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                                                                  EXHIBIT 10.18

                              EMPLOYMENT AGREEMENT


PARTIES:

               Innovative Gaming Corporation of America, Inc.
               4750 Turbo Circle
               Reno, Nevada   89502                (the "Company")


               Edward G. Stevenson
               7 Kelly Circle
               Glenbrook, Nevada 89413                    (the "Executive")

DATE:   January 1, 1999


RECITALS:

A.      The parties hereto entered into an employment agreement dated as of
        February 15, 1996 (the "First Employment Agreement") to provide for the
        employment of the Executive as President and Chief Executive Officer of
        the Company.

B.      Subsequent to the date of execution of the First Employment Agreement,
        Executive became Chairman of the Board of the Company and relinquished
        the position of President of the Company.

C.      The First Employment Agreement terminates February 15, 1999.

D.      The parties wish to terminate the First Employment Agreement as of the
        date hereof and provide for the continued employment of the Executive as
        the Chairman of the Board and Chief Executive Officer of the Company
        following the termination of the First Employment Agreement pursuant to
        the terms and conditions of this Agreement.

E.      The Executive wishes to receive compensation from the Company for the
        Executive's continued services, and the Company wants reasonable
        protection of its confidential business and technical information that
        has been acquired and is being developed by the Company at substantial
        expense.

F.      The Company wishes to obtain reasonable protection against unfair
        competition from the Executive following termination of employment and
        to further protect against unfair use of its confidential business and
        technical information and the Executive is willing to grant the Company
        the benefits of a covenant-not-to-compete for these purposes.


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AGREEMENT:

The Company and the Executive, each intending to be legally bound, agree as
follows:

        1. Termination of First Employment Agreement. The First Employment
Agreement is hereby terminated. All terms and conditions relating to Executive's
employment with the Company are contained in this Agreement.

        2. Employment. Subject to all of the terms and conditions of this
Agreement, the Company agrees to continue to employ the Executive as the
Chairman of the Board and the Chief Executive Officer of the Company, and the
Executive accepts such employment.

        3. Duties. The Executive will devote substantially all of his business
hours to and, during such time, make the best use of his energy, knowledge and
training in advancing the Company's interests. The Executive will diligently and
conscientiously perform the duties of the Executive's position within the
general guidelines to be determined by the Company's Board of Directors (the
"Board of Directors"). While the Executive is employed by the Company, Executive
will keep the Company informed of any other business activities, and will
promptly stop any activity or employment that might conflict with the Company's
interests or adversely affect the performance of the Executive's duties for the
Company.

        4. Term. This Agreement will remain in effect for three (3) years after
the date of this Agreement, unless it is terminated in accordance with Section 5
hereof.

        5. Termination. Subject to the respective continuing obligations of the
Company and the Executive under Sections 7, 8 and 9 hereof:

              a. The Company may terminate this Agreement immediately upon
        written notice to the Executive "for cause," which is defined as: (i)
        dishonesty, fraud, material and deliberate injury or attempted injury,
        in each case related to the Company or its business, (ii) any criminal
        activity of a serious nature, or (iii) the continued failure by
        Executive to satisfactorily perform the duties assigned to him pursuant
        to Section 3 of this Agreement for a period of 60 days after a written
        demand by the Board of Directors for such satisfactory performance which
        specifically identifies the manner in which it is alleged that Executive
        has not satisfactorily performed such duties. In the event of
        termination of this Agreement for cause pursuant to this Section 5(a),
        Executive will be paid at the usual rate Executive's annual Base Salary
        through the date of 

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        termination specified in any notice of termination and Executive will
        have no right to receive any bonus for the period after which the
        termination occurs or any future periods, provided that such payments
        will be made within 30 days after termination for cause pursuant to this
        Section 5(a). Any termination by the Company other than for a reason
        enumerated in this Section 5(a) shall be deemed to be a termination
        "without cause." The Executive shall also be deemed to be terminated
        "without cause" in the event: (i) the Executive is required to relocate
        from the Reno, Nevada metropolitan area or (ii) the Executive is removed
        from the office of Chief Executive Officer or (iii) the Executive has
        had his authority and position diminished from that provided in Section
        2; provided, however, that it shall not be deemed to be a diminishment
        of authority and position if the Company's Board of Directors appoints a
        Co-Chairman and Co-Chief Executive Officer.

               b. This Agreement will terminate upon the Executive's death or
        permanent disability.

6.      Compensation.

                1. Base Salary. In consideration for the Executive's services
        under this Agreement, the Company agrees to pay the Executive an initial
        base salary at a rate of Two Hundred Fifty Thousand Dollars
        ($250,000.00) per year (the "Base Salary"). Such Base Salary shall be
        paid no less often than monthly in accordance with the standard payroll
        practices of the Company. Such Base Salary may be adjusted from time to
        time by the Board of Directors but may not be decreased during the term
        of this Agreement.

