MASTER LEASE AGREEMENT


      THIS  MASTER LEASE AGREEMENT ("Lease") is made and  entered
into  this  21st  day  of  February, 1997,  by  and  between  PDS
FINANCIAL CORPORATION, a Minnesota corporation ("Lessor"),  whose
address  is  6442  City  West Parkway,  Suite  300,  Minneapolis,
Minnesota  55344  and  SHOWBOAT  MARINA  CASINO  PARTNERSHIP,  an
Indiana partnership ("Lessee"), whose address is 400 East Chicago
Avenue, East Chicago, Indiana  46312.

Lessor  desires to lease to Lessee, and Lessee desires  to  lease
from Lessor in accordance with the terms and conditions contained
herein,  certain  equipment more fully  described  in  the  Lease
Schedule  or Schedules, referred to herein as a "Lease Schedule,"
as  may  from time to time be executed by Lessee.  All  equipment
described in such Lease Schedules shall be collectively  referred
to  as  the "Equipment" and individually referred to as a  "Unit"
and  is to be installed in and to be used in connection with  the
business  location  described  in  a  particular  Lease  Schedule
("Premises").

     NOW THEREFORE, Lessor and Lessee agree as follows:

1.    LEASE.   This  Lease  establishes  the  general  terms  and
conditions  by which Lessor shall lease the Equipment to  Lessee.
Each  Lease Schedule shall be in the form provided by Lessor  and
shall incorporate by reference the terms of this Lease.

2.  TERM:  RENT AND PAYMENT.

     2.1 TERM.  The term of this Lease shall commence on the date
set  forth  in each Lease Schedule (the "Commencement Date")  and
continue as specified in such Lease Schedule ("Term").

      2.2 RENT AND PAYMENT.  Lessee's obligation to pay rent  for
the  Equipment  shall  commence  on  the  Commencement  Date  and
continue  for  the Term.  The Basic Rent set forth on  the  Lease
Schedule  shall be payable on the Commencement Date  and  on  the
same  day  of  each month thereafter ("Rent Date").  Any  amounts
payable  by  Lessee,  other  than Basic  Rent,  shall  be  deemed
Additional  Charges and shall be payable on the  Rent  Date  next
following the date upon which they accrue or the last day of  the
Term,  whichever is earlier.  Lessee shall make all  payments  at
the address of Lessor set forth above or at such other address as
Lessor may designate in writing.  As used herein, the term "Rent"
shall mean all Basic Rent and Additional Charges.

      2.3 LATE CHARGE.  If any Rent is not received by Lessor  or
its assignees within ten (10) days of when due, a late charge  on
such  Rent  shall be due and payable with such Rent in an  amount
equal  to  four percent (4%) of the amount past due or  any  part
thereof, as reimbursement for administrative costs and not  as  a
penalty.

     2.4 LESSOR'S PERFORMANCE OF LESSEE'S OBLIGATIONS.  If Lessee
fails  to comply with any of its covenants or obligations herein,
Lessor  may, at its option, perform such covenants or obligations
on  Lessee's  behalf without thereby waiving such  conditions  or
obligations  or  the  failure to comply therewith  and  all  sums
advanced by Lessor in connection therewith shall be repayable  by
Lessee  as  Additional  Charges.  No such  performance  shall  be
deemed to relieve Lessee of its obligations herein.

3.  CERTIFICATE OF ACCEPTANCE.  Lessee shall deliver to Lessor  a
certificate    of    delivery,   installation   and    acceptance
("Certificate of Acceptance") in the form provided by the Lessor.

4.   NET LEASE. This Lease including each Lease Schedule is a net
lease  and Lessee's obligation to pay all Rent due and the rights
of  Lessor  or  its  assignees in, and to,  such  Rent  shall  be
absolute    and    unconditional   under    all    circumstances,
notwithstanding:   (i)   any   setoff,   abatement,    reduction,
counterclaim, recoupment, defense or other right which Lessee may
have against Lessor, its assignees, the manufacturer or seller of
any  Unit,  or  any  other  person  for  any  reason  whatsoever,
including,  without  limitation, any breach  by  Lessor  of  this
Lease; (ii) any defect

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in title, condition, operation, fitness for use, or any damage to
or  destruction  of,  the Equipment; (iii)  any  interruption  or
cessation  of use or possession of  the Equipment for any  reason
whatsoever; or (iv) any insolvency, bankruptcy, reorganization or
similar proceedings instituted by or against Lessee.

5.  LOCATION: USE: MAINTENANCE; IDENTIFICATION AND INSPECTION.

     5.1 LOCATION, USE, MAINTENANCE AND REPAIRS. (a) Lessee shall
keep and use the Equipment on the Premises and shall not relocate
or  remove any Unit unless Lessor consents, in writing, prior  to
its relocation or removal. (b) Lessee shall at all times and,  at
its  sole  cost  and  expense,  properly  use  and  maintain  the
Equipment in good operating condition, other than the normal wear
and  tear,  and  make  all  necessary  repairs,  alterations  and
replacements  thereto  (collectively, "Repairs"),  all  of  which
shall  immediately become the property of Lessor and  subject  to
this  Lease.   Lessee shall comply with manufacturer instructions
relating   to  the  Equipment,  and  any  applicable   laws   and
governmental  regulations. (c) Lessee shall  pay  all  costs  and
expenses associated with removal and return of the Equipment.

      5.2 IDENTIFICATION AND INSPECTION.  Upon request by Lessor,
Lessee  shall  mark  each  Unit conspicuously   with  appropriate
labels  or  tags furnished by Lessor and maintain  such  markings
through  the  Term to clearly disclose that said  Unit  is  being
leased  from  Lessor.   Subject to Lessee's  reasonable  security
requirements,  Lessee  shall permit Lessor's  representatives  to
enter  the  Premises where any Unit is located  to  inspect  such
Unit.

6.   LOCATION: LIENS AND ENCUMBRANCES.

      6.1 PERSONAL PROPERTY.  Each Unit is personal property  and
Lessee  shall  not affix any Unit to realty so as to  change  its
nature  to  a fixture or real property and agrees that each  Unit
shall  remain personal property during the Term. LESSOR EXPRESSLY
RETAINS  OWNERSHIP  AND  TITLE TO THE  EQUIPMENT.  LESSEE  HEREBY
AGREES   THAT  IT  SHALL  BE  RESPONSIBLE  FOR  ALL  OF  LESSOR'S
OBLIGATIONS  AS REQUIRED BY THE STATE GAMING LAWS AND REGULATIONS
REGARDING  MAINTENANCE,  USE, POSSESSION  AND  OPERATION  OF  THE
EQUIPMENT.  Lessee  hereby authorizes,  empowers,  and  grants  a
limited power of attorney to Lessor to record and/or execute  and
file,   on   Lessee's  behalf,  any  certificates,   memorandums,
statements,  refiling, and continuations thereof as Lessor  deems
reasonably  necessary or advisable to preserve  and  protect  its
interest  hereunder.   The  parties  intend  to  create  a  lease
agreement  and  the  relationship of lessor  and  lessee  between
themselves.   Nothing  in  this  Lease  shall  be  construed   or
interpreted  to create or imply the existence of a finance  lease
or  installment  lease contract.  Lessor makes no  representation
regarding  the  treatment of this Lease,  the  Equipment  or  the
payment  of obligations under this Lease for financial  statement
reporting or tax purposes.

      6.2  LIENS  AND  ENCUMBRANCES.  Unless  otherwise  provided
herein, Lessee shall not directly or indirectly create, incur  or
suffer a mortgage, claim, lien, charge, encumbrance or the  legal
process of a creditor of Lessee of any kind upon or against  this
Lease or any Unit.  Lessee shall at all times protect and defend,
at its own cost and expense, the title of Lessor from and against
such  mortgages, claims, liens, charges, encumbrances  and  legal
processes of creditors of Lessee and shall keep all the Equipment
free  and  clear from all such claims, liens and legal processes.
If  any  such  lien  or  encumbrance is  incurred,  Lessee  shall
immediately notify Lessor and shall take all actions required  by
Lessor to remove the same.

7.  RETURN OF EQUIPMENT.

      7.1  DUTY OF RETURN.  At the expiration of the Term or upon
termination of the Lease, Lessee at its expense shall return each
Unit  to  Lessor or its designee at the destination specified  by
Lessor,   in   accordance  with  appropriate  gaming   laws   and
regulations.    Each   Unit  shall  conform   to   all   of   the
manufacturer's  specifications and gaming  laws  and  regulations
with respect to normal function, capability, design and condition
(less normal wear and tear).

      7.2  FAILURE  TO  RETURN. If Lessee  fails  to  return  the
Equipment  or  any  portion thereof, as  provided  above,  within
fourteen   (14)  days  following  expiration  of  the   term   or
termination of the Lease, then Lessee shall pay to

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Lessor   an  additional   month's Rent for  each  month,  or  any
portion  thereof, that Lessee fails to comply with the  terms  of
this return provision, until all of the Equipment is returned, as
provided herein.

8.  RISK OF LOSS: INSURANCE.

      8.1  RISK OF LOSS.  Lessee shall bear the risk  of all loss
or  damage  to any Unit or caused by any Unit during  the  period
from the time the Unit is shipped by its vendor until the time it
is returned as provided herein.

      8.2  UNIT  REPLACEMENT.   If  any  Unit  is  lost,  stolen,
destroyed, seized by governmental action or, in Lessee's  opinion
or  Lessor's opinion, damaged ("Event of Loss"), this Lease shall
remain  in  full force and effect without abatement of  Rent  and
Lessee shall promptly replace such Unit at its sole expense  with
a  Unit of equivalent value and utility, and similar kind and  in
substantially the same condition as the replaced Unit immediately
prior  to  the  Event  of Loss.  Title to such  replacement  unit
immediately shall vest and remain in Lessor, and such unit  shall
be  deemed a Unit under this Lease.  Upon such vesting  of  title
and  provided  Lessee is not in default under this Lease,  Lessor
shall cause to be paid to Lessee or the vendor of the replacement
unit  any insurance proceeds actually received by Lessor for  the
replacement  Unit.  Lessee shall promptly notify  Lessor  of  any
Event of Loss and shall provide Lessor with and shall enter into,
execute  and  deliver such documentation as Lessor shall  request
with respect to the replacement of any such Unit.

      8.3  INSURANCE.  Lessee shall obtain and maintain  in  full
force  and effect all risk, full replacement cost property damage
insurance  on the Premises: (i) comprehensive personal liability,
(ii)  all  risk  property  damage on  the  Equipment  in  amounts
reasonably  acceptable  to  Lessor,  (iii)  workers  compensation
insurance  and (iv) marine insurance. Such insurance  shall:  (i)
name Lessor and its Assignees, if any, as additional insureds and
first loss payees as their interests may appear; and (ii) provide
that the policy may not be canceled or materially altered without
thirty  (30)  days  prior  written  notice  to  Lessor  and   its
Assignees.   All  such insurance shall be placed  with  companies
having  a  rating  of at least A, Class XII or better  by  Best's
rating service.  Lessee shall furnish to Lessor, upon request and
throughout   the   Term,  insurance  certificates   of   a   kind
satisfactory to Lessor and its Assignees showing the existence of
the insurance required hereunder and premium paid.

9.   LESSOR'S PURCHASE AND PERFORMANCE. Upon receipt of  a  Lease
Schedule executed and delivered by Lessee, Lessee shall bear  all
responsibilities and perform all obligations of Lessor thereunder
other than payment of the purchase price.

10.  TAXES.

      10.1  TAXES.   Lessee agrees to report, file, pay  promptly
when  due  to  the  appropriate taxing authority  and  indemnify,
defend,  and  hold Lessor harmless from and against any  and  all
taxes  (including gross receipts), assessments, license fees  and
other federal, state or local governmental charges of any kind or
nature,  together with any penalties, interest or  fines  related
thereto  (collectively, "Taxes") that pertain to  the  Equipment,
its  purchase, or this Lease, except such Taxes based solely upon
the net income of Lessor.

       10.2  LESSOR'S  FILING  OF  TAXES.   Notwithstanding   the
foregoing,  Lessor  at  its election may report  and  file  sales
and/or  use  taxes which are filed and paid periodically  through
the  Term,  and the amounts so due may be invoiced to Lessee  and
payable as specified therein.

11.   INDEMNIFICATION.  Except for the negligence of Lessor,  its
employees  or agents and assigns, Lessee hereby assumes liability
for  and  agrees  to indemnify, defend, protect,  save  and  hold
harmless  the  Lessor,  its  agents,  employees,  directors   and
assignees from and against any and all losses, damages, injuries,
claims,  penalties, demands and all expenses, legal or  otherwise
(including  reasonable  attorneys' fees)  of  whatever  kind  and
nature  arising  from  the purchase, ownership,  use,  condition,
operation or maintenance of the Equipment, until the Equipment is
returned  to Lessor.  Any claim, defense, setoff, or other  right
of Lessee against any such indemnified party shall not in any way
affect,   limit,  or  diminish  Lessee's  indemnity   obligations
hereunder.   Lessee  shall notify Lessor immediately  as  to  any
claim,  suit, action, damage, or injury related to the  Equipment
of which Lessee has

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actual  or  other notice and shall, at its own cost and  expense,
defend  any  and  all suits which may be brought against  Lessor,
shall  satisfy, pay and discharge any and all judgments and fines
that  may  be  recovered against Lessor in  any  such  action  or
actions, provided, however, that Lessor shall give Lessee written
notice  of  any  such claim or demand.  Lessee  agrees  that  its
obligations under this Section 11 shall survive the expiration or
termination of this Lease.

12.   REPRESENTATIONS  AND  WARRANTIES.   Lessee  represents  and
warrants  to  Lessor that:  i) the making of this Lease  and  any
Lease Schedule executed by Lessee is duly authorized on the  part
of  Lessee  and  that upon due execution thereof  by  Lessee  and
Lessor they shall constitute valid obligations binding upon,  and
enforceable against, Lessee in accordance with their  terms;  ii)
neither the making of this Lease or such Lease Schedule, nor  the
due  performance by Lessee, including the commitment and  payment
of  the  Rent,  shall result in any breach of,  or  constitute  a
default   under,   or   violation  of,   Lessee's   articles   of
incorporation,  by-laws, or any agreement to which  Lessee  is  a
party  or  by which Lessee is bound; iii) no approval or  consent
not already obtained or withholding of objection is required from
any governmental authority with respect to the entering into,  or
performance  of this Lease or any Lease Schedule by  Lessee;  iv)
Lessee  has  obtained  or will obtain all  licenses  and  permits
required  by  applicable laws or regulations (the "Gaming  Laws")
for  the  operation of its business prior to the commencement  of
gaming on the Premises.

