<PAGE>   1



EXHIBIT 10.16
                                                                         7900-02

                 LEASE SCHEDULE NO. 1 TO MASTER LEASE AGREEMENT


     This Lease Schedule No. 1 is attached to and made a part of the Master
Lease Agreement ("Lease") between PDS FINANCIAL CORPORATION, a Minnesota
corporation ("Lessor"), and THE MAJESTIC STAR CASINO, LLC, an Indiana limited
liability company ("Lessee"), dated September 15, 1997.

     1.       Description of Equipment: The Equipment listed on Attachment
              "A" to this Lease Schedule is added to the Equipment leased
              under the Lease and made subject to the provisions of the
              Lease.

     2.       Commencement Date: The Commencement Date for the Equipment
              leased under this Schedule will be September 15, 1997.

     3.       Term: The Term shall commence on the Commencement Date and
              shall continue for 48 consecutive months.

     4.       The Basic Rent due each month during the Term for the
              Equipment described herein is as follows:

              a.       The first payment under this Lease Schedule in an
                       amount equal to $60,951.66 shall be due and payable
                       on September 15, 1997.

              b.       Payment of the Basic Rent in the amount of $60,951.66
                       shall be due on October 15, 1997 and on the 15th day
                       of each month thereafter through and including August
                       15, 2001.

              c.       In addition to the monthly Basic Rent due as set
                       forth above, in accordance with Section 10.1 of the
                       Lease, Lessee shall pay Lessor an amount equal to all
                       applicable taxes, net of any tax credits, which may
                       be imposed by any Federal, State or local authority
                       from time to time.

     5.       All of the provisions of the Lease are incorporated by
              reference herein as if set forth fully herein.

Dated:  September 15, 1997

LESSEE:                                        LESSOR:

THE MAJESTIC STAR CASINO, LLC,                 PDS FINANCIAL CORPORATION,
an Indiana limited liability company           a Minnesota corporation


By:   _____________________________            By:  ___________________________

Its:  _____________________________            Its: ___________________________



<PAGE>   2

                                                                        7900-04

                 LEASE SCHEDULE NO. 2 TO MASTER LEASE AGREEMENT


     This Lease Schedule No. 2 is attached to and made a part of the Master
Lease Agreement ("Lease") between PDS FINANCIAL CORPORATION, a Minnesota
corporation ("Lessor"), and THE MAJESTIC STAR CASINO, LLC, an Indiana limited
liability company ("Lessee"), dated September 15, 1997.

     l.       Description of Equipment: The Equipment listed on Attachment
              "A" to this Lease Schedule is added to the Equipment leased
              under the Lease and made subject to the provisions of the
              Lease.

     2.       Commencement Date: The Commencement Date for the Equipment
              leased under this Schedule will be September 15, 1997.

     3.       Term: The Term shall commence on the Commencement Date and
              shall continue for 48 consecutive months.

     4.       The Basic Rent due each month during the Term for the
              Equipment described herein is as follows:

              a.       The first payment under this Lease Schedule in an
                       amount equal to $48,062.38 shall be due and payable
                       on September 15, 1997.

              b.       Payment of the Basic Rent in the amount of $48,062.38
                       shall be due on October 15, 1997 and on the 15th day
                       of each month thereafter through and including August
                       15, 2001.

              c.       In addition to the monthly Basic Rent due as set
                       forth above, in accordance with Section 10.1 of the
                       Lease, Lessee shall pay Lessor an amount equal to all
                       applicable taxes, net of any tax credits, which may
                       be imposed by any Federal, State or local authority
                       from time to time.

     5.       All of the provisions of the Lease are incorporated by
              reference herein as if set forth fully herein.

Dated:  September 15, 1997

LESSEE:                                        LESSOR:

THE MAJESTIC STAR CASINO, LLC,                 PDS FINANCIAL CORPORATION,
an Indiana limited liability company           a Minnesota corporation


By:   _____________________________            By:  ___________________________

Its:  _____________________________            Its: ___________________________





<PAGE>   3

                                                                         7900-05

                 LEASE SCHEDULE NO. 3 TO MASTER LEASE AGREEMENT


     This Lease Schedule No. 3 is attached to and made a part of the Master
Lease Agreement ("Lease") between PDS FINANCIAL CORPORATION, a Minnesota
corporation ("Lessor"), and THE MAJESTIC STAR CASINO, LLC, an Indiana limited
liability company ("Lessee"), dated September 15, 1997.

     1.       Description of Equipment: The Equipment listed on Attachment
              "A" to this Lease Schedule is added to the Equipment leased
              under the Lease and made subject to the provisions of the
              Lease.

     2.       Commencement Date: The Commencement Date for the Equipment
              leased under this Schedule will be September 15, 1997.

     3.       Term: The Term shall commence on the Commencement Date and
              shall continue for 48 consecutive months.

