<PAGE>

                                                                   Exhibit 10.6

                                    GUARANTY

                  GUARANTY, dated this 10th day of April, 2004 between and among
Stephen F. Cohen ("Cohen"), Patrick Danan ("Danan"), Frank A. Leo ("Leo") and
Leonard Mercer ("Mercer")(Cohen, Danan, Leo and Mercer are hereinafter
collectively referred to as the "Guarantors") in favor of Vestin Mortgage, Inc.
("Vestin").

                                   WITNESSETH

                  WHEREAS, Cohen, Danan and Leo are the sole and exclusive
members of, and own 100% of the equity interests in, Raceway Ventures, LLC, a
Florida limited liability company ("Purchaser"); and

                  WHEREAS, Mercer is a stockholder of International Housing
Development Group Corp. ("International") which is engaged in the development,
ownership, operation and sales of real property; and

                  WHEREAS, Cohen, Danan and Leo are the remaining stockholders
of International; and

                  WHEREAS, Guarantors desires to have Purchaser acquire 19,549
shares of the Common Stock (the "Common Stock") of Mid-State Raceway, Inc.
("Raceway") and warrants (the "Warrants") to purchase 1,250,000 shares of Common
Stock from All Capital LLC ("All Capital") and 450,000 shares of Common Stock
from Victoria Scott respectively; and

                  WHEREAS, Raceway owns in excess of 600 acres of real property
in Vernon New York ("Development Property") suitable for real estate development
by International; and

                  WHEREAS, if Cohen, Danan and Leo acquire a controlling
interest in Raceway, International and Mercer will benefit from the development
of the Development Property; and

                  WHEREAS, Raceway and Mid-State Development Corporation
("Development") (Raceway and Development are hereinafter collectively referred
to herein as "Borrower") are indebted to Vestin in the amount of up to
$26,000,000 ("Existing Indebtedness") as evidenced by a Consolidated Secured
Promissory Note (the "Note"); and

                  WHEREAS, the Guarantor and the Purchaser desire to have Vestin
execute and deliver its consent to acquisition by the Purchaser of the Common
Stock and Warrants (the "Consent"); and


<PAGE>




                  WHEREAS, as a condition to Vestin executing and delivering the
Consent, Vestin has requested that the Guarantors execute and deliver this or a
related form of Guaranty.

                  NOW THEREFORE, in consideration of the premises, the mutual
agreements herein contained the parties hereto agree as follows:

          1.      Guaranty of Payment and Performance.

                  (a) Subject to and in accordance with the provisions of
subparagraphs 1 (b) and (c) hereof, each of the Guarantor does hereby jointly
and severally, absolutely, unconditionally and irrevocably guaranty to Vestin
the full and punctual payment and performance of the Obligations (as defined).
For purposes of this Guaranty the term "Obligations" shall be and mean the
Borrower's obligations under the Note solely and exclusively for the payment of
principal and interest thereon computed at the rate of 11% per annum, whether
now existing or hereafter arising, when the same shall become due and payable,
in accordance with the terms of the Note; provided however that anything in this
Guaranty to the contrary notwithstanding, Guarantor's obligations hereunder
and/or with respect to the Obligations shall in no event or circumstance exceed
the aggregate amount of $10,000,000.00.

                  (b) If any of the Obligations shall not be paid in full as the
same shall become due and payable, either at stated maturity or otherwise, in
accordance with the terms of the Note, then and in that event:

                                                      (i) Vestin shall take and
                                    perform such reasonable efforts
                                    (collectively "Collection Efforts") as shall
                                    be reasonably necessary to cause the
                                    Borrower to make payment of the Obligations
                                    then due and payable; and

                                                      (ii) Vestin shall,
                                    following the completion of the Collection
                                    Efforts transmit to the Guarantors written
                                    notice ("Vestin Notice") setting forth: (A)
                                    the continued existence of the Borrower's
                                    default in payment of the Obligations, (B)
                                    the amount of the Obligations which are at
                                    such time the subject of Borrower's payment
                                    default prior to any acceleration and/or
                                    imposition of Default Interest ("Current
                                    Default"), (C) the amount of the costs
                                    incurred by Vestin in performing the
                                    Collection Efforts (the "Collection Costs"),
                                    (D) the total amount of the Obligations and
                                    (E) the sum of the Collection Costs and the
                                    Obligations (the "Buy Out Amount"); and

                                                      (iii) Guarantors shall
                                    have the right during the seven day period
                                    following transmittal by Vestin of the
                                    Vestin Notice to either (A) cure the
                                    Borrower's payment default by


