EMPLOYMENT AGREEMENT
                              --------------------

     THIS  EMPLOYMENT  AGREEMENT  (this "Agreement") is executed as of this 19th
                                                                            ----
day of June, 1998 (the "Effective Date"), by and between AMERICAN BINGO & GAMING
CORP.,  a  Delaware  corporation  (the  "Company"),  and  RICHARD M. KELLEY (the
"Executive").

     WHEREAS,  the  parties wish to enter into an employment agreement to employ
the Executive as its Vice President and Chief Financial Officer and to set forth
certain  additional  agreements  between  the  Executive  and  the  Company;

     NOW,  THEREFORE,  in  consideration  of  the  mutual  covenants  and
representations  contained  herein,  the  parties  hereto  agree  as  follows:

     1.     TERM
            ----

     The  Company  will  employ  the Executive, and the Executive will serve the
Company,  under  the  terms  of this Agreement, for an initial term of two years
commencing  on  June  29,  1998  (the  "Employment  Date").  The  terms  of this
Agreement  may  be  extended  for  one  or  more additional twelve-month periods
provided  the Company and the Executive agree in writing to such an extension no
later  than  thirty  days prior to the expiration of the term of this Agreement.
Notwithstanding  the  foregoing,  the  Executive's  employment  hereunder may be
earlier terminated as provided in Section 4 hereof.  The term of this Agreement,
as  in  effect  from  time  to  time  in accordance with the foregoing, shall be
referred  to  herein  as  the "Term."  The period of time between the Employment
Date  and  the  termination  of  the  Executive's  employment hereunder shall be
referred  to  herein  as  the  "Employment  Period."

     2.     EMPLOYMENT
            ----------

          (a) POSITIONS AND REPORTING.  The Company hereby employs the Executive
for the Employment  Period as its Vice President and Chief Financial  Officer on
the terms and conditions set forth in this Agreement.

          (b) AUTHORITY AND DUTIES. The Executive shall exercise such authority,
perform such executive duties and functions and discharge such  responsibilities
as the President of the Company may from time to time determine, consistent with
the Executive's  position and the By-Laws of the Company.  Without  limiting the
generality  of  the  foregoing,  the  Executive  shall  report  directly  and be
responsible to the President of the Company.  During the Employment  Period, the
Executive shall devote his full business time, skill and efforts to the business
of the Company.  Notwithstanding  the foregoing,  the Executive may (i) make and
manage  passive  personal  business  investments  of his  choice (in the case of
publicly held  corporations,  not to exceed 2% of the outstanding  voting stock)
and  serve  in  any  capacity   with  any  civic,   educational   or  charitable
organization,  or any trade  association,  without seeking or obtaining approval
from the President of the Company,  provided such  activities and service do not
materially  interfere or conflict with the performance of his duties  hereunder,
and (ii) with the approval of the President, serve on the boards of directors of
other corporations.

          (c) PRIOR  EMPLOYMENT.  The Executive  represents and warrants that he
has no individual  employment  agreement or  non-competition  agreement with his
current or any prior employer or any other agreement, contract, judgment, decree
or limitation which would prohibit,  limit or otherwise  restrict the employment
of the Executive by the Company pursuant to the terms of this Agreement.

     3.     COMPENSATION  AND  BENEFITS
            ---------------------------

          (a) SALARY. During the Employment Period, the Company shall pay to the
Executive,  as  compensation  for the  performance of his duties and obligations
under this  Agreement,  a base salary at the rate of One Hundred Forty  Thousand
($140,000)  Dollars  per  annum,  payable in arrears  not less  frequently  than
monthly in accordance  with the normal  payroll  practices of the Company.  Such
base salary  shall be subject to review each year for a possible  increase,  but
shall  in no  event  be  decreased  from  its  then-existing  level  during  the
Employment Period. The Executive may also be requested to serve as a director or
officer of various  subsidiaries  and  affiliates  of the  Company and he hereby
agrees to fulfill his duties as such an officer and a director of such  entities
without additional compensation.

