<PAGE>
                                  EXHIBIT 10.4


                                 LOAN AGREEMENT

        THIS LOAN AGREEMENT ("Agreement") is made this 5th day of May, 2003 by
and between Scioto Downs, Inc., an Ohio corporation ("Borrower"), having as its
address 6000 South High Street, Columbus, OH 43207; and MTR Gaming Group, Inc.,
a Delaware corporation ("Lender"), having as its address State Route 2, P.O. Box
356, Chester, WV 26034.

                                    RECITALS:

        WHEREAS, the Borrower is in need of accessing funds for use for both
capital expenditure and general operating matters and desires to borrow, and the
Lender desires to lend, such amounts as may be advanced from time to time in an
amount not to exceed One Million Dollars ($1,000,000.00) [the "Loan"]; and

        WHEREAS, pursuant to the an Open-End Mortgage, Security Agreement and
Financing Statement of even date hereof (the "Mortgage"), the Borrower has
granted to the Lender a mortgage on the approximately 173 acre parcel of real
property located in the State of Ohio, County of Franklin, and Township of
Hamilton, commonly known as 6000 South High Street, as more fully described in
Exhibit A attached hereto and made a part hereof (the "Property"); and

        WHEREAS, pursuant to the terms and conditions of a Merger Agreement
entered into as of December 23, 2002, as amended (the "Merger Agreement), by and
between Lender, Borrower and Racing Acquisition Corp. (a wholly owned subsidiary
of the Lender), the Lender has contracted to acquire all of the issued and
outstanding stock of the Borrower (the "Acquisition"); and

        WHEREAS, in consideration of the Loan, and on account of Manager's
extensive experience in the racing, simulcasting, gaming and food service
business, the Borrower has entered into a Management Agreement, of even date
herewith (the "Management Agreement"), pursuant to which, subject to the
approval of the Ohio Racing Commission, the Lender will manage the business
operations of the Borrower: and

        WHEREAS, the Loan is evidenced by a Promissory Note, of even date
herewith, in the maximum principal amount of One Million Dollars
($1,000,000.00); and

        WHEREAS, the parties desire to set forth their respective rights and
obligations under this Agreement.

        NOW, THEREFORE in consideration of the Loan and for other good and
valuable consideration the receipt and sufficiency of which have been hereby
acknowledged, the parties hereto agree as follows:

        1.      Recitals. The foregoing recitals are hereby incorporated as
though more fully set forth herein.

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        2.      Term. The Term of the Loan shall commence on the date first
written above, with all obligations maturing on December 31, 2003, or on such
earlier date on which the Loan shall become due and payable, in whole or in
part, in accordance with the terms of the Loan Documents, by acceleration or
otherwise (the "Maturity Date").

        3.      Promissory Note. Borrower shall, contemporaneously with the
execution of this Agreement, execute a Promissory Note in the form attached
hereto as Exhibit B and incorporated herein by reference (the "Note"). The
principal and interest and any other amount of payment or premium due shall
hereinafter be referred to as the "Indebtedness."

        4.      Loan Documents. This Agreement, the Note, the Mortgage, the
Management Agreement and such other documentation as shall be required under
this Agreement or by Lender or its counsel shall hereinafter collectively be
referred to as the "Loan Documents".

        5.      Extension of Loan.

(a)     Lender's obligation to extend the Loan is subject to the satisfaction of
the following conditions:

                (i)     Receipt by Lender of a copy of the resolutions adopted
                by the Board of Directors of the Borrower, certified by an
                authorized officer thereof, authorizing (i) the borrowings
                hereunder and the transactions contemplated by the Loan
                Documents to which such entity is or will be a party and (ii)
                the execution, delivery and performance by Borrower of each Loan
                Document to which it is or will be a party and the execution and
                delivery of the other documents to be delivered by Borrower in
                connection herewith;

                (ii)    Receipt by Lender of a certificate of an authorized
                officer of the Borrower certifying the names and true signatures
                of the officers of Borrower authorized to sign each Loan
                Document to which such entity is or will be a party and the
                other documents to be executed and delivered by the Borrower in
                connection herewith, together with evidence of the incumbency of
                such authorized officers;

