SEVERANCE AGREEMENT
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     This  Severance  Agreement  (the  "Agreement")  is  made  this  18th day of
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September,  1998,  by and between G. George Fox (hereinafter "Fox") and American
Bingo  &  Gaming  Corp.  (hereinafter  "ABG").

     WHEREAS  Fox  is  a  member  of  the  Board  of  Directors  of  ABG;

     WHEREAS Fox's continued participation as a member of the Board of Directors
of  ABG will require a substantial amount of travel and time which will conflict
with  Fox's  other  business  commitments;

     WHEREAS  Fox  and  ABG  have  made  a  joint determination that, subject to
certain  terms  of  separation being agreed to between Fox and ABG, it may be in
the  best interest of Fox and ABG for Fox to resign from the Board of Directors;
and

     WHEREAS  ABG acknowledges with appreciation Fox's service to ABG and agrees
to  accept  Fox's  resignation;

     NOW,  THEREFORE,  in  consideration of the mutual promises contained herein
and  the  terms  set  forth  below,  the  parties  agree  as  follows:

     1.   Resignation.  Fox  hereby  agrees  that,  subject  to (i) the Board of
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          Directors of ABG duly authorizing  this Agreement,  (ii) an authorized
          officer of ABG  executing  and  delivering  to Fox this  Agreement and
          (iii) ABG taking each of the actions set forth herein, Fox will tender
          his  resignation  from all positions  held with ABG and its subsidiary
          companies (if any).

     2.   Reimbursement.  ABG does hereby agree to  reimburse  and pay to Fox as
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          soon as reasonably possible,  and in no event later than five business
          days following the date of this Agreement, $17,000.

     3.   Stock  Options.  Fox has been duly issued  options to purchase  27,000
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          shares  of ABG's  Common  Stock,  par value  $0.001  per  share,  (the
          "Options") pursuant to ABG's 1997 Stock Option Plan (the "Plan").  ABG
          does hereby represent and agree that it has or will  contemporaneously
          with the approval and execution of this Agreement (i) take all actions
          necessary to accelerate  Fox's right to exercise the Options to a time
          prior to his planned  resignation from the Board of Directors and (ii)
          take all actions  necessary to approve and confirm that Fox's  Options
          will not expire due to his resignation from the Board of Directors and
          to assure that such  Options  will  otherwise  be  exercisable  by Fox
          through  April 20, 2003 in  accordance  with the terms of the Plan and
          the agreement under which his Options were provided.

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     4.   Post Resignation  Remarks.  ABG acknowledges with  appreciation  Fox's
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          service to ABG and agrees that, except as may otherwise be required by
          law,  ABG  shall  not  and  shall  advise  and  direct  its  officers,
          directors, employees and agents within its control not to make, repeat
          or publish any  remark,  comment or other  statement  in an attempt to
          defame,  disparage  or  detract  from  Fox's  character,   reputation,
          professional standing or business.  Likewise,  Fox agrees that, except
          as may  otherwise  be required by law,  Fox shall not make,  repeat or
          publish  any  remark,  comment  or other  statement  in an  attempt to
          defame,   disparage  or  detract  from  the   character,   reputation,
          professional  standing  or  business  of ABG  or any of its  officers,
          directors, employees or agents.

     5.   Confidentiality.  Fox hereby acknowledges,  represents and agrees that
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          he will  maintain  the  confidentiality  of all  information  obtained
          regarding   ABG,   including  but  not  limited  to  its   operations,
          management, financial matters, plans and other material data, and that
          he  will  not 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
          such  confidential   information  concerning  ABG.  However,  Fox  may
          disclose any information  required by law to be disclosed by Fox after
          Fox has notified ABG of such requirement and given ABG the opportunity
          to review the information to be disclosed.

     6.   Fox  Global  Release.  ABG,  on behalf of itself  and on behalf of its
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          officers  and  directors,  hereby  releases Fox from any and all past,
          present or future claims,  demands,  actions, causes of action, costs,
          judgments,  expenses,  attorney's  fees,  damages and all  liabilities
          whatsoever at law or in equity,  whether  known or unknown,  that they
          may have,  claim to have,  or have ever had,  against Fox arising from
          any and all causes of action, whether intentional,  wanton,  reckless,
          malicious,  negligent,  grossly negligent, or inadvertent, in contract
          or in tort,  including any claims relating to any  misrepresentations,
          disclosures  and/or  failures  to  disclose  in  connection  with  all
          matters,  and including  but not limited to those matters  relating to
          Fox's  involvement  on the Board of  Directors of ABG. In this regard,
          the parties to this Agreement  intend for the release provided by this
          Agreement  to cause,  to the fullest  extent  permitted  by law and at
          equity,  the complete and final  discharge  and  extinguishing  of all
          claims and causes of action  against  Fox,  whether  known or unknown,
          involving  the parties  hereto,  for all time up to and  including the
          date of this Agreement.  ABG agrees to indemnify and hold Fox harmless
          from and against any and all costs,  judgments,  expenses,  attorney's
          fees, damages or liabilities whatsoever relating to any and all claims
          that may be brought  against Fox in connection  with his position as a
          member  of the  Board  of  Directors  of ABG  to  the  fullest  extent
          authorized  by  Delaware  law  as  provided  in  paragraph  7  of  the
          Certificate of Incorporation of ABG, as amended October 17, 1994.

