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                              EMPLOYMENT AGREEMENT


         THIS EMPLOYMENT AGREEMENT is effective as of the 1st day of June, 1997,
by and between Capital Gaming International, Inc., a New Jersey corporation (the
"Company"), and Michael W. Barozzi (the "Employee"), an individual, residing at
8223 Turtle Creek Circle, Las Vegas, Nevada 89113.

                                    RECITALS

         A. Employee presently consults for the Company and its subsidiary
pursuant to a Consulting Agreement; and

         B. It is deemed by the Company to be in the best interests of the
Company and its shareholders and creditors to obtain Employee's full-time
employment with the Company upon the terms and conditions set forth herein; and

         C. Employee desires assurance of a long-term future with the Company,
and is willing to enter into a long-term agreement with the Company upon the
terms and conditions set forth herein.

         NOW, THEREFORE, in consideration of the mutual covenants and
obligations set forth herein, the parties hereby agree as follows:

                                    AGREEMENT

         1. Term of Employment: Unless earlier terminated as herein provided,
the Term of Employee's employment with the Company shall be for a period of
three (3) years from June 1, 1997 and such term shall end on May 31, 2000;
provided, however, that this Agreement and the Term of the Employee's employment
with the Company hereunder shall automatically be extended for one year
commencing on May 31, 2000 unless the Employee or the Company shall have given
written


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notice to the other at least ninety (90) days prior to such anniversary that the
Term shall expire at the end of the then-current Term, as applicable. For
purposes of this Agreement, the "Term" of this Agreement shall mean and include
cumulatively (a) the initial term of this Agreement from the effective date
hereof through May 31, 2000 and (b) any and all one-year extension(s) of the
initial term of this Agreement. In the event of the occurrence of any of the
one-year extensions of this Agreement, the Employee's salary and other
compensation for the extension year shall be negotiated in good faith; and in
the event that agreement is not reached by the beginning of the one-year
extension period, then all of the terms of this Agreement in effect immediately
prior to the commencement of the one-year extension shall be continued for the
then-commencing year. Various provisions of this Agreement are intended to
survive the expiration or termination of the Term as expressly stated therein.

         2. Duties and Authority of Employee: During the Term, the Employee
shall be Senior Vice President of Operations of the Company, and shall devote
his best efforts to rendering services to the Company and its subsidiaries in
such capacity. As Senior Vice President of Operations, the Employee shall report
to the Chief Executive Officer and the Board of Directors. The Employee shall
perform such duties and services, consistent with his position as senior officer
of the Company, as may be assigned to him from time to time by the Chief
Executive Officer or the Board of Directors. Employee warrants and agrees to use
his best efforts to perform well and faithfully such duties and other reasonable
executive duties and responsibilities, consistent with his position as Senior
Vice President of Operations as are properly assigned to him. Employee shall not
be required, without his consent, to undertake responsibilities not commensurate
with his position, nor shall the Company limit or restrict his authority or
responsibility in the performance of those duties.

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         3. Time to be Devoted to Employment. The Employee agrees to devote his
full business time, attention and energies to the best interests of the
Corporation.

         4. Restrictions on Other Employment. During the Term of employment, the
Employee agrees that, unless he has the express prior written approval of the
Chairman of the Board of Directors or CEO of the Company, he shall not accept a
membership on a Board of Directors, act as an officer, employee or consultant,
or engage in any other business activity that would in any way conflict with the
business of the Company or the time needed by Employee to perform his duties. It
is understood that the Employee's employment during the Term shall be on an
exclusive basis, except that the Employee may, subject to the provisions of
Paragraph 10 hereof, undertake, or continue to conduct, other business, civic or
charitable activities during the Term if such activities do not materially
interfere, directly or indirectly, with the duties of the Employee hereunder,
and do not compete with any business of the Company; provided, however, that no
additional outside business activities shall be undertaken without the prior
written consent of the Board. Notwithstanding the foregoing, nothing contained
in this Employment Agreement shall be deemed to preclude Employee from owning
less than one percent (1%) in market value of the publicly traded capital stock
of an entity, whether or not in competition with the business of the Company or
its subsidiaries or affiliates, or from carrying on activities normally incident
to managing passive investments. Employee shall be deemed to be engaged in or
concerned with a duty or pursuit which is contrary to any provision of this
Agreement only if he has received written notice to such effect, setting forth
with reasonable specificity the basis of such claim, from the Company and has
not, within thirty (30) days from the date of his receipt of any such written
notice, initiated steps to eliminate his engagement in or concern with such
duties or pursuits as are specified in such notice

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as being contrary to this Agreement.

         5. Obligations of the Company. All obligations of the Company hereunder
shall in all respects be joint and several obligations of the Company and each
of the subsidiaries of the Company.

