in
exchange for 40 shares of Monticello  Raceway  Management,  representing  40% of
Monticello Raceway  Management's  outstanding capital stock. As a result of this
redemption, Empire Resorts' will not receive, directly or indirectly, any of the

                                       77





shares of Empire  Resorts'  common stock to be issued to the members of Catskill
Development  pursuant to the  consolidation.  Moreover,  Catskill  Development's
redemption of Empire  Resorts'  indirect  interest will result in Americas Tower
Partners' and Watertone Holdings' (both of which are controlled by or affiliated
with certain  officers and directors of Empire Resorts)  membership  interest in
Catskill  Development  increasing to approximately 33% each, giving them and the
other members of Catskill  Development the right to receive a greater percentage
of the consideration to be received by Catskill Development's members as part of
the consolidation.

DISTRIBUTION  BY CATSKILL  DEVELOPMENT  OF ITS INTERESTS IN  MONTICELLO  RACEWAY
MANAGEMENT, MONTICELLO CASINO MANAGEMENT AND MOHAWK MANAGEMENT

            Catskill   Development   currently   owns  all  of  the  issued  and
outstanding  common  shares  of  Monticello  Raceway  Management  and 60% of the
outstanding membership interests of both Monticello Casino Management and Mohawk
Management.  Immediately  following  Catskill  Development's  redemption  of all
interests  in itself held by Alpha  Monticello,  a wholly  owned  subsidiary  of
Empire  Resorts  (as  described  in  the  prior  paragraph),  but  prior  to the
consolidation's closing, Catskill Development will contribute all of its rights,
title and interest in and to the business of  Monticello  Raceway and all of its
other assets and liabilities,  except for Catskill Development's interest in 229
acres  of land in  Monticello,  New York and its  right  to  certain  litigation
claims,  to  Monticello   Casino  Management  and  Catskill   Development  shall
subsequently  distribute all of its interests in Monticello Raceway  Management,
Monticello  Casino  Management and Mohawk  Management to Catskill  Development's
then  current  members.  Catskill  Development's  members  will  then,  in turn,
contribute  all of these  equity  interests  to Empire  Resorts in exchange  for
shares of Empire  Resorts'  common stock.  As a result of this  distribution  by
Catskill Development,  at the consolidation's closing, Catskill Development will
neither be contributing any assets to Empire Resorts nor receiving any shares of
Empire Resorts' common stock.  Rather,  Catskill  Development's  members will be
transferring  all  of  Catskill   Development's   current  equity  interests  in
Monticello   Raceway   Management,   Monticello  Casino  Management  and  Mohawk
Management  to Empire  Resorts in  exchange  for a direct  issuance of shares of
Empire Resorts' common stock. Furthermore, as a result of this distribution,  at
the time of the consolidation's closing,  Catskill Development will not have any
assets other than 229 acres of land in Monticello, New York.

                                       78





FORMATION OF LITIGATION TRUST

            Another  material  condition to the  consolidation's  closing is for
each  of  Catskill  Development,   Monticello  Raceway  Development  and  Mohawk
Management  to assign to a grantor trust (the  "LITIGATION  TRUST") all of their
claims under or related to the  alienation and  frustration of their  agreements
and business  relations  with the St. Regis Mohawk Tribe and their rights to any
proceeds  from any  judgment or  settlement  that may arise from any  litigation
relating to that claim,  including (1) that certain litigation entitled Catskill
Development,   L.L.C.,   Mohawk  Management,   L.L.C.,  and  Monticello  Raceway
Development   Company,   L.L.C.,   Plaintiffs.   v.  Park  Place   Entertainment
Corporation,  Defendant.  (Civil Action No. 00CIV8660  (CM)(GAY)) (United States
District Court Southern District Of New York) (the "PARK PLACE  LITIGATION") and
(2) that  certain  litigation  entitled  Catskill  Development,  L.L.C.,  Mohawk
Management,   L.L.C.,  and  Monticello  Raceway  Development  Company,   L.L.C.,
Plaintiffs. against Gary Melius, Ivan Kaufman, Walter Horn, President R.C. - St.
Regis Management Company, et al, Defendants. (Index No. 891/03 (Supreme Court of
the State of New York County of Sullivan) (the "MELIUS LITIGATION").

            BACKGROUND OF LITIGATION CLAIMS

            As  mentioned  above  in  "The  Consolidation  -  Background  of the
Consolidation"  beginning on page 32, in 1996, a group of  businessmen  formed a
coalition with Empire Resorts and two other entities and commenced  negotiations
with the St. Regis Mohawk  Tribe about  developing a Class III Gaming  casino on
land adjacent to Monticello  Raceway.  This coalition then formed three entities
to accomplish distinct aspects of the project:

            o   Catskill Development was formed to acquire the land on which the
                casino would be built and obtain  approval for and implement the
                transfer  of the land to the  United  States of America in trust
                for the St. Regis Mohawk Tribe for off-reservation gaming.

            o   Monticello Raceway  Development was formed to develop the casino
                property,  and provide  technical  expertise  for the  planning,
                design,  engineering,  and construction of the casino.  It would
                also help the St. Regis Mohawk Tribe in obtaining  financing for
                the casino undertaking.

            o   Mohawk Management was formed to manage the casino.

            Each party negotiated a separate  contract with the St. Regis Mohawk
Tribe to cover its role.  Thus,  Catskill  Development,  after itself  acquiring
title to  Monticello  Raceway  and the  surrounding  property  for $10  million,
negotiated a land  purchase  agreement;  Mohawk  Management  negotiated a gaming
facility management agreement;  and Monticello Raceway Development  negotiated a
gaming  facility  development  and  construction  agreement.  Each  of the  land
purchase  agreement and gaming  facility  management  agreement  were subject to
certain  regulatory  approvals from the Bureau of Indian  Affairs,  the National
Indian Gaming Commission and the State of New York.

            On August 2,  1996,  Catskill  Development  applied to the Bureau of
Indian Affairs and National  Indian Gaming  Commission to place 29 acres of land
adjacent to Monticello Raceway in trust status and to approve the land for Class
III Gaming.  The Bureau of Indian  Affairs then spent 3 1/2 years  reviewing and
processing  the  application,   finally  approving  it  on  April  6,  2000  and
simultaneously requesting that New York State Governor George Pataki concur.

                                       79





            Before the Governor  could  formally  concur or the National  Indian
Gaming  Commission  could approve the casino  management  agreement,  Park Place
Entertainment  Corporation,  the world's largest gaming corporation and Atlantic
City's largest casino operator,  entered into an agreement providing for the St.
Regis Mohawk Tribe to commit their future casino development efforts exclusively
to Park Place Entertainment Corporation,  which conflicted with their agreements
with Catskill Development, Monticello Raceway Development and Mohawk Management.
In an agreement  executed on April 14, 2000, the St. Regis Mohawk Tribe promised
to work exclusively with Park Place Entertainment Corporation for consideration,
among  other  things,  of  $3,000,000  in  cash  and  Park  Place  Entertainment
Corporation's  promise to  indemnify  the St.  Regis  Mohawk  Tribe  against any
litigation that may result.  For a new casino project at another location in the
Catskills,  Park Place Entertainment  Corporation and the St. Regis Mohawk Tribe
agreed  to  enter  into  agreements  very  similar  to  those  between  Catskill
Development,  Monticello  Raceway  Development and Mohawk Management and the St.
Regis Mohawk Tribe, substituting Park Place Entertainment Corporation's name for
that  of  Catskill  Development,   Monticello  Raceway  Development  and  Mohawk
Management.


            In  response  to  these  events,   each  of  Catskill   Development,
Monticello   Raceway   Development   and  Mohawk   Management  sued  Park  Place
Entertainment  Corporation,  asserting claims under New York law for intentional
interference   with  contractual   relations  and  interference   with  business
relations.  The trial court  subsequently  dismissed  the claim for  intentional
interference  with contractual  relations on the grounds that the contracts were
subject to certain approvals and granted Park Place Entertainment  Corporation's
motion for summary  judgment  with  respect to the  interference  with  business
relations  complaint on the grounds that  insufficient  evidence of causation or
wrongful  conduct had been  produced,  effectively  dismissing  the entire case.
These court rulings,  however,  have been appealed.  In addition,  on October 7,
2003, after receiving a remand of jurisdiction  from the Second Circuit Court of
Appeals,  the trial court granted the  plaintiffs'  motion to vacate the earlier
decision granting summary judgment to Park Place Entertainment  Corporation,  in
order to allow  additional  discovery  proceedings with respect to evidence that
the  plaintiffs  had not received in  connection  with their  earlier  discovery
requests prior to the summary judgment decision.


            Separately,  on  April  11,  2003,  each  of  Catskill  Development,
Monticello  Raceway  Development and Mohawk  Management  filed suit against Gary
Melius,  Ivan  Kaufman and Walter Horn,  each of whom served as an  intermediary
between the St.  Regis  Mohawk  Tribe and Park Place  Entertainment  Corporation
during Park Place  Entertainment  Corporation's  successful effort to induce the
St. Regis Mohawk Tribe to renounce their  agreements with Catskill  Development,
Monticello  Raceway  Development  and Mohawk  Management and commit their casino
efforts  exclusively to Park Place Entertainment  Corporation.  In this lawsuit,
the  plaintiffs  have alleged  that the  defendants  engaged in a conspiracy  to
restrain  and  interfere  with the  plaintiffs'  efforts  to develop a casino in
Monticello,  New  York  with  the St.  Regis  Mohawk  Tribe.  In  addition,  the
plaintiffs have alleged that the defendants engaged in a fraud and conspiracy by
withholding  material  evidence from the  plaintiffs  in  connection  with their
lawsuit against Park Place Entertainment Corporation. The plaintiffs are seeking
$2 billion in damages. This lawsuit is still in its preliminary stages.

            SPIN-OFF OF LITIGATION CLAIMS


            In  order to  better  focus on the  development  of a video  lottery
terminal program at Monticello  Raceway and current business  arrangements  with
the  Cayuga  Nation  of New  York,  while at the same  time not  abandoning  the
interersts of their stakeholders in the claims against Park Place  Entertainment


                                       80




Corporation, Gary Melius, Ivan Kaufman and Walter Horn, the parties have made it
a condition to the consolidation's closing that Catskill Development, Monticello
Raceway  Development and Mohawk  Management assign all of their claims emanating
from the above described actions against Park Place  Entertainment  Corporation,
Gary  Melius,  Ivan  Kaufman  and Walter  Horn,  along with their  rights to any
proceeds  from any  judgment or  settlement  that may arise from any  litigation
relating to such subject  matter,  to a grantor  trust in which Empire  Resorts'
common  stockholders of record  immediately before the  consolidation's  closing
(but  following the  redemption of the common stock held by The Bryanston  Group
and Beatrice Tollman) will have a 19.75% interest,  with the members of Catskill
Development  and  Monticello   Raceway   Development   immediately   before  the
consolidation's  closing  owning  the  remaining  80.25%.  Empire  Resorts  will
separately  enter into an agreement with the litigation  trust pursuant to which
Empire  Resorts  will  provide  the trust  with a  $2,500,000  line of credit to
finance the litigation.  However,  aside from  performing its obligations  under
this line of credit,  neither Empire  Resorts nor any of its  post-consolidation
subsidiaries will have any future involvement with the ongoing litigation or any
future suits that may arise.  Paul A. deBary,  a member of Empire Resorts' board
of directors,  and Joseph E.  Bernstein,  a member of Empire  Resorts'  board of
directors and a managing  director of Americas  Tower  Partners,  have agreed to
serve as  co-trustees  for the trust.  For these  services,  Messrs.  deBary and
Bernstein will receive 1% and 4%,  respectively,  of any proceeds that the trust
receives  from the  ongoing  litigation,  or any future  litigation  that may be
brought by the trust.


REDEMPTION OF CERTAIN SHARES OF COMMON STOCK

            On April 17, 2002, a 44 count federal  indictment  was issued for an
alleged $42 million  bank and tax fraud scheme that named as  defendants,  among
others,  Stanley  Tollman,  Empire  Resorts' former chairman and chief executive
officer,  Brett  Tollman,  a former  member  of its  board of  directors,  Monty
Hundley, Empire Resorts' former president and chief executive officer and two of
Empire  Resorts'  former vice  presidents,  James  Cutler and Sanford  Freedman.
Although all of these people have resigned from Empire Resorts at various points
over the previous two years,  the allegations in the indictment  include charges
that the defendants improperly misrepresented their ownership of Empire Resorts'
stock  and  the  ownership  of The  Bryanston  Group,  Empire  Resorts'  largest
stockholder.  In  addition,  the  indictment  includes a  substitution  of asset
provision  stating  that the U.S.  Attorney  plans  to try to seize  any  Empire
Resorts stock owned by the defendants and The Bryanston Group. These indictments
had an immediate negative impact on Empire Resorts, as the New York State Racing
and Wagering  Board  commenced  an  investigation  of the  ownership of Catskill
Development,  Empire Resorts'  auditors  resigned and Empire Resorts'  principal
lender began contemplating an acceleration of Empire Resorts' outstanding debt.

            In light of these indictments, on December 10, 2002, in an effort to
remove the principal  defendants  from any position of control or influence over
Empire Resorts,  Empire Resorts entered into a  recapitalization  agreement with
Stanley Tollman,  Beatrice Tollman (Stanley Tollman's wife), Monty Hundley,  The
Bryanston  Group and  Alpha  Monticello,  a wholly  owned  subsidiary  of Empire
Resorts. Under this agreement,  each of The Bryanston Group and Beatrice Tollman
granted  Empire  Resorts a three year option to redeem from them up to 2,326,857
and 66,000 shares of Empire Resorts' common stock, respectively, at a redemption
price of $2.12 per share,  payable in cash or by promissory  note. The Bryanston

                                       81





Group and Beatrice Tollman also granted Robert A. Berman,  Empire Resorts' chief
executive  officer,  an  irrevocable  three year  proxy to vote these  shares of
common stock at his discretion.


            Prior to closing of the consolidation,  in accordance with the terms
of the restated contribution agreement, Empire Resorts is required to redeem all
of  the  shares  of  Empire  Resorts'  common  stock  that  are  subject  to the
recapitalization agreement and that are held by The Bryanston Group and Beatrice
Tollman. In order to consummate this redemption, Empire Resorts will need to pay
to these  parties,  either in cash,  by issuance of a  promissory  note,  or any
combination  of the two, the sum of  $5,072,284.  Should Empire  Resorts pay any
portion of this amount by issuing a promissory  note, such note would be payable
over three years pursuant to the following schedule:

                      Date                                  Amount
                      ----                                  ------
         (1 Year Anniversary of Note)               (13.33% of the Note Amount)
         (18 Month Anniversary of Note)             (17.78% of the Note Amount)
         (2 Year Anniversary of Note)               (22.22% of the Note Amount)
         (30 Month Anniversary of Note)             (26.67% of the Note Amount)
         (3 Year Anniversary of Note)               (20.00% of the Note Amount)

            In addition,  under the terms of the note,  interest would accrue on
the  outstanding  principal  amount at the rate of 7% per  annum,  and upon each
principal  amount  payment,  Empire  Resorts  would also be  required to pay all
unpaid accrued interest with respect to such principal amount payment.

LISTING OF COMMON STOCK ON NASDAQ


            In the restated contribution agreement, Empire Resorts has agreed to
use all reasonable  efforts to cause the shares of Empire  Resorts' common stock
which are to be issued pursuant to the consolidation to be listed for trading on
the  Nasdaq  Small Cap  Market  and Boston  Stock  Exchange.  Such  listing is a
condition to the  obligations  of Catskill  Development  and the members of both
Catskill  Development  and  Monticello  Raceway  Development  to consummate  the
consolidation.


                                       82





                               UNAUDITED PRO FORMA
                   CONSOLIDATED CONDENSED FINANCIAL STATEMENTS

            The  following   unaudited  pro  forma  consolidated   statement  of
operations  for the period ended December 31, 2002 and for the period ended June
30, 2003 was  prepared as if the  consolidation  was  effective as of January 1,
2002. The pro forma consolidated  balance sheet as of June 30, 2003 was prepared
as if the consolidation was effective as of such date.

            The unaudited pro forma consolidated  financial statements should be
read in conjunction with the historical  financial  statements and notes thereto
incorporated by reference for Empire  Resorts,  and included herein for Catskill
Development  and  Monticello  Raceway  Development.   The  pro  forma  financial
information is presented for  illustrative  purposes only and is not necessarily
indicative of the future  financial  position or future results of operations of
the  combined   enterprise  after  the  consolidation  of  Empire  Resorts  with
Monticello Raceway Management,  Monticello Casino Management,  Mohawk Management
and Monticello Raceway  Development,  or of the financial position or results of
operations of the combined  enterprise that would have actually occurred had the
consolidation  been effected as of the dates described above. The  consolidation
will be accounted for as a reverse acquisition wherein Catskill  Development and
the members of Monticello  Raceway  Development  will be treated as the acquirer
for  accounting  purposes  since the members of both  Catskill  Development  and
Monticello Raceway Development will control the combined enterprise.

                                       83



                 Condensed Consolidated Pro Forma Balance Sheet
                               as of June 30, 2003
                    (in thousands, except for per share data)

                                                                                  Pro Forma
                                                                                (Consolidated
                                                                                Empire Resorts
                                           Empire      Catskill                 and Catskill
                                           Resorts    Development Adjustments   Development)
                                           --------   ----------- -----------   --------------
ASSETS

Current Assets
  Cash .................................. $      94    $   1,396          --       $   1,490
  Receivables and other current assets ..        12          960          --             972
                                          ---------    ---------   ---------    ------------
  Total current assets ..................       106        2,356          --           2,426
  Net property and equipment ............      --          5,576      (5,576) A         --
  Investments and advances in affiliates      7,517         --        (7,517) C         --
  Development costs Cayuga Nation .......     1,056         --            --           1,056
  Deferred costs - leased property
  development ...........................      --          6,790          --           6,790
                                         ----------    ---------   ---------    ------------
      Total assets ....................   $   8,679    $  14,722      13,093)      $  10,308
                                         ==========    =========   =========    ============

LIABILITIES AND STOCKHOLDERS'
EQUITY

Current liabilities
  Accounts payable and accrued expenses . $     981    $   2,947          --       $   3,928
  Accrued payroll and related liabilities       360         --            --             360
                                          ---------    ---------   ---------   -------------
      Total current liabilities .......       1,341        2,947          --           4,288
                                          ---------    ---------   ---------    ------------
Long-term debt
  Notes payable .........................      --          7,154      (7,154) D         --
                                                                       5,073  F        5,073
Capital
  Common stock ..........................        57         --           166  B          223
Contributed capital and other .........        --         18,149     (18,149) G           --
Preferred stock .......................       6,855         --             --          6,855
Paid in capital .......................     114,174         --        (7,517) C
                                                                    (113,748) E
                                                                       7,154  D
                                                                        (166) B
                                                                      (5,576) A
                                                                      18,149  G       12,470
Deficit ...............................    (113,748)     (13,528)    113,748  E      (13,528)
Treasury stock ........................        --           --        (5,073) F       (5,073)
                                         ----------    ---------     ----------    ----------
      Total capital ...................       7,338        4,621     (11,012)            947
                                         ----------    ---------     ----------    ----------
      Total liabilities and capital ...   $   8,679    $  14,722   $ (13,093)      $  10,308
                                          =========    =========     ==========    ==========

                                       84



            Condensed Consolidated Pro Forma Statements of Operations
                      for the year ended December 31, 2002
                    (in thousands, except for per share data)

                                                                                  Pro Forma
                                                                                (Consolidated
                                                                                Empire Resorts
                                           Empire      Catskill                 and Catskill
                                           Resorts    Development Adjustments   Development)
                                           --------   ----------- -----------   --------------

Revenues ...............................   $   --      $ 11,366     $   --         $ 11,366
                                           --------    --------     ---------      -----------
Costs and Expenses
  Pari-mutuel wagering purses ..........       --         3,932         --            3,932
  Rent - Monticello Raceway lease ......       --          --          1,800 J        1,800
  Selling, general, administrative and
  other ................................      2,672       7,991         --           10,618
  Interest .............................        459         620         (620)I          814
                                                                         355 H
  Depreciation .........................         77         756         (756)K           77
  Pre-opening and development costs ....         24        --             --             24
                                           --------    --------     ---------      -----------
      Total costs and expenses .........      3,187      13,299          779         17,265
                                           --------    --------     ---------      -----------
Other income (loss)
  Impairment loss - Casino Ventures ....     (3,000)       --             --         (3,000)
  Gain on sale of investments and related
  management contract ..................      3,277        --             --          3,277
Impairment loss on investment...........     (6,934)       --          6,934 M          --
  Gain on extinguishment of debt .......        326        --             --            326
                                           --------    --------     ---------      -----------
      Total other net income ...........     (6,331)       --          6,934            603
                                           --------    --------     ---------      -----------
Net loss before minority interest ......     (9,518)     (1,933)       6,155         (5,296)
Minority interest ......................         18        --             --             18
                                           --------    --------     ---------      -----------
Net loss ...............................     (9,500)     (1,933)       6,155       $ (5,278)
                                           ========    ========     =========      ===========

Cumulative undeclared dividends on .....       (174)       --             --           (174)
preferred stock
Loss applicable to common shares .......     (9,674)     (1,933)       6,155       $ (5,452)
                                           ========    ========    =========      ===========
Weighted average common shares
outstanding, basic and diluted .........      4,615      16,643       (2,393)B       18,865
                                           ========    ========    =========      ===========
Loss per common share, basic
and diluted.............................   $  (2.10)   $  (0.12)    $    --       $   (0.29)
                                           ========    ========     =========      ==========

                                       85



            Condensed Consolidated Pro Forma Statements of Operations
                     for the six months ended June 30, 2003
                    (in thousands, except for per share data)

                                                                                  Pro Forma
                                                                                (Consolidated
                                                                                Empire Resorts
                                           Empire      Catskill                 and Catskill
                                           Resorts    Development Adjustments   Development)
                                           --------   ----------- -----------   --------------

Revenues ...............................   $   --      $  4,834      $   --         $  4,834
                                           --------    --------     ---------      -----------
Costs and Expenses
  Pari-mutuel wagering purses ..........       --         1,667          --            1,667
  Rent - Monticello Raceway lease ......       --          --             900 J          900
  Selling, general, administrative and
  other ................................      3,260       3,862          --            7,122
  Interest .............................        556         333          (333)I          734
                                                                          178 H
Depreciation ...........................       --           348          (348)K           --
                                          ---------    --------      -----------     ----------
      Total costs and expenses .........      3,816       6,210           397         10,423
                                          ---------    --------      -----------     ----------
Other income (loss)
Equity in loss of affiliate ............       (344)       --             344 L         --
Gain on sale of investments and related
management contract ....................        135        --            --              135
Gain on extinguishment of debt .........        389        --            --              389
Recovery of insurance proceeds .........        500        --            --              500
                                          ---------    --------      -----------     ----------
      Total other net income ...........        680        --            344           1,024
                                          ---------    --------      -----------     ----------
Net loss ...............................     (3,136)     (1,376)         (53)         (4,565)
                                          =========    ========      ===========     ==========
Cumulative undeclared dividends on
preferred stock ........................       (779)       --            --             (779)
Net loss applicable to common shares ...   $ (3,915)   $ (1,376)     $   (53)        $(5,344)
                                          =========    ========      ===========     ==========
Weighted average common shares
outstanding, basic and diluted .........      5,121      16,643       (2,393) B       19,371
                                          =========    ========      ===========    ============
Loss per common share,
basic and diluted......................    $  (0.76)   $  (0.08)     $   --         $  (0.28)
                                          =========    ========      ===========    ============

         Notes to Pro Forma Condensed Consolidated Financial Statements

            The following are brief descriptions of the pro forma adjustments to
the balance  sheets and statements of operations of Empire  Resorts,  Monticello
Raceway  Development,  an inactive company,  and Catskill Development to reflect
the   consolidation.   This   consolidation  was  accounted  for  as  a  reverse
acquisition.  Empire  Resorts is acquiring from Catskill  Development's  members
certain assets and  liabilities  and all of their equity  holdings of Monticello
Casino Management,  Monticello  Raceway Management and Mohawk Management.  After

                                       86





the  distribution  of Empire  Resorts'  stock to the  members  of both  Catskill
Development and Monticello  Raceway  Development  pursuant to the consolidation,
the members of Monticello Raceway Development and Catskill Development will hold
80.25% of the outstanding common stock of Empire Resorts.

            The pro forma financial  statements that represent the  consolidated
financial position of Monticello Raceway  Development,  Catskill Development and
Empire Resorts are based on estimates and historical cost. These estimates could
and most likely will vary, possibly substantially,  from the actual results that
will be reported in a future  reporting  period  after the date of the  closing.
Prior to the closing, new approvals, regulations,  ratification of contracts and
certified  appraisals  may be  disclosed  in  future  public  filings,  possibly
changing a reader's  evaluation of the  consolidation.  In addition,  subsequent
public filings may contain  information  different from the information in these
pro forma financial statements.

            The condensed consolidated pro-forma balance sheet is based upon the
historical balance sheets of Empire Resorts,  Monticello Raceway Development and
Catskill  Development  as of June 30, 2003 and assumes  the  consolidation  took
place on that date.  The condensed  statements of operations  for the year ended
December  31, 2002 and the for the six months ended June 30, 2003 are based upon
the historical statements of Empire Resorts,  Monticello Raceway Development and
Catskill  Development for those periods.  The pro forma statements of operations
have been adjusted to reflect the assumption that the  consolidation  took place
on January 1, 2002.

            The unaudited pro forma financial statements should be read together
with  the  financial   statements  and  notes  of  Empire  Resorts,   which  are
incorporated  by reference from Empire Resorts' Annual Report on Form 10-KSB for
the year ended  December 31, 2002 and  Quarterly  Reports on Form 10-QSB for the
quarters  ended  March 31 and  June 30,  2003,  and the  consolidated  financial
statements of Catskill  Development for the year ended December 31, 2002 and the
six months ended June 30, 2003.

PRO  FORMA  ADJUSTMENTS  TO THE  CONDENSED  CONSOLIDATED  BALANCE  SHEET  ARE AS
FOLLOWS:

(A)         Distribution  of net property and equipment of Catskill  Development
            to the members of Catskill Development excluding Empire Resorts.

(B)         Issuance  of  approximately  16,643,000  shares of  Empire  Resorts'
            common stock in connection with the  consolidation.  The table below
            summarizes the changes to Empire Resorts'  capitalization  that will
            result from the  consolidation.  The  outstanding  balance of common
            stock  and  options  outstanding  as of July  2003  was used for the
            presentation of these pro forma financial statements. At the date of
            the closing of the consolidation,  the shares of common stock issued
            will  reflect  the actual  amount of shares  outstanding  as of that
            date.

                                       87




     Number of shares of common stock outstanding prior to the
     consolidation (approximated)......................................   5,711,000
     Number of shares of common stock to be redeemed (see note F)......  (2,393,000)
     Outstanding options (approximated)................................     778,000
     Shares issued in consolidation to members of both Catskill
     Development and Monticello Raceway Development (approximated).....  16,643,000
     Total percentage of shares to be issued pursuant to the
     consolidation (actual).........................................        80.25%

(C)  To eliminate Empire Resorts' investment in Catskill Development recorded on
     Empire Resorts' balance sheet at June 30, 2003 in the amount of $7,517,000.

(D)  Contribution  of long term debt and related  interest by certain members of
     Catskill Development to the new consolidated entity in consideration of the
     consolidation.

(E)  Elimination  of  Empire  Resorts'  recorded  deficit,   as  the  accounting
     acquiree.

(F)  Redemption  of Empire  Resorts'  common  stock of certain  stockholders  in
     exchange   for   approximately    $5,073,000   of   individual    long-term
     non-convertible   7%  notes   payable,   which  was  a  condition   of  the
     consolidation.

PRO FORMA ADJUSTMENTS TO THE CONDENSED CONSOLIDATED BALANCE SHEET:

(G)  Elimination  of  contributed   capital  of  Catskill   Development  as  the
     accounting acquirer.

PRO FORMA ADJUSTMENTS TO THE CONDENSED  CONSOLIDATED STATEMENT OF OPERATIONS ARE
AS FOLLOWS:

(H)  Records the interest  expense for the year ended  December 31, 2002 and the
     six months ended June 30, 2003 as a result of Item F above.

(I)  Elimination  of  interest  on long term debt (see (D))  related  to certain
     members of Catskill Development.

(J)  Reflects recognition of rent expense to be paid to Catskill Development for
     the year ended  December  31,  2002 and for the six  months  ended June 30,
     2003.

(K)  Elimination of  depreciation  of net property and equipment  distributed by
     Catskill Development to its members not including Empire Resorts.

(L)  Elimination of Empire Resorts' recorded loss in equity of affiliate for the
     six months  ended June 30.  2003  included  in the  operations  of Catskill
     Development.


(M)  Elimination  of  loss  based  upon  impairment  recognized  in  2002 on the
     investment in Catskill Development.


                                       88




                                    BUSINESS

                                 EMPIRE RESORTS

            For a  detailed  discussion  of  the  following  items  and  further
information concerning Empire Resorts,  please see Empire Resorts' Annual Report
on Form 10-KSB for the year ended  December  31,  2002,  Empire  Resorts'  Proxy
Statement dated February 21, 2003 for its 2003 Annual Meeting of Stockholders on
Schedule 14A and Empire Resorts' Quarterly Report on Form 10-QSB for the quarter
ended  September  30,  2003,   copies  of  which   accompany  this   information
statement/prospectus:


            o   Empire Resorts' business;

            o   Empire Resorts' property;

            o   pending  legal   proceedings   involving  Empire  Resorts,   its
                principal stockholders and/or managers;

            o   matters  submitted  to a vote of  Empire  Resorts'  stockholders
                during the fourth quarter of 2002;

            o   the  market  for  Empire  Resorts'  common  stock  and  sales of
                unregistered securities;

            o   Empire Resorts' disclosure controls and procedures;

            o   Empire Resorts' directors and executive officers;

            o   Empire Resort's executive compensation;

            o   security  ownership of certain  beneficial owners and management
                of Empire Resorts and related stockholder matters;

            o   changes in and disagreements  with accountants in accounting and
                financial disclosure;

            o   certain relationships and related transactions  involving Empire
                Resorts; and

            o   fees paid to Empire Resorts'  principal  accountants in 2002 and
                the services that were performed.

            For further  information,  please also review the documents that are
incorporated by reference into this information statement/prospectus. See "Where
You Can Find  More  Information"  beginning  on page 174 and  "Incorporation  of
Documents by Reference" beginning on page 175.

                                       89





BUSINESS AFTER THE CONSOLIDATION

            Following the consolidation,  each of Monticello Raceway Management,
Monticello  Casino  Management,   Monticello  Raceway   Development  and  Mohawk
Management  will become  wholly owned  subsidiaries  of Empire  Resorts.  Empire
Resorts  intends to manage  these  holdings  in a manner  consistent  with their
existing  businesses and plans of operation.  See "Business - Monticello Raceway
Management"  beginning  on page 90,  "Business - Monticello  Casino  Management"
beginning on page 96, "Business - Monticello Raceway  Development"  beginning on
page 103 and  "Business  - Mohawk  Management"  beginning  on page  108.  Empire
Resorts does not have any additional  business plans following the consolidation
other than overseeing its investment in these acquired companies.

                          MONTICELLO RACEWAY MANAGEMENT

GENERAL

            Monticello  Raceway  Management is a New York corporation whose sole
business is the operation of Monticello Raceway, a harness horseracing  facility
located in Monticello,  New York,  approximately  90 miles northwest of New York
City in the Catskills Mountains.

RACETRACK OPERATIONS

            Monticello  Raceway began  operation in 1958 and offers  pari-mutuel
wagering on live harness horseracing  throughout the year, along with year round
simulcasting  from  various  harness  and  thoroughbred  racetracks  across  the
country. Monticello Raceway derives its revenue principally from (i) wagering at
Monticello  Raceway on live races run at the track;  (ii) fees from  wagering at
out-of-state   locations  on  races  run  at  Monticello  Raceway  using  export
simulcasting;  (iii)  revenue  allocations,  as  prescribed by law, from betting
activity at  "off-track  betting"  facilities  located in New York City,  Nassau
County and the Catskills  region;  (iv) wagering at Monticello  Raceway on races
broadcast  from  out-of-state  racetracks  using  import  simulcasting;  and (v)
admission  fees,  program and racing form sales,  the sale of food and beverages
and certain other ancillary  activities.  Some of Monticello Raceway's off-track
betting revenue, however, is shared with Yonkers Raceway, a harness horse racing
facility located in Yonkers, New York.

VIDEO LOTTERY TERMINALS

            Video lottery terminals are video gaming devices generally  operated
under the auspices of a state  lottery.  To the patron,  these  devices are very
similar in appearance to a traditional slot machine. During the past decade, the
operation of these gaming  devices at racetracks in several  states  outside New
York has been authorized, with a portion of the revenues dedicated to increasing
purses.  The operation of these devices has generally  improved the economics of
the racetracks' operations.

            On October 31, 2001,  the State of New York enacted a bill  granting
seven racetracks across the state,  including  Monticello Raceway,  the right to
have the New  York  State  Lottery  install  video  lottery  terminals  on their
premises. The video lottery terminal operation will be conducted by the New York

                                       90





State Lottery with the racetracks functioning largely as agents for the New York
State  Lottery.  Under  the  initial  New  York  video  lottery  terminal  laws,
Monticello Raceway would be permitted to retain 25% of the revenues generated by
video lottery terminal operations after the payout of prizes, but must apply 35%
of its revenue from video lottery  terminals in their first year of operation to
enhancing  purses at the track  (escalating  to 45% of  revenue in years two and
three),  and to surrender an additional  5% of such revenue to a state  breeding
development  fund.  Monticello  Raceway,   under  additional   legislation,   is
authorized to enter into an agreement with the  organizations  representing  its
horsemen  to reduce the  percentages  of its vendor  fees  dedicated  to enhance
purses at such track during the initial three years,  to an amount not less than
25% of any gross revenues received by Monticello Raceway. The initial law allows
Monticello  Raceway to operate its video  lottery  terminals  from 10:00 a.m. to
10:00 p.m. on weekdays and midnight on weekends.  Also,  the initial law was set
to expire December 31, 2007.

            Monticello  Raceway  Management has submitted a business plan to the
New York State Lottery,  in accordance  with New York State Lottery  procedures,
based upon the initial  legislation and certain  assumptions  recommended by the
New York State Lottery and other estimates considered  preliminary by Monticello
Raceway  Management.  Based upon this business  plan, the New York State Lottery
has made an initial  allocation of 1,800 video  lottery  terminals to Monticello
Raceway. Using these estimates and assumptions,  the plan did not show levels of
operating income currently  considered adequate by Monticello Raceway Management
to go  forward  with  the  project.  The  New  York  State  Lottery  has not yet
established a firm start date or adopted regulations with regard to the program.

            On May 15, 2003, New York State enacted legislative  amendments that
extend the initial  term of the program to 10-years  from the date of  inception
and that permit year round operations with extended hours.  Approximately 29% of
total video lottery terminal revenue received is to be distributed to the tracks
and  their  horsemen/breeders'  associations.  A  percentage  of  video  lottery
terminal revenues is to be made available to provide gradually increasing purses
for the horsemen and for a breeding  fund,  thus improving the quality of racing
at the track.  During the initial  eighteen months of the program,  the New York
State Lottery has the ability to approve the opening of temporary  video lottery
terminal structures, while more comprehensive construction takes place.

DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS

            Monticello Raceway Management's directors and executive officers are
as follows:

            Name                         Age          Position
            ----                         ---          --------
            Philip B. Berman             47           Director
            Thomas W. Aro                60           Director
            Philip Carter                52           Director
            Clifford A. Ehrlich          43           President, Treasurer and
                                                      Director
            Morad Tahbaz                 47           Vice President, Secretary
                                                      and Director

                                       91





            The principal  occupation for the past five years and current public
directorships of each of Monticello Raceway Management's directors and executive
officers are as follows:

            PHILIP B. BERMAN.  Philip B. Berman is the vice president of project
coordination of Empire  Resorts.  From 1995 to 2003, Mr. Berman was the director
of project operations for Watermark Group, Inc. Prior to that, he was a regional
manager of the insurance division at Markel Rhulen Insurance Corporation and was
the  operations   manager  at  Maranatha   Associates,   a  civil   engineering,
construction  development and consulting firm. Mr. Berman holds the professional
designations  of  project   management   professional  and  certified   internet
webmaster.  Mr. Berman has a B.A. in business  management from the University of
Miami, Florida and is completing his studies and thesis for an M.S. in strategic
management from Manhattanville College.

            THOMAS W.  ARO.  Thomas W. Aro is  Empire  Resorts'  executive  vice
president  and  secretary  and was a member of its board of directors  from 1994
through July 2003.  Mr. Aro has been Empire  Resorts'  executive  vice president
since its formation in 1993 and its secretary since 1998. Mr. Aro also serves as
chief operating  officer of Empire Resorts' gaming  subsidiaries and has over 30
years experience in the hospitality and gaming industries.  Mr. Aro received his
B.S. from the University of Arizona and is a certified public accountant.

            PHILIP  CARTER.  Philip  Carter is a member of the State Bars of New
York and California,  specializing in real estate and partnership taxation.  Mr.
Carter began his legal career working on Wall Street at the law firms of Emmett,
Marvin  & Martin  and  Rosenman  &  Colin,  before  starting  his own law  firm,
Bernstein  & Carter,  in 1980.  Mr.  Carter  was a member of the  ownership  and
development team that built Americas Tower at 1177 Avenue of the Americas,  is a
partner in Americas  Tower  Partners and is involved in the racetrack and casino
development at Monticello  Raceway.  Since 1996, Mr. Carter has been involved on
an almost daily basis with the track  operations.  Mr. Carter is a member of the
Catskill  Development  Executive Committee in charge of operations at Monticello
Raceway.  Mr. Carter is also the chairman and chief  executive  officer of Urban
Partners,  an owner and  developer  of real  estate  in  Manhattan.  Mr.  Carter
received both a B.S. in political  science and a J.D. from the University of San
Francisco  and  attended  the  masters of law  taxation  program at the New York
University School of Law.


            CLIFFORD A.  EHRLICH.  Clifford A. Ehrlich has served as  Monticello
Raceway  Management's  president and general  manager  since 1995.  From 1981 to
1994,  Mr.  Ehrlich was vice  president  and an owner of the Pines  Resort Hotel
&  Conference Center, a legendary  year-round resort hotel in the Catskills.
Over the years,  Mr.  Ehrlich has also held the position of executive  committee
member of the Sullivan County Tourism  Advisory Board and served as president of
the Catskill Resort  Association.  Mr. Ehrlich graduated with a Bachelors Degree
in business administration with an emphasis in management and marketing from the
University of Colorado Business School in 1981.


            MORAD TAHBAZ. Morad Tahbaz is the president of Catskill Development,
a member of  Monticello  Raceway's  Operating  Board,  the  president  of Empire
Resorts and a director of Empire Resorts. Mr. Tahbaz also serves on the board of
directors of Air Methods  Corporation,  a publicly  traded company that provides
air medical  emergency  transport  services  and systems  throughout  the United

                                       92





States of America.  In 1983, Mr. Tahbaz joined Americas Partners,  at which time
he became primarily responsible for acquisitions.  Subsequently, Mr. Tahbaz took
on the added  responsibility  of the  development of Americas Tower, a 1,000,000
square  foot  office  building  in  New  York  that  is  the   headquarters  for
PriceWaterhouseCoopers.  Mr. Tahbaz remains a partner in Americas Partners.  Mr.
Tahbaz  holds a B.A. in  philosophy  and fine arts from Colgate  University  and
attended the Institute for  Architecture  and Urban Studies in New York. He also
holds an M.B.A. in finance from Columbia University Graduate School of Business,
where  throughout  his  career,  he has  conducted  a series of lectures on real
estate development and finance for graduate students.

EXECUTIVE COMPENSATION

            The following table provides certain  information for the year ended
December  31, 2002  concerning  compensation  awarded  to,  earned by or paid to
Monticello  Raceway  Management's  president.   Other  than  Monticello  Raceway
Management's president,  none of its executive officers received compensation in
excess of $100,000 during fiscal 2002.

                                                                                         Long Term
                                                                                        Compensation
                                                                                        ------------
                                                                                         Securities
Name and Principal                                                Other Annual           Underlying
Position                      Year        Salary ($)    Bonus     Compensation ($)(1)      Options
---------                     ----        ------        -----     ------------             -------
Clifford A. Ehrlich
  President and Secretary     2002        $120,000        --           --                    --

(1)  Perquisites  and other  personal  benefits,  securities or property did not
     exceed the lesser of $50,000 or 10% of such executive's salary and bonus.

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT


            The following table sets forth information  concerning  ownership of
Monticello  Raceway  Management's  capital stock, as of November 5, 2003, by (i)
each person  known to be the  beneficial  owner of more than five percent of its
capital  stock,  (ii) each director and executive  officer  required to be named
hereunder  and (iii) all directors  and  executive  officers as a group.  Unless
otherwise noted,  each person listed below has sole voting and dispositive power
with  respect to the  shares  beneficially  owned by him and his  address is c/o
Monticello Raceway, Route 17B, P.O. Box 5013, Monticello, NY, 12701.


                                    Common Stock Beneficially Owned(1)
Name and Address                    Shares(2)            Percentage(2)
----------------                    ---------            -------------
Robert A. Berman(3)                  11.56                  11.56%
Joseph E. Bernstein(4)                8.75                   8.75%
Ralph J. Bernstein(5)                 8.75                   8.75%
JB Trust(4)                           8.58                   8.58%
Maurice Dabbah(6)                     7.88                   7.88%
Morad Tahbaz(7)                       5.00                   5.00%
Clifford A. Ehrlich(8)                1.38                   1.38%

                                       93




                       Common Stock Beneficially Owned(1)
Name and Address                    Shares(2)            Percentage(2)
----------------                    ---------            -------------
Philip Carter                         2.50                   2.50%
Thomas W. Aro                           --                     --
Philip B. Berman                      6.46                   6.46%
All Directors and Executive
Officers as a Group (5
persons) (7)(8)                      66.90                  66.90%

--------------

(1)  A person is deemed to be the beneficial owner of voting securities that can
     be acquired  by such  person  within 60 days after the record date upon the
     exercise  of  options  and  warrants  and  the  conversion  of  convertible
     securities.  Each beneficial  owner's percentage of ownership is determined
     by assuming that all options,  warrants or convertible  securities  held by
     such person  (but not those held by any other  person)  that are  currently
     exercisable  or  convertible  (i.e.,  that are  exercisable  or convertible
     within 60 days after the record date) have been exercised or converted.

(2)  As Monticello  Raceway  Management is a wholly owned subsidiary of Catskill
     Development,  except as otherwise noted, each person's beneficial ownership
     is determined by his beneficial ownership in Catskill Development.

