<PAGE>

                                                                  EXHIBIT 10.67

                                   GUARANTY
                                   --------



          GUARANTY dated as of December 29, 2000 ("Guaranty"), by SANTA FE
GAMING CORPORATION, a Nevada corporation, having an office at 4336 Losee Road,
Suite 9, Las Vegas, Nevada 89030 ("SFGC"), PIONEER HOTEL INC., a Nevada
corporation, having an office at 4336 Losee Road, Suite 9, Las Vegas, Nevada
89030 ("Tenant"), and SANTA FE HOTEL INC., a Nevada corporation, having an
office at 4336 Losee Road, Suite 9, Las Vegas, Nevada 89030 ("SFHI") (each of
SFGC, Tenant and SFHI are a "Guarantor", and collectively, are the
"Guarantors").



                                    RECITALS
                                    --------

          A.   Pursuant to that certain Exchange Agreement dated as of December
29, 2000 among Tenant, Pioneer, LLC ("Transferor"), HAHF Pioneer, LLC
("Landlord") and Heller Affordable Housing Of Florida, Inc., a Florida
corporation (the "Exchange Agreement"), Transferor agreed to transfer to
Landlord, and Landlord agreed to accept from Transferor, Transferor's fee title
and ground leasehold interest in and to certain premises (the "Premises") known
as the Pioneer Hotel and Casino, Laughlin, Nevada and more particularly
described in the Exchange Agreement.  Concurrently therewith, Tenant agreed to
lease from Landlord, and Landlord agreed to lease to Tenant, the Premises,
pursuant to a lease of even date herewith (the "Lease").  The Lease, the
Exchange Agreement, the documents evidencing or securing the Additional
Collateral (as defined in Section 4) together with all other certificates,
                          ---------
statements, instruments and documents executed and delivered by Transferor,
Tenant or any Guarantor in connection therewith or with the transactions
contemplated therein, being herein referred to, collectively, as the
"Documents".

          B.   Tenant and SFHI are each wholly owned subsidiaries of SFGC.

          C.   Landlord is unwilling to enter into the transactions contemplated
by the Documents unless each of the Guarantors execute and deliver this
Guaranty.



                                   AGREEMENTS
                                   ----------

          Accordingly, in order to induce Landlord to enter into the Lease, the
Guarantors hereby agree as follows:

          1.   Each Guarantor absolutely, unconditionally and irrevocably,
jointly and severally guarantees to Landlord (a) the due, complete and punctual
payment
<PAGE>

by Tenant of all Fixed Rent and Additional Rent (as such terms are defined in
the Lease) under the Lease; (b) the due, complete and punctual performance and
observance of all of the terms, covenants and conditions of any of the
Documents, to be paid, performed and observed by Transferor, Tenant or any
Guarantor (each, a "Transferor Party" and collectively, the "Transferor
Parties") during the term of the Lease (herein called the "Term"); (c) the
accuracy of each representation and warranty made by any Transferor Party under
the Documents; (d) all of the obligations of the Transferor Parties pursuant to
the Documents, including, without limitation, the obligations contained on
Schedule 1 attached hereto and made a part hereof, and (e) the full and prompt
----------
payment of all legal and other costs and expenses paid or incurred by the
Landlord in the enforcement of this Guaranty, including, without limitation,
reasonable attorneys' fees, all irrespective of the validity, binding effect,
legality or enforceability against any Transferor Party of the Documents, or any
other circumstance which might now or hereafter otherwise constitute a legal or
equitable discharge or defense of any Guarantor.  In addition, SFHI hereby
agrees to deposit the proceeds from the sale of the Lone Mountain Property (as
defined in the Exchange Agreement), net of customary closing expenses related to
such sale and subject to a maximum deposit requirement of $5,000,000, into the
Restricted Cash Collateral Account (as defined in Schedule 1 attached hereto and
                                                  ----------
made a part hereof) within three (3) business days of the closing of such sale,
and to provide Landlord with notice of such deposit within such three (3)
business day period.  The obligations of SFHI set forth in the foregoing
sentence and the obligations of the Guarantors referred to in clauses (a)
through (e) above, collectively, are hereinafter referred to collectively as the
"Obligations").  Guarantors hereby agree that upon the occurrence of an "Event
of Default" (as such term is defined in Section 12.1 of the Lease) by Tenant
                                        ------------
under the Lease or a breach under any of the other Documents which is not cured
within any applicable grace period thereunder or, if there is no grace period,
within thirty (30) days after a notice by Landlord (collectively, together with
any Event of Default under the Lease, an "Event of Default"), Guarantors shall,
upon written demand specifying the nature of such Event of Default remaining to
be cured, cure such Event of Default by payment or performance in accordance
with the terms of the applicable Document.  Each Guarantor acknowledges that it
has received copies of the Documents and that the same are legal, valid and
binding instruments enforceable against the applicable Transferor Parties, in
accordance with their respective terms, and each Guarantor waives any notice
under any of the Documents.  Notwithstanding the foregoing, Tenant shall not be
deemed to guarantee its compliance, as the tenant under the Lease, with respect
to those obligations set forth in clauses (a) and (b) above.

          2.   Any act of Landlord consisting of a waiver of any of the terms,
covenants or conditions of the Lease or any other Document or the giving of any
consent under the Lease, or the granting of any indulgences or extensions of
time to Lessee, may be done without notice to or consent from any Guarantor and
without releasing any Guarantor.

