<PAGE>

                                                                   EXHIBIT 10.54

RECORDING REQUESTED BY
AND WHEN RECORDED MAIL TO:

Sheppard, Mullin, Richter & Hampton, LLP
333 South Hope Street, 48th Floor
Los Angeles, California  90071
Attention:  Richard L. Sommers, Esquire

INSTRUCTIONS TO COUNTY RECORDER:
Please index this document as
(1) a construction deed of trust
(2) assignment of rents and leases; and
(3) a fixture filing.
___________________________________________________________________________
                        (Space above for Recorder's Use)


                           CONSTRUCTION DEED OF TRUST
                  with Assignment of Rents and Fixture Filing


NOTICE:  THE OBLIGATIONS SECURED HEREBY PROVIDE FOR THE PERIODIC INCREASES
AND/OR DECREASES IN THE APPLICABLE INTEREST RATE.

NOTICE:  THE OBLIGATIONS SECURED HEREBY INCLUDE REVOLVING CREDIT OBLIGATIONS
WHICH PERMIT BORROWING, REPAYMENT AND REBORROWING.

     The parties to this Construction Deed of Trust with Assignment of Rents and
Fixture Filing ("Deed of Trust"), made as of March 18, 1999, are COAST HOTELS
AND CASINOS, INC., a Nevada corporation, as trustor ("Trustor"), EQUITABLE DEED
COMPANY, a California corporation, as trustee ("Trustee"), and BANK OF AMERICA
NATIONAL TRUST AND SAVINGS ASSOCIATION, a national banking association, as
beneficiary ("Beneficiary"), as "Administrative Agent" for itself and the other
lenders (collectively, the "Lenders") now or hereafter a party to that certain
Loan Agreement (the "Loan Agreement") dated as of March 18, 1999 among
Beneficiary (in its individual capacity) and the Lenders as the lenders, Trustor
as the borrower, and Beneficiary as the administrative agent. Capitalized terms
used herein but not defined herein have the meanings given them in the Loan
Agreement.

      Pursuant to the Loan Agreement, Beneficiary and the Lenders have agreed to
make loans and letters of credit available to Trustor in the aggregate maximum
principal amount (including future advances) of $75,000,000 (collectively, the
"Loan").  The Loan Agreement also provides for certain interest rate hedging
arrangements entered into with the Lenders with respect to the indebtedness
under the Loan Agreement (the "Secured Swap Agreements") to be secured by this
Deed of Trust.

                                      -1-
<PAGE>

     1.   Grant in Trust and Secured Obligations.
          --------------------------------------

          1.1  Grant in Trust.  For the purpose of securing payment and
               --------------
performance of the Secured Obligations defined and described in Section 1.2,
                                                                        ---
Trustor hereby irrevocably and unconditionally grants, conveys, transfers and
assigns to Trustee, in trust for the benefit of Beneficiary, with power of sale
and right of entry and possession, all estate, right, title and interest which
Trustor now has or may later acquire in and to the following property (all or
any part of such property, or any interest in all or any part of it, as the
context may require, the "Property"):

               (a) The real property located in the County of Clark, State of
     Nevada (the "County"), as described in Exhibit A, together with all
                                            ---------
     existing and future easements and rights affording access to it (the
     "Land"); together with

               (b) All of Trustor's right, title and interest under and in
     connection with that certain Ground Lease Agreement, dated as of October
     28, 1994, by and among Wanda Peccole, as successor Trustee of The Peccole
     1982 Trust dated February 15, 1982 and The William Peter And Wanda Ruth
     Peccole Family Limited Partnership, a Nevada limited partnership
     (collectively, as "Owner") and 21 Stars, Ltd., a Nevada limited liability
     company (as "Landlord") and Barbary Coast Hotel & Casino, a Nevada general
     partnership (as "Tenant") (the "Existing Ground Lease"), a memorandum of
     which was recorded on November 1, 1994, in Book 941101, as Instrument No.
     01375, in the Official Records of Clark County, Nevada, including, without
     limitation, (i) all options to extend or renew the Existing Ground Lease
     (and the leasehold estate for the term of each extension or renewal), (ii)
     all options and rights of first refusal contained in the Existing Ground
     Lease to purchase the portion of the Land which is subject to the Existing
     Ground Lease, and (iii) all of Trustor's other rights, titles and interests
     under the Existing Ground Lease; together with

               (c) All buildings, structures and improvements now located or
     later to be constructed on the Land, all parking areas, roads, driveways,
     walks, fences, walls, berms, landscaping, recreation facilities, lighting
     facilities and other on site improvements (the "Improvements"); together
     with

               (d) All existing and future appurtenances, privileges,
     easements, franchises, hereditaments and tenements of the Land, including
     all minerals, oil, gas, other hydrocarbons and associated substances,
     sulphur, nitrogen, carbon dioxide, helium and other commercially valuable
     substances which may be in, under or produced from any part of the Land,
     all development rights and credits, air rights, water, water courses, water
     rights (whether riparian, appropriative or otherwise, and whether or not
     appurtenant), water stock and water permits (together with the statutory
     right to file applications to change, and any and all applications to
     change the same), including any water permits, and any land lying in the
     streets, roads or avenues, open or proposed, in front of or adjoining the
     Land and Improvements; together with

                                      -2-
<PAGE>

               (e) All existing and future leases, subleases, subtenancies,
     licenses, occupancy agreements and concessions ("Leases", which shall not
     include the Existing Ground Lease) relating to the use and enjoyment of all
     or any part of the Land and Improvements, whether written or oral and
     whether in existence at or upon the recordation of this Deed of Trust or
     entered into after the recordation of this Deed of Trust, and all rents,
     security deposits, royalties, issues, profits, receipts, earnings, revenue,
     income, products and proceeds and other benefits of the Land and
     Improvements, whether now due, past due or to become due, including all
     prepaid rents, security deposits, fixed, additional and contingent rents,
     deficiency rents and liquidated damages, license fees, occupancy charges,
     hotel room charges, cabana charges, casino revenues, show ticket revenues,
     food and beverage revenues, room service revenues, merchandise sales
     revenues, parking, maintenance, common area, tax, insurance, utility and
     service charges and contributions, proceeds of sale of electricity, gas,
     heating, air conditioning, cable and other utilities and services,
     instruction fees, membership charges, restaurant, snack bar and shop
     revenues, liquidated damages, and all other rights to payments; together
     with and any and all guaranties and other agreements relating to or made in
     connection with any of such leases; together with

               (f) All real property and improvements on it, and all
     appurtenances and other property and interests of any kind or character,
     whether described in Exhibit A or not, which are reasonably necessary or
                          ---------
     desirable to promote the present and any reasonable future beneficial use
     and enjoyment of the Land and Improvements; together with

               (g) All goods, materials, supplies, chattels, furniture,
     fixtures, equipment and machinery now or later to be attached to, placed in
     or on, or used in connection with the use, enjoyment, occupancy or
     operation of all or any part of the Land and Improvements, whether stored
     on the Land or elsewhere, including all pumping plants, engines, pipes,
     ditches and flumes, and also all gas, electric, cooking, heating, cooling,
     air conditioning, lighting, refrigeration and plumbing fixtures and
     equipment, all water, sanitary and storm sewer, drainage, electricity,
     steam, gas, telephone, cable and other utility equipment and facilities,
     all plumbing, lighting, heating, ventilating, air conditioning,
     refrigerating, incinerating, compacting, fire protection and sprinkler,
     surveillance and security, vacuum cleaning, public address and
     communications equipment and systems, all kitchen and laundry appliances,
     screens, awnings, floor coverings, partitions, elevators, escalators,
     motors, machinery, pipes, fittings and other items of equipment and
     property of every kind and description, all of which shall be considered to
     the fullest extent of the law to be real property for purposes of this Deed
     of Trust; together with

               (h) All building materials, equipment, work in process or other
     personal property of any kind, whether stored on the Land or elsewhere,
     which have

                                      -3-
<PAGE>

     been or later will be acquired for the purpose of being delivered to,
     incorporated into or installed in or about the Land or Improvements;
     together with

               (i) All rights to the payment of money, accounts, accounts
     receivable, reserves, deferred payments, refunds, cost savings, payments
     and deposits, room revenues, food revenues, beverage revenues and casino
     revenues, whether now or later to be received from third parties or
     deposited by Trustor with third parties (including all utility deposits),
     contract rights, development and use rights, governmental permits and
     licenses, applications, architectural and engineering plans, specifications
     and drawings, as-built drawings, chattel paper, instruments, documents,
     notes, drafts and letters of credit (other than letters of credit in favor
     of Beneficiary), which arise from or relate to construction on the Land or
     to any business now or later to be conducted on it, or to the Land and
     Improvements generally; together with

               (j) All proceeds, including all claims to and demands for them,
     of the voluntary or involuntary conversion of any of the Land, Improvements
     or the other property described above into cash or liquidated claims,
     including proceeds of all present and future fire, hazard or casualty
     insurance policies and all condemnation awards or payments now or later to
     be made by any public body or decree by any court of competent jurisdiction
     for any taking or in connection with any condemnation or eminent domain
     proceeding, and all causes of action and their proceeds for any damage or
     injury to the Land, Improvements or the other property described above or
     any part of them, or breach of warranty in connection with the construction
     of the Improvements, including causes of action arising in tort, contract,
     fraud or concealment of a material fact; together with

               (k) All books and records pertaining to any and all of the
     property described above, including computer readable memory and any
     computer hardware or software necessary to access and process such memory
     ("Books and Records"); together with

               (l) All proceeds of, additions and accretions to, substitutions
     and replacements for, and changes in any of the property described above,
     including all proceeds of any voluntary or involuntary disposition or claim
     respecting any such property (arising out of any judgment, condemnation or
     award, or otherwise arising) and all goods, documents, general intangibles,
     chattel paper and accounts, wherever located, acquired with cash proceeds
     of any of the foregoing or its proceeds,

provided that the term "Property", as used in this Deed of Trust, shall not
--------                                                                ---
include (i) any personal property or fixtures, the purchase of which was
financed by a purchase money security interest, including any Capital Lease
Obligation, permitted under Section 6.9 or 6.10 of the Loan Agreement, (ii) any
                                    ---    ----
capital stock or other equity interests in any gaming licensees, and (iii) any
gaming licenses and liquor licenses which are not transferable.

                                      -4-
<PAGE>

Trustor shall and will warrant and forever defend the Property in the quiet and
peaceable possession of the Trustee, its successors and assigns against all and
every person or persons lawfully claiming or to claim the whole or any part
thereof.  Trustor agrees that any greater title to the Property hereafter
acquired by Trustor during the term hereof shall be subject hereto.

