<PAGE>
                                                                  Exhibit 10(29)









                               OPERATING AGREEMENT
                                       OF

                          STRATOSPHERE DEVELOPMENT LLC
                      a Delaware limited-liability company





<PAGE>

                               OPERATING AGREEMENT

                                       OF

                          STRATOSPHERE DEVELOPMENT LLC
                      a Delaware limited-liability company



This Operating Agreement ("Agreement") is made and entered into as of the ____
day of _________, 2000, by and among the undersigned, Stratosphere Corporation,
which constitutes the Stratosphere member ("Stratosphere Member"), Arizona
Charlie's, Inc. which constitutes the Arizona Member ("Arizona Member") and
Fresca, LLC, which constitutes the Fresca, LLC Member ("Fresca Member") of
Stratosphere Development LLC, a Delaware limited-liability company (the
"Company"), and the Company, with reference to the recitals set forth below.

                                 R E C I T A L S

         A. The undersigned Members have caused the Company to be organized
pursuant to the provisions of the Act (as defined below); and

         B. The Members and the Company desire by this Agreement to set forth
their agreement as to the relationship between them and as to the conduct of the
business and the affairs of the Company and its separate Series.

         THEREFORE, in consideration of the mutual covenants, agreements and
promises made herein, the parties hereto agree as follows:

                                   ARTICLE I

                                   DEFINITIONS

         Act. "Act" shall mean the Delaware Limited Liability Company Act.

         Affiliate. "Affiliate" means with respect to a specified Person, any
other Person who or which is (a) a principal of the specified Person, (b)
directly or indirectly controlling, controlled by or under common control with
the specified Person, or (c) any member, director, officer, manager, relative or
spouse of the specified Person. For purposes of this definition, "control",
"controlling", "controlled" mean the right to exercise, directly or indirectly,
more than fifty percent of the voting power of the stockholders, members or
owners and, with respect to any individual, partnership, trust or other entity
or association, or the possession, directly or indirectly, of the power to
direct or cause the direction of the management or policies of the controlled
entity.

                                       2
<PAGE>

         Agreement. "Agreement" means this Operating Agreement, as amended from
time to time.

         Certificate."Certificate" means the Certification of Formation of
the Company as filed with the Secretary of the State of Delaware, as amended
from time to time.

         Capital Accounts. "Capital Accounts" means the respective capital
account maintained for each of the Stratosphere Member, Arizona Member and
Fresca Member in accordance with this Agreement and the applicable provisions of
the Code.

         Capital Contribution. "Capital Contribution" means the total amount of
cash and the agreed fair market value (net of liabilities) of any property
contributed at any time to the capital of a Series of the Company by the Member
who is the Member associated with such Series.

         Cash Available for Distribution. "Cash Available For Distribution" in
respect of a Series means an amount equal to the total cash revenues generated
by or received from the operations of that Series (including proceeds from the
sale of assets for the refinancing of any loan attributable to that Series)
which is available in the accounts of the Series less (i) payments on
indebtedness applicable to that Series (including, without limitation, principal
and accrued but unpaid interest, and including loans or advances by the Member
associated with that Series), (ii) payments for operating expenses, capital
improvements, replacements and all other cash expenditures incurred incident to
the normal operation of the business applicable to that Series, and for legal,
accounting, brokerage or similar service fees relating to that Series and (iii)
reasonable reserves in respect of that Series established by the Member
associated with that Series, based on an assessment of the needs of the business
and operations relating to set aside or allocated for working capital, the
payment of debt service, taxes, insurance and other anticipated costs and
expenses incident to the ownership and operation of the business relating to
that Series.

         Code. "Code" means the Internal Revenue Code of 1986, as amended from
time to time, or any corresponding United States federal tax statute enacted
after the date of this Agreement. A reference to a specific section of the Code
refers not only to such specific section but also to any corresponding provision
of any United States federal tax statute enacted after the date of this
Agreement, as such specific section or corresponding provision is in effect on
the date of application of the provisions of this Agreement containing such
reference.

         Covered Person. "Covered Person" of a Series means (a) the Member or
any Affiliate of the Member associated with that Series, (b) any officers,
directors, stockholders, members, partners, employees, representatives or agents
of the Member, (c) any office, employee, representative or agent of the Company
acting in furtherance of the business of that Series or its Affiliates, or (d)
any Person who was, at the time of the act




                                       3
<PAGE>

or omission in question, a Person described in any of the preceding clauses (a)
through (c).