                                       2
<PAGE>

          3.   The obligations and liability of the Guarantors under this
Guaranty shall be absolute and unconditional, and joint and several, and shall
not be subject to any counterclaim, set-off, deduction or defense based upon any
claim which any Guarantor may have against Landlord and shall remain in full
force and effect without regard to, and shall not be released, discharged or
terminated or in any other way affected by, any circumstance or condition
(whether or not such Guarantor shall have any knowledge or notice thereof),
including, without limitation: (a) any amendment, modification, extension or
renewal of the Lease or of any of the other Documents (except that the liability
of any Guarantor hereunder shall be deemed to apply to the Lease or such other
Document as so amended, modified, extended or renewed); (b) any exercise or
nonexercise by Landlord of any right, power or remedy under or in respect of the
Lease or any of the other Documents or any waiver, consent, indulgence or other
action, inaction or omission under or in respect of the Lease or such other
Document; (c) any assignment, sale, sublease, surrender, forfeiture, reentry,
re-letting or other transfer by Landlord or Tenant in respect of the Lease or
any interest in the Premises; (d) any bankruptcy, insolvency, receivership,
reorganization, composition, adjustment, dissolution, liquidation or other like
proceeding involving or affecting any Transferor Party, or Landlord or their
obligations, properties or creditors, or any action taken with respect to such
obligations or properties or the Lease or any other Document, by any trustee or
receiver of Landlord or any Transferor Party, or by any court of competent
jurisdiction, in any such proceeding; (e) any invalidity or unenforceability, in
whole or in part of any obligation of Tenant under the Lease, or of any term of
the Lease, or of any term of any other Document; or (f) any transfer by any
Guarantor of any or all of the capital stock of such Guarantor or the control
thereof.

          The obligations of each of the Guarantors shall not be affected by the
exercise of any renewal option or purchase option provided in the Lease, and
this Guaranty shall be deemed to include, without limitation, all additional
liabilities and obligations of Tenant to Landlord resulting from the exercise of
any such option.

          Notwithstanding the foregoing, the Guarantors shall have no obligation
to pay Landlord any amount with respect to which Tenant has obtained a final,
non-appealable judgment confirming that Tenant has no obligation to pay such
amount.

          4.   This Guaranty is an absolute and unconditional guaranty of
payment and performance and not merely of collection.  The Obligations set forth
in this Guaranty are secured in part by (a) a deed of trust encumbering certain
real property owned by SFHI defined as the "Lone Mountain Property" in the
Exchange Agreement and (b) the pledge by SFHI of the Restricted Cash Collateral
Account and the Unrestricted Cash Collateral Account established or to be
established by SFHI in favor of Landlord in the original principal amount of
$10,000,000 and $5,000,000, respectively, pursuant to each Cash Collateral
Agreement (as defined in the Exchange Agreement) (collectively, the collateral
described in clauses (a) and (b) hereof are the "Additional Collateral").
Notwithstanding such Additional Collateral, each Guarantor acknowledges

                                       3
<PAGE>

and agrees that its liability hereunder shall be primary and that in any right
of action which shall accrue to Landlord under the Documents, Landlord may, at
its option, (x) proceed against any Guarantor and Tenant jointly and severally;
(y) Landlord may proceed against any Guarantor under this Guaranty without
commencing any suit or proceeding of any kind or nature whatsoever against
Tenant or any other Transferor Party (or with respect to the Additional
Collateral) or without having obtained any judgment against Tenant or any other
Transferor Party (or with respect to the Additional Collateral) and without any
presentment, and demand for payment, notice of nonpayment, notice of dishonor,
protest, notice of protest, nonperformance or nonobservance, or of any notice of
acceptance of this Guaranty or of any other notice or demand to which a
Guarantor might otherwise be entitled, all of which each Guarantor hereby
expressly waives; and (z) proceed against any party obligated under the terms of
any of the Documents or any of the Additional Collateral, any Guarantor or any
other guarantor or surety in such order, either concurrently or consecutively,
as Landlord may designate or only against such parties as Landlord may wish to
proceed. Without limiting the generality of the foregoing, or any other
provision hereof, each Guarantor further expressly waives, to the extent
permitted by law, any and all rights and defenses, including without limitation
any rights of subrogation, reimbursement, indemnification and contribution,
which might otherwise be available to such Guarantor under any applicable laws,
including without limitation, those under Nevada Revised Statutes Sections
40.430 through 40.495. All rights, remedies and recourse afforded to herein or
in any of the other Documents or otherwise available at law or in equity shall
be deemed separate, cumulative and concurrent and not alternative; may, to the
extent permitted by law, be pursued separately, successively or concurrently
against any Guarantor, Tenant, or anyone else obligated under the Documents, or
any one or more of them, at the sole discretion of Landlord; and may be
exercised as often as occasion therefor arises, it being understood that the
exercise or the failure to exercise, or election not to exercise any of the same
or of any other right, remedy or recourse available to Landlord and no single or
partial exercise of any such right, remedy or recourse shall preclude any other
or future exercise thereof or of any other right, remedy or recourse or limit or
prejudice any other legal or equitable remedy that Landlord may have.

          5.   Each Guarantor and Landlord waive trial by jury of all issues
arising in any action, suit or proceeding to which Landlord and any Guarantor
may be parties in connection with this Guaranty.

          6.   No Guarantor shall directly or indirectly sell, lease or
otherwise dispose of all or substantially all of its properties or assets if
such sale, lease or disposition would cause such Guarantor to breach any of its
obligations or covenants under this Guaranty.  No termination of this Guaranty
shall relieve a Guarantor of any liability accruing prior to the effective date
of the termination of this Guaranty.