          1.2  Secured Obligations.
               -------------------

               (a) Trustor makes the grant, conveyance, transfer and assignment
     set forth in Section 1.1 for the purpose of securing the following
                          ---
     obligations (the "Secured Obligations") in any order of priority that
     Beneficiary may choose:

                    (i) Payment of all obligations at any time owing under each
          of the promissory notes (collectively, the "Notes") issued from time
          to time pursuant to the Loan Agreement, payable by Trustor, as maker,
          in the aggregate principal amount of Seventy-Five Million Dollars
          ($75,000,000), including any and all obligations to pay interest
          thereon;

                    (ii) Payment and performance of all obligations of Trustor
          under this Deed of Trust;

                    (iii) Payment and performance of all obligations of Trustor
          under the Loan Agreement;

                    (iv) Payment and performance of any obligations of Trustor
          under any of the "Loan Documents," as defined in the Loan Agreement,
          which are executed by Trustor, provided that this Deed of Trust shall
                                         --------
          not secure the Hazardous Materials Indemnity set forth in Section

          11.22 of the Loan Agreement;
          -----

                    (v) Payment and performance of all future advances and
          other obligations that Trustor or any successor in ownership of all or
          part of the Property may agree to pay and/or perform (whether as
          principal, surety or guarantor) for the benefit of Beneficiary and/or
          any of the Lenders, when a writing evidences the parties' agreement
          that the advance or obligation be secured by this Deed of Trust;

                    (vi) Payment and performance of the obligations of Trustor
          under each Secured Swap Agreement; and

                    (vii) Payment and performance of all modifications,
          amendments, extensions and renewals, however evidenced, of any of the
          Secured Obligations.

                                      -5-
<PAGE>

          (b) All persons who may have or acquire an interest in all or any
     part of the Property will be considered to have notice of, and will be
     bound by, the terms of the Secured Obligations and each other agreement or
     instrument made or entered into in connection with each of the Secured
     Obligations.  Such terms include any provisions in the Notes or the Loan
     Agreement which permit borrowing, repayment and reborrowing, or which
     provide that the interest rate on one or more of the Secured Obligations
     may vary from time to time.

          1.3  Future Advances (NRS 106.300, et seq).  It is the intention of
               -------------------------------------
Trustor, Beneficiary and the Lenders that this Deed of Trust is an "instrument"
(as defined in NRS 106.330, as amended or recodified from time to time) which
secures "future advances" (as defined in NRS 106.320, as amended or recodified
from time to time) and which is governed pursuant to NRS 106.300 through
106.400, as amended or recodified from time to time ("NRS" means Nevada Revised
Statutes).  It is the intention of the parties that the Secured Obligations
include the obligation of the Trustor to repay "future advances" of "principal"
(as defined in NRS 106.345, as amended or recodified from time to time) in an
amount up to the Commitment which is initially $75,000,000, and that the lien of
this Deed of Trust secures the obligation of Trustor to repay all such "future
advances" with the priority set forth in NRS 106.370(1), as amended or
recodified from time to time.

     2.   Assignment of Rents.
          -------------------

          2.1  Assignment.  Subject to Section 2.2 hereof, effective upon the
               ----------                      ---
recordation of this Deed of Trust, Trustor hereby irrevocably, absolutely,
presently and unconditionally assigns to Beneficiary all rents, royalties,
issues, profits, revenue, income and proceeds of the Property, including the
fees, charges, accounts or other payments for the use or occupancy of rooms and
other public facilities, whether now due, past due or to become due, including
all prepaid rents and security deposits (some or all collectively, as the
context may require, "Rents").  This is an absolute assignment, not an
assignment for security only.

          2.2  Grant of License.  Beneficiary hereby confers upon Trustor a
               ----------------
license ("License") to collect and retain the Rents as they become due and
payable, so long as no Event of Default, as defined in Section 6.2, shall exist
                                                               ---
and be continuing.  If an Event of Default has occurred and is continuing,
Beneficiary shall have the right, which it may choose to exercise in its sole
discretion, to terminate this License without notice to or demand upon Trustor,
and without regard to the adequacy of Beneficiary's security under this Deed of
Trust.

          2.3  Collection and Application of Rents.  Subject to the License
               -----------------------------------
granted to Trustor under Section 2.2, Beneficiary has the right, power and
                                 ---
authority to collect any and all Rents.  Subject to applicable Gaming Laws,
Trustor hereby appoints Beneficiary its attorney-in-fact to perform any and all
of the following acts, if and at the times when Beneficiary in its sole
discretion may so choose:

               (a) Demand, receive and enforce payment of any and all Rents; or

                                      -6-
<PAGE>

               (b) Give receipts, releases and satisfactions for any and all
     Rents; or

               (c) Sue either in the name of Trustor or in the name of
     Beneficiary for any and all Rents.

Beneficiary's right to the Rents does not depend on whether or not Beneficiary
takes possession of the Property as permitted under Subsection 6.3(c).  In
                                                               ------
Beneficiary's sole discretion, Beneficiary may choose to collect Rents either
with or without taking possession of the Property.  Beneficiary shall apply all
Rents collected by it in the manner provided under Section 6.6.  If an Event of
                                                           ---
Default occurs while Beneficiary is in possession of all or part of the Property
and is collecting and applying Rents as permitted under this Deed of Trust,
Beneficiary, Trustee and any receiver shall nevertheless be entitled to exercise
and invoke every right and remedy afforded any of them under this Deed of Trust
and at law and in equity, including the right to exercise the power of sale
granted under Section 1.1 and Subsection 6.3(g).
                      ---                ------

          2.4  Beneficiary Not Responsible.  Under no circumstances shall
               ---------------------------
Beneficiary have any duty to produce Rents from the Property.  Regardless of
whether or not Beneficiary, in person or by agent, takes actual possession of
the Land and Improvements, Beneficiary is not and shall not be deemed to be:

               (a) A "mortgagee in possession" for any purpose; or

               (b) Responsible for performing any of the obligations of the
     lessor under any lease; or

               (c) Responsible for any waste committed by lessees or any other
     parties, any dangerous or defective condition of the Property, or any
     negligence in the management, upkeep, repair or control of the Property; or

               (d) Liable in any manner for the Property or the use, occupancy,
     enjoyment or operation of all or any part of it.

     2.5  Trustor shall not accept any deposit or prepayment of Rents for any
rental period exceeding two (2) months without Beneficiary's prior written
consent, which shall not be unreasonably withheld or delayed.  Trustor shall not
lease the Property or any part of it in a manner which would violate the Loan
Agreement.

     3.   Grant of Security Interest.
          --------------------------

          3.1  Security Agreement.  The parties intend for this Deed of Trust to
               ------------------
create a lien on and security interest in the Property, and an absolute
assignment of the Rents and the Leases, all in favor of Beneficiary.  The
parties acknowledge that some of the Property and

                                      -7-
<PAGE>

some of the Rents and Leases may be determined under applicable law to be
personal property or fixtures. To the extent such Property, Rents or Leases
constitute personal property, Trustor, as debtor, hereby grants to Beneficiary,
as secured party, a security interest in all such Property, Rents and Leases, to
secure payment and performance of the Secured Obligations, and Trustor, as
debtor, also has granted a security interest in such Property, Rents and Leases
pursuant to that certain Security Agreement dated as of March 18, 1999, executed
by Trustor, as debtor, in favor of Beneficiary, as secured party. This Deed of
Trust constitutes a security agreement under the Nevada Uniform Commercial Code,
as amended or recodified from time to time, covering all such Property, Rents
and Leases. To the extent such Property, Rents or Leases are not real property
encumbered by the lien created by Section 1.1, above, and are not absolutely
                                          ---
assigned by the assignment set forth in Section 2.1, above, it is the intention
                                                ---
of the parties that such Property, Rents and/or Leases shall constitute
"proceeds, product, offspring, rents or profits" (as defined in and for the
purposes of Section 552(b) of the United States Bankruptcy Code, as such Section
may be modified or supplemented) of the Land and Improvements, and/or "fees,
charges, accounts, or other payments for the use or occupancy of rooms and other
public facilities in . . . lodging properties," as applicable (as such terms are
defined in and for the purpose of Section 552(b) of the United States Bankruptcy
Code, as such Section may be modified or supplemented).

          3.2    Financing Statements.  Trustor shall execute one or more
                 --------------------
financing statements and such other documents as Beneficiary may from time to
time reasonably require to perfect or continue the perfection of Beneficiary's
security interest in any Property, Rents or Leases.  Notwithstanding anything
contained herein, Trustor shall not be required under any circumstance to take
any further action to perfect any interest granted to Beneficiary in any cage
cash, deposit accounts, markers, instruments or other cash items which are used
in connection with the casino operations of Trustor. Trustor shall pay all
reasonable fees and costs that Beneficiary may incur in filing such documents in
public offices and in obtaining such record searches as Beneficiary may
reasonably require.  If Trustor fails to execute any financing statements or
other documents for the perfection or continuation of any security interest,
Trustor hereby appoints Beneficiary as its true and lawful attorney-in-fact
(which appointment is irrevocable and coupled with an interest) to execute any
such documents on its behalf.  If any financing statement or other document is
filed in the records normally pertaining to personal property, that filing shall
never be construed as in any way derogating from or impairing this Deed of Trust
or the rights or obligations of the parties under it.

     4.   Fixture Filing; Construction Mortgage.
          -------------------------------------

          4.1  Fixture Filing.  This Deed of Trust constitutes a financing
               --------------
statement filed as a fixture filing under NRS 104.9402(6) of the Nevada Uniform
Commercial Code, as amended or recodified from time to time, covering any
Property which now is or later may become fixtures attached to the Land or
Improvements.  In connection therewith, the addresses of Trustor, as debtor, and
Beneficiary, as secured party, are as set forth in Section 8.12, below.  The
                                                           ----
foregoing address of Beneficiary, as secured party, is also the address from
which information concerning the security interest may be obtained by any

                                      -8-
<PAGE>

interested party.  The property subject to this fixture filing is described in
Section 1.1, above. Portions of the property subject to this fixture filing as
        ---
identified in this Section are or are to become fixtures related to the real
estate described in Exhibit A attached hereto.
                    ---------

          4.2  Construction Mortgage.  This Deed of Trust constitutes a
               ---------------------
"construction mortgage" as that term is defined in NRS 104.9313(1)(c), as
amended or recodified from time to time, and as used in the Nevada Uniform
Commercial Code, as amended or recodified from time to time.

