QuickLinks -- Click here to rapidly navigate through this document

EXHIBIT 10.8

EMPLOYMENT AGREEMENT

        This EMPLOYMENT AGREEMENT (the "Agreement") is entered into as of
September 3, 2002, by and between PENN NATIONAL GAMING, INC., a Pennsylvania
corporation (the "Company"), and JORDAN SAVITCH ("Executive"), an individual
residing in Pennsylvania.

        WHEREAS, Executive desires to become employed by the Company, and the
Company desires to employ Executive upon the terms and conditions hereinafter
set forth.

        NOW, THEREFORE, the parties hereto, intending to be legally bound,
hereby agree as follows:

        1.    Employment.    The Company hereby agrees to employ Executive and
Executive hereby accepts such employment, in accordance with the terms,
conditions and provisions hereinafter set forth.

        1.1    Duties and Responsibilities.    Commencing on September 3, 2002
(the "Commencement Date"), Executive shall serve as the Senior Vice President
and General Counsel of the Company. Executive shall perform all duties and
accept all responsibilities incident to such position as may be reasonably
assigned to him by the Company's Chief Executive Officer or by the Board of
Directors (the "Board").

        1.2    Term.    The term of this Agreement shall begin on the date
hereof and shall terminate on the second anniversary of the Commencement Date
(the "Initial Term") unless earlier terminated in accordance with Section 3
hereof. This Agreement shall automatically renew for additional one-year periods
(each, a "Renewal Term" and, together with the Initial Term, the "Employment
Term") unless either party has delivered written notice of non-renewal at least
90 days prior to the start of a Renewal Term or unless earlier terminated in
accordance with Section 3 hereof.

        1.3    Extent of Service.    Executive agrees to use Executive's best
efforts to carry out Executive's duties and responsibilities and, consistent
with the other provisions of this Agreement, to devote substantially all of
Executive's business time, attention and energy thereto. The foregoing shall not
be construed as preventing Executive from engaging in other business activities,
provided that Executive agrees not to become engaged in any other business
activity which, in the reasonable judgment of the Board, is likely to interfere
with Executive's ability to discharge Executive's duties and responsibilities to
the Company.

        2.    Compensation.    For all services rendered by Executive hereunder,
the Company shall compensate the Executive as set forth below.

        2.1    Base Salary.    The Company shall pay Executive a base salary
("Base Salary"), commencing on the Commencement Date, at the annual rate of
$275,000, payable in installments at such times as the Company customarily pays
its other senior level executives. Executive's Base Salary shall be reviewed
annually for appropriate increases, but not decreases, by the Company pursuant
to the Company's performance review policies for senior level executives.

        2.2    Cash Bonus.    Executive shall be eligible for an annual cash
bonus determined in accordance with the Senior Management Incentive Compensation
Plan provided that the maximum bonus percentage may, in the discretion of the
Board, be limited to 50% of the Base Salary. Executive may also be eligible to
receive such other cash bonuses as the Board or the Chief Executive Officer may
elect, in their sole discretion, to grant to Executive to award meritorious
performance or such other criteria as the Board or the Chief Executive Officer
may, from time to time, establish.

        2.3    Other Benefits.    Executive shall be entitled to participate in
all other employee benefit plans and programs, including, without limitation,
health, vacation, retirement, deferred compensation or SERP, made available to
the Company's senior level executives as a group (excluding the Company's Chief
Executive Officer) ("Peer Executives"), as such plans and programs may be in
effect from time to time and subject to the eligibility requirements of the each
plan. Nothing in this Agreement shall prevent the Company from amending or
terminating any retirement, welfare or other employee benefit

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

plans or programs from time to time, as the Company deems appropriate. Company
shall maintain life insurance on the Executive in the amount of two times
initial annual Base Salary, to the extent it can be issued at standard rates,
and Executive may name the beneficiary of such policy. Some or all of such
coverage may be maintained pursuant to the Company's group-term life insurance
policy.

        2.4    Vacation, Sick Leave and Holidays.    Executive shall be entitled
in each calendar year to four weeks of paid vacation time, prorated for 2002.
Each vacation shall be taken by Executive at such time or times as agreed upon
by the Company and Executive, and any portion of Executive's allowable vacation
time not used during the calendar year shall be subject to the Company's payroll
policies regarding carryover vacation. Executive shall be entitled to holiday
and sick leave in accordance with the Company's holiday and other pay for time
not worked policies.

        2.5    Reimbursement of Expenses.    Executive shall be provided with
reimbursement of reasonable expenses related to Executive's employment by the
Company on a basis no less favorable than that which may be authorized from time
to time for Peer Executives.

