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                                                                EXHIBIT 4.2 (c)


                               SUBSIDIARY GUARANTY


     GUARANTY, dated as of December 20, 2000 (as amended, modified or
supplemented from time to time, this "Guaranty"), made by each of the
undersigned guarantors (each, a "Guarantor" and, together with any other entity
that becomes a party hereto pursuant to Section 24 hereof, the "Guarantors").
Except as otherwise defined herein, capitalized terms used herein and defined in
the Credit Agreement (as defined below) shall be used herein as therein defined.


                              W I T N E S S E T H :
                              - - - - - - - - - -


     WHEREAS, Ameristar Casinos, Inc. (the "Borrower"), the financial
institutions from time to time party thereto (the "Lenders"), Wells Fargo Bank,
N.A., as Co-Arranger and Syndication Agent (the "Syndication Agent"), Bear
Stearns Corporate Lending Inc., as Documentation Agent (the "Documentation
Agent"), Deutsche Bank Securities Inc., as Lead Arranger and sole Book Manager
(the "Lead Arranger") and Bankers Trust Company, as Administrative Agent
(together with any successor Administrative Agent, the "Administrative Agent"),
have entered into a Credit Agreement, dated as of December 20, 2000 (as amended,
modified or supplemented from time to time, the "Credit Agreement"), providing
for the making of Loans to, and the issuance of, and participation in, Letters
of Credit for the account of, the Borrower as contemplated therein (such
Lenders, the Issuing Lenders, the Syndication Agent, the Documentation Agent,
the Lead Arranger and the Administrative Agent are hereinafter called the
"Lender Creditors");

     WHEREAS, the Borrower may from time to time be party to one or more (i)
interest rate swap agreements, interest rate cap agreements, interest rate
collar agreements or other similar agreement or arrangements, and/or (ii) other
types of hedging agreements (each such agreement or arrangement with an Interest
Rate Creditor (as hereinafter defined), an "Interest Rate Protection or Other
Hedging Agreement") with any Lender or any Affiliate of any Lender (each such
Lender or Affiliate, even if the respective Lender ceases to be a Lender under
the Credit Agreement for any reason, and their successors and subsequent
assigns, if any, collectively the "Interest Rate Creditors", and together with
the Lender Creditors, are hereinafter called the "Secured Creditors");

     WHEREAS, each Guarantor is a Subsidiary of the Borrower;

     WHEREAS, it is a condition to the making of Loans and issuing of Letters of
Credit under the Credit Agreement that each Guarantor shall have executed and
delivered this Guaranty; and

     WHEREAS, each Guarantor will obtain benefits from the incurrence of Loans
by the Borrower under the Credit Agreement and the entering into of Interest
Rate Protection or Other Hedging Agreements and, accordingly, desires to execute
this Guaranty in order to satisfy the conditions described in the preceding
paragraph and to induce the Lenders to make Loans and issue Letters of Credit to
the Borrower and the Interest Rate Creditors to enter into Interest Rate
Protection or Other Hedging Agreements with the Borrower;



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     NOW, THEREFORE, in consideration of the foregoing and other benefits
accruing to each Guarantor, the receipt and sufficiency of which are hereby
acknowledged, each Guarantor hereby makes the following representations and
warranties to the Secured Creditors and, subject to Gaming Regulations, hereby
covenants and agrees with each Secured Creditor as follows:

     1. Each Guarantor, jointly and severally, irrevocably and unconditionally
guarantees: (i) to the Lender Creditors the full and prompt payment when due
(whether at the stated maturity, by acceleration or otherwise) of (x) the
principal of and interest on the Notes issued by, and the Loans made to, the
Borrower under the Credit Agreement and all reimbursement obligations and Unpaid
Drawings with respect to Letters of Credit and (y) all other obligations
(including obligations which, but for the automatic stay under Section 362(a) of
the Bankruptcy Code, would become due) and liabilities owing by the Borrower to
the Lender Creditors under the Credit Agreement (including, without limitation,
indemnities, Fees and interest thereon) and the other Credit Documents to which
the Borrower is a party, whether now existing or hereafter incurred under,
arising out of or in connection with the Credit Agreement or any such other
Credit Document and the due performance and compliance with the terms of the
Credit Documents by the Borrower (all such principal, interest, liabilities and
obligations under this clause (i), except to the extent consisting of
obligations or liabilities with respect to Interest Rate Protection or Other
Hedging Agreements, being herein collectively called the "Credit Document
Obligations"); and (ii) to each Interest Rate Creditor the full and prompt
payment when due (whether at the stated maturity, by acceleration or otherwise)
of all obligations (including obligations which, but for the automatic stay
under Section 362(a) of the Bankruptcy Code, would become due) and liabilities
owing by the Borrower to one or more Interest Rate Creditors under any Interest
Rate Protection or Other Hedging Agreements, whether now in existence or
hereafter arising, and the due performance and compliance by the Borrower with
all terms, conditions and agreements contained therein (all such obligations and
liabilities being herein collectively called the "Other Obligations," and
together with the Credit Document Obligations are herein collectively called the
"Guaranteed Obligations"). Each Guarantor understands, agrees and confirms that
this Guaranty is a guarantee of payment and not of collection, and that the
Secured Creditors may enforce this Guaranty up to the full amount of the
Guaranteed Obligations against such Guarantor without proceeding against any
other Guarantor, the Borrower, against any security for the Guaranteed
Obligations, or under any other guaranty covering all or a portion of the
Guaranteed Obligations.