13.   DISCLAIMERS; MANUFACTURERS WARRANTIES.  LESSEE ACKNOWLEDGES
THAT  EACH  UNIT  IS  OF  THE  DESIGN, CAPACITY  AND  MANUFACTURE
SPECIFIED FOR AND BY THE LESSEE AND THAT LESSEE IS SATISFIED THAT
THE  SAME  IS  SUITABLE  FOR LESSEE'S PURPOSES.   LESSEE  AGREES,
REGARDLESS  OF CAUSE, NOT TO ASSERT ANY CLAIM WHATSOEVER  AGAINST
LESSOR FOR LOSS OF ANTICIPATORY PROFITS OR CONSEQUENTIAL DAMAGES.
LESSOR EXPRESSLY DISCLAIMS ANY AND ALL WARRANTIES WITH RESPECT TO
THE EQUIPMENT WHETHER EXPRESSED OR IMPLIED.  Without limiting the
generality  of  the foregoing it is intended by  the  parties  to
exclude  any  and  all implied warranties of merchantability  and
fitness  for particular purposes. NO SALESMAN OR AGENT OF  LESSOR
IS  AUTHORIZED TO WAIVE OR ALTER ANY TERM OF THIS LEASE  OR  MAKE
ANY REPRESENTATION REGARDING THE EQUIPMENT.

14.  ASSIGNMENT OF LEASE.

      14.1  ASSIGNMENT BY LESSOR.  Lessee acknowledges and agrees
that  Lessor  may  assign, mortgage, or  otherwise  transfer  its
interest   thereunder   and/or  in  the   Equipment   to   others
("Assignees") without  consent of Lessee, provided  however  that
Lessee and the Indiana Gaming Commission ("Control Board")  shall
be  notified of any assignment.  Accordingly, Lessee  and  Lessor
agree  that  upon  such assignment, Lessee (i) shall  acknowledge
such  assignment  in writing by executing a Notice,  Consent  and
Acknowledgment  of  Assignment furnished by  Lessor;  (ii)  shall
promptly  pay  all  Rent  when due to the  designated  Assignees,
notwithstanding  any  defense,  setoff,  abatement,   recoupment,
reduction or counterclaim whatsoever that Lessee may have against
Lessor;  (iii)  shall not permit the Lease or Lease  Schedule  so
assigned  to  be amended or the terms thereof waived without  the
prior  written consent of the Assignees; (iv) shall  not  require
the  Assignees  to perform any obligations of Lessor  under  such
Lease  Schedule; (v) shall not terminate or attempt to  terminate
the  Lease or Lease Schedule on account of any default by Lessor;
and  (vi) acknowledges that any Assignee may reassign its  rights
and  interest  with the same force and effect as  the  assignment
described herein.

      14.2  ASSIGNMENT  OR SUBLEASE BY LESSEE. Lessee  shall  not
assign  this Lease or any Lease Schedule or assign its rights  in
or sublet the Equipment, or any interest therein without Lessor's
and its Assignee's prior written consent, which consent shall not
be unreasonably withheld.

15.  FINANCIAL INFORMATION; FURTHER ASSURANCES.

      15.1  FINANCIAL INFORMATION.  Throughout the  Term,  Lessee
shall deliver to Lessor copies of unaudited quarterly and audited
annual  financial  statements of Lessee which  will  reflect  the
financial condition and

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operations of Lessee as well as such other information  regarding
Lessee reasonably requested by Lessor or its Assignees.

      15.2  FURTHER ASSURANCES.  Lessee shall execute and deliver
to  Lessor, such other documents, and take such further action as
Lessor  may request, in order to effectively carry out the intent
and  purposes  of  this  Lease  and  the  Lease  Schedules.   All
documentation  shall be in a form acceptable to  Lessor  and  its
Assignees.  Lessee  shall provide all necessary  notices  to  the
Control  Board.   During the Term of any Lease  Schedule,  Lessee
shall  comply  with  Section 4.07, Restricted  Payments,  of  its
Indenture  with American Bank National Association  dated  as  of
March  28,  1996 (the "Indenture").  The financial  covenants  of
Section  4.07  of  the  Indenture  are  incorporated  herein   by
reference.

     15.3 LEASE AGREEMENT. If any court of competent jurisdiction
should   determine  that  this  Lease  constitutes   a   security
arrangement  as opposed to a true lease, the parties  then  agree
that this Lease shall constitute a security agreement within  the
meaning of the Uniform Commercial Code and that the Lessor  shall
be  considered a secured party under the provisions  thereof  and
shall  be  entitled to all the rights and remedies of  a  secured
party  and Lessee, as debtor, grants to Lessor, as secured party,
a  security  interest in the Equipment; provided  nothing  herein
shall  be construed nor shall the inclusion of this paragraph  be
interpreted  as derogating from the stated intent and contractual
understanding of the parties that this is a true lease.

16.  DEFAULT BY LESSEE; REMEDIES.

      16.1  DEFAULT BY LESSEE.  Lessee shall be in default   upon
the  occurrence  of  any one of the following events  ("Event  of
Default"):  (a)  failure to pay Rent when  due;  (b)  failure  to
perform  any other term, condition or covenant of this  Lease  or
any  Lease Schedule; (c) Lessee ceases or is enjoined, restrained
or  in  any  way prevented from conducting business  as  a  going
concern; (d) if any proceeding is filed  by or against the Lessee
for  an  assignment for the benefit of creditors, a voluntary  or
involuntary petition in bankruptcy, or if Lessee is adjudicated a
bankrupt  or  an insolvent; (e) Lessee attempts to remove,  sell,
transfer,  encumber, part with possession or sublet the Equipment
or  any  Unit  thereof;  (f) any Unit is attached,  levied  upon,
encumbered,  pledged, or seized under any judicial  process;  (g)
any warranty or representation made or furnished to the Lessor by
or  on behalf of the Lessee is false in any material respect when
made  or  furnished; (h) failure to maintain in  full  force  and
effect  the  licenses and permits required under the Gaming  Laws
for  the  operation of Lessee's business;  (i) failure to  comply
with  all  gaming regulations; (j) if a material  default  occurs
under  any  mortgage, indenture, or instrument under which  there
may  be issued or by which there may be secured or evidenced  any
indebtedness   of  Lessee  for  money  borrowed,   whether   such
indebtedness  now  exists  or shall be created  hereafter,  which
event of default is not cured within thirty (30) days, or in  the
event of a non-monetary default, within such reasonable period of
time  as  may be agreed upon by the parties hereto;  or  (k)  any
change in control of the Lessee or its business.

       16.2   LESSOR  REMEDIES.  Lessee  acknowledges  that   the
enforcement of this Lease requires approval of the Control  Board
and/or the Indiana Gaming Commission ("the Commission") and  that
copies  of all Default Notices, legal proceedings, etc.  will  be
forwarded  to  the appropriate agency as required by  state  law,
regulation  or  upon  request  of  the  Control  Board   or   the
Commission.  Lessee further acknowledges that upon any  Event  of
Default,  and at any time thereafter, Lessor, may in addition  to
any  and all rights and remedies it may have at law or in equity,
without  notice to or demand upon Lessee at its sole option:  (i)
declare the aggregate Rent then accrued and unpaid together  with
the  balance of any Rent to be immediately due and payable;  (ii)
proceed  by appropriate court action or other proceeding,  either
at  law or in equity to enforce performance by Lessee of any  and
all  covenants of this Lease; (iii) on written notice to  Lessee,
terminate any of Lessee's rights under this Lease or Schedule  in
which  event  Lessee shall immediately surrender and  return  the
Equipment to Lessor pursuant to the provisions hereof;  and  (iv)
subject  to appropriate Gaming Laws, rules, laws and regulations,
and required approvals, take possession, sell and/or re-lease any
Unit as Lessor may desire, in its sole discretion.

Lessor's  rights  and  remedies  herein  are  cumulative  and  in
addition to any rights or remedies available at law or in  equity
including  the  Uniform Commercial Code,  and  may  be  exercised
concurrently  or  separately.   Lessee  shall  pay   all   costs,
expenses,  losses, damages and legal costs (including  reasonable
attorneys' fees) incurred by Lessor and its

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Assignees as a result of enforcing any terms or conditions of the
Lease or any Schedules.  A termination hereunder shall occur only
upon  written  notice by Lessor to Lessee and no repossession  or
other  act by Lessor after default shall relieve Lessee from  any
of  its obligations to Lessor hereunder unless Lessor so notifies
Lessee in writing.

17.  MISCELLANEOUS.

      17.1  NOTICES.  Except as otherwise required  by  law,  all
notices  required herein shall be in writing and sent by  prepaid
certified  mail  or by courier, addressed to  the  party  at  the
address  of  the  party specified herein or  such  other  address
designated  in  writing.   Notice shall  be  effective  upon  the
earlier of its receipt or four (4) days after it is sent.

      17.2  SURVIVAL OF INDEMNITIES.  All indemnities  of  Lessee
shall  survive and continue in full force and effect  for  events
occurring  prior to the return of the Equipment  to  the  Lessor,
notwithstanding the expiration or termination of the Term.

     17.3 COUNTERPARTS.  Each Lease and any Lease Schedule may be
executed in counterparts.

      17.4 MULTIPLE LESSEES.  If more than one Lessee is named in
this  Lease  or a Lease Schedule the liability of each  shall  be
joint and several.

      17.5 TITLES.  Section titles are not intended to have legal
effect  or limit or otherwise affect the interpretation  of  this
Lease or any Lease Schedule.

      17.6  WAIVER.  No delay or omission in the exercise of  any
right or remedy herein provided or otherwise available to Lessor,
or  prior  course  of conduct, shall impair or diminish  Lessor's
rights  to  exercise the same or any other right of  Lessor;  nor
shall  any obligation of Lessee hereunder be deemed waived.   The
acceptance of rent by Lessor after it is due shall not be  deemed
to  be  a waiver of any breach by Lessee of its obligations under
this Lease or any Lease Schedule.

      17.7  SUCCESSORS.  This Lease and each Lease Schedule shall
inure to the benefit of and be binding upon Lessor and Lessee and
their respective successors in interest.

      17.8  NOT  AN  OFFER.   Neither this Lease  nor  any  Lease
Schedule  shall be deemed to constitute an offer  or  be  binding
upon Lessor until executed by Lessor's authorized officer.

      17.9 SEVERABILITY.  If any provisions of this Lease or  any
Lease Schedule shall be held to be invalid or unenforceable,  the
validity  and  enforceability of the remaining provision  thereof
shall not be affected or impaired in any way.

      17.10  MODIFICATION.   Lessor and  Lessee  agree  that  any
modifications  to this Lease or any Lease Schedule  shall  be  in
writing and shall be signed by both parties and their last  known
assignees, if any.

      17.11 LEASE IRREVOCABLE.  This Lease is irrevocable for the
full  Term  hereof  and the Rent shall not  abate  by  reason  of
termination of Lessee's right of possession and/or the taking  of
possession by the Lessor or for any other reason.

     17.12 GOVERNING LAW.  This Lease and each Lease Schedule are
entered into under and shall be construed in accordance with, and
governed by the laws of the State of Indiana.

      17.13  RIDERS.  In the event that any riders  are  attached
hereto  and made a part hereof and if there is a conflict between
the  terms  and  provisions  of any rider,  including  any  Lease
Schedule  and  the  terms and provisions herein,  the  terms  and
provisions  of the rider or Lease Schedule shall control  to  the
extent of such conflict.

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     17.14 ENTIRE AGREEMENT.  LESSEE REPRESENTS THAT IT HAS READ,
RECEIVED,  RETAINED  A COPY OF AND UNDERSTANDS  THIS  LEASE,  AND
AGREES  TO  BE  BOUND  BY ITS TERMS AND CONDITIONS.   LESSOR  AND
LESSEE  AGREE  THAT THIS LEASE, ALL RIDERS, LEASE  SCHEDULES,  OR
EXHIBITS  HERETO,  AND THE LEASE SCHEDULES SHALL  CONSTITUTE  THE
ENTIRE  AGREEMENT AND SUPERSEDE ALL PROPOSALS,  ORAL OR  WRITTEN,
ALL  PRIOR  NEGOTIATIONS  AND  ALL OTHER  COMMUNICATIONS  BETWEEN
LESSOR AND LESSEE WITH RESPECT TO ANY UNIT.

      IN  WITNESS  WHEREOF, the parties hereto have  caused  this
Lease  to  be  duly  executed on the  date  set  forth  by  their
authorized representatives.


LESSEE:                                   LESSOR:

SHOWBOAT MARINA CASINO                    PDS FINANCIAL CORPORATION,
PARTNERSHIP, an Indiana                   a Minnesota corporation
general partnership

By:  SHOWBOAT MARINA PARTNERSHIP,
     an Indiana general partnership,
     its general partner                  By:___________________________
                                          Its:__________________________
By:  SHOWBOAT INDIANA INVESTMENT
     LIMITED PARTNERSHIP, a Nevada limited
     partnership, its general partner

By:  SHOWBOAT INDIANA, INC., a Nevada
     corporation, its general partner


By:_____________________________________
     Name:______________________________
     Title:_____________________________

                                7
                                
<PAGE>

         LEASE SCHEDULE NO. 1 TO MASTER LEASE AGREEMENT


      This Lease Schedule No. 1 is attached to and made a part of
the  Master  Lease  Agreement  ("Lease")  between  PDS  FINANCIAL
CORPORATION,  a  Minnesota corporation ("Lessor"),  and  SHOWBOAT
MARINA  CASINO  PARTNERSHIP, an Indiana  partnership  ("Lessee"),
dated February 21, 1997.

     1.   Description of Equipment:  The Equipment listed on
          Attachment "A" to this Lease Schedule is added  to
          the  Equipment  leased under the  Lease  and  made
          subject to the provisions of the Lease.
     
     2.   Commencement Date:  The Commencement Date for  the
          Equipment leased under this Schedule will  be  the
          date  the  Equipment is delivered and accepted  by
          the Lessee.
     