     5.   Rights and Duties of the Parties.
          --------------------------------

          5.1  Representations and Warranties.  Trustor represents and warrants
               ------------------------------
that, except as previously disclosed to Beneficiary in a writing making
reference to this Section 5.1:
                          ---

               (a) Trustor lawfully possesses and holds the tenant's interest
     in the Existing Ground Lease and title to all of the Improvements;

               (b) Trustor has the full and unlimited power, right and
     authority to encumber the Property and assign the Rents;

               (c) This Deed of Trust creates a second priority lien on the
     Property, junior solely to no more than $2,000,000 principal indebtedness
     under a deed of trust in favor of American Bank National Association,
     recorded January 30, 1996 in Book No. 960130 and as Document Nos. 00397 and
     00398 in the Official Records of Clark County, Nevada;

               (d) Trustor's rights in the Property include all property and
     rights which are reasonably necessary to promote the present and any
     reasonable future beneficial use and enjoyment of the Land and Improvements
     as a hotel casino;

               (e) Trustor owns any Property which is personal property free
     and clear of any security agreements (except as identified in Section 3.1
                                                                           ---
     hereof), reservations of title or conditional sales contracts not of
     record or not approved by or in favor of Beneficiary; and

               (f) Trustor's place of business, or its chief executive office
     if it has more than one place of business, is located at the address
     specified below.

          5.2  Taxes and Assessments.  Trustor shall pay prior to delinquency
               ---------------------
all taxes, levies, charges and assessments, including assessments on appurtenant
water stock, imposed by any public or quasi-public authority or utility company
(collectively, "Impositions") which are (or if not paid, may become) a lien on
all or part of the Property or any interest in it, or which may cause any
decrease in the value of the Property or any part of

                                      -9-
<PAGE>

it. If any such taxes, levies, charges or assessments become delinquent,
Beneficiary may require Trustor to present evidence that they have been paid in
full, on thirty (30) days' written notice by Beneficiary to Trustor.
Notwithstanding the foregoing, Trustor shall not be required to pay any
Imposition so long as (i) its validity is being actively contested in good faith
and by appropriate proceedings, and (ii) Trustor has demonstrated to
Beneficiary's reasonable satisfaction that leaving such Imposition unpaid
pending the outcome of such proceedings could not result in conveyance of the
Property in satisfaction of such Imposition or otherwise impair Beneficiary's
interest under this Deed of Trust.

          5.3  Performance of Secured Obligations.  Trustor shall promptly pay
               ----------------------------------
and perform each Secured Obligation in accordance with its terms.

          5.4  Liens, Charges and Encumbrances.  Trustor shall immediately
               -------------------------------
discharge any Lien on the Property which Beneficiary has not consented to in
writing, except Permitted Encumbrances and Permitted Rights of Others.  Trustor
shall pay when due each obligation secured by or reducible to a Lien, charge or
encumbrance which now does or later may encumber or appear to encumber all or
part of the Property or any interest in it, whether the Lien, charge or
encumbrance is or would be senior or subordinate to this Deed of Trust, except
any Permitted Encumbrances and Permitted  Rights of Others.  This Section 5.4 is
                                                                          ---
subject to Trustor's right, granted in the Loan Agreement, to contest in good
faith claims and liens for labor done and materials and services furnished in
connection with construction of the Improvements and the right of Trustor to
contest Liens by appropriate proceedings diligently pursued provided Trustor has
established and maintained reserves therefor which are reasonably acceptable to
the Administrative Agent.

          5.5  Damages and Insurance and Condemnation Proceeds.
               -----------------------------------------------

               (a) Trustor hereby absolutely and irrevocably assigns to
     Beneficiary, and authorizes the payor to pay to Beneficiary the following
     claims, causes of action, awards, payments and rights to payment:

                    (i) All awards of damages and all other compensation
          payable directly or indirectly because of a condemnation, proposed
          condemnation or taking for public or private use which affects all or
          part of the Property or any interest in it;

                    (ii) All other awards, claims and causes of action, arising
          out of any warranty affecting all or any part of the Property, or for
          damage or injury to or decrease in value of all or part of the
          Property or any interest in it;

                    (iii) All proceeds of any insurance policies payable because
          of loss sustained to all or part of the Property in excess of
          $250,000; and

                    (iv) All interest which may accrue on any of the foregoing.

                                      -10-
<PAGE>

               (b) Trustor shall immediately notify Beneficiary in writing if:

                    (i) Any damage occurs or any injury or loss is sustained in
          the amount of $250,000 or more to all or part of the Property, or any
          action or proceeding relating to any such damage, injury or loss is
          commenced; or

                    (ii) Any offer is made, or any action or proceeding is
          commenced, which relates to any actual or proposed condemnation or
          taking of all or part of the Property.

               (c) If Beneficiary chooses to do so, Beneficiary may in its own
     name appear in or prosecute any action or proceeding to enforce any cause
     of action based on warranty, or for damage, injury or loss to all or part
     of the Property, and Beneficiary may make any compromise or settlement of
     the action or proceeding. Beneficiary, if it so chooses, may participate in
     any action or proceeding relating to condemnation or taking of all or part
     of the Property, and may join Trustor in adjusting any loss covered by
     insurance.

               (d) All proceeds of these assigned claims, other property and
     rights which Trustor may receive or be entitled to shall be paid to
     Beneficiary.  In each instance, Beneficiary shall apply such proceeds first
     toward reimbursement of all of Beneficiary's reasonable costs and expenses
     of recovering the proceeds, including reasonable attorneys' fees.  Such
     attorneys' fees shall include the reasonably allocated costs for services
     of in-house counsel.  If, in any instance, each and all of the following
     conditions are satisfied in Beneficiary's reasonable judgment, Beneficiary
     must permit Trustor to use the balance of such proceeds ("Net Claims
     Proceeds") to pay costs of repairing or reconstructing the Property in the
     manner described below:

                    (i) The plans and specifications, cost breakdown,
          construction contract, construction schedule, contractor and payment
          and performance bond for the work of repair or reconstruction must all
          be reasonably acceptable to Beneficiary;

                    (ii) Beneficiary must receive evidence reasonably
          satisfactory to it that after repair or reconstruction, the Property
          would be not substantially less valuable than prior to the damage or
          condemnation;

                    (iii) The Net Claims Proceeds must be sufficient in
          Beneficiary's reasonable determination to pay for the total cost of
          repair or reconstruction, including all associated development costs
          and interest projected to be payable on the Secured Obligations until
          the repair or reconstruction is complete; or Trustor must provide its
          own funds in an amount equal to the difference between the Net Claims
          Proceeds and a reasonable

                                      -11-
<PAGE>

          estimate, made by Trustor and found acceptable by Beneficiary, of the
          total cost of repair or reconstruction; and

                    (iv) No Event of Default shall have occurred and be
     continuing. If Beneficiary finds that such conditions have been met,
     Beneficiary shall hold the Net Claims Proceeds and any funds which Trustor
     is required to provide in an interest-bearing account and shall disburse
     them to Trustor to pay costs of repair or reconstruction monthly as
     incurred, subject to a 10% retention, to be disbursed upon presentation of
     evidence reasonably satisfactory to Beneficiary that repair or
     reconstruction has been completed satisfactorily and lien-free.
     Disbursements hereunder shall first be made from Net Claims Proceeds prior
     to reducing amounts contributed by Trustor. Any funds remaining upon the
     completion of the repair or reconstruction shall be immediately returned to
     Trustor. However, if Beneficiary finds that one or more of such conditions
     have not been satisfied, Beneficiary may apply the Net Claims Proceeds to
     pay or prepay (without premium) some or all of the Secured Obligations in
     such order and proportions as Beneficiary in its sole discretion may
     choose.

               (e) Trustor hereby specifically, unconditionally and irrevocably
     waives all rights of a property owner under all laws, including NRS 37.115,
     as amended or recodified from time to time, which provide for allocation of
     condemnation proceeds between a property owner and a lienholder, and any
     other law or successor statute of similar import.  Trustor hereby
     specifically, unconditionally and irrevocably waives all right to recover
     against Beneficiary or any Lender (or any officer, employee, agent or
     representative of Beneficiary or any Lender) for any loss incurred by
     Trustor from any cause insured against or required by any Loan Document to
     be insured against; provided, however, that this waiver of subrogation
     shall not be effective with respect to any insurance policy if the coverage
     thereunder would be materially reduced or impaired as a result.

          5.6  Maintenance and Preservation of Property.
               ----------------------------------------

               (a) Trustor shall insure the Property as required by the Loan
     Agreement and keep the Property in good condition and repair, reasonable
     wear and tear excepted.

               (b) Trustor shall not remove or demolish the Property or any
     part of it with a fair market value reasonably determined by Beneficiary to
     be in excess of $2,000,000, or materially alter, restore or add to the
     Property (except as permitted by the Loan Agreement), or initiate or allow
     any change in any zoning or other land use classification which materially
     affects the Property or any part of it, except as permitted or required by
     the Loan Documents or with Beneficiary's express prior written consent in
     each instance.

                                      -12-
<PAGE>

               (c) If all or material part of the Property becomes damaged or
     destroyed, Trustor shall promptly and completely repair and/or restore the
     Property in a good and workmanlike manner in accordance with sound building
     practices, provided that Beneficiary agrees to disburse insurance proceeds
     to pay costs of the work of repair or reconstruction under Section 5.5.
                                                                        ---

               (d) Trustor shall not commit or allow any act upon or use of the
     Property which would violate: (i) any applicable law or order of any
     governmental authority in any material respect, whether now existing or
     later to be enacted; or (ii) any public or private covenant, condition,
     restriction or equitable servitude affecting the Property.  Trustor shall
     not bring or keep any article on the Property or cause or allow any
     condition to exist on it, if that could invalidate or would be prohibited
     by any insurance coverage required to be maintained by Trustor on the
     Property or any part of it under the Loan Agreement.

               (e) Trustor shall not commit or allow waste of the Property.

               (f) Trustor shall perform all other acts which from the
     character or use of the Property may be reasonably necessary to maintain
     and preserve its value.

           5.7  Insurance.
                ---------

               (a) Trustor shall maintain the following insurance with respect
     to the Property:

                    (i) Trustor shall provide, maintain and keep in force at
          all times during any period of construction with respect to the
          portion of the Property affected by such construction a policy or
          policies of builder's "all risk" insurance in nonreporting form in an
          amount not less than the full insurable current value of such portion
          of the Property on a replacement cost basis.  The policy or policies
          shall insure against loss or damage by hazards customarily included
          within such "all risk" policies and any other risks or hazards which
          Beneficiary may reasonably specify (and shall include boiler and
          machinery insurance), and each shall contain a Lender's Loss Payable
          Endorsement (Form 438 BFU or equivalent) in favor of Beneficiary.