     2. Additionally, but subject to the proviso to the provisions of Section 26
hereof, each Guarantor, jointly and severally, unconditionally and irrevocably,
guarantees the payment of any and all Guaranteed Obligations of the Borrower to
the Secured Creditors whether or not due or payable by the Borrower upon the
occurrence in respect of the Borrower of any of the events specified in Section
10.05 of the Credit Agreement, and unconditionally and irrevocably, jointly and
severally, promises to pay such Guaranteed Obligations to the Secured Creditors,
or order, on demand, in lawful money of the United States.

     3. The liability of each Guarantor hereunder is exclusive and independent
of any security for or other guaranty of the Guaranteed Obligations of the
Borrower whether executed by such Guarantor, any other Guarantor, any other
guarantor or by any other party, and the liability of each Guarantor hereunder
shall not be affected or impaired by (a) any direction as


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to application of payment by the Borrower or by any other party, (b) any other
continuing or other guaranty, undertaking or maximum liability of any other
guarantor or of any other party as to the Guaranteed Obligations of the
Borrower, (c) any payment on or in reduction of any such other guaranty or
undertaking, (d) any dissolution, termination or increase, decrease or change in
personnel by the Borrower, (e) any payment made to any Secured Creditor on the
Guaranteed Obligations which any Secured Creditor repays the Borrower pursuant
to court order in any bankruptcy, reorganization, arrangement, moratorium or
other debtor relief proceeding, and each Guarantor waives any right to the
deferral or modification of its obligations hereunder by reason of any such
proceeding or (f) any action or inaction by the Secured Creditors as
contemplated in Section 6 hereof.

     4. The obligations of each Guarantor hereunder are independent of the
obligations of any other Guarantor, any other guarantor of any of the Borrower's
obligations or the Borrower, and a separate action or actions may be brought and
prosecuted against each Guarantor whether or not action is brought against any
other Guarantor, any other guarantor of any of the Borrower's obligations or the
Borrower and whether or not any other Guarantor, any other guarantor of the
Borrower or the Borrower is joined in any such action or actions. Each Guarantor
waives, to the fullest extent permitted by law, the benefit of any statute of
limitations affecting its liability hereunder or the enforcement thereof. Any
payment by the Borrower or other circumstance which operates to toll any statute
of limitations as to the Borrower shall operate to toll the statute of
limitations as to each Guarantor.

     5. Each Guarantor hereby waives (to the fullest extent permitted by
applicable law) notice of acceptance of this Guaranty and notice of any
liability to which it may apply, and waives promptness, diligence, presentment,
demand of payment, protest, notice of dishonor or nonpayment of any such
liabilities, suit or taking of other action by the Administrative Agent or any
other Secured Creditor against, and any other notice to, any party liable
thereon (including such Guarantor or any other guarantor or the Borrower).

     6. Any Secured Creditor may (except as shall be required by applicable
statute and cannot be waived) at any time and from time to time without the
consent of, or notice to, any Guarantor, without incurring responsibility to
such Guarantor, without impairing or releasing the obligations of such Guarantor
hereunder, upon or without any terms or conditions and in whole or in part,
subject to applicable Gaming Regulations:

          (a) change the manner, place or terms of payment of, and/or change or
     extend the time of payment of, renew, increase, accelerate or alter, any of
     the Guaranteed Obligations, any security therefor, or any liability
     incurred directly or indirectly in respect thereof, and the guaranty herein
     made shall apply to the Guaranteed Obligations as so changed, extended,
     renewed or altered;

          (b) sell, exchange, release, surrender, realize upon or otherwise deal
     with in any manner and in any order any property by whomsoever at any time
     pledged or mortgaged to secure, or howsoever securing, the Guaranteed
     Obligations or any liabilities (including any of those hereunder) incurred
     directly or indirectly in respect thereof or hereof, and/or any offset
     thereagainst;



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          (c) exercise or refrain from exercising any rights against the
     Borrower or others or otherwise act or refrain from acting;

          (d) settle or compromise any of the Guaranteed Obligations, any
     security therefor or any liability (including any of those hereunder)
     incurred directly or indirectly in respect thereof or hereof, and may
     subordinate the payment of all or any part thereof to the payment of any
     liability (whether due or not) of the Borrower to creditors of the
     Borrower;

