<PAGE>
                                                                    EXHIBIT 99.1

                             LETTER OF TRANSMITTAL

                           WITH RESPECT TO TENDER OF
       ANY AND ALL OUTSTANDING 10 1/4% SENIOR SUBORDINATED NOTES DUE 2007
                                IN EXCHANGE FOR
                   10 1/4% SENIOR SUBORDINATED NOTES DUE 2007
                                       OF

                             MANDALAY RESORT GROUP

                 PURSUANT TO THE PROSPECTUS DATED       , 2000

--------------------------------------------------------------------------------
    THE EXCHANGE OFFER WILL EXPIRE AT 5:00 P.M., NEW YORK CITY TIME, ON       ,
   2000, UNLESS EXTENDED (SUCH TIME AND DATE, AS THE SAME MAY BE EXTENDED FROM
   TIME TO TIME, THE "EXPIRATION DATE"). TENDERS MAY BE WITHDRAWN AT ANY TIME
   PRIOR TO THE EXPIRATION DATE.
--------------------------------------------------------------------------------

                             THE EXCHANGE AGENT IS:
                              THE BANK OF NEW YORK

<TABLE>
<S>                               <C>                                  <C>
    BY REGISTERED OR                FACSIMILE TRANSACTIONS:            BY HAND OR OVERNIGHT DELIVERY:
    CERTIFIED MAIL:               (Eligible Institutions Only)              The Bank of New York
  The Bank of New York                   (212) 815-6339                      101 Barclay Street
 101 Barclay Street, 7E                                                Corporate Trust Services Window
New York, New York 10286            TO CONFIRM BY TELEPHONE                     Ground Level
     Attn: Kin Lau                  OR FOR INFORMATION CALL:              New York, New York 10286
Reorganization Department                (212) 815-3750                         Attn: Kin Lau
                                                                          Reorganization Department
</TABLE>

DELIVERY OF THIS LETTER OF TRANSMITTAL TO AN ADDRESS OTHER THAN AS SET FORTH
ABOVE OR TRANSMISSION TO A FACSIMILE NUMBER OTHER THAN THE ONE LISTED ABOVE WILL
NOT CONSTITUTE VALID DELIVERY TO THE EXCHANGE AGENT.

    The instructions set forth in this Letter of Transmittal should be read
carefully before this Letter of Transmittal is completed. The undersigned
acknowledges that he or she has received and reviewed the prospectus
dated       , 2000, of Mandalay Resort Group, a Nevada corporation ("Mandalay"
or the "Company"), and this Letter of Transmittal (the "Letter of Transmittal"),
which together constitute the Company's offer (the "Exchange Offer") to exchange
$1,000 principal amount of its 10 1/4% Senior Subordinated Notes due 2007 (the
"Exchange Notes") that have been registered under the Securities Act of 1933, as
amended (the "Securities Act"), for each $1,000 principal amount of its
outstanding 10 1/4% Senior Subordinated Notes due 2007 (the "Old Notes").
Recipients of the prospectus should read the requirements described in the
prospectus with respect to eligibility to participate in the Exchange Offer.
Capitalized terms used but not defined herein have the meaning given to them in
the prospectus.

PLEASE READ THIS ENTIRE LETTER OF TRANSMITTAL CAREFULLY BEFORE CHECKING ANY BOX
BELOW.

    This Letter of Transmittal is to be used by a holder of Old Notes:

    - if certificates representing tendered Old Notes are to be forwarded
      herewith; or
<PAGE>
    - if a tender is made pursuant to the guaranteed delivery procedures in the
      section of the prospectus entitled "The Exchange Offer--Procedures for
      Tendering Old Notes."

    Holders that are tendering by book-entry transfer to the exchange agent's
account at DTC can execute the tender through ATOP for which the Exchange Offer
will be eligible. DTC participants that are accepting the Exchange Offer must
transmit their acceptance to DTC which will verify the acceptance and execute a
book-entry delivery to the exchange agent's account at DTC. DTC will then send
an agent's message forming part of a book-entry transfer in which the
participant agrees to be bound by the terms of the Letter of Transmittal (an
"Agent's Message") to the exchange agent for its acceptance. Transmission of the
Agent's Message by DTC will satisfy the terms of the Exchange Offer as to
execution and delivery of a Letter of Transmittal by the participant identified
in the Agent's Message.

    In order to properly complete this Letter of Transmittal, a holder of Old
Notes must:

    - complete the box entitled "Description of Old Notes Tendered;"

    - if appropriate, check and complete the boxes relating to book-entry
      transfer, guaranteed delivery, Special Issuance Instructions and Special
      Delivery Instructions;

    - sign the Letter of Transmittal by completing the box entitled "Sign Here;"
      and

    - complete the Substitute Form W-9.

    Each holder of Old Notes should carefully read the detailed instructions
below prior to completing the Letter of Transmittal.

