<PAGE>

                                  SGC GUARANTY

          This GUARANTY is entered into as of April 14, 1998 by SANTA FE 
GAMING CORPORATION (formerly Sahara Gaming Corporation), a Nevada corporation 
("GUARANTOR"), in favor of and for the benefit of SUNAMERICA LIFE INSURANCE 
COMPANY, as collateral agent for and representative of (in such capacity 
herein called "REPRESENTATIVE") the holders of the Notes from time to time 
("HOLDERS") and, subject to subsection 3.7, for the benefit of the other 
Beneficiaries (as hereinafter defined).

                                    RECITALS

          A.   Santa Fe Hotel Inc., a Nevada corporation ("COMPANY"), and 
Guarantor have entered into that certain Note Purchase Agreement dated as of 
April 14, 1998 with SunAmerica Life Insurance Company and Credit Suisse First 
Boston Mortgage Capital LLC (said Note Purchase Agreement, as it may 
hereafter be amended, supplemented or otherwise modified from time to time, 
being the "NOTE PURCHASE AGREEMENT"; capitalized terms defined therein and 
not otherwise defined herein being used herein as therein defined).

          B.   Guarantor owns all the capital stock of Company and will 
benefit from the transactions contemplated by the Basic Documents.

          C.   It is a condition precedent to the acquisition of the Notes 
under the Note Purchase Agreement that Company's obligations thereunder be 
guarantied by Guarantor.

          D.   Guarantor is willing irrevocably and unconditionally to 
guaranty such obligations of Company.

          NOW, THEREFORE, based upon the foregoing and other good and 
valuable consideration, the receipt and sufficiency of which are hereby 
acknowledged, and in order to induce Holders and Representative to enter into 
the Note Purchase Agreement and to acquire the Notes thereunder, Guarantor 
hereby agrees as follows:

SECTION 1.   DEFINITIONS

     1.1  CERTAIN DEFINED TERMS.  As used in this Guaranty, the following 
terms shall have the following meanings unless the context otherwise requires:

          "BENEFICIARIES" means Representative and Holders.

          "GUARANTIED OBLIGATIONS" has the meaning assigned to that term in 
     subsection 2.1.

          "GUARANTY" means this Guaranty dated as of April 14, 1998, as it 
     may be amended, supplemented or otherwise modified from time to time.


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<PAGE>

          "PAYMENT IN FULL," "PAID IN FULL" or any similar term means payment in
     full of the Guarantied Obligations, including without limitation all
     principal, interest, costs, fees and expenses (including, without
     limitation, reasonable legal fees and expenses) of Beneficiaries as
     required under the Basic Documents.

     1.2  INTERPRETATION.  References to "Sections" and "subsections" shall 
be to Sections and subsections, respectively, of this Guaranty unless 
otherwise specifically provided.  In the event of any conflict or 
inconsistency between the terms, conditions and provisions of this Guaranty 
and the terms, conditions and provisions of the Note Purchase Agreement, the 
terms, conditions and provisions of this Guaranty shall prevail.

SECTION 2.   THE GUARANTY

     2.1  GUARANTY OF THE GUARANTIED OBLIGATIONS.  Guarantor hereby 
irrevocably and unconditionally guaranties, as primary obligor and not merely 
as surety, the due and punctual payment in full of all Guarantied Obligations 
when the same shall become due, whether at stated maturity, by required 
prepayment, declaration, acceleration, demand or otherwise (including amounts 
that would become due but for the operation of the automatic stay under 
Section 362(a) of the Bankruptcy Code, 11 U.S.C. Section 362(a)).  The term 
"GUARANTIED OBLIGATIONS" is used herein in its most comprehensive sense and 
includes: 

          (a) any and all Obligations of Company now or hereafter made, incurred
     or created, whether absolute or contingent, liquidated or unliquidated,
     whether due or not due, and however arising under or in connection with the
     Note Purchase Agreement and the other Basic Documents, including those
     arising under successive borrowing transactions under the Note Purchase
     Agreement which shall either continue the Obligations of Company or from
     time to time renew them after they have been satisfied and including
     interest which, but for the filing of a petition in bankruptcy with respect
     to Company, would have accrued on any Guarantied Obligations, whether or
     not a claim is allowed against Company for such interest in the related
     bankruptcy proceeding; and

          (b) those expenses set forth in subsection 2.7 hereof.