          (e) apply any sums by whomsoever paid or howsoever realized to any
     liability or liabilities of the Borrower to the Secured Creditors
     regardless of what liabilities of the Borrower remain unpaid;

          (f) consent to or waive any breach of, or any act, omission or default
     under, any of the Interest Rate Protection or Other Hedging Agreements, the
     Credit Documents or any of the instruments or agreements referred to
     therein, or otherwise amend, modify or supplement any of the Interest Rate
     Protection or Other Hedging Agreements, the Credit Documents or any of such
     other instruments or agreements;

          (g) act or fail to act in any manner referred to in this Guaranty
     which may deprive such Guarantor of its right to subrogation against the
     Borrower to recover full indemnity for any payments made pursuant to this
     Guaranty; and/or

          (h) release or substitute any one or more endorsers, guarantors, the
     Borrower or other obligors.

     7. No invalidity, irregularity or unenforceability of all or any part of
the Guaranteed Obligations or of any security therefor shall affect, impair or
be a defense to this Guaranty, and this Guaranty shall be primary, absolute and
unconditional notwithstanding the occurrence of any event or the existence of
any other circumstances which might constitute a legal or equitable discharge of
a surety or guarantor except payment in full of the Guaranteed Obligations.

     8. This Guaranty is a continuing one and all liabilities to which it
applies or may apply under the terms hereof shall be conclusively presumed to
have been created in reliance hereon. No failure or delay on the part of any
Secured Creditor in exercising any right, power or privilege hereunder shall
operate as a waiver thereof; nor shall any single or partial exercise of any
right, power or privilege hereunder preclude any other or further exercise
thereof or the exercise of any other right, power or privilege. Subject to
Gaming Regulations, the rights and remedies herein expressly specified are
cumulative and not exclusive of any rights or remedies which any Secured
Creditor would otherwise have. No notice to or demand on any Guarantor in any
case shall entitle such Guarantor to any other further notice or demand in
similar or other circumstances or constitute a waiver of the rights of any
Secured Creditor to any other or further action in any circumstances without
notice or demand. It is not necessary for any Secured Creditor to inquire into
the capacity or powers of the Borrower or any of its Subsidiaries or the
officers, directors, partners or agents acting or purporting to act on its
behalf, and any



<PAGE>   5

indebtedness made or created in reliance upon the professed exercise of such
powers shall be guaranteed hereunder.

     9. Any indebtedness of the Borrower now or hereafter held by any Guarantor
is hereby subordinated to the indebtedness of the Borrower to the Secured
Creditors; and such indebtedness of the Borrower to any Guarantor, if the
Administrative Agent, after an Event of Default has occurred and is continuing,
so requests, shall be collected, enforced and received by such Guarantor as
trustee for the Secured Creditors and be paid over to the Secured Creditors on
account of the indebtedness of the Borrower to the Secured Creditors, but
without affecting or impairing in any manner the liability of such Guarantor
under the other provisions of this Guaranty. Prior to the transfer by any
Guarantor of any note or negotiable instrument evidencing any indebtedness of
the Borrower to such Guarantor, such Guarantor shall mark such note or
negotiable instrument with a legend that the same is subject to this
subordination. Without limiting the generality of the foregoing, each Guarantor
hereby agrees with the Secured Creditors that it will not exercise any right of
subrogation which it may at any time otherwise have as a result of this Guaranty
(whether contractual, under Section 509 of the Bankruptcy Code or otherwise)
until all Guaranteed Obligations have been irrevocably paid in full.

     10. (a) Each Guarantor waives any right (except as shall be required by
applicable statute or law and cannot be waived) to require the Secured Creditors
to: (i) proceed against the Borrower, any other Guarantor, any other guarantor
of the Borrower or any other party; (ii) proceed against or exhaust any security
held from the Borrower, any other Guarantor, any other guarantor of the Borrower
or any other party; or (iii) pursue any other remedy in the Secured Creditors'
power whatsoever. Each Guarantor waives (to the fullest extent permitted by
applicable law) any defense based on or arising out of any defense of the
Borrower, any other Guarantor, any other guarantor of the Borrower or any other
party other than payment in full of the Guaranteed Obligations, including,
without limitation, any defense based on or arising out of the disability of the
Borrower, any other Guarantor, any other guarantor of the Borrower or any other
party, or the unenforceability of the Guaranteed Obligations or any part thereof
from any cause, or the cessation from any cause of the liability of the Borrower
other than payment in full of the Guaranteed Obligations. The Secured Creditors
may, at their election but subject to Gaming Regulations, foreclose on any
security held by the Administrative Agent, the Collateral Agent or the other
Secured Creditors by one or more judicial or nonjudicial sales, whether or not
every aspect of any such sale is commercially reasonable (to the extent such
sale is permitted by applicable law), or exercise any other right or remedy the
Secured Creditors may have against the Borrower or any other party, or any
security, without affecting or impairing in any way the liability of any
Guarantor hereunder except to the extent the Guaranteed Obligations have been
paid in full. Each Guarantor waives any defense arising out of any such election
by the Secured Creditors, even though such election operates to impair or
extinguish any right of reimbursement or subrogation or other right or remedy of
such Guarantor against the Borrower or any other party or any security. To the
extent permitted by Nevada Revised Statutes ("NRS") 40.495, Guarantor waives any
and all defenses and benefits now or hereafter arising or asserted based on the
one-action rule under NRS 40. 430.