    Holders of Old Notes who desire to tender their Old Notes for exchange and
whose Old Notes are not immediately available or who cannot deliver their Old
Notes, this Letter of Transmittal and all other documents required hereby to the
exchange agent or complete the procedures for book-entry transfer on or prior to
the Expiration Date, must tender the Old Notes pursuant to the guaranteed
delivery procedures set forth in the section of prospectus entitled "The
Exchange Offer--Procedures for Tendering Old Notes." See Instruction 2. Delivery
of documents to DTC does not constitute delivery to the exchange agent. In order
to ensure participation in the Exchange Offer, Old Notes must be properly
tendered prior to the Expiration Date.

    Holders of Old Notes who wish to tender their Old Notes for exchange must
complete columns (1) through (3) in box below entitled "Description of Old Notes
Tendered," and sign the box below entitled "Sign Here." If only those columns
are completed, such holder of Old Notes will have tendered for exchange all Old
Notes listed in column (3) below. If the holder of Old Notes wishes to tender
for exchange less than all of such Old Notes, column (4) must be completed in
full. In such case, such holder of Old Notes should refer to Instruction 5.

    The Exchange Offer may be extended, terminated or amended, as provided in
the prospectus. During any such extension of the Exchange Offer, all Old Notes
previously tendered and not withdrawn pursuant to the Exchange Offer will remain
subject to such Exchange Offer. The Exchange Offer is scheduled to expire at
5:00 p.m., New York City time, on       , 2000, unless extended by Mandalay.

                                       2
<PAGE>
    The undersigned hereby tenders for exchange the Old Notes described in the
box entitled "Description of Old Notes Tendered" below pursuant to the terms and
conditions described in the prospectus and this Letter of Transmittal.

<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------------
<S>                                            <C>                <C>                <C>
                                  DESCRIPTION OF OLD NOTES TENDERED
------------------------------------------------------------------------------------------------------
                     (1)                              (2)                (3)                (4)
                                                                      AGGREGATE
           NAME(S) AND ADDRESS(ES)                                PRINCIPAL AMOUNT   PRINCIPAL AMOUNT
           OF REGISTERED HOLDER(S)                CERTIFICATE      REPRESENTED BY      TENDERED FOR
         (PLEASE FILL IN, IF BLANK)                NUMBER(S)      CERTIFICATE(S)(A)     EXCHANGE(B)
------------------------------------------------------------------------------------------------------

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

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

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

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

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

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

                                               -------------------------------------------------------
                                                TOTAL PRINCIPAL
                                                AMOUNT TENDERED

------------------------------------------------------------------------------------------------------
</TABLE>

    (A)  Unless otherwise indicated in this column, any tendering holder
         will be deemed to have tendered the entire principal amount
         represented by the Old Notes indicated in the column labeled
         "Aggregate Principal Amount Represented by Certificate(s)." See
         Instruction 5.

    (B)  The minimum permitted tender is $1,000 in principal amount of Old
         Notes. All other tenders must be integral multiples of $1,000.

<TABLE>
<S>                                            <C>                <C>                <C>
------------------------------------------------------------------------------------------------------
</TABLE>

                                       3
<PAGE>
/ /  CHECK HERE IF TENDERED OLD NOTES ARE ENCLOSED HEREWITH.

/ /  CHECK HERE IF TENDERED OLD NOTES ARE BEING DELIVERED PURSUANT TO A NOTICE
    OF GUARANTEED DELIVERY AND COMPLETE THE FOLLOWING (FOR USE BY ELIGIBLE
    INSTITUTIONS ONLY):

    Name(s) of Registered Holder(s) ____________________________________________

    Window Ticket Number (if any) ______________________________________________

    Date of Execution of Notice of Guaranteed Delivery _________________________

    Name of Institution that guaranteed delivery _______________________________

    Only registered holders are entitled to tender their Old Notes for exchange
in the Exchange Offer. Any financial institution that is a participant in DTC's
system and whose name appears on a security position listing as the record owner
of the Old Notes and who wishes to make book-entry delivery of Old Notes as
described above must complete and execute a participant's letter (which will be
distributed to participants by DTC) instructing DTC's nominee to tender such Old
Notes for exchange. Persons who are beneficial owners of Old Notes but are not
registered holders and who seek to tender Old Notes should:

    - contact the registered holder of such Old Notes and instruct such
      registered holder to tender on his or her behalf;

    - obtain and include with this Letter of Transmittal, Old Notes properly
      endorsed for transfer by the registered holder or accompanied by a
      properly completed bond power from the registered holder, with signatures
      on the endorsement or bond power guaranteed by a firm that is a member of
      a registered national securities exchange, a member of the National
      Association of Securities Dealers, Inc., a commercial bank or trading
      company having an office in the United States or certain other eligible
      guarantors (each, an "Eligible Institution"); or

    - effect a record transfer of such Old Notes from the registered holder to
      such beneficial owner and comply with the requirements applicable to
      registered holders for tendering Old Notes prior to the Expiration Date.
      See the section entitled "The Exchange Offer--Procedures for Tendering Old
      Notes" in the prospectus.

                       SIGNATURES MUST BE PROVIDED BELOW.
              PLEASE READ THE ACCOMPANYING INSTRUCTIONS CAREFULLY.