     2.2  PAYMENT BY GUARANTOR; APPLICATION OF PAYMENTS.  Guarantor hereby 
agrees, in furtherance of the foregoing and not in limitation of any other 
right which any Beneficiary may have at law or in equity against Guarantor by 
virtue hereof, that upon the failure of Company to pay any of the Guarantied 
Obligations when and as the same shall become due, whether at stated 
maturity, by required prepayment, declaration, acceleration, demand or 
otherwise (including amounts that would become due but for the operation of 
the automatic stay under Section 362(a) of the Bankruptcy Code, 11 U.S.C.  
Section  362(a)), Guarantor will upon demand pay, or cause to be paid, in 
cash, to Representative for the ratable benefit of Beneficiaries, an amount 
equal to the sum of the unpaid principal amount of all Guarantied Obligations 
then due as aforesaid, accrued and unpaid interest on such Guarantied 
Obligations (including, without limitation, interest which, but for the 
filing of a petition in bankruptcy 


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<PAGE>

with respect to Company, would have accrued on such Guarantied Obligations, 
whether or not a claim is allowed against Company for such interest in the 
related bankruptcy proceeding) and all other Guarantied Obligations then owed 
to Beneficiaries as aforesaid.  All such payments shall be applied promptly 
from time to time by Representative:

          FIRST, to the payment of the costs and expenses of any collection or
     other realization under this Guaranty, including reasonable compensation to
     Representative and its agents and counsel, and all expenses, liabilities
     and advances made or incurred by Representative in connection therewith;

          SECOND, to the payment of all other Guarantied Obligations in such
     order as Representative shall elect pursuant to Section 2.5A(ii) of the
     Note Purchase Agreement; and

          THIRD, after payment in full of all Guarantied Obligations, to the
     payment to Guarantor, or its successors or assigns, or to whomsoever may be
     lawfully entitled to receive the same or as a court of competent
     jurisdiction may direct, of any surplus then remaining from such payments.

     2.3  LIABILITY OF GUARANTOR ABSOLUTE.  Guarantor agrees that its 
obligations hereunder are irrevocable, absolute, independent and 
unconditional and shall not be affected by any circumstance which constitutes 
a legal or equitable discharge of a guarantor or surety other than payment in 
full of the Guarantied Obligations.  In furtherance of the foregoing and 
without limiting the generality thereof, Guarantor agrees as follows:

          (a)  This Guaranty is a guaranty of payment when due and not of
     collectibility.

          (b)  Representative may enforce this Guaranty upon the occurrence of
     an Event of Default under the Note Purchase Agreement.

          (c)  The obligations of Guarantor hereunder are independent of the
     obligations of Company under the Basic Documents, and a separate action or
     actions may be brought and prosecuted against Guarantor whether or not any
     action is brought against Company or any other guarantors and whether or
     not Company is joined in any such action or actions.

          (d)  Payment by Guarantor of a portion, but not all, of the Guarantied
     Obligations shall in no way limit, affect, modify or abridge Guarantor's
     liability for any portion of the Guarantied Obligations which has not been
     paid.  Without limiting the generality of the foregoing, if Representative
     is awarded a judgment in any suit brought to enforce Guarantor's covenant
     to pay a portion of the Guarantied Obligations, such judgment shall not be
     deemed to release Guarantor from its covenant to pay the portion of the
     Guarantied Obligations that is not the subject of such suit, and such
     judgment shall not, except to the extent satisfied by Guarantor, limit,
     affect, 


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<PAGE>

     modify or abridge Guarantor's liability hereunder in respect of the
     Guarantied Obligations.

          (e)  Any Beneficiary, upon such terms as it deems appropriate, without
     notice or demand and without affecting the validity or enforceability of
     this Guaranty or giving rise to any reduction, limitation, impairment,
     discharge or termination of Guarantor's liability hereunder, from time to
     time may (i) renew, extend, accelerate, increase the rate of interest on,
     or otherwise change the time, place, manner or terms of payment of the
     Guarantied Obligations; (ii) settle, compromise, release or discharge, or
     accept or refuse any offer of performance with respect to, or substitutions
     for, the Guarantied Obligations or any agreement relating thereto and/or
     subordinate the payment of the same to the payment of any other
     obligations; (iii) request and accept other guaranties of the Guarantied
     Obligations and take and hold security for the payment of this Guaranty or
     the Guarantied Obligations; (iv) release, surrender, exchange, substitute,
     compromise, settle, rescind, waive, alter, subordinate or modify, with or
     without consideration, any security for payment of the Guarantied
     Obligations, any other guaranties of the Guarantied Obligations, or any
     other obligation of any Person (including any other guarantor) with respect
     to the Guarantied Obligations; (v) enforce and apply any security now or
     hereafter held by or for the benefit of such Beneficiary in respect of this
     Guaranty or the Guarantied Obligations and direct the order or manner of
     sale thereof, or exercise any other right or remedy that such Beneficiary
     may have against any such security, in each case as such Beneficiary in its
     discretion may determine consistent with the Note Purchase Agreement and
     any applicable security agreement, including foreclosure on any such
     security pursuant to one or more judicial or nonjudicial sales, whether or
     not every aspect of any such sale is commercially reasonable, and even
     though such action operates to impair or extinguish any right of
     reimbursement or subrogation or other right or remedy of Guarantor against
     Company or any security for the Guarantied Obligations; and (vi) exercise
     any other rights available to it under the Basic Documents.