     (b) Each Guarantor waives all presentments, demands for performance,
protests and notices, including, without limitation, notices of nonperformance,
notices of protest, notices of dishonor, notices of acceptance of this Guaranty,
and notices of the existence, creation


<PAGE>   6

or incurring of new or additional indebtedness. Each Guarantor assumes all
responsibility for being and keeping itself informed of the Borrower's financial
condition and assets, and of all other circumstances bearing upon the risk of
nonpayment of the Guaranteed Obligations and the nature, scope and extent of the
risks which such Guarantor assumes and incurs hereunder, and agrees that the
Secured Creditors shall have no duty to advise any Guarantor of information
known to them regarding such circumstances or risks.

     11. By their acceptance hereof, the Secured Creditors agree that this
Guaranty may be enforced only by the action of the Administrative Agent or the
Collateral Agent, in each case acting upon the instructions of the Required
Lenders (or, after the date on which all Credit Document Obligations have been
paid in full, the holders of at least a majority of the outstanding Other
Obligations) and that no other Secured Creditor shall have any right
individually to seek to enforce or to enforce this Guaranty or to realize upon
the security to be granted by the Security Documents, it being understood and
agreed that such rights and remedies may be exercised by the Administrative
Agent or the Collateral Agent or the holders of at least a majority of the
outstanding Other Obligations, as the case may be, for the benefit of the
Secured Creditors upon the terms of this Guaranty and the Security Documents. By
their acceptance hereof, the Secured Creditors further agree that this Guaranty
may not be enforced against any director, officer, employee, stockholder,
partner or member of any Guarantor (except to the extent such stockholder,
partner or member is also a Guarantor hereunder).

     12. In order to induce the Lenders to make Loans and issue Letters of
Credit pursuant to the Credit Agreement, and in order to induce the Interest
Rate Creditors to execute, deliver and perform the Interest Rate Protection or
Other Hedging Agreements, each Guarantor represents, warrants and covenants
that:

          (a) Such Guarantor (i) is a duly organized and validly existing
     corporation in good standing under the laws of the jurisdiction of its
     incorporation, (ii) has the corporate power and authority to own its
     property and assets and to transact the business in which it is engaged and
     presently proposes to engage and (iii) is duly qualified and is authorized
     to do business and is in good standing in each jurisdiction where the
     conduct of its business requires such qualification except for failures to
     be so qualified which, individually or in the aggregate, could not
     reasonably be expected to have a Material Adverse Effect.

          (b) Such Guarantor has the corporate power and authority to execute,
     deliver and perform the terms and provisions of this Guaranty and each
     other Credit Document to which it is a party and has taken all necessary
     corporate action to authorize the execution, delivery and performance by it
     of each such Credit Document. Such Guarantor has duly executed and
     delivered this Guaranty and each other Credit Document to which it is a
     party, and each such Credit Document constitutes the legal, valid and
     binding obligation of such Guarantor enforceable in accordance with its
     terms, except to the extent that the enforceability thereof may be limited
     by applicable bankruptcy, insolvency, reorganization, moratorium or other
     similar laws generally affecting creditors' rights and by equitable
     principles (regardless of whether enforcement is sought in equity or at
     law).


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          (c) Neither the execution, delivery or performance by such Guarantor
     of this Guaranty or any other Credit Document to which it is a party, nor
     compliance by it with the terms and provisions hereof and thereof, (i) will
     contravene any provision of any applicable law, statute, rule or regulation
     (other than Gaming Regulations), or any applicable order, writ, injunction
     or decree of any court or governmental instrumentality, (ii) will conflict
     with or result in any breach of any of the terms, covenants, conditions or
     provisions of, or constitute a default under, or result in the creation or
     imposition of (or the obligation to create or impose) any Lien (except
     pursuant to the Security Documents) upon any of the property or assets of
     such Guarantor or any of its Subsidiaries pursuant to the terms of any
     indenture, mortgage, deed of trust, loan agreement, credit agreement, or
     any other material agreement or other instrument to which such Guarantor or
     any of its Subsidiaries is a party or by which it or any of its property or
     assets is bound or to which it may be subject or (iii) will violate any
     provision of the certificate of incorporation or by-laws (or equivalent
     organizational documents) of such Guarantor or any of its Subsidiaries.

