Exhibit
10.5





AGREEMENT





AGREEMENT
(this “Agreement”) dated as of July 17, 2008, is by and among Las Vegas Gaming,
Inc., a Nevada corporation (the “Company”), and IGT, a Nevada
corporation (the “IGT”).





RECITALS




The
Company and IGT have entered into a non-binding term sheet concerning a
potential resolution of certain pending litigation that involves potential
licenses of intellectual property and products, software development and access
to intellectual property and a potential investment by IGT in the Company (such
potential transaction, the “Settlement”).  In
connection with the execution of the term sheet, IGT is providing $1,500,000 to
the Company to fund working capital needs of the Company on the terms set forth
herein.




NOW
THEREFORE, in consideration of the foregoing and the mutual covenants herein
contained, the parties hereto hereby agree as follows:




Section
1.     Funding.  On
the date hereof, IGT has sent to the Company $1,500,000 in cash by wire transfer
of immediately available funds, and the Company hereby acknowledges receipt of
same.  The Company covenants and agrees that it will use the funds
solely for working capital purposes; provided, that the Company will not use
such funds in any manner to advance the pending litigation involving IGT or any
affiliates of IGT.




Section
2.     Finalization of
Terms. In the event that IGT and the Company do not execute definitive
agreements concerning the Settlement by August 15, 2008, then on October 30,
2008 (a) the Company will issue to IGT 750,000 shares of its common stock, par
value $.001 per share, such shares to be duly authorized and validly issued and
evidenced by a duly and validly executed share certificate delivered to IGT on
such date, and (ii) IGT will have, automatically and without need of any further
action on the part of the Company or IGT, a first right of refusal to take an
exclusive license from the Company to any and all patents owned or controlled by
the Company which have one or more claims covering the Company’s
PlayerVision-related hardware and firmware (“PVT”) PVT based on the
Company’s currently existing technology and patent pool, such first right of
refusal to be automatically effective as of such date and to continue
thereafter.  The terms of the exclusive license will be negotiated as
necessary.  The Company may not license any third party, other than
end users and operators, to their PlayerVision technology and their PVT patents
until it is determined pursuant to this Section 2 whether IGT
will have a first right of refusal, and if IGT receives such first right of
refusal the Company may not abrogate IGT’s first right of refusal rights by
licensing to third parties prior to IGT exercising its first right of refusal
rights.  The Company will have the option of returning to IGT
$1,525,000 in cash by wire transfer of immediately available funds, such funds
to be received by IGT no later than October 29, 2008, in lieu of issuing the
common stock and granting the first right of refusal described in this Section
2.




Section
3.       Company
Representations.  This Agreement has been duly and validly
authorized, executed and delivered by the Company and constitutes a binding
obligation of the Company enforceable against it in accordance with its terms,
subject to applicable bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium and similar laws affecting creditors’’ rights an
remedies generally, and subject, as to enforceability, to general principles of
equity (regardless of whether enforcement is sought in a proceeding at law or in
equity).  The execution ,delivery and performance by the Company of
this Agreement, the compliance by the Company with all of the provisions of this
Agreement and the






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consummation
of the transactions herein contemplated will not (a) conflict with or result in
a breach or violation of any of the terms or provisions of, or constitute a
default under, an indenture, mortgage, deed of trust, loan agreement or other
agreement or instrument to which the Company is a party or by which the Company
is bound or to which any of the property or assets of the Company is subject,
(b) result in any violation of the provisions of any of the organizational or
governing documents of the Company or any statute, order, rule or regulation of
any court or governmental agency or body having jurisdiction over the Company or
any of its properties, or (c) require any consent, approval, authorization,
order, registration or qualification of or with any court or governmental agency
or body having jurisdiction over the Company or any of its
properties.




Section
4.         No
Admission.  The parties hereto covenant and agree that nothing
in this Agreement, including, without limitation, the payment of $1,500,000 by
IGT to the Company, shall be construed or deemed to be an admission by either
party hereto (or any of their respective affiliates) of any fact or condition or
an expression by either party hereto (or any of their respective affiliates) of
fault, liability or obligation, in each case of any nature whatsoever with
respect to the pending litigation between IGT and the Company (or with respect
to any other matter between the parties hereto and any of their respective
affiliates).




Section
5.         Assignment.  The
Company may not directly or indirectly assign, transfer or convey, or delegate
its obligations under, this Agreement to any person or entity without the prior
written consent of IGT.




Section
6.        Entire
Agreement.  This Agreement embodies the entire agreement and
understanding between the parties hereto in respect of the subject matter
contained herein.  This Agreement supersedes all prior written and
prior or contemporaneous oral agreements and understandings between the parties
with respect to the subject matter of this Agreement.




Section
7.        Governing Law;
Jurisdiction.  THIS AGREEMENT WILL BE GOVERNED BY AND CONSTRUED
AND ENFORCED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEVADA WITHOUT
REFERENCE TO PRINCIPLES OF CONFLICTS OF LAW THAT WOULD RESULT IN THE APPLICATION
OF THE LAWS OF ANOTHER JURISDICTION.  ANY  LEGAL ACTION OR
PROCEEDING BY OR AGAINST ANY PARTY HERETO OR WITH RESPECT TO OR ARISING OUT OF
THIS AGREEMENT MAY BE BROUGHT IN OR REMOVED TO THE COURTS OF THE STATE OF
NEVADA.  BY EXECUTION AND DELIVERY OF THIS AGREEMENT, EACH PARTY
ACCEPTS, FOR ITSELF AND IN RESPECT OF ITS PROPERTY, GENERALLY AND
UNCONDITIONALLY, THE JURISDICTION OF THE AFORESAID COURTS (AND COURTS OF APPEALS
THEREFROM) FOR LEGAL PROCEEDINGS ARISING OUT OF OR IN CONNECTION WITH THIS
AGREEMENT.




Section
8.         Severability.  If
any provision of this Agreement or the application thereof to any person or
entity or circumstances is determined by a court of competent jurisdiction to be
invalid, void or unenforceable, the remaining provisions hereof, or the
application of such provision to persons or entities or circumstances other than
those as to which it has been held invalid or unenforceable, will remain in full
force and effect and will in no way be affected, impaired or invalidated
thereby, so long as the economic or legal substance of the transactions
contemplated hereby is not affected in any manner adverse to any
party.  Upon such determination, the parties will negotiate in good
faith in an effort to agree upon a suitable and equitable substitute provision
to effect the original intent of the parties.




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Section
9.        Expenses.  Except
as set forth herein, each of the Company and IGT will pay its respective fees
and expenses related to the transactions contemplated by this
Agreement.




Section
10.     Counterparts.  This
Agreement may be executed in any number of counterparts, each of which will be
deemed to be an original, but all of which, when taken together, will constitute
one and the same instrument.









[Signature
page follows]






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IN
WITNESS WHEREOF, the parties have caused this Agreement to be duly executed and
delivered as of the date first above written.









LAS VEGAS
GAMING, INC.




By: /s/  Jon D.
Berkley




Name:  
Jon D.
Berkley




Title:    
President &
CEO








INVESTOR





IGT




By: /s/ Richard
Pennington




Name: 
Richard
Pennington




Title:    EVP Corporate
Strategy









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