<PAGE>

                                                                   EXHIBIT 10.16



                                  $50,000,000


                         COAST HOTELS AND CASINOS, INC.
                              COAST RESORTS, INC.

                   9 1/2% SENIOR SUBORDINATED NOTES DUE 2009



                              PLACEMENT AGREEMENT


                                January 23, 2001
<PAGE>

                                                                January 23, 2001

Banc of America Securities LLC
as Representative of the Placement Agents
c/o Banc of America Securities LLC
100 North Tryon Street, 7/th/ Floor
Charlotte, NC 28255

Ladies and Gentlemen:

     Coast Hotels and Casinos, Inc., a Nevada corporation (the "Company"),
proposes to issue and sell to Banc of America Securities LLC and each other
Placement Agent named in Schedule I hereto (collectively, the "Placement
Agents"), for whom Banc of America Securities LLC shall act as representative
(in such capacity, the "Representative"), $50,000,000 principal amount of its 9
1/2% Senior Subordinated Notes due 2009 (the "Notes") to be issued pursuant to
the provisions of that certain Indenture to be dated as of March 23, 1999, as
amended (the "Indenture"), among the Company, Coast Resorts, Inc., as Guarantor
(the "Guarantor"), and Firstar Bank N.A. (formerly known as Firstar Bank of
Minnesota, N.A.), as trustee (the "Trustee"), which shall be supplemented to
provide for the issuance of the Notes (the "Supplemental Indenture"). The Notes
will be guaranteed (the "Guarantee") by the Guarantor.

     The Notes will be offered without being registered under the Securities Act
of 1933, as amended (the "Securities Act"), to qualified institutional buyers in
compliance with the exemption from registration provided by Rule 144A under the
Securities Act.

     The Placement Agents and their direct and indirect transferees will be
entitled to the benefits of a Registration Rights Agreement dated as of the
Closing Date (as defined in Section 4), among the Company, the Guarantor and the
Placement Agents (the "Registration Rights Agreement").

     In connection with the sale of the Notes, the Company will prepare a final
offering memorandum (the "Memorandum") including a description of the terms of
the Notes and the Guarantee, the terms of the offering and a description of the
Company and the Guarantor.  As used herein, the term "Memorandum" shall include
in each case the documents incorporated by reference therein.  The terms
"supplement", "amendment" and "amend" as used herein with respect to a
Memorandum shall include all documents deemed to be incorporated by reference in
the Memorandum that are filed subsequent to the date of such Memorandum with the
Securities and Exchange Commission (the "Commission") pursuant to the Securities
Exchange Act of 1934, as amended (the "Exchange Act").

     1.  Representations and Warranties. The Company and the Guarantor represent
and warrant to, and agree with, you that:
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          (a)  (i) Each document, if any, to be filed pursuant to the Exchange
     Act and incorporated by reference in the Memorandum complied or will comply
     when so filed in all material respects with the Exchange Act and the
     applicable rules and regulations of the Commission thereunder and (ii) the
     Memorandum, in the form used by the Placement Agents to confirm sales and
     on the Closing Date (as defined in Section 4), as amended or supplemented
     if the Company and the Guarantor shall have furnished any amendments or
     supplements thereto, will not contain any untrue statement of a material
     fact or omit to state a material fact necessary to make the statements
     therein, in the light of the circumstances under which they were made, not
     misleading, except that the representations and warranties set forth in
     this paragraph do not apply to statements or omissions in the Memorandum
     based upon information relating to any Placement Agent furnished to the
     Company in writing by such Placement Agent through the Representative
     expressly for use therein.

          (b)  Each of the Company and the Guarantor has been duly incorporated,
     is validly existing as a corporation in good standing under the laws of the
     jurisdiction of its incorporation, has the corporate power and authority to
     own its property and to conduct its business as described in the Memorandum
     and is duly qualified to transact business and is in good standing in each
     jurisdiction in which the conduct of its business or its ownership or
     leasing of property requires such qualification, except to the extent that
     the failure to be so qualified or be in good standing would not have a
     material adverse effect on the Company and the Guarantor, taken together.
     The Company is the Guarantor's only subsidiary. The Company does not have
     any subsidiaries.

          (c)  All of the issued shares of capital stock of the Company have
     been duly and validly authorized and issued, are fully paid and non-
     assessable and are owned directly by the Guarantor, free and clear of all
     liens, encumbrances, equities or claims, except for liens, encumbrances,
     equities or claims arising under that certain Amended and Restated Loan
     Agreement, dated as of September 16, 1999, by and among the Company, Bank
     of America, N.A., as administrative agent, and the several lenders referred
     to therein (the "Credit Facility").

          (d)  Prior to the Closing Date (as defined in Section 4), this
     Agreement shall have been duly authorized by the Company and the Guarantor.
     This Agreement has been executed and delivered by the Company.

          (e)  Prior to the Closing Date, the Notes shall have been duly
     authorized and, when executed and authenticated in accordance with the
     provisions of the Indenture and delivered to and paid for by the Placement
     Agents in accordance with the terms of this Agreement, will be valid and
     binding obligations of the Company, enforceable against the Company in
     accordance with their terms, subject to applicable bankruptcy, insolvency,
     reorganization, moratorium or similar laws affecting creditors' rights
     generally and general principles of equity, and will be entitled to the
     benefits of the

                                       2
<PAGE>

     Indenture pursuant to which such Notes are to be issued and the
     Registration Rights Agreement.

          (f)  Prior to the Closing Date, the Guarantee to be endorsed on the
     Notes by the Guarantor shall have been duly authorized, executed and
     delivered and, when the Notes have been executed and authenticated in
     accordance with the provisions of the Indenture and delivered to and paid
     for by the Placement Agents in accordance with the terms of this Agreement,
     the Guarantee of the Guarantor thereon will be the valid and binding
     obligation of the Guarantor, enforceable against the Guarantor in
     accordance with its terms, subject to applicable bankruptcy, insolvency,
     reorganization, moratorium or similar laws affecting creditors' rights
     generally and general principles of equity, and will be entitled to the
     benefits of the Indenture pursuant to which such Notes are to be issued and
     the Registration Rights Agreement.