        2.6    Relocation Expenses.    Company will pay or reimburse the
Executive, for reasonable relocation expenses (net of taxes, if any) related to
his and his immediate family's relocation closer to corporate headquarters. Such
payment/reimbursement will be based upon the Company's relocation policy.

        2.7    Incentive Compensation.    

        (a)    Initial Equity Compensation.    The Company shall grant to
Executive a non-qualified stock option (the "Initial Option"), substantially in
the form of Exhibit A hereto, to purchase 115,000 shares of common stock of the
Company at a price per share of $17.46. The terms of the Initial Option shall be
governed by the Penn National Gaming, Inc. 1994 Stock Option Plan and, provided
that Executive remains employed by the Company as of the relevant vesting date,
shall vest in equal quarterly installments over four years, with the first
installment vesting on September 3, 2002, and with each subsequent installment
vesting on the same date of the third month immediately following the prior
installment.

        (b)    Subsequent Equity Compensation.    Executive shall be entitled to
receive subsequent equity compensation grants on substantially the same terms
and conditions as equity compensation grants provided to Peer Executives taking
into account Executive's position as the Senior Vice President and General
Counsel and the Board's assessment of Executive's performance.

        (c)    Other Incentive Compensation.    Executive shall be entitled to
participate in any short-term and long-term incentive programs established by
the Company for Peer Executives, at levels commensurate with the benefits
provided to Peer Executives taking into account his position as the Senior Vice
President and General Counsel.

        2.8    Change of Control.    In the event that a change in control of
the Company occurs, Executive shall be entitled to any payments and/or benefits
that may become payable as a result of such event on substantially the same
terms and conditions as any payments and/or benefits provided to Peer Executives
taking into account Executive's position as the Senior Vice President and
General Counsel.

        3.    Termination.    Executive's employment may be terminated prior to
the end of the Employment Term in accordance with, and subject to the terms and
conditions, set forth below.

        3.1    Termination by the Company.    

        (a)    Without Cause.    The Company may terminate Executive at any time
without Cause (as defined in subsection (b) below) effective upon not less than
60 days' prior written notice to Executive; provided, however, that, in the
event that such notice is given, Executive shall be under no obligation to
render any additional services to the Company and shall be allowed to seek other

2

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

employment (in which case Executive shall notify the Company in writing as to
the effective date of termination).

        (b)    With Cause.    The Company may terminate Executive at any time
for Cause effective immediately upon delivery of written notice to Executive. As
used herein, the term "Cause" shall mean:

        (i)    Executive shall have been convicted of a felony;

        (ii)    Executive is found disqualified or not suitable to hold a casino
or gaming license by a gaming authority in any such jurisdiction where the
Executive is required to be found qualified, suitable or licensed, as the case
may be;

        (iii)    Executive materially breaches any Company policy and fails to
cure such breach within 30 days after receipt of written notice thereof to
Executive from the Company or Executive materially breaches the terms of
Sections 4 or 5 this Agreement (regarding Confidentiality and Non-Competition);
or

        (iv)    Executive misappropriates corporate funds or commits other acts
of dishonesty.

        3.2    Termination by the Executive.    

        (a)    Voluntary Termination.    Executive may voluntarily terminate his
employment for any reason effective upon 60 days' prior written notice to the
Company, unless such notice requirement is waived by the Company (in which case
the Company shall notify Executive in writing as to the effective date of
termination).

        (b)    For Good Reason.    Executive may terminate his employment for
Good Reason (as defined below) effective immediately upon delivery of written
notice to the Company provided such notice is delivered within 60 days of
Executive's actual knowledge of the occurrence of all circumstances or events
constituting Good Reason. As used herein, the term "Good Reason" shall mean the
Company hiring or otherwise designating another employee to serve as chief legal
officer of the Company or the Company's election not to renew this Agreement.
Notwithstanding anything herein to the contrary, the Company's reliance on or
use of outside legal counsel or other independent contractors shall not under
any circumstances constitute Good Reason.

        3.3    Termination for Death or Disability.    In the event of the death
or total disability of Executive, this Agreement shall terminate effective as of
the date of Executive's death or total disability. The term "total disability"
shall have the definition set forth in the Company's Long Term Disability
Insurance Policy in effect at the time of such determination.

        3.4    Payments Due Upon Termination.    

        (a)    Generally.    Upon any termination described in Sections 3.1, 3.2
or 3.3 above, Executive shall be entitled to receive any amounts due for Base
Salary earned or expenses incurred through the effective date of termination and
any benefits accrued or earned in accordance with the terms of any applicable
benefit plans and programs. Executive shall also be entitled to receive such
amounts as may be due under the Company's then current severance pay plan, if
any, for Peer Executives ("Standard Severance") provided the circumstances of
Executive's termination have not otherwise disqualified him under the terms of
such plan.