          7.   Each Guarantor, at its own expense, shall execute, acknowledge
and deliver all instruments, take all action and furnish such information as
Landlord from

                                       4
<PAGE>

time to time may reasonably request for the assuring to Landlord the full
benefits intended to be created by this Guaranty.

          8.   SFGC represents and warrants to Landlord that:

               (a)  SFGC is a corporation duly organized, validly existing and
in good standing under the laws of the laws of the State of Nevada.

               (b)  SFGC owns one hundred percent (100%) of the authorized and
outstanding voting stock of Tenant and SFHI.

               (c)  The financial statements of SFGC contained in its Annual
Report on Form 10-K for the fiscal years ended September 30, 1999, September 30,
1998 and September 30, 1997, copies of which have been furnished to the
Landlord, are true and correct in all respects and fairly present the financial
condition and results of operations of SFGC at such respective dates. Such
financial statements, together with the notes thereto, were prepared in
accordance with U.S. generally accepted accounting principles applied on a
consistent basis throughout such periods indicated, and present fairly the
financial condition and operating results of SFGC as of such dates, and for the
periods, indicated therein, subject to normal year-end audit adjustments which
are not expected in the aggregate to be material. No material adverse change has
occurred in the business or financial condition of SFGC reflected in such
financial statements since the respective dates of such financial statements,
or, so far as SFGC currently knows or can now reasonably foresee, may occur in
the future in the business or prospects or condition (financial or otherwise) of
SFGC or any of its properties or assets.

          9.   Tenant represents and warrants to Landlord that:

               (a)  Tenant is a corporation duly organized, validly existing and
in good standing under the laws of Nevada.

               (b)  The unaudited financial statements of Tenant for the fiscal
years ended September 30, 1999, September 30, 1998 and September 30, 1997,
copies of which have been furnished to the Landlord, are true and correct in all
respects and fairly present the financial condition and results of operations of
Tenant at such respective dates. Such financial statements, together with the
notes thereto, were prepared in accordance with U.S. generally accepted
accounting principles applied on a consistent basis throughout such periods
indicated, and present fairly the financial condition and operating results of
Tenant as of such dates, and for the periods, indicated therein, subject to
normal year-end audit adjustments which are not expected in the aggregate to be
material. No material adverse change has occurred in the business or financial
condition of Tenant reflected in such financial statements since the respective
dates of such financial statements, or, so far as Tenant currently knows or can
now reasonably foresee, may occur in the future in the business or prospects or
condition (financial or otherwise) of Tenant or any of its properties or assets.

                                       5
<PAGE>

          10.  SFHI represents and warrants to Landlord that:

               (a)  SFHI is a corporation duly organized, validly existing and
in good standing under the laws of Nevada.

          11.  Each Guarantor represents and warrants to Landlord that:

               (a)  Such Guarantor has full power, authority and legal right to
execute, deliver, perform and observe the provisions of this Guaranty,
including, without limitation, the payment of all moneys hereunder.

               (b)  The execution, delivery and performance by such Guarantor of
this Guaranty has been duly authorized by all necessary corporate action.

               (c)  Such Guarantor, as of the date of the execution of this
Guaranty, has not received notice of, nor, to the best of its knowledge, is it
in violation of any decree, ruling, judgment, order or injunction applicable to
it nor any law, ordinance, rule or regulation of whatever nature nor are there
any actions, proceedings or investigations pending or, to the best of its
knowledge, threatened against or affecting such Guarantor (or any basis therefor
known to such Guarantor) before or by any court, arbitrator, administrative
agency or other governmental authority or entity, any of which violations,
actions, proceedings or investigations, if adversely decided, would materially
and adversely affect its ability to carry out any of the terms, covenants and
conditions of this Guaranty.

               (d)  No authorization, approval, consent or permission
(governmental or otherwise) of any court, agency, commission or other authority
or entity, which, if not granted, would materially and adversely affect such
Guarantor's ability to carry out any of the terms, covenants and conditions of
this Guaranty, is required for the due execution, delivery, performance or
observance by such Guarantor of this Guaranty or for the payment of any sums
hereunder. Such Guarantor covenants that if any such authorization, approval,
consent, filing or permission shall be required in the future in order to permit
or effect performance of the obligations of such Guarantor under this Guaranty,
such Guarantor shall promptly inform Landlord or its successors or assigns and
shall use its best efforts to obtain promptly such authorization, approval,
consent, filing or permission.

               (e)  Such Guarantor, as of the date of the execution of this
Guaranty, has not received notice of, and, to the best of its knowledge is not
in default in the observance or performance of the terms and conditions of any
loan or other agreement, instrument, guaranty, indenture, charter or other
document to which it is a party or by which it is bound (collectively, such
Guarantor's "Other Obligations"), which default might materially and adversely
affect its ability to carry out any of the terms, covenants or conditions of
this Guaranty. Such Guarantor shall promptly comply with all of such Guarantor's
Other Obligations, whether currently or hereafter in force,

                                       6
<PAGE>

the default of which would materially and adversely affect its ability to carry
out any of the terms, covenants or conditions of this Guaranty.

          (f)  Neither the execution and delivery of this Guaranty, nor the
consummation of the transactions herein contemplated, nor compliance with the
terms and provisions hereof, conflict or will conflict with or result in a
breach of any of the terms, conditions or provisions of the certificate of
incorporation or by-laws of such Guarantor, or similar documents of such
Guarantor, or of any order, writ, injunction or decree of any court of competent
jurisdiction or governmental authority, or of any agreement or instrument to
which such Guarantor is a party or by which it is bound, or constitutes or will
constitute a default thereunder.

          (g)  This Guaranty is in furtherance of the business purposes of such
Guarantor and such Guarantor expects to derive substantial benefit from the
performance contemplated by the terms of the Documents.

