STOCK PURCHASE AGREEMENT

Stock Purchase Agreement

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CHURCHILL DOWNS INC | CHURCHILL DOWNS LOUISIANA VIDEO POKER COMPANY, L.L.C. | LOUISIANA VENTURES, INC.

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Title: STOCK PURCHASE AGREEMENT
Date: 10/20/2004
Industry: Casinos and Gaming Law Firm: Wyatt, Tarrant & Comb, LLP; Adams and Reese, LLP Sector: Services

STOCK PURCHASE AGREEMENT, Parties: churchill downs inc , churchill downs louisiana video poker company l.l.c. , louisiana ventures inc.

EXHIBIT 2.3

EXECUTION COPY

STOCK PURCHASE AGREEMENT

By and Between

CHURCHILL DOWNS LOUISIANA VIDEO POKER COMPANY, L.L.C.

(Purchaser)

And

STEVEN M. RITTVO

RALPH CAPITELLI

T. CAREY WICKER III

And

LOUISIANA VENTURES, INC.

(Sellers)

Dated as of October 14, 2004

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EXECUTION COPY

TABLE OF CONTENTS

PAGE

RECITALS....................................................................1

DEFINITIONS.................................................................1

ARTICLE 1 SALE AND PURCHASE OF SHARES; CLOSING..............................4

Section 1.01 Sale of Stock.................................................4

Section 1.02 Purchase Price................................................4

Section 1.03 Reimbursements................................................4

Section 1.04 Closing.......................................................4

Section 1.05 Payment and Closing Deliveries................................5

Section 1.06 Dividends Prior To Closing....................................6

Section 1.07 Right to Revenues; Risk of Loss...............................7

ARTICLE 2 REPRESENTATIONS AND WARRANTIES OF SELLERS.........................7

Section 2.01 Ownership.....................................................7

Section 2.02 Authority; Enforceability.....................................7

Section 2.03 Organization; Authority.......................................8

Section 2.04 Subsidiaries..................................................8

Section 2.05 Capital Stock.................................................8

Section 2.06 Title to Stock, Liens, Etc....................................9

Section 2.07 Consents and Approvals; Conflicts.............................9

Section 2.08 Financial Statements..........................................9

Section 2.09 Absence of Certain Changes....................................9

Section 2.10 Legal Proceedings; Etc........................................10

Section 2.11 Permits; Compliance With Laws.................................10

Section 2.12 Title to Property; Condition of Property;