          (f)  This Guaranty and the obligations of Guarantor hereunder shall be
     valid and enforceable and shall not be subject to any reduction,
     limitation, impairment, discharge or termination for any reason (other than
     payment in full of the Guarantied Obligations), including without
     limitation the occurrence of any of the following, whether or not Guarantor
     shall have had notice or knowledge of any of them: (i) any failure or
     omission to assert or enforce or agreement or election not to assert or
     enforce, or the stay or enjoining, by order of court, by operation of law
     or otherwise, of the exercise or enforcement of, any claim or demand or any
     right, power or remedy (whether arising under the Basic Documents, at law,
     in equity or otherwise) with respect to the Guarantied Obligations or any
     agreement relating thereto, or with respect to any other guaranty of or
     security for the payment of the Guarantied Obligations; (ii) any
     rescission, waiver, amendment or modification of, or any consent to
     departure from, any of the terms or provisions (including without
     limitation provisions relating to events of default) of the Note Purchase
     Agreement, any of the other Basic Documents or any agreement or instrument
     executed pursuant thereto, or of any other 


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<PAGE>

     guaranty or security for the Guarantied Obligations or any agreement 
     relating to such other guaranty or security; (iii) the Guarantied 
     Obligations, or any agreement relating thereto, at any time being found 
     to be illegal, invalid or unenforceable in any respect; (iv) the 
     application of payments received from any source (other than payments 
     received pursuant to the other Basic Documents or from the proceeds of 
     any security for the Guarantied Obligations, except to the extent such 
     security also serves as collateral for Indebtedness other than the 
     Guarantied Obligations) to the payment of Indebtedness other than the 
     Guarantied Obligations, even though any Beneficiary might have elected 
     to apply such payment to any part or all of the Guarantied Obligations; 
     (v) any Beneficiary's consent to the change, reorganization or 
     termination of the corporate structure or existence of Company or any of 
     its Subsidiaries and to any corresponding restructuring of the 
     Guarantied Obligations; (vi) any failure to perfect or continue 
     perfection of a security interest in any collateral which secures any of 
     the Guarantied Obligations; (vii) any defenses, set-offs or 
     counterclaims which Company may allege or assert against any Beneficiary 
     in respect of the Guarantied Obligations, including but not limited to 
     failure of consideration, breach of warranty, payment, statute of 
     frauds, statute of limitations, accord and satisfaction and usury; and 
     (viii) any other act or thing or omission, or delay to do any other act 
     or thing, which may or might in any manner or to any extent vary the 
     risk of Guarantor as an obligor in respect of the Guarantied Obligations.

     2.4  WAIVERS BY GUARANTOR.  Guarantor hereby waives, for the benefit of
Beneficiaries:

          (a)  any right to require any Beneficiary, as a condition of payment
     or performance by Guarantor, to (i) proceed against Company, any other
     guarantor of the Guarantied Obligations or any other Person, (ii) proceed
     against or exhaust any security held from Company, any such other guarantor
     or any other Person, (iii) proceed against or have resort to any balance of
     any deposit account or credit on the books of any Beneficiary in favor of
     Company or any other Person, or (iv) pursue any other remedy in the power
     of any Beneficiary whatsoever;

          (b)  any defense arising by reason of the incapacity, lack of
     authority or any disability or other defense of Company including, without
     limitation, any defense based on or arising out of the lack of validity or
     the unenforceability of the Guarantied Obligations or any agreement or
     instrument relating thereto or by reason of the cessation of the liability
     of Company from any cause other than payment in full of the Guarantied
     Obligations;

          (c)  any defense based upon any statute or rule of law which provides
     that the obligation of a surety must be neither larger in amount nor in
     other respects more burdensome than that of the principal;


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<PAGE>

          (d)  any defense based upon any Beneficiary's errors or omissions in
     the administration of the Guarantied Obligations, except behavior which
     amounts to bad faith;