(3)  Robert A. Berman beneficially owns a 67.66% limited partnership interest of
     Watertone  Holdings,  which owns an economic ownership interest of 15%, 13%
     and 25%,  respectively,  of  Catskill  Development's  casino  and  wagering
     operations;  horseracing and other pari-mutuel activities;  and real estate
     ownership and development  operations.  Mr. Berman also  beneficially  owns
     390,127  shares of Empire  Resorts'  common  stock,  which owns an economic
     ownership  interest of 48.31%,  36.88% and 25%,  respectively,  of Catskill
     Development's  casino  and  wagering  operations;   horseracing  and  other
     pari-mutuel   activities;   and  real  estate   ownership  and  development
     operations.  Mr.  Berman is a member  of  Catskill  Development's  board of
     directors.


(4)  Joseph E. Bernstein beneficially owns a 1% economic interest and 50% voting
     power  in  Americas  Tower  Partners,  and  the  JB  Trust,  in  which  Mr.
     Bernstein's  mother,  Helen Bernstein,  is sole trustee and Mr. Bernstein's
     children  are  ultimate  beneficiaries,  beneficially  owns a 49%  economic
     interest,  with no  voting  rights.  Joseph E.  Bernstein  and the JB Trust
     beneficially  own, 2% and 98%,  respectively,  of 35% of the  interests  of
     Americas  Tower  Partners in Catskill  Development,  which  comprises of an
     economic ownership interest of 33%, 25% and 25%, respectively,  of Catskill
     Development's  casino  and  wagering  operations,   horseracing  and  other

                                       94





     pari-mutuel   activities,   and  real  estate   ownership  and  development
     operations.  By virtue of a 50% voting  control  position in Americas Tower
     Partners,  Joseph E. Bernstein is deemed to be the beneficial  owner of 35%
     of the interest of Americas  Tower  Partners in Catskill  Development.  Mr.
     Bernstein disclaims beneficial ownership of the assets of the JB Trust.


(5)  Ralph J. Bernstein beneficially owns a 35% partnership interest of Americas
     Tower Partners,  which owns an economic  ownership interest of 33%, 25% and
     25%,   respectively,   of  Catskill   Development's   casino  and  wagering
     operations;  horseracing and other pari-mutuel activities;  and real estate
     ownership and development operations. Mr. Bernstein is a member of Catskill
     Development's board of directors.

(6)  Maurice  Dabbah  beneficially  owns  35% of  the  membership  interests  of
     Monticello Realty,  which owns an economic ownership interest of 33%, 22.5%
     and 22.5%,  respectively,  of Catskill  Development's  casino and  wagering
     operations;  horseracing and other pari-mutuel activities;  and real estate
     ownership and  development  operations.  Mr. Dabbah is a member of Catskill
     Development's board of directors.

(7)  Morad Tahbaz beneficially owns a 20% partnership interest of Americas Tower
     Partners,  which owns an economic  ownership  interest of 33%, 25% and 25%,
     respectively,  of Catskill  Development's  casino and wagering  operations;
     horseracing and other pari-mutuel activities; and real estate ownership and
     development operations.

(8)  Clifford  A.  Ehrlich  owns an  economic  ownership  interest  of  1.38% of
     Catskill  Development's  casino and wagering  operations;  horseracing  and
     other  pari-mutuel  activities;  and real estate  ownership and development
     operations.

MARKET FOR MONTICELLO RACEWAY MANAGEMENT'S CAPITAL STOCK,  DIVIDENDS AND RELATED
MATTERS

            At this  time,  there is no public  trading  market  for  Monticello
Raceway  Management's  capital stock,  nor is any such public market expected to
develop. As indicated above, Monticello Raceway Management is presently a wholly
owned subsidiary of Catskill Development.

            There  are no  outstanding  options  or  warrants  to  purchase,  or
securities convertible into, Monticello Raceway Management's capital stock.

            No shares of Monticello  Raceway  Management's  capital stock can be
sold  pursuant to Rule 144 under the  Securities  Act of 1933,  as amended,  and
neither Empire Resorts nor Monticello  Raceway Management has agreed to register
any shares of Monticello Raceway Management's capital stock under the Securities
Act of 1933,  as amended,  for sale by security  holders.  Furthermore,  neither
Empire Resorts nor Monticello  Raceway  Management has any intention to publicly
offer any capital stock of Monticello Raceway Management now or in the future.

            Monticello  Raceway  Management  has not  declared a dividend on its
common shares and does not have an equity compensation plan.

                                       95





                          MONTICELLO CASINO MANAGEMENT

GENERAL

            Monticello  Casino  Management  was  formed  by Empire  Resorts  and
Catskill  Development  in July  2000 for the  stated  purpose  of  managing  the
operations of a casino and related  gaming  activities on those 29 acres of land
subject to the Land Purchase Agreement.

GAMING FACILITY MANAGEMENT AGREEMENT


            On April 3, 2003, Monticello Casino Management entered into a gaming
facility management  agreement with the Cayuga Nation of New York and the Cayuga
Catskill  Gaming  Authority (the "GAMING  FACILITY  MANAGEMENT  AGREEMENT"),  an
instrumentality of the Cayuga Nation of New York which was formed to develop and
conduct  gaming  operations on the 29 acres of land subject to the Land Purchase
Agreement.  Under this  agreement,  the Cayuga  Catskill  Gaming  Authority  has
retained Monticello Casino Management to manage all Class III Gaming activities,
other  than  horseracing,  that may be  conducted  on the land for  seven  years
commencing  upon  the  National  Indian  Gaming  Commission's  approval  of  the
agreement.  Monticello  Casino  Management  has also been retained to manage all
lawful  commercial  activities  on the land  related to gaming such as automatic
teller machines, food service,  lodging and retail. At the same time, Monticello
Casino  Management  has agreed to assist the Cayuga  Catskill  Gaming  Authority
obtain  financing  for  the  gaming   enterprise  and  all  related   commercial
activities.  In exchange for these  services,  Monticello  Casino  Management is
entitled to receive a management  fee equal to 35% of the net  revenues  derived
from the  operations  it  manages.  This 35% figure was agreed to by each of the
parties to the Gaming  Facility  Management  Agreement as it is consistent  with
other  management fees that have been granted to third parties in similar Native
American gaming facility management agreements. For instance, in the Amended and
Restated Gaming Facility  Management  Agreement dated,  August 30, 1995, between
the Mohegan Tribe of Indians of Connecticut and Trading Cove  Associates,  Inc.,
Trading Cove Associates,  Inc. was entitled to a management fee ranging from 30%
to 40%,  depending on the level of the net revenues generated by the Mohegan Sun
Casino (See page F-8 of the Registration Statement on Form S-1/A, No. 033-80655,
filed by the Mohegan  Tribal Gaming  Authority  with the Securities and Exchange
Commission on June 3, 1996).


            Monticello   Casino   Management  is  entitled  to  pay  itself  its
management fee on or before the 25th day of each calendar month. However, before
Monticello  Casino  Management  can pay itself its fee, it must first pay to the
Cayuga  Catskill  Gaming  Authority a minimum return of  $516,666.66  per month.
These minimum  priority  payments are to be charged  against the Cayuga Catskill
Gaming Authority's  distribution of net revenues and, when there is insufficient
net  revenues  in a given  month to pay the minimum  return,  Monticello  Casino
Management  is obligated to advance the funds  necessary to  compensate  for the
deficiency,  with the Cayuga Catskill Gaming  Authority  reimbursing  Monticello
Casino Management in the next succeeding month or months.  The minimum return is
required to be paid to the Cayuga Catskill  Gaming  Authority every month gaming
is  conducted,  including on a pro rata basis during those months when gaming is
conducted only for part of a month.

                                       96





            While the terms of the Gaming Facility Management  Agreement provide
Monticello   Casino  Management  with  wide  discretion  as  to  the  day-to-day
management of the gaming  facilities,  all major decisions or expenditures  must
first  be  approved  by a  management  business  board to be  comprised  of four
persons, two of whom are to be appointed by the Cayuga Catskill Gaming Authority
and the other two of whom are to be appointed by Monticello  Casino  Management.
In addition,  absent  approval from this management  business board,  Monticello
Casino  Management's  operational  expenses for any fiscal year must stay within
the budget that has been agreed to by the board for that fiscal  year.  Finally,
under the Gaming  Facility  Management  Agreement,  the Cayuga  Catskill  Gaming
Authority is entitled to select a  reasonable  number of  inspectors  that shall
have full  access,  without  notice,  to all  aspects of the gaming  enterprise,
including the daily  operations of the  enterprise,  and the right to verify the
daily gross revenues and all income of the gaming enterprise.  Monticello Casino
Management  is also required to have the gaming  enterprise's  books and records
audited  each  year by a  nationally  recognized  independent  certified  public
accounting firm with casino industry experience.

            In  carrying  out its  duties as  manager  of the  gaming  facility,
Monticello  Raceway  Management  is required to provide the Cayuga Nation of New
York and other recognized Native American tribes with certain  preferences.  For
instance,  under the Gaming Facility  Management  Agreement,  Monticello  Casino
Management must:

            o   give preference in recruiting,  training and employment first to
                qualified members of the Cayuga Nation of New York, and secondly
                to other qualified Native Americans and the local community;

            o   provide  training  programs for members of the Cayuga  Nation of
                New York;

            o   use reasonable  commercial  efforts to recruit and train members
                of the Cayuga Nation of New York, including, without limitation,
                providing job fairs for members of the Cayuga Nation of New York
                and clearly  specifying in all job advertisements the preference
                for members of the Cayuga Nation of New York; and

            o   in entering into  contracts for the supply of goods and services
                for the gaming  enterprise,  give preference  first to qualified
                members of the Cayuga Nation of New York, and qualified business
                entities  certified by the Cayuga Catskill  Gaming  Authority or
                the Cayuga Nation of New York as being  controlled by members of
                the Cayuga  Nation of New York,  and  second to other  qualified
                Native Americans and qualified  business  entities  certified by
                the Cayuga Catskill Gaming  Authority to be controlled by Native
                Americans and to the local community.

PLAN OF OPERATIONS

            Monticello  Casino  Management  does not have any plan of operations
for the next twelve  months,  other than waiting for the National  Indian Gaming
Commission  and  Bureau of Indian  Affairs  to  approve  the terms of the Gaming
Facility Management Agreement and Land Purchase Agreement,  respectively.  Until
the National Indian Gaming Commission  approves the terms of the Gaming Facility

                                       97





Management  Agreement  and  the  Land  Purchase  Agreement,   Monticello  Casino
Management  will  not  have any  cash  requirements  nor the  need to raise  any
additional funds. Following approval of the Gaming Facility Management Agreement
and the Land Purchase  Agreement,  Monticello Casino Management intends to carry
out its duties under the Gaming Facility Management  Agreement as the manager of
all  Class  III  Gaming  on the 29 acres of land  subject  to the Land  Purchase
Agreement,  and to assist the Cayuga Catskill Gaming  Authority in its effort to
obtain  financing  for the gaming  facility  and all  ancillary  activities.  As
Monticello Casino Management's  obligations under the Gaming Facility Management
Agreement do not require any meaningful initial expenditures,  Monticello Casino
Management  does not  expect  its  capital  needs to change  should  the  Gaming
Facility Management Agreement and Land Purchase Agreement be approved within the
next twelve months. Initially,  Monticello Casino Management anticipates that it
will only need to hire three to five employees,  whose salaries would be covered
by the management  fees  Monticello  Casino  Management is entitled to under the
Gaming  Facility  Management  Agreement.  Alternatively,  these  funds  will  be
provided by Empire Resorts,  either directly from Empire Resorts'  cash-on-hand,
or from the  issuance  by  Empire  Resorts  of  additional  equity  and/or  debt
securities. Also, Monticello Casino Management plans to use office space located
within a building at Monticello  Raceway at no cost, as both  Monticello  Casino
Management  and Monticello  Raceway will be owned and leased by Empire  Resorts,
respectively, at closing.

DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS

            Monticello Casino  Management's  managers and executive officers are
as follows:

            Name                      Age          Position
            ----                      ---          --------
            Robert A. Berman          43           Manager
            Ralph J. Bernstein        46           Manager
            Thomas W. Aro             60           Manager
            Morad Tahbaz              47           Manager

            The principal  occupation for the past five years and current public
directorships of each of Monticello Casino Management's managers are as follows:

            ROBERT  A.  BERMAN.  Robert  A.  Berman  is  Empire  Resorts'  chief
executive  officer,  a member of its board of directors and its former chairman.
As the managing director of Watermark Investments Limited from 1994 to 2000, Mr.
Berman  oversaw a number  of  private  partnerships  investing  in real  estate,
technology and basic industries. From 1998 to 1999, Mr. Berman was vice chairman
and a director of Executone  Information Systems, a telecommunications  company.
From  1995 to 1999,  Mr.  Berman  served  as  chairman  of the  board  and chief
executive  officer of  Hospitality  Worldwide  Services,  Inc., a hotel services
company with average annual sales above $150 million.

            RALPH J.  BERNSTEIN.  Ralph J. Bernstein is a co-founder and general
partner of Americas Partners, an investment and venture capital firm, and, since
1981 has been  responsible  for the  acquisition,  renovation,  development  and
financing of several  million  square feet of commercial  space.  Mr.  Bernstein
started his career in agribusiness with a large European  multi-national trading
and real estate  development  company,  where he was later  responsible for that

                                       98





company's U.S. real estate  activities.  Mr. Bernstein also serves as a director
for Air Methods Corporation, a publicly traded company that provides air medical
emergency  transport  services  and  systems  throughout  the  United  States of
America.  Mr.  Bernstein  holds a Bachelor of Arts degree in economics  from the
University of California at Davis.

            THOMAS W.  ARO.  Thomas W. Aro is  Empire  Resorts'  executive  vice
president  and  secretary  and was a member of its board of directors  from 1994
through July 2003.  Mr. Aro has been Empire  Resorts'  executive  vice president
since its formation in 1993 and its secretary since 1998. Mr. Aro also serves as
chief operating  officer of Empire Resorts' gaming  subsidiaries and has over 30
years experience in the hospitality and gaming industries.  Mr. Aro received his
BS from the University of Arizona and is a certified public accountant.

            MORAD TAHBAZ. Morad Tahbaz is the president of Catskill Development,
a member of  Monticello  Raceway's  Operating  Board,  the  president  of Empire
Resorts and a director of Empire Resorts. Mr. Tahbaz also serves on the board of
directors of Air Methods  Corporation,  a publicly  traded company that provides
air medical  emergency  transport  services  and systems  throughout  the United
States of America. In 1983 Mr. Tahbaz joined Americas Partners, at which time he
became primarily responsible for acquisitions.  Subsequently, Mr. Tahbaz took on
the added  responsibility  of the  development  of Americas  Tower,  a 1,000,000
square  foot  office  building  in  New  York  that  is  the   headquarters  for
PriceWaterhouseCoopers.  Mr. Tahbaz remains a partner in Americas Partners.  Mr.
Tahbaz  holds a B.A. in  philosophy  and fine arts from Colgate  University  and
attended the Institute for  Architecture  and Urban Studies in New York. He also
holds an M.B.A. in finance from Columbia University Graduate School of Business,
where  throughout  his  career,  he has  conducted  a series of lectures on real
estate development and finance for graduate students.

EXECUTIVE COMPENSATION

            Monticello Casino Management has never had any meaningful operations
or engaged in any  business  other than the  negotiation  and  execution  of the
Gaming Facility Management Agreement. Consequently, Monticello Casino Management
has never  elected or appointed  any  officers,  or persons  acting in a similar
capacity. Moreover, Monticello Casino Management has never had any employees and
no member,  manager or other person has ever  received any form of  compensation
from Monticello Casino Management.

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT


            The following table sets forth information  concerning  ownership of
Monticello Casino Management's  membership interests, as of November 5, 2003, by
(i) each person  known to be the  beneficial  owner of more than five percent of
Monticello  Casino  Management's  membership  interests,  (ii) each  manager and
executive  officer  required to be named  hereunder  and (iii) all  managers and
executive officers as a group.  Unless otherwise noted, each person listed below
has sole voting and dispositive power with respect to the interests beneficially
owned by him and his address is c/o  Monticello  Raceway,  Route 17B,  P.O.  Box
5013, Monticello, NY, 12701.


                                       99




                                   Percentage Membership Interests
Name and Address                        Beneficially Owned(1)
----------------                        ---------------------
Catskill Development                           60.00%
Alpha Monticello                               40.00%
Empire Resorts(2)                              40.00%
Robert A. Berman(3)                             9.74%
Maurice Dabbah(4)                               7.00%
Joseph E. Bernstein(5)                          7.00%
Ralph J. Bernstein(6)                           7.00%
JB Trust(5)                                     6.79%
Morad Tahbaz(7)                                 4.00%
Thomas W. Aro                                    *
All Managers and Executive
Officers as a Group (4 persons)
(4)(6)(7)                                      20.74%

                                      100





--------------
* less than 1%

(1)         A person is deemed to be the beneficial  owner of voting  securities
            that can be acquired by such person  within 60 days after the record
            date upon the exercise of options and warrants and the conversion of
            convertible  securities.   Each  beneficial  owner's  percentage  of
            ownership is determined  by assuming  that all options,  warrants or
            convertible  securities  held by such  person (but not those held by
            any other  person) that are  currently  exercisable  or  convertible
            (i.e., that are exercisable or convertible  within 60 days after the
            record date) have been exercised or converted.

(2)         These membership  interests are held by Alpha  Monticello,  a wholly
            owned subsidiary of Empire Resorts.

(3)         Robert A.  Berman  beneficially  owns a 67.66%  limited  partnership
            interest of  Watertone  Holdings,  which owns an economic  ownership
            interest   of  15%,   13%  and  25%,   respectively,   of   Catskill
            Development's casino and wagering operations;  horseracing and other
            pari-mutuel  activities;  and real estate  ownership and development
            operations.  Mr.  Berman also  beneficially  owns 390,127  shares of
            Empire  Resorts'  common  stock,  which owns an  economic  ownership
            interest  of  48.31%,  36.88%  and 25%,  respectively,  of  Catskill
            Development's casino and wagering operations;  horseracing and other
            pari-mutuel  activities;  and real estate  ownership and development
            operations.  Catskill  Development  owns  60% of  Monticello  Casino
            Management and Empire  Resorts,  through a wholly owned  subsidiary,
            beneficially  owns a 40%  membership  interest of Monticello  Casino
            Management.

(4)         Maurice Dabbah beneficially owns 35% of the membership  interests of
            Monticello Realty, which owns an economic ownership interest of 33%,
            22.5% and 22.5%, respectively,  of Catskill Development's casino and
            wagering operations;  horseracing and other pari-mutuel  activities;
            and real  estate  ownership  and  development  operations.  Catskill
            Development,  in turn, owns a 60% membership  interest of Monticello
            Casino Management.


(5)         Joseph E. Bernstein beneficially owns a 1% economic interest and 50%
            voting power in Americas Tower Partners,  and the JB Trust, in which
            Mr.  Bernstein's  mother,  Helen Bernstein,  is sole trustee and Mr.
            Bernstein's children are ultimate beneficiaries, beneficially owns a
            49% economic  interest,  with no voting rights.  Joseph E. Bernstein
            and the JB Trust beneficially own, 2% and 98%, respectively,  of 35%
            of the interests of Americas Tower Partners in Catskill Development,
            which  comprises of an economic  ownership  interest of 33%, 25% and
            25%,  respectively,  of Catskill  Development's  casino and wagering

                                      101





            operations,  horseracing and other pari-mutuel activities,  and real
            estate  ownership  and  development  operations.  By virtue of a 50%
            voting  control  position  in  Americas  Tower  Partners,  Joseph E.
            Bernstein  is  deemed  to be  the  beneficial  owner  of  35% of the
            interest  of  Americas  Tower  Partners  in  Catskill   Development.
            Catskill  Development,  in turn,  owns a 60% membership  interest of
            Monticello Casino  Management.  Mr. Bernstein  disclaims  beneficial
            ownership of the assets of the JB Trust.


(6)         Ralph J. Bernstein  beneficially owns a 35% partnership  interest of
            Americas Tower Partners,  which owns an economic  ownership interest
            of 33%, 25% and 25%, respectively,  of Catskill Development's casino
            and  wagering   operations;   horseracing   and  other   pari-mutuel
            activities;  and real estate  ownership and development  operations.
            Catskill  Development,  in turn,  owns a 60% membership  interest of
            Monticello Casino Management.

(7)         Morad  Tahbaz  beneficially  owns  a  20%  partnership  interest  of
            Americas Tower Partners,  which owns an economic  ownership interest
            of 33%, 25% and 25%, respectively,  of Catskill Development's casino
            and  wagering   operations;   horseracing   and  other   pari-mutuel
            activities;  and real estate  ownership and development  operations.
            Catskill  Development,  in turn,  owns a 60% membership  interest of
            Monticello Casino Management.

MARKET FOR MONTICELLO CASINO MANAGEMENT'S  MEMBERSHIP  INTERESTS,  DIVIDENDS AND
RELATED MATTERS

            At this  time,  there is no public  trading  market  for  Monticello
Casino Management's membership interests, nor is any such public market expected
to develop.  As  indicated  above,  Monticello  Casino  Management's  membership
interests  are  presently  owned 60% by  Catskill  Development  and 40% by Alpha
Monticello, a wholly owned subsidiary of Empire Resorts.

            There  are no  outstanding  options  or  warrants  to  purchase,  or
securities   convertible  into,   Monticello  Casino   Management's   membership
interests.

            No equity  interests of  Monticello  Casino  Management  can be sold
pursuant to Rule 144 under the Securities  Act of 1933, as amended,  and neither
Empire  Resorts nor  Monticello  Casino  Management  has agreed to register  any
membership  interest of Monticello Casino Management under the Securities Act of
1933, as amended,  for sale by any of its members.  Furthermore,  neither Empire
Resorts nor Monticello Casino Management has any intention to publicly offer any
membership interests of Monticello Casino Management now or in the future.

            Monticello  Casino  Management  has  never  made a  distribution  of
profits  or losses to its  members,  though it  intends to do so once the Gaming
Facility  Management  Agreement and Land Purchase  Agreement are approved by the
National   Indian  Gaming   Commission   and  the  Bureau  of  Indian   Affairs,
respectively, and Monticello Casino Management commences full-time operations.

                                      102





            Monticello  Casino  Management does not have an equity  compensation
plan.

                         MONTICELLO RACEWAY DEVELOPMENT

GENERAL

            Monticello  Raceway  Development  was originally  formed by Americas
Tower  Partners  and BKB,  LLC,  an  affiliate  of Robert A. Berman and Scott A.
Kaniewski, in October 1995 for the stated purpose of developing and constructing
a casino, a raceway,  lodging  facilities,  retail,  entertainment and amusement
facilities on those 229 acres of land in Monticello,  New York that are owned by
Catskill Development.

DEVELOPMENT, LEASING AND PROPERTY MANAGEMENT AGREEMENT

            On December 1, 1995,  Monticello  Raceway  Development  and Catskill
Development entered into a development leasing and property management agreement
(the "DEVELOPMENT LEASING AND PROPERTY MANAGEMENT AGREEMENT"), pursuant to which
Catskill  Development granted Monticello Raceway Development the exclusive right
for 25 years to develop,  lease and manage Catskill  Development's  229 acres of
land in Monticello,  New York. Specifically,  Monticello Raceway Development was
made  responsible for all  improvements to the property,  including a casino,  a
hotel, an  attached/incorporated  raceway  facility,  retail,  entertainment and
amusement facilities. This agreement also contemplated the conveyance of land to
the United States of America in trust for a Native  American  tribe to operate a
Class II and Class III Gaming  facility.  In such event, the parties agreed that
Monticello  Raceway  Development would be the exclusive  developer of the casino
buildings and related facilities for the Native American tribe.

            For these services,  Monticello  Raceway  Development is entitled to
receive the following compensation:

            o   for  development,  construction,  rehabilitation,  renovation or
                tenant improvement, a developer's fee of 5% of the total project
                costs;

            o   a  monthly  property  management  fee  that is  consistent  with
                property  management  fees  charged for similar  services in the
                Monticello area; and

            o   leasing  commissions that are consistent with leasing commission
                rates for similar properties in the Monticello area.

            The  terms  of  payment  under  this  agreement   provide  that  the
developer's  fee shall be  payable in  accordance  with  Catskill  Development's
approved  budget and schedule of payments for each project  approved by Catskill
Development.  Fees for property management and leasing commissions shall be paid
on a monthly basis. Fees earned, but not paid, shall accrue interest at the rate
of 1% per month until paid.

                                      103





GAMING FACILITY DEVELOPMENT AND CONSTRUCTION AGREEMENT

            On April 3, 2003,  Monticello  Raceway  Development  entered  into a
gaming facility  development and  construction  agreement with the Cayuga Gaming
Authority  and the Cayuga Nation of New York (the "GAMING  FACILITY  DEVELOPMENT
AND  CONSTRUCTION  AGREEMENT"),  pursuant  to which the Cayuga  Catskill  Gaming
Authority granted Monticello Raceway  Development the exclusive right to design,
engineer,  construct,  furnish and  develop the gaming  facility to be opened on
those 29 acres of land subject to the Land Purchase  Agreement,  and  Monticello
Raceway Development agreed to help arrange financing of the project. In exchange
for these  services,  the Cayuga  Catskill  Gaming  Authority  has agreed to pay
Monticello  Raceway  Development a development fee equal to 5% of the first $505
million  of the  project's  costs,  payable  monthly  as the  project  costs are
incurred.  However,  the Cayuga Catskill Gaming  Authority is entitled to retain
10% of such  development  fees until the  project is 50%  completed  and then 5%
until the project is completed.  On the  completion  date,  the Cayuga  Catskill
Gaming  Authority  is  required  to pay  Monticello  Raceway  Development  these
retained fees.

            Similar to the Gaming Facility Management Agreement among Monticello
Casino Management,  the Cayuga Nation of New York and the Cayuga Catskill Gaming
Authority,  in the execution of its duties under the Gaming Facility Development
and  Construction  Agreement,  Monticello  Raceway  Development  must first seek
approval  from a  development  business  board  before  any major  decisions  or
unapproved material  expenditures are made. The development business board shall
be  comprised  of four  persons,  two of whom are to be  appointed by the Cayuga
Catskill  Gaming  Authority  and the  other two of whom are to be  appointed  by
Monticello  Raceway  Development.  In addition,  absent prior  approval from the
development  business board,  Monticello Raceway Development must operate within
the objectives,  schedule  requirements,  design criteria,  space  requirements,
special  equipment,  design  requirements  and budget  that is  approved  by the
development  business board before the  commencement of development  activities.
Finally,  similar to the covenants of the Gaming Facility Management  Agreement,
the Gaming Facility  Development and  Construction  Agreement  provides that any
general  contractor  hired  by  Monticello  Raceway  Development  shall  use its
reasonable  best efforts to give and to cause  subcontractors  to give, a hiring
preference to qualified members of the Cayuga Nation of New York.

PLAN OF OPERATIONS

            Monticello Raceway  Development does not have any plan of operations
for the next twelve months,  other than waiting for the Bureau of Indian Affairs
to approve the terms of the Land Purchase Agreement and continuing to serve as a
plaintiff  in the Park Place and Melius  Litigations  (subject  to the terms and
conditions of the declaration of trust of the Litigation  Trust). As the cost of
the Park Place and Melius Litigations has been, and through the closing will be,
financed by Catskill Development, at which point the litigation will be financed
by Empire Resorts,  until the Bureau of Indian Affairs approves the terms of the
Land Purchase  Agreement,  Monticello Raceway Development will not have any cash
requirements nor the need to raise any additional funds.  Following  approval of
the Land Purchase Agreement, Monticello Raceway Development intends to carry out
its duties under the Gaming Facility  Development and Construction  Agreement as
the  exclusive  developer of the 29 acres of land  subject to the Land  Purchase
Agreement and to help the Cayuga Catskill Gaming  Authority secure financing for

                                      104





the design,  development  and  construction  of a gaming facility to be built on
that land.  As Monticello  Raceway  Development's  obligations  under the Gaming
Facility  Development and  Construction  Agreement do not require any meaningful
initial  expenditures,  Monticello Raceway  Development does not expect that its
capital needs will change should the Land Purchase  Agreement be approved within
the next twelve months.  Initially,  Monticello Raceway Development  anticipates
that it will only need to hire three to five employees,  whose salaries would be
covered by the development  fees Monticello  Raceway  Development is entitled to
under the Gaming Facility Development and Construction Agreement. Alternatively,
these funds will be  provided by Empire  Resorts,  either  directly  from Empire
Resorts'  cash-on-hand,  or from the  issuance by Empire  Resorts of  additional
equity and/or debt securities. Also, Monticello Raceway Development plans to use
office space located within a building at Monticello Raceway at no cost, as both
Monticello  Raceway  Development and Monticello Raceway will be owned and leased
by Empire Resorts, respectively, at closing. Monticello Raceway Development does
not  plan  to  develop  any of the  other  200  acres  of  land  subject  to the
Development  Leasing and Property  Management  Agreement  during the next twelve
months.

DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS

            Monticello Raceway Development's managers and executive officers are
as follows:

            Name                                            Age          Position
            ----                                            ---          --------
            Joseph E. Bernstein                             54           Manager
            Ralph J. Bernstein                              46           Manager
            Philip B. Berman                                47           Manager
            Scott A. Kaniewski                              39           Manager

            The principal  occupation for the past five years and current public
directorships  of each  of  Monticello  Raceway  Development's  managers  are as
follows:

            PHILIP B. BERMAN.  Philip B. Berman is the vice president of project
coordination of Empire  Resorts.  From 1995 to 2003, Mr. Berman was the director
of project operations for Watermark Group, Inc. Prior to that, he was a regional
manager of the insurance division at Markel Rhulen Insurance Corporation and was
the  operations   manager  at  Maranatha   Associates,   a  civil   engineering,
construction  development and consulting firm. Mr. Berman holds the professional
designations  of  project   management   professional  and  certified   internet
webmaster.  Mr. Berman has a B.A. in business  management from the University of
Miami, Florida and is completing his studies and thesis for an M.S. in strategic
management from Manhattanville College.

            JOSEPH E.  BERNSTEIN.  Joseph E.  Bernstein  started his career as a
corporate  tax  attorney  on Wall  Street at Cahill  Gordon & Reindel  and as an
international  tax  attorney  at  Rosenman  & Colin.  He later  started  his own
international tax practice. Since the early 1980s, Mr. Bernstein (along with his
brother Ralph,  and their  partner,  Morad Tahbaz,  through their  jointly-owned
entity,  Americas Tower  Partners) has been involved in the development of three
million  square feet of  commercial  property in Manhattan,  including  Americas
Tower,  a 50-story  office  building on Avenue of the  Americas and 46th Street,
serving as world headquarters to  PriceWaterhouseCoopers  and US headquarters to
Israel's  largest bank,  Bank  Hapoalim.  Americas  Tower  Partners is presently

                                      105





developing AQUARIA  Entertainment City, a $375 million tourism project in Eilat,
Israel, and the $100 million Mt. Arbel Resort & Residence Club, with 36 holes of
golf  designed by Robert  Trent Jones II,  overlooking  the Sea of Galilee.  Mr.
Bernstein  holds a B.A. in economics from the University of California at Davis;
a B.A. in agricultural  business management from the University of California at
Davis; an M.B.A. in Finance from UCLA Graduate School of Management; a J.D. from
the  University  of  California  at Davis  School of Law;  and, a Master of Laws
Degree (LL.M.) in taxation from the New York University School of Law.

            RALPH J.  BERNSTEIN.  Ralph J. Bernstein is a co-founder and general
partner of Americas Partners, an investment and venture capital firm, and, since
1981 has been  responsible  for the  acquisition,  renovation,  development  and
financing of several  million  square feet of commercial  space.  Mr.  Bernstein
started his career in agribusiness with a large European  multi-national trading
and real estate  development  company,  where he was later  responsible for that
company's U.S. real estate  activities.  Mr. Bernstein also serves as a director
for Air Methods Corporation, a publicly traded company that provides air medical
emergency  transport  services  and  systems  throughout  the  United  States of
America.  He holds a Bachelor of Arts degree in economics from the University of
California at Davis.

            SCOTT  A.  KANIEWSKI.  Scott A.  Kaniewski  is the  chief  financial
officer of Empire  Resorts and was a member of its board of directors from March
2002 through July 2003.  Mr.  Kaniewski was a director of Watermark  Investments
Limited from 1995 to 2000. From 1995-1999, Mr. Kaniewski served as a director of
Hospitality  Worldwide Services,  Inc. and president of its real estate advisory
group from 1998 to 1999. From 1989 to 1995, Mr. Kaniewski held several positions
with VMS Realty  Partners,  a real estate  investment and  development  company,
including vice president of hotel  investments.  Mr. Kaniewski received his B.S.
from Indiana University and is a certified public accountant.

EXECUTIVE COMPENSATION

            Monticello   Raceway   Development  has  never  had  any  meaningful
operations or engaged in any business other than the  negotiation  and execution
of a gaming facility  development and  construction  agreement with both the St.
Regis Mohawk Tribe and the Cayuga Nation of New York.  Consequently,  Monticello
Raceway  Development  has never elected or appointed  any  officers,  or persons
acting in a similar capacity. Moreover, Monticello Raceway Development has never
had any employees  and no member,  manager or other person has ever received any
form of compensation from Monticello Raceway Development.

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT


            The following table sets forth information  concerning  ownership of
Monticello Raceway Development's  membership interests,  as of November 5, 2003,
by (i) each person known to be the beneficial owner of more than five percent of
Monticello Raceway  Development's  membership  interests,  (ii) each manager and
executive  officer  required to be named  hereunder  and (iii) all  managers and
executive officers as a group.  Unless otherwise noted, each person listed below
has sole voting and dispositive power with respect to the interests beneficially
owned by him and his address is c/o  Monticello  Raceway,  Route 17B,  P.O.  Box
5013, Monticello, NY, 12701.


                                      106





                                        Percentage Membership Interest
Name and Address                            Beneficially Owned(1)
----------------                            ---------------------
Americas Tower Partners                          50.00%
Joseph E. Bernstein(2)                           17.50%
Ralph J. Bernstein(3)                            17.50%
JB Trust(2)                                      17.15%
Morad Tahbaz(4)                                  10.00%
Robert A. Berman                                 41.00%
Phillip Carter (5)                                5.00%
Phillip Berman                                    1.30%
Scott A. Kaniewski(6)                             7.70%
All Managers and Executive
Officers as a Group (4 persons)
(2)(3)(6)                                        44.00%
--------------
* less than 1%


(1)         A person is deemed to be the beneficial  owner of voting  securities
            that can be acquired by such person  within 60 days after the record
            date upon the exercise of options and warrants and the conversion of
            convertible  securities.   Each  beneficial  owner's  percentage  of
            ownership is determined  by assuming  that all options,  warrants or
            convertible  securities  held by such  person (but not those held by
            any other  person) that are  currently  exercisable  or  convertible
            (i.e., that are exercisable or convertible  within 60 days after the
            record date) have been exercised or converted.

(2)         Joseph E. Bernstein beneficially owns a 1% economic interest and 50%
            voting power in Americas Tower Partners,  and the JB Trust, in which
            Mr.  Bernstein's  mother,  Helen Bernstein,  is sole trustee and Mr.
            Bernstein's children are ultimate beneficiaries, beneficially owns a
            49% economic  interest,  with no voting rights.  Joseph E. Bernstein
            and the JB Trust beneficially own, 2% and 98%, respectively,  of 35%
            of Americas Tower  Partners' 75%  membership  interest in Monticello
            Raceway  Development.  By virtue of a 50% voting control position in
            Americas  Tower  Partners,  Joseph E.  Bernstein is deemed to be the
            beneficial  owner of 35% of the interest of Americas  Tower Partners
            in  Catskill   Development.   Mr.  Bernstein  disclaims   beneficial
            ownership of the assets of the JB Trust.

(3)         Ralph J. Bernstein  beneficially owns a 35% partnership  interest of
            Americas Tower  Partners,  which owns a 50%  membership  interest of
            Monticello Raceway Development.


                                      107





(4)         Morad  Tahbaz  beneficially  owns  a  20%  partnership  interest  of
            Americas Tower  Partners,  which owns a 50%  membership  interest of
            Monticello Raceway Development.

(5)         Philip  Carter  beneficially  owns  a 10%  partnership  interest  of
            Americas Tower  Partners,  which owns a 50%  membership  interest of
            Monticello Raceway Development.

(6)         Includes  a 0.025%  membership  interest  held by  Kaniewski  Family
            Limited  Partnership,  with  respect to which Mr.  Kaniewski  is the
            general  partner  and a 1% limited  partner  (with  sole  voting and
            disposition  rights) and a 0.025%  membership  interest  held by KFP
            Trust, with respect to which Stacey Kaniewski, Mr. Kaniewski's wife,
            is the sole  trustee,  and with  respect to which,  Mr.  Kaniewski's
            children  are  its  sole  beneficiaries.   Mr.  Kaniewski  disclaims
            beneficial ownership of all interests held by KFP Trust.


MARKET FOR MONTICELLO RACEWAY DEVELOPMENT'S MEMBERSHIP INTERESTS,  DIVIDENDS AND
RELATED MATTERS


            At this  time,  there is no public  trading  market  for  Monticello
Raceway  Development's  membership  interests,  nor is any  such  public  market
expected to develop.  Monticello Raceway Development's  membership interests are
presently owned 50% by Americas Tower Partners,  41% by Robert A. Berman, Empire
Resorts'  chief  executive  officer,  a member of its board of directors and its
former  chairman,  7.65% by Scott A. Kaniewski,  Empire Resorts' chief financial
officer and a former member of its board of directors,  0.05% by two  affiliates
of Mr.  Kaniewski and 1.30% by Philip B. Berman,  Empire Resorts' vice president
of project coordination.


            There  are no  outstanding  options  or  warrants  to  purchase,  or
securities   convertible  into,  Monticello  Raceway  Development's   membership
interests.

            No membership  interests of Monticello  Raceway  Development  can be
sold  pursuant to Rule 144 under the  Securities  Act of 1933,  as amended,  and
neither Empire Resorts nor Monticello Raceway Development has agreed to register
any membership  interest of Monticello Raceway  Development under the Securities
Act of 1933, as amended,  for sale by any of its members.  Furthermore,  neither
Empire Resorts nor Monticello Raceway  Development has any intention to publicly
offer any membership  interests of Monticello Raceway  Development now or in the
future.

            Monticello  Raceway  Development  has never made a  distribution  of
profits  or losses to its  members,  though  it  intends  to do so once the Land
Purchase  Agreement is approved by the Bureau of Indian  Affairs and  Monticello
Raceway Development commences full-time operations.

            Monticello Raceway  Development does not have an equity compensation
plan.

                                MOHAWK MANAGEMENT

GENERAL

            Mohawk Management was formed in May 1996 by Catskill Development and
Empire  Resorts  to  manage  the  operations  of a  casino  and  related  gaming
activities on 29 acres of land in Monticello,  New York, in accordance  with the

                                      108





terms of a gaming facility  management  agreement,  dated July 31, 1996, between
Mohawk  Management  and the St.  Regis  Mohawk  Tribe.  Aside from aiding in the
preparation  and filing of the required  applications  in order for the National
Indian Gaming Commission to approve this management contract,  Mohawk Management
has never had any  operations.  In  addition,  since the St.  Regis Mohawk Tribe
withdrew from the  management  agreement in 2000 to pursue a casino project with
Park Place Entertainment  Corporation,  Mohawk Management has had no business or
operations  except  for  serving  as a  plaintiff  in the Park  Place and Melius
Litigations. See "Material Conditions to Closing- Formation of Litigation Trust"
beginning  on page 79 for a more  detailed  description  of the Park  Place  and
Melius Litigations.

PLAN OF OPERATIONS

            Mohawk  Management  has no plan of  operation  for the  next  twelve
months  other  than to  continue  serving as a  plaintiff  in the Park Place and
Melius  Litigations,  subject to the terms and conditions of the  declaration of
trust  of the  Litigation  Trust.  As the  cost of the  Park  Place  and  Melius
Litigations  has been,  and through the  closing  will be,  financed by Catskill
Development,  at which point the litigation  will be financed by Empire Resorts,
over  the  next  twelve  months,  Mohawk  Management  will  not  have  any  cash
requirements nor the need to raise any additional funds.

DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS

            Mohawk Management's managers and executive officers are as follows:

            Name                        Age          Position
            ----                        ---          --------
            Ralph J. Bernstein          46           Manager
            Robert A. Berman            43           Manager
            Thomas W. Aro               60           Manager
            Morad Tahbaz                47           Manager

            The principal  occupation for the past five years and current public
directorships of each of Mohawk Management's managers are as follows:

            ROBERT  A.  BERMAN.  Robert  A.  Berman  is  Empire  Resorts'  chief
executive  officer,  a member of its board of directors and its former chairman.
As the managing director of Watermark Investments Limited from 1994 to 2000, Mr.
Berman  oversaw a number  of  private  partnerships  investing  in real  estate,
technology and basic industries. From 1998 to 1999, Mr. Berman was vice chairman
and a director of Executone  Information Systems, a telecommunications  company.
From  1995 to 1999,  Mr.  Berman  served  as  chairman  of the  board  and chief
executive  officer of  Hospitality  Worldwide  Services,  Inc., a hotel services
company with average annual sales above $150 million.

            RALPH J.  BERNSTEIN.  Ralph J. Bernstein is a co-founder and general
partner of Americas Partners, an investment and venture capital firm, and, since
1981 has been  responsible  for the  acquisition,  renovation,  development  and
financing of several  million  square feet of commercial  space.  Mr.  Bernstein
started his career in agribusiness with a large European  multi-national trading

                                      109





and real estate  development  company,  where he was later  responsible for that
company's U.S. real estate  activities.  Mr. Bernstein also serves as a director
for Air Methods Corporation, a publicly traded company that provides air medical
emergency  transport  services  and  systems  throughout  the  United  States of
America.  Mr.  Bernstein  holds a Bachelor of Arts degree in economics  from the
University of California at Davis.

            THOMAS W.  ARO.  Thomas W. Aro is  Empire  Resorts'  executive  vice
president  and  secretary  and was a member of its board of directors  from 1994
through July 2003.  Mr. Aro has been Empire  Resorts'  executive  vice president
since its formation in 1993 and its secretary since 1998. Mr. Aro also serves as
chief operating  officer of Empire Resorts' gaming  subsidiaries and has over 30
years experience in the hospitality and gaming industries.  Mr. Aro received his
B.S. from the University of Arizona and is a certified public accountant.

            MORAD TAHBAZ. Morad Tahbaz is the president of Catskill Development,
a member of  Monticello  Raceway's  Operating  Board,  the  president  of Empire
Resorts and a director of Empire Resorts. Mr. Tahbaz also serves on the board of
directors of Air Methods  Corporation,  a publicly  traded company that provides
air medical  emergency  transport  services  and systems  throughout  the United
States of America.  In 1983, Mr. Tahbaz joined Americas Partners,  at which time
he became primarily responsible for acquisitions.  Subsequently, Mr. Tahbaz took
on the added  responsibility  of the  development of Americas Tower, a 1,000,000
square  foot  office  building  in  New  York  that  is  the   headquarters  for
PriceWaterhouseCoopers.  Mr. Tahbaz remains a partner in Americas Partners.  Mr.
Tahbaz  holds a B.A. in  philosophy  and fine arts from Colgate  University  and
attended the Institute for  Architecture  and Urban Studies in New York. He also
holds an M.B.A. in finance from Columbia University Graduate School of Business,
where  throughout  his  career,  he has  conducted  a series of lectures on real
estate development and finance for graduate students.