                                       4
<PAGE>
Ladies and Gentlemen:

    Upon the terms and subject to the conditions of the Exchange Offer, the
undersigned hereby tenders to Mandalay for exchange the Old Notes indicated
above. Subject to, and effective upon, acceptance for purchase of the Old Notes
tendered herewith, the undersigned hereby sells, assigns, transfers and
exchanges to Mandalay all right, title and interest in and to all such Old Notes
tendered for exchange hereby. The undersigned hereby irrevocably constitutes and
appoints the exchange agent as the true and lawful agent and attorney-in-fact of
the undersigned (with full knowledge that the exchange agent also acts as agent
of Mandalay) with respect to such Old Notes, with full power of substitution and
resubstitution (such power of attorney being deemed to be an irrevocable power
coupled with an interest) to:

    - deliver certificates representing such Old Notes, or transfer ownership of
      such Old Notes on the account books maintained by DTC, together, in each
      such case, with all accompanying evidences of transfer and authenticity to
      Mandalay;

    - present and deliver such Old Notes for transfer on the books of Mandalay;
      and

    - receive all benefits or otherwise exercise all rights and incidents of
      beneficial ownership of such Old Notes, all in accordance with the terms
      of the Exchange Offer.

    The undersigned represents and warrants that it has full power and authority
to tender, exchange, assign and transfer the Old Notes and to acquire Exchange
Notes issuable upon the exchange of such tendered Old Notes, and that, when the
same are accepted for exchange, Mandalay will acquire good and unencumbered
title to the tendered Old Notes, free and clear of all liens, restrictions,
charges and encumbrances and not subject to any adverse claim. The undersigned
also warrants that it will, upon request, execute and deliver any additional
documents deemed by the exchange agent or Mandalay to be necessary or desirable
to complete the exchange, assignment and transfer of tendered Old Notes or
transfer ownership of such Old Notes on the account books maintained by the
book-entry transfer facility. The undersigned further agrees that acceptance of
any and all validly tendered Old Notes by Mandalay and the issuance of Exchange
Notes in exchange therefor shall constitute performance in full by Mandalay of
its obligations under the Registration Rights Agreement.

    By tendering, each holder of Old Notes represents that the Exchange Notes
acquired in the exchange will be obtained in the ordinary course of such
holder's business, that such holder has no arrangement with any person to
participate in the distribution of such Exchange Notes, that such holder is not
an "affiliate" of Mandalay within the meaning of Rule 405 under the Securities
Act and that such holder is not engaged in, and does not intend to engage in, a
distribution of the Exchange Notes. Any holder of Old Notes who is an affiliate
of Mandalay or who tenders Old Notes in the Exchange Offer for the purpose of
participating in a distribution of the Exchange Notes cannot rely on the
position of the staff of the Securities and Exchange Commission (the
"Commission") enunciated in its series of interpretive "no-action" letters with
respect to exchange offers and must comply with the registration and prospectus
delivery requirements of the Securities Act in connection with any secondary
resale transaction.

    If the undersigned is not a broker-dealer, the undersigned represents that
it is not engaged in, and does not intend to engage in, a distribution of
Exchange Notes. If the undersigned is a broker-dealer holding Old Notes that
were acquired for its own account as a result of market-making activities or
other trading activities, it acknowledges that it will deliver a prospectus
meeting the requirements of the Securities Act in connection with any resale of
Exchange Notes received in respect of such Old Notes pursuant to the Exchange
Offer, however, by so acknowledging and by delivering a prospectus in connection
with the exchange of Old Notes, the undersigned will not be deemed to admit that
it is an "underwriter" within the meaning of the Securities Act.

                                       5
<PAGE>
    All authority conferred or agreed to be conferred pursuant to this Letter of
Transmittal and every obligation of the undersigned hereunder shall be binding
upon the successors, assigns, heirs, executors, administrators, trustees in
bankruptcy, and personal and legal representatives of the undersigned and shall
not be affected by, and shall survive, the death or incapacity of the
undersigned. Old Notes properly tendered may be withdrawn at any time prior to
the Expiration Date in accordance with the terms of this Letter of Transmittal.

    The Exchange Offer is subject to certain conditions, each of which may be
waived or modified by Mandalay, in whole or in part, at any time and from time
to time, as described in the prospectus under the caption "The Exchange
Offer--Certain Conditions to the Exchange Offer." The undersigned recognizes
that as a result of such conditions Mandalay may not be required to accept for
exchange, or to issue Exchange Notes in exchange for, any of the Old Notes
properly tendered hereby. In such event, the tendered Old Notes not accepted for
exchange will be returned to the undersigned without cost to the undersigned at
the address shown below the undersigned's signature(s) unless otherwise
indicated under "Special Issuance Instructions" below.