          (e)  (i) any principles or provisions of law, statutory or otherwise,
     which are or might be in conflict with the terms of this Guaranty and any
     legal or equitable discharge of Guarantor's obligations hereunder, (ii) the
     benefit of any statute of limitations affecting Guarantor's liability
     hereunder or the enforcement hereof, (iii) any rights to set-offs,
     recoupments and counterclaims, and (iv) promptness, diligence and any
     requirement that any Beneficiary protect, secure, perfect or insure any
     security interest or lien or any property subject thereto;

          (f)  notices, demands, presentments, protests, notices of protest,
     notices of dishonor and notices of any action or inaction, including
     acceptance of this Guaranty, notices of default under the Note Purchase
     Agreement or any agreement or instrument related thereto, notices of any
     renewal, extension or modification of the Guarantied Obligations or any
     agreement related thereto, notices of any extension of credit to Company
     and notices of any of the matters referred to in subsection 2.3 and any
     right to consent to any thereof; and

          (g)  any defenses or benefits that may be derived from or afforded by
     law which limit the liability of or exonerate guarantors or sureties, or
     which may conflict with the terms of this Guaranty, including without
     limitation the provisions of Nevada Revised Statutes Sections 40.430-
     40.459, 40.475 and 40.485 as permitted by Nevada Revised Statutes Section
     40.495, and any successor provisions.

     2.5  CERTAIN CALIFORNIA LAW WAIVERS.  As used in this subsection 2.5, any
reference to "the principal" includes Company, and any reference to "the
creditor" includes each Beneficiary.  In accordance with Section 2856 of the
California Civil Code:

          (a)  Guarantor agrees to withhold the exercise of any and all rights
     of subrogation, reimbursement and contribution against Company, against any
     other guarantor of any of the Guarantied Obligations and against any
     collateral or security granted by any such other guarantor for any of the
     Guarantied Obligations until the Guarantied Obligations shall have been
     paid in full, all as more fully set forth in subsection 2.6;

          (b)  Guarantor waives any and all other rights and defenses available
     to Guarantor as against any Beneficiary by reason of Sections 2787 to 2855,
     inclusive, 2899 and 3433 of the California Civil Code except to the extent
     expressly provided herein, including without limitation any and all rights
     or defenses Guarantor may have by reason of protection afforded to the
     principal with respect to any of the Guarantied Obligations, or to any
     other guarantor of any of the Guarantied Obligations with respect to any of
     such guarantor's obligations under its guaranty, in either case pursuant to
     the antideficiency or other laws of the State of California limiting or
     

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<PAGE>

     discharging the principal's indebtedness or such guarantor's obligations,
     including without limitation Section 580a, 580b, 580d, or 726 of the
     California Code of Civil Procedure; and

          (c)  Guarantor waives all rights and defenses arising out of an
     election of remedies by the creditor, even though that election of
     remedies, such as a nonjudicial foreclosure with respect to security for
     any Guarantied Obligation, has destroyed Guarantor's rights of subrogation
     and reimbursement against the principal by the operation of Section 580d of
     the Code of Civil Procedure or otherwise; and even though that election of
     remedies by the creditor, such as nonjudicial foreclosure with respect to
     security for an obligation of any other guarantor of any of the Guarantied
     Obligations, has destroyed Guarantor's rights of contribution against such
     other guarantor.

No other provision of this Guaranty shall be construed as limiting the
generality of any of the covenants and waivers set forth in this subsection 2.5.
In accordance with subsection 3.6 below, this Guaranty shall be governed by, and
shall be construed and enforced in accordance with, the internal laws of the
State of Nevada, without regard to conflicts of laws principles.  This
subsection 2.5 is included solely out of an abundance of caution, and shall not
be construed to mean that any of the above-referenced provisions of California
law are in any way applicable to this Guaranty or to any of the Guarantied
Obligations.