     3.   Term:  The Term shall commence on the Commencement
          Date and shall continue for 48 consecutive months.
     
     4.   The  Basic Rent due each month during the Term for
          the Equipment described herein is as follows:
     
               a.    The  first  payment  under  this  Lease
               Schedule  in  an amount equal  to  $88,609.18
               shall be due and payable on April 1, 1997.
     
               b.    Payment of the Basic Rent in the amount
               of $88,609.18 shall be due on May 1, 1997 and
               on  the  first  day of each month  thereafter
               through and including March 1, 2001.
     
               c.    In  addition to the monthly Basic  Rent
               due  as  set  forth above, Lessee  shall  pay
               Lessor an amount equal to all taxes which may
               be  imposed  by any Federal, State  or  local
               authority from time to time.
     
     5.   All   of   the   provisions  of  the   Lease   are
          incorporated by reference herein as if  set  forth
          fully herein.
     
Dated:  February 21, 1997

LESSEE:                                   LESSOR:

SHOWBOAT MARINA CASINO                    PDS FINANCIAL CORPORATION,
PARTNERSHIP, an Indiana                   a Minnesota corporation
general partnership

By:  SHOWBOAT MARINA PARTNERSHIP,
     an Indiana general partnership,
     its general partner                  By:___________________________
                                          Its:__________________________
By:  SHOWBOAT INDIANA INVESTMENT
     LIMITED PARTNERSHIP, a Nevada limited
     partnership, its general partner

By:  SHOWBOAT INDIANA, INC., a Nevada
     corporation, its general partner


By:_____________________________________
     Name:________________________________
     Title:_______________________________

<PAGE>
 
          LEASE SCHEDULE NO. 2 TO MASTER LEASE AGREEMENT

      This Lease Schedule No. 2 is attached to and made a part of
the  Master  Lease  Agreement  ("Lease")  between  PDS  FINANCIAL
CORPORATION,  a  Minnesota corporation ("Lessor"),  and  SHOWBOAT
MARINA  CASINO  PARTNERSHIP, an Indiana  partnership  ("Lessee"),
dated February 21, 1997.

     1.   Description of Equipment:  The Equipment listed on
          Attachment "A" to this Lease Schedule is added  to
          the  Equipment  leased under the  Lease  and  made
          subject to the provisions of the Lease.
     
     2.   Commencement Date:  The Commencement Date for  the
          Equipment leased under this Schedule will  be  the
          date  the  Equipment is delivered and accepted  by
          the Lessee.
     
     3.   Term:  The Term shall commence on the Commencement
          Date and shall continue for 48 consecutive months.
     
     4.   The  Basic Rent due each month during the Term for
          the Equipment described herein is as follows:
     
               a.    The  first  payment  under  this  Lease
               Schedule  in  an amount equal  to  $80,035.85
               shall be due and payable on April 1, 1997.
     
               b.    Payment of the Basic Rent in the amount
               of $80,035.85 shall be due on May 1, 1997 and
               on  the  first  day of each month  thereafter
               through and including March 1, 2001.
     
               c.    In  addition to the monthly Basic  Rent
               due  as  set  forth above, Lessee  shall  pay
               Lessor an amount equal to all taxes which may
               be  imposed  by any Federal, State  or  local
               authority from time to time.
     
     5.   All   of   the   provisions  of  the   Lease   are
          incorporated by reference herein as if  set  forth
          fully herein.
     
Dated:  February 21, 1997

LESSEE:                                   LESSOR:

SHOWBOAT MARINA CASINO                    PDS FINANCIAL CORPORATION,
PARTNERSHIP, an Indiana                   a Minnesota corporation
general partnership

By:  SHOWBOAT MARINA PARTNERSHIP,
     an Indiana general partnership,
     its general partner                  By:___________________________
                                          Its:__________________________
By:  SHOWBOAT INDIANA INVESTMENT
     LIMITED PARTNERSHIP, a Nevada limited
     partnership, its general partner

By:  SHOWBOAT INDIANA, INC., a Nevada
     corporation, its general partner


By:___________________________________
     Name:____________________________
     Title:___________________________

<PAGE>

         LEASE SCHEDULE NO. 3 TO MASTER LEASE AGREEMENT

      This Lease Schedule No. 3 is attached to and made a part of
the  Master  Lease  Agreement  ("Lease")  between  PDS  FINANCIAL
CORPORATION,  a  Minnesota corporation ("Lessor"),  and  SHOWBOAT
MARINA  CASINO  PARTNERSHIP, an Indiana  partnership  ("Lessee"),
dated February 21, 1997.

     1.   Description of Equipment:  The Equipment listed on
          Attachment "A" to this Lease Schedule is added  to
          the  Equipment  leased under the  Lease  and  made
          subject to the provisions of the Lease.
     
     2.   Commencement Date:  The Commencement Date for  the
          Equipment leased under this Schedule will  be  the
          date  the  Equipment is delivered and accepted  by
          the Lessee.
     
     3.   Term:  The Term shall commence on the Commencement
          Date and shall continue for 48 consecutive months.
     
     4.   The  Basic Rent due each month during the Term for
          the Equipment described herein is as follows:
     
               a.    The  first  payment  under  this  Lease
               Schedule  in  an amount equal  to  $79,450.81
               shall be due and payable on April 1, 1997.
     
               b.    Payment of the Basic Rent in the amount
               of $79,450.81 shall be due on May 1, 1997 and
               on  the  first  day of each month  thereafter
               through and including March 1, 2001.
     
               c.    In  addition to the monthly Basic  Rent
               due  as  set  forth above, Lessee  shall  pay
               Lessor an amount equal to all taxes which may
               be  imposed  by any Federal, State  or  local
               authority from time to time.
     
     5.   All   of   the   provisions  of  the   Lease   are
          incorporated by reference herein as if  set  forth
          fully herein.
     
Dated:  February 21, 1997

LESSEE:                                   LESSOR:

SHOWBOAT MARINA CASINO                    PDS FINANCIAL CORPORATION,
PARTNERSHIP, an Indiana                   a Minnesota corporation
general partnership

By:  SHOWBOAT MARINA PARTNERSHIP,
     an Indiana general partnership,
     its general partner                  By:___________________________
                                          Its:__________________________
By:  SHOWBOAT INDIANA INVESTMENT
     LIMITED PARTNERSHIP, a Nevada limited
     partnership, its general partner

By:  SHOWBOAT INDIANA, INC., a Nevada
     corporation, its general partner


By:_____________________________________
     Name:______________________________
     Title:_____________________________

<PAGE>

         LEASE SCHEDULE NO. 4 TO MASTER LEASE AGREEMENT

      This Lease Schedule No. 4 is attached to and made a part of
the  Master  Lease  Agreement  ("Lease")  between  PDS  FINANCIAL
CORPORATION,  a  Minnesota corporation ("Lessor"),  and  SHOWBOAT
MARINA  CASINO  PARTNERSHIP, an Indiana  partnership  ("Lessee"),
dated February 21, 1997.

     1.   Description of Equipment:  The Equipment listed on
          Attachment "A" to this Lease Schedule is added  to
          the  Equipment  leased under the  Lease  and  made
          subject to the provisions of the Lease.
     
     2.   Commencement Date:  The Commencement Date for  the
          Equipment leased under this Schedule will  be  the
          date  the  Equipment is delivered and accepted  by
          the Lessee.
     
     3.   Term:  The Term shall commence on the Commencement
          Date and shall continue for 48 consecutive months.
     
     4.   The  Basic Rent due each month during the Term for
          the Equipment described herein is as follows:
     
               a.    The  first  payment  under  this  Lease
               Schedule  in  an amount equal  to  $33,711.01
               shall be due and payable on April 1, 1997.
     
               b.    Payment of the Basic Rent in the amount
               of $33,711.01 shall be due on May 1, 1997 and
               on  the  first  day of each month  thereafter
               through and including March 1, 2001.
     
               c.    In  addition to the monthly Basic  Rent
               due  as  set  forth above, Lessee  shall  pay
               Lessor an amount equal to all taxes which may
               be  imposed  by any Federal, State  or  local
               authority from time to time.
     
     5.   All   of   the   provisions  of  the   Lease   are
          incorporated by reference herein as if  set  forth
          fully herein.
     
Dated:  March 5, 1997

LESSEE:                                   LESSOR:

SHOWBOAT MARINA CASINO                    PDS FINANCIAL CORPORATION,
PARTNERSHIP, an Indiana                   a Minnesota corporation
general partnership

By:  SHOWBOAT MARINA PARTNERSHIP,
     an Indiana general partnership,
     its general partner                  By:__________________________
                                          Its:_________________________
By:  SHOWBOAT INDIANA INVESTMENT
     LIMITED PARTNERSHIP, a Nevada limited
     partnership, its general partner

By:  SHOWBOAT INDIANA, INC., a Nevada
     corporation, its general partner


By:_____________________________________
     Name:______________________________
     Title:_____________________________

<PAGE>
                    
                    PURCHASE/RENEWAL OPTION
                    TO LEASE SCHEDULE NO. 1

This  Purchase/Renewal Option is attached to and made a  part  of
the  Master  Lease  Agreement  ("Lease")  between  PDS  FINANCIAL
CORPORATION,  a  Minnesota corporation ("Lessor"),  and  SHOWBOAT
MARINA CASINO PARTNERSHIP, an Indiana partnership ("Lessee")  and
Lease  Schedule  No.  1  to  Master  Lease  Agreement  ("Schedule
No. 1"), each dated February 21, 1997.

If  Lessee has not been in default under the terms of the  Lease,
at  the expiration of the Term, Lessor grants Lessee an option to
(a) purchase (the "Purchase Option") all but not less than all of
the  Equipment described on the above Lease Schedule for the  sum
equal  to  $1.00 (the "Exercise Price").  Upon timely receipt  of
such  notice of exercise, receipt of the payment of all Rent  due
under  the Lease and payment of the Exercise Price, Lessor  will,
with  exercise  of the purchase option, execute  and  deliver  to
Lessee  a  Bill of Sale for the Equipment described in the  Lease
Schedule.   Upon failure of the Lessor to so deliver  a  Bill  of
Sale,  this Purchase/Renewal Option to Lease Schedule No. 1 shall
then  constitute  a  conveyance of the  Equipment  in  accordance
herewith.   Lessee shall in all respects remain  obligated  under
the  Lease for payment of Rent, care, maintenance, delivery,  use
and  insurance of the Equipment until Lessor inspects and accepts
the  Equipment.  In the event it shall at any time be  determined
that by reason of the options hereby given or otherwise that  the
lease  of the Equipment to which the Purchase Option applies  was
in  fact a sale to the Lessee of the Equipment, the Lessee agrees
that  neither it nor its successors or assigns has or  will  have
any  claim  or cause of action against Lessor, its successors  or
assigns,  for  any reason for loss sustained by  virtue  of  such
determination.

LESSEE  ACKNOWLEDGES THAT THE EQUIPMENT SOLD BY LESSOR UNDER  THE
PURCHASE OPTION  IS BEING SOLD IN AN "AS IS, WHERE IS" CONDITION.
LESSOR  MAKES,  AND WILL MAKE, NO REPRESENTATIONS  OR  WARRANTIES
REGARDING THE EQUIPMENT, ITS SUITABILITY FOR LESSEE'S PURPOSE, OR
ITS COMPLIANCE WITH ANY LAWS. LESSEE HEREBY ASSUMES ALL LIABILITY
FOR  THE EQUIPMENT AND AGREES TO INDEMNIFY LESSOR  PER THE  TERMS
OF  THE  LEASE FOR ANY CLAIMS ARISING OUT OF THE PURCHASE OF  THE
EQUIPMENT.

LESSEE:                                   LESSOR:

SHOWBOAT MARINA CASINO                    PDS FINANCIAL CORPORATION,
PARTNERSHIP, an Indiana                   a Minnesota corporation
general partnership

By:  SHOWBOAT MARINA PARTNERSHIP,
     an Indiana general partnership,
     its general partner                  By:__________________________
                                          Its:_________________________
By:  SHOWBOAT INDIANA INVESTMENT
     LIMITED PARTNERSHIP, a Nevada limited
     partnership, its general partner

By:  SHOWBOAT INDIANA, INC., a Nevada
     corporation, its general partner


By:_____________________________________
     Name:______________________________
     Title:_____________________________

<PAGE>

                    PURCHASE/RENEWAL OPTION
                    TO LEASE SCHEDULE NO. 2

This  Purchase/Renewal Option is attached to and made a  part  of
the  Master  Lease  Agreement  ("Lease")  between  PDS  FINANCIAL
CORPORATION,  a  Minnesota corporation ("Lessor"),  and  SHOWBOAT
MARINA CASINO PARTNERSHIP, an Indiana partnership ("Lessee")  and
Lease  Schedule  No.  2  to  Master  Lease  Agreement  ("Schedule
No. 2"), each dated February 21, 1997.

If  Lessee has not been in default under the terms of the  Lease,
at  the expiration of the Term, Lessor grants Lessee an option to
(a) purchase (the "Purchase Option") all but not less than all of
the  Equipment described on the above Lease Schedule for the  sum
equal  to  $1.00 (the "Exercise Price").  Upon timely receipt  of
such  notice of exercise, receipt of the payment of all Rent  due
under  the Lease and payment of the Exercise Price, Lessor  will,
with  exercise  of the purchase option, execute  and  deliver  to
Lessee  a  Bill of Sale for the Equipment described in the  Lease
Schedule.   Upon failure of the Lessor to so deliver  a  Bill  of
Sale,  this Purchase/Renewal Option to Lease Schedule No. 2 shall
then  constitute  a  conveyance of the  Equipment  in  accordance
herewith.   Lessee shall in all respects remain  obligated  under
the  Lease for payment of Rent, care, maintenance, delivery,  use
and  insurance of the Equipment until Lessor inspects and accepts
the  Equipment.  In the event it shall at any time be  determined
that by reason of the options hereby given or otherwise that  the
lease  of the Equipment to which the Purchase Option applies  was
in  fact a sale to the Lessee of the Equipment, the Lessee agrees
that  neither it nor its successors or assigns has or  will  have
any  claim  or cause of action against Lessor, its successors  or
assigns,  for  any reason for loss sustained by  virtue  of  such
determination.

LESSEE  ACKNOWLEDGES THAT THE EQUIPMENT SOLD BY LESSOR UNDER  THE
PURCHASE OPTION  IS BEING SOLD IN AN "AS IS, WHERE IS" CONDITION.
LESSOR  MAKES,  AND WILL MAKE, NO REPRESENTATIONS  OR  WARRANTIES
REGARDING THE EQUIPMENT, ITS SUITABILITY FOR LESSEE'S PURPOSE, OR
ITS COMPLIANCE WITH ANY LAWS. LESSEE HEREBY ASSUMES ALL LIABILITY
FOR  THE EQUIPMENT AND AGREES TO INDEMNIFY LESSOR  PER THE  TERMS
OF  THE  LEASE FOR ANY CLAIMS ARISING OUT OF THE PURCHASE OF  THE
EQUIPMENT.