     4.       The Basic Rent due each month during tile Term for the
              Equipment described herein is as follows:

              a.       The first payment under this Lease Schedule in an
                       amount equal to $21,387.43 shall be due and payable
                       on September 15, 1997.

              b.       Payment of the Basic Rent in the amount of $21,387.43
                       shall be due on October 15, 1997 and on the 15th day
                       of each month thereafter through and including August
                       15, 2001.

              c.       In addition to the monthly Basic Rent due as set
                       forth above, in accordance with Section 10.1 of the
                       Lease, Lessee shall pay Lessor an amount equal to all
                       applicable taxes, net of any tax credits, which may
                       be imposed by any Federal, State or local authority
                       from time to time.

     5.       All of the provisions of the Lease are incorporated by
              reference herein as if set forth fully herein.

Dated:  September 15, 1997

LESSEE:                                        LESSOR:

THE MAJESTIC STAR CASINO, LLC,                 PDS FINANCIAL CORPORATION,
an Indiana limited liability company           a Minnesota corporation


By:   _____________________________            By:  ___________________________

Its:  _____________________________            Its: ___________________________



<PAGE>   4



                           AMENDMENT TO SALES ORDERS

DATE:    September 15, 1997

PARTIES: Seller:                            Buyer:
         IGT                                The Majestic Star Casino, LLC d/b/a
         9295 Prototype Drive               Majestic Star Casino
         Reno, Nevada 89511                 One N. Buffington Harbor
                                            Gary, Indiana 46406
         Assignee:
         PDS Financial Corporation
         Suite 300
         6442 City West Parkway
         Minneapolis, NW 55344

         WHEREAS, The Majestic Star Casino, LLC d/b/a Majestic Star Casino, an
Indiana limited liability company ("Majestic") and IGT, a Nevada corporation
("IGT"), entered into that certain agreement to purchase equipment dated April
5, 1996 referencing Sales Order No. 111513 (the "Sales Order No. 1") as modified
by that certain Modification Of Agreement dated September 12, 1996 (the
"Modification No. 1") and that agreement to purchase equipment dated May 5, 1996
referencing Sales Order No. 112272 (the "Sales Order No. 2") as modified by that
certain Modification Of Agreement Dated September 12, 1996 (the "Modification
No. 2") and that certain agreement to purchase equipment dated April 15, 1996
referencing Sales Order No. 112276 (the "Sales Order No. 3") as modified by that
certain Modification Of Agreement dated September 12, 1996 (the "Modification
No. 3") (Sales Order No. 1, Modification No. 1, Sales Order No. 2, Modification
No. 2, Sales Order No. 3, and Modification No. 3 are occasionally hereinafter
collectively the "Sales Agreements") for the sale by IGT and the purchase by
Majestic of certain equipment described in the Sales Agreements (the
"Equipment"). The Sales Agreements provide terms and conditions for payment of
the purchase prices for the Equipment as well as other terms and conditions
relating thereto.

         WHEREAS, IGT has assigned to PDS Financial Corporation, a Minnesota
corporation ("PDS") all of IGT's right, title and interest in and to the
payments due and to become due under the Sales Agreements and a first priority
perfected purchase money security interest in and to the Equipment but none of
IGT's obligations under the Sales Agreements;

         WHEREAS, the parties hereto desire to amend the payment terms under the
Sales Agreements so that the payments due under the Sales Agreements shall be
due and payable as more particularly provided herein; and

         WHEREAS Majestic acknowledges and agrees, for valuable consideration,
(a) that this Amendment To Sales Orders ("Amendment") is in substitution and
replacement of the payment terms of the Sales Agreements; (b) that all
capitalized terms in this Amendment, if not defined herein, shall have the
meaning ascribed respectively to such terms in the Sales Agreements; (c) that
all of the provisions of the Sales Agreements are incorporated herein by
reference; and (d) to


<PAGE>   5



assume and to pay the payments as evidenced in this Amendment as herein
modified, and to comply with all other terms of the Sales Agreements as hereby
modified, as if such terms were repeated herein, as well as the terms and
provisions of any other documents executed by Majestic in connection herewith
(the Sales Agreements, this Agreement, and any and all documents and instruments
executed in connection therewith and herewith are hereinafter collectively
referred to as the "Collateral Documents").

         NOW THEREFORE, for value received, the parties hereto agree as follows:

         1. The aforesaid Whereas clauses are incorporated herein as though more
fully stated in their entirety.

         2. The terms of payment under the Sales Agreements are amended and
consolidated as follows:

                  The total amount of indebtedness due under the Sales
                  Agreements (the "Indebtedness") is THREE MILLION EIGHT HUNDRED
                  FIVE THOUSAND SEVENTY AND 78/100 DOLLARS ($3,805,070.78)
                  together with interest on the unpaid principal balance from
                  and after the date of this Amendment at the annual rate of
                  interest of eleven and one-half percent (11.5%) per annum
                  payable in forty-two (42) payments as follows:

                  (1)      On October 15, 1997, there shall be paid an
                           installment of ONE HUNDRED TEN THOUSAND FOUR HUNDRED
                           SEVENTY-SEVEN AND 01/100 DOLLARS
                           ($110,477.01) and on the 15th day of each month
                           thereafter up to and including February 15, 2001,
                           there shall be paid an installment payment of ONE
                           HUNDRED TEN THOUSAND FOUR HUNDRED SEVENTY-SEVEN AND
                           01/100 DOLLARS ($110,477.01).