          (b) ANNUAL BONUS.  During the Employment  Period,  the Executive shall
have  the  opportunity  to earn an  annual  discretionary  bonus  of up to Fifty
Thousand ($50,000) Dollars per annum. The Executive and the Company  acknowledge
that an  incentive  program  which will serve as the basis for  determining  the
Executive's  annual  bonus  has not yet been  established  and  hereby  agree to
establish such program as soon as possible  following the  Employment  Date. The
Executive  acknowledges that this annual discretionary bonus shall be terminated
upon the  establishment  and  adoption  of an annual  incentive  program  by the
Company which may be similar or greater in value.  Until such incentive  program
is established,  the Executive's  bonus  opportunity  shall be discretionary and
shall be  comparable  to or  greater  than  awards  granted  to other  executive
officers of the Company.

          (c) EQUITY  PARTICIPATION.  The Executive shall be entitled to receive
awards  under any stock option or equity based  incentive  compensation  plan or
arrangement adopted by the Company for which senior executives are eligible. The
level of the Executive's  future  participation  in any such plan or arrangement
shall be  determined  by the Board of Directors and shall be comparable to other
executive officers of the Company.

          (d) OTHER BENEFITS.  During the Employment Period, the Executive shall
be entitled to participate in the Company's group health insurance plan,  dental
plan, group life insurance plan,  long-term  disability insurance plan, employee
stock purchase plan,  profit sharing plan,  SARSEP and all of the other employee
benefit  plans,  programs and  arrangements  of the Company in effect during the
Employment  Period which are  generally  available to senior  executives  of the
Company,  subject to and on a basis  consistent  with the terms,  conditions and
overall  administration of such plans,  programs and arrangements.  In addition,
during the Employment Period, the Executive shall be entitled to fringe benefits
and perquisites  comparable to those of other senior  executives of the Company,
including,  but not  limited  to,  three  weeks  of paid  vacation  per year and
reasonable professional membership license fees and expenses.

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<PAGE>

          (e) MOVING EXPENSES.  The Company shall pay or reimburse the Executive
for the direct and reasonable  expenses  incurred in connection  with relocating
the Executive and his immediate  family to Columbia,  South Carolina;  provided,
however, such moving expenses shall not exceed $20,000. In addition,  during the
transition  period,  the  Company  shall pay up to six months of full  furnished
housing expenses for the Executive and shall pay for the Executive's  reasonable
temporary  ground  transportation  expenses  or,  at  the  determination  of the
Company's President, shall pay for the Executive's vehicles to be transported to
South  Carolina.  It is the intent of this Section 3(e) that the Executive shall
not incur any  out-of-pocket  expenses  related to his  relocation  to Columbia,
South Carolina.

          (f) BUSINESS EXPENSES. During the Employment Period, the Company shall
pay directly or reimburse the Executive for all documented  reasonable  business
expenses  incurred by the Executive in the  performance of his duties under this
Agreement, in accordance with the Company's policies.

          (g) VEHICLE  ALLOWANCE.  The  Company  shall  provide the  Executive a
vehicle allowance in the amount of Three Hundred ($300) Dollars per month.

          (h) INDEMNIFICATION.  During the Employment Period and thereafter, the
Company  shall  indemnify  the  Executive  to the fullest  extent  permitted  by
applicable  law,  and the  Executive  shall be  entitled  to the  protection  of
insurance  policies the Company may elect to maintain  generally for the benefit
of its  officers,  with respect to all costs,  charges and  expenses  whatsoever
incurred or sustained by the  Executive in connection  with any action,  suit or
proceeding  to which he may be made a party by reason of being or having been an
officer or employee of the Company or having  served any other  enterprise  as a
director,  officer or employee at the request of the Company.  The Company shall
maintain director and officer insurance at reasonable and customary levels.

     4.     TERMINATION  OF  EMPLOYMENT
            ---------------------------

          (a) TERMINATION FOR CAUSE.  The Company may immediately  terminate the
Executive's  employment  hereunder  for  "cause"  upon  written  notice  to  the
Executive.  For purposes of this  Agreement,  the Company  shall have "cause" to
terminate the Executive's  employment hereunder if such termination shall be the
result of:

               (i) willful,  material fraud or material dishonesty in connection
          with the Executive's performance hereunder that results in harm to the
          Company;

               (ii) the failure by the  Executive to  substantially  perform his
          material duties  hereunder in good faith that results in material harm
          to the Company,  if the Executive has been provided an  opportunity to
          cure as provided in Section 4(c) of this Agreement;

               (iii) the Executive's  material breach of this Agreement,  if the
          Executive  has been  provided  an  opportunity  to cure as provided in
          Section 4(c) of this Agreement;

