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                                                                    EXHIBIT 8.12


                              MANAGEMENT AGREEMENT

         THIS MANAGEMENT AGREEMENT dated as of December 1, 1997, between Retama
         Development Corporation having an office at 1 Retama Parkway, Selma,
         Texas 78154 ("Owner"), Retama Partners, Ltd. having an office at 1964
         South Alamo, San Antonio, Texas 78204 ("License Holder"), and Retama
         Entertainment Group, Inc., a Texas Limited Liability Corporation,
         having an office at 1 Retama Parkway, Selma, Texas 78154 ("Operator").

                                   ARTICLE I

                      LIMITATIONS ON AUTHORITY OF OPERATOR

            1.1   In addition to the other provisions of this Agreement which
         limit the actions which Operator may take on its own behalf or on
         behalf of Owner, Operator may not, without the prior written consent of
         Owner (which consent shall not be unreasonably withheld or delayed),
         negotiate or execute any of the following types of agreements on its
         behalf or on behalf of Owner for leasing, licensing or granting of
         concessions tbr commercial space or services at the Class I Horse
         Racetrack located in the City of Selma, Bexar County, Texas (the
         "Racetrack") or for providing services with respect to the Racetrack:

                    (a) Agreements providing for the sale or acquisition of real
                  property or of personal property which is not to be used in
                  the ordinary course of the business of operating the
                  Racetrack;

                    (b) Agreements which have a term or any commitment by Owner
                  or Operator in excess of one year, except agreements or
                  purchases approved and set tbrth in the annual Business Plan
                  as hereinafter defined in Section 4.4(a).

                    (c) Agreements which require aggregate expenditure by Owner
                  in excess of $250,000.00 except agreements or purchases
                  approved and set forth in the annual Business Plan.

                                   ARTICLE II

                                      TERM

            2.1   This agreement shall be effective upon the Effective Date (the
         "Commencement Date"), and shall continue in force until 11:59 p.m.,
         November 1, 2000. Notwithstanding the foregoing, the Owner may extend
         the Agreement, at its sole option, to 11:59 p.m. on November 1, 2002,
         by giving to Operator not less than ninety (90) days
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         prior written notice of its intention to extend this Agreement. Should
         Owner chose to extend this Agreement, Operator may, but is not required
         to, agree to such extension.

                                   ARTICLE III

                       OPERATION OF RACETRACK BY OPERATOR

            3.1   During the term of this Agreement, Operator shall operate the
         Racetrack, considering the physical characteristics of the Racetrack
         and the markets available to it, shall provide or cause to be provided
         all amenities in connection therewith which are customary and usual to
         such an operation and shall conduct regular horse race meetings with
         wagering on the results and related activities as permitted by the
         Texas Racing Commission in a manner calculated to optimize financial
         performance.

            3.2   Owner and License Holder engage Operator, as an independent
         contractor, to be the exclusive operator and manager of the Racetrack
         during the term of this Agreement upon the terms and conditions of the
         Agreement. Subject to the provisions of Article I and the other
         provisions of this Agreement, Operator shall have absolute control and
         discretion in the operation, direction, marketing, maintenance, and
         management of the Racetrack, including the authority to enter into
         agreements and take such other actions, as an independent contractor,
         but on behalf of Owner. as Operator shall reasonably deem appropriate,
         in its name on behalf of the Owner or in Owner's name except as
         expressly provided herein to the contrary.

            3.3   Subject to the other terms and provisions of this Agreement,
         Operator shall have the exclusive right to hire, discharge, supervise,
         promote, train, determine salaries and benefits of, and establish
         personnel policies and incentives for and otherwise handle relations
         with Racetrack personnel. All Racetrack personnel shall be employees of
         Operator, other than contracted labor and/or services such as
         Grandstand cleaning.

            3.4   Notwithstanding the powers and rights granted to Operator
         pursuant to this Article III, Operator must operate the Racetrack
         consistent with the provisions of the Texas Racing Act and the rules of
         the Texas Racing Commission.