    Unless otherwise indicated under "Special Issuance Instructions" below,
please return any certificates representing Old Notes not tendered or not
accepted for exchange in the name(s) of the holder(s) appearing under
"Description of Old Notes Tendered." Similarly, unless otherwise indicated under
"Special Delivery Instructions," please mail any certificates representing Old
Notes not tendered or not accepted for exchange (and accompanying document, as
appropriate) to the address(es) of the holder(s) appearing under "Description of
Old Notes Tendered." In the event that both the "Special Issuance Instructions"
and the "Special Delivery Instructions" are completed, please issue the
certificates representing the Exchange Notes issued in exchange for the Old
Notes accepted for exchange in the name(s) of, and return any Old Notes not
tendered or not accepted for exchange to, the person or persons so indicated.
Unless otherwise indicated under "Special Issuance Instructions," in the case of
a book-entry delivery of Old Notes, please credit the account maintained at DTC
with any Old Notes not tendered or not accepted for exchange. The undersigned
recognizes that Mandalay does not have any obligation pursuant to the Special
Issuance Instructions, to transfer any Old Notes from the name of the holder
thereof if Mandalay does not accept for exchange any of the Old Notes so
tendered or if such transfer would not be in compliance with any transfer
restrictions applicable to such Old Notes.

                                       6
<PAGE>
                         SPECIAL ISSUANCE INSTRUCTIONS
                        (SEE INSTRUCTIONS 1, 6, 7 AND 8)

      To be completed ONLY if (i) Exchange Notes issued for Old Notes,
  certificates for Old Notes in a principal amount not exchanged for Exchange
  Notes, or Old Notes (if any) not tendered for exchange are to be issued in
  the name of someone other than the undersigned, or (ii) Old Notes tendered
  by book-entry transfer which are not exchanged are to be returned by credit
  to an account maintained at DTC other than the account indicated above.

  Issue to:

  Name: ______________________________________________________________________
                                 (PLEASE PRINT)
  Address: ___________________________________________________________________
  ____________________________________________________________________________

  ____________________________________________________________________________
                               (INCLUDE ZIP CODE)

   __________________________________________________________________________
              (TAXPAYER IDENTIFICATION OR SOCIAL SECURITY NUMBER)

      Credit Old Notes not exchanged and delivered by book-entry transfer to
  the DTC account set forth below:

  ____________________________________________________________________________
                                (ACCOUNT NUMBER)

                         SPECIAL DELIVERY INSTRUCTIONS
                        (SEE INSTRUCTIONS 1, 6, 7 AND 8)

      To be completed ONLY if the Exchange Notes issued for Old Notes,
  certificates for Old Notes in a principal amount not exchanged for Exchange
  Notes, or Old Notes (if any) not tendered for exchange are to be sent to
  someone other than the undersigned or to the undersigned at an address other
  than that shown above.

  Mail to:

  Name: ______________________________________________________________________
                                 (PLEASE PRINT)

  Address: ___________________________________________________________________

  ____________________________________________________________________________

  ____________________________________________________________________________
                               (INCLUDE ZIP CODE)

   __________________________________________________________________________
              (TAXPAYER IDENTIFICATION OR SOCIAL SECURITY NUMBER)

                                       7
<PAGE>
--------------------------------------------------------------------------------
            SIGN HERE TO TENDER YOUR OLD NOTES IN THE EXCHANGE OFFER

  ____________________________________________________________________________

  ____________________________________________________________________________
                     SIGNATURE(S) OF HOLDER(S) OF OLD NOTES

  Dated: _____________________________________________________________________
      (Must be signed by the registered holder(s) of Old Notes exactly as
  name(s) appear(s) on certificate(s) representing the Old Notes or on a
  security position listing or by person(s) authorized to become registered
  holder(s) by certificates and documents transmitted herewith. If signature
  is by attorney-in-fact, executor, administrator, trustee, guardian, officer
  of a corporation or other person acting in a fiduciary or representative
  capacity, please provide the following information and see Instruction 6.)

  Capacity (Full Title) ______________________________________________________

  ____________________________________________________________________________

  Name(s) ____________________________________________________________________

  ____________________________________________________________________________
                             (PLEASE TYPE OR PRINT)

  Address ____________________________________________________________________

  ____________________________________________________________________________

  ____________________________________________________________________________

  ____________________________________________________________________________
                               (INCLUDE ZIP CODE)

  Area Code and Telephone Number (   )________________________________________

  Tax Identification or Social Security No. __________________________________

                           GUARANTEE OF SIGNATURE(S)
                    (IF REQUIRED--SEE INSTRUCTIONS 1 AND 6)

  Authorized Signature _______________________________________________________

  Name _______________________________________________________________________
                             (PLEASE TYPE OR PRINT)

  Title ______________________________________________________________________

  Name of Firm _______________________________________________________________

  Address ____________________________________________________________________

  ____________________________________________________________________________

  ____________________________________________________________________________

  ____________________________________________________________________________
                               (INCLUDE ZIP CODE)

  Area Code and Telephone Number (   )________________________________________

  Dated: _____________________________________________________________________

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

     IMPORTANT: COMPLETE AND SIGN THE SUBSTITUTE FORM W-9 IN THIS LETTER OF
                                  TRANSMITTAL

                                       8
<PAGE>
                                  INSTRUCTIONS
         FORMING PART OF THE TERMS AND CONDITIONS OF THE EXCHANGE OFFER

    1.  GUARANTEE OF SIGNATURES.  Signatures on this Letter of Transmittal need
not be guaranteed if the Old Notes tendered hereby are tendered:

    - by the registered holder(s) of Old Notes thereof, unless such holder has
      completed either the box entitled "Special Issuance Instructions" or the
      box entitled "Special Delivery Instructions" above; or

    - to the account of a firm that is an Eligible Institution.