Real Property Leases, Etc.....................................11

Section 2.13 Environmental Matters.........................................12

Section 2.14 Insurance.....................................................12

Section 2.15 Contracts.....................................................13

Section 2.16 Employees.....................................................14

Section 2.17 Employee Benefit Plans........................................14

Section 2.18 Labor Relations...............................................16

Section 2.19 Potential Conflicts of Interest...............................17

Section 2.20 Patents, Trademarks, Etc......................................17

Section 2.21 Accounts Receivable...........................................17

Section 2.22 Taxes.........................................................17

Section 2.23 Indebtedness..................................................19

Section 2.24 Officers and Directors, Bank Accounts,

Signing Authority, Powers of Attorney.........................19

Section 2.25 Minute Books, Etc.............................................19

Section 2.26 Broker........................................................20

Section 2.27 Accuracy of Representations and Warranties....................20

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EXECUTION COPY

Section 2.28 Effectiveness of Representations and Warranties...............20

ARTICLE 3 REPRESENTATIONS AND WARRANTIES OF PURCHASER.......................20

Section 3.01 Organization of Purchaser.....................................20

Section 3.02 Authority; Enforceability.....................................20

Section 3.03 Consents and Approvals; Conflicts.............................20

Section 3.04 Investment Representation.....................................21

Section 3.05 No Representations and Warranties; Conduct of Due Diligence...21

Section 3.06 Brokerage Fees................................................21

Section 3.07 Securities Act Representations................................21

Section 3.08 Effectiveness of Representations and Warranties...............22

ARTICLE 4 PRE-CLOSING COVENANTS.............................................22

Section 4.01 Legal Requirements............................................22

Section 4.02 Access To Properties and Records..............................22

Section 4.03 Conduct of Business...........................................22

Section 4.04 Public Statements.............................................24

ARTICLE 5 CLOSING CONDITIONS................................................24

Section 5.01 Conditions Applicable To All Parties..........................24

Section 5.02 Conditions To Obligations of Purchaser........................24

Section 5.03 Conditions to Obligations of Sellers..........................26

ARTICLE 6 POST-CLOSING COVENANTS............................................27

Section 6.01 General.......................................................27

Section 6.02 Employee Retention............................................27

Section 6.03 Non-competition...............................................28

Section 6.04 Alliance Gaming Corporation 401K Profit Sharing Plan..........30

ARTICLE 7 TERMINATION AND AMENDMENT.........................................30

Section 7.01 Termination...................................................30

Section 7.02 Effect of Termination.........................................30

Section 7.03 Amendment.....................................................31

Section 7.04 Extension; Waiver.............................................31

ARTICLE 8 TAX MATTERS.......................................................31

Section 8.01 Additional Definitions........................................31

Section 8.02 Preparation and Filing of Tax Returns.........................31

Section 8.03 Sellers' Contest Rights.......................................32

Section 8.04 Purchaser's Contest Rights....................................32

Section 8.05 Notification Requirements.....................................33

Section 8.06 Cooperation...................................................33

Section 8.07 Retention of Data and Documentation...........................33

Section 8.08 Tax Audit Costs...............................................34

Section 8.09 Tax Sharing Agreements........................................34

Section 8.10 Returns for Periods Through the Closing Date..................34

Section 8.11 Carrybacks....................................................34

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EXECUTION COPY

Section 8.12 Retention of Carryovers.......................................34

ARTICLE 9 INDEMNIFICATION; REMEDIES.........................................34

Section 9.01 Indemnification By Sellers....................................34

Section 9.02 Indemnification By Purchaser..................................35

Section 9.03 Notice and Defense of Third Party Claims......................35

Section 9.04 Exclusive Remedy..............................................36

ARTICLE 10 MISCELLANEOUS....................................................36

Section 10.01 Confidentiality...............................................36

Section 10.02 Survival of Representations, Warranties and Agreements........37

Section 10.03 Notices.......................................................37

Section 10.04 Headings; Gender..............................................38

Section 10.05 Entire Agreement; No Third Party Beneficiaries................39

Section 10.06 Governing Law.................................................39

Section 10.07 Assignment....................................................39

Section 10.08 Severability..................................................39

Section 10.09 Counterparts..................................................39

Section 10.10 Expenses......................................................39

Section 10.11 Amendments and Waivers........................................39

Section 10.12 Construction..................................................40

Section 10.13 Understanding.................................................40

Section 10.14 Arbitration...................................................40

ARTICLE 11 INTERVENORS......................................................40

Section 11.01 Spousal Consent...............................................40

EXHIBIT INDEX

Exhibit A- Operating Agreement dated March 9, 1992

Addendum dated November 9, 1995

Second Addendum dated November 1, 2001

Third Addendum dated December 4, 2001

Fourth Addendum dated April 30, 2003

Exhibit B - Form of Escrow Agreement

Exhibit C - Adam and Reese LLP Opinion

Exhibit D - LHBPA Release

Exhibit E - Krantz Release

Exhibit F - Withdrawal of Objection to Assignment

Exhibit G - Spousal Consent

iii

<PAGE>

STOCK PURCHASE AGREEMENT

THIS STOCK PURCHASE AGREEMENT ("Agreement") is made and entered into as

of the day of the 14th day of October, 2004 by and between Churchill Downs

Louisiana Video Poker Company, L.L.C., a Louisiana limited liability company,

("Purchaser"); STEVEN M. RITTVO, RALPH CAPITELLI and T. CAREY WICKER III, all

Louisiana residents, and LOUISIANA VENTURES, INC., a Nevada corporation ("LVI")

(each a "Seller" and all collectively "Sellers").

RECITALS

WHEREAS, Sellers are the owners of all of the issued and outstanding

shares of all classes of common stock of Video Services, Inc., a Louisiana

corporation ("VSI");

WHEREAS, VSI is engaged in the business of selecting, owning,

installing, operating and maintaining video poker devices and other electronic

gaming machines at the Fair Grounds Race Course and at off-track betting parlors

operated in the greater New Orleans, Louisiana area, by or under the auspices of

the Fair Grounds Race Course (the "Business"); and

WHEREAS, Sellers desire to sell to Purchaser and Purchaser desires to

purchase from Sellers, all of the issued and outstanding shares of common stock

of VSI for the consideration and subject to the terms and conditions set forth

in this Agreement.

NOW, THEREFORE, for and in consideration of the mutual promises,

covenants and agreements set forth herein, and in reliance upon the

representations and warranties contained herein, Purchaser and Sellers do now

agree as follows:

DEFINITIONS

In addition to the other defined terms used herein, as used in this

Agreement, the following terms when capitalized shall have the meanings

indicated herein. All defined terms shall include the singular and the plural.