          (g)  Prior to the Closing Date, each of the Registration Rights
     Agreement and the Supplemental Indenture shall have been duly authorized
     and, when executed and delivered by the Company and the Guarantor, and the
     Trustee (in the case of the Supplemental Indenture), will be a valid and
     binding agreement of the Company and the Guarantor, enforceable against
     each of them in accordance with its terms, subject to applicable
     bankruptcy, insolvency, reorganization, moratorium or similar laws
     affecting creditors' rights generally and general principles of equity and
     except as rights to indemnification and contribution under the Registration
     Rights Agreement may be limited under applicable law.

          (h)  The Indenture, as supplemented or amended through the date
     hereof, is a valid and binding agreement of the Company and the Guarantor,
     enforceable against each of them in accordance with its terms, subject to
     applicable bankruptcy, insolvency, reorganization, moratorium or similar
     laws affecting creditors' rights generally and general principles of
     equity.

          (i)  The execution and delivery by the Company and the Guarantor of,
     and the performance by the Company and the Guarantor of their respective
     obligations under, this Agreement, the Indenture, the Supplemental
     Indenture, the Registration Rights Agreement, the Notes and the Guarantee,
     as applicable, will not contravene any provision of applicable law or the
     articles of incorporation or bylaws of the Company or the Guarantor or any
     agreement or other instrument binding upon the Company or the Guarantor
     that is material to the Company or the Guarantor or any judgment, order or
     decree applicable to the Company or any of the aforementioned actions of
     any governmental body or the Guarantor, agency or court having jurisdiction
     over the Company or the Guarantor, and no consent, approval, authorization
     or order of, or qualification with, any governmental body or agency is
     required for the performance by the Company or the Guarantor of their
     respective obligations under this Agreement, the Indenture, the
     Supplemental Indenture, the Registration Rights Agreement, the Notes and
     the Guarantee, as applicable, except (i) such as may be required by the
     securities or Blue

                                       3
<PAGE>

     Sky laws of the various states in connection with the offer and sale of the
     Notes or by Federal and state securities laws with respect to the Company's
     and the Guarantor's obligations under the Registration Rights Agreement or
     (ii) where the failure to obtain such consent, approval, authorization,
     order or qualification would not, either individually or in the aggregate,
     have a material adverse effect on the Company and the Guarantor, taken
     together.

          (j)  Each of the Company and the Guarantor possesses the permits,
     licenses, consents and other authorizations (collectively, "Governmental
     Licenses") issued by, and has made all filings with, the appropriate
     regulatory entities necessary to own, lease and operate its properties and
     to conduct the businesses now operated by it, except where the failure
     thereof would not, singly or in the aggregate, have a material adverse
     effect on the Company and the Guarantor, taken together. All such
     Governmental Licenses are valid and in full force and effect, except where
     the invalidity of such Governmental Licenses or the failure of such
     Governmental Licenses to be in full force and effect would not have a
     material adverse effect on the Company and the Guarantor, taken together.
     Each of the Company and Guarantor is in compliance with the terms and
     conditions of all such Governmental Licenses, except where the failure so
     to comply would not, singly or in the aggregate, have a material adverse
     effect on the Company and the Guarantor, taken together. No event has
     occurred (including, without limitation, the receipt of any notice from any
     regulatory entity) which allows, or after notice or lapse of time, or both,
     would allow revocation, modification, suspension or termination of any
     Governmental License or would result in any other material impairment of
     the rights of the holder of any such Governmental Authorization which,
     singly or in the aggregate, would result in a material adverse effect on
     the Company and the Guarantor, taken together. To the knowledge of the
     Company and the Guarantor, no regulatory entity is considering limiting,
     suspending or revoking any Governmental License or is investigating either
     of them, other than ordinary course administrative reviews or any ordinary
     course review of the transactions contemplated hereby.

          (k)  As of the Closing Date, there shall not have occurred any
     material adverse change, or any development involving a prospective
     material adverse change; in the condition, financial or otherwise, or in
     the earnings, business or operations of the Company from that set forth in
     the Memorandum.

          (l)  There are no legal or governmental proceedings pending or, to the
     knowledge of the Company and Guarantor, threatened, to which the Company or
     the Guarantor is a party or to which any of the properties of the Company
     or the Guarantor is subject other than proceedings that will be accurately
     described in all material respects in the Memorandum and proceedings that
     would not have a material adverse effect (i) on the Company and the
     Guarantor, taken together, (ii) on the power or ability of the Company or
     the Guarantor to perform their respective obligations under this Agreement,
     the Indenture, the Supplemental Indenture, the Registration Rights
     Agreement, the Notes or the Guarantee, as applicable.

                                       4
<PAGE>

          (m)  The Company and the Guarantor have good and marketable fee simple
     title to all real property owned by them which is material to their
     businesses, free and clear of all liens and defects other than (i) those
     that will be described in the Memorandum and (ii) such liens and
     encumbrances as do not materially affect the value of such property and do
     not interfere with the use made and proposed to be made of such property.
     The Company and the Guarantor have a valid leasehold interest in all leases
     of real property and buildings held by them under lease, free and clear of
     all liens, other than (i) such liens and encumbrances as are not material
     and do not interfere with the use made and proposed to be made of such real
     property and buildings and (ii) such liens and encumbrances as will be
     described in the Memorandum.

          (n)  The Company and the Guarantor own, possess or have the right to
     use, or can acquire on reasonable terms, all patents, patent rights,
     licenses, inventions, copyrights, know-how (including trade secrets and
     other unpatented and/or unpatentable proprietary or confidential
     information, systems or procedures), trademarks, service marks and trade
     names ("intellectual property") currently employed by them in connection
     with the business now operated by them, except where the failure to own,
     possess, have the right to use or otherwise be able to acquire such
     intellectual property would not, singly or in the aggregate, have a
     material adverse effect on the Company and the Guarantor, taken together;
     and, neither the Company nor the Guarantor has received any notice of
     infringement of or conflict with asserted rights of others with respect to
     any of such intellectual property which, singly or in the aggregate, if the
     subject of an unfavorable decision, ruling or finding, would reasonably be
     expected to have a material adverse effect on the Company and the
     Guarantor, taken together.