         6. Compensation:

                  a. Salary:

                           i. During the Term, the Employee shall be paid an
annual base salary of Two Hundred Fifty Thousand ($250,000) Dollars (herein
"Salary"), which may be increased, from time to time, at the election of the
Board, or any committee of the Board to which such power has been delegated by
the Board. Employee shall be entitled to annual salary reviews in June of each
year of this Agreement (or as soon as is practicable after the fiscal year-end
audit is complete).
                           
                           ii. The Employee's Salary shall be paid in the same
installments which prevail for other senior corporate officers of the Company
(but in no event less frequently than monthly), or such other installments as
are agreed upon between the Employee and the Company.

                  b. Bonus and Incentive Compensation: Employee shall be paid
bonus or other additional cash compensation (herein "Incentive Compensation") in
such amounts and at such times as shall be determined before the end of each
fiscal year by the Executive Compensation Committee of the Board of Directors.
Additionally, within thirty (30) days following the end of each fiscal year,
Employee shall be paid such amount as is necessary so that Employee's total cash
compensation for such fiscal year is no less than fifty (50%) percent of the
total cash compensation paid to the Chairman and CEO in such fiscal year.

                  c. Stock Grant: Employee shall be entitled to his pro rata
share of all

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distributions of New Common Stock as defined in and pursuant to the Company's
First Amended Plan of Reorganization, it being understood and agreed that all
such distributions shall be shared equally between four or five members of
senior management.

                  d. Other Benefits: The Employee shall, to the extent deemed
appropriate by the Board (or any applicable committee of the Board), participate
at a level consistent with his rank as a senior executive in profit sharing,
stock appreciation rights, stock bonus, stock option, deferred compensation, and
other similar plans or benefits which are made available to other senior
executives employed by the Company during the Term. Also, during the Term,
Employee shall continue to participate in all fringe benefits and perquisites
currently being provided to Employee and other senior executives of the Company.
In the event that the Company establishes an individual or group retirement
plan, or continues with the existing plan, the Employee shall be entitled to
participate, to the extent deemed appropriate by the Board (or any applicable
committee of the Board), in such retirement plan consistent with his rank in the
Company. In addition, Employee shall participate, to the extent deemed
appropriate by the Board (or any applicable committee of the Board), consistent
with his rank in any other fringe benefits or perquisites hereafter adopted by
the Company and made applicable to its senior executives. Further, during the
Term, the Company will provide, at its expense, life, business travel,
disability (in an amount sufficient to fund not more than Employee's Salary),
medical, dental and hospitalization insurance for the Employee and his
dependents in amounts and on terms as favorable as those provided for any other
senior executive officer of the Company.

                  e. Withholding: All compensation shall be subject to normal
required tax withholdings.

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                  f. Reimbursement for Professional Memberships: The Corporation
shall reimburse the Employee, in accordance with standard business practices of
accounting and receipts, for the cost of all professional association
memberships and/or seminars reasonably attendant thereto.

         7. Vacation: Employee shall be entitled to four (4) weeks vacation time
for each year during the Term. At Employee's option, vacation may be taken,
either in whole or in part, consecutively or not, in the year that Employee's
entitlement to that vacation accrues or, if unused during such year, such
vacation time shall be carried over (subject to no limitation on maximum
accrual), and may be used in any subsequent year during the Term, provided that
no more than thirty (30) days of vacation may be taken in any one calendar year.
Upon termination of Employee's employment with the Company for any reason
whatsoever, Employee shall be paid his Salary for all unused then accrued
vacation (except for vacation days for which Employee shall have received
payment pursuant to the immediately following sentence), at the Salary rate then
existing at the date of termination of Employee's employment with the Company,
with no limitation on the maximum accrual of such vacation days for which the
Employee shall receive such payment. At any time or times upon written request
made by Employee to the Company (with no limitation as to the number or
frequency of such requests), Employee shall be paid his Salary for the quantity
(as specified in such request) of the unused then accrued vacation days, at the
Salary rate existing on the date of such request, with no limitation on the
maximum accrual of such vacation days for which the Employee may receive such
payment.

         8. Expenses: The Company will reimburse Employee for all expenses
reasonably incurred by Employee in the performance of his duties under this
Agreement. Reimbursement shall

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be made in accordance with the practices and requirements generally applied by
the Company in connection with reimbursement of expenses incurred by its
employees. In the event that the Company is ever the subject of an audit, and
expenses of the Employee which the Company has reimbursed to the Employee
pursuant to this Agreement are ever found to have been expended for a personal
use by the Employee, such reimbursement of the Employee's business expenses
shall be considered to be additional Salary, and the Employee shall not be
liable for such reimbursed business expenses.