                                   ARTICLE IV

               REPORTING, OPERATING BUDGETS, AND CAPITAL BIJDGETS

            4.1   Within sixty (60) days after the end of each Fiscal Year of
         Owner ("Fiscal Year") that ends during the term of this Agreement,
         Operator shall submit to Owner a balance sheet, a statement of
         operations and a statement of net cash flow (the "Annual Financial
         Statements"), in comparative form with the preceding Fiscal Year, all
         in
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         reasonable detail, in accordance with generally accepted accounting
         principles. Fiscal Year shall be defined as the calendar year.

            4.2   (a) Beginning on the Commencement Date, Operator shall keep or
         cause to be kept, for the account of Owner, complete and accurate books
         of account and other records reflecting the results of the operation of
         the Racetrack, on an accrual basis in accordance with generally
         accepted accounting principles.

            (b)   Owner and License Holder may through its duly appointed 
         agents, inspect all such operating reports, books and records during
         normal daytime business hours at the racetrack or the offices of the
         Operator, at whichever locations any such records are maintained from
         time to time.

            (c)   Operator shall obtain an audit of the financial statements
         which shall be completed within 180 days of the fiscal year end. The
         auditor shall be approved bv Owner.

            4.3   Within tbrty five (45) days alter the end of each month during
         the term of this Agreement, Operator shall submit to Owner, Trustee and
         License Holder a financial statement showing the financial results of
         operation of the Racetrack tbr such month, together with the financial
         results of the operation for the period from the beginning of the
         Fiscal Year to the end of such month. Such statement shall: (i) be in
         customary form, providing comparison with the items contained in the
         current Business Plan (as defined in Section 4.4(a) which has been
         approved by Owner or has otherwise been approved as provided in Section
         4.4(c) and with the prior Fiscal Year's results; (ii) be taken from the
         books and records with respect to the Racetrack maintained by the
         Operator; (iii) be prepared on the accrual basis in accordance with
         generally acceptable accounting principles; and (iv) include a
         statement of operations (with budget variances including variances in
         admissions and handle), a balance sheet, a reconciliation cash flow,
         and any other financial schedules rcasonably requested by Owner or
         License Holder.

            4.4   (a) At least one hundred twenty (120) days before the end of
         each Fiscal Year during the term of this Agreement, Operator shall
         submit to Owner and License Holder, for written approval, an annual
         Business Plan (the "Business Plan") for the operation of the Racetrack
         for the forthcoming Fiscal Year. The Business Plan for each Fiscal Year
         shall consist of: (i) an operating budget (the "Operating Budget")
         showing, in reasonable detail, the projected or estimated revenue and
         expenses, including reconciliation of cash flow, in respect of the
         Racetrack for the Fiscal Year on a month-to-month basis; and (ii) a
         capital budget (the "Capital Budget") showing in reasonable detail, the
         projected or estimated capital expenditures to be made with respect to
         the Racetrack for such Fiscal Year. Operating projections for the
         Fiscal Year shall include a description of the methods to be employed
         and the practices, policies and strategies to be adopted in order to
         achieve such projections. The form of the Business Plan will be in the
         form attached hereto as Exhibit ~'A", as such form may be modified
         hereafter with the consent of Owner and Operator. The expenditures in
         any Capital Budget shall be shown
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         by fiscal month or quarter for each Fiscal Year (or portion thereof')
         covered by the Capital Budget. All original and updated Capital Budgets
         shall cover a minimum of twelve (12) fiscal months.

            (b)   Owner and Operator shall jointly review each Business Plan and
         all of the items constituting the Business Plan and shall approve the
         Business Plan and attempt to resolve any differences of opinion with
         respect to the contents of the Business Plan.