    In all other cases, all signatures on this Letter of Transmittal must be
guaranteed by an Eligible Institution. Persons who are beneficial owners of Old
Notes but are not the registered holder(s) and who seek to tender Old Notes for
exchange should:

    - contact the registered holder(s) of such Old Notes and instruct such
      registered holder(s) to tender on such beneficial owner's behalf;

    - obtain and include with this Letter of Transmittal, Old Notes properly
      endorsed for transfer by the registered holder(s) or accompanied by a
      properly completed bond power from the registered holder(s) with
      signatures on the endorsement or bond power guaranteed by an Eligible
      Institution; or

    - effect a record transfer of such Old Notes from the registered holder(s)
      to such beneficial owner and comply with the requirements applicable to
      registered holder(s) for tendering Old Notes for exchange prior to the
      Expiration Date. See Instruction 6.

    2.  DELIVERY OF THIS LETTER OF TRANSMITTAL AND CERTIFICATES FOR OLD NOTES OR
BOOK-ENTRY CONFIRMATIONS; GUARANTEED DELIVERY PROCEDURES.  This Letter of
Transmittal is to be completed by registered holder(s) if certificates
representing Old Notes are to be forwarded herewith. All physically delivered
Old Notes, as well as a properly completed and duly executed Letters of
Transmittal (or manually signed facsimiles thereof) and any other required
documents, must be received by the exchange agent at its address set forth on
the cover of this Letter of Transmittal prior to the Expiration Date or the
tendering holder must comply with the guaranteed delivery procedures set forth
below. Delivery of the documents to DTC does not constitute delivery to the
exchange agent.

    The method of delivery of this Letter of Transmittal, Old Notes and all
other required documents to the exchange agent is at the election and risk of
the holder thereof. If such delivery is by mail, it is suggested that holders
use properly insured registered mail, return receipt requested, and that the
mailing be sufficiently in advance of the Expiration Date, to permit delivery to
the exchange agent prior to such date. Except as otherwise provided below, the
delivery will be deemed made when actually received or confirmed by the exchange
agent. This Letter of Transmittal and Old Notes tendered for exchange should be
sent only to the exchange agent, not to Mandalay.

    A holder who desires to tender Old Notes for exchange and who cannot comply
with the procedures set forth herein for tender on a timely basis or whose Old
Notes are not immediately available must comply with the guaranteed delivery
procedures described below.

    If holders desire to tender Old Notes for exchange pursuant to the Exchange
Offer and:

    - certificates representing such Old Notes are not lost but are not
      immediately available;

    - time will not permit this Letter of Transmittal, certificates representing
      Old Notes or other required documents to reach the exchange agent prior to
      the Expiration Date; or

    - the procedures for book-entry transfer cannot be completed prior to the
      Expiration Date,

                                       9
<PAGE>
such holder may effect a tender of Old Notes for exchange in accordance with the
guaranteed delivery procedures set forth in the prospectus under the caption
"The Exchange Offer--Procedures for Tendering Old Notes."

    Pursuant to the guaranteed delivery procedures:

        (a) such tender must be made by or through an Eligible Institution
    (defined as an institution that is a recognized member in good standing of a
    Medallion Signature Guarantee Program recognized by the exchange agent,
    i.e., the Securities Transfer Agent's Medallion Program, the Stock
    Exchange's Medallion Program and the New York Stock Exchange's Medallion
    Signature Program);

        (b) prior to the Expiration Date, the exchange agent must have received
    from such Eligible Institution, at one of the addresses of the exchange
    agent set forth herein, a properly completed and duly executed Notice of
    Guaranteed Delivery (by facsimile, mail or hand delivery) substantially in
    the form provided by Mandalay setting forth the name(s) and address(es) of
    the registered holder(s) of such Old Notes, the certificate number(s) and
    the principal amount of Old Notes being tendered for exchange and stating
    that the tender is being made thereby and guaranteeing that, within three
    (3) New York Stock Exchange trading days after the Expiration Date, a
    properly completed and duly executed Letter of Transmittal, or a facsimile
    thereof, together with certificates representing the Old Notes (or
    confirmation of book-entry transfer of such Old Notes into the exchange
    agent's account with DTC and an Agent's Message) and any other documents
    required by this Letter of Transmittal and the instructions hereto, will be
    deposited by such Eligible Institution with the exchange agent; and

        (c) this Letter of Transmittal or a facsimile thereof, properly
    completed together with duly executed certificates for all physically
    delivered Old Notes in proper form for transfer (or confirmation of
    book-entry transfer of such Old Notes into the exchange agent's account with
    DTC as described above) and all other required documents must be received by
    the exchange agent within three (3) New York Stock Exchange trading days
    after the date of the Notice of Guaranteed Delivery.

    All tendering holders, by execution of this Letter of Transmittal, waive any
right to receive any notice of the acceptance of their Old Notes for exchange.

    3.  INADEQUATE SPACE.  If the space provided in the box entitled
"Description of Old Notes Tendered" above is inadequate, the certificate numbers
and principal amounts of Old Notes tendered should be listed on a separate
signed schedule affixed hereto.

