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                                                                   EXHIBIT 10.39

                             FIRST AMENDMENT TO THE
                         HORSESHOE GAMING HOLDING CORP.
                                   401(K) PLAN

This First Amendment to the Horseshoe Gaming Holding Corp. 401(k) Plan ("Plan")
is hereby adopted by Horseshoe Gaming Holding Corp. ("Company").

                                   BACKGROUND

        A. The Company adopted the Plan to provide retirement benefits to the
employees of the Company and all participating affiliated employers.

        B. The Company reserved the right to amend the Plan pursuant to Section
12.1 thereof.

        C. The Company now wishes to amend the Plan in certain respects.

                                    AMENDMENT

        Therefore, the Company hereby amends the Plan, effective as specifically
provided herein, as follows:

        1. The first paragraph of Section 1.7, defining compensation, is hereby
amended, effective January 1, 2001, to read as follows:

        "COMPENSATION" shall mean the regular compensation paid to a Participant
        by the Employer for the Plan Year, including annual bonus amounts and
        paid time off, but exclusive of any extraordinary compensation, awards,
        or benefits, any severance benefits, any program of deferred
        compensation or additional benefits payable other than in cash and any
        compensation received prior to his becoming a Participant in the Plan."

        2. The first paragraph of Section 4.1(a) of the Plan, relating to
elections of benefits, is hereby amended, effective January 1, 2001, to read as
follows:

        "(a) Elections. A Participant may elect to defer a portion of his
             Compensation for a Plan Year. The amount of a Participant's
             Compensation that is deferred in accordance with the Participant's
             election shall be withheld by the Employer from the Participant's
             Compensation on a ratable basis throughout the Plan Year. The
             amount deferred on behalf of each Participant shall be contributed
             by the Employer to the Plan and allocated to the Participant's
             Account."


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        3. Section 4.2(a) of the Plan, relating to matching contributions, is
hereby amended, effective January 1, 2001, to read as follows:

        "(a) For each Plan Year, the Employer may contribute to the Plan, on
             behalf of each Participant a discretionary matching contribution
             equal to a percentage (as determined by the Employer's board of
             directors) of the elective deferrals made by each such Participant
             each payroll period.

             Notwithstanding the foregoing, a Participant shall be entitled to
             receive a supplemental Employer matching contribution for the Plan
             Year to the extent necessary to ensure that the rate of Employer
             matching contributions made on behalf of such Participant for the
             Plan Year is the same as the rate of Employer matching
             contributions for any other Participant with the same rate of
             elective deferrals for the Plan Year.

             To be eligible for an allocation of a supplemental Employer
             matching contribution under this Section 4.2(a), a Participant must
             be employed by the Employer on the last day of the Plan Year;
             provided, however, that if the Participant's failure to be employed
             by the Employer on the last day of the Plan Year is due to the
             Participant's Disability, death or retirement on or after his
             Normal Retirement Date during such Plan Year, such Participant
             shall nevertheless be entitled to share in the allocation of any
             supplemental Employer matching contribution for such Plan Year as
             provided in this Section 4.2(a).

             The Employer's board of directors may also determine to suspend or
             reduce its contributions under this Section for any Plan Year or
             any portion thereof. Allocations under this Section shall be
             subject to the special rules of Section 13.3 in any Plan Year in
             which the Plan is a Top-Heavy Plan (as defined in Section
             13.2(c))."

        4. Section 8.1(a) of the Plan, relating to Plan loans, is hereby amended
to read as follows:

        "(a) Permissible Amount and Procedures. Upon the application of a
             Participant, the Administrator may, in accordance with a uniform
             and nondiscriminatory policy, direct the Trustee to grant a loan to
             the Participant, which loan shall be secured by the Participant's
             vested Account balance. The Participant's signature shall be
             required on a promissory note. In determining a rate of interest on
             such loans, the Administrator may refer to the rate of interest
             used for obligations of a comparable nature by commercial lending
             institutions within a radius of fifty (50) miles of the Employer's
             principal place of business. Participant loans shall be treated as
             segregated investments, and interest repayments shall be credited
             only to the Participant's Account."


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        5. The first sentence of Section 8.2, relating to hardship
distributions, is hereby amended to read as follows: 1.

        "8.2 HARDSHIP DISTRIBUTIONS. In the case of a financial hardship
             resulting from a proven immediate and heavy financial need, a
             Participant may receive a distribution not to exceed the lesser of
             (i) the vested value of the Participant's Account, without regard
             to earnings on his elective deferrals after December 31, 1988, and
             without regard to any "fail safe" contributions made under Section
             10.2, or (ii) the amount necessary to satisfy the financial
             hardship."

        6. Section 8.3 of the Plan, relating to withdrawals after age 59-1/2, is
hereby amended to read as follows:

        "8.3 WITHDRAWALS AFTER AGE 59 1/2. After attaining age fifty-nine and
             one-half (59 1/2), a Participant, by giving notice to the
             Administrator, may withdraw from the Plan a sum (a) not in excess
             of the credit balance of his vested Account and (b) not less than
             such minimum amount as the Administrator may establish from time to
             time to facilitate administration of the Plan. Any such withdrawals
             shall be made in accordance with nondiscriminatory and objective
             standards consistently applied by the Administrator."

        7. Section 8.4 of the Plan, relating to withdrawals of rollover
contributions, is hereby amended to read as follows:

        "8.4 WITHDRAWALS OF ROLLOVER CONTRIBUTIONS. A Participant, by giving
             written notice to the Administrator, may withdraw from the Plan a
             sum (a) not in excess of the credit balance of the Participant's
             Account attributable to his rollover contributions and (b) not less
             than such minimum amount as the Administrator may establish from
             time to time to facilitate administration of the plan. Any such
             withdrawals shall be made in accordance with nondiscriminatory and
             objective standards consistently applied by the Administrator."

        8. Except as expressly provided in this Amendment, the Plan shall remain
unchanged.

        IN WITNESS WHEREOF, the Employer, by its duly authorized officer, has
caused this Amendment to be executed on the ________ day of _____________, 2001.


                                                 HORSESHOE GAMING HOLDING CORP.

                                                 By:
                                                     ---------------------------
                                                 Title:
                                                        ------------------------


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