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<PAGE>

               (iv) the failure by the  Executive to  diligently  pursue in good
          faith and  obtain  any  operating  or other  licenses  required  to be
          obtained by the Executive individually for the execution of his duties
          and responsibilities on behalf of the Company; provided,  however, the
          Executive  shall be entitled to the  severance  pay and  benefits  set
          forth under Section 5(a) hereof if the Executive's inability to obtain
          any  operating or other  license is due to some factor  outside of the
          Executive's control;

               (v) the appropriation of a material  business  opportunity of the
          Company,  including  attempting  to secure or  securing  any  personal
          profit in connection  with any  transaction  entered into on behalf of
          the Company;

               (vi) the material  misappropriation of any of the Company's funds
          or property; or

               (vii) the conviction of, or the entering of a guilty plea or plea
          of no contest with respect to, a felony or the equivalent thereof.

          (b) TERMINATION FOR GOOD REASON. The Executive shall have the right to
terminate  his  employment  with the Company at any time for "good  reason" upon
thirty days prior written notice to the Company.  For purposes of this Agreement
and subject to the  Company's  opportunity  to cure as provided in Section  4(c)
hereof,  the  Executive  shall have "good  reason" to terminate  his  employment
hereunder if such termination shall be the result of:

               (i) a significant  diminution during the Employment Period in the
          Executive's  duties  or  responsibilities  as set  forth in  Section 2
          hereof;

               (ii) a significant  breach by the Company of the compensation and
          benefits provisions set forth in Section 3 hereof;

               (iii) a notice of termination by the Executive under Section 4(i)
          hereof within twelve  months  following the  occurrence of a Change in
          Control (as defined in Section 4(h) hereof);

               (iv) a  significant  breach by the  Company  of any other term of
          this Agreement; or

               (v) the failure of the Company  and the  Executive  to agree to a
          written  extension of this Agreement at least thirty days prior to the
          expiration  of the  Term of this  Agreement;  provided,  however,  the
          Executive's  notice  of  termination  under  this  provision  must  be
          received by the Company  prior to the  expiration  of the Term of this
          Agreement.

          (c)  NOTICE  OF  OPPORTUNITY  TO CURE.  As noted in  Section  4(a) and
Section  4(b), in certain  situations  it shall be a condition  precedent to the
Company's  right to terminate  the  Executive's  employment  for "cause" and the
Executive's  right to terminate  his  employment  for "good reason" that (1) the
party  seeking the  termination  shall first have given the other party  written
notice stating with  specificity the reason for the  termination  ("breach") and
(2) if such breach is  susceptible  of cure or remedy,  a period of 30 days from
and after the giving of such notice  shall have  elapsed  without the  breaching
party  having  effectively  cured or  remedied  such  breach  during such 30-day
period,  unless such breach cannot be cured or remedied within 30 days, in which
case the period for remedy or cure shall be extended for a reasonable  time (not
to exceed an  additional  30 days),  provided the  breaching  party has made and
continues to make a diligent effort to effect such remedy or cure.

                                       4
<PAGE>

          (d) TERMINATION UPON DEATH. Except as provided in this Agreement,  the
Employment  Period and all benefits and other rights of the Executive under this
Agreement  shall be terminated by the death of the  Executive.  The  Executive's
estate  shall be  entitled  to  receive  all  compensation,  reimbursements  and
benefits,  including but not limited to life insurance  benefits,  payable to or
accruable for the benefit of the Executive under this Agreement.

          (e)  TERMINATION  UPON  DISABILITY.   The  Employment  Period  may  be
terminated  by the  Company if the  Executive  shall be  rendered  incapable  of
performing  his  duties to the  Company  by reason of any  medically  determined
physical or mental impairment for a period of at least three consecutive  months
(a  "Disability").  In the  event  that the  Company  elects  to  terminate  the
Employment  Period due to the Disability of the Executive,  the Executive  shall
receive  all  compensation,  reimbursements  and other  benefits  payable to, or
accruable for the benefit of, the  Executive  under this  Agreement  through the
date of the  determination  of the  Disability  and to the date  upon  which the
Executive first becomes eligible to receive disability  benefits pursuant to the
Company's long-term disability insurance policy as may then be in effect.