                (iii)   Receipt by Lender of duly executed Loan Documents;

                (iv)    Receipt by Lender of a certificate, dated as of a date
                not more than ten (10) Business Days prior to the date on which
                the Loan is to be made, of the appropriate official of the State
                of Ohio, of the Borrower certifying as to the existence in good
                standing of, and the payment of taxes by, the Borrower in such
                jurisdictions and listing all charter documents of the Borrower
                on file with such official(s);

                (v)     Receipt by Lender of a copy of the charter of the
                Borrower, certified as of a date not more than thirty (30) days
                prior to the Effective Date by the appropriate official(s) of
                the jurisdiction of incorporation of the Borrower and as of the
                date on which the Loan is to be made by an authorized officer of
                Borrower;


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                (vi)    Receipt by Lender of a schedule of payables together
                with such other substantiation as Lender may require in its sole
                and absolute discretion;

                (vii)   Receipt by the Lender of a non-disturbance agreement
                from National City Bank providing that National City Bank will
                not terminate the Management Agreement upon the foreclosure of
                National City Bank's loan with the Borrower (the "National City
                Bank Loan"), or upon National City Bank taking title to the
                Scioto Property under a deed in lieu of foreclosure, or taking
                possession of the Scioto Property directly or through a
                receiver.

                (viii)  Receipt by the Lender of an estoppel certificate from
                National City Bank to the effect that the National City Bank
                Loan is not in default.

                (ix)    If required, the receipt by the Lender of authorization
                from the Ohio Racing Commission as to the execution of the
                Management Agreement and the permissibility of the Manager Fees
                thereunder.

                (x)     Receipt by Lender of such other agreements, instruments,
                approvals, opinions and other documents as the Lender may
                reasonably request;

        (b)     Lender's obligation to extend the loan is conditioned upon the
documents referred to in Section 5(a) above being satisfactory to the Lender in
its sole discretion.


        6.      Representations and Warranties of Borrower. Borrower represents
and warrants to Lender the following, each of which shall be true and correct as
of the date of this Agreement:

                a.      The making of and performance of this Agreement by
Borrower does not violate any laws, or breach any agreement, nor will it result
in the default of any other agreement or instrument to which such party is
bound.

                b.      Borrower has the power and authority to enter into and
perform this Agreement, including the Loan Documents, and to incur and perform
the Obligations (as hereafter defined) herein and therein provided, and has
taken all actions necessary to authorize the execution, delivery and performance
of the Agreement including the Loan Documents.

                c.      All of the representations and warranties set forth
above shall survive and continue in full force and effect and remain true until
all Obligations (as hereinafter defined) are satisfied in full and there remain
no outstanding commitments hereunder.

        7.      Borrower's Obligations. Borrower shall have the following
obligations, which shall hereinafter be referred to as the "Obligations."


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<PAGE>

                a.      To pay the principal of and interest on the Note in
accordance with the terms thereof and to satisfy all of its other liabilities to
Lender hereunder, whether now existing or hereafter incurred, matured or
unmatured, direct or contingent, joint or several, including any extensions,
modifications, renewals thereof and substitutions therefore.

                b.      To pay applicable property taxes with respect to the
Property.

                c.      To safeguard the Property against waste, impairment,
loss or damage, and to maintain the Property in substantially the same condition
as on the date hereof.

                d.      To obtain such insurance as the Lender may, in its sole
discretion, specify and, at Lender's request, to cause Lender to be named as an
additional insured.

                e.      To observe and comply with any and all of the covenants
and promises made or due or owing to Lender pursuant to this Agreement or any of
the Loan Documents.

