<PAGE>

                                                                    EXHIBIT 10.7


                                    AGREEMENT

        THIS AGREEMENT ("Agreement") is made effective the 24th day of May,
2002, by and between Prospector Gaming Enterprises, Inc., a Nevada corporation
doing business as Gold Ranch Casino & RV Resort (PGE), California Prospectors,
Ltd., a Nevada limited liability company, Target Investments, LLC, a Nevada
limited liability company, Gold Ranch R.V. Resort, LLC, a Nevada limited
liability company, Stremmel Capital Group, Ltd., a Nevada limited liability
company, Steve Stremmel and Peter Stremmel (collectively Sellers), and Last
Chance, Inc., a Nevada Corporation (Last Chance), The Sands Regent, a Nevada
corporation and Last Chance, Inc., a Nevada Corporation (cumulatively Buyers).

        A. Sellers and Last Chance are parties to one or more of the Integrated
Agreements dated December 27, 2001, by which Last Chance will or may acquire
from Sellers, by purchase, lease or option, the Gold Ranch Casino and RV Resort
located at I-80 West, Exit 2, Gold Ranch Road, Verdi, Washoe County, Nevada,
consisting of an 8,000 square foot casino offering 284 slot machines, a coffee
shop style restaurant, 2 bars, a Jack In The Box restaurant operated by a third
party, a video arcade, a convenience store, a 105 space RV Park, an ARCO
gasoline station, a California Lottery Station, the real property upon which
these facilities are located, and water and sewer services, all of which is more
particularly described in the Integrated Agreements.

        B. The capitalized terms used in this Agreement shall have the meanings
ascribed thereto in the Integrated Agreements unless specifically otherwise
provided in this Agreement.

        C. The Purchase Price for the Acquired Assets under the Asset Purchase
Agreement is to be paid in part by delivery by Last Chance of the Note which is
to be modified, following the Closing, as provided in this Agreement.

        D. The parties have further agreed, following the Closing, to modify the
terms of the Option To Purchase All Assets of Gold Ranch RV Resort Business, the
Option To Purchase the RV Park Property, and the Option To Purchase The Gold
Ranch Casino Property and Improvements, the Leach Field Property, the Frontage
Parcel, the California Lottery Station and the California Lottery Property, and
Right Of First Refusal (Option to Purchase the Gold Ranch Casino Property) in
accordance with this Agreement.

        E. Nevada State Bank (Bank) and Buyers have entered into a Reducing
Revolving Line of Credit Loan Agreement (Loan Agreement) which will provide
financing for the acquisition by Buyers of the Gold Ranch Casino and RV Resort.
Buyer's obligations under the Loan Agreement and related documents and
agreements (Loan Documents) are to be collateralized by liens upon and security
interests in and to various of the Integrated Agreements and the Integral
Properties and Assets.




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        WHEREFORE, in consideration of the premises and other good and valuable
consideration, the receipt and sufficiency of which is hereby acknowledged, the
parties hereto, intending to be bound, agree as follows:

        1. Modification of the Note. The Note shall be modified to provide for
the repayment of principal on a straight-line basis, together with interest,
over a seven (7) year term with the entire balance of principal and interest all
due and payable sixty (60) months from and after the date of execution of the
Note. Except as modified herein, all of the terms and provisions stated in
Section 2.6(d) of the Asset Purchase Agreement are hereby ratified, approved and
confirmed.

        2. Modification of the Option to Purchase the Gold Ranch Casino
Property. Section 2 of the Option to Purchase the Gold Ranch Casino Property
shall be modified to permit Last Chance to exercise the exclusive option, right
and privilege to purchase the Option Assets commencing on the date the Note is
paid in full or otherwise discharged to the mutual satisfaction of the parties
and terminating on the date of the expiration of the term of the Option to
Purchase the Gold Ranch Casino Property as provided in Section 4 thereof. Except
as modified herein all other terms and conditions of the Option to Purchase the
Gold Ranch Casino Property are hereby ratified, approved and confirmed.

        3. Modification of the Option To Purchase the RV Park Property. Section
2 of the Option To Purchase the RV Park Property shall be modified to permit
Last Chance to exercise the exclusive option, right and privilege to purchase
the Option Assets commencing on the date that the Note is paid in full or
otherwise discharged to the mutual satisfaction of the parties and terminating
on the date of the expiration of the term of the Option to Purchase the RV Park
Property as provided in Section 4 thereof, provided, however, that, in the event
that Last Chance has exercised the Option to Purchase the Gold Ranch Casino
Property, the Option To Purchase the RV Park Property must be exercised upon the
earlier of: (i) the termination of all right, title and interest of Last Chance
in, to and under the Integrated Agreements as the result of an arms-length
transaction with a third party which is not an Affiliate, or (ii) the eighteenth
(18th) anniversary of the Closing Date. Except as herein provided, the terms and
conditions of the Option to Purchase the Gold Ranch Casino Property are hereby
ratified, approved and confirmed.