     2.6  GUARANTOR'S RIGHTS OF SUBROGATION, CONTRIBUTION, ETC.  Until the
Guarantied Obligations shall have been paid in full, Guarantor shall withhold
exercise of (a) any claim, right or remedy, direct or indirect, that Guarantor
now has or may hereafter have against Company or any of its assets in connection
with this Guaranty or the performance by Guarantor of its obligations hereunder,
in each case whether such claim, right or remedy arises in equity, under
contract, by statute, including without limitation under Nevada Revised Statutes
Section 40.475 or 40.485 as permitted by Nevada Revised Statutes Section 40.495
(1993), under common law or otherwise and including without limitation (i) any
right of subrogation, reimbursement or indemnification that Guarantor now has or
may hereafter have against Company, (ii) any right to enforce, or to participate
in, any claim, right or remedy that any Beneficiary now has or may hereafter
have against Company, and (iii) any benefit of, and any right to participate in,
any collateral or security now or hereafter held by any Beneficiary, and (b) any
right of contribution Guarantor may have against any other guarantor of any of
the Guarantied Obligations.  Guarantor further agrees that, to the extent the
agreement to withhold the exercise of its rights of subrogation, reimbursement,
indemnification and contribution as set forth herein is found by a court of
competent jurisdiction to be void or voidable for any reason, any rights of
subrogation, reimbursement or indemnification Guarantor may have against Company
or against any collateral or security, and any rights of contribution Guarantor
may have against any such other guarantor, shall be junior and subordinate to
any rights any Beneficiary may have against Company, to all right, title and
interest any Beneficiary may have in any such collateral or security, and to any
right any Beneficiary may have against such other guarantor.  Representative, on
behalf of Beneficiaries, may use, sell or dispose of any item of collateral or
security as it sees fit 


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<PAGE>

without regard to any subrogation rights Guarantor may have, and upon any 
such disposition or sale any rights of subrogation such Guarantor may have 
shall terminate.  If any amount shall be paid to Guarantor on account of any 
such subrogation, reimbursement or indemnification rights at any time when 
all Guarantied Obligations shall not have been paid in full, such amount 
shall be held in trust for Representative on behalf of Beneficiaries and 
shall forthwith be paid over to Representative for the benefit of 
Beneficiaries to be credited and applied against the Guarantied Obligations, 
whether matured or unmatured, in accordance with the terms hereof.

     2.7  EXPENSES.  Guarantor agrees to pay, or cause to be paid, on demand, 
and to save Beneficiaries harmless against liability for, any and all costs 
and expenses (including reasonable fees and disbursements of counsel and 
reasonable allocated costs of internal counsel) incurred or expended by any 
Beneficiary in connection with the enforcement of or preservation of any 
rights under this Guaranty.

     2.8  CONTINUING GUARANTY.   This Guaranty is a continuing guaranty and 
shall remain in effect until all of the Guarantied Obligations shall have 
been paid in full.  Guarantor hereby irrevocably waives any right to revoke 
this Guaranty as to future transactions giving rise to any Guarantied 
Obligations.

     2.9  AUTHORITY OF GUARANTOR OR COMPANY.  It is not necessary for any 
Beneficiary to inquire into the capacity or powers of Guarantor or Company or 
the officers, directors or any agents acting or purporting to act on behalf 
of any of them.

     2.10 FINANCIAL CONDITION OF COMPANY.  Any extensions of credit may be 
granted to Company or continued from time to time without notice to or 
authorization from Guarantor regardless of the financial or other condition 
of Company at the time of any such grant or continuation.  No Beneficiary 
shall have any obligation to disclose or discuss with Guarantor its 
assessment, or Guarantor's assessment, of the financial condition of Company. 
Guarantor has adequate means to obtain information from Company on a 
continuing basis concerning the financial condition of Company and its 
ability to perform its obligations under the Basic Documents, and Guarantor 
assumes the responsibility for being and keeping informed of the financial 
condition of Company and of all circumstances bearing upon the risk of 
nonpayment of the Guarantied Obligations. Guarantor hereby waives and 
relinquishes any duty on the part of any Beneficiary to disclose any matter, 
fact or thing relating to the business, operations or conditions of Company 
now known or hereafter known by any Beneficiary.

     2.11 RIGHTS CUMULATIVE.  The rights, powers and remedies given to 
Beneficiaries by this Guaranty are cumulative and shall be in addition to and 
independent of all rights, powers and remedies given to Beneficiaries by 
virtue of any statute or rule of law or in any of the other Basic Documents 
or any agreement between Guarantor and any Beneficiary or Beneficiaries or 
between Company and any Beneficiary or Beneficiaries.  Any forbearance or 
failure to exercise, and any delay by any Beneficiary in exercising, any 
right, power or remedy hereunder shall not impair any such right, power or 
remedy or be construed to be a waiver thereof, nor shall it preclude the 
further exercise of any such right, power or remedy.


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<PAGE>

     2.12 BANKRUPTCY; POST-PETITION INTEREST; REINSTATEMENT OF GUARANTY.  (a) 
So long as any Guarantied Obligations remain outstanding, Guarantor shall 
not, without the prior written consent of Representative in accordance with 
the terms of the Note Purchase Agreement, commence or join with any other 
Person in commencing any bankruptcy, reorganization or insolvency proceedings 
of or against Company.  The obligations of Guarantor under this Guaranty 
shall not be reduced, limited, impaired, discharged, deferred, suspended or 
terminated by any proceeding, voluntary or involuntary, involving the 
bankruptcy, insolvency, receivership, reorganization, liquidation or 
arrangement of Company or by any defense which Company may have by reason of 
the order, decree or decision of any court or administrative body resulting 
from any such proceeding.