                8.      Default. The occurrence of any one or more of the
following events shall constitute an Event of Default ("Event of Default")
hereunder:

                a.      Borrower shall admit its inability to pay its debts or
shall make an assignment for the benefit of itself or any of its creditors.

                c.      Proceedings in bankruptcy or for reorganization of
Borrower for readjustment of any of its debts under the Bankruptcy Code shall be
commenced against or by Borrower and, except with respect to any such
proceedings instituted by Borrower shall not be discharged within thirty (30)
days of their commencement.

                d.      A receiver or trustee shall be appointed for Borrower or
for any substantial part of its assets; any proceedings shall be instituted for
the dissolution, or the full or partial liquidation, of Borrower which shall not
be discharged within thirty (30) days of its commencement.

                e.      Borrower's representations and warranties set forth in
Section 6 hereof are not true and complete in all material respects on the date
hereof and during the period during which the Borrower's Indebtedness has not
been satisfied in full.

                f.      Borrower fails to satisfy its obligations set forth in
Section 7 hereof.

                g.      Borrower breaches its obligation under the Merger
Agreement.


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<PAGE>

                h.      Borrower breaches its obligations under the , the Note,
the Mortgage, the Management Agreement or under any other of the Loan Documents
(subject to any applicable cure period).

                (i)     Mara Enterprises, Inc. ("Mara") breaches its obligations
under the Option Agreement, of even date hereof, or of substantially even date
hereof, pursuant to which Mara granted to Lender an option to purchase the
approximately 37 acre parcel of land in the County of Franklin, Township of
Hamilton, as more fully described in such Option Agreement.

        9.      Acceleration. Upon the occurrence of an Event of Default, Lender
may, by written notice to Borrower, declare the Loan, all interest thereon and
all other amounts payable under this Agreement to be forthwith due and payable,
whereupon the Loan, all such interest and all such amounts shall become and be
forthwith due and payable, without presentment, demand, protest or further
notice of any kind, all of which are hereby expressly waived by Borrower.

        10.     Notice. All notices, requests, demands and other communications
hereunder shall be in writing and shall be deemed to have been duly given if
delivered personally (upon delivery), by recognized overnight courier service
(one business day after deposit), or by United States certified or registered
mail, postage prepaid, return receipt requested (upon three (3) business days
after deposit). If to Lender, notice shall be sent to the following address: MTR
Gaming Group, Inc., State Route 2, P.O. Box 356, Chester, WV 26034, Attn: Edson
R. Arneault with a copy to Robert L. Ruben, Esq., Ruben & Aronson, LLP, 4800
Montgomery Lane, Suite 150, Bethesda, MD 20814; if to Borrower, notice shall be
sent to the following address: 6000 South High Street, Columbus, OH 43207 with a
copy to Roderick H. Willcox, 65 E. State Street, Suite 1000, Columbus, OH
43215-4213. Any party hereto may change its address for receipt of notice by
giving written notice to all other parties hereto.

        11.     Waiver. The Borrower hereby waives, to the extent permitted by
law, any requirement that the Lender protect, secure, perfect or insure any
security interest or lien on any property subject thereto or exhaust any right
or take any action against any Person or collateral prior to Lender's exercise
of its rights hereunder.

        12.     Remedies.

        a.      No remedy herein conferred upon or reserved to a party is
intended to be exclusive of any other remedy or remedies, and each and every
such remedy shall be cumulative, and shall be in addition to every other remedy
given hereunder and now or hereafter existing at law or in equity or by statute.

        b.      Notwithstanding any provision in the Loan Documents to the
contrary, the prevailing party in any litigation or mediation with respect to
any disputes relating to this



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<PAGE>

Agreement shall be entitled to recover its reasonable attorneys fees from the
other party for all matters, including but not limited to appeals.

