Document:

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                                                                   EXHIBIT 10(4)

                          REGISTRATION RIGHTS AGREEMENT

     THIS REGISTRATION RIGHTS AGREEMENT, dated as of August 1, 2001 (this
"AGREEMENT"), by and between Innovative Gaming Corporation of America, a
Minnesota corporation, with principal executive offices located at 333 Orville
Wright Court, Las Vegas, Nevada 89119 (the "COMPANY"), and _______________ (the
"INITIAL INVESTOR").

     WHEREAS, upon the terms and subject to the conditions of the Securities
Purchase Agreement dated as of August 1, 2001, between the Initial Investor and
the Company (the "SECURITIES PURCHASE AGREEMENT"), the Company has agreed to
issue and sell to the Initial Investor (i) 1,667 shares of its Series K 7%
Convertible Preferred Stock, par value $0.01 per share (the "PREFERRED SHARES")
which, upon the terms of and subject to the conditions of the Company's
Certificate of Designation of Series K 7% Convertible Preferred Stock (the
"CERTIFICATE OF DESIGNATION"), are convertible into shares of the Company's
common stock, par value $0.01 per share (the "COMMON STOCK") and (ii) Common
Stock Purchase Warrants (the "WARRANTS") to purchase shares of Common Stock; and

     WHEREAS, to induce the Initial Investor to execute and deliver the
Securities Purchase Agreement, the Company has agreed to provide with respect to
the Common Stock issued or issuable in lieu of cash dividend payments on the
Preferred Shares, upon conversion of the Preferred Shares and exercise of the
Warrants certain registration rights under the Securities Act;

     NOW, Therefore, in consideration of the premises and the mutual covenants
contained herein, the parties hereto, intending to be legally bound, hereby
agree as follows:

     1. DEFINITIONS

     (a) As used in this Agreement, the following terms shall have the meanings:

          (i) "AFFILIATE," of any specified Person means any other Person who
     directly, or indirectly through one or more intermediaries, is in control
     of, is controlled by, or is under common control with, such specified
     Person. For purposes of this definition, control of a Person means the
     power, directly or indirectly, to direct or cause the direction of the
     management and policies of such Person whether by contract, securities,
     ownership or otherwise; and the terms "CONTROLLING" and "CONTROLLED" have
     the respective meanings correlative to the foregoing.

          (ii) "CLOSING DATE" means the date and time of the issuance and sale
     of the Preferred Shares and the Warrants.

          (iii) "COMMISSION" means the Securities and Exchange Commission.

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          (iv) "EXCHANGE ACT" means the Securities Exchange Act of 1934, as
     amended, and the rules and regulations of the Commission thereunder, or any
     similar successor statute.

          (v) "INVESTOR" means each of the Initial Investor and any transferee
     or assignee of Registrable Securities which agrees to become bound by all
     of the terms and provisions of this Agreement in accordance with Section 8
     hereof.

          (vi) "PERSON" means any individual, partnership, corporation, limited
     liability company, joint stock company, association, trust, unincorporated
     organization, or a government or agency or political subdivision thereof.

          (vii) "PROSPECTUS" means the prospectus (including, without
     limitation, any preliminary prospectus and any final prospectus filed
     pursuant to Rule 424(b) under the Securities Act, including any prospectus
     that discloses information previously omitted from a prospectus filed as
     part of an effective registration statement in reliance on Rule 430A under
     the Securities Act) included in the Registration Statement, as amended or
     supplemented by any prospectus supplement with respect to the terms of the
     offering of any portion of the Registrable Securities covered by the
     Registration Statement and by all other amendments and supplements to such
     prospectus, including all material incorporated by reference in such
     prospectus and all documents filed after the date of such prospectus by the
     Company under the Exchange Act and incorporated by reference therein.

          (viii) "PUBLIC OFFERING" means an offer registered with the Commission
     and the appropriate state securities commissions by the Company of its
     Common Stock and made pursuant to the Securities Act.

          (ix) "REGISTRABLE SECURITIES" means the Common Stock issued or
     issuable (i) in lieu of cash dividend payments on the Preferred Shares,
     (ii) upon conversion or redemption of the Preferred Shares or (iii) upon
     exercise of the Warrants; provided, however, a share of Common Stock shall
     cease to be a Registrable Security for purposes of this Agreement when it
     no longer is a Restricted Security.

          (x) "REGISTRATION STATEMENT" means a registration statement of the
     Company filed on an appropriate form under the Securities Act providing for
     the registration of, and the sale on a continuous or delayed basis by the
     holders of, all of the Registrable Securities pursuant to Rule 415 under
     the Securities Act, including the Prospectus contained therein and forming
     a part thereof, any amendments to such registration statement and
     supplements to such Prospectus, and all exhibits and other material
     incorporated by reference in such registration statement and Prospectus.

          (xi) "RESTRICTED SECURITY" means any share of Common Stock issued or
     issuable in lieu of cash dividend payments on the Preferred Shares, upon
     conversion or redemption of the Preferred Shares or exercise of the
     Warrants except any such share that (i) has been registered pursuant to an
     effective registration statement under the Securities Act and sold in a
     manner contemplated by the prospectus included in such registration

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     statement, (ii) has been transferred in compliance with the resale
     provisions of Rule 144 under the Securities Act (or any successor provision
     thereto) or is transferable pursuant to paragraph (k) of Rule 144 under the
     Securities Act (or any successor provision thereto), or (iii) otherwise has
     been transferred and a new share of Common Stock not subject to transfer
     restrictions under the Securities Act has been delivered by or on behalf of
     the Company.

          (xii) "SECURITIES ACT" means the Securities Act of 1933, as amended,
     and the rules and regulations of the Commission thereunder, or any similar
     successor statute.

          (xviii) "_______" means _____________.

     (b) All capitalized terms used and not defined herein have the respective
meaning assigned to them in the Securities Purchase Agreement.

     2. REGISTRATION

     (a) FILING AND EFFECTIVENESS OF REGISTRATION STATEMENT. The Company shall
prepare and file with the Commission not later than 60 days after the Closing
Date, a Registration Statement on Form S-3 relating to the offer and resale of
the Registrable Securities by the holders thereof and shall use its best efforts
to cause the Commission to declare such Registration Statement effective under
the Securities Act as promptly as practicable but not later than 180 days after
the Closing Date, assuming for purposes hereof a Conversion Price under the
Certificate of Designation of $.50 per share. The Company shall promptly (and,
in any event, no more than 24 hours after it receives comments from the
Commission), notify the Buyer when and if it receives any comments from the
Commission on the Registration Statement and promptly forward a copy of such
comments, if they are in writing, to the Buyer. At such time after the filing of
the Registration Statement pursuant to this Section 2(a) as (i) the Commission
indicates, either orally or in writing, that it has no further comments with
respect to such Registration Statement or that it is willing to entertain
appropriate requests for acceleration of effectiveness of such Registration
Statement and (ii) the Company shall have received all necessary Nevada gaming
regulatory approvals, the Company shall promptly, and in no event later than two
business days after receipt of such indication from the Commission, request that
the effectiveness of such Registration Statement be accelerated within 48 hours
of the Commission's receipt of such request. The Company shall not include any
other securities in the Registration Statement relating to the offer and sale of
the Registrable Securities. The Company shall notify the Initial Investor by
written notice that such Registration Statement has been declared effective by
the Commission within 24 hours of such declaration by the Commission.

     (b) REGISTRATION DEFAULT. If the Registration Statement covering the
Registrable Securities required to be filed by the Company pursuant to Section
2(a) is not (i) filed with the Commission within 60 days after the Closing Date
or (ii) declared effective by the Commission within 180 days after the Closing
Date (either of which, without duplication, an "INITIAL DATE"), then the Company
shall make the payments to the Initial Investor as provided in the next sentence
as liquidated damages and not as a penalty. The amount to be paid by the Company
to the Initial Investor shall be determined as of each Computation Date (as
defined

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below), and such amount shall be equal to 2% (the "LIQUIDATED DAMAGE RATE") of
the Purchase Price (as defined in the Securities Purchase Agreement) from the
Initial Date to the first Computation Date and 3.5% for each Computation Date
thereafter, calculated on a pro rata basis to the date on which the Registration
Statement is filed with (in the event of an Initial Date pursuant to clause (i)
above) or declared effective by (in the event of an Initial Date pursuant to
clause (ii) above) the Commission (the "PERIODIC AMOUNT"). The full Periodic
Amount shall be paid by the Company to the Initial Investor by wire transfer of
immediately available funds within three days after each Computation Date.

     As used in this Section 2(b), "COMPUTATION DATE" means the date which is 30
days after the Initial Date and, if the Registration Statement required to be
filed by the Company pursuant to Section 2(a) has not theretofore been declared
effective by the Commission, each date which is 30 days after the previous
Computation Date until such Registration Statement is so declared effective.

     Notwithstanding the above, if the Registration Statement covering the
Registrable Securities required to be filed by the Company pursuant to Section
2(a) is not filed with the Commission within 60 days after the Closing Date, the
Company shall be in default of this Registration Rights Agreement.

     (c) ELIGIBILITY FOR USE OF FORM S-3. The Company agrees that at such time
as it meets all the requirements for the use of Securities Act Registration
Statement on Form S-3 it shall file all reports and information required to be
filed by it with the Commission in a timely manner and take all such other
action so as to maintain such eligibility for the use of such form.

     (d) ADDITIONAL REGISTRATION STATEMENT. In the event the Current Market
Price declines to $.75 per share or less and each time thereafter that the
Current Market Price declines by 25% (each such date, a "DECLINE DATE"), the
Company shall, to the extent required by the Securities Act (because the
additional shares were not covered by the Registration Statement filed pursuant
to Section 2(a)), as reasonably determined by the Initial Investor, file an
additional Registration Statement with the Commission for such additional number
of Registrable Securities as would be issuable upon conversion of the Preferred
Shares and exercise of the Warrants (the "ADDITIONAL REGISTRABLE SECURITIES") in
addition to those previously registered, assuming (x) with respect to the first
Additional Registration Statement, a Conversion Price of $.25 per share and (y)
with respect to each succeeding Additional Registration Statement, a Conversion
Price of 25% less than the Conversion Price assumed with respect to the
immediately preceding Additional Registration Statement. The Company shall, to
the extent required by the Securities Act, as reasonably determined by the
Initial Investor, prepare and file with the Commission not later than the 30th
day thereafter, a Registration Statement relating to the offer and sale of such
Additional Registrable Securities and shall use its best efforts to cause the
Commission to declare such Registration Statement effective under the Securities
Act as promptly as practicable but not later than 60 days thereafter. The
Company shall not include any other securities in the Registration Statement
relating to the offer and sale of such Additional Registrable Securities.

     If the Additional Registration Statement is not (i) filed with the
Commission within 30 days after the Decline Date or (ii) declared effective by
the Commission within 60

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days after the Decline Date (either of which, without duplication, an
"ADDITIONAL REGISTRATION DATE"), then the Company shall make the payments to the
Initial Investor at the Liquidated Damage Rate from the Additional Registration
Date to the first Additional Computation Date and 3.5% for each Additional
Computation Date thereafter, calculated on a pro rata basis to the date on which
the Additional Registration Statement is filed with (in the event of an
Additional Registration Date pursuant to clause (i) above) or declared effective
by (in the event of an Additional Registration Date pursuant to clause (ii)
above) the Commission (the "ADDITIONAL PERIODIC AMOUNT"). The full Additional
Periodic Amount shall be paid by the Company to the Initial Investor by wire
transfer of immediately available funds within three days after each Additional
Computation Date.

     As used in this Section 2(d), "ADDITIONAL COMPUTATION DATE" means the date
which is 30 days after the Additional Registration Date and, if the Additional
Registration Statement required to be filed by the Company pursuant to this
Section 2(d) has not theretofore been declared effective by the Commission, each
date which is 30 days after the previous Additional Computation Date until such
Additional Registration Statement is so declared effective.

          (e) (i) If the Company proposes to register any of its warrants,
     Common Stock or any other shares of common stock of the Company under the
     Securities Act (other than a registration (A) on Form S-8 or S-4 or any
     successor or similar forms, (B) relating to Common Stock or any other
     shares of common stock of the Company issuable upon exercise of employee
     share options or in connection with any employee benefit or similar plan of
     the Company or (C) in connection with a direct or indirect acquisition by
     the Company of another Person or any transaction with respect to which Rule
     145 (or any successor provision) under the Securities Act applies), whether
     or not for sale for its own account, it will each such time, give prompt
     written notice at least 20 days prior to the anticipated filing date of the
     registration statement relating to such registration to each Investor,
     which notice shall set forth such Investor's rights under this Section 2(e)
     and shall offer such Investor the opportunity to include in such
     registration statement such number of Registrable Securities as such
     Investor may request. Upon the written request of any Investor made within
     10 days after the receipt of notice from the Company (which request shall
     specify the number of Registrable Securities intended to be disposed of by
     such Investor), the Company will use its best efforts to effect the
     registration under the Securities Act of all Registrable Securities that
     the Company has been so requested to register by such Investor, to the
     extent requisite to permit the disposition of the Registrable Securities so
     to be registered; provided, however, that (x) if such registration involves
     a Public Offering, the Investors who so make a written request must sell
     their Registrable Securities to the underwriters selected by the Company
     with the consent of each Investor who so makes a written request on the
     same terms and conditions as apply to the Company and (y) if, at any time
     after giving written notice of its intention to register any Registrable
     Securities pursuant to this Section 2 and prior to the effective date of
     the registration statement filed in connection with such registration, the
     Company shall determine for any reason not to register such Registrable
     Securities, the Company shall give written notice to each Investor who so
     makes a written request and, thereupon, shall be relieved of its obligation
     to register any Registrable Securities in connection with such
     registration. The Company's obligations under this Section 2(e) shall
     terminate on

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     the date that the registration statement to be filed in accordance with
     Section 2(a) is declared effective by the Commission.

          (ii) If a registration pursuant to this Section 2(e) involves a Public
     Offering and the managing underwriter thereof advises the Company that, in
     its view, the number of shares of Common Stock, Warrants or other shares of
     Common Stock that the Company, each Investor and all other sellers (the
     "THIRD-PARTY SELLERS") intend to include in such registration exceeds the
     largest number of shares of Common Stock or Warrants (including any other
     shares of Common Stock or Warrants of the Company) that can be sold without
     having an adverse effect on such Public Offering (the "MAXIMUM OFFERING
     SIZE"), the Company will include in such registration, only that number of
     shares of Common Stock or Warrants, as applicable, such that the number of
     shares of Registrable Securities registered does not exceed the Maximum
     Offering Size, with the difference between the number of shares in the
     Maximum Offering Size and the number of shares to be issued by the Company
     to be allocated (after including all shares to be issued and sold by the
     Company, the Investors and any Third-Party Sellers) first, among the
     Investors pro rata on the basis of the relative number of shares of Common
     Stock or Warrants offered for sale under such registration by each of the
     Investors and, second, to any Third-Party Sellers. If as a result of the
     proration provisions of this Section 2(e)(ii), any Investor is not entitled
     to include all such Registrable Securities in such registration, such
     Investor may elect to withdraw its request to include any Registrable
     Securities in such registration. With respect to registrations pursuant to
     this Section 2(e), the number of securities required to satisfy any
     underwriters' over-allotment option shall be allocated among the Company,
     the Investors and any Third-Party Seller pro rata on the basis of the
     relative number of securities offered for sale under such registration by
     each of the Investors, the Company and any such Third-Party Sellers before
     the exercise of such over-allotment option.

     3. OBLIGATIONS OF THE COMPANY

     In connection with the registration of the Registrable Securities, the
Company shall:

     (a) Promptly (i) prepare and file with the Commission such amendments
(including post-effective amendments) to the Registration Statement and
supplements to the Prospectus as may be necessary to keep the Registration
Statement continuously effective and in compliance with the provisions of the
Securities Act applicable thereto so as to permit the Prospectus forming part
thereof to be current and useable by Investors for resales of the Registrable
Securities for a period of two years from the date on which the Registration
Statement is first declared effective by the Commission (the "EFFECTIVE TIME")
or such shorter period that will terminate when all the Registrable Securities
covered by the Registration Statement have been sold pursuant thereto in
accordance with the plan of distribution provided in the Prospectus, transferred
pursuant to Rule 144 under the Securities Act or otherwise transferred in a
manner that results in the delivery of new securities not subject to transfer
restrictions under the Securities Act (the "REGISTRATION PERIOD") and (ii) take
all lawful action such that each of (A) the Registration Statement and any
amendment thereto does not, when it becomes effective, contain an untrue
statement of a material fact or omit to state a material fact required to be
stated

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therein or necessary to make the statements therein, not misleading and (B) the
Prospectus forming part of the Registration Statement, and any amendment or
supplement thereto, does not at any time during the Registration Period include
an untrue statement of a material fact or omit to state a material fact required
to be stated therein or necessary to make the statements therein, in light of
the circumstances under which they were made, not misleading;

     (b) During the Registration Period, comply with the provisions of the
Securities Act with respect to the Registrable Securities of the Company covered
by the Registration Statement until such time as all of such Registrable
Securities have been disposed of in accordance with the intended methods of
disposition by the Investors as set forth in the Prospectus forming part of the
Registration Statement;

     (c) (i) Prior to the filing with the Commission of any Registration
Statement (including any amendments thereto) and the distribution or delivery of
any Prospectus (including any supplements thereto), provide (A) draft copies
thereof to the Investors and reflect in such documents all such comments as the
Investors (and their counsel) reasonably may propose and (B) to the Investors a
copy of the accountant's consent letter to be included in the filing and (ii)
furnish to each Investor whose Registrable Securities are included in the
Registration Statement and its legal counsel identified to the Company, (A)
promptly after the same is prepared and publicly distributed, filed with the
Commission, or received by the Company, one copy of the Registration Statement,
each Prospectus, and each amendment or supplement thereto, and (B) such number
of copies of the Prospectus and all amendments and supplements thereto and such
other documents, as such Investor may reasonably request in order to facilitate
the disposition of the Registrable Securities owned by such Investor;

     (d) (i) Register or qualify the Registrable Securities covered by the
Registration Statement under such securities or "blue sky" laws of such
jurisdictions as the Investors who hold a majority-in-interest of the
Registrable Securities being offered reasonably request, (ii) prepare and file
in such jurisdictions such amendments (including post-effective amendments) and
supplements to such registrations and qualifications as may be necessary to
maintain the effectiveness thereof at all times during the Registration Period,
(iii) take all such other lawful actions as may be necessary to maintain such
registrations and qualifications in effect at all times during the Registration
Period, and (iv) take all such other lawful actions reasonably necessary or
advisable to qualify the Registrable Securities for sale in such jurisdictions;
provided, however, that the Company shall not be required in connection
therewith or as a condition thereto to (A) qualify to do business in any
jurisdiction where it would not otherwise be required to qualify but for this
Section 3(d), (B) subject itself to general taxation in any such jurisdiction or
(C) file a general consent to service of process in any such jurisdiction;

     (e) As promptly as practicable after becoming aware of such event, notify
each Investor of the occurrence of any event, as a result of which the
Prospectus included in the Registration Statement, as then in effect, includes
an untrue statement of a material fact or omits to state a material fact
required to be stated therein or necessary to make the statements therein, in
light of the circumstances under which they were made, not misleading, and
promptly prepare an amendment to the Registration Statement and supplement to
the Prospectus to correct such untrue statement or omission, and deliver a
number of copies of such supplement and amendment to each Investor as such
Investor may reasonably request;

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     (f) As promptly as practicable after becoming aware of such event, notify
each Investor who holds Registrable Securities being sold (or, in the event of
an underwritten offering, the managing underwriters) of the issuance by the
Commission of any stop order or other suspension of the effectiveness of the
Registration Statement at the earliest possible time and take all lawful action
to effect the withdrawal, recession or removal of such stop order or other
suspension;

     (g) Cause all the Registrable Securities covered by the Registration
Statement to be listed on the principal national securities exchange, and
included in an inter-dealer quotation system of a registered national securities
association, on or in which securities of the same class or series issued by the
Company are then listed or included;

     (h) Maintain a transfer agent and registrar, which may be a single entity,
for the Registrable Securities not later than the effective date of the
Registration Statement;

     (i) Cooperate with the Investors who hold Registrable Securities being
offered to facilitate the timely preparation and delivery of certificates for
the Registrable Securities to be offered pursuant to the registration statement
and enable such certificates for the Registrable Securities to be in such
denominations or amounts, as the case may be, as the Investors reasonably may
request and registered in such names as the Investor may request; and, within
three business days after a registration statement which includes Registrable
Securities is declared effective by the Commission, deliver and cause legal
counsel selected by the Company to deliver to the transfer agent for the
Registrable Securities (with copies to the Investors whose Registrable
Securities are included in such registration statement) an appropriate
instruction and, to the extent necessary, an opinion of such counsel;

     (j) Take all such other lawful actions reasonably necessary to expedite and
facilitate the disposition by the Investors of their Registrable Securities in
accordance with the intended methods therefor provided in the Prospectus which
are customary under the circumstances;

     (k) Make generally available to its security holders as soon as
practicable, but in any event not later than three (3) months after (i) the
effective date (as defined in Rule 158(c) under the Securities Act) of the
Registration Statement, and (ii) the effective date of each post-effective
amendment to the Registration Statement, as the case may be, an earnings
statement of the Company and its subsidiaries complying with Section 11(a) of
the Securities Act and the rules and regulations of the Commission thereunder
(including, at the option of the Company, Rule 158);

     (l) In the event of an underwritten offering, promptly include or
incorporate in a Prospectus supplement or post-effective amendment to the
Registration Statement such information as the managers reasonably agree should
be included therein and to which the Company does not reasonably object and make
all required filings of such Prospectus supplement or post-effective amendment
as soon as practicable after it is notified of the matters to be included or
incorporated in such Prospectus supplement or post-effective amendment;

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     (m) (i) Make reasonably available for inspection by Investors, any
underwriter participating in any disposition pursuant to the Registration
Statement, and any attorney, accountant or other agent retained by such
Investors or any such underwriter all relevant financial and other records,
pertinent corporate documents and properties of the Company and its
subsidiaries, and (ii) cause the Company's officers, directors and employees to
supply all information reasonably requested by such Investors or any such
underwriter, attorney, accountant or agent in connection with the Registration
Statement, in each case, as is customary for similar due diligence examinations;
provided, however, that all records, information and documents that are
designated in writing by the Company, in good faith, as confidential,
proprietary or containing any material nonpublic information shall be kept
confidential by such Investors and any such underwriter, attorney, accountant or
agent (pursuant to an appropriate confidentiality agreement in the case of any
such holder or agent), unless such disclosure is made pursuant to judicial
process in a court proceeding (after first giving the Company an opportunity
promptly to seek a protective order or otherwise limit the scope of the
information sought to be disclosed) or is required by law, or such records,
information or documents become available to the public generally or through a
third party not in violation of an accompanying obligation of confidentiality;
and provided, further, that, if the foregoing inspection and information
gathering would otherwise disrupt the Company's conduct of its business, such
inspection and information gathering shall, to the maximum extent possible, be
coordinated on behalf of the Investors and the other parties entitled thereto by
one firm of counsel designed by and on behalf of the majority in interest of
Investors and other parties;

     (n) In connection with any underwritten offering, make such representations
and warranties to the Investors participating in such underwritten offering and
to the managers, in form, substance and scope as are customarily made by the
Company to underwriters in secondary underwritten offerings;

     (o) In connection with any underwritten offering, obtain opinions of
counsel to the Company (which counsel and opinions (in form, scope and
substance) shall be reasonably satisfactory to the managers) addressed to the
underwriters, covering such matters as are customarily covered in opinions
requested in secondary underwritten offerings (it being agreed that the matters
to be covered by such opinions shall include, without limitation, as of the date
of the opinion and as of the Effective Time of the Registration Statement or
most recent post-effective amendment thereto, as the case may be, the absence
from the Registration Statement and the Prospectus, including any documents
incorporated by reference therein, of an untrue statement of a material fact or
the omission of a material fact required to be stated therein or necessary to
make the statements therein (in the case of the Prospectus, in light of the
circumstances under which they were made) not misleading, subject to customary
limitations);

     (p) In connection with any underwritten offering, obtain "cold comfort"
letters and updates thereof from the independent public accountants of the
Company (and, if necessary, from the independent public accountants of any
subsidiary of the Company or of any business acquired by the Company, in each
case for which financial statements and financial data are, or are required to
be, included in the Registration Statement), addressed to each underwriter
participating in such underwritten offering (if such underwriter has provided
such letter, representations or documentation, if any, required for such cold
comfort letter to be so

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addressed), in customary form and covering matters of the type customarily
covered in "cold comfort" letters in connection with secondary underwritten
offerings;

     (q) In connection with any underwritten offering, deliver such documents
and certificates as may be reasonably required by the managers, if any; and

     (r) In the event that any broker-dealer registered under the Exchange Act
shall be an "AFFILIATE" (as defined in Rule 2729(b)(1) of the rules and
regulations of the National Association of Securities Dealers, Inc. (the "NASD
RULES") (or any successor provision thereto)) of the Company or has a "CONFLICT
OF INTEREST" (as defined in Rule 2720(b)(7) of the NASD Rules (or any successor
provision thereto)) and such broker-dealer shall underwrite, participate as a
member of an underwriting syndicate or selling group or assist in the
distribution of any Registrable Securities covered by the Registration
Statement, whether as a holder of such Registrable Securities or as an
underwriter, a placement or sales agent or a broker or dealer in respect
thereof, or otherwise, the Company shall assist such broker-dealer in complying
with the requirements of the NASD Rules, including, without limitation, by (A)
engaging a "QUALIFIED INDEPENDENT UNDERWRITER" (as defined in Rule 2720(b)(15)
of the NASD Rules (or any successor provision thereto)) to participate in the
preparation of the Registration Statement relating to such Registrable
Securities, to exercise usual standards of due diligence in respect thereof and
to recommend the public offering price of such Registrable Securities, (B)
indemnifying such qualified independent underwriter to the extent of the
indemnification of underwriters provided in Section 6 hereof, and (C) providing
such information to such broker-dealer as may be required in order for such
broker-dealer to comply with the requirements of the NASD Rules.

     4. OBLIGATIONS OF THE INVESTORS

     In connection with the registration of the Registrable Securities, the
Investors shall have the following obligations:

     (a) It shall be a condition precedent to the obligations of the Company to
complete the registration pursuant to this Agreement with respect to the
Registrable Securities of a particular Investor that such Investor shall furnish
to the Company such information regarding itself, the Registrable Securities
held by it and the intended method of disposition of the Registrable Securities
held by it as shall be reasonably required to effect the registration of such
Registrable Securities and shall execute such documents in connection with such
registration as the Company may reasonably request. As least seven days prior to
the first anticipated filing date of the Registration Statement, the Company
shall notify each Investor of the information the Company requires from each
such Investor (the "REQUESTED INFORMATION") if such Investor elects to have any
of its Registrable Securities included in the Registration Statement. If at
least two business days prior to the anticipated filing date the Company has not
received the Requested Information from an Investor (a "NON-RESPONSIVE
INVESTOR"), then the Company may file the Registration Statement without
including Registrable Securities of such Non-Responsive Investor and have no
further obligations to the Non-Responsive Investor;

     (b) Each Investor by its acceptance of the Registrable Securities agrees to
cooperate with the Company in connection with the preparation and filing of the
Registration

<PAGE>   11

Statement hereunder, unless such Investor has notified the Company in writing of
its election to exclude all of its Registrable Securities from the Registration
Statement; and

     (c) Each Investor agrees that, upon receipt of any notice from the Company
of the occurrence of any event of the kind described in Section 3(e) or 3(f), it
shall immediately discontinue its disposition of Registrable Securities pursuant
to the Registration Statement covering such Registrable Securities until such
Investor's receipt of the copies of the supplemented or amended Prospectus
contemplated by Section 3(e) and, if so directed by the Company, such Investor
shall deliver to the Company (at the expense of the Company) or destroy (and
deliver to the Company a certificate of destruction) all copies in such
Investor's possession, of the Prospectus covering such Registrable Securities
current at the time of receipt of such notice.

     5. EXPENSES OF REGISTRATION

     All expenses, other than underwriting discounts and commissions, incurred
in connection with registrations, filings or qualifications pursuant to Section
3, but including, without limitation, all registration, listing, and
qualifications fees, printing and engraving fees, accounting fees, and the fees
and disbursements of counsel for the Company.

     6. INDEMNIFICATION AND CONTRIBUTION

     (a) The Company shall indemnify and hold harmless each Investor and each
underwriter, if any, which facilitates the disposition of Registrable
Securities, and each of their respective officers and directors and each person
who controls such Investor or underwriter within the meaning of Section 15 of
the Securities Act or Section 20 of the Exchange Act (each such person being
sometimes hereinafter referred to as an "INDEMNIFIED PERSON") from and against
any losses, claims, damages or liabilities, joint or several, to which such
Indemnified Person may become subject under the Securities Act or otherwise,
insofar as such losses, claims, damages or liabilities (or actions in respect
thereof) arise out of or are based upon an untrue statement or alleged untrue
statement of a material fact contained in any Registration Statement or an
omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein, not misleading, or
arise out of or are based upon an untrue statement or alleged untrue statement
of a material fact contained in any Prospectus or an omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading; and the Company hereby agrees to
reimburse such Indemnified Person for all reasonable legal and other expenses
incurred by them in connection with investigating or defending any such action
or claim as and when such expenses are incurred; provided, however, that the
Company shall not be liable to any such Indemnified Person in any such case to
the extent that any such loss, claim, damage or liability arises out of or is
based upon (i) an untrue statement or alleged untrue statement made in, or an
omission or alleged omission from, such Registration Statement or Prospectus in
reliance upon and in conformity with written information furnished to the
Company by such Indemnified Person expressly for use therein or (ii) in the case
of the occurrence of an event of the type specified in Section 3(e), the use by
the Indemnified Person of an outdated or defective Prospectus after the Company
has provided to such

<PAGE>   12

Indemnified Person an updated Prospectus correcting the untrue statement or
alleged untrue statement or omission or alleged omission giving rise to such
loss, claim, damage or liability.

     (b) INDEMNIFICATION BY THE INVESTORS AND UNDERWRITERS. Each Investor
agrees, as a consequence of the inclusion of any of its Registrable Securities
in a Registration Statement, and each underwriter, if any, which facilitates the
disposition of Registrable Securities shall agree, as a consequence of
facilitating such disposition of Registrable Securities, severally and not
jointly, to (i) indemnify and hold harmless the Company, its directors
(including any person who, with his or her consent, is named in the Registration
Statement as a director nominee of the Company), its officers who sign any
Registration Statement and each person, if any, who controls the Company within
the meaning of either Section 15 of the Securities Act or Section 20 of the
Exchange Act, against any losses, claims, damages or liabilities to which the
Company or such other persons may become subject, under the Securities Act or
otherwise, insofar as such losses, claims, damages or liabilities (or actions in
respect thereof) arise out of or are based upon an untrue statement or alleged
untrue statement of a material fact contained in such Registration Statement or
Prospectus or arise out of or are based upon the omission or alleged omission to
state therein a material fact required to be stated therein or necessary to make
the statements therein (in light of the circumstances under which they were
made, in the case of the Prospectus), not misleading, in each case to the
extent, but only to the extent, that such untrue statement or alleged untrue
statement or omission or alleged omission was made in reliance upon and in
conformity with written information furnished to the Company by such holder or
underwriter expressly for use therein; provided, however, that no Investor or
underwriter shall be liable under this Section 6(b) for any amount in excess of
the net proceeds paid to such Investor or underwriter in respect of shares sold
by it, and (ii) reimburse the Company for any legal or other expenses incurred
by the Company in connection with investigating or defending any such action or
claim as such expenses are incurred.

     (c) NOTICE OF CLAIMS, ETC. Promptly after receipt by a party seeking
indemnification pursuant to this Section 6 (an "INDEMNIFIED PARTY") of written
notice of any investigation, claim, proceeding or other action in respect of
which indemnification is being sought (each, a "CLAIM"), the Indemnified Party
promptly shall notify the party against whom indemnification pursuant to this
Section 6 is being sought (the "INDEMNIFYING PARTY") of the commencement
thereof; but the omission to so notify the Indemnifying Party shall not relieve
it from any liability that it otherwise may have to the Indemnified Party,
except to the extent that the Indemnifying Party is materially prejudiced and
forfeits substantive rights and defenses by reason of such failure. In
connection with any Claim as to which both the Indemnifying Party and the
Indemnified Party are parties, the Indemnifying Party shall be entitled to
assume the defense thereof. Notwithstanding the assumption of the defense of any
Claim by the Indemnifying Party, the Indemnified Party shall have the right to
employ separate legal counsel and to participate in the defense of such Claim,
and the Indemnifying Party shall bear the reasonable fees, out-of-pocket costs
and expenses of such separate legal counsel to the Indemnified Party if (and
only if): (x) the Indemnifying Party shall have agreed to pay such fees, costs
and expenses, (y) the Indemnified Party and the Indemnifying Party shall
reasonably have concluded that representation of the Indemnified Party by the
Indemnifying Party by the same legal counsel would not be appropriate due to
actual or, as reasonably determined by legal counsel to the Indemnified Party,
potentially differing interests between such parties in the conduct of the
defense of such Claim, or if there may be legal defenses available to the

<PAGE>   13

Indemnified Party that are in addition to or disparate from those available to
the Indemnifying Party, or (z) the Indemnifying Party shall have failed to
employ legal counsel reasonably satisfactory to the Indemnified Party within a
reasonable period of time after notice of the commencement of such Claim. If the
Indemnified Party employs separate legal counsel in circumstances other than as
described in clauses (x), (y) or (z) above, the fees, costs and expenses of such
legal counsel shall be borne exclusively by the Indemnified Party. Except as
provided above, the Indemnifying Party shall not, in connection with any Claim
in the same jurisdiction, be liable for the fees and expenses of more than one
firm of counsel for the Indemnified Party (together with appropriate local
counsel). The Indemnified Party shall not, without the prior written consent of
the Indemnifying Party (which consent shall not unreasonably be withheld),
settle or compromise any Claim or consent to the entry of any judgment that does
not include an unconditional release of the Indemnifying Party from all
liabilities with respect to such Claim or judgment.

     (d) CONTRIBUTION. If the indemnification provided for in this Section 6 is
unavailable to or insufficient to hold harmless an Indemnified Person under
subsection (a) or (b) above in respect of any losses, claims, damages or
liabilities (or actions in respect thereof) referred to therein, then each
Indemnifying Party shall contribute to the amount paid or payable by such
Indemnified Party as a result of such losses, claims, damages or liabilities (or
actions in respect thereof) in such proportion as is appropriate to reflect the
relative fault of the Indemnifying Party and the Indemnified Party in connection
with the statements or omissions which resulted in such losses, claims, damages
or liabilities (or actions in respect thereof), as well as any other relevant
equitable considerations. The relative fault of such Indemnifying Party and
Indemnified Party shall be determined by reference to, among other things,
whether the untrue or alleged untrue statement of a material fact or omission or
alleged omission to state a material fact relates to information supplied by
such Indemnifying Party or by such Indemnified Party, and the parties' relative
intent, knowledge, access to information and opportunity to correct or prevent
such statement or omission. The parties hereto agree that it would not be just
and equitable if contribution pursuant to this Section 6(d) were determined by
pro rata allocation (even if the Investors or any underwriters were treated as
one entity for such purpose) or by any other method of allocation which does not
take account of the equitable considerations referred to in this Section 6(d).
The amount paid or payable by an Indemnified Party as a result of the losses,
claims, damages or liabilities (or actions in respect thereof) referred to above
shall be deemed to include any legal or other fees or expenses reasonably
incurred by such Indemnified Party in connection with investigating or defending
any such action or claim. No person guilty of fraudulent misrepresentation
(within the meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation. The obligations of the Investors and any underwriters in this
Section 6(d) to contribute shall be several in proportion to the percentage of
Registrable Securities registered or underwritten, as the case may be, by them
and not joint.

     (e) Notwithstanding any other provision of this Section 6, in no event
shall any (i) Investor be required to undertake liability to any person under
this Section 6 for any amounts in excess of the dollar amount of the proceeds to
be received by such Investor from the sale of such Investor's Registrable
Securities (after deducting any fees, discounts and commissions applicable
thereto) pursuant to any Registration Statement under which such Registrable
Securities are to be registered under the Securities Act and (ii) underwriter be

<PAGE>   14

required to undertake liability to any Person hereunder for any amounts in
excess of the aggregate discount, commission or other compensation payable to
such underwriter with respect to the Registrable Securities underwritten by it
and distributed pursuant to the Registration Statement.

     (f) The obligations of the Company under this Section 6 shall be in
addition to any liability which the Company may otherwise have to any
Indemnified Person and the obligations of any Indemnified Person under this
Section 6 shall be in addition to any liability which such Indemnified Person
may otherwise have to the Company. The remedies provided in this Section 6 are
not exclusive and shall not limit any rights or remedies which may otherwise be
available to an indemnified party at law or in equity.

     7. RULE 144

     With a view to making available to the Investors the benefits of Rule 144
under the Securities Act or any other similar rule or regulation of the
Commission that may at any time permit the Investors to sell securities of the
Company to the public without registration ("RULE 144"), the Company agrees to
use its best efforts to:

     (a) comply with the provisions of paragraph (c) (1) of Rule 144; and

     (b) file with the Commission in a timely manner all reports and other
documents required to be filed by the Company pursuant to Section 13 or 15(d)
under the Exchange Act; and, if at any time it is not required to file such
reports but in the past had been required to or did file such reports, it will,
upon the request of any Investor, make available other information as required
by, and so long as necessary to permit sales of, its Registrable Securities
pursuant to Rule 144.

     8. ASSIGNMENT

     The rights to have the Company register Registrable Securities pursuant to
this Agreement shall be automatically assigned by the Investors to any permitted
transferee of all or any portion of such Registrable Securities (or all or any
portion of any Preferred Shares or Warrant of the Company which is convertible
into Registrable Securities) only if: (a) the Investor agrees in writing with
the transferee or assignee to assign such rights, and a copy of such agreement
is furnished to the Company within a reasonable time after such assignment, (b)
the Company is, within a reasonable time after such transfer or assignment,
furnished with written notice of (i) the name and address of such transferee or
assignee and (ii) the securities with respect to which such registration rights
are being transferred or assigned, (c) immediately following such transfer or
assignment, the securities so transferred or assigned to the transferee or
assignee constitute Restricted Securities, and (d) at or before the time the
Company received the written notice contemplated by clause (b) of this sentence
the transferee or assignee agrees in writing with the Company to be bound by all
of the provisions contained herein.

     9. AMENDMENT AND WAIVER

     Any provision of this Agreement may be amended and the observance thereof
may be waived (either generally or in a particular instance and either
retroactively or

<PAGE>   15

prospectively), only with the written consent of the Company and Investors who
hold a majority-in-interest of the Registrable Securities. Any amendment or
waiver effected in accordance with this Section 9 shall be binding upon each
Investor and the Company.

     10. CHANGES IN COMMON STOCK

     If, and as often as, there are any changes in the Common Stock by way of
stock split, stock dividend, reverse split, combination or reclassification, or
through merger, consolidation, reorganization or recapitalization, or by any
other means, appropriate adjustment shall be made in the provisions hereof, as
may be required, so that the rights and privileges granted hereby shall continue
with respect to the Common Stock as so changed.

     11. MISCELLANEOUS

     (a) A person or entity shall be deemed to be a holder of Registrable
Securities whenever such person or entity owns of record such Registrable
Securities. If the Company receives conflicting instructions, notices or
elections from two or more persons or entities with respect to the same
Registrable Securities, the Company shall act upon the basis of instructions,
notice or election received from the registered owner of such Registrable
Securities.

     (b) If, after the date hereof and prior to the Commission declaring the
Registration Statement to be filed pursuant to Section 2(a) effective under the
Securities Act, the Company grants to any Person any registration rights with
respect to any Company securities which are more favorable to such other Person
than those provided in this Agreement, then the Company forthwith shall grant
(by means of an amendment to this Agreement or otherwise) identical registration
rights to all Investors hereunder.

     (c) Except as may be otherwise provided herein, any notice or other
communication or delivery required or permitted hereunder shall be in writing
and shall be delivered personally or sent by certified mail, postage prepaid, or
by a nationally recognized overnight courier service, and shall be deemed given
when so delivered personally or by overnight courier service, or, if mailed,
three days after the date of deposit in the United States mails, as follows:

<PAGE>   16

                           (i)      if to the Company, to:

                                    Innovative Gaming Corporation of America
                                    333 Orville Wright Court
                                    Las Vegas, Nevada  89119
                                    Attention: Loren A. Piel, General Counsel
                                    (702) 614-7199
                                    (703) 614-7114 (Fax)

                                    with a copy to:

                                    Maslon Edelman Borman & Brand, LLP
                                    3300 Wells Fargo Center
                                    90 South Seventh Street
                                    Minneapolis, Minnesota  55402
                                    Attention:  Douglas T. Holod, Esq.
                                    (612) 672-8200
                                    (612) 672-8397 (Fax)

                            (ii)    if to the Initial Investor, to:

                                    ---------------
                                    ---------------
                                    ---------------
                                    ---------------
                                    ---------------
                                    ---------------
                                    ---------------

                                    with a copy to:

                                    ---------------
                                    ---------------
                                    ---------------
                                    ---------------
                                    ---------------
                                    ---------------

     (iii) if to any other Investor, at such address as such Investor shall have
provided in writing to the Company.

The Company, the Initial Investor or any Investor may change the foregoing
address by notice given pursuant to this Section 11(c).

     (d) Failure of any party to exercise any right or remedy under this
Agreement or otherwise, or delay by a party in exercising such right or remedy,
shall not operate as a waiver thereof.

<PAGE>   17

     (e) This Agreement shall be governed by and interpreted in accordance with
the laws of the State of New York. Each of the parties consents to the
jurisdiction of the federal courts whose districts encompass any part of the
City of New York or the state courts of the State of New York sitting in the
City of New York in connection with any dispute arising under this Agreement and
hereby waives, to the maximum extent permitted by law, any objection including
any objection based on forum non conveniens, to the bringing of any such
proceeding in such jurisdictions.

     (f) The remedies provided in this Agreement are cumulative and not
exclusive of any remedies provided by law. If any term, provision, covenant or
restriction of this Agreement is held by a court of competent jurisdiction to be
invalid, illegal, void or unenforceable, the remainder of the terms, provisions,
covenants and restrictions set forth herein shall remain in full force and
effect and shall in no way be affected, impaired or invalidated, and the parties
hereto shall use their best efforts to find and employ an alternative means to
achieve the same or substantially the same result as that contemplated by such
term, provision, covenant or restriction. It is hereby stipulated and declared
to be the intention of the parties that they would have executed the remaining
terms, provisions, covenants and restrictions without including any of such that
may be hereafter declared invalid, illegal, void or unenforceable.

     (g) The Company shall not enter into any agreement with respect to its
securities that is inconsistent with the rights granted to the holders of
Registrable Securities in this Agreement or otherwise conflicts with the
provisions hereof. The Company is not currently a party to any agreement
granting any registration rights with respect to any of its securities to any
person which conflicts with the Company's obligations hereunder or gives any
other party the right to include any securities in any Registration Statement
filed pursuant hereto. Without limiting the generality of the foregoing, without
the written consent of the holders of a majority in interest of the Registrable
Securities, the Company shall not grant to any person the right to request it to
register any of its securities under the Securities Act unless the rights so
granted are subject in all respect to the prior rights of the holders of
Registrable Securities set forth herein, and are not otherwise in conflict or
inconsistent with the provisions of this Agreement. The restrictions on the
Company's rights to grant registration rights under this paragraph shall
terminate on the date the Registration Statement to be filed pursuant to Section
2(a) is declared effective by the Commission. Notwithstanding the foregoing, the
Company shall be permitted to enter into and perform one or more registration
rights agreements with holders of the Company's Series K 7% Convertible
Preferred Stock, par value $0.01 per share, each containing provisions
substantially similar to the provisions of this Agreement, provided, that the
terms of any such registration rights agreement do not conflict with any of the
provisions of this Agreement.

     (h) This Agreement, the Securities Purchase Agreement, the Escrow
Instructions, dated as of a date even herewith (the "ESCROW INSTRUCTIONS"),
between the Company, the Initial Investor and Cadwalader, Wickersham & Taft, the
Preferred Shares and the Warrants constitute the entire agreement among the
parties hereto with respect to the subject matter hereof. There are no
restrictions, promises, warranties or undertakings, other than those set forth
or referred to herein. This Agreement, the Securities Purchase Agreement, the
Escrow Instructions, the Certificate of Designation and the Warrants supersede
all prior agreements and undertakings among the parties hereto with respect to
the subject matter hereof.

<PAGE>   18

     (i) Subject to the requirements of Section 8 hereof, this Agreement shall
inure to the benefit of and be binding upon the successors and assigns of each
of the parties hereto.

     (j) All pronouns and any variations thereof refer to the masculine,
feminine or neuter, singular or plural, as the context may require.

     (k) The headings in this Agreement are for convenience of reference only
and shall not limit or otherwise affect the meaning thereof.

     (l) The Company acknowledges that any failure by the Company to perform its
obligations under Section 3, or any delay in such performance could result in
direct damages to the Investors and the Company agrees that, in addition to any
other liability the Company may have by reason of any such failure or delay, the
Company shall be liable for all direct damages caused by such failure or delay.

     (m) This Agreement may be executed in two or more counterparts, each of
which shall be deemed an original but all of which shall constitute one and the
same agreement. A facsimile transmission of this signed Agreement shall be legal
and binding on all parties hereto.

<PAGE>   19

                  IN WITNESS WHEREOF, the parties have caused this Agreement to
be duly executed and delivered as of the date first above written.

                              INNOVATIVE GAMING CORPORATION OF AMERICA

                              By:
                                 ----------------------------------------------
                                 Name:
                                 Title:

                                 ----------------------------------------------
                                                                               -

                               By:
                                  ----------------------------------------------

                               By:
                                  ----------------------------------------------
                                  Name:
                                  Title:<PAGE>   1

                                                                   EXHIBIT 10(5)

                              CONSULTING AGREEMENT

This Consulting Agreement (the "Agreement"), effective as of July 1st, 2001 is
entered into by and between Innovative Gaming Corporation of America, a
Minnesota Corporation (herein referred to as the "Company") and Medallion Media,
LLC, a California limited liability company (herein referred to as the
"Consultant").

                                    RECITALS

WHEREAS, Company desires to engage the services of Consultant to represent the
Company in media communications and media and public relations to the public
through the use of print, television and airspace, and to consult with
management concerning such Company activities. Medallion is a full service Media
Consulting firm dedicated to assisting its clients reach their financial, social
and political goals by getting them positive media exposure.

NOW THEREFORE, in consideration of the promises and the mutual covenants and
agreements hereinafter set forth, the parties hereto covenant and agree as
follows:

         1.       Term of Consultancy. Company hereby agrees to retain the
                  Consultant to act in a consulting capacity to the Company and
                  the Consultant hereby agrees to provide services to the
                  Company commencing July 1st, 2001 and ending on June 30th,
                  2002.

         2.       Duties of Consultant. The Consultant agrees that it will
                  generally provide the following specified consulting services
                  through its officers and employees during the term specified
                  in Section 1.

               (a) Consult and assist the Company in developing and implementing
appropriate plans and means for presenting the Company's "message" to the public
community, establishing an image for the Company in the community, and creating
the foundation for subsequent public relations efforts; Managing Director,
Christi O'Connor will work directly with the Company to develop their image,
determine what stories are best, and pursue getting those stories airtime and
press coverage.

               (b) With the cooperation of the Company, maintain an awareness
during the term of this Agreement of the Company's plans, strategy and
personnel, as they may evolve during such period, and consult and assist the
Company in communicating appropriate information regarding such plans, strategy
and personnel to the public in order to effectively communicate the Company's
message.

               (c) Otherwise perform as the Company's consultant for media
relations and relations with media professionals.

         3.       Allocation of Time and Energies. The Consultant hereby
                  promises to perform and discharge faithfully the
                  responsibilities which may be assigned to the Consultant from
                  time to time by the officers and duly authorized
                  representatives of the Company in connection with the conduct
                  of its media relations and communications activities, so long
                  as such activities are in compliance with applicable laws and
                  regulations. Consultant and staff shall diligently and
                  thoroughly provide the consulting services required hereunder.
                  Although no specific hours-per-day requirement will be
                  required, Consultant and the Company agree that Consultant
                  will perform the duties set forth herein above in a diligent
                  and professional manner. The parties acknowledge and agree
                  that a disproportionately large amount of the

                                       1.
<PAGE>   2
         effort to be expended and the costs to be incurred by the Consultant
         and the benefits to be received by the Company are expected to occur
         within or shortly after the first two months of the effectiveness of
         this Agreement. It is explicitly understood that Consultant's
         performance of its duties hereunder will in no way be measured by the
         amount of actual media placed on the airwaves, print or other mediums.
         It is understood that the Company is entering into this Agreement with
         Medallion Media, LLC, a limited liability company and not any
         individual member of Medallion Media, and, as such, Consultant will not
         be deemed to have breached this Agreement if any member, officer or
         director of Medallion leaves the firm or dies or becomes physically
         unable to perform any meaningful activities during the term of the
         Agreement, provided the Consultant otherwise performs its obligations
         under this Agreement. Notwithstanding the foregoing, in the event
         Christi O'Connor leaves the Consultant, the Company shall be entitled
         to terminate this Agreement immediately.

         4.       Duties of the Company. IGCA's Chairman Roland Thomas will work
                  directly with Medallion's Managing Director to accomplish
                  their goals. All IGCA officers and employees shall be open to
                  the advise of Christi O'Connor in all areas where Medallion
                  provides its expertise.

         5.       Remuneration. As full and complete compensation for services
                  described in this Agreement, the Company shall compensate
                  Medallion Media, LLC as follows:

                  5.1 For undertaking this engagement and for other good and
valuable consideration, the Company agrees to issue to the Consultant a
"Commencement Bonus" consisting of 200,000 shares of the Company's common stock
fully paid and non-assessable and that the issuance and eventual transfer of
them to Consultant has been duly authorized by the Company. Company warrants
that all Securities issued to Consultant pursuant to this Agreement shall have
been validly issued, fully paid and non-assessable and that the issuance. Any
transfer of them to Consultant shall have been duly authorized by the Company's
board of directors. The said securities are to be delivered to Consultant within
ten (10) business days of the signing of this Agreement. Consultant shall have
"piggy back" rights to any registration statement the Company files. This
Commencement Bonus shall be issued to the Consultant immediately following
execution of this Agreement and shall, when issued and delivered to Consultant,
be fully paid and non-assessable. The Company understands and agrees that
Consultant has foregone significant opportunities to accept this engagement and
that the Company derives substantial benefit from the execution of this
Agreement and the ability to announce its relationship with Consultant. The
Commencement Bonus constitutes payment for Consultant's agreement to consult to
the Company and is a nonrefundable, non-apportionable, and non-ratable retainer.
If the Company decides to terminate this Agreement prior to April 1, 2002 for
any reason whatsoever, it is agreed and understood that Consultant will not be
requested or demanded by the Company to return any of the Commencement Bonus
paid to it hereunder. Further, if and in the event the Company is acquired in
whole or in part, during the term of this agreement, it is agreed and understood
Consultant will not be requested or demanded by the Company to return any of the
Commencement Bonus paid to it hereunder. It is further agreed that if at any
time during the term of this agreement, the Company or substantially all of the
Company's assets are merged with or acquired by another entity, or some other
change occurs in the legal entity that constitutes the Company, the Consultant
shall retain and will not be requested by the Company to return any of the
Commencement Bonus.

                                       2.
<PAGE>   3
         5.2 The Commencement Bonus shares issued pursuant to this agreement
shall be issued in the names of Christi O'Connor, 200,000 shares.

         5.3 With each transfer of shares of Common Stock to be issued pursuant
to this Agreement (collectively, the "Shares"), Company shall cause to be issued
a certificate representing the Common Stock and a written opinion of counsel for
the Company stating that said shares are validly issued, fully paid and
non-assessable and that the issuance and eventual transfer of them to Consultant
has been duly authorized by the Company. Company warrants that all Securities
issued to Consultant pursuant to this Agreement shall have been validly issued,
fully paid and non-assessable. The issuance and any transfer of them to
Consultant shall have been duly authorized by the Company's board of directors.

         5.4 Consultant acknowledges that the shares of Common Stock to be
issued pursuant to this Agreement (collectively, the "Shares") have not been
registered under the Securities Act of 1933, and accordingly are "restricted
securities" within the meaning of Rule 144 of the Act. As such, the Shares may
not be resold or transferred unless the Company has received an opinion of
counsel reasonably satisfactory to the Company that such resale or transfer is
exempt from the registration requirements of that Act.

         5.5 In connection with the acquisition of Shares hereunder, the
Consultant represents and warrants to the Company, to the best of its/his
knowledge, as follows:

         (a)      Consultant acknowledges that the Consultant has been afforded
                  the opportunity to ask questions of and receive answers from
                  duly authorized officers or other representatives of the
                  Company concerning an investment in the Shares, and any
                  additional information which the Consultant has requested.

         (b)      Consultant's investment in restricted securities is reasonable
                  in relation to the Consultant's net worth, which is in excess
                  of ten (10) times the Consultant's cost basis in the Shares.
                  Consultant acknowledges that an investment in the Shares is
                  speculative and involves the risk of loss. Consultant has the
                  requisite knowledge to assess the relative merits and risks of
                  this investment without the necessity of relying upon other
                  advisors, and Consultant can afford the risk of loss of his
                  entire investment in the Shares. Consultant is (i) an
                  accredited investor, as that term is defined in Regulation D
                  promulgated under the Securities Act of 1933, and (ii) a
                  purchaser described in Section 25102 (f) (2) of the California
                  Corporate Securities Law of 1968, as amended.

         (c)      Consultant is acquiring the Shares for the Consultant's own
                  account for long-term investment and not with a view toward
                  resale or distribution thereof except in accordance with
                  applicable securities laws.

         5.6 In addition, Company shall pay Consultant a monthly retainer of
five thousand dollars ($5,000) per month, payable on the first day of each month
during the tenure of this agreement. Payment should be mailed to: Medallion
Media 154 Del Oro Lagoon Novato, Ca. 94949.

                                       3.
<PAGE>   4
         6. Non-Assignability of Services. Consultant's services under this
contract are offered to Company only and may not be assigned by Company to any
entity with which Company merges or which acquires the Company or substantially
all of its assets. In the event of such merger or acquisition, all compensation
to Consultant herein under the schedules set forth herein shall remain due and
payable, and any compensation received by the Consultant may be retained in the
entirety by Consultant, all without any reduction or pro-rating and shall be
considered and remain fully paid and non-assessable. Notwithstanding the
non-assignability of Consultant's services, Company shall assure that in the
event of any merger, acquisition, or similar change of form of entity, that its
successor entity shall agree to complete all obligations to Consultant,
including the provision and transfer of all compensation herein, and the
preservation of the value thereof consistent with the rights granted to
Consultant by the Company herein, and to Shareholders.

                  7. Expenses. Consultant agrees to pay for all its expenses
                  (phone, labor, etc.), other than extraordinary items. These
                  extraordinary items include but are not limited to travel
                  required or requested by the Company, luncheons or dinners to
                  large groups of media professionals, print advertisements in
                  publications, etc. These items will be approved in advance by
                  the Company.

                  8. Indemnification. The Company warrants and represents that
                  all oral communications, written documents or materials
                  furnished to Consultant by the Company with respect to
                  affairs, operations, profitability and strategic planning of
                  the Company are accurate and Consultant may rely upon the
                  accuracy thereof without independent investigation. The
                  Company will protect, indemnify and hold Consultant harmless
                  against any claims or litigation including any damages,
                  liability, cost and reasonable attorney's fees as incurred
                  with respect thereto resulting from Consultant's communication
                  or dissemination of any said information, documents or
                  materials excluding any such claims or litigation resulting
                  from Consultant's communication or dissemination of
                  information not provided by the Company. The Consultant hereby
                  agrees to protect, indemnify and hold harmless Company against
                  any claims or litigation including any damages, liability,
                  cost and reasonable attorney's fees and costs as incurred with
                  respect thereto resulting from Consultant's communication or
                  dissemination of information not provided or authorized by the
                  Company.

         9. Legal Representation. The Company acknowledges that it has been
represented by independent legal counsel in the preparation of this Agreement.
Consultant represents that it has consulted with independent legal counsel
and/or tax, financial and business advisors, to the extent the Consultant deemed
necessary.

         10. Status as Independent Contractor. Consultant's engagement pursuant
to this Agreement shall be as independent contractor, and not as an employee,
officer or other agent of the Company. Neither party to this Agreement shall
represent or hold itself out to be the employer or employee of the other.
Consultant further acknowledges the consideration provided hereinabove is a
gross amount of consideration and that the Company will not withhold from such
consideration any amounts as to income taxes, social security payments or any
other payroll taxes. All such income taxes and other

                                       4.
<PAGE>   5
such payment shall be made or provided for by Consultant and the Company shall
have no responsibility or duties regarding such matters. Neither the Company or
the Consultant possess the authority to bind each other in any agreements
without the express written consent of the entity to be bound.

11. Attorney's Fee. If any legal action or any arbitration or other proceeding
is brought for the enforcement or interpretation of this Agreement, or because
of an alleged dispute, breach, default or misrepresentation in connection with
or related to this Agreement, the successful or prevailing party shall be
entitled to recover reasonable attorneys' fees and other costs in connection
with that action or proceeding, in addition to any other relief to which it or
they may be entitled.

12. Waiver. The waiver by either party of a breach of any provision of this
Agreement by the other party shall not operate or be construed as a waiver of
any subsequent breach by such other party.

13. Notices. All notices, requests, and other communications hereunder shall be
deemed to be duly given if sent by U.S. mail, postage prepaid, addressed to the
other party at the address as set forth herein below:

To the Company

Innovative Gaming Corporation of America
Roland C. Thomas
Chairman/CEO

333 Orville Wright Court
Las Vegas , NV 89119

       With a copy to:              Loren A. Piel, Esq.
                                    General Counsel
                                    Innovative Gaming Corporation of America
                                    333 Orville Wright Court
                                    Las Vegas, NV  89119

To the Consultant:

Christi O'Connor
Medallion Media
154 Del Oro Lagoon
Novato CA 94949

       It is understood that either party may change the address to which
notices for it shall be addressed by providing notice of such change to the
other party in the manner set forth in this paragraph.

                                       5.
<PAGE>   6
13. Choice of Law, Jurisdiction and Venue. This Agreement shall be governed by,
construed and enforced in accordance with the laws of the State of California.
The parties agree that San Francisco County, CA. will be the venue of any
dispute and will have jurisdiction over all parties.

14. Arbitration. Any controversy or claim arising out of or relating to this
Agreement, or the alleged breach thereof, or relating to Consultant's activities
or remuneration under this Agreement, shall be settled by binding arbitration in
California, in accordance with the applicable rules of the American Arbitration
Association, and judgment on the award rendered by the arbitrator(s) shall be
binding on the parties and may be entered in any court having jurisdiction as
provided by Paragraph 14 herein. The provisions of Title 9 of Part 3 of the
California Code of Civil Procedure, including section 1283.05, and successor
statutes, permitting expanded discovery proceedings shall be applicable to all
disputes that are arbitrated under this paragraph.

15. Neither party to this Agreement shall be deemed to be granted under the
terms of this Agreement any right, title or interest in or to the trademarks,
trade names, service marks, copyrights, patents or other intellectual property
of the other party. The Consultant and Company expressly acknowledge and agree
that neither party is granted under this Agreement the right to use or
incorporate in any materials, including without limitation marketing materials,
the name, logos, trademarks, or copyrights of the other party without the
advance approval of such party.

16. The parties shall perform all of their respective obligations under this
Agreement in compliance with all applicable federal, state and local laws,
ordinances, rules, regulations, codes or orders.

17. Complete Agreement. This Agreement contains the entire agreement of the
parties relating to the subject matter hereof. This Agreement and its terms may
not be changed orally but only by an agreement in writing signed by the party
against whom enforcement of any waiver, change, modification, extension or
discharge is sought.

18. Regulatory Matters.

         18.1 PROHIBITED CONTRACTS. Consultant acknowledges that the Company,
together with its parent and affiliated corporations, partnerships and companies
(collectively, "INNOVATIVE"), is subject to the provisions of the gaming laws,
rules and regulations of each jurisdiction in which Company is licensed to
conduct business including, without limitation, the following acts and any
rules, regulations or orders promulgated thereunder: (i) the Nevada Gaming
Control Act, (ii) the Mississippi Gaming Control Act, (iii) the New Jersey
Casino Control Act, and (iv) any other act, laws, statutes, ordinances, rules,
regulations or tribal compact governing any casino operation (collectively, the
"ACTS"), which prohibit a gaming licensee from entering into any contract or
agreement with (a) a person who is found unsuitable, who is denied a license, or
whose license was revoked by the gaming authorities of any state, nation, tribe
or any other gaming regulatory board, agency or commission (each a
"COMMISSION"), or (b) any business enterprise under control of such person
without the prior approval of the appropriate Commission.

         18.2 LICENSING AND REGULATORY REQUIREMENTS. Consultant hereby covenants
and agrees to use its best efforts to comply and to cause each of its directors,
officers, partners, members and employees (each an "AFFILIATE") to comply with
the requirements of all Acts to the extent the Acts apply. Consultant shall
complete and submit to the Company, and shall cause its Affiliates to

                                       6.
<PAGE>   7
complete and submit to the Company, background investigation consent forms and
shall supply such further information as may be reasonably necessary for Company
to meet its obligations under Company's Compliance Plan. If any Commission
requests that Consultant or any Affiliate (i) provide information to, (ii) file
an application with, (iii) respond to written or oral questions, (iv) cooperate
in a background investigation, (v) appear before such Commission, or (vi) comply
with any other request, Consultant agrees to use its best efforts to comply
fully, and to cause each Affiliate to comply fully, with such request.
Consultant hereby agrees to promptly provide the Company with written notice of
any Commission request and to keep the Company informed of the status of all
such requests and actions taken in response thereto. By entering the Agreement,
Consultant hereby represents and warrants that neither Consultant nor any
Affiliate has been found unsuitable or denied any license or approval by any
Commission. In the event that Consultant has been found unsuitable or has been
denied any license or approval, prior approval of each Commission is required
before the Agreement can be effective. If there has been a finding of
unsuitability or a denial of any license or approval, immediately contact the
Company's General Counsel either via telephone at 702-614-7199 or via letter to
Innovative Gaming Corporation of America, 333 Orville Wright Court, Las Vegas,
Nevada 89119 Attention: General Counsel.

         18.3 TERMINATION OF AGREEMENT. In the event (i) Consultant or any
Affiliate fails to abide by the requirements of this Section 18, or (ii)
Consultant or any Affiliate is found unsuitable or unqualified for any license,
registration, approval or finding of suitability, or otherwise to be associated
with a gaming licensee by any Commission, or (iii) Company determines in the
exercise of its sole and absolute discretion that Consultant's or any
Affiliate's continued association with Company may result in (a) the
disapproval, modification or non-renewal of any contract under which Company has
sole or shared authority to manage any gaming operations, or (b) the loss,
non-renewal or non-reinstatement of any license, registration, approval, finding
of suitability or franchise held by Company to conduct any portion of Company's
business, or (c) the imposition of any fine or the taking of any disciplinary
action by any Commission, Company shall be entitled immediately to terminate the
Agreement and any unexercised Options or unconverted Convertible and Company
shall thereafter have no liability to Consultant or any Affiliate for any loss,
costs, expense, loss of anticipated profits, direct damages, indirect damages,
consequential damages, punitive damages, or other damages or liability of any
nature whatsoever whether based on contract, tort or any other theories of
liability.

19. Neither party to this Agreement shall be deemed to be granted under the
terms of this Agreement any right, title or interest in or to the trademarks,
trade names, service marks, copyrights, patents or other intellectual property
of the other party. The Consultant and Company expressly acknowledge and agree
that neither party is granted under this Agreement the right to use or
incorporate in any materials, including without limitation marketing materials,
the name, logos, trademarks, or copyrights of the other party without the
advance approval of such party.

20. This Agreement is effective on the date of execution or, upon approval of
the Nevada Gaming Control Board or Nevada Gaming Commission (or any other gaming
authority with jurisdiction over the Company or its operations) if such approval
is required, whichever is later. Should any such prior approval be required, but
not obtained, then this Agreement shall be null and void.

                                       7.
<PAGE>   8
AGREED TO:

"Company"

INNOVATIVE GAMING CORPORATION OF AMERICA

Date:                              By: ______________________________
                                       Roland C. Thomas, Chairman/CEO

"Consultant"

MEDALLION MEDIA , LLC

Date:                                   By:_________________________________
                                           Christi O'Connor, Managing Director

                                       8.

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