LESSEE:                                   LESSOR:

SHOWBOAT MARINA CASINO                    PDS FINANCIAL CORPORATION,
PARTNERSHIP, an Indiana                   a Minnesota corporation
general partnership

By:  SHOWBOAT MARINA PARTNERSHIP,
     an Indiana general partnership,
     its general partner                  By:__________________________
                                          Its:_________________________
By:  SHOWBOAT INDIANA INVESTMENT
     LIMITED PARTNERSHIP, a Nevada limited
     partnership, its general partner

By:  SHOWBOAT INDIANA, INC., a Nevada
     corporation, its general partner


By:___________________________________
     Name:____________________________
     Title:___________________________

<PAGE>
                    PURCHASE/RENEWAL OPTION
                    TO LEASE SCHEDULE NO. 3

This  Purchase/Renewal Option is attached to and made a  part  of
the  Master  Lease  Agreement  ("Lease")  between  PDS  FINANCIAL
CORPORATION,  a  Minnesota corporation ("Lessor"),  and  SHOWBOAT
MARINA CASINO PARTNERSHIP, an Indiana partnership ("Lessee")  and
Lease  Schedule  No.  3  to  Master  Lease  Agreement  ("Schedule
No. 3"), each dated February 21, 1997.

If  Lessee has not been in default under the terms of the  Lease,
at  the expiration of the Term, Lessor grants Lessee an option to
(a) purchase (the "Purchase Option") all but not less than all of
the  Equipment described on the above Lease Schedule for the  sum
equal  to  $1.00 (the "Exercise Price").  Upon timely receipt  of
such  notice of exercise, receipt of the payment of all Rent  due
under  the Lease and payment of the Exercise Price, Lessor  will,
with  exercise  of the purchase option, execute  and  deliver  to
Lessee  a  Bill of Sale for the Equipment described in the  Lease
Schedule.   Upon failure of the Lessor to so deliver  a  Bill  of
Sale,  this Purchase/Renewal Option to Lease Schedule No. 3 shall
then  constitute  a  conveyance of the  Equipment  in  accordance
herewith.   Lessee shall in all respects remain  obligated  under
the  Lease for payment of Rent, care, maintenance, delivery,  use
and  insurance of the Equipment until Lessor inspects and accepts
the  Equipment.  In the event it shall at any time be  determined
that by reason of the options hereby given or otherwise that  the
lease  of the Equipment to which the Purchase Option applies  was
in  fact a sale to the Lessee of the Equipment, the Lessee agrees
that  neither it nor its successors or assigns has or  will  have
any  claim  or cause of action against Lessor, its successors  or
assigns,  for  any reason for loss sustained by  virtue  of  such
determination.

LESSEE  ACKNOWLEDGES THAT THE EQUIPMENT SOLD BY LESSOR UNDER  THE
PURCHASE OPTION  IS BEING SOLD IN AN "AS IS, WHERE IS" CONDITION.
LESSOR  MAKES,  AND WILL MAKE, NO REPRESENTATIONS  OR  WARRANTIES
REGARDING THE EQUIPMENT, ITS SUITABILITY FOR LESSEE'S PURPOSE, OR
ITS COMPLIANCE WITH ANY LAWS. LESSEE HEREBY ASSUMES ALL LIABILITY
FOR  THE EQUIPMENT AND AGREES TO INDEMNIFY LESSOR  PER THE  TERMS
OF  THE  LEASE FOR ANY CLAIMS ARISING OUT OF THE PURCHASE OF  THE
EQUIPMENT.

LESSEE:                            LESSOR:

SHOWBOAT MARINA CASINO             PDS FINANCIAL CORPORATION,
PARTNERSHIP, an Indiana            a Minnesota corporation
general partnership

By:SHOWBOAT MARINA PARTNERSHIP,an
   Indiana  general  partnership,
   its general partner
By:_____________________________
Its:____________________________

By:  SHOWBOAT INDIANA INVESTMENT
     LIMITED PARTNERSHIP, a Nevada
     limited partnership, its
     general partner

By:  SHOWBOAT INDIANA, INC., a Nevada
     corporation, its general partner


By:___________________________________
     Name:____________________________
     Title:___________________________

<PAGE>
                    PURCHASE/RENEWAL OPTION
                    TO LEASE SCHEDULE NO. 4


This  Purchase/Renewal Option is attached to and made a  part  of
the  Master  Lease  Agreement dated February 21,  1997  ("Lease")
between   PDS  FINANCIAL  CORPORATION,  a  Minnesota  corporation
("Lessor"),  and SHOWBOAT MARINA CASINO PARTNERSHIP,  an  Indiana
partnership  ("Lessee") and Lease Schedule No. 4 to Master  Lease
Agreement dated March 5, 1997 ("Schedule No. 4").

If  Lessee has not been in default under the terms of the  Lease,
at  the expiration of the Term, Lessor grants Lessee an option to
(a) purchase (the "Purchase Option") all but not less than all of
the  Equipment described on the above Lease Schedule for the  sum
equal  to  $1.00 (the "Exercise Price").  Upon timely receipt  of
such  notice of exercise, receipt of the payment of all Rent  due
under  the Lease and payment of the Exercise Price, Lessor  will,
with  exercise  of the purchase option, execute  and  deliver  to
Lessee  a  Bill of Sale for the Equipment described in the  Lease
Schedule.   Upon failure of the Lessor to so deliver  a  Bill  of
Sale,  this Purchase/Renewal Option to Lease Schedule No. 4 shall
then  constitute  a  conveyance of the  Equipment  in  accordance
herewith.   Lessee shall in all respects remain  obligated  under
the  Lease for payment of Rent, care, maintenance, delivery,  use
and  insurance of the Equipment until Lessor inspects and accepts
the  Equipment.  In the event it shall at any time be  determined
that by reason of the options hereby given or otherwise that  the
lease  of the Equipment to which the Purchase Option applies  was
in  fact a sale to the Lessee of the Equipment, the Lessee agrees
that  neither it nor its successors or assigns has or  will  have
any  claim  or cause of action against Lessor, its successors  or
assigns,  for  any reason for loss sustained by  virtue  of  such
determination.

LESSEE  ACKNOWLEDGES THAT THE EQUIPMENT SOLD BY LESSOR UNDER  THE
PURCHASE OPTION  IS BEING SOLD IN AN "AS IS, WHERE IS" CONDITION.
LESSOR  MAKES,  AND WILL MAKE, NO REPRESENTATIONS  OR  WARRANTIES
REGARDING THE EQUIPMENT, ITS SUITABILITY FOR LESSEE'S PURPOSE, OR
ITS COMPLIANCE WITH ANY LAWS. LESSEE HEREBY ASSUMES ALL LIABILITY
FOR  THE EQUIPMENT AND AGREES TO INDEMNIFY LESSOR  PER THE  TERMS
OF  THE  LEASE FOR ANY CLAIMS ARISING OUT OF THE PURCHASE OF  THE
EQUIPMENT.

LESSEE:                            LESSOR:

SHOWBOAT MARINA CASINO             PDS FINANCIAL CORPORATION,
PARTNERSHIP, an Indiana            a Minnesota corporation
general partnership

By: SHOWBOAT MARINA PARTNERSHIP,
    an Indiana general partnership,
    its general partner

By:______________________________
Its:_____________________________

By:  SHOWBOAT INDIANA INVESTMENT
     LIMITED PARTNERSHIP, a Nevada
     limited partnership, its
     general partner

By:  SHOWBOAT INDIANA, INC., a Nevada
     corporation, its general partner


By:_______________________________
     Name:________________________
     Title:_______________________

<PAGE>

                 FIRST PREFERRED SHIP MORTGAGE

                   PRELIMINARY MORTGAGE DATA:


VESSEL NAME:                      MV/SHOWBOAT

U.S.C.G.  OFFICIAL NUMBER:        ____________

HOME PORT:                        __________________________

HAILING PORT:                     __________________________

NAME AND ADDRESS OF MORTGAGOR:    Showboat Marina Casino Partnership
                                  400 East Chicago Avenue
                                  East Chicago, Indiana  46312

NAME AND ADDRESS OF MORTGAGEE:    PDS Financial Corporation
                                  6442 City West Parkway, Suite 300
                                  Minneapolis, MN  55344

AMOUNT OF DIRECT OR CONTINGENT
OBLIGATIONS THAT IS OR MAY
BECOME SECURED BY THIS
MORTGAGE, EXCLUSIVE OF
INTEREST, EXPENSES AND FEES:      $11,000,000.00

INTEREST OF MORTGAGOR IN VESSEL:  100%

INTEREST IN VESSEL MORTGAGED
HEREUNDER:                        100%


                SUBSTANTIVE MORTGAGE PROVISIONS:

       THIS PREFERRED SHIP MORTGAGE (this "Mortgage") is made and
entered  into as of this 21st day of February, 1997  by  SHOWBOAT
MARINA  CASINO PARTNERSHIP, an Indiana partnership, as  Mortgagor
(the  "Shipowner"),  in  favor of PDS  FINANCIAL  CORPORATION,  a
Minnesota  corporation,  of 6442 City West  Parkway,  Suite  300,
Minneapolis, MN, 55344, as Mortgagee ("Mortgagee").

       WHEREAS,  the Shipowner, upon documentation of the  Vessel
(as  such  term  is hereinafter defined) with the  United  States
Coast  Guard, will be the sole owner of the whole (100%)  of  the
self-propelled vessel "M/V Showboat", Official Number __________,
described   more  fully  in  the  Granting  Clause  hereof   (the
"Vessel").

<PAGE>

        WHEREAS,  Mortgagee  has  leased  (the  "Lease")  to  the
Shipowner certain equipment (the "Equipment") having an  original
purchase price equal to $11,000,000.00 pursuant to the terms  and
conditions  of  a  Master  Lease Agreement  (the  "Lease")  dated
February 21, 1997 and various Lease Schedules thereto (each Lease
Schedule a "Schedule" and collectively the "Schedules").

       WHEREAS, the Shipowner has agreed to execute this Mortgage
in favor of Mortgagee to secure Shipowner's obligations under the
Lease and the Schedules (collectively, the "Lease").

      NOW, THEREFORE, WITNESSETH:

                        GRANTING CLAUSE

        THAT,  in  consideration  of  the  premises  and  of  the
additional  covenants  contained herein and  of  other  good  and
valuable   consideration,  the  receipt  of   which   is   hereby
acknowledged,  and  in order to secure the full  payment  of  all
charges,  fees  and  other sums owing under  the  Lease  and  all
amounts  owing to the Mortgagee by the Shipowner, as provided  in
this  Mortgage, and to secure the due performance and  observance
of  all  of the agreements and covenants contained in the  Lease,
subject to the terms and conditions of that certain Intercreditor
Agreement  (the "Intercreditor Agreement") entered  into  by  and
among  the  Shipowner, Mortgagee and Firstar Bank  of  Minnesota,
N.A.  dated  February 21, 1997, the Shipowner by  these  presents
grants,  conveys, pledges, confirms, renews, assigns,  transfers,
mortgages  and sets over, and shall warrant and defend  unto  the
Mortgagee  the whole (100%) of the following Vessel described  as
follows:

OFFICIAL NUMBER     HOME PORT                     VESSEL NAME

_______________     _________________________     M/V SHOWBOAT

(such  Vessel being duly documented in the name of the  Shipowner
under  the  laws  of the United States), together  with  all  its
components,  engines, boilers, machinery, masts, boats,  anchors,
cables,  chains,  rigging, tackle, equipment,  gaming  equipment,
apparel,  furniture,  capstans,  outfit,  tools,  pumps,   gears,
furnishings, appliances, fittings and spare and replacement parts
and  all  other appurtenances thereto appertaining or  belonging,
whether now owned or hereafter acquired, whether on board or  not
on  board,  and  also  any  and all additions,  improvements  and
replacements hereinafter made in or to said Vessel  or  any  part
thereof,  including  all  items and appurtenances  as  aforesaid;
provided,  that the foregoing shall be deemed to cover the  whole
(100%)  of  the Vessel, and shall not include any property  other
than a "vessel" within the meaning of Chapter 313 of Title 46  of
the United States Code, as amended (the "Ship Mortgagee Act").

       TO  HAVE AND TO HOLD, subject to Section 4.06(b), all  and
singular  the  above  mortgaged and  described  Vessel  unto  the
Mortgagee, its successors and assigns, to its and their  own  use
and benefit forever.

       THE SAID Vessel to remain mortgaged to the Mortgagee until
such time as the

                                2
<PAGE>

Mortgagor's  obligations secured hereby are  otherwise  satisfied
and  discharged  in accordance with the terms thereof,  and  this
Mortgage,  and  all  other  sums that  may  be  secured  by  this
Mortgage,  are  paid  in  accordance with  the  respective  terms
hereof, and all of the obligations assumed herein shall have been
complied with.

       IT  IS  HEREBY  COVENANTED, DECLARED AND AGREED  that  the
property  above  described is to be held subject to  the  further
covenants, conditions, provisions, terms and uses hereinafter set
forth.

                           ARTICLE I

               PARTICULAR COVENANTS OF SHIPOWNER

      The Shipowner hereby further agrees to the additional terms
and conditions hereinafter set forth.

       SECTION 1.01.  The Shipowner will comply with and  satisfy
all  of the provisions of applicable laws and regulations of  the
United  States  of  America, as at any time  amended,  including,
without  limitation, laws and regulations relating to citizenship
of  the  Shipowner,  in  order  to establish  and  maintain  this
Mortgage  as a preferred ship mortgage upon the Vessel  and  upon
all  components, replacements and improvements made in or to  the
Vessel for the amounts secured hereby.  The Shipowner also agrees
to  execute and record from time to time, at its expense  and  at
reasonable advance intervals, such additional instruments as  may
be  necessary  or  appropriate  so  that  this  Mortgage  may  be
established  and preserved as a valid preferred ship mortgage  on
the   Vessel  and  all  components,  improvements,  renewals  and
substitute  parts  subject to no prior  Liens,  except  Permitted
Liens,  until  the obligations of Mortgagor hereby secured  shall
have  been  satisfied in full and all of the obligations  assumed
herein shall have been complied with.

      SECTION 1.02.

