<PAGE>

                                 EXHIBIT 10.4

                                   GUARANTY
                                   --------

THIS GUARANTY is made this 31st day of July, 1995, by HOLLYWOOD PARK, INC., a
Delaware corporation ("Guarantor") in favor of the COMMUNITY REDEVELOPMENT
AGENCY OF THE CITY OF COMPTON, a public body, corporate and politic ("Agency").

                                    RECITALS

A. The Agency (as the "Agency" therein) and Compton Entertainment, Inc., a
California corporation ("CEI") (as the "Redeveloper" therein), are parties to
that certain Amended and Restated Disposition and Development Agreement,
Agreement of Purchase and Sale, and Lease with Option to Purchase dated as of
April 4, 1995 (the "DDA"), covering the real property (the "Property") described
in Exhibit A hereto. The DDA provides, among other things, for the development
of a hotel and card club (the "Project") on the Property.

B. CEI has agreed to complete the construction and development of certain
improvements and the development of the Project on the Property consistent with
the Scope of Development attached as Exhibit 5 to the DDA, and within the times
specified in the Schedule of Performance attached as Exhibit 3 to the DDA.

C. Concurrently herewith, CEI is assigning all of its rights under the DDA to
HP/Compton, Inc., a California corporation ("HP/Compton"), and HP/Compton is
assuming all of CEI's obligations as Redeveloper under the DDA, pursuant to an
Assignment, Assumption and Consent Agreement (the "Assignment").

D. HP/Compton is a wholly owned subsidiary of Guarantor.

E. Guarantor is substantially and financially interested in the business and
affairs of HP/Compton; and it will be of substantial economic benefit to
Guarantor for HP/Compton to construct, develop and operate the Project and
perform all other obligations of Redeveloper pursuant to the DDA.

F. Agency would be unwilling to consent to the Assignment absent assurances and
guarantees from Guarantor that the construction of the Project will be completed
and the other obligations of the Redeveloper shall be performed in accordance
with the DDA.

NOW, THEREFORE, to induce Agency to consent to the assignment of the DDA,
Guarantor hereby guaranties, represents, warrants and covenants as follows:

                                      -1-
<PAGE>

1. Guaranty

The Guarantor unconditionally promises and agrees to perform and comply with all
provisions and conditions of the DDA and any modifications, additions,
amendments and supplements thereto, and the agreements, provisions and
conditions of any rider or exhibit thereto now or hereafter existing, or to
cause the same to be performed and complied with. The words "perform and comply
with" are used in their most comprehensive sense and include (i) payment of any
and all rental and other obligations of Redeveloper to pay money to Agency
arising under the DDA, including, without limitation, the obligation to pay any
and all interest on past due obligations of Redeveloper, any and all costs
advanced by Redeveloper, and all expenses (including, without limitation, court
costs and reasonable attorney's fees) that may arise in consequence of
Redeveloper's default under the DDA, (ii) payment and performance of all
obligations of Redeveloper to purchase the Property arising under the DDA, and
(iii) construction of the Project within the times and in the manner provided
for in or contemplated by the provisions of the DDA, including, to the extent
required by the DDA, payment of all costs and expenses thereof and payment of
and satisfaction or discharge of all liens, charges or claims that are or may be
imposed upon or claimed against the Property or any portion thereof. As a
condition to the Guarantor's obligations under this Guaranty, Agency shall
confer upon Guarantor all rights and benefits of Redeveloper under the DDA,
including, without limitation, the right to occupy and operate the Property and
the Project and any business thereon, notwithstanding any breach or default by
Redeveloper under the DDA. If within thirty (30) days following written demand
from the Agency, Guarantor fails to commence performance of and compliance with
all provisions and conditions of the DDA and thereafter to diligently perform
and comply therewith, Agency may, but shall have no obligation to, take such
actions as Agency deems appropriate with respect to the Project and the
Property, and Guarantor shall be liable to Agency as if Guarantor were the
Redeveloper under the DDA for failure to perform and comply with the provisions
and conditions of the DDA.

2. General

(a) Guarantor authorizes Agency, without notice or demand and without affecting
Guarantor's liability under this Guaranty, to:

                                      -2-
<PAGE>

(i) consent to any extensions, accelerations, or other changes in the time for
any payment or performance of obligations provided for in the DDA, or consent to
any other alteration of any covenant, term, or condition of the DDA in any
respect, and to consent to any assignment, subletting, or reassignment of the
DDA;

(ii) take and hold security for any payment provided for in the DDA or for the
performance of any covenant, term, or condition of the DDA, or exchange,
subordinate, waive, or release any security; and

(iii) apply this security and direct the order or manner of its sale as Agency
may determine.

