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                                   EXHIBIT 4.3

                      NON-QUALIFIED STOCK OPTION AGREEMENT


         THIS NON-QUALIFIED STOCK OPTION AGREEMENT is entered into as of October
13, 2000 by and between MTR Gaming Group, Inc. a Delaware corporation (the
"Company"), and Sherrilyn D. Farkas (the "Optionee").

         In consideration of the mutual promises hereinafter set forth, and for
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, and in furtherance of the Company's intention to provide an
incentive to motivate the performance of certain of its employees, the parties
hereby agree as follows:

         1. OPTION GRANT. The Company and the Optionee hereby agree to be bound
by the terms of this Agreement with respect to the grant made by the Company's
Board of Directors on March 13, 2000 of an option to purchase an aggregate of
10,000 shares of the common stock, $.0001 par value per share, of the Company
("Common Stock") at an exercise price of $2.50 per share, being equal to the
fair market value of such shares of Common Stock on the date of such grant (the
"Option"). This Option is not intended to constitute an "incentive stock option"
(within the meaning of Section 422 of the Internal Revenue Code of 1986, as
amended).

         2. TERM; EXERCISE. This Option will expire on March 12, 2010, subject
to earlier termination as provided herein (the "Termination Date"). This Option
is exercisable at anytime prior to the Termination Date except as otherwise
provided by the terms of this Option. In no event may a fraction of a share of
Common Stock be purchased under this Option. Notwithstanding anything to the
contrary in this Agreement, this Option may only be exercised if the Optionee is
employed by the Company at the time of such exercise.

         3. NOTICE OF EXERCISE; PAYMENT. This Option shall be exercisable by
giving written notice to the Company at its principal office, presently State
Route 2 South, Chester, West Virginia, Attn.: Chief Financial Officer, stating
that the Optionee is exercising this Option, specifying the number of shares
being purchased and accompanied by payment in full of the aggregate purchase
price therefor: (a) in cash or by certified check; (b) with previously acquired
shares of Common Stock having an aggregate Fair Market Value on the date of
exercise equal to the aggregate exercise price of all Options being exercised;
(c) with any combination of cash, certified check or shares of Common Stock
having such value; or (d) any other form of legal consideration that may be
acceptable to the Board in its sole discretion.

         4. REPRESENTATIONS AND WARRANTIES OF OPTIONEE. Notwithstanding the
foregoing, this Option shall not be exercisable by the Optionee unless: (a) a
Registration Statement under the Securities Act of 1933, as amended (the
"Securities Act") with respect to the shares of Common Stock to be received upon
the exercise of the Option shall be effective and current at the time of
exercise; or (b) there is an exemption from the registration requirements under
the Securities Act for the issuance of the shares of Common Stock upon exercise.
The Optionee hereby represents and warrants to the Company, that: (i) the shares
of Common Stock to be issued upon the exercise of this Option are being acquired
by the Optionee for the Optionee's own account, for investment only and not with
a view to the resale or distribution thereof; and (ii) any subsequent resale or
distribution of shares of Common Stock by the Optionee will be made only
pursuant to (x) a Registration Statement under the Securities Act which is
effective and current with respect to the shares of Common Stock being sold, or
(y) a specific exemption from the registration requirements of the Securities
Act, but in claiming such exemption, the Optionee shall, prior to any offer of
sale or sale of such shares of Common Stock, provide the Company with a
favorable written opinion of counsel satisfactory to the Company, in form,
substance and scope satisfactory to the Company, as to the applicability of such
exemption to the proposed sale or distribution. Such representation and
warranties shall also be deemed to be made by the Optionee upon each exercise of
this Option. Nothing herein shall be construed as requiring the Company to
register the shares subject to this Option under the Securities Act.

         5. NO RIGHT TO CONTINUED EMPLOYMENT. Nothing herein shall confer upon
the Optionee any right to continue in the employ of the Company, any of its
Subsidiaries or a Parent, or interfere in any way with any right of the Company,
any Subsidiary or a Parent to terminate such employment at any time for any
reason whatsoever without liability to the Company, the Subsidiary or Parent.

         6. LEGENDS; STOP TRANSFER INSTRUCTIONS. The Company may affix
appropriate legends upon the certificates for shares of Common Stock issued upon
exercise of this Option and may issue such "stop transfer" instructions to its
transfer agent in respect of such shares as it determines, in its discretion, to
be necessary or appropriate to: (a) prevent a violation of, or to perfect an
exemption from, the registration requirements of the Securities Act and any
applicable state securities laws; or (b) implement the provisions of any
agreement between the Company and the Optionee with respect to such shares of
Common Stock.