         Fiscal Year. "Fiscal Year" means that calendar year.

         Interest. "Interest" means, the entire ownership interest with respect
to each Series of the Member related to such Series, including the right of the
Member to any and all benefits to which a member may be entitled as provided
under the Act and this Agreement.

         Person. "Person" means a natural person, any form of business or social
organization and any other non-governmental legal entity including, but not
limited to, a corporation, partnership, association, trust, unincorporated
organization, estate or limited-liability company.

         Records Office. "Records Office" means an office of the Company in
Nevada, which may but need not be a place of its business, at which it shall
keep all records identified in NRS Section 86.241, except that none of the lists
required to be maintained pursuant to NRS Section 86.241 need be maintained in
alphabetical order, nor shall the Company be required to maintain at its Records
Office copies of powers of attorney except those relating to the execution of
the Articles and this Agreement.

         Secretary of State. "Secretary of State" means the office of the
Delaware Secretary of State.

         Series. "Series" means one of three Series of interests: the
Stratosphere Series to which the Stratosphere Member is associated, the Arizona
Series to which the Arizona Member is associated and the Fresca Series to which
the Fresca Member is associated.

                                   ARTICLE II

                              INTRODUCTORY MATTERS

         2.1 Registered Office. The registered office of the Company in the
State of Delaware is located at 2711 Centerville Road, Suite 400, Wilmington,
Delaware 19808.

         2.2 Other Offices. The Company may establish and maintain other offices
at any time and at any place or places as the Members may designate or as the
business of the Company may require.

         2.3 Registered Agent. The name and address of the registered agent of
the Company for service of process on the Company in the State of Delaware are
Corporation Service Company, 2711 Centerville Road, Suite 400, Wilmington,
Delaware 19808.

         2.4 Purpose. The Company is formed for the object and purpose of, and
the nature of the business to be conducted and promoted by the Company is,
engaging in any lawful act or activity for which limited liability companies may
be formed and engaging




                                       4
<PAGE>

in any and all activities necessary or incidental to the foregoing. Each Series
may have a similar or separate business purpose from each other Series.

         2.5 Powers of the Company. A Member associated with a Series, shall
have the power and authority to take any and all actions necessary, appropriate,
advisable, convenient or incidental to or for the furtherance of the purpose set
forth in Section 2.4, including, but not limited to, the power and authority to:

                  (a) borrow money and issue evidence of indebtedness, and to
secure the same by a mortgage, pledge or other lien on any or all of the assets
of such Series;

                  (b) conduct its business and operations in any state,
territory, district or possession of the United States or in any foreign country
that may be necessary or convenient to the accomplishment of the purpose of the
Company and/or the Series;

                  (c) acquire, by purchase, lease, contribution of property or
otherwise, and own hold, maintain, finance, improve, lease, sell, convey,
mortgage, transfer, demolish or dispose of any real or personal property that
may be necessary, convenient or incidental to the accomplishment of the purpose
of the Company and that Series.

                  (d) enter into, perform and carry out contracts of any kind,
including without limitation, contracts with any Member or any Affiliate that
are necessary to, in connection with, convenient to, or incidental to the
accomplishment of the purpose of the Company and or such Series.

                  (e) purchase, take, receive, subscribe for or otherwise
acquire, own, hold, vote, use, employ, sell, mortgage, lend, pledge or otherwise
dispose of, and otherwise use and deal in and with, shares or other interests in
or obligations of domestic or foreign entities;

                  (f) lend money for any proper purpose, invest and reinvest its
funds and take and hold real and personal property for the payment of funds so
loaned or invested;

                  (g) sue and be sued, complain and defend and participate in
administrative or other proceedings, in its name;

                  (h) appoint employees, agents and officers of the Company
and/or of the Series, and define their duties and fix their compensation to be
paid from such Series;

                  (i) indemnify any person or entity and obtain any and all
types of insurance;

                  (j) cease its activities and cancel its insurance;



                                       5
<PAGE>

                  (k) negotiate, enter into, renegotiate, extend, renew,
terminate, modify, amend, waiver, execute, acknowledge or take any other action
with respect to any lease, contract or security agreement in respect of any
assets of the Series.

                  (l) pay, collect, compromise, litigate, arbitrate or otherwise
adjust or settle any and all other claims or demands of or against the Company
or in respect of such Series or hold such proceeds against the payment of
contingent liabilities; and

                  (m) make, execute, acknowledge and file any and all documents
or instruments necessary, convenient or incidental to the accomplishment of the
purpose of the Company or such Series.