                    (ii) Trustor shall provide, maintain and keep in force at
          all times for all portions of the Property not covered by a policy or
          policies described in Section 5.7(a)(i), above, a policy or policies
                                        ---------
          of fire and hazards "all risk" insurance providing extended coverage,
          in an amount not less than the full insurable value of such portions
          of the Property on a replacement cost basis.  The policy or policies
          shall insure against loss or damage by hazards customarily included
          within "all risk" and "extended coverage" policies and any other risks
          or hazards which Beneficiary may reasonably specify (and shall include
          boiler and machinery insurance), and each shall contain a Lender's


                                      -13-
<PAGE>

          Loss Payable Endorsement (Form 438 BFU or equivalent) in favor of
          Beneficiary.

                    (iii) Trustor shall provide, maintain and keep in force at
          all times for all portions of the Property any policy or policies of
          business interruption insurance that Beneficiary reasonably requires
          (including insurance against income loss during a period of at least
          one (1) year), and each such policy shall contain a Lender's Loss
          Payable Endorsement (Form 438 BFU or equivalent) in favor of
          Beneficiary.

                    (iv) Trustor shall provide, maintain and keep in force at
          all times a policy or policies of comprehensive liability insurance
          naming Beneficiary as Administrative Agent as additional insured, on
          an "occurrence" basis, against claims for "personal injury" liability,
          including bodily injury, death or property damage liability, with a
          limit of not less than One Hundred Million Dollars ($100,000,000).
          Such insurance shall be primary and noncontributory with any other
          insurance carried by Beneficiary.

                    (v) Trustor shall provide, maintain and keep in force at
          all times such policies of worker's compensation insurance as may be
          required by applicable laws (including employer's liability insurance,
          if reasonably required by Beneficiary), covering all required
          employees of Trustor and each required contractor and subcontractor.

                    (vi) Trustor shall provide, maintain and keep in force at
          all times any and all additional insurance, as is carried by
          responsible companies engaged in similar businesses and owning similar
          assets in the general areas in which Trustor operates, that
          Beneficiary in its reasonable judgment may from time to time require.

               (b) All such policies of insurance shall be issued by companies
     approved by Beneficiary having a minimum A.M. Best's rating of A-.  The
     limits, coverage, forms, deductibles, inception and expiration dates and
     cancellation provisions of all such policies shall be reasonably acceptable
     to Beneficiary.  Each property insurance policy maintained in connection
     with any of the Property shall contain a Lender's Loss Payable Endorsement
     (Form 438 BFU or equivalent) in favor of Beneficiary, and shall provide
     that all proceeds be payable to Beneficiary to the extent of its interest
     in accordance with this Deed of Trust.  Each liability insurance policy
     maintained in connection with any of the Property shall name Beneficiary,
     as Administrative Agent for the Lenders, as additional insured.  An
     approval by Beneficiary is not, and shall not be deemed to be, a
     representation of the solvency of any insurer or the sufficiency of any
     amount of insurance.  Each policy of insurance required hereunder shall
     provide that it may not be modified or canceled without at

                                      -14-
<PAGE>

     least thirty days' prior written notice to Beneficiary, and shall permit a
     waiver of subrogation by Trustor in favor of Beneficiary and the Lenders.

               (c) Upon reasonable notice from Beneficiary, Trustor shall
     supply Beneficiary with certificates of each policy required hereunder and
     any other policy of insurance maintained in connection with any of the
     Property, together with an original or underlyer of each such policy and
     all endorsements thereto.  When any insurance policy required hereunder
     expires, Trustor shall furnish Beneficiary with proof acceptable to
     Beneficiary that the policy has been reinstated or a new policy issued,
     continuing in force the insurance covered by the policy which expired.  If
     Trustor fails to pay any such premium, Beneficiary shall have the right,
     but not the obligation, to obtain current coverage and advance funds to pay
     the premiums for it.  Trustor shall repay Beneficiary immediately on demand
     for any advance for such premiums, which shall be considered to be an
     additional loan to Trustor bearing interest at the Default Rate, and
     secured by this Deed of Trust and any other collateral held by Beneficiary
     in connection with the Secured Obligations.

          5.8  Trustee's Acceptance of Trust.  Trustee accepts this trust when
               -----------------------------
this Deed of Trust is recorded.

          5.9  Releases, Extensions, Modifications and Additional Security.
               -----------------------------------------------------------

               (a) From time to time, Beneficiary may perform any of the
     following acts without incurring any liability or giving notice to any
     person, and without affecting the personal liability of any person for the
     payment of the Secured Obligations (except as provided below), and without
     affecting the security hereof for the full amount of the Secured
     Obligations on all Property remaining subject hereto, and without the
     necessity that any sum representing the value of any portion of the
     Property affected by the Beneficiary's action be credited on the Secured
     Obligations:

                    (i) Release any person liable for payment of any Secured
          Obligation;

                    (ii) Extend the time for payment, or otherwise alter the
          terms of payment, of any Secured Obligation;

                    (iii) Accept additional real or personal property of any
          kind as security for any Secured Obligation, whether evidenced by
          deeds of trust, mortgages, security agreements or any other
          instruments of security; or

                    (iv) Alter, substitute or release any property securing the
          Secured Obligations.

                                      -15-
<PAGE>

               (b) From time to time when requested to do so by Beneficiary in
     writing, Trustee may perform any of the following acts without incurring
     any liability or giving notice to any person:

                    (i) Consent to the making of any plat or map of the
          Property or any part of it;

                    (ii) Join in granting any easement or creating any
          restriction affecting the Property;

                    (iii) Join in any subordination or other agreement affecting
          this Deed of Trust or the lien of it; or

                    (iv) Reconvey the Property or any part of it without any
          warranty.

          5.10 Reconveyance. When all of the Secured Obligations have been paid
               ------------
in full, Beneficiary shall request Trustee in writing to reconvey the Property,
and shall surrender this Deed of Trust and all notes and instruments evidencing
the Secured Obligations to Trustee. When Trustee receives Beneficiary's written
request for reconveyance and all fees and other sums owing to Trustee by
Trustor, Trustee shall promptly reconvey the Property, or so much of it as is
then held under this Deed of Trust, without warranty to the person or persons
legally entitled to it. Such person or persons shall pay any costs of
recordation. In the reconveyance, the grantee may be described as "the person or
persons legally entitled thereto," and the recitals of any matters or facts
shall be conclusive proof of their truthfulness. Neither Beneficiary nor Trustee
shall have any duty to determine the rights of persons claiming to be rightful
grantees of any reconveyance. The Trustee shall confirm the release of its lien
on any personal property disposed of in accordance with the Loan Agreement.

          5.11 Compensation, Exculpation.
               -------------------------

               (a) Trustor agrees to pay reasonable fees as may be charged by
     Beneficiary and Trustee subject to the maximum amounts legally permitted,
     or reasonable fees as may be charged by Beneficiary and Trustee when the
     law provides no maximum limit, for any services that Beneficiary or Trustee
     may render in connection with this Deed of Trust, including Beneficiary's
     providing a statement of the Secured Obligations or Trustee's rendering of
     services in connection with a reconveyance.  Trustor shall also pay or
     reimburse all of Beneficiary's and Trustee's reasonable costs and expenses
     which may be incurred in rendering any such services. Trustor further
     agrees to pay or reimburse Beneficiary for all reasonable costs, expenses
     and other advances which may be incurred or made by Beneficiary or Trustee
     in any efforts to enforce any terms of this Deed of Trust, including any
     rights or remedies afforded to Beneficiary or Trustee or both of them under
     Section 6.3, whether any lawsuit is filed or not, or in defending any
     action or proceeding arising

                                      -16-
<PAGE>

     under or relating to this Deed of Trust, including reasonable attorneys'
     fees and other legal costs, costs of any Foreclosure Sale (as defined in
     Subsection 6.3(h)) incurred in accordance with applicable law, and any cost
                ------
     of evidence of title. If Beneficiary chooses to dispose of Property through
     more than one Foreclosure Sale, Trustor shall pay all costs, expenses or
     other advances that may be incurred or made by Trustee or Beneficiary in
     each of such Foreclosure Sales.

               (b) Beneficiary shall not be directly or indirectly liable to
     Trustor or any other person as a consequence of any of the following:

                    (i) Beneficiary's exercise of or failure to exercise any
          rights, remedies or powers granted to Beneficiary in this Deed of
          Trust;

                    (ii) Beneficiary's failure or refusal to perform or
          discharge any obligation or liability of Trustor under any agreement
          related to the Property or under this Deed of Trust; or

                    (iii) Any loss sustained by Trustor or any third party
          resulting from Beneficiary's failure to lease the Property, or from
          any other act or omission of Beneficiary in managing the Property,
          after an Event of Default, unless the loss is caused by the gross
          negligence, willful misconduct or bad faith of Beneficiary.

     To the extent permitted by applicable law, Trustor hereby expressly waives
     and releases all liability of the types described above, and agrees that no
     such liability shall be asserted against or imposed upon Beneficiary.

               (c) Trustor shall pay all obligations to pay money arising under
     this Section within ten Banking Days of demand by Trustee or Beneficiary.
     Each such obligation shall be added to, and considered to be part of, the
     principal of the Notes, and shall bear interest from the date the
     obligation arises at the Default Rate described in the Loan Agreement.

          5.12 Defense and Notice of Claims and Actions.  At Trustor's sole
               ----------------------------------------
expense, Trustor shall protect, preserve and defend the Property and title to
and right of possession of the Property, and the security of this Deed of Trust
and the rights and powers of Beneficiary and Trustee created under it against
all adverse claims.  Trustor shall give Beneficiary and Trustee prompt notice in
writing if any claim is asserted which does or could affect any of such matters,
or if any action or proceeding is commenced which alleges or relates to any such
claim.

          5.13 Substitution of Trustee.  From time to time, Beneficiary may
               -----------------------
substitute a successor to any Trustee named in or acting under this Deed of
Trust in any manner now or later to be provided at law, or by a written
instrument executed and acknowledged by

                                      -17-
<PAGE>

Beneficiary and recorded in the office of the Clark County Recorder. Any such
instrument shall be conclusive proof of the proper substitution of the successor
Trustee, who shall, automatically upon recordation of the instrument, succeed to
all estate, title, rights, powers and duties of the predecessor Trustee without
conveyance from it.

          5.14 Subrogation.  Beneficiary shall be subrogated to the liens of all
               -----------
encumbrances, whether released of record or not, which are discharged in whole
or in part by Beneficiary in accordance with this Deed of Trust or with the
proceeds of any loan secured by this Deed of Trust.