       (a)     Prior to any repair or construction on or  to  the
Vessel by any shipyard, shipbuilder, contractor or otherwise, the
Shipowner  shall  cause any agreement between the  Shipowner  and
such  shipyard,  shipbuilder,  contractor  or  other  party  with
respect to such repair or construction, except any such agreement
entered into prior to or as of the date hereof in connection with
the  Contemplated  Improvements, to expressly  provide  that  (i)
title  to the Vessel shall remain with the Shipowner, subject  to
the  Lien  granted under this Mortgage, and (ii)  any  additions,
replacements, and substitutions to the Vessel (together with  all
goods,  materials, equipment and other personal property  affixed
to  the  Vessel)  shall be part of the Vessel,  subject  to  this
Mortgage.

       (b)    Notwithstanding the foregoing, at least thirty (30)
days  prior  to  such  time, if any, that  the  Vessel  shall  be
eligible or required under Chapter 121 of Title 46 of the  United
States  Code  or  other  Applicable Law  to  be  redocumented  or
remeasured or reclassified with the United States Coast Guard  or
other appropriate Governmental Authority as a successor vessel of
the Vessel, whether as

                                3
<PAGE>

a.result of any construction, repair or improvement to the Vessel
or  otherwise,  the  Shipowner shall provide the  Mortgagee  with
written  notice of such potential eligibility for or  requirement
of redocumentation or remeasurement or reclassification.  Whether
or  not the Shipowner provides such notice to the Mortgagee,  the
Shipowner shall promptly take, as soon as the Vessel is  eligible
for redocumentation or remeasurement or reclassification, any and
all  such  actions  necessary to obtain such  redocumentation  or
remeasurement or reclassification and in the event this  Mortgage
shall,  as  a result of such redocumentation or remeasurement  or
reclassification or any failure to obtain any redocumentation  or
remeasurement or reclassification within any required  period  of
time  after application for such redocumentation or remeasurement
or  reclassification has been made, fail to be a valid  preferred
ship mortgage, simultaneously therewith execute, acknowledge  and
deliver to the Mortgagee a preferred ship mortgage in the form of
this Mortgage, subject to no additional prior Liens.

       (c)    To the extent permitted by Applicable Law, the form
of any mortgage to be delivered to the Mortgagee pursuant to this
Section  1.02  shall  be  subject to such changes,  additions  or
modifications resulting from any changes in Applicable Law as  of
the  date hereof, as is deemed necessary or appropriate,  in  the
sole  discretion  of  the Mortgagee, in order  to  establish  and
maintain a perfected preferred ship mortgage in the Vessel and to
entitle the Mortgagee to the same rights and benefits as if  such
mortgage  were  executed and delivered  as  of  the  date  hereof
subject to no prior Liens, except Permitted Liens.

        SECTION  1.03.   The  Vessel  shall,  and  the  Shipowner
covenants that it will, at all times comply with in all  material
respects, shall not permit the Vessel to be operated contrary to,
all  applicable  laws, treaties and conventions,  and  rules  and
regulations issued thereunder and will not engage in any unlawful
trade or violate any law or carry any cargo that will expose  any
of the Vessel to penalty, forfeiture or capture, and will not do,
or  suffer  or  permit  to be done, anything  which  can  or  may
injuriously affect the documentation of the Vessel under the laws
and  regulations of the United States of America and will at  all
times  keep the Vessel duly documented thereunder.  The Shipowner
shall  do  everything necessary to establish  and  maintain  this
Mortgage  as  a  first  preferred ship mortgage  on  the  Vessel,
subject  to  no prior Liens, except Permitted Liens, and  execute
and  deliver  any  amendments, addenda  or  assignments  to  this
Mortgage  as Mortgagee from time to time may require in its  sole
judgment.

       SECTION  1.04.   The Shipowner shall, at  the  Shipowner's
expense, at all times maintain the Vessel in thorough repair  and
working  order, ordinary wear and tear excepted, and  shall  make
all  proper renewals and replacements.  The Mortgagee shall  have
the right at any time, on reasonable notice, to inspect or survey
the  Vessel to ascertain its condition and to satisfy itself that
the  Vessel  is being properly repaired and maintained,  and  the
Shipowner  shall  cause  to  be made all  such  repairs,  without
expense  to the Mortgagee, as such inspection or survey may  show
to  be  required  to  the satisfaction of  the  Vessel's  salvage
association,  classification society,  the  United  States  Coast
Guard, or any other federal, state or local regulatory agency, as
the  case  may be.  The Shipowner shall also permit the Mortgagee
to inspect the

                                4
<PAGE>

Vessel's rough and smooth logs, whenever requested, on reasonable
notice,  and  shall furnish the Mortgagee with  full  information
regarding any casualties or other material accidents or damage to
the Vessel.  The Shipowner shall further permit the Mortgagee  to
inspect  the Vessel's papers and examine the Shipowner's accounts
and  related papers, and at the request of the Mortgagee, certify
monthly  that all wages and other claims whatsoever  which  might
have  given rise to a Lien upon the Vessel shall have been  paid,
subject to this Mortgage.

       SECTION  1.05.  The Shipowner will pay and  discharge,  or
cause  to be paid and discharged, when due and payable from  time
to  time, all taxes, assessments, governmental charges, fines and
penalties lawfully imposed on the Vessel or any income therefrom.

       SECTION 1.06.  The Shipowner will not change the  flag  or
home port of the Vessel without the prior written consent of  the
Mortgagee, and any such written consent to any one change of  the
flag  or home port shall not be construed to be a waiver of  this
provision with respect to any subsequent proposed change  of  the
flag or home port.  The Shipowner shall not permit the Vessel  to
leave the continental United States of America.

        SECTION  1.07.   The  Shipowner  will  not  sell,  lease,
mortgage,  demise,  charter or consent  to  the  sale,  mortgage,
demise,  charter,  or  transfer of the Vessel,  or  any  interest
therein, without the prior written consent of the Mortgagee.  Any
such  written  consent to any one sale, lease, mortgage,  demise,
charter or transfer shall not be construed to be a waiver of this
provision  with respect to any subsequent proposed  sale,  lease,
mortgage,  demise, charter or transfer, and any  such  subsequent
proposed  sale, mortgage, lease, demise, charter or  transfer  of
the  Vessel  (or  any interest therein) shall be subject  to  the
provisions of this Mortgage and the Lien hereof.

      SECTION 1.08.

      (a)    Neither the Shipowner nor any charterer, operator or
master  of  the Vessel nor any other person or entity has  and/or
shall  have  any  right, power or authority to create,  incur  or
permit  to  be  placed or imposed upon the Vessel,  or  any  part
thereof,  any  Liens, other than (i) maritime  liens  for  crew's
wages from a current voyage or salvage (which shall be discharged
promptly  and, in any event, within forty-five (45)  days  unless
Shipowner  causes  any Liens asserted against the  Vessel  to  be
discharged  forthwith  and  such Liens  are  being  contested  in
appropriate  proceedings diligently conducted, so  long  as  such
proceedings do not involve a significant risk of sale, forfeiture
or  loss  of  the Vessel or interest therein), (ii)  the  Firstar
Mortgage (as such term is defined in the Intercreditor Agreement)
and  any financing statements filed in connection therewith,  and
(iii) this Mortgage (collectively the "Permitted Liens").

       (b)     The  Shipowner will exhibit and will cause  to  be
retained at all times, a certified copy of this Mortgage  and  of
any  amendments or supplements hereto or assignments  hereof,  on
board  the  Vessel  and  will cause such  certified  copy  to  be
exhibited on demand, to any person or entity having business with
the  Vessel  and  to  any representative of  the  Shipowner,  the
Mortgagee or any assignee thereof.  Unless otherwise approved  by
the Mortgagee, a notice reading as follows, printed in plain type
of such size that each paragraph of reading matter shall cover  a
space  not less than six (6) inches wide by nine (9) inches high,
and  framed  under  glass, shall be placed and  kept  prominently
displayed on the Vessel:

                                5

<PAGE>

                       NOTICE OF MORTGAGE

       This Vessel is owned by Showboat Marina Casino Partnership
and  is  covered by a preferred ship mortgage in favor of Firstar
Bank  of Minnesota, N.A., successor-in-interest to American  Bank
National Association ("Firstar"), as mortgagee.  Under the  terms
of  said  mortgage, no owner, operator, charterer,  cargo  owner,
subcharterer or the master of this Vessel, or any other person or
entity,  has  the right, power or authority to create,  incur  or
permit  to  exist on this Vessel any lien whatsoever  other  than
liens  for  crew's wages from the current voyage and  salvage  or
otherwise  permitted by such mortgage.  Firstar has consented  to
this Mortgage pursuant to the Intercreditor Agreement.

       Shipowner shall change at Shipowner's cost such notice  to
reflect the identity of any successor Mortgagee.

      SECTION 1.09.

       (a)    The Shipowner will, at its own expense, when and so
long  as  this Mortgage shall be outstanding, carry all necessary
insurance  on  and with respect to the Vessel and  its  operation
(and all additions, improvements and replacements made in and  to
the  Vessel,  or  any  part thereof) and keep  them  insured,  by
financially  sound and reputable insurers of a character  usually
insuring  entities  engaged in the same or similar  business  and
similarly situated as Shipowner, against loss or damages  of  all
kinds  and  in  the amounts customarily insured against  by  such
entities  or as the Mortgagee shall from time to time  reasonably
require.

      (b)    If the Mortgagee takes possession of the Vessel, the
insurance  policy  or  policies  and  any  unearned  or  returned
premiums  thereon  shall, at the option of the Mortgagee,  become
the sole property of the Mortgagee upon the Mortgagee's crediting
the  amount of any unearned premium upon the obligations  of  the
Mortgagor secured hereby; provided, however, that nothing in this
provision  shall impose upon the Mortgagee any duty to  determine
the adequacy of any insurance.

       (c)     In  the  event of any insured loss  which  is  not
greater than $100,000, the Shipowner shall have the sole right to
settle  any  and  all losses and claims.  In  the  event  of  any
insured  loss in excess of $100,000, Mortgagee may but shall  not
be  obligated to make proof of loss if such proof of loss is  not
promptly made by the Shipowner, and the payment for any such loss
shall  be  made  by  the insurer directly  to  Mortgagee  or  its
assigns.

       (d)     In  the  event  the Shipowner  fails  to  provide,
maintain,  keep in force or deliver and furnish to Mortgagee  the
policies  of  insurance required by this Section, Mortgagee  may,
after  providing at least three (3) days prior written notice  to
the   Shipowner,  procure  such  insurance  for  risks   covering
Mortgagee's  interest, and the Shipowner will  pay  all  premiums
thereon promptly upon demand by Mortgagee, and until such payment
is made by the Shipowner the amount of all such premiums together
with  a late charge on such amount equal to four percent (4%)  of
the  amount  past  due or any part thereof, as reimbursement  for
administrative costs and not as a penalty, which amount

                                6

<PAGE>

shall be secured by this Mortgage.

        (e)     During  the  continuance  of  (i)  a  taking   or
requisition  of  the  use  of the Vessel  by  any  United  States
government or governmental body, or (ii) a charter of the use  of
the  Vessel by any United States government or governmental body,
the  provisions  of  this Section shall be deemed  to  have  been
complied with in all respects if such United States government or
governmental  body shall have agreed to reimburse  the  Shipowner
for  loss  or damage resulting from the risks indicated  in  this
Section,  or  if  the  Shipowner  shall  be  entitled   to   just
compensation  therefor.  In the event of any taking, requisition,
charter  or  loss  contemplated  by  this  Section  1.09(e),  the
Shipowner  shall promptly furnish to the Mortgagee a  Shipowner's
Certificate  stating  that such taking, requisition,  charter  or
loss  has  occurred  and  that the United  States  government  or
governmental  body  in  question  has  agreed  to  reimburse  the
Shipowner  for loss or damage resulting from the risks  indicated
in  Section  1.09(a) or that the Shipowner is  entitled  to  just
compensation  therefor.  All amounts received  by  the  Shipowner
from  the  United  States government or governmental  body  as  a
result  of  any taking, requisition, charter or loss contemplated
by this Section shall be paid to Mortgagee or its assigns.

       (f)     The Shipowner shall not, without the prior written
consent  of the Mortgagee, do any act, or voluntarily  suffer  or
permit any act to be done, whereby any insurance required by this
Section 1.09 shall or may be suspended, impaired or defeated,  or
suffer or permit the Vessel to engage in any voyage, to carry any
cargo,  or  engage in any other activity not permitted under  the
policies  of insurance then in effect without procuring insurance
satisfactory to the Mortgagee covering the Vessel in all respects
for such voyage, the carriage of such voyage or such activity.

       (g)     In  the  event that any claim or Lien is  asserted
against  the Vessel for loss, damage or expense which is  covered
by  insurance hereunder, and it is necessary for the Shipowner to
obtain  a  bond  or  supply  other security  to  prevent  arrest,
detention or attachment of the Vessel or to obtain the release of
the  Vessel  from arrest, detention or attachment on  account  of
said claim or Lien, the Mortgagee, at the written request of  the
Shipowner may, but it shall not be required to, assign all of its
right, title and interest in and to said insurance covering  such
loss,  damage  or  expense, to any person,  firm  or  corporation
executing a surety or guaranty bond or other agreement to save or
to  release  the Vessel from such arrest, detention or attachment
as  collateral security to indemnify against liability under said
bond or other agreement.

       (h)     At  Mortgagee's option, all policies  of  required
insurance  shall  either have attached thereto  a  lender's  loss
payable  endorsement  for  the  benefit  of  Mortgagee  in   form
satisfactory  to  Mortgagee  and  shall  name  Mortgagee  as   an
additional  insured and loss payee.  The Shipowner shall  deliver
to  the  Mortgagee  copies  of the original  policies  evidencing
insurance  maintained  under  this  Section,  together  with  any
certificates covering such policies.

                           ARTICLE II

          REPRESENTATIONS AND WARRANTIES OF SHIPOWNER

                                7

<PAGE>

       The  Shipowner  hereby represents,  warrants  and  further
covenants to and for the benefit of Mortgagee as follows:

       SECTION  2.01.  The Shipowner is a partnership  organized,
validly existing and in good standing under the laws of the State
of  Indiana  and  has  all  requisite  organizational  power  and
authority  and the legal right to own and operate its  properties
and  to  carry  on  its  business as  presently  conducted.   The
Shipowner has all requisite organizational power and authority to
enter  into  this  Mortgage  and to carry  out  the  transactions
contemplated hereby.

