EMPLOYMENT AGREEMENT


     THIS   AGREEMENT  is dated, made and entered into on March ____, 1997 and
is  effective  as of the 25th day of July, 1996, by and  between  Casino Magic
Corp.,  a  Minnesota  corporation  (the  "Company"), and David L. Paltzik (the
"Employee").

                                  RECITALS

     WHEREAS,  the Company is desirous of obtaining the full-time services of
the  Employee:

    WHEREAS,    Employee commenced his employment with the Company on June 25,
1996.

    WHEREAS,  the Employee and the Company are each willing to enter into this
employment  agreement  (the  "Agreement'), all on the terms and subject to the
conditions herein contained; and

    WHEREAS,  Employee  is  desirous  of receiving stock grants and options to
purchase  common  stock  in  the  company  under the Company's Incentive Stock
Option  Play,  which  options and grants require the approval of the Company's
Board of Directors and the Stock Option Committee, respectively; and

    WHEREAS, this Agreement is intended to supersede and take the place of all
prior agreements and understandings concerning employment;
 .

                                 AGREEMENT

     NOW    THEREFORE,  in  consideration  of  the  premises  and  the  mutual
agreements
hereinafter set forth, the parties agree as follows:


1.     Employment of the Employee; Term

     (a)        The Company agrees to and hereby does employ the Employee, and
the  Employee  accepts  such  employment  and  agrees to discharge faithfully,
diligently  and  to  the best of Employee's abilities, the responsibilities of
such employment on the terms and subject to the conditions herein provided.

     (b)          The  initial  term  of Employee's employment hereunder shall
terminate  on  December 31, 1998 ("Initial Expiration Date"),unless terminated
earlier as provided in Section 4.

     (c)       Notwithstanding the foregoing, following the Initial Expiration
Date,  Employee's  employment shall thereafter continue on an at will basis on
the  terms and conditions contained in this Agreement, provided, however, that
all obligations of the Company and the rights of the Employee under Subsection
4(a) will terminate.

2.         Duties of the Employee.  During the term of Employee's employment
with the Company hereunder, the Employee shall:

     (a)            Devote  substantially  all of Employee's business time and
attention  necessary  to  carry  out  the  duties  of  Employee's  employment
thereunder,  applying Employee's best effort and skill for the benefit of the
Company.

(b)         Act as Vice Presidentof Construction for the Company and  perform
such services and assume such duties and responsibilities as are assigned  to
Employee    by   the President, consistent with such office, all in accordance
with the terms of this Agreement, the Articles of Incorporation and
By-Laws of the Company.

(c)     Report directly to the President of the Company.

3.          Compensation.    As  compensation  and  in consideration for the
performance  of  services  by the Employee and Employee's observance of all of
the  provisions  of  this Agreement, the Company agrees to pay or provide, and
Employee agrees to accept, the following:

     (a)        Salary.  During the term of Employee's employment, the Company
shall  pay to the Employee, at least semi-monthly, a base salary at an initial
annual  rate  of  $200,000.00. The employee's base salary may be reviewed from
time  to  time,  but  at  least  annually  for  increases as determined by the
Company.

     (b)     Benefits.  During the term of Employee's employment, the Employee
shag  be  entitled  to  three  weeks of paid vacation per annum from and after
Employee's employment start date, seven paid holidays annually, and three paid
sick  days  annually.   In addition, during the term of Employee's employment,
the  Employee  shall  be  entitled to medical and hospitalization insurance or
reimbursement,  consistent  with  that provided to other salaried employees of
the  Company,  or  as  may  be established in a written policy by the Board of
Directors.  The Company further agrees to waive the 90-day eligibility period.