          (o)  The Company and the Guarantor (i) are in compliance with all
     applicable foreign, federal, state and local laws and regulations relating
     to the protection of human health and safety or the environment and
     relating to hazardous or toxic substances or wastes, pollutants or
     contaminants ("Environmental Laws"), (ii) have received all permits,
     licenses or other approvals required of them under applicable Environmental
     Laws to conduct their respective businesses and (iii) are in compliance
     with all terms and conditions of any such permit, license or approval,
     except where such noncompliance with Environmental Laws, failure to receive
     required permits, licenses or other approvals or failure to comply with the
     terms and conditions of such permits, licenses or approvals would not,
     singly or in the aggregate, have a material adverse effect on the Company
     and the Guarantor, taken together.

          (p)  There are no costs or liabilities associated with Environmental
     Laws (including, without limitation, any capital or operating expenditures
     required for clean-up, closure of properties or compliance with
     Environmental Laws or any permit, license or approval, any related
     constraints on operating activities and any potential liabilities to third
     parties) which would, singly or in the aggregate, have a material adverse
     effect on the Company and the Guarantor, taken together.

                                       5
<PAGE>

          (q)  The Company is not, and after giving effect to the offering and
     sale of the Notes and the application of the proceeds thereof as described
     in the Memorandum, will not be an "investment company" as such term is
     defined in the Investment Company Act of 1940, as amended.

          (r)  Neither the Company nor any affiliate (as defined in Rule 501(b)
     of Regulation D under the Securities Act, an "Affiliate") of the Company
     has directly, or through any agent, (i) sold, offered for sale, solicited
     offers to buy or otherwise negotiated in respect of, any security (as
     defined in the Securities Act) which is or will be integrated with the sale
     of the Notes in a manner that would require the registration under the
     Securities Act of the Notes or the Guarantee or (ii) other than with
     respect to actions taken by the Placement Agents, as to which the Company
     makes no representation or warranty, engaged in any form of general
     solicitation or general advertising in connection with the offering of the
     Notes (as those terms are used in Regulation D under the Securities Act) or
     in any manner involving a public offering within the meaning of Section
     4(2) of the Securities Act.

          (s)  No "nationally recognized statistical rating organization" as
     such term is defined for purposes of Rule 436(g)(2) under the Securities
     Act (i) has imposed (or has informed the Company that it is considering
     imposing) any condition on the Company retaining any rating assigned to it
     or any of its securities or (ii) has indicated to the Company that it is
     considering (A) the downgrading, suspension, or withdrawal of, or any
     review for a possible change that does not indicate the direction of the
     possible change in, any rating so assigned or (B) any change in the outlook
     for any rating of the Company or any of its securities.

          (t)  It is not necessary in connection with the offer, sale and
     delivery of the Notes to the Placement Agents in the manner contemplated by
     this Agreement to register the Notes or the Guarantee under the Securities
     Act and the Indenture, as amended, is qualified under the Trust Indenture
     Act of 1939, as amended.

          (u)  The Notes satisfy the requirements set forth in Rule 144A(d)(3)
     under the Securities Act.

     2.   Agreements to Sell and Purchase. Subject to the conditions set
forth herein and upon the basis of the representations and warranties herein
contained, the Company hereby agrees to sell to the several Placement Agents,
and each Placement Agent agrees, severally and not jointly, to purchase from the
Company the respective principal amount of Notes set forth in Schedule I hereto
opposite its name at a purchase price of 98.25% of the principal amount thereof
(the "Purchase Price"), plus accrued interest, if any, to the Closing Date.

     The Company hereby agrees that, without the prior written consent of the
Representative, it will not, during the period beginning on the date hereof and
continuing to and including the

                                       6
<PAGE>

Closing Date, offer, sell, contract to sell or otherwise dispose of any debt of
the Company or warrants to purchase debt of the Company substantially similar to
the Notes (other than the sale of the Notes under this Agreement).

     3.   Terms of Offering. You have advised the Company that the Placement
Agents will make an offering of the Notes purchased by the Placement Agents
hereunder on the terms to be set forth in the Memorandum, as soon as practicable
after this Agreement is entered into as in your judgment is advisable.

     4.   Payment and Delivery. Payment for the Notes shall be made to the
Company in Federal or other funds immediately available in New York City against
delivery of such Notes for the respective accounts of the several Placement
Agents at 10:00 a.m., New York City time, on February 2, 2001, or at such other
time on the same or such other date, not later than February 9, 2001, as shall
be designated in writing by you. The time and date of such payment are
hereinafter referred to as the "Closing Date."

     Certificates for the Notes shall be in definitive form or global form, as
specified by you in accordance with the terms of the Indenture, and registered
in such names and in such denominations as you shall request in writing not
later than one full business day prior to the Closing Date.  The certificates
evidencing the Notes shall be delivered to you on the Closing Date for the
respective accounts of the several Placement Agents, with any transfer taxes
payable in connection with the transfer of the Notes to the Placement Agents
duly paid, against payment of the Purchase Price therefor, plus accrued
interest, if any, to the date of payment and delivery.

     5.   Conditions to the Placement Agents' Obligations. The several
obligations of the Placement Agents to purchase and pay for the Notes on the
Closing Date are subject to the following conditions:

          (a)  Subsequent to the execution and delivery of this Agreement and
     prior to the Closing Date:

               (i)  there shall not have occurred any downgrading, nor shall any
          notice have been given of any intended or potential downgrading or of
          any review for a possible change that does not indicate the direction
          of the possible change, in the rating accorded the Company, the
          Guarantor or any of their securities or in the rating outlook for the
          Company or the Guarantor by any "nationally recognized statistical
          rating organization," as such term is defined for purposes of Rule
          436(g)(2) under the Securities Act; and

               (ii)  there shall not have occurred any change, or any
          development involving a prospective change, in the condition,
          financial or otherwise, or in the earnings, business or operations of
          the Company or the Guarantor from that set forth in the Memorandum
          that, in your judgment, is material and adverse and that

                                       7
<PAGE>

          makes it, in your judgment, impracticable to market the Notes on the
          terms and in the manner contemplated in the Memorandum.