                2. Bonus. In addition to other compensation to be paid under
        this Section 6, the Company will pay Executive an annual bonus or a
        merit increase of up to 25% of the current year's Base Salary for each
        year in which he performs services under this Agreement, the exact
        amount to be determined by the Board of Directors based upon Executive's
        and the Company's attainment during the preceding year of specified
        annual objectives established by the Board of Directors in consultation
        with the Executive. In addition to such bonus, the Company will pay
        Executive an additional annual bonus of up to 25% of the current year's
        Base Salary for each year in which he performs services under this
        Agreement, the exact amount to be determined pursuant to a profit
        formula to be determined by the Compensation Committee of the Company's
        Board of Directors.

                3. Reimbursement of Business Expenses. In addition to payment of
        Base Salary, the Company agrees to reimburse the Executive for all
        reasonable out-of-pocket business 

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        expenses incurred by the Executive on behalf of the Company, provided
        that the Executive properly accounts to the Company for all such
        expenses in accordance with the rules and regulations of the Internal
        Revenue Service under the Internal Revenue Code of 1986, as amended, and
        in accordance with the standard policies of the Company relating to
        reimbursement of business expenses.

                4. Benefits and Vacation. The Executive will be entitled to
        participate in all benefit plans adopted by the Company to the extent
        that the terms of such benefit plans permit the Executive to
        participate. The Executive will be entitled to an annual paid vacation
        of three weeks and all legal holidays observed by the Company, in each
        case, in accordance with the Company's policies as in effect from time
        to time.

                5. Termination Without Cause. If the Company terminates this
        Agreement without cause, (i) all options granted to Executive to
        purchase Common Stock of the Company shall vest and remain exercisable
        for thirty-six months following such termination without cause; and (ii)
        the Company shall pay or grant to Executive: (1) the greater of (a) the
        Base Salary (or such greater amount as it may be at the time of such
        termination) for a twelve (12) month period after the date of such
        termination or (b) base salary for the balance of the remaining
        Agreement term; (2) any accrued bonus to be paid pursuant to Section
        6(b) of this Agreement for the period through the date of termination;
        (3) the unreimbursed out-of-pocket business expenses incurred by the
        Executive on behalf of the Company of this Agreement; and (4) a
        continuation of health, life and disability insurance benefits for a
        twelve (12) month period after the date of termination on the same basis
        as Executive's health, life and disability insurance benefits
        immediately prior to such termination.

7.      Inventions.

                1. "Inventions," as used in this Section 7, means any
        discoveries, improvements and ideas (whether or not they are in writing
        or reduced to practice) or works of authorship (whether or not they can
        be patented or copyrighted) that the Executive makes, authors, or
        conceives (either alone or with others) and that:

                        (1) concern directly the Company's business or the
                Company's present or demonstrably anticipated future research or
                development;

                        (2) result from any work the Executive performs for the
                Company;


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                        (3) use the Company's equipment, supplies, facilities,
                or trade secret information; or

                        (4) the Executive develops during the time the Executive
                is performing employment duties for the Company.

        2. The Executive agrees that all Inventions made by the Executive during
or within six (6) months after the term of this Agreement will be the Company's
sole and exclusive property. The Executive will, with respect to any Invention:

                        (1) keep current, accurate, and complete records, which
                will belong to the Company and be kept and stored on the
                Company's premises while the Executive is employed by the
                Company;

                        (2) promptly and fully disclose the existence and
                describe the nature of the Invention to the Company in writing
                (and without request);

                        (3) assign (and the Executive does hereby assign) to the
                Company all of his rights to the Invention, any applications he
                makes for patents or copyrights in any country, and any patents
                or copyrights granted to him in any country; and

                        (4) acknowledge and deliver promptly to the Company any
                written instruments, and perform any other acts necessary in the
                Company's opinion to preserve property rights in the Invention
                against forfeiture, abandonment or loss and to obtain and
                maintain letters patent and/or copyrights to the Invention and
                to vest the entire right and title to the Invention in the
                Company.

        The requirements of this subsection 7(b) do not apply to an Invention
        for which no equipment, supplies, facility or trade secret information
        of the Company was used and which was developed entirely on the
        Executive's own time, and (1) which does not relate directly to the
        Company's business or to the Company's actual or demonstrably
        anticipated research or development, or (2) which does not result from
        any work the Executive performed for the Company. Except as previously
        disclosed to the Company in writing, the Executive does not have, and
        will not assert, any claims to or rights under any Inventions as having
        been made, conceived, authored or acquired by the Executive prior to his
        employment by the Company. With respect to any obligations performed by
        the Executive under this subsection 


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        7(b) following termination of employment, the Company will pay the
        Executive reasonable hourly compensation (consistent with the last Base
        salary) and will pay or reimburse all reasonable out-of-pocket expenses.

8.      Confidential Information.

        1. "Confidential Information," as used in this Section 8, means
information that is not generally known and that is proprietary to the Company
or that the Company is obligated to treat as proprietary. Any information that
the Executive reasonably considers Confidential Information, or that the Company
treats as Confidential Information, will be presumed to be Confidential
Information (whether the Executive or others originated it and regardless of how
the Executive obtained it).

