Kansas Gaming Ventures, Inc.
                           6601 South Beimuda Road
                           Las Vegas, Nevada 89119

January 22,1997

Kansas Magic Corp.
c/o Casino Magic Corp.
711 Casino Magic Drive
Bay St. Louis, Mississippi 39520

Gentlemen:

     We refer to the (a) Operating Agreement dated November 23, 1994 of Kansas
Gaming Partners, L.C., a Kansas limited liability company ("KGP"), among KGP.,
Kansas Gaming Ventures, Inc., a Nevada corporation and wholly-owned subsidiary
of  Alliance  Gaming  Corporation,  a  Nevada corporation ("KGVI"), and Kansas
Magic  Corp.,  a  Minnesota  corporation and wholly-owned subsidiary of Casino
Magic  Corp.  ("KMC"),  and (b) Operating Agreement dated November 23, 1994 of
Kansas  Financial Partners, L.L.C., a Kansas limited liability company ("KFP";
together  with  KGP,  the  "Kansas  LLCs"),  among  KFP,  KGVI  and  KMC  (the
agreements, referred to in clauses- (a) and (b), the "Operating Agreements").
Capitalized terms not defined herein have the meanings ascribed to them in the
Operating Agreements.

     The  Kansas LLCs have undertaken certain development work to date related
to the Camptown racetrack in Frontenac, Kansas (the "Project").  KMC no longer
desires  to  continue  such  development  work  and  KMC  therefore  desires
to-restructure the Kansas LLCs in order to provide that Kansas Alliance Corp.,
a Nevada corporation and an affiliate of KGVI (the "Transferee"), will acquire
from  KMC  a  49.9%  Membership  Interest in each of the Kansas LLCs presently
owned  by  KMC,  which  will  assign, transfer and set over each of such 49.9%
Membership  Interests  to  the Transferee, as provided herein, thereby causing
the  Transferee  to  own  49.9%  of the equity interests in each of the Kansas
LLCS,  with  the  option  to  acquire  the  remaining .I% Membership lnterests
therein, as provided herein. Inconnectiontherewiththc Transferee will make the
payments to KMC provided for herein.

The parties agree as follows:

1)        Effective on the date hereof, KMC hereby assigns, transfers and sets
over  to  the  Transferee,  KMC's  entire right, title and interest in a 49.9%
Membership

Interest  in  each  of  the  Kansas LLCs . including without limitation, KMC's
capital  accounts  associated  with  such Membership interest.   In connection
with  such transaction, (a) KMC shall hereafter promptly upon request execute,
deliver  and cause to be recorded and/or filed such additional or supplemental
documents  and  instruments  (including  confirmatory deeds, limited Usability
company  certificate amendments, transfers and assignments, including those in
the  form  attached  hereto  as  t  ) as KGVI may from time to time reasonably
request  and  (b)  the  parties  shall, if KGVI requests, promptly execute and
deliver appropriate amendments to the Operating Agreements.


2)          (a)  KGVI  and  the Transferee shall have the right, in their sole
discretion,.  to  conduct  all  operations  and management of the Kansas LLCS,
without  the  requirement to consult with or obtain the approval or consent of
KMC  (consistent  with  the Operating Agreements, as amended to implement this
letter  agreement);  in  connection  therewith,, KGVI and the Transferee shall
have  the right to make all determinations relating to funding (or the failure
to  fund)  the  Project  and  any  and  all  related or ancillary amounts.  In
addition,  KGVI  and  the  Transferee  shall  have  the  right  to  abandon or
discontinue  efforts  in  respect  of the Project at any time (the date of any
such    abandonment or discontinuance, the "Project Termination Date") without
obligation  to  KMC  or  any  of  its  affiliates,  except with respect to the
obligations  set  forth  in Section 3 below.  In furtherance of the foregoing,
KMC  shall  cause  such  members  of  any  board  of  directors, management or
operating  committee  or  similar  capacity  who  have been appointed by it to
resign  as  of  the  date  of  this  letter  agreement and to be replaced with
designees of KGVI and the Transferee.