(a) "AFFILIATE" shall mean with respect to any specified Person, any

other Person directly or indirectly controlling, controlled by or under direct

or indirect common control with such Person.

(b) "APPLICABLE LAW" shall mean any statute, law, rule or regulation or

any judgment, order, writ, injunction or decree of any Governmental Entity to

which a specified Person or its property is subject.

bank balances) plus the Undeposited Net Win as of 2:01 A.M. on the Closing Date.

<PAGE>

consummation of a tender for or purchase of more than fifty percent (50%) of a

company's capital stock by a third party, (ii) a merger, consolidation or

recapitalization of a company such that the stockholders of the company

immediately prior to the consummation of such transaction possess less than

fifty percent (50%) of the voting securities of the surviving entity immediately

after the transaction (determined on a fully-diluted basis assuming the

conversion of all convertible securities of such Person), or (iii) the sale,

lease or other disposition of all or substantially all of the assets of a

company.

(d) "CLOSING" shall mean the consummation of the Purchase (as defined

in Section 1.01) and the other transactions contemplated by this Agreement.

(e) "CLOSING DATE" shall mean the date on which the Closing occurs.

(f) "DISCLOSURE LETTER" shall mean that certain Disclosure Letter

delivered to Purchaser by Sellers on or before October 14th, 2004, the purpose

of which is to disclose certain matters related to this Agreement.

(g) "ENCUMBRANCES" shall mean adverse claims, pledges, liens, defects,

leases, licenses, equities, conditional sales contracts, charges, claims,

encumbrances, security interests, easements, restrictions, chattel mortgages,

mortgages or deeds of trust, of any kind or nature whatsoever, and any

preferential arrangement or restriction of any kind, including, without

limitation, any restriction on the use, voting, transfer, receipt of income or

other exercise of any attribute of ownership.

(h) "GOVERNMENTAL ENTITY" shall mean any court or tribunal in any

jurisdiction or any public, governmental or regulatory body, agency, department,

commission, board, bureau or other authority or instrumentality.

(i) "INDEBTEDNESS" shall mean, as applied to any Person, (i) all

indebtedness of such Person for borrowed money, whether current or funded, or

secured or unsecured, (ii) all indebtedness of such Person for the deferred

purchase price of property or services represented by a note or other security,

(iii) all indebtedness of such Person created or arising under any conditional

sale or other title retention agreement with respect to property acquired by

such Person (even though the rights and remedies of the seller or lender under

such agreement in the event of default are limited to repossession or sale of

such property), (iv) all indebtedness of such Person secured by a purchase money

mortgage or other lien to secure all or part of the purchase price of property

subject to such mortgage or lien, (v) all pre-Closing obligations under leases

which shall have been or must be, in accordance with generally accepted

accounting principles, recorded as capital leases in respect of which such

Person is liable as lessee, (vi) any liability of such Person in respect of

banker's acceptances or letters of credit, (vii) any liability in respect of

interest, fees or other charges in respect of any indebtedness referred to a

clauses (i) through (vi) above, (viii) all indebtedness referred to in clauses

(i) through (vii) above which is directly or indirectly guaranteed by such

Person or which such Person has agreed (contingently or otherwise) to purchase

or otherwise acquire or in respect of which it has otherwise assured a creditor

against loss and (ix) all other accrued liabilities that appear on the Balance

Sheet.

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(j) "IRS" shall mean the United States Internal Revenue Service.

(k) "KNOWLEDGE" (including, without limitation, the terms "KNOW",

"KNOWING", "KNOWLEDGE", "BEST KNOWLEDGE", or "TO THE BEST KNOWLEDGE OF") shall

mean with respect to each Seller the actual knowledge of such Seller, or where

applicable, their officers or directors, without independent investigation.

(l) "LEASES" shall mean any executory lease to which VSI is subject,

having future rental payments of more than $5,000 in the aggregate and any

executory lease to which VSI is subject where the future rental payments under

such lease, when aggregated with the future rental payments under all other

executory leases to which VSI is a party, are more than $10,000 in the

aggregate, all shown on Section 2.12(d) of the Disclosure Letter.

(m) "MATERIAL ADVERSE EFFECT" shall mean any circumstance, change in,

or effect on the Business that, individually or in the aggregate with any other

circumstances, changes in, or effects on, the Business, is materially adverse to

the Business, operations, results of operations or financial condition of VSI

excluding from the foregoing any event, change or circumstance arising out of

(i) the compliance by VSI with the terms and conditions of this Agreement, (ii)

general economic or financial conditions which are not unique to VSI but also

affect other Persons who participate or are engaged in the lines of business in

which VSI participates or is engaged, or (iii) changes resulting from acts of

terrorism or acts of war or escalation of hostilities, whether occurring within

or outside the United States, or any effect of any such acts of hostilities on

general economic or other conditions.