      SECTION 2.02.

       (a)    The execution and delivery by the Shipowner of this
Mortgage  (together with the Declaration of citizenship  attached
hereto as Exhibit B) and the consummation by the Shipowner of the
transactions  contemplated  hereby have  been  duly  and  validly
authorized by all necessary organizational action on the part  of
the  Shipowner.  This Mortgage has been duly and validly executed
and  delivered by the Shipowner.  This Mortgage is  a  valid  and
binding  obligation  of  the Shipowner  enforceable  against  the
Shipowner   in   accordance   with   its   terms,   except   that
enforceability  may be limited by (i) equitable principles,  (ii)
bankruptcy, insolvency, reorganization, moratorium and other laws
affecting the enforcement of creditors' rights, (iii) limitations
imposed  by applicable laws upon the enforceability of rights  to
indemnification, and (iv) commercial reasonableness.

       (b)     The  execution, delivery and  performance  by  the
Shipowner   of  this  Mortgage  and  the  consummation   of   the
transactions  contemplated  hereby,  do  not  (i)   violate   any
provision  of  the  organizational  documents,  if  any,  of  the
Shipowner,  or  any  charter of the Vessel  (ii)  conflict  with,
result  in  a  breach of or constitute (or, with  the  giving  of
notice or lapse of time, or both, constitute) a default under, or
require  the approval or consent of any Person (other than  those
consents  previously obtained) pursuant to,  any  material  note,
bond,  mortgage or any franchise, license, permit,  agreement  or
other  instrument or obligation of the Shipowner or  violate  any
provision  of Applicable Law binding on the Shipowner,  or  (iii)
result in the creation or imposition of any Lien upon any of  the
Shipowner's assets except for Liens created under this  Mortgage.
Except  for  filings  and  recordings  in  connection  with   the
perfection  of  Liens  created by this Mortgage,  the  Lease  and
Schedules,  no  Governmental Approval (other than those  consents
previously  obtained) is or will be required in  connection  with
the  execution, delivery and performance by the Shipowner of this
Mortgage  or  the  consummation of the transactions  contemplated
hereby.

       SECTION  2.03.  The Shipowner is a citizen of  the  United
States  within  the meaning of Section 2 of the Shipping  Act  of
1916, as amended.

       SECTION  2.04.   The Shipowner is the sole  owner  and  is
lawfully  possessed of the whole (100%) of the Vessel, free  from
any security interests, liens, charges or encumbrances other than
this Mortgage and Liens permitted hereunder.  Upon filing of this
Mortgage  with  the  U.S.   Coast  Guard,  this  Mortgage   shall
constitute a valid and perfected preferred ship mortgage in favor
of the Mortgagee

                                8

<PAGE>

subject  to  no  prior  Liens other than  Permitted  Liens.   The
Shipowner will warrant and defend title to and possession of  the
Vessel and every part thereof against, and will hold harmless the
Mortgagee from and against, any and all claims and demands of any
persons  arising as the result of any Lien, charge or encumbrance
on  the  Vessel, provided that the foregoing shall not  apply  to
Permitted Liens.

                          ARTICLE III

                     DEFAULTS AND REMEDIES

       SECTION  3.01.  The occurrence and continuance of  one  or
more  of  the  following  events shall constitute  an  "Event  of
Default";

       (a)    The Shipowner shall fail to pay any payment of Rent
due  or  to become due under the Lease or the Schedules when  due
and payable subject to the terms of the Lease and the Schedules;

       (b)     Any  representation or warranty made in, under  or
pursuant to this Mortgage shall have been false or misleading  in
any  materially  adverse respect as of the  date  on  which  such
representation or warranty was made;

       (c)    This Mortgage, at any time after its execution  and
delivery and due recording with the United States Coast Guard for
any  reason,  shall  cease to constitute a  valid  and  perfected
preferred ship mortgage;

       (d)     Shipowner  shall fail to pay when due  any  amount
required to be paid by Shipowner under this Mortgage or timely to
observe,  perform  or discharge any obligation, term,  condition,
covenant  or  agreement contained herein or in the  Lease  or  an
event  of  default  shall occur under the  Lease,  and  any  such
failure or default shall remain unremedied according to the terms
thereof;

       (e)     With respect to Sections 1.09(a), 1.09(e) and 3.05
hereof,  the Shipowner shall fail timely to observe,  perform  or
discharge its obligations contained therein and any such  failure
shall remain unremedied for five (5) days after written notice to
the Shipowner by Mortgagee;

      (f)    Any "Event of Default" as defined in the Lease shall
have occurred and be continuing thereunder; or

       (g)    The Shipowner shall remove or attempt to remove the
Vessel beyond the limits of the United States of America.

       SECTION 3.02.  If any Event of Default shall have occurred
and be continuing:

       (a)     The Mortgagee may declare all aggregate rent  then
accrued and unpaid, together

                                9

<PAGE>

with  the  balance of any rent for the entire term of the  Lease,
and  all  additional lease charges due under the Lease,  together
with all other amounts owing to the Mortgagee under this Mortgage
to be forthwith due and payable.

       (b)     The  Mortgagee may exercise all of the rights  and
remedies in foreclosure and otherwise given to mortgagees by laws
of the United States of America or other applicable provisions of
law, including but not limited to, the law of any jurisdiction in
which the Vessel may be found.

      (c)    The Mortgagee may bring suit at law, in equity or in
admiralty, as it may be advised, to recover judgment for any  and
all  amounts due under the Lease, this Mortgage or otherwise  and
collect  the  same  out  of any property  of  Shipowner,  whether
covered by this Mortgage or otherwise.

       (d)    The Mortgagee may take and enter into possession of
the  Vessel  at any time wherever the same may be, without  legal
process and without being responsible for loss or damage, and the
Shipowner or other person in possession forthwith upon demand  of
the  Mortgagee shall surrender to the Mortgagee possession of the
Vessel and the Mortgagee may, without being responsible for  loss
or damage, hold, lay up, lease, charter, operate or otherwise use
the Vessel for such time and upon such terms as it may deem to be
for  its  best advantage, and demand, collect and retain, subject
to   Permitted  Liens,  all  hire,  freights,  earnings,  issues,
revenues (excluding gaming revenues), income, profits, return  of
premiums,  salvage  awards or recoveries, recoveries  in  general
average,  and all other sums due or to become due in  respect  to
any of the Vessel or in respect of any insurance thereon from any
person or entity whomsoever.

       (e)    The Mortgagee may take and enter into possession of
the  Vessel at any time, wherever the same may be, without  legal
process,  or  if it seems desirable to the Mortgagee and  without
being  responsible  for loss and damage, with or  without  taking
possession of the Vessel, sell the Vessel, whether in whole or in
component  parts, at any place and at such time as the  Mortgagee
may  specify  and  in  such  manner as  the  Mortgagee  may  deem
advisable, free from any claim by the Shipowner in admiralty,  in
equity,  at law or by statute, after first giving notice  of  the
time and place of sale with a general description of the property
in the following manner:

             (i)     By  publication of such notice for  six  (6)
      consecutive  days  (except  Sunday)  in  a  daily   English
      language newspaper of general circulation published in  the
      county in which the sale takes place or as designated by  a
      United  States  District Court having jurisdiction  in  the
      circumstance; and

             (ii)    By sending a similar notice to the Shipowner
      by  registered mail on the date of first publication to the
      Shipowner at the address first specified hereinabove.

       (f)     The  Mortgagee may exercise all rights, privileges
and  remedies  in  foreclosure or otherwise given  the  Mortgagee
under this Mortgage and by the Lease.

                               10

<PAGE>

       SECTION  3.03.   Any  sale  of  the  Vessel  and/or  their
component parts made pursuant to this Mortgage, whether under the
power  of sale hereby granted or any judicial proceedings,  shall
operate  to  divest all right, title and interest of  any  nature
whatsoever of the Shipowner therein and thereto (other  than  the
right of the Shipowner to receive monies upon the application  of
funds  in  accordance with the terms of this Mortgage, and  shall
bar the Shipowner and its successors and assigns, and all persons
claiming by, through or under them.  No purchaser shall be  bound
to  inquire whether notice has been given, or whether any default
has  occurred, or as to the propriety of the sale, or as  to  the
application of the proceeds thereof.  In case of any  such  sale,
any  holder  of  the Lease, whether by assignment  or  otherwise,
shall  be  entitled,  for  the purpose of  making  settlement  or
payment  for  the  property  purchased,  to  use  and  apply  the
indebtedness evidenced under the Lease in order that there may be
credited against the amount remaining due and unpaid thereon  the
sums  payable out of the net proceeds of such sale to such holder
after  allowing  for the costs and expenses  of  sale  and  other
charges; and thereupon such holder shall be credited, on  account
of  such  purchase price, with the net proceeds that  shall  have
been credited upon the Lease.  At any such sale, any holder under
the  Lease, whether by assignment or otherwise, may bid  for  and
purchase such property and upon compliance with the terms of sale
may  hold,  retain and dispose of such property  without  further
accountability therefor.

        SECTION   3.04.   The  Mortgagee  is  hereby  irrevocably
appointed  attorney-in-fact of the Shipowner during the existence
and  occurrence of an Event of Default to execute and deliver  to
any purchaser aforesaid, and is hereby vested with full power and
authority  to  make, in the name and in behalf of the  Shipowner,
subject to the Intercreditor Agreement, a good conveyance of  the
title  to the Equipment on the Vessel and/or its component  parts
so  sold.   In  the  event of the sale of the Vessel  and/or  its
component  parts, under any power herein contained, the Shipowner
will, if and when required by the Mortgagee, execute such form of
conveyance  of  the  Vessel and/or its  component  parts  as  the
Mortgagee may direct or approve.

      SECTION 3.05.

       (a)     The  Mortgagee  is  hereby  irrevocably  appointed
attorney-in-fact  of the Shipowner during the  existence  of  any
Payment  Default or Event of Default to demand, collect, receive,
compromise and sue for, in the name of the Shipowner, so  far  as
may  be permitted by law and subject only to Permitted Liens, all
freight,  hire,  earnings,  issues, revenues  (including  without
limitation any gaming revenues), income and profits of the Vessel
and all amounts due from underwriters under any insurance thereon
as  payment of losses or as return premiums or otherwise, salvage
awards   and   recoveries,  recoveries  in  general  average   or
otherwise, and all other sums thereafter due or to become due  in
respect  of  the Vessel, or in respect of any insurance  thereon,
from  any  person  or entity whomsoever, and to  make,  give  and
execute  in  the  name  of the Shipowner acquittances,  receipts,
releases or other discharges for the same, whether under seal  or
otherwise, and to accept and endorse in the name of the Shipowner
all   checks,  notes,  drafts,  warrants,  agreements  and  other
instruments  in  writing with respect to the foregoing,  and  the
Shipowner authorizes the Mortgagee to take any such action.

                               11

<PAGE>

       (b)     If any legal proceedings shall be taken to enforce
any right under this Mortgage, the Mortgagee shall be entitled as
a  matter of right to the appointment of a receiver of the Vessel
and  of the freights, hire, earnings, issues, revenues (excluding
any gaming revenues), income and profits due or to become due and
arising from the operation thereof.

       SECTION  3.06.   In  the event that the  Vessel  shall  be
arrested,  attached or detained by a marshal or other officer  of
any  court  of law, equity or admiralty jurisdiction  or  by  any
government  or  other  authority,  the  Shipowner  shall   within
twenty-four (24) hours thereafter notify the Mortgagee in writing
by  telegram, facsimile or reputable overnight courier  confirmed
by  letter  by  First  Class U.S. Mail, and shall  use  its  best
efforts  to  obtain  the  release  of  the  Vessel  from  arrest,
attachment or detention within fifteen (15) days from the date of
arrest,  attachment  or detention.  In the  event  the  Shipowner
shall  not  have obtained the release of the Vessel from  arrest,
attachment or detention within fifteen (15) days from the date of
arrest,  attachment  or  detention,  the  Shipowner  does  hereby
authorize  and  empower  the  Mortgagee,  in  the  name  of   the
Shipowner, or its successors or assigns, to apply for and receive
possession of and to take possession of the Vessel with  all  the
rights  and  powers  that the Shipowner,  or  its  successors  or
assigns,  might have, possess or exercise in any such event;  and
this  power of attorney shall be irrevocable and may be exercised
not only by the Mortgagee but also by an appointee or appointees,
with  full  power of substitution, to the same extent as  if  the
said  appointee  or  appointees had been  named  as  one  of  the
attorneys  above  named  by express designation.   The  Shipowner
authorizes and empowers the Mortgagee or its appointees or any of
them  to appear in the name of the Shipowner, its successors  and
assigns, in any court where a suit is pending against the  Vessel
because or on account of any alleged Lien against the Vessel from
which  the Vessel has not been released and to take such  actions
and/or  proceedings as the Mortgagee or its appointees or any  of
them  may  deem proper towards the defense of such suit  and  the
purchase,  satisfaction  or  discharge  of  such  Lien,  and  all
expenditures to the extent reasonably made or incurred by them or
any  of  them  for  the  purpose of  such  defense  or  purchase,
satisfaction   or  discharge  shall  constitute   an   additional
indebtedness  which  shall be secured by this  Mortgage  in  like
manner  and extent as if the amount and description-thereof  were
written herein.

      SECTION 3.07.  Each and every power and remedy herein given
to the Mortgagee shall be cumulative and shall be, in addition to
every other power and remedy given herein, given to the Mortgagee
pursuant  to the Lease or now or hereafter existing  at  law,  in
equity, in admiralty or by statute, and each and every power  and
remedy  whether  herein  given  or  otherwise  existing  may   be
exercised from time to time and as often and in such order as may
be  deemed  expedient by the Mortgagee, and the exercise  or  the
beginning  of  the exercise of any power or remedy shall  not  be
construed  to be a waiver of the right to exercise  at  the  same
time  or  thereafter any other power or remedy.  The exercise  of
any  right or remedy shall not constitute an election of remedies
by  Mortgagee.   No  delay or omission by the  Mortgagee  in  the
exercise  of any right or power or in the pursuit of  any  remedy
accruing or above provided shall impair any such right, power  or
remedy.   No  provision of this Mortgage or the  Lease  shall  be
deemed  to  constitute a waiver by the Mortgagee of the preferred
status  of this Mortgage given by Chapter 313 of Title 46 of  the
United  States  Code,  and any provision of this  Mortgage  which
would otherwise constitute such a waiver shall to such extent  be
of no force and effect.