          (h)  There is no default on the part of such Guarantor under this
Guaranty and no event has occurred and is continuing which with notice or lapse
of time or both would constitute a default hereunder.

          (i)  This Guaranty does not contain any untrue statement of a material
fact or omit or will omit to state a material fact necessary in order to make
the statements contained herein, in light of the circumstances under which the
same were made, not misleading on the date as of which the same were made.

          (j)  To the best knowledge of such Guarantor, such Guarantor (i) has
filed all tax returns which are required to be filed, (ii) is not in default in
the payment of taxes (including interest and penalties) levied or assessed
against it or any of its assets, and (iii) has not been advised of any proposed
deficiency with respect to any income taxes for any period.  All charges,
accruals and reserves for Federal, state and other such taxes, assessments,
liens and charges applicable to such Guarantor are adequate.

          12.  This Guaranty shall continue in full force and effect throughout
the Term (as such term is defined in the Lease) and thereafter so long as any
obligation or liability of Tenant under the Lease shall remain unperformed or
unsatisfied (whether or not the Lease shall have terminated), but this Guaranty
shall terminate and be of no further force or effect upon the full performance
and satisfaction by the Guarantors and Tenant of all of their respective
obligations and liabilities hereunder and under the Documents.

          13.  No delay on the part of Landlord in exercising any right, power
or privilege under this Guaranty nor any failure to exercise the same shall
operate as a waiver of or otherwise affect any right, power or privilege, nor
shall any single or partial

                                       7
<PAGE>

exercise thereof preclude any other or further exercise thereof or the exercise
of any other right, power or privilege.

          14.  Each Guarantor agrees that any final judgment from which such
Guarantor has not appealed, or is not permitted to appeal further, shall be
conclusive and binding upon such Guarantor and, so far as is permitted under
applicable law, shall be enforced in any of the courts to the jurisdiction of
which such Guarantor is subject, by a suit upon such judgment and that such
Guarantor shall not assert any defense in any such suit upon such judgment.

          15.  Each Guarantor shall preserve, maintain and keep in full force
and effect and good standing its corporate existence and all rights, privileges
and franchises which are necessary or desirable in the normal conduct of its
business.  Notwithstanding the foregoing, this covenant shall not be deemed to
be violated if such Guarantor converts from a corporation to another legal form
of ownership as long as such conversion does not have an adverse effect on such
Guarantor's financial or legal capacity to discharge its obligations under this
Guaranty.

          16.  The Guarantors will cause Tenant to comply with, and will take
all actions necessary to prevent the occurrence of an Event of Default under,
the respective terms, covenants, agreements and conditions set forth in the
Lease.

          17.  Each Guarantor shall promptly notify Landlord of the occurrence
of any event relating to it which would interfere with the ability of such
Guarantor to perform its obligations under this Guaranty.

          18.  Each Guarantor agrees that, without the necessity of any
reservation of rights against such Guarantor, the Obligations or rights of
offset with respect thereto, and the Documents, or any of them, may, from time
to time, in whole or in part, be renewed, extended, amended, modified,
accelerated, compromised, released (whether by operation of law or otherwise) or
waived by Landlord, all without notice to or further consent by such Guarantor
and such Guarantor will remain bound hereunder and such Guarantor expressly
waives such notice or further consent, notwithstanding any such renewal,
extension, amendment, modification, acceleration, compromise, release or waiver.

          19.  Should Landlord be obligated by any bankruptcy or other law to
(a) repay to Tenant or any Guarantor or to any trustee, receiver or other
representative of any of them, any amounts previously paid by any Guarantor
pursuant to this Guaranty or by Tenant or pursuant to the Documents, or (b)
reconvey to any Guarantor or Tenant any property previously conveyed by any of
them to Landlord or its designee in total or partial satisfaction of the
Obligations, then, to the extent permitted by law, this Guaranty shall be
reinstated with respect to the amount of the indebtedness satisfied by the
payment or conveyance before it was caused to be returned.

                                       8
<PAGE>

          20.  Each Guarantor hereby agrees to and hereby does jointly and
severally indemnify and hold Landlord harmless from and against all loss, cost,
liability or expense (including, without limitation, reasonable attorneys' fees
and disbursements) incurred in connection with the enforcement of any of the
Documents or this Guaranty or the collection of any amounts due thereunder or
hereunder, or by reason of the assertion by Tenant of any defense to the
performance of the Obligations or the assertion by any Guarantor of any defense
to its Obligations hereunder; provided, that the foregoing provisions of this
Section 20 shall be of no force or effect if such Guarantor shall be the
----------
prevailing partly in any such enforcement action.

          21.  No payment by any Guarantor pursuant to any provisions of this
Guaranty shall entitle such Guarantor, by subrogation or otherwise, to any of
the rights of Landlord to any payment by Tenant or out of the property of
Tenant, except after payment in full of all sums (including interest, costs and
expenses) which may be or become payable by Tenant to Landlord at any time or
from time to time and until the Obligations have been completely performed.

          22.  Each Guarantor waives (a) any and all notice of the creation,
renewal, extension, accrual or acceptance of any of the Obligations or this
Guaranty or of the reliance by Landlord upon this Guaranty and (b) any other
notice or demand to which such Guarantor might otherwise by entitled, except as
otherwise specifically provided in this Guaranty.