EXECUTIVE COMPENSATION

            As stated  above,  Mohawk  Management  has never had any  meaningful
operations or engaged in any business other than the  negotiation  and execution
of a gaming  facility  management  agreement with the St. Regis Mohawk Tribe and
serving as a plaintiff in the Park Place and Melius  Litigations.  Consequently,
Mohawk Management has never elected or appointed any officers, or persons acting
in a similar capacity.  Moreover,  Mohawk Management has never had any employees
and  no  member,  manager  or  other  person  has  ever  received  any  form  of
compensation from Mohawk Management.

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT


            The following table sets forth information  concerning  ownership of
Mohawk Management's  membership  interests,  as of November 5, 2003, by (i) each
person  known to be the  beneficial  owner of more than five  percent  of Mohawk
Management's  membership  interests,  (ii) each  manager and  executive  officer
required to be named hereunder and (iii) all managers and executive  officers as
a group.  Unless  otherwise  noted,  each party listed below has sole voting and
dispositive  power with respect to the interests  beneficially  owned by him and
his address is c/o Monticello Raceway, Route 17B, P.O. Box 5013, Monticello, NY,
12701.


                                      110




                                             Percentage Membership Interests
Name and Address                                  Beneficially Owned(1)
----------------                                  ---------------------
Catskill Development                                     60.00%
Alpha Casino Management, Inc.                            40.00%
Empire Resorts(2)                                        40.00%
Robert A. Berman(3)                                       9.74%
Maurice Dabbah(4)                                         7.00%
Joseph E. Bernstein(5)                                    7.00%
Ralph J. Bernstein(6)                                     7.00%
JB Trust(5)                                               6.79%
Morad Tahbaz(7)                                           4.00%
Thomas W. Aro                                              *
All Managers and Executive
Officers as a Group (4 persons)
(4)(6)(7)                                                20.74%
--------------
* less than 1%

(1)         A person is deemed to be the beneficial  owner of voting  securities
            that can be acquired by such person  within 60 days after the record
            date upon the exercise of options and warrants and the conversion of
            convertible  securities.   Each  beneficial  owner's  percentage  of
            ownership is determined  by assuming  that all options,  warrants or
            convertible  securities  held by such  person (but not those held by
            any other  person) that are  currently  exercisable  or  convertible
            (i.e., that are exercisable or convertible  within 60 days after the
            record date) have been exercised or converted.

(2)         These membership interests are held by Alpha Casino Management, Inc,
            a wholly owned subsidiary of Empire Resorts.

(3)         Robert A.  Berman  beneficially  owns a 67.66%  limited  partnership
            interest of  Watertone  Holdings,  which owns an economic  ownership
            interest   of  15%,   13%  and  25%,   respectively,   of   Catskill
            Development's casino and wagering operations;  horseracing and other
            pari-mutuel  activities;  and real estate  ownership and development
            operations.  Mr.  Berman also  beneficially  owns 390,127  shares of
            Empire  Resorts'  common  stock,  which owns an  economic  ownership
            interest  of  48.31%,  36.88%  and 25%,  respectively,  of  Catskill
            Development's casino and wagering operations;  horseracing and other
            pari-mutuel  activities;  and real estate  ownership and development
            operations.  Catskill  Development owns 60% of Mohawk Management and
            Empire Resorts, through a wholly owned subsidiary, beneficially owns
            a 40% membership interest of Mohawk Management.

(4)         Maurice Dabbah beneficially owns 35% of the membership  interests of
            Monticello Realty, which owns an economic ownership interest of 33%,
            22.5% and 22.5%, respectively,  of Catskill Development's casino and
            wagering operations;  horseracing and other pari-mutuel  activities;
            and real  estate  ownership  and  development  operations.  Catskill
            Development,  in turn,  owns a 60%  membership  interest  of  Mohawk
            Management.

                                      111





(5)         Joseph E. Bernstein beneficially owns a 1% economic interest and 50%
            voting power in Americas Tower Partners,  and the JB Trust, in which
            Mr.  Bernstein's  mother,  Helen Bernstein,  is sole trustee and Mr.
            Bernstein's children are ultimate beneficiaries, beneficially owns a
            49% economic  interest,  with no voting rights.  Joseph E. Bernstein
            and the JB Trust beneficially own, 2% and 98%, respectively,  of 35%
            of the interests of Americas Tower Partners in Catskill Development,
            which  comprises of an economic  ownership  interest of 33%, 25% and
            25%,  respectively,  of Catskill  Development's  casino and wagering
            operations,  horseracing and other pari-mutuel activities,  and real
            estate  ownership  and  development  operations.  By virtue of a 50%
            voting  control  position  in  Americas  Tower  Partners,  Joseph E.
            Bernstein  is  deemed  to be  the  beneficial  owner  of  35% of the
            interest  of  Americas  Tower  Partners  in  Catskill   Development.
            Catskill  Development,  in turn,  owns a 60% membership  interest of
            Monticello Casino  Management.  Mr. Bernstein  disclaims  beneficial
            ownership of the assets of the JB Trust.


(6)         Ralph J. Bernstein  beneficially owns a 35% partnership  interest of
            Americas Tower Partners,  which owns an economic  ownership interest
            of 33%, 25% and 25%, respectively,  of Catskill Development's casino
            and  wagering   operations;   horseracing   and  other   pari-mutuel
            activities;  and real estate  ownership and development  operations.
            Catskill  Development,  in turn,  owns a 60% membership  interest of
            Mohawk Management.

(7)         Morad  Tahbaz  beneficially  owns  a  20%  partnership  interest  of
            Americas Tower Partners,  which owns an economic  ownership interest
            of 33%, 25% and 25%, respectively,  of Catskill Development's casino
            and  wagering   operations;   horseracing   and  other   pari-mutuel
            activities;  and real estate  ownership and development  operations.
            Catskill  Development,  in turn,  owns a 60% membership  interest of
            Mohawk Management.

MARKET FOR MOHAWK  MANAGEMENT'S  MEMBERSHIP  INTERESTS,  DIVIDENDS  AND  RELATED
MATTERS

            At  this  time,  there  is  no  public  trading  market  for  Mohawk
Management's  membership  interests,  nor is any such public market  expected to
develop.  As indicated  above,  Mohawk  Management's  membership  interests  are
presently owned 60% by Catskill  Development and 40% by Alpha Casino Management,
a wholly owned subsidiary of Empire Resorts.

            There  are no  outstanding  options  or  warrants  to  purchase,  or
securities convertible into, Mohawk Management's membership interests.

            No membership interests of Mohawk Management can be sold pursuant to
Rule 144 under the  Securities  Act of 1933,  as  amended,  and  neither  Empire
Resorts nor Mohawk Management has agreed to register any membership  interest of
Mohawk Management under the Securities Act of 1933, as amended,  for sale by any
of its members.  Furthermore,  neither Empire Resorts nor Mohawk  Management has

                                      112





any intention to publicly  offer any membership  interests of Mohawk  Management
now or in the future.

            Mohawk Management has never made a distribution of profits or losses
to its members, nor does it intend to do so in the future.

            Mohawk Management does not have an equity compensation plan.

                MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
                       CONDITION AND RESULTS OF OPERATIONS

                                 EMPIRE RESORTS

            For  Empire  Resorts'   management's   discussion  and  analysis  of
financial condition and results of operations, please see Empire Resorts' Annual
Report on Form 10-KSB for the year ended  December  31,  2002,  Empire  Resorts'
Proxy  Statement  dated  February  21,  2003  for its  2003  Annual  Meeting  of
Stockholders on Schedule 14A and Empire Resorts' Quarterly Report on Form 10-QSB
for the quarter ended June 30, 2003,  copies of which accompany this information
statement/prospectus.  For further information, please also review the documents
that are incorporated by reference into this  information  statement/prospectus.
See  "Where  You  Can  Find  More   Information"   beginning  on  page  174  and
"Incorporation of Documents by Reference" beginning on page 175.

                   CATSKILL DEVELOPMENT AND ACQUIRED COMPANIES

            As  none  of  Monticello  Casino   Management,   Monticello  Raceway
Development  and Mohawk  Management has had revenue from operations in either of
the last two fiscal years, no management's  discussion and analysis of financial
condition  and results of  operations  has been  provided  for these  companies.
Rather, in lieu of such disclosure,  a plan of operations for each of Monticello
Casino Management,  Monticello Raceway Development and Mohawk Management for the
next twelve  months has been  described  above under the heading  Business.  See
"Business - Monticello Casino Management - Plan of Operations" beginning on page
97; "Business - Monticello Raceway  Development - Plan of Operations"  beginning
on page 104; and "Business - Mohawk  Management - Plan of Operations"  beginning
on page 109.

            Monticello  Raceway  Management  has had revenue from  operations in
each of the last two fiscal years. However, rather than providing a management's
discussion  and analysis of financial  condition  and results of  operations  of
Monticello Raceway  Management on a stand-alone  basis,  Empire Resorts believes
that a management's  discussion and analysis of financial  condition and results
of  operations  covering  Catskill  Development,  currently  Monticello  Raceway
Management's  sole  stockholder,  provides more  informative  disclosure.  While
Empire  Resorts is  technically  purchasing  assets from Catskill  Development's
members as part of the  consolidation,  Empire Resorts is effectively  acquiring
Catskill  Development  since the consolidation  will leave Catskill  Development
with only an interest in a 229 acre parcel of land in  Monticello,  New York, in
which  Empire  Resorts  will hold a leasehold  interest  and a purchase  option.
Empire Resorts believes that providing a management's discussion and analysis of

                                      113





financial  condition and results of operations  for Catskill  Development,  on a
combined   basis,  is  more   informative  to  stockholders   and  investors  in
understanding the consolidation.

BACKGROUND

            Catskill  Development  was  formed as a New York  limited  liability
company in 1995 to pursue the  development  of gaming  operations in Monticello,
New York. Catskill  Development's  business plan envisioned three distinct lines
of business: casino activities with a Native American tribe, real estate related
activities  and  gaming  operations  related  to  Monticello  Raceway  including
pari-mutuel wagering and video lottery terminal operations. Catskill Development
currently  owns all of the issued and  outstanding  capital  stock of Monticello
Raceway  Management,  the licensed  operator of  Monticello  Raceway,  and a 60%
membership  interest of both Mohawk Management and Monticello Casino Management.
As stated above,  both Mohawk  Management and Monticello  Casino  Management are
inactive at this time.

            Currently,   Catskill   Development,   through   Monticello  Raceway
Management,  conducts  pari-mutuel  wagering on live harness horse race meetings
and participates in intrastate and interstate  simulcast  wagering at Monticello
Raceway.  Monticello  Raceway  Management is also pursuing the  development of a
video lottery terminal program.  See "Business - Monticello Raceway  Management"
beginning on page 90.  Catskill  Development  currently owns  approximately  229
acres of land in Monticello, New York, encompassing Monticello Raceway, and is a
party to a land purchase  agreement  pursuant to which Catskill  Development has
proposed to  transfer  29 acres of this land to the United  States of America in
trust for the Cayuga Nation of New York for the purpose of Class III Gaming. See
"Recent  Developments - Ground Lease and Land Purchase  Agreement"  beginning on
page 117. Finally,  Catskill  Development is seeking to manage a Native American
casino on these 29 acres once the land is  transferred  to the United  States of
America in trust for the Cayuga  Nation of New York.  See "Business - Monticello
Casino Management" beginning on page 96.

DISCUSSION

            The  following  discussion  should be read in  conjunction  with the
consolidated  financial  statements  of Catskill  Development  and notes thereto
included elsewhere in this information statement/prospectus.

            For the  years  ended  December  31,  2002 and  December  31,  2001,
Catskill  Development  had net cash used in  operating  activities  which mainly
consisted of the expenses  associated with the Park Place Litigation of $215,489
and $533,096,  respectively.  Both years  resulted in losses of  $1,932,924  and
$2,071,232, respectively. The accrued and unpaid interest for the periods due to
Monticello Realty and Americas Tower Partners,  the co-holders of a note secured
by a mortgage, and members of Catskill Development, was $620,125 on December 31,
2002 and $563,750 on December 31, 2001 on a balance of  $5,637,500 at January 1,
2001 and depreciation  recorded was $755,601 and $743,716,  respectively.  Other
current  assets  increased in both periods by $562,486 to $1,368,792 on December
31,  2002 and  $126,507  to  $806,306 on  December  31,  2001.  Restricted  cash
decreased  by $35,694 on December  31, 2002 and  $213,052 On December  31, 2001.
Accounts payable and accrued expenses  increased in both periods by $865,682 and
$144,125, respectively.

                                      114





            Cash used for investing  activities in the years ended  December 31,
2002 and December 31, 2001, amounted to $499,116 and $254,986, respectively, and
consisted  of $171,246  and  $143,521  which was used to purchase  property  and
equipment and $327,870 and $111,465, which was used for real estate development,
the main pursuit of the entity.

            Cash  from  additional  member  contributions  in 2001  amounted  to
$1,024,800  which was used to assist in funding  the Park Place  Litigation  and
operating  expenses.  There were no additional  contributions  by members during
2002.

            For the six months ended June 30, 2003, Catskill Development had net
cash  provided by operating  activities of $112,350 and for the six months ended
June 30, 2002 used in operating  activities  a total of  $318,825.  Both periods
resulted in a net loss of $1,376,224 and $1,676,526,  respectively.  The accrued
interest not paid for the periods due to  Monticello  Realty and Americas  Tower
Partners,  the  co-holders  of a note  secured  by a  mortgage,  and  members of
Catskill  Development,  was $332,750 and $302,500 on a balance of  $6,821,375 at
January 1, 2003 and $6,201,250 at January 1, 2002, and depreciation recorded was
$347,850 and  $376,022,  respectively.  Other current  assets  decreased in both
periods by $504,355  and $32,406,  respectively.  Restricted  cash  increased by
$52,664 and  decreased by $21,626,  respectively.  Accounts  payable and accrued
expenses increased in both periods by $361,485 and $625,147,  respectively, from
starting  balances of $2,585,909 at January 1, 2003 and $1,720,227 at January 1,
2002.

            Cash used in investing  activities for the six months ended June 30,
2003 and June 30, 2002  consisted of $783,513  and  $164,350,  respectively,  of
which  $62,178  and $37,945 was used to purchase  property  and  equipment,  and
$721,335  and  $126,405  was used for real estate  development,  increasing  the
balance to $6,068,469 at January 1, 2003 and $5,740,599 at January 1, 2002.

            Cash provided by financing  activities for the six months ended June
30, 2003  amounted to  $1,423,297,  which was used to assist in funding the Park
Place  Litigation and operating  expenses.  The January 1, 2002 balance remained
unchanged in 2002.


                               RECENT DEVELOPMENTS

            Monticello Raceway Management,  which is presently owned by Catskill
Development  and  will  become a  wholly  owned  subsidiary  of  Empire  Resorts
following the consolidation,  Empire Resorts,  Catskill  Development,  Robert A.
Berman,  Empire  Resorts  chief  executive  officer and a member of its board of
directors, and The Berkshire Bank entered into a series of agreements on October
29, 2003 in order to provide Empire Resorts and  Monticello  Raceway  Management
with short term secured financing. Set forth below is a summary of each of these
agreements.  Please note, however, that the summaries below do not purport to be
complete and are qualified in their  entirety by reference to the  provisions of
the actual  agreement  being  summarized.  The complete  text of each  agreement
summarized below has been filed as an exhibit to the  registration  statement of
which this information statement/prospectus forms a part.


                                      115





LOAN AND SECURITY AGREEMENT AND TERM LOAN NOTE

            THE LOAN

            Pursuant to that certain Loan and Security Agreement,  dated October
29, 2003 (the "LOAN AGREEMENT"),  The Berkshire Bank advanced Monticello Raceway
Management  $3,500,000  (the  "LOAN"),  and  concurrently,   Monticello  Raceway
Management  issued a term note (the "TERM NOTE") to The  Berkshire  Bank for the
original principal amount of the Loan.

            INTEREST

            The unpaid  principal  balance of the Loan bears  interest  at a per
annum rate equal to 8.75%.  Interest on the Loan is payable monthly, in arrears,
on the first day of each calendar month, beginning on December 1, 2003. Upon and
during the continuance of an event of default under the Loan Agreement, the Loan
shall bear  interest at a rate that is five  percent  (5%) in excess of the rate
otherwise applicable at such time.

            REPAYMENT; PREPAYMENT

            The principal amount of the Loan together with interest must be paid
in twenty-three (23) consecutive monthly installments of $55,868.72,  commencing
on December 1, 2003, with the final payment and all accrued but unpaid interest,
fees, costs and expenses due on November 1, 2005.

            Monticello  Raceway  Management  may  prepay the Loan in whole or in
part.  However,  if the Loan is prepaid in whole or in part prior to October 29,
2004,  Monticello  Raceway  Management  must pay a prepayment fee of 2.5% of the
principal  balance of the Loan then being prepaid.  In addition,  any prepayment
must be  accompanied  by all accrued and unpaid  interest.  Moreover,  under the
terms of the Loan Agreement,  Catskill Development has the right to purchase the
Loan from The Berkshire Bank for the unpaid  principal  balance plus all accrued
but unpaid interest, fees and expenses, subject to the payment of any applicable
prepayment fees.

            SECURITY

            Monticello  Raceway  Management has  collateralized  its obligations
under the Loan  Agreement  by its grant of a lien on and  security  interest  in
substantially all of its assets, whether now owned or acquired in the future.

            COVENANTS

            Until all of Monticello Raceway  Management's  obligations under the
Loan Agreement and Term Note have been  irrevocably  satisfied in full, the Loan
Agreement  requires  Monticello  Raceway  Management  to perform or comply  with
certain  covenants,  including,  without  limitation,  covenants relating to (i)
limitations  on  indebtedness,  (ii)  limitations  on liens,  (iii)  notice  and
information delivery requirements, (iv) the payment of taxes and claims, (v) the
maintenance of assets and properties, (vi) the maintenance of insurance policies
and (vii) compliance with laws.


                                      116





            ATM MACHINES

            Under  the  Loan  Agreement,  The  Berkshire  Bank was  granted  the
exclusive  right to install and operate ATM  machines on 200 acres of land owned
by Catskill  Development  and all  improvements  on such land for ten (10) years
after the signing of the Loan Agreement. Monticello Raceway Management, however,
is entitled to 25% of the net income generated by these ATM machines.

            EVENTS OF DEFAULT

            The Loan Agreement  contains  customary events of default including,
without  limitation,  (i) the failure to pay  principal  or interest on the Loan
when due, (ii) any  representation  or warranty  proving to have been materially
false when made,  (iii) the failure to comply  with any other term,  covenant or
agreement of the Loan  Agreement,  (iv)  defaults  with respect to certain other
indebtedness,  (v)  entry  of  material  judgments  against  Monticello  Raceway
Management,  (vi)  default or breach  under any  agreements  related to the Loan
Agreement,  (vii)  bankruptcy  and insolvency and (viii) the failure of the Loan
Agreement or any collateral  documents to remain in full force and effect and to
create a valid and perfected first priority  security interest in the collateral
securing the Loan.

GROUND LEASE AND LAND PURCHASE AGREEMENT

            Catskill Development  currently owns approximately 229 acres of land
in Monticello,  New York,  encompassing  Monticello Raceway. A 29 acre parcel of
this land is presently  subject to a land  purchase  agreement  that was entered
into by  Catskill  Development  and the Cayuga  Catskill  Gaming  Authority,  an
affiliate of the Cayuga Nation of New York, on April 3, 2003 (the "LAND PURCHASE
AGREEMENT").  Pursuant  to the terms of the Land  Purchase  Agreement,  Catskill
Development  has  agreed to  convey  this 29 acre  parcel of land to the  United
States of  America to be held in trust for the  benefit of the Cayuga  Nation of
New York  following the Bureau of Indian  Affairs'  approval of the transfer and
its  authorization  to use such land for Class II and Class III Gaming purposes.
At the same time, Catskill  Development and the Cayuga Catskill Gaming Authority
also entered into a shared  facilities  agreement,  whereby the Cayuga  Catskill
Gaming  Authority  agreed,  among other things,  not to use the property for any
purpose other than Class II or Class III Gaming,  and  activities  incidental to
gaming such as the  operation of  entertainment,  parking,  restaurant or retail
facilities.  However,  if the required  approvals  for the land transfer are not
received by  Catskill  Development  and the Cayuga  Nation of New York by May 1,
2004, the Land Purchase Agreement shall terminate.

            On October 29, 2003,  Catskill  Development  and Monticello  Raceway
Management entered into a 48 year ground lease (the "GROUND LEASE") with respect
to 200 acres of land in Monticello,  New York and all buildings and improvements
located on such land owned by Catskill  Development  that are not subject to the
Land Purchase Agreement (the "LEASED  PROPERTY").  Under the terms of the Ground
Lease,  Monticello Raceway Management will pay Catskill  Development  $1,800,000
per year,  subject to annual  adjustments  consistent  with the  consumer  price
index,  payable  in equal  monthly  installments.  During  the first year of the
lease,  however,  Monticello Raceway Management has the right, at its option, to
defer its monthly rental  payments for up to 12 months,  with such deferred rent
accruing interest at the rate of 4.5% per annum.


                                      117





            During the first three years of the Ground Lease, Monticello Raceway
Management may, at its option, purchase the Leased Property for a purchase price
equal  to the sum of (x) the  rent  payable  for the  year in  which  Monticello
Raceway  Management  exercises  this purchase  option divided by 5% (which would
equal $36,000,000 in the first year of the Ground Lease) and (y) an amount equal
to all transfer  taxes and closing  costs  incurred by Catskill  Development  as
seller. Monticello Raceway Management may not assign its rights under the Ground
Lease,  sublet any part of the Leased Property,  nor enter into a transaction or
series of  transactions  that would result in a change of control of  Monticello
Raceway Management without the consent of Catskill Development.  However, in the
event that Catskill Development  withholds its consent to such assignment of the
Ground Lease or the subletting of all or part of the Leased Property, Monticello
Raceway  Management may exercise its option to purchase the Leased Property even
after the first three years of the Ground Lease.

            Under the terms of the Ground Lease,  absent Catskill  Development's
prior  written  consent,  Monticello  Raceway  Management is required to use the
Leased Property solely for racing, gaming, entertainment,  retail, lodging, food
service,  any other use related to so-called  "tourism" and other  ancillary and
related activities.

            In the event that The Berkshire  Bank declares an "event of default"
under the  Loan,  or  commences  a  foreclosure  proceeding  with  regard to the
Leasehold  Mortgage  (as  defined  below),  or  succeeds  to  the  interests  of
Monticello  Raceway  Management under the Ground Lease, The Berkshire Bank shall
also have the right,  at its option,  to defer its monthly rental payments until
the date that the Loan has been repaid in full, with such deferred rent accruing
interest at the rate of 4.5% per annum. This right,  however,  shall expire upon
any  refinancing  of the Leasehold  Mortgage in which the Leasehold  Mortgage is
assigned  to a new  lender  that  pays the full  amount  outstanding  under  the
Leasehold Mortgage.

            In addition,  in the event that The  Berkshire  Bank succeeds to the
interests of Monticello  Raceway Management under the Ground Lease, (i) then any
net revenues received by The Berkshire Bank or its successor  thereafter,  shall
be deemed to be payments in reduction of the Loan,  and (ii) The Berkshire  Bank
shall have a one-time  right to assign and  transfer its rights under the Ground
Lease, without the prior consent of Catskill Development, provided such assignee
or transferee is not (i) in competition with Catskill  Development,  (ii) in the
gaming industry,  (iii) currently in litigation with Catskill Development or any
of its constituent members, (iv) in default under any agreement it may have with
Catskill  Development or any of its  constituent  members,  or (v) listed on the
specially designated Nationals and Blocked Persons List maintained in accordance
with the so-called "Patriot Act."

LEASEHOLD MORTGAGE

            In order to secure the repayment of the Loan and the  performance of
all of its obligations under the Loan Agreement, Term Note and any other related
agreement,  Monticello Raceway Management has entered into a Leasehold Mortgage,
Security  Agreement,  Assignment  of Leases and Rents and Fixture  Filings  (the
"LEASEHOLD MORTGAGE"), as mortgagor, with The Berkshire Bank.


                                      118





            PROPERTY MORTGAGED

            Under the Leasehold  Mortgage,  Monticello  Raceway  Management  has
granted The  Berkshire  Bank a security  interest in all of  Monticello  Raceway
Management's property,  rights,  interests and estates now owned, or acquired in
the future, including, among others things:

            o   Monticello Raceway Management's leasehold interest in the Ground
                Lease;

            o   Monticello  Raceway  Management's   leasehold  interest  in  all
                additional lands, estates and development rights acquired in the
                future by Monticello  Raceway  Management  for use in connection
                with the  Leased  Property  and the  development  of the  Leased
                Property;

            o   Monticello Raceway Management's personal property located on the
                Leased Property;

            o   all leases and other agreements  affecting the use, enjoyment or
                occupancy of the Leased Property (a "LEASE" or "LEASES") and all
                right,  title  and  interest,  if  any,  of  Monticello  Raceway
                Management, of all rents, additional rents, revenues, issues and
                profits from the Leased  Property (the "RENTS") and all proceeds
                from the sale or other disposition of the Leases;

            o   all awards or payments made with respect to the Leased Property,
                whether from the exercise of the right of eminent domain, or for
                a change of grade, or for any other injury to or decrease in the
                value of the Leased Property;

            o   all  proceeds  of and any  unearned  premiums  on any  insurance
                policies covering the Leased Property;

            o   all refunds,  rebates or credits in connection  with a reduction
                in  real  estate  taxes  and  assessments  charged  against  the
                Leased Property; and

            o   all   agreements,    contracts,    certificates,    instruments,
                franchises,  permits, licenses, plans,  specifications and other
                documents  entered  into  pertaining  to  the  use,  occupation,
                construction,  management or operation of the Leased Property or
                with respect to any business or activity conducted on the Land.

            In  addition  to  the  foregoing,   under  the  Leasehold  Mortgage,
Monticello Raceway  Management  assigned its right, title and interest in and to
all  current  and  future  Leases  and  Rents to The  Berkshire  Bank.  However,
Berkshire Bank has granted  Monticello Raceway Management a revocable license to
collect and receive the Rents.


                                      119





            MATERIAL COVENANTS

            The  Leasehold  Mortgage  incorporates  by  reference  each  of  the
covenants  of the Loan  Agreement  and the Term  Note  and all  other  documents
executed by Monticello  Raceway  Management  and/or others and by or in favor of
The Berkshire Bank,  which wholly or partially secure or guaranty payment of the
Loan.

            In addition,  without The Berkshire  Bank's prior  written  consent,
Monticello Raceway Management may not, among other things,

            o   execute any Lease (i) demising in excess of 10,000  square feet,
                individually  or when combined with any other Leases or (ii) for
                a term of more than one year;

            o   conduct,  demolish or materially  alter any  improvements on the
                Leased Property;

            o   execute any agreements (other than the Leases) for a term longer
                than the Loan,  unless such  agreements are  terminable  without
                penalty upon 30 days' notice (and in addition,  if The Berkshire
                Bank is dissatisfied  with the management of the Leased Property
                under any property management agreement existing at the time, it
                may direct  Monticello  Raceway  Management  to  terminate  such
                agreement  and to  hire  a  management  company  that  it  deems
                acceptable);

            o   use the Leased  Property for anything other than its current use
                or   for   racing,   gaming,   entertainment,   retail,   hotel,
                restaurants,  any other use related to so-called  "tourism"  and
                other ancillary and related activities thereto; and

            o   except  as  expressly  permitted  in the Loan  Agreement,  sell,
                convey, mortgage, grant, bargain,  encumber,  pledge, assign, or
                otherwise transfer the Leased Property or any part thereof.

            GROUND LEASE

            Under the Leasehold  Mortgage,  Monticello  Raceway  Management must
enforce the Ground Lease and not terminate,  modify, cancel, change, supplement,
alter or amend the Ground Lease, or waive, excuse, condone or in any way release
or discharge  Catskill  Development of or from any of the material covenants and
conditions to be performed or observed by Catskill Development.  Moreover, under
the  Leasehold  Mortgage,  Monticello  Raceway  Management  has  assigned to The
Berkshire Bank, all of Monticello Raceway  Management's  interests in the Ground
Lease.  However,  so long as no event of default has occurred and is continuing,
Monticello  Raceway  Management has a revocable license to take all actions with
respect to the Ground Lease.

            Upon the acquisition of the fee title or any other estate,  title or
interest in the Leased Property by Monticello Raceway Management,  The Berkshire
Bank has the right to cause the Leasehold  Mortgage to  automatically  attach to
and cover and be a lien upon such other estate so  acquired,  and for such other
estate to be  considered  as  mortgaged,  assigned and conveyed to The Berkshire
Bank.


                                      120





NONDISTURBANCE AND ATTORNMENT AGREEMENT

            Catskill  Development  is indebted to Americas  Tower  Partners  and
Monticello Realty, in equal portions,  in the total original principal amount of
$5,000,000,  which  indebtedness  continues to bear  interest at the rate of ten
percent (10%)  compounded  annually and is due and payable on September 15, 2004
and is secured by a mortgage  (the "SENIOR  MORTGAGE")  dated October 1, 1999 on
Catskill  Development's  fee  interest in the Leased  Property.  Americas  Tower
Partners, Monticello Realty, Monticello Raceway Management, Catskill Development
and The Berkshire Bank entered into a  Nondisturbance  and Attornment  Agreement
dated as of October 29, 2003 to confirm the rights and  obligations  of Americas
Tower  Partners and  Monticello  Realty if they exercise any of their rights and
remedies  as holder of the  Senior  Mortgage  and become the owner of the Leased
Property,  and also to confirm the rights and  obligations of The Berkshire Bank
in the  event of any  attempted  termination  of the  Ground  Lease.  Under  the
conditions described in the Nondisturbance and Attornment Agreement,  even after
Americas Tower Partners and  Monticello  Realty,  become the owner of the Leased
Property,  the Ground Lease shall  continue in full force and effect as a direct
lease between Americas Tower Partners and Monticello  Realty,  as landlord,  and
Monticello  Raceway  Management,  as  tenant.  In  addition,  in the event  that
Americas Tower Partners and Monticello Realty, as landlord,  desire to terminate
the Ground Lease,  The Berkshire Bank shall have the  opportunity to perform any
obligation of, or remedy any default by, Catskill Development, and if the Ground
Lease is  terminated  for any reason,  The Berkshire  Bank may require  Americas
Tower Partners and Monticello  Realty,  as landlord,  to enter into a new ground
lease with the Berkshire Bank, on the same terms and conditions as are contained
in the Ground Lease.


                                      121






SURETY AGREEMENT

            GENERAL

            To induce The Berkshire Bank to make the Loan to Monticello  Raceway
Management,  Empire  Resorts  has  executed  a  surety  agreement  (the  "SURETY
AGREEMENT") in favor of The Berkshire Bank, pursuant to which Empire Resorts has
guaranteed Monticello Raceway Management's  performance of its obligations under
the Loan Agreement and Term Note.

            SCOPE OF SURETY

            The Surety  Agreement  constitutes a guarantee of payment and not of
collection.  For example,  The Berkshire  Bank may institute a legal  proceeding
directly against Empire Resorts to enforce its rights under the Surety Agreement
without  first  instituting  a  legal  proceeding   against  Monticello  Raceway
Management.   Furthermore,  under  the  Surety  Agreement,  Empire  Resorts  has
acknowledged  that  its  obligations  under  the  Surety  Agreement  will not be
reduced, impaired or affected in any way by reason of, among other things:

            o   the   invalidity,   unenforceability   or   voidability  of  any
                obligations,  liens or rights  in any  property  pledged  by any
                person in connection with the Loan;

            o   the  existence  or  nonexistence  of any  defenses  which may be
                available to Monticello  Raceway  Management with respect to its
                obligations under the Loan Agreement and Term Note;

            o   any  delay  by The  Berkshire  Bank  in  making  a  demand  upon
                Monticello Raceway Management or any delay in enforcing,  or any
                failure  to  enforce,  any  rights  against  Monticello  Raceway
                Management or any other person or persons  liable for any or all
                of Monticello  Raceway  Management's  obligations under the Loan
                Agreement and Term Note, even if such demand rights are lost due
                to such delay or failure; or

            o   any other fact, event, condition or omission which may give rise
                to a suretyship defense.

            Under the Surety Agreement,  Empire Resorts has further acknowledged
that its  obligations  under the Surety  Agreement will not be effected,  in any
way, by any of the following events:

            o   an  extension or change in the time,  manner,  place or terms of
                payment  of  any  or  all  of  Monticello  Raceway  Management's
                obligations,

            o   the  amendment,  supplement,  restatement  or replacement of the
                Loan Agreement or any related agreements,

            o   the renewal or extension of any financing  reflected in the Loan
                Agreement,


                                      122





            o   the  modification of the terms and conditions  under which loans
                and  extensions  of  credit  may be made to  Monticello  Raceway
                Management, or

            o   the  settlement,  compromise  or  releases  from liabilities  of
                Monticello Raceway Management for any obligations.

            COVENANTS

            Until all of Monticello Raceway  Management's  obligations under the
Loan Agreement and Term Note have been irrevocably satisfied in full, the Surety
Agreement  requires Empire Resorts to perform or comply with certain  covenants,
including,  without  limitation,   covenants  relating  to  (i)  limitations  on
indebtedness,  (ii) limitations on liens, (iii) notice and information  delivery
requirements,  (iv) the  payment of taxes and  claims,  (v) the  maintenance  of
assets and  properties,  (vi) the  maintenance  of insurance  policies and (vii)
compliance with laws.

            EVENTS OF DEFAULT

            The Surety Agreement contains customary events of default including,
without  limitation,  (i) the failure to make any  payments  when due,  (ii) any
representation  or  warranty  proving to have been  false  when made,  (iii) the
failure to comply  with any other  term,  covenant  or  agreement  of the Surety
Agreement,  (iv) defaults with respect to certain other indebtedness,  (v) entry
of material  judgments against Empire Resorts,  (vi) default or breach under any
agreements related to the Loan Agreement, and (vii) bankruptcy and insolvency.

GUARANTEE AGREEMENT

            To induce The Berkshire Bank to make the Loan to Monticello  Raceway
Management,  Robert A. Berman,  Empire  Resorts' chief  executive  officer and a
member of its board of directors, has executed a Guarantee Agreement in favor of
The Berkshire Bank, on terms substantially similar to the above described Surety
Agreement,  pursuant  to which Mr.  Berman  has  guaranteed  Monticello  Raceway
Management's  performance of its  obligations  under the Loan Agreement and Term
Note. However,  in contrast to the Surety Agreement,  The Berkshire Bank may not
exercise any of its rights or remedies  against Mr.  Berman under the  Guarantee
Agreement unless and until Mr. Berman  beneficially owns (directly or indirectly
through immediate family members,  trusts or interest in partnerships or limited
liabilities  companies)  less than ten percent (10%) of the  outstanding  common
voting  stock  of  either  Empire  Resorts  or  Monticello  Raceway  Management.
Immediately upon such an occurrence, however, all of The Berkshire Bank's rights
and remedies under the Guarantee Agreement shall be immediately available to The
Berkshire Bank, without further notice to Mr. Berman.

SECURITY AGREEMENT

            Pursuant to a Security  Agreement,  dated as of October 29, 2003, by
and between Catskill  Development and The Berkshire Bank,  Catskill  Development
has  agreed to grant The  Berkshire  Bank a lien on and a security  interest  in
substantially all of its assets that relate to Monticello  Raceway (the "RACEWAY


                                      123






ASSETS"),  whether now owned or acquired in the future.  In connection with this
Security Agreement,  Catskill Development has agreed,  except as is contemplated
by the consolidation's terms, not to, among other things:

            o   merge or consolidate with any other person;

            o   commence a dissolution or liquidation;

            o   sell any Raceway Assets; or

            o   cause or consent to any of its Raceway  Assets,  at any time, to
                become  subject  to any  claim,  encumbrance,  lien or  security
                interest.

            Catskill Development has also acknowledged in the Security Agreement
that its liability under the Security Agreement will not be reduced, impaired or
affected in any way by reason of, among other things:

            o   the   invalidity,   unenforceability   or   voidability  of  any
                obligations,  liens or rights  in any  property  pledged  by any
                person in connection with the Loan;

            o   the  existence  or  nonexistence  of any  defenses  which may be
                available to the Monticello  Raceway  Management with respect to
                its obligations under the Loan Agreement and Term Note;

            o   any  delay  by The  Berkshire  Bank  in  making  a  demand  upon
                Monticello Raceway Management or any delay in enforcing,  or any
                failure  to  enforce,  any  rights  against  Monticello  Raceway
                Management or any other person or persons  liable for any or all
                of Monticello  Raceway  Management's  obligations under the Loan
                Agreement and Term Note, even if such demand rights are lost due
                to such delay or failure; or

            o   any other fact, event, condition or omission which may give rise
                to a defense against The Berkshire Bank.

            Under the  Security  Agreement,  Catskill  Development  has  further
acknowledged  that its  obligations  under the  Security  Agreement  will not be
effected, in any way, by any of the following events:

            o   an  extension or change in the time,  manner,  place or terms of
                payment  of  any  or  all  of  Monticello  Raceway  Management's
                obligations,

            o   the  amendment,  supplement,  restatement  or replacement of the
                Loan Agreement or any related agreements,

            o   the renewal or  extension  any  financing  reflected in the Loan
                Agreement,


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            o   the  modification of the terms and conditions  under which loans
                and  extensions  of  credit  may be made to  Monticello  Raceway
                Management, or

            o   the  settlement,  compromise  or  releases from  liabilities  of
                Monticello Raceway Management for any obligations.


                              SELLING STOCKHOLDERS

            The  shares  of  Empire   Resorts'   common   stock  issued  in  the
consolidation  will be registered  under the Securities Act of 1933, as amended.
These shares will be freely  transferable  under the  Securities Act of 1933, as
amended,  except  for  shares  issued  to  persons  who  may  be  deemed  to  be
"affiliates"  of Catskill  Development  or Monticello  Raceway  Development  for
purposes of Rule 145 under the Securities Act of 1933, as amended.

            Affiliates may not sell their shares of Empire Resorts' common stock
acquired in connection  with the  consolidation  except pursuant to an effective
registration  statement  under the Securities Act of 1933, as amended,  covering
those shares or in compliance with Rule 145 under the Securities Act of 1933, as
amended, or another applicable exemption to the registration requirements of the
Securities  Act of 1933, as amended.  Persons who may be deemed to be affiliates
of Catskill  Development or Monticello  Raceway  Development  generally  include
individuals  or entities  that  control,  are  controlled by or are under common
control with Catskill  Development  or Monticello  Raceway  Development  and may
include  officers and certain  beneficial  holders of Catskill  Development  and
Monticello Raceway Development.


            Pursuant to the restated  contribution  agreement,  each of Catskill
Development  and  Monticello  Raceway  Development  agreed to cause  each of its
affiliates  under Section 2(11) of the Securities  Act of 1933, as amended,  and
Rule 145,  to deliver  an  executed  "affiliate  agreement"  to Empire  Resorts.
Pursuant to these affiliate agreements,  no affiliate of Catskill Development or
Monticello  Raceway  Development may sell,  transfer or otherwise dispose of any
shares of Empire  Resorts'  common stock issued to that  affiliate,  directly or
indirectly, in connection with the consolidation,  except in compliance with the
applicable  provisions of the Securities Act of 1933, as amended,  and the rules
and regulations thereunder. Because the selling stockholders listed in the table
below may be deemed to be  affiliates  of  Catskill  Development  or  Monticello
Raceway  Development,  the  registration  statement  of which  this  information
statement/prospectus is a part will also cover any offers or sales of the resale
shares sold by the selling stockholders.  The affiliates of Catskill Development
and  Monticello  Raceway  Development  and any other  holder of such  shares who
relies on this information statement/prospectus,  as so amended or supplemented,
in  connection  with any such offer or sale is  referred  to below as a "selling
stockholder."  Notwithstanding  the  transfer  restrictions  set  forth  in  the
affiliate  agreements,  for so long as the registration  statement of which this
information  statement/prospectus  is a part is  effective,  the  affiliates  of
Catskill  Development and Monticello Raceway  Development will be able, pursuant
to the registration  statement,  to sell, transfer or otherwise dispose of their
shares of Empire Resorts' common stock received in the consolidation.


            This information  statement/prospectus  may be used by affiliates of
Catskill  Development and Monticello Raceway Development and by any other holder
of  the  Empire   Resorts'   common  stock  acquired  in  connection   with  the

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consolidation  to cover the public offering and resale of Empire Resorts' common
stock to be  issued  in  connection  with  the  consolidation.  Pursuant  to the
registration statement of which this information statement/prospectus is a part,
Empire Resorts has registered under the Securities Act of 1933, as amended,  the
issuance of its common  stock to the members of both  Catskill  Development  and
Monticello Raceway Development pursuant to the consolidation.

            Empire  Resorts  does not know when or in what  amounts  the selling
stockholders may offer shares for sale. The selling  stockholders may choose not
to sell any of the  shares  offered  by this  prospectus.  Because  the  selling
stockholders may offer all or some of the shares pursuant to this offering,  and
because there are currently no agreements,  arrangements or understandings  with
respect to the sale of any of the shares,  Empire  Resorts  cannot  estimate the
number of the shares that the selling stockholders will hold after completion of
the offering.  For purposes of the table below,  Empire Resorts has assumed that
the selling stockholders will sell all of the shares covered by this prospectus.

            The following  table,  which sets forth  information with respect to
the selling stockholders, gives effect to the issuance of Empire Resorts' common
stock  upon the  closing of the  consolidation  and also  assumes  the number of
shares of Empire Resorts' common stock  outstanding at the effective time of the
consolidation is the same as the number of shares outstanding on the record date
for  determining  the  stockholders  of Empire Resorts  entitled to receive this
information statement/prospectus:


                            Shares of Empire
                                Resorts'                                       Shares of Empire Resorts'
                           Common Stock to be        Shares of Empire          Common Stock to be Owned
                           Owned Immediately            Resorts'                  after the Offering
Name of Selling                 after the              Common Stock            -----------------------
 Stockholder                  Consolidation            to be Offered           Amount        Percent
----------------           -----------------         ----------------       -----------     ----------
Americas Tower
Partners                        6,599,294                 6,599,294              --             --

Watertone
Holdings                        4,565,010                 4,565,010              --             --

Monticello
Realty                          5,732,261                 5,732,261              --             --

Robert A.
Berman                          1,098,094                   710,967           387,127         1.71%

Scott A.
Kaniewski                         134,096                   132,656             1,440           *

KFP Trust                          34,986                       434            34,552           *

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                            Shares of Empire
                                Resorts'                                       Shares of Empire Resorts'
                           Common Stock to be        Shares of Empire          Common Stock to be Owned
                           Owned Immediately            Resorts'                  after the Offering
Name of Selling                 after the              Common Stock            -----------------------
 Stockholder                  Consolidation            to be Offered           Amount        Percent
----------------           -----------------         ----------------       -----------     ----------
Kaniewski
Family Limited
Partnership                        28,940                       434            28,506           *

Philip B. Berman                   45,985                    22,542            23,443           *

Clifford A.
Ehrlich                           250,512                   250,512              --            --

Fox-Hollow Lane, LLC              182,191                   182,191              --            --

Shamrock Strategies, Inc.          22,774                    22,774              --            --


----------
* less than 1%


            Americas  Tower  Partners  is  beneficially  owned  35% by Joseph E.
Bernstein,  a member  of Empire  Resorts'  board of  directors,  35% by Ralph J.
Bernstein, a member of Empire Resorts' board of directors, and 20% Morad Tahbaz,
Empire Resorts' president and a member of its board of directors.