     (c)        Business Expenses.  The Company shall reimburse the Employee
for  business  expenses reasonably incurred by the Employee in connection with
the  performance  of  Employee's  duties  hereunder,  upon the presentation by
Employee  of receipts and itemized accounts of such expenditures in accordance
with  the  rules  and  regulations  of  the  Internal  Revenue  Code.    Such
expenditures  shag  be  subject  at  all  times  to  the prior approval of the
President  of  the  Company  or  his designee.  Except for expenses previously
approved  by  such  officer  or  his  designee,  the Board of Directors of the
Company  may  take such action as may be necessary to enforce the repayment to
the  Company  by the Employee of any amounts reimbursed upon finding that such
reimbursement  was  not  made  primarily  for  the  purpose  of  advancing the
legitimate  interests  of  the  Company.    In  lieu  of direct payment by the
Employee,  the Company, by action of its Board of Directors, may withhold such
disallowed  amounts  from future compensation of the Employee until the amount
owed to the Company has been recovered.

    (d)               Moving Allowance.  Subject to submission of invoices and
Company  approval,  the  Company  will  reimburse  Employee for the reasonable
expenses incurred in moving his household goods to the Gulf coast area.

     (e)          Bonus.    In  addition to the foregoing, Employee shall be
entitled  to  participate  in  any  executive  bonus  pool  established by the
Company.

     (f)          Employment  Bonus  and  Lump  Sum  Relocation  Payment. Upon
commencement  of  employment,  Employee  is  to be paid the sum of $82,500.00,
however,  such  sum shall be promptly returned to  the  Company  if,  prior to
the anniversary of the Employee's initial year
under this Agreement, Employee voluntarily  terminates his employment with the
Company or is terminated for "good cause" as set forth in Subsection 4(a).

4.     Termination of Agreement.

     (a)       Termination With Cause.  The Company may terminate Employee's
term  of  employment under this Agreement for "good cause" upon notice of such
termination  to  the  Employee.   For purposes of this Agreement, "good cause"
shall  mean Employee's (i) failure or refusal to observe or perform any of the
material  provisions of this Agreement or any other written agreement with the
Company,  or  to  substantially perform any of the material duties required of
Employee under this Agreement or any other written agreement with the Company,
or  (ii)  commission of fraud, misappropriation, embezzlement or other acts of
dishonesty,  alcoholism,  drug  addiction or dependency, or conviction for any
crime  punishable  as  a  felony  or  as  a  gross misdemeanor involving moral
turpitude,  which  actions  have a material adverse effect upon the Employee's
ability  to  perform  the duties which are assumed or assigned under Section 2
hereof,  or  which  actions  or  occurrences  are  materially  adverse  to the
interests  of  the  Company,  or  (iii)  unreasonable  refusal  or  failure to
faithfully  perform  the  duties and responsibilities of Employee's employment
hereunder  or  to comply with the directions of the President, his designee or
the  Board  of Directors.  Termination of Employee's employment for good cause
under  Subsection  4(a)(ii) above shall be effective upon notice.  Termination
of Employee's employment for good cause under Subsections 4(a)(i) or 4(a)(iii)
shall  be  effective  upon fourteen days' prior notice; provided that prior to
the  giving  of  such notice of termination, the Company shall notify Employee
that a factual basis for termination for good cause termination such basis.

     (b)        Termination with Notice.  After the Initial Expiration Date,
Employee's term of employment under this Agreement may be terminated by either
party for any reason upon not less than 30 days' prior written notice.

     (c)          Termination  upon Death of Employee.  This Agreement shall
automatically terminate in the event of the Employee's death.

     (d)     Termination If Employee Not Found Suitable by Mississippi Gaming
Commission  and  Related  Matters.   Employee's position with the Company may
require a finding of suitability by the Mississippi Gaming Commission or other
state  gaming  commission,  as  the  case  may  be.   The Company will pay all
investigative fees and costs associated with the Mississippi Gaming Commission
or  other state gaming commission suitability determinations.  If the Employee
is  not  found  suitable  by the Mississippi Gaming Commission or other gaming
commission  as  the  case may be, Employee's employment with the Company shall
thereafter  immediately  terminate and this Agreement shall be deemed null and
void.