    4.  WITHDRAWAL OF TENDERS.  A tender of Old Notes may be withdrawn at any
time prior to the Expiration Date by delivery of written or facsimile (receipt
confirmed by telephone) notice of withdrawal to the exchange agent at the
address set forth on the cover of this Letter of Transmittal. To be effective, a
notice of withdrawal must:

    - specify the name of the person having tendered the Old Notes to be
      withdrawn (the "Depositor");

    - identify the Old Notes to be withdrawn (including the certificate number
      or numbers and principal amount of such Old Notes);

    - specify the principal amount of Old Notes to be withdrawn;

    - include a statement that such holder is withdrawing his election to have
      such Old Notes exchanged;

    - be signed by the holder in the same manner as the original signature on
      the Letter of Transmittal by which such Old Notes were tendered or as
      otherwise described above (including

                                       10
<PAGE>
      any required signature guarantees) or be accompanied by documents of
      transfer sufficient to have the trustee under the Indenture register the
      transfer of such Old Notes into the name of the person withdrawing the
      tender; and

    - specify the name in which any such Old Notes are to be registered, if
      different from that of the Depositor.

    The exchange agent will return the properly withdrawn Old Notes promptly
following receipt of notice of withdrawal. If Old Notes have been tendered
pursuant to the procedure for book-entry transfer, any notice of withdrawal must
specify the name and number of the account at the book-entry transfer facility.
All questions as to the validity of notices of withdrawals, including, time of
receipt, will be determined by Mandalay and such determination will be final and
binding on all parties.

    Any Old Notes so withdrawn will be deemed not to have been validly tendered
for exchange for purposes of the Exchange Offer. Any Old Notes which have been
tendered for exchange but which are not exchanged for any reason will be
returned to the holder thereof without cost to such holder (or, in the case of
Old Notes tendered by book-entry transfer into the exchange agent's account at
the book-entry transfer facility pursuant to the book-entry transfer procedures
described above, such Old Notes will be credited to an account with such
book-entry transfer facility specified by the holder) as soon as practicable
after withdrawal, rejection of tender or termination of the Exchange Offer.
Properly withdrawn Old Notes may be retendered by following one of the
procedures described under the caption "The Exchange Offer--Procedures for
Tendering Old Notes" in the prospectus at any time prior to the Expiration Date.

    5.  PARTIAL TENDERS (NOT APPLICABLE TO HOLDERS OF OLD NOTES WHO TENDER BY
BOOK-ENTRY TRANSFER).  Tenders of Old Notes will be accepted only in integral
multiples of $1,000 principal amount. If a tender for exchange is to be made
with respect to less than the entire principal amount of any Old Notes, fill in
the principal amount of Old Notes which are tendered for exchange in column
(4) of the box entitled "Description of Old Notes Tendered," as more fully
described in the footnotes thereto. In the case of a partial tender for
exchange, a new certificate, in fully registered form, for the remainder of the
principal amount of the Old Notes, will be sent to the holders of Old Notes
unless otherwise indicated in the boxes entitled "Special Issuance Instructions"
or "Special Delivery Instructions" above, as soon as practicable after the
expiration or termination of the Exchange Offer.

    6.  SIGNATURES ON THIS LETTER OF TRANSMITTAL; BOND POWERS AND
ENDORSEMENTS.  If this Letter of Transmittal is signed by the holder(s) of the
Old Notes tendered for exchange hereby, the signature(s) must correspond exactly
with the name(s) as written on the face of the certificate(s) without
alteration, enlargement or any change whatsoever.

    If any of the Old Notes tendered hereby are owned of record by two or more
joint owners, all such owners must sign this Letter of Transmittal. If any
tendered Old Notes are registered in different names on several certificates, it
will be necessary to complete, sign and submit as many separate copies of this
Letter of Transmittal and any necessary or required documents as there are names
in which certificates are held.

    If this Letter of Transmittal or any certificates or bond powers are signed
by trustees, executors, administrators, guardians, attorneys-in-fact, officers
of corporations or others acting in a fiduciary or representative capacity, such
persons should so indicate when signing, and proper evidence satisfactory to
Mandalay of its authority so to act must be submitted, unless waived by
Mandalay.

    If this Letter of Transmittal is signed by the holder(s) of the Old Notes
listed and transmitted hereby, no endorsements of certificates or separate bond
powers are required unless certificates for Old Notes not tendered or not
accepted for exchange are to be issued or returned in the name of a person other
than for the holder(s) thereof. Signatures on such certificates must be
guaranteed by an Eligible Institution (unless signed by an Eligible
Institution).

                                       11
<PAGE>
    If this Letter of Transmittal is signed by a person other than the
registered holder(s) of the Old Notes, the certificates representing such Old
Notes must be properly endorsed for transfer by the registered holder or be
accompanied by a properly completed bond power from the registered holder, in
either case signed by such registered holder(s) exactly as the name(s) of the
registered holder(s) the Old Notes appear(s) on the certificates. Signatures on
the endorsement or bond power must be guaranteed by an Eligible Institution
(unless signed by an Eligible Institution).