          (b)  The Placement Agents shall have received on the Closing Date a
     certificate, dated the Closing Date and signed by an executive officer of
     the Company and the Guarantor, to the effect set forth in Section 5(a)(i)
     and to the effect that the representations and warranties of the Company
     and the Guarantor contained in this Agreement are true and correct as of
     the Closing Date and that the Company and the Guarantor have complied with
     all of the agreements and satisfied all of the conditions on its part to be
     performed or satisfied hereunder on or before the Closing Date.

          The officer signing and delivering such certificate may rely upon the
     best of his or her knowledge as to proceedings threatened.

          (c)  The Placement Agents shall have received on the Closing Date the
     opinions of Gibson, Dunn & Crutcher LLP, outside counsel for the Company
     and the Guarantor, and McDonald Carano Wilson McCune Bergin Frankovich &
     Hicks LLP, outside Nevada counsel for the Company, dated the Closing Date,
     to the effect set forth in Exhibits A-1 and A-2, respectively. Such opinion
     shall be rendered to the Placement Agents at the request of the Company and
     the Guarantor and shall so state therein.

          (d)  The Placement Agents shall have received on the Closing Date an
     opinion of Latham & Watkins, counsel for the Placement Agents, dated the
     Closing Date, in form and substance reasonably satisfactory to the
     Placement Agents, covering such matters as are customarily covered in such
     opinions.

          (e)  The Placement Agents shall have received on each of the date
     hereof and the Closing Date a letter, dated the date hereof or the Closing
     Date, as the case may be, in form and substance satisfactory to the
     Placement Agents, from PricewaterhouseCoopers LLP, independent public
     accountants, containing statements and information of the type ordinarily
     included in accountants' "comfort letters" to underwriters with respect to
     the financial statements and certain financial information contained in or
     incorporated by reference into the Memorandum; provided that the letter
     delivered on the Closing Date shall use a "cut-off date" not earlier than
     the date hereof.

          (f)  The Company shall have received all consents, waivers or
     amendments under the Credit Facility and any other agreement to which the
     Company or the Guarantor is a party which are necessary or appropriate for
     the consummation of the transactions contemplated hereby.

     6.   Covenants of the Company and the Guarantor. In further consideration
of the agreements of the Placement Agents contained in this Agreement, the
Company and the Guarantor, jointly and severally, covenant with each Placement
Agent as follows:

                                       8
<PAGE>

          (a)  To furnish to you in New York City, without charge, prior to 3:00
     p.m. New York City time on January 29, 2001 and during the period mentioned
     in Section 6(c), as many copies of the Memorandum, any documents
     incorporated by reference therein and any supplements and amendments
     thereto as you may reasonably request.

          (b)  Before amending or supplementing the Memorandum, to furnish to
     you a copy of each such proposed amendment or supplement and not to use any
     such proposed amendment or supplement to which you reasonably object.

          (c)  If, during such period after the date on which the Memorandum is
     first delivered to you and prior to the date on which all of the Notes
     shall have been sold by the Placement Agents, any event shall occur or
     condition exist as a result of which it is necessary to amend or supplement
     the Memorandum in order to make the statements therein, in the light of the
     circumstances when the Memorandum is delivered to a purchaser, not
     misleading, or if, in the reasonable opinion of counsel for the Placement
     Agents, it is necessary to amend or supplement the Memorandum to comply
     with applicable law, forthwith to prepare and furnish, at its own expense,
     to the Placement Agents, either amendments or supplements to the Memorandum
     so that the statements in the Memorandum as so amended or supplemented will
     not, in the light of the circumstances when the Memorandum is delivered to
     a purchaser, be misleading or so that the Memorandum, as amended or
     supplemented, will comply with applicable law.

          (d)  To endeavor to qualify the Notes for offer and sale under the
     securities or Blue Sky laws of such jurisdictions as you shall reasonably
     request.

          (e)  Whether or not the transactions contemplated in this Agreement
     are consummated or this Agreement is terminated, to pay or cause to be paid
     all expenses incident to the performance of their obligations under this
     Agreement, including: (i) the fees, disbursements and expenses of counsel
     and the accountants of the Company and the Guarantor in connection with the
     issuance and sale of the Notes and all other fees or expenses in connection
     with the preparation of the Memorandum and all amendments and supplements
     thereto, including all printing costs associated therewith, and the
     delivering of copies thereof to the Placement Agents, in the quantities
     herein above specified, (ii) all costs and expenses related to the transfer
     and delivery of the Notes to the Placement Agents, including any transfer
     or other taxes payable thereon, (iii) the cost of printing or producing any
     Blue Sky or legal investment memorandum in connection with the offer and
     sale of the Notes under state securities laws and all expenses in
     connection with the qualification of the Notes for offer and sale under
     state securities laws as provided in Section 6(d) hereof, including filing
     fees and the reasonable fees and disbursements of counsel for the Placement
     Agents in connection with such qualification and in connection with the
     Blue Sky or legal investment memorandum, (iv) any fees charged by rating
     agencies for the rating of the Notes, (v) the fees and expenses, if any,
     incurred in connection with the admission of the Notes for trading in
     PORTAL or any appropriate market system, (vi) the costs and charges of the
     Trustee and any transfer agent, registrar

                                       9
<PAGE>

     or depositary, (vii) the cost of the preparation, issuance and delivery of
     the Notes, (viii) the costs and expenses of the Company relating to
     investor presentations on any "road show" undertaken in connection with the
     marketing of the offering of the Notes, including, without limitation,
     expenses associated with the production of road show slides and graphics,
     fees and expenses of any consultants engaged in connection with the road
     show presentations with the prior approval of the Company, travel and
     lodging expenses of the representatives and officers of the Company and any
     such consultants, and the cost of any aircraft chartered in connection with
     the road show, and (ix) all other costs and expenses incident to the
     performance of the obligations of the Company and the Guarantor hereunder
     for which provision is not otherwise made in this Section. It is
     understood, however, that except as provided in this Section, Section 8,
     and the last paragraph of Section 10, the Placement Agents will pay all of
     their costs and expenses, including fees and disbursements of their
     counsel, transfer taxes payable on resale of any of the Notes by them and
     any advertising expenses connected with any offers they may make.