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         7. TAXES. The Company may withhold cash and/or shares of Common Stock
to be issued to the Optionee in the amount which the Company determines is
necessary to satisfy its obligation to withhold taxes or other amounts incurred
by reason of the grant or exercise of this Option, its disposition or the
disposition of the underlying shares of Common Stock. Alternatively, the Company
may require the Optionee to pay the Company such amount in cash promptly upon
demand.

         8. COMPLIANCE WITH APPLICABLE LAWS. The Optionee agrees to comply with
all applicable laws relating to the grant and exercise of the Option and the
disposition of the shares of Common Stock acquired upon exercise of the Option,
including without limitation, federal and state securities and "blue sky" laws,
and applicable prospectus delivery requirements.

         9. TRANSFERABILITY. The Option is not transferable otherwise than by
will or the laws of descent and distribution and may be exercised, during the
lifetime of the Optionee, only by the Optionee, or the Optionee's legal
representatives, provided, however, that the Option may be exercised and the
underlying securities resold by any family member of the Optionee who has
acquired the Option from the Optionee through a gift or a domestic relations
order. For purposes of this Option, "family member" includes any child,
stepchild, grandchild, parent, stepparent, grandparent, spouse, former spouse,
sibling, niece, nephew, mother-in-law, father-in-law, son-in-law,
daughter-in-law, brother-in-law, or sister-in-law, including adoptive
relationships, any person sharing the Optionee's household (other than a tenant
or employee), a trust in which these persons have more than fifty percent of the
beneficial interest, a foundation in which these persons (or the Optionee)
control the management of assets, and any other entity in which these persons
(or the Optionee) own more than fifty percent of the voting interests.

         10. SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon and
inure to the benefit of the parties hereto, any successor or assign of the
Company and to any Legal Representative of the Optionee, or any family member as
defined in this Agreement acquiring the Option as a result of a gift or pursuant
to a domestic relations order.

         11. RESTRICTION ON SALES. The Optionee agrees not to sell more than
25,000 shares of Common Stock issuable pursuant to this agreement in any
calendar week without the written consent of the Company.

         12. GOVERNING LAW. This Agreement shall be governed by, and construed
and enforced in accordance with, the laws of the State of Delaware, without
regard to the conflicts of law rules thereof.

         13. VALIDITY. The invalidity, illegality or unenforceability of any
provision herein shall not affect the validity, legality or enforceability of
any other provision, all or which shall be valid, legal and enforceable to the
fullest extent permitted by applicable law.

         14. ADJUSTMENTS UPON CHANGES IN COMMON STOCK. Notwithstanding any other
provision of this Agreement, in the event of a stock dividend, recapitalization,
merger in which the Company is the surviving corporation, spin-off, split-up,
combination or exchange of shares or the like which results in a change in the
number or kind of shares of Common Stock which is outstanding immediately prior
to such event, the aggregate number and kind of shares subject to the Agreement,
the aggregate number and kind of shares subject to each outstanding Award, the
exercise price of each option, any contingencies and restrictions based on the
number or kind of shares, shall be appropriately adjusted by the Board of
Directors, whose determination shall be conclusive and binding on all parties.
Such adjustment may provide for the elimination of fractional shares without
payment therefor. In the event of (a) the liquidation or dissolution of the
Company, (b) a merger in which the Company is not the surviving corporation or a
consolidation, or (c) any transaction (or series of related transactions) in
which (i) more than 50% of the outstanding Common Stock is transferred or
exchanged for other consideration, or (ii) shares of Common Stock in excess of
the number of shares of Common Stock outstanding immediately preceding the
transaction are issued (other than to stockholders of the Company with respect
to their shares of stock in the Company), any outstanding options, unvested
stock shall terminate upon the earliest of any such event, unless other
provision is made therefor in the transaction. The Company and the Optionee
agree that the terms of this Section 14 shall apply to and be deemed to be
incorporated in all option agreements executed by and between the Company and
the Optionee prior to the date of this Agreement.


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         IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the day and year first above written.

                             MTR GAMING GROUP, INC.

                     BY:         /s/ EDSON R. ARNEAULT

                     NAME:           EDSON R. ARNEAULT

                     ITS:                 PRESIDENT

                                    OPTIONEE

                     BY:         /s/ SHERRILYN D. FARKAS

                                     Sherrilyn D. Farkas
                                     (Name of Optionee)

                                    (Address)

                            (Social Security Number)



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