EMPLOYMENT AGREEMENT


     THIS  AGREEMENT  is  dated,  made,  entered  into on June 3, 1997, and is
effective as of the 25th day of June, 1996, by and between Casino Magic Corp.,
a  Minnesota  corporation  (the  "Company"),  and  Kenneth  N.  Schultz  (the
"Employee").

                                   RECITALS

     WHEREAS,  the  Company is desirous of retaining 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  Plan,  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
hereunder,  applying  Employee's  best effort and skill for the benefit of the
Company.

(b)     Act as Vice President of Construction for the Company and perform such
services  and  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 semimonthly, a base salary at an initial annual
rate  of
$200,000,  provided  that  the  annual  rate  of  his salary shall be $170,000
effective  beginning  June  1, 1997 through December 31, 1997.  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
shall be entitled to paid time off based upon the Company's policies in effect
from  time  to time, consistent with that provided to employees having duties,
authority  and status equal to that of Employee.  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 confirms that Employee has
satisfied  any  eligibility  period  requirement.



     (c)       Business. 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 shall
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

      (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's 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

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 exists, specifying 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  found  not  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 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 Section 5 or 6 hereof (unless otherwise provided therein) or
Employee's  obligation  or liability to pay to the Company any amounts owed to
the  Company  by  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
Employee,  at  least  semimonthly,  Employee's  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 the 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 which is the
greater  of  $200,000 or the amount 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  in  any  other circumstance, including 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;

(ii)          The duties of Employee with the Company or compensation from the
Company changes from that specified in this Agreement in any material respect;
or

(iii)        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, and as a result terminates his employment with the
Company.   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 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)        Title.  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
final  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 venturer, 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 or Mississippi, or within a 150 mile
radius  of  any  gaming  casino  owned,  operated  or under development by the
Company.   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  related  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,  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  5, the Company shall be entitled to specific
performance  of  Section 5 and may seek a temporary or permanent injunction to
enjoin  the Employee from breaching Section 5, 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 the 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 Sections 5 and 6
of
this  Agreement  shall  survive  the  expiration  of  the  term  of Employee's
employment  hereunder,  and  shall  be binding upon the Employee following the
termination  of  Employee's  employment  by  the  Company.

     8.     Affiliate.  The term "Company" when used in Sections 5, 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 hasassumed 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.

     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  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 following 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 directed 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
     711  Casino  Magic  Drive
     Bay  Saint  Louis,  MS  39520
     Telecopier  No.  (601)  467-7998

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.   Counterparts.  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.       Attorneys 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
first
above  written.



CASINO  MAGIC  CORP.                                                  EMPLOYEE



By:                                                                        By:
     James  E.  Ernst                                       Kenneth N. Schultz



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