<PAGE>




                                    making payment to Vestin of the full amount
                                    of the Current Default prior to the
                                    expiration of such seven day period, or (B)
                                    purchasing, for cash, 100% of the payees
                                    interest in and to the Note and the proceeds
                                    thereof and all collateral securing the same
                                    (the "Property") for the Buy-Out Amount.
                                    If the Guarantors elect to exercise the
                                    purchase right described above they shall
                                    (C) give Vestin written notice of such
                                    election ("Purchase Notice") prior to the
                                    expiration of such seven day period; which
                                    Purchase Notice shall specify a closing date
                                    for such purchase within 14 days following
                                    the transmittal of the Purchase Notice to
                                    Vestin and (D) have the right to transfer,
                                    sell assign and convey their rights to
                                    acquire the Property and/or any agreements
                                    with respect to the acquisition of the
                                    Property to any third party.

                  (c) If the Guarantors shall fail or refuse to either pay the
full amount of the Current Default or transmit the Purchase Notice within the
seven day period following the transmittal of the Vestin Notice and/or having
transmitted the Purchase Notice failed and/or refused to fully and timely
perform their obligations thereunder, then and in any such event the Guarantors
shall, upon demand, immediately pay to Vestin any such Obligations without
presentment, diligence, protest or other notice of any kind, all of which are
hereby expressly waived. In addition to the foregoing, the Guarantors agree to
pay any and all reasonable expenses (including without limitation, reasonable
attorney's fees and expenses) which may be paid or incurred by Vestin in
connection with the enforcement by Vestin of the obligations of the Guarantors
with respect to the Obligations. All payments under this Guaranty shall be made
in the place, currency and manner specified for the Obligations as provided in
the Note.

                  (d) Without limiting the generality of the provisions of
subparagraph 1(a) hereof but expressly subject to the provisions of
subparagraphs 1(b) and (c) hereof:

                           (i) The liability of the Guarantors under this
Guaranty is primary, absolute, direct and immediate, and not conditional or
contingent upon pursuit by Vestin of any remedies it may have against the
Borrower or any other person or entity, whether pursuant to the terms hereof or
at law, in equity or by statute;

                           (ii) Each of the Guarantors hereby waives any right
he otherwise might have to require Vestin to make any demand upon and/or proceed
against the Borrower or any other person or entity before seeking enforcement of
this Guaranty, or to pursue any legal, equitable or statutory remedy otherwise
available to Vestin in any particular manner or order;

                           (iii) Each of the Guarantors hereby expressly
authorizes Vestin, in its sole and absolute discretion, without notice to or
further assent of the Guarantors and without in any way discharging,
terminating, releasing, affecting or impairing the obligations and liabilities
of the Guarantors hereunder, from time to time or at any one or more times to:
(A) amend, modify, renew, extend, accelerate or otherwise change the time or
manner of payment for or performance of, or otherwise change, modify or amend
any of the other terms and conditions of the


<PAGE>




Obligations, (B) release, discharge or compromise or settle with the Borrower,
(C) waive compliance with or any default under, forbear from, delay or only
partially enforce, or grant any other indulgences with respect to the
Obligations, (D) assign, transfer, pledge, hypothecate, grant a security
interest in or otherwise transfer his interest in this Guaranty, and (E)
otherwise deal in all respects with the Borrower with respect to the Note as if
this Guaranty was not in effect;

                           (iv) Each of the Guarantors: (A) agrees that the
validity and enforceability of his obligations hereunder shall be unaffected by
the genuineness, validity, regularity or enforceability of the Note or by any
other circumstance which might otherwise constitute a legal or equitable
discharge or defense of a surety or guarantor, (B) expressly waives any defense
arising by reason of laches, the statute of limitations or any incapacity, lack
of authority, or other defense of the Borrower (including, without limitation,
the bankruptcy, reorganization, liquidation, dissolution, release or discharge
of the Borrower or any arrangement, compromise, settlement or other action with
respect to the Borrower's creditors or by reason of the cessation from any cause
whatsoever (other than payment or performance in full) of the liability of the
Borrower), and (C) hereby releases Vestin from any requirement of looking into
such matters.