                                  ARTICLE III

                              CAPITAL CONTRIBUTIONS

         3.1 Initial Capital. The initial capital of a Series shall be the
Capital Contribution of the Member associated with that Series, such Capital
Contribution made in exchange for a 100% ownership and profits interest in such
Series and only in such Series. The Member is not required to make any
additional Capital Contributions.

         3.2 Capital Account of a Series. The Capital Account of a Series shall
be established on the Company's books representing the Member associated with
that Series' Capital Contributions to the Company. The Capital Account of a
Series of the Member associated with such Series shall be credited with the
amount of its Capital Contribution and any such subsequent Capital Contributions
made by such Member upon receipt thereof by the Company.

         3.3 Special Rules With Respect to the Capital Account of a Series.

                  (a) Consideration of Code. Notwithstanding any other provision
of this Agreement, the Capital Account of a Series shall be maintained and
adjusted in accordance with the Code and the Treasury regulations including
Treasury Regulations Section 1.704-1(b)(2)(iv).

                  (b) Time of Adjustment. For purposes of computing the balance
in the Capital Account of a Series, no credit shall be given for any Capital
Contribution which the Member is to make until such Capital Contribution is
actually received with respect of such Series.

                  (c) Intent to Comply with Treasury Regulations. All provisions
of this Agreement relating to the maintenance of the Capital Account of a Series
are intended to comply with Treasury Regulations Section 1.704-1(b), and shall
be interpreted and applied in a manner consistent with such Treasury
Regulations. The applicable Member shall make any appropriate modifications in
the event unanticipated events might





                                       6
<PAGE>

otherwise cause this Agreement not to comply with Treasury Regulations Section
1.704-1(b).

         3.4 Separate Records. Separate and distinct records shall be maintained
for each Series. The Assets Associated with each Series shall be held and
accounted for separately from the other assets of the other Series.

                                   ARTICLE IV

                               PROFITS AND LOSSES

         4.1 Profits and Losses. Profits and losses in respect of a Series for
any Fiscal Year shall be allocated and credited to the Capital Account of each
Series.

         4.2 Series Separate. The debts, liabilities and obligations incurred,
contracted for or otherwise existing with respect to a particular Series shall
be enforceable against the assets of such Series only, and not against the
assets of the Company generally or any other Series hereof.

                                   ARTICLE V

                                  DISTRIBUTIONS

         5.1 Operating Distributions. Subject to Section 5.2, the Cash Available
For Distribution in respect of a Series shall, at such times as the Member
associated with such Series deems advisable, be distributed to such Member
associated with the Series.

                                   ARTICLE VI

                                   MEMBERSHIP

         6.1 Limitation of Liability. In addition to the procurance of Section
4.3 hereof, no Member shall not be individually liable under a judgment, decree
or order of a court, or in any other manner, for a debt, obligation or liability
of the Company or of any Series except as provided by law or in an agreement
signed by such Member. No Member shall be required to loan any funds to the
Company or in respect of any Series nor shall a Member be required to make any
contribution to the Company in respect of any Series, nor shall the Member be
subject to any liability to the Company or other Member or any third party, as a
result of the Member's negative Capital Account balance in respect of a Series.
However, nothing in this Agreement shall prevent the Member from making secured
or unsecured loans to the Company with respect of a Series.

         6.2 Powers of the Member. Each Member associated with a Series as it
relates to such Series shall have full, exclusive and complete discretion to
manage and control the business and affairs of the Company as it relates to such
Series, to make all decisions affecting the business and affairs of the Company
as it relates to such Series





                                       7
<PAGE>

and to take all such actions as it deems necessary, appropriate or convenient to
or for the furtherance of the purpose of the Company as it relates to such
Series, including, without limitation, the power and authority to execute all
documents and instruments, perform all duties and powers, and do all things on
behalf of the Company as it relates to such Series in all matters necessary,
desirable, convenient or incidental to the purpose of the Company as it relates
to such Series or to delegate to any other Person (including officers) such
power, authority and duties. The Member is an agent of the Company's business
and the actions of the Member taken in such capacity and in accordance with this
Agreement shall bind the Company with respect of the Series to which such Member
is associated. The Member shall be the sole Person with the power to bind the
Company in respect of the Series to which such Member is associated except and
to the extent that such power is expressly delegated to another Person by the
Member in this Agreement or in writing or by oral communication, and such
delegation shall not cause the Member to cease to be the Member. There shall not
be a "manager" (within the meaning of the Act) of the Company.