(b) Notwithstanding any termination, renewal, extension or holding over of the
DDA, this Guaranty shall continue until all of the covenants and obligations on
the part of Redeveloper to be performed have been fully and completely performed
by Redeveloper and Guarantor shall not be released of any obligation or
liability under this Guaranty so long as there is any claim against Redeveloper
arising out of the DDA that has not been settled or discharged in full.

(c) The liability of Guarantor hereunder shall be unaffected by

(i) any amendment or modification of the provisions of the DDA or any other
instrument delivered to or made with Agency by Redeveloper (including, without
limitation, the deed of trust described in Section 1(d)(iii) of the DDA (the
"Deed of Trust")), (ii) the release of Redeveloper from the performance or
observance of any of the agreements, covenants, terms or conditions contained in
any of said instruments by operation of law, foreclosure, deed in lieu of
foreclosure, termination of lease, or otherwise, (iii) the release, substitution
or addition of any one or more guarantors or endorsers, or (iv) the assignment
of this Guaranty in whole or in part, irrespective of the terms and conditions
upon which such actions are taken and whether made with or without the consent
of or notice to Guarantor.

                                      -3-
<PAGE>

3. Independent Obligations. The obligations of Guarantor under this Guaranty are
independent of, and may exceed, the obligations of Redeveloper. A separate
action may, at Agency's option, be brought and prosecuted against Guarantor,
whether or not any action is first or subsequently brought against Redeveloper,
or whether or not Redeveloper is joined in any action, and Guarantor may be
joined in any action or proceeding commenced by Agency against Redeveloper
arising out of, in connection with, or based upon the DDA. Agency's rights
hereunder shall not be exhausted by its exercise of any of its rights or
remedies or by any such action or by any number of successive actions until and
unless all indebtedness and obligations hereby guaranteed have been paid and
fully performed. All of Agency's remedies against Guarantor are cumulative.

4. Waivers. Guarantor waives any right to:

(a) require Agency to proceed against Redeveloper or any other person or entity
or pursue any other remedy in Agency's power before proceeding against
Guarantor;

(b) complain of delay or failure by Agency to exercise any right, power or
privilege under the DDA, this Guaranty, or any other document made to or with
Agency by Redeveloper; and

(c) require Agency to proceed against or exhaust any security held by Agency.

                                      -4-
<PAGE>

Guarantor waives any defense arising by reason of any disability or other
defense of Redeveloper or by reason of the cessation from any cause of the
liability of Redeveloper. Guarantor waives all demands upon and notices to
Redeveloper and to Guarantor, including, without limitation, demands for
performance, notices of nonperformance, notices of non-payment, and notices of
acceptance of this Guaranty. Guarantor waives (i) the defense of all statutes of
limitations in any action hereunder or for the performance of any obligation
hereby guaranteed; (ii) any defense that may arise by reason of the incapacity,
lack of authority, or disability of Redeveloper, or by Agency's failure to file
or enforce a claim against the estate (either in bankruptcy or any other
proceeding) of Redeveloper or any other person; (iv) any defense based upon or
arising out of any defense which Redeveloper may have to the payment or
performance of any part of the obligations hereby guaranteed; (v) presentment,
demand, protest and notice of any kind, including, without limiting the
generality of the foregoing, notice of the existence, creation or incurring of
any new or additional obligation or indebtedness or of any action or non-action
on the part of Redeveloper, Agency, any creditor of Redeveloper or any other
person whomsoever, in connection with any obligation or evidence of indebtedness
held by Agency as collateral or in connection with any obligation hereby
guaranteed; (vi) any defense based upon an election of remedies by Agency,
including, without limitation, an election to proceed by non-judicial rather
than judicial foreclosure, or to terminate the leasehold or other interests in
the DDA which destroys or otherwise impairs the subrogation rights of Guarantor
or the right of Guarantor to proceed against Redeveloper for reimbursement, or
both; (viii) diligence by Agency in the collection of the obligations set forth
in the DDA; (ix) any defense based upon any statute or rule of law which
provides that the obligation of a surety must be neither larger in amount nor in
other respects more burdensome than that of the principal; (x) any defense based
upon, or upon the effect of, California Code of Civil Procedure Sections 580a,
580b, 580d, and 726 or California Civil Code Sections 2809, 2810, 2819, 2839,
2845, 2849, 2850, 2899, 2924 and 3433 et seq.; (xi) any duty on Agency's part to
disclose to Guarantor any facts Agency may now or hereafter know about
Redeveloper regardless of whether Agency has reason to believe that any such
facts materially increase the risk beyond that which Guarantor intends to assume
or whether Agency has reason to believe that such facts are unknown to Guarantor
and whether Agency has a reasonable opportunity to communicate such facts to
Guarantor, it being understood and agreed that Guarantor is fully responsible
for being and keeping informed of the financial condition of Redeveloper and of
all circumstances bearing on the risk of non-performance of any obligations
hereby guaranteed; (xii) any defense arising because of Agency's election, in
any proceeding instituted under the federal Bankruptcy Code, of the application
of Section 1111(b)(2) of the

