Sedona City Council Approves Off-Track Betting for ILX Resorts

(Sedona, Arizona) - February 13, 2007 - The Sedona City Council this evening approved 4-3 to grant ILX Resorts, Inc., the owner of the Los Abrigados Resort & Spa, an off track betting (OTB) license for horse racing in Sedona.

The OTB will be located at Los Abrigados' Steaks & Sticks restaurant at 160 Portal Lane in Sedona, Arizona.

The license is approved exclusively for Turf Paradise of Phoenix, a leading Arizona OTB operator with 54 Arizona locations, and approved in 43 Arizona cities. The license will allow Turf Paradise to offer betting on live horse races throughout the United State via simulcast on big screen televisions.

Because Turf Paradise does not conduct live races during the summer, a separate OTB operator, Yavapai Downs at Prescott Valley, is expected to apply for an OTB license at Steaks & Sticks during the summer months. Turf Paradise and Yavapai Downs are the only two state licensed OTB operators for horse racing in Arizona.

Senior management from both ILX Resorts and Turf Paradise were on hand at the city council meeting to make their case.

Ed Zelinski, EVP of ILX Resorts, said that 80 responses had been received by the City of Sedona regarding ILX's OTB license request, and only 14 of those responses were objections. It should also be noted that only residents in favor of the OTB license voiced their opinion at the city council meeting.

Joe Martori, CEO of ILX, also spoke. He said that fifteen years ago ILX applied for an OTB license that was rejected. During this time, said Mr. Martori, the cultural diversity in Sedona has increased dramatically and "times have changed."

Nancy Stone, President of ILX, spoke and noted that OTB sports betting is the #3 sports related draw to Arizona ahead of both the Phoenix Suns and the Arizona Cardinals. She said that offering OTB at Steaks & Sticks would increase tourism and the length of visitor stays in Sedona. Overall, it would lead to increased tax revenue for the city.

Jack Mullen, the Director of Off-Track Betting for Turf Paradise, stated that the Steaks & Sticks location would be the only location applied for and, therefore, Sedona would only have one OTB facility.

The approval was a close decision with Mayor Colquitt, and Councilors Adams and Stern voting to deny the request on grounds that OTB will not benefit the community and is not good for Sedona's image.

Councilors Scagnelli, Gomez, Bradshaw and Frey voted to approve the license on the basis that the Steaks & Sticks location would be the only OTB location in Sedona, that the license would only be approved through May, 2009, during which time it could be revoked, and that it would lead to increased tourism and visitor stays in Sedona as well as provide additional entertainment for local residents.

All city council members stated that ILX Resorts, Inc. is a first class operator and a good Sedona citizen.

Note: ILX Resorts, Inc. reported Q4 2006 and full year 2006 results on February 13, 2007. Net income for the three and twelve months ended December 31, 2006 was $170,000 and $2,166,000. Net income, excluding one-time occurrences, was $449,000 and $2,130,000 for the three and twelve months ended December 31, 2005. Revenue for the quarter and year ended December 31, 2006 was $13.3 million and $54.5 million. Revenue for the same periods in 2005 was $14.5 million and $56.9 million. Had the Company not been required to implement a new accounting standard, 2006 revenue for the three and twelve months ending Decemeber 2006 would have been $13.7 million and $55.9 million.