         9. Termination of Term and/or Agreement: 

                  a. Termination by the Company for Cause:

                           i. The Company may, at any time, at its election,
terminate the Term for cause prior to the Term's expiration as a result of any
of the following events: (1) Employee acting fraudulently in his relations with
the Company or on behalf of the Company, (2) Employee misappropriating or doing
material, intentional damage to the property of the Company, (3) Employee being
convicted of a felony, (4) Employee's acts or omissions amounting to willful
misconduct or recklessness by the Employee in the performance of his duties
under this Agreement or the habitual neglect of such duties, (5) failure of the
Employee to obtain or retain for any reason, any permit, license or approval
which shall be required by any regulatory agency or entity with jurisdiction
over any portion of the Company's business or any business of a subsidiary of
the Company, or (6) any other material breach by the Employee of any of the
terms of this Agreement.

                           ii. Any such termination shall be effective upon the
Company's giving of written notice to the Employee setting forth in reasonable
detail the grounds for the termination, provided, however, that in the event of
a notice of termination under Paragraph 9(a)(i)(5) hereof, if

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Employee first failed to cure such condition within thirty (30) days after
notice hereof or, if a cure was not possible within thirty (30) days, failed to
take all diligent action within such period leading to a cure within 120 days
after such notice, the Company may elect to terminate the Term notwithstanding
the Employee's diligent action to cure.

                           iii. In the event that there is a termination of the
Term by the Company under this Paragraph 9(a), and the cause is solely the cause
described under Paragraph 9(a)(i)(5) above, and not within any other
subparagraph of Paragraph 9(a)(i), Employee shall be entitled to severance pay
equivalent t one (1) year's Salary payable on the same basis as his Salary had
been paid at the date of termination, and to the continuation of all fringe
benefits and insurance described in Paragraph 6(d) for a one (1) year period
following such termination (which continuation shall not, however, duplicate
insurance already provided by Paragraph 6(d) for such period), provided that the
actions or inactions of Employee leading to the loss of or failure to obtain or
retain the applicable permit, license or approval were made in the good faith
belief that his actions or inactions were for the benefit of, and in the best
interests of, the Company, and not in violation of any law, and provided further
that Employee used his best efforts to obtain or retain (as the case may be)
such license, permit or approval.

                           iv. In the event of a termination for cause under
this Paragraph 9(a), the Company's obligations to pay Salary and other
compensation and benefits to the Employee shall terminate simultaneously with
the effectiveness of the termination of the Term.

                  b. Disability: In the event that Employee shall become subject
to a Disability (as defined below) during the Term, the Term shall immediately
terminate, but the current Salary payable to Employee shall be continued for a
period of (6) months, and shall thereafter be reduced

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to sixty percent (60%) of the Salary in effect at the date of the Disability,
subject to maximum annual compensation equal to Employee's Salary then in
effect. Such reduced compensation shall continue until the termination of
Employee's Disability, the expiration of the Term, the Employee's attaining age
65, or the expiration of thirty-six (36) months from the inception of the
Disability, whichever occurs first (the "Disability Period"). During any such
Disability Period, the Company shall also keep in force for the benefit of
Employee and Employee's dependents all life, health and medical insurance
policies maintained for Employee's benefit under the terms of this Agreement,
and Employee shall be considered to be employed for purposes of the vesting and
accrual of benefits of all other plans and programs of the Company in which
Employee is a participant, and which vest or accrue benefits over a period of
time. All stock options which vest during the Disability Period shall be
exercisable until the fifth (5th) anniversary date from the date they became
first exercisable by the Employee. Notwithstanding the foregoing, the Company
shall not be required to add Employee to any bonus, profit sharing, stock bonus,
stock option, deferred compensation, and other similar plans, or make any new
awards to Employee under this Agreement with respect to such new or presently
existing plans during the period of such Disability. All Salary payments
pursuant to this Paragraph 9(b) due to Employee under its terms shall be reduced
by any disability program or disability insurance of the Company. Employee
expressly acknowledges that the Company may obtain disability insurance with
respect to the Employee in order to fund Salary payments to Employee during any
period of Disability. Employee also expressly acknowledges that he will fully
cooperate with the Company in submitting to all necessary physical or mental
examinations requested by the Company in determining Employee's Disability. For
purposes of this Agreement, Employee shall be deemed to have become subject to a
disability (herein "Disability") if, because

                                        9

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of any physical or mental condition, Employee shall be unable to perform his
duties and responsibilities to the extent reasonably necessary for Employee to
give the Company substantially the value of his services for a consecutive one
hundred eighty (180) day period, or for an aggregate of one hundred eighty (180)
days within any period of twelve (12) consecutive months, and either the Company
or the Employee shall thereafter give written notice to the other of such
party's election that Employee be treated as subject to a Disability. The date
of such Disability shall be the third calendar day immediately following
transmittal of such written notice of Disability.