          (f)  TERMINATION   WITHOUT  CAUSE.   The  Company  may  terminate  the
Executive's  employment  hereunder  without "cause" at any time upon thirty days
prior written notice to the Executive;  provided,  however, that in the event of
such  termination  the  Executive  shall be  entitled to the  severance  pay and
benefits set forth under Section 5(a) hereof.

          (g) TERMINATION  WITHOUT GOOD REASON.  The Executive may terminate his
employment  with the Company at any time without  "good reason" upon thirty days
prior  written  notice  to  the  Company;  provided,  however,  the  Executive's
effective date of  termination  shall be no later than sixty days after the date
of notice to the Company unless otherwise agreed by the Company. In the event of
such a voluntary  termination by the Executive,  the Executive  shall receive no
further  payments  or  benefits  due  under  this  Agreement  from and after the
effective date of termination.  A voluntary  termination under this Section 4(g)
shall not be deemed a breach of this Agreement.

          (h)  DEFINITION OF CHANGE IN CONTROL.  A "Change in Control"  shall be
deemed to have taken place if:

               (i) there shall be consummated any consolidation or merger of the
          Company  in which  the  Company  is not the  continuing  or  surviving
          corporation or pursuant to which shares of the Company's capital stock
          are converted into cash,  securities or other  property,  other than a
          consolidation  or merger of the  Company  in which the  holders of the
          Company's  voting  stock  immediately  prior to the  consolidation  or
          merger shall, upon consummation of the consolidation or merger, own at
          least 50% of the voting  stock of the  surviving  corporation,  or any
          sale,  lease,  exchange or other  transfer  (in one  transaction  or a
          series of  transactions  contemplated  or  arranged  by any party as a
          single plan) of all or substantially all of the assets of the Company;
          or

                                       5
<PAGE>

               (ii) any  person  (as such  term is used in  Sections  13(d)  and
          14(d)(2)  of the  Securities  Exchange  Act of 1934,  as amended  (the
          "Exchange  Act")),  shall after the date hereof become the  beneficial
          owner (as defined in Rules 13d-3 and 13d-5  under the  Exchange  Act),
          directly or indirectly,  of securities of the Company representing 35%
          or more of the voting power of all then outstanding  securities of the
          Company  having the right under ordinary  circumstances  to vote in an
          election of the Board (including,  without limitation,  any securities
          of the Company that any such person has the right to acquire  pursuant
          to any agreement,  or upon exercise of conversion rights,  warrants or
          options,  or otherwise,  which shall be deemed  beneficially  owned by
          such person); or

               (iii)  individuals  who at the date hereof  constitute the entire
          Board and any new  directors  whose  election  by the Board,  or whose
          nomination for election by the Company's stockholders, shall have been
          approved  by a vote of at least a majority  of the  directors  then in
          office who either were  directors at the date hereto or whose election
          or  nomination   for  election   shall  have  been  so  approved  (the
          "Continuing  Directors")  shall cease for any reason to  constitute  a
          majority of the members of the Board.

          (i)  NOTICE  OF  TERMINATION.   Any  termination  of  the  Executive's
employment   hereunder  by  either  the  Company  or  the  Executive   shall  be
communicated  to the other  party by a "Notice  of  Termination"  to be given in
accordance with Section 10 hereof. For purposes of this Agreement,  a "Notice of
Termination" means a written notice which (i) indicates the specific termination
provision in this Agreement  relied upon, (ii) briefly  summarizes the facts and
circumstances  deemed to provide a basis for the  termination of the Executive's
employment and the applicable  provision hereof, and (iii) if the effective date
of termination  is other than the date of receipt of such notice,  specifies the
effective date of termination.

     5.     CONSEQUENCES  OF  TERMINATION
            -----------------------------

          (a)  TERMINATION  WITHOUT  CAUSE OR FOR GOOD  REASON.  In the event of
termination  of the  Executive's  employment  hereunder  by the Company  without
"cause"  pursuant to Section  4(f)  hereof,  by the Company  pursuant to Section
4(a)(iv) due to some factor outside of the Executive's  control which caused the
Executive  to be unable to obtain  any  operating  or other  license,  or by the
Executive for "good reason" pursuant to Section 4(b) hereof, the Executive shall
be entitled to the following severance pay and benefits:

               (i) SEVERANCE  PAY - severance  payment in the form of a lump sum
          single payment  comprised of the Executive's  base salary as in effect
          immediately  prior to such  termination for the greater of nine months
          or the remaining Term of this Agreement (the "Severance Period"),  and
          any  accrued,   earned  or  unpaid  benefits  applicable  through  the
          Severance Period,  with all benefits,  including bonuses, to be earned
          through the Severance Period; and

                                       6
<PAGE>

               (ii)  BENEFITS  CONTINUATION  -  continuation  for the  Severance
          Period of coverage under the group health, dental, disability and life
          insurance  benefit  plans or  arrangements  in which the  Executive is
          participating at the time of termination;  provided, however, that the
                                                     --------  ------- 
          Company's  obligation to provide such coverages shall be terminated if
          the  Executive is able to obtain  substitute  effective  coverage from
          another  employer  at  any  time  during  the  Severance  Period.  The
          Executive  shall  be  entitled,  at the  expiration  of the  Severance
          Period, to elect continued medical coverage in accordance with section
          4980B  of the  Internal  Revenue  Code of  1986,  as  amended  (or any
          successor provision thereto).

          (b) OTHER TERMINATIONS. In the event of termination of the Executive's
employment  under  Sections 4(a) (other than Section  4(a)(iv) as noted),  4(d),
4(e) or 4(g) for any reason  other than those  specified in Section 5(a) hereof,
the  Executive   shall  not  be  entitled  to  any  severance  pay  or  benefits
continuation contemplated by the foregoing,  except as may otherwise be provided
under  the  applicable  benefit  plans  or  award  agreements  relating  to  the
Executive.

          (c)  ACCRUED  RIGHTS.  Notwithstanding  any  other  provision  of this
Agreement,  in the event of termination of the Executive's  employment hereunder
for any reason, the Executive shall be entitled to payment of any unpaid portion
of his base salary through the effective date of termination, and payment of any
accrued but unpaid rights  solely in accordance  with the terms of any incentive
bonus, stock option or employee benefit plan or program of the Company.

     6.     CONFIDENTIALITY
            ---------------

     The  Executive  agrees  that  he will not at any time during the Employment
Period or at any time thereafter for any reason, in any fashion, form or manner,
either  directly  or indirectly, divulge, disclose or communicate to any person,
firm,  corporation  or  other  business  entity,  in  any manner whatsoever, any
confidential  information  or  trade  secrets  concerning  the  business  of the
Company,  including,  without  limiting  the  generality  of  the foregoing, the
techniques,  methods  or systems of its operation or management, any information
regarding  its  financial  matters, or any other material information concerning
the  business  of  the  Company,  its  manner  of  operation, its plans or other
material  data.  The  provisions  of  this  Section  6  shall  not  apply to (i)
information that is public knowledge other than as a result of disclosure by the
Executive  in  breach  of  this  Section 6; (ii) information disseminated by the
Company  to  third parties in the ordinary course of business; (iii) information
lawfully received by the Executive from a third party who, based upon inquiry by
the  Executive,  is  not bound by a confidential relationship to the Company; or
(iv)  information  disclosed  under  a  requirement  of  law  or  as directed by
applicable  legal  authority  having  jurisdiction  over  the  Executive.

     The  Executive  further  agrees  that he will not remove from the Company's
premises  (except  to the extent such removal is for purposes of the performance
of  the  Executive's  duties  at home or while traveling, or except as otherwise
specifically  authorized by the Company) Company property which includes, but is
not  limited to, any document, record, notebook, plan, model, component, device,
or  computer  software  or code, whether embodied in a disk or in any other form
(collectively,  the  "Proprietary  Items").  The  Executive  recognizes that, as
between  the Company and the Executive, all of the Proprietary Items, whether or
not developed by the Executive, are the exclusive property of the Company.  Upon
termination  of  this  Agreement  by  either  party,  or upon the request of the
Company  during  the Employment Period, the Executive will return to the Company
all  of  the  Proprietary  Items in the Executive's possession or subject to the
Executive's  control,  and the Executive shall not retain any copies, abstracts,
sketches,  or  other  physical  embodiments  of  any  of  the Proprietary Items.

