EXHIBIT 10.29

                          RIV ACQUISITION HOLDINGS INC.
                      3753 Howard Hughes Parkway, Suite 101
                             Las Vegas, Nevada 89109

                                  June 8, 2007

Mr. Larry Kwon
Jefferies & Company, Inc.
520 Madison Avenue
New York, NY 10022

Dear Mr. Kwon:

Riv Acquisition Holdings Inc. ("RAH") is pleased to submit this preliminary,
non-binding indication of interest (the "Proposal") to acquire all of the issued
and outstanding stock of Riviera Holdings Corporation ("Riviera").

The principal terms of our Proposal are outlined below. In outlining the
principal terms of our Proposal, we have attempted to respond to the items
requested in your June 4, 2007 letter. We note that your letter stated that all
indications of interest are due no later than 5:00 p.m. (EDT) on Monday, June
11, 2007.

o     Valuation:

      Consistent with our letter of May 16, 2007 to Riviera's Board of
      Directors, we propose to acquire all of the issued and outstanding stock
      of Riviera at a price of $34.00 per share in cash. This represents a
      $423,767,670 aggregate implied equity valuation of Riviera, based upon
      12,463,755 issued and outstanding shares as of May 8, 2007 as disclosed in
      Riviera's most recent Form 10-Q for the quarterly period ended March 31,
      2007. We propose to structure our acquisition on the terms set forth in
      the draft merger agreement delivered to you on May 20, 2007, which was
      substantially the same as the prior merger agreement with RAH dated as of
      April 5, 2006 (the "Prior Merger Agreement") but which also included the
      addition of a "go-shop" provision allowing the Board to solicit bids for
      Riviera without triggering a break-up fee. We continue to await your
      comments on the draft merger agreement.

o     Acknowledgement of Outstanding Debt:

      As you requested in your June 4, 2007 letter, we acknowledge that we are
      aware of the change of control provisions in Riviera's debt instruments
      and are prepared, if necessary, to (i) redeem the $215 million principal
      amount of Riviera's Senior Secured Notes in a manner permitted under the
      Note Indenture or cause the Note Indenture's change of control provisions
      to be appropriately amended or waived and (ii) obtain a replacement for
      Riviera's $30 million revolving credit line on terms not less favorable to
      Riviera than the terms of the existing line.


                                  EXHIBIT 10.29
<PAGE>

o     Financing Sources:

      Our investment group is led by Paul C. Kanavos, the Chairman and CEO of
      Flag Luxury Properties, LLC; Robert Sillerman, Chairman and CEO of CKX,
      Inc.; 30-year Las Vegas-based real estate developer Brett Torino, also a
      principal of Flag Luxury Properties; and Barry Sternlicht, Chairman and
      CEO of Starwood Capital Group. We are in the process of obtaining a debt
      financing commitment from Credit Suisse ("CS") in an aggregate amount
      equal to 85% of the purchase price (including debt refinancing) and
      closing costs associated with the anticipated transaction. Delivery of CS'
      commitment letter is subject to satisfactory completion of CS' due
      diligence, the principal components of which will include an appraisal of
      Riviera's assets, an agreed-upon procedures financial review of the
      Riviera Hotel and Casino, and environmental and engineering due diligence.
      We expect that CS will be able to complete its due diligence within three
      weeks. In order to meet this timetable, CS will require full access to
      Riviera's premises, senior management and accountants, commencing
      immediately. Our principal contact at CS is Ian Davis, who may be reached
      at 212.325.4958. The balance of the aggregate purchase price in excess of
      the debt funding from CS will be supplied via equity commitments from the
      principals of our investment group. Our principals are prepared to deliver
      bank letters demonstrating the availability of the necessary equity.

o     Merger Agreement:

      As requested in your June 4, 2007 letter, we acknowledge that we have
      reviewed Riviera's most recent Form 10-K and Form 10-Q, Riviera's proxy
      statement filed July 3, 2006 pertaining to the merger agreement with RAH,
      the descriptions of Riviera's contractual obligations to its employees
      described in the foregoing documents, and the Prior Merger Agreement
      (including the termination fee provisions thereof, pursuant to which a fee
      of approximately $7.9 million may become payable to RAH if Riviera enters
      into a definitive acquisition agreement with any other party prior to
      August 29, 2007).

o     Due Diligence Requirements:

      As you know, RAH and its advisors conducted substantial due diligence in
      connection with the Prior Merger Agreement. We will need to update our
      legal due diligence for the period from April 5, 2006 to the present and
      we will require the cooperation of Riviera's senior management in doing
      so. We believe that completion of our legal due diligence can be completed
      within one to two weeks. In addition, as discussed above, delivery of a
      debt funding commitment letter is subject to satisfactory completion of
      CS's due diligence.

      Our principal legal counsel is Cadwalader, Wickersham & Taft LLP. Our
      principal Nevada gaming counsel is Jolley Urga Wirth Woodbury & Standish.
      Our financial advisor is Bear, Stearns & Co. Inc.

      CS's advisors are BDO Seidman, LLP, CB Richard Ellis and LandAmerica.

o     Approvals:


                                  EXHIBIT 10.29
<PAGE>

      Attached hereto is a letter from our gaming counsel, Jolley Urga Wirth
      Woodbury & Standish, stating that (i) we are fully aware of the Nevada
      gaming statutes and licensing requirements, particularly the time,
      information and application processes required to obtain a gaming license
      or finding of suitability and (ii) based on the information provided by
      us, our gaming counsel knows of no reason why we would not obtain from
      Nevada gaming authorities the required licenses, findings or suitability
      or other approvals or clearances to consummate the acquisition within a
      reasonable and customary period of time after execution of the acquisition
      agreement.

      The completion of the proposed transaction would, of course, require the
      approval of the Nevada and Colorado gaming authorities as well as the
      expiration of the necessary waiting period under the Hart-Scott-Rodino
      Antitrust Improvements Act.

      Paul Kanavos, Brett Torino and Barry Sternlicht have already filed
      applications with the Nevada and Colorado gaming authorities, and Robert
      Sillerman will do so promptly upon the execution of a definitive merger
      agreement.

o     Other Considerations:

      Riviera has taken the position that the restrictions contained in the
      business combinations provisions of the Nevada corporate statutes and in
      Riviera's articles of incorporation are impediments to consummating a
      merger with RAH. As previously indicated to you, we strongly believe that
      these restrictions are not applicable to RAH, and we also believe that the
      most expeditious way to resolve this issue is through a negotiated
      settlement between RAH and Riviera. Our acquisition of Bill Westerman's
      shares was approved by the Board and even if, for the sake of argument,
      the provisions of the business combinations law and/or the articles did
      apply, the Board is free to remove any conditions it placed on the
      acquisition.

o     Timing:

      We have been advised by our gaming counsel that approval of the Nevada and
      Colorado gaming authorities can be secured within nine months to a year
      following execution of a definitive merger agreement and we expect that we
      would proceed to closing immediately upon obtaining such approvals. We are
      prepared to explore alternative structuring arrangements that would reduce
      the period necessary to secure the necessary gaming approvals. Given that
      we completed a substantial amount of due diligence in connection with the
      Prior Merger Agreement and that three out of four principals in our
      investment group have already filed applications with the Nevada and
      Colorado gaming authorities, we believe that our group has a significant
      advantage over other potential bidders from a timing perspective.

o     Contacts:

      The name, telephone and facsimile numbers and e-mail addresses of the
      primary contacts within our investment group as well as at our outside
      advisors are attached hereto on Annex A.


                                  EXHIBIT 10.29
<PAGE>

This Proposal is merely a non-binding indication of interest and is not
intended, nor should it be construed, to give rise to any legal obligation. This
Proposal is also entirely subject to the execution of definitive documentation.

Sincerely,



Paul Kanavos

/s/ Paul Kanavos

President


                                  EXHIBIT 10.29