<PAGE>

Name of Offeree:                                      Memorandum No.____________

                   CONFIDENTIAL PRIVATE PLACEMENT MEMORANDUM

                            TRANS WORLD GAMING CORP.

Minimum Offering:  7 Units                        Minimum Investment:  $500,000
  (Gross Proceeds of $3,500,000)
Maximum Offering:  12 Units
  (Gross Proceeds of $6,000,000)

     TRANS WORLD GAMING CORP., a Nevada corporation (the "Company"), is
privately offering to selected accredited investors a minimum of 7 units, and a
maximum of 12 units, each unit (the "Unit(s)") consisting of (i) one $500,000
principal amount 12% secured convertible senior bonds due June 30, 1999 (the
"Bond(s)") and (ii) a warrant to purchase 100,000 shares of common stock, par
value $.001 per share, of the Company (the "Common Stock") at an exercise price
of $1.00 per share (the "Warrant(s)").  Interest on the Bonds will begin to
accrue as of the closing of this confidential private placement and is payable
by the Company semi-annually with the first payment commencing December 15,
1996.  The Bonds are convertible at the option of the holder thereof at a
conversion price of $5.00 per share of Common Stock.  The Company may redeem the
Bonds in whole but not in part at 100% of the principal amount of the Bonds plus
accrued interest through the date fixed for payment commencing six months after
closing of a public offering of equity securities of the Company that raises
gross proceeds to the Company of at least $6,000,000.  The Warrants will, unless
previously exercised, expire five years after the Closing of this offering (the
"Closing").  As used herein, the term "Unit" means one Debenture in the
principal amount of $500,000 and one Warrant to purchase 100,000 shares of
Common Stock.  The Common Stock of the Company is traded over-the-counter on the
NASDAQ National Market under the symbol "IBET."  Neither the Units, nor the
Bonds and Warrants, sold in this offering will be eligible to be traded over-
the-counter on the NASDAQ National Market System and no other trading market is
expected to develop for any of the Units, Bonds or Warrants.  On June 26, 1996,
the closing bid price of the Company's Common Stock, as reported on the NASDAQ
National Market System, was $2.40675.

     THE UNITS, BONDS AND WARRANTS OFFERED HEREBY ARE SPECULATIVE AND SHOULD
ONLY BE PURCHASED BY PERSONS WHO CAN AFFORD TO LOSE THEIR ENTIRE INVESTMENT.
See "Risk Factors" beginning on page 16 for certain information prospective
purchasers should consider.

     THESE SECURITIES ARE OFFERED PURSUANT TO EXEMPTIONS FROM REGISTRATION UNDER
THE SECURITIES ACT OF 1933 AND CERTAIN STATE SECURITIES LAWS AND THE SECURITIES
WILL BE DEEMED "RESTRICTED SECURITIES" THEREUNDER.  THESE SECURITIES AND THIS
OFFERING HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND EXCHANGE
COMMISSION OR ANY STATE AUTHORITY NOR HAS THE COMMISSION OR ANY STATE AUTHORITY
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS MEMORANDUM.  ANY REPRESENTATION TO
THE CONTRARY IS A CRIMINAL OFFENSE.

<TABLE>
<CAPTION>
---------------------------------------------------------------------------------------------------------------
                               Price to Investors    Commission and Fees(1)    Proceeds to the Company(1)(2)(3)
---------------------------------------------------------------------------------------------------------------
<S>                            <C>                   <C>                       <C>
Per Unit                       $  500,000            $ 65,000                  $  435,000
---------------------------------------------------------------------------------------------------------------
Total Minimum ($3,500,000)     $3,500,000            $455,000                  $3,045,000
---------------------------------------------------------------------------------------------------------------
Total Maximum ($6,000,000)     $6,000,000            $780,000                  $5,220,000
---------------------------------------------------------------------------------------------------------------
</TABLE>

SEE "NOTES TO TABLE" ON FOLLOWING PAGE.

     THE INFORMATION CONTAINED IN THIS MEMORANDUM IS CONFIDENTIAL, AND THE
ABOVE-NAMED OFFEREE, BY ACCEPTING DELIVERY OF THIS MEMORANDUM, AGREES TO RETURN
IT AND ALL EXHIBITS AND DOCUMENTS RECEIVED FROM THE COMPANY IF THE OFFEREE DOES
NOT PURCHASE ANY OF THE UNITS OFFERED HEREBY. ANY REPRODUCTION OR OTHER
DISTRIBUTION OF THIS MEMORANDUM, IN WHOLE OR IN PART, WITHOUT THE PRIOR WRITTEN
CONSENT OF THE COMPANY IS PROHIBITED. NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR MAKE ANY REPRESENTATIONS OTHER THAN THOSE CONTAINED IN THIS
MEMORANDUM, AND IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATIONS MUST NOT
BE RELIED UPON.  NO OFFERING LITERATURE OR ADVERTISING OF ANY KIND, OTHER THAN
THIS MEMORANDUM, SHALL BE EMPLOYED IN THE OFFERING OF THE UNITS.

                             --------------------

                         C. P. BAKER & COMPANY, LTD.
                             As Placement Agent

                             --------------------

  The date of this Confidential Private Placement Memorandum is June 30, 1996


<PAGE>

NOTES TO TABLE ON COVER PAGE

     (1)  The Units are being offered by the Company to selected accredited
investors purchasing for investment.  C. P. Baker & Company, Ltd. (the
"Placement Agent") has been retained to act, on a best efforts basis, as
agent for the Company in connection with the private placement of the Units.
The Company has agreed (i) to pay the Placement Agent a 10% commission and a
3% non-accountable expense allowance in connection with the arrangement of
this financing, and (ii) to indemnify the Placement Agent against certain
liabilities, including liabilities under the Securities Act of 1933, as
amended.

     (2)  A minimum of 7 Units or $3,500,000 in gross proceeds (comprised of
the sale of 7 Bonds in the aggregate principal amount of $3,500,000 and 7
Warrants to purchase in the aggregate up to 700,000 shares of Common Stock),
and a maximum of 12 Units or $6,000,000 in gross proceeds (comprised of the
sale of 12 Bonds in the aggregate principal amount of $6,000,000 and 12
Warrants to purchase in the aggregate up to 1,200,000 shares of Common
Stock), are being offered by the Company (the "Offering"). Unless the
Offering is terminated by the Company, and provided that subscriptions for
the minimum gross proceeds of $3,500,000 have been accepted by the Company on
or prior to June 25, 1996 (the "Specified Date") (which date may be extended
by mutual agreement of the Company and the Placement Agent to a date no later
than July 2, 1996), but subscriptions for less than 12 Units have been
accepted, the Company may elect to have an initial Closing at any time prior
to the Termination Date (defined below), at which time all theretofore
accepted subscriptions for Units will be accepted and Bonds will be issued
by the Company in an aggregate principal amount equal to 100% of the
aggregate gross proceeds and Warrants will be delivered.  If subscriptions
for gross proceeds of at least $3,500,000 have been accepted on or before the
initial date of Closing, the Offering will terminate on the earlier of:  (i)
the date that gross proceeds equal to at least $6,000,000 have been received
and accepted by the Company, (ii) the date determined by the Company to
terminate the Offering, or (iii) July 31, 1996 (the "Termination Date").  If
subscriptions for at least 7 Units and payment of $3,500,000 therefore are
not received by the Specified Date, then the Offering will terminate on the
Specified Date and each subscriber's funds then held in escrow will be
returned to him or her without interest or deduction.  See "Offering--Plan of
Offering." The termination date of the offering of Units is July 31, 1996,
unless extended by mutual agreement of the Placement Agent and the Company.
A minimum investment of $500,000 for the purchase of one Unit is required,
unless otherwise agreed by the Company.

     (3)  Before deducting expenses payable by the Company estimated at
$120,000.


                                       2


<PAGE>

                             --------------------

     UNLESS THE CONTEXT CLEARLY SUGGESTS OTHERWISE, REFERENCES IN THIS
MEMORANDUM TO THE ASSETS AND OPERATIONS OF THE COMPANY INCLUDE THE ASSETS AND
OPERATIONS OF THE COMPANY'S WHOLLY-OWNED SUBSIDIARY, TRANS WORLD GAMING OF
LOUISIANA, INC., A LOUISIANA CORPORATION ("TRANS WORLD LOUISIANA"), DURING
THE PERIOD TO WHICH THE INFORMATION RELATES.

                             --------------------

     Information contained in this Memorandum contains "forward-looking
statements" within the meaning of the Private Securities Litigation Reform
Act of 1995, which can be identified by the use of forward-looking
terminology such as "may," "will," "expect," "anticipate," "estimate," or
"continue" or the negative thereof or other variations thereon or comparable
terminology.  The statements in "Risk Factors" beginning on page 14 of the
Memorandum constitute cautionary statements identifying important factors,
including certain risks and uncertainties, with respect to such
forward-looking statements that could cause actual results to differ
materially from those reflected in such forward-looking statements.

