Document:

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                                                                   EXHIBIT 10.42

                              EMPLOYMENT AGREEMENT

         This EMPLOYMENT AGREEMENT (this "Employment Agreement") is entered into
as of June 19, 2000, by and between Empress Casino Joliet Corporation
("Employer"), and Douglas Ferrari ("Employee").

                                    RECITALS

         WHEREAS, Employer operates a casino and hotel facility in Joliet,
Illinois; and

         WHEREAS, Employer desires to employ Employee and Employee desires to
accept such employment, pursuant to the terms of this Employment Agreement, and
in furtherance of such desires Employer and Employee wish to enter into this
Employment Agreement.

         NOW, THEREFORE, for good and valuable consideration, the receipt and
adequacy of which is hereby acknowledged, and in consideration of the mutual
covenants, promises and agreements herein contained, the parties hereto agree as
follows:

                                    AGREEMENT

         1. Definitions. All capitalized words referenced or used in this
Employment Agreement and not specifically defined herein shall have the meaning
set forth on Exhibit A, which is attached hereto and by this reference made a
part hereof.

         2. Term. This Employment Agreement shall become effective on the date
first above written (the "Commencement Date") and shall continue in effect for a
period terminating June 18, 2003 unless terminated sooner by Employer or
Employee pursuant to the terms set forth herein.

         3. Position to be Held by Employee. Employee is hereby employed and
hired by Employer to serve and act as the Vice President & Assistant General
Manager and shall perform each and all of the duties and shall have all of the
responsibilities described herein. Employee shall at all times report directly
to and take directives from the Senior Vice President & General Manager (the
"Supervisor") or such other executive of Employer as directed by Employer.

         4. Duties and Responsibilities.

            A. Duties. In Employee's capacity as Vice President & Assistant
General Manager of Employer, Employee shall devote his best efforts and his full
business time and attention to the performance of the duties customarily
incident to the position of Vice President & Assistant General Manager and to
such other duties as may be reasonably requested by the Supervisor in a manner
so as to maximize, to the best of the Employee's ability, the profitability of
the Employer, for and on behalf of the Employer in accordance with all
applicable laws and regulations. The authority of Employee to bind Employer
shall be as broad or as limited as may be determined from time to time by the
Supervisor or the Board of Directors of Employer (the "Board"). Employee
acknowledges and agrees that in connection with his employment he may be
required to travel on behalf of Employer.

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            B. Fiduciary Duty. In every instance, Employee shall carry out his
various duties and responsibilities in a fiduciary capacity on behalf of
Employer, in an effort to maximize the profitability of Employer. In no event
whatsoever shall Employee enter into any commitments or obligations, oral or
written, or take or omit to take any other action, the result of which would be
to create a conflict of interest between Employer and Employee, or the result of
which would (directly or indirectly) benefit Employee, any person or entity
associated with or affiliated with Employee, or any person or entity in any
manner involved in the gaming industry to the detriment of Employer. In all
instances, Employee shall perform his services and oversee his departments in a
thorough, competent, efficient and professional manner.

            C. Full-Time Effort. Employee acknowledges and agrees that the
duties and responsibilities to be discharged by Employee require a full-time
effort on the part of Employee, and accordingly, Employee agrees to devote his
full-time effort and resources for and on behalf of Employer, and agrees that he
will not, during the term hereof, enter into (directly or indirectly) any other
business activities or ventures, other than investments which are passive in
nature provided no such investment may exceed 5% of the equity securities of any
entity without the prior approval of the Board.

            D. Directives from the Supervisor. In all instances, Employee agrees
to carry out all of his duties and responsibilities as set forth herein pursuant
to the guidance, directives and instructions of the Supervisor and agrees that
at all times his authority shall be subordinate to such Supervisor. The wishes
and directives of the Supervisor shall prevail in all matters and decisions as
to which there is a disagreement between Employee and the Supervisor, and
Employee shall carry out any and all lawful directives from the Supervisor to
the best of his ability.

         5. Compensation. As compensation for the services to be rendered by
Employee pursuant to the terms of this Employment Agreement, Employee shall be
entitled to receive the following:

            A. a base salary of One Hundred Forty Thousand Dollars ($140,000.00)
per year (payable in equal bi-weekly installments), which may be adjusted
annually by a merit increase based upon Employer's existing policy and an annual
performance appraisal of Employee by Employer (the "Base Compensation");

            B. a discretionary bonus in an amount determined in accordance with
Employer's bonus plan, as may be amended from time to time by Employer in
Employer's sole discretion, (the "Bonus"); and

            C. the right to participate in any employee stock option or stock
purchase plan that may be adopted by Employer for its executive level employees,
such participation to be at a level commensurate with that of other executives
performing similar duties and at a similar compensation level as that of
Employee.

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         6. Fringe Benefits. It is understood and agreed that the Base
Compensation to be received by Employee is to be all-inclusive of other typical
fringe benefits provided to executives in a similar position as Employee;
provided, however, that Employee shall be entitled to the following benefits:

            A. reimbursement, on an on-going basis, for all reasonable
entertainment, travel and other similar expenses incurred in the performance of
his duties and responsibilities hereunder, such expenses to be subject to
budgets established for such purpose and the Employer's reimbursement
procedures;

            B. participation in such health coverage plans, policies and
practices for Employee and all members of his immediate family which Employer
may offer to its executives at a level commensurate with that of Employee in
Employer's sole discretion, from time to time;

            C. participation in such pension plans as Employer shall adopt for
all of the employees of Employer; it being understood and agreed that the only
pension plan that Employer has adopted at this time is a Section 401(k) form of
pension plan;

            D. participation in such deferred compensation plan as Employer may
adopt for employees of the Employer at a level commensurate with Employee; it
being understood that a deferred compensation plan exists at the time of the
execution of this Agreement;

            E. occasional use of a company vehicle as and when needed in
connection with the performance of Employee's duties and responsibilities;

            F. participation in Employer's vacation policy as may be in effect
from time to time for employees at a level commensurate with Employee; and

            G. participation in any agreement, which Employer may adopt in its
sole discretion allowing for payment to employees at a level commensurate with
Employee as a result of a change of control.

         7. Gaming License. Employee understands that it shall be necessary for
Employee to maintain in full force and effect at all times, gaming licenses as
required by certain jurisdictions in which Employer conducts gaming operations.
Accordingly, during the course of his employment, Employee agrees to use his
best efforts to obtain and maintain such licenses, to fully cooperate in the
investigation or investigations to be conducted in connection therewith and
otherwise to fully comply with all requirements of applicable Gaming Authorities
and Governmental Authorities.

         8. Termination.

            A. Termination for Cause. Employer may terminate Employee for
"cause" as provided in this Section 8. For purposes of this Employment
Agreement, "cause" means the occurrence of one or more of the following events:

               i. the revocation, suspension or failure to renew for a period in
excess of ninety (90) days, of any such gaming license due to an act or omission
(or alleged act or omission) of Employee upon which the Gaming Authorities or
Governmental Authorities have based their determination to revoke, suspend or
fail to renew any gaming license;

               ii. failure or refusal by Employee to observe or perform any of
the material provisions of this Employment Agreement or any other written
agreement with Employer, or to perform in a reasonably satisfactory manner all
of the material duties required of Employee under this Employment Agreement or
any other written agreement with Employer;

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               iii. commission of fraud, misappropriation, embezzlement or other
acts of dishonesty, or conviction for any crime punishable as a felony or a
gross misdemeanor involving dishonesty or moral turpitude or the use of illegal
drugs while on duty for Employer or on the premises of any facility operated by
Employer or one of its affiliated entities;

               iv. unreasonable refusal or failure to comply with the proper and
lawful directives of and/or procedures established by the Supervisor, Chief
Executive Officer, President, Chief Operating Officer, or the Board (or persons
of comparable or senior position); and/or

               v. the death of Employee or the mental or physical disability of
Employee to such a degree that Employee, in the reasonable judgment of a
licensed physician retained by Employer, is unable to carry out all of his
obligations, duties and responsibilities set forth herein for a period in excess
of ninety (90) days.

         Termination of Employee's employment for cause under Subsections
8(A)(i), 8(A)(iii) or 8(A)(v) above shall be effective immediately upon notice
thereof by Employer to Employee. Termination of Employee's employment for cause
under Subsections 8(A)(ii) or 8(A)(iv) above shall be effective upon fourteen
(14) days' prior notice thereof by Employer to Employee. The factual basis for
termination for cause shall be included within any such notice of termination.

            B. Termination for Cause or Resignation. Upon termination of
Employee's employment with Employer (i) by Employer for cause or (ii) upon the
resignation of Employee, all compensation as defined by Section 5 herein and all
fringe benefits as defined by Section 6 hereof will cease at the effective date
of termination.

            C. Termination Without Cause or Expiration of Term. Employer, in its
discretion, may terminate Employee at any time without cause. If Employee is
terminated by Employer without cause, Employer shall pay Employee an amount
equal to six (6) months of his Base Compensation, less federal, state and local
withholding taxes. In the event that this Employment Agreement expires and
Employee is not retained by Employer in a position of similar or increased
compensation and prestige, Employee shall receive an amount equal to six (6)
months of his Base Compensation, less federal, state and local withholding
taxes. All fringe benefits as described in this Employment Agreement, or
otherwise provided to Employee, including life and disability insurance, shall
terminate immediately upon the termination of the Employee.

         9. Survival of Certain Covenants. The covenants not to compete, solicit
or hire and the confidentiality agreements set forth in Sections 10 and 11
herein below shall continue to apply beyond termination in the manner and to the
extent set forth herein.

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         10. Covenants Not to Compete, Solicit or Hire.

             A. Covenant Not to Compete. If Employee ceases to be employed by
Employer for any reason whatsoever, Employee shall not, for a period of time
equal to six (6) months following the effective date of his termination,
directly or indirectly, whether as principal, manager, agent, consultant,
officer, director, stockholder, partner, investor, lender or employee, or in any
other capacity, carry on, be engaged in or employed by or be a consultant to or
to have any financial interest in any other casino or gaming operation of any
kind conducting business within one hundred (100) miles of any gaming facility
principally owned or controlled by Jack B. Binion, Employer, or Employer's
parent company, affiliates, subsidiaries or related companies, unless such
gaming facility is located in Las Vegas, Reno, Lake Tahoe or Atlantic City.
Employer and Employee agree that such covenant not to compete is a condition of
Employee's employment and that the covenant not to compete has been given by
Employee to Employer for full and adequate consideration. Nothing contained
herein shall prohibit Employee from owning or holding stock in a casino or
gaming operation wherever located, provided that such entity or entities
operating and/or owning said gaming or casino operation is publicly traded and
the stock owned or held by the Employee does not constitute more than one
percent (1%) of the outstanding equity interest of said gaming or casino
operation.

             B. Covenant Not to Solicit or Hire. If Employee ceases to be
employed by Employer for any reason whatsoever, Employee shall not, for a period
of time equal to one (1) year following the effective date of his termination,
directly or indirectly, hire, retain or solicit, or cause any other employer of
his or any other person who has retained Employee as a consultant or independent
contractor to hire, retain or solicit, as an employee, consultant, independent
contractor in a supervisory capacity or otherwise any person who was at any time
during the period commencing on the date three (3) months prior to the
Commencement Date and ending on the date of the termination of Employee's
employment hereunder, an employee of or consultant or independent contractor in
a supervisory capacity to Employer, or any other gaming operation principally
owned or controlled by Jack B. Binion, Employer, or Employer's parent company,
affiliates, subsidiaries or related companies.

         11. Nondisclosure of Confidential Information.

             A. Definition of Confidential Information. For purposes of this
Employment Agreement, "Confidential Information" means any information that is
not generally known to the public that relates to the existing or reasonably
foreseeable business of Employer. Confidential Information includes, but is not
limited to, information contained in or relating to the customer lists, account
lists, price lists, product designs, marketing plans or proposals, acquisition
or growth plans or proposals, customer information, merchandising, selling,
accounting, finances, knowhow, trademarks, trade names, trade practices, trade
secrets and other proprietary information of Employer.

             B. Employee Shall Not Disclose Confidential Information. Employee
will not, during the term of Employee's employment and following the termination
of this Employment Agreement, until such time as the confidential information
becomes generally known to or readily ascertainable by proper means by the
public, use, show, display, release, discuss, communicate, divulge or otherwise
disclose Confidential Information to any unauthorized person, firm, corporation,
association or other entity for any reason or purpose whatsoever, without the
prior written consent or authorization of Employer. Nothing contained herein
shall be interpreted or construed as restraining or preventing Employee from
using Confidential Information in the proper conduct of services to be rendered
by Employee on behalf of Employer pursuant to this Employment Agreement. Mistake
or lack of knowledge as to the status of information wrongly disclosed or used
by Employer shall not serve as a defense to this provision.

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             C. Rights to Publish. During the term of this Employment Agreement
and thereafter, Employee shall not produce for publication, circulation or
production any movies or writing of any kind, including but not limited to
articles, books, manuscripts and playwrights about, concerning, discussing, or
mentioning Jack Binion, or any person related to Jack Binion by blood or
marriage whether such related person is now or at a later date is deceased.
Further, Employee shall not disclose any information to any party, or consult
with any person or entity engaged in or making any efforts to publish, circulate
or produce any writing, movie or television program of any kind whatsoever
including but not limited to an article, book, manuscript, or playwright
concerning Jack Binion, or any person related to Jack Binion by blood or
marriage whether such related person is now or at a later date deceased.

             D. Scope. Employee's covenant in Subsection 11(B) above not to
disclose Confidential Information shall not apply to information which, at the
time of such disclosure, may be obtained from sources other than from Employer,
or its agents, lawyers or accountants, provided however, that such information
received is not received from sources which received the information in an
improper manner or against the wishes of Employer.

             E. Title. All documents and other tangible or intangible property
relating in any way to the business of Employer which are conceived or generated
by Employee or come into Employee's possession during Employee's employment with
Employer shall be and remain the exclusive property of Employer, and Employee
agrees to return immediately to Employer, upon its request, all such documents
and tangible and intangible property, including, but not limited to, all
records, manuals, books, blank forms, documents, letters, memoranda, notes,
notebooks, reports, data, tables, magnetic tapes, computer disks, calculations
or copies thereof, which are the property of Employer and which relate in any
way to the business, employees, customers, products, services, practices or
techniques of Employer, as well as all other property of Employer, including but
not limited to, all documents which in whole or in part contain any Confidential
Information of Employer which in any of these cases are in Employee's possession
or under Employee's control.

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

         12. Reasonableness of Terms. The Employer and the Employee stipulate
and agree that the terms and covenants contained in Section 10 and Section 11
herein are fair and reasonable in all respects, including the time period and
geographical coverage in Section 10, that these restrictions are designed for
the reasonable protection of the Employer's business and Employer's legitimate
interests therein, do not stifle the inherent skills or experience of Employee
and would not operate as a bar to Employee's sole means of earning wages. In the
event that these restrictions are found to be overly broad or unreasonable, the
Employer and the Employee agree that such restrictions shall be severable and
enforceable on such modified terms as may be deemed reasonable and enforceable
by a court of competent jurisdiction.

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         13. Representations and Warranties.

         Employee hereby represents and warrants to Employer, and its affiliated
or related entities that:

             A. the execution, delivery and performance by Employee of this
Employment Agreement will not conflict with, violate the terms of or create a
default under any other agreement by which Employee is bound, including without
limitation Employee's present employment or similar agreements, whether oral or
written;

             B. no Gaming Authority or other Governmental Authority has ever
denied or otherwise declined to issue any gaming license or related
authorization applied for by Employee;

             C. Employee is not aware of any facts which, if known to any Gaming
Authority or other Governmental Authority, would cause the refusal of his
application for, or renewal of, any gaming licenses required to be obtained by
Employee pursuant to Section 7 of this Employment Agreement;

             D. Employee is not aware of any mental, physical or emotional
condition which currently affects Employee, and which might result in Employee's
being unable to carry out all of his duties, obligations and responsibilities
set forth herein;

             E. Employee understands and agrees that Employer is entering into
this Employment Agreement in strict reliance upon the representations and
warranties of Employee set forth herein, and that a breach of any of said
representations and warranties by Employee would constitute a default hereunder;
and

             F. Employee has received and reviewed Employer's current vacation
policy and understands and agrees to its terms.

         14. Entire Agreement. This Employment Agreement constitutes the entire
agreement of the parties hereto with respect to the subject matter set forth
herein, and supersedes any and all previous oral or written agreements,
understandings or discussions between the parties hereto with respect to the
subject matter set forth herein and the employment of Employee.

         15. All Amendments in Writing. This Employment Agreement may be amended
only pursuant to a written instrument executed by Employer and Employee. It
shall not be reasonable for either Employer or Employee to rely on any oral
statements or representations by the other party that are in conflict with the
terms of this Employment Agreement.

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         16. Arbitration. In the event of any dispute or controversy between
Employer and Employee with respect to any of the matters set forth herein, both
Employer and Employee agree to submit such dispute or controversy to binding
arbitration, to be conducted in Las Vegas, Nevada pursuant to the then
prevailing rules and regulations of the American Arbitration Association. In
such arbitration, the prevailing party shall be entitled, in addition to any
award made in such proceeding, to recover all of its costs and expenses incurred
in connection therewith, including, without limitation, attorneys' fees. This
provision does not in any way affect Section 23 of this Employment Agreement.

         17. Governing Law. This Employment Agreement shall be governed and
construed in accordance with the internal laws of the State of Illinois. The
terms of this Employment Agreement are intended to supplement but not displace
the parties' respective rights under the Illinois Trade Secrets Act, 765 ILCS
1065/1, et seq., as amended, and any similar laws adopted in Nevada, Indiana,
Mississippi or Louisiana.

         18. Notices. All notices required or desired to be given under this
Employment Agreement shall be in writing and shall be deemed to have been duly
given (i) on the date of service if served personally on the party to whom
notice is to be given, (ii) on the date of receipt by the party to whom notice
is to be given if transmitted to such party by telefax, provided a copy is
mailed as set forth below on the date of transmission, or (iii) on the third day
after mailing if mailed to the party to whom notice is to be given by registered
or certified mail, return receipt requested, postage prepaid, to at the
following addresses, or to such other address as may be provided from time to
time by one party to the other:

             If to Employer: Empress Casino Joliet Corporation
                             2300 Empress Drive
                             Joliet, IL 60436
                             Attn: Sr. Vice President & General Manager

             If to Employee: Mr. Douglas Ferrari
                             Highpoint Community
                             1354 South Highpoint Drive
                             Apartment 201
                             Romeoville, Illinois 60446

         19. Assignment. This Employment Agreement shall be binding upon and
inure to the benefit of the parties hereto and their respective heirs,
successors, administrators and assigns. Notwithstanding the foregoing, Employee
understands and agrees that the nature of this Employment Agreement is a
personal services agreement, and that Employer is entering into this Employment
Agreement based upon the specific services to be rendered personally by Employee
hereunder; and accordingly, Employee shall not assign, transfer or delegate in
any manner any of his duties, responsibilities or obligations hereunder.

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<PAGE>   9

         20. No Third Party Beneficiaries. This Employment Agreement is solely
for the benefit of Employee, Employer, Employer's affiliated or related
companies and Employee's majority owner Jack Binion and his heirs, and in no
event shall any other person or entity by deemed or construed as a third party
beneficiary of any of the provisions or conditions set forth herein.

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

         22. Construction. Whenever possible, each provision of this Employment
Agreement shall be interpreted in such a manner as to be effective or valid
under applicable law, but if any provision of this Employment Agreement shall be
prohibited by or invalid under applicable law, such provision shall be
ineffective only to the extent of such prohibition or invalidity without
invalidating the remainder of such provision or the remaining provisions of this
Employment Agreement. Without limiting the generality of the foregoing, if any
court determines that the term or the business or geographic scope of the
covenants contained in Subsections 10(A) or 10(B) is impermissible due to the
extent thereof, said covenant shall be modified to reduce its term and/or
business or geographic scope, as the case may be, to the extent necessary to
make such covenant valid, and said covenant shall be enforced as modified.

         23. Withholding. Employer shall withhold from any payments due to
Employee hereunder, all taxes, FICA or other amounts required to be withheld
pursuant to any applicable law.

         24. Injunctive Relief. Employee and Employer each acknowledge that the
provisions of Sections 10 and 11 are reasonable and necessary, that the damages
that would be suffered as a result of a breach or threatened breach by Employee
of Sections 10 and/or 11 may not be calculable, and that the award of a money
judgment to Employer for such a breach or threatened breach thereof by Employee
would be an inadequate remedy. Consequently, Employee agrees that in addition to
any other remedy to which Employer may be entitled in law or in equity, the
provisions of Sections 10 and 11 may be enforced by Employer by injunctive or
other equitable relief, including a temporary and/or permanent injunction
(without proving a breach thereof), and Employer shall not be obligated to post
bond or other security in seeking such relief. Employee hereby waives any and
all objections he may have and consents to the jurisdiction of any state or
federal court located in the States of Nevada, Mississippi, Illinois, Indiana or
Louisiana and hereby waives any and all objections to venue.

         25. Counterparts. This Employment Agreement may be executed in any
number of counterparts, each of which shall be deemed an original but all of
which together shall constitute a single instrument.

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         IN WITNESS WHEREOF, the undersigned have executed this Employment
Agreement as of the day and year first above written.

                                        "EMPLOYER"

                                        By:
                                            ------------------------------------
                                            David Fendrick
                                            Sr. Vice President & General Manager

                                        "EMPLOYEE"

                                        ----------------------------------------
                                        Douglas Ferrari

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                                    EXHIBIT A

                                   DEFINITIONS

         All capitalized terms referenced or used in this Employment Agreement
and not specifically defined therein shall have the meaning set forth below in
this Exhibit A, which is attached to and made a part of this Employment
Agreement for all purposes.

         Gaming Authorities. The term "Gaming Authorities" shall mean all
agencies, authorities and instrumentalities of any state, nation (including
Native American nations) or other governmental entity or any subdivision
thereof, regulating gaming or related activities in the United States or any
state or political subdivision thereof, including, without limitation, the
Nevada, Illinois, Indiana, Mississippi and Louisiana gaming commissions.

         Governmental Authority. The term "Governmental Authority" means the
governments of (i) the United States of America, (ii) the State of Mississippi,
(iii) Tunica County, (iv) the State of Louisiana, (v) Bossier City, Louisiana,
(vi) the State of Illinois, (vii) Joliet, Illinois, (viii) the State of Indiana,
(ix) Hammond, Indiana and (x) any other political subdivision of any state of
the United States in which a casino facility is operated by Employer and any
court or political subdivision, agency, commission, board or instrumentality or
officer thereof, whether federal, state or local, having or exercising
jurisdiction over Employer or a facility operated by Employer, and including,
without limitation, any Gaming Authority.

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                                    ADDENDUM

         The following is an addendum to the Employment Agreement dated June 19,
2000, entered into by and between Empress Casino Joliet Corporation ("Employer")
and Douglas Ferrari ("Employee").

         Any and all terms utilized in this addendum which are defined in the
Employment Agreement shall have the meaning attributed to them in the Employment
Agreement. The contents of this addendum are an integral part of the Employment
Agreement and should there be any conflict in terms and conditions, this
addendum shall control.

         Employer and Employee agree as follows:

         1. Position To Be Held By Employee. Effective January 29, 2001,
            Employee is hereby employed by Employer to serve and act as the
            Senior Vice President & General Manager and shall perform each and
            all of the duties and shall have all of the responsibilities
            customarily incident to the position of Senior Vice President &
            General Manager and such other duties as may be reasonably requested
            by the President of the Employer. Employee shall at all times report
            directly to and take directives from the President of Employer.

         2. Employee's Base Compensation. Effective January 29, 2001, Employee's
            Base Compensation shall be Two Hundred Thousand Dollars
            ($200,000.00) per year.

         All terms and conditions of the Employment Agreement not modified by
this addendum shall remain in full force and effect.

         By their signatures below, the parties to this addendum to the
Employment Agreement agree to its terms and conditions.

EMPLOYER                                    EMPLOYEE

By:
    --------------------------------        ------------------------------------
Its:                                        Douglas Ferrari
     -------------------------------
Date:                                       Date:
     -------------------------------              ------------------------------

                                       12<PAGE>   1
                                                                   Exhibit 10.43

                          EXECUTIVE SEVERANCE AGREEMENT

        THIS AMENDED AGREEMENT, dated as of August 21, 2000 (this "Agreement"),
by and between Horseshoe Gaming Holding Corp., a Delaware corporation (the
"Company"), and Roger P.Wagner (the "Executive").

        WHEREAS, the purpose of this Agreement is to afford the Executive
additional security concerning his employment with the Company by providing for
certain payments to the Executive in the event that there is a Change in Control
(as defined below) of the Company; and

        WHEREAS, the provisions of this Agreement shall only be effective in the
event that there is a Change in Control, and nothing in this Agreement extends
or expands the Executive's present rights concerning employment with the Company
in the absence of a Change in Control or is intended to create a contract,
guarantee or promise of continued employment by the Company or alter the
compensation that the Executive could reasonably expect in the absence of a
Change in Control.

        NOW, THEREFORE, in consideration of the premises and mutual covenants
herein, and for good and valuable consideration, the receipt and adequacy of
which is hereby acknowledged, the parties agree as follows:

        SECTION 1. Term of Agreement; Certain Definitions.

        1.1 Term of Agreement. This Agreement shall be effective immediately
upon its execution by the parties hereto and shall remain in effect until the
earliest of: (A) the termination of the Executive's employment with the Company
for any reason whatsoever prior to the announcement of a transaction which, if
consummated, would constitute a Change in Control; (B) the termination of
Executive's employment with the Company following the announcement of a
transaction which, if consummated, would constitute a Change in Control by
reason of death or Disability (as defined in the Employment Agreement) or by the
Company for Cause; (C) the termination of Executive's employment with the
Company for Cause within ninety (90) days following a Change in Control; or (D)
ninety (90) days after the date of a Change in Control.

        1.2 Certain Definitions. The following terms, as used in this Agreement,
shall be deemed to mean the following:

               (A) "Cause" shall mean the occurrence of one or more of the
following events:

                      (i) The failure of Executive to obtain any of the gaming
        licenses required pursuant to Section 7 of the Employment Agreement,
        dated as of November 3, 1998, by and between Horseshoe Gaming, Inc.
        ("HGI") and Executive (the "Employment Agreement"), within a reasonable
        period of time following employment, or obtain any of the gaming
        licenses required for Executive to perform his duties under the
        Employment Agreement,

<PAGE>   2
        within a reasonable period of time, or the revocation, suspension or
        failure to renew for a period in excess of ninety (90) days, of any such
        gaming license for any reason;

                      (ii) Failure or refusal by Executive to observe or perform
        any of the material provisions of the Employment Agreement, or any
        written agreement with the Company, or to perform in a reasonably
        satisfactory manner all of the material duties required of Executive
        under the Employment Agreement or any written agreement with the
        Company;

                      (iii) Executive being charged with or indicted for the
        commission of fraud, misappropriation, embezzlement or other acts of
        dishonesty, or conviction or please of nolo contendere for any crime
        punishable as a felony or a gross misdemeanor involving dishonesty, or
        moral turpitude or the use of illegal drugs while on duty for the
        Company or HGI or on the premises of the operating casino and hotel
        facilities in Tunica, Mississippi, Bossier City, Louisiana, Hammond,
        Indiana and Joliet, Illinois; and/or

                      (iv) Unreasonable refusal or failure to comply with the
        proper and lawful directives of and/or procedures established by the CEO
        or the Board of Directors of the Company or HGI (or persons of
        comparable or senior position).

        Termination of Executive's employment for Cause under Subsections
1.2(A)(i) or 1.2(A)(iii) above shall be effective immediately upon notice
thereof by the Company or HGI to Executive. Termination of Executive's
employment for Cause under Subsections 1.2(A)(ii) or 1.2(A)(iv) above shall be
effective upon fourteen (14) days' prior notice thereof by the Company or HGI to
Executive. The factual basis for termination for cause shall be included within
any such notice of termination.

               (B) "Change in Control" shall mean each of the following
occurring:

                      (i) prior to the completion of an Initial Public Offering
        by the Company, the failure at any time of (a) Jack B. Binion, (b)
        Phyllis Cope, (c) Peri Cope Howard or any Affiliate of the persons
        described in clause (a), (b) or (c) above (collectively, "Excluded
        Persons") as a group to own and control at least forty percent (40%) of
        the issued and outstanding Equity Interests of the Company;

                      (ii) after the completion of an Initial Public Offering by
        the Company, the acquisition, in one or more transactions, of beneficial
        ownership by (i) any person or entity (other than an Excluded Person) or
        (ii) any group of persons or entities (excluding any group in which
        Excluded Persons beneficially own in the aggregate at least seventy-five
        percent (75%) of the equity and voting interests beneficially owned by
        the group) who constitute a group (within the meaning of Section
        13(d)(3) of the Securities Exchange Act of 1934, as amended (the
        "Exchange Act")), in either case, of Equity Interests of the Company
        such that, as a result of such acquisition, such person, entity or group
        beneficially owns (within the meaning of Rule 13d-3 under the Exchange
        Act), directly or indirectly, thirty percent (30%) or more of the voting
        power of Equity Interests of the Company entitled to vote in the
        election of directors of the Company then outstanding; provided,
        however, that no Change of Control shall be deemed to have occurred if
        (x) Excluded Persons beneficially own, in the

                                      -2-

<PAGE>   3

        aggregate, at such time, a greater percentage of the total voting power
        of Equity Interests of the Company entitled to vote in the election of
        directors of the Company than such other person, entity or group or (y)
        at the time of such acquisition, Excluded Persons (or any of them)
        possess the ability (by contract or otherwise) to elect, or cause the
        election of, a majority of the members of the Board of Directors of the
        Company;

                      (iii) any merger or consolidation of the Company with or
        into any person or any sale, transfer or other conveyance, whether
        direct or indirect, of all or substantially all of the assets of the
        Company on a consolidated basis, in one transaction or a series of
        related transactions, if immediately after giving effect to such
        transaction or transactions, any person or group (excluding any group in
        which Excluded Persons beneficially own in the aggregate at least
        seventy-five percent (75%) of the equity and voting interests
        beneficially owned by the group) is or becomes the beneficial owner,
        directly or indirectly, of thirty percent (30%) or more of the total
        voting power of Equity Interests of the surviving or transferee person;
        provided, however, that no Change of Control shall be deemed to have
        occurred if (A) Excluded Persons beneficially own, in the aggregate, at
        such time, (x) forty percent (40%) or more of the total voting power of
        Equity Interests of the surviving or transferee person and (y) a greater
        percentage of the total voting power of Equity Interests of the
        surviving or transferee Person than such other person or group or (B)
        after giving effect to such transaction, Excluded Persons (or any of
        them) possess the ability (by contract or otherwise) to elect, or cause
        the election of, a majority of the members of the Board of Directors of
        the Company;

                      (iv) during any period of twelve (12) consecutive months
        after January 1, 1999, individuals who at the beginning of any such
        twelve (12) month period constituted the Board of Directors of the
        Company (together with any new directors whose election by such Board of
        Directors or whose nomination for election by shareholders of the
        Company was approved by a vote of a majority of the directors then still
        in office who were either directors at the beginning of such period or
        whose election or nomination for election was previously so approved,
        including new directors designated in or provided for in an agreement
        regarding the merger, consolidation or sale, transfer or other
        conveyance, of all or substantially all of the assets of the Company, if
        such agreement was approved by a vote of such majority of directors),
        cease for any reason to constitute a majority of the Board of Directors
        of the Company then in office;

                      (v) the Company adopts a plan of liquidation; or

                      (vi) any sale, transfer or other conveyance, whether
        direct or indirect, of all or substantially all of the assets (whether
        consisting of stock of subsidiaries, interests in partnerships or
        limited liability partnerships or companies or real or personal,
        tangible and intangible property) comprising any three (3) of the
        Company's four (4) current casinos in any one transaction or a series of
        related transactions to a person other than an Excluded Person.

                For all purposes of this Agreement, a Change in Control shall be
        considered "announced" on the date the Company (or a person authorized
        by the Company) shall issue

                                      -3-

<PAGE>   4
        a press release or otherwise make a statement intended for public
        dissemination describing or announcing the execution of a definitive
        agreement relating to a transaction which, if consummated, will
        constitute a Change in Control, provided that either that transaction or
        another transaction constituting a Change in Control and resulting from
        such announcement is subsequently consummated.

                For purposes of the foregoing, the "Equity Interest" of any
        person means any shares, interests, participations or other equivalents
        (however designated) in such person's equity, and shall in any event
        include any and all shares, interests, rights to purchase (other than
        convertible or exchangeable Indebtedness that is not itself otherwise
        capital stock), warrants, options, participations or other equivalents
        of or interests (however, designated) in stock issued by, or
        partnership, participation or membership interests in such person.

                For purposes of the foregoing, "Affiliate", as applied to any
        person, means any other person directly or indirectly controlling,
        controlled by, or under common control with, that person, any spouse,
        immediate family member or relative of such person or any trust for the
        benefit of, or established by, any of such persons. For the purposes of
        this definition, "control" (including, with correlative meanings, the
        terms "controlling", "controlled by" and "under common control with"),
        as applied to any person, means the possession, directly or indirectly,
        of the power to direct or cause the direction of the management and
        policies of that person, whether through the ownership of voting
        securities or by contract or otherwise.

        SECTION 2. Compensation Upon Change in Control.

        2.1 Payment Upon Change in Control. If Executive is employed by the
Company on the date of the announcement of a transaction which, if consummated,
would constitute a Change in Control and either (i) Executive is employed by the
Company ninety (90) days after the date the Change in Control shall occur or
(ii) the Executive's employment is terminated by the Company for any reason
other than Cause within ninety (90) days after the Change in Control or by
reason of the Executive's death or Disability (as defined in the Employment
Agreement), then ninety (90) days following the closing of the transaction
constituting the Change in Control the Company shall pay to the Executive (or in
the event of the Executive's death, the Executive's estate) a lump-sum cash
amount equal to the product of (x) 2.99 and (y) the sum of (1) Executive's
annual base salary as then in effect and (2) the maximum amount of any bonus or
incentive compensation to which the Executive would be entitled for the year in
which the Change in Control occurred (calculated by assuming that all
performance goals or targets are satisfied and that the Executive was employed
for the entire year).

        2.2 Re-instatement of Equity Incentives. In the event of a Change in
Control where the Executive's employment by the Company had been terminated for
any reason other than Cause after the date of the announcement of a transaction
which, if consummated, would constitute a Change in Control, then,
notwithstanding any term or provision in any stock option or stock appreciation
right or any equity incentive plan or agreement to the contrary, on the date of
the Change of Control any stock options or stock appreciation rights which were
canceled by reason of such termination of employment shall be re-instated and
instead treated as if for all purposes of such stock options or

                                      -4-

<PAGE>   5
stock appreciation rights the Executive had remained in the employ of the
Company until one day after such Change in Control.

        2.3 Termination of Employment Agreement and Rights to Other Severance
Payments. In the event of a Change in Control, then notwithstanding any
inconsistent term or provision of the Employment Agreement, the Executive and
the Company agree that the Executive's Employment Agreement shall terminate as
of the date of such Change of Control. Thereupon, the Executive shall become an
"at will" employee of the Company, and neither the Company nor the Executive
shall have any further duties, obligations or liabilities to the other under, or
by reason of, such Employment Agreement. Furthermore, the receipt by the
Executive of the payments under this Agreement shall be in lieu of any other
payments then or thereafter required to be made to the Executive as a result of
the termination of his employment, whether provided under the Employment
Agreement, under any other contract or agreement to which the Company, HGI and
Executive are a party or under any severance policy, practice or plan of the
Company or HGI. The foregoing is not intended to diminish, reduce or eliminate
any other benefits or payments to which the Executive is otherwise entitled
under any benefit plan or arrangement of the Company or any affiliate, including
by way of illustration and not by way of limitation, any pension,
profit-sharing, 401(k), stock bonus or deferred compensation plan or any
medical, dental, hospitalization, life insurance or other welfare benefit plan
or program of the Company.

        2.4 Limitation on Payments. Notwithstanding any other provision herein
to the contrary, in the event that the Executive becomes entitled to any
payments under this Agreement and any portion of such payments or benefits, when
combined with any other payments or benefits provided to the Executive
(including, without limiting the generality of the foregoing, by reason of any
stock options), in the absence of this Section 2.4, would be subject to the tax
(the "Excise Tax") imposed by Section 4999 of the Internal Revenue Code of 1986,
as amended (the "Code"), then the amount payable to the Executive under this
Agreement shall be reduced such that none of the amounts payable to the
Executive under this Agreement and any other payments or benefits received or to
be received by the Executive in connection with a Change in Control or the
termination of the Executive's employment (whether pursuant to the terms of this
Agreement or any other plan, arrangement or agreement with the Company, any
person whose actions result in a Change in Control or any person having such a
relationship with the Company or such person as to require attribution of stock
ownership between the parties under Section 318(a) of the Code) shall be treated
as "parachute payments" within the meaning of Section 280G(b)(2) of the Code.
For purposes of applying the foregoing sentence, if in the opinion of tax
counsel selected by the Company's independent auditors and acceptable to the
Executive, such payments or benefits (in whole or in part) represent reasonable
compensation for services actually rendered within the meaning of Section
280G(b)(4) of the Code, then such amounts shall be excluded from any such
calculation. Furthermore, in determining the maximum amount of the payments to
the Executive which would not constitute a parachute payment within the meaning
of Sections 280G(b)(1) and (4), the value of any non-cash benefits or any
deferred payment or benefit shall be determined by the Company's independent
auditors in accordance with the principles of Sections 280G(d)(3) and (4) of the
Code. Further, it is the intent of the parties that this Section 2.4 shall be
applied to the payments to the Executive notwithstanding the benefits of any
exemptions provided in Section 280G(b)(5) of the Code for any payments by reason
of the Company's status immediately before the Change in

                                      -5-

<PAGE>   6
Control.

        2.5 Escrow. To facilitate and ensure the payment of the amount provided
in Section 2.1 hereof to Executive and other executives of the Company who are
parties to executive severance agreements with the Company substantially similar
to this Agreement (collectively, the "Affected Executives"), the Company agrees
to establish, at the time of any Change in Control, an escrow arrangement to
provide for the payment upon satisfaction of the applicable conditions of all
amounts payable to the Affected Executives by reason of any Change in Control.
The escrow agent therefore and the terms and provisions of the escrow agreement
shall be mutually satisfactory to the Company and a majority of the Affected
Executives. The Company shall pay all of the costs and expenses associated with
any such escrow arrangement.

        SECTION 3. Arbitration. In the event of any dispute or controversy
between the Company and Executive with respect to any of the matters set forth
herein, both the Company and Executive agree to submit such dispute or
controversy to binding arbitration, to be conducted in Illinois pursuant to the
then prevailing rules and regulations of the American Arbitration Association.
In such arbitration, the prevailing party shall be entitled, in addition to any
award made in such proceeding, to recover all of its costs and expenses incurred
in connection therewith, including, without limitation, attorneys' fees.

        SECTION 4. No Mitigation. The Executive shall have no obligation to take
any action to mitigate or offset any amounts payable by the Company hereunder by
seeking other employment or otherwise, nor shall the amount of any payment
provided for in this Agreement be reduced by any compensation earned by the
Executive as the result of employment by another employer after the date of
termination of the Executive's employment or otherwise.

        SECTION 5. Notices. All notices required or desired to be given under
this Agreement shall be in writing and shall be deemed to have been duly given:
(i) on the date of service if served personally on the party to whom notice is
to be given; (ii) on the date of receipt by the party to whom notice is to be
given if transmitted to such party by courier or by telefax, provided that in
the case of a copy sent by telefax, a copy is mailed as set forth below on the
date of transmission; or (iii) on the third day after mailing if mailed to the
party to whom notice is given by registered or certified mail, return receipt
requested, postage prepaid to the following addresses, or to such other address
as may be provided from time to time by one party to the other:

               To the Company:

                      Horseshoe Gaming Holding Corp.
                      Empress Casino Joliet
                      2300 Empress Drive
                      Joliet, IL  60436
                      Attention:  Mr. Jack B. Binion

               with a copy to:

                      Swidler Berlin Shereff Friedman, LLP

                                      -6-

<PAGE>   7
                      The Chrysler Building
                      405 Lexington Avenue
                      New  York, New York 10714
                      Attention:  Martin Nussbaum, Esq.
                      Fax: (212) 891-9598

               To the Executive:

                      Mr. Roger P.Wagner

        SECTION 6. General Provisions

        6.1 Amendments. This Agreement is intended to amend and restate the
Agreement between the Company and the Executive, dated February 2000, and the
terms and provisions of this amendment and restatement sets forth the sole
obligations and liabilities of the Company upon a Change of Control. This
Agreement may be further amended only pursuant to a written instrument executed
by the Company and Executive. It shall not be reasonable for either the Company
or Executive to rely on any oral statements or representations by the other
party that are in conflict with the terms of this Agreement.

        6.2 Severability. If any provision of this Agreement shall be determined
to be invalid or unenforceable by a court of competent jurisdiction, the
remaining provisions of this Agreement shall remain in full force and effect to
the fullest extent permitted by law.

        6.3 Successors and Assigns. This Agreement and the obligations of the
Company hereunder shall be binding upon and shall be assumed by any successor of
the Company including without limitation, any corporation or corporations
acquiring directly or indirectly all or substantially all of the assets of the
Company, whether by merger, consolidation, sale or otherwise (and such successor
shall thereafter be deemed "the Company" for purposes of this Agreement), but
shall not otherwise be assignable by the Company. The Company shall take all
actions necessary to insure that such corporation or transferee is bound by the
provisions of this Agreement. The term "the Executive" shall wherever
appropriate be interpreted to include the Executive's estate.

        6.4 Governing Law. This Agreement shall be construed, interpreted and
governed in accordance with the internal laws of the State of Illinois, without
reference to rules relating to conflicts of law.

        6.5 Inconsistencies. The terms of this Agreement supersede any
inconsistent prior promises, policies, representations, understandings,
arrangements or agreements between the parties, whether by employment contract,
stock option agreement or otherwise.

        6.6 Headings. The section headings contained in this Agreement are for
the convenience of reference only and shall not affect the construction of any
provision of this Agreement.

                                      -7-

<PAGE>   8
        6.7 Survival. Notwithstanding the termination of the term of this
Agreement, the duties and obligations of the Company, if any, following the
termination of the Executive's employment following a Change in Control shall
survive indefinitely.

        6.8 Withholding. The Company may deduct and withhold from any payments
hereunder the amount which the Company, in its reasonable judgment, is required
to deduct and withhold for any federal, state or local income or employment
taxes.

        6.9 Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed an original but all of which
together shall constitute a single instrument.

        IN WITNESS WHEREOF, the parties have executed this Agreement as of the
day and year first above written.

                         HORSESHOE GAMING HOLDING CORP.

                         By:
                            -------------------------------
                         Name: Jack B. Binion
                         Title: Chief Executive Officer

                         EXECUTIVE

                         -----------------------------------
                         Roger P. Wagner

                                      -8-

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