    7.  TRANSFER TAXES.  Except as set forth in this Instruction 7, Mandalay
will pay or cause to be paid any transfer taxes applicable to the exchange of
Old Notes pursuant to the Exchange Offer. If, however, a transfer tax is imposed
for any reason other than the exchange of Old Notes pursuant to the Exchange
Offer, then the amount of any transfer taxes (whether imposed on the registered
holder(s) or any other persons) will be payable by the tendering holder. If
satisfactory evidence of the payment of such taxes or exemptions therefrom is
not submitted with this Letter of Transmittal, the amount of such transfer taxes
will be billed directly to such tendering holder.

    8.  SPECIAL ISSUANCE AND DELIVERY INSTRUCTIONS.  If the Exchange Notes are
to be issued or if any Old Notes not tendered or not accepted for exchange are
to be issued or sent to a person other than the person(s) signing this Letter of
Transmittal or to an address other than that shown above, the appropriate boxes
on this Letter of Transmittal should be completed. Holders of Old Notes
tendering Old Notes by book-entry transfer may request that Old Notes not
accepted for exchange be credited to such account maintained at DTC as such
holder may designate.

    9.  IRREGULARITIES.  All questions as to the forms of all documents and the
validity of (including time of receipt) and acceptance of the tenders and
withdrawals of Old Notes will be determined by Mandalay, in its sole discretion,
which determination shall be final and binding. Alternative, conditional or
contingent tenders will not be considered valid. Mandalay reserves the absolute
right to reject any or all tenders of Old Notes that are not in proper form or
the acceptance of which would, in Mandalay's opinion, be unlawful. Mandalay also
reserves the right to waive any defects, irregularities or conditions of tender
as to particular Old Notes. Mandalay's interpretations of the terms and
conditions of the Exchange Offer (including the instructions in this Letter of
Transmittal) will be final and binding. Any defect or irregularity in connection
with tenders of Old Notes must be cured within such time as Mandalay determines,
unless waived by Mandalay. Tenders of Old Notes shall not be deemed to have been
made until all defects or irregularities have been waived by Mandalay or cured.
Neither Mandalay, the exchange agent, nor any other person will be under any
duty to give notice of any defects or irregularities in tenders of Old Notes, or
will incur any liability to registered holders of Old Notes for failure to give
such notice.

    10.  WAIVER OF CONDITIONS.  To the extent permitted by applicable law,
Mandalay reserves the right to waive any and all conditions to the Exchange
Offer as described under "The Exchange Offer--Conditions to the Exchange Offer"
in the prospectus, and accept for exchange any Old Notes tendered.

    11.  TAX IDENTIFICATION NUMBER AND BACKUP WITHHOLDING.  Federal income tax
law generally requires that a holder of Old Notes whose tendered Old Notes are
accepted for exchange or such holder's assignee (in either case, the "Payee"),
provide the exchange agent (the "Payor") with such Payee's correct Taxpayer
Identification Number ("TIN"), which, in the case of a Payee who is an
individual, is such Payee's social security number. If the Payor is not provided
with the correct TIN or an adequate basis for an exemption, such Payee may be
subject to a $50 penalty imposed by the Internal Revenue Service and backup
withholding in an amount equal to 31% of the gross proceeds received pursuant to
the Exchange Offer. If withholding results in an overpayment of taxes, a refund
may be obtained.

    To prevent backup withholding, each Payee must provide such Payee's correct
TIN by completing the "Substitute Form W-9" set forth herein, certifying that
the TIN provided is correct (or that such Payee is awaiting a TIN) and that:

                                       12
<PAGE>
    - the Payee is exempt from backup withholding;

    - the Payee has not been notified by the Internal Revenue Service that such
      Payee is subject to backup withholding as a result of a failure to report
      all interest or dividends; or

    - the Internal Revenue Service has notified the Payee that such Payee is no
      longer subject to backup withholding.

    If the Payee does not have a TIN, such Payee should consult the enclosed
Guidelines for Certification of Taxpayer Identification Number on Substitute
Form W-9 (the "W-9 Guidelines") for instructions on applying for a TIN, write
"Applied For" in the space for the TIN in Part 1 of the Substitute Form W-9, and
sign and date the Substitute Form W-9 and the Certificate of Awaiting Taxpayer
Identification Number set forth herein. If the Payee does not provide such
Payee's TIN to the Payor within 60 days, backup withholding will begin and
continue until such Payee furnishes such Payee's TIN to the Payor. NOTE: Writing
"Applied For" on the form means that the Payee has already applied for a TIN or
that such Payee intends to apply for one in the near future.

    If Old Notes are held in more than one name or are not in the name of the
actual owner, consult the W-9 Guidelines for information on which TIN to report.

    Exempt Payees (including, among others, all corporations and certain foreign
individuals) are not subject to these backup withholding and reporting
requirements. To prevent possible erroneous backup withholding, an exempt Payee
must enter its correct TIN in Part I of the Substitute Form W-9, write "Exempt"
in Part 2 of such form and sign and date the form. See the W-9 Guidelines for
additional instructions. In order for a nonresident alien or foreign entity to
qualify as exempt, such person must submit a completed Form W-8, "Certificate of
Foreign Status," signed under penalty of perjury attesting to such exempt
status. Such form may be obtained from the Payor.