                             --------------------

     THIS MEMORANDUM DOES NOT CONSTITUTE AN OFFER OR SOLICITATION TO ANY
PERSON IN ANY STATE OR JURISDICTION IN WHICH SUCH OFFER OR SOLICITATION IS
NOT AUTHORIZED.  IN ADDITION, THIS MEMORANDUM CONSTITUTES AN OFFER ONLY IF A
NAME AND AN IDENTIFICATION NUMBER APPEAR ON THE COVER PAGE HEREOF.

     THE UNITS ARE OFFERED BY THE COMPANY SUBJECT TO WITHDRAWAL, CANCELLATION
OR MODIFICATION OF THE OFFER, WITHOUT NOTICE.  THE COMPANY RESERVES THE RIGHT
TO REJECT A SUBSCRIPTION, IN WHOLE OR IN PART, FOR ANY REASON.


                    IMPORTANT NOTICES TO INVESTORS

     The Company urges all prospective investors to read this Confidential
Memorandum carefully. If prospective investors indicate sufficient
interest, the Company will schedule one or more informational meetings for
prospective investors at the Company's corporate offices, or at another
suitable meeting place, and the Company will notify all prospective investors
of the times, dates and places of such meetings if they are scheduled.  The
Company encourages prospective investors to attend an informational meeting
if one is held. Investors may contact Stanley Kohlenberg, the Company's
President and Chief Executive Officer, if they desire additional information
regarding the Company or this offering, or if they desire to verify any of
the information contained or referred to in this Memorandum.  Mr. Kohlenberg
may be contacted during regular business hours at (212) 563-3355.  Investors
will be asked to acknowledge in the Subscription Agreement attached hereto as
Exhibit A (the "Subscription Agreement") that they are "accredited investors"
as defined under the Securities Act of 1933 and that they were given the
opportunity to (a) ask questions of and receive answers from a representative
of the Company, and (b) obtain additional information, and that they either
did so or elected to waive such opportunity.  Prospective investors will be
required to sign a confidentiality agreement if they wish to inspect
documents which the Company deems to be proprietary.

                             --------------------

     THIS OFFERING IS BEING MADE IN RELIANCE ON AN EXEMPTION FROM
REGISTRATION UNDER THE SECURITIES ACT OF 1933 AND CERTAIN STATE SECURITIES
LAWS AS AN OFFER AND SALE OF SECURITIES NOT INVOLVING A PUBLIC OFFERING. THE
UNITS, NOTES AND WARRANTS MAY NOT BE SOLD OR TRANSFERRED IN THE ABSENCE OF AN
EFFECTIVE REGISTRATION STATEMENT FOR THE SHARES OR AN OPINION OF COUNSEL,
ACCEPTABLE TO THE COMPANY, THAT THE TRANSFER IS

                                       3

<PAGE>

EXEMPT FROM REGISTRATION.  PROSPECTIVE INVESTORS SHOULD ASSUME THAT THEY WILL
BE REQUIRED TO BEAR THE ECONOMIC RISK OF AN INVESTMENT IN THE NOTES AND
WARRANTS FOR AN INDEFINITE PERIOD OF TIME.

                             --------------------

     NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATIONS IN CONNECTION WITH THIS OFFERING OTHER THAN THOSE CONTAINED IN
THIS MEMORANDUM, AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATIONS MUST
NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE COMPANY.

                             --------------------

     THIS MEMORANDUM DOES NOT CONSTITUTE AN OFFER TO SELL OR A SOLICITATION OF
AN OFFER TO BUY ANY OF THE SHARES IN ANY STATE OR OTHER JURISDICTION IN WHICH
SUCH AN OFFER OR SOLICITATION IS NOT AUTHORIZED, NEITHER THE DELIVERY OF THIS
MEMORANDUM NOR ANY SALE HEREUNDER SHALL UNDER ANY CIRCUMSTANCES CREATE ANY
IMPLICATION THAT THERE HAS BEEN NO CHANGE IN THE AFFAIRS OF THE COMPANY SINCE
THE DATE OF THIS MEMORANDUM.

                             --------------------

     BY ACCEPTING A COPY OF THIS CONFIDENTIAL MEMORANDUM, EACH PROSPECTIVE
INVESTOR AGREES TO KEEP THE INFORMATION HEREIN CONFIDENTIAL AND NOT DISCLOSE
SUCH INFORMATION TO ANY OTHER PERSON AND NOT TO USE THE INFORMATION HEREIN FOR
ANY PURPOSE OTHER THAN TO EVALUATE AN INVESTMENT IN THE UNITS.

                             --------------------

     ANY SALE OF UNITS TO A RESIDENT OF THE STATE OF FLORIDA IS VOIDABLE BY THE
INVESTOR EITHER WITHIN THREE DAYS AFTER THE FIRST TENDER OF CONSIDERATION IS
MADE BY THE INVESTOR TO THE COMPANY, THE PLACEMENT AGENT OR THE ESCROW AGENT, OR
WITHIN THREE DAYS AFTER THE INVESTOR RECEIVES A COPY OF THIS CONFIDENTIAL
MEMORANDUM.


                                       4

<PAGE>

                   SUMMARY OF THE COMPANY'S BUSINESS

     Trans World Gaming Corp. (the "Company" or "TWG") is engaged in the
management of gaming establishments which feature mechanized gaming devices,
such as video poker machines (the "VLTs").  Currently, the Company is
focusing on developing and maximizing the profit potential of its interests
in two Louisiana video poker locations acquired in December 1994.  The
Company's long-range objective is to become the premier management company of
mechanized gaming establishments that are located domestically at local
neighborhood sites and internationally at hotel or resort locations.  To
achieve this goal, the Company's strategy consists of: (i) identifying gaming
establishments which focus primarily on a local, machine-based market and in
which the mechanized gaming devices are centrally audited by a local or state
governmental office (such as the Louisiana State Police Department); (ii)
leasing or owning mechanized gaming machines that are user-friendly for
occasional gamblers; and (iii) retaining local management following an
acquisition to insure a smooth transition to the Company.  Through this
strategy, the Company believes it can address a specific niche in the gaming
industry which addresses the local, neighborhood market as opposed to the
destination, high-roller clientele.

     Company's management expects that near-term acquisitions will focus
primarily on diversifying video poker opportunities outside the State of
Louisiana.  While the Company believes that there are significant
opportunities in the Company's niche market inside the State of Louisiana and
the Company is committed to maximizing performance at existing properties,
the Company believes it must consider appropriate opportunities to expand to
other markets as they arise.  In Louisiana, there are currently more than
16,000 VLTs located in bars, restaurants, truck stops, racetracks and OTB
parlors.  As reported by the Louisiana State Police, the average daily net
win of a VLT machine in a truck stop in the State of Louisiana was $87, which
generated a total of approximately $152 million in franchise taxes to the
State during calendar 1995.  "Net win" is defined as the revenue generated by
the VLTs at a location after payment of prizes and before state franchise
taxes.  The truck stop segment of the Louisiana VLT market generated revenue
of approximately $129 per day per VLT in 100 licensed locations.  This
reflects approximately 4,000 VLTs which in the aggregate produced over $60
million in Louisiana state franchise tax revenue during 1995.

     The Company currently owns certain interests in two gaming
establishments at truck stops in Louisiana, which include (i) a gaming
establishment known as the Gold Nugget, located at the Lafayette 76 Auto and
Truck Plaza (the "76 Truck Plaza"), a truck stop in Lafayette, Louisiana, and
(ii) a new gaming establishment, the Toledo Palace, that the Company
established and licensed at a truck stop known as the Woodlands Travel Plaza
("Woodlands") located in DeRidder, Louisiana, which is located approximately
120 miles from the Gold Nugget.  Both the Gold Nugget and the Toledo Palace
video poker parlors are licensed to operate only video lottery terminals
(VLTs"), also known as "draw poker" machines.  The Company owns real estate
at the Woodlands, and owns the right to the profits at the Gold Nugget.

     The Gold Nugget gaming facility currently has 50 VLTs, the maximum
permitted by law, that can be played for amounts ranging from $.25 to $2.00,
and is open 24 hours a day, seven days a week.  The Gold Nugget is located at
a major intersection in Lafayette, Louisiana and is situated in an
approximately 5,000 square foot building located adjacent to a 265 seat,
24-hour restaurant in the 76 Truck Plaza, which also contains a large
convenience store and a gas station with 16 fuel pumps that sell an average
of approximately 450,000 gallons of fuel each month.  The average daily net
win of a VLT at the Gold Nugget during January and February 1996 was $295.
Maintenance of the existing customer base of the Gold Nugget is a high
priority of the Company's management.  The Company believes that the
atmosphere within the gaming facility, the training and responsiveness of the
staff, the comfort factor and security all contribute to continuing patronage
by its customers.  Except for the Gold Nugget Gaming Facility, all of the
businesses at the 76 Plaza are managed and operated by Prime Properties,
which leases the 76 Plaza

                                       5


<PAGE>

from National Auto Truck Stops, Inc. The portion of the 76 Plaza occupied by
the Gold Nugget is subleased by Prime Properties to the Company. The VLTs at
the Gold Nugget are owned, maintained and operated by Chrysolith, and the
Gold Nugget is managed by the Company.