     (e)      Termination Obligations.  In the event of a termination of the
Employee's  term of employment in accordance with Section 4, the Company shall
have  no  further  obligation  to  the  Employee under this Agreement, and the
Employee shall only be entitled to payment by the Company for all compensation
accrued  under  this  Agreement  to  such  date of termination.  However, such
termination of the Employee's employment shall not terminate or extinguish the
Employee's obligations under Sections 3 or 6 hereof (unless otherwise provided
therein)  or  Employee's  obligation  or  liability  to pay to the Company any
amounts  owed  to the Company the Employee, including, but not limited to, any
amounts  misappropriated or obtained by the Employee, without prejudice to any
other  rights or remedies of the Company at law or in equity.  Notwithstanding
the  foregoing,  in  the  event  that  the  Employee's  term  of employment is
terminated  by  the  Company  other  than  for  "good cause" as provided under
Subsection  4(a)  prior  to  the  Initial  Expiration  Date, the Company shall
continue  to  pay  to the Employee, at least semimonthly, base salary based on
the  annualized monthly base salary then being paid to Employee as of the date
of termination) through the Initial Expiration Date.  Employee and the Company
acknowledge and agree that no part of any incentive compensation that is based
on  the  Company's financial performance for a fiscal year, if any, is payable
if  Employee's  employment is terminated for any reason prior to expiration of
such fiscal year.

     (f)     Severance Allowance. In the event Employee's term of employment
is  terminated  by  the Company pursuant to Subsections 4(b) or 4(d), Employee
will  be  entitled  to receive a severance allowance in an amount equal to six
months'  base  salary  (based on the annualized monthly base salary then being
paid  to  Employee  as of the date of termination) to be paid out over the six
months  following  Employee's  date  of  termination  in  at least semimonthly
installments.    No  severance  allowance  will  be payable to Employee if the
Employee  voluntarily  resigns  or otherwise terminates employment pursuant to
Subsection 4(b).

     (g)          Options and Grants.  Notwithstanding any provision in this
Agreement  to  the  contrary,  should  the current President of the Company be
replaced or terminated prior to the Initial Expiration Date, any stock options
or  grants  given  to  Employee  pursuant to an executed agreement between the
Company  and  Employee shall promptly vest if, prior to the Initial Expiration
Date:                                                   -

(i)     Employee is also replaced or terminated; or

(ii)          The duties of Employee with the Company or compensation from the
Company  changes  in  any material respect.  Within ninety (90) days after the
President  is  replaced,  Employee makes a reasonable good faith determination
that due solely to specified action or inaction of such replacement, he cannot
effectively  discharge  the  duties  delineated herein.  To be effective, such
determination  by  Employee must be provided to the Company in a writing which
sets  forth  the  factual  basis of such action or inaction by the replacement
President.

5.     Disclosure of Confidential Information.

     (a)        Definition of Confidential Information. For purposes of this
Agreement,  "Confidential  Information"  means  any  information  that  is not
generally  known  to  the  public  that  relates to the existing or reasonably
foreseeable  business  of  the  Company which has been expressly or implicitly
protected by the Company or which, from all of the circumstances, the Employee
knows  or has reason to know that the Company y intends or expects the secrecy
of  such information to be maintained.  Confidential Information includes, but
is not limited to, information contained in or relating to the customer lists,
account  lists,  price  lists,  product designs, marketing plans or proposals,
customer  information, merchandising, selling, accounting, finances, know-how,
trademarks,  trade names, trade practices, trade secrets and other proprietary
information of the Company.

     (b)          Employee Shall Not Disclose Confidential Information.  The
Employee  will not, during the term of  Employee's employment or following the
termination  of  Employee's  employment  with the Company, use, show, display,
release,  discuss,  communicate,  divulge  or  otherwise disclose Confidential
Information to any person, firm, corporation, association, or other entity for
any  reason  or  purpose  whatsoever,  without  the  prior  written consent or
authorization of the Company.

     (c)      Scope.  Employee's covenant in Subsection 5(b) to not disclose
Confidential  Information shall not apply to information which, at the time of
such  disclosure,  may  be  obtained  from sources outside of the Company, its
agents,  lawyers  or accountants, so long as those sources did not receive the
information directly or indirectly as the result of Employee's action.