                               12

<PAGE>

       To  the fullest extent that it may lawfully so agree,  the
Shipowner  covenants and agrees it shall not at any  time  insist
upon,  claim,  plead,  or take the benefit or  advantage  of  any
appraisement,   valuation,   stay,  extension,   moratorium,   or
redemption  law  now or hereafter in force in order  to  prevent,
delay  or hinder the enforcement of this Mortgage or the exercise
by the Mortgagee of any of the remedies set forth in this Article
III or the taking of possession of the Vessel by any purchaser at
any  sale held pursuant to this Mortgage; and the Shipowner,  for
itself and all who may claim through it, as far as it or they now
or hereafter lawfully may do so, hereby waives the benefit of all
such laws.

       SECTION  3.08.  In case the Mortgagee shall have proceeded
to  enforce  any  right, power or remedy under this  Mortgage  by
foreclosure, entry or otherwise, and such proceedings shall  have
been  discontinued or abandoned for any reason or shall have been
determined  adversely to the Mortgagee, then, and in  every  such
case,  the Shipowner and the Mortgagee shall be restored to their
former  positions  and  rights  hereunder  with  respect  to  the
property subject or intended to be subject to this Mortgage,  and
all  rights, remedies and powers of the Mortgagee shall  continue
as if no such proceedings had been taken.

      SECTION 3.09.  The gross proceeds of the sale of the Vessel
by the Mortgagee under any of the powers herein specified and any
and  all  other monies received by the Mortgagee pursuant  to  or
under the terms of this Mortgage or in any proceedings hereunder,
the  application  of  which has not elsewhere  been  specifically
provided  for  herein  or  in the Lease  shall  be  held  by  the
Mortgagee and shall be applied as follows:

       First:   To  the  payment of all costs  and  expenses
     incurred   by   the  Mortgagee  in  the   exercise   or
     administration  of  its rights and remedies  hereunder,
     including the expenses of any sale, the expenses of any
     retaking,  attorneys fees, court costs, and  any  other
     expenses  or advances made or incurred by the Mortgagee
     in  the  administration or protection of its rights  or
     the pursuit of its remedies hereunder;
     
      Second:  To the payment of all unpaid payments of rent
     due  and to become due for the entire term of the Lease
     and  all  other sums or charges due under the terms  of
     the  Lease, together with interest thereon, and to  the
     payment of all other sums secured hereby, in such order
     of application as the Mortgagee may elect;
     
       Third:   To  the  payment of any  surplus  thereafter
     remaining  to  the  Shipowner,  or  its  successors  or
     assigns,  or  as a court of competent jurisdiction  may
     direct.
     
       In the event that the proceeds are insufficient to pay the
amounts  specified in the subclauses "First" and "Second"  above,
the  Mortgagee shall be entitled to collect the balance from  the
Shipowner or any other person or entity liable therefor.

       SECTION 3.10.  If the Shipowner shall make default in  the
observance or performance of any of the covenants, conditions  or
agreements  in  this  Mortgage on its part  to  be  performed  or
observed,

                               13

<PAGE>

the Mortgagee may in its sole discretion do all acts and make all
expenditures necessary to remedy such default, including, without
limitation  of the foregoing, purchase of insurance,  payment  of
taxes, claims and assessments, and entry upon the Vessel to  make
repairs,   and   the  Shipowner  shall  promptly  reimburse   the
Mortgagee,  with  interest at the rate  of  twelve  and  one-half
percent  (12.5%) for any and all expenditures so made or incurred
and, until the Shipowner has so reimbursed the Mortgagee for such
expenditures,  the amount thereof shall be a debt  due  from  the
Shipowner  to the Mortgagee and payment thereof shall be  secured
by  the lien of this Mortgage in like manner and extent as if the
amount  and  description  thereof were written  herein;  but  the
Mortgagee,  though  privileged  so  to  do,  shall  be  under  no
obligation  to  make any such expenditures nor shall  the  making
thereof relieve the Shipowner of any default in that respect.

       SECTION  3.11.   Until  an Event  of  Default  shall  have
occurred  and be continuing, the Shipowner shall be suffered  and
permitted to retain title to and possession of the Vessel.

       SECTION  3.12.  Mortgagee may, if it so elects,  seek  the
appointment  of  a receiver or keeper to take possession  of  the
Vessel and to enforce any of Mortgagee's remedies with respect to
such  appointment without prior notice or hearing.   The  rights,
remedies and powers of any receiver appointed by a court shall be
as ordered by the court.

                           ARTICLE IV

                       CERTAIN AGREEMENTS

      SECTION 4.01.  Regardless of the occurrence of a Default or
Event  of  Default, the Shipowner agrees to pay to the  Mortgagee
any  and all advances, charges, costs and expenses, including the
fees  and  expenses  of  attorneys and  any  experts  or  agents,
incurred  by  the Mortgagee, and this Mortgage shall also  secure
the   repayment  of  such  sums,  in  connection  with  (a)   the
administration  of  this  Mortgage  (b)  the  protection  of  its
priority in the Vessel, including the discharging of any prior or
junior  Lien  or  adverse claim against the Vessel  or  any  part
thereof   that   is  not  permitted  hereby,  (c)  the   custody,
preservation  or  sale of, collection from, or other  realization
upon,  the Vessel, (d) the exercise or enforcement of any of  the
rights,  powers or remedies of the Mortgagee under this Mortgage,
the  Lease  or  under Applicable Law, or (e) the failure  by  the
Shipowner  to  perform or observe any of the  provisions  hereof.
All such amounts and all other amounts payable hereunder shall be
payable  on demand, together with interest at the rate of  twelve
and one-half percent per annum.

      SECTION 4.02.  All of the covenants, promises, stipulations
and  agreements of the Shipowner contained in this Mortgage shall
bind the Shipowner and its successors and assigns and shall inure
to  the benefit of the Mortgagee and its respective successor and
assigns.   In  the event of any assignment of this Mortgage,  the
term  "Mortgagee", as used in this Mortgage, shall be  deemed  to
include any such assignee.

       SECTION 4.03.  This Mortgage may be executed in any number
of

                               14

<PAGE>

counterparts,  each  of  which shall be  an  original;  but  such
counterparts  shall  together constitute but  one  and  the  same
instrument.

       SECTION 4.04.  If any provision of this Mortgage is deemed
to    be   invalid   or   unenforceable,   such   invalidity   or
unenforceability shall not affect the validity or  enforceability
of the remaining provisions of this Mortgage.

       SECTION 4.05.  For purposes of the Ship Mortgage Act,  the
total  principal amount of the debt secured by this  Mortgage  is
$11,000,000.00, plus interest, expenses and fees and  performance
of the foregoing Mortgage covenants.  The discharge amount is the
same as the total amount.

      SECTION 4.06.

       (a)     All  notices and other communications  under  this
Mortgage shall be in writing and shall be given in the manner set
forth in the Lease.  Unless otherwise specified in a notice given
in  accordance  with the foregoing provisions  of  this  Section,
notices  and  other communications shall be given to the  parties
hereto  at  their  respective addresses (or to  their  respective
telecopier  numbers) indicated in the Preliminary  Mortgage  Data
section hereof.

       (b)     Mortgagee  shall  promptly  execute,  deliver  and
acknowledge  (if acknowledgment is appropriate) any necessary  or
proper  instruments of termination, satisfaction  or  release  to
evidence the release of this Mortgage as and when permitted to be
released pursuant to the Indenture or hereunder.

      (c)    Capitalized terms not otherwise defined herein shall
have the meanings set forth in the Lease.

       SECTION 4.07.  WAIVER OF TRIAL BY JURY.  THE SHIPOWNER AND
THE  MORTGAGEE HEREBY WAIVE THE RIGHT TO A TRIAL BY JURY  IN  ANY
ACTION  UNDER  THIS  MORTGAGE OR ANY ACTION ARISING  OUT  OF  THE
TRANSACTIONS  CONTEMPLATED  HEREBY,  REGARDLESS  OF  WHICH  PARTY
INITIATES SUCH ACTION OR ACTIONS.

       THE  SHIPOWNER SPECIFICALLY AGREES THAT IT  HAS  READ  AND
FULLY UNDERSTANDS EACH OF THE FOREGOING WAIVERS CONTAINED IN THIS
MORTGAGE  AND  THAT  SUCH  WAIVERS ARE  KNOWINGLY  MADE,  WITHOUT
DURESS, ARE NEGOTIATED AND BARGAINED FOR TERMS OF THIS AGREEMENT,
AND  ARE MATERIAL INDUCEMENTS TO THE MORTGAGEE, WITHOUT WHICH THE
LEASE  WOULD NOT HAVE BEEN EXTENDED BY THE MORTGAGEE  OR  TO  THE
SHIPOWNER.

        SECTION   4.08.   PAYMENTS  SET  ASIDE.   Notwithstanding
anything  to  the contrary herein contained, this Mortgage  shall
continue to be effective or be reinstated, as the case may be, if
at any

                               15

<PAGE>

time  any payment, or any part thereof, on the Lease or any other
obligation secured hereby is rescinded, invalidated, declared  to
be  fraudulent  or  preferential  or  otherwise  required  to  be
restored  or  returned by the Mortgagee in  connection  with  any
bankruptcy,  reorganization or similar proceeding  involving  the
Shipowner,  any other party liable with respect to the  Lease  or
any other obligation secured hereby or otherwise, if the proceeds
of  any such payment are required to be returned by the Mortgagee
under any such circumstances.  Without limiting the generality of
the  foregoing,  if  prior to any such rescission,  invalidation,
declaration, restoration or return, this Mortgage shall have been
released or terminated, this Mortgage shall be reinstated in full
force  and effect, and such prior cancellation or surrender shall
not  diminish,  discharge or otherwise affect the obligations  of
the Shipowner in respect of this Mortgage.

       SECTION  4.09.   POWER OF ATTORNEY.  The Shipowner  hereby
irrevocably appoints the Mortgagee, and its employees, agents and
permitted assigns as the Shipowner's true and lawful attorneys-in-
fact,  with full power of substitution, to do all things required
to  be  done by the Mortgagee under this Mortgage and to  do  all
things  that  the  Mortgagee may deem necessary or  advisable  to
assure  the  attachment, perfection and first  priority  of  this
Mortgage  (other than Permitted Liens) or otherwise  to  exercise
the  rights and remedies of the Mortgagee hereunder or carry  out
the  intent of this Mortgage.  Without limitation, the  Mortgagee
and  its officers and agents shall be entitled to do all  of  the
following, as fully as the Shipowner might:

       (a)     to sign the name of the Shipowner on any documents
necessary for the documentation or redocumentation of the  Vessel
or  any  successor vessel of the Vessel and to take  all  actions
necessary  to document or redocument such Vessel with the  United
States  Coast Guard or other appropriate Governmental  Authority;
and

       (b)    to sign in the name of the Shipowner on all or  any
mortgage described in Section 1.02 and to file such mortgage with
the  United  States Coast Guard or other appropriate Governmental
Authority,  and  to take such other action as Mortgagee,  in  its
sole discretion, may elect in order to establish and maintain the
Lien  in the Vessel as a preferred ship mortgage upon the  Vessel
(subject  to no prior Liens other than Permitted Liens)  and  all
additions,  improvements and replacements  made  in  or  to  such
vessel, or any part thereof.

                               16

<PAGE>

       IN  WITNESS WHEREOF, the parties have caused this Mortgage
to be duly executed as of the day and year first above written.

                              MORTGAGOR/SHIPOWNER:

                              SHOWBOAT MARINA CASINO PARTNERSHIP,
                              an Indiana general partnership

                              By: SHOWBOAT MARINA PARTNERSHIP, an     
                                  Indiana general partnership, its
                                  general partner

                              By: SHOWBOAT INDIANA INVESTMENT
                                  LIMITED PARTNERSHIP, a Nevada
                                  limited partnership, its general 
                                  partner

                              By: SHOWBOAT INDIANA, INC., a Nevada    
                                  corporation, its general partner

                              By:______________________________
                                   Name:_______________________
                                   Title:______________________


STATE OF INDIANA          )
                          ) SS
COUNTY OF _______________ )

     The foregoing instrument was acknowledged before me this ___   
day of _________, 1997 by ________________, the _________________  
of _________________________ on behalf of Showboat Marina  Casino  
Partnership, an Indiana general partnership.


                                   ______________________________
                                   Notary Public

My Commission Expires:_______________

                               17

<PAGE>

                              MORTGAGEE:

                              PDS FINANCIAL CORPORATION,
                              a Minnesota corporation

                              By:_______________________________
                              Its:______________________________


STATE OF ___________________  )
                              )
COUNTY OF __________________  )

     The foregoing instrument was acknowledged before me  this ___        
day of _____________, 1997 by _______________________________, the  
_________________  of  PDS  Financial  Corporation,  a   Minnesota 
corporation, on behalf of the corporation.


                              ________________________________
                              Notary Public

My Commission Expires:________________

                               18

<PAGE>

                    INTERCREDITOR AGREEMENT

      This Intercreditor Agreement ("Agreement") is entered  into
as  of the 21st day of February, 1997, by and among PDS Financial
Corporation,  a  Minnesota corporation ("PDS"),  Showboat  Marina
Casino  Partnership,  an  Indiana  Partnership  ("Showboat")  and
Firstar  Bank of Minnesota, N.A., a national banking association,
as trustee ("Firstar").

                              RECITALS

      A.    Showboat, with its partnership address  at  400  East
Chicago  Avenue, East Chicago, Indiana 46312, upon  documentation
of  the  Vessel (as such term is hereinafter defined), will  have
purchased  the  M/V  _________________________,  Official  Vessel
Number  __________ (the "Vessel").  Firstar is the  bond  trustee
for   certain   financing  involving  Showboat   and   Showboat's
affiliates  (the  "Firstar Financing")  in  connection  with  the
purchase  of  the Vessel and completion of improvements  thereto.
The  Firstar  Financing  is secured by a certain  Preferred  Ship
Mortgage   (the  "Firstar  Mortgage")  encumbering  the   Vessel.
Subject  to  certain conditions, PDS intends to provide  Showboat
with certain lease financing in connection with certain Equipment
(as such term is hereinafter defined) to be located on the Vessel
and used in connection with the gaming operations to be conducted
by  Showboat  on  the  Vessel  (the  "PDS  Financing").  The  PDS
Financing  will  be secured by a Preferred Ship Mortgage  against
the  Vessel  which such lien shall attach and be limited  to  the
Equipment (the "PDS Mortgage").