     The Woodlands includes a 24-hour restaurant, a convenience store and a
gas station that currently sells an average of approximately 130,000 gallons
of fuel per month. Woodlands is located on State Route 3236 in DeRidder,
Louisiana, approximately 20 miles from the Texas border. On September 12,
1995, the Company received an establishment license for the operation of up
to 50 VLTs at the Toledo Palace, and commenced operations at the Toledo
Palace on October 18, 1995 with 15 video lottery machines. The average daily
net win of a VLT machine at the Toledo Palace during January and February
1996 was $70.

     The VLTs at both locations are owned, maintained and operated by
Chrysolith, L.L.C. ("Chrysolith"), a Louisiana limited liability company and
a Louisiana-licensed video gaming machine operator in which 49% of the Class
B membership units is owned by the Company. Louisiana law permits VLTs to be
owned, maintained and operated only by a Louisiana resident or an entity that
is majority-owned by a Louisiana resident.

     The Company receives revenue generated by VLTs at both the Gold Nugget
and Toledo Palace after payment of franchise taxes by Chrysolith to the State
of Louisiana and all prizes to the players. The Company then reimburses
Chrysolith for all direct operating costs incurred in the operation of the
VLTs. At the Woodlands truck stop, additional revenue is derived from the
sale of fuel, supplies, and food normally associated with a truck stop
operation.

     The Company was incorporated under the laws of the State of Nevada on
October 20, 1993 and Trans World Louisiana was incorporated under the laws of
the State of Louisiana on April 8, 1994. The Company's executive offices are
located at One Penn Plaza, Suite 4303, New York, New York 10119 and its
telephone number is (212) 563-3355.


                           SUMMARY OF THE OFFERING

SECURITIES BEING OFFERED:     The Company is offering a minimum of 7 Units to
                              raise gross proceeds of $3,500,000 and a maximum
                              of 12 Units to raise gross proceeds of $6,000,000.
                              The Units are offered in a minimum investment of
                              $500,000, unless otherwise agreed by the Company.
                              C.P. Baker & Company, LTD., a registered
                              broker/dealer (the "Placement Agent"), is acting
                              as Placement Agent in connection with the sale of
                              the Units. The Units are restricted securities as
                              defined under the federal securities laws.  See
                              "Terms of the Offering."

BONDS:                        Payment of the principal of the Bonds is due June
                              30, 1999 (the "Maturity Date"). The 12% per annum
                              interest on the Bonds shall begin to accrue from
                              the date of original issuance and shall be payable
                              semi-annually on June 15 and December 15 of each
                              year, with the first such payment due on December
                              15, 1996.

                              The Bonds will be substantially in the form
                              appended  hereto as Exhibit B.

CONVERSION RIGHTS:            The Bonds are convertible any time prior to
                              maturity, unless previously redeemed, into shares
                              of Common Stock of the Company at a conversion



                                       6

<PAGE>

                              price of $5.00 per share, subject to adjustment
                              in certain events as described in the Bonds and
                              the Indenture governing the Bonds.

OPTION REDEMPTION:            The Bonds are redeemable, in whole but not in
                              part, at the option of the Company, at 100% of the
                              principal amount of the Bonds plus accrued
                              interest thereon through the date fixed for
                              redemption, within six months following a public
                              offering of equity securities by the Company in
                              which gross proceeds of at least $6,000,000 is
                              raised by the Company.

SECURITY:                     The Company will grant to the holders of the Bonds
                              a first priority perfected security interest in
                              the Woodlands Travel Plaza located in DeRidder,
                              Louisiana, including all related present and
                              future personal, tangible and intangible assets
                              of the Company located thereon, and a second
                              priority perfected security interest in the
                              subsidiary's subleasehold interest in the Gold
                              Nugget located in Layfayette, Louisiana, including
                              all related present and future personal, tangible
                              and intangible assets of the Company located
                              thereon. As soon as the first priority security
                              interest held by Prime Properties on the
                              subsidiary's interest in the Gold Nugget is paid
                              off, the Company will also grant a first priority
                              perfected security interest in the subsidiary's
                              subleasehold interest, including all related
                              present and future personal, tangible and
                              intangible assets of the Company located thereon.

WARRANTS:                     Each purchaser of a Unit will receive one Warrant
                              to purchase 100,000 shares of the Common Stock at
                              an exercise price of $1.00 per share. The Warrants
                              are exercisable for a period of five years after
                              the Closing; provided, however, that the Warrants
                              may be exercised at any time until June 30, 2001.

                              The Warrants will be substantially in the form
                              appended hereto as Exhibit C.

REGISTRATION RIGHTS:          Holders of the Bonds and the Warrants and the
                              shares of Common Stock issuable upon conversion
                              of the Bonds and exercise of the Warrants are
                              entitled to have their shares of Common Stock
                              registered as part of the next registered public
                              offering of the Common Stock by the Company, as
                              permitted under rules of the Securities and
                              Exchange Commission. If no public offering of
                              Common Stock has occurred by December 31, 1997,
                              then upon written request of the holders of
                              Warrants issued in this offering and exercisable
                              for not less than 700,000 shares of Common Stock,
                              and on a one-time basis, the Company shall file
                              and use its reasonable efforts to cause to be
                              declared effective a registration statement or
                              post-effective amendment thereto as permitted
                              under the Securities Act of 1933, as amended
                              covering the sale by the holder of the
                              Warrants, or any portion thereof, Common Stock
                              issuable upon exercise of the Warrants or any
                              portion thereof, or both as the holder may
                              elect.  The Company will be required to
                              maintain effectiveness of the registration
                              statement, subject to certain suspension
                              periods as more fully described in the Warrant.


                                       7

<PAGE>

USE OF PROCEEDS:              Upon completion of the Offering, the Company will
                              receive net proceeds of approximately
                              $2,925,000 if the minimum $3,500,000 in Units
                              are sold, and approximately $5,100,000 if the
                              maximum $6,000,000 in Units are sold, after
                              deducting commissions and expenses of the
                              offering estimated to total $575,000 if the
                              minimum is sold, and $900,000 if the maximum is
                              sold.  Expenses of the offering include legal
                              and accounting fees in connection with this
                              offering and "blue sky" fees and expenses.  The
                              proceeds of the offering are intended to be
                              used to repay all outstanding indebtedness of
                              the Company owed to Chrysolith, LLC, which was
                              approximately $2,100,000 on June 20, 1996, to
                              repay bridge notes in the aggregate outstanding
                              principal amount of $220,000 to pay an
                              outstanding vendor's lienholder on the
                              Woodlands, to pay certain commission and
                              expense obligations in the amount of
                              approximately $75,000 owed to the Placement
                              Agent or a result of prior bridge financings
                              and for certain lease payments, working capital
                              and other general corporate purposes.


                             TERMS OF THE OFFERING

     PLAN OF OFFERING

     The Company is privately offering for sale to selected accredited
investors up to 12 units, each Unit (the "Unit") consisting of (i) a $500,000
principal amount of 12% Secured Convertible Senior Bond due June 30, 1999
(the "Bonds") and (ii) a warrant to purchase 100,000 shares of common stock,
par value $.001 per share, of the Company (the "Common Stock") at an exercise
price of $1.00 per share (the "Warrants").  The Warrants are exercisable at
any time after the Closing of this offering and will, unless previously
exercised, expire five years after the date of Closing.

     C.P. Baker & Company (the "Placement Agent") has been retained by the
Company to act, on a best efforts basis, as agent for the Company in
connection with the arrangement of this transaction.  The Company has agreed
(i) to pay the Placement Agent a 10% commission and a 3% non-accountable
expense allowance in connection with the arrangement of this financing, and
(ii) to indemnify the Placement Agent against certain liabilities, including
liabilities under the Securities Act of 1933, as amended.