          23.  As long as this Guaranty shall be in force and effect, promptly
when available after the close of the relevant financial accounting period of
each Guarantor, (a) SFGC shall furnish to Landlord its Annual Report on Form 10-
K (the "Form 10-K"), or Quarterly Report on Form 10-Q (the "Form 10-Q"), as
applicable, as filed with The United States Securities and Exchange Commission
which (i) with respect to a Form 10-K, shall contain an audited balance sheet of
such Guarantor as of the last day of such accounting period and an audited
income statement for such accounting period, both of which shall be certified by
a firm of independent certified public accountants which at the time shall be
regularly engaged in auditing the books and records of such Guarantor, and (ii)
with respect to Form 10-Q, shall contain an unaudited balance sheet of such
Guarantor as of the last day of such accounting period and an unaudited income
statement for such accounting period, both of which shall be certified by a firm
of independent certified public accountants which at the time shall be regularly
engaged in auditing the books and records of such Guarantor, (b) SFGC shall
furnish to Landlord audited annual financial statements, consolidating its
subsidiaries, and (c) each of Tenant and SFHI shall furnish to Landlord its
unaudited quarterly financial statements, as delivered to such Guarantor's
shareholder(s), which shall contain an unaudited balance sheet of such Guarantor
as of the last day of such accounting period and an unaudited income statement
for such accounting period, both of which shall be certified by such Guarantor
to be true, complete and correct as of and for the period so presented.

                                       9
<PAGE>

          24.  Any notice or other communication hereunder shall be in writing
and shall be deemed duly served if mailed by registered or certified mail in any
post office station or letter box addressed if to a Guarantor, to it at the
address of such Guarantor set forth herein or such other address as such
Guarantor shall have last designated by notice to Landlord, and addressed if to
Landlord, c/o Heller Financial, Inc., 500 West Monroe, Chicago, Illinois 60661,
Attn: Manager of Operations - Capital Finance Group, or such other address as
Landlord shall have last designated by notice to the Guarantors, with a copy to
Paul, Hastings, Janofsky & Walker LLP, Park Avenue Tower, 75 East 55th Street,
New York, New York 10022, Attn: Kevin J. O'Shea.  Copies of all communications
shall also be delivered to the Mortgagee (as defined in the Lease) in the manner
and at the address set forth in the Mortgage (as defined in the Lease).

          25.  This Guaranty may not be changed, modified, discharged or
terminated orally or in any manner other than by an agreement in writing signed
by each Guarantor and Landlord, or their respective successors and assigns.

          26.  This Guaranty and any issues arising hereunder shall be governed
by the internal laws of the State of New York without regard to principles of
conflicts of law.

          27.  If any provision of this Guaranty or the application thereof to
any person or circumstance shall to any extent be held void, unenforceable or
invalid, then the remainder of this Guaranty or the application of such
provision to persons or circumstances other than those as to which it is held
void, unenforceable or invalid, shall not be affected thereby, and each
provision of this Guaranty shall be valid and enforceable to the fullest extent
permitted by law.

          28.  The word "person" when used in this Guaranty shall mean any
natural person, partnership, trust, corporation or any other form of business or
legal entity.

          29.  This Guaranty shall inure to the benefit of and may be enforced
by Landlord and its successors or assigns, and shall be binding upon and
enforceable against each Guarantor and their respective successors and assigns.

          30.  Each Guarantor acknowledges that Landlord may conditionally
assign its rights hereunder to the Mortgagee and agrees that this Guaranty shall
inure to the benefit of the Mortgagee to the extent provided in such assignment.

                                       10
<PAGE>

          IN WITNESS WHEREOF, each Guarantor has duly executed this Guaranty as
of the day and year first above written.



                              SANTA FE GAMING CORPORATION



                              By: /s/ Thomas K. Land
                                 ---------------------------------
                                    Name: Thomas K. Land
                                         -------------------------
                                    Its: SVP & CFO
                                        --------------------------



                              PIONEER HOTEL INC.



                              By: /s/ Thomas K. Land
                                 ---------------------------------
                                    Name: Thomas K. Land
                                         -------------------------
                                    Its: SVP & CFO
                                        --------------------------



                              SANTA FE HOTEL INC.



                              By: /s/ Thomas K. Land
                                 ---------------------------------
                                    Name: Thomas K. Land
                                         -------------------------
                                    Its: SVP & CFO
                                        --------------------------

<PAGE>

                                  SCHEDULE 1
                                  ----------

          Guarantors each agree to comply with their respective obligations set
forth in this Schedule 1.  Certain terms used and not otherwise defined in this
              ----------
Schedule 1 shall have the respective meanings given to them in the Guaranty to
----------
which this Schedule 1 is attached.
           ----------

          1.   Fixed Charge Ratio.

               (a) Tenant shall not permit the ratio (such ratio, the "Fixed
Charge Ratio") of Operating Cash Flow to Fixed Charges for any four consecutive
fiscal quarters of Tenant (a "Rolling Fiscal Year") to be less than 1.00 to 1;
provided, however, that (i) the first Rolling Fiscal Year for which the Fixed
--------  -------
Charge Ratio is applicable shall be the Rolling Fiscal Year ending on March 31,
2001 and (ii) for all fiscal quarters preceding the fiscal quarter ending March
31, 2001, Fixed Charge Ratio shall be calculated by using the Pro Forma Fixed
Charges for such fiscal quarters.

               (b) If the Fixed Charge Ratio as of the last day of any Rolling
Fiscal Year is less than 1.20 to 1, the Management Fees paid for such period
shall be reduced (or, if already paid, returned by SFGC) by such amount
necessary for the Fixed Charge Ratio to be 1.20 to 1. If the Fixed Charge Ratio
is less than 1.00 to 1 on the last day of any Rolling Fiscal Year, it shall
constitute an Event of Default under the Lease if not timely cured by Guarantors
in the manner set forth in clauses (c)-(i) below.