          (d) No order, consent, approval, license, authorization or validation
     of, or filing, recording or registration with (except (x) as have been
     obtained or made, (y) if this representation is being made at any time
     prior to the tenth day following the Initial Borrowing Date, filings or
     recordations of financing statements or Mortgages pursuant to the terms of
     the Security Documents and (z) as required by the Gaming Regulations), or
     exemption by, any governmental or public body or authority, or any
     subdivision thereof, is required to authorize, or is required in connection
     with, (i) the execution, delivery and performance of this Guaranty or any
     other Credit Document to which such Guarantor is a party or (ii) the
     legality, validity, binding effect or enforceability of this Guaranty or
     any other Credit Document to which such Guarantor is a party.

          (e) There are no actions, suits or proceedings (private or
     governmental) pending or threatened (i) with respect to any Credit
     Documents to which such Guarantor is a party or (ii) with respect to such
     Guarantor that could reasonably be expected to have a Material Adverse
     Effect.

     13. Each Guarantor covenants and agrees that on and after the date hereof
and until the termination of the Total Commitment, and all Interest Rate
Protection or Other Hedging Agreements and when no Note or Letter of Credit
remains outstanding and all Guaranteed Obligations have been paid in full, such
Guarantor shall take, or will refrain from taking, as the case may be, all
actions that are necessary to be taken or not taken so that no violation of any
provision, covenant or agreement contained in Section 8 or 9 of the Credit
Agreement, and so that no Default or Event of Default, is caused by the actions
of such Guarantor or any of its Subsidiaries.

     14. The Guarantors hereby jointly and severally agree to pay all reasonable
out-of-pocket costs and expenses of each Secured Creditor in connection with the
enforcement of this Guaranty and any amendment, waiver or consent relating
hereto (including, without limitation, the reasonable fees and disbursements of
counsel employed by any of the Secured Creditors).


<PAGE>   8

     15. Neither this Guaranty nor any provision hereof may be changed, waived,
discharged or terminated except with the written consent of each Guarantor
directly affected thereby and either (x) the Required Lenders (or to the extent
required by Section 13.12 of the Credit Agreement, with the written consent of
each Lender) at all times prior to the time on which all Credit Document
Obligations have been paid in full or (y) the holders of at least a majority of
the outstanding Other Obligations at all times after the time on which all
Credit Document Obligations have been paid in full; provided, that any change,
waiver, modification or variance affecting the rights and benefits of a single
Class (as defined below) of Secured Creditors (and not all Secured Creditors in
a like or similar manner) shall require the written consent of the Requisite
Creditors (as defined below) of such Class of Secured Creditors (it being
understood that the addition or release of any Guarantor hereunder shall not
constitute a change, waiver, discharge or termination affecting any Guarantor
other than the Guarantor so added or released). For the purpose of this Guaranty
the term "Class" shall mean each class of Secured Creditors, i.e., whether (x)
the Lender Creditors as holders of the Credit Document Obligations or (y) the
Interest Rate Creditors as the holders of the Other Obligations. For the purpose
of this Guaranty, the term "Requisite Creditors" of any Class shall mean each of
(x) with respect to the Credit Document Obligations, the Required Lenders (or to
the extent required by Section 13.12 of the Credit Agreement, each Lender) and
(y) with respect to the Other Obligations, the holders of at least a majority of
all obligations outstanding from time to time under the Interest Rate Protection
or Other Hedging Agreements.

     16. Each Guarantor acknowledges that an executed (or conformed) copy of
each of the Credit Documents and Interest Rate Protection or Other Hedging
Agreements has been made available to its principal executive officers and such
officers are familiar with the contents thereof.

     17. In addition to any rights now or hereafter granted under applicable law
or otherwise (including, without limitation, Section 151 of the New York Debtor
and Creditor Law) and not by way of limitation of any such rights, upon any
amount becoming due and payable by the Borrower under the Credit Agreement
(whether at stated maturity, by acceleration or otherwise) or any payment
default under any Interest Rate Protection or Other Hedging Agreement continuing
after any applicable grace period), each Secured Creditor is hereby authorized
at any time or from time to time, without notice to any Guarantor or to any
other Person, any such notice being expressly waived, to set off and to
appropriate and apply any and all deposits (general or special) and any other
indebtedness at any time held or owing by such Secured Creditor to or for the
credit or the account of such Guarantor, against and on account of the
obligations and liabilities of such Guarantor to such Secured Creditor under
this Guaranty, irrespective of whether or not such Secured Creditor shall have
made any demand hereunder and although said obligations, liabilities, deposits
or claims, or any of them, shall be contingent or unmatured. By its acceptance
hereof, each Secured Creditor acknowledges and agrees that the provisions set
forth in this Section 17 are subject to the sharing provisions set forth in
Section 13.06 of the Credit Agreement.

     18. All notices, requests, demands or other communications pursuant hereto
shall be deemed to have been duly given or made when delivered to the Person to
which such notice, request, demand or other communication is required or
permitted to be given or made under this Guaranty, addressed to such party at
(i) in the case of any Lender Creditor, as provided



<PAGE>   9

in the Credit Agreement, (ii) in the case of any Guarantor, at its address set
forth opposite its signature below and (iii) in the case of any Interest Rate
Creditor, at such address as such Interest Rate Creditor shall have specified in
writing to the Guarantor; or in any case at such other address as any of the
Persons listed above may hereafter notify the others in writing.

     19. If a claim is ever made upon any Secured Creditor for repayment or
recovery of any amount or amounts received in payment or on account of any of
the Guaranteed Obligations and any of the aforesaid payees repays all or part of
said amount by reason of (i) any judgment, decree or order of any court or
administrative body having jurisdiction over such payee or any of its property
or (ii) any settlement or compromise of any such claim effected in good faith by
such payee with any such claimant (including the Borrower), then and in such
event each Guarantor agrees that any such judgment, decree, order, settlement or
compromise shall be binding upon such Guarantor, notwithstanding any revocation
hereof or other instrument evidencing any liability of the Borrower, and such
Guarantor shall be and remain liable to the aforesaid payees hereunder for the
amount so repaid or recovered to the same extent as if such amount had never
originally been received by any such payee.

     20. (A) THIS GUARANTY AND THE RIGHTS AND OBLIGATIONS OF THE SECURED
CREDITORS AND OF THE UNDERSIGNED HEREUNDER SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAW OF THE STATE OF NEW YORK WITHOUT REGARD TO ANY CONFLICTS
OF LAW PRINCIPLES. Any legal action or proceeding with respect to this Guaranty
or any other Credit Document to which any Guarantor is a party may be brought in
the courts of the State of New York or of the United States of America for the
Southern District of New York, and, by execution and delivery of this Guaranty,
each Guarantor hereby irrevocably accepts for itself and in respect of its
property, generally and unconditionally, the personal jurisdiction of the
aforesaid courts in any such legal action or proceeding. Each Guarantor hereby
further irrevocably waives any claim that any such courts lack personal
jurisdiction over such Guarantor, and agrees not to plead or claim, in any legal
action or proceeding with respect to this Guaranty or any other Credit Document
to which such Guarantor is a party brought in any of the aforesaid courts, that
any such court lacks personal jurisdiction over such Guarantor. Each Guarantor
further irrevocably consents to the service of process out of any of the
aforementioned courts in any such action or proceeding by the mailing of copies
thereof by registered or certified mail, postage prepaid, to such Guarantor at
its address set forth opposite its signature below. Each Guarantor hereby
irrevocably waives any objection to such service of process and further
irrevocably waives and agrees not to plead or claim in any action or proceeding
commenced hereunder or under any other Credit Document to which such Guarantor
is a party that such service of process was in any way invalid or ineffective.
Nothing herein shall affect the right of any of the Secured Creditors to serve
process in any other manner permitted by law or to commence legal proceedings or
otherwise proceed against each Guarantor in any other jurisdiction.

     (B) Each Guarantor hereby irrevocably waives any objection which it may now
or hereafter have to the laying of venue of any of the aforesaid actions or
proceedings arising out of or in connection with this Guaranty or any other
Credit Document to which such Guarantor is a party brought in the courts
referred to in clause (A) above and hereby further


<PAGE>   10

irrevocably waives and agrees not to plead or claim in any such court that such
action or proceeding brought in any such court has been brought in an
inconvenient forum.

     (C) EACH GUARANTOR AND EACH CREDITOR (BY ITS ACCEPTANCE OF THE BENEFITS OF
THIS GUARANTY) HEREBY IRREVOCABLY WAIVES ALL RIGHTS TO A TRIAL BY JURY IN ANY
ACTION, PROCEEDING OR COUNTERCLAIM ARISING OUT OF OR RELATING TO THIS GUARANTY,
THE OTHER CREDIT DOCUMENTS TO WHICH SUCH GUARANTOR IS A PARTY OR THE
TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY.

     21. In the event that all of the capital stock of one or more Guarantors is
sold or otherwise disposed of (except to the Borrower or a Subsidiary) or
liquidated in compliance with the requirements of Section 9.02 of the Credit
Agreement (or such sale or other disposition or liquidation has been approved in
writing by the Required Lenders or all of the Lenders if required by Section
13.12 of the Credit Agreement) and the proceeds of such sale, disposition or
liquidation are applied in accordance with the provisions of the Credit
Agreement, to the extent applicable, such Guarantor shall be released from this
Guaranty and this Guaranty shall, as to each such Guarantor or Guarantors,
terminate, and have no further force or effect (it being understood and agreed
that the sale of one or more Persons that own, directly or indirectly, all of
the capital stock or partnership interests of any Guarantor shall be deemed to
be a sale of such Guarantor for the purposes of this Section 21).

     22. This Guaranty may be executed in any number of counterparts and by the
different parties hereto on separate counterparts, each of which when so
executed and delivered shall be an original, but all of which shall together
constitute one and the same instrument. A set of counterparts executed by all
the parties hereto shall be lodged with the Borrower and the Administrative
Agent.

     23. All payments made by any Guarantor hereunder will be made without
setoff, counterclaim or other defense, and on the same basis as payments are
made by the Borrower under Sections 4.03 and 4.04 of the Credit Agreement.

     24. It is understood and agreed that any Subsidiary of Borrower that is
required to execute a counterpart of this Guaranty after the date hereof
pursuant to the Credit Agreement shall automatically become a Guarantor
hereunder by executing a counterpart hereof and delivering the same to the
Administrative Agent.

     25. At any time a payment in respect of the Guaranteed Obligations is made
under this Guaranty, the right of contribution of each Guarantor against each
other Guarantor shall be determined as provided in the immediately following
sentence, with the right of contribution of each Guarantor to be revised and
restated as of each date on which a payment (a "Relevant Payment") is made on
the Guaranteed Obligations under this Guaranty. At any time that a Relevant
Payment is made by a Guarantor that results in the aggregate payments made by
such Guarantor in respect of the Guaranteed Obligations to and including the
date of the Relevant Payment exceeding such Guarantor's Contribution Percentage
(as defined below) of the aggregate payments made by all Guarantors in respect
of the Guaranteed Obligations to and including the date of the Relevant Payment
(such excess, the "Aggregate Excess Amount"), each


<PAGE>   11

such Guarantor shall have a right of contribution against each other Guarantor
who has made payments in respect of the Guaranteed Obligations to and including
the date of the Relevant Payment in an aggregate amount less than such other
Guarantor's Contribution Percentage of the aggregate payments made to and
including the date of the Relevant Payment by all Guarantors in respect of the
Guaranteed Obligations (the aggregate amount of such deficit, the "Aggregate
Deficit Amount") in an amount equal to (x) a fraction the numerator of which is
the Aggregate Excess Amount of such Guarantor and the denominator of which is
the Aggregate Excess Amount of all Guarantors multiplied by (y) the Aggregate
Deficit Amount of such other Guarantor. A Guarantor's right of contribution
pursuant to the preceding sentences shall arise at the time of each computation,
subject to adjustment to the time of each computation; provided that no
Guarantor may take any action to enforce such right until the Guaranteed
Obligations have been irrevocably paid in full, it being expressly recognized
and agreed by all parties hereto that any Guarantor's right of contribution
arising pursuant to this Section 25 against any other Guarantor shall be
expressly junior and subordinate to such other Guarantor's obligations and
liabilities in respect of the Guaranteed Obligations and any other obligations
owing under this Guaranty. As used in this Section 25: (i) each Guarantor's
"Contribution Percentage" shall mean the percentage obtained by dividing (x) the
Adjusted Net Worth (as defined below) of such Guarantor by (y) the aggregate
Adjusted Net Worth of all Guarantors; (ii) the "Adjusted Net Worth" of each
Guarantor shall mean the greater of (x) the Net Worth (as defined below) of such
Guarantor and (y) zero; and (iii) the "Net Worth" of each Guarantor shall mean
the amount by which the fair saleable value of such Guarantor's assets on the
date of any Relevant Payment exceeds its existing debts and other liabilities
(including contingent liabilities, but without giving effect to any Guaranteed
Obligations arising under this Guaranty or any guaranteed obligations arising
under any guaranty of the Subordinated Obligations (as defined below)) on such
date. All parties hereto recognize and agree that, except for any right of
contribution arising pursuant to this Section 25, each Guarantor who makes any
payment in respect of the Guaranteed Obligations shall have no right of
contribution or subrogation against any other Guarantor in respect of such
payment until all of the Guaranteed Obligations have been irrevocably paid in
full. Each of the Guarantors recognizes and acknowledges that the rights to
contribution arising hereunder shall constitute an asset in favor of the party
entitled to such contribution. In this connection, each Guarantor has the right
to waive its contribution right against any Guarantor to the extent that after
giving effect to such waiver such Guarantor would remain solvent, in the
determination of the Required Lenders.

     26. Each Guarantor and each Secured Creditor (by its acceptance of the
benefits of this Guaranty) hereby confirms that it is its intention that this
Guaranty not constitute a fraudulent transfer or conveyance for purposes of the
Bankruptcy Code, the Uniform Fraudulent Conveyance Act of any similar Federal or
state law. To effectuate the foregoing intention, each Guarantor and each
Secured Creditor (by its acceptance of the benefits of this Guaranty) hereby
irrevocably agrees that the Guaranteed Obligations guaranteed by such Guarantor
shall be limited to such amount as will, after giving effect to such maximum
amount and all other (contingent or otherwise) liabilities of such Guarantor
that are relevant under such laws (it being understood that it is the intention
of the parties to this Guaranty and the parties to any guaranty of the
Subordinated Bridge Loans and the Permanent Senior Subordinated Notes
(collectively, the "Subordinated Obligations") that, to the maximum extent
permitted under applicable laws, the liabilities in respect of the guarantees of
the Subordinated Obligations shall not be included for the foregoing purposes
and that, if any reduction is required to the amount


<PAGE>   12

guaranteed by any Guarantor hereunder and with respect to the Subordinated
Obligations that its guarantee of amounts owing in respect of the Subordinated
Obligations shall first be reduced) and after giving effect to any rights to
contribution pursuant to any agreement providing for an equitable contribution
among such Guarantor and the other Guarantors, result in the Guaranteed
Obligations of such Guarantor in respect of such maximum amount not constituting
a fraudulent transfer or conveyance. Notwithstanding the provisions of the two
preceding sentences, as between the Secured Creditors and the holders of the
Subordinated Obligations, it is agreed (and the provisions of the Senior
Subordinated Financing Agreement so provide and the provisions of the Permanent
Senior Subordinated Note Documents shall so provide) that any diminution
(whether pursuant to court decree or otherwise) of any Guarantor's obligation to
make any distribution or payment pursuant to this Guaranty shall have no force
or effect for purposes of the subordination provisions contained in such
agreements, and that any payments received in respect of a Guarantor's
obligations with respect to the Subordinated Obligations shall be turned over to
the holders of the Senior Debt (or obligations which would have constituted
Senior Debt if same had not been reduced or disallowed) of such Guarantor (which
Senior Debt shall be calculated as if there were no diminution thereto pursuant
to this Section 26 or for any other reason other than the irrevocable payment in
full in cash of the respective obligations which would otherwise have
constituted Senior Debt) until all such Senior Debt (or obligations which would
have constituted Senior Debt if same had not been reduced or disallowed) has
been irrevocably paid in full.

     27. This Guaranty is subject to the Gaming Regulations and laws involving
the sale and distribution of liquor (the "Liquor Laws"). Without limiting the
foregoing, the Secured Creditors acknowledge that (i) they are subject to being
called forward by the Gaming Authorities or such other governmental authorities
enforcing the Liquor Laws, in their discretion, for licensing or a finding of
suitability or to file or provide other information and (ii) all rights,
remedies and powers in or under this Guaranty may be exercised only to the
extent that the exercise thereof does not violate any applicable provisions of
the Gaming Regulations and Liquor Laws and only to the extent that required
approvals (including prior approvals) are obtained from the requisite Gaming
Authorities. The Secured Creditors agree to cooperate with all Gaming
Authorities in connection with the provision of such documents or other
information as may be requested by such Gaming Authorities.





<PAGE>   13

     IN WITNESS WHEREOF, each Guarantor has caused this Guaranty to be executed
and delivered as of the date first above written.



Address:

c/o Ameristar Casinos, Inc.            AMERISTAR CASINO VICKSBURG, INC.,
3773 Howard Hughes Parkway             AMERISTAR CASINO COUNCIL BLUFFS, INC.,
Suite 490S                             CACTUS PETE'S, INC.,
Las Vegas, Nevada 89109                A.C. FOOD SERVICES, INC.,
Attention: Vice President              AMERISTAR CASINO ST. LOUIS, INC.,
Tel: 702-567-7000                      AMERISTAR CASINO KANSAS CITY, INC.,
Fax: 702-369-8860                      AMERISTAR CASINO ST. CHARLES, INC.,
                                         each as a Guarantor
with copies to:

Ameristar Casinos, Inc.                By:  /s/ Thomas M. Steinbauer
16633 Ventura Blvd.                        -----------------------------------
Suite 1050                                 Title:  Vice President, Treasurer &
Encino, California 91436                           Secretary
Attention: Senior Vice President
  of Legal Affairs
Tel: 818-817-6480
Fax: 818-995-7099

and

Gibson, Dunn & Crutcher LLP
333 S. Grand Avenue
Los Angeles, CA 90071
Attention: Jeff Hudson, Esq.
Tel: 213-229-7332
Fax: 213-229-6332


Accepted and Agreed to:

BANKERS TRUST COMPANY,
   as Administrative Agent
   and as Collateral Agent

By /s/ Laura Burwick
   ---------------------------
      Title: Principal