          5.15 Site Visits, Observation and Testing.  Subject to compliance with
               ------------------------------------
Gaming Laws, including restrictions on access to security and surveillance
systems and the casino cage, Beneficiary and its agents and representatives
shall have the right at any reasonable time and upon reasonable prior notice to
enter and visit the Property for the purpose of inspecting construction,
performing appraisals, observing the Property, taking and removing soil or
groundwater samples, and conducting tests on any part of the Property.
Beneficiary has no duty, however, to visit or observe the Property or to conduct
tests, and no site visit, observation or testing by Beneficiary, its agents or
its representatives shall impose any liability on Beneficiary, its agents or its
representatives, provided that Beneficiary shall indemnify Trustor against and
                 --------
hold Trustor harmless from all losses and damages which Trustor may suffer or
incur as a result of the gross negligence or willful misconduct of Beneficiary,
its agents or its representatives in connection with any site visit, observation
or testing conducted by Beneficiary, its agents or its representatives pursuant
to this Section.  In no event shall any site visit, observation or testing by
Beneficiary, its agents or its representatives be a representation that
"Hazardous Materials" (as defined in the Loan Agreement) are or are not present
in, on, or under the Property, or that there has been or shall be compliance
with any law, regulation or ordinance pertaining to Hazardous Materials or any
other applicable governmental law.  Neither Trustor nor any other party is
entitled to rely on any site visit, observation or testing by Beneficiary, its
agents or its representatives. Beneficiary owes no duty of care to protect
Trustor or any other party against, or to inform Trustor or any other party of,
any Hazardous Materials or any other adverse condition affecting the Property.
Beneficiary, its agents or its representatives shall give Trustor reasonable
notice before entering the Property.  Beneficiary, its agents or its
representatives shall not interfere with Trustor's use of the Property in
exercising any rights provided in this Section except in the case of emergency.

          5.16  Notice of Change.  Trustor shall give Beneficiary written notice
               ----------------
within thirty days of any change in (a) the location of Trustor's place of
business or its chief executive office if it has more than one place of
business, (b) the location of any of the Property, including the Books and
Records and (c) Trustor's name or business structure. Unless otherwise
reasonably approved by Beneficiary in writing, all Property that consists of
personal property (other than the Books and Records) will be located on the Land
except in the ordinary course of business or as permitted in the Loan Agreement
and all Books and

                                      -18-
<PAGE>

Records will be located at Trustor's place of business or chief executive
office if Trustor has more than one place of business.

          5.17 Title Insurance.  At any time and from time to time at the
               ---------------
reasonable request of Beneficiary, Trustor, at its sole cost and expense, shall
deliver to Beneficiary title insurance indorsements and reinsurance issued by
title insurance companies, all in form and substance reasonably satisfactory to
Beneficiary, with respect to this Deed of Trust, including CLTA 122 endorsements
insuring that each advance is secured by this Deed of Trust (without any
exception not set forth in the policy of title insurance insuring this Deed of
Trust other than (i) liens for real estate taxes and assessments not yet due and
payable, (ii) Permitted Encumbrances and (iii) any matters insured to be
subordinate to this Deed of Trust), and CLTA 101.4 endorsements insuring the
priority of the Deed of Trust over any mechanic's lien.  Beneficiary consents to
the issuance of all title insurance by Nevada Title Company and the reinsurers
designated as of the Closing Date.

     6.   Accelerating Transfers, Default and Remedies.
          --------------------------------------------

          6.1  Accelerating Transfers.
               ----------------------

               (a) "Accelerating Transfer" means any sale, contract to sell,
     conveyance, encumbrance, lease or other transfer of all or any material
     part of the Property or any interest in it (and not leases made in the
     ordinary course of business and provided that no Default or Event of
     Default exists), whether voluntary, involuntary, by operation of law or
     otherwise which is not permitted under the Loan Agreement, and any "Change
     of Control" described in the Loan Agreement.

               (b) Trustor acknowledges that Beneficiary is making advances
     under the Loan Agreement in reliance on the expertise, skill and experience
     of Trustor; thus, the Secured Obligations include material elements similar
     in nature to a personal service contract.  In consideration of
     Beneficiary's reliance, Trustor agrees that Trustor shall not make any
     Accelerating Transfer, unless the transfer is preceded by Beneficiary's
     express written consent to the particular transaction and transferee.
     Beneficiary may withhold such consent in its sole discretion.  If any
     Accelerating Transfer occurs, Beneficiary, in its sole discretion may
     declare all of the Secured Obligations to be immediately due and payable,
     and Beneficiary and Trustee may invoke any rights and remedies provided by
     Section 6.3 of this Deed of Trust.
             ---

          6.2  Events of Default.  Trustor will be in default under this Deed of
               -----------------
Trust upon the occurrence of any one or more of the following events (some or
all collectively, "Events of Default;" any one singly, an "Event of Default"):

               (a) Trustor fails to pay any principal indebtedness secured
     hereby when due; or

                                      -19-
<PAGE>

               (b) Trustor fails to perform any obligation arising under this
     Deed of Trust and does not cure that failure within any applicable cure
     period provided for in the Loan Agreement; or

               (c) Trustor or any other "borrower" (as that term is defined in
     NRS 106.310, as amended or recodified from time to time) who may send a
     notice pursuant to NRS 106.380(1), as amended or recodified from time to
     time, with respect to this Deed of Trust, (i) delivers, sends by mail or
     otherwise gives, or purports to deliver, send by mail or otherwise give, to
     Beneficiary or any Lender (A) any notice of an election to terminate the
     operation of this Deed of Trust as security for any Secured Obligation
     (including, without limitation, any obligation to repay any "future
     advance" (as defined in NRS 106.320, as amended or recodified from time to
     time) of "principal" (as defined in NRS 106.345, as amended or recodified
     from time to time)), or (B) any other notice pursuant to NRS 106.380(1), as
     amended or recodified from time to time, (ii) records a statement pursuant
     to NRS 106.380(3), as amended or recodified from time to time or (iii)
     causes this Deed of Trust, any Secured Obligation, Beneficiary or any
     Lender to be subject to NRS 106.380(2), 106(3) or 106.400, as amended or
     recodified from time to time; or

               (d) An Event of Default (as defined in the Loan Agreement)
     occurs and remains continuing under the Loan Agreement.

          6.3  Remedies.  At any time after the occurrence of an Event of
               --------
Default (following expiration of any applicable cure period), Beneficiary and
Trustee will be entitled to invoke any and all of the following rights and
remedies, all of which will be cumulative, and the exercise of any one or more
of which shall not constitute an election of remedies:

               (a) Acceleration.  Subject to applicable Gaming Laws,
                   ------------
     Beneficiary may declare any or all of the Secured Obligations to be due and
     payable immediately.

               (b) Receiver.  Subject to applicable Gaming Laws, Beneficiary
                   --------
     may apply to any court of competent jurisdiction for, and obtain
     appointment of, a receiver for the Property; and Beneficiary may request,
     in connection with any foreclosure proceeding hereunder, that the Nevada
     Gaming Commission petition a District Court of the State of Nevada for the
     appointment of a supervisor to conduct the normal gaming activities on the
     Property following such foreclosure proceeding.

               (c) Entry.  Subject to applicable Gaming Laws, Beneficiary, in
                   -----
     person, by agent or by court-appointed receiver, may enter, take possession
     of, manage and operate all or any part of the Property, and may also do any
     and all other things in connection with those actions that Beneficiary may
     in its sole discretion consider necessary and appropriate to protect the
     security of this Deed of Trust.  Such other things may include: taking and
     possessing all of Trustor's or the then owner's Books and Records; entering
     into, enforcing, modifying, or canceling leases on such terms

                                      -20-
<PAGE>

     and conditions as Beneficiary may consider proper; obtaining and evicting
     tenants; fixing or modifying Rents; collecting and receiving any payment of
     money owing to Trustor; completing construction; and/or contracting for and
     making repairs and alterations.  If Beneficiary so requests, Trustor shall
     assemble all of the Property that has been removed from the Land and make
     all of it available to Beneficiary at the site of the Land.  Trustor hereby
     irrevocably constitutes and appoints Beneficiary as Trustor's attorney-in-
     fact to perform such acts and execute such documents as Beneficiary in its
     sole discretion may consider to be appropriate in connection with taking
     these measures, including endorsement of Trustor's name on any instruments.
     Regardless of any provision of this Deed of Trust or the Loan Agreement,
     Beneficiary shall not be considered to have accepted any property other
     than cash or immediately available funds in satisfaction of any obligation
     of Trustor to Beneficiary, unless Beneficiary has given express written
     notice of Beneficiary's election of that remedy in accordance with the
     Nevada Uniform Commercial Code, as it may be amended or recodified from
     time to time.

               (d) Cure; Protection of Security.  Either Beneficiary or Trustee
                   ----------------------------
     may cure any breach or default of Trustor, and if it chooses to do so in
     connection with any such cure, Beneficiary or Trustee may also, subject to
     applicable Gaming Laws, enter the Property and/or do any and all other
     things which it may in its sole discretion consider necessary and
     appropriate to protect the security of this Deed of Trust, including,
     without limitation, the right to complete the Improvements.  Such other
     things may include: appearing in and/or defending any action or proceeding
     which purports to affect the security of, or the rights or powers of
     Beneficiary or Trustee under, this Deed of Trust; paying, purchasing,
     contesting or compromising any encumbrance, charge, lien or claim of lien
     which in Beneficiary's or Trustee's sole judgment is or may be senior in
     priority to this Deed of Trust, such judgment of Beneficiary or Trustee to
     be conclusive as among the parties to this Deed of Trust; obtaining
     insurance and/or paying any premiums or charges for insurance required to
     be carried under the Loan Agreement; otherwise caring for and protecting
     any and all of the Property; and/or employing counsel, accountants,
     contractors and other appropriate persons to assist Beneficiary or Trustee.
     Beneficiary and Trustee may take any of the actions permitted under this
     Subsection 6.3(d) either with or without giving notice to any person.
                ------

               (e) Uniform Commercial Code Remedies.  Subject to applicable
                   --------------------------------
     Gaming Laws, Beneficiary may exercise any or all of the remedies granted to
     a secured party under the NRS Article 104.9101 et seq. (the Nevada
     enactment of the Uniform Commercial Code).

               (f) Judicial Action.  Beneficiary may bring an action in any
                   ---------------
     court of competent jurisdiction to foreclose this instrument or to obtain
     specific enforcement of any of the covenants or agreements of this Deed of
     Trust.

                                      -21-
<PAGE>

               (g) Power of Sale.  Under the power of sale hereby granted,
                   -------------
     Beneficiary shall have the discretionary right to cause some or all of the
     Property, including any Property which constitutes personal property to be
     sold or otherwise disposed of in any combination and in any manner
     permitted by applicable law and Gaming Laws.