     A minimum of 6 Units or $3,500,000 in gross proceeds (comprised of the
sale of 7 Bonds in the aggregate principal amount of $3,500,000 and 7
Warrants to purchase in the aggregate up to 700,000 shares of Common Stock),
and a maximum of 12 Units or $6,000,000 in gross proceeds (comprised of the
sale of 12 Bonds in the aggregate principal amount of $6,000,000 and 12
Warrants to purchase in the aggregate up to 1,200,000 shares of Common
Stock), is being offered by the Company (the "Offering").   Unless the
Offering is terminated by the Company, and provided that subscriptions for
the minimum gross proceeds of $3,500,000 have been accepted by the Company on
or prior to June 25, 1996 (the "Specified Date") (which date may be extended
by mutual agreement of the Company and the Placement Agent to a date no later
than July 2, 1996), but subscriptions for less than 12 Units have been
accepted, the Company may elect to have an initial Closing at any time prior
to the Termination Date (defined below), at which time all theretofore
accepted subscriptions for Units will be accepted and Bonds will be issued by
the Company in an aggregate principal amount equal to 100% of the aggregate
gross proceeds and Warrants will be delivered.  If subscriptions for gross
proceeds of at least $3,500,000 have been accepted on or before the initial
date of Closing, the Offering will terminate on the earlier of: (i) the date
that gross proceeds equal to $6,000,000 has been received and accepted by the
Company, (ii) the date determined by

                                       8

<PAGE>

the Company to terminate the Offering, or (iii) July 31, 1996 (the
"Termination Date"). If subscriptions for at least 7 Units and payment of
$3,500,000 therefore are not received by the Specified Date, then the
Offering will terminate on the Specified Date and each subscriber's funds
then held in escrow will be returned to him or her without interest or
deduction. See "Offering--Plan of Offering." The termination date of the
offering of Units is July 31, 1996, unless extended by mutual agreement of
the Placement Agent and the Company. A minimum investment of $500,000 for the
purchase of one Unit is required, unless otherwise agreed by the Company.

     The Company's Common Stock presently is publicly traded on the NASDAQ
National Market under the symbol "IBET." Neither the Bonds nor the Warrants
are eligible to be traded over the counter in the NASDAQ National Market,
although the shares of Common Stock subject to the Warrants will carry
certain demand and "piggyback" registration rights and, upon registration,
will be listed for trading on the NASDAQ National Market. See "The
Warrants--Registration Rights." See "Risk Factors--National Market Listing."

     INVESTOR QUALIFICATIONS

     The Offering is directed only to those persons and entities who have
such knowledge and experience in financial and business matters that they are
capable of evaluating the merits and risks of a prospective investment in
shares of Common Stock of the Company, and who are "accredited investors" as
defined in Rule 501(a) of Regulation D under the Securities Act. The Company
reserves the right to waive the suitability requirements set forth above in
certain instances where it is believed to be in the best interests of the
Company to do so and where such waiver will not, in the Company's judgment,
based upon advice of legal counsel, jeopardize the exemption of the Offering
from the registration requirements under federal or state securities laws.

     Each investor will be required to state in the Subscription Agreement
and related Prospective Purchaser Questionnaire, attached hereto as Exhibit
A, that the investor believes that he or she is able to bear the economic
risk of investment in the Units and that he or she has provided complete and
accurate information to the Company, to the extent that such information has
been requested, for the purposes of the foregoing inquiry of the Company.

     Investors are urged to seek independent advice from their professional
advisors relating to the suitability of an investment in the Units in light
of their overall financial needs and with respect to the legal and tax
implications of such investment.

     EVALUATION OF INVESTMENT

     The Company will determine, prior to a sale of the Units offered pursuant
to this Memorandum, that each prospective investor has sufficient knowledge and
experience in financial and business matters to be capable of evaluating the
merits and risks of the prospective investment in such Units or has designated a
qualified "purchaser representative" who has such knowledge and experience in
financial and business matters that the investor and such purchaser
representative together are capable of evaluating the merits and risks of the
prospective investment in the Units.  Any person intending to act as a purchaser
representative for the purpose of evaluating the merits and risks of the
prospective investment offered hereby is required (a) to promptly advise the
Company of such representation, (b) to receive a written acknowledgment from the
prospective purchaser that such person is the prospective purchaser's
representative in connection with evaluating the merits and risks of an
investment in the Units and to forward copies thereof to the Company, and (c) to
provide the prospective purchaser with written disclosure, prior to the
execution of the written acknowledgment described above, of any material

                                       9

<PAGE>

relationship between the purchaser representative (and his affiliates, as
defined in Regulation D under the Securities Act) and the Company (and its
affiliates, as so defined) that then exists, that is mutually contemplated,
or that has existed at any time within the past two years, together with any
compensation received or to be received as a result of such relationship, and
to forward copies of such written disclosure to the Company.

     RESTRICTIONS ON TRANSFERABILITY OF THE UNITS, BONDS, WARRANTS AND OTHER
SECURITIES

     The Units, Bonds and Warrants offered hereby have not been registered
under the Securities Act or any applicable state securities laws, nor have
the shares of Common Stock which may be purchased upon exercise of the
Warrants (collectively the "Securities"). The shares of Common Stock that can
be purchased by holders of the Warrants upon exercise thereof have certain
demand and "piggyback" registration rights. The Company is offering the Units
in reliance upon certain exemptions from registration contained in the
Securities Act of 1933, as amended (the "Securities Act") and such state
securities laws. As a consequence, investors may not sell, transfer, pledge
or otherwise dispose of the Securities unless such transfer, pledge or
disposition is subsequently registered under the Securities Act and
appropriate state securities laws or exemptions from such registrations are
available. Accordingly, each investor must bear the economic risk of the
investment for an indefinite period of time.

     The Company has placed certain restrictions on the sale, transfer,
pledge or other disposition of the Bonds and Warrants, including the placing
of a restrictive legend on any certificate evidencing the Securities. Each
purchaser must agree in writing in the Subscription Agreement that the
Securities will not be sold or assigned without registration. The Company
will not allow any transfer of the Securities by investors which is in
circumvention of these restrictions.  Other than as set forth in the
Subscription Agreement, Company has no obligation to register the Securities
for resale and does not intend to do so. Investors may wish to seek
independent legal advice regarding the effect of these restrictions and
investment representations on the transferability of the Securities offered
pursuant to this Memorandum. Rule 144 under the Act is not presently
available for resale of the shares of Securities offered hereby, and there
can be no assurance that Rule 144 will be available to investors in the
future.

     RESIDENCY REQUIREMENTS

     Investment in the Securities is limited to persons who are "accredited"
investors and who are bona fide residents of the states of Texas, New York,
Massachusetts and Florida or such other state or jurisdiction in which the
Offering is exempt from registration or in which the Company has requested
and received clearance to make sales of the Securities offered hereby.

                                  THE BONDS

     GENERAL

     The 12% Secured Convertible Senior Bonds (the "Bonds") will be limited
to a minimum of $3,500,000 and maximum of $6,000,000 aggregate principal
amount and will be secured as described in the Bonds and the Indenture. A
form of the Bonds is attached to this Memorandum as Exhibit B. The following
summaries of certain provisions of the Bonds do not purport to be complete
and are subject to, and are qualified in their entirety by reference to, all
provisions of the Bonds, including the definition therein of certain terms.

                                      10


<PAGE>

     ISSUANCE AND MATURITY

     Unless otherwise authorized by the Company, the Bonds will be issued in
minimum denominations of $500,000, in the total aggregate principal amount of
$3,500,000 (minimum) and $6,000,000 (maximum).

     Individual Bonds will be issued in principal amounts equal to the full
purchase price thereof after individual Subscription Agreements are accepted
by the Company and funds equal to $3,500,000, representing the total gross
proceeds of the Offering, are received by the Placement Agent and deposited
in an escrow account at Continental Stock Transfer and Trust Co., New York,
New York, and such proceeds are disbursed from the escrow account in
accordance with the instructions of the Company and Placement Agent.
Regardless of when such Bond(s) are issued however, the entire principal
amount of each Bond shall be payable in one balloon payment on the date that
is 36 months from the date of the initial Closing.

     INTEREST

     Each Bond will bear interest at a rate of twelve percent (12%) per
annum. Interest shall begin to accrue on the date of issuance of the Bond.
Accrued interest is payable semi-annually on June 15 and December 15 of each
year that the Bonds are outstanding with the first payment due December 15,
1996.

     OPTIONAL REDEMPTION BY THE COMPANY

     The Company may, at its option, redeem the Bonds, in whole but not in
part at 100% of principal amount thereof together with interest accrued
thereon through the date fixed for redemption, within six months following a
public offering by the Company of Common Stock that raises not less than
$6,000,000 in gross proceeds.

     OPTIONAL CONVERSION

     The Bonds are convertible at the option of the holder any time unless
previously redeemed, shares of Common Stock of Company at a conversion price
of $5.00 per share or 100,000 shares of Common Stock per $500,000 Unit.

     SECURITY

     The Company will grant to the holders of the Bonds a first priority
perfected security interest in the Woodlands Travel Plaza located in
DeRidder, Louisiana, including all related present and future personal,
tangible and intangible assets of the Company located thereon, and a second
priority perfected security interest in the subsidiary's subleasehold
interest in the Gold Nugget located in Layfayette, Louisiana, including all
related present and future personal, tangible and intangible assets of the
Company located thereon. As soon as the first priority security interest held
by Prime Properties on the subsidiary's interest in the Gold Nugget is paid
off, the Company will also grant a first priority perfected security interest
in the subsidiary's subleasehold interest, including all related present and
future personal, tangible and intangible assets of the Company located
thereon.