          (b)  Guarantor acknowledges and agrees that any interest on any 
portion of the Guarantied Obligations which accrues after the commencement of 
any proceeding referred to in clause (a) above (or, if interest on any 
portion of the Guarantied Obligations ceases to accrue by operation of law by 
reason of the commencement of said proceeding, such interest as would have 
accrued on such portion of the Guarantied Obligations if said proceedings had 
not been commenced) shall be included in the Guarantied Obligations, because 
it is the intention of Guarantor and Beneficiaries that the Guarantied 
Obligations which are guarantied by Guarantor pursuant to this Guaranty 
should be determined without regard to any rule of law or order which may 
relieve Company of any portion of such Guarantied Obligations.  Guarantor 
will permit any trustee in bankruptcy, receiver, debtor in possession, 
assignee for the benefit of creditors or similar person to pay 
Representative, or allow the claim of Representative in respect of, any such 
interest accruing after the date on which such proceeding is commenced.

          (c)  In the event that all or any portion of the Guarantied 
Obligations are paid by Company, the obligations of Guarantor hereunder shall 
continue and remain in full force and effect or be reinstated, as the case 
may be, in the event that all or any part of such payment(s) are rescinded or 
recovered directly or indirectly from any Beneficiary as a preference, 
fraudulent transfer or otherwise, and any such payments which are so 
rescinded or recovered shall constitute Guarantied Obligations for all 
purposes under this Guaranty.

     2.13 NOTICE OF EVENTS.  As soon as Guarantor obtains knowledge thereof, 
Guarantor shall give Representative written notice of any condition or event 
which has resulted in (a) a material adverse change in the financial 
condition of Guarantor or Company or (b) a breach of or noncompliance with 
any term, condition or covenant contained herein or in the Note Purchase 
Agreement, any other Basic Document or any other document delivered pursuant 
hereto or thereto.

     2.14 SET OFF.  In addition to any other rights any Beneficiary may have 
under law or in equity, if any amount shall at any time be due and owing by 
Guarantor to any Beneficiary under this Guaranty, such Beneficiary is 
authorized at any time or from time to time, without notice (any such notice 
being hereby expressly waived), to set off and to appropriate and to apply 
any and all deposits (general or special, including but not limited to 
Indebtedness evidenced by certificates of deposit, whether matured or 
unmatured) and any 


                                       9

<PAGE>

other Indebtedness of such Beneficiary owing to Guarantor and any other 
property of Guarantor held by any Beneficiary to or for the credit or the 
account of Guarantor against and on account of the Guarantied Obligations and 
liabilities of Guarantor to any Beneficiary under this Guaranty.

SECTION 3.  MISCELLANEOUS

     3.1  SURVIVAL OF WARRANTIES.  All agreements, representations and 
warranties made herein shall survive the execution and delivery of this 
Guaranty and the other Basic Documents and any increase in the amount of the 
Notes or other Obligations under the Note Purchase Agreement.

     3.2  NOTICES.  Any communications between Representative and Guarantor 
and any notices or requests provided herein to be given may be given by 
mailing the same, postage prepaid, or by telex, facsimile transmission or 
cable to each such party at its address set forth in the Note Purchase 
Agreement, on the signature pages hereof or to such other addresses as each 
such party may in writing hereafter indicate.  Any notice, request or demand 
to or upon Representative or Guarantor shall not be effective until received.

     3.3  SEVERABILITY.  In case any provision in or obligation under this 
Guaranty shall be invalid, illegal or unenforceable in any jurisdiction, the 
validity, legality and enforceability of the remaining provisions or 
obligations, or of such provision or obligation in any other jurisdiction, 
shall not in any way be affected or impaired thereby.

     3.4  AMENDMENTS AND WAIVERS.  No amendment, modification, termination or 
waiver of any provision of this Guaranty, and no consent to any departure by 
Guarantor therefrom, shall in any event be effective without the written 
concurrence of Representative and, in the case of any such amendment or 
modification, Guarantor against whom enforcement of such amendment or 
modification is sought.  Any such waiver or consent shall be effective only 
in the specific instance and for the specific purpose for which it was given.

     3.5  HEADINGS.  Section and subsection headings in this Guaranty are 
included herein for convenience of reference only and shall not constitute a 
part of this Guaranty for any other purpose or be given any substantive 
effect.