               (c) In the first fiscal quarter that the Fixed Charge Ratio is
less than 1.00 to 1, Guarantors shall cure the Event of Default under the Lease
caused by such deficiency by, on or before the third (3/rd/) business day
following Tenant's delivery of the relevant Quarterly Compliance Certificate,
contributing capital to Tenant in an amount equal to Fixed Charges less
Operating Cash Flow for such Rolling Fiscal Year. If the foregoing cure is not
timely accomplished by Guarantors, such failure shall constitute an immediate
Event of Default under the Lease.

               (d) In the second consecutive fiscal quarter that the Fixed
Charge Ratio is less than 1.00 to 1, Guarantors shall cure the Event of Default
under the Lease caused by such deficiency by, on or before the third (3/rd/)
business day following Tenant's delivery of the relevant Quarterly Compliance
Certificate, (i) contributing capital to Tenant in an amount equal to Fixed
Charges less Operating Cash Flow for such Rolling Fiscal Year (after giving
credit to Tenant for any required capital contribution made pursuant to clause
(c) above) and (ii) if such second consecutive fiscal quarter occurs after the
fiscal quarter ending December 31, 2003, making an incremental cash payment to
the Restricted Cash Collateral Account equal to (A) the Stipulated Loss Value
multiplied by (B) a fraction, the numerator of which is one (1) and the
denominator of which is the number of years (including any fractional portion of
a year) remaining in the term of the Lease. If the foregoing cure is not timely
accomplished by Guarantors, such failure shall constitute an immediate Event of
Default under the Lease.
<PAGE>

          (e)  In the third consecutive fiscal quarter that the Fixed Charge
Ratio is less than 1.00 to 1, Guarantors shall cure the Event of Default under
the Lease caused by such deficiency by, on or before the third (3/rd/) business
day following Tenant's delivery of the relevant Quarterly Compliance
Certificate, (i) contributing capital to Tenant in an amount equal to Fixed
Charges less Operating Cash Flow for such Rolling Fiscal Year (after giving
credit to Tenant for any required capital payment contribution made pursuant to
clauses (c) and (d) above) and (ii) (A) if such third consecutive fiscal quarter
occurs after the fiscal quarter ending December 31, 2003, making an incremental
cash payment to the Restricted Cash Collateral Account equal to (y) the
Stipulated Loss Value multiplied by (z) a fraction, the numerator of which is
one (1) and the denominator of which is the number of years (including any
fractional portion of a year) remaining in the term of the Lease or (B) if such
third consecutive fiscal quarter occurs on or prior to the fiscal quarter ending
December 31, 2003, making an incremental cash payment to the Restricted Cash
Collateral Account equal to (y) the cash payment calculated pursuant to
clause(e)(ii)(A) above multiplied by (z) 25%. If the foregoing cure is not
timely accomplished by Guarantors, such failure shall constitute an immediate
Event of Default under the Lease.

          (f)  In the fourth consecutive fiscal quarter that the Fixed Charge
Ratio is less than 1.00 to 1, (i) if such fourth consecutive fiscal quarter
occurs after the fiscal quarter ending December 31, 2003, Guarantors shall have
no right to cure the Event of Default under the Lease caused by such deficiency
and (ii) if such fourth consecutive fiscal quarter occurs on or before the
fiscal quarter ending December 31, 2003, Guarantors shall cure such deficiency
by making a cure payment in the manner set forth in clause (e)(i) and (e)(ii)(B)
above.

          (g) In the fifth consecutive fiscal quarter occurring on or prior to
the fiscal quarter ending December 31, 2003 in which the Fixed Charge Ratio is
less than 1.00 to 1, Guarantors shall cure such deficiency by making a cure
payment in the manner set forth in clause (e)(i) and (e)(ii)(B) above.

          (h)  In any of the sixth, seventh or eighth consecutive fiscal
quarters ending on or prior to December 31, 2003 in which the Fixed Charge Ratio
is less than 1.00 to 1, Guarantors shall cure such deficiency by making a cure
payment in the manner set forth in clause (e)(i) and (e)(ii)(B) above except
that the cash payment in clause (e)(ii)(B) shall be multiplied by 50% and not
25%.

          (i)  In the ninth or any subsequent consecutive fiscal quarter ending
on or prior to December 31, 2003 in which the Fixed Charge Ratio is less than
1.00 to 1, Guarantors shall cure such deficiency in the same manner as is
required pursuant to clause (e)(i) and (e)(ii)(B) above except that the cash
payment in clause (e)(ii)(B) shall be multiplied by 100% and not 25%.

          (j)  Notwithstanding anything to the contrary set forth in this
Schedule 1 or the Guaranty to which it is attached, (i) Guarantors shall have no
----------
right to

                                       2
<PAGE>

cure such Event of Default if, at any time during the term of the Lease, an
Event of Default has occurred under Sections 12.1(a) or (b) of the Lease,
whether or not such Event of Default is subsequently cured by Tenant or the
Guarantors and (ii) if the Fixed Charge Ratio is less than 1.00 to 1 in any
fiscal quarter ending after December 31, 2007, Guarantors shall remain obligated
to make the capital contribution to Tenant referred to above but, instead of the
cure payment to be made by Guarantors based on the Stipulated Loss Value,
Guarantors shall be obligated to make a cure payment equal to the aggregate
amount of fixed rent remaining in the term of the Lease discounted to present
value using a discount rate equal to 14% per annum.