         6.3 Election of Officers. Members may from time to time appoint any
individuals as officers with such titles as the Members may deem appropriate.
The initial officer will be: Albo J. Antenucci, Jr., as President. Such officers
shall serve until their successors are duly appointed or until their earlier
removal or resignation. Any officer appointed by the Member may be removed at
any time by the Member and any vacancy in any officer shall be filled by the
Member.

         6.4 Member Approval of Actions by the Officers. Unless otherwise
required by this Agreement, actions and consents of the Members may be
communicated or reflected orally, electronically or in writing, and no action
need be taken at a formal meeting. Notwithstanding any other provision of this
Agreement, no officer shall cause or commit the Company or any Series to do any
of the following without the express written consent of the Member associated
with the Series with respect to which the action is being taken:

                  (a) appoint and remove any other officer;

                  (b) appoint a liquidator upon dissolution;

                  (c) determine indemnification rights as set forth in this
Agreement;

                  (d) sell all or substantially all of the assets of the Company
or of any Series;

                  (e) create any lien, mortgage, pledge or other security
interest on the assets of the Company or of any Series or securing indebtedness
of any third party whether or not for the benefit of the Company or any Series;

                  (f) change the principal office of the Company or establish
any subsidiary offices of the Company;



                                       8
<PAGE>

                  (g) commence a voluntary case under any bankruptcy, insolvency
or similar law by the Company or any Series;

                  (h) adopt any employee benefit, profit sharing, incentive,
bonus, pension, retirement or option plans; and

                  (i) any action requiring the approval of the Member under the
Act.

         6.5 Transfer of Interest. The Interest of the Member is personal
property, and such Interest may be transferred or assigned, in whole or in part,
in the sole discretion of the Member.

                                  ARTICLE VII

                         DISSOLUTION OF THE COMPANY AND
                       TERMINATION OF A MEMBER'S INTEREST

         7.1 Dissolution. The Company shall be dissolved and its affairs wound
up when all of the Series have been terminated in accordance with the Act.

         7.2 Resignation. The Member may resign or withdraw as a Member
associated with a Series before the dissolution and winding up of the Company.
Subject to applicable law, if the Member resigns or withdraws, the Member will
be entitled to receive, within a reasonable time after resignation or
withdrawal, such consideration for the Interest with the Series as the Member
shall determine in its sole discretion.

         7.3 Distribution on Dissolution and Liquidation. In the event of the
dissolution of the Company for any reason (including the Company's liquidation
within the meaning of Treasury Regulation 1.704-1(b)(2)(ii)(g)) or of a Series
the business of the Company or of a Series shall be continued to the extent
necessary to allow an orderly winding up of its affairs, including the
liquidation and termination of the Company or of the Series pursuant to the
provisions of this Section 7.3 as promptly as practicable thereafter, and each
of the following shall be accomplished:

                  (a) the Member associated with a Series shall elect or appoint
a liquidator for such Series;

                  (b) the liquidator shall cause to be prepared a statement
setting forth the assets and liabilities of the Series as of the date of
dissolution, a copy of which statement shall be furnished to the Member
associated with the Series;

                  (c) the assets of a Series shall be liquidated by the
liquidator as promptly as possible, but in an orderly and businesslike manner;
the liquidator may, in the exercise of its business judgment, determine not to
sell all or any portion of the assets,




                                       9
<PAGE>

in which event such assets shall be distributed in kind based upon the fair
market value as of the date of such distribution;

                  (d) any profits or losses realized with respect to a Series
upon the sale of its assets shall be recognized and allocated to the Member
associated with such Series;

                  (e) the proceeds of sale and all other assets of the Series
shall be applied and distributed as follows and in the following order of
priority:

                           (i) to the expenses of liquidation;

                           (ii) to the payment of the debts and liabilities of
the Series;

                           (iii) to the setting up of any reserves which the
liquidator shall determine to be reasonably necessary for contingent,
unliquidated or unforeseen liabilities or obligations of the Series or the
Member associated with the Series arising out of or in connection with the
Series. Such reserves shall be held by the liquidator or paid over to a bank or
title company selected by it, to be held by such bank or title company as escrow
holder or liquidator for the purposes of disbursing such reserves to satisfy the
liabilities and obligations described above; and

                           (iv) the balance (including amounts released from any
unnecessary reserves set up pursuant to Section 7.3(e)(iii)), if any, to the
Member associated with the Series.