                  c. Death: The term will automatically terminate upon the death
of the Employee; however, the Company will pay death benefits equal to sixty
percent (60%) of Employee's Salary (up to an annual maximum equal to Employee's
then current Salary in effect) at his death to any surviving spouse of Employee
(or, if there shall be no surviving spouse, to Employee's surviving children)
for twelve (12) months after Employee's death, or so long as the spouse (or
children, if applicable) survives Employee, whichever ends first, and there
shall be full acceleration of vesting or exercisability upon death of all
outstanding unvested stock options and stock awards (whether such awards are
made before or after the date of this Agreement), and delivery to the
appropriate person of all stock pursuant to the terms of any such plans or
agreements. All stock options which have their vesting accelerated pursuant to
this Paragraph 9(c) shall, notwithstanding the provisions of the relevant stock
option agreement to which they pertain, terminate unless previously exercised by
Employee's heirs or assigns prior to the fifth anniversary date from the date of
Employee's death.

                  d. Termination by the Company Without Cause:

                           i. Termination Without Cause Described: If, during
the Term, Employee

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is not re-elected to, or is removed from, the position of Senior Vice President
of Operations, other than pursuant to Paragraph 9(a), (b), (c) or (f), or if the
Company otherwise materially breaches this Agreement and fails to complete the
cure of such breach within thirty (30) days after written notice from Employee,
then at any time within three (3) months after the date upon which Employee is
removed from such position or the breach date, as the case may be, Employee may
elect, by notice in writing to the Chief Executive Officer of the Company, to
treat the situation as a "Termination Without Cause" of Employee's employment by
the Company effective one (1) week after the notice, and to discontinue his
obligations to perform services hereunder. The Term shall end at such effective
date.

                           ii. Employee's Obligations After Termination Without
Cause: In the event of a Termination Without Cause, Employee's obligations under
Paragraph 2 shall cease as of the date notice of such termination is given;
provided, however, that all payments and benefits provided to Employee hereunder
because of a Termination Without Cause shall be upon the condition of, and
partly in consideration for, Employee's continued compliance with any covenants
in this Agreement (including the covenants contained in Paragraph 10) which, by
their terms, apply during the Term or thereafter.

                           iii. Payments and Benefits to Employee after a
Termination Without Cause: In the event of any Termination Without Cause, the
Employee shall be entitled to and the Company shall be obligated to pay the
Employee a lump sum severance payment of $600,000.

                  e. Employee's Additional Election and Rights after a Change in
Control:

                           i. Employee's Right to Elect Termination after a
Change in Control:

                                    (1) Permitted Period for Elective
Termination: In the event of a

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Change in Control (as defined in Paragraph 15 hereof), Employee shall have the
right to elect to terminate the Term (and his obligation to render services
under this Agreement) by notice in writing to the Chief Executive Officer of the
Company within twenty-four (24) months after the Change in Control.

                                    (2) Payments and Benefits to Employee after
Elective Termination: If the Employee elects termination under Paragraph
9(e)(i)(1), the Employee shall be entitled to and the Company shall be obligated
to provide the Employee with all rights and benefits he would be entitled to
upon a Termination Without Cause pursuant to Paragraph 9(d)(iii).

                                    (3) Limitation on Amounts:

                                             (a) Notwithstanding the foregoing,
in the event that any payment or benefit received, or to be received, by
Employee (whether pursuant to the terms of this Agreement or any other plan,
arrangement or agreement with the Company, or any other plan, arrangement or
agreement with any person whose actions result in a Change of Control, or any
person affiliated with the Company or such person) (all such payments and
benefits being hereinafter called "Total Payments") would not be deductible (in
whole or in part) as a result of Section 280G of the Internal Revenue Code of
1986, as amended (the "Code"), by the Company, an affiliate or other person
making such payment or providing such benefit, then, to the extent necessary to
make such portion of the Total Payments deductible, the Total Payments shall be
reduced in one of the two alternative orders set forth in Paragraph
9(e)(i)(3)(b) hereof.

                                             (b) If the Total Payments all
become payable at approximately the same time, (i) the benefits under the first
sentence of Paragraph 9(d)(iii)(2) shall first be reduced (if necessary, to
zero), (ii) the payment pursuant to Paragraph 9(e)(iii), if applicable,

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shall then be reduced (if necessary, to zero), (iii) acceleration of vesting of
awards under stock options, the 1990 Stock Option Plan, or any similar stock
plans or agreement of the Company under Paragraph 9(d)(iii)(2) shall next be
reduced (if necessary, to zero), and (iv) other portions of the Total Payments
shall be reduced as necessary. If the Total Payments do not become payable until
any portion thereof would not be deductible, and such portion (and any
subsequent portions) of the Total Payments shall be reduced to zero.