          (f)   Neither the Company, the Guarantor nor any of their Affiliates
     will sell, offer for sale or solicit offers to buy or otherwise negotiate
     in respect of any security (as defined in the Securities Act) which could
     be integrated with the sale of the Notes in a manner which would require
     the registration under the Securities Act of the Notes.

          (g)   Not to solicit any offer to buy or offer or sell the Notes by
     means of any form of general solicitation or general advertising (as those
     terms are used in Regulation D under the Securities Act) or in any manner
     involving a public offering within the meaning of Section 4(2) of the
     Securities Act.

          (h)   While any of the Notes remain "restricted securities" within the
     meaning of the Securities Act, to make available, upon request, to any
     seller of such Notes the information specified in Rule 144A(d)(4) under the
     Securities Act, unless the Company is then subject to Section 13 or 15(d)
     of the Exchange Act.

          (i)   If requested by you, to use its best efforts to permit the Notes
     to be designated PORTAL securities in accordance with the rules and
     regulations adopted by the National Association of Securities Dealers, Inc.
     relating to trading in the PORTAL Market.

          (j)   During the period of two years after the Closing Date, the
     Company will not, and will not permit any of its affiliates (as defined in
     Rule 144A under the Securities Act) to resell any of the Notes which
     constitute "restricted securities" under Rule 144A that have been
     reacquired by any of them.

     7.   Offering of Notes; Restrictions on Transfer. (a) Each Placement Agent,
severally and not jointly, represents and warrants that such Placement Agent is
a qualified institutional buyer as defined in Rule 144A under the Securities Act
(a "QIB"). Each Placement Agent,

                                       10
<PAGE>

severally and not jointly, agrees with the Company and the Guarantor that (i) it
will not solicit offers for, or offer or sell, Notes by any form of general
solicitation or general advertising (as those terms are used in Regulation D
under the Securities Act) or in any manner involving a public offering within
the meaning of Section 4(2) of the Securities Act and (ii) it will solicit
offers for Notes only from, and will offer Notes only to, persons that it
reasonably believes to be QIBs.

     8.   Indemnity and Contribution. (a) The Company and the Guarantor, jointly
and severally, agree to indemnify and hold harmless each Placement Agent and
each person, if any, who controls any Placement Agent within the meaning of
either Section 15 of the Securities Act or Section 20 of the Exchange Act from
and against any and all losses, claims, damages and liabilities (including,
without limitation, any legal or other expenses reasonably incurred in
connection with defending or investigating any such action or claim) caused by
any untrue statement or alleged untrue statement of a material fact contained in
the Memorandum (as amended or supplemented if the Company and the Guarantor
shall have furnished any amendments or supplements thereto), or caused by any
omission or alleged omission to state therein a material fact necessary to make
the statements therein in the light of the circumstances under which they were
made not misleading, except insofar as such losses, claims, damages or
liabilities are caused by any such untrue statement or omission or alleged
untrue statement or omission based upon information relating to any Placement
Agent furnished to the Company in writing by such Placement Agent through the
Representative expressly for use therein.

     (a)  Each Placement Agent agrees, severally and not jointly, to indemnify
and hold harmless the Company and the Guarantor, their directors, their officers
and each person, if any, who controls the Company or the Guarantor within the
meaning of either Section 15 of the Securities Act or Section 20 of the Exchange
Act to the same extent as the foregoing indemnity from the Company and the
Guarantor to such Placement Agent, but only with reference to information
relating to such Placement Agent furnished to the Company in writing by such
Placement Agent expressly for use in either Memorandum or any amendments or
supplements thereto.

     (b)  In case any proceeding (including any governmental investigation)
shall be instituted involving any person in respect of which indemnity may be
sought pursuant to Section 8(a) or 8(b), such person (the "indemnified party")
shall promptly notify the person against whom such indemnity may be sought (the
"indemnifying party") in writing and the indemnifying party, upon request of the
indemnified party, shall retain counsel reasonably satisfactory to the
indemnified party to represent the indemnified party and any others the
indemnifying party may designate in such proceeding and shall pay the fees and
disbursements of such counsel related to such proceeding.  The Company may
assume at its sole expense the defense of any such litigation or proceeding;
such defense shall be conducted by counsel reasonably satisfactory to such
indemnified person and the Company shall pay the fees and disbursements of such
counsel related to such proceeding.  Notwithstanding the foregoing, in any such
proceeding, any indemnified party shall have the right to retain its own counsel
and assume its own defense in such proceeding, but the fees and expenses of such
counsel shall be at the