          2.   Permitted Dividends, etc.  No Guarantor shall declare or pay any
               -------------------------
dividends (other than dividends payable solely in capital stock of such
Guarantor) or return any capital to its stockholder(s) or authorize or make any
other distribution, payment or delivery of property or cash to its
stockholder(s) or redeem, retire, exchange or otherwise acquire, directly or
indirectly, any shares of any class of its capital stock or other ownership
interests now or hereafter outstanding (or any warrants for or options or stock
appreciation rights in respect of any such shares), or set aside funds for any
of the foregoing purposes, except as permitted in Section 3 below.
                                                  ---------

          3.   Repurchase of Capital Stock by SFGC.  SFGC may repurchase shares
               -----------------------------------
of its common stock or preferred stock (excluding any such shares beneficially
held by any officers, directors, subsidiaries or Affiliates of SFGC) so long as
immediately following such repurchase, SFGC is in compliance with its
obligations as a Guarantor under the Guaranty and this Schedule 1.
                                                       ----------

          4.   Liquidity Ratio.  SFGC, on a consolidated basis with its wholly-
               ---------------
owned subsidiaries, shall at all times maintain a Consolidated Liquidity of not
less than $25,000,000.

          5.   Non-Compete.  Neither SFGC nor any of its Controlled subsidiaries
               -----------
shall own, manage or operate any hotel, casino or  similar facility (other than
the Premises) located within a 50 mile radius of the town of Laughlin, Nevada.
Upon the termination of the Lease pursuant to an Event of Default thereunder,
this restrictive covenant shall remain in force for a period of two years
following such termination; if the Lease is terminated for any other reason,
this restrictive covenant shall terminate upon the termination of the Lease.

          6.   Reserved.
               --------

          7.   Reserved.
               --------

          8.   Reserved.
               --------

          9.   Quarterly Compliance Certificate.  On or before the 30/th/ day
               --------------------------------
following the end of each fiscal quarter of Guarantor, Guarantor shall deliver
to Landlord

                                       3
<PAGE>

a certificate (the "Quarterly Compliance Certificate") in the form of Schedule
                                                                      --------
1-1 attached hereto.
---

          10.  Reserved.
               --------

          11.  Certain Definitions.  The following definitions used in this
               -------------------
Schedule 1 shall have the meanings ascribed to them below:
----------

"CAPX" shall mean, for each fiscal year of Tenant, the greater of (a) $1,000,000
and (b) actual capital expenditures, excluding any expenditures funded from the
Unrestricted Cash Collateral Account (as defined herein) for (i) constructing a
parking garage on the Premises, (ii) purchasing the land subject to the Ground
Lease, or (iii) exercising the purchase option under the Gaming Lease (as
defined in the Exchange Agreement); provided, however, that as a condition to
                                    --------  -------
the exclusion of any expenditures in clauses (i)-(iii) above, Landlord must
receive a first priority security interest or first priority lien on the
acquired asset in a manner which is acceptable to Landlord in its reasonable
discretion (which would include a requirement that any acquired real property
first be legally subdivided and segregated from the Premises at Tenant's
expense).

"Consolidated Liquidity" shall mean, as of any date, an amount calculated as (a)
all cash held in the Restricted Cash Collateral Account, which shall include any
interest earned thereon and the proceeds from any sale of the Lone Mountain
Property plus (b) 90% of unencumbered cash held by the Guarantors plus (c) the
Lone Mountain Value plus (d) 50% of the WWP Value plus (e) 50% of the cash
equity of the Guarantors in any properties received by the Guarantors in a
"Section 1031" like-kind exchange transaction, subject to a maximum amount of
$5,000,000 to be counted pursuant to this clause (e).

"Control" or "Controlled by" or "Controlling" or any derivative thereof, when
used with respect to any specified Person, means the possession, directly or
indirectly, of the power to direct or cause the direction of the management or
policies of such Person, whether through ownership of voting securities or other
ownership interests, or by contract; provided, however, that, without limiting
                                     --------  -------
the generality of the foregoing, (a) any Person which, together with its
Affiliates, owns, directly or indirectly, securities representing more than 50%
of the value or ordinary voting power of a corporation or more than 50% of the
partnership, general partnership, membership or other ownership interests (based
upon value or vote) of any other Person is deemed to Control such corporation or
other Person, (b) a general partner shall always be deemed to Control any
partnership of which it is a general partner, and (c) a managing member of a
limited liability company shall always be deemed to Control any limited
liability company of which it is a managing member.

"EBITDA" shall mean, as of any date, the sum of the amounts for the twelve
months ending on such date of (a) net income calculated in accordance with GAAP,
(b) provisions for taxes based on income, (c) interest expense, (d) the non-cash
portion of any retirement, pension plan or deferred compensation expense
incurred by Tenant,

                                       4
<PAGE>

(e) depreciation expense and (f) amortization expense including any amortization
or write-off related to the write-up of any assets as a result of purchase
accounting less the sum of (i) gains on sales of assets (excluding sales in the
ordinary course of business) and other extraordinary gains and other one-time
non-cash gains, all as determined on a consolidated basis in accordance with
GAAP, and (ii) any cash payment in such period that was made in respect of any
non-cash deferred compensation expense incurred in a previous period but only to
the extent that at or about the time such cash payment is made Tenant does not
receive a cash reimbursement in a like amount.

"Exchange Agreement" shall mean the Exchange Agreement dated December 29, 2000
among Tenant, Pioneer LLC, Landlord and Heller Affordable Housing of Florida,
Inc.