     3.6  APPLICABLE LAW.  THIS GUARANTY AND THE RIGHTS AND OBLIGATIONS OF 
GUARANTOR AND BENEFICIARIES HEREUNDER SHALL BE GOVERNED BY, AND SHALL BE 
CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF 
NEVADA, WITHOUT REGARD TO CONFLICTS OF LAWS PRINCIPLES.

     3.7  SUCCESSORS AND ASSIGNS.  This Guaranty is a continuing guaranty and 
shall be binding upon Guarantor and its respective successors and assigns.  
This Guaranty shall inure to the benefit of Beneficiaries and their 
respective successors and assigns.  Guarantor shall not assign this Guaranty 
or any of the rights or obligations of Guarantor hereunder without the 


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<PAGE>

prior written consent of all Holders.  Any Beneficiary may, without notice or 
consent, assign its interest in this Guaranty in whole or in part, in 
accordance with Section 9.14 of the Note Purchase Agreement with respect to 
an assignment by any Holder and in accordance with Section 8.7 of the Note 
Purchase Agreement with respect to an assignment by the Collateral Agent.  
The terms and provisions of this Guaranty shall inure to the benefit of any 
transferee or assignee of any Note, and in the event of such transfer or 
assignment the rights and privileges herein conferred upon such Beneficiary 
shall automatically extend to and be vested in such transferee or assignee, 
all subject to the terms and conditions hereof.

     3.8  CONSENT TO JURISDICTION AND SERVICE OF PROCESS.  ALL JUDICIAL 
PROCEEDINGS BROUGHT AGAINST GUARANTOR ARISING OUT OF OR RELATING TO THIS 
GUARANTY, OR ANY OBLIGATIONS HEREUNDER, MAY BE BROUGHT IN ANY STATE OR 
FEDERAL COURT OF COMPETENT JURISDICTION IN THE STATE OF NEVADA.  BY EXECUTING 
AND DELIVERING THIS AGREEMENT, GUARANTOR, FOR ITSELF AND IN CONNECTION WITH 
ITS PROPERTIES, IRREVOCABLY 

          (I)  ACCEPTS GENERALLY AND UNCONDITIONALLY THE NONEXCLUSIVE
     JURISDICTION AND VENUE OF SUCH COURTS; 

          (II) WAIVES ANY DEFENSE OF FORUM NON CONVENIENS;

          (III)AGREES THAT SERVICE OF ALL PROCESS IN ANY SUCH PROCEEDING IN
     ANY SUCH COURT MAY BE MADE BY REGISTERED OR CERTIFIED MAIL, RETURN RECEIPT
     REQUESTED, TO GUARANTOR AT ITS ADDRESS PROVIDED IN ACCORDANCE WITH
     SUBSECTION 3.2; 

          (IV) AGREES THAT SERVICE AS PROVIDED IN CLAUSE (III) ABOVE IS
     SUFFICIENT TO CONFER PERSONAL JURISDICTION OVER GUARANTOR IN ANY SUCH
     PROCEEDING IN ANY SUCH COURT, AND OTHERWISE CONSTITUTES EFFECTIVE AND
     BINDING SERVICE IN EVERY RESPECT;

          (V)  AGREES THAT BENEFICIARIES RETAIN THE RIGHT TO SERVE PROCESS IN
     ANY OTHER MANNER PERMITTED BY LAW OR TO BRING PROCEEDINGS AGAINST GUARANTOR
     IN THE COURTS OF ANY OTHER JURISDICTION; AND

          (VI) AGREES THAT THE PROVISIONS OF THIS SUBSECTION 3.8 RELATING TO
     JURISDICTION AND VENUE SHALL BE BINDING AND ENFORCEABLE TO THE FULLEST
     EXTENT PERMISSIBLE.

     3.9  WAIVER OF TRIAL BY JURY.  GUARANTOR AND, BY ITS ACCEPTANCE OF THE
BENEFITS HEREOF, EACH BENEFICIARY EACH HEREBY AGREES TO WAIVE ITS RESPECTIVE
RIGHTS TO A JURY TRIAL OF ANY CLAIM OR 