            Watertone  Holdings is  beneficially  owned 70% by Robert A. Berman,
Empire Resorts' chief executive  officer, a member of its board of directors and
its  former  chairman,  and 11% by Scott A.  Kaniewski,  Empire  Resorts'  chief
financial officer and a former member of its board of directors.

            Scott  Kaniewski is a 1% limited  partner and the general partner of
the Kaniewski Family Limited  Partnership with sole voting and disposition power
over its assets.

            Stacey B. Kaniewski,  Scott A. Kaniewski's wife, is the sole trustee
of the KFP Trust with sole voting and  disposition  power over its  assets,  and
whose sole beneficiaries are Scott A. Kaniewski's children.

            Philip B.  Berman is  Empire  Resorts'  vice  president  of  project
coordination, and each of Robert A. Berman and Philip B. Berman are brothers.


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            Charles    Degliomini,    Empire    Resorts'   vice   president   of
communications,  is the  managing  member of  Fox-Hollow  Lane,  LLC,  a limited
liability company owned by Mr. Degliomini's immediate family.


                              PLAN OF DISTRIBUTION

            Empire Resorts will not receive any of the proceeds of any resale of
Empire  Resorts'  common  stock  by the  selling  stockholders  pursuant  to the
registration  statement of which this information  statement/prospectus  forms a
part. The selling stockholders will receive all of the proceeds.

            The selling  stockholders,  including their  pledgees,  transferees,
assignees,  donees or other successors in interest, may, from time to time, sell
any or all of  their  shares  of  Empire  Resorts'  common  stock,  at  fixed or
negotiated prices, using one or more of the following methods:

            o   on the NASDAQ Small Cap Market,  or on any other stock exchange,
                market or trading facility on which Empire Resorts' common stock
                may from time to time be trading;

            o   in the over-the-counter market;

            o   in privately negotiated transactions or otherwise;

            o   a distribution to a selling stockholder's  partners,  members or
                stockholders;

            o   through agents or underwriters;

            o   ordinary  brokerage  transactions  and transactions in which the
                broker-dealer solicits purchasers;

            o   block trades in which the broker-dealer will attempt to sell the
                shares as agent but may  position  and  resell a portion  of the
                block as principal to facilitate the transaction;

            o   purchases  by a  broker-dealer  as  principal  and resale by the
                broker-dealer for its account;

            o   an exchange  distribution  in  accordance  with the rules of the
                applicable exchange;

            o   through the writing of options on the shares;

            o   short sales;

            o   broker-dealers may agree with the selling stockholders to sell a
                specified number of such shares at a stipulated price per share;

            o   a combination of any such methods of sale; and

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            o   any other method permitted pursuant to applicable law.

            The selling  stockholders may also sell shares under Rule 144 of the
Securities  Act of 1933,  as  amended,  if  available,  rather  than  under this
registration  statement of which this information  statement/prospectus  forms a
part.

            The selling  stockholders may also engage in short sales against the
box, puts and calls and other  transactions  in the securities or derivatives of
Empire Resorts and may sell or deliver  shares in connection  with these trades.
The selling  stockholders  may pledge  their shares to their  brokers  under the
margin provisions of customer agreements. If a selling stockholder defaults on a
margin  loan,  the broker  may,  from time to time,  offer and sell the  pledged
shares.

            Broker-dealers  engaged by the selling  stockholders may arrange for
other  broker-dealers  to  participate  in  sales.  Broker-dealers  may  receive
commissions or discounts from the selling stockholders (or, if any broker-dealer
acts as agent for the purchaser of shares,  from the purchaser) in amounts to be
negotiated.


            The  selling  stockholders  and any  broker-dealers  or  agents  who
publicly offer or sell the shares will be deemed to be "underwriters" within the
meaning of the  Securities  Act of 1933,  as amended,  in  connection  with such
sales. In such event, any commissions  received by such broker-dealers or agents
and any profit on the resale of the shares purchased by them may be deemed to be
underwriting  commissions  or discounts  under the  Securities  Act of 1933,  as
amended.


            To  comply  with  the  securities  laws  of  certain  jurisdictions,
registered  or licensed  brokers or dealers may need to offer or sell the shares
offered   by   this   registration   statement   of   which   this   information
statement/prospectus  forms a part. The applicable  rules and regulations  under
the Securities Exchange Act of 1934, as amended, may limit any person engaged in
a  distribution  of the  shares of common  stock  covered  by this  registration
statement  of which this  information  statement/prospectus  forms a part in its
ability to engage in market  activities  with respect to such shares.  A selling
stockholder,  for  example,  will be subject  to  applicable  provisions  of the
Securities Exchange Act of 1934, as amended, and the rules and regulations under
it, which  provisions  may limit the timing of purchases and sales of any shares
of common stock by that selling stockholder.

                        COMPARISON OF STOCKHOLDER RIGHTS

            Empire  Resorts is a  Delaware  corporation  subject to the  General
Corporation Law of the State of Delaware. Monticello Raceway Management is a New
York  corporation  subject to the New York  Business  Corporation  Law.  Each of
Monticello  Casino  Management,   Monticello  Raceway   Development  and  Mohawk
Management  are New York  limited  liability  companies  subject to the New York
Limited Liability Company Law.  Stockholders of Monticello  Raceway  Management,
whose  rights  are  currently  governed  by  Monticello   Raceway   Management's
certificate of incorporation,  bylaws and the New York Business  Corporation Law
and members of Monticello Casino Management,  Monticello Raceway Development and
Mohawk  Management,  whose  rights are  governed by their  respective  operating
agreements and the New York Limited Liability Company Law, will, upon completion
of the  consolidation,  become  stockholders  of Empire Resorts and their rights

                                      129





will be governed by Empire Resorts' certificate of incorporation, bylaws and the
Delaware General Corporation Law.

            The following  description  summarizes the material differences that
may affect the rights of stockholders and members, as the case may be, of Empire
Resorts, Monticello Raceway Management, Monticello Casino Management, Monticello
Raceway Development and Mohawk Management, but does not purport to be a complete
statement of all those  differences,  or a complete  description of the specific
provisions referred to in this summary. Stockholders should carefully review the
relevant  provisions of New York law, Delaware law, Empire Resorts'  certificate
of incorporation  and bylaws,  Monticello  Raceway  Management's  certificate of
incorporation  and bylaws and the  operating  agreements  of  Monticello  Casino
Management, Monticello Raceway Development and Mohawk Management.

OWNERSHIP INTEREST

            EMPIRE RESORTS

            A  stockholder's  interest in Empire  Resorts is  represented by the
ownership of its capital stock.  The authorized  capital stock of Empire Resorts
consists of 75,000,000  shares of common stock and 5,000,000 shares of preferred
stock,  of which 821,496 shares have been designated  Series B Preferred  Stock,
$.01 par value per share, 137,889 shares have been designated Series C Preferred
Stock,  $.01 par value per share,  4,000  shares have been  designated  Series D
Preferred  Stock,  $.01 par  value  per share  and  1,730,697  shares  have been
designated Series E Preferred Stock, $.01 par value per share.

            MONTICELLO RACEWAY MANAGEMENT

            A  stockholder's   interest  in  Monticello  Raceway  Management  is
represented by the ownership of its capital stock. The authorized  capital stock
of Monticello Raceway consists of 200 shares at no par value.

            MONTICELLO CASINO  MANAGEMENT,  MONTICELLO  RACEWAY  DEVELOPMENT AND
MOHAWK MANAGEMENT

            A  member's  interest  in  each  of  Monticello  Casino  Management,
Monticello  Raceway  Development  and Mohawk  Management is  represented  by the
ownership of percentage membership interests and the member's capital account. A
member's  capital account  consists of the amount of capital  contributed by the
member to Monticello  Casino  Management,  Monticello  Raceway  Development  and
Mohawk  Management,  as the case may be,  increased  for,  among  other  things,
allocations of profit, and reduced for, among other things,  allocations of loss
and distributions to the member.  In general,  distributions to members are made
according to their percentage membership interests.

                                      130





RIGHTS OF REDEMPTION

            EMPIRE RESORTS

            Under  the   Delaware   General   Corporation   Law,   with  certain
limitations,  a corporation's stock may be made redeemable by the corporation at
its option, at the option of the holders of the stock or upon the happening of a
specified event.

            The  Certificate  of  Designations  for  Empire  Resorts'  Series  C
Preferred  Stock  provides  that Empire  Resorts may,  within 120 days after the
occurrence  of a "capital  event,"  elect to redeem all or a pro rata portion of
the  outstanding  Series C Preferred  Stock for the redemption  price of $72 per
share, plus all unpaid accrued dividends. A "capital event" is defined as a sale
of assets of Empire Resorts which results in at least a $5,000,000 excess of the
purchase price paid for the assets and Empire Resorts' basis in such assets.

            The  Certificate  of  Designations  for  Empire  Resorts'  Series  D
Preferred  Stock  provides  that on or after  February  8, 2005,  the holders of
Empire  Resorts'  Series D  Preferred  Stock  can  demand  that  their  Series D
Preferred  Stock be redeemed for that number of shares of Empire Resorts' common
stock  equal to the  product of (a) the  number of shares of Series D  Preferred
Stock  surrendered  and (b) a  fraction,  the  numerator  of which is the common
stock's current market price and the denominator of which is the lesser of $6.00
and the average of the two lowest  closing prices of the common stock during the
preceding 30 days. The holders of Empire  Resorts'  Series D Preferred Stock can
also  demand  that  their  shares be  redeemed  if Empire  Resorts  defaults  in
effecting a conversion of shares of Series D Preferred  Stock in accordance with
the  Certificate of Designations  and such default  continues for 10 days, or if
Empire Resorts defaults in the payment of the stated value ($1,000 per share) or
of dividends when due and such default  continues for 10 days. Upon a redemption
following such a default  described in the prior  sentence,  Empire Resorts must
pay the  holders of Series D  Preferred  Stock  demanding  redemption,  in cash,
$1,250 per share of Series D Preferred Stock plus all accrued unpaid  dividends.
Finally, between the date Empire Resorts announces its intention to effectuate a
change in its control  until  three days prior to such  change in  control,  the
holders of Series D  Preferred  Stock may demand  that their  Series D Preferred
Stock be  redeemed  for 125% of the number of shares of Empire  Resorts'  common
stock to which their Series D Preferred Stock would otherwise be convertible.

            The  Certificate  of  Designations  for  Empire  Resorts'  Series  E
Preferred Stock provides that Empire Resorts,  at its option,  may redeem all or
part of the Series E  Preferred  Stock at any time for the  redemption  price of
$10.00 per share, plus all accrued unpaid dividends, in cash or by delivery of a
promissory note payable over three years.

            MONTICELLO RACEWAY MANAGEMENT

            Under the New York  Business  Corporation  Law,  subject  to several
limitations, a corporation's certificate of incorporation may provide for one or
more  classes  or  series  of  shares  to be  redeemable  at the  option  of the
corporation,  the  holders  of the class or  series,  other  persons or upon the
happening  of a  specified  event,  for  cash,  other  property,  debt or  other
securities of the same or another  corporation,  at the time or times,  price or

                                      131





prices,  or rate or  rates,  and with any  adjustments,  that are  stated in the
certificate of incorporation.  Monticello  Raceway  Management's  certificate of
corporation does not provide for the redemption of any stock.

            MONTICELLO CASINO  MANAGEMENT,  MONTICELLO  RACEWAY  DEVELOPMENT AND
MOHAWK MANAGEMENT

            Neither the operating  agreements of Monticello  Casino  Management,
Monticello  Raceway  Development,  Mohawk  Management,  nor the New York Limited
Liability Company Law provide Monticello Casino  Management,  Monticello Raceway
Development  or  Mohawk  Management  with any  rights  of  redemption,  or their
respective members with the right to demand redemption.

LIQUIDATION

            EMPIRE RESORTS

            Under  the   Delaware   General   Corporation   Law,   with  certain
limitations,  the  certificate  of  incorporation  can  provide  the  holders of
preferred  stock  with  special  rights  upon the  dissolution  of,  or upon the
distribution of any assets of, the corporation.

            Pursuant to Empire Resorts'  certificate of incorporation,  upon the
liquidation,  dissolution or winding up of Empire Resorts, no distribution shall
be made (i) to the holders of stock  ranking  junior  (either as to dividends or
upon liquidation, dissolution or winding up) to the Series B, Series C, Series D
and Series E Preferred  Stock unless,  prior  thereto,  the holders of Series B,
Series  C,  Series  D and  Series  E  Preferred  Stock  shall  have  received  a
liquidation preference of $29, $72, $1,000 and $10 per share, respectively, plus
an amount equal to all accrued unpaid  dividends  thereon,  if any,  through the
date of such payment or (ii) to the holders of stock  ranking on parity  (either
as to dividends or upon liquidation,  dissolution or winding up) with the Series
B, Series C, Series D and Series E Preferred Stock,  except  distributions  made
ratably on the Series B, Series C, Series D and Series E Preferred Stock and all
such other parity stock in  proportion to the total amounts to which the holders
of such shares are entitled to upon a liquidation, dissolution or winding up.

            MONTICELLO RACEWAY MANAGEMENT

            Under the New York  Business  Corporation  Law, the  certificate  of
incorporation  may deny,  limit or otherwise  define the  liquidation  rights of
shares of any class, but no such limitation or definition of liquidation  rights
will be effective unless at the time one or more classes of outstanding  shares,
singly or in the  aggregate,  are  entitled  to  unlimited  liquidation  rights.
However,  each share in a particular class shall have equal  liquidation  rights
with every other share in that class.

            As Monticello  Raceway  Management's  certificate  of  incorporation
provides  for only one class of stock,  there  are no  preferential  liquidation
rights.

                                      132





            MONTICELLO CASINO  MANAGEMENT,  MONTICELLO  RACEWAY  DEVELOPMENT AND
MOHAWK MANAGEMENT

            Under the New York Limited Liability Company Law, except as provided
in  the  operating  agreement,   distributions  pursuant  to  a  liquidation  or
dissolution   shall  be  made  first  to   members   for  the  return  of  their
contributions,  to the extent not previously returned,  and second, with respect
to the member's  membership  interests,  in the proportions in which the members
share in distributions.

            The operating  agreements for each of Monticello Casino  Management,
Monticello  Raceway  Management  and  Mohawk  Management  provide  that  upon  a
dissolution,   the  company's  property  and  assets  or  the  proceeds  from  a
liquidation  of its properties and assets shall be distributed to the members in
accordance  with the  positive  balances in their  respective  capital  accounts
determined  after  allocating  all items for periods  prior to and including the
date of distribution and after taking into account all prior distributions.

DIVIDENDS

            EMPIRE RESORTS

            Under the Delaware General Corporation Law, a board of directors may
authorize a corporation to declare and pay dividends and other  distributions to
its  stockholders,  subject to any restrictions  contained in the  corporation's
certificate of incorporation, either out of surplus, or, if there is no surplus,
out of net  profits  for the  current  or  preceding  fiscal  year in which  the
dividend  is  declared.  However,  a  distribution  out  of net  profits  is not
permitted  if a  corporation's  capital  is less  than  the  amount  of  capital
represented  by the  issued  and  outstanding  stock  of all  classes  having  a
preference  upon the  distribution  of  assets,  until the  deficiency  has been
repaired.

            The  Certificate of  Designations  for Empire  Resorts' Series B and
Series C  Preferred  Stock  provides  that the holders of shares of Series B and
Series C Preferred  Stock shall be  entitled to receive,  out of assets  legally
available for payment, a cash dividend of $2.90 and $5.76 per annum per share of
Series B and Series C Preferred Stock, respectively.  This Series B and Series C
Preferred  Stock dividend shall accrue from the date of initial  issuance and be
payable  on the first  day of each  January,  April,  July and  October.  If any
dividend on any share shall for any reason not be paid at the time such dividend
becomes  due,  such  dividend in arrears  shall be paid as soon as payments  are
permissible under Delaware law. However,  any dividend payment which is not made
by Empire Resorts on or before  January 30 of the following  calendar year shall
be payable in the form of shares of Empire  Resorts' common stock in such number
of shares as shall be  determined  by dividing (A) the product of (x) the amount
of the unpaid  dividend  and (y) 1.3 by (B) the fair market  value of the common
stock.

            The  Certificate  of  Designations  for  Empire  Resorts'  Series  D
Preferred  Stock provides that the holders of shares of Series D Preferred Stock
are  entitled  to  receive  a  dividend  of $70 per  annum per share of Series D
Preferred  Stock,  which shall  increase to $150 per annum per share of Series D
Preferred Stock upon the conversion of the outstanding  Series D Preferred Stock
into more than 330,000 shares of Empire  Resorts'  common stock.  Dividends with
respect  to a share of Series D  Preferred  Stock are  payable in arrears on the
earlier  to occur of the  conversion  or  redemption  of such  share of Series D

                                      133





Preferred  Stock.  At the option of Empire  Resorts,  Series D  Preferred  Stock
dividends are payable in cash or, subject to certain limitations, by delivery of
that  number of shares of common  stock  that the  amount of  accrued  dividends
payable would entitle the Series D Preferred  Stock holder to acquire at a price
per share of common  stock  equal to the lesser of $6.00 and the  average of the
two lowest closing prices of the common stock during the preceding 30 days.

            The  Certificate  of  Designations  for  Empire  Resorts'  Series  E
Preferred  Stock provides that the holders of shares of Series E Preferred Stock
are entitled to receive, when and as declared by the board of directors,  out of
assets  legally  available  for payment,  a cash  dividend of $.80 per annum per
share of Series E Preferred Stock. Dividends with respect to a share of Series E
Preferred  Stock shall  accrue from the date of initial  issuance and be payable
(whether or not declared by the board of directors) upon the earliest of (i) the
redemption  of such share of Series E Preferred  Stock or (ii) the  liquidation,
dissolution or winding up of Empire Resorts.

            MONTICELLO RACEWAY MANAGEMENT

            Under the New York  Business  Corporation  Law,  a  corporation  may
declare  and  pay  dividends  or make  other  distributions,  except  when it is
insolvent or would thereby be made insolvent,  or when the declaration,  payment
or  distribution  would  be  contrary  to  any  restrictions  contained  in  its
certificate  of  incorporation.  Except as  otherwise  provided  in the New York
Business  Corporation  Law,  dividends  may  be  declared  and  paid  and  other
distributions  may only be made out of  surplus,  so that the net  assets of the
corporation  remaining after the  declaration,  payment or distribution  must at
least equal the amount of its stated capital.

            Monticello  Raceway  Management's  certificate of incorporation does
not contain any  restrictions  on the  declaration,  payment or  distribution of
dividends.

            MONTICELLO CASINO  MANAGEMENT,  MONTICELLO  RACEWAY  DEVELOPMENT AND
MOHAWK MANAGEMENT

            The  New  York  Limited   Liability   Company  Law   provides   that
distributions  of cash or other assets of a limited  liability  company shall be
allocated among the members, and among classes of members, if any, in the manner
provided in the operating agreement.

            The operating  agreements for each of Monticello Casino  Management,
Monticello  Raceway  Management and Mohawk  Management  provide that the company
shall  distribute  all  available  cash to its members  each  fiscal  quarter in
accordance with their respective percentage membership interests.

                                      134





STATE ANTI-TAKEOVER STATUTES

            EMPIRE RESORTS

            Delaware General Corporation Law Section 203, in general,  prohibits
a business  combination  between a  corporation  and an  interested  stockholder
within three years of the time the stockholder became an interested stockholder,
unless:

            o   prior  to  the  time  the   stockholder   became  an  interested
                stockholder,  the board of directors of the corporation approved
                either the business combination or the transaction that resulted
                in the stockholder becoming an interested stockholder;

            o   upon  completion  of  the  transaction   that  resulted  in  the
                stockholder becoming an interested  stockholder,  the interested
                stockholder  owned  at  least  85% of the  voting  stock  of the
                corporation  outstanding  at the  time  the  transaction  began,
                exclusive of shares owned by directors who are also officers and
                by employee stock plans; or

            o   at or after  the  time  the  stockholder  became  an  interested
                stockholder,  the business  combination is approved by the board
                of   directors   and   authorized   at  an  annual  or   special
                stockholders' meeting by the affirmative vote of at least 66.67%
                of the  outstanding  voting  stock  which  is not  owned  by the
                interested stockholder.

            The term "business  combination" is defined to include,  among other
transactions between an interested stockholder and the corporation or any direct
or indirect majority owned subsidiary of the corporation:

            o   a merger or consolidation;

            o   a sale, pledge, transfer or other disposition (including as part
                of a dissolution,  but other than to the interested  stockholder
                proportionately  as a stockholder) of assets having an aggregate
                market value equal to 10% or more of either the aggregate market
                value of all assets of the  corporation on a consolidated  basis
                or the aggregate  market value of all the  outstanding  stock of
                the corporation;

            o   transactions  that would increase the  interested  stockholder's
                proportionate  share  ownership  of the  stock  of any  class or
                series of the corporation or majority owned subsidiary; and

            o   any   receipt  by  the   interested   stockholder   (other  than
                proportionately  as a stockholder)  of the benefit of any loans,
                advances,   guarantees,  pledges  or  other  financial  benefits
                provided by or through the  corporation  or any  majority  owned
                subsidiary.

            In  general,  and  subject to  several  exceptions,  an  "interested
stockholder"  is any person  who is the owner of 15% or more of the  outstanding
voting stock (or, in the case of a corporation with classes of voting stock with

                                      135





disparate  voting  power,  15% or more of the  voting  power of the  outstanding
voting stock) of the  corporation,  and the  affiliates  and  associates of that
person.

            The term  "owner" is broadly  defined  to include  any person  that,
individually,  with or through that  person's  affiliates or  associates,  among
other  things,  beneficially  owns the stock,  or has the right to  acquire  the
stock, whether or not the right is immediately exercisable,  under any agreement
or understanding or upon the exercise of warrants or options or otherwise or has
the right to vote the stock  under any  agreement  or  understanding,  or has an
agreement  or  understanding  with the  beneficial  owner of the  stock  for the
purpose of acquiring, holding, voting or disposing of the stock.

            The  restrictions in Section 203 do not apply to  corporations  that
have  elected,  in the  manner  provided  in Section  203,  not to be subject to
Section 203 of the Delaware General Corporation Law or, with certain exceptions,
which  do not  have a class  of  voting  stock  that  is  listed  on a  national
securities  exchange or  authorized  for quotation on the Nasdaq Stock Market or
held of record by more than 2,000 stockholders.  Empire Resorts'  certificate of
incorporation and bylaws do not opt out of Section 203.

            MONTICELLO RACEWAY MANAGEMENT

            Section 912 of the New York Business  Corporation  Law prohibits any
"business combination" (defined to include a variety of transactions,  including
mergers,  sales or  dispositions  of assets,  issuances of stock,  liquidations,
reclassifications  and  benefits  from  the  corporation,   including  loans  or
guarantees)  with,  involving or proposed by any "interested  stockholder" for a
period of five years after the date on which the interested  stockholder  became
an interested stockholder.  "Interested stockholder" is defined generally as any
person  who,  directly  or  indirectly,  beneficially  owns  20% or  more of the
outstanding  voting stock of a New York corporation.  These  restrictions do not
apply,  however, to any business  combination with an interested  stockholder if
the business combination, or the purchase of stock by the interested stockholder
that caused the stockholder to become an interested  stockholder was approved by
the board of  directors of the New York  corporation  prior to the date on which
the interested stockholder became an interested stockholder. After the five-year
period, a business combination between a New York corporation and the interested
stockholder is prohibited unless either the "fair price" provisions set forth in
Section  912 are  complied  with or the  business  combination  is approved by a
majority  of  the  outstanding  voting  stock  not  beneficially  owned  by  the
interested stockholder or its affiliates and associates.

            A New  York  corporation  may  adopt  an  amendment  to its  bylaws,
approved by the affirmative vote of a majority of the outstanding  voting stock,
excluding the voting stock of interested  stockholders  and their affiliates and
associates,  expressly electing not to be governed by Section 912. The amendment
will not,  however,  be effective until 18 months after the stockholder vote and
will  not  apply  to any  business  combination  with a  stockholder  who was an
interested  stockholder  on or prior  to the  effective  date of the  amendment.
Monticello Raceway  Management's  bylaws do not contain a provision electing not
to be governed by Section 912.

                                      136





            MONTICELLO CASINO  MANAGEMENT,  MONTICELLO  RACEWAY  DEVELOPMENT AND
MOHAWK MANAGEMENT

            The New York  Limited  Liability  Company  Law does not  contain any
provision  comparable to either Section 203 of the Delaware General  Corporation
Law or Section 912 of the New York Business Corporation Law.

                                      137





VOTING RIGHTS

            EMPIRE RESORTS

            The Delaware General Corporation Law provides that, unless otherwise
provided in the certificate of incorporation, each stockholder shall be entitled
to one vote for each share of capital stock held by such stockholder.

            The  Certificate  of  Designations  for  Empire  Resorts'  Series  B
Preferred  Stock provides that the holders of shares of Series B Preferred Stock
are  entitled  to vote on all  matters  submitted  to the vote of the holders of
common stock and each share of Series B Preferred  Stock shall represent 8/10 of
one share of common stock for voting purposes.

            The  Certificate  of  Designations  for  Empire  Resorts'  Series  C
Preferred  Stock provides that the holders of shares of Series C Preferred Stock
are  entitled  to vote on all  matters  submitted  to the vote of the holders of
common  stock and each share of Series C  Preferred  stock shall  represent  2.4
shares of common stock for voting purposes.

            The  Certificate  of  Designations  for  Empire  Resorts'  Series  D
Preferred  Stock  provides  that prior to  conversion,  the  holders of Series D
Preferred  Stock shall not be entitled to vote on any matter  except as required
by Delaware law.

            The  Certificate  of  Designations  for  Empire  Resorts'  Series  E
Preferred  Stock provides that the holders of Series E Preferred Stock shall not
be entitled to vote on any matter except as required by Delaware  law.  However,
pursuant to the amendment to Empire Resorts'  certificate of incorporation  that
will take effect prior to the closing of the  consolidation  and is described in
this  information  statement/prospectus,  the  holders  of  shares  of  Series E
Preferred Stock will be entitled to vote on all matters submitted to the vote of
the  holders of common  stock and each share of Series E  Preferred  Stock shall
represent 1/4 of one share of common stock for voting purposes.

            MONTICELLO RACEWAY MANAGEMENT

            The  New  York  Business   Corporation  Law  provides  that,  unless
otherwise  provided in the certificate of incorporation,  each stockholder shall
be  entitled  to one  vote  for  each  share  of  capital  stock  held  by  such
stockholder.

            MONTICELLO CASINO  MANAGEMENT,  MONTICELLO  RACEWAY  DEVELOPMENT AND
MOHAWK MANAGEMENT

            Under the New York Limited Liability Company Law, except as provided
in the  operating  agreement,  in managing the affairs of the limited  liability
company,  electing managers or voting on any other matter that requires the vote
at a meeting of the members,  each member of a limited  liability  company shall
vote in proportion to such member's share of the current  profits of the limited
liability  company.  Further,  under New York law,  except  as  provided  in the
operating  agreement,  whether or not a limited  liability company is managed by
the  members or by one or more  managers,  the vote of a majority in interest of
the members entitled to vote thereon shall be required to:

                                      138





            o   admit a person as a member  and issue such  person a  membership
                interest in the limited liability company;

            o   approve the incurrence of indebtedness by the limited  liability
                company other than in the ordinary course of its business;

            o   adopt, amend,  restate or revoke the articles of organization or
                operating agreement;

            o   approve the dissolution of the limited liability company;

            o   approve the sale,  exchange,  lease,  mortgage,  pledge or other
                transfer  of all or  substantially  all  of  the  assets  of the
                limited liability company; or

            o   approve  a merger  or  consolidation  of the  limited  liability
                company  with or  into  another  limited  liability  company  or
                foreign limited liability company.

            Under each of Monticello  Casino  Management's,  Monticello  Raceway
Development's,  and Mohawk Management's operating agreement,  the affairs of the
company shall be managed by a board of managers, but such board may not, without
the consent of all members:

            o   acquire or sell real property;

            o   sell, exchange, pledge, encumber or dispose of all assets or any
                substantial asset of the company;

            o   admit any person as a member; or

            o   amend the operating agreement in any respect.

            Under each of Monticello Casino Management's and Mohawk Management's
operating agreement,  the board of managers also may not, without the consent of
all members:

            o   enter into any contract or agreement  not in existence  with any
                member or  affiliate of a member or any contract or agreement to
                merge or consolidate with any other entity; or

            o   approve  annual budgets or approve any act which is unrelated to
                the business of the company.

            Under Monticello  Raceway  Development's  operating  agreement,  the
board of managers also may not, without the consent of all members:

            o   enter into any  contract or  agreement  to merge or  consolidate
                with another entity; or

            o   do any act which is unrelated to the business of the company.

                                      139





NUMBER AND ELECTION OF DIRECTORS

            EMPIRE RESORTS

            The  Delaware  General   Corporation  Law  permits  a  corporation's
certificate  of  incorporation  or bylaws to contain  provisions  governing  the
number and terms of directors.  However,  if the  certificate  of  incorporation
contains  provisions  fixing  the  number of  directors,  the  number may not be
changed  without  amending the certificate of  incorporation.  Delaware law also
permits a corporation's  certificate of  incorporation  or bylaws adopted by the
stockholders  to  provide  that  directors  be  divided  into one,  two or three
classes,  with the term of office of one class of  directors to expire each year
and with the terms of office of no two classes expiring the same year.

            Pursuant  to  Empire  Resorts'  bylaws,   the  number  of  directors
constituting  the whole board of directors shall be seven,  which may be changed
by the affirmative vote of a majority of the whole board of directors. Directors
shall be elected at the annual  meeting by a plurality  of the  stockholders  to
hold  office.  Pursuant  to the  amendment  to Empire  Resorts'  certificate  of
incorporation  that will take effect on or before closing and which is described
in this information  statement/prospectus,  the number of directors constituting
the  whole  board  of  directors  shall  be fixed  exclusively  by the  board of
directors  pursuant to a resolution adopted by a majority of the total number of
directors that Empire  Resorts would have if there were no vacancies.  Directors
shall be  elected by a  plurality  of votes  cast,  and the  directors  shall be
divided into three  classes,  as nearly  equal in number as  possible,  with the
initial  term of office of the first  class of  directors  to expire at the 2004
annual meeting of stockholders of Empire Resorts,  the initial term of office of
the  second  class  of  directors  to  expire  at the  2005  annual  meeting  of
stockholders of Empire Resorts and the initial term of office of the third class
of  directors  to expire at the 2006 annual  meeting of  stockholders  of Empire
Resorts.  Commencing  with the 2004  annual  meeting of  stockholders  of Empire
Resorts, directors elected to succeed those directors whose terms have thereupon
expired shall be elected for a term of office to expire at the third  succeeding
annual meeting of stockholders of Empire Resorts after their election.

            MONTICELLO RACEWAY MANAGEMENT

            Under the New York Business Corporation Law, the number of directors
of a  corporation  may be fixed by a  corporation's  bylaws,  by  action  of the
stockholders  or by action of the board under the specific  provision of a bylaw
adopted  by the  stockholders.  At  each  annual  meeting  of the  stockholders,
directors are to be elected to hold office until the next annual meeting, except
for corporations with classified boards.  The New York Business  Corporation Law
also  permits  a  corporation's   certificate  of   incorporation  or  specified
provisions of a bylaw adopted by the stockholders,  to provide that directors be
divided into either two,  three or four  classes.  All classes must be as nearly
equal in number as possible.  The term of office of one class of directors shall
expire each year,  with the terms of office of no two classes  expiring the same
year.

            Pursuant  to  Monticello   Raceway   Management's   certificate   of
incorporation and bylaws,  Monticello Raceway Management shall have 5 directors.
When less than three stockholders own all of the shares, the number of directors
may be less than  three but not less than the  number of  stockholders.  At each
annual meeting of stockholders,  the stockholders  shall elect directors to hold

                                      140





office until the next annual meeting.  Each director shall hold office until the
expiration  of the term for which he is elected and until his successor has been
elected and qualified, or until his prior resignation or removal.

            MONTICELLO  RACEWAY  DEVELOPMENT,  MONTICELLO  CASINO MANAGEMENT AND
MOHAWK MANAGEMENT

            Under the New York Limited Liability Company Law, if the articles of
organization  provide that the management of the limited liability company shall
be vested in a manager or  managers  or class or classes of  managers,  then the
management  of the  limited  liability  company  shall be  vested in one or more
managers or classes of  managers,  subject to any  provisions  in the  operating
agreement.

            The  operating  agreement of each of Monticello  Casino  Management,
Monticello Raceway  Development and Mohawk Management  provides that the company
shall be  managed  by a board of  managers  and not the  members.  The  board of
managers for each of Monticello  Casino  Management and Mohawk  Management shall
consist  of 5  individuals,  2 of whom  shall be  designated  and  appointed  by
Catskill Development,  and 2 of whom shall be designated and appointed by Empire
Resorts.  Each of the four appointed managers shall serve as a manager until his
successor shall have been appointed, or until his earlier death,  resignation or
removal.  The fifth  manager shall be a  disinterested  third party elected by a
majority vote of the four appointed  members of the board of managers for a term
of one (1) year. The board of managers of Monticello  Raceway  Development shall
consist  of 5  individuals,  2 of whom  shall be  designated  and  appointed  by
Americas  Tower  Partners,  and 2 of whom shall be  designated  and appointed by
Robert A. Berman,  Scott A.  Kaniewski  and Philip B. Berman.  The fifth manager
shall be nominated and elected by a majority vote of the four appointed  members
of the board of managers.

REMOVAL OF DIRECTORS

            EMPIRE RESORTS

            The Delaware  General  Corporation Law provides that a corporation's
director or directors  may be removed with or without  cause by the holders of a
majority of the shares then entitled to vote at an election of directors, except
that:

            o   members of a  classified  board may be  removed  only for cause,
                unless the certificate of incorporation provides otherwise, and

            o   in the case of a corporation  having cumulative  voting, if less
                than the  entire  board is to be  removed,  no  director  may be
                removed  without cause if the votes cast against the  director's
                removal  would be  sufficient  to  elect  the  director  if then
                cumulatively  voted  at an  election  of  the  entire  board  of
                directors  or of the class of directors of which the director is
                a part.

            Pursuant  to  Empire  Resorts'  bylaws,  any one or  more of  Empire
Resorts' directors may be removed, with or without cause, by the vote or written
consent  of the  holders  of a majority  of the  shares  entitled  to vote at an

                                      141





election of directors.  Pursuant to the amendment to Empire Resorts' certificate
of  incorporation  that will take  effect on or before the  closing and which is
described in this information  statement/prospectus,  any director or the entire
board of directors may be removed by the  stockholders  only for cause, and such
removal  must be  approved  by the  affirmative  vote of 80% of Empire  Resorts'
voting stock,  voting together as a single class, or the affirmative  vote of at
least a majority of the total number of directors that Empire Resorts would have
if there were no vacancies.

            MONTICELLO RACEWAY MANAGEMENT

            The New York  Business  Corporation  Law provides that any or all of
the  directors  may be  removed  for  cause by a vote of the  stockholders.  The
certificate of  incorporation or bylaws may provide for the removal by action of
the board,  except in the case of any director elected by cumulative  voting, or
by the holders of the shares of any class or series, or holders of bonds, voting
as a  class,  when so  entitled  by the  certificate  of  incorporation.  If the
certificate  of  incorporation  or  the  bylaws  so  provide,  any or all of the
directors may be removed without cause by a vote of the  stockholders.  Further,
the removal of directors, with or without cause, is subject to the following:

            o   in the  case  of a  corporation  having  cumulative  voting,  no
                director  may be  removed  unless  the votes  cast  against  the
                director's  removal would be sufficient to elect the director if
                voted cumulatively, and

            o   if a director  is elected by the  holders of shares of any class
                or series,  the director  may be removed only by the  applicable
                vote of the holders of the shares of that class or series voting
                as a class.

            An action to procure a judgment removing a director for cause may be
brought  by the  attorney  general or by the  holders of 10% of the  outstanding
shares, whether or not entitled to vote.

            Pursuant to Monticello  Raceway  Management's  bylaws, any or all of
the  directors  may be removed for cause by the vote of the  stockholders  or by
action of the board.  Directors may be removed without cause only by the vote of
the stockholders.

            MONTICELLO  RACEWAY  DEVELOPMENT,  MONTICELLO  CASINO MANAGEMENT AND
MOHAWK MANAGEMENT

            Under the New York Limited  Liability Law, except as provided in the
operating  agreement,  any or all managers of a limited liability company may be
removed or replaced with or without cause by a vote of a majority in interest of
the members entitled to vote thereon.

            Pursuant  to  each  of  Monticello   Casino   Management's,   Mohawk
Management's and Monticello Raceway Development's operating agreement, a manager
may be removed and replaced, at any time, by those who elected or appointed him,
except the fifth  manager who may be  replaced  by a majority  vote of the other
managers, or by a coin toss.

                                      142





VACANCIES ON THE BOARD OF DIRECTORS

            EMPIRE RESORTS

            The Delaware General Corporation Law provides that, unless otherwise
provided in the  certificate of  incorporation  or the bylaws,  vacancies on the
board of directors and newly created directorships resulting from an increase in
the authorized  number of directors may be filled by a majority of the directors
then in office,  although less than a quorum, or by the sole remaining director.
In  the  case  of  a  classified   board,   such  vacancies  and  newly  created
directorships may be filled by a majority of the directors elected by the class,
or by the sole remaining director so elected. In the case of a classified board,
directors  elected to fill vacancies or newly created  directorships  shall hold
office until the next election of the class for which they have been chosen, and
until their  successors have been duly elected and qualified.  In addition,  the
Delaware  Court of  Chancery  may  summarily  order an election to fill any such
vacancy or newly created  directorship,  or replace the directors  chosen by the
directors then in office if:

            o   at the time of any such vacancy or newly  created  directorship,
                the directors in office  constitute  less than a majority of the
                whole board as constituted immediately before the increase; and

            o   any  stockholder  holding  at least 10% of the  total  number of
                outstanding shares entitled to vote for the directors applies to
                the Delaware Court of Chancery for the order.

            Pursuant to Empire  Resorts'  bylaws,  vacancies  and newly  created
directorships  resulting  from  any  resignation,  removal  or  increase  in the
authorized  number of  directors  may be filled  only by a majority  vote of the
directors then in office,  although less than a quorum, or by the sole remaining
director.

            MONTICELLO RACEWAY MANAGEMENT

            Under New York Business Corporation Law, newly created directorships
resulting from an increase in the number of directors and vacancies occurring in
the board for any reason  except the removal of directors  without  cause may be
filled by a vote of the board of  directors  then in office,  though less than a
quorum.  However,  the certificate of  incorporation  or bylaws may provide that
such newly  created  directorships  or vacancies are to be filled by the vote of
the  stockholders.  Unless the certificate of incorporation or bylaws adopted by
the  stockholders  provide  that the  board  of  directors  may  fill  vacancies
occurring  on the  board of  directors  by reason of the  removal  of  directors
without  cause,   such  vacancies  may  be  filled  only  by  the  vote  of  the
stockholders.

            MONTICELLO  RACEWAY  DEVELOPMENT,  MONTICELLO  CASINO MANAGEMENT AND
MOHAWK MANAGEMENT

            Under the New York Limited Liability Company Law, except as provided
in the operating  agreement,  if management of the limited  liability company is
vested in a group of  managers,  any  vacancies  occurring  in such group may be

                                      143





filled by the vote of a majority in  interest  of the  members  entitled to vote
thereon. Moreover, except as provided in the operating agreement:

            o   a manager  chosen to fill a vacancy  shall  serve the  unexpired
                term of his or her predecessor;

            o   any  manager's  position  filled by reason of an increase in the
                number of managers  shall be filled by the vote of a majority in
                interest of the members entitled to vote thereon; and

            o   a manager  chosen to fill a position  resulting from an increase
                in the  number of  managers  shall  hold  office  until the next
                annual  meeting of members or until a successor has been elected
                and qualified.

            Pursuant  to  each  of  Monticello   Casino   Management's,   Mohawk
Management's  and Monticello  Raceway  Development's  operating  agreement,  any
manager who is  removed,  dies or resigns  shall be  replaced  by an  individual
elected or appointed in the same manner as the departed manager was appointed or
elected.  Each  manager  shall hold office until his  successor  shall have been
appointed  or  elected,  or until  the  earlier  of his  death,  resignation  or
replacement.

AMENDMENTS TO THE CERTIFICATE OF INCORPORATION

            EMPIRE RESORTS

            Under the Delaware  General  Corporation Law, unless a corporation's
certificate of incorporation  requires a greater vote, a proposed amendment to a
corporation's  certificate of  incorporation  requires an affirmative  vote of a
majority of the voting power of the  outstanding  stock  entitled to vote on the
amendment  and a majority of the voting  power of the  outstanding  stock of any
class entitled to vote on the amendment separately as a class.

            Except  as  described   below,  if  a  proposed   amendment  to  the
certificate  of  incorporation  would change the aggregate  number of authorized
shares of any class of capital  stock,  the par value of the shares of any class
of capital stock,  or alter or change the powers,  preferences or special rights
of the shares of any class of capital stock so as to affect them adversely,  the
Delaware General  Corporation Law requires that the amendment be approved by the
holders of a majority of the outstanding  shares of the affected  class,  voting
separately  as a class,  whether  or not the  class is  entitled  to vote on the
amendment by the  certificate of  incorporation.  If a proposed  amendment would
alter or change the powers,  preferences or special rights of one or more series
of any class so as to affect them adversely,  but would not affect the remainder
of the class,  then only the shares of the series so affected  would be entitled
to vote as a separate class on the proposed amendment.  The authorized number of
shares of any  class of stock  may be  increased  or  decreased  (but may not be
decreased  below  the  number of  outstanding  shares  in the  class)  without a
separate  vote of  stockholders  of the  class if so  provided  in the  original
certificate of incorporation or in any amendment  thereto that created the class
of stock or that was adopted  prior to the  issuance of any shares of the class,
or in an amendment authorized by a majority vote of the holders of shares of the
class.