                                       11

<PAGE>

     EVENTS OF DEFAULT; ENFORCEMENT

     The following events are defined in the Bonds as Events of Default:

          (a)  default in the payment of any installment of interest on the
     Securities as and when the same becomes due and payable, and the
     continuance of such default of 30 days; or

          (b)  default in the payment of all or any part of the principal on
      the Securities as and when the same shall become due and payable
      either at maturity, upon acceleration or redemption or otherwise; or

          (c)  failure on the part of the Issuer duly to observe or perform
      any covenants or agreements on the part of the Issuer contained in the
      Securities, in this Indenture in the Subscription Agreement or any of
      the Collateral Agreements and the continuance of such failure for a
      period of 15 days after the date on which written notice specifying
      such failure, stating that such notice is a "Notice of Event of
      Default" hereunder and demanding that the Issuer remedy the same, is
      given to the Issuer by the Trustee or to the Issuer and the Trustee by
      the Holders of at least 25% in aggregate principal amount of the
      Securities at the time outstanding; or

          (d)  failure on the part of the Issuer to appoint a Trustee within
      5 days of a written request of the holders of 25% in principal amount
      of the securities to appoint a Trustee; or

          (e)  default under any mortgage, indenture or instrument under
      which there may be issued or by which there may be secured or evidenced
      any Indebtedness for money borrowed by the Issuer or any of its
      Subsidiaries (or the payment of which is Guaranteed by the Issuer or
      any of its Subsidiaries), which default is caused by a failure to pay
      due principal or interest on such Indebtedness after any applicable
      grace period (a "Payment Default"), and the principal amount of any
      such Indebtedness, together with the principal amount of any other such
      Indebtedness under which there has been and is continuing a Payment
      Default, aggregates $150,000 or more; or

          (f)  default under any mortgage, indenture or instrument under
      which there may be issued or by which there may be secured or evidenced
      any Indebtedness for money borrowed by the Issuer or any of its
      Subsidiaries (or the payment of which is Guaranteed by the Issuer or
      any of its Subsidiaries), which default results in the acceleration of
      such Indebtedness prior to its express maturity and the principal
      amount of any such Indebtedness, together with the principal amount of
      any other such Indebtedness under which there has been and is
      continuing a Payment Default or the maturity of which has been so
      accelerated and not rescinded, aggregates $150,000 or more; or

          (g)  failure by the Issuer or any of its Subsidiaries to pay final
      judgments (other than any judgment as to which a reputable insurance
      company has accepted coverage without a reservation of rights)
      aggregating in excess of $150,000, which judgments are not stayed or
      discharged within 15 days after the entry; or

          (h)  a court having jurisdiction in the premises shall enter a
      decree or order for relief in respect of the Issuer or any of its
      Subsidiaries in an involuntary case under any applicable bankruptcy,
      insolvency or other similar law now or hereafter in effect, or
      appointing a receiver, liquidator, assignee, custodian, trustee,
      sequestrator (or similar official) of the Issuer or any of its
      Subsidiaries or for any substantial part of the property of the Issuer
      or any of its Subsidiaries or ordering the winding up or liquidation of
      the affairs of the Issuer or any of its Subsidiaries and such decree or
      order shall remain unstayed and in effect for a period of 15
      consecutive days; or


                                       12

<PAGE>

          (i)  the Issuer or any of its Subsidiaries shall commence a
      voluntary case under any applicable bankruptcy, insolvency or other
      similar law now or hereafter in effect, or consent to the entry of an
      order for relief in an involuntary case under any such law, or consent
      to the appointment or taking possession by a receiver, liquidator,
      assignee, custodian, trustee, sequestrator (or similar official) of the
      Issuer or any of its Subsidiaries or for any substantial part of the
      property of the Issuer or any of its Subsidiaries, or the Issuer or any
      of its Subsidiaries shall make any general assignment for the benefit
      of creditors;

          (j)  loss by the Issuer or any subsidiary of any gambling license
      or the legal right to operate any gaming establishment including,
      without limitation, those of the Gold Nugget or DeRidder locations, but
      not including any loss resulting from a general prohibition or
      revocation of gambling licenses by the Louisiana legislature;

          (k)  indictment of any officer or key employee of the Issuer or
      any of its subsidiaries by any governmental authority;

          (l)  fraud by an officer or key employee of the Issuer or any of
      its subsidiaries;

          (m)  the Issuer does not pay, or shall be unable to pay, or shall
      admit in writing its inability to pay its debts as such debts
      become due; or

          (n)  any event which, in the reasonable judgment of Securityholders
      of 51% in principal amount of the Securities has a material adverse
      effect on the condition, operations or properties (financial or
      otherwise) of the Issuer or any of its subsidiaries, taken as a whole.

     Pursuant to the terms of the Bonds, the Company agrees that it shall
give notice to the Holder at his or her registered address by certified mail,
of the occurrence of any Event of Default within five (5) days after such
Event of Default shall have occurred.

     The Bonds provide that if an event of default as defined in the Bonds
occurs and is continuing, the registered Holder of each Bond then outstanding
may proceed to protect and enforce such Holder's right by any remedy
available at law or equity.

     TRANSFER OF BONDS

     The Bonds offered hereby are not registered under the Securities Act,
the securities law of any state or any similar laws in any other jurisdiction
but are being offered and sold subject to an exemption from registration
provided by Sections 3(b) and 4(2) of the Securities Act and applicable rules
promulgated thereunder and are also being offered and sold pursuant to
applicable state securities laws exemptions.  Because the Bonds will not be
registered under applicable securities laws, they cannot be resold unless
they are subsequently registered under such acts or laws or unless an
exemption from such registration is available and each Bond will contain a
restrictive legend to that effect.  Therefore, each investor must bear the
economic risk of an investment in the Bonds for an indefinite period of time.

     ORIGINAL ISSUE DISCOUNT

     The Company believes that purchasers of the Units will acquire the Bonds
with original issue discount ("OID") and as such will be subject to special
tax accounting rules based upon the provisions of the Internal Revenue Code
of 1986, as amended (the "Code"), and regulations, rulings and judicial
decisions thereunder as of the date hereof.  Persons considering purchasing
the Bonds with original issue discount should consult their own tax advisors
with respect to the timing, reporting and determination of the


                                       13

<PAGE>

original issue discount.  Further, each prospective Purchaser is advised to
consult with such Purchaser's own tax advisor regarding the specific federal,
state, local and foreign tax consequences of acquiring, holding and disposing
the Units, the Bonds, the Warrants, and the Common Stock issuable upon
conversion of the Bonds and exercise of the Notes.

                                 THE WARRANTS

     Each Warrant entitles the registered holder thereof (the "Warrant
holder") to purchase 100,000 shares of Common Stock of the Company at a price
of $1.00 per share at any time until June 30, 2001.  Each Warrant shall
expire five years after the Closing.  A Warrant holder as such is not
entitled to vote, receive dividends or exercise any of the rights of a holder
of Common Stock for any purpose until the Warrant has been duly exercised.

     Each Warrant provides for adjustment of the exercise price and the
number of shares of Common Stock purchasable upon the exercise of the Warrant
to protect the Warrant holder against dilution upon the occurrence of certain
events, including stock dividends, stock splits, reclassifications and
mergers, consolidations or certain dispositions of assets of the Company.

     The shares of Common Stock issuable upon exercise of the Warrants carry
certain demand and "piggyback" registration rights. If the Company proposes
to register any of its securities under the Securities Act, the Company must
include in such registration any such shares of Common Stock issuable upon
exercise of the Warrants as such Warrant holders may request.

     The costs and expenses of any such registration statement (other than
underwriting discounts and commissions and any legal or accounting expenses
incurred directly by the requesting holders) will be borne by the Company.

     The Company has sufficient shares of Common Stock authorized and
reserved for issuance upon exercise of the Warrants, and such shares, when
issued, will be fully paid and nonassessable.  To exercise a Warrant, the
Warrant holder must send the original Warrant certificate to the Company,
together with a notice stating the number of shares of Common Stock to be
purchased and cash or a certified check or bank draft for the total exercise
price of such shares.  The Company will then return a certificate evidencing
the number of shares of Common Stock issued upon exercise of the Warrant and
a new Warrant certificate if less than all the shares covered by the
exercised Warrant certificate are purchased.  Warrant holders will be
required to give the Company notice prior to the exercise of any Warrants and
will be unable to exercise the Warrants or transfer the Warrants or the
shares of Common Stock issued upon exercise of the Warrants unless such
transfer or exercise is either registered under the Securities Act and
applicable state securities laws or exemptions from such registration are
available.  See "The Offering--Restrictions on Transferability of Securities."