                                       7
<PAGE>

     7.     INVENTIONS
            ----------

     The  Executive  is  hereby retained in a capacity such that the Executive's
responsibilities  may  include  the  making  of  technical  and  managerial
contributions  of  value  to  the  Company.  The Executive hereby assigns to the
Company  all right, title and interest in such contributions and inventions made
or conceived by the Executive alone or jointly with others during the Employment
Period  which  directly  relate to the business of the Company.  This assignment
shall  include  (a)  the right to file and prosecute patent applications on such
inventions  in  any  and  all  countries,  (b) the patent applications filed and
patents  issuing  thereon,  and  (c) the right to obtain copyright, trademark or
trade  name  protection for any such work product.  The Executive shall promptly
and  fully  disclose  all  such  contributions and inventions to the Company and
assist  the  Company  in  obtaining and protecting the rights therein (including
patents  thereon)  in  any  and  all  countries;  provided,  however,  that said
                                                  --------   -------
contributions  and  inventions  will  be the property of Company, whether or not
patented or registered for copyright, trademark or trade name protection, as the
case may be.  Inventions conceived by the Executive which are not related to the
business  of  the  Company  will  remain  the  property  of  the  Executive.

     8.     NON-COMPETITION
            ---------------

     The Executive agrees that he shall not, during the Employment Period and/or
Severance Period and during the "Restricted Period," without the approval of the
Board,  directly  or indirectly, alone or as a partner, joint venturer, officer,
director,  employee,  consultant,  agent,  independent contractor or stockholder
(other  than  as  provided  below)  of  any  company  or business, engage in any
"Competitive  Business"  within a fifty mile radius of any locality in which the
Company  or  any  of  its  subsidiaries  or  affiliates then operates; provided,
however,  this  non-competition provision shall not apply (i) if the Executive's
employment  is  terminated  b  the  Executive pursuant to Section 4(b)(i), (ii),
(iii) or (iv) hereof, or (ii) if the Executive's employment is terminated by the
Company  pursuant  to  Section  4(f)  hereof,  or  (iii)  if the Company and the
Executive  mutually agree to terminate the Executive's employment.  For purposes
of the foregoing, the term "Restricted Period" shall mean:  (i) six months after
the  Employment Period or, if applicable, six months after the Severance Period,
whichever is longer, with respect to any "Competitive Business" outside of South
Carolina;  and (ii) two years after the Employment Period or, if applicable, two
years  after  the  Severance  Period,  whichever  is longer, with respect to any
"Competitive  Business"  within  South Carolina.  For purposes of the foregoing,
the  term  "Competitive  Business"  shall  mean  any  business  involved  in the
ownership,  operation  or management of a bingo or video gaming business or such
other  business  as  the  Company  may then be engaged in as a primary source of
business.  Notwithstanding the foregoing, the Executive shall not be prohibited,
during  the  non-competition  period  applicable above, from acting as a passive
investor  where  he  owns not more than 2% of the issued and outstanding capital
stock  of  any  publicly-held  company.  During  the  period  that  the  above
non-competition  restriction  applies,  the  Executive  shall  not,  without the
written  consent  of  the  Company,  solicit  any employee of the Company or any
employee  of  a  subsidiary  or affiliate of the Company to terminate his or her
employment.  The  period  of  time  applicable to any covenant in this Section 8
will  be  extended  by  the  duration  of any violation by the Executive of such
covenant.

                                       8
<PAGE>

     If any covenant in this Section 8 is held to be unreasonable, arbitrary, or
against  public  policy,  such  covenant will be considered to be divisible with
respect  to  scope,  time,  and  geographic area, and such lesser scope, time or
geographic  area,  or  all  of  them,  as  a court of competent jurisdiction may
determine  to  be reasonable, not arbitrary, and not against public policy, will
be  effective,  binding,  and  enforceable  against  the  Executive.

     9.     BREACH  OF  RESTRICTIVE  COVENANTS
            ----------------------------------

     The  parties  agree  that a breach or violation of Section 6, 7 or 8 hereof
will  result in immediate and irreparable injury and harm to the innocent party,
who  shall  have,  in  addition  to  any  and  all  remedies  of  law  and other
consequences  under  this  Agreement,  the  right  to  an  injunction,  specific
performance or other equitable relief to prevent the violation of the obligation
hereunder.