                                  ARTICLE VIII

                                 INDEMNIFICATION

         8.1 Indemnification. Each Series shall indemnify each Covered Person to
the fullest extent permitted by law.

         8.2 Advance Payment of Expenses. The expenses of the Member and/or
Officers incurred in defending a civil or criminal action, suit or proceeding
shall be paid by the Series with which the Member and/or Officer is associated
as they are incurred and in advance of the final disposition of the action, suit
or proceeding, upon receipt of an undertaking by or on behalf of the Member to
repay the amount if it is ultimately determined by a court of competent
jurisdiction that the Member is not entitled to be indemnified by the Series.

         8.3 Determination of Right to Indemnification. Any indemnification
under Section 8.1, unless ordered by a court or advanced pursuant to Section 8.2
above, must be made by the Series only as authorized in the specific case upon a
determination that indemnification of the Covered Person is proper in the
circumstances. The determination must be made by the Member associated with the
Series or



                                       10
<PAGE>

         8.4 Assets. Any indemnification under this Article VIII shall be
satisfied solely out of the assets of the Series involved.

                                   ARTICLE IX

                            MISCELLANEOUS PROVISIONS

         9.1 Insurance. A Member associated with a Series may purchase and
maintain insurance, to the extent and in such amounts as the Member shall, in
its sole discretion, deem reasonable, on behalf of Covered Persons of such
Series and such other Persons as the Member shall determine, against any
liability that may be asserted against or expenses that may be incurred by any
such Person in connection with the activities of such Series.

         9.2 Amendments. This Agreement may be amended only by a writing signed
by each Member, provided, however, that any amendments related solely to a
Series may be effected by a writing signed by the Member associated with that
Series.

         9.3 Applicable Law; Jurisdiction. This Agreement, and the rights and
obligations of the parties hereto, shall be interpreted and enforced in
accordance with and governed by the laws of the State of Delaware without regard
to the conflict laws of that State.

         9.4 Interpretation. The headings in this Agreement are inserted for
convenience only and are in no way intended to describe, interpret, define, or
limit the scope, extent or intent of this Agreement or any provisions contained
herein. In the interpretation of this Agreement, the singular may be read as the
plural, and vice versa, the neuter gender as the masculine or feminine, and vice
versa, and the future tense as the past or present, and vice versa, all
interchangeably as the context may require in order to fully effectuate the
intent of the parties and the transactions contemplated herein. Syntax shall
yield to the substance of the terms and provisions hereof.

         9.5 Counterparts and Facsimile Copies. Facsimile copies of this
Agreement, any counterpart of this Agreement or any approval or written consent
of the Member, and facsimile signatures hereon or thereon, shall have the same
force and effect as originals.

         9.6 Waivers. No waiver of any of the provisions of this Agreement shall
be deemed, or shall constitute, a waiver of any other provision, whether or not
similar, nor shall any waiver constitute a continuing waiver, and n waiver shall
be binding unless evidenced by an instrument in writing and executed by the
party making the waiver.

         9.7 No Third Party Beneficiaries. This Agreement is made solely among
and for the benefit of the Members and the Company and their respective
successors and assigns, and no other Person shall have any rights, interest or
claims hereunder or be entitled to any benefits under or on account of this
Agreement as a third party beneficiary or otherwise.



                                       11
<PAGE>

         IN WITNESS WHEREOF, this Agreement was executed as of the date
first-above written.

                                   MEMBER and STRATOSPHERE
                                   DEVELOPMENT LLC, a Delaware
                                   limited-liability company

                                   STRATOSPHERE CORPORATION


                                   By: /s/ William F. Bischoff
                                      ------------------------------
                                   Name:   William F. Bischoff
                                        ----------------------------
                                   Title:  Sr. V. P./CEO
                                         ---------------------------

                                   MEMBER and STRATOSPHERE
                                   DEVELOPMENT LLC, a Delaware
                                   limited-liability company

                                   ARIZONA CHARLIES INC.


                                   By: /s/ Ron Lurie
                                      ------------------------------
                                   Name:   Ron Lurie
                                        ----------------------------
                                   Title:  Ex V.P./G.M.
                                         ---------------------------

                                   MEMBER and STRATOSPHERE
                                   DEVELOPMENT LLC, a Delaware
                                   limited-liability company

                                   FRESCA LLC


                                   By: /s/ Don Joshua
                                      ------------------------------
                                   Name:   Don Joshua
                                        ----------------------------
                                   Title:  Executive VP/GM
                                         ---------------------------