"Fixed Charges" shall mean, for each Rolling Fiscal Year, the sum of (a) fixed
rent paid pursuant to the Lease plus (b) fixed rent paid pursuant to gaming
equipment leases relating to the Premises plus (c) fixed rent paid pursuant to
the Ground Lease plus (d) amounts that may be paid in respect of Management Fees
plus (e) rental payments due under any other contractual obligations of Tenant
with respect to the Premises plus (f) CAPX.

"GAAP" shall mean generally accepted accounting principles in the United States
of America as in effect from time to time.

 "Lone Mountain Property" shall have the meaning given to such term in the
Purchase Agreement.

"Lone Mountain Value" shall mean, at any date, (a) if the Lone Mountain Property
is subject to a purchase option in favor of Station Casinos, Inc. (or its
successor or assignee) at such date, the option value or (b) if the Lone
Mountain Property is not subject to such purchase option at such date, 70% of
the fair market value of the Lone Mountain Property, as determined by a MAI
appraiser selected by SFGC and reasonably acceptable to Landlord.

"Management Agreement" shall mean the Management Agreement dated December 30,
1998 between SFGC and Tenant, as amended pursuant to any amendments approved in
writing by Landlord pursuant to this Schedule 1.
                                     ----------

"Management Fees" shall mean the fees provided to be paid by Tenant pursuant to
the Management Agreement.

"Operating Cash Flow" shall mean, for each Rolling Fiscal Year, the sum of (a)
EBITDA plus (b) the amounts set forth in clauses (a) through (e) of the
definition of Fixed Charges.

                                       5
<PAGE>

"Person" means an individual, general or limited partnership, limited liability
partnership or company, corporation, trust, estate, real estate investment
trust, association or any other entity.

"Pro Forma Fixed Charges" shall mean, for each relevant fiscal quarter, (a) the
actual amounts incurred in such quarter for the expense categories described in
clauses (c), (d) and (e) of the definition of Fixed Charges and (b) instead of
any actual amounts incurred by Tenant for the expense categories described in
clauses (a), (b) and (f) of the definition of Fixed Charges, the amounts which
Tenant would have incurred in such quarter for the expense categories described
in clauses (a), (b) and (f) of the definition of Fixed Charges if such quarter
had occurred in 2001.

"Restricted Cash Collateral Account" shall mean the Account established pursuant
to the Exchange Agreement in the approximate amount of $10,000,000.

"Stipulated Loss Value" shall mean the Stipulated Loss Value set forth in the
Lease applicable at the time the relevant cure calculation is made.  For the
sake of clarity, any cure payment calculation pursuant to Section 1 of this
                                                          ---------
Schedule 1 to be made "in the manner set forth in clause (e)(i) and (e)(ii)(B)"
----------
or words of similar import shall be calculated using the higher Stipulated Loss
Value applicable at the time the calculation is made as opposed to the
Stipulated Loss Value applicable in clause (e)(ii)(B).

"Unrestricted Cash Collateral Account" shall mean the Account established
pursuant to the Exchange Agreement in the approximate amount of $5,000,000.

"WWP Value" shall mean, at any date, (a) if the "Wet 'n Wild" property is 100%
owned by SFGC and unleveraged and unencumbered, (i) the $63,100,000 value set
forth in the December 10, 1999 appraisal by PKF Consulting or (ii) the "orderly
liquidated value" of the "Wet n' Wild" property (or such legally subdivided
portion thereof which remains after any sale of a portion of such property) as
determined by a MAI appraiser selected by Guarantor and approved by Landlord
subsequent to December 29, 2000 or (b) if the "Wet 'n Wild" property is either
not 100% owned by SFGC or is leveraged or is encumbered, zero (0).


                                   *   *   *

                               End of Schedule 1
                               -----------------

                                   *   *   *

                                       6
<PAGE>

                                 SCHEDULE 1-1
                                 ------------

                   GUARANTY QUARTERLY COMPLIANCE CERTIFICATE
                   -----------------------------------------



Heller EMX, Inc.
500 West Monroe
Chicago, Illinois 60661
Attention:     Manager of Operations
               Capital Finance Group

Ladies and Gentlemen:

     Reference is made to that certain Guaranty from Pioneer LLC ("Tenant"),
Santa Fe Gaming Corporation ("SFGC") and Santa Fe Hotel Inc. ("SFHI"), as
Guarantors, dated as of December 29, 2000 and to the Schedule 1 attached to such
                                                     ----------
document.  Unless otherwise defined herein, terms defined in the Guaranty and
the attached Schedule 1 are used herein with the same meaning.
             ----------

     I, ____________, of SFGC do hereby certify on behalf of SFGC, Tenant and
SFHI as of the quarter ended _________________, as follows:

1.   Consolidated Liquidity of SFGC = $____________ (minimum $25,000,000).
     Consolidated liquidity is calculated as follows:

      Cash in Restricted Collateral Account                   $  _____________
      90% of Cash held by Guarantors                          $  _____________
      Lone Mountain Value                                     $      5,000,000
      50% of WWP Value and Cash Equity in 1031 Properties     $  _____________
     ---------------------------------------------------------------------------

          Consolidated Liquidity                              $  _____________



2.   The delivery of this certificate shall constitute a re-affirmation of the
     covenants set forth in Section 3 of such Schedule 1.
                                              ----------

                                       7
<PAGE>

     IN WITNESS WHEREOF, the undersigned has executed this certificate as of the
date set forth below.


                                         SANTA FE GAMING CORPORATION

                                         By: /s/ Thomas K. Land
                                            --------------------------------
                                         Name: Thomas K. Land
                                              ------------------------------
                                         Title: SVP & CFO
                                               -----------------------------
                                         Date: December 29, 2000
                                              ------------------------------

                                       8