     (d)       Tide.  All documents or other tangible or intangible property
relating  in  any  way  to  the business of the Company which are conceived or
generated by Employee or come into Employee's possession during the employment
period shall be and remain the exclusive property of the Company, and Employee
agrees  to  return  all  such documents, and tangible and intangible property,
including,  but  not  limited  to,  all  records, manuals, books, blank forms,
documents,  letters,  memoranda,  notes,  notebooks,  reports,  data,  tables,
magnetic  tapes, computer disks, calculations or copies thereof, which are the
property of the Company or which relate in any way to the business, customers,
products,  practices  or  techniques of the Company, and all other property of
the Company, including, but not limited to, all documents which in whole or in
part contain any Confidential Information of the Company which in any of these
cases are in Employee's possession or under Employee's control, to the Company
upon  the  termination  of  Employee's employment with the Company, or at such
earlier time as the Company may request him to do so.

     (e)          Compelled Disclosure.  In the event a third party seeks to
compel  disclosure  of Confidential Information by the Employee by judicial or
administrative  process,  the  Employee  shall  promptly  notify  the Board of
Directors  of  the  Company  of  such  occurrence and furnish to such Board of
Directors a copy of the demand, summons, subpoena or other process served upon
the Employee to compel such disclosure, and will permit the Company to assume,
at  its  expense,  but  with  the  Employee's  cooperation,  defense  of  such
disclosure  demand.    In the event that the Company refuses to contest such a
third  party  disclosure demand under judicial or administrative process, or a
judicial  order is issued compelling disclosure of Confidential Information by
the  Employee,  the Employee shall be entitled to disclose such information in
compliance with the terms of such administrative or judicial process or order.

6.     Non-competition.

     (a)      Restriction.  Commencing on the date hereof and for so long as
Employee  continues  to  receive  compensation under this Agreement (salary or
severance),  whether  voluntarily or involuntarily and whether or not for good
cause,  Employee  shall not, without the prior written consent of the Company,
directly  or  indirectly,  engage in, or assist any other person to engage in,
any  activity,  whether  as  a  proprietor, partner, joint venture, principal,
employer,  officer,  agent, employee, consultant or beneficial or record owner
(other  than  as an investor owning less than a 2% interest in an entity whose
securities  are  regularly  traded in a public market), and whether or not for
compensation,  that  is  competitive  in  any respect with the business of the
Company  within the States of Louisiana and Mississippi.  For purposes of this
Agreement,  the  "business  of the Company" shall be any business in which the
Company  is  engaged at the time of Employee's termination of employment or in
which  the  Company  was  engaged within six months prior to such termination,
including,  but not limited to, a business involved in or relating to gambling
casinos or gaming establishments.

     (b)          Modification.    In  the event that any court of competent
jurisdiction  determines that the term, the business scope or geographic scope
of  the  covenants  contained  in  Subsection 6(a) is impermissible due to the
extent  thereof, said covenant shall be modified to reduce its terms, business
scope or geographic scope, as the case may be, to the extent necessary to make
said covenant valid, and said covenant shall be enforced as modified.

     (c)     Non-Compete Consideration.  As additional consideration for the
Employee's  observance  of  the  non-compete  covenant set forth in Subsection
6(a),  the Company has granted to Employee incentive stock options to purchase
shares of the Company's common stock.

7.     Breach of Restrictive Covenants.

     (a)          It  is  agreed  that  it would be difficult or impossible to
ascertain  the  measure of damages to the Company resulting from any breach of
Sections  5  or  6, and that injury to the Company from any such breach may be
irremediable.    In the event of a breach or threatened breach by the Employee
of  the  provisions  of  Section  3, the Company shall be entitled to specific
performance  of  Section 3 and may seek a temporary or permanent injunction to
enjoin the Employee from breaching Sections 3, in addition to any other rights
or  remedies that the Company may have available under applicable law for such
breach  or threatened breach, including the recovery of damages.  In the event
of a breach of Section 6, damages shall be limited to salary discontinuance of
any  and all compensation, including but not necessarily limited to salary and
severance, otherwise payable to Employee under this Agreement

     (b)      Survival of Restrictive Covenant.  The provisions of Section 3
of  @  Agreement  shall  survive  the  expiration  of  the  term of employee's
employment  thereunder, and shall be binding upon the Employee's following the
termination of Employee's employment by the Company.

