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                                                                  EXHIBIT 10.23

                                  April 1, 1999

William W. Warner
8504 Estrelita Drive
Las Vegas, NV  89128

RE:      LONG-TERM STAY-ON PERFORMANCE INCENTIVE PAYMENT.

Dear Bill:

         This letter (the "AGREEMENT") sets forth the terms and conditions
pursuant to which Station Casinos, Inc. (the "COMPANY") has decided to award you
a Long-Term Stay-On Performance Incentive Payment (the "LTSO Payment").

1.       PURPOSE. The purpose of the LTSO Payment is to advance the interests of
         the Company by providing you with a cash incentive to remain with the
         Company through April 1, 2006.

2.       AMOUNT. Subject to the conditions contained herein, the Company will
         provide you with a LTSO Payment in the amount of $500,000 as follows:

         (a)      On April 1, 2003 (the "FIRST AWARD DATE"), you will be paid
                  one-half of the LTSO Payment, minus the deductions required by
                  law, provided that you have remained continuously employed by
                  the Company from April 1, 1999 through March 31, 2003. In the
                  event that your employment or service with the Company is
                  terminated for any reason, including, but not limited to, your
                  death, disability, resignation or retirement, at any time
                  before the First Award Date, you will forfeit any and all
                  eligibility for payments pursuant to this Agreement.

         (b)      On April 1, 2006 (the "SECOND AWARD DATE"), you will be paid
                  the second half of the LTSO Payment, minus the deductions
                  required by law, provided that you have remained continuously
                  employed by the Company from April 1, 1999 through March 31,
                  2006. In the event that your employment or service with the
                  Company is terminated for any reason, including, but not
                  limited to, your death, disability, resignation or retirement,
                  at any time after the First Award Date but before the Second
                  Award Date, you will forfeit any and all eligibility for
                  remaining payments pursuant to this Agreement.


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Long-Term Stay-On Performance Plan
April 1, 1999
Page 2
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3.       EMPLOYMENT AGREEMENT. The LTSO Payment is conditioned upon your signing
         an employment agreement with the Company, which shall be dated as of
         December 1, 1999 (the "EMPLOYMENT AGREEMENT"). If prior to the First
         Award Date or the Second Award Date, you breach any term of the
         Employment Agreement, you will forfeit any and all rights to any and
         all payments under this Agreement as of the date of such breach.

4.       RIGHT TO CONTINUED EMPLOYMENT OR SERVICE. Nothing in this Agreement
         shall confer on you any right to continue in the employ of or service
         to the Company or, except as may otherwise be limited by a written
         agreement between the Company and you, in any way affect the Company's
         right to terminate your employment or service without prior notice at
         any time for any or no reason.

5.       CONFIDENTIALITY. As a condition of your receipt of the LTSO Payment,
         you agree that you will not disclose the contents of this Agreement,
         including the amount of the LTSO Payment, to anyone except your
         immediate family, accountant or attorney without the prior written
         consent of the Company. If you breach this obligation, you will forfeit
         any and all rights to any and all payments under this Agreement.

6.       GOVERNING LAW. The validity, construction, interpretation and effect of
         this Agreement shall exclusively be governed by and determined in
         accordance with the law of the State of Nevada (without reference to
         the principles of conflict of laws thereof), except to the extent
         preempted by federal law, which shall govern to that extent.

7.       ASSIGNABILITY; BINDING NATURE. This Agreement shall be binding upon and
         inure to the benefit of the parties hereto and their respective
         successors, heirs and assigns; provided, however, that none of your
         rights or obligations under this Agreement may be assigned or
         transferred by you, other than rights to compensation and benefits
         hereunder, which may be transferred only by will or operation of law
         and subject to the limitations of this Agreement.

                                        STATION CASINOS, INC.,

                                        A Nevada corporation

                                        By: /s/ GLENN C. CHRISTENSON
                                            ---------------------------
                                            Glenn C. Christenson
                                            Executive Vice President
                                            Chief Financial Officer
                                            Chief Administrative Officer

By signing below, you hereby acknowledge and agree to all of the foregoing terms
and conditions of this Agreement.

AGREED TO AND ACCEPTED BY:

/s/ WILLIAM W. WARNER
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William W. Warner