            (c)   Owner shall give its written approval or disapproval of the
         Business Plan not later than thirty (30) days after the delivery of the
         proposed Business Plan to Owner by Operator. If Owner does not approve
         or disapprove any portion of such Business Plan within such 30-day
         period, then Owner shall be deemed to have approved the Business Plan
         as submitted by Operator. If Owner objects to all or any portion of
         such Business Plan, then Owner shall noti~, Operator of the reasons for
         its objections. and Owner and Operator shall use their reasonable
         efforts to agree in respect to the items to which Owner objects. Should
         Owner and Operator not reach agreement on all or any portion of the
         Business Plan prior to the commencement of the Fiscal Year to which
         such Business Plan relates, Operator shall be entitled to operate the
         Racetrack in accordance with the immediately prior Fiscal Year's
         Business Plan (or those portions of the current Business Plan which
         have been agreed upon by Owner and Operator or that Owner has not
         disapproved), for the Fiscal Year covered by the Business Plan, pending
         Owner's approval of a new Business Plan, or such disputed portions
         thereof, for such Fiscal Year. With regard to the portions of the
         Business Plan as to which agreement has not yet been reached, Operator
         shall operate the Racetrack at rates or levels of expenditures
         comparable to those of the preceding Fiscal Year with suitable
         adjustments of rates and expenses for such items or portions thereof as
         reasonably dictated by inflationary factors and for such other items
         included within the disputed portions of the Business Plan which have
         been agreed upon by Owner and Operator. Any interim business plan used
         pursuant to this Section 4.4(c) shall be ret~rred to as the Interim
         Business Plan.

            (d)   Once a Business Plan has been approved or deemed approved by
         Owner (or portions thereof have been approved or an Interim Business
         Plan has been deemed approved as proved for in Section 4.4[c]),
         Operator may incur expenditures set forth in such Business Plan or
         Interim Business Plan.

            (e)   For the purposes of reviewing the operation and management of
         the Racetrack, including, but not limited to, Business Plans proposed
         by Operator and such other matters as Owner may determine, Owner and
         Operator shall meet as frequently and at such place, date, and time and
         among such persons, all as Owner shall reasonably require. Without
         limiting the foregoing, Operator agrees that at least four times each
         Fiscal Year (e.g., on or about January 10, April 10, July 10, and
         October 10) Owner and Operator shall review in particular the Business
         Plan for such Fiscal Year, and in the case of the last meeting
         scheduled before the end of the Fiscal Year, the Business Plan proposed
         by Operator for the next succeeding Fiscal Year. Amendments to the
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         Businesses Plan shall be made as agreed between Owner and Operator to
         reflect changes in business activity or other factors affecting
         economic performance.

            4.5   Subject to approval oF Owner, which approval shall not be
         unreasonably withheld or delayed, Operator shall have the right to
         "subcontract" concessions or other service contracts when such action
         is in the best interest of the Racetrack. Any such contract shall
         comply with the provisions of Rev. Proc. 93-19, as amended by the
         Internal Revenue Service.

            4.6   Owner shall not during the term of this agreement compete with
         the duties reserved to Operator by this Agreement.

                                    ARTICLE V

                      BANK ACCOUNTS AND CASH DISBURSEMENTS

            5.1   The Owner shall establish one or more commercial banking
         accounts as provided for in the Business Plan and the Indenture.
         Operator shall designate at least two employees of Operator who will
         have signature authority on such accounts. Operator shall take all
         necessary actions to make the daily transfers from such accounts held
         by the Trustee under the Indenture as required thereby. The accounts
         described in this Section 5.1 shall be referred to as the Agency
         Accounts. Operator shall annually present to Owner a list of employees
         with signature authority. Owner may request bonding of employees with
         signature authority if adequate insurance is not in place covering the
         actions of such persons.

            5.2   Owner shall bear all losses resulting t(Y)om any failure or
         insolvency of the bank, trust company or other financial institution in
         which the Agency Accounts or the investments authorized by Section 5.3
         are maintained. Operator shall maintain the Agency Accounts at either
         Frost National Bank, Banc One or another financial institution
         acceptable to Owner. Upon the termination of this Agreement, and the
         payment to Operator of all amounts due upon such termination, all
         remaining amounts in the Agency Accounts shall be transferred to Owner.