(b)   KGVI, KMC and the Transferee agree that, effective as of this date, each
of the Operating
       Agreements is amended as follows,

(i)      Section 4.2 of each of the Operating Agreements is amended to read as
follows:
      "Each  Member  (excluding,  however,  KMC)  agrees  to  make  additional
capital.  contributions  in  cash  in  an  amount  equal to 50% of the amounts
necessary,  in  the  event of the exercise of the Option, to consummate such
transactions as are agreed upon by the affirmative vote of the owners of mot-e
than 50% of all Membership Interests.";

(ii)     The fourth and fifth sentences of Section 6.1 of each of the
      Operating  Agreements are amended to read as follows: "Each Member shall
have authority to bind the Company, by execution of documents or otherwise, to
any  obligation  not  inconsistent  with  this  Agreement  or  the  Act.
Notwithstanding the foregoing, Kansas Magic Corp., acting alone, shall have no
right,  power  or  authority whatsoever to bind or obligate the Company to any
contract.,  debt,  agreement,  liability  or  obligation, and the signature or
other  written concurrence of another Member of the Company shall be necessary
for  the  Company  to  be  so  bound  or  obligated.   Subject to, and without
affecting,  Article  XIII  of  the Articles of Organization of the Company, no
person  dealing  with  any  Member shall be required to determine the Member's
authority  to  act  on  behalf  of  the  Company  or to determine any facts or
circumstances bearing upon the existence of such authority."

(iii) The first sentence of Section 7. 1.1 of each of the Operating Agreements
is  amended  to read as follows:  "No Member shall Transfer any portion of its
interest  in the Company or enter into any agreement by which any person shall
become  interested  in  the  Company  unless  the prior written consent of the
owners  of  more  than 50% of all Membership Interests is obtained pursuant to
Section 7.2 of this Agreement.";

(iv)     The first sentence of Section 7.2 of each of the Operating Agreements
is  amended to read as follows: "Prior written consent will be deemed obtained
only  when  the  owners  of  a Majority In.  Interest approve such Transfer in
writing,"; and

(v)      Section 7.4 of each of the Operating Agreements is amended to read as
follows-  "The  Members, upon the affirmative vote of the owners of a Majority
In  Interest,  may admit additional Members on the terms and conditions agreed
upon  at  the  time  of  such admittance; provided that such additional Member
shall  be  subject  to  this  Agreement  and  shall  so  agree in writing upon
request."

(c)     KMC agrees that it shall not bind or seek or attempt to bind either of
the  LLCs  to  any liability or obligation without obtaining the prior written
consent  of  KGVI,  which consent may be denied or conditioned in the sole and
absolute  discretion.  of  KGVI.  KMC shall indemnify and hold harmless KG- VI
and  the  Transferee  and  their  respective  affiliates  from  any  breach or
violation  of  the  terms  of  this  paragraph  by  KMC,  including  costs and
attorneys' fees incurred in defending against any such liability or obligation
or in enforcing its right to indemnity hereunder.

3)       The Transferee shall be obligated to pay to King Hershey Koch & Stone
for  the  benefit  of  KMC,  as provided herein, as the full consideration and
purchase price for KMC's 49.9% Membership Interest in each of the Kansas LLCS,
as  described  above,  up to S25,000.  In addition, KGVI shall be obligated to
pay  to  KMC an additional contingent purchase price (the 'Contingent Purchase
Price"),  as  follows-.    The Contingent Purchase Price shall be equal to the
lesser  of  (a) S 1,700.000, plus a return thereon of 10% per year, compounded
annually  (beginning  on  the  date  hereof)  until  paid in full, and (b) the
cumulative cash otherwise available for distribution to