                                             (c) For purposes of this
limitation, (i) no portion of the Total Payments, the receipt or enjoyment of
which the Employee shall have effectively waived in writing prior to the date of
termination shall be taken into account; (ii) no portion of the Total Payments
shall be taken into account which, in the opinion of tax counsel selected by the
Company's independent auditors and acceptable to the Employee, does not
constitute a "parachute payment" within the meaning of Section 280G(b)(4)(A) of
the Code; (iii) the payments in Paragraph 9(d)(iii) (1) through (3), and
Paragraph 9(e)(iii), if applicable, shall be reduced only to the extent
necessary so that the Total Payments (other than those referred to in Paragraphs
9(e)(i)(3)(c) (i) or (ii)) in their entirety constitute reasonable compensation
for services actually rendered within the meaning of Section 280G(b)(4) of the
Code, or are otherwise not subject to disallowance as deductions, in the opinion
of the tax counsel referred to in Paragraph 9(e)(i)(3)(c)(ii); and (iv) the
value of any non-cash benefit or any deferred payment or benefit included in the
Total Payments shall be determined by the Company's independent auditors in
accordance with the principles of Section 280G(d) (3) and (4) of the Code.
Notwithstanding any dispute as to the total amount to be paid to Employee,
payments will be made with respect to the amounts clearly deductible under
Section 280G of the Code within the time period specified above in Paragraph
9(d)(iii) and 9(e)(iii), as applicable.

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                                             (d) If it is established, pursuant
to a final determination of a court or an Internal Revenue Service proceeding
that, notwithstanding the good faith of Employee and the company in applying the
terms of this Paragraph 9(e)(i)(3), the aggregate Total Payments paid to or for
Employee's benefit are in an amount that would result in any portion of such
Total Payments not being deductible by reason of Section 280G of the Code, then
Employee shall have an obligation to pay the Company, an amount equal to the sum
of (i) the excess of the aggregate Total Payments that could have been paid to
or for Employee's benefit without any portion of such Total Payments not being
deductible by reason of Section 280G of the Code (such excess constituting a
loan by the Company to Employee); and (ii) notwithstanding Paragraph 16(c)
hereof, interest on the loan amount set forth in clause (i) of this sentence at
the rate provided in Section 1274(b)(2)(B) of the Code from the date of
Employee's receipt of such excess until the date of such payment.

                                    (4) Employee's Obligations After Elective
Termination: If Employee elects to terminate his obligations to render services
under this Agreement pursuant to Paragraph 9(e)(i)(1), his obligations under
Paragraph 2 shall cease as of the date notice of such termination is given.
Employee agrees that all payments made because of such elective termination
shall be upon the condition of, and partly in consideration for, his continued
compliance with any covenants under Paragraph 10 and Paragraph 11 of this
Agreement, which by their terms apply during the Term, or thereafter.

                           ii. Agreement in Full Effect after a Change in
Control: Upon and after a Change in Control, until and unless Employee makes a
written election pursuant to Paragraph 9(e)(i)(1), this Agreement shall continue
in full force and effect, in accordance with all the provisions hereof. 

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                           iii. Additional Payments and Provisions after
Termination Without Cause upon or after a Change in Control: In the event of a
Termination Without Cause of Employee by the Company upon or after a Change in
Control (or upon or after the occurrence of any other event which constitutes a
change of ownership or effective control of the Company, or in the ownership of
its assets, or which would be deemed to be such a change under Section 280G of
the Code, or the regulations or other legal authority developed thereunder), the
Company shall provide Employee with the payments and benefits required by
Paragraph 9(d)(iii), and shall also pay Employee to the extent permitted by law
and without regard to any forfeiture provisions, a lump sum payment equal to the
benefits payable to Employee pursuant to any retirement plan which may be
established for the benefit of Employee.

                  f. Voluntary Resignation: A "Voluntary Resignation" shall mean
a termination of employment by the Employee on his own initiative other than a
termination due to Disability or pursuant to Paragraph 9(e) hereof. In the event
of Voluntary Resignation, the Employee is entitled to payment equal to one year
Salary, payable in twelve (12) equal monthly installments and in consideration
of such payments, the Employee consents and covenants to use his good faith best
efforts to effectuate a transition of new management in a manner which maintains
the then existing Indian gaming management agreements, or at the option of the
Company, effectuate a run-off of the then existing Indian gaming management
agreements and tribal loans for as long as necessary after such resignation, but
in no event more than twelve (12) months. As used herein, the term "best
efforts" shall not require the Employee to incur non-reimbursable business
expenses and shall not require that the Employee be employed exclusively by the
Company.