    12.  MUTILATED, LOST, STOLEN OR DESTROYED OLD NOTES.  Any holder of Old
Notes whose Old Notes have been mutilated, lost, stolen or destroyed should
contact the exchange agent at the address or telephone number set forth on the
cover of this Letter of Transmittal for further instructions.

    13.  REQUESTS FOR ASSISTANCE OR ADDITIONAL COPIES.  Requests for assistance
or for additional copies of the prospectus, this Letter of Transmittal, the
Notice of Guaranteed Delivery and the Guidelines for Certification of Taxpayer
Identification Number on Substitute Form W-9 may be directed to the exchange
agent at its address set forth on the cover of this Letter of Transmittal.

    IMPORTANT--THIS LETTER OF TRANSMITTAL, TOGETHER WITH CERTIFICATES FOR
TENDERED OLD NOTES AND ALL OTHER REQUIRED DOCUMENTS, WITH ANY REQUIRED SIGNATURE
GUARANTEES AND ALL OTHER REQUIRED DOCUMENTS MUST BE RECEIVED BY THE EXCHANGE
AGENT PRIOR TO THE EXPIRATION DATE.

                                       13
<PAGE>
                       PAYOR'S NAME: THE BANK OF NEW YORK

<TABLE>
<C>                                          <S>                        <C>
---------------------------------------------------------------------------------------------------------------
              SUBSTITUTE                     Part 1--PLEASE                  TIN ------------------------
               FORM W-9                      PROVIDE YOUR TIN IN              (Social Security Number or
                                             THE BOX AT RIGHT AND           Employer Identification Number)
                                             CERTIFY BY SIGNING
                                             AND DATING BELOW

                                             ------------------------------------------------------------------
                                             Part 2--FOR PAYEES EXEMPT FROM BACKUP WITHHOLDING PLEASE WRITE
                                             "EXEMPT" HERE (SEE INSTRUCTIONS)
                                             ------------------------------------------------------------------
                                             Part 3--CERTIFICATION UNDER PENALTIES OF PERJURY, I CERTIFY THAT
                                             (1) The number shown on this form is my correct TIN (or I am
                                             waiting for a number to be issued to me), and (2) I am not subject
                                             to backup withholding because: (a) I am exempt from backup
                                             withholding, or (b) I have not been notified by the Internal
                                             Revenue Service (the "IRS") that I am subject to backup
                                             withholding as a result of a failure to report all interest or
                                             dividends or (c) the IRS has notified me that I am no longer
                                             subject to backup withholding.
             Department of
             the Treasury
               Internal
            Revenue Service
                                             ------------------------------------------------------------------
          Payor's Request for                THE INTERNAL REVENUE SERVICE DOES NOT REQUIRE YOUR CONSENT TO ANY
        Taxpayer Identification              PROVISION OF THIS DOCUMENT OTHER THAN THE CERTIFICATIONS REQUIRED
            Number ("TIN")                   TO AVOID BACK-UP WITHHOLDING
           and Certification

                                             SIGNATURE ---------------  DATE ---------------

---------------------------------------------------------------------------------------------------------------
</TABLE>

    You must cross out item (2) of Part 3 above if you have been notified by the
IRS that you are currently subject to backup withholding because of
underreporting interest or dividends on your tax return.

   YOU MUST COMPLETE THE FOLLOWING CERTIFICATE IF YOU WROTE "APPLIED FOR" IN
                       PART 1 OF THE SUBSTITUTE FORM W-9

            CERTIFICATE OF AWAITING TAXPAYER IDENTIFICATION NUMBER
I CERTIFY UNDER PENALTIES OF PERJURY THAT A TAXPAYER IDENTIFICATION NUMBER HAS
NOT BEEN ISSUED TO ME, AND THAT I MAILED OR DELIVERED AN APPLICATION TO RECEIVE
A TAXPAYER IDENTIFICATION NUMBER TO THE APPROPRIATE INTERNAL REVENUE SERVICE
CENTER OR SOCIAL SECURITY ADMINISTRATIVE OFFICE (OR I INTEND TO MAIL OR DELIVER
AN APPLICATION IN THE NEAR FUTURE). I UNDERSTAND THAT IF I DO NOT PROVIDE A
TAXPAYER IDENTIFICATION NUMBER TO THE PAYOR WITHIN 60 DAYS, THE PAYOR IS
REQUIRED TO WITHHOLD 31 PERCENT OF ALL CASH PAYMENTS MADE TO ME THEREAFTER UNTIL
I PROVIDE A NUMBER.

Signature                               Date
              -------------------                     -------------------

NOTE:  FAILURE TO COMPLETE AND RETURN THIS FORM MAY RESULT IN BACKUP WITHHOLDING
       OF 31 PERCENT OF ANY CASH PAYMENTS. PLEASE REVIEW THE ENCLOSED GUIDELINES
       FOR CERTIFICATION OF TAXPAYER IDENTIFICATION NUMBER ON SUBSTITUTE FORM
       W-9 FOR ADDITIONAL DETAILS.

                                       14