                                      144





            While  Empire  Resorts'   certificate  of  incorporation   does  not
currently  provide for any greater voting  requirements  than is required by the
Delaware  General  Corporation  Law, the proposed  amendment to be adopted on or
before closing that is described in this information  statement/prospectus would
require,  unless  waived  by a  vote  of  75% of the  board  of  directors,  the
affirmative  vote of 80% of the  total  number of votes  entitled  to be cast by
stockholders  to approve  any  amendment  to the  provisions  that  establish  a
staggered board of directors.

            MONTICELLO RACEWAY MANAGEMENT

            Under the New York Business  Corporation Law, proposed amendments to
a certificate of  incorporation  must be authorized by a New York  corporation's
board of directors and  generally  must be approved by the vote of a majority of
all  outstanding  shares  entitled  to  vote  on  the  proposed  amendment  at a
stockholders'  meeting.  The  approval  of  a  majority  of  the  votes  of  all
outstanding  shares  of any  class of  capital  stock of a  corporation,  voting
separately  as a class,  is  required  to  approve  a  proposed  amendment  to a
corporation's  certificate  of  incorporation,  whether or not the  holders  are
otherwise entitled to vote on the amendment by the certificate of incorporation,
that:

            o   would decrease the par value of the shares of the class,  change
                any shares of the class into a different number of shares of the
                same class or into the same or a different number of shares of a
                different  class,  alter or  change  the  designation,  relative
                rights, preferences or limitations of the shares of the class or
                provide new conversion  rights or the alteration of any existing
                conversion rights, so as to affect them adversely;

            o   would  exclude or limit the  voting  rights of the shares of the
                class,  except as such  rights may be  limited by voting  rights
                given to new shares then being authorized of any existing or new
                class or series of shares; or

            o   would  subordinate  the  rights  of the  shares  of the class by
                authorizing shares having preferences  superior to the rights of
                the existing shares.

            If a proposed  amendment would have any of the effects  discussed in
the last  sentence of the previous  paragraph  only on one or more series of any
class so as to affect them adversely,  but would not affect the remainder of the
class,  then only the shares of the series  affected by the  proposed  amendment
would be entitled to vote as a separate class on the proposed amendment.

            Monticello  Raceway  Management's  certificate of incorporation does
not currently  provide for any greater voting  requirements  than is required by
the New York Business Corporation Law.

            MONTICELLO  RACEWAY  DEVELOPMENT,  MONTICELLO  CASINO MANAGEMENT AND
MOHAWK MANAGEMENT

            Under each of Monticello  Casino  Management's,  Monticello  Raceway
Development's  and  Mohawk  Management's  operating  agreement,   the  operating
agreement  may only be amended  upon a  unanimous  vote of the  members.  If any
matter requiring a unanimous vote of the members is deadlocked, the members have

                                      145





agreed  that any member  shall have the right to submit  such  matter to binding
arbitration for resolution.

AMENDMENTS TO THE BYLAWS

            EMPIRE RESORTS

            Pursuant to Delaware General Corporation Law,  stockholders entitled
to vote  have the  power to  adopt,  amend or  repeal  bylaws.  In  addition,  a
corporation may, in its certificate of  incorporation,  confer this power on the
board of  directors.  Nevertheless,  the  stockholders  always have the power to
adopt,  amend or repeal the bylaws,  even though the board may also be delegated
the power.

            Empire Resorts' certificate of incorporation authorizes the board of
directors or the  stockholders  to alter,  amend or repeal  bylaws by a majority
vote.

            MONTICELLO RACEWAY MANAGEMENT

            The New York Business  Corporation Law provides that a corporation's
bylaws may be  amended,  repealed  or adopted by a majority of votes cast by the
shares  entitled to vote in the election of any  directors.  When so provided in
the  certificate  of  incorporation  or bylaws,  a  corporation's  bylaws may be
amended,  repealed or adopted by the board,  but any bylaw  adopted by the board
may be amended or repealed by the stockholders.

            Under  Monticello  Raceway  Management's  bylaws,  any  bylaw may be
amended,  repealed or adopted by a vote of the holders of the shares at the time
entitled to vote in the election of any  directors.  Bylaws may also be amended,
repealed  or adopted by the board,  but the  stockholders  entitled  to vote may
amend any bylaw adopted by the board.

            MONTICELLO CASINO  MANAGEMENT,  MONTICELLO  RACEWAY  DEVELOPMENT AND
MOHAWK MANAGEMENT

            This section is not  applicable  to  Monticello  Casino  Management,
Monticello Raceway Development and Mohawk Management.

SPECIAL MEETINGS

            EMPIRE RESORTS

            The Delaware General Corporation Law provides that a special meeting
of  stockholders  may be called by the board of  directors  or by any  person or
persons as may be authorized by a corporation's  certificate of incorporation or
bylaws.

            Under Empire Resorts'  bylaws, a special meeting of stockholders may
be called at any time by the board of directors or its chairman.

                                      146





            MONTICELLO RACEWAY MANAGEMENT

            The New York  Business  Corporation  Law  provides  that,  if, for a
period of one month  after the date  fixed by or under the bylaws for the annual
stockholders'  meeting  or,  if no date has been so  fixed,  for a period  of 13
months after the last annual  meeting,  there is a failure to elect a sufficient
number  of  directors  to  conduct  the  corporation's  business,  the  board of
directors  must call a special  meeting for the  election of  directors.  If the
board of directors  does not call a special  meeting  within two weeks after the
expiration  of the 13 month  period or if it is  called  but  directors  are not
elected for a period of two months after the  expiration of the 13 month period,
holders of 10% of the votes of the shares  entitled  to vote in an  election  of
directors may, in writing, demand the call of a special meeting for the election
of  directors.   The  New  York  Business   Corporation   Law  provides  that  a
corporation's  board of directors or any person  authorized  by a  corporation's
certificate of incorporation or bylaws may call a special stockholders' meeting.

            Under Monticello Raceway  Management's  bylaws,  special meetings of
the stockholders may be called by the board of directors or by the president.

            MONTICELLO  RACEWAY  DEVELOPMENT,  MONTICELLO  CASINO MANAGEMENT AND
MOHAWK MANAGEMENT

            Neither the New York Limited Liability Company Law nor the operating
agreements  for  each  of  Monticello  Raceway  Development,  Monticello  Casino
Management and Mohawk Management contain  comparable  provisions with respect to
the right to call special meetings of members.

ACTION BY WRITTEN CONSENT

            EMPIRE RESORTS

            Delaware  General  Corporation Law provides that,  unless  otherwise
stated in the certificate of incorporation,  any action which may be taken at an
annual  meeting  or  special  meeting  of  stockholders  may be taken  without a
meeting, if a consent, setting forth the action so taken in writing is signed by
the holders of the outstanding stock having at least the minimum number of votes
necessary  to  authorize  the action at a meeting of  stockholders  at which all
shares entitled to vote at the meeting were present and voted.

            Empire Resorts' bylaws do not place any limitations on the rights of
stockholders to act by written consent in lieu of a meeting of stockholders.

            MONTICELLO RACEWAY MANAGEMENT

            Under the New York Business  Corporation Law, whenever  stockholders
are required or permitted to vote on a matter,  such action may be taken without
a meeting on written  consent,  signed by the holders of all outstanding  shares
entitled  to vote on such  matter or, if the  certificate  of  incorporation  so
permits,  signed by the holders of  outstanding  shares having not less than the
minimum  number of votes that would be necessary  to authorize  such matter at a
meeting at which all shares  entitled to vote on such  matter  were  present and
voted.

                                      147





            Monticello  Raceway  Management's  certificate of incorporation does
not permit the  stockholders  to act by less than unanimous  written  consent in
lieu of a meeting of stockholders.

            MONTICELLO  RACEWAY  DEVELOPMENT,  MONTICELLO  CASINO MANAGEMENT AND
MOHAWK MANAGEMENT

            Under the New York Limited  Liability  Company Law, whenever members
of a limited liability company are required or permitted to take any action by a
vote,  except as provided in the operating  agreement,  such action may be taken
without a meeting,  without  prior notice and without a vote, if a consent is in
writing,  setting  forth the action so taken and signed by the  members who hold
the voting interests having not less than the minimum number of votes that would
be  necessary  to authorize or take such action at a meeting at which all of the
members entitled to vote therein were present and voted.

            The operating  agreements of each of Monticello  Casino  Management,
Monticello  Raceway  Development and Mohawk Management do not restrict the right
of their members to act by written consent in lieu of a meeting.

LIMITATIONS OF PERSONAL LIABILITY OF DIRECTORS AND OFFICERS

            EMPIRE RESORTS

            The Delaware  General  Corporation Law provides that a corporation's
certificate  of  incorporation  may  include a provision  limiting a  director's
personal  liability to the corporation or its  stockholders for monetary damages
for breach of his or her fiduciary duty as a director.  However, the certificate
of  incorporation  may not  contain  a  provision  that  eliminates  or limits a
director's liability for:

            o   any breach of the director's  duty of loyalty to the corporation
                or its stockholders;

            o   acts or omissions not in good faith or that involve  intentional
                misconduct or a knowing violation of the law;

            o   violation  of  certain   provisions  of  the  Delaware   General
                Corporation Law;

            o   any  transaction  from which the  director  derived an  improper
                personal benefit; or

            o   any act or omission that occurred before the provision  limiting
                director liability was adopted.

            Empire  Resorts'  certificate  of  incorporation  provides  that  no
director shall be personally  liable to Empire Resorts or its  stockholders  for
monetary  damages for the breach of his or her  fiduciary  duty as a director to
the fullest extent permitted by Delaware law.

            MONTICELLO RACEWAY MANAGEMENT

            The New York Business  Corporation Law provides that a corporation's
certificate of incorporation  may contain a provision  eliminating or limiting a
director's personal liability to the corporation or its stockholders for damages

                                      148





for any  breach  of duty in his or her  capacity  as a  director.  However,  the
certificate  of  incorporation  may not contain a provision  that  eliminates or
limits a director's liability:

            o   if a  judgment  or  other  final  adjudication  adverse  to  the
                director  establishes that the director's acts or omissions were
                in bad faith or  involved  intentional  misconduct  or a knowing
                violation of law, that the director  personally gained in fact a
                financial  profit or other  advantage  to which the director was
                not  legally  entitled,  or that the  director's  acts  violated
                certain provisions of the New York Business Corporation Law; or

            o   for any act or  omission  that  occurred  before  the  provision
                limiting director liability was adopted.

            Monticello  Raceway  Management's  certificate of incorporation does
provide for the elimination or limitation of its directors'  personal  liability
to Monticello  Raceway  Management  for damages for any breach of duty in his or
her capacity as a director.

            MONTICELLO  RACEWAY  DEVELOPMENT,  MONTICELLO  CASINO MANAGEMENT AND
MOHAWK MANAGEMENT

            Under the New York Limited  Liability  Company  Law,  the  operating
agreement  of a New York  limited  liability  company  may set forth a provision
eliminating  or  limiting  the  personal  liability  of  managers to the limited
liability  company or its  members  for  damages  for any breach of duty in such
capacity, provided that no such provision shall eliminate or limit:

            o   the  liability  of any  manager  if a  judgment  or other  final
                adjudication  adverse to him or her establishes  that his or her
                acts or  omissions  were in bad  faith or  involved  intentional
                misconduct  or a  knowing  violation  of law or  that  he or she
                personally  gained in fact a financial profit or other advantage
                to which he or she was not legally entitled or that with respect
                to a  distribution  to its  members,  his or her  acts  were not
                performed  in good  faith and with  that  degree of care that an
                ordinary  prudent  person  in a like  position  would  use under
                similar circumstances; or

            o   the  liability  of any manager for any act or omission  prior to
                the adoption of a provision authorized by this subdivision.

            The operating  agreements of each of Monticello  Casino  Management,
Monticello  Raceway  Development and Mohawk  Management  provide that no manager
shall be liable to the company or any member for any loss or damage sustained by
the company or any member solely by reason of being such manager,  and acting or
omitting to act in such  capacity in the conduct of the business of the company,
provided  such  manager has  performed  his or her duties in good faith and with
that degree of care that an ordinary prudent person in a like position would use
under similar circumstances.

                                      149





INDEMNIFICATION OF DIRECTORS AND OFFICERS

            EMPIRE RESORTS

            The Delaware General Corporation Law generally permits a corporation
to indemnify its directors and officers against expenses,  judgments,  fines and
amounts paid in settlement actually and reasonably incurred in connection with a
third  party  action,  other than a  derivative  action,  and  against  expenses
actually and  reasonably  incurred in the defense or  settlement of a derivative
action, provided that there is a determination that the individual acted in good
faith and in a manner  reasonably  believed  to be in or not opposed to the best
interests of the corporation.  The determination must be made, in the case of an
individual who is a director or officer at the time of determination, by:

            o   a majority of the  directors  who are not parties to the action,
                suit or proceeding, even though less than a quorum;

            o   a committee of these directors  designated by a majority vote of
                these directors, even though less than a quorum;

            o   independent  legal  counsel,  regardless  of whether a quorum of
                these directors exists; or

            o   a  majority  vote of the  stockholders,  at a meeting at which a
                quorum is present.

Without court  approval,  however,  an individual  may not be indemnified in any
claim,  issue or matter in a  derivative  action as to which the  individual  is
adjudged  liable  to  the  corporation.   In  addition,  Delaware  law  requires
indemnification  of directors and officers for expenses relating to a successful
defense  on the merits or  otherwise  of a  derivative  or  third-party  action.
Further,  Delaware law permits a corporation to advance expenses incurred in the
defense  of  any  proceeding  to  directors  and  officers  contingent  upon  an
undertaking by or on behalf of the  individuals'  to repay any advances if it is
determined  ultimately  that the individuals are not entitled to be indemnified.
Under Delaware law, the rights to  indemnification  and  advancement of expenses
provided  under the law are  non-exclusive,  in that,  subject to public  policy
issues,  indemnification  and  advancement  of expenses  beyond that provided by
statute may be provided by bylaw, agreement, vote of stockholders, disinterested
directors or otherwise.

            Empire Resorts' certificate of incorporation and bylaws provide that
its officers and directors shall be indemnified to the fullest extent  permitted
by applicable  law, and that Empire  Resorts shall pay the expenses  incurred in
defending  any  proceeding  in advance of its final  disposition.  However,  the
payment of  expenses  incurred  by a director or officer in advance of the final
disposition  of the  proceeding  will  be  made  only  upon  the  receipt  of an
undertaking  by the  director  or officer to repay all  amounts  advanced  if it
should be ultimately  determined that the director or officer is not entitled to
be indemnified.

                                      150





            MONTICELLO RACEWAY MANAGEMENT

            Under the New York  Business  Corporation  Law,  a  corporation  may
indemnify its  directors  and officers  that are made,  or are  threatened to be
made, a party to any action or  proceeding,  except for  stockholder  derivative
suits,  against  judgments,  fines,  amounts paid in settlement  and  reasonable
expenses  incurred as a result of the action or  proceeding  if the  director or
officer acted in good faith, for a purpose that he or she reasonably believed to
be in the best  interests  of the  corporation  or,  in the case of  service  to
another  corporation  or  enterprise,  not opposed to the best  interests of the
corporation.  In criminal proceedings,  in addition to the preceding conditions,
the director or officer must not have had  reasonable  cause to believe that his
or her conduct was unlawful.  In the case of stockholder  derivative  suits, the
corporation may indemnify a director or officer if he or she acted in good faith
for a purpose  that he or she  reasonably  believed  to be in or, in the case of
service to another corporation or enterprise,  not opposed to the best interests
of the corporation,  except that, in either case, no indemnification may be made
in respect of:

            o   a  threatened  action,  or a pending  action  that is settled or
                otherwise disposed of; or

            o   any claim,  issue or matter as to which such individual has been
                adjudged to be liable to the corporation, unless and only to the
                extent that the court in which the action was brought, or, if no
                action  was  brought,  any  court  of  competent   jurisdiction,
                determines,   upon  application,   that,  in  view  of  all  the
                circumstances   of  the  case,  the  individual  is  fairly  and
                reasonably  entitled  to  indemnity  for  such  portion  of  the
                settlement amount and expenses as the court deems proper.

            Any individual who has been successful on the merits or otherwise in
the  defense of a civil or  criminal  action or  proceeding  will be entitled to
indemnification. Except as provided in the preceding sentence, unless ordered by
a court pursuant to the New York Business  Corporation Law, any  indemnification
under the New York Business  Corporation Law pursuant to the above paragraph may
be made only if  authorized  in the  specific  case and after a finding that the
director or officer met the applicable  standard of conduct by the disinterested
directors  if a  quorum  is  available,  or  if  the  quorum  so  directs  or is
unavailable,  by the board of directors upon the written  opinion of independent
legal counsel, or the stockholders.

            A corporation may advance expenses incurred by a director or officer
in  defending  any  action or  proceeding  prior to its final  disposition  upon
receipt of an  undertaking  by or on behalf of the  officer or director to repay
the advance to the extent the advance exceeds the  indemnification  to which the
officer or director is entitled.

            The  indemnification  described  above  under the New York  Business
Corporation  Law is not  exclusive  of other  indemnification  rights to which a
director or officer may be entitled,  whether  contained in the  certificate  of
incorporation or bylaws, or, when authorized by the certificate of incorporation
or bylaws contained in:

            o   a resolution of stockholders;

            o   a resolution of directors; or

                                      151





            o   an agreement providing for indemnification,

provided that indemnification may not be made to or on behalf of any director or
officer if a judgment or other  final  adjudication  adverse to the  director or
officer establishes that his or her acts were committed in bad faith or were the
result of active and  deliberate  dishonesty  and were  material to the cause of
action so adjudicated,  or that he or she personally  gained in fact a financial
profit or other advantage to which he or she was not legally entitled.

            Monticello  Raceway  Management's  certificate of incorporation  and
bylaws do not provide for the indemnification of its directors and officers.

            MONTICELLO  RACEWAY  DEVELOPMENT,  MONTICELLO  CASINO MANAGEMENT AND
MOHAWK MANAGEMENT

            Under the New York Limited  Liability  Company  Law,  subject to the
standards  and  restrictions,  if any, set forth in its operating  agreement,  a
limited  liability  company may, and shall have the power to, indemnify and hold
harmless,  and advance  expenses to, any manager or any testator or intestate of
such  manager  from and  against  any and all  claims  and  demands  whatsoever;
provided,  however,  that no indemnification  may be made to or on behalf of any
manager if a  judgment  or other  final  adjudication  adverse  to such  manager
establishes:

            o   that his or her acts  were  committed  in bad  faith or were the
                result of active and deliberate  dishonesty and were material to
                the cause of action so adjudicated, or

            o   that he or she personally  gained in fact a financial  profit or
                other advantage to which he or she was not legally entitled.

            The operating  agreements for each of Monticello Casino  Management,
Monticello  Raceway  Development and Mohawk Management provide that so long as a
manager  acts in good faith and with a degree of care that an  ordinary  prudent
person in a like  position  would use under similar  circumstances,  the company
shall  indemnify  and hold  harmless  each  manager from and against any and all
claims and demands whatsoever; provided, however, that no indemnification may be
made to or on behalf of any manager if a judgment  or other  final  adjudication
adverse to such manager establishes:

            o   that his acts were  committed in bad faith or were the result of
                active and deliberate  dishonesty and were material to the cause
                of action so adjudicated, or

            o   that he personally  gained a financial profit or other advantage
                to which he was not legally entitled.

            This indemnity includes reimbursement of actual expenses incurred in
the defense of such matters.

                                      152





              AMENDMENT OF CERTIFICATE OF INCORPORATION TO CREATE A
                          STAGGERED BOARD OF DIRECTORS


            As discussed  above, the adoption of an amendment to Empire Resorts'
certificate  of  incorporation  and bylaws which  provides for the creation of a
staggered board is a condition to consummation of the consolidation. On November
12,  2003,  Empire  Resorts'  board of directors  adopted and  approved  such an
amendment,   which  amendment  was  subsequently  approved  by  Empire  Resorts'
Controlling   Stockholders  as  part  of  the  written  consent   approving  the
consolidation and restated contribution agreement.


REASONS FOR THE AMENDMENT

            In addition  to being a  necessary  condition  to  consummating  the
consolidation,  Empire  Resorts'  board of directors  believes  that a staggered
board serves the best  interests of Empire Resorts and its  stockholders,  as it
promotes  the  continuity  and  stability  of Empire  Resorts  and its  existing
business  plan.  The staggered  election of directors  assures that at any given
time  two-thirds  of the  directors  will  have had prior  experience  on Empire
Resorts'  board of directors.  Empire  Resorts' board of directors also believes
that  staggering  will  enhance  Empire  Resorts'  ability to attract and retain
well-qualified  individuals  who are able to commit  the time and  resources  to
understand Empire Resorts,  its business affairs and operations.  The continuity
and quality of  leadership  that  results  from a staggered  board of  directors
should, in the opinion of Empire Resorts,  promote the long-term value of Empire
Resorts. Staggered terms for directors would also moderate the pace of change in
the board of  directors by  extending  the time  required to elect a majority of
directors from one to two years.  This delay reduces the vulnerability of Empire
Resorts to unsolicited  takeover attempts and attempts to compel Empire Resorts'
restructuring  or otherwise force it into an extraordinary  transaction.  Empire
Resorts  believes  that this delay  also  serves  the best  interests  of Empire
Resorts and its  stockholders  by forcing most potential  acquirers to negotiate
with the board of directors  rather than acting  unilaterally.  Empire  Resorts'
believes that under most  circumstances  it can obtain the best terms for Empire
Resorts  and its  stockholders  if the board of  directors  is in a position  to
negotiate effectively on the stockholders' behalf.

            Except  with  respect to the  consolidation,  Empire  Resorts is not
aware, at present,  of any effort to accumulate shares of Empire Resorts' common
stock or to obtain control of Empire Resorts by means of a merger, tender offer,
solicitation in opposition to management, or otherwise. Empire Resorts believes,
however,  that it is  appropriate  to adopt  provisions  for its  certificate of
incorporation  that may have an  antitakeover  effect at a time when there is no
pending  threat of an  unsolicited  takeover so that both the board of directors
and the stockholders will be able to make a more careful and reasoned evaluation
of the  advantages  and  disadvantages  of including  such  provisions in Empire
Resorts' certificate of incorporation.


            Simultaneous with its approval and recommendation  that stockholders
adopt this amendment to Empire  Resorts  certificate  of  incorporation,  Empire
Resorts'  board of  directors  also  approved an  identical  amendment to Empire
Resorts'  bylaws.  Except as described in this paragraph,  this amendment is not
part of a plan to implement any additional anti-takeover measures.


                                      153





DESCRIPTION OF THE AMENDMENT

            The election of directors of Empire Resorts is currently governed by
Empire  Resorts'  bylaws,  which  provide that all  directors  are to be elected
annually for a term of one year, to hold office until the next annual meeting of
stockholders  and until their  successors are duly elected and  qualified.  This
amendment to Empire Resorts'  certificate of  incorporation  and bylaws provides
for the  division  of the board of  directors  into  three  classes to allow for
staggered  terms of office,  with one class of  directors  elected each year and
each director so elected  serving for a term of three years.  Section  141(d) of
the  Delaware  General   Corporation  Law  permits  either  the  certificate  of
incorporation  or the bylaws of a corporation to provide for the  classification
of directors for staggered terms of office.  Neither Empire Resorts' certificate
of  incorporation  nor its  bylaws,  in their  current  form,  contain  any such
provision.

            The proposed amendments provide for the creation of three classes of
directors, as nearly equal in size as possible. Upon their initial election, the
Class I directors  will hold office for a term expiring in one year, at the 2004
annual meeting of  stockholders;  Class II directors will hold office for a term
expiring in two years, at the 2005 annual meeting of stockholders; and Class III
directors  will hold  office for a term  expiring  in three  years,  at the 2006
annual  meeting  of  stockholders.  Commencing  at the 2004  annual  meeting  of
stockholders, the stockholders will elect only one class of directors each year,
beginning with Class I directors,  with each director so elected  holding office
for a  three-year  term.  The  result  of this  process  is  that  approximately
one-third of the board of directors will be up for election each year.

POSSIBLE NEGATIVE EFFECTS OF IMPLEMENTING A STAGGERED BOARD OF DIRECTORS

            Although the creation of a staggered  board of directors is designed
as a  protective  measure for Empire  Resorts'  stockholders,  the creation of a
staggered board of directors may have the effect of preventing stockholders from
realizing an  opportunity  to sell their shares of capital  stock at higher than
market  prices by  deterring  unsolicited  takeover  offers or other  efforts to
obtain control of Empire Resorts.

            In addition,  staggered board provisions will generally delay, deter
or impede  changes in  control  of the board of  directors  or the  approval  of
certain stockholder proposals that might have the effect of facilitating changes
in  control of the board of  directors,  even if the  holders  of a majority  of
Empire Resorts' voting securities believe the changes or actions would be in the
best interests of Empire Resorts and its stockholders.  For example,  staggering
terms of the members of the board of  directors  would  operate to increase  the
time  required  for  someone to obtain  control of Empire  Resorts  without  the
cooperation or approval of the incumbent board of directors, even if that person
holds or  acquires  a  majority  of the  voting  power.  Moreover,  by  possibly
deterring future takeover offers, the creation of a staggered board of directors
might have the  incidental  effect of  inhibiting  certain  changes in incumbent
management,  some or all of whom may be  replaced  in the  course of a change in
control of Empire Resorts' board of directors.

            Delaware law provides that,  unless a  corporation's  certificate of
incorporation  specifically provides otherwise, if a corporation has a staggered
board,  the directors of the corporation may only be removed by the stockholders
for cause. The certificate of incorporation  will not have a provision  allowing

                                      154





removal  of  directors  other  than  for  cause.  Elimination  of the  right  of
stockholders  to remove  directors  without  cause will make the  removal of any
director more difficult (unless cause is readily  apparent),  even if a majority
of the stockholders believe removal is in their best interest.

            The  board  of  directors  of  Empire  Resorts  has  considered  the
potential  adverse  impact of the proposed  amendment  and  concluded  that such
adverse effects are outweighed by the benefits the amendment would afford Empire
Resorts and its stockholders.

FILLING BOARD VACANCIES AND REMOVAL OF DIRECTORS

            The staggered  board amendment also provides that any vacancy on the
board  of  directors,  whether  by  reason  of  removal,  resignation,  death or
otherwise  shall be filled  exclusively  by a vote of no less than a majority of
the remaining  directors.  Any director appointed by a majority of the remaining
directors  shall hold office for the  remainder of the full term of the class of
directors in which the vacancy  occurred and until such director's  successor is
elected and qualified.

            Permitting  directors rather than  stockholders to fill vacancies is
consistent  with, and supportive of, the purposes of adopting a staggered  board
since  together  the two  provisions  tend to moderate  the pace at which Empire
Resorts' board of directors  could be changed and is a further  deterrent to the
strategy of removing  existing  directors and replacing them with persons chosen
by a takeover  bidder.  In addition,  because the board of  directors  fixes the
number of directors, it would also prevent those seeking majority representation
on  Empire   Resorts'  board  of  directors  from   attempting  to  obtain  such
representation  through expanding the size of the board of directors and filling
the new directorships with their nominees.

EFFECTIVENESS OF AMENDMENT

            This amendment to Empire Resorts' certificate of incorporation shall
become  effective  on or after  the 20th day  following  the date on which  this
information statement/prospectus is sent to Empire Resorts' stockholders.

            AMENDMENT OF CERTIFICATE OF INCORPORATION TO PROVIDE THE
             HOLDERS OF SERIES E PREFERRED STOCK WITH VOTING RIGHTS


            On November 12, 2003, Empire Resorts' board of directors adopted and
approved an amendment to its  certificate  of  incorporation  that would provide
each holder of its Series E Preferred  Stock with one vote for every four shares
of Series E Preferred  Stock held by such holder on all matters  submitted  to a
vote of  stockholders.  This  amendment  was  subsequently  approved  by  Empire
Resorts' Controlling Stockholders by a majority written consent.


REASONS FOR THE AMENDMENT

            Section  303  of the  New  York  Racing,  Pari-Mutuel  Wagering  and
Breeding Law  provides  that if the New York Racing and  Wagering  Board,  which
licenses Monticello Raceway Management to operate Monticello Raceway, determines
that it is inconsistent with the public interest,  convenience or necessity,  or

                                      155





with the best interests of racing  generally,  that any person  continue to be a
stockholder of record or the beneficial  owner of any association or corporation
licensed to conduct  pari-mutuel  wagering and harness horse racing in New York,
or which owns 25% or more of the stock of such licensee,  the board may order or
direct each such stockholder or beneficial owner,  irrespective of the time when
such stockholder or beneficial owner acquired his stock or beneficial  interest,
to dispose of such stock or interest  within a  prescribed  period of time to be
specified by the board.  As Empire  Resorts will own 100% of Monticello  Raceway
Management  following  the  consolidation,  Section 303 of the New York  Racing,
Pari-Mutuel  Wagering and Breeding Law will  continue to be applicable to Empire
Resorts' stockholders upon the consolidation's closing.

            Presently,  there are 1,730,697  shares of Empire  Resorts' Series E
Preferred Stock issued and outstanding,  1,704,030 of which are owned by Stanley
Tollman and The Bryanston Group. As previously discussed, in April 2002, each of
Stanley  Tollman,  Brett  Tollman and Monty  Hundley were  indicted by a federal
grand  jury on 44  counts  of tax fraud  and bank  fraud.  In May 2002,  Stanley
Tollman was declared a fugitive from justice by United  States  Attorney for the
Southern  District of New York,  and on September 5, 2003,  Brett  Tollman plead
guilty to tax fraud and admitted failing to report $2.7 million in income to the
Internal  Revenue  Service.  Monty Hundley has plead not guilty to these charges
and is scheduled to go on trial in October 2003. Each of Stanley Tollman,  Brett
Tollman and Monty Hundley is an affiliate of The Bryanston Group.

            These events may have increased the likelihood,  however small, that
the New York Racing and  Wagering  Board may deem both  Stanley  Tollman and The
Bryanston Group to be unsuitable  stockholders of Empire Resorts and demand that
they  immediately  liquidate their  interests in Empire Resorts.  Empire Resorts
believes that as the Series E Preferred  Stock  currently has no voting  rights,
liquidation  of these  equity  interests  would be  difficult.  An  inability of
Stanley Tollman or The Bryanston Group to liquidate their respective holdings of
Series E Preferred  Stock would place  Monticello  Raceway  Management's  gaming
license in jeopardy. Empire Resorts believes that attaching voting rights to the
Series E Preferred  Stock would allow for a forced  liquidation  to proceed more
readily.

            Empire  Resorts  decided  to  provide  the  holders  of its Series E
Preferred  Stock with only one vote for every four  shares of Series E Preferred
Stock held by them in order to ensure that  Stanley  Tollman  and The  Bryanston
Group,  either  separately  or  together,  do not control more than 5% of Empire
Resorts'  voting power should they retain their Series E Preferred  Stock.  This
restriction  on their voting power is important,  as all of the gaming  compacts
between  the State of New York and Native  American  tribes that allow for Class
III Gaming to be conducted on Native  American land (located within the State of
New York)  require  that each person or entity  owning more than 5% of a company
wishing to provide Class III Gaming services on such land first receive a "Class
III Gaming  Enterprise  License."  In order for an  applicant  to obtain  such a
license,  the State of New York must  conclude  that the  applicant  is suitable
after  conducting a mandatory  background  investigation.  As Stanley Tollman is
currently listed by the United States  Government as a fugitive from justice and
Brett Tollman, an affiliate of The Bryanston Group, has recently plead guilty to
various counts of tax fraud, Empire Resorts believes that it is highly uncertain
that either  Stanley  Tollman or The Bryanston  Group could ever receive a Class
III Gaming Enterprise License.  Therefore,  should either Stanley Tollman or The

                                      156





Bryanston Group, together or separately, control more than 5% of Empire Resorts'
voting  power,  it is  unlikely  that either  Monticello  Casino  Management  or
Monticello Raceway Development,  both of which will be wholly owned subsidiaries
of Empire  Resorts  following the  consolidation,  would be permitted to perform
under the Gaming Facility Management  Agreement and Gaming Facility  Development
and  Construction   Agreement,   respectively,   as  each  of  these  agreements
contemplate  the provision of Class III Gaming services for the Cayuga Nation of
New York.  See  "Business  -  Monticello  Casino  Management  - Gaming  Facility
Management  Agreement"  beginning on page 96 and "Business - Monticello  Raceway
Development - Gaming Facility Development and Construction  Agreement" beginning
on page 104. By limiting the voting power of the Series E Preferred Stock to one
vote for every four shares,  however, Empire Resorts will be able to ensure that
Stanley  Tollman and The Bryanston Group control less than 5% of Empire Resorts'
voting power, thus eliminating the requirement that either of them would have to
apply for a Class III Gaming Enterprise  License in order for Empire Resorts and
its  subsidiaries  to effectuate  its business plan of developing and managing a
Native American casino in Monticello, New York.

EFFECT OF THE AMENDMENT

            Currently the holders of Empire  Resorts'  Series E Preferred  Stock
have no voting  rights,  except as required by law. Upon the  effective  date of
this amendment,  the holders of Empire Resorts' Series E Preferred Stock will be
entitled to one vote for every four  shares of Series E Preferred  Stock held by
them on any matter submitted to a vote of stockholders.

            This  amendment  will not have any  impact on the  holders of Empire
Resorts'  common  stock or Series B Preferred  Stock other than  diluting  their
voting power.  Following the  effectiveness  of this  amendment,  the holders of
Empire Resorts' Series E Preferred Stock will have approximately  432,675 votes,
representing about 2% of Empire Resorts' post-consolidation voting power.

DIVIDENDS

            The  holders of shares of Series E Preferred  Stock are  entitled to
receive,  when and as declared by the board of directors,  out of assets legally
available  for payment,  a cash dividend of $.80 per annum per share of Series E
Preferred Stock.  Dividends with respect to a share of Series E Preferred Stock,
shall accrue from the date of initial  issuance  and be payable  (whether or not
declared by the board of directors)  upon the earliest of (i) the  redemption of
such share of Series E Preferred Stock or (ii) the  liquidation,  dissolution or
winding   up  of   Empire   Resorts.   As  of  the  date  of  this   information
statement/prospectus, the board of directors has not declared any dividends with
respect to the Series E Preferred Stock and no dividends have accrued.

EFFECTIVENESS OF AMENDMENT

            This amendment to Empire Resorts' certificate of incorporation shall
become  effective  on or after  the 20th day  following  the date on which  this
information statement/prospectus is sent to Empire Resorts' stockholders.

                                      157





                  EMPIRE RESORTS POST CONSOLIDATION MANAGEMENT
                           AND PRINCIPAL STOCKHOLDERS

MANAGEMENT AFTER THE CONSOLIDATION


            The  following  table  provides   information   about  the  intended
directors and executive officer of the combined  enterprise.  Each person listed
was elected by Empire Resorts'  Controlling  Stockholders as part of the written
consent  in lieu of a meeting of  stockholders  delivered  to Empire  Resorts on
November 25,  2003,  in which the  controlling  stockholders  also  approved the
consolidation,  the  restated  contribution  agreement,  an  amendment to Empire
Resorts'  certificate  of  incorporation  providing  for a  staggered  board  of
directors  and an  amendment to Empire  Resorts'  certificate  of  incorporation
providing the holders of Series E Preferred Stock with certain voting rights.


Name                       Age     Position
----                       ---     --------
David Matheson             51      Class __ Director and Chairman of the Board of Directors
John Sharpe                61      Class __ Director
Ralph J. Bernstein         46      Class __ Director
Robert A. Berman           43      Chief Executive Officer and Class __ Director
David P. Hanlon            58      Class __ Director and Vice Chairman of the Board of Directors
Arthur I. Sonnenblick      71      Class __ Director
Paul A. deBary             56      Class __ Director
Joseph E. Bernstein        54      Class __ Director
Morad Tahbaz               47      President and Class __ Director

            The principal  occupation for the past five years and current public
directorships of each of Empire Resorts' directors and executive officers are as
follows:

            DAVID MATHESON.  Over the years, David Matheson,  who is a member of
the Coeur d'Alene Tribe of Coeur  d'Alene,  Idaho,  has served as Tribal Council
leader, Tribal Chairman, and manager of various tribal operations.  Mr. Matheson
is chief executive officer of the Coeur d'Alene Casino & Resort Hotel in Worley,
Idaho,  which  was  voted #1 casino in the  Spokesman  Reader  Review  for three
consecutive  years.  Mr. Matheson was appointed by President  George H. W. Bush,
Sr. to serve as Deputy  Commissioner for Indian Affairs,  U.S. Department of the
Interior,  which he did for four  years,  during  the  time  the  Indian  Gaming
Regulatory  Act of 1988 was  being  implemented.  Mr.  Matheson  was  awarded  a
Commendation  from the Secretary of the Interior for Outstanding  Service.  More
recently, he was appointed by President George W. Bush, Jr. as an advisor to the
President's Commission on Reservation Economies.  Mr. Matheson previously served
as a delegate to the People's Republic of China's Native American Trade Mission,
and as chief  executive  officer of Coeur d'Alene  Development  Enterprises.  He
holds an M.A. in business administration from the University of Washington. Over
the past twenty years, he has held many esteemed positions and has received many
honors for his work in preserving cultural traditions,  the native language, and
ceremonial practices.  He recently published his first novel, Red Thunder, which
depicts the faith,  courage and  dedication of the  Schi'tsu'umsh  Indians,  now
called the Coeur d'Alene Tribe.

                                      158





            ROBERT  A.  BERMAN.  Robert  A.  Berman  is  Empire  Resorts'  chief
executive  officer,  a member of its board of directors and its former chairman.
As the managing director of Watermark Investments Limited from 1994 to 2000, Mr.
Berman  oversaw a number  of  private  partnerships  investing  in real  estate,
technology and basic industries. From 1998 to 1999, Mr. Berman was vice chairman
and a director of Executone  Information Systems, a telecommunications  company.
From  1995 to 1999,  Mr.  Berman  served  as  chairman  of the  board  and chief
executive  officer of  Hospitality  Worldwide  Services,  Inc., a hotel services
company with average annual sales above $150 million.

            RALPH J.  BERNSTEIN.  Ralph J. Bernstein is a co-founder and general
partner of Americas Partners, an investment and venture capital firm, and, since
1981 has been  responsible  for the  acquisition,  renovation,  development  and
financing of several  million  square feet of commercial  space.  Mr.  Bernstein
started his career in agribusiness with a large European  multi-national trading
and real estate  development  company,  where he was later  responsible for that
company's U.S. real estate  activities.  Mr. Bernstein also serves as a director
for Air Methods Corporation, a publicly traded company that provides air medical
emergency  transport  services  and  systems  throughout  the  United  States of
America.  He holds a Bachelor of Arts degree in economics from the University of
California at Davis.

            JOHN SHARPE. John Sharpe most recently served as president and chief
operating  officer of Four  Seasons  Hotels & Resorts,  from which he retired in
1999, after 23 years of service.  During his tenure at Four Seasons, the world's
largest  operator  of  luxury  hotels,   Mr.  Sharpe  directed  worldwide  hotel
operations,  marketing  and human  resources,  and took  great  pride in helping
create Four Seasons' renowned reputation for the highest level of service in the
worldwide  hospitality  industry.  In 1999,  Mr.  Sharpe was  bestowed  with the
"Corporate Hotelier of the World" award by Hotels Magazine, Inc. Mr. Sharpe also
received  the  "Silver  Plate"  award of the  International  Food  Manufacturers
Association,  and the "Gold Award" of the Ontario Hostelry Institute. Mr. Sharpe
graduated  with a B.S. in hotel  administration  from Cornell  University and is
currently  a trustee of the  Culinary  Institute  of  America,  and chair of the
Industry  Advisory Council at the Cornell Hotel School. He serves on a number of
boards,  including  Fairmont  Hotels &  Resorts,  Toronto,  Canada.  Mr.  Sharpe
previously  served as  executive-in-residence,  School of Hotel  Administration,
Cornell University;  chair, board of governors,  Ryerson Polytechnic University,
Toronto, Canada; and, co-chair, American Hotel Foundation, Washington, D.C.

            DAVID P. HANLON. David P. Hanlon is presently a U.S. gaming industry
consultant, including Native American and international gaming ventures. He most
recently  served as president  and chief  operating  officer of Rio Suites Hotel
Casino,  from  1996-1999,  where  he  guided  the  corporation  through  a major
expansion and successful return to profitability.  From 1994-1995,  he served as
president and chief executive  officer of  International  Game  Technology,  the
world's leading manufacturer of microprocessor gaming machines.  From 1988-1993,
he served as president and chief  executive  officer of Merv  Griffin's  Resorts
International,  where he completed two complex  billion  dollar  restructurings,
while  successfully  selling off international  properties in the Bahamas.  From
1984-1988, he served as president of Harrah's Atlantic City (Harrah's Marina and
Trump Plaza), where he was responsible for casino and hotel operations and 9,000
employees. During his four-year leadership,  Harrah's became the most profitable
operation in Atlantic  City.  Between  1978-1983,  he served as chief  financial

                                      159





officer and executive vice president of Caesar's  World,  Inc.,  where he was in
charge of all East Coast operations.  Prior to starting his career in the gaming
industry,  Mr.  Hanlon  served  as  director  of  corporate  finance  for  Fluor
Corporation,  from 1975-1978.  Mr. Hanlon's  education  includes a B.S. in hotel
administration from Cornell  University,  an M.S. in accounting and an M.B.A. in
finance from the Wharton School,  University of  Pennsylvania,  and an [Advanced
Management   Program  at  the   Harvard   Business   School].   Mr.   Hanlon  is
executive-in-residence,  School of Hotel Administration, Cornell University, and
a member of various boards.

            ARTHUR I. SONNENBLICK.  Arthur I. Sonnenblick is the senior managing
director of Sonnenblick-Goldman Company. Founded in 1893, Sonnenblick-Goldman is
the nation's leading independent real estate investment banking firm. Each year,
the firm handles billions of dollars of private equity, joint venture,  mortgage
and   sale    transactions.    Mr.    Sonnenblick   served   as   president   of
Sonnenblick-Goldman  Company from  1978-1987  and chief  executive  officer from
1978-1995.  He is a member of Urban Land Institute and International  Council of
Shopping  Centers,  and has lectured at the Urban Land Institute  Practicing Law
Institute,   International   Council  of  Shopping  Centers,   Mortgage  Bankers
Association,  National  Association of Home Builders,  New York Chapter American
Institute of Appraisers,  Columbia University,  Fordham University, and New York
University.  From 1979 to 1983, Mr.  Sonnenblick was a partner and member of the
board of directors of Lehman  Brothers Kuhn Loeb. He is also a past president of
the Mortgage  Bankers  Association of New York and a past member of the board of
governors of the Real Estate Board of New York.  Mr.  Sonnenblick is currently a
member of the board of  directors  of  Alexanders,  Inc.  and is chairman of the
board of trustees of the Educational Alliance. He holds a Bachelor of Science in
economics from the Wharton School of the University of  Pennsylvania  and served
on active duty in the U. S. Naval Reserve as a Lieutenant Junior Grade from 1953
to 1957.