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         10. Confidential Information; Restriction on Competition:

                  a. Confidential Information: "Confidential Information" is
defined as information obtained by Employee as a result of his current or prior
positions with the Company, concerning the businesses, finances, clients,
affairs, business plans, strategies, methods, results from operations,
regulatory matters or investigations by others, and present and future plans
relating to the Company, any subsidiaries, parent or affiliates thereof or any
company formed or funded by the Company at any time for any reason or purpose
whatsoever. It is not intended to include business information that is available
in the public domain or information that was possessed by Employee prior to his
employment with the Company. Employee agrees that he will not, at any time
during or after the Term of employment, disclose, reproduce, assign or transfer
to any person, firm, corporation or other business entity, except as required by
law, any Confidential Information without the Company's express written consent;
nor shall Employee make use of any such Confidential Information for his own
purpose or for the benefit of any person, firm, corporation or other business
entity, except the Company or any subsidiary or affiliate thereof. Upon
termination of employment for any reason, Employee will immediately return all
books, files, papers, records and documents (including those contained in
computer disks) relating to the business of the Company.

                  b. Restriction on Competition: During the Term and for a
period of nine (9) months thereafter, the Employee will not in the Western
Hemisphere north of the Equator compete, directly or indirectly, with the
business of the Company or any of its subsidiaries or affiliates or, as an
officer, director, shareholder, employee, partner, agent or consultant or
otherwise, associate himself directly or indirectly, whether or not for
compensation, with any person or entity engaged in a business competing with any
business of the Company or its subsidiaries or its affiliates in the

                                       16

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Western Hemisphere north of the Equator. The term "associate directly or
indirectly" shall mean that for the applicable period, Employee shall not cause,
assist or in any way influence any other individual, company or entity to engage
in any of the activities prohibited by this Paragraph 10.

         11. Right to Injunctive Relief: The Employee acknowledges that the
Company will suffer irreparable injury, not readily susceptible of valuation in
monetary damages, if the Employee breaches any of its obligations under
Paragraph 10 above. Accordingly, the Employee agrees that the Company shall e
entitled, in addition to, and not in lieu of, any other available remedies, to
seek and obtain injunctive relief against any breach or prospective breach by
the Employee of the Employee's obligations under Paragraph 10 of this Agreement,
in any Federal or State court sitting in the State of Arizona. The Employee
hereby submits to the jurisdiction of those courts for the purposes of any
actions or proceedings instituted by the Company to obtain such injunctive
relief, and agrees that process may be served by registered mail, addressed to
the last address of the Employee known to the Company, or in any other manner
authorized by law.

         12. Liability Insurance:

                  a. Insurance: Subject only to the provisions of Paragraph
12(b) below, the Company hereby agrees that, so long as Employee shall continue
to serve as a director, officer, employee or consultant of the Company (or shall
continue at the request of the Company to serve as a director, officer,
employee, partner, consultant, or agent of another corporation, partnership,
joint venture, trust or other enterprise), and thereafter so long as Employee
shall be subject to any possible claim or threatened, pending or completed
action, suit or proceeding, whether civil, criminal or investigative by reason
of the fact that Employee was a director, officer, or employee of the Company
(or served in any of said other capacities), the Company will purchase and
maintain in

                                       17

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effect for the benefit of Employee one or more valid, binding and enforceable
policies of directors and officers insurance providing, in all respect,
aggregate coverage of at least $20,000,000, after a deductible payable by
Employee of at least $150,000 (the "Insurance Policies").

                  b. Limitation on Company Obligation: The Company shall not be
required to maintain the Insurance Policies in effect if said insurance is not
reasonably available or if, in the reasonable business judgment of the then
Board, either (i) the premium cost for such insurance is substantially
disproportionate to the amount of coverage, or (ii) the coverage provided by
such insurance is so limited by exclusions that there is insufficient benefit
from such insurance.

         13. Indemnity:

                  a. Subject only to the exclusions set forth in Paragraph 13(b)
below and the restrictions set forth in the New Jersey Business Corporation Act,
and in addition to any rights of Employee under the By-Laws of the Company, any
applicable state law, Paragraph 12 of this Agreement, or any other agreement,
the Company hereby further agrees to hold harmless and indemnify Employee:

                           i. Against any and all expenses (including attorneys'
fees), judgments, fines and amounts paid in settlement actually and reasonably
incurred by Employee in connection with any threatened, pending or completed
action, suit or proceeding, whether civil, criminal, administrative or
investigative (including an action by or in the right of the Company, its
subsidiaries and/or affiliates) to which Employee is, was, or at any time
becomes a party, or is threatened to be made a party, by reason of the fact that
Employee is, was, or at any time becomes, a director, officer, employee,
consultant, or agent of the Company (its subsidiaries and/or affiliates), or is,
or was, serving, or at any time serves, at the request of the Company, as a
director, officer, employee,