                                       14




<PAGE>

     TRANSFER OF WARRANTS

     The Warrants offered hereby are not registered under the Securities Act,
the securities law of any state or any similar laws in any other jurisdiction
but are being offered and sold subject to an exemption from registration
provided by Sections 3(b) and 4(2) of the Act and applicable rules
promulgated thereunder and are also being offered and sold pursuant to
applicable state securities laws exemptions.  Because the Warrants will not
be registered under applicable securities laws, they cannot be resold unless
they are subsequently registered under such acts or laws or unless an
exemption from such registration is available and each Warrant will contain a
restrictive legend to that effect.  The Company has no obligation to register
the Warrants. Therefore, each investor must bear the economic risk of an
investment in the Warrants for an indefinite period of time.

                                      15


<PAGE>

                                RISK FACTORS

     AN INVESTMENT IN THE SECURITIES OFFERED HEREBY IS SPECULATIVE IN NATURE,
INVOLVES A HIGH DEGREE OF RISK AND SHOULD NOT BE MADE BY AN INVESTOR WHO
CANNOT AFFORD THE LOSS OF  HIS ENTIRE INVESTMENT.  EACH PROSPECTIVE INVESTOR
SHOULD CAREFULLY CONSIDER THE FOLLOWING RISK FACTORS ASSOCIATED WITH THE
OFFERING, AS WELL AS OTHER INFORMATION CONTAINED ELSEWHERE IN THIS
CONFIDENTIAL PRIVATE PLACEMENT MEMORANDUM BEFORE MAKING AN INVESTMENT.

     ACCUMULATED DEFICIT; OPERATING LOSSES.  On December 31, 1995, the
Company had an accumulated deficit of approximately $482,000 and a working
capital deficit of approximately $3,640,000. For the period from its
inception through December 31, 1994, the Company had a net loss of
approximately $571,000.  For the fiscal year ended December 31, 1995, the
Company generated net earnings of approximately $90,000.  The Company's
ability to achieve continued profitability is dependent upon the successful
operation of gaming establishments at the Gold Nugget and Woodlands.  There
can be no assurance that the Company will achieve continued profitability as
a result of these operations or otherwise.

     POSSIBLE INABILITY TO MEET SUBSTANTIAL DEBT SERVICE; RISK OF SEVERE
LIMITATION ON BUSINESS ACTIVITIES.  On January 19, 1996 the Company and
Chrysolith reached an agreement to extend the maturity date of the Chrysolith
Note and other financial obligations owed to Chrysolith until June 30, 1996
in exchange for the Company's agreement to pay Chrysolith $15,634 per week in
principle payments during the extension period.  Chrysolith agreed to extend
this due date until July 2, 1996.  If the Company fails to repay the
Chrysolith Note by July 2, 1996, or the Prime Note quarterly payment of
$292,000 due on June 21, 1996, the Company could lose its interest in the
Gold Nugget and lose its leasehold interest under the Prime Sublease, either
of which would materially and adversely affect the business of the Company
and would cause it to substantially limit or cease its business operations,
or to seek protection under federal bankruptcy laws.

     Following completion of the Offering, the principal amount of the
Company's indebtedness as of June 30, 1996 with respect to the Gold Nugget
transaction will approximate $1,610,000 payable in equal quarterly
installments through December 21, 1997.  With respect to the Woodlands
transaction, the principal amount of the Company's remaining indebtedness is
$435,017 payable on December 30, 1996 with interest payable monthly at 10%
(the "Woodlands Note").  A notice of assessment for failure to pay state fuel
tax of approximately $70,000 due the State of Louisiana was received at the
Woodlands which the Company believes relates to the prior owner's operations.
The Company is not named as the recipient of the notice.  The Company will
be dependent on cash on hand and cash flow from operations (assuming
continued operation of both the Gold Nugget and the Toledo Palace) following
this Offering to pay debt service on the Prime Note, as well as anticipated
and unanticipated cash requirements.  If cash on hand and cash flow from
operations are insufficient to meet the debt service and other cash
requirements, the Company will need to seek additional financing.  There can
be no assurance that the Company will be successful in obtaining additional
financing or that such financing, if obtained, will be on terms favorable to
the Company.  Furthermore, if such financing involves the sale of the
Company's equity securities, there could be further significant dilution to
investors in this offering.  If the Company defaults in its obligations under
the Prime Note and/or the Woodland Note, it would lose its interests in the
Gold Nugget and Woodlands, including the Toledo Palace, which would
materially and adversely effect the business of the Company.

     POSSIBLE LOSS OF SUBLEASE AND OPERATING RIGHTS TO GOLD NUGGET;
FORFEITURE OF ALL MONIES PAID IN CONNECTION WITH GOLD NUGGET TRANSACTIONS.  A
Note in the original principal amount of $3,000,000 payable to Prime
Properties in equal quarterly installments through December 21, 1997 (the

                                      16

<PAGE>

"Prime Note") is secured by the Company's sublease with Prime Properties for
the Gold Nugget premises. In the event the Company defaults on the Prime
Note, Prime Properties could terminate the Company's sublease and its rights
relating to the establishment license for the Gold Nugget.

     POSSIBLE LOSS OF SUBLEASE FOR GOLD NUGGET DUE TO TERMINATION OF
OVER-LEASE.  Simultaneously with the closing of the Company's initial public
offering in December 1994, the Company entered into an 18-year sublease with
Prime Properties for the Gold Nugget premises.  The sublease is subject to
the terms and conditions of the lease with respect to the 76 Truck Plaza
between Prime Properties, the operator of the 76 Truck Plaza, as lessee and
National Auto Truck Stops, Inc. ("National"), as lessor (the "Over-Lease").
Although National is aware of the Company's use of the Gold Nugget
facilities, National has not yet granted its written consent to the sublease,
as required by the Over-Lease.  The Over-Lease expires September 30, 1999,
subject to the right of Prime Properties to extend the term for up to five
successive three-year periods.  Prime Properties is not contractually
obligated to the Company to exercise its right to extend the Over-Lease at
the end of its term or any renewal term.  In addition, National Auto Truck
Stops, Inc. has the right to terminate the Over-Lease under certain
circumstances, including if Prime Properties defaults, under the terms of the
Over-Lease, or if Prime Properties does not renew a franchise relationship
between National and Prime Properties.  The termination of the Over-Lease
upon the expiration of its terms (or any renewal term), or as a result of a
breach by Prime Properties or otherwise, will result in the termination of
the Company's sublease for the Gold Nugget gaming facility premises, and any
such termination would have a materially adverse effect on the operations and
the financial condition of the Company.

     TAXATION OF GAMING OPERATIONS.  The Company believes that the prospect
of significant additional revenue is one of the primary reasons why
jurisdictions have legalized gaming.  As a result, gaming operators are
typically subject to significant taxes and fees in addition to federal and
state corporate income taxes, and such taxes and fees are subject to increase
at any time.  Any material increase in these taxes or fees would adversely
affect the results of operations of the Company.  Under Louisiana law,
approximately 32.5% of gaming revenues (after payout of winnings) generated
by the Gold Nugget and the Toledo Palace is payable as gaming taxes to the
State of Louisiana.

     UNCERTAINTY RELATED TO PROPOSED LOUISIANA GAMING REFORM.  The gaming
industry in the State of Louisiana has recently received national media
attention in part due to the commencement by federal authorities of an
investigation of certain members of the Louisiana legislature and their
association with gaming interests and the declaring of bankruptcy by Harrah's
Jazz, Louisiana's only land-based casino which operated in a temporary
facility in New Orleans from May 1995 to November 1995.  As a result of these
and other incidents, there are reports that a significant percentage of
Louisiana residents are opposed to gaming in the State. Following the general
election in Louisiana in November, 1995, many politicians were elected,
including Governor Foster, on anti-gambling platforms.  The Governor of
Louisiana called a special legislative session on March 25, 1996 to
determine, among other things, the future of gaming in the state.  Proposals
included a state-wide referendum to abolish all gaming or a local option
which would decide the future of gaming parish by parish.  At the close of
the session on April 19, 1996, the state-wide referendum was defeated and a
local option bill was passed and sent to the Governor for signature.  At the
November 1996 general election, residents of each of the parishes must decide
whether to continue video poker and if applicable, riverboats and land based
casinos.  In the event that video poker is eliminated at either location, or
a result of a parish referendum, operations would be required to terminate
before June 1999.  The Company cannot predict the likelihood of whether the
Louisiana legislature will in the future adopt any new, or modify any
existing, gaming statute, or how any such new or different statutes or
regulations would impact TWG's operations in the State of Louisiana.