                    (i) Sales of Personal Property.
                        --------------------------

                         (A) For purposes of this power of sale, Beneficiary
               may elect to treat as personal property any Property which is
               intangible or which can be severed from the Land or Improvements
               without causing structural damage.  If it chooses to do so,
               Beneficiary may dispose of any personal property separately from
               the sale of real property, in any manner permitted by or under
               the NRS, including any public or private sale, or in any manner
               permitted by any other applicable law.

                         (B) The following provision shall apply in the absence
               of any specific statutory requirement which permits or requires a
               different notice period:  In connection with any sale or other
               disposition of such Property, Trustor agrees that the following
               procedures constitute a commercially reasonable sale:
               Beneficiary shall mail written notice of the sale to Trustor not
               later than forty-five (45) days prior to such sale.  Once per
               week during the four weeks immediately preceding such sale,
               Beneficiary will publish notice of the sale in a local daily
               newspaper of general circulation.  Upon receipt of any written
               request, Beneficiary will make the Property available to any bona
               fide prospective purchaser for inspection during reasonable
               business hours.  Notwithstanding any provision to the contrary,
               Beneficiary shall be under no obligation to consummate a sale if,
               in its judgment, none of the offers received by it equals the
               fair value of the Property offered for sale.  The foregoing
               procedures do not constitute the only procedures that may be
               commercially reasonable.

                    (ii) Trustee's Sales of Real Property or Mixed Collateral.
                         ----------------------------------------------------

                         (A) Beneficiary may choose to dispose of some or all
               of the Property which consists solely of real property in any
               manner then permitted by applicable law.  In its discretion,
               Beneficiary may also or alternatively choose to dispose of some
               or all of the Property, in any combination consisting of both
               real and personal property, together in one sale to be held in
               accordance with the law and procedures applicable to real
               property.  Trustor agrees that such a sale of personal property
               together with real property constitutes a commercially reasonable
               sale of the personal property.  For purposes of this power of


                                      -22-
<PAGE>

               sale, either a sale of real property alone, or a sale of both
               real and personal property together in accordance with law, will
               sometimes be referred to as a "Trustee's Sale."

                         (B) Before any Trustee's Sale, Beneficiary or Trustee
               shall give and record such notice of default and election to sell
               as may then be required by law.  When all time periods then
               legally mandated have expired, and after such notice of sale as
               may then be legally required has been given, Trustee may sell the
               property being sold at a public auction to be held at the time
               and place specified in the notice of sale.  Neither Trustee nor
               Beneficiary shall have any obligation to make demand on Trustor
               before any Trustee's Sale.  From time to time in accordance with
               then applicable law, Trustee may, and in any event at
               Beneficiary's request shall, postpone any Trustee's Sale by
               public announcement at the time and place noticed for that sale.

                         (C) At any Trustee's Sale, Trustee shall sell to the
               highest bidder at public auction for cash in lawful money of the
               United States.  Trustee shall execute and deliver to the
               purchaser(s) a deed or deeds conveying the property being sold
               without any covenant or warranty whatsoever, express or implied.
               The recitals in any such deed of any matters or facts, including
               any facts bearing upon the regularity or validity of any
               Trustee's Sale, shall be conclusive proof of their truthfulness.
               Any such deed shall be conclusive against all persons as to the
               facts recited in it.

               (h) Single or Multiple Foreclosure Sales.  If the Property
                   ------------------------------------
     consists of more than one lot, parcel or item of property, Beneficiary may:

                    (i) Designate the order in which the lots, parcels and/or
          items shall be sold or disposed of or offered for sale or disposition;
          and

                    (ii) Elect to dispose of the lots, parcels and/or items
          through a single consolidated sale or disposition to be held or made
          under the power of sale granted in Subsections 6.3(g) and 6.7, or in
                                                         ------     ---
          connection with judicial proceedings, or by virtue of a judgment and
          decree of foreclosure and sale; or through two or more such sales or
          dispositions; or in any other manner Beneficiary may deem to be in its
          best interests (any such sale or disposition, a "Foreclosure Sale;"
          any two or more, "Foreclosure Sales").

     If Beneficiary chooses to have more than one Foreclosure Sale, Beneficiary
     at its option may cause the Foreclosure Sales to be held simultaneously or
     successively, on the same day, or on such different days and at such
     different times and in such order as Beneficiary may deem to be in its best
     interests.  No Foreclosure Sale shall terminate

                                      -23-
<PAGE>

     or affect the liens of this Deed of Trust on any part of the Property which
     has not been sold, until all of the Secured Obligations have been paid in
     full.

          6.4  Credit Bids.  At any Foreclosure Sale, any person, including
               -----------
Trustor, Trustee or Beneficiary, may bid for and acquire the Property or any
part of either to the extent permitted by then applicable law.  Instead of
paying cash for such property, Beneficiary may settle for the purchase price by
crediting the sales price of the property against the following obligations:

               (a) First, the portion of the Secured Obligations attributable
     to the expenses of sale incurred in accordance with applicable law, costs
     of any action and any other sums for which Trustor is obligated to pay or
     reimburse Beneficiary or Trustee under this Deed of Trust; and

               (b) Second, all other Secured Obligations in any order and
     proportions as Beneficiary in its sole discretion may choose.

          6.5  Application of Foreclosure Sale Proceeds.  Beneficiary and
               ----------------------------------------
Trustee shall apply the proceeds of any Foreclosure Sale in the following
manner:

               (a) First, to pay the portion of the Secured Obligations
     attributable to the expenses of sale incurred in accordance with applicable
     law, costs of any action and any other sums for which Trustor is obligated
     to reimburse Beneficiary or Trustee under Section 5.11;
                                                       ----

               (b) Second, to pay the portion of the Secured Obligations
     attributable to any sums expended or advanced by Beneficiary or Trustee
     under the terms of this Deed of Trust which then remain unpaid;

               (c) Third, to pay all other Secured Obligations in any order and
     proportions as Beneficiary in its sole discretion may choose; and

               (d) Fourth, to remit the remainder, if any to the person or
     persons entitled to it.

          6.6  Application of Rents and Other Sums.  Beneficiary shall apply any
               -----------------------------------
and all Rents collected by it, and any and all sums other than proceeds of a
Foreclosure Sale which Beneficiary may receive or collect under Section 6.3, in
                                                                        ---
the following manner:

               (a) First, to pay the portion of the Secured Obligations
     attributable to the costs and expenses of operation and collection that may
     be incurred by Trustee, Beneficiary or any receiver in accordance with
     applicable law;

                                      -24-
<PAGE>

               (b) Second, to pay all other Secured Obligations in any order
     and proportions as Beneficiary in its sole discretion may choose; and

               (c) Third, to remit the remainder, if any, to the person or
     persons entitled to it.  Beneficiary shall have no liability for any funds
     which it does not actually receive.

          6.7 Incorporation of Certain Nevada Covenants.  Covenants Nos. 1, 2
              -----------------------------------------
(full replacement value), 3, 4 (at the applicable Default Rate), 5, 6, 7
(reasonable), 8 and 9 of NRS 107.030, where not in conflict with the provisions
of the Loan Documents, are hereby adopted and made a part of this Deed of Trust.
Upon any Event of Default by Trustor hereunder, Beneficiary may (a) declare all
sums secured immediately due and payable with  out demand or notice or (b) have
a receiver appointed as a matter of right without regard to the sufficiency of
said property or any other security or guaranty and without any showing as
required by NRS (S)107.100.  All remedies provided in this Deed of Trust are
distinct and cumulative to any other right or remedy under this Deed of Trust or
afforded by law or equity and may be exercised concurrently, independently or
successively.  The sale of said property conducted pursuant to Covenants Nos. 6,
7 and 8 of NRS (S)107.030 may be conducted either as to the whole of said
property or in separate parcels and in such order as Trustee may determine.

     7.   Leasehold Mortgage Provisions.  The provisions of this Section 7 shall
          -----------------------------                                  -
apply in the event that, and so long as, any portion of the Property consists of
Trustor's interests as tenant under any lease or leases (collectively, including
the Existing Ground Lease, the "Ground Leases").  Unless otherwise expressly
provided, the lien of this Deed of Trust shall encumber all of Trustor's rights
and interests under and in connection with any Ground Lease, including without
limitation renewal and extension rights, options to expand, and purchase options
(all of which rights shall be collectively referred to herein as a "Ground
Leasehold"). Trustor hereby agrees, with respect to each Ground Lease, as
follows:

          7.1 Trustor shall timely perform its obligations in connection with
each Ground Lease.  Without limiting the generality of Section 6.3(d), above,
                                                               ------
Trustor specifically acknowledges Beneficiary's right, while any default by
Trustor under any Ground Lease remains uncured, to perform the defaulted
obligations and take all other actions which Beneficiary deems necessary to
protect its interests with respect thereto, and Trustor hereby irrevocably
appoints Beneficiary its true and lawful attorney-in-fact (which appointment is
irrevocable and coupled with an interest) in its name or otherwise to execute
all documents, and perform all other acts, which Beneficiary reasonably deems
necessary to preserve its or Trustor's rights with respect to any Ground Lease.

          7.2 Trustor shall not, without Beneficiary's prior written consent,
modify, or cause or permit the termination of, any Ground Lease, or waive or in
any way release the landlord under any Ground Lease of or from any obligation or
condition.

                                      -25-
<PAGE>

          7.3 Trustor shall notify Beneficiary promptly in writing of (i) the
occurrence of any default by the landlord under any Ground Lease and (ii) the
receipt by Trustor of any notice claiming the occurrence of any default by
Trustor under any Ground Lease or the occurrence of any event which, with the
passage of time or the giving of notice or both, would constitute a default by
Trustor under any Ground Lease (and Trustor shall also promptly deliver a copy
of any such notice to Beneficiary).

          7.4 Unless Beneficiary otherwise consents in writing, so long as any
Secured Obligation remains outstanding, neither the fee title to, nor any other
estate or interest in, the real property subject to any Ground Lease shall merge
with any Ground Leasehold, notwithstanding the union of such estates in the
landlord or the tenant or in a third party.  Any acquisition of the landlord's
interest in any Ground Lease by Trustor or any affiliate of Trustor shall be
accomplished in such a manner as to avoid a merger of the interests of landlord
and tenant unless Beneficiary consents to such merger in writing.

          7.5 If Trustor acquires fee title to any portion of the real property
subject to any Ground Lease, this Deed of Trust shall automatically be a lien on
such fee title.