        (b)    Without Cause; For Good Reason.    In the event employment is
terminated by the Company without Cause under Section 3.1(a) or by Executive for
Good Reason under Section 3.2(b) and subject to Executive executing a mutual
release in a form reasonably acceptable

3

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

to the Company and Executive, Executive shall be entitled to receive the
following in lieu of any Standard Severance:

        (i)    Executive shall receive a cash payment equal to the Executive's
monthly Base Salary at the rate in effect on the effective date of termination
multiplied by the greater of (x) the number of months remaining in the
Employment Term or (y) twelve months (the "Severance Period").

        (ii)    Executive shall continue to receive the health benefits coverage
in effect on the effective date of termination (or as the same may be changed
from time to time for Peer Executives) for himself and, if any, his spouse and
dependents for the Severance Period. In the event such coverage can not be
continued (or where such continuation would adversely affect the tax status of
the plan pursuant to which the coverage is provided), the Company may elect to
pay Executive cash in lieu of such coverage in an amount equal to Executive's
after-tax cost of obtaining generally comparable coverage.

        (c)    Payments.    All payments due under this Section 3.4 shall be
made within 15 days of the effective date of termination. Except as otherwise
provided in this Section 3.4, no other payments or benefits shall be due under
this Agreement to Executive.

        3.5    Options.    Except as otherwise provided in the relevant option
plan or option agreement, all Options granted under this Agreement shall cease
vesting upon termination of Executive's employment for any reason.

        3.6    Notice of Termination.    Any termination of Executive's
employment shall be communicated by a written notice of termination delivered
within the time period specified in this Section 3. The notice of termination
shall (i) indicate the specific termination provision in this Agreement relied
upon, (ii) briefly summarize the facts and circumstances deemed to provide a
basis for a termination of employment and the applicable provision hereof, and
(iii) specify the termination date in accordance with the requirements of this
Agreement.

        4.    Confidentiality.    The Executive recognizes and acknowledges that
he will have access to certain confidential information of the Company and that
such information constitutes valuable, special and unique property of the
Company (including, but not limited to, information such as business strategies,
marketing plans, customer lists, and other business related information for the
Company's customers). The Executive agrees that he will not, for any reason or
purpose whatsoever, during or after the term of his employment, disclose any of
such confidential information to any party, and that he will keep inviolate and
secret all confidential information or knowledge which he has access to by
virtue of his employment hereunder, except as necessary in the ordinary course
of performing his duties hereunder.

        5.    Non-Competition.    

        (a)    During his employment by the Company and for a period of one year
thereafter (provided that the benefits to which Executive is entitled under
Section 3.4 have been paid in full or continue to be paid), Executive shall not,
except with the prior written consent of the Company, directly or indirectly,
own, manage, operate, join, control, finance or participate in the ownership,
management, operation, control or financing of, or be connected as an officer,
director, employee, partner, principal, agent, representative, consultant or
otherwise with, or use or permit his name to be used in connection with, any
business or enterprise which is primarily in the business of owning and
operating gaming establishments or in any other business in which the Company is
primarily engaged at the time of Executive's termination of employment.

        (b)    The foregoing restrictions shall not be construed to prohibit
Executive's ownership of less than three percent of any class of securities of
any corporation which is engaged in any of the foregoing businesses and has a
class of securities registered pursuant to the Securities Exchange

4

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

Act of 1934, provided that such ownership represents a passive investment and
that neither Executive nor any group of persons including Executive in any way,
either directly or indirectly, manages or exercises control of any such
corporation, guarantees any of its financial obligations, otherwise takes any
part in its business, other than exercising Executive's rights as a shareholder,
or seeks to do any of the foregoing.

        6.    Non-Solicitation.    During his employment by the Company and for
the period of one year thereafter, Executive will not, except with the prior
written consent of the Company, directly or indirectly, solicit or hire, or
encourage the solicitation or hiring of, any person who is, or was within a six
month period prior to such solicitation or hiring, an employee of the Company
for any position as an employee, independent contractor, consultant or
otherwise.

        7.    Document Surrender.    Executive, at the expiration of his
employment for any reason whatsoever, shall surrender and deliver to the Company
all documents, correspondence and any other information, of any type whatsoever,
from the Company or any of its agents, servants, employees, suppliers, and
existing or potential customers, that come into Executive's possession by any
means whatsoever, during the course of employment.

        8.    Governing Law.    This Agreement shall be governed by and
construed in accordance with the internal laws (and not the law of conflicts) of
the Commonwealth of Pennsylvania.