                                      -5-
<PAGE>

federal Bankruptcy Code; and (xiii) any defense based on any borrowing or grant
of a security interest under Section 364 of the federal Bankruptcy Code, it
being agreed by the Guarantor that this Guaranty is an absolute guaranty of
payment and not of collection, that the failure of Agency to exercise any rights
or remedies it has or may have against Redeveloper shall in no way impair the
obligation of such guaranty and that the liability of the Guarantor hereunder is
and shall be direct and unconditional.

5. No Reporting Duty. Guarantor assumes full responsibility for keeping fully
informed of the financial condition of Redeveloper and all other circumstances
affecting Redeveloper's ability to perform Redeveloper's obligations under the
DDA, and agrees that Agency will have no duty to report to Guarantor any
information that Agency receives about Redeveloper's financial condition or any
circumstances bearing on Redeveloper's ability to perform such obligations.

6. Continuing Guaranty. This Guaranty shall remain in full force notwithstanding
the appointment of a receiver to take possession of all or substantially all of
the assets of Redeveloper, or an assignment by Redeveloper for the benefit of
creditors, or any action taken or suffered by Redeveloper under any insolvency,
bankruptcy, reorganization, moratorium, or other debtor relief act or statute,
whether now existing or later amended or enacted, or the disaffirmance of the
DDA in any action or otherwise.

7. Joint and Several Obligations. If this Guaranty is signed, or if the
obligations of Redeveloper are otherwise guaranteed, by more than one party,
their obligations shall be joint and several, and the release or limitation of
liability of any one or more of the guarantors shall not release or limit the
liability of any other guarantors.

8. Successors and Assigns. This Guaranty shall be binding upon Guarantor and
Guarantor's heirs, administrators, personal and legal representatives,
successors, and assigns, and shall inure to the benefit of Agency and Agency's
successors and assigns. Agency may, without notice, assign this Guaranty, the
DDA, or the rents and other sums payable under the DDA, in whole or in part.

9. Guaranty of Costs and Fees. In addition to the amounts guaranteed, Guarantor
agrees to pay reasonable attorney fees and all other costs and expenses incurred
by Agency in enforcing this Guaranty or in any action or proceeding arising out
of, or relating to, this Guaranty, whether or not any suit is filed. Until paid
to Agency such sums shall bear interest at the rate of two (2) percentage points
per annum in excess of the Bank of America Reference Rate.

                                      -6-
<PAGE>

10. Governing Law. This Guaranty shall be deemed to be made under and shall be
governed by California law in all respects, including matters of construction,
validity, and performance, and the terms and provisions of this Guaranty may not
be waived, altered, modified, or amended except in a writing signed by an
authorized officer of Agency and by Guarantor.

11. Waiver of Subrogation Rights. Guarantor waives all rights and defenses
arising out of an election remedies by the Agency, even though that election of
remedies, such as a nonjudicial foreclosure with respect to security for a
guaranteed obligation, has destroyed the Guarantor's rights of subrogation and
reimbursement against the Guarantor by the operation of Section 580d of the Code
of Civil Procedure or otherwise.