          7.6 Trustor shall not subordinate any Ground Lease or Ground
Leasehold to any deed of trust or other encumbrance of, or lien on, any interest
in the real property subject to such Ground Leasehold without the prior written
consent of Beneficiary.  Any such subordination without such consent shall, at
Beneficiary's option, be void.

          7.7 All subleases entered into by Trustor with respect to all or any
portion of the Property (and all existing subleases modified by Trustor) shall
provide that such subleases are subordinate to the lien of this Deed of Trust
and any modifications of this Deed of Trust and the obligations secured hereby
and that, if Beneficiary forecloses under this Deed of Trust or enters into a
new lease with any landlord under any Ground Lease pursuant to the provisions
for a new lease, if any, contained in the applicable Ground Lease or in any
other document or agreement, the subtenant shall attorn to Beneficiary or its
assignee and the sublease shall remain in full force and effect in accordance
with its terms notwithstanding the termination of the applicable Ground Lease.

          7.8 Trustor shall exercise any option or right to renew or extend the
term of any Ground Lease at least six months prior to the date of termination of
any such option or right, shall give immediate written notice thereof to
Beneficiary, and shall execute, deliver and record any documents requested by
Beneficiary to evidence the lien of this Deed of Trust on such extended or
renewed lease term.  If Trustor fails to exercise any such option or right as
required herein, Beneficiary may exercise the option or right as Trustor's agent
and attorney-in-fact pursuant to this Deed of Trust, or in Beneficiary's own
name or in the name of and on behalf of a nominee of Beneficiary, as Beneficiary
chooses in its absolute discretion.

          7.9 As security for the Secured Obligations, Trustor hereby assigns
to Beneficiary a security interest in all prepaid rents and security deposits
and all other security

                                      -26-
<PAGE>

which the landlords under the Ground Leases hold for the performance of
Trustor's obligations thereunder.

          7.10 Promptly upon demand by Beneficiary, Trustor shall use reasonable
efforts to obtain from the landlord under any Ground Lease and furnish to
Beneficiary an estoppel certificate of such landlord stating the date through
which rent has been paid, whether or not there are any defaults, and the
specific nature of any claimed defaults.

          7.11 Trustor shall notify Beneficiary promptly in writing of any
request by either party to any Ground Lease for arbitration, appraisal or other
proceedings relating to any Ground Lease and of the institution of any such
proceeding, and shall promptly deliver to Beneficiary a copy of all
determinations in any such proceeding.  Beneficiary shall have the right,
following written notice to Trustor, to participate in any such proceeding in
association with Trustor or on its own behalf as an interested party.  Trustor
shall notify Beneficiary promptly in writing of the institution of any legal
proceeding involving obligations under any Ground Lease, and Beneficiary may
intervene in any such legal proceeding and be made a party.  Trustor shall
promptly provide Beneficiary with a copy of any decision rendered in connection
with any such proceeding.

          7.12 To the extent permitted by law, the price payable by Trustor or
any other party in the exercise of the right of redemption, if any, from any
sale under, or decree of foreclosure of, this Deed of Trust shall include all
rents and other amounts paid and other sums advanced by Beneficiary on behalf of
Trustor as the tenant under the Ground Leases.

          7.13 In addition to all other Events of Default described in this Deed
of Trust, the occurrence of any of the following shall be an Event of Default
hereunder:

               (a) A breach or default by Trustor under any Ground Lease,
     subject to any applicable cure period; or

               (b) The occurrence of any event or circumstance which gives the
     landlord under any Ground Lease a right to terminate such Ground Lease.

          7.14 As used in this Deed of Trust, the "Bankruptcy Code" shall mean
11 U.S.C. (S)(S) 101 et seq., as modified and/or recodified from time to time.
                     -- ---
Notwithstanding anything to the contrary contained herein with respect to any
Ground Lease:

               (a) The lien of this Deed of Trust attaches to all of Trustor's
     rights under Subsection 365(h) of the Bankruptcy Code, including without
     limitation any and all elections to be made thereunder, any and all rights
     under any Ground Lease which Trustor is entitled to retain pursuant to 11
     U.S.C. (S) 365(h)(1)(A)(ii) in the event of a rejection under the
     Bankruptcy Code of such Ground Lease by the landlord thereunder (or any
     trustee thereof), and any and all rights of offset under or as described in
     11 U.S.C. (S) 365(h)(1)(B).

                                      -27-
<PAGE>

               (b) Trustor acknowledges and agrees that, as the beneficiary
     under this Deed of Trust and by operation of 11 U.S.C. (S)365(h)(1)(D),
     Beneficiary has, and until this Deed of Trust has been fully reconveyed
     continuously shall have, whether before or after any default under any of
     the Secured Obligations or the taking of any action to enforce any of
     Beneficiary's rights and remedies under this Deed of Trust or any
     foreclosure sale hereunder, the complete, unfettered and exclusive right,
     in its sole and absolute discretion, to elect (the "365(h) Election")
     whether (i) any Ground Lease that has been rejected under the Bankruptcy
     Code by the landlord thereunder (or any trustee therefor) shall be treated
     as terminated under 11 U.S.C. (S)365(h)(1)(A)(i), or (ii) the rights under
     such Ground Lease that are in or appurtenant to the real property, as
     described in 11 U.S.C. (S)365(h)(1)(A)(ii), should be retained pursuant to
     that subsection.  To the extent that, notwithstanding the preceding
     sentence and 11 U.S.C. (S)365(h)(1)(D), Trustor now or at any time in the
     future has any right to make, or to participate in or otherwise in any
     manner affect the making of, the 365(h) Election with respect to any Ground
     Lease, Trustor hereby absolutely assigns and conveys to Beneficiary any and
     all such rights, and all of Trustor's right, title, and interest therein,
     which may be used and exercised by Beneficiary completely, exclusively, and
     without any restriction whatsoever, in Beneficiary's sole and absolute
     discretion, whether before or after any default upon any of the Secured
     Obligations, the taking of any action to enforce any of Beneficiary's
     rights and remedies under this Deed of Trust, or any foreclosure sale
     hereunder.  Trustor hereby unconditionally and irrevocably appoints
     Beneficiary as its attorney-in-fact (which appointment is coupled with an
     interest) to exercise Trustor's right, if any, to make, or participate in
     or otherwise in any matter affect the making of, the 365(h) Election with
     respect to any Ground Lease. Trustor shall not in any manner impede or
     interfere with any action taken by Beneficiary and, at the request of
     Beneficiary, Trustor shall take or join in the taking of any action to
     make, or participate in or otherwise in any manner affect the making of,
     the 365(h) Election with respect to any Ground Lease, in such manner as
     Beneficiary determines in its sole and absolute discretion.  Unless and
     until instructed to do so by Beneficiary (as determined by Beneficiary in
     its sole and absolute discretion), Trustor shall not take any action to
     make, or participate in or otherwise in any manner affect the making of,
     the 365(h) Election with respect to any Ground Lease, including in
     particular, but without limitation, any election to treat any Ground Lease
     as terminated.  Beneficiary shall have no obligation whatsoever to Trustor
     or any other person or entity in connection with the making of the 365(h)
     Election with respect to any Ground Lease or any instruction by Beneficiary
     to Trustor given, withheld or delayed in respect thereof, nor shall
     Beneficiary have any liability to Trustor or any other person or entity
     arising from any of the same.

               (c) As security for the Secured Obligations, Trustor hereby
     irrevocably assigns to Beneficiary all of Trustor's rights to damages
     arising from any rejection by any landlord (or any trustee thereof) of any
     Ground Lease under the Bankruptcy Code. Beneficiary and Trustor shall
     proceed jointly or in the name of Trustor in respect of

                                      -28-
<PAGE>

     any claim or proceeding relating to the rejection of any Ground Lease,
     including without limitation the right to file and prosecute any proofs of
     claim, complaints, motions and other documents in any case in respect of
     such landlord under the Bankruptcy Code. This assignment shall continue in
     effect until all of the Secured Obligations have been satisfied in full.
     Any amounts received by Beneficiary or Trustor as damages arising from the
     rejection of any Ground Lease as aforesaid shall be applied first to all
     costs reasonably incurred by Beneficiary (including attorneys' fees) in
     connection with this subsection (c) and then in accordance with other
     applicable provisions of this Deed of Trust.

               (d) If, pursuant to the Bankruptcy Code, Trustor seeks to offset
     against the rent reserved in any Ground Lease the amount of any damages
     caused by the nonperformance of the landlord's obligations after the
     rejection by the landlord (or any trustee thereof) of such Ground Lease,
     Trustor shall, prior to effecting such offset, notify Beneficiary in
     writing of its intent to do so, setting forth the amounts proposed to be
     offset and, in the event that Beneficiary objects, Trustor shall not effect
     any offset of the amounts to which Beneficiary objects.  If Beneficiary
     fails to object within 10 days following receipt of such notice, Trustor
     may offset the amounts set forth in Trustor's notice.

               (e) If any legal proceeding is commenced with respect to any
     Ground Lease in connection with any case under the Bankruptcy Code,
     Beneficiary and Trustor shall cooperatively conduct any such proceeding
     with counsel reasonably agreed upon between Trustor and Beneficiary.
     Trustor shall, upon demand, pay to Beneficiary all costs (including
     attorneys' fees) reasonably incurred by Beneficiary in connection with any
     such proceeding.

               (f) Trustor shall immediately notify Beneficiary orally upon
     learning of any filing by or against any landlord of a petition under the
     Bankruptcy Code. Trustor shall thereafter promptly give written notice of
     such filing to Beneficiary, setting forth any information available to
     Trustor with respect to the date of such filing, the court in which such
     petition was filed, and the relief sought therein.  Trustor shall promptly
     deliver to Beneficiary all notices, pleadings and other documents received
     by Trustor in connection with any such proceeding.

          7.15 No maintenance, repair or other obligation of Trustor hereunder
which relates to the "Property" shall apply to any Ground Leasehold with respect
to which the applicable Ground Lease imposes such obligation on the landlord so
long as (a) Trustor does not own the landlord's interest; (b) such landlord is
performing such obligation in accordance with the terms of such Ground Lease;
and (c) the Ground Lease has not been rejected by the landlord (or any trustee
thereof) under the Bankruptcy Code.

                                      -29-
<PAGE>

          7.16 The generality of the provisions of this Deed of Trust shall not
be limited by any provision of this Section 7 that sets forth particular
                                            -
obligations of Trustor as the tenant under the Ground Leases.