(n) "OPERATING AGREEMENT" shall mean the agreement between VSI and Fair

Grounds Corporation, Jefferson Downs Corporation and Finish Line Management

Corporation dated March 9, 1992, as amended, attached as Exhibit "A", in globo.

(o) "PARTY" shall mean singularly one of the persons or plurally two or

more of the persons executing this Agreement.

(p) "PERSON" shall mean an individual, firm, corporation, general or

limited partnership, limited liability company, limited liability partnership,

joint venture, trust, governmental authority or body, association,

unincorporated organization or other entity.

(q) "PROCEEDINGS" shall mean any suit, action, proceeding, dispute or

claim before or investigation by any Governmental Entity.

(r) "STOCK" shall mean, collectively, all of the authorized, issued and

outstanding shares of Class A (non-voting) common stock, no par value per share,

and all of the authorized, issued and outstanding shares of Class B (voting)

common stock, no par value per share, of VSI representing 100% of the aggregate

authorized, issued and outstanding capital stock, voting and non-voting, of VSI.

(s) "TAX" shall mean any federal, state, local or foreign income, gross

receipt,

<PAGE>

license, net equity payroll, payroll, employment excise, severance, stamp,

occupation, premium, windfall profits, environmental (including taxes under Code

ss. 59A), custom duties, capital stock, franchise, import and export, profits,

withholding, social security, unemployment, disability, real property, personal

property, intangible property, sales, use, transfer, registration, value added,

alternative, or add-on-minimum, estimated, or other government tax, duty, fee or

charge of any kind whatsoever, including any interest, penalty, or addition

thereto, whether disputed or not.

(t) "UNDEPOSITED NET WIN" shall mean the amount of all of VSI's gross

deposits less all fully paid payouts, to the extent that such amount has not

been deposited in VSI's bank accounts as of 2:01 A.M. on the Closing Date.

(t) "VSI GROUP" shall mean VSI and all entities included in any

affiliated group with VSI for which consolidated or combined Tax Returns were

filed or are or were required to be filed.

ARTICLE 1

SALE AND PURCHASE OF SHARES; CLOSING

SECTION 1.01 SALE OF STOCK. Subject to the terms and conditions herein

stated, at the Closing Sellers shall sell, transfer, assign and deliver to

Purchaser, and Purchaser shall purchase from Sellers, all of the Stock, all with

full warranty of title and free and clear of all Encumbrances, in exchange for

the payment of the Purchase Price described below (the "PURCHASE").

SECTION 1.02 PURCHASE PRICE. Purchaser shall pay to Sellers, as the

purchase price for the Stock, an aggregate amount of Four Million Dollars

($4,000,000) (the "PURCHASE PRICE"), pursuant to the payment instructions,

percentages and wire instructions attached as Section 1.02 of the Disclosure

Letter.

SECTION 1.03 REIMBURSEMENTS. The Purchaser shall, at Closing, reimburse

Sellers as follows (collectively, the "REIMBURSEMENTS").

(a) Purchaser shall reimburse Sellers for the cost of all licenses and

permits paid by VSI for the year 2004-2005 as set forth on Section 1.03(a) of

the Disclosure Letter.

(b) Purchaser shall reimburse Sellers for the pro rata share of all

taxes or other fees paid by or on behalf of VSI prior to Closing as set forth on

Section 1.03(b) of the Disclosure Letter.

SECTION 1.04 CLOSING. Subject to satisfaction or waiver of the

conditions specified in Article 5 hereof, the Closing shall take place at 10:00

am. local time on October 14, 2004 at the law offices of Lemle & Kelleher, 21st

Floor, 601 Poydras Street, New Orleans, Louisiana 70130 or at such other time

and place as Purchaser and Sellers may agree.

<PAGE>

SECTION 1.05 PAYMENT AND CLOSING DELIVERIES.