KGVI, or the Transferee as permitted by the Operating Agreements, derived from
the  Project  from the date hereof through the earlier to occur of January 22,
2017  and  the  Project  Termination  Date  (thus,  KMC shall receive all cash
otherwise  available for distribution to KGVI and the Transferee (but not, for
example, cash available for distribution to additional Members other than KGVI
or  the  Transferee)  from  the  Project,  as  described  above, until KMC has
received  in  the aggregate S 1,700,000 plus 10% interest per year, compounded
annually,  or  until January 7, 2017, whichever occurs first).  The Contingent
Purchase  Price shall be payable prior to the time that any cash distributions
from the Project are made to KGVT. or the Transferee.  KGVI and the Transferee
shall  be responsible to make such payments solely from such cash derived from
the  Project  and  neither KGVI nor the Transferee nor any of their respective
affiliates shall be liable to KMC for any other amount or in any other respect
related  to  the  transactions  contemplated  hereby.    Notwitbstanding  the
foregoing,  KGVI  or  the  Transferee, may, at any time, in their sole option,
accelerate  payment of the unpaid portion of the Contingent Purchase Price, in
whole or in part-t, to an earlier time than otherwise provided above.

4)     Except for the future right to receive the Contingent Purchase Price as
set  forth  in  Section  3  above,  KMC  shall  have  no  right to receive any
distributions  or returns of capital with respect to or by reason of the 49.9%
Membership Interest being transferred to the Transferee, all of such interests
in each of the Kansas and LLCs being transferred, assigned and set over to the
Transferee as provided herein.

5)     Each party represents to the other that it has full corporate authority
to enter into and to consummate the transactions contemplated hereby, and that
such  transactions  have  been  duly  authorized  by  all necessary corporate,
shareholder  and  other  action  and  that  this letter agreement (a) does not
violate  any  instrument  or  agreement  binding  upon  such  party  and  (b)
constitutes  the legal and valid obligations of such party, and is enforceable
against such party in accordance with its terms.  Each party represents to the
other  that  except  as  set  forth  in  Section  7  below,  no consent of any
governmental  authority  or other third party is required for the consummation
of the transactions contemplated hereby.  KMC represents that it has not bound
either  of  the  Kansas  LLCs  to  any -liability, obligation, contract, debt,
undertaking  or  incurred  or  permitted to exist any obligation, liability or
lien  against  the  Kansas  LLCs  or  their  properties  or  assets.    The
representations  above shall survive the execution and delivery of This letter
agreement and the consummation of the transactions contemplated hereby and, in
the  event  of  any breach of any of such representations by KMC, KGVI and the
Transferee  shall  be entitled, in addition to au other rights and remedies at
law  or  in  equity,  to  withhold  amounts  otherwise payable as provided iii
Section  3  above  and to apply such withheld amounts to the amounts of KGVI's
and the Transferee's damage resulting therefrom.

6)      Each of the Kansas, LLCs and KGVI agrees to indemnify, defend and hold
harmless  KMC  and  its  affiliates from and against any and all loss, cost or
expense,  including reasonable attorney's fees and disbursements, resulting or
arising  from  the  operation  of the Kansas LLCs with respect to any event or
circumstance first existing or arising after the date hereof

7)          This  letter agreement (a) shall be governed by and construed-d in
accordance  with  the internal laws of Kansas, without regard to principles of
conflicts  of  laws,  (b)  may  be  executed  in counterparts and delivered by
facsimile  transmission, (c) shall not be assigned or delegated by KMC without
the  prior  written  consent  of  KGVI  (but  may  be  assigned by KGVI or the
Transferee);  subject  to  the  foregoing, shall be binding upon and inure the
benefit  of  the  parties'  respective  successors  and  assigns.   Each party
consents  to  the jurisdiction of any federal or state court sitting in Kansas
City, Kansas over any dispute arising thereunder or related hereto.

8)          The  transactions  contemplated  by this letter agreement (and the
performance  of each party's obligations hereunder) are subject to appropriate
regulatory  approvals. including the approval of the Kansas Racing Commission,
if  required;  in  such  regard,  each.  party  agrees  to  make all necessary
appropriate  filings,  appear  at  all  necessary  or appropriate hearings and
otherwise  reasonably  cooperate  with  the  other  to  obtain such regulatory
approvals.