                  (2)      On March 15, 2001 there shall be paid an installment
                           payment of ONE HUNDRED TEN THOUSAND FOUR HUNDRED
                           SEVENTY-SEVEN AND 01/100 DOLLARS ($110,477.01),
                           together with any unpaid principal balance plus
                           accrued interest thereon.

                  (3)      The installment payments required to be made monthly
                           shall be processed through Automated Monthly
                           Withdrawals (ACH) implemented and maintained by PDS
                           or PDS's assignee.

                  (4)      Majestic may prepay the balance of the Indebtedness,
                           in whole but not in part, upon thirty (30) days
                           advance written


<PAGE>   6



                           notice, so long as Majestic pays a prepayment premium
                           equal to 2.25% of the outstanding balance as of such
                           prepayment.

         3. Other Terms. In addition to the terms and conditions of the Sales
Agreements, the above amended payment terms are subject to the following terms
and conditions:

                  (1)      The Collateral Documents are in full force and effect
                           and there are no defaults, or events which with the
                           giving of notice and the passage of time would
                           constitute events of default, under the Collateral
                           Documents.

                  (2)      In the event of any claim concerning the location,
                           installation or repair, warranties, or use of the
                           property or any other claim concerning the Equipment,
                           regardless of cause or consequence, Buyer's sole
                           remedy, if any, shall be against the manufacturer of
                           the Equipment.

                  (3)      PDS shall not be liable for any direct, indirect,
                           incidental, or consequential damages, including but
                           not limited to loss of use, revenue, or prospective
                           profits, resulting from operation, use, misuse or
                           malfunction of the Equipment.
                           PDS DISCLAIMS ALL WARRANTIES, BOTH EXPRESS AND
                           IMPLIED, INCLUDING BUT NOT LIMITED TO, IMPLIED
                           WARRANTIES OR MERCHANTABILITY, FITNESS FOR A
                           PARTICULAR PURPOSE, DESIGN, CAPACITY, AND
                           PERFORMANCE, WITH RESPECT TO THE EQUIPMENT, AND ANY
                           ACCOMPANYING ORAL OR WRITTEN MATERIALS OR
                           INSTRUCTIONS.

                  (4)      If any provision of this Amendment is held invalid or
                           unenforceable, it shall be considered deleted from
                           this Amendment, and such invalidity shall not affect
                           the other provisions which shall be given effect in
                           the absence of the invalid provisions, and to this
                           end, the provisions of this Amendment are declared to
                           be severable.

                  (5)      Time is of the essence in this Amendment and this
                           Amendment constitutes the entire agreement between
                           the parties and may not be amended except in writing
                           signed by all parties hereto. There are no other
                           written or oral agreements, representations, or
                           understandings of any kind. If there is any apparent
                           inconsistency, ambiguity, or conflict between the
                           terms of this Amendment and the


<PAGE>   7



                           Sales Agreements, this Amendment shall take
                           precedence.

                  (6)      Each person executing this Amendment warrants to all
                           parties hereto that this Amendment contains all
                           signatures and formalities necessary to bind the
                           parties hereto and that each person executing this
                           Amendment is authorized and has received full
                           authority, approval, and direction to execute and
                           deliver this Amendment on behalf of the party for
                           which he signs.

                  (7)      Notwithstanding any other provision in this
                           Amendment, this Amendment and all of the terms,
                           conditions, and obligations of this Amendment are
                           contingent upon the review and approval of this
                           Amendment by the Indiana Gaming Commission and any
                           other necessary governmental authority, as well as
                           their approval of the Equipment; the sale and
                           shipment of the Equipment by IGT; and for the Buyer
                           to possess and use the Equipment. The parties
                           acknowledge and agree that this Amendment is solely
                           for commercial or business purposes.


         IN WITNESS WHEREOF, the parties hereto have caused this instrument to
be duly executed as of the date first above written.

<TABLE>
<S>                                                   <C>
THE MAJESTIC STAR CASINO, LLC,                        PDS FINANCIAL CORPORATION,
D/B/A MAJESTIC STAR CASINO,                           a Minnesota corporation
an Indiana limited liability company

By:   ________________________________________        By:  ________________________________________


Name: ________________________________________        Name:________________________________________


Its:  ________________________________________        Its: ________________________________________


Date: ________________________________________        Date:________________________________________
</TABLE>







<PAGE>   8


IGT, a Nevada corporation


By:   ________________________________________


Name: ________________________________________


Its:  ________________________________________


Date: ________________________________________