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     7.   ABG Release.  Except as expressly set out herein,  Fox hereby releases
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          ABG and its officers and directors  from any and all past,  present or
          future claims,  demands,  actions, causes of action, costs, judgments,
          expenses,  attorney's fees, damages and all liabilities  whatsoever at
          law or in equity, whether known or unknown, that he may have, claim to
          have,  or have ever had,  against ABG and its officers  and  directors
          arising  from  any and all  causes  of  action,  whether  intentional,
          wanton,  reckless,   malicious,   negligent,   grossly  negligent,  or
          inadvertent,  in contract or in tort, including but not limited to any
          claims relating to any misrepresentations, disclosures and/or failures
          to disclose in  connection  with all matters,  and  including  but not
          limited to those  matters  relating to his Options,  and those matters
          relating to his position as a member of the Board of Directors of ABG.
          In this regard,  the parties to this Agreement  intend for the release
          provided by this Agreement to cause,  to the fullest extent  permitted
          by  law  and  at  equity,   the  complete  and  final   discharge  and
          extinguishing  of all claims and causes of action against ABG, whether
          known or unknown, involving the parties hereto, for all time up to and
          including the date of this Agreement. The above notwithstanding,  this
          release shall not release ABG from (A) any of its  obligations set out
          in this Agreement, or (B) any release,  defense,  indemnity,  right of
          contribution  or  other  recovery  owed by ABG to Fox for any  claims,
          demands,  actions,  causes  of  action,  costs,  judgments,  expenses,
          attorney's fees, damages or liabilities whatsoever at law or in equity
          to the extent this release, defense,  indemnity, right of contribution
          or other recovery  would  otherwise have been provided to Fox pursuant
          to the terms of the current  Certificate of  Incorporation of ABG, the
          current By-Laws of ABG or as otherwise  provided by applicable law. In
          addition,  to the extent any  insurance  product would provide Fox any
          protection,  release,  defense,  indemnity,  right of  contribution or
          other  recovery  relating  to a claim,  including  but not  limited to
          director's  and  officer's  insurance,  this release  shall not act to
          release  Fox's  claim or rights to claim to the extent it would  limit
          his rights to the protections otherwise provided under those insurance
          products,  nor  shall it be  construed  in a  manner  which in any way
          reduces or eliminates  coverage otherwise available to him under those
          insurance products.

     8.   Governing Law. This  Agreement  shall be governed by and construed and
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          enforced in accordance with the laws of the State of South Carolina.

     9.   Future Agreement.  This Agreement comprises the entire agreement, oral
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          and written, between and among the released parties with regard to the
          subject matter of the Agreement.  This Agreement may not be amended in
          any respect except by writing,  duly executed by the released  parties
          and/or the authorized representatives of the released parties.

     10.  Severability. If any provision of this Agreement or any portion of any
          ------------
          provision of this  Agreement  is at any time deemed or declared  void,
          voidable  or  unenforceable,  then such  provision  or portion of such
          provision is severable  from the  remainder of the  Agreement  and the
          remainder of this Agreement shall be fully enforced.

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     11.  Further  Assurances.  The  parties  shall  from time to time  promptly
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          execute and deliver such further instruments,  documents or papers and
          perform all acts necessary or proper to carry out and effect the terms
          and provisions of this Agreement.

     12.  Counterparts and Fax Signature Pages. It is understood and agreed that
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          this  Agreement  may be executed in duplicate  counterpart  originals,
          each of which shall be deemed an original for all purposes. Signatures
          need not be in original  and a facsimile  and/or copy bearing a copied
          or facsimile  signature shall suffice as a binding  signature for this
          Agreement.

     13.  Supersedes  Prior  Agreements.  It is understood  and agreed that this
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          Agreement  contains  the entire  agreement  between  the  parties  and
          supersedes  any  and  all  prior   agreements  and   arrangements   or
          understandings  between  the parties  relating  to the subject  matter
          hereof.  No oral  understanding,  statements,  promises or inducements
          contrary to the terms of this Agreement  exist.  This Agreement cannot
          be changed or terminated orally.

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


WITNESSES:


/s/  Madelyn  Kravitz              /s/  G.  George  Fox
---------------------              --------------------
                                        G.  George  Fox


WITNESSES:                    AMERICAN  BINGO  &  GAMING  CORP.


/s/  Daniel  J.  Fritze            /s/  Andre  M.  Hilliou
-----------------------            ---------------------------------------------
                                   By:  Andre  M.  Hilliou,  President  and  CEO

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