                                      17


<PAGE>

     POSSIBLE LOSS OF ESTABLISHMENT LICENSE.  Effective January 1, 1996, in
order for the maximum of 50 VLTs to be operated at a truck stop location in
Louisiana, the truck stop must meet certain requirements relating to its
operation as a truck stop, including the operation of a 24-hour restaurant,
the availability of mechanic services 24 hours/7 days a week, paved parking
for at least 50 18-wheeled vehicles and the sale of at least 100,000 gallons
of fuel per month, of which 40,000 gallons must be diesel fuel.  The Company
believes that the 76 Truck Plaza, at which the Gold Nugget is located, and
Woodlands currently satisfies these requirements.  The failure of either
location to meet the standard for maintaining a truck stop gaming
establishment could cause the number of VLTs permitted to be operated at such
location to be decreased or eliminated, which could have a material adverse
impact on the revenue of the Company.  Moreover, if Prime Properties (which
operates the 76 Truck Plaza at which the Gold Nugget is located) or the
Company (which operates Woodlands) loses its fuel franchise for any reason,
the truck stop would no longer qualify as a site for a gaming establishment.
Nine other truck stop gaming establishments located in Louisiana (unrelated
to the Company) were closed in January 1996 by the Louisiana State Police for
failure to comply with these regulations.  Owners of such facilities can file
an appeal and continue to operate while the appeal is pending..

     Following the general election in Louisiana in November, 1995, many
politicians were elected, including Governor Foster, on anti-gambling
platforms.  The Governor of Louisiana called a special legislative session on
March 25, 1996 to determine, among other things, the future of gaming in the
state.  Proposals included a state-wide referendum to abolish all gaming or a
local option which would decide the future of gaming parish by parish.  At
the close of the session on April 19, 1996, the state-wide referendum was
defeated and a local option bill was passed and sent to the Governor for
signature.  At the November 1996 general election, residents of each of the
parishes must decide whether to continue video poker and if applicable,
riverboats and land based casinos.  In the event that video poker is
eliminated at either location, or a result of a parish referendum, operations
would be required to terminate before June 1999.

     NEED FOR ADDITIONAL FINANCING.  The Company believes, although there can
be no assurance, that existing cash, together with anticipated cash flows
from operations and anticipated net proceeds from this Offering or a working
capital line of credit, will be sufficient to satisfy its liquidity and
capital requirements for the next twelve months.  Twelve months after this
offering, the Company may require additional capital to fund operations and
growth opportunities.  If such additional financing is not available, this
would have a materially adverse effect on the financial condition and
operations of the Company.  The Company may require additional financing for
acquisition of other gaming businesses when and if the opportunity to acquire
such businesses arises.  The Company has no immediate plan, agreements or
understandings with respect to such transactions.  The Company's ability to
obtain additional financing may be limited for a number of reasons, including
the fact that a substantial portion of the Company's assets are subject to
liens.  There can be no assurance that such financing will be available, if
at all, on terms favorable to the Company.

     LICENSING AND REGULATION.  The Company's operations will be subject to
regulation by each jurisdiction in which it plans to conduct business, as
well as Federal laws and the laws of any foreign country in which it seeks to
operate.  Each of the Company's officers, directors, managers and principal
stockholders, as well as persons who have more than a 5% income or profit
interest in, or who exercised significant influence over the activities of,
the Company will be subject to strict scrutiny and approval of the gaming
commission or other regulatory body of each jurisdiction in which the Company
may conduct gaming operations.  The Company has not been, and cannot be,
licensed in Louisiana to directly own or operate VLTs because of the
residency requirements for such a license.  The ownership, operations and
management of the VLTs at the Gold Nugget and the Toledo Palace have been
undertaken by Chrysolith, a licensed video machine operator in the State of
Louisiana.  If Chrysolith's licenses were revoked or not renewed or otherwise
impaired, the Company would either have to enter into an agreement with
another

                                      18

<PAGE>

Louisiana-licensed VLT operator, or terminate gaming operations at
the locations at which Chrysolith owns, operates and maintains VLTs.  There
can be no assurance that the Company could enter into an agreement with
another Louisiana-licensed VLT operator expeditiously or on acceptable terms,
if at all, in such event, and if it were unable to do so, the Company's
operations and financial condition would be materially adversely affected.
The Company owns 49% of the Class B membership units in Chrysolith.

     The failure to obtain any license for properties upon which the Company
plans to operate or manage a gaming establishment in the future would have a
materially adverse affect on the Company's business.  Obtaining required
licenses can be time consuming and costly with no assurance of success.  In
addition, the Company is subject to changes in the laws of the jurisdictions
in which it operates, which could materially limit the Company's ability to
conduct business profitably.

     In the event that a required license is not granted for any particular
location, the Company's options would include effecting a transfer of
substantially all the related gaming assets to a different location or
selling its interest in the gaming operations at that location to a third
party.  There can be no assurance that the Company would be able to relocate
gaming assets or sell its interests on acceptable terms or at all, and the
inability to do so would have a materially adverse effect upon the business
and prospects of the Company.

     COMPETITION.  The gaming industry is highly fragmented and characterized
by a high degree of competition among a large number of participants.  The
Gold Nugget and the Toledo Palace compete with numerous existing and proposed
gaming operations in Louisiana and, to a lesser extent, adjacent portions of
Mississippi, including truck stop sites which contain VLTs, comprehensive
land-based and riverboat casinos, Native American gaming ventures and other
forms of legalized gambling.  In addition, under Louisiana law racetracks and
off-track betting parlors may install an unlimited number of VLTs, and
establishments with alcoholic beverage licenses, such as restaurants and
bars, as well as hotels, are eligible to apply for a license to operate up to
three VLTs.  Many of the Company's competitors and potential competitors have
greater financial and marketing resources, significantly more experience in
operating gaming facilities, operate a greater number and variety of gaming
facilities, and have better sites, than the Company.  The Company believes
that competition in the gaming industry is based on the quality and location
of gaming facilities, the effectiveness of marketing resources and customer
service and satisfaction.

     There are four gaming operations within five miles of the Gold Nugget
and one gaming operation within five miles of the Toledo Palace, all of which
contain 50 VLTs, exclusive of numerous restaurants, bars and hotels which are
limited to three VLTs each.  As of January 1, 1996, there were approximately
100 truck stops with VLTs in Louisiana.  In addition, there are three
land-based casinos on Native American Indian reservations in Charenton,
Louisiana, which is located approximately 60 miles from the Gold Nugget, and
in Marksville and Kinder, Louisiana, which are located 65 miles and 70 miles
from the Toledo Palace, respectively.  There also are a significant number of
gaming license applications currently pending in Louisiana.

     In 1991, Louisiana enacted a law enabling unlimited stakes riverboat
gaming on up to six gaming riverboats in any one parish (county) with a
maximum of 15 for the entire state.  The first of these riverboats became
operational in December 1993.  Louisiana has also approved land-based gaming
for one location in downtown New Orleans which opened in a temporary facility
in May 1995 and suspended operations in November 1995, and dockside gaming at
certain locations on the Red River.  Land-based and riverboat casinos
operating from New Orleans dock sites may be expected to benefit from the
status of New Orleans as a desirable tourist destination, business and
convention center.

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<PAGE>

     The Gold Nugget and the Toledo Palace also compete with other forms of
gaming, including bingo and pull tab games, card clubs, pari-mutuel betting
on horse racing and dog racing, state-sponsored lotteries, as well as other
forms of wagering entertainment.

     PENDING LITIGATION.  In March, 1995, Trans World Gaming of Louisiana,
Inc., a wholly owned subsidiary of the Company, was served with a petition
filed by Charles Alan Jones, III and Kelly McCoy Jones (the "Petitioners") to
enforce a mortgage held by the Petitioners on the Woodlands property.  The
Petitioners hold a promissory note from the Company in the principal amount
of $435,017 (the "Note") which is secured by a mortgage on the property.  The
petition seeks acceleration of the Note, with interest and attorneys' fees,
and recognition of the mortgage based on a monthly interest payment that was
approximately seven days late on February 7, 1995. The Company has made, and
the Petitioners have accepted, monthly interest payments since then.  The
Company has filed an answer, but discovery has not moved forward.
Petitioners have filed a motion to enforce an oral settlement allegedly made
between the Company's former Chief Executive Officer and Mr. Jones, for which
a hearing is scheduled on July 15, 1996.  The Company's management believes
it has defenses to the Petitioners' claims and that the suit is without
merit.  If the petition is not withdrawn or a settlement is not otherwise
reached, and if the Note is accelerated as part of a judicial order, the
Company will use $435,017 from the proceeds of this offering to satisfy the
obligation.

     DEPENDENCE ON CHRYSOLITH.  The Company does not have, and will not be
able to obtain, a license to own or operate VLTs in Louisiana because such
licenses may be granted only to Louisiana residents or entities which are at
least 51% owned by Louisiana residents.  The Company has entered into
agreements with Chrysolith pursuant to which Chrysolith operates the VLTs at
the Golden Nugget and at Toledo Palace.  If for any reason Chrysolith or its
51% shareholder are determined by the Louisiana Authorities to be in
violation of Chrysolith's license or of the Louisiana laws and regulations,
and Chrysolith subsequently lost its operator's license, or such license was
limited or modified, the Company would need to immediately replace Chrysolith
with another Louisiana licensee to operate the Toledo Palace and the Gold
Nugget.  Any such licensed operators would then be required to own or obtain
VLTs for these gaming facilities.  Although the Company believes that a
substitute for Chrysolith could be located, there can be no assurance that
the Company could find such a replacement quickly or in a timely way, or that
such a licensee would agree to operate VLTs at the Toledo Palace and the Gold
Nugget gaming facilities on terms acceptable to the Company.  There can be no
assurance that Chrysolith will be able to successfully operate the VLTs at
Gold Nugget and Toledo Palace.  If the Company were required to find a
replacement for Chrysolith and were unable to do so expeditiously, its
business and financial condition would be materially adversely affected.

