Exhibit 10.42  Johan P. Finley   February 24, 2004   PDS Gaming Corporation
6171 McLeod Drive
Las Vegas, Nevada 89120  Re:Guaranty dated February 24, 2004
(Guaranty) of Promissory Note dated February 24, 2004 in the amount of
$7,691,796 (Note) and Collateral Documents; PDS Gaming Corporation, PDS
Gaming Corporation-Nevada, PDS Gaming Corporation-Mississippi, and PDS Gaming
Corporation-Colorado (jointly and severally Borrower); First State Bank of
Thermopolis (Lender); Johan P. Finley (Guarantor)  Gentlemen:  This letter sets forth the agreement between
Borrower and Guarantor with respect to the above-referenced Note.  If the following terms and conditions meet
with your approval, please sign this letter where indicated below and return
the original to me.  Capitalized terms
used herein have the meanings ascribed to them in the Guaranty.  For good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, Borrower and Guarantor agree as follows:  1.Indemnification.  Borrower agrees to indemnify and hold
harmless Guarantor from and against any and all losses, claims, damages,
liabilities and expenses (including without limitation and as incurred
reasonable costs of investigating, preparing or defending any such claim or action,
including attorneys fees and legal costs and accountants fees and costs)
arising out of, or in connection with, the Guaranty.  Borrower will not, however, be responsible for any claims,
liabilities, losses, damages or expenses that have resulted solely from
Guarantors willful misconduct or gross negligence.  In case any action is brought against Guarantor with respect to
which indemnity may be sought against Borrower, Guarantor will promptly notify
Borrower in writing and Borrower will, if requested by Guarantor, assume the
defense thereof, including the employment of counsel reasonably satisfactory to
Guarantor and payment of all reasonable fees and expenses, including without
limitation and as incurred legal fees and costs and accountants fees and
costs.  The failure to so notify
Borrower shall not affect any obligations Borrower may have to  1 
   Guarantor pursuant to this letter agreement
or otherwise, except to the extent that Borrower is materially adversely
affected and irreparably prejudiced by such failure.  The indemnification, contribution and expense reimbursement obligations
set forth herein shall be in addition to any liability Borrower may have to
Guarantor at common law or otherwise and shall survive the conclusion of the
Guaranty in connection with the Note.  2.Disposition
of Assets  In case of any Event of Default on the part of Borrower, which remains
uncured after applicable notice and the expiration of time to cure as provided
in the Note and Collateral Documents, Guarantor has the right to dispose of the
assets of Borrower as required to satisfy the Note and all sums due thereunder
including without limitation the costs of collection, fees, charges, and
accrued and unpaid interest whether at the Note rate or any accelerated rate
due at default or maturity, notwithstanding anything to the contrary set forth
in the Note or Collateral Documents.  3.Fees
for Guaranty  For and in exchange for the Guaranty made by Guarantor, Borrower agrees
to pay to Guarantor each year that lump sum equal to two percent (2.00%) of the
Principal outstanding as of March 1.  
The first such payment will be made on or about March 1, 2004, and
each annual lump sum payment thereafter will be due and payable on March 1
of each following year until the Note is cancelled.  The Fees will be prorated for any partial year.  4.Legal
Fees and Costs  Borrower agrees that it will pay the legal fees and costs incurred by
Borrower and Guarantor in connection with the provision of the Guaranty.  Borrower and Guarantor acknowledge and agree
that the legal fees and costs contemplated by this paragraph 4 are additional
to those fees and costs contemplated in the Indemnification set forth in
paragraph 1, above.  5.Miscellaneous  (a)Non-waiver.  No delay or failure of Guarantor in
exercising any right, remedy, power or privilege hereunder shall affect such
right, remedy, power or privilege, nor shall any single or partial exercise
thereof preclude the exercise of any other right, remedy, power or privilege.  (b)Delay.  No delay or failure of Guarantor at any time
to demand strict adherence to the terms hereof shall be deemed to constitute a
course of conduct inconsistent with Guarantors right at any time, before or
after any Event of Default, to demand strict adherence to the terms hereof.  2 
   (c)Governing Law.  This letter of agreement shall be
interpreted and the rights of the parties hereunder shall be determined under
the laws of the State of Nevada.  (d)Invalidity.  Should any part, term or provision of this
letter of agreement be decided, by a court of competent jurisdiction, to be
illegal or in conflict with any law, the validity of the remaining portions or
provisions of this letter of agreement shall not be affected thereby.  (e)Notices.   Any notices required to be given hereunder
by one party to the other shall be deemed effectively given if delivered to the
other party at that partys last known address by overnight courier with proof
of delivery, by certified mail return receipt requested, confirmed facsimile
transmission, or if delivered by hand.  If the foregoing terms and conditions meet with your approval, please
sign this letter where indicated below and return the original to me.  Sincerely,  /s/ Johan P. FinleyJohan P. Finley   ACCEPTED AND AGREED TO this 24th day of March, 2004.   PDS Gaming Corporation, PDS GamingCorporation-Nevada, PDS GamingCorporation-Mississippi, PDS GamingCorporation-ColoradoBy
  /s/ Peter D. ClearyPeter D. Cleary, President  3