            PAUL A. DEBARY.  Paul A. deBary is a managing  director at Marquette
deBary Co., Inc., a New York based broker-dealer, where he serves as a financial
advisor for state and local government agencies, public and private corporations
and non-profits.  Prior to assuming his current position,  he served as managing
director in the Public Finance Department of Prudential  Securities from 1994 to
1997. He was a partner in the law firm of Hawkins,  Delafield & Wood in New York
from 1975 to 1994.  Mr. deBary  received an AB in 1968,  and M.B.A.  and J.D. in
1971 from Columbia  University.  He is a member of the American Bar Association,
the New York State Bar  Association,  the  Association of the Bar of the City of
New York and the  National  Association  of Bond Lawyers and serves as President
and as a Director of the Society of Columbia graduates. Mr. deBary has served as
a director of Empire Resorts since March 2002.

            JOSEPH E.  BERNSTEIN.  Joseph E.  Bernstein  started his career as a
corporate  tax  attorney  on Wall  Street at Cahill  Gordon & Reindel  and as an
international  tax  attorney  at  Rosenman  & Colin.  He later  started  his own
international  tax practice.  Since the early 1980's,  Mr. Bernstein (along with
his brother Ralph, and their partner,  Morad Tahbaz, through their jointly-owned
entity,  Americas Tower  Partners) has been involved in the development of three
million  square feet of  commercial  property in Manhattan,  including  Americas
Tower,  a 50-story  office  building on Avenue of the  Americas and 46th Street,
serving as world headquarters to  PriceWaterhouseCoopers  and US headquarters to
Israel's largest bank, Bank Hapoalim.

                                      160





            MORAD TAHBAZ. Morad Tahbaz is the president of Catskill Development,
a member of  Monticello  Raceway's  Operating  Board,  the  president  of Empire
Resorts and a director of Empire Resorts. Mr. Tahbaz also serves on the board of
directors of Air Methods  Corporation,  a publicly  traded company that provides
air medical  emergency  transport  services  and systems  throughout  the United
States of America. In 1983 Mr. Tahbaz joined Americas Partners, at which time he
became primarily responsible for acquisitions.  Subsequently, Mr. Tahbaz took on
the added  responsibility  of the  development  of Americas  Tower,  a 1,000,000
square  foot  office  building  in  New  York  that  is  the   headquarters  for
PriceWaterhouseCoopers.  Mr. Tahbaz remains a partner in Americas Partners.  Mr.
Tahbaz  holds a B.A. in  philosophy  and fine arts from Colgate  University  and
attended the Institute for  Architecture  and Urban Studies in New York. He also
holds an M.B.A. in finance from Columbia University Graduate School of Business,
where  throughout  his  career,  he has  conducted  a series of lectures on real
estate development and finance for graduate students.

TERMS OF OFFICE

            As discussed  above,  Class I directors  will hold office for a term
expiring  in one year,  at the 2004  annual  meeting of  stockholders;  Class II
directors will hold office for a term expiring in two years,  at the 2005 annual
meeting of  stockholders;  and Class III  directors  will hold office for a term
expiring in three years, at the 2006 annual meeting of stockholders.

PRINCIPAL STOCKHOLDERS AFTER THE CONSOLIDATION


            Empire Resorts  estimates that following the  consolidation,  Empire
Resorts will have approximately 22,702,896 shares of common stock, 44,258 shares
of Series B Preferred  Stock and  1,730,697  shares of Series E Preferred  Stock
issued and  outstanding.  The  following  table sets forth  certain  information
regarding  the  estimated   beneficial   ownership  of  Empire  Resorts'  voting
securities  following the merger, based on data existing as of November 5, 2003,
by all individuals expected to be directors and executive officers following the
consolidation;  persons  expected  to own 5% or  more  of any  class  of  Empire
Resorts' voting securities following the consolidation;  and all of the expected
directors and executive  officers as a group.  Unless otherwise  indicated,  the
address of each stockholder,  director and executive officer listed below is c/o
Empire Resorts, Inc., Route 17B, P.O. Box 5013, Monticello, New York, 12701.


                                        Common Stock Beneficially   Series B Preferred Stock Series E Preferred Stock
                                                Owned(1)             Beneficially Owned(1)     Beneficially Owned(1)
                                       --------------------------   ------------------------ -----------------------
                                        Shares         Percentage   Shares    Percentage     Shares  Percentage
                                        ------         ----------   ------    ----------     ------  ----------
Robert A. Berman                       4,574,477(2)       19.92%      --           --            --     --

Scott A. Kaniewski                       682,456(3)        2.97%      --           --            --     --

Thomas W. Aro                             43,500(4)         *         --           --            --     --

Paul A. deBary                           186,328            *         --           --            --     --

Morad Tahbaz                           1,337,359(5)        5.81%      --           --            --     --


                                      161




                                        Common Stock Beneficially   Series B Preferred Stock Series E Preferred Stock
                                                Owned(1)             Beneficially Owned(1)     Beneficially Owned(1)
                                       --------------------------   ------------------------ -----------------------
                                        Shares         Percentage   Shares    Percentage     Shares  Percentage
                                        ------         ----------   ------    ----------     ------  ----------

David Matheson                            15,000(6)         *         --           --            --     --

John Sharpe                               15,000(7)         *         --           --            --     --

David Hanlon                              15,000(8)        *          --           --            --     --

Arthur Sonnenblick                        15,000(9)        *          --           --            --     --

Joseph E. Bernstein                    2,423,253(10)      10.67%      --           --            --     --

JB Trust                               2,263,558           9.97%      --           --            --     --

Ralph Bernstein                        2,324,753(11)      10.23%      --           --            --     --

Maurice Dabbah                         2,006,291           8.84%      --           --            --     --

Directors and executive officers as
a group (11 persons) (2)-(11)         10,722,920          45.77%      --           --            --     --

BP Group, Ltd.
8306 Tibet Butler Drive
Windemere, FL                               --          --          44,258          100%         --     --

The Bryanston Group, Inc.
2424 Route 52
Hopewell Junction, NY 12533                 --          --            --           --         551,213     89.6%

Stanley Tollman
The Bryanston Group, Inc.
2424 Route 52Hopewell Junction, NY          --          --            --           --         152,817      8.8%
12533


---------
* less than 1%

(1)         A person is deemed to be the beneficial  owner of voting  securities
            that can be acquired by such person  within 60 days after the record
            date upon the exercise of options and warrants and the conversion of
            convertible  securities.   Each  beneficial  owner's  percentage  of
            ownership is determined  by assuming  that all options,  warrants or
            convertible  securities  held by such  person (but not those held by
            any other  person) that are  currently  exercisable  or  convertible
            (i.e., that are exercisable or convertible  within 60 days after the
            record date) have been exercised or converted.


(2)         Includes  3,228,217  shares of common stock owned directly by Robert
            A.  Berman,  options  that are  currently  exercisable  into 279,189
            shares of common  stock and  1,070,071  shares of common  stock held
            directly by the Berman  Family  Trust.  Debbie N. Berman,  Robert A.
            Berman's wife, and Philip B. Berman, Robert A. Berman's brother, are

                                      162



            co-trustees  of the Berman  Family  Trust and have joint  voting and
            dispositive  power with respect to its  holdings.  The Berman Family
            Trust is 88% owned by Robert A.  Berman,  3% by Debbie N. Berman and
            9% by Robert  A.  Berman's  children.  Robert  A.  Berman  disclaims
            beneficial  ownership  of all  shares  of common  stock  held by the
            Berman Family Trust.

(3)         Includes  134,096  shares of common stock owned directly by Scott A.
            Kaniewski,  252,671  shares of common  stock owned by the  Kaniewski
            Family Limited Partnership, with respect to which Mr. Kaniewski is a
            1% limited  partner  and the  general  partner  with sole voting and
            disposition  power and options that are currently  exercisable  into
            295,689  shares  of  common  stock.  Scott  A.  Kaniewski  disclaims
            beneficial  ownership of the 252,671 shares of common stock owned by
            the Kaniewski Family Limited  Partnership for any purpose other than
            voting and  dispositive  powers.  Does not include 306,171 shares of
            common  stock owned by the KFP Trust whose sole trustee is Stacey B.
            Kaniewski,   the  wife  of  Scott  A.  Kaniewski,   and  whose  sole
            beneficiaries are Scott A. Kaniewski's children. Stacey B. Kaniewski
            has sole voting and  dispositive  power over these  shares of common
            stock.  Scott A.  Kaniewski  disclaims  beneficial  ownership of the
            shares owned by the KFP Trust.

(4)         Represents options that are currently exercisable into 43,500 shares
            of common stock.

(5)         Represents  1,319,859 shares of common stock owned directly by Morad
            Tahbaz and options that are currently exercisable into 17,500 shares
            of common stock.


(6)         Represents options that are currently exercisable into 15,000 shares
            of common stock.

(7)         Represents options that are currently exercisable into 15,000 shares
            of common stock.

(8)         Represents options that are currently exercisable into 15,000 shares
            of common stock.

(9)         Represents options that are currently exercisable into 15,000 shares
            of common stock.


(10)        Includes  2,263,558  shares of common stock owned directly by the JB
            Trust,  144,695  shares held in the name of Joseph E.  Bernstein  on
            behalf of the JB Trust, and options held by Joseph E. Bernstein that
            are currently exercisable into 15,000 shares of common stock. Joseph
            E. Bernstein disclaims  beneficial  ownership of all shares owned by
            the JB  Trust,  whose  ultimate  beneficiaries  are Mr.  Bernstein's
            children and whose sole  trustee is Mr.  Bernstein's  mother,  Helen
            Bernstein.

(11)        Represents  2,309,753 shares of common stock owned directly by Ralph
            J. Bernstein and options that are currently  exercisable  into15,000
            shares of common stock.


                                      163





DIRECTOR AND EXECUTIVE COMPENSATION

            DIRECTORS - CASH COMPENSATION

            Following the consolidation, the members of Empire Resorts' board of
directors will each receive  $20,000 per year and $1,000 per meeting.  Directors
that also serve on committees  of the board of  directors,  other than the audit
committee,   will  receive  an  additional  $1,000  per  committee  meeting  for
non-employee  committee  members,  with the  chairperson  to receive  $2,500 per
meeting. With respect to the audit committee,  its non-employee chairperson will
receive an additional annual payment of $10,000, and each audit committee member
(including the chairperson) will receive $2,500 per audit committee meeting.

            DIRECTORS - STOCK COMPENSATION

            Following  the  consolidation,  each of the new  members  of  Empire
Resorts'  board of  directors,  upon their  election to the board,  will receive
options to purchase  15,000 shares of Empire  Resorts'  common stock at its then
current fair market  value.  In addition,  all members of the board of directors
shall receive an annual grant of 10,000 stock options at the common stock's then
current  fair  market  value.  All stock  options  granted  to  Empire  Resorts'
directors shall vest immediately.

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

            Empire Resorts, Catskill Development, the Cayuga Nation of New York,
the Cayuga Catskill Gaming  Authority,  Robert A. Berman,  Empire Resorts' chief
executive  officer,  a member of its board of directors and its former chairman,
and Morad Tahbaz,  Catskill  Development's  and Empire Resorts'  president and a
member of Catskill  Development's  and Empire Resorts' boards of directors,  are
parties to a letter agreement,  dated as of April 3, 2003, as amended,  pursuant
to  which  Empire  Resorts  has  agreed  to  fund  the  Cayuga  Catskill  Gaming
Authority's  purchase  of those 29 acres of land  subject  to the Land  Purchase
Agreement and the development costs of building a Class III Gaming enterprise on
such land.  Empire  Resorts is to be reimbursed  for up to  $10,000,000 of these
advances from any third party  construction  financing  that is received and, to
the extent that such third party financing or $10,000,000 cap is insufficient to
fully reimburse Empire Resorts,  from  distributions  made to Monticello  Casino
Management under the Gaming Facility Management Agreement.

            Under this letter agreement,  Catskill Development,  Empire Resorts,
Robert A. Berman and Morad Tahbaz, on the one hand, and the Cayuga Nation of New
York, on the other hand, have also agreed that for 10 years, each shall have the
right to participate in the development or operation by the other of

            o   one or more hotels, motels or other similar facilities providing
                overnight  accommodations  including ancillary  beverage,  food,
                entertainment,  commercial  and or retail  services  within a 15
                mile radius of the 29 acres to be acquired by the Cayuga  Nation
                of New York under the Land Purchase Agreement; and

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            o   any other entertainment,  sports and/or retail facility within a
                5 mile radius of the property

            In each  case,  the  non-developing  party  will  have the  right to
purchase up to 33.33% of the equity in the facility  being  developed,  with the
purchase  price  being a pro rata share of the costs of such  facility  less any
amount  advanced  by any lender for any  mortgage  or other loan  secured by the
facility's  property or cash flow. The purchase price for this acquired interest
must be paid in cash at the time the  interest is actually  purchased.  However,
with respect to any acquired interest purchased by the Cayuga Nation of New York
prior to the second anniversary of the primary gaming facility's public opening,
the Cayuga Nation of New York may pay for its acquired interest by delivery of a
non-recourse promissory note, payable over five years, with interest accruing on
the unpaid  principal amount at the then existing prime rate. These parties have
further agreed that the first hotel facility to be built that is governed by the
letter agreement will be deemed the gaming enterprise's  preferred provider,  in
that the gaming  enterprise  shall be obligated  to refer its  customers to that
hotel.

            In  consideration   of  the  agreements   contained  in  the  letter
agreement,  each of the  parties  has  agreed  that for a period  ending  on the
earliest of (i) approval (A) by the Bureau of Indian Affairs of the  application
to  transfer  the 29 acres of land to the United  States of America in trust for
the  Cayuga  Nation  of New York and to use such land for Class II and Class III
Gaming and (B) by the National  Indian Gaming  Commission of the Gaming Facility
Management  Agreement,  (ii) the termination of the Gaming  Facility  Management
Agreement  because of  Monticello  Casino  Management's  material  breach of its
obligations,  (iii) the  termination  of the  Gaming  Facility  Development  and
Construction  Agreement  because of Monticello  Raceway  Development's  material
breach of its  obligations,  and (iv) April 30, 2004, each party,  respectively,
will refrain from having discussions  regarding the development of another Class
III Gaming facility in Sullivan County, New York.

            Finally, under the letter agreement, Empire Resorts made an award to
the Cayuga  Nation of New York of 300,000  shares of Empire  Resorts  restricted
common  stock.  100,000  of these  shares  vested  on April  11,  2003.  100,000
additional  shares vest on October 11, 2003,  and the remaining  100,000  shares
vest on April 11, 2004.


            Empire  Resorts  and  Monticello  Realty  are  parties  to a  letter
agreement,  dated  July 30,  2003,  pursuant  to which  Empire  Resorts  granted
Monticello  Realty the right to appoint up to two  observers  for each of Empire
Resorts'  board of  directors'  meetings for the lesser of (i) 36 months or (ii)
the first day on which Monticello Realty and its beneficial owners cease to own,
together, at least 5% of Empire Resorts' outstanding common stock.

            Robert A. Berman has executed a Guarantee  Agreement,  dated October
29, 2003, in favor of The Berkshire Bank,  guarantying the performance,  subject
to the terms and conditions provided in the Guarantee  Agreement,  of Monticello
Raceway  Management's  performance  under the Loan  Agreement and Term Note. See
"Recent Developments - Guarantee Agreement" beginning on page 123.


                                      165





                              CORPORATE GOVERNANCE

            In  anticipation  of  the  consolidation,  Empire  Resorts  recently
adopted a new code of ethics for its  executive  officers and  directors and new
charters for each of its audit committee,  corporate  governance and nominations
committee and compensation  committee. As Empire Resorts expects to grow rapidly
in terms of  operations,  employees  and revenue  following  the  consolidation,
Empire  Resorts  believed that it was important to revise the documents  setting
forth its corporate governance standards. Each of these new charters and code of
ethics is summarized below.

SUMMARY OF CODE OF ETHICS

            The following  principles will apply to all principal  executive and
senior financial officers:

            o   to act with honesty and integrity in fulfilling their duties and
                responsibilities;

            o   to handle in an ethical manner all actual or apparent  conflicts
                of  interest  with  respect  to any  personal  and  professional
                relationships;

            o   to avoid any  personal  activities,  investments,  interests  or
                associations  that  interfere  or appear to  interfere  with the
                officer's good judgment or independent exercise of judgment;

            o   to avoid the actual or  appearance  of  personal  gain due to an
                officer's position or relationship with Empire Resorts;

            o   to  comply  with  any  applicable  government  laws,  rules  and
                regulations;

            o   to adhere to Empire Resorts' code of ethics; and

             o  not to engage in any  conduct  that  represents  a  conflict  of
                interest.

            If a principal  executive or senior  financial  officer has concerns
regarding a real or potential  conflict of interest,  the officer should consult
with a person designated by the audit committee regarding compliance and ethics.

            It is the  responsibility  of the  principal  executive  and  senior
financial officers to assure that:

            o   all records and reports  fairly and  accurately  reflect  Empire
                Resorts' financial position and its respective transactions,  do
                not contain any false or misleading  information,  are supported
                by  accurate  documentation  and  are  in  accordance  with  any
                applicable law;

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            o   there is full compliance with Empire Resorts' system of internal
                accounting controls;

            o   there are no transactions that are  intentionally  misclassified
                with respect to accounts departments or accounting periods; and

            o   no   information   has  been  concealed  from  any  internal  or
                independent auditors.

            Each principal executive and senior financial officer is responsible
for bringing to the attention of the audit committee:

            o   any material information or public information  affecting Empire
                Resorts' disclosures, Securities and Exchange Commission filings
                or financial condition;

            o   any  significant  deficiencies  in the  design or  operation  of
                internal   controls  which  adversely   affect  Empire  Resorts'
                financial data;

            o   any  fraud  by  management  or  other  employees   significantly
                involved   with  Empire   Resorts'   financial   reporting   and
                disclosures or internal controls; and

            o   any information  regarding  violations of the code of ethics, or
                any  securities  laws or other laws,  rules or  regulations,  by
                employees or agents of Empire Resorts.

            Any  conduct  that  represents  a conflict  of  interest is strictly
prohibited.  In the event of a  violation  of Empire  Resorts'  code of  ethics,
Empire Resorts will take appropriate action designed to deter further wrongdoing
and promote accountability.  The board of directors may waive the code of ethics
provisions only with the specific written advice of counsel and, if appropriate,
outside  auditors,  and only on the condition  that the waiver is  appropriately
disclosed and mechanisms are in place to monitor the waiver.

SUMMARY OF CORPORATE GOVERNANCE AND NOMINATIONS COMMITTEE CHARTER

            PURPOSE

            The purpose of the corporate governance and nominations committee is
to develop and oversee the corporate  governance  principles of Empire  Resorts,
manage committee operations,  and report to the board of directors not less than
once a year.

            ORGANIZATION

            The  members  of the  committee  will  be  composed  of  independent
directors,  unless the Nasdaq rules allow otherwise. The board of directors will
appoint the  initial 3 members.  Subsequent  members  will be  nominated  by the
committee and appointed by the board of directors.  The board of directors  will
determine the duration of the directors' service on the committee.

            Nasdaq rules allow for a  non-independent  director who is neither a
current  officer  or  employee,  nor a person  who has the same  residence  as a
current officer or employee,  nor is related by blood, marriage or adoption to a

                                      167





current officer or employee, to serve for up to two years, under exceptional and
limited  circumstances,  so long as the  committee  already  has at least  three
members, if the board of directors discloses all relevant information  regarding
the  nomination  in  the  next  annual  meeting  proxy  statement  prior  to the
appointment,  and  determines  that this  appointment is in the best interest of
Empire Resorts.

            Nasdaq rules further allow for a non-independent  director who is an
officer and owns 20% or more of the company's  stock or voting power, so long as
the  committee  already  has at least  three  members,  does  not  have  another
non-independent  director,  and if the board of directors discloses all relevant
information  regarding the nomination in the next annual meeting proxy statement
prior  to the  appointment,  and  determines  this  appointment  is in the  best
interest of the company.

            STRUCTURE AND PROCESS

            The  committee  will  meet at least  twice a year,  in  addition  to
attending regularly  scheduled meetings of the board of directors.  The board of
directors  will designate one  chairperson,  who will determine any voting ties.
Further  meetings and actions will be taken by unanimous  written consent of the
committee, or by the decision of the chairperson or the board of directors.

            DUTIES AND RESPONSIBILITIES

            The committee's duties and responsibilities are as follows:

            o   to  assist   the  board  of   directors   with  its  duties  and
                responsibilities;

            o   to make recommendations on the size of the board of directors or
                the  size  of  other  committees,  but  not  for  the  corporate
                governance and nominations committee;

            o   to  assist  in  selecting  and  identifying  potential  board of
                directors or other  committee  members and  recommend  qualified
                individuals in the case of vacancies,  but not for the corporate
                governance and nominations committee;

            o   to develop standards of independence for the board of directors;

            o   to monitor compliance with the standards of independence between
                directors and Empire Resorts, its subsidiaries and affiliates;

            o   to  establish  procedures  to evaluate  and oversee the board of
                directors and management;

            o   to   receive   interested-party   communications   directed   at
                non-management directors through the committee chairperson;

            o   to develop,  recommend and oversee  implementation  of corporate
                governance  principles  for Empire  Resorts,  and  review  these
                principles at least once a year;

                                      168





            o   to review and  report to the board of  directors  the  corporate
                governance  implications  of any changes to the  charters of any
                board of directors' committees;

            o   to   prepare   and  issue  an  annual   committee   "performance
                evaluation"  that  compares  the  performance  of the  corporate
                governance and  nominations  committee with the  requirements of
                the   committee's   charter   and   make   recommendations   for
                improvements   of  the  corporate   governance  and  nominations
                committee charter; and

            o   to perform other express duties relating to corporate governance
                or the nomination of the board of directors and other  committee
                members.

            RESOURCES AND AUTHORITY OF THE COMMITTEE

            The corporate governance and nominations committee has the authority
to make decisions it deems appropriate without seeking the approval of the board
of directors or  management.  The authority to identify  director  candidates is
vested solely with the corporate governance and nominations committee.

            AMENDMENTS

              The corporate governance and nominations committee charter and its
provisions can be amended or repealed by the board of directors.

SUMMARY OF AUDIT COMMITTEE CHARTER

            PURPOSE

            The  purpose  of  the  audit  committee  is to  oversee  the  annual
independent  audit of Empire  Resorts'  financial  statements,  the  systems  of
internal accounting and financial controls, the qualifications, independence and
performance of the independent  auditor,  Empire Resorts'  compliance with legal
and  regulatory  requirements,   the  integrity  of  the  financial  statements,
financial  reporting  process  and  ethics  programs,  and to make the  board of
directors aware of any significant  financial matters. It is not the committee's
duty to plan or conduct  audits or to determine  the accuracy and  compliance of
Empire Resorts' financial statements and disclosures.

            COMMITTEE MEMBERSHIP

            The committee will be composed of at least three directors appointed
by the board of directors. Subsequent members and vacancies will be nominated by
the corporate governance committee and appointed by the board of directors.  The
board of directors will determine the duration of the committee members' service
on the  committee.  In  addition,  the board of  directors  will  designate  one
chairperson,  who will determine any voting ties.  Further  meetings and actions
will be taken by unanimous written consent of the committee,  or by the decision
of the chairperson or the board of directors. The chairperson will report to the
board of directors no less often than quarterly,  but more often if requested by
the board of directors.

                                      169





            All committee members must:

            o   be  independent   under  the  Nasdaq  rules,   unless  otherwise
                permitted under Nasdaq rules and the Sarbanes-Oxley Act of 2002;

            o   be able to understand fundamental financial statements;

            o   not be an affiliate of Empire  Resorts or any  subsidiaries,  as
                defined by Rule 10A-3 of the Securities Exchange Act of 1934, as
                amended;

            o   not  accept  other  compensation  from  Empire  Resorts  or  its
                affiliates for any other services, except for services performed
                as a member of Empire Resorts' board of directors; and

            o   not own 20% or more of Empire Resorts' voting securities.

            Nasdaq  rules  allow  for a  non-independent  director  who is not a
current  employee or an  immediate  family  member to serve for up to two years,
under exceptional and limited circumstances, so long as he or she does not chair
the  committee,  if the board of directors  discloses  all relevant  information
regarding this  nomination in the next annual meeting proxy  statement  prior to
the appointment, and determines that this appointment is in the best interest of
Empire Resorts.

            At least one committee member must have a professional certification
in  accounting,  an  accounting  or  finance  background,  or  other  experience
demonstrating the member's  financial  sophistication to be considered an "audit
committee financial expert."

            COMMITTEE AUTHORITY, FUNCTIONS AND RESPONSIBILITIES

            The members of the audit  committee are not full-time  employees and
do not represent themselves to be auditors or accountants.  The responsibilities
and functions of the committee are as follows:

            o   oversight and sole authority over  independent  auditors,  audit
                engagements and procedures of independent auditors;

            o   annual review and evaluation of the audit committee  charter and
                the current and prospective independent auditors;

            o   to review with  management the timing and process for any active
                or  potential  audit  engagement  or any  significant  financial
                reporting issues;

            o   to look into the regular rotation of Empire Resorts' audit firm;

            o   to review and discuss with management,  the independent auditors
                and the  board of  directors  whether  to  include  the  audited
                statements in Empire Resorts' Form 10-KSB;

                                      170





            o   to obtain  confirmation  from the independent  auditors that the
                audit  was  conducted  in  accordance  with  Section  10A of the
                Securities Exchange Act of 1934, as amended;

            o   to  review  and  discuss  with  management  and the  independent
                auditors the quarterly financial  statements prior to the filing
                of a Form 10-Q or Form10-QSB;

            o   to  inquire  and  discuss  the  impact of  current  or  proposed
                pronouncements  by the  Financial  Accounting  Standards  Board,
                American  Institute of Certified  Financial  Accountants and the
                Securities and Exchange Commission;

            o   to meet  separately  and  discuss any item  communicated  to the
                committee by the independent auditors;

            o   to review  quarterly  reports from the  independent  auditors on
                significant  written   communications  between  the  independent
                auditors and management;

            o   to evaluate the cooperation of the  independent  auditors and to
                insure the independent  auditors have full cooperation  relating
                to the conduct of the audit;

            o   to review with management Empire Resorts' press releases;

            o   to obtain and review  from  management  its  analysis  of Empire
                Resorts' major  financial risks and exposures and steps taken to
                monitor and control such risks;

            o   to consult  with  Empire  Resorts and the  independent  auditors
                regarding the scope and quality of the  accounting and financial
                reporting controls;

            o   to establish  procedures for receiving and reviewing  complaints
                and  anonymous  submissions  regarding  accounting  or  auditing
                matters;

            o   to investigate,  review and report to the board of directors any
                proprietary  and  ethical   implications  of  any   transactions
                reported or disclosed to the committee;

            o   to meet at least once every  fiscal  quarter in order to discuss
                with  management  the annual  and  quarterly  audited  financial
                statements;

            o   to  meet  periodically  with  management,   the  chief  internal
                auditor,  and the  independent  auditors in order to discuss any
                matter  members of the  committee  believe  should be  discussed
                privately;

            o   to keep minutes of each meeting to be  distributed to members of
                the  committee,  members  of the  board  of  directors  and  the
                secretary of Empire Resorts;

            o   to produce an annual performance  evaluation comparing committee
                performance and requirements,  and to make  recommendations  for
                improvement to the charter; and

                                      171





            o   to perform other functions and have such powers as may be necessary.

            The independent  auditor team shall annually submit to the committee
a formal written statement  regarding the  appropriateness of the fees billed in
the last two fiscal years.

            RESOURCES AND AUTHORITY OF THE COMMITTEE

            The  committee is granted the  resources  and authority to discharge
its duties and  responsibilities  without  seeking the  approval of the board of
directors.

            AMENDMENTS

            The  board of  directors  may amend or  repeal  the audit  committee
charter.

SUMMARY OF COMPENSATION COMMITTEE CHARTER

            PURPOSE

            The purpose of the  compensation  committee  charter is to discharge
the  responsibilities  of the board of directors and to produce an annual report
regarding executive compensation.

            ORGANIZATION

            The committee will be composed of independent directors,  unless the
Nasdaq rules allow otherwise.  The board of directors will appoint the initial 3
members.  Subsequent members will be nominated by the committee and appointed by
the board of directors.  The board of directors  will  determine the duration of
the members' service on the committee.

            Nasdaq rules allow, under exceptional and limited circumstances, for
a non-independent  director who is neither a current officer or employee,  nor a
person living with a current officer or employee, nor related by blood, marriage
or adoption to a current officer or employee,  to serve for up to two years as a
member of the  committee,  so long as the  committee  already has at least three
members,  and if the  board of  directors  discloses  all  relevant  information
regarding the nomination and determines this appointment is in the best interest
of Empire Resorts.

            STRUCTURE AND PROCESS

            The  committee  will  meet at least  twice a year,  in  addition  to
attending regularly  scheduled meetings of the board of directors.  The board of
directors  will designate one  chairperson,  who will determine any voting ties.
Further  meetings and actions will be taken by unanimous  written consent of the
committee, or by the decision of the chairperson or the board of directors.  The
committee may invite Empire Resorts' chief executive officer to participate, but
not vote, in the meetings of the committee,  except for those meetings regarding
the chief executive  officer and chief  executive  officer's  compensation.  The
chief  executive  officer  is  barred  from any  meetings  regarding  the  chief
executive officer's compensation.

                                      172





            DUTIES AND RESPONSIBILITIES OF THE COMMITTEE

            The committee's duties and responsibilities are:

            o   general compensation policies and programs;

            o   approval and sole determination of the chief executive officer's
                compensation, including long term incentive programs, subject to
                ratification by the board of directors;

            o   to evaluate  the chief  executive  officer's  performance  on an
                annual basis;

            o   to review,  approve,  recommend and oversee all proposed officer
                compensation, severance or termination payments;

            o   to recommend,  approve and oversee  incentive  compensation  and
                equity based plans,  issuances  and  amendments of tax qualified
                employee benefit or parallel  non-qualified  stock option plans,
                and regulatory compliance regarding compensation matters;

            o   to  produce  a  report  on  executive  compensation  for  Empire
                Resorts' annual report and proxy statement; and

            o   to perform other duties or  responsibilities  expressly assigned
                by the board of directors regarding compensation programs.

            COMMITTEE REPORTS

            The committee will produce the following reports:

            o   annual report on executive compensation in Empire Resorts' proxy
                statement;

            o   annual  performance  evaluation  of  the  committee,   including
                comparison of current  performance  with the requirements of the
                committee charter;

            o   recommendations   for  any   improvements  to  the  compensation
                committee charter; and

            o   summary of actions taken at any committee meeting.

            RESOURCES AND AUTHORITY OF THE COMMITTEE

            The  committee is granted the  resources  and authority to discharge
its duties and  responsibilities  without  seeking the  approval of the board of
directors.

            AMENDMENTS

            The  board  of  directors  may  amend  or  repeal  the  compensation
committee charter.

                                      173





                                     EXPERTS

            The consolidated financial statements of Empire Resorts incorporated
in this  information  statement/prospectus  by reference to the Annual Report on
Form 10-KSB of Empire Resorts for the year ended December 31, 2002, have been so
incorporated  in  reliance  on the  report  of  Friedman  Alpren  &  Green  LLP,
independent  accountants,  given on the  authority  of said firm as  experts  in
auditing and accounting.

            The combined  financial  statements of Catskill  Development and its
subsidiaries  included  in  this  information  statement/prospectus,  have  been
audited by Bachrach,  Waschitz & Waschitz,  LLP, independent public accountants,
and are included  herein in reliance  upon the reports of said firm and upon the
authority of said firm as experts in accounting and auditing.

            The financial  statements of Monticello Raceway Development included
in  this  information  statement/prospectus,  have  been  audited  by  Bachrach,
Waschitz & Waschitz,  LLP,  independent  public  accountants,  and are  included
herein in reliance  upon the reports of said firm and upon the authority of said
firm as experts in accounting and auditing.

                                  LEGAL MATTERS

            The  validity of the shares of Empire  Resorts'  common  stock to be
issued in the  consolidation  will be passed  upon for Empire  Resorts by Olshan
Grundman Frome  Rosenzweig & Wolosky LLP, New York, New York,  counsel to Empire
Resorts.   Certain  legal  matters  with  respect  to  the  federal  income  tax
consequences  of the  consolidation  will also be passed upon by Olshan Grundman
Frome Rosenzweig & Wolosky LLP, New York, New York.

                       WHERE YOU CAN FIND MORE INFORMATION

            Empire Resorts is subject to the  informational  requirements of the
Securities  Exchange Act of 1934, as amended.  In accordance with the Securities
Exchange Act of 1934, as amended,  Empire  Resorts  files annual,  quarterly and
special reports,  proxy statements and other information with the Securities and
Exchange  Commission.  You may read and copy any  reports,  statements  or other
information  that  Empire  Resorts  has  filed at the  Securities  and  Exchange
Commission's public reference room at 450 Fifth Street, N.W.,  Washington,  D.C.
20549.  Please call the SEC at 1-800-SEC-0330 for more information on the public
reference room. Empire Resorts'  Securities and Exchange  Commission filings are
also  available  to the public from  commercial  retrieval  services  and at the
website maintained by the Securities and Exchange Commission at WWW.SEC.GOV.

            Empire  Resorts has filed a  registration  statement  on Form S-4 to
register  with the  Securities  and  Exchange  Commission  the  shares of Empire
Resorts'  common stock to be issued in the  consolidation.  This prospectus does
not contain all of the information in the registration statement.  You will find
additional information about Empire Resorts in the registration  statement.  Any
statements  made  in  this  information   statement/prospectus   concerning  the
provisions of legal documents are not  necessarily  complete and you should read
the  documents  which are filed as exhibits  to the  registration  statement  or
otherwise filed with the Securities and Exchange Commission.

                                      174





            This  information  statement/prospectus  is accompanied by a copy of
Empire  Resorts'  Annual  Report on Form 10-KSB for the year ended  December 31,
2002,  Empire  Resorts'  Proxy  Statement  dated  February 21, 2003 for its 2003
Annual Meeting of  Stockholders  on Schedule 14A and Empire  Resorts'  Quarterly
Report on Form 10-QSB for the three months ended June 30, 2003.

                     INCORPORATION OF DOCUMENTS BY REFERENCE

            This  information   statement/prospectus   incorporates   documents,
including  important business and financial  information,  by reference that are
not  part  of this  information  statement/prospectus  or  delivered  with  this
information  statement/prospectus.  This means that Empire Resorts is disclosing
important information to you by referring you to those documents.  You should be
aware that  information  in a document  incorporated  by reference may have been
modified or superseded by information  that is included in other  documents that
were  filed at a later  date and which are also  incorporated  by  reference  or
included in this information statement/prospectus.

            Empire Resorts has filed the following documents with the Securities
and Exchange Commission and they are incorporated herein by reference:

            o   Quarterly  Report on Form  10-QSB for the fiscal  quarter  ended
                June 30, 2003;

            o   Amendment  No. 1 to  Quarterly  Report  on Form  10-QSB  for the
                fiscal quarter ended March 31, 2003;

            o   Quarterly  Report on Form  10-QSB for the fiscal  quarter  ended
                March 31, 2003;

            o   Annual Report on Form 10-KSB for the fiscal year ended  December
                31, 2002;

            o   Current Report of Empire Resorts on Form 8-K/A filed on November
                3, 2003;

            o   Current  Report of Empire  Resorts  on Form 8-K filed on October
                31, 2003;

            o   Current Report of Empire Resorts on Form 8-K filed on October 8,
                2003;

            o   Current  Report of Empire  Resorts on Form 8-K filed on July 30,
                2003;

            o   Current  Report of Empire  Resorts on Form 8-K filed on July 10,
                2003;

            o   Current  Report of Empire  Resorts on Form 8-K filed on June 24,
                2003;

            o   Current  Report of Empire  Resorts  on Form 8-K filed on May 16,
                2003;

            o   Current  Report of Empire Resorts on Form 8-K filed on April 21,
                2003;

            o   Current  Report of Empire Resorts on Form 8-K filed on April 14,
                2003;


                                      175





            o   Current  Report of Empire Resorts on Form 8-K filed on April 11,
                2003;

            o   Current  Report of Empire  Resorts on Form 8-K filed on April 7,
                2003;

            o   Current  Report of Empire Resorts on Form 8-K filed on March 24,
                2003;

            o   Current  Report of Empire Resorts on Form 8-K filed on March 18,
                2003;

            o   Current Report of Empire Resorts on Form 8-K/A filed on February
                21, 2003;

            o   Current  Report of Empire  Resorts on Form 8-K filed on February
                21, 2003;

            o   Current  Report of Empire  Resorts on Form 8-K filed on February
                13, 2003;

            o   Current Report of Empire Resorts on Form 8-K/A filed on February
                10, 2003;

            o   Current  Report of Empire  Resorts on Form 8-K filed on February
                4, 2003;

            o   Current  Report of Empire  Resorts  on Form 8-K filed on January
                17, 2003;

            o   Current  Report of Empire Resorts on Form 8-K/A filed on January
                16, 2003; and


            o   Description  of Empire  Resorts'  common stock  contained in its
                Registration  Statement  on  Form  8-A12B,  as  filed  with  the
                Securities and Exchange Commission on June 20, 2001.

            All  additional  documents  that  Empire  Resorts  may file with the
Securities and Exchange  Commission  pursuant to Sections  13(a),  13(c),  14 or
15(d) of the  Securities  Exchange Act of 1934, as amended,  between the date of
this information  statement/prospectus and the termination of the offering shall
be  deemed  to be  incorporated  by  reference  herein  and to be a part of this
prospectus  from the date of filing of such documents or reports.  Any statement
contained  herein or in a document  incorporated  by  reference  or deemed to be
incorporated by reference into this  information  statement/prospectus  shall be
deemed to be modified or  superseded  for  purposes  of this  prospectus  to the
extent that a statement contained in any other subsequently filed document which
also  is or is  deemed  to be  incorporated  by  reference  herein  modifies  or
supersedes  such statement.  Any such statement so modified or superseded  shall
not be deemed,  except as modified or  superseded,  to constitute a part of this
prospectus.

            Documents   incorporated   by   reference   into  this   information
statement/prospectus  are  available  from Empire  Resorts  without  charge upon
written or oral request at the address or phone number provided below.  Exhibits
to    documents    incorporated    by    reference    into   this    information
statement/prospectus   will  only  be   furnished   if  they  are   specifically
incorporated  by reference into this document.  If you request any  incorporated

                                      176





documents from Empire  Resorts,  they will be mailed to you by first class mail,
or another  equally  prompt  means,  within one business day after the date your
request is received.

                              Empire Resorts, Inc.
                             c/o Monticello Raceway
                                    Route 17B
                                 P.O. Box 5013
                           Monticello, New York 12701
                            (845) 794-4100, ext. 478
                         Attention: Corporate Secretary


                                      177




     INDEX TO CONSOLIDATED FINANCIAL STATEMENTS OF CATSKILL DEVELOPMENT, LLC

Report of Bachrach, Waschitz & Waschitz, LLP, Independent Auditors...............................................F-2

Consolidated Balance Sheets as of December 31, 2001 and 2002.........................................................F-3

Consolidated Income Statements for the years ended December 31, 2001 and 2002........................................F-4

Consolidated Statements of Cash Flows for the years ended December 31, 2001 and 2002.................................F-5

Consolidated Statements of Changes in Members' Equity for the years ended December 31, 2001 and 2002.................F-6

Notes to Consolidated Financial Statements December 31, 2001 and 2002................................................F-7

Consolidated Balance Sheets as of June 30, 2002 and 2003.............................................................F-17

Consolidated Income Statements for the six months ended June 30, 2002 and 2003.......................................F-18

Consolidated Statements of Cash Flows for the six months ended June 30, 2002 and 2003................................F-19

Consolidated Statements of Changes in Members' Equity for the six months ended June 30, 2002 and 2003................F-20

Notes to Consolidated Financial Statements June 30, 2002 and 2003....................................................F-21

  INDEX TO FINANCIAL STATEMENTS OF MONTICELLO RACEWAY DEVELOPMENT COMPANY, LLC

Report of Bachrach, Waschitz & Waschitz, LLP, Independent Auditors...............................................F-31

Balance Sheets as of December 31, 2001 and 2002......................................................................F-32

Income Statements for the years ended December 31, 2001 and 2002.....................................................F-33

Statements of Cash Flows for the years ended December 31, 2001 and 2002..............................................F-34

Statements of Changes in Members' Equity for the years ended December 31, 2001 and 2002..............................F-35

Notes to Financial Statements December 31, 2001 and 2002.............................................................F-36

Balance Sheets as of June 30, 2002 and 2003..........................................................................F-37

Income Statements for the six months ended June 30, 2002 and 2003....................................................F-38

Statements of Cash Flows for the six months ended June 30, 2002 and 2003.............................................F-39

Statements of Changes in Members' Equity for the six months ended June 30, 2002 and 2003.............................F-40

Notes to Financial Statements June 30, 2002 and 2003.................................................................F-41

                                      F-1




                         REPORT OF INDEPENDENT AUDITORS


To the Members of
Catskill Development, LLC

We have  audited  the  accompanying  consolidated  balance  sheets  of  Catskill
Development,  LLC as of December 31, 2002 and 2001, and the related consolidated
income statements, changes in member's equity and cash flows for the years ended
December 31, 2002 and 2001. These financial statements are the responsibility of
the Company's  management.  Our responsibility is to express an opinion on these
financial statements based on our audits.

We conducted our audits in  accordance  with United  States  generally  accepted
auditing  standards.  Those standards require that we plan and perform the audit
to obtain reasonable  assurance about whether the financial  statements are free
of material misstatement. An audit includes examining, on a test basis, evidence
supporting  the amounts and  disclosures in the financial  statements.  An audit
also includes assessing the accounting principles used and significant estimates
made by  management,  as well as  evaluating  the  overall  financial  statement
presentation.  We believe  that our audits  provide a  reasonable  basis for our
opinion.

In our opinion,  the financial  statements  referred to above present fairly, in
all  material  respects,   the  consolidated   financial  position  of  Catskill
Development,  LLC at December 31, 2002 and 2001, and the consolidated results of
its  operations  and its cash flows for the years  ended  December  31, 2002 and
2001, in conformity with United States generally accepted accounting principles.