     10.     NOTICE
             ------

     For  purposes  of  this  Agreement,  notices,  demands  and  all  other
communications  provided  for in this Agreement shall be in writing and shall be
deemed  to  have  been duly given when delivered or (unless otherwise specified)
mailed  by United States certified or registered mail, return receipt requested,
postage  prepaid,  addressed  as  follows:

          (a) If to the Company, to:

              American  Bingo  &  Gaming  Corp.
              Attn:  Andre  M.  Hilliou
              1440  Charleston  Highway
              West  Columbia,  SC  29169

          (b) If to the Executive, to:

              Richard  M.  Kelley
              14612  Addison  Street
              Sherman  Oaks,  CA  91403

or  to  such other respective addresses as the parties hereto shall designate to
the  other  by like notice, provided that notice of a change of address shall be
effective  only  upon  receipt  thereof.

                                       9
<PAGE>

     11.     ARBITRATION;  LEGAL  FEES
             -------------------------

     Except  as provided in Section 9 hereof, any dispute or controversy arising
under  or  in  connection  with  this  Agreement shall be settled exclusively by
arbitration  in  South  Carolina  in  accordance  with the rules of the American
Arbitration  Association  then  in  effect.  Judgment  may  be  entered  on  the
arbitrator's  award  in  any  court  having  jurisdiction.  The  Company  shall
reimburse  the  Executive for all reasonable legal fees and costs and other fees
and  expenses  which  the  Executive  may  incur  in  respect  of any dispute or
controversy  arising  against  the  Company  under  or  in  connection with this
Agreement;  provided,  however,  that  the  Company  shall  only  reimburse  the
            --------   -------
Executive  for  such  fees,  costs and expenses if the Executive prevails in any
such  action.

     12.     WAIVER  OF  BREACH
             ------------------

     Any  waiver  of  any breach of the Agreement shall not be construed to be a
continuing  waiver or consent to any subsequent breach on the part either of the
Executive  or  of  the  Company.

     13.     NON-ASSIGNMENT;  SUCCESSORS
             ---------------------------

     Neither  party  hereto  may assign his or its rights or delegate his or its
duties  under  this  Agreement  without  the  prior written consent of the other
party;  provided, however, that (i) this Agreement shall inure to the benefit of
        --------  -------
and  be  binding upon the successors and assigns of the Company upon any sale of
all  or  substantially  all  of  the  Company's  assets,  or  upon  any  merger,
consolidation  or  reorganization  of  the  Company  with  or  into  any  other
corporation,  all as though such successors and assigns of the Company and their
respective  successors  and  assigns  were  the Company; and (ii) this Agreement
shall  inure  to  the  benefit  of  and  be  binding  upon the heirs, assigns or
designees  of the Executive to the extent of any payments due to them hereunder.
As  used  in  this Agreement, the term "Company" shall be deemed to refer to any
such  successor  or assign of the Company referred to in the preceding sentence.

     14.     WITHHOLDING  OF  TAXES
             ----------------------

     All payments required to be made by the Company to the Executive under this
Agreement  shall be subject to the withholding of such amounts, if any, relating
to  tax  and other payroll deductions as the Company may reasonably determine it
should  withhold  pursuant  to  any  applicable  law  or  regulation.

     15.     SEVERABILITY
             ------------

     To  the  extent any provision of this Agreement or portion thereof shall be
invalid  or  unenforceable,  it  shall  be  considered deleted therefrom and the
remainder  of such provision and of this agreement shall be unaffected and shall
continue  in  full  force  and  effect.

     16.     COUNTERPARTS
             ------------

     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  instrument.

                                       10
<PAGE>

     17.     GOVERNING  LAW
             --------------

     This  Agreement  shall  be  governed  by  and  construed  and  enforced  in
accordance  with  the  laws of the State of South Carolina without regard to the
conflicts  of  law  principles  thereof.

     18.     ENTIRE  AGREEMENT
             -----------------

     This  Agreement  constitutes  the  entire  agreement by the Company and the
Executive  with  respect to the subject matter hereof and supersedes any and all
prior  agreements  or  understandings between the Executive and the Company with
respect  to  the subject matter hereof, whether written or oral.  This Agreement
may  be amended or modified only by written instrument executed by the Executive
and  the  Company.

     IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first  set  forth  above.

THE  EXECUTIVE                AMERICAN  BINGO  &  GAMING  CORP.

/s/  Richard  M.  Kelley      /s/   Andre  M.  Hilliou
------------------------      ------------------------
Richard  M.  Kelley           By:   Andre  M.  Hilliou
                              Its:  President  and  Chief  Executive  Officer

                                       11

<PAGE>