      B.    The parties hereto acknowledge that the execution and
delivery  of  this  Agreement is a condition precedent  to  PDS's
willingness to provide the PDS Financing to Showboat.

                             AGREEMENT

      1.   CONSENT.  Firstar hereby consents to the execution and
delivery by Showboat of the PDS Mortgage.

      2.    DEFINITIONS.   Except as otherwise provided  in  this
Agreement, capitalized terms used herein shall have the  meanings
set forth below:

           "PDS Debt" shall mean all indebtedness and liabilities
of Showboat to PDS under, secured by or pursuant to:  (a) the PDS
Financing;  (b) the PDS Mortgage; (c) all fees and  reimbursement
of expenses payable with respect to the PDS Mortgage; and (d) any
and  all extensions, renewals, amendments and modifications  with
respect to the PDS Financing and/or the PDS Mortgage.

           "Equipment"  shall  mean all  equipment  described  on
Attachment "A" hereto.

            "Firstar  Debt"  shall  mean  all  indebtedness   and
liabilities of Showboat to Firstar including but not  limited  to
payments of principal and accrued interest under, secured  by  or
pursuant  to:   (a)  the  Firstar  Financing;  (b)  the   Firstar
Mortgage; (c) all fees and reimbursement of expenses payable with
respect to the Firstar Financing and/or the Firstar Mortgage; and
(d)   any   and   all   extensions,  renewals,   amendments   and
modifications  with respect to the Firstar Financing  and/or  the
Firstar Mortgage.

          "PDS Event of Default" shall have the meaning set forth
in the PDS Mortgage.

<PAGE>

           "Firstar Event of Default" shall have the meaning  set
forth  in  that  certain Indenture dated March 28,  1996  between
Showboat, Showboat Marina Finance Corporation and Firstar.

     3.   PRIORITY OF LIENS.

           a.    Except as otherwise expressly provided  in  this
Agreement, any security interest or lien that Firstar now has  or
hereafter  acquires  in the Equipment, whether  now  existing  or
hereafter  arising, is and shall be subordinate and  inferior  in
every  respect to any security interest or lien in the Equipment,
whether  now existing or hereafter arising, that PDS now  has  or
hereafter  acquires under the PDS Debt.  The priorities specified
herein  are  applicable irrespective of  the  time  or  order  or
recordation  of  preferred  ship  mortgages,  the  attachment  or
perfection of security interests, the time or order of filing  of
financing  statements  or  whether  any  Equipment  is   in   the
possession of PDS, Firstar or Showboat.

           b.    At  a  foreclosure sale of the  Vessel,  Firstar
shall,  if  permitted  by  a court having  jurisdiction  of  such
foreclosure  proceedings, credit bid the obligations  owed  under
the PDS Debt, and if Firstar is the purchaser of the Vessel at  a
foreclosure  sale confirmed by the court having  jurisdiction  of
the  foreclosure sale, Firstar shall hold the Equipment in  trust
for  PDS  and  shall promptly after receiving possession  of  the
Vessel (i) notify PDS that it has possession of the Vessel,  (ii)
provide  PDS  access to the Vessel to remove the  Equipment,  and
(iii) execute and deliver to PDS any documents or instruments  as
PDS may reasonably request to transfer title to the Equipment  to
PDS.

          c.   In holding the Equipment in trust for PDS:

                 (i).  PDS  shall  be  obligated  to  insure  the
Equipment against all damage, destruction, or other risk at PDS's
sole cost and expense; and

               (ii).     Firstar shall not incur an obligation as
bailee with respect to the condition of the Equipment unless  PDS
and  Firstar reach a different agreement in writing.  PDS  agrees
to  remove the Equipment from the Vessel within 30 days following
notification  from  Firstar with respect  to  possession  of  the
Vessel.  If PDS fails to remove the Equipment within such  30-day
period, Firstar, shall have the right to remove the Equipment and
store  the same and PDS agrees to reimburse Firstar for all costs
and  expenses relating to such removal and storage, plus interest
at  the  rate of two percent over the prime rate as published  in
the Wall Street Journal, until paid.

          d.   If it is necessary for PDS to bid at a foreclosure
sale  to  protect  its  interests  in  the  Equipment,  then,  if
permitted  by  a  court having jurisdiction over the  foreclosure
sale  of  the  Vessel,  PDS and Firstar may,  but  shall  not  be
required  to, jointly credit bid the obligations owed by Showboat
under  and  pursuant to:  (a) the PDS Debt; and (b)  the  Firstar
Debt, and if they are the successful purchasers of the Vessel  as
a  result  of  such  credit bid, then upon confirmation  of  such
foreclosure  sale  by the court:  (a) Firstar shall  provide  PDS
access to the Vessel to remove the Equipment which removal  shall
begin  within  30  days  of PDS receiving  notice  and  shall  be
promptly  completed; (b) Firstar shall execute  and  deliver  any
documents  or  instruments  as PDS  may  reasonably   request  to
transfer title to the Equipment to PDS; (c) PDS shall execute and
deliver documents or instruments to transfer title to the  Vessel
without  the  Equipment to Firstar.  The parties acknowledge  and
agree  that  if the court having jurisdiction of the  foreclosure
sale  refuses to permit the joint bid pursuant to this paragraph,
each party shall have the right to bid at the foreclosure sale to
protect its

                                2
                                
<PAGE>

own interest.

           e.    Firstar  and  PDS shall not  allege,  institute,
assert,  or  in any way assist or cooperate with the  allegation,
institution  or  assertion  that  the  joint  bid  set  forth  in
paragraph  3.d above shall not be permitted by the  court  having
jurisdiction of the foreclosure sale.

     4.   DAMAGE TO VESSEL DURING REPOSSESSION OF EQUIPMENT.  The
parties acknowledge that some items of the Equipment are attached
to  the Vessel and that removal of such Equipment from the Vessel
by   PDS  may  leave  holes  or  disconnected  conduit  or  other
electrical  connections  in the Vessel and  may  otherwise  cause
damage  to the Vessel.  Notwithstanding the foregoing,  PDS  will
use  reasonable care not to damage the Vessel as a result of  its
removal of the Equipment and will repair any major damage to  the
Vessel that is caused as a result of the removal of the Equipment
from  the  Vessel.   The  term  "major  damage"  shall  mean  any
collective damage to the Vessel caused as a result of removal  of
the Equipment in excess of $5000.00 in the aggregate.

     5.   LEGEND; FURTHER ASSURANCES.

           a.    The  parties  shall  cause  each  instrument  or
document  which now or hereafter evidences all or any portion  of
the  PDS Debt or the Firstar Debt to be conspicuously marked with
the following legend:

       "This  instrument is subject to  the  terms  of  an
       Intercreditor Agreement dated as of February  ____,
       1997."
       
            b.   Upon request, Firstar and PDS will execute all
  documents and instruments reasonably necessary to evidence or
  carry out the provisions of this Agreement.
  
        6.    NO IMPAIRMENT OF SHOWBOAT'S OBLIGATIONS.  Nothing
  contained   in  this  Agreement  shall  impair,  as   between
  Showboat, PDS and Firstar, the obligations of Showboat, which
  are  unconditional and absolute, to pay the PDS Debt and  the
  Firstar  Debt  as and when all or any portion  thereof  shall
  become  due  and  payable in accordance  with  its  terms  or
  prevent  Firstar or PDS from exercising all of their  rights,
  powers and remedies provided by agreement, applicable law  or
  otherwise  in accordance with the terms hereof.   Nothing  in
  this  Agreement shall impair Firstar's or PDS's rights  under
  any  other  security interest, lien or mortgage in any  other
  property  of  Showboat.  This Agreement  is  solely  for  the
  benefit  of  Firstar and PDS and is not for  the  benefit  of
  Showboat, any guarantor or any other third party.
  
        7.    DOCUMENTATION OF VESSEL; FILING OF PDS  MORTGAGE.
  Showboat   shall   cause,  as  soon  as   practicable   after
  construction has been sufficiently completed to  permit  such
  actions  (but  in no event later than five (5) business  days
  after title to the Vessel has been conveyed to Showboat), the
  Vessel to be a newly documented United States vessel with the
  United  States Coast Guard, and to file and perfect  the  PDS
  Mortgage.   Showboat shall also cause, as soon as practicable
  after filing of the PDS Mortgage with the United States Coast
  Guard,  Financing Statements to be filed with respect to  the
  Equipment  with  the Secretary of State of  Indiana  and  the
  Office  of  the Lake County Recorder.  In no event shall  the
  Vessel  be titled under the laws of any state, including  the
  State of Indiana.
  
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        8.    PRIORITY OF LIENS.  Firstar and PDS have or  will
  forthwith take preferred ship mortgages pursuant to 46 U.S.C.
  Section  31322,  and nothing contained in this  agreement  is
  intended to or shall be construed or shall operate to prevent
  said  mortgages  from constituting "preferred"  mortgages  as
  that  term is defined in 46 U.S.C. Section 31322.   Upon  the
  execution of this Agreement, Firstar and PDS agree  that  any
  maritime  lien presently held by Firstar or PDS  against  the
  Vessel  shall not constitute a "preferred maritime lien,"  as
  that  term is defined in 46 U.S.C. Section 31303(5) and  that
  the  preferred status of any such "preferred maritime  lien,"
  if any, is hereby waived as a means to insure that:  (a) upon
  proper filing of the PDS Mortgage with the appropriate United
  States  Coast  Guard authorities, the PDS Mortgage  shall  be
  senior to all liens on the Vessel but such lien shall only be
  utilized  to  secure its interest in the Equipment;  and  (b)
  upon   proper  filing  of  the  Firstar  Mortgage  with   the
  appropriate  United  States  Coast  Guard  authorities,   the
  Firstar  Mortgage shall be senior to all liens on the  Vessel
  except  for  the  PDS  Mortgage; all pursuant  to  46  U.S.C.
  Section 31322.
  
        9.    DURATION.   This  Agreement is  of  a  continuing
  nature, and it shall continue in force so long as any portion
  of  the  Firstar  Debt or PDS Debt remains unpaid;  provided,
  however, this Agreement shall terminate at such time  as  the
  PDS  Debt  is  paid in full, so long as such  termination  or
  payment  does  not  result  in  or  constitute  a  breach  or
  violation of this Agreement; provided, further, however, this
  Agreement  shall  still be in effect if any payment,  or  any
  part  thereof,  on  any  such  indebtedness,  obligations  or
  liabilities  is  rescinded or otherwise must be  restored  or
  returned  upon the bankruptcy of Showboat, or upon  or  as  a
  result  of  the appointment of a conservator of Showboat,  or
  otherwise, all as though such payments had not been made.
  
        10.   SUCCESSORS AND ASSIGNS.  This Agreement shall  be
  binding  upon Firstar and PDS and their respective successors
  and  assigns;  provided  that this  Agreement  shall  not  be
  assignable by Firstar and PDS except in conjunction with  the
  assignment of the PDS Debt or the Firstar Debt, as  the  case
  may  be,  and the assumption by the assignee, in writing,  of
  the  terms and provisions of this Agreement.  Firstar and PDS
  will provide the other parties with prompt written notice  of
  any   assignment  of  the  Firstar  Debt  or  the  PDS  Debt,
  respectively and a copy of the document whereby the  assignee
  shall have agreed to be bound by the terms and provisions  of
  this Agreement.
  
        11.  GOVERNING LAW; REMEDIES.  This Agreement shall  in
  all  respects be governed by, and construed and  enforced  in
  accordance with, Federal Admiralty Law and to the extent  not
  within  Admiralty  jurisdiction the  laws  of  the  State  of
  Indiana,  except for its rules relating to the  conflicts  of
  law.   The  parties acknowledge that the provisions  of  this
  Agreement  are  unique and money damages may not  provide  an
  adequate  remedy for any breach thereof, and each  party  may
  seek  specific performance and other equitable  remedies  for
  any breaches under this Agreement.
  
         12.   AMENDMENT  AND  WAIVERS.   Except  as  otherwise
  provided  herein, this Agreement may be changed, modified  or
  waived only by a written document signed by Firstar and  PDS.
  No delay or failure by any party to exercise any right, power
  or  remedy  hereunder  shall affect or operate  as  a  waiver
  hereunder.
  
       13.  NOTICES.
  
             a.    All notices to be given under this Agreement
  must  be in writing and will be effective only when given  at
  the  addresses  and  to the attention of the  persons  stated
  below, or at such
  
                                4
                                
<PAGE>
  
  other address or to the attention of such other person as the
  recipient has previously designated in writing to the sending
  party.   No  party is obligated to give any other  party  any
  notices  under this Agreement except as expressly  set  forth
  herein.
  
             b.    Any communication or notice so addressed and
  mailed  shall be deemed to be given three days after mailing.
  Any  communication  or notice otherwise  delivered  shall  be
  deemed  to  be  given  when answered-back  if  telexed,  when
  receipt   is   acknowledged  if  telecopied,  or   personally
  delivered.
  
        14.  ENTIRE AGREEMENT.  This Agreement constitutes  the
  entire agreement between the parties and supersedes all prior
  agreements and understandings, oral and written, between  the
  parties hereto with respect to the subject matter hereof  and
  the transactions contemplated hereby.
  
        15.   COUNTERPARTS.  This Agreement may be executed  in
  any number of counterparts and by different parties hereto on
  separate  counterparts each of which, when  so  executed  and
  delivered,  shall  be an original, and all such  counterparts
  shall together constitute one and the same instrument.
  
        IN  WITNESS  WHEREOF, the parties hereto have  executed
  this Agreement as of the day and year first above written.
  
  FIRSTAR BANK OF MINNESOTA,         PDS FINANCIAL CORPORATION,
  N.A., a national banking      a Minnesota corporation
  association
  
  
  By:_______________________         By:_______________________
  Its:______________________         Its:______________________
  
  
                                     SHOWBOAT MARINA
                                     CASINO PARTNERSHIP,
                                     an Indiana general
                                     partnership
  
                                     By:  SHOWBOAT MARINA PARTNERSHIP, 
                                          an Indiana general partnership,
                                          its general partner
  
                                     By:  SHOWBOAT INDIANA INVESTMENT 
                                          LIMITED PARTNERSHIP, 
                                          a Nevada limited partnership,
                                          its general partner
  
                                     By:  SHOWBOAT INDIANA, INC.,
                                          a Nevada corporation,
                                          its general partner
  
  
                                     By:____________________________
  
                                          Name:_____________________
  
                                          Title:____________________
  
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