/s/ Bachrach, Waschitz & Waschitz, LLP

June 25, 2003

                                      F-2




                            Catskill Development, LLC
                           Consolidated Balance Sheets
                           December 31, 2002 and 2001


                                                                 December 31, 2002         December 31, 2001
                                                                 -----------------         -----------------
ASSETS

Current Assets:
   Cash & Cash Equivalents                                        $   643,864                   1,358,469
   Restricted Cash                                                     42,376                      78,070
   Other Current Assets                                             1,368,792                     806,306
                                                                  -----------                 -----------
     Total Current Assets                                           2,055,032                   2,242,845
                                                                  -----------                 -----------
Net Property and Equipment                                          5,856,246                   6,443,420

                                                                  -----------                 -----------
Real Estate Development                                             6,068,469                   5,740,599
                                                                  -----------                 -----------

Total Assets                                                      $13,979,747                  14,426,864
                                                                  ===========                 ===========


LIABILITIES AND MEMEBERS' EQUITY

Current Liabilities:
   Accounts Payable and Accrued Expenses                          $ 2,585,909                   1,720,227
                                                                  -----------                 -----------

     Total Current Liabilities                                      2,585,909                   1,720,227

                                                                  -----------                 -----------
Long-Term Debt:
   Notes Payable                                                    6,821,375                   6,201,250
                                                                  -----------                 -----------
     Total Long-Term Debt                                           6,821,375                   6,201,250
                                                                  -----------                 -----------


Members' Equity                                                     4,572,463                   6,505,387
                                                                  -----------                 -----------

Total Liabilities and Members' Equity                             $13,979,747                  14,426,864
                                                                  ===========                 ===========


                       Bachrach, Waschitz & Waschitz, LLP
                 See Notes To Consolidated Financial Statements

                                      F-3




                            Catskill Development, LLC
                         Consolidated Income Statements
                 For the Years Ended December 31, 2002 and 2001


                                                 December 31, 2002     December 31, 2001
                                                 -----------------     ------------------


Revenues                                           $ 11,366,441             10,533,803
                                                   ------------           ------------

Costs and Expenses
   Purses, Awards and Other                           3,932,168              3,700,717
   General and Administrative                         7,990,892              7,596,578
   Depreciation                                         755,601                743,716
   Interest                                             620,704                564,024
                                                   ------------           ------------

   Total Costs and Expenses                          13,299,365             12,605,035
                                                   ------------           ------------

        Net (Loss)                                 $ (1,932,924)            (2,071,232)
                                                   ============           ============


                       Bachrach, Waschitz & Waschitz, LLP
                 See Notes To Consolidated Financial Statements

                                      F-4




                            Catskill Development, LLC
                      Consolidated Statements of Cash Flows
                 For the Years Ended December 31, 2002 and 2001



                                                                     December 31, 2002         December 31, 2001
                                                                     -----------------         -----------------

Operating Activities:
   Net Loss                                                           $(1,932,924)                (2,071,232)
     Adjustments to reconcile net loss to net cash
     Provided(Used) by operating activities:
       Depreciation                                                       755,601                    743,716
       Loss on Asset Disposal                                               2,819                       --
       Accrued Interest Not Paid                                          620,125                    563,750

   (Increase) Decrease in:
     Restricted Cash                                                       35,694                    213,052
     Other Current Assets                                                (562,486)                  (126,507)

   Increase (Decrease) in:
     Accounts Payable and Accrued Expenses                                865,682                    144,125
                                                                      -----------                -----------

          Net Cash Used by Operating Activities                          (215,489)                  (533,096)
                                                                      -----------                -----------

Investing Activities:
   Purchase of Property, Plant and Equipment                             (171,246)                  (143,521)
   Real Estate Development                                               (327,870)                  (111,465)
                                                                      -----------                -----------

          Net Cash Used in Investing Activities                          (499,116)                  (254,986)
                                                                      -----------                -----------

Financing Activities:
   Member Contributions                                                      --                    1,024,800
                                                                      -----------                -----------

         Net Cash Provided by Financing Activities                           --                    1,024,800
                                                                      -----------                -----------


Net Increase (Decrease) in Cash                                          (714,605)                   236,718
Cash at Beginning of Year                                               1,358,469                  1,121,751
                                                                      -----------                -----------

Cash at End of Year                                                   $   643,864                  1,358,469
                                                                      ===========                ===========

Supplemental Disclosures:
  Interest Paid                                                       $       579                        274


                       Bachrach, Waschitz & Waschitz, LLP
                 See Notes To Consolidated Financial Statements

                                      F-5




                           Catskill Development, LLC
              Consolidated Statements of Changes in Member's Equity
                 For the Years Ended December 31, 2002 and 2001


                                              Preferred                   Other                                Total
                                               Capital                   Capital        Accumulated            Members
                                            Contributions             Contributions      Deficit               Equity
                                            ------------          ------------         ------------          ------------

Balance December 31, 2000                   $ 15,703,893                   400           (8,152,474)            7,551,819

Capital Contributions                          1,024,800                  --                   --               1,024,800

Net (Loss)                                          --                    --             (2,071,232)           (2,071,232)
                                            ------------          ------------         ------------          ------------

Balance December 31, 2001                     16,728,693                   400          (10,223,706)            6,505,387

Capital Adjustment                                (3,900)                3,900                 --

Net (Loss)                                          --                    --             (1,932,924)           (1,932,924)
                                            ------------          ------------         ------------          ------------

Balance December 31, 2002                   $ 16,724,793                   400          (12,152,730)            4,572,463
                                            ============          ============         ============          ============


                       Bachrach, Waschitz & Waschitz, LLP
                 See Notes To Consolidated Financial Statements


                                      F-6




                            CATSKILL DEVELOPMENT, LLC
                            -------------------------

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           DECEMBER 31, 2002 AND 2001

1.   SIGNIFICANT ACCOUNTING POLICIES
     -------------------------------

     This summary of significant  accounting  policies of Catskill  Development,
     LLC (the  Company) is presented to assist in  understanding  the  Company's
     financial   statements.    The   financial   statements   and   notes   are
     representations  of the Company's  management who is responsible  for their
     integrity and objectivity.  These accounting  policies conform to generally
     accepted  accounting  principles and have been consistently  applied in the
     preparation of the financial statements.

     A.   Organization and Business Activity
          ----------------------------------

     In October 1995,  Catskill  Development,  LLC, a New York limited liability
     company, was formed to pursue the development of a proposed Native American
     Casino  in  Monticello,  New York (the  "Casino  Project").  The  Company's
     business  plan  envisioned  three  distinct  lines of  business:  a) casino
     activities; b) real estate related activities; and c) the gaming operations
     related to Monticello  Raceway (the  "Raceway")  including  pari-mutuel and
     future  Video  Lottery  Terminal  ("VLT")  operations.  Monticello  Raceway
     Management.  Inc.  (MRMI),  a  New  York  Corporation,  is a  wholly  owned
     subsidiary  and  was  formed  to  hold  the  pari-mutuel  license.   Mohawk
     Management, LLC (MM), a New Your Limited Liability Company, is 60% owned by
     the  Company  and was  formed  to  manage  the  St.  Regis  Mohawk  Casino.
     Monticello  Casino  Management,  LLC (MCM),  a New York  Limited  Liability
     Company,  is 60% owned by the  Company  and was  formed to manage any other
     Native American Casino at the Raceway. Both MM and MCM are inactive at this
     time.

     Currently,  the Company conducts pari-mutuel wagering on live race meetings
     for Standard  bred horses and  participates  in intrastate  and  interstate
     simulcast  wagering at the Raceway in  Monticello,  New York. The Company's
     operations  are  subject to  regulation  by the New York  State  Racing and
     Wagering Board.

     The Company  continues to pursue a Native  American  Casino  Project at the
     Raceway. However, to this point it has been unsuccessful (see Note 6).

     B.   Principles of Consolidation
          ---------------------------

     The accompanying  consolidated financial statements include the accounts of
     the  Company  and  its  wholly   owned   subsidiary,   Monticello   Raceway
     Managements,  Inc, Mohawk Management, LLC and Monticello Casino Management,
     LLC.  All  significant  intercompany  balances and  transactions  have been
     eliminated in consolidation.


                                      F-7




                            CATSKILL DEVELOPMENT, LLC
                            -------------------------

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           DECEMBER 31, 2002 AND 2001


     C.   Use of Estimates
          ----------------

     The  preparation  of financial  statements  in conformity  with  accounting
     principles  generally  accepted  in the United  States of America  required
     management  to make  estimates  and  assumptions  that affect the  reported
     amounts of assets and liabilities  and disclosure of contingent  assets and
     liabilities  at the  dates of the  financial  statements  and the  reported
     amounts of revenues  and  expenses  during the  reporting  periods.  Actual
     results could differ from those estimated.

     D.   Concentrations of Credit Risk
          -----------------------------

     The Company maintains significant cash balances with financial institutions
     in  excess of the  insurance  provided  by the  Federal  Deposit  Insurance
     Corporation (FDIC).

     The Company,  in the normal  course of business,  settles  wagers for other
     racetracks and is thereby exposed to credit risk. However,  receivables are
     generally not a significant  portion of the Company's  total assets and are
     comprised of a large number of accounts.

     E.   Cash and Cash Equivalents
          -------------------------

     Cash and cash  equivalents  include  cash on account,  demand  deposits and
     certificates of deposits with original maturities of less than three months
     at acquisition.

    F.    Restricted Cash
          ---------------

     Under New York States  Racing,  Pari-Mutuel  Wagering  and Breeding Law the
     track is  obliged  to  withhold a certain  percentage  of certain  types of
     wagers  towards  the  establishment  of a pool of money the use of which is
     restricted to the funding of approved capital improvements,  repairs and/or
     certain  advertising  expenses.  Periodically  during  the year  the  track
     petitions  the  Racing  and  Wagering  Board  to  certify  that  the  noted
     expenditures are eligible for re-imbursement  from the capital  improvement
     fund.  The  unexpended  balance is shown as restricted  cash on the balance
     sheet.

     G.   Property and Equipment
          ----------------------

     Plant and equipment are recorded at cost.  Depreciation is calculated using
     the  straight-line  basis over the  estimated  useful  lives of the related
     assets as follows: 15 years for grandstands and buildings, 5 to 7 years for


                                      F-8




                            CATSKILL DEVELOPMENT, LLC
                            -------------------------

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           DECEMBER 31, 2002 AND 2001


     equipment and 7 years for furniture and fixtures.


     H.   Real Estate Development
          -----------------------

     In  connection  with its real estate  activities,  the Company  capitalizes
     certain legal,  architectural,  engineering and environmental study fees as
     well as other costs directly related to the development of its real estate.
     (See Note 2)

     I.   Impairment of Assets
          --------------------

     In the event that facts and circumstances indicate that the carrying amount
     of tangible  assets or groups of assets may be impaired,  an  evaluation of
     recoverability  would be  performed.  If an  evaluation  is  required,  the
     estimate future undiscounted cash flows associated with the assets would be
     compared to the assets'  carrying  amount to determine  if a write-down  to
     market  value or  discounted  cash flow value is required.  Management  has
     determined that no impairment of assets has occurred.

     J.   Inventory
          ---------

     Inventory  is recorded at the lower of cost or market on a first in,  first
     out basis.

     K.   Revenue Recognition
          -------------------

     Wagering  revenues are  recognized  gross of purses,  stakes and awards and
     pari-mutual  wagering taxes.  The costs relating to these amounts are shown
     as "Purses, Awards and Other" in the accompanying Income Statements.

     L.   Advertising
          -----------

     The  Company  expenses  the costs of  general  advertising,  promotion  and
     marketing programs at the time the costs are incurred.

     M.   Income Taxes
          ------------

     The  Company  was formed as a limited  liability  company and elected to be
     treated as a partnership  for tax purposes,  and thus no income tax expense
     is  recorded  in the  statements.  Income  of the  Company  is taxed to the
     members  in their  respective  returns.  All  income  from  the 100%  owned
     subsidiary  is passed  to the  Company  because  of a  management  contract
     between  the  companies.   Therefore  no  tax  accrual  is  needed  on  the
     subsidiary's records.


                                      F-9




                            CATSKILL DEVELOPMENT, LLC
                            -------------------------

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           DECEMBER 31, 2002 AND 2001


2.   FIXED ASSETS
     ------------

                                               December 31, 2002              December 31, 2001
                                               -----------------              -----------------
Land                                                 $   770,000                       770,000
Buildings & Improvements                               8,517,724                     8,414,664
Furniture, Fixtures & Equipment                        1,253,302                     1,195,613
                                                     -----------                   -----------
Subtotal                                              10,541,026                    10,380,277
Less: Accumulated Depreciation                         4,684,780                     3,936,857
                                                     -----------                   -----------
Net Property and Equipment                           $ 5,856,246                     6,443,420
                                                     ===========                   ===========



     Depreciation  expense was $755,601 for the year ended December 31, 2002 and
     $743,716 for the year ended December 31, 2001. The above land and buildings
     are security for the mortgage described in Note 3.

     The Company is in the  business of  developing  real estate for  additional
     gaming  activities.  For the years ended  December  31, 2002 and 2001,  the
     Company had capitalized $327,870 and $111,645, respectively to continue its
     efforts.

3.   MEMBERS EQUITY AND SENIOR OBLIGATION
     ------------------------------------

     The members of the Company have contributed  considerable  amounts of money
     to the  Company to fund the  purchasing  of the Raceway  and  pursuing  the
     approval and  development of a Native  American  Casino on a portion of the
     Raceway  property.  These  contributions  (and a priority return of 10% per
     anum) and the mortgage  described below,  (with interest  compounded at 10%
     per annum) must be repaid before any net earnings from operations  would be
     available for  distribution to the Company's other members.  As of December
     31,  2002 the  aggregate  amount  needed to  satisfy  the  payment  of said
     contributions  (with priority returns) to certain members of the Company is
     $29,991,362.

     These preferred capital balances are subordinate to a mortgage,  payable to
     two members,  (the "Senior  Obligation"),  which at December 31, 2002,  and
     December 31, 2001 was  $6,821,375  and  $6,201,250  respectively  including
     accrued  interest at 10% per annum.  All payments  accrue and the principal
     and  accrued  interest  totaling  $8,052,550  is due  September  15,  2004.
     Currently,  any cash  flow from the  operations  of the  Raceway  are being
     retained by the Company for working capital purposes and to fund litigation
     and  development  expenses  in  conjunction  with  other  potential  gaming
     operations at the track.  As a result,  the Company is not expected to make


                                      F-10




                            CATSKILL DEVELOPMENT, LLC
                            -------------------------

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           DECEMBER 31, 2002 AND 2001


     any  distributions  with respect to certain other members'  interests until
     the Company has achieved  additional  net revenues  sufficient to discharge
     the payment of the Senior Obligation,  accrued interest,  preferred capital
     balance and priority returns.

     The  Company  was  formed as a limited  liability  company,  therefore  its
     members  individual  liability is limited under the appropriate laws of the
     State of New York.  The  Company  will  cease to exist  July 1,  2025.  The
     Company's  distinct  lines of business:  (A) casino  development;  (B) real
     estate  related  activities;  and  (C) the  gaming  operations  related  to
     Monticello Raceway including  pari-mutuel and future Video Lottery Terminal
     operations  are owned as follows:  (after the  transaction  of February 12,
     2002 noted below and the transaction of December 10, 2002 described in Note
     6 - Commitments and Contingencies)

                                                 Casino         Real Estate         Racing
                                              ------------   ----------------    ------------
                    Voting Members:
                    Alpha Monticello, Inc.       48.310           25.000            36.870
                    Americas Tower Partners      20.000           25.000            25.000
                    Monticello Realty, LLC       20.000           22.500            22.500
                    Watertone Holdings, LP        9.190           25.000            13.130

                    Non-Voting Members:
                    Cliff Ehrlich                 1.375            1.375             1.375
                    Fox-Hollow Lane, LLC          1.000            1.000             1.000
                    Shamrock Strategies, Inc.     0.125            0.125             0.125


     On February 12, 2002, Alpha Monticello,  Inc. (a wholly owned subsidiary of
     Empire Resorts, Inc. ("Empire"),  a member of the Company,  entered into an
     agreement with Watertone  Holdings LP  ("Watertone"),  also a member of the
     Company,  providing for the  acquisition of 47.5% of  Watertone's  economic
     interests in the casino and racetrack  business  components of the Company.
     The transaction contemplated by this agreement closed on March 12, 2002.


4.   RELATED PARTY TRANSACTIONS
     --------------------------

     As explained in Notes 1G and 2 the Company is in the business of developing
     real estate for  additional  gaming  activities.  In  connection  with this
     development the Company has paid various consulting fees to related parties
     consisting  of members or  directors  of Catskill  Development,  LLC.  From
     inception  through  December  31,  2002  the  Company  has  capitalized  as
     development costs $868,574 of such related party transactions.


                                      F-11




                            CATSKILL DEVELOPMENT, LLC
                            -------------------------

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           DECEMBER 31, 2002 AND 2001


5.   OPERATING LEASES
     ----------------

     At December 31, 2002 the Company had  commitments  under  operating  leases
     which end in 2006 for various  pieces of equipment  requiring  annual lease
     payments for the twelve months ending December 31 as follows:


             2003                           $151,321
             2004                            140,121
             2005                             18,451
             2006                              8,808
                                   ------------------
                  Total                     $318,701
                                   ==================


     Lease  expense was $165,721  and $153,208 for the years ended  December 31,
     2002 and 2001 respectively.

6.   COMMITMENTS AND CONTINGENCIES
     -----------------------------

     The Monticello Harness Horsemen's  Association,  Inc. has brought an action
     against Monticello Raceway  Management,  Inc. and one of the members of the
     Company  seeking the sum of  $1,300,0000  to be credited to the  horsemen's
     purse account.  The suit claims that revenues  received by the Raceway from
     various simulcasting sources were not properly credited to their horsemen's
     purse  account.  Management  has  responded  vigorously to contest the case
     after attempts at out-of-court  settlement  proved  fruitless.  On June 19,
     2003 the case was dismissed because of lack of subject matter jurisdiction.
     The  plaintiff  is expected to file a complaint  in the proper  court or to
     seek  alternative  dispute  resolution.  There are disputed  issues of fact
     between the  parties,  which makes an estimate of the outcome or the amount
     or range of loss  difficult  to gauge.  In  accordance  with  Statement  of
     Financial  Accounting  Standards No. 5, the amount of the loss, if any that
     may be  ultimately  realized  has not been  reflected  in the  accompanying
     financial statements.

     In July  1996,  the  Company  and its  members  entered  into a  series  of
     agreements  with the Mohawk Tribe related to the development of a casino on
     land adjacent to the Monticello Raceway in Monticello,  New York.  Pursuant
     to such agreements,  the Mohawk Tribe was to purchase certain land from the
     Company  and  various  affiliates  of the  Company  were to help  with  the
     development of a casino on the land and manage any resulting  casino.  More
     particularly, the Tribe entered into a Gaming Facility Management Agreement
     with Mohawk Management LLC ("MM"). Pursuant to such Agreement, MM was to be
     provided with the exclusive right to manage the Monticello Casino for seven
     (7) years from its opening and to receive certain fees for the provision of
     management and related services.


                                      F-12




                            CATSKILL DEVELOPMENT, LLC
                            -------------------------

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           DECEMBER 31, 2002 AND 2001


     Completion of the project  contemplated  by the agreements  with the Mohawk
     Tribe was  subject  to  certain  conditions,  including  the  obtaining  of
     relevant  federal  and  State  governmental  approvals.   The  Company,  in
     conjunction with its affiliates,  assumed responsibility for and undertook,
     seeking and obtaining all local,  state and federal  approvals  required or
     necessary  to  construct  and operate the Casino  Project.  By letter dated
     April 6,  2000,  addressed  to  Governor  George  Pataki,  Kevin  Governor,
     Assistant Secretary of the Department of the Interior, advised and notified
     the Governor of New York that the Company's  proposed  casino  project with
     the Mohawk Tribe had been  approved  and  specifically  requested  that the
     Governor concur.  However, on April 22, 2000, the Company became aware of a
     purported  letter  agreement  between  the  Mohawk  Tribe  and  Park  Place
     Entertainment  Corporation  ("PPE"),  which  agreement (with two irrelevant
     exceptions) purportedly gave PPE the exclusive rights to develop and manage
     any casino development the Mohawk Tribe may have in the State of New York.

     Since  2000,  the Company has been  engaged in  litigation  with Park Place
     Entertainment  ("PPE")  alleging  tortuous  interference  with contract and
     business  relationship  in regard to the Company's  agreements with the St.
     Regis Mohawk Tribe. On March 14, 2003, attorneys for the Plaintiffs filed a
     motion  requesting  the  District  Court to  vacate a  judgment,  which was
     adverse to the Company, issued on August 26th, 2002, on the ground that new
     evidence  has been found that has a material  bearing on  important  issues
     affecting the judgment.  The motion  indicates  that audio tapes of certain
     conversations  concerning  the  transaction  at issue in the case were made
     available to the plaintiffs by  Presidents,  R.C., the plaintiff in another
     case against PPE and that the tapes provide  evidence  which raise material
     issues  regarding  important  issues in the case and the positions taken by
     the  defendant.  The motion  requests that the judgment be vacated and that
     the  Plaintiffs  be  permitted  to  continue  discovery  and  file  amended
     pleadings  to reflect the  evidence  contained  in the case.  Although  the
     Company has been  advised by the  attorneys  handling the case that the new
     evidence relates to substantial important issues, it does not relate to all
     of the issues or charges in the  Plaintiff's  original  complaint or all of
     the issues  covered by the  pending  appeal in the case by the  Plaintiffs.
     Accordingly,  no assurance  can be given that the motion will be granted or
     that,  if  granted,  it  will  provide  relief  sufficient  to  permit  the
     Plaintiffs  to  proceed  with a trial  or  provide  evidence  that  will be
     available for purposes of the record in the appeal.

     Legal fees in connection  with the  aforementioned  litigation  amounted to
     $2,644,389  and  $2,228,077  for the years ended December 31, 2002 and 2001
     respectively.


                                      F-13




                            CATSKILL DEVELOPMENT, LLC
                            -------------------------

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           DECEMBER 31, 2002 AND 2001


     The  Company  is  also  a  party  to  a  various   non-environmental  legal
     proceedings  and  administrative  actions,  all arising  from the  ordinary
     course of business. Although it is impossible to predict the outcome of any
     legal  proceeding,  the Company  believes any liability that may finally be
     determined  with  respect  to such  legal  proceedings  should  not  have a
     material effect on The Company's consolidated  financial position,  results
     of operations or cash flows.

     In October 23, 2002, the Company retained CIBC World Markets Corporation to
     help it review its  strategic  alternatives  and assist in  maximizing  the
     value of its  assets.  The  Company  is in  negotiations  with a  federally
     recognized  Native American tribe in New York and various casino management
     and  development  entities  with  respect  to the  development  of a Native
     American  Casino.  The  development of a casino at the Raceway will require
     consummation  of  arrangements  with these parties and various  reviews and
     approvals.  No  assurances  can be given  that  such  arrangements  will be
     entered into or that any approvals will be obtained.

     On December 10, 2002,  Empire reached an agreement  with  Bryanston  Group,
     Inc.  ("Bryanston")  (a former  member of the  Company)  and certain  other
     affiliates  regarding  certain  obligations due from and claims against the
     Company.  Included in the agreement  with  Bryanston is the  acquisition of
     Bryanston's  interest  in  Catskill   Development,   including  its  voting
     membership interest and preferred capital account in the Company. Bryanston
     has agreed to transfer such interests to Empire.

7.   VIDEO LOTTERY TERMINALS
     -----------------------

     In October 2001, the New York State Legislature passed a bill that expanded
     the nature and scope of gaming in the state ("VLT  Legislation").  The bill
     was signed by the  Governor on October 31, 2001.  The  provision of the VLT
     Legislation  relevant to the Company  include:  a)  authority  given to the
     Governor to  negotiate  casino  licenses  for up to three  Native  American
     casinos in the  Catskills;  and b) the  authority for several of New York's
     racetracks,  including  the  Raceway,  to operate  video  lottery  terminal
     ("VLT") in their facilities. The VLT operation will be conducted by the New
     York State Lottery (the "Lottery") with the racetracks  functioning largely
     as agents for the Lottery.

     The Company  received a letter  from the  Lottery,  dated  March 21,  2002,
     advising the Raceway that the Lottery has completed  its initial  review of
     the  Raceway's  business  plan for the  operation  of VLT's at the  Raceway
     during  the  initial  three  year  trial  period   approved  by  the  State
     Legislature.  Based  on such  review,  the  Lottery  has  made  an  initial
     allocation  of 1,800  VLT's to the  Raceway  and has  approved  the maximum
     permitted rate for  compensation of 25% of revenues  generated after payout
     of prizes for the Raceway. The law currently provides that the Raceway must


                                      F-14




     apply 35% in the first year,  escalating to 45% in years two and three,  of
     its  compensation  to  enhance  purses  at the  Raceway  and each year must
     dedicate 5% of its compensation to a State Breeding Development Fund.

     The  business  plan was  submitted  at the request of the  Lottery,  and in
     accordance  with Lottery  procedures,  does not represent a final  decision
     with respect to the  implementation  of VLT's by the Company.  The business
     plan  includes  certain  assumptions  recommended  by the Lottery and other
     estimates  considered  preliminary  by the  Company The Lottery has not yet
     established  a firm start date or adopted  regulations  with  regard to the
     program.

     On May 16, 2002, the New York State Legislature  passed a bill that further
     expanded  the  October  2001 VLT  Legislation.  This bill  extends the test
     period under the current law from three years to a period  ending  December
     31,  2007.  Further,  the bill  authorizes  each  track  to  enter  into an
     agreement  with the  organization  representing  its horsemen to reduce the
     percentage of its vendor fees  dedicated to enhancing  purses at such track
     during the initial three years, to an amount not less than 25 percent. That
     bill was signed by the Governor on May 29, 2002. In addition, the Company's
     ability to proceed  with the VLT  program may be impacted by its plans with
     respect to casino development at the site.

8.   SUBSEQUENT EVENTS
     -----------------

     On  February  4, 2003 the  Company  entered  into a Letter  of Intent  with
     Empire,  its partner in  developing  gaming  activities  at the  Monticello
     Raceway (the "Raceway") and other related entities.  The agreement provides
     for Empire to acquire a 48 year ground lease on the Raceway and  contiguous
     properties,  together with all of the Company's  development and management
     rights with respect to the site and related gaming activities,  in exchange
     for an 80.25% position in Empire's common stock.

     The Letter of Intent provides for the Company to lease its 230-acre Raceway
     property  to Empire  for a period  of 48 years  for an annual  base rent of
     $1,800,000.  Lease  terms are to  contain  certain  options  for  Empire to
     acquire  title to portions of the  property.  Empire will have the right to
     purchase  a 29-acre  parcel  for the  purpose  of placing it in trust for a
     Native  American  Tribe or Nation at the purchase price of $1. The exercise
     of  such  option  will  require  obtaining   necessary  federal  and  state
     approvals.  In addition, the remaining property may be purchased within two
     years of the opening of a casino at the present  value of the ground  lease
     at the time of such exercise.


                                      F-15




                            CATSKILL DEVELOPMENT, LLC
                            -------------------------

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           DECEMBER 31, 2002 AND 2001

     The  agreement  is  subject  to the  execution  of  definitive  agreements,
     approvals  by  Empire's   Board  of  Directors  and  an  opinion  that  the
     transaction   will  be  tax-free   to  all  parties  and  other   technical
     requirements,  including a fairness opinion. No assurance can be given that
     the transactions provided for in the Letter of Intent will ultimately occur
     or will occur at the times and on the terms and conditions contained in the
     Letter of Intent.

     On April 3, 2003,  the Cayuga  Nation,  a New York  State  based  federally
     recognized Indian Nation (the "Cayuga Nation"),  the Company and certain of
     the Company affiliates,  including a subsidiary of the Company entered into
     a series of agreements  which provide for the  development  of a trust land
     casino adjacent to the Raceway.  In furtherance of these  transactions,  on
     April 10, 2003, the Cayuga Nation, Empire and the Company, officially filed
     with the  Eastern  Regional  Office of the  Bureau of  Indian  Affairs,  an
     application  requesting that the Secretary of the Interior acquire in trust
     on behalf of the Cayuga Nation a 30 acre parcel of land in Monticello,  New
     York to be used for gaming purposes. This transaction,  if completed, gives
     Empire control of the Raceway and all  development  rights for the proposed
     Native  American  casino and any potential  future video  lottery  terminal
     operations. The Company believes this will strengthen our ability to obtain
     new  financing on reasonable  terms and our  long-term  viability and hopes
     that this  transaction  will close  sometime in the third  quarter of 2003,
     although  there  are a  number  of  approvals  that  must be  obtained  and
     conditions that must be met.

     On May 15,  2003,  New  York  State  enacted  legislation  to  enhance  the
     incentives  for racetracks in the State to participate in the State's Video
     Lottery program.  Although  legislation had authorized the program earlier,
     none of the  racetracks  authorized to participate in the program had found
     the terms  sufficiently  attractive to justify the  investment  required to
     participate in the program. Under the newly enacted legislative amendments,
     the initial term of the program has been extended to 10-years from the date
     of  inception  and  permits  year round  operations  with  extended  hours.
     Approximately 29% of total VLT revenue received is to be distributed to the
     tracks and their  horsemen/  breeders  associations.  A  percentage  of VLT
     revenues is to be made available to provide gradually increasing purses for
     the horsemen and for a breeding fund,  thus improving the quality of racing
     at the track.  During the initial  eighteen  months of the program,  the NY
     State  Lottery  has the ability to approve  the  opening of  temporary  VLT
     structures -- while more comprehensive construction takes place.

     Pursuant to the original  legislation,  the New York State  Lottery made an
     allocation  of 1,800  VLT's to  Monticello  Raceway.  If market  conditions
     permit,  additional  machines may be added without the need for  additional
     legislation.


                                      F-16





                            Catskill Development, LLC
                           Consolidated Balance Sheets
                             June 30, 2003 and 2002


                                                              June 30, 2003               June 30, 2002
                                                          ---------------------       ---------------------
ASSETS

Current Assets:
   Cash & Cash Equivalents                                     $ 1,395,998                     875,294
   Restricted Cash                                                  95,040                      56,444
   Other Current Assets                                            864,437                     773,899
                                                               -----------                 -----------

       Total Current Assets                                      2,355,475                   1,705,637
                                                               -----------                 -----------

Net Property and Equipment                                       5,575,775                   6,105,342
                                                               -----------                 -----------

Real Estate Development                                          6,789,804                   5,867,004
                                                               -----------                 -----------

       Total Assets                                            $14,721,054                  13,677,983
                                                               ===========                 ===========



LIABILITIES AND MEMEBERS' EQUITY

Current Liabilities:
   Accounts Payable and Accrued Expenses                       $ 2,947,394                   2,345,374
                                                               -----------                 -----------

       Total Current Liabilities                                 2,947,394                   2,345,374
                                                               -----------                 -----------

Long-Term Debt:
   Notes Payable                                                 7,154,125                   6,503,750
                                                               -----------                 -----------
       Total Long-Term Debt                                      7,154,125                   6,503,750
                                                               -----------                 -----------


Members' Equity                                                  4,619,535                   4,828,859
                                                               -----------                 -----------

Total Liabilities and Members' Equity                          $14,721,054                  13,677,983
                                                               ===========                 ===========


                 See Accompanying Notes And Accountant's Report

                                      F-17



                            Catskill Development, LLC
                         Consolidated Income Statements
                 For the Six Months Ended June 30, 2003 and 2002


                                              June 30, 2003       June 30, 2002
                                              -------------       --------------

Revenues                                        $ 4,834,223           5,515,866
                                                -----------         -----------

Costs and Expenses
   Purses, Awards and Other                       1,667,061           1,940,205
   General and Administrative                     3,862,643           4,573,275
   Depreciation                                     347,850             376,022
   Interest                                         332,893             302,890
                                                -----------         -----------

     Total Costs and Expenses                     6,210,447           7,192,392
                                                -----------         -----------

       Net (Loss)                               $(1,376,224)         (1,676,526)
                                                ===========         ===========



                 See Accompanying Notes And Accountant's Report

                                      F-18



                            Catskill Development, LLC
                      Consolidated Statements of Cash Flows
                 For the Six Months Ended June 30, 2003 and 2002



                                                    June 30, 2003     June 30, 2002
                                                    -------------     -------------

Operating Activities:
  Net Loss                                            $(1,376,224)    (1,676,526)
     Adjustments to reconcile net loss to net cash
     Provided(Used) by operating activities:
        Depreciation                                      347,850        376,022
        Loss on Asset Disposal                             (5,202)          --
        Accrued Interest Not Paid                         332,750        302,500

  (Increase) Decrease in:
     Restricted Cash                                      (52,664)        21,626
     Other Current Assets                                 504,355         32,406

  Increase (Decrease) in:
     Accounts Payable and Accrued Expenses                361,485        625,147
                                                      -----------    -----------

  Net Cash Provided  (Used) by Operating Activities       112,350       (318,825)
                                                      -----------    -----------

  Investing Activities:
     Purchase of Property, Plant and Equipment            (62,178)       (37,945)
     Real Estate Development                             (721,335)      (126,405)
                                                      -----------    -----------
          Net Cash Used in Investing Activities          (783,513)      (164,350)
                                                      -----------    -----------

  Financing Activities:
     Member Contributions                               1,423,297           --
                                                      -----------    -----------

          Net Cash Provided by Financing Activities     1,423,297           --
                                                      -----------    -----------


  Net Increase (Decrease) in Cash                         752,134       (483,175)
  Cash at Beginning of Period                             643,864      1,358,469
                                                      -----------    -----------

  Cash at End of Period                               $ 1,395,998        875,294
                                                      ===========    ===========


  Supplemental Disclosures:
     Interest Paid                                    $        38            180



                 See Accompanying Notes And Accountant's Report


                                      F-19




                            Catskill Development, LLC
              Consolidated Statements of Changes in Member's Equity
                 For the Six Months Ended June 30, 2003 and 2002


                                     Preferred              Other                                     Total
                                      Capital              Capital           Accumulated             Members
                                   Contributions         Contributions         Deficit                Equity
                                   -----------          -----------          -----------           -----------

Balance December 31, 2002          $16,724,793                  400          (12,152,731)            4,572,462

Capital Contributions                1,423,297                 --                   --               1,423,297

Net (Loss)                                --                   --             (1,376,224)           (1,376,224)
                                   -----------          -----------          -----------           -----------


Balance June 30, 2003              $18,148,090                  400          (13,528,955)            4,619,535
                                   ===========          ===========          ===========           ===========




Balance December 31, 2001          $16,728,693                  400          (10,223,708)            6,505,385

Net (Loss)                                --                   --             (1,676,526)           (1,676,526)
                                   -----------          -----------          -----------           -----------

Balance June 30, 2002               $16,728,693                 400          (11,900,234)            4,828,859
                                   ===========          ===========          ===========           ===========


                 See Accompanying Notes And Accountant's Report

                                      F-20




                            Catskill Development, LLC
                            -------------------------

                   Notes to Consolidated Financial Statements
                             June 30, 2003 and 2002


1.  SIGNIFICANT ACCOUNTING POLICIES
    -------------------------------

     This summary of significant  accounting  policies of Catskill  Development,
     LLC (the  Company) is presented to assist in  understanding  the  Company's
     financial  statements.  These  accounting  policies have been  consistently
     applied in the preparation of the financial statements,  and all normal and
     recurring   adjustments  and  accruals  considered  necessary  for  a  fair
     presentation have been included. Operating results for the six month period
     ended June 30, 2003 are not necessarily  indicative of the results that may
     be expected for the year ended December 31, 2003.

     A. Organization and Business Activity
        ----------------------------------

     In October 1995,  Catskill  Development,  LLC, a New York limited liability
     company, was formed to pursue the development of a proposed Native American
     Casino  in  Monticello,  New York (the  "Casino  Project").  The  Company's
     business  plan  envisioned  three  distinct  lines of  business:  a) casino
     activities; b) real estate related activities; and c) the gaming operations
     related to Monticello  Raceway (the  "Raceway")  including  pari-mutuel and
     future  Video  Lottery  Terminal  ("VLT")  operations.  Monticello  Raceway
     Management.  Inc.  (MRMI),  a  New  York  Corporation,  is a  wholly  owned
     subsidiary  and was  formed  to hold  the  pari-mutuel  license.  .  Mohawk
     Management, LLC (MM), a New Your Limited Liability Company, is 60% owned by
     the  Company  and was  formed  to  manage  the  St.  Regis  Mohawk  Casino.
     Monticello  Casino  Management,  LLC (MCM),  a New York  Limited  Liability
     Company,  is 60% owned by the  Company  and was  formed to manage any other
     Native American Casino at the Raceway. Both MM and MCM are inactive at this
     time.

     Currently,  the Company conducts pari-mutuel wagering on live race meetings
     for Standard  bred horses and  participates  in intrastate  and  interstate
     simulcast  wagering at the Raceway in  Monticello,  New York. The Company's
     operations  are  subject to  regulation  by the New York  State  Racing and
     Wagering Board.

     The Company  continues to pursue a Native  American  Casino  Project at the
     Raceway. However, to this point it has been unsuccessful (see Note 8).

     B.  PRINCIPLES OF CONSOLIDATION
         ---------------------------

     The accompanying  consolidated financial statements include the accounts of
     the Company's  subsidiaries,  Monticello Raceway  Managements,  Inc, Mohawk
     Management,  LLC and Monticello  Casino  Management,  LLC. All  significant


                                      F-21




                            Catskill Development, LLC
                            -------------------------

                   Notes to Consolidated Financial Statements
                             June 30, 2003 and 2002


     inter-company   balances  and   transactions   have  been   eliminated   in
     consolidation.

     C.   Use of Estimates
          ----------------

     The  preparation  of financial  statements  in conformity  with  accounting
     principles  generally  accepted  in the United  States of America  required
     management  to make  estimates  and  assumptions  that affect the  reported
     amounts of assets and liabilities  and disclosure of contingent  assets and
     liabilities  at the  dates of the  financial  statements  and the  reported
     amounts of revenues  and  expenses  during the  reporting  periods.  Actual
     results could differ from those estimated.

     D.  Concentrations of Credit Risk
         -----------------------------

     The Company maintains significant cash balances with financial institutions
     in  excess of the  insurance  provided  by the  Federal  Deposit  Insurance
     Corporation (FDIC).

     The Company,  in the normal  course of business,  settles  wagers for other
     racetracks and is thereby exposed to credit risk. However,  receivables are
     generally not a significant  portion of the Company's  total assets and are
     comprised of a large number of accounts.

     E.  Cash and Cash Equivalents
         -------------------------

     Cash and cash  equivalents  include  cash on account,  demand  deposits and
     certificates of deposits with original maturities of less than three months
     at acquisition.

     F.  Restricted Cash
         ---------------

     Under New York States  Racing,  Pari-Mutuel  Wagering  and Breeding Law the
     track is  obliged  to  withhold a certain  percentage  of certain  types of
     wagers  towards  the  establishment  of a pool of money the use of which is
     restricted to the funding of approved capital improvements,  repairs and/or
     certain  advertising  expenses.  Periodically  during  the year  the  track
     petitions  the  Racing  and  Wagering  Board  to  certify  that  the  noted
     expenditures are eligible for re-imbursement  from the capital  improvement
     fund.  The  unexpended  balance is shown as restricted  cash on the balance
     sheet.

     G.  Property, and Equipment
         -----------------------


                                      F-22




                            Catskill Development, LLC
                            -------------------------

                   Notes to Consolidated Financial Statements
                             June 30, 2003 and 2002


     Plant and equipment are recorded at cost.  Depreciation is calculated using
     the  straight-line  basis over the  estimated  useful  lives of the related
     assets as follows: 15 years for grandstands and buildings, 5 to 7 years for
     equipment and 7 years for furniture and fixtures.


     H.  Real Estate Development
         -----------------------

     In  connection  with its real estate  activities,  the Company  capitalizes
     certain legal,  architectural,  engineering and environmental study fees as
     well as other costs directly related to the development of its real estate.
     (See Note 2)

     I.  Impairment of Assets
         --------------------

     In the event that facts and circumstances indicate that the carrying amount
     of tangible  assets or groups of assets may be impaired,  an  evaluation of
     recoverability  would be  performed.  If an  evaluation  is  required,  the
     estimate future undiscounted cash flows associated with the assets would be
     compared to the assets'  carrying  amount to determine  if a write-down  to
     market  value or  discounted  cash flow value is required.  Management  has
     determined that no impairment of assets has occurred.

     J.  Inventory
         ---------

     Inventory  is recorded at the lower of cost or market on a first in,  first
     out basis.

     K.  Revenue Recognition
         -------------------

     Wagering  revenues are  recognized  gross of purses,  stakes and awards and
     pari-mutual  wagering taxes.  The costs relating to these amounts are shown
     as "Purses, Awards and Other" in the accompanying Income Statements.

     L.  Advertising
         -----------

     The  Company  expenses  the costs of  general  advertising,  promotion  and
     marketing programs at the time the costs are incurred.


                                      F-23




                            Catskill Development, LLC
                            -------------------------

                   Notes to Consolidated Financial Statements
                             June 30, 2003 and 2002


     M.  Income Taxes
         ------------

     The  Company  was formed as a limited  liability  company and elected to be
     treated as a partnership  for tax purposes,  and thus no income tax expense
     is  recorded  in the  statements.  Income  of the  Company  is taxed to the
     members  in their  respective  returns.  All  income  from  the 100%  owned
     subsidiary  is passed  to the  Company  because  of a  management  contract
     between  the  companies.   Therefore  no  tax  accrual  is  needed  on  the
     subsidiary's records.

2.   FIXED ASSETS
     ------------

                                              June 30, 2003         June 30, 2002
                                              -------------         --------------
Land                                            $   770,000              770,000
Buildings & Improvements                          8,574,666            8,414,664
Furniture, Fixtures & Equipment                   1,258,538            1,233,558
                                                -----------          -----------
   Subtotal                                      10,603,204           10,418,222
Less: Accumulated Depreciation                    5,027,429            4,312,880
                                                -----------          -----------
   Net Property and Equipment                   $ 5,575,775            6,105,342
                                                ===========          ===========


     Depreciation  expense was  $347,850  and  $376,022 for the six months ended
     June 30,  2003 and 2002  respectively.  The above  land and  buildings  are
     security for the mortgage described in Note 3.

     The Company is in the  business of  developing  real estate for  additional
     gaming  activities.  For the six months  ended June 30, 2003 and 2002,  the
     Company had capitalized $721,335 and $126,405, respectively to continue its
     efforts.

3.   MEMBERS EQUITY AND SENIOR OBLIGATION
     ------------------------------------

     The members of the Company have contributed  considerable  amounts of money
     to the  Company to fund the  purchasing  of the Raceway  and  pursuing  the
     approval and  development of a Native  American  Casino on a portion of the
     Raceway  property.  These  contributions  (and a priority return of 10% per
     anum) and the mortgage  described below,  (with interest  compounded at 10%
     per annum) must be repaid before any net earnings from operations  would be
     available for  distribution to the Company's other members.  As of June, 30
     2003  the   aggregate   amount  needed  to  satisfy  the  payment  of  said
     contributions  (with priority returns) to certain members of the Company is
     $34,539,867.