At the Closing:

(a) Purchaser shall have caused to be delivered the

Purchase Price by wire transfer of immediately

available funds to Sellers in the percentage as set

forth in Section 1.02 of the Disclosure Letter;

(b) Purchaser shall have caused to be delivered the

amounts due as (i) Reimbursements by wire transfer of

immediately available funds pursuant to the

percentages and wire instructions attached as Section

1.02 of the Disclosure Letter hereto, and (ii) the

Bankroll Amount by wire transfer of immediately

available funds pursuant to the terms of Section

1.06;

certificates representing the Stock duly endorsed in

blank, or accompanied by stock powers duly executed

in blank, in a form satisfactory to Purchaser, which

shall transfer to Purchaser good title to the Stock

free and clear of any Encumbrance, and (ii) written

resignations of all officers and directors of VSI

other than Fred Bergquist;

(d) Sellers shall have deposited into the sweep account

designated to the state police as the account from

which video poker taxes are to be paid, in

immediately available funds, a sum sufficient to pay

all video poker taxes due through the Closing Date;

(e) Sellers shall deliver the opinion of Adams and Reese

LLP in substantially the form attached as Exhibit "C"

hereto;

(f) Sellers shall and shall cause VSI to execute and

deliver to Purchaser a Mutual Release with the

Louisiana Horsemen's Benevolent and Protective

Association 1993, Inc. in substantially the form

attached as Exhibit "D" hereto (the "LHBPA RELEASE");

(g) Purchaser shall deliver to Sellers counterparts to

the LHBPA Release, executed by the Louisiana

Horsemen's Benevolent and Protective Association

1993, Inc.;

(h) Sellers shall and shall cause VSI to execute and

deliver to Purchaser a Mutual Release with Fair

Grounds Corporation, Bryan G. Krantz, Vickie Krantz,

Family Racing Venture, L.L.C., Gentilly Gaming,

L.L.C., Finish Line Management Corp., Continental

Advertising, Inc., F.G. Staffing Services, Inc. and

Fair Grounds International Ventures, L.L.C.

(collectively, the "KRANTZ PARTIES") in substantially

the form attached as Exhibit "E" hereto (the "KRANTZ

RELEASE");

<PAGE>

(i) Purchaser shall deliver to Sellers counterparts to

the Krantz Release, executed by the Krantz Parties;

(j) Sellers shall deliver to Purchaser a Withdrawal of

Objection to Assignment and Assumption of Contract

and Waiver of Cure in substantially the form attached

as Exhibit "F" hereto; and

(k) Sellers and Purchaser shall (i) provide to the other

such certificates, agreements and instruments as are

required to be delivered under Article 5, (ii)

provide to the others proof or indication of the

satisfaction or waiver of the conditions set forth in

Article 5, and (iii) take such other action as is

required to consummate the transactions contemplated

by this Agreement.

SECTION 1.06 INDEBTEDNESS; DIVIDENDS PRIOR TO CLOSING; POST-CLOSING

PAYMENTS.

(a) Sellers shall cause VSI to discharge all Indebtedness outstanding

as of 10:00 A.M. on the Closing Date.

(b) Sellers shall retain as earned income all cash on hand, including

but not limited to cash in all bank accounts, cash in the change bank at each

location and other miscellaneous cash that is used in the daily operation of VSI

as of 2:01 A.M. on the Closing Date after the discharge of Indebtedness under

Section 1.06(a) (the "CASH ON HAND"). Sellers, with a representative of

Purchaser present, will count down the final Cash on Hand in the cage and count

rooms beginning at 8:00 A.M. on the Closing Date (the "FINAL CASH COUNT"). At

the Closing, in the form of a cash dividend, (i) VSI shall disburse all of the

available Cash on Hand MINUS $5,000 in petty cash MINUS the Bankroll Amount, to

Sellers by immediately available funds pursuant to the terms of the Operating

Agreement of VSI and Article 4, Section 4.1(b) of the Articles of Incorporation

of VSI, all in the percentage allocation set forth on Section 1.06 of the

Disclosure Letter, and (ii) Purchaser shall pay to Sellers the Bankroll Amount

PLUS the Reimbursements plus $5,000 in petty cash by (A) making wire transfers

of the Bankroll Amount minus the Undeposited Net Win PLUS the Reimbursements

PLUS $5,000 in petty cash MINUS $500,000 as of the Closing to the Sellers in the

percentage allocation set forth on Section 1.06 of the Disclosure Letter, (B)

writing and delivering a check to each of the Sellers for the Seller's share of

the Undeposited Net Win in the percentage allocation set forth in Section 1.06

of the Disclosure Letter, and (C) making a wire transfer of $500,000 as of the

Closing to Adams & Reese, as escrow agent for the Sellers (the "ESCROW AGENT"),

to be held by the Escrow Agent pursuant to the terms of this Section 1.06

(collectively, the "DIVIDEND").

Closing Date in order to discharge any Indebtedness that was outstanding as of

10:00 A.M. on the Closing Date that was not discharged as of the Closing Date.