        9.    Notices.    All notices and other communications required or
permitted under this Agreement or necessary or convenient in connection herewith
shall be in writing and shall be deemed to have been given when hand delivered,
delivered by guaranteed next-day delivery or sent by facsimile (with
confirmation of transmission) or shall be deemed given on the third business day
when mailed by registered or certified mail, as follows (provided that notice of
change of address shall be deemed given only when received):

        If to the Company, to:

                Penn National Gaming, Inc.
                825 Berkshire Boulevard, Suite 200
                Wyomissing, PA 19610
                Attention: President
                Fax: 610-373-4966

        With a required copy to:

                Morgan, Lewis & Bockius LLP
                1701 Market Street
                Philadelphia, PA 19103-2921
                Attention: Joseph Ronan, Esquire
                Fax: 215-963-5299

        If to Executive, to:

                Jordan Savitch
                60 Garlor Drive
                Havertown, PA 19083
                Fax: 801-838-5712

5

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

        With a required copy to:

                Andrew J. Rudolph, Esq.
                Pepper Hamilton LLP
                2 Logan Square
                Philadelphia, PA 19103
                Fax: 215-981-4750

or to such other names or addresses as the Company or Executive, as the case may
be, shall designate by notice to each other person entitled to receive notices
in the manner specified in this Section.

        10.    Contents of Amendment; Amendment and Assignment.    

        (a)    This Agreement sets forth the entire understanding between the
parties hereto with respect to the subject matter hereof and cannot be changed,
modified, extended, waived or terminated except upon a written instrument signed
by the party against which it is to be enforced.

        (b)    All of the terms and provisions of this Agreement shall be
binding upon and inure to the benefit of and be enforceable by the respective
heirs, executors, administrators, legal representatives, successors and assigns
of the parties hereto, except that the duties and responsibilities of Executive
under this Agreement are of a personal nature and shall not be assignable or
delegatable in whole or in part by Executive. The Company shall require any
successor (whether direct or indirect, by purchase, merger, consolidation,
reorganization or otherwise) to all or substantially all of the business or
assets of the Company, within 15 days of such succession, expressly to assume
and agree to perform this Agreement in the same manner and to the same extent as
the Company would be required to perform if no such succession had taken place

        11.    Severability.    If any provision of this Agreement or
application thereof to anyone or under any circumstances is adjudicated to be
invalid or unenforceable in any jurisdiction, such invalidity or
unenforceability shall not affect any other provision or application of this
Agreement which can be given effect without the invalid or unenforceable
provision or application and shall not invalidate or render unenforceable such
provision or application in any other jurisdiction. If any provision is held
void, invalid or unenforceable with respect to particular circumstances, it
shall nevertheless remain in full force and effect in all other circumstances.

        12.    Remedies Cumulative; No Waiver.    No remedy conferred upon a
party by this Agreement is intended to be exclusive of any other remedy, and
each and every such remedy shall be cumulative and shall be in addition to any
other remedy given under this Agreement or now or hereafter existing at law or
in equity. No delay or omission by a party in exercising any right, remedy or
power under this Agreement or existing at law or in equity shall be construed as
a waiver thereof, and any such right, remedy or power may be exercised by such
party from time to time and as often as may be deemed expedient or necessary by
such party in its sole discretion.

        13.    Beneficiaries/References.    Executive shall be entitled, to the
extent permitted under any applicable law, to select and change a beneficiary or
beneficiaries to receive any compensation or benefit payable under this
Agreement following Executive's death by giving the Company written notice
thereof. In the event of Executive's death or a judicial determination of
Executive's incompetence, reference in this Agreement to Executive shall be
deemed, where appropriate, to refer to Executive's beneficiary, estate or other
legal representative.

        14.    Withholding.    All payments under this Agreement shall be made
subject to applicable tax withholding, and the Company shall withhold from any
payments under this Agreement all federal, state and local taxes as the Company
is required to withhold pursuant to any law or governmental rule or regulation.
Except as specifically provided otherwise in this Agreement, Executive shall
bear all

6

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

expense of, and be solely responsible for, all federal, state and local taxes
due with respect to any payment received under this Agreement.

        15.    Regulatory Compliance.    The terms and provisions hereof shall
be conditioned on and subject to compliance with all laws, rules, and
regulations of all jurisdictions, or agencies, boards or commissions thereof,
having regulatory jurisdiction over the employment or activities of Executive
hereunder.

        IN WITNESS WHEREOF, the undersigned, intending to be legally bound, have
executed this Agreement as of the date first above written.

    PENN NATIONAL GAMING, INC.
 
 
By:
/s/  PETER M. CARLINO      

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

Peter M. Carlino
Chairman and CEO
 
 
By:
/s/  JORDAN SAVITCH      

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

Jordan Savitch

7

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

Exhibit A

STOCK OPTION AGREEMENT

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

QuickLinks

EXHIBIT 10.8