9)          The  parties acknowledge that (a) KGVI and the Transferee shall be
permitted  (in their sole discretion) to admit additional members to either or
both  of  the  Kansas  LLCS,  in which case the parties' respective Membership
Interests  shall  be  reduced  proportionately,  and  (b) neither KGVI nor the
Transferee  shall  have  any  fiduciary  or other obligations to KMC or any of
KMC's  affiliates, other than the obligations explicitly set forth herein, and
KGVI  and the Transferee shall be permitted to operate, finance and manage the
Kansas  LLCs  and  the Project in their sole discretion in such manner as they
determine,  and  (c)  KGVI  and the Transferee shall have the eight to acquire
KMC's . 1% interest in each of the Kansas LLCs at any time upon written notice
to KMC for S1,000 in cash (by wire transfer or check), in which case KMC shall
assign,  transfer  and  set  over  to KGVI and/or the Transferee such interest
documents  and  instruments  in  the  form attached hereto as Exhibit A(with
appropriate  conforming  changes)  or such other form as KGVI shall reasonably
request,

Please  indicate  your  agreement  to  the foregoing by signing a copy of this
letter
agreement where indicated below.

                              Very truly yours,

                              Kansas Gaming Ventures, Inc.

                              By:
                              Name:  Scott Schweinfurth
                              Title:    Treasurer
Ageed to,

Kartsas Magic Corp.

By:
       Name:  Robert Callaway
       Title:    Secretary

[Transferee]

By:
       Name:
       Title:


<PAGE>
                                                  Exhibit A



[KANSAS GAMING PARTNERS]

ASSIGNMENT OF MEMBERSHIP INTEREST AND
ADMISSION OF NEW MEMBER


     FOR  VALUABLE  CONSIDERATION,  the  receipt  and sufficiency of which are
acknowledged,  Kansas  Magic  Corp.  (the  "Transferor"),  the  owner of a 50%
membership  interest  in  Kansas  Gaming  Partners, L.L.C. (the "LCC"), hereby
assigns, transfers, bargains and conveys
to (the "Transferee") all of the Transferor's Tight, title and interest in and
to  a  49.9%  Membership  Interest  in  the  LLC  owned by the Transferor (the
"Interest").    The  Transferor  is  retaining ownership of a 10% ' Membership
Interest  in the LLC, subject to the terms of a letter agreement dated January
-1  1997  between  the  Transferor  and  Kansas  Gaming Ventures, Inc. and the
Transferee  (the  "Letter  Agreement").   The Transferee accepts the foregoing
assignment  of the Interest and agrees that it -is bound by, and its ownership
of  the  Interest  is  subject  to,  the  Operating Agreement of the LLC dated
November  23, 1994, as amended by certain provisions of the Letter Agreement.
Kansas Gaming Ventures, Inc.. ("KGVI") consents to the foregoing assignment of
the  Interest,  and  KGVI  and  the  Transfcror  agree that the Trarisferee is
admitted as a new Member of the LLC.



WITNESS our hands and seals this day of Janua-ry , 1997.

                    KANSAS GAMING VENTURES, INC.

                    By:
                    Name:  Robert Callaway
                                               Title:    Secretary

                    [Transferee]

                    By:
                    Name:
                    Title:

                    KANSAS GAMING VENTURES, INC.

                    By:
                    Name:
                    Title:


[KANSAS FINANCIAL PARTNERS]

ASSIGNMENT OF MEMBERSHIP INTEREST AND
ADMISSION OF NEW MEMBER



     FOR  VALUABLE  CONSIDERATION,  the  receipt  and sufficiency of which are
acknowledged,  Kansas  Magic  Corp.  (the  "Transferor"),  the  owner of a 50%
membership  interest  in Kansas Financial Partners, L.L.C. (the "L.LC") hereby
assigns, transfers, bargains and conveys
to                     (the "Transferee") all of the Transferor's right, title
and interest in and to a
49.9% Membership Interest in the LLC owned by the Transferor (the "Interest").
 The  Transferor  is  retaining  ownership of a.10% Membership Interest in the
LLC,  subject to the terms of a letter agreement dated January _, 1997 between
the  Transferor  and  Kansas  Gaming  Ventures,  Inc,  and the Transferee (the
"Letter  Agreement").   The Transferee accepts the foregoing assignment of the
Interest  and agrees that it is bound by, and its ownership of the Interest is
subject  to,  the  Operating  Agreement of the LLC dated November 23, 1994, as
amended  by  certain  provisions  of  the  Letter  Agreement.    Kansas Gaming
Ventures, Inc.  ("KGVT") consents to the foregoing assignment of the Interest,
and  KGVI  and  the  Transferor agree that the Transferee is admitted as a new
Member of the LLC.