LVI shall instruct the Escrow Agent, on the date that is sixty days from the

Closing Date, to disburse any funds remaining in the escrow account to the

Sellers by check or immediately available funds pursuant to the terms of the

Operating Agreement of VSI and Article 4, Section 4.1(b) of

<PAGE>

the Articles of Incorporation of VSI, all in the percentage allocation set forth

on Section 1.06 of the Disclosure Letter.

(d) In the event of any dispute between Sellers on the one hand and

Purchaser on the other as to how the funds deposited into escrow should be

disbursed, the Escrow Agent may retain all disputed funds until resolution of

the dispute by the Parties or pursuant to Section 10.14. Seller, Purchasers and

Escrow Agent will execute the Escrow Agreement substantially in the form

attached hereto as Exhibit "B".

SECTION 1.07 RIGHT TO REVENUES; RISK OF LOSS. Purchaser will be

entitled to all VSI collections and will be subject to all payment and

disbursement obligations and liabilities of VSI arising on and after 10:00 A.M.

on the Closing Date regardless of the actual time of the Closing.

ARTICLE 2

REPRESENTATIONS AND WARRANTIES OF SELLERS

Each of the representations and warranties set forth herein shall be

separate and independent, and, except as expressly provided herein, shall not be

limited by reference to any other representation or warranty or anything else in

this Agreement. Sellers individually represent and warrant, as provided for

herein, to Purchaser as follows:

SECTION 2.01 OWNERSHIP. Each Seller is, and at the Closing Date will

be, the sole record and beneficial owner of the number of shares of the Stock,

which are represented by the certificates bearing the numbers shown opposite

their names in Section 2.05. Each Seller has and at the Closing Date will have

good and marketable title to the shares of Stock registered in his or its name

and the absolute right to deliver such shares of Stock in accordance with the

terms of this Agreement, free and clear of all Encumbrances. The Stock is duly

authorized, validly issued, fully paid and nonassessable, and was issued by VSI

in compliance with federal and state securities laws. The transfer of the Stock

to Purchaser in accordance with the terms of this Agreement will transfer good

and marketable title to the Stock to Purchaser free and clear of all

Encumbrances, restrictions, and claims of every kind.

SECTION 2.02 AUTHORITY; Enforceability. Each Seller has the full legal

right, power and authority to execute, deliver and perform this Agreement and

the other documents, instruments and agreements contemplated hereby

(collectively, the "TRANSACTION DOCUMENTS") to which any Seller is a party, to

perform Sellers' obligations, as applicable, hereunder and thereunder, each in

accordance with its respective terms, and to sell the Stock to Purchaser. Each

of the Transaction Documents to which any Seller is a party has been duly

authorized, executed and delivered by such Seller, or when executed will be duly

authorized, executed and delivered by such Seller and constitutes, or when

executed and delivered will constitute, a valid and legally binding obligation

of such Seller, enforceable against such Seller in accordance with their

respective terms, except as such enforceability may be limited by applicable

bankruptcy, insolvency, reorganization, moratorium and similar laws affecting

creditors' rights generally and equitable principles which may limit the

availability of certain equitable

<PAGE>

remedies in certain instances.

SECTION 2.03 ORGANIZATION; AUTHORITY. VSI is a corporation duly

organized, validly existing and in good standing under the laws of the State of

Louisiana. VSI is duly qualified and in good standing as a foreign entity in all

jurisdictions in which the character of the properties owned or leased or the

nature of the activities conducted by it makes such qualification necessary.

Complete and correct copies of the Articles of Incorporation and By-Laws of VSI

and all amendments thereto are set forth on Section 2.03(a) of the Disclosure

Letter. VSI has all requisite power and authority to own or lease and operate

its properties and to carry on its business as such business is now conducted.

VSI was organized, incorporated and began conducting business in 1992, and,

except as disclosed on Section 2.03(b) of the Disclosure Letter, has been under

the same management and ownership since that time. Except as disclosed on

Section 2.03 of the Disclosure Letter, neither Sellers nor VSI has ever operated

the business conducted by VSI under a fictitious name.

SECTION 2.04 SUBSIDIARIES. VSI has no subsidiaries, owns or holds of

record and/or beneficially no shares of any class in the capital of any

corporations, and owns no legal and/or beneficial interests in any partnerships,

limited liability companies, business trusts or joint ventures or in any other

unincorporated trade or business enterprises.

SECTION 2.05 CAPITAL STOCK. The authorized capital stock of VSI

consists exclusively of five hundred ten (510) shares of Class A (non-voting)

common stock, no par value per share, and four hundred ninety (490) shares of

Class B (voting) common stock, no par value per share. All of the authorized

Stock has been issued, is outstanding and owned of record and beneficially by

Sellers in the following amounts:

SHAREHOLDER NO. OF SHARES CERTIFICATE NO.