          7.17 Trustor hereby represents and warrants to Beneficiary as follows:

               (a) The Existing Ground Lease is in full force and effect;

               (b) Trustor owns the entire tenant's interest under the Existing
     Ground Lease and has the right under the Existing Ground Lease to execute
     this Deed of Trust; and

               (c) No default under the Existing Ground Lease remains uncured,
     nor has any event occurred which, with the passage of time or service of
     notice or both, would constitute such a default.

     8.   Miscellaneous Provisions.
          ------------------------

          8.1  Additional Provisions.  The Loan Documents fully state all of the
               ---------------------
terms and conditions of the parties' agreement regarding the matters mentioned
in or incidental to this Deed of Trust.  The Loan Documents also grant further
rights to Beneficiary and contain further agreements and affirmative and
negative covenants by Trustor which apply to this Deed of Trust and to the
Property.

          8.2  No Waiver or Cure.
               -----------------

               (a) Each waiver by Beneficiary or Trustee must be in writing,
     and no waiver shall be construed as a continuing waiver.  No waiver shall
     be implied from any delay or failure by Beneficiary or Trustee to take
     action on account of any default of Trustor.  Consent by Beneficiary or
     Trustee to any act or omission by Trustor shall not be construed as a
     consent to any other or subsequent act or omission or to waive the
     requirement for Beneficiary's or Trustee's consent to be obtained in any
     future or other instance.

               (b) If any of the events described below occurs, that event
     alone shall not: cure or waive any breach, Event of Default or notice of
     default under this Deed of Trust or invalidate any act performed pursuant
     to any such default or notice; or nullify the effect of any notice of
     default or sale (unless all Secured Obligations then due have been paid and
     performed and all other defaults under the Loan Documents have been cured);
     or impair the security of this Deed of Trust; or prejudice Beneficiary,
     Trustee or any receiver in the exercise of any right or remedy afforded any
     of them under this Deed of Trust; or be construed as an affirmation by
     Beneficiary of any tenancy, lease or option, or a subordination of the lien
     of this Deed of Trust:

                                      -30-
<PAGE>

                    (i) Beneficiary, its agent or a receiver takes possession
          of all or any part of the Property in the manner provided in
          Subsection 6.3(c).

                    (ii) Beneficiary collects and applies Rents as permitted
          under Sections 2.3 and 6.6, either with or without taking possession
                         ---     ---
          of all or any part of the Property.

                    (iii) Beneficiary receives and applies to any Secured
          Obligation proceeds of any Property, including any proceeds of
          insurance policies, condemnation awards, or other claims, property or
          rights assigned to Beneficiary under Section 5.5.
                                                       ---
                    (iv) Beneficiary makes a site visit, observes the Property
          and/or conducts tests as permitted under this Deed of Trust or under
          the Loan Agreement.

                    (v) Beneficiary receives any sums under this Deed of Trust
          or any proceeds of any collateral held for any of the Secured
          Obligations, and applies them to one or more Secured Obligations.

                    (vi) Beneficiary, Trustee or any receiver invokes any right
          or remedy provided under this Deed of Trust.

          8.3  Powers of Beneficiary and Trustee.
               ---------------------------------

               (a) Trustee shall have no obligation to perform any act which it
     is empowered to perform under this Deed of Trust unless it is requested to
     do so in writing and is reasonably indemnified against loss, cost,
     liability and expense.

               (b) If either Beneficiary or Trustee performs any act which it
     is empowered or authorized to perform under this Deed of Trust or the Loan
     Agreement, that act alone shall not release or change the personal
     liability of any person for the payment and performance of the Secured
     Obligations then outstanding, or the lien of this Deed of Trust on all or
     the remainder of the Property for full payment and performance of all
     outstanding Secured Obligations.  The liability of the original Trustor
     shall not be released or changed if Beneficiary grants any successor in
     interest to Trustor any extension of time for payment, or modification of
     the terms of payment, of any Secured Obligation.  Beneficiary shall not be
     required to comply with any demand by the original Trustor that Beneficiary
     refuse to grant such an extension or modification to, or commence
     proceedings against, any such successor in interest.

               (c) Beneficiary may take any of the actions permitted under
     Subsections 6.3(b), 6.3(c), 6.7 and/or the Loan Agreement regardless of the
                 ------  ------  ---
     adequacy of the security for the Secured Obligations, or whether any or all
     of the Secured

                                      -31-
<PAGE>

     Obligations have been declared to be immediately due and payable, or
     whether notice of default and election to sell has been given under this
     Deed of Trust.

               (d) From time to time, Trustor, Beneficiary or Trustee may apply
     to any court of competent jurisdiction for aid and direction in executing
     the trust and enforcing the rights and remedies created under this Deed of
     Trust.  Trustor, Beneficiary or Trustee may from time to time obtain orders
     or decrees directing, confirming or approving acts in executing this trust
     and enforcing these rights and remedies.

          8.4  Merger.  No merger shall occur as a result of Beneficiary's
               ------
acquiring any other estate in or any other lien on the Property unless
Beneficiary consents to a merger in writing.

          8.5  Joint and Several Liability.  If Trustor consists of more than
               ---------------------------
one person, each shall be jointly and severally liable for the faithful
performance of all of Trustor's obligations under this Deed of Trust.

          8.6  Applicable Law.  This Deed of Trust shall be governed by Nevada
               --------------
law.

          8.7  Successors in Interest.  The terms, covenants and conditions of
               ----------------------
this Deed of Trust shall be binding upon and inure to the benefit of the heirs,
successors and assigns of the parties.  However, this Section 8.7 does not waive
                                                              ---
the provisions of Section 6.1.
                          ---

          8.8  Interpretation.
               --------------

               (a) Whenever the context requires, all words used in the
     singular will be construed to have been used in the plural, and vice versa,
     and each gender will include any other gender.  The captions of the
     sections of this Deed of Trust are for convenience only and do not define
     or limit any terms or provisions.  The word "include(s)" means "include(s),
     without limitation," and the word "including" means "including, but not
     limited to."

               (b) The word "obligations" is used in its broadest and most
     comprehensive sense, and includes all primary, secondary, direct, indirect,
     fixed and contingent obligations.  It further includes all principal,
     interest, prepayment charges, late charges, loan fees and any other fees
     and charges accruing or assessed at any time, as well as all obligations to
     perform acts or satisfy conditions.

               (c) No listing of specific instances, items or matters in any
     way limits the scope or generality of any language of this Deed of Trust.
     The Exhibit to this Deed of Trust is hereby incorporated in this Deed of
     Trust.

                                      -32-
<PAGE>

               (d) The terms of the Loan Agreement shall prevail over the terms
     of this Deed of Trust in the event of any conflict.

          8.9  In-House Counsel Fees.  Whenever Trustor is obligated to pay or
               ---------------------
reimburse Beneficiary or Trustee for any attorneys' fees, those fees shall
include the reasonably allocated costs for services of in-house counsel.

          8.10 Waiver of Marshaling.  Trustor waives all rights, legal and
               --------------------
equitable, it may now or hereafter have to require marshaling of assets or to
require upon foreclosure sales of assets in a particular order, including any
rights provided by NRS 100.040 and 100.050, as such Sections may be amended or
recodified from time to time.  Each successor and assign of Trustor, including
any holder of a lien subordinate to this Deed of Trust, by acceptance of its
interest or lien agrees that it shall be bound by the above waiver, as if it had
given the waiver itself.

          8.11 Severability.  If any provision of this Deed of Trust should be
               ------------
held unenforceable or void, that provision shall be deemed severable from the
remaining provisions and in no way affect the validity of this Deed of Trust.

          8.12 Notices.  Trustor hereby requests that a copy of notice of
               -------
default and notice of sale be mailed to it at the address set forth below.  That
address is also the mailing address of Trustor as debtor under the Nevada
Uniform Commercial Code.  Beneficiary's address given below is the address for
Beneficiary as secured party under the Nevada Uniform Commercial Code.

                                     "Trustor"

                                     COAST HOTELS AND CASINOS, INC.,
                                     a Nevada corporation


                                     By  _________________________
                                         Gage Parrish, Vice President and
                                         Chief Financial Officer

                                     Address Where Notices to Trustor
                                     Are to Be Sent:

                                     Coast Hotels and Casinos, Inc.
                                     4500 West Tropicana Road
                                     Las Vegas, Nevada 89103


                                     Address Where Notices to Trustee

                                      -33-
<PAGE>

                                     Are to Be Sent:

                                     Equitable Deed Company
                                     555 South Flower Street
                                     Los Angeles, California 90071

                                     Address Where Notices to Beneficiary
                                     Are to Be Sent:

                                     Bank of America National Trust and Savings
                                        Association
                                     555 South Flower Street
                                     Los Angeles, California 90071
                                     Attention: Janice Hammond, Vice President

                                      -34-
<PAGE>

STATE OF _____________   )
                            SS.
COUNTY OF ____________   )

     On ____________________ before me (here insert name and title of the
officer) personally appeared ___________________________________________________
personally known to me (or proved to me on the basis of satisfactory evidence)
to be the person(s) whose name(s) is/are subscribed to the within instrument and
acknowledged to me that he/she/they executed the same in his/her/their
authorized capacity(ies), and that by his/her/their signature(s) on the
instrument the person(s), or the entity upon behalf of which the person(s),
acted, executed the instrument.

WITNESS my hand and official seal.

Signature ___________________________         (Seal)



STATE OF ______________  )
                            SS.
COUNTY OF ____________   )

     On ____________________ before me (here insert name and title of the
officer) personally appeared ___________________________________________________
personally known to me (or proved to me on the basis of satisfactory evidence)
to be the person(s) whose name(s) is/are subscribed to the within instrument and
acknowledged to me that he/she/they executed the same in his/her/their
authorized capacity(ies), and that by his/her/their signature(s) on the
instrument the person(s), or the entity upon behalf of which the person(s),
acted, executed the instrument.

WITNESS my hand and official seal.

Signature ___________________________         (Seal)

                                      -35-
<PAGE>

                                   EXHIBIT A
                                   ---------


          EXHIBIT A to DEED OF TRUST executed as of March 18, 1999, by COAST
HOTELS AND CASINOS, INC., a Nevada corporation, as "Trustor", to EQUITABLE DEED
COMPANY, as "Trustee", for the benefit of BANK OF AMERICA NATIONAL TRUST AND
SAVINGS ASSOCIATION, a national banking association, as "Beneficiary."

          All that certain real property located in the County of Clark, State
of Nevada, described as follows:

     A portion of Sections 31 and 32, Township 20 South, Range 60 East, M.D.B. &
     M., more particularly described as Parcel 1, as shown by Parcel Map in File
     83, Page 86, recorded November 9, 1995 in Book 951109 as Document No. 02011
     of Official Records, Clark County, Nevada.

                                   Exhibit A
                                  Page 1 of 1