                                      F-24




                            Catskill Development, LLC
                            -------------------------

                   Notes to Consolidated Financial Statements
                             June 30, 2003 and 2002


     These preferred capital balances are subordinate to a mortgage,  payable to
     two members,  (the "Senior  Obligation"),  which at June 30, 2003, and 2002
     was $7,154,125 and $6,503,750  respectively  including  accrued interest at
     10% per annum.  All payments accrue and the principal and accrued  interest
     totaling  $8,052,550 is due September  15, 2004.  Currently,  any cash flow
     from the  operations  of the Raceway are being  retained by the Company for
     working capital purposes and to fund litigation and development expenses in
     conjunction  with other  potential  gaming  operations  at the track.  As a
     result,  the Company is not expected to make any distributions with respect
     to  certain  other  members'  interests  until  the  Company  has  achieved
     additional  net revenues  sufficient to discharge the payment of the Senior
     Obligation,  accrued  interest,  preferred  capital  balance  and  priority
     returns.

     The  Company  was  formed as a limited  liability  company,  therefore  its
     members  individual  liability is limited under the appropriate laws of the
     State of New York.  The  Company  will  cease to exist  July 1,  2025.  The
     Company's  distinct  lines of business:  (A) casino  development;  (B) real
     estate  related  activities;  and  (C) the  gaming  operations  related  to
     Monticello Raceway including  pari-mutuel and future Video Lottery Terminal
     operations are owned as follows:


                                                 Casino             Real Estate          Racing
                                            -----------------   ------------------   --------------
               Voting Members:
               --------------
               Alpha Monticello, Inc.            48.310              25.000              36.870
               Americas Tower Partners           20.000              25.000              25.000
               Monticello Realty, LLC            20.000              22.500              22.500
               Watertone Holdings, LP             9.190              25.000              13.130

               Non-Voting Members:
               ------------------
               Cliff Ehrlich                      1.375               1.375               1.375
               Fox-Hollow Lane, LLC               1.000               1.000               1.000
               Shamrock Strategies, Inc.          0.125               0.125               0.125




4.   RELATED PARTY TRANSACTIONS
     --------------------------

     As explained in Notes 1G and 2 the Company is in the business of developing
     real estate for  additional  gaming  activities.  In  connection  with this
     development the Company has paid various consulting fees to related parties
     consisting  of members or  directors  of Catskill  Development,  LLC.  From
     inception  through June 30, 2003 the Company has capitalized as development
     costs $976,858 of such related party transactions.


                                      F-25




                            Catskill Development, LLC
                            -------------------------

                   Notes to Consolidated Financial Statements
                             June 30, 2003 and 2002


5.   OPERATING LEASES
     ----------------

     At June 30, 2003 the Company had commitments  under operating  leases which
     end in 2006 for various pieces of equipment requiring annual lease payments
     for the twelve months ending June 30 as follows:

             2004                           $ 150,921
             2005                              76,374
             2006                              17,616
                                   -------------------

                  Total                     $ 244,911
                                   ===================



     Lease  expense was  $77,461  and $82,860 for the six months  ended June 30,
     2003 and 2002 respectively.

6.   COMMITMENTS AND CONTINGENCIES
     -----------------------------

     The Monticello Harness Horsemen's  Association,  Inc. has brought an action
     against Monticello Raceway  Management,  Inc. and one of the members of the
     Company  seeking the sum of  $1,562,776  to be  credited to the  horsemen's
     purse account and an additional  $4,000,000 in punitive  damages.  The suit
     claims that  revenues  received by the Raceway  from  various  simulcasting
     sources were not properly  credited to their  horsemen's  purse account.  A
     separate action seeking $50,000  questions the proper  assignment of stalls
     to the Horseman.  Management  has responded  vigorously to contest the case
     after  attempts at  out-of-court  settlement  proved  fruitless.  There are
     disputed issues of fact between the parties, which makes an estimate of the
     outcome or the amount or range of loss  difficult to gauge.  In  accordance
     with Statement of Financial  Accounting  Standards No. 5, the amount of the
     loss, if any that may be ultimately  realized has not been reflected in the
     accompanying financial statements.

     In July  1996,  the  Company  and its  members  entered  into a  series  of
     agreements  with the Mohawk Tribe related to the development of a casino on
     land adjacent to the Monticello Raceway in Monticello,  New York.  Pursuant
     to such agreements,  the Mohawk Tribe was to purchase certain land from the
     Company  and  various  affiliates  of the  Company  were to help  with  the
     development of a casino on the land and manage any resulting  casino.  More
     particularly, the Tribe entered into a Gaming Facility Management Agreement
     with Mohawk Management LLC ("MM"). Pursuant to such Agreement, MM was to be
     provided with the exclusive right to manage the Monticello Casino for seven
     (7) years from its opening and to receive certain fees for the provision of
     management and related services.



                                      F-26




                            Catskill Development, LLC
                            -------------------------

                   Notes to Consolidated Financial Statements
                             June 30, 2003 and 2002


     Completion of the project  contemplated  by the agreements  with the Mohawk
     Tribe was  subject  to  certain  conditions,  including  the  obtaining  of
     relevant  federal  and  State  governmental  approvals.   The  Company,  in
     conjunction with its affiliates,  assumed responsibility for and undertook,
     seeking and obtaining all local,  state and federal  approvals  required or
     necessary  to  construct  and operate the Casino  Project.  By letter dated
     April 6,  2000,  addressed  to  Governor  George  Pataki,  Kevin  Governor,
     Assistant Secretary of the Department of the Interior, advised and notified
     the Governor of New York that the Company's  proposed  casino  project with
     the Mohawk Tribe had been  approved  and  specifically  requested  that the
     Governor concur.  However, on April 22, 2000, the Company became aware of a
     purported  letter  agreement  between  the  Mohawk  Tribe  and  Park  Place
     Entertainment  Corporation  ("PPE"),  which  agreement (with two irrelevant
     exceptions) purportedly gave PPE the exclusive rights to develop and manage
     any casino development the Mohawk Tribe may have in the State of New York.

     Since  2000,  the Company has been  engaged in  litigation  with Park Place
     Entertainment  ("PPE")  alleging  tortuous  interference  with contract and
     business  relationship  in regard to the Company's  agreements with the St.
     Regis Mohawk Tribe. On March 14, 2003, attorneys for the Plaintiffs filed a
     motion  requesting  the  District  Court to  vacate a  judgment,  which was
     adverse to the Company, issued on August 26th, 2002, on the ground that new
     evidence  has been found that has a material  bearing on  important  issues
     affecting the judgment.  The motion  indicates  that audio tapes of certain
     conversations  concerning  the  transaction  at issue in the case were made
     available to the plaintiffs by  Presidents,  R.C., the plaintiff in another
     case against PPE and that the tapes provide  evidence  which raise material
     issues  regarding  important  issues in the case and the positions taken by
     the  defendant.  The motion  requests that the judgment be vacated and that
     the  Plaintiffs  be  permitted  to  continue  discovery  and  file  amended
     pleadings  to reflect the  evidence  contained  in the case.  Although  the
     Company has been  advised by the  attorneys  handling the case that the new
     evidence relates to substantial important issues, it does not relate to all
     of the issues or charges in the  Plaintiff's  original  complaint or all of
     the issues  covered by the  pending  appeal in the case by the  Plaintiffs.
     Accordingly,  no assurance  can be given that the motion will be granted or
     that,  if  granted,  it  will  provide  relief  sufficient  to  permit  the
     Plaintiffs  to  proceed  with a trial  or  provide  evidence  that  will be
     available for purposes of the record in the appeal.

     Legal fees in connection  with the  aforementioned  litigation  amounted to
     $1,018,028  and  $1,945,255 for the six months ended June 30, 2003 and 2002
     respectively.

     The  Company  is  also  a  party  to  a  various   non-environmental  legal
     proceedings  and  administrative  actions,  all arising  from the  ordinary
     course of business. Although it is impossible to predict the outcome of any


                                      F-27




                            Catskill Development, LLC
                            -------------------------

                   Notes to Consolidated Financial Statements
                             June 30, 2003 and 2002

     legal  proceeding,  the Company  believes any liability that may finally be
     determined  with  respect  to such  legal  proceedings  should  not  have a
     material effect on The Company's consolidated  financial position,  results
     of operations or cash flows.

     In October 23, 2002, the Company retained CIBC World Markets Corporation to
     help it review its  strategic  alternatives  and assist in  maximizing  the
     value of its  assets.  The  Company  is in  negotiations  with a  federally
     recognized  Native American tribe in New York and various casino management
     and  development  entities  with  respect  to the  development  of a Native
     American  Casino.  The  development of a casino at the Raceway will require
     consummation  of  arrangements  with these parties and various  reviews and
     approvals.  No  assurances  can be given  that  such  arrangements  will be
     entered into or that any approvals will be obtained.



7.   VIDEO LOTTERY TERMINALS
     -----------------------

     In October 2001, the New York State Legislature passed a bill that expanded
     the nature and scope of gaming in the state ("VLT  Legislation").  The bill
     was signed by the  Governor on October 31, 2001.  The  provision of the VLT
     Legislation  relevant to the Company  include:  a)  authority  given to the
     Governor to  negotiate  casino  licenses  for up to three  Native  American
     casinos in the  Catskills;  and b) the  authority for several of New York's
     racetracks,  including  the  Raceway,  to operate  video  lottery  terminal
     ("VLT") in their facilities. The VLT operation will be conducted by the New
     York State Lottery (the "Lottery") with the racetracks  functioning largely
     as agents for the Lottery.

     The Company  received a letter  from the  Lottery,  dated  March 21,  2002,
     advising the Raceway that the Lottery has completed  its initial  review of
     the  Raceway's  business  plan for the  operation  of VLT's at the  Raceway
     during  the  initial  three  year  trial  period   approved  by  the  State
     Legislature.  Based  on such  review,  the  Lottery  has  made  an  initial
     allocation of 1,800 VLT's to the Raceway.

     The  business  plan was  submitted  at the request of the  Lottery,  and in
     accordance  with Lottery  procedures,  does not represent a final  decision
     with respect to the  implementation  of VLT's by the Company.  The business
     plan  includes  certain  assumptions  recommended  by the Lottery and other
     estimates  considered  preliminary  by the  Company The Lottery has not yet
     established  a firm start date or adopted  regulations  with  regard to the
     program.

     On May 15,  2003,  New  York  State  enacted  legislation  to  enhance  the
     incentives  for racetracks in the State to participate in the State's Video
     Lottery program.  Although  legislation had authorized the program earlier,


                                      F-28




                            Catskill Development, LLC
                            -------------------------

                   Notes to Consolidated Financial Statements
                             June 30, 2003 and 2002

     none of the  racetracks  authorized to participate in the program had found
     the terms  sufficiently  attractive to justify the  investment  required to
     participate in the program. Under the newly enacted legislative amendments,
     the initial term of the program has been extended to 10-years from the date
     of  inception  and  permits  year round  operations  with  extended  hours.
     Approximately 29% of total VLT revenue received is to be distributed to the
     tracks and their  horsemen/  breeders  associations.  A  percentage  of VLT
     revenues is to be made available to provide gradually increasing purses for
     the horsemen and for a breeding fund,  thus improving the quality of racing
     at the track.  During the initial  eighteen  months of the program,  the NY
     State  Lottery  has the ability to approve  the  opening of  temporary  VLT
     structures -- while more comprehensive  construction takes place.  Pursuant
     to the original legislation,  the New York State Lottery made an allocation
     of  1,800  VLT's  to  Monticello  Raceway.  If  market  conditions  permit,
     additional   machines  may  be  added  without  the  need  for   additional
     legislation.

8.   CASINO DEVELOPMENT
     ------------------

     On April 3, 2003,  the Cayuga  Nation,  a New York  State  based  federally
     recognized Indian Nation (the "Cayuga Nation"),  the Company and certain of
     the Company affiliates,  including a subsidiary of the Company entered into
     a series of agreements  which provide for the  development  of a trust land
     casino adjacent to the Raceway.  In furtherance of these  transactions,  on
     April 10, 2003, the Cayuga Nation, Empire and the Company, officially filed
     with the  Eastern  Regional  Office of the  Bureau of  Indian  Affairs,  an
     application  requesting that the Secretary of the Interior acquire in trust
     on behalf of the Cayuga Nation a 30 acre parcel of land in Monticello,  New
     York to be used for gaming purposes. This transaction,  if completed, gives
     Empire control of the Raceway and all  development  rights for the proposed
     Native  American  casino and any potential  future video  lottery  terminal
     operations. The Company believes this will strengthen our ability to obtain
     new  financing on reasonable  terms and our  long-term  viability and hopes
     that this  transaction  will close  sometime in the fourth quarter of 2003,
     although  there  are a  number  of  approvals  that  must be  obtained  and
     conditions that must be met.

9.   SUBSEQUENT EVENTS
     -----------------

     On July 3,  2003 the  Company  entered  into a  Definitive  Agreement  with
     Empire,  its partner in  developing  gaming  activities  at the  Monticello
     Raceway (the "Raceway") and other related entities.  The agreement provides
     for Empire to acquire a 48 year ground lease on the Raceway and  contiguous
     properties,  together with all of the Company's  development and management
     rights with respect to the site and related gaming activities,  in exchange
     for an 80.25% position in Empire's common stock.


                                      F-29




                            Catskill Development, LLC
                            -------------------------

                   Notes to Consolidated Financial Statements
                             June 30, 2003 and 2002


     The  Definitive  Agreement  provides  for the Company to lease its 230-acre
     Raceway property to Empire for a period of 48 years for an annual base rent
     of  $1,800,000.  The Lease  terms are to contain  certain  options  for the
     Company to acquire title to portions of the property.  The exercise of such
     option will  require  obtaining  necessary  federal and state  approvals to
     create  a Native  American  gaming  facility  on the  property.  If such an
     approval  is  reached,  the  Company  will  have the  ability  to apply any
     proceeds that Catskill receives for the Casino project,  in relation to the
     land placed in trust,  and apply  those  proceeds  against  the  negotiated
     purchase price.


     On July  17,  2003  The New  York  State  Supreme  Court  decided  that the
     Legislature did not violate the state  constitution  when it authorized the
     governor to sign accords with Indian tribes  allowing them to build six new
     casinos.  Judge Joseph  Teresi,  an Albany  County  judge,  also ruled that
     racetracks  could install video lottery  terminals and the state could take
     part in interstate lotteries.


                                      F-30




                         REPORT OF INDEPENDENT AUDITORS


To the Members of
Monticello Raceway Development, LLC

We  have  audited  the  accompanying   balance  sheets  of  Monticello   Raceway
Development  Company,  LLC as of  December  31,  2002 and 2001,  and the related
income statements, changes in member's equity and cash flows for the years ended
December 31, 2002 and 2001. These financial statements are the responsibility of
the Company's  management.  Our responsibility is to express an opinion on these
financial statements based on our audits.

We conducted our audits in  accordance  with United  States  generally  accepted
auditing  standards.  Those standards require that we plan and perform the audit
to obtain reasonable  assurance about whether the financial  statements are free
of material misstatement. An audit includes examining, on a test basis, evidence
supporting  the amounts and  disclosures in the financial  statements.  An audit
also includes assessing the accounting principles used and significant estimates
made by  management,  as well as  evaluating  the  overall  financial  statement
presentation.  We believe  that our audits  provide a  reasonable  basis for our
opinion.

In our opinion,  the financial  statements  referred to above present fairly, in
all material respects,  the financial position of Monticello Raceway Development
Company,  LLC at December 31, 2002 and 2001,  and the results of its  operations
and its cash flows for the years ended December 31, 2002 and 2001, in conformity
with United States generally accepted accounting principles.


/s/ Bachrach, Waschitz & Waschitz, LLP
--------------------------------------

July 18, 2003

                                      F-31




                   Monticello Raceway Development Company, LLC
                                 Balance Sheets
                     December 31, 2002 and December 31, 2001


                                                       December 31, 2002    December 31, 2001
                                                       -----------------    ------------------
ASSETS

Current Assets:
   Due From Members                                    $             200                  200
                                                       -----------------    ------------------

       Total Assets                                    $             200                  200
                                                       =================    ==================



LIABILITIES AND MEMEBERS' EQUITY

Current Liabilities:
   Accounts Payable and Accrued Expenses               $              --                    --
                                                       -----------------    ------------------

       Total Current Liabilities                                      --                    --
                                                       -----------------    ------------------


Members' Equity                                                      200                   200
                                                       -----------------    ------------------

Total Liabilities and Members' Equity                  $             200                   200
                                                       =================    ==================


                        See Notes To Financial Statements


                                      F-32




                   Monticello Raceway Development Company, LLC
                                Income Statements
                 For the Years Ended December 31, 2002 and 2001





                                       December 31, 2002                   December 31, 2001
                                ---------------------------------   --------------------------------

Revenues                        $                              -                                  -
                                ---------------------------------   --------------------------------
Costs and Expenses                                             -                                  -
                                ---------------------------------   --------------------------------
   Net Income                   $                              -                                  -
                                =================================   ================================


                        See Notes To Financial Statements


                                      F-32




                  Monticello Raceway Development Company, LLC
                           Statements of Cash Flows
                 For the Years Ended December 31, 2002 and 2001



                                                            December 31, 2002                    December 31, 2001
                                                            -----------------------------   -----------------------------

Operating Activities:
Net Income                                                  $                              -                                  -

    Net Cash (Provided) Used by Operating Activities                                       -                                  -
                                                            ---------------------------------   --------------------------------
Investing Activities:

    Net Cash (Provided) Used in Investing Activities                                       -                                  -
                                                            ---------------------------------   --------------------------------

Financing Activities:

    Net Cash Provided (Used) by Financing Activities                                       -                                  -
                                                            ---------------------------------   --------------------------------

Net Increase (Decrease) in Cash                                                            -                                  -
Cash at Beginning of Year                                                                  -                                  -
                                                            ---------------------------------   --------------------------------

Cash at End of Year                                         $                              -                                  -
                                                            =================================   ================================

Supplemental Disclosures:
  Interest Paid                                             $                              -                                  -


                       See Notes To Financial Statements

                                      F-34




                   Monticello Raceway Management Company, LLC
                    Statements of Changes in Member's Equity
                 For the Years Ended December 31, 2002 and 2001



                                                                  Total
                                                                 Members
                                                                 Equity
                                                         -----------------------

                  Balance December 31, 2000                               $ 200

                  Net Income                                                  -
                                                         -----------------------

                  Balance December 31, 2001                                 200

                  Net Income                                                  -
                                                         -----------------------

                  Balance December 31, 2002                               $ 200
                                                         =======================


                        See Notes To Financial Statements

                                      F-35



                   Monticello Raceway Development Company, LLC

                          Notes to Financial Statements
                           December 31, 2002 and 2001

1.  SIGNIFICANT ACCOUNTING POLICIES
    -------------------------------

     This  summary of  significant  accounting  policies of  Monticello  Raceway
     Development   Company,   LLC  (the  Company)  is  presented  to  assist  in
     understanding the Company's financial statements.  The financial statements
     and  notes  are   representations  of  the  Company's   management  who  is
     responsible for their integrity and objectivity.  These accounting policies
     conform  to  generally  accepted   accounting   principles  and  have  been
     consistently applied in the preparation of the financial statements.

     A.  ORGANIZATION AND BUSINESS ACTIVITY
         ----------------------------------

     In  October  1995,   Monticello  Raceway  Development   Company,  LLC  (the
     "Company")  a New York  limited  liability  company,  was formed to provide
     exclusive services under a 25-year agreement with Catskill Development, LLC
     to  develop,  manage  and lease  all  projects  on the 230  acres  owned by
     Catskill Development, LLC. in Monticello, New York.

     Catskill  Development,  LLC  continues to pursue a Native  American  Casino
     Project  at  Monticello  Raceway.  However,  to  this  point  it  has  been
     unsuccessful. Therefore the company is inactive.


                                      F-36




                   Monticello Raceway Development Company, LLC
                                 Balance Sheets
                             June 30, 2003 and 2002


                                                                   June 30, 2003                   June 30, 2002
                                                           ------------------------------   -----------------------------
ASSETS

Current Assets:
   Due From Members                                        $                         200                             200
                                                           ------------------------------   -----------------------------

     Total Assets                                          $                         200                             200
                                                           ==============================   =============================



LIABILITIES AND MEMEBERS' EQUITY

Current Liabilities:
   Accounts Payable and Accrued Expenses                   $                           -                               -
                                                           ------------------------------   -----------------------------

     Total Current Liabilities                                                         -                               -
                                                           ------------------------------   -----------------------------


Members' Equity                                                                      200                             200
                                                           ------------------------------   -----------------------------

Total Liabilities and Members' Equity                      $                         200                             200
                                                           ==============================   =============================


                 See Accompanying Notes And Accountant's Report


                                      F-37





                   Monticello Raceway Development Company, LLC
                                Income Statements
                 For the Six Months Ended June 30, 2003 and 2002





                                            June 30, 2003                       June 30, 2002
                                   ---------------------------------   --------------------------------


Revenues                           $                              -                                  -
                                   ---------------------------------   --------------------------------

Costs and Expenses                                                -                                  -
                                   ---------------------------------   --------------------------------

   Net Income                      $                              -                                  -
                                   =================================   ================================


                 See Accompanying Notes And Accountant's Report


                                      F-38




                   Monticello Raceway Development Company, LLC
                            Statements of Cash Flows
                 For the Six Months Ended June 30, 2003 and 2002



                                                                       June 30, 2003                 June 30, 2002
                                                              ---------------------------------   ---------------------------

Operating Activities:
Net Income                                                    $                              -                                  -

      Net Cash (Provided) Used by Operating Activities                                       -                                  -
                                                              ---------------------------------   --------------------------------

Investing Activities:

      Net Cash (Provided) Used in Investing Activities                                       -                                  -
                                                              ---------------------------------   --------------------------------

Financing Activities:

      Net Cash Provided (Used) by Financing Activities                                       -                                  -
                                                              ---------------------------------   --------------------------------


Net Increase (Decrease) in Cash                                                              -                                  -
Cash at Beginning of Year                                                                    -                                  -
                                                              ---------------------------------   --------------------------------

Cash at End of Year                                           $                              -                                  -
                                                              =================================   ================================

Supplemental Disclosures:
  Interest Paid                                               $                              -                                  -


                 See Accompanying Notes And Accountant's Report

                                      F-39



                     Monticello Raceway Management Company, LLC
                      Statements of Changes in Member's Equity
                   For the Six Months Ended June 30, 2003 and 2002


                                                                Total
                                                               Members
                                                               Equity
                                                       -----------------------

Balance December 31, 2001                                               $ 200

Net Income                                                                  -
                                                       -----------------------
Balance June 30, 2002                                                   $ 200
                                                       =======================



Balance December 31, 2002                                               $ 200

Net Income                                                                  -
                                                       -----------------------

Balance June 30, 2003                                                   $ 200
                                                       =======================



                 See Accompanying Notes And Accountant's Report

                                      F-40




                   Monticello Raceway Development Company, LLC

                          Notes to Financial Statements
                             June 30, 2003 and 2002

1.  SIGNIFICANT ACCOUNTING POLICIES
    -------------------------------

     This  summary of  significant  accounting  policies of  Monticello  Raceway
     Development   Company,   LLC  (the  Company)  is  presented  to  assist  in
     understanding the Company's financial statements.  The financial statements
     and  notes  are   representations  of  the  Company's   management  who  is
     responsible for their integrity and objectivity.  These accounting policies
     conform  to  generally  accepted   accounting   principles  and  have  been
     consistently applied in the preparation of the financial statements.

     A.   Organization and Business Activity
          ----------------------------------

     In  October  1995,   Monticello  Raceway  Development   Company,  LLC  (the
     "Company")  a New York  limited  liability  company,  was formed to provide
     exclusive services under a 25-year agreement with Catskill Development, LLC
     to  develop,  manage  and lease  all  projects  on the 230  acres  owned by
     Catskill Development, LLC. in Monticello, New York.

     Catskill  Development,  LLC  continues to pursue a Native  American  Casino
     Project  at  Monticello  Raceway.  However,  to  this  point  it  has  been
     unsuccessful. Therefore the company is inactive.


                                      F-41



                 PART II--INFORMATION NOT REQUIRED IN PROSPECTUS

ITEM 20.    INDEMNIFICATION OF DIRECTORS AND OFFICERS.

            Section 145 of the Delaware General Corporation Law ("DGCL"), as the
same exists or may hereafter be amended,  provides  that a Delaware  corporation
may indemnify any persons who were, or are threatened to be made, parties to any
threatened,  pending or completed  action,  suit or  proceeding,  whether civil,
criminal,  administrative  or  investigative  (other than an action by or in the
right of such corporation),  by reason of the fact that such person is or was an
officer, director,  employee or agent of such corporation,  or is or was serving
at the request of such corporation as a director,  officer, employee or agent of
another corporation or enterprise. The indemnity may include expenses (including
attorneys' fees),  judgments,  fines and amounts paid in settlement actually and
reasonably  incurred  by such person in  connection  with such  action,  suit or
proceeding,  provided  such person acted in good faith and in a manner he or she
reasonably  believed to be in or not opposed to the corporation's best interests
and, with respect to any criminal action or proceeding,  had no reasonable cause
to believe  that his or her  conduct was  illegal.  A Delaware  corporation  may
indemnify any persons who are, were or are threatened to be made, a party to any
threatened,  pending  or  completed  action  or suit by or in the  right  of the
corporation  by reason of the fact that such  person  was a  director,  officer,
employee  or agent of such  corporation,  or is or was serving at the request of
such  corporation  as  a  director,   officer,  employee  or  agent  of  another
corporation  or  enterprise.  The  indemnity  may  include  expenses  (including
attorneys'  fees) actually and reasonably  incurred by such person in connection
with the  defense or  settlement  of such action or suit,  provided  such person
acted in good faith and in a manner he or she  reasonably  believed  to be in or
not   opposed  to  the   corporation's   best   interests,   provided   that  no
indemnification is permitted without judicial approval if the officer, director,
employee or agent is adjudged to be liable to the corporation. Where an officer,
director,  employee or agent is  successful  on the merits or  otherwise  in the
defense of any action referred to above,  the corporation  must indemnify him or
her  against  the  expenses  which such  officer or director  has  actually  and
reasonably incurred.

            DGCL Section 145 further  authorizes a  corporation  to purchase and
maintain  insurance  on behalf of any person who is or was a director,  officer,
employee or agent of the corporation, or is or was serving at the request of the
corporation as a director,  officer, employee or agent of another corporation or
enterprise,  against any liability  asserted  against him or her and incurred by
him or her in any  such  capacity,  arising  out of his or her  status  as such,
whether or not the  corporation  would otherwise have the power to indemnify him
or her under Section 145 of the DGCL.

            Empire  Resorts'  Certificate  of  Incorporation,  as  amended,  and
Amended and  Restated  By-laws  (the  "By-laws")  limit,  to the maximum  extent
permitted by DGCL, the personal  liability of directors for monetary damages for
breach  of their  fiduciary  duties  as a  director,  except  for (i)  liability
resulting from a breach of the  director's  duty of loyalty to Empire Resorts or
its  stockholders,  (ii) acts or omissions  which are not in good faith or which
involve  intentional  misconduct or a knowing  violation of law,  (iii) unlawful
payment of dividends or unlawful stock repurchases or redemptions as provided in
Section 174 of the DGCL or (iv) a transaction from which the director derived an
improper personal  benefit.  Empire Resorts'  Certificate of Incorporation  also
provides  mandatory  indemnification  for the  benefit of  Empire's  current and

                                      II-1





former  directors and officers and for the benefit of Empire Resorts'  employees
and agents, in each instance to the fullest extent permitted by Delaware law, as
it may be amended from time to time.

            The By-laws  also provide that Empire  Resorts  will  indemnify  its
directors,  officers,  employees  and agents  upon the  determination  that such
person has met the applicable standard of conduct under Delaware law as restated
in the By-laws.  The determination  that the applicable  standard of conduct has
been met shall be made (1) by the Board of  Directors  by a  majority  vote of a
quorum  consisting  of directors  who were not parties to such  action,  suit or
proceeding, or (2) if such a quorum is not obtainable, or even if obtainable, by
a quorum of disinterested  directors,  or (3) by independent  legal counsel in a
written  opinion,  or (4) by the  stockholders.  To the extent  that a director,
officer,  employee or agent of Empire Resorts has been  successful on the merits
or  otherwise  in defense of any  action,  suit or  proceeding,  whether  civil,
criminal,  administrative or investigative (hereinafter a "proceeding"),  Empire
Resorts will  indemnify him against  expenses  without the necessity of making a
determination  of whether or not that person has met the applicable  standard of
conduct.

            The By-laws  allow  Empire  Resorts to pay in advance  all  expenses
incurred by a director,  officer,  employee or agent in defending any proceeding
in which such expenses  within the scope of the  indemnification  provisions are
incurred in advance of final  disposition,  upon an undertaking by such party to
repay such  expenses,  if it is  ultimately  determined  that such party was not
entitled to indemnity by Empire Resorts.  The By-laws also permit Empire Resorts
to provide any other  indemnification  and advancement of expenses  permitted by
law and  permit  Empire  Resorts to provide  any  additional  rights to which an
indemnified  person  may be  entitled  under  any  by-law,  agreement,  vote  of
stockholders  or  disinterested  directors  or  otherwise.  Indemnification  and
advancement  of  expenses  provided  in  the  By-laws  shall,  unless  otherwise
provided,  continue  as to a person  who has ceased to be a  director,  officer,
employee  or agent  and  shall  inure to the  benefit  of such  person's  heirs,
executors and administrators.

            The By-laws provide, for the purposes of the Indemnity Section, that
references  to "the  Corporation"  shall  include,  in addition to the resulting
corporation,  any  constituent  corporation  (including  any  constituent  of  a
constituent)  absorbed  in a  consolidation  or merger  which,  if its  separate
existence  had  continued,  would have had power and  authority to indemnify its
directors,  officers,  employees  or agents,  so that any person who is or was a
director,  officer, employee or agent of such constituent corporation,  or is or
was  serving  at the  request of such  constituent  corporation  as a  director,
officer, employee or agent of another corporation,  partnership,  joint venture,
trust or other enterprise, shall stand in the same position under the provisions
of the  Indemnity  Section  of the  By-laws  with  respect to the  resulting  or
surviving  corporation  as he  would  have  with  respect  to  such  constituent
corporation if its separate existence had continued.

            In addition,  Empire Resorts has entered into employment  agreements
with certain of its officers providing additional indemnification benefits. From
time to time,  officers  and  directors  may be  provided  with  indemnification
agreements that are consistent with the foregoing provisions.

                                      II-2





            Empire  Resorts has policies of directors'  and officers'  liability
insurance  which insure  directors  and  officers  against the costs of defense,
settlement and/or payment of judgment under certain circumstances.

ITEM 21.    EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.

   (a) Exhibits:

            The  following  is a list  of  Exhibits  included  as  part  of this
Registration Statement.

Exhibits and Financial Statement Schedules
------------------------------------------

Exhibit
Number               Description
------               -----------

2.1**                Amended and  Restated  Securities  Contribution  Agreement,
                     dated as of November ___,  2003,  between  Empire  Resorts,
                     Inc.,   Catskill   Development,   L.L.C.,   Americas  Tower
                     Partners,  BKB,  LLC, the members of Catskill  Development,
                     L.L.C.  and the members of Monticello  Raceway  Development
                     Company, LLC
4.1                  Form  of  Common   Stock   Certificate   (Incorporated   by
                     reference,  filed  with  Company's  Registration  Statement
                     filed on Form  SB-2  (File  No.  33-64236)  filed  with the
                     Commission on June 10, 1993 and as amended on September 30,
                     1993,  October 25,  1993,  November 2, 1993 and November 4,
                     1993,   which   Registration   Statement  became  effective
                     November 5, 1993. Such  Registration  Statement was further
                     amended  by Post  Effective  Amendment  filed on August 20,
                     1999.)
5.1**                Legality Opinion
8.1**                Tax Opinion of Olshan  Grundman Frome  Rosenzweig & Wolosky
                     LLP
10.1                 1993 Stock Option Plan  (Incorporated  by reference,  filed
                     with Company's  Registration  Statement  filed on Form SB-2
                     (File No.  33-64236)  filed with the Commission on June 10,
                     1993 and as amended on  September  30,  1993,  October  25,
                     1993,   November  2,  1993  and  November  4,  1993,  which
                     Registration  Statement became effective  November 5, 1993.
                     Such  Registration  Statement  was further  amended by Post
                     Effective Amendment filed on August 20, 1999.)
10.2                 1998 Stock Option Plan  (Incorporated  by reference,  filed
                     with  Proxy  Statement  pursuant  to  Section  14(a) of the
                     Securities Exchange Act of 1934, as amended, filed with the
                     Commission on August 25, 1999.)
10.3                 Amended and Restated  Contribution  Agreement,  dated as of
                     February  8,  2002,  by  and  between   Alpha   Hospitality
                     Corporation and Watertone Holdings,  L.P.  (Incorporated by
                     reference,  filed as an  exhibit to Form 8-K filed by Alpha
                     Hospitality Corporation on February 26, 2002.)
10.4**               Amended and Restated  Employment  Agreement  between Empire
                     Resorts, Inc. and Robert A. Berman dated  ________________,
                     2003

                                      II-3




Exhibit
Number               Description
------               -----------
10.5**               Amended and Restated  Employment  Agreement  between Empire
                     Resorts,    Inc.    and    Scott   A.    Kaniewski    dated
                     ________________, 2003
10.6**               Tag-Along  Agreement,  dated as of March 12,  2002,  by and
                     between Bryanston and Watertone Holdings L.P.
10.7                 Irrevocable  Proxy for  Meeting  of  Shareholders  of Alpha
                     Hospitality  Corporation,  dated April 30,  2002,  given by
                     Bryanston  to Watertone  Holdings,  L.P.  (Incorporated  by
                     reference,  filed as an  exhibit to Form 8-K filed by Alpha
                     Hospitality Corporation on May 1, 2002.)
10.8                 Recapitalization Agreement by and between Alpha Hospitality
                     Corporation, Alpha Monticello, Inc., Bryanston Group, Inc.,
                     Stanley   Tollman,   Beatrice  Tollman  and  Monty  Hundley
                     (Incorporated by reference, filed as an exhibit to Form 8-K
                     filed by Alpha  Hospitality  Corporation  on  December  10,
                     2002.)
10.9**               Agreement  of Lease  made as of the  29th  day of  October,
                     2003, between Catskill  Development,  L.L.C. and Monticello
                     Raceway Management, Inc.
10.10**              Term Note,  dated  October 29, 2003,  issued by  Monticello
                     Raceway Management, Inc. to The Berkshire Bank.
10.11**              Leasehold  Mortgage,  Security  Agreement,   Assignment  of
                     Leases and Rents and  Fixture  Filing,  dated as of October
                     29,  2003,  by  Monticello  Raceway  Management,  Inc.,  as
                     mortgagor, to The Berkshire Bank
10.12**              Loan and Security Agreement, dated October 29, 2003, by and
                     among Monticello Raceway Management, Inc. and The Berkshire
                     Bank
10.13**              Surety  Agreement  made and  executed  October  29, 2003 by
                     Empire Resorts, Inc. in favor of The Berkshire Bank

                                      II-4





10.14**              Security  Agreement,  dated as of October 29, 2003,  by and
                     between Catskill Development, L.L.C. and The Berkshire Bank
10.15**              Guaranty  Agreement  made and executed  October 29, 2003 by
                     Robert A. Berman in favor of The Berkshire Bank
10.16**              Nondisturbance and Attornment  Agreement,  made and entered
                     into as of October 29, 2003, by and between  Americas Tower
                     Partners,  Monticello  Realty,  L.L.C.,  Monticello Raceway
                     Management,  Inc.,  Catskill  Development,  L.L.C.  and The
                     Berkshire Bank
13.1**               Form  10-KSB for the year  ending  12/31/02,  as amended to
                     date
13.2**               Forms 10-QSB for the quarter ending 06/30/2003
13.3**               Proxy Statement on Schedule 14A for the 2003 Annual Meeting
                     of Stockholders
14.1*                Code of Ethics
23.1*                Consent of Friedman Alpren and Green LLP
23.2*                Consent of Bachrach, Waschitz & Waschitz, LLP
23.3*                Consent of Kane Reece Associates, Inc.
23.4**               Consent of Olshan  Grundman Frome  Rosenzweig & Wolosky LLP
                     (contained in Exhibit 5.1)
24.1*                Power of Attorney
--------------
*  Filed herewith.
** To be filed by amendment.

ITEM 22.    UNDERTAKINGS.

            The undersigned registrant hereby undertakes:

            (a) Rule 415 Offering.  If the small business  issuer is registering
securities  under Rule 415 of the Securities Act, that the small business issuer
will:

                (1)  File,  during  any  period  in  which  it  offers  or sells
securities, a post-effective amendment to this registration statement to:

                    (i) Include any prospectus  required by section  10(a)(3) of
the Securities Act;

                    (ii) Reflect in the  prospectus  any facts or events  which,
individually or together,  represent a fundamental  change in the information in
the  registration  statement.  Notwithstanding  the foregoing,,  any increase or
decrease  in  volume  of  securities  offered  (if the  total  dollar  value  of
securities  offered  would not exceed that which was  registered)  any deviation

                                      II-5





from  the  low or  high  end of the  estimated  maximum  offering  range  may be
reflected in the form of prospectus  filed with the Commission  pursuant to Rule
424(b) if, in the aggregate,  the changes in volume and price  represent no more
than a 20%  change  in the  maximum  aggregate  offering  price set forth in the
"Calculation of Registration Fee" table in the effective registration statement;
and

                    (iii) Include any additional or changed material information
on the plan of distribution.

                        NOTE:  Small  business  issuers  do not need to give the
            statements in paragraphs  (a)(1) (i) and  (a)(1)(ii) of this Item if
            the  registration  statement is on Form S-3 or S-8  (ss.ss.239.13 or
            239.16b  of  this  chapter),  and  the  information  required  in  a
            post-effective  amendment is incorporated by reference from periodic
            reports filed by the small business issuer under the Exchange Act

                (2) For  determining  liability  under the Securities Act, treat
each post-effective  amendment as a new registration statement of the securities
offered,  and the offering of the securities at that time to be the initial bona
fide offering.


                (3) File a post-effective  amendment to remove from registration
any of the securities that remain unsold at the end of the offering.

            (c)  Competitive  bids.  If the small  business  issuer is  offering
securities at competitive  bidding,  with  modifications  to suit the particular
case, the small business issuer will:


                (1) use its best  efforts to  distribute  before the  opening of
bids, to prospective bidders,  underwriters, and dealers, a reasonable number of
copies  of a  prospectus  that meet the  requirements  of  section  10(a) of the
Securities Act, and relating to the securities  offered at competitive  bidding,
as contained in the registration statement, together with any supplements; and:


                (2) file an amendment to the registration  statement  reflecting
the result of bidding,  the terms of the  reoffering  and related  matters where
required by the applicable form, not later than the first use, authorized by the
issuer  after the opening of bids,  of a prospectus  relating to the  securities
offered at  competitive  bidding,  unless the issuer  proposes no further public
offering of such securities by the issuer or by the purchasers.

                                      II-6





            (e)  Request  for  acceleration  of  effective  date.  If the  small
business  issuer  will  request  acceleration  of  the  effective  date  of  the
registration  statement  under Rule 461 under the  Securities  Act,  include the
following:


                        "Insofar  as  indemnification  for  liabilities  arising
            under the  Securities  Act of 1933 (the "Act") may be  permitted  to
            directors,  officers and  controlling  persons of the small business
            issuer pursuant to the foregoing provisions, or otherwise, the small
            business  issuer  has  been  advised  that  in  the  opinion  of the
            Securities and Exchange  Commission such  indemnification is against
            public   policy  as  expressed   in  the  Act  and  is,   therefore,
            unenforceable."

            In  the  event  that  a  claim  for  indemnification   against  such
liabilities  (other  than the payment by the small  business  issuer of expenses
incurred  or paid by a  director,  officer  or  controlling  person of the small
business issuer in the successful defense of any action,  suit or proceeding) is
asserted by such director,  officer or controlling person in connection with the
securities  being  registered,  the small  business  issuer will,  unless in the
opinion of its counsel  the matter has been  settled by  controlling  precedent,
submit  to a  court  of  appropriate  jurisdiction  the  question  whether  such
indemnification  by it is against  public policy as expressed in the  Securities
Act and will be governed by the final adjudication of such issue.

            (f) If the issuer relies on 430A under the Securities  Act, that the
small business issuer will:

                (1) For  determining  any liability  under the  Securities  Act,
treat the information  omitted from the form of prospectus filed as part of this
registration  statement  in reliance  upon Rule 430A and  contained in a form of
prospectus  filed by the small business issuer under Rule 424(b)(1),  or (4), or
497(h) under the Securities Act as part of this registration statement as of the
time the Commission declared it effective.

                (2) For  determining  any liability  under the  Securities  Act,
treat each post-effective  amendment that contains a form of prospectus as a new
registration statement for the securities offered in the registration statement,
and that  offering  of the  securities  at that  time as the  initial  bona fide
offering of those securities.

            The undersigned  registrant hereby undertakes to respond to requests
for information  that is incorporated by reference into the prospectus  pursuant
to Items 4, 10(b), 11, or 13 of this Form, within one business day of receipt of
such  request,  and to send the  incorporated  documents  by first class mail or
other equally  prompt means.  This includes  information  contained in documents
filed subsequent to the effective date of the registration statement through the
date of responding to the request.

            The undersigned registrant hereby undertakes to supply by means of a
post-effective  amendment  all  information  concerning a  transaction,  and the
company  being  acquired  involved  therein,  that  was not the  subject  of and
included in the registration statement when it became effective.

                                      II-7





                                   SIGNATURES

            Pursuant to the  requirements  of the Securities Act, the registrant
has duly caused this  registration  statement  to be signed on its behalf by the
undersigned,  thereunto duly  authorized,  in the City of New York, State of New
York, on November 6, 2003.

                                        Empire Resorts, Inc.
                                        (Registrant)

                                        By: /s/ Robert A. Berman
                                            ------------------------
                                            Robert A. Berman
                                            Chief Executive Officer


            Pursuant to the  requirements  of the Securities  Act of 1933,  this
registration  statement  has  been  signed  by  the  following  persons  in  the
capacities and on the dates indicated.


Signature                    Title                             Date
---------                    -----                             ----

                              Chief Executive Officer and
                              Director (Principal Executive
/s/ Robert A. Berman          Officer)                         November 6, 2003
-----------------------
Robert A. Berman

                              Chief Financial Officer
                              (Principal Accounting and
         *                    Financial Officer)               November 6, 2003
-----------------------
Scott A. Kaniewski


         *                    Chairman of the Board and
-----------------------       Director                         November 6, 2003
David Matheson


        *                     Vice Chairman of the Board
----------------------        and Director                     November 6, 2003
David P. Hanlon

                                      II-8




Signature                    Title                             Date
---------                    -----                             ----


        *                    President and Director            November 6, 2003
----------------------
Morad Tahbaz


        *                    Director                          November 6, 2003
----------------------
Paul deBary


        *                    Director                          November 6, 2003
----------------------
John Sharp


        *                    Director                          November 6, 2003
----------------------
Ralph J. Bernstein


        *                    Director                          November 6, 2003
-------------------------
Arthur I. Sonnenblick


        *                    Director                          November 6, 2003
-------------------------
Joseph Bernstein


*  By:  /s/ Robert A. Berman
        --------------------
        Robert A. Berman
        Attorney-in-fact

                                      II-9