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

Steven M. Rittvo 228.62 shares (Class A) 7

Ralph Capitelli 140.69 shares (Class A) 5

T. Carey Wicker III 140.69 shares (Class A) 6

Louisiana Ventures, Inc. 490 shares (Class B) 2

All of the authorized Class B shares are issued and outstanding and are owned by

LVI which is a subsidiary of Foreign Gaming Ventures, Inc., a Nevada corporation

which is a subsidiary of Alliance Gaming Corporation ("Alliance"). LVI

represents and warrants that it has not created or granted, and there are no

existing Encumbrances, options, warrants, calls, purchase rights, contracts,

commitments, equities, claims, demands or other agreements or rights with

respect to the capital stock of VSI owned by LVI, except as disclosed on Section

2.05 of the Disclosure Letter and there are no convertible or exchangeable

securities of VSI outstanding which, upon conversion or exchange, would require

the issuance of any shares of capital stock or other securities of VSI. The

other Sellers represent and warrant that they have not created or granted, and

there are no existing Encumbrances, options, warrants, calls, purchase rights,

contracts, commitments, equities, claims, demands or other agreements or rights

with respect to the capital stock of VSI held by such Sellers.

<PAGE>

SECTION 2.06 TITLE TO STOCK, LIENS, ETC. Sellers have, and as of the

consummation of the Closing, Purchaser will have, sole record and beneficial

ownership of all of the Stock, free and clear of any mortgage, lien, pledge,

charge, security interest, Encumbrance, title retention agreement, option,

equity or other adverse claim thereto.

SECTION 2.07 CONSENTS AND APPROVALS; CONFLICTS. Except as set forth in

Section 2.07 of the Disclosure Letter, no filing with or notice to, and no

permit, authorization, consent or approval of, any Governmental Entity is

necessary for the execution and delivery by Sellers of the Transaction Documents

or the consummation by Sellers of the transactions contemplated hereby. The

execution and delivery of the Transaction Documents by Sellers and the

consummation of the transactions contemplated hereby and thereby will not (a)

violate or conflict with any provision of the Articles of Incorporation or

By-Laws of VSI, each as amended to date; or (b) constitute a violation of, or be

in conflict with, or constitute or create a default under, give rise to a right

of termination of, or accelerate the performance required by, or result in the

creation or imposition of any Encumbrance upon any property of VSI pursuant to

(i) any agreement or instrument to which VSI is a party or by which any of its

properties is bound, or (ii) any statute, judgment, decree, order, regulation or

rule of any court or governmental or regulatory authority. Neither the execution

and delivery of this Agreement by Sellers, nor the consummation of the

transactions contemplated hereby, will conflict with or result in a breach of,

or give rise to a right of termination of, or accelerate the performance

required by, any terms of any court order, consent decree, note, bond, mortgage,

indenture, deed of trust, Lease, license, loan agreement, the articles of

incorporation or bylaws of LVI or other instrument or obligation binding on

Sellers or VSI or to which any Seller or VSI is subject or a party, or

constitute a default thereunder, or result in the creation of any Encumbrance

upon any of the assets of Sellers or VSI, except for any such conflict, breach,

termination, acceleration, default or Encumbrance which would not have a

Material Adverse Effect on (a) the business, assets or financial condition of

VSI or (b) Sellers' ability to consummate any of the transactions contemplated

hereby.

SECTION 2.08 FINANCIAL STATEMENTS. LVI will deliver the following

financial statements (the "FINANCIAL STATEMENTS") to Purchaser, and there are

attached as Section 2.08 of the Disclosure Letter the audited balance sheets of

VSI as of June 30, 2004 (such balance sheet as of being referred to herein as

the "BALANCE SHEET"), and the unaudited balance sheet of VSI as of August 31,

2004 (such balance sheet as of being referred to herein as the "INTERIM BALANCE

SHEET"), the related audited statements of income and cash flows of VSI for the

fiscal year ended June 30, 2004 and the unaudited statements of income and cash

flows for the period ended August 31, 2004. LVI represents and warrants that

each of the Financial Statements has been prepared in accordance with GAAP,

consistently applied, is true and correct and has been prepared consistently

with VSI's past practices; each such balance sheet fairly and accurately

presents the financial condition of VSI as of its respective date; and such

statements of income and cash flows fairly and accurately present the results of

operations for the periods covered thereby.