        2. Except as specifically permitted by an authorized officer of the
Company or by written Company policies, the Executive will never, either during
or after his employment by the Company, use Confidential Information for any
purpose other than the business of the Company or disclose it to any person who
is not also an Executive of the Company. When the Executive's employment with
the Company ends, the Executive will promptly deliver to the Company all records
and any compositions, articles, devices, apparatus and other items that
disclose, describe or embody Confidential Information, including all copies,
reproductions and specimens of the Confidential Information in the Executive's
possession, regardless of who prepared them and will promptly deliver any other
property of the Company in the Executive's possession, whether or not
Confidential Information.

        9. Competitive Activities. The Executive agrees that, during the term of
employment with the Company and the period during which severance is paid, if
any, under this Agreement following termination of employment (if this Agreement
is terminated by the Company "without cause," then the Executive will not alone,
or in any capacity with another firm,

                1. directly engage in any commercial activity that competes with
        the Company's business, as the Company has conducted it during the two
        (2) years before the Executive's employment with the Company ends,
        within any state in the United States or within any country in which the
        Company directly markets or services products or provides services,

                2. in any way interfere or attempt to interfere with the
        Company's relationships with any of its current or potential customers,
        or

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                3. employ or attempt to employ any of the Company's then
        Executives on behalf of any other entity competing with the Company.

This Section 9 shall cease to be applicable to any activity of the Executive
from and after such time as the Company (i) shall have ceased all business
activities for a period of sixty (60) days or (ii) shall have made a decision
through its Board of Directors not to continue, or shall have ceased for a
period of sixty (60) days, the business activities with which such activity of
the Executive would be competitive.

        10. Conflicts of Interest. The Executive agrees that he will not,
directly or indirectly, transact business with the Company personally, or as
agent, owner, partner or shareholder of any other entity; provided, however,
that any such transaction may be entered into if approved by the Board of
Directors.

        11. No Adequate Remedy. The Executive understands that if the Executive
fails to fulfill the Executive's obligations under this Agreement, the damages
to the Company would be very difficult to determine. Therefore, in addition to
any other rights or remedies available to the Company at law, in equity, or by
statute, the Executive hereby consents to the specific enforcement of this
Agreement by the Company through an injunction or restraining order issued by an
appropriate court.

        12. Miscellaneous.

                1. Successors and Assigns. This Agreement is binding on and
        inures to the benefit of the Company's successors and assigns, all of
        which are included in the term the "Company" as it is used in this
        Agreement; provided, however, that the Company may assign this Agreement
        only in connection with a merger, consolidation, assignment, sale or
        other disposition of substantially all of its assets or business.

                2. Modification. This Agreement may be modified or amended only
        by a written statement signed by both the Company and the Executive.

                3. Governing law. The laws of Nevada will govern the validity,
        construction, and performance of this Agreement. Any legal proceeding
        related to this Agreement will be brought in an appropriate Nevada
        court, and both the Company and the Executive hereby consent to the
        exclusive jurisdiction of that court for this purpose.

                4. Construction. Wherever possible, each provision of this
        Agreement will be interpreted so that it is valid under the applicable
        law. If any provision of this Agreement is to any extent invalid under
        the applicable law, 

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        that provision will still be effective to the extent it remains valid.
        The remainder of this Agreement also will continue to be valid, and the
        entire Agreement will continue to be valid in other jurisdictions.

                5. Waivers. No failure or delay by either the Company or the
        Executive in exercising any right or remedy under this Agreement will
        waive any provision of the Agreement. Nor will any single or partial
        exercise by either the Company or the Executive of any right or remedy
        under this Agreement preclude either of them from otherwise or further
        exercising these rights or remedies, or any other rights or remedies
        granted by any law or any related document.

                6. Captions. The headings in this Agreement are for convenience
        only and do not affect this Agreement's interpretation.

                7. Entire Agreement. This Agreement supersedes all previous and
        contemporaneous oral negotiations, commitments, writings and
        understandings between the parties concerning the matters in this
        Agreement, including without limitation the First Employment Agreement
        and any policy or personnel manuals of the Company.

                8. Notices. All notices and other communications required or
        permitted under this Agreement shall be in writing and shall be hand
        delivered or sent by registered or certified first-class mail, postage
        prepaid, and shall be effective upon delivery if hand delivered, or
        three (3) days after mailing if mailed to the addresses stated at the
        beginning of this Agreement. These addresses may be changed at any time
        by like notice. IN WITNESS WHEREOF, the Company and the Executive have
        executed this Agreement as of the date first above written.


INNOVATIVE GAMING CORPORATION       EXECUTIVE
OF AMERICA

        By/s/ Lyle Berman
 -----------------------------------               /s/ Edward G. Stevenson   
            Its Director                       -------------------------------
                                                   Edward G. Stevenson


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