        13.     Miscellaneous.

                a.      This Agreement shall be binding upon, and shall inure to
the benefit of, and be enforceable by, the respective personal representatives,
heirs, successors and/or assigns of the parties hereto.

                b.      This Agreement shall be construed and enforced in
accordance with the laws of the State of Ohio and any action or proceeding
instituted with respect to the performance or interpretation of any of the Loan
Documents shall be brought in the courts of Ohio, with respect to which neither
party shall assert lack of personal or subject matter jurisdiction or improper
venue.

                c.      This Agreement may be executed in one or more
counterparts, each of which shall be deemed to be an original but all of which
together shall constitute one and the same document.

                d.      The Borrower agrees to execute such further
documentation and/or to undertake such further action(s) as may be necessary in
the reasonable opinion of Lender in order to effectuate the terms of this
Agreement.

                e.      If any provision of this Agreement shall be held invalid
under any applicable laws, such invalidity shall not affect any other provision
of this Agreement that can be given effect without the invalid provision and, to
this end, the provisions hereof are severable.

                f.      All terms defined in this Agreement and any of the Loan
Documents shall have the same meaning and effect in this Agreement as they have
in the Loan Documents.

                g.      This Agreement is not assignable by Borrower.

                h.      The occurrence of an Event of Default under this
Agreement shall be treated by the parties as a default under the terms and
provisions of the Loan Documents.

                i.      Time is of the essence to this Agreement and the Loan
Documents in each and every provision where time is a factor.

        14.     Jury Trial Waiver. BY EXECUTION HEREOF AND ACCEPTANCE HEREOF,
BORROWER, AND LENDER AGREE THAT NEITHER BORROWER NOR LENDER, NOR ANY ASSIGNEE,
SUCCESSOR, HEIR OR LEGAL REPRESENTATIVE (ALL OF WHOM ARE COLLECTIVELY REFERRED
TO AS THE "PARTIES") SHALL SEEK A JURY TRIAL IN ANY LAWSUIT, PROCEEDING,
COUNTERCLAIM OR ANY OTHER LITIGATION


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<PAGE>

PROCEDURE BASED UPON OR ARISING OUT OF THIS OBLIGATION OR ANY OF THE LOAN
DOCUMENTS, ANY RELATED AGREEMENT OR INSTRUMENT, ANY OTHER COLLATERAL FOR THE
INDEBTEDNESS OR THE DEALINGS OR RELATIONSHIP BY OR AMONG THE PARTIES, OR ANY OF
THEM. NONE OF THE PARTIES WILL SEEK TO CONSOLIDATE ANY SUCH ACTION IN WHICH A
JURY TRIAL HAS BEEN WAIVED, WITH ANY OTHER ACTION IN WHICH A JURY TRIAL HAS NOT
BEEN WAIVED. THE PROVISIONS OF THIS PARAGRAPH HAVE BEEN FULLY NEGOTIATED BY THE
PARTIES WITH LENDER, AND THESE PROVISIONS SHALL BE SUBJECT TO NO EXCEPTIONS.
LENDER HAS IN NO WAY AGREED WITH OR REPRESENTED TO BORROWER THAT ANY PROVISIONS
OF THIS PARAGRAPH WILL NOT BE FULLY ENFORCED IN ALL INSTANCES.

        15.     Entire Agreement. All prior negotiations between the parties are
merged in this Agreement, and the Loan Documents, and there are no promises,
agreements, additions, undertakings, warranties or representations, oral or
written, expressed or implied, between them other than as set forth hereinabove.
No change or modification of this Agreement shall be valid unless the same is in
writing and signed by the parties hereto. No waiver of any breach of any
provision of this Agreement shall be valid unless in writing and signed by the
party against whom it is sought to be enforced and no such waiver shall be
deemed to be a consent to any subsequent breach of the same or any other
provision.



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<PAGE>

        IN WITNESS WHEREOF, the parties have executed this Agreement for the
purposes herein contained, the date, month and year first above written.


ATTEST:                                     LENDER:

                                            MTR GAMING GROUP, INC.


----------------------------                ----------------------------
                                            By:
                                            Its:

WITNESS:                                    BORROWER:

                                            SCIOTO DOWNS, INC.


----------------------------                ----------------------------
                                            By:  Edward T. Ryan
                                            Its: President









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<PAGE>


                                    EXHIBIT A

                        LEGAL DESCRIPTION OF THE PROPERTY







<PAGE>


                                    EXHIBIT B

                             FORM OF PROMISSORY NOTE














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