                                       11
<PAGE>

expense of such indemnified party unless (i) the indemnifying party and the
indemnified party shall have mutually agreed to the retention of such counsel or
(ii) the named parties to any such proceeding (including any impleaded parties)
include both the indemnifying party and the indemnified party and representation
of both parties by the same counsel would be inappropriate due to actual or
potential differing interests between them. It is understood that the
indemnifying party shall not, in respect of the legal expenses of any
indemnified party in connection with any proceeding or related proceedings in
the same jurisdiction, be liable for the fees and expenses of more than one
separate firm (in addition to any local counsel) for all such indemnified
parties and that all such fees and expenses shall be reimbursed as they are
incurred. Such firm shall be designated in writing by the Representative, in the
case of parties indemnified pursuant to Section 8(a), and by the Company, in the
case of parties indemnified pursuant to Section 8(b). The indemnifying party
shall not be liable for any settlement of any proceeding effected without its
written consent, but if settled with such consent or if there be a final
judgment for the plaintiff, the indemnifying party agrees to indemnify the
indemnified party from and against any loss or liability by reason of such
settlement or judgment. Notwithstanding the foregoing sentence, if at any time
an indemnified party shall have requested an indemnifying party to reimburse the
indemnified party for fees and expenses of counsel as contemplated by the third
and fourth sentences of this paragraph, the indemnifying party agrees that it
shall be liable for any settlement of any proceeding effected without its
written consent if (i) such settlement is entered into more than 30 days after
receipt by such indemnifying party of the aforesaid request and (ii) such
indemnifying party shall not have reimbursed the indemnified party in accordance
with such request prior to the date of such settlement. No indemnifying party
shall, without the prior written consent of the indemnified party, effect any
settlement of any pending or threatened proceeding in respect of which any
indemnified party is or could have been a party and indemnity could have been
sought hereunder by such indemnified party, unless such settlement includes an
unconditional release of such indemnified party from all liability on claims
that are the subject matter of such proceeding.

     (c)  To the extent the indemnification provided for in Section 8(a) or
8(b) is unavailable to an indemnified party or insufficient in respect of any
losses, claims, damages or liabilities referred to therein, then each
indemnifying party under such paragraph, in lieu of indemnifying such
indemnified party thereunder, shall contribute to the amount paid or payable by
such indemnified party as a result of such losses, claims, damages or
liabilities (i) in such proportion as is appropriate to reflect the relative
benefits received by the Company and the Guarantor on the one hand and the
Placement Agents on the other hand from the offering of the Notes or (ii) if the
allocation provided by clause 8(d)(i) above is not permitted by applicable law,
in such proportion as is appropriate to reflect not only the relative benefits
referred to in clause 8(d)(i) above but also the relative fault of the Company
and the Guarantor on the one hand and of the Placement Agents on the other hand
in connection with the statements or omissions that resulted in such losses,
claims, damages or liabilities, as well as any other relevant equitable
considerations.  The relative benefits received by the Company and the Guarantor
on the one hand and the Placement Agents on the other hand in connection with
the offering of the Notes shall be deemed to be in the same respective
proportions as the net proceeds from the offering of the Notes (before deducting
expenses) received by the Company and the total discounts and

                                       12
<PAGE>

commissions received by the Placement Agents, in each case as set forth in the
Memorandum, bear to the aggregate offering price of the Notes. The relative
fault of the Company and the Guarantor on the one hand and of the Placement
Agents on the other hand shall be determined by reference to, among other
things, whether the untrue or alleged untrue statement of a material fact or the
omission or alleged omission to state a material fact relates to information
supplied by the Company or the Guarantor, on the one hand, or by the Placement
Agents, on the other hand, and the parties' relative intent, knowledge, access
to information and opportunity to correct or prevent such statement or omission.
The Placement Agents' respective obligations to contribute pursuant to this
Section 8 are several in proportion to the respective principal amount of Notes
they have purchased hereunder, and not joint.

     (d)  The Company, the Guarantor and the Placement Agents agree that it
would not be just or equitable if contribution pursuant to this Section 8 were
determined by pro rata allocation (even if the Placement Agents were treated as
one entity for such purpose) or by any other method of allocation that does not
take account of the equitable considerations referred to in Section 8(d).  The
amount paid or payable by an indemnified party as a result of the losses,
claims, damages and liabilities referred to in Section 8(d) shall be deemed to
include, subject to the limitations set forth above, any legal or other expenses
reasonably incurred by such indemnified party in connection with investigating
or defending any such action or claim.  Notwithstanding the provisions of this
Section 8, no Placement Agent shall be required to contribute any amount in
excess of the amount by which the total price at which the Notes resold by it in
the initial placement of such Notes were offered to investors exceeds the amount
of any damages that such Placement Agent has otherwise been required to pay by
reason of such untrue or alleged untrue statement or omission or alleged
omission.  No person guilty of fraudulent misrepresentation (within the meaning
of Section 11(f) of the Securities Act) shall be entitled to contribution from
any person who was not guilty of such fraudulent misrepresentation.  The
remedies provided for in this Section 8 are not exclusive and shall not limit
any rights or remedies which may otherwise be available to any indemnified party
at law or in equity.

     (e)  The indemnity and contribution provisions contained in this Section 8
and the representations, warranties and other statements of the Company and the
Guarantor contained in this Agreement shall remain operative and in full force
and effect regardless of (i) any termination of this Agreement, (ii) any
investigation made by or on behalf of any Placement Agent or any person
controlling any Placement Agent or by or on behalf of the Company or the
Guarantor, their officers or directors or any person controlling the Company or
the Guarantor and (iii) acceptance of and payment for any of the Notes.

     9.   Termination.  This Agreement shall be subject to termination by
notice given by you to the Company and the Guarantor, if (a) after the execution
and delivery of this Agreement and prior to the Closing Date (i) trading
generally shall have been suspended or materially limited on or by, as the case
may be, any of the New York Stock Exchange, the American Stock Exchange, the
National Association of Securities Dealers, Inc., the Chicago Board of Options
Exchange, the Chicago Mercantile Exchange or the Chicago Board of Trade, (ii)
trading of any securities of the Company shall have been suspended on any
exchange or in any over-the-counter

                                       13
<PAGE>

market, (iii) a general moratorium on commercial banking activities in New York
shall have been declared by either Federal or New York State authorities or (iv)
there shall have occurred any outbreak or escalation of hostilities or any
change in financial markets or any calamity or crisis that, in your judgment, is
material and adverse and (b) in the case of any of the events specified in
clauses 9(a)(i) through 9(a)(iv), such event, singly or together with any other
such event, makes it, in your judgment, impracticable to market the Notes on the
terms and in the manner contemplated in the Memorandum.

     10.  Effectiveness; Defaulting Placement Agents.  This Agreement shall
become effective upon the execution and delivery hereof by the parties hereto.