        4. Modification of the Option To Purchase All Assets of Gold Ranch RV
Resort Business and Right of First Refusal. Section 2 of the Option To Purchase
All Assets of Gold Ranch RV Resort Business shall be modified to permit Last
Chance to exercise the exclusive option, right and privilege to purchase the
Assets commencing on the date that the Note is paid in full or otherwise
discharged to the mutual satisfaction of the parties and terminating on the date
of the expiration of the term of the Option to Purchase All Assets of Gold Ranch
RV Resort Business as provided in Section 4 thereof, provided, however, that, in
the event that Last Chance has exercised the Option to Purchase the Gold Ranch
Casino Property, the Option To Purchase the RV Park Property must be exercised
upon the earlier of: (i) the termination of all right,




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title and interest of Last Chance in, to and under the Integrated Agreements as
the result of an arms-length transaction with a third party which is not an
Affiliate, or (ii) the eighteenth (18th) anniversary of the Closing Date. Except
as herein provided, the terms and conditions of the Option To Purchase All
Assets of Gold Ranch RV Resort Business are hereby ratified, approved and
confirmed.

        5. Bank Approval. It is understood that, pursuant to the terms and
conditions of the Loan Agreement and the Loan Documents, all modifications
contemplated by this Agreement and the performance thereof are subject to
approval by Nevada State Bank.

        6. Additional Documents. Following the Closing and as permitted or
required by the Loan Agreement and the Loan Documents, the parties agree to
execute such additional documents as may be reasonably necessary to carry out
the provisions of this Agreement.

        WHEREFORE, the parties have executed this Agreement effective the day
and year first above written.

Last Chance, Inc.                          Prospector Gaming Enterprises, Inc.
a Nevada corporation                       a Nevada corporation


By:  /s/ Ferenc B. Szony                   By:  /s/ Peter Stremmel
   ---------------------------------          ----------------------------------
Its:  President                            Its: President
    --------------------------------           ---------------------------------


The Sands Regent,
a Nevada corporation

By:  /s/ Ferenc B. Szony
   ----------------------------------
Its:  President
    ---------------------------------


Peter Stremmel                             Steve Stremmel

 /s/ Peter Stremmel                         /s/ Steve Stremmel
------------------------------------       -------------------------------------



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Target Investments, L.L.C.                 Stremmel Capital Group, Ltd.


By: /s/ Peter Stremmel                     By: /s/ Peter Stremmel
   ---------------------------------          ----------------------------------

Its: Manager                               Its: Manager
    --------------------------------           ---------------------------------


California Prospectors, L.L.C.             Gold Ranch RV Resort, L.L.C.


By:  /s/ Peter Stremmel                    By:  /s/ Peter Stremmel
    --------------------------------           ---------------------------------
Its: Manager                               Its: Manager
    --------------------------------           ---------------------------------


State of Nevada       )
                      ) ss.
County of Washoe      )

        This instrument was acknowledged before me on the 30th day of May, 2002,
by Ferenc Szony, the President of Last Chance, Inc.

                                   /s/ Yvonne Cody
                                  --------------------------------------
                                  Notary Public


State of Nevada       )
                      ) ss.
County of Washoe      )

        This instrument was acknowledged before me on the 30th day of May, 2002,
by Peter Stremmel, the President of Prospector Gaming Enterprises, Inc.

                                   /s/ Michelle Balogh
                                  --------------------------------------
                                  Notary Public



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State of Nevada       )
                      ) ss.
County of Washoe      )

        This instrument was acknowledged before me on the 30th day of May, 2002,
by Ferenc B. Szony, the President of The Sands Regent,

                                   /s/ Yvonne Cody
                                  --------------------------------------
                                  Notary Public

State of Nevada       )
                      ) ss.
County of Washoe      )

        This instrument was acknowledged before me on the 30th day of May, 2002,
by Peter Stremmel, the Manager of Target Investments, L.L.C.

                                  /s/ Michelle Balogh
                                  --------------------------------------
                                  Notary Public

State of Nevada       )
                      ) ss.
County of Washoe      )

        This instrument was acknowledged before me on the 30th day of May, 2002,
by Peter Stremmel, the Manager of Stremmel Capital Group, Ltd.

                                  /s/ Michelle Balogh
                                  --------------------------------------
                                  Notary Public

State of Nevada       )
                      ) ss.
County of Washoe      )

        This instrument was acknowledged before me on the 30th day of May, 2002,
by Peter Stremmel, the Manager of California Prospectors,
L.L.C.

                                  /s/ Michelle Balogh
                                  --------------------------------------
                                  Notary Public




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<PAGE>

State of Nevada       )
                      ) ss.
County of Washoe      )

        This instrument was acknowledged before me on the 30th day of May, 2002,
by Peter Stremmel, the Manager of Gold Ranch RV Resort, L.L.C.

                                  /s/ Michelle Balogh
                                  --------------------------------------
                                  Notary Public

State of Nevada       )
                      ) ss.
County of Washoe      )

        This instrument was acknowledged before me on the 30th day of May, 2002,
by Peter Stremmel.

                                   /s/ Michelle Balogh
                                  --------------------------------------
                                  Notary Public

State of Nevada       )
                      ) ss.
County of Washoe      )

        This instrument was acknowledged before me on the 30th day of May, 2002,
by Steve Stremmel.
                                   /s/ Michelle Balogh
                                  --------------------------------------
                                  Notary Public



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