                  2. Guarantor's Obligations Not Affected. This Guaranty is an
absolute, unconditional, irrevocable, present and continuing guarantee of
payment and performance and not merely of collection or collectibility, and,
except as expressly provided herein to the contrary, is in no way conditioned or
contingent upon any attempt to collect from the Borrower or any other person any
of the Obligations or upon any other condition or contingency. The obligations
of the Guarantors under this Guarantee shall remain in full force and effect
without regard to, and shall not be impaired or affected by:

                           (i) any change in the existence, structure or
ownership of the Borrower, or any insolvency, bankruptcy, reorganization,
arrangement, adjustment, composition, liquidation, receivership or similar
proceeding affecting the Borrower;

                           (ii) the existence of any claim or other rights that
the Guarantors or any of them may have at any time against the Borrower, whether
in connection herewith or in any unrelated transactions; provided however that
nothing herein shall prevent the assertion of any such claim by separate suit or
compulsory counterclaim;

                           (iii) any exercise or non-exercise by Vestin or any
other person of any right, power, privilege or remedy pursuant to or in respect
of this Guaranty, or any waiver of any such right, power, privilege or remedy;
or

                           (iv) any merger or consolidation of the Borrower
with or into any other person, or any sale, lease or transfer of any or all of
the assets of the Borrower to any other person or the dissolution, termination,
winding up or other discontinuation of the Borrower.

                  3. Waiver. Except as herein expressly provided to the
contrary, each of the Guarantors unconditionally waives (i) all notices which
may be required by statute, rule of


<PAGE>



law or otherwise, notice of acceptance of this Guaranty as well as (a)
presentment, demand for payment and/or performance and protest of non-payment
and/or non-performance, (b) notice of presentment, demand and protest, (c)
notice of any default hereunder and/or under the Note, and of all indulgences,
(d) demand for observance of performance of, or enforcement of, any terms or
provisions of this Guaranty, and (e) all other notices and demands otherwise
required by law or statute which Guarantors may lawfully waive. Further, to the
extent permitted by law, each of the Guarantors waives the rights to (f) trial
by jury, (g) implead the Borrower or assert a counterclaim against the Borrower,
(h) to consolidate any such action with any proceeding involving the Borrower,
and (ii) any requirement of diligence on the part of Vestin.

                  4. Termination. This Guaranty and the obligations of the
Guarantors hereunder shall terminate and be of no further force and effect on
the earlier to occur of (a) the date when the Obligations shall be have been
indefeasibly paid in full, or (b) the VLT Commencement Date (as defined). The
"VLT Commencement Date" shall be and mean the date upon which video lottery
terminals ("VLT's") installed on the premises of Vernon Downs Race Track, Vernon
New York, are first activated and available for utilization on a pilot,
temporary or permanent basis.

                  5. No Waivers. No failure or delay by Vestin in exercising any
right, power or privilege hereunder shall operate as a waiver thereof nor shall
any single or partial exercise thereof preclude any other or further exercise
thereof or the exercise of any other right, power or privilege. The rights and
remedies provided herein shall be cumulative and not exclusive of any rights or
remedies provided by law.

                  6. Notices. Any and all notices, requests or instructions
desired or required to be given to Vestin or to Guarantors shall be in writing
and shall either be hand delivered or mailed to the recipient first class,
postage prepaid, certified, return receipt requested at the following respective
addresses:

                                 To:    Guarantors
                                        c/o Raceway Ventures, LLC
                                        5300 NW 12th Ave. Suite 1
                                        Ft. Lauderdale, Florida 33309

                                 To:    Vestin
                                        2901 El Camino Avenue
                                        Suite 206
                                        Las Vegas, NV 89102

or at such other address as any party hereto shall designate in a writing
complying with the provisions of this Paragraph.


<PAGE>


                  7. Savings Clause. If any provision of this Guaranty is held
to be invalid or unenforceable by any court or tribunal of competent
jurisdiction, the remainder hereof shall not be affected thereby, and such
provisions shall be carried out as nearly as possible according to its original
terms and intent to eliminate such invalidity or unenforceability.

                  8. General. This agreement sets forth the entire agreement
between the parties hereto with respect to the subject matter herein contained;
shall be governed and construed in accordance with the laws of the State of
Nevada; cannot be altered, amended, modified or terminated except by a writing
executed by both of the parties hereto or as herein expressly otherwise
provided; and shall inure to the benefit of and be binding upon the parties
hereto and their respective successors, transferees, heirs, assigns and
beneficiaries.

                  9. Counterparts. This Guarantee may be executed in two or more
counterparts, and it shall not be necessary that the signatures of all parties
hereto be contained on any one counterpart hereof; each counterpart shall be
deemed an original, but all counterparts together shall constitute one and the
same instrument. Each of the parties executing and delivering this Guarantee
hereby waives and relinquishes all rights and defenses arising from Lender's
failure to obtain an executed copy of this Guarantee from any other party or
parties included in the definition of "Guarantor" in this instrument.

                  IN WITNESS WHEREOF, each of the undersigned has caused this
Guaranty to be executed and delivered as of the day and year first above
written.

                                            /s/ Steven F. Cohen
                                            -------------------

                                            /s/ Patrick Danan
                                            -----------------

                                            /s/ Frank A. Leo
                                            ----------------

                                            /s/ Leonard Mercer
                                            ------------------