8.        Affiliate.  The term "Company" when used in Sections 3, 6 and 7 of
this  Agreement  shall  mean  in addition to the Company, any affiliate of the
Company.    The terms '"affiliate" or "affiliates" when used in this Agreement
shall  mean any corporation that controls the Company, or is controlled by the
Company, or is under common control with the Company.

9.     Entire Agreement;  Modification.  This Agreement constitutes the full
and  complete  understanding  and agreement of the parties with respect to the
employment  of  the  Employee  by  the  Company,  and  supersedes  any  prior
understanding  or  agreement  between  the  parties  relating  thereto.    No
amendment,  waiver or modification of any provision of this Agreement shall be
binding unless made in writing and signed by the parties hereto.

10.          Assignment.    The  rights  and benefits of the Company and its
permitted  assigns  under  this  Agreement  shall  be  fully  assignable  and
transferable to any other entity:

(a)     which is an affiliate of the Company; or

(b)     which is not an affiliate and with which the Company has merged or
consolidated,  or  to which it may have sold substantially all its assets in a
transaction  in which it has assumed the liabilities of the Company under this
Agreement,  and in the event of any such assignment or transfer, all covenants
and  agreements hereunder shall inure to the benefit of, and be enforceable by
or  against  the  successors  and assigns of the Company.  This Agreement is a
personal service contract and shall not be assignable by the Employee, but all
obligations and agreements of the Employee hereunder shall be binding upon and
enforceable  against  the  Employee  and  Employee's personal representatives,
heirs, legatees and devisees.

11.          Notices.    To  be  effective,  all  notices, consents or other
communications required or permitted hereunder shall be in writing.  A written
notice or other communication shall be deemed to have been given hereunder (i)
if  delivered  by hand, when the notifying party delivers such notice or other
communication  to  all  other  parties to this Agreement, (ii) if delivered by
telecopier  or overnight delivery service, on the first business day following
the date of such notice or other communication is transmitted by telecopier or
timely  delivered  to the overnight courier, or (iii) if delivered by mail, on
the  third  business  day    the  date  such  notice or other communication is
deposited  in  the  U.S. mail by certified or registered mail addressed to the
other  party.   Mailed or telecopied communications shall be as follows unless
written  notice  of a change of address or telecopier number has been given in
writing in accordance with this Section:
If to Company:           Casino Magic Corp.
     Attn: Robert Callaway
Bay St. Louis, NE 39520
Facsimile No. (601) 467-3407

If to Employee:           Kenneth N. Schultz
     9032 Greymonte Circle
Gulfport, MS 39503

12.        Waiver.    No  waiver  of any term, condition or covenant of this
Agreement by a party shall be deemed to be a waiver of any subsequent breaches
of the same or other terms, covenants or conditions hereof by such party.

13.          Counter Parts.  This Agreement may be executed in counterparts,
each  of  which  shall  be deemed to be an original, and all such counterparts
shall constitute one instrument.

 14.      Construction.  Whenever possible, each provision of this Agreement
shall  be  interpreted  in  such  manner  as  to  be  effective or valid under
applicable  law, but if any provision of this Agreement shall be prohibited by
or  invalid  under applicable law, such provision shall be ineffective only to
the  extent  of  such  prohibition  or  invalidity  without  invalidating  the
remainder of such provision or the remaining provisions of this Agreement.

15.              Applicable  Law.   This Agreement shall be governed by, and
construed in accordance with, the laws of the State of Mississippi.

16.         Attorney's Fees.  In the event a judgment is entered against any
party  hereto  in a court of competent jurisdiction based upon a breach of the
terms of this Agreement, the prevailing party shall be entitled to receive, as
part  of  any  award,  the  amount  of reasonable attorney's fees and expenses
incurred  by  the  prevailing  party in such action A party shall be deemed to
have  prevailed if the judgment entered (without including attorney's fees and
expenses) is more favorable to that party than any offer of settlement made to
that  party  within  twenty  days  after the services of the complaint in such
action.

IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date flat above written.

CASINO MAGIC CORP.                 EMPLOYEE


By:
       Ed Ernst, President                     Kenneth N. Schultz

                                (Type or Print Name of Employee)