     LIABILITY INSURANCE.  The Company currently maintains and intends to
maintain general liability insurance with coverage limits of $1,000,000 per
occurrence, $2,000,000 per year in the aggregate.  The Company also maintains
a $1,000,000 umbrella liability insurance policy (with a $10,000 self-insured
retention).  There can be no assurance that liability claims will not exceed
the coverage limits of such policies or that such insurance will continue to
be available on commercially reasonable terms at all.  There can be no
assurance that liability claims will not exceed the coverage limits of such
policies or that such insurance will continue to be available on commercially
reasonable terms at all.  There can be no assurance, however, that such
insurance will be adequate to cover unanticipated liabilities.

     NO DIVIDENDS.  The Company has not paid any dividends to date on its
Common Stock, and does not expect to declare or pay any dividends in the
foreseeable future.  The Company intends to retain future earnings for
investment in its business.

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<PAGE>

     POSSIBLE DELISTING AND RISK OF LOW-PRICED SECURITIES.  The Company's
Common Stock is listed on the NASDAQ National Market System.  To qualify for
initial quotation or listing of securities, the NASDAQ National Market
required satisfaction of certain financial tests, including the attainment of
specified minimum levels of assets, income, net worth and certain minimum
requirements relating to the market value of the securities to be listed
(exclusive of shares owned by insiders), as well as the number of shares and
stockholders.  However, there can be no assurance that the Company will be
able to satisfy certain other specified financial tests and market related
criteria required for continued quotation on the NASDAQ National Market
System following the Offering.  If the Company is unable to satisfy the
NASDAQ National Market maintenance criteria in the future, its Common Stock
may be delisted from trading on the NASDAQ National Market, and, if delisted,
might be eligible to be quoted on the NASDAQ market (collectively, the NASDAQ
National Market System, "NASDAQ").  If delisting from NASDAQ occurs, trading
in the Company's securities would thereafter be conducted in the
over-the-counter market in the so-called "pink sheets" or the "Electronic
Bulletin Board" of the National Association of Securities Dealers, Inc.
("NASD") and consequently an investor could find it more difficult to dispose
of, or to obtain accurate quotations as to the price, of the Company's
securities.

     The Securities Enforcement and Penny Stock Reform Act of 1990 requires
additional disclosure relating to the market for penny stocks in connection
with trades in any stock defined as a penny stock.  Commission regulations
generally define a penny stock to be an equity security that has a market
price of less than $5.00 per share, subject to certain exceptions.  Such
exceptions include any equity security listed on NASDAQ and any equity
security issued by an issuer that has (i) net tangible assets of at least
$2,000,000, if such issuer has been in continuous operation for three years,
(ii) net tangible assets of at least $5,000,000, if such issuer has bee in
continuous operation for less than three years, or (iii) average annual
revenue of at least $6,000,000, if such issuer has been in continuous
operation for less than three years.  Unless an exception is available, the
regulations require the delivery, prior to any transaction involving a penny
stock, of a disclosure schedule explaining the penny stock market and the
risks associated therewith.

     In addition, if the Company's securities are not quoted on NASDAQ, or
the Company does not have $2,000,000 in net tangible assets, trading in the
Common Stock would be covered by Rule 15g-9 promulgated under the Exchange
Act for non-NASDAQ and non-exchange listed securities.  Under such rule,
broker/dealers who recommend such securities to person other than established
customers and accredited investors must make a special written suitability
determination for the purchaser and receive the purchaser's written agreement
to a transaction prior to sale.  Securities also are exempt from this rule if
the market price is at least $5.00 per share.

     If the Company's securities become subject to the regulations applicable
to penny stocks, the market liquidity for the Company's securities could be
severely affected.  In such an event, the regulations on penny stocks could
limit the ability of broker/dealers to sell the Company's securities and thus
the ability of purchasers of the Company's securities to sell their
securities in the secondary market.

     POSSIBLE ADVERSE EFFECT OF ISSUANCE OF PREFERRED STOCK.  The Company's
Articles of Incorporation authorize the issuance of 2,000,000 shares of
"blank check" Preferred Stock, with designations, rights and preferences
determined from time to time by its Board of Directors.  Accordingly, the
Company's Board of Directors is empowered, without further stockholder
approval, to issue Preferred Stock with dividend, liquidation, conversion,
voting or other rights that could adversely affect the voting power or other
rights of the holders of the Common Stock.  In the event of issuance, the
Preferred Stock could be used, under certain circumstances, as a method of
discouraging, delaying or preventing a change in control of the company.  The
Company has no current plans to issue any shares of Preferred Stock.
However, there can be no assurance that Preferred Stock will not be issued at
some time in the future.



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<PAGE>

                               RECENT DEVELOPMENTS

     On May 8, 1996, Mr. Andrew Tottenham was appointed to serve as a member
of the Company's Board of Directors.  Mr. Tottenham is the son-in-law of Mr.
Kohlenberg, the Company's current Chief Executive Officer and Chairman.  He
presently also serves as the sole member of the Audit and Compensation
Committee of the Board.

                                  USE OF PROCEEDS

     Upon completion of the Offering, the Company expects to receive net
proceeds of approximately $2,925,000 if the minimum Units are sold, and
$5,100,000 if the maximum Units are sold, after deducting commissions to the
placement agent of 10% of the gross proceeds, a non-accountable expense
allowance of 3% of the gross proceeds, and additional expenses of the
Offering including accounting and legal fees in connection with the Offering
and "Blue Sky" fees and other related expenses payable at the time of the
closing of the Offering.

     The proceeds of the Offering will be used to retire all of the
outstanding obligations to Chrysolith LLC estimated at $2,100,000 and to make
a regular quarterly payment of principal and interest in the amount of
$292,000 on a promissory note in the original principal amount of $3,000,000
payable to Prime Properties, Inc. (the "Prime Note"), which payment is due on
June 21, 1996. The Company will also retire amounts outstanding under the
1996 Bridge Financing (presently $220,000), accelerate the maturity of the
Woodlands Notes of $435,017 and use the remainder for working capital
purposes which include legal and accounting fees in connection with the
Company's financing efforts during January through June 1996, and for the
payment of certain accounts payable (which includes amounts owing to
Oppenheimer Wolff & Donnelly, the Company's legal counsel).  The Company's
current accounts payable at June 17, 1996 were approximately $362,000.

     The foregoing represents the Company's best estimate of its allocation
of the net proceeds of this Offering based upon the Company's current
business plans, the terms of the proposed Public Offering, and the estimates
regarding its anticipated expenditures. Actual expenditures may vary
substantially form these estimates, and the Company may find it necessary or
advisable to use the net proceeds for other purposes.  Until utilized, the
net proceeds of this Offering will be invested in short-term bank
certificates of deposit, interest-bearing savings accounts or other
short-term interest-bearing investments.

                    ADDITIONAL INFORMATION ABOUT THE COMPANY

     Attached to this Memorandum are the following exhibits:

     Exhibit A  --   Subscription Agreement
     Exhibit B  --   12% Secured Convertible Senior Bond due June 30, 1999
     Exhibit C  --   Common Stock Purchase Warrant
     Exhibit D  --   Company's Quarterly Report on Form 10-QSB for the
                     Quarter Ended March 31, 1996
     Exhibit E  --   Company's Proxy Statement dated April 18, 1996
     Exhibit F  --   Company's Annual Report on Form 10-KSB/A for the
                     Year Ended December 31, 1995.

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<PAGE>

Purchasers should carefully review these documents for a discussion of the
Company's business, properties, management, executive compensation, security
ownership, financial statements and other information regarding the Company.

     In addition, the Company is subject to the informational requirements of
the Securities Exchange Act of 1934 (the "Exchange Act") and, in accordance
therewith, files reports, proxy statements and other information with the
Commission.  Such reports, proxy statements and other information filed by
the Company pursuant to the Exchange Act may be inspected and copied at the
public reference facilities maintained by the Commission at Judiciary Plaza,
450 Fifth Street, N.W., Washington, D.C. 20549 and at the following regional
offices of the Commission: 7 World Trade Center, 13th Floor, New York, New
York 10048; Citicorp Center, 500 West Madison Street, Suite 1400 and the John
C. Kluczynski Federal Building, Chicago, Illinois 60661-2511.  Copies of such
material can also be obtained from the Public Reference Section of the
Commission at Judiciary Plaza, 450 Fifth Street, N.W., Washington, D.C.
20549, at prescribed rates.


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