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<PAGE>

CAUSE OF ACTION BASED UPON OR ARISING OUT OF THIS GUARANTY.  The scope of 
this waiver is intended to be all encompassing of any and all disputes that 
may be filed in any court and that relate to the subject matter of this 
transaction, including without limitation contract claims, tort claims, 
breach of duty claims and all other common law and statutory claims.  
Guarantor and, by its acceptance of the benefits hereof, each Beneficiary 
each (i) acknowledges that this waiver is a material inducement for Guarantor 
and Beneficiaries to enter into a business relationship, that Guarantor and 
Beneficiaries have already relied on this waiver in entering into this 
Guaranty or accepting the benefits thereof, as the case may be, and that each 
will continue to rely on this waiver in their related future dealings and 
(ii) further warrants and represents that each has reviewed this waiver with 
its legal counsel, and that each knowingly and voluntarily waives its jury 
trial rights following consultation with legal counsel.  THIS WAIVER IS 
IRREVOCABLE, MEANING THAT IT MAY NOT BE MODIFIED EITHER ORALLY OR IN WRITING 
(OTHER THAN BY A MUTUAL WRITTEN WAIVER SPECIFICALLY REFERRING TO THIS 
SUBSECTION 3.9 AND EXECUTED BY REPRESENTATIVE AND GUARANTOR), AND THIS WAIVER 
SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS OR 
MODIFICATIONS TO THIS GUARANTY.  In the event of litigation, this Guaranty 
may be filed as a written consent to a trial by the court.

     3.10 NO OTHER WRITING.  This writing is intended by Guarantor and 
Beneficiaries as the final expression of this Guaranty and is also intended 
as a complete and exclusive statement of the terms of their agreement with 
respect to the matters covered hereby.  No course of dealing, course of 
performance or trade usage, and no parol evidence of any nature, shall be 
used to supplement or modify any terms of this Guaranty.  There are no 
conditions to the full effectiveness of this Guaranty.

     3.11 FURTHER ASSURANCES.  At any time or from time to time, upon the 
request of Representative, Guarantor shall execute and deliver such further 
documents and do such other acts and things as Representative may reasonably 
request in order to effect fully the purposes of this Guaranty.

     3.12 COUNTERPARTS; EFFECTIVENESS.  This Guaranty may be executed in any 
number of counterparts and by the different parties hereto in separate 
counterparts, each of which when so executed and delivered shall be deemed to 
be an original for all purposes; but all such counterparts together shall 
constitute but one and the same instrument.  This Guaranty shall become 
effective as to Guarantor upon the execution of a counterpart hereof by 
Guarantor and receipt by Representative of written or telephonic notification 
of such execution and authorization of delivery thereof.

     3.13 REPRESENTATIVE AS COLLATERAL AGENT.

          (a)  Representative has been appointed to act as Representative 
hereunder by Holders.  Representative shall be obligated, and shall have the 
right hereunder, to make demands, to give notices, to exercise or refrain 
from exercising any rights, and to take or 


                                       12

<PAGE>

refrain from taking any action, solely in accordance with this Guaranty and 
the Note Purchase Agreement.

          (b)  Representative shall at all times be the same Person that is 
Collateral Agent under the Note Purchase Agreement.  Written notice of 
resignation by Collateral Agent pursuant to subsection 8.7 of the Note 
Purchase Agreement shall also constitute notice of resignation as 
Representative under this Guaranty; removal of Collateral Agent pursuant to 
subsection 8.7 of the Note Purchase Agreement shall also constitute removal 
as Representative under this Guaranty; and appointment of a successor 
Collateral Agent pursuant to subsection 8.7 of the Note Purchase Agreement 
shall also constitute appointment of a successor Representative under this 
Guaranty.  Upon the acceptance of any appointment as Collateral Agent under 
subsection 8.7 of the Note Purchase Agreement by a successor Collateral 
Agent, that successor Collateral Agent shall thereupon succeed to and become 
vested with all the rights, powers, privileges and duties of the retiring or 
removed Representative under this Guaranty, and the retiring or removed 
Representative under this Guaranty shall promptly (i) transfer to such 
successor Representative all sums held hereunder, together with all records 
and other documents necessary or appropriate in connection with the 
performance of the duties of the successor Representative under this 
Guaranty, and (ii) take such other actions as may be necessary or appropriate 
in connection with the assignment to such successor Representative of the 
rights created hereunder, whereupon such retiring or removed Representative 
shall be discharged from its duties and obligations under this Guaranty.  
After any retiring or removed Representative's resignation or removal 
hereunder as Representative, the provisions of this Guaranty shall inure to 
its benefit as to any actions taken or omitted to be taken by it under this 
Guaranty while it was Representative hereunder. 


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<PAGE>

          IN WITNESS WHEREOF, the undersigned Guarantor has caused this 
Guaranty to be duly executed and delivered by its officer thereunto duly 
authorized as of the date first written above.

                                  SANTA FE GAMING CORPORATION


                                  By /s/ Thomas K. Land

                                  Title Senior Vice President and 
                                         Chief Financial Officer



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