     If, on the Closing Date, either of the Placement Agents shall fail or
refuse to purchase Notes that it or they have agreed to purchase hereunder on
such date, and the aggregate principal amount of Notes which such defaulting
Placement Agent agreed but failed or refused to purchase is not more than one-
tenth of the aggregate principal amount of Notes to be purchased on such date,
the other Placement Agent shall be obligated severally to purchase the Notes
which such defaulting Placement Agent agreed but failed or refused to purchase
on such date; provided that in no event shall the principal amount of Notes that
a Placement Agent has agreed to purchase pursuant to this Agreement be increased
pursuant to this Section 10 by an amount in excess of one-ninth of such
principal amount of Notes without the written consent of such Placement Agent.
If, on the Closing Date, either Placement Agent shall fail or refuse to purchase
Notes which it has agreed to purchase hereunder on such date and the aggregate
principal amount of Notes with respect to which such default occurs is more than
one-tenth of the aggregate principal amount of Notes to be purchased on such
date, and arrangements satisfactory to you and the Company for the purchase of
such Notes are not made within 36 hours after such default, this Agreement shall
terminate without liability on the part of the non-defaulting Placement Agent,
the Company or the Guarantor.  In any such case either you or the Company shall
have the right to postpone the Closing Date, but in no event for longer than
seven days, in order that the required changes, if any, in the Memorandum or in
any other documents or arrangements may be effected.  Any action taken under
this paragraph shall not relieve a defaulting Placement Agent from liability in
respect of any default of such Placement Agent under this Agreement.

     If this Agreement shall be terminated by the Placement Agents, or either of
them, because of any failure or refusal on the part of the Company or the
Guarantor to comply with the terms or to fulfill any of the conditions of this
Agreement, or if for any reason the Company or the Guarantor shall be unable to
perform its obligations under this Agreement, the Company and the Guarantor will
reimburse the Placement Agents or such Placement Agent as has so terminated this
Agreement with respect to itself, severally, for all out-of-pocket expenses
(including the fees and disbursements of their counsel) reasonably incurred by
such Placement Agent in connection with this Agreement or the offering
contemplated hereunder.

     11.  Counterparts.  This Agreement may be signed in any number of
counterparts, each of which shall be an original, with the same effect as if the
signatures thereto and hereto were upon the same instrument.

                                       14
<PAGE>

     12.  Applicable Law. This Agreement shall be governed by and construed in
accordance with the internal laws of the State of New York.

     13.  Headings. The headings of the sections of this Agreement have been
inserted for convenience of reference only and shall not be deemed a part of
this Agreement.

                           [Signature page follows]

                                       15
<PAGE>

                         Very truly yours,

                         COAST HOTELS AND CASINOS, INC.



                         By:___________________________
                         Name:  Gage Parrish
                         Title: Vice President and Chief Financial Officer


                         COAST RESORTS, INC.



                         By:___________________________
                         Name:  Gage Parrish
                         Title: Vice President and Chief Financial Officer



Accepted as of the date hereof

Banc of America Securities LLC
Morgan Stanley & Co. Incorporated

By:  Banc of America Securities LLC



   By:______________________________
   Name:  Bruce R. Thompson
   Title: Managing Director


                    [Signature page to Placement Agreement]
<PAGE>

                                   SCHEDULE I

<TABLE>
<CAPTION>
                                                    Principal Amount of
Placement Agent                                    Notes to be Purchased
---------------                                    ---------------------
<S>                                                <C>
Banc of America Securities LLC                            $25,000,000
Morgan Stanley & Co. Incorporated                          25,000,000
                                                          -----------
     Total                                                $50,000,000
                                                          ===========
</TABLE>

                                      S-1
<PAGE>

                                                                     EXHIBIT A-1

                      OPINION OF GIBSON, DUNN & CRUTCHER

     The opinion of the counsel for the Company, to be delivered pursuant to
Section 5(c) of the Placement Agreement shall be attached hereto.

     1.  The Notes, when executed and authenticated in accordance with the
provisions of the Indenture and delivered to and paid for by the Placement
Agents in accordance with the terms of the Placement Agreement, will be valid
and binding obligations of the Issuer, enforceable against the Issuer in
accordance with their terms, and will be entitled to the benefits of the
Indenture and the Registration Rights Agreement.

     2.  Each of the Indenture and the Registration Rights Agreement constitutes
a legal, valid and binding obligation of the Issuer and the Guarantor,
enforceable against such parties in accordance with its terms.

     3.  When the Notes have been executed and authenticated in accordance with
the provisions of the Indenture and delivered to and paid for by the Placement
Agents in accordance with the terms of the Placement Agreement, the guarantees
to be endorsed on the Notes by the Guarantor (the "Guarantees") will be valid
                                                   ----------
and binding obligations of the Guarantor, enforceable against the Guarantor in
accordance with their terms, and will be entitled to the benefits of the
Indenture and the Registration Rights Agreement.

     4.  The Supplemental Indenture constitutes a valid and binding obligation
of the Issuer and the Guarantor, enforceable against such parties in accordance
with its terms.

     5.  The Issuer is not, and after giving effect to the offering and sale of
the Notes and the application of the proceeds thereof as described in the
Memorandum will not be, an "investment company" within the meaning of the
Investment Company Act of 1940, as amended.

     6.  The statements in the Memorandum under the captions "Description of the
Notes," "Private Placement" and "Transfer Restrictions," insofar as such
statements constitute summaries of the legal matters, documents or proceedings
referred to therein, fairly summarize in all material respects the matters
referred to therein.

     7.  To its knowledge, there are no legal or governmental proceedings
pending or threatened to which the Company or the Guarantor is a party or to
which any of the properties of the Company or the Guarantor is subject, other
than proceedings summarized in the Memorandum and proceedings which it believes
are not likely to have a material adverse effect on the Company and the
Guarantor, taken as a whole, or on the power or ability of the Company or the
Guarantor to perform their respective obligations under the Placement Agreement,
the

                                     A1-1
<PAGE>

Indenture as amended by the Supplemental Indenture, the Registration Rights
Agreement, the Notes or the Guarantees, as applicable, or to consummate the
transactions contemplated by the Memorandum.