WITNESS our hands and seals this _ day of January, 1997.

               KANSAS MAGIC CORP.

                                   By:
                                   Name:  Robert Callaway
                                   Title:    Secretary

                                   [Transferere]

                                   By:
                                   Name:
                                   Title:

                                   KANSAS GAMING  VENTURES, INC

                                   By:
                                   Name:
                                   Title:


<PAGE>
FIRST AMENDNENT
TO
ARTICLES OF ORGANIZATION
OF
KANSAS GAMING PARTNERS, L.L.C.


The undersigned, for purposes of amending the Aiticies of Organization of
Kansas  Gaming  Panners,  L.L.C.,  filed  on  July  19,  1994  ("Alticies  of
Organizadon"), adopts the
following:

1.          Article  VM  of the Articles of Organization is amended to read as
follows:

         Management  of  the  Company shall be reserved in its members; Kansas
Gaming  Venmres,  Inc.,  a Nevada corporation, Kansas Alliance Corp.. a Nevada
corporation, and Kansas Magic Co-rp., a Minnesota corporation, whose addresses
are  c/o  King Rershey Koch & Stone, Suite 2100, 2345 Grand Boulevard., Kaasas
City, Missouri 641 08.

2.     The Articles of Organization are amended by adding the following new

Article XIII:

"ARTICLE XIII

         Notice is hereby given that Kansas Magic Corp., acting along, has no
right,  power  or  authority whatsoever to bind or obligate the Company to any
contract, debt, agreement, liability or obligation, and the signature or other
written  concurrence  of  another member of the Company shall be necessary for
the Company to be so bound or obligated."

3.          Except  as  modified  by  this  First  Amendment,  the Articles of
Organization are ratified by the parties.

     This First Amendment to the Articles of Organization was duly executed on
this day of January, 1997, and is filed in accordance with the Act.

                                   KANSAS GAMING VENTURES, INC.

                                   By:
                                   Name:
                                   Title:

                                   KANSAS ALLIANCE CORP.

                                   By:
                                   Name:
                                   Title:


FIRST AMENDMENT
TO
ARTICLES OF ORGANIZATION
OF
KANSAS FINANCIAL PARTNERS, L.L.C.



     The undersigned, for the purpose of amending the Articles of Organization
of  Kansas  Financial  partners,  L.L.C., filed on July 19, 1994 ("Articles of
Organization"), adopts the following:



Article VIII of the Articles of Organization is amended to read as follows:



Management  of  the  Company  shall  be reserved in its members: Kansas Gaming
Ventures,  Inc.,  a  Nevada  corporation,  Kansas  Alliance  Corp.,  a  Nevada
corporation,  and Kansas Magic Corp., a Minnesota corporation, whose addresses
are  c/o  King  Hershey Koch & Stone, Suite 2100, 2345 Grand Boulevard, Kansas
City, Missouri 64108.



2.     The Articles of Organization are amended by adding the following new

ARTICLE XIII:
"ARTICLE XIII



Notice  is  hereby  given that Kansas Magic Corp., acting along, has no right,
power  or authority whatsoever to bind or obligate the Company to any contract
debt,  agreement,  liability or obligation, and the signature or other written
concurrence  of  another  member  of  the  Company  shall be necessary for the
Company to be so bound or obligated."

3.            Except  as  modified  by  this  First Amendment, the Articles of
Organization
         as originally filed remain in effect and are ratified by the parties.

This First Amendment to the Articles of Organization was duty executed on this
 day of January, 1997, and is filed in accordance with the Act.


                         KANSAS GAMING VENTURES, INC.


                         By:
                         Name:
                         Title:

     KANSAS ALLIANCE CORP.


                         By:
                         Name:
                         Title: