DEVELOPMENT AGREEMENT



     THIS DEVELOPMENT AGREEMENT is made as of this 17th day of June, 1997 by

and among the CITY OF BETTENDORF, a municipal corporation of the State of Iowa

(the "City") and LADY LUCK BETTENDORF, L.C., an Iowa limited liability company,

LADY LUCK QUAD CITIES, INC., a Delaware corporation and BETTENDORF RIVERFRONT

DEVELOPMENT COMPANY, L.C., an Iowa limited liability company (hereinafter

collectively referred to as "Lady Luck").



     WHEREAS, the City desires to assist in the participation of the

redevelopment of the former J.I. Case property; and



     WHEREAS, the acquisition of real estate and construction of certain public

access improvements (as described below) for public use will benefit the

residents of the City with additional public parking and increased access to the

riverfront; and



     WHEREAS, the site and surrounding area have been found by the City to be an

area deserving of urban renewal - economic redevelopment status, which status

authorizes the development of a tax increment financing District to fund certain

public and private improvements in District 1 under Ordinance 36-90 (the

"District"); and



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     WHEREAS, this Agreement is in the public's interest and in furtherance of

the urban renewal plan; and



     WHEREAS, this Agreement will assist in the redevelopment of such property,

provide additional parking for the downtown area and increase public access to

the riverfront; and



     WHEREAS, this Agreement shall detail certain limits on the District funds

and the manner of their expenditure; and



     WHEREAS, the purpose of this Agreement is to increase public access to the

City's riverfront and downtown, ensure both increased tax base within the

community and further job opportunities for the residents of the City; and



     WHEREAS, City participation in the below described project will diversify

the tax base by increasing commercial property development, make it more likely

that the Bettendorf Riverfront Development Company will be able to market and

fill the commercial center adjacent to the Lady Luck boat, and will springboard

other phases of expansion of the former J.I. Case site; and



     WHEREAS, in order to accomplish the foregoing purposes, Lady Luck has

assembled a development site, as more particularly set forth on Exhibit "A" (the

"Property"); and



     WHEREAS, it is a goal of this Agreement to provide the improvements called

for herein without adversely impacting the



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current revenues of the Bettendorf School District and Scott County.



          NOW, THEREFORE, IT IS HEREBY AGREED AS FOLLOWS:



     1.   The Project.

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     Lady Luck and the City agree to develop the Property as a joint project

which will be known as the Bettendorf Downtown Riverfront Project (the

"Project") which shall be comprised of the following elements ("Project

Improvements");



     A.   Waterfront hotel and restaurant as set forth on Exhibit "B" (the

          "Hotel");



     B.   A railroad overpass for vehicular access from State Street to the

          Hotel as set forth on Exhibit "C" (the "Overpass");



     C.   The Bettendorf Downtown Riverfront Parking Center consisting of a

          multi-level 500 car parking ramp as set forth on Exhibit "D" (the

          "Parking Facility");



     D.   An improved area for public parking on State Street as set forth on

          Exhibit "E" (the "Parking Courtyard");



     E.   The Marina with seasonal and transient docking facilities as set forth

          on Exhibit "F" (the "Marina");



     2.   Lady Luck Obligations.

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     A.   Lady Luck shall design and construct or cause to be constructed) the

Hotel, Overpass, Parking Facility and Marina. Lady Luck shall consult with the

City in all matters relating to the development and construction of these

improvements, and shall comply with all laws regarding site plan approvals and

permitting. This consultation shall include, without limitation, the following

matters:



          i.   The design and construction of the improvements;



          ii.  The selection, approval, hiring and discharge of engineers,

          architects, contractors, subcontractors, professionals and other third

          parties;



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<PAGE>



          iii. The negotiation and execution of contracts, agreements,

          easements, and other documents with third parties; and



          iv.  The preparation of budgets, cost estimates, financial

          projections, statements, information and reports as Lady Luck deems

          appropriate.



     B.   The City shall not, in this consultation, unreasonably withhold or

delay its approval.



     C.   Lady Luck shall demolish the Plaza Building at 1823 State Street at

its cost (including any environmental remediation as required by applicable

law), shall backfill the building footprint with appropriate fill materials

including a top layer of soil sufficient to sustain grass (which shall be

initially sodded by Lady Luck) and shall cause the real estate (as legally

described on Exhibit "E-1") to be donated to the City for the City's use.



     D.   Lady Luck shall pay all real estate taxes imposed on the Property.



     E.   Lady Luck shall pay to the City one-half of the damages awarded to (or

the settlement amount negotiated with) the owners of the real estate fronting on

George Thuenen Drive arising out of the taking of any access thereto by the

construction of the Overpass.



     F.   For the life of bonds issued by the City to finance its obligations

hereunder, Lady Luck or its assignees shall not object to a minimum assessed

valuation of the Hotel, Parking Facility and Marina in an amount of $32 million

commencing December 31, 1997.



     G.   Lady Luck shall pay a maintenance fee of Fifty Thousand Dollars

($50,000) per year commencing on January 1 following completion of construction

of the Overpass and each year thereafter for fifteen (15) years (or a total of

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