     8.  Assuming the accuracy of the representations and warranties of the
Company and the Guarantor contained in Sections 1(r) and 1(u) of the Placement
Agreement and of the Placement Agents contained in Section 7 of the Placement
Agreement and compliance by them with their agreements contained in Sections
6(f) and 6(g) of the Placement Agreement, no registration of the Notes under the
Securities Act is required for the sale and delivery of the Notes to the
Placement Agents and the initial resale of such Notes by the Placement Agents in
the manner contemplated by the Placement Agreement, it being understood that we
express no opinion as to any subsequent resale of the Notes.

     9.  Assuming the accuracy of the representations and warranties of the
Company and the Guarantor contained in Sections 1(r) and 1(u) of the Placement
Agreement and of the Placement Agents contained in Section 7 of the Placement
Agreement and compliance by them with their agreements contained in Sections
6(f) and 6(g) of the Placement Agreement, none of the issuance of the Notes, the
execution and delivery by the Issuer and Guarantor of, and the performance by
the Issuer or the Guarantor of their respective obligations under the Placement
Agreement, the Indenture as amended by the Supplemental Indenture, the
Registration Rights Agreement, and the Notes, and the performance by the
Guarantor of its obligations under the Guarantees will result in a breach or
violation of, or constitute a default under, (i) (A) any statute, rule or
regulation of the United States or the State of New York that in our experience
is generally applicable to transactions of the type contemplated by the
Memorandum or (B) to the best of our knowledge, any judgment, order or decree
applicable to the Issuer or the Guarantor of any governmental authority or court
having jurisdiction over the Issuer or the Guarantor, or (ii) any agreement or
other instrument binding upon the Issuer or the Guarantor that has been
identified to us by the Issuer or the Guarantor, as the case may be, pursuant to
the officer's certificate attached to the opinion, as being the only such
documents that are material to the Issuer and the Guarantor taken as a whole
(each a "Material Contract"), except, in each case, for such breaches,
         -----------------
violations or defaults that would not have a material adverse effect on the
Issuer and the Guarantor, taken as whole (a "Material Adverse Effect").
                                             -----------------------

     10. Assuming the accuracy of the representations and warranties of the
Company and the Guarantor contained in Sections 1(r) and 1(u) of the Placement
Agreement and of the Placement Agents contained in Section 7 of the Placement
Agreement and compliance by them with their agreements contained in Sections
6(f) and 6(g) of the Placement Agreement, no consent, approval, authorization or
order of, or qualification with, any governmental body or agency is required for
the performance by the Issuer, or the Guarantor of their respective obligations
under the Placement Agreement, the Indenture as amended by the Supplemental
Indenture, the Registration Rights Agreement, the Notes or the Guarantees except
for such consents, approvals, authorizations or orders, or qualifications (i) as
may be required under state securities or blue sky laws, (ii) as may be
necessary in connection with the transactions

                                     A1-2
<PAGE>

contemplated by the Registration Rights Agreement, (iii) as already have been
obtained or (iv) the failure of which to obtain, would not have a Material
Adverse Effect.

                                     A1-3
<PAGE>

                                                                     EXHIBIT A-2

                   OPINION OF MCDONALD CARANO WILSON MCCUNE
                           BERGIN FRANKOVICH & HICKS

The opinion of the Nevada counsel for the Company, to be delivered pursuant to
Section 5(c) of the Placement Agreement shall be attached hereto.

     1.  Each of the Company and Guarantor has been duly incorporated and is
validly existing as a corporation in good standing under the laws of the State
of Nevada, each with full corporate power and authority to own its properties
and conduct its business as described in the Memorandum. The Company is
Guarantor's only Subsidiary. The Company does not have any subsidiaries.

     2.  All the outstanding shares of capital stock of the Company have been
duly and validly authorized and issued and are fully paid and non-assessable,
and all outstanding shares of capital stock of the Company are owned directly by
Guarantor, free and clear of any liens or encumbrances.

     3.  The Supplemental Indenture has been duly and validly authorized by all
necessary action on the part of the Company and Guarantor, and no other
proceedings by the Company or Guarantor are necessary to authorize such actions.

     4.  The Placement Agreement has been authorized, executed and delivered by
the Company and Guarantor.

     5.  The Notes have been duly authorized by the Company.

     6.  The Guaranty to be endorsed on the Notes by Guarantor has been duly
authorized, executed and delivered by Guarantor.

     7.  Each of the Indenture, as supplemented or amended through the date
hereof, and the Registration Rights Agreement has been duly authorized, executed
and delivered by the Company.

     8.  Each of the Company and Guarantor possesses the Governmental Licenses
issued by, and has made all filings with, the appropriate regulatory entities
necessary to own, lease, and operate its properties and to conduct the
businesses now operated by it, except where the failure thereof would not,
singly or in the aggregate, have a material adverse effect on the Company and
Guarantor, taken together. All such Governmental Licenses are valid and in full
force and effect, except where the invalidity of such Governmental Licenses or
the failure of such Governmental Licenses to be in full force and effect would
not have a material adverse effect on the Company

                                      B-1
<PAGE>

and Guarantor, taken together. To the best of our knowledge, each of the Company
and Guarantor is in compliance with the terms and conditions of all such
Governmental Licenses, except where the failure to so comply would not, singly
or in the aggregate, have a material adverse effect on the Company and
Guarantor, taken together. To the best of its knowledge, no event has occurred
(including, without limitation, the receipt of any notice from any regulatory
entity) which allows, or after notice or lapse of time, or both, would allow
revocation, modification, suspension, or termination of any Governmental License
or would result in any other material impairment of the rights of the holder of
any such Governmental Authorization which, singly or in the aggregate, would
result in a material adverse effect on the Company and Guarantor taken together.

     10.  The information contained in the Memorandum under the captions "Nevada
Regulation and Licensing," to the extent such information constitutes matters of
Nevada law or legal conclusions based upon Nevada law, has been reviewed by it
and fairly summarizes the matters therein described in all material respects.

                                      B-2