                                       18

<PAGE>



consultant, partner, trustee or agent (regardless of his title) of another
corporation, partnership, joint venture, trust or other enterprise; and

                           ii. Otherwise to the fullest extent as may be
provided to Employee by the Company under the provisions of the By-Laws of the
Company and the New Jersey Business Corporation Act; and

                           iii. From any and all income and excise taxes (and
interest and penalties relating thereto) imposed on Employee with reference to
any payment under this Paragraph 13 (including, without limitation, payments in
indemnity for such taxes).

                  b. Notwithstanding the foregoing, no indemnity pursuant to
this Paragraph 13 shall be paid by the Company:

                           i. except to the extent the aggregate of losses to be
indemnified thereunder exceed the sum of Five Hundred ($500) Dollars, plus the
amount of such losses for which the Employee has already been indemnified,
either pursuant to any Insurance Policies purchased and maintained by the
Company pursuant to Paragraph 12 above;

                           ii. in respect to remuneration paid to Employee if it
shall be determined by a final judgment or other final adjudication that such
remuneration was in violation of law;

                           iii. on account of any suit in which judgment is
rendered against Employee for an accounting of profits made from the purchase or
sale by Employee of securities of the Company pursuant to the provisions of
Section 16(b) of the Securities Exchange Act of 1934, and amendments thereto, or
similar provisions of any Federal, state or local statutory law;

                           iv. on account of actions or omissions by the
Employee which are finally adjudicated to have been material to the cause of
action adjudicated and (x) were in breach of his

                                       19

<PAGE>



duty of loyalty to the Company or its shareholders, (y) were not in good faith
or involved a knowing violation of law or (z) resulted in receipt by Employee of
an improper personal benefit; or

                           v. if a final decision by a court having jurisdiction
in the matter shall determine that such indemnification to Employee is not
lawful.

                  c. All agreements and obligations of the Company contained
herein shall continue during the period Employee is a director, officer,
employee, consultant or agent of the Company (or is, or was, serving at the
request of the Company as a director, officer, employee, partner, consultant, or
agent of another corporation, partnership, joint venture, trust or other
enterprise), and shall continue thereafter so long as Employee shall be subject
to any possible claim or threatened, pending or completed action, suit or
proceeding, whether civil, criminal or investigative, by reason of the fact that
Employee was an officer or director of the Company, or serving in any other
capacity referred to herein.

                  d. The Company shall not be liable to indemnify Employee under
this Agreement for any amounts paid in settlement of any action or claim
effected without its written consent. The Company shall not settle any action or
claim in any manner which would impose any penalty or limitation on Employee
without Employee's written consent. Neither the Company nor Employee will
unreasonably withhold consent to any proposed settlement.

                  e. The Company will pay all expenses immediately upon the
presentment of bills for such expenses. Employee agrees that Employee will
reimburse the Company for all reasonable expenses paid by the Company in
defending any civil or criminal action, suit or proceeding against Employee in
the event, and only to the extent, that it shall be ultimately determined that
Employee is not entitled to be indemnified by the Company for such expenses
under the provisions of the

                                       20

<PAGE>



applicable state statute, the By-Laws, this Agreement, or otherwise. This
Agreement shall not affect any rights of Employee against the Company, any
insurer, or any other person to seek indemnification or contribution.

                  f. If the Company fails to pay any expenses (including,
without limiting the generality of the foregoing, legal fees and expenses
incurred in defending any action, suit or proceeding), Employee shall be
entitled to institute suit against the Company to compel such payment, and the
Company shall pay Employee all costs and legal fees incurred in enforcing such
right to prompt payment.

                  g. To the extent allowable under New Jersey law, the burden of
proof with respect to any proceeding or determination with respect to Employee's
entitlement to indemnification under this Agreement shall be on the Company.

                  h. Neither the failure of the Company, its Board of Directors,
independent legal counsel, nor its stockholders, to have made a determination
that indemnification of the Employee is proper in the circumstances because he
has met the applicable standard of conduct set forth in the New Jersey Business
Corporation Act, nor an actual determination by the Company, its Board of
Directors, independent legal counsel, or its shareholders, that the Employee has
not met such applicable standard of conduct shall be a defense to any action on
the part of Employee to recover indemnification under this Agreement, or create
a presumption that Employee has not met the applicable standard of conduct.

         14. Change in Control:

                  a. For purposes of this Agreement, "Change in Control" shall
have the meaning given to the term "Change of Control" in Section 1.1 of the
Indenture dated February 17, 1994

                                       21

<PAGE>



among the Company, certain of its subsidiaries and First Trust National
Association, as Trustee, relating to the Company's $135,000,000 11-1/2% Senior
Secured Notes due 2001 (the "Indenture"); provided, however, that for purposes
of this Agreement, all references to "35% of the total voting power" of the
Company in such definition shall be amended to read "25% of the total voting
power."