            5.3   After adequate working capital reserves have been provided in
         accordance with the current approved Business Plan and the Indenture,
         Operator shall pay to the Trustee from the Agency Accounts any fund not
         required for current obligations per the terms of the Indenture.
         Surplus funds shall be invested by Operator in bank certificates of
         deposit, repurchase agreements, treasury bills or similar securities,
         or money market or other day-to-day depository accounts, in accordance
         with the procedures proposed by Operator and approved by Owner, and in
         accordance with the Indenture.

            5.4   The Operator shall pay out of Agency Accounts all Racetrack
         Costs incurred by the Owner or by the Operator on behalf of Owner.
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                                   ARTICLE VI

                                 OPERATOR'S FEES

            6.1   As consideration for its services hereunder, Operator shall be
         entitled to receive a monthly fixed management ibe (the "Fixed
         Management Fee") in the amount of $15,000.00 plus, subject to the
         limitations set forth in this Section, a variable management fee (the
         "Variable Management Fee"), which together with the Fixed Management
         Fee are collectively retbrred to as the "Management Fees." The Fixed
         Management Fee shall be payable in arrears on or before the first
         working day of each month during the term of this Agreement. The
         Variable Management Fee shall be payable in arrears on the first day of
         August for the preceding Fiscal Year. It is the intention of the Owner
         and the Operator that the Management Fees comply with the terms and
         provisions of Rev. Proc. 93-19. Until such time as all bonded
         indebtedness related to the project is discharged in full, the
         Management Fees set forth in this Article VI shall not be amended
         unless Owner first obtains an opinion of nationally recognized bond
         counsel, to the effect that such changes shall not adversely affect the
         exclusion from gross income under Section 103(a) of the Internal
         Revenue Code of 1986, as amended, of interest on the Bonds.

            6.2   The Variable Management Fee is an amount equal to 25% of the
         profit of the Racetrack in excess of $1 million before depreciation and
         amortization, and before the payment of debt service on the Bonds
         computed in accordance with the Business Plan. By way of example, if
         the profit before depreciation and amortization and before the payment
         of debt service on the Bonds is $1,500,000, the Variable Management Fee
         would equal $125,000 (i.e., $1,500,000 minus $1,000,000 then multiplied
         by 25%). Notwithstanding the foregoing, the Variable Management Fee
         will not be paid (but will accrue) until the accrued interest on the
         Series A Bonds has been paid.

            6.3   All calculations shall be based upon the audited Annual
         Financial Statements of the Racetrack.

                                   ARTICLE VII

                                    EXPENSES

            7.1   For the purposes of this Agreement, the term "Racetrack
         Expense" shall mean all costs and other expenditures which are (a) paid
         by Operator or are paid on behalf of Owner (and reimbursed by Owner or
         Trustee to Operator) or are paid by Owner or Trustee to Operator or to
         any person for materials or services provided and which directly relate
         to the operation of the Racetrack and are included in the Business Plan
         for the Fiscal Year in question which has been approved by Owner and
         Operator or has been approved as otherwise provided in Section 4.4(c),
         as the case may be, or (b) otherwise expressly provided in this
         Agreement to be a Racetrack Expense. Racetrack Expense

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         shall not include any costs or other expenditures which are paid or
         incurred by Operator or any affiliated party and which relate only
         indirectly to the ownership, construction, use, occupancy or operation
         of the Racetrack, such as, but not limited to, overhead allowances or
         charges for Operator or any affiliated party of any off-site personnel
         of Operator or any affiliated party who are not providing services
         directly to the Racetrack. Only Racetrack Expense shall be incurred by
         Operator in a proposed Business Plan.

            7.2   Except as provided in Section 7.1, all costs and expenses
         incurred by Operator in the performance of Operator's obligations under
         this Agreement shall be for and on behalf of Owner and for its account,
         and such costs and expenses shall be a Racetrack Expense. Subject to
         the provisions of Section 7.1 and this 7.2, Operator sh