12. Bankruptcy Claims. Guarantor shall file in any bankruptcy or other
proceeding in which the filing of claims is required by law all claims which
Guarantor may have against Redeveloper relating to any indebtedness of
Redeveloper to Guarantor and will assign to Agency all rights of Guarantor
thereunder. If Guarantor does not file any such claim, Agency, as attorney-in-
fact for Guarantor, is hereby authorized to do so in the name of Guarantor or,
in Agency's discretion, to assign the claim to a nominee and to cause proof of
claim to be filed in the name of Agency's nominee. The foregoing power of
attorney is coupled with an interest and cannot be revoked. Agency or its
nominee shall have the sole right to accept or reject any plan proposed in such
proceeding and to take any other action which a party filing a claim is entitled
to do. In all such cases, whether in administration, bankruptcy or otherwise,
the person or persons authorized to pay such claim shall pay to Agency the
amount payable on such claim and, to the full extent necessary for that purpose,
Guarantor hereby assigns to Agency all of Guarantor's rights to any such
payments or distributions to which Guarantor would otherwise be entitled;
provided, however, Guarantor's obligations hereunder shall not be satisfied
except to the extent that Agency receives cash by reason of any such payment or
distribution in such amount as is necessary to satisfy all amounts due under the
DDA; and provided further that Agency or its nominee shall remit to Guarantor
any amounts received which exceed the amounts owed to Agency under the terms of
the DDA. However, should any dispute arise as between Guarantor and any third
party (including the principal obligor) with respect to the rights to such
funds, Agency may interplead such funds and shall thereupon be released from any
obligation to pay such funds to Guarantor and shall be entitled to all costs,
including attorney's fees, incurred in the filing of such interpleader action.
If Agency receives anything hereunder other than cash, the same shall be held as
collateral for amounts due under this Guaranty.

                                      -7-
<PAGE>

13. Change of Title. Guarantor agrees that no change of ownership or legal title
to the Property, whether effected with or without the consent of the Agency,
shall affect or change or discharge the obligations of the Guarantor hereunder.

14. Receipt of DDA. Guarantor acknowledges receipt of a copy of the DDA, and all
of the instruments described therein, or attached thereto as exhibits. All of
the terms defined in the DDA, when used herein, shall have the same meanings as
defined in the DDA.

15. Warranties. Guarantor hereby represents and warrants to Agency that:

(a) Any financial statements and other information concerning Guarantor
heretofore delivered by Guarantor to Agency are true and correct in all
respects, have been prepared in accordance with generally accepted accounting
practices consistently applied, fairly present the financial condition of
Guarantor as of the dates thereof, and no material adverse change has occurred
in the financial condition of Guarantor reflected therein since the respective
dates thereof. Guarantor shall deliver to Agency updated financial statements
annually or upon the happening of any material adverse change in the financial
condition of Guarantor.

(b) The assumption by Guarantor of the obligations of the DDA will result in
direct financial and material benefits to Guarantor.

(c) The assumption of the DDA by HP/Compton has been duly authorized and
executed by HP/Compton and is a legal, valid and binding instrument, enforceable
against HP/Compton in accordance with its terms.

(d) Guarantor (i) is a corporation duly organized, validly existing, and in good
standing under the laws of the State of Delaware; (ii) has the power and
authority to own its properties and assets to carry on its business as now being
conducted (and as now contemplated); and (iii) has the power to execute and
perform all the undertakings of this Guaranty.

                                      -8-
<PAGE>

(e) The execution and performance of this Guaranty by Guarantor

(i) has been duly authorized by all requisite corporate action, (ii) will not
violate any provision of law, rule, or regulation, any order of any court or
other agency of government, any provision of any charter document, or by-law of
Guarantor, and (iii) will not violate any provision of any indenture, agreement,
or other instrument, binding upon Guarantor or result in the creation or
imposition of any lien, charge or encumbrance of any nature on any asset of
Guarantor.

16. Severance. If any of the provisions of this Guaranty shall contravene or be
held invalid under the laws of any jurisdiction, this Guaranty shall be
construed as if it did not contain those provisions, and the rights and
obligations of the parties shall be construed and enforced accordingly.

17. Successors. The provisions of this Guaranty shall bind and inure to the
benefit of the heirs, executors, administrators, legal representatives,
successors and assigns of Agency and Guarantor. Whenever the context requires,
all terms used in the singular will be construed in the plural and vice-versa.
The term "Redeveloper" as used herein refers to both named Redeveloper and any
other person or entity at any time assuming or otherwise becoming primarily
liable on all or any part of the obligations of the DDA.

IN WITNESS WHEREOF, Guarantor has executed this Guaranty as of the date first
written above.

                             HOLLYWOOD PARK, INC.,
                                a Delaware corporation


          By: /s/ G. Michael Finnigan
          --------------------------------
          President Gaming & Entertainment


          By: /s/ Donald M. Robbins
          --------------------------------
          Assistant Secretary


"Guarantor"

                                      -9-