         15. Miscellaneous:

                  a. Employee Representations: The Employee represents and
warrants to the Company that there is no restriction or limitation, by reason of
any agreement or otherwise, upon the Employee's right or ability to enter into
this Agreement and fulfill his obligations under this Agreement.

                  b. Termination of Employment Agreements: All other agreements
between the Company and Employee with respect to employment and/or consulting
(except stock option agreements) shall be terminated and superseded hereby upon
execution of this Agreement.

                  c. Interest on Amounts Due: In the event any amount due either
to Employee or the Company under this Agreement is not paid when due, it shall
thereafter bear interest at the rate equivalent to the Citibank, N.A., New York,
New York (or its successor), prime rate as it shall vary from time to time over
the period until paid. Such interest shall be compounded on a monthly basis.

                  d. Key Man Insurance: Employee expressly acknowledges that the
Company may obtain up to $5 million in Key Man insurance coverage with respect
to Employee and Employee shall cooperate fully in order for the Company to
obtain such insurance.

                  e. Priority Over Stock Option Agreements: In the event of a
conflict between this Agreement and any of the stock option agreements
previously entered into between the Company an Employee, the terms and
conditions of this Agreement shall control.

                                       22

<PAGE>



                  f. Amendment: This Agreement shall not be changed or
terminated except in writing signed by both parties.

                  g. Governing Law: This Agreement shall be governed by, and
construed under, the substantial laws of the State of Arizona without regard to
choice of law doctrines.

                  h. Successors and Assigns: The terms and provisions of this
Agreement shall inure to the benefit of the personal representatives, heirs and
legatees of the Employee, and shall be binding upon and inure to the benefit of
any successors or assigns of the Company. This Agreement shall survive any
merger or voluntary or involuntary dissolution, and shall bind any person
acquiring the Company's assets in such event.

                  i. Notices: Any notices or other communications required or
permitted to be given under this Agreement shall be deemed given on the day when
delivered in person, on the next day after being sent via overnight mail (such
as Federal Express), or on the third business day after the day on which mailed
by first class mail from within the United States of America addressed to the
party receiving the communication at the principal office of the Company, or
such other address as the party receiving the communication shall have
designated to the other in writing.

                  j. Consents and Approvals: As to any paragraph of this
Agreement providing for the consent or approval of any party to this Agreement,
such provision shall be deemed to include the restriction that any such exercise
of approval or consent shall be reasonable and not unreasonably denied
regardless of whether such provision actually sets forth a specification that
such an approval or consent shall not be unreasonably denied.

                  k. Severability: If any provision of this Agreement is found
to be invalid or unenforceable, the remainder of this Agreement shall,
nevertheless, remain in full force and effect.

                                       23

<PAGE>



If any provision is held invalid or unenforceable with respect to particular
circumstances, it shall nevertheless remain in full force and effect in all
other circumstances. If the provision held invalid or substantially limited
involves the compensation or benefits of Employee, Employee shall have the
option for thirty (30) days following the final decision holding such provision
to be invalid to terminate this Agreement by written notice to the Company.

                  l. Captions: Captions in this Agreement are merely to
facilitate references, and shall not affect the interpretation of any of the
provisions.

                  m. Dispute Resolution: Except as provided for in Paragraph 11
hereof, all claims or disputes regarding or arising out of this Agreement shall
be resolved using arbitration. Such dispute shall be resolved pursuant to the
procedural rules of the American Arbitration Association using a panel of three
(3) arbitrators. Either party may deliver a written demand for arbitration of
the claim or dispute to the other and to the American Arbitration Association.
Both parties must then select one (1) arbitrator no later than twenty (20) days
after delivery and receipt of such notice of arbitration. Both such arbitrators
shall have experience in the gaming industry. The third arbitrator will be
selected by the first two arbitrators from a panel obtained from the American
Arbitration Association and shall be an attorney. Once the panel is established,
it shall hold a hearing in Phoenix, Arizona within thirty (30) days to resolve
the dispute under the Agreement. The determination and award of the panel shall
be binding on both parties and may be enforced in any court of competent
jurisdiction.

                  n. Independent Counsel: Employee and the Company acknowledge
and agree that the Company has been represented in connection with this
Agreement by its in-house counsel and Employee has had an opportunity to consult
with his own independent counsel with respect to this Agreement.


                                       24

<PAGE>



         IN WITNESS WHEREOF, this Agreement has been duly executed as of the day
and year first above written.


                                   CAPITAL GAMING INTERNATIONAL, INC.

Dated:___________________          By:______________________________________
                                            Edward M. Tracy
                                            Chairman and CEO

                                   EMPLOYEE



Dated:___________________          _________________________________________
                                   Michael W. Barozzi


a:\barozzi.emp



                                       25