AGREEMENT

     AGREEMENT  (the  "Agreement")  made  as  of  April 10, 1998 (the "Effective
Date"),  by  and  between  John  T.  Orton ("Orton") and American Bingo & Gaming
Corp.,  a  Delaware  corporation  (the  "Company").  Orton  and  the Company are
collectively  referred  to  as  the  "Parties."

     1. Orton is employed by the Company as Chief Financial  Officer pursuant to
an Employment  Agreement  dated October 29, 1996 (the  "Employment  Agreement").
Orton  will  continue  to  perform  his duties  full-time  under the  Employment
Agreement  until the Company  completes  its annual  shareholder  meeting or the
Close of business on June 5, 1998, whichever is sooner.  Commencing Monday, June
8, 1998, Orton will perform his employment  duties on an as-needed basis, not to
exceed twenty hours per week  (including  all travel time).  To the extent Orton
works in excess of twenty  hours on behalf of the  Company  during any  calendar
week,  such excess  hours shall be credited to and offset  Orton's  maximum time
availability in subsequent  periods;  and any excess hours that have not been so
offset in any calendar month (i.e.,  those  exceeding 80 hours in the aggregate)
shall be compensated at $125 per hour.  Orton shall report all accumulated  time
credits  to the  Company  at the end of  each  calendar  month.  Notwithstanding
anything in the  Employment  Agreement to the  contrary,  Orton shall be free to
work for, consult with,  assist and/or receive  compensation from other sources,
so long as such  affiliations do not materially  interfere with the duties to be
rendered by Orton to the Company under this paragraph 1.

     2.  Orton's  employment  relationship  with the  Company,  and  (except  as
provided herein) his Employment Agreement,  shall terminate on December 31, 1998
(the "Termination Date").  Orton shall receive his full annualized  compensation
of One  Hundred  Thousand  Dollars  ($100,000)  through  December  31,  1998  in
customary  semi-monthly  payments,  subject to any  customary  and  required tax
withholdings  and  deductions,  and  shall  receive  all  benefits  and  bonuses
customarily provided by the Company and/or set forth in the Employment Agreement
to the extent such rights accrue during the period prior to the Termination Date
(even if  distributed  thereafter),  including but not limited to those benefits
and  bonuses  referred  to in  paragraphs  4, and 6 through 8 of the  Employment
Agreement.

     3. To the extent the following may be lawfully accomplished,  Orton may, at
his election, exercise the option to defer all or a portion of his income to the
1999 Calendar year.  This election may be  accomplished by the designation of an
escrow agent to receive and hold Orton's  compensation  from the Company.  Orton
will notify the Company in writing if he chooses to exercise this election.

     4. Subsequent to the Termination  Date, Orton shall not hold himself out as
being affiliated with, an agent for, or possessing authority to bind the Company
in any manner.

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     5. Prior to and after the Termination  Date, Orton shall be entitled to all
indemnity protections (statutory, contractual, and those arising under insurance
policies)  that apply to other former  officers of the Company,  and the Company
shall not hereafter reduce the level of such protection available to Orton.

     6. Orton currently holds, under the Company's Stock Plans, several tranches
of stock  options,  consisting  in the aggregate of 75,000 shares at an exercise
price of $5.00 per share, and 50,000 shares (25,000 of which are already vested)
at an  exercise  price of $2.00 per  share  (collectively,  including  any stock
options hereafter issued to Orton, the "Options").  All of Orton's Options shall
be fully  vested  as of the  Effective  Date,  notwithstanding  anything  to the
contrary in the Employment  Agreement or any other  agreement  applicable to the
Options.  To the extent Company consent is thereafter  required for transfers of
securities,  the Company  shall not  unreasonably  delay or withhold  consent to
Orton's requests,  provided they are consistent with applicable law, to sell the
Company's   securities;   and  the  Company  shall  provide  reasonable  letters
confirming Orton's right to sell (including,  after 1998, as a non-affiliate) in
accordance with Rule 144 restrictions or other applicable regulations.

     7. To the  extent  any  provision  of this  Agreement  conflicts  with  the
Employment Agreement or any other agreement between the Parties, such agreements
are deemed automatically  modified in accordance herewith.  Except to the extent
automatically   modified  herein  as  necessary  to  avoid  conflict  with  this
Agreement, all existing agreements regarding  noncompetition,  exclusivity,  and
confidentiality  existing between Orton and the Company shall continue in effect
in accordance with their terms.

     8. Orton understands that all health insurance benefits paid by the Company
for Orton or his  dependents  will cease as of the  Termination  Date.  However,
Orton may elect at his own expense,  to continue the health  insurance  coverage
formerly  provided by the Company to the extent  authorized  by Texas'  employee
health insurance  continuation laws, or if applicable,  the Consolidated Omnibus
Budget  Reconciliation  Act of 1985  (COBRA).  Orton may notify  the  Company in
writing of his  election to continue  the health  insurance  coverage on himself
and/or his dependents, as currently in effect, in which case he shall pay to the
Company (or the carrier, as the case may be) the premiums  attributable  thereto
in  advance  on the first day of each  month.  The  Company  will  assist in the
arrangements for the continuation of his health insurance.

     9. Orton shall have the option to purchase  from the Company or its lessor,
if  applicable  (with all  transferable  warranties),  his  company  car, a 1996
Chevrolet Tahoe (VIN number 16NEC13R3TJ354596) for 75 percent of the lowest 1998
year-end blue book price,  which option may be exercised  during the period from
December 31, 1998 through and including January 31, 1999.

     10. Upon the  Termination  Date,  Orton  shall  promptly  surrender  to the
Company all materials  (including,  without limitation,  keys, access cards, and
files)  belonging  to  the  Company,  whether  or  not  deemed  confidential  or
proprietary.

     11.  This  Agreement  may not be  modified  except in a written  instrument
hereafter signed by the Parties to be bound by such modification. This Agreement
shall bind and inure to the benefit of the Parties,  their successors,  assigns,
heirs and legal representatives.

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     12. The prevailing Party in any proceeding relating to this Agreement shall
be entitled  to recover  reasonable  attorneys  fees.  Either  Party may request
mediation of any dispute,  in which event the Parties,  through their attorneys,
shall  promptly  select a mediator  and convene a mediation  within  thirty (30)
days, subject to the mediator's schedule.

     13. The provisions of this Agreement are deemed  severable;  if a provision
herein is unenforceable the remainder of the Agreement shall remain  enforceable
provided  that the  deletion of the  invalid  provision  does not  substantially
defeat the objects and benefits to be derived under this Agreement.

     14. Each Party shall take such  actions as may be  reasonably  necessary to
effectuate this Agreement.

     15.  This  Agreement  binds and inures to the  benefit  of the  successors,
assigns, and legal representatives of the Parties,  provided that the obligation
of Orton to furnish personal services may not be assigned.

     16. THIS  AGREEMENT  SHALL BE DEEMED  PERFORMABLE  BY ALL PARTIES IN TRAVIS
COUNTY,  TEXAS,  AND THE CONSTRUCTION AND ENFORCEMENT OF THIS AGREEMENT SHALL BE
GOVERNED BY TEXAS LAW.

     17. The undersigned  representative  of the Company  represents that he has
been  authorized by the Company's  Board of Directors to sign this  Agreement on
behalf of the Company.

Executed  as  of  the  Effective  Date.

                                   AMERICAN  BINGO  &  GAMING,  INC.



                                   By:  /s/  Greg  Wilson
                                        -----------------
                                        Its  Authorized  Representative


                                        /s/  John  T.  Orton
                                        --------------------
                                        John  T.  Orton

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