SECTION 2.09 ABSENCE OF CERTAIN CHANGES. LVI represents and warrants

that

<PAGE>

except as set forth on Section 2.09 of the Disclosure Letter, since August 31,

2004, VSI has carried on its business only in the ordinary course, and there has

not been (a) any change in the assets, liabilities, sales, income or business of

VSI or in its relationships with suppliers, customers or lessors, other than

changes which were both in the ordinary course of business and have not been,

either in any case or in the aggregate, materially adverse; (b) any capital

expenditure, capital improvement or capital addition by VSI which in the

aggregate exceeds $25,000, or any other acquisition or disposition by VSI of any

asset or property other than in the ordinary course of business; (c) any damage,

destruction or loss, whether or not covered by insurance, materially and

adversely affecting, either in any case or in the aggregate, the property or

business of VSI; (d) any declaration, setting aside or payment of any dividend

or any other distributions in respect of the shares of the capital stock of VSI;

(e) any issuance of any shares or option or right to acquire shares of capital

stock of VSI or any direct or indirect redemption, purchase or other acquisition

of any of the Stock; (f) any increase in the compensation, pension or other

benefits payable or to become payable by VSI to any of its officers or

employees, or any bonus payments or arrangements made to or with any of them

(other than pursuant to the terms of any existing written agreement or plan of

which the Purchaser has been supplied complete and correct copies); (g) any

forgiveness or cancellation of any debt or claim by VSI or any waiver of any

right of material value other than compromises of accounts receivable in the

ordinary course of business; (h) any entry by VSI into any contract or

transaction other than in the ordinary course of business; (i) any incurrence by

VSI of any obligations or liabilities, whether absolute, accrued, contingent or

otherwise (including, without limitation, liabilities as guarantor or otherwise

with respect to obligations of others), other than obligations and liabilities

incurred in the ordinary course of business; (j) any mortgage, pledge, lien,

lease, security interest or other charge or encumbrance on any of the assets,

tangible or intangible, of VSI; (k) any discharge or satisfaction by VSI of any

lien or encumbrance, or payment by VSI of any obligation or liability (fixed or

contingent) other than (i) current liabilities included in the Balance Sheet and

(ii) current liabilities incurred since the date of the Balance Sheet in the

ordinary course of business, or (l) any amendment to VSI's articles of

incorporation or bylaws.

SECTION 2.10 LEGAL PROCEEDINGS; ETC. LVI represents and warrants that

except as set forth in Section 2.10 of the Disclosure Letter, no action, suit,

proceeding or investigation is pending or, to LVI's Knowledge, threatened

against VSI or any Seller, nor is there any basis therefor known to LVI. The

other Sellers represent, to such Seller's Knowledge, there is no action, suit,

proceeding or investigation pending or threatened against any Seller, nor is

there any basis therefor known to such Sellers.

SECTION 2.11 PERMITS; COMPLIANCE WITH LAWS. To the Knowledge of each

Seller, (a) VSI has all necessary permits, licenses and governmental

authorizations (collectively the "LICENSES") for the lease, ownership, use or

operations of its properties and assets and the carrying on of the business of

VSI as presently conducted, (b) VSI has conducted its business in substantial

compliance with and is in substantial compliance with all Applicable Laws,

regulations, orders, permits, judgments, ordinances or decrees of all

Governmental Entities having jurisdiction over VSI and/or its business

operations, (c) there are no inquiries, pending or threatened, by any

Governmental Entity

<PAGE>

that would have a Material Adverse Effect, (d) there will be no Material Adverse

Effect as a result of the transactions hereunder or contemplated hereby, and (e)

true and complete copies of such licenses have previously been delivered to

Purchaser.

SECTION 2.12 TITLE TO PROPERTY; CONDITION OF PROPERTY; REAL PROPERTY

LEASES, ETC. LVI represents and warrants that:

(a) Except as set forth in Section 2.12(a) of the Disclosure Letter,

VSI has good and marketable title to all of its properties and assets,

including, without limitation, all those reflected in the Balance Sheet (except

for properties or assets sold or otherwise disposed of in the ordinary course of

business since the date of the Balance Sheet), all free and clear of all liens,

pledges, charges, security interests, Encumbrances or title retention agreements

of any kind or nature.

(b) Section 2.12(b) of the Disclosure Letter sets forth a complete and

correct list of the following personal property of VSI: machinery, tools,

computers and related software, office equipment, furnishings, vehicles,

inventory, spare parts, any fixtures attached to real property leased to VSI,

and any other tangible personal property (collectively, the "TANGIBLE ASSETs").

All of the Tangible Assets are available for use in VSI's business except for

those items being serviced in the ordinary course of business. All of the

Tangible Assets and the state of maintenance thereof are in compliance with all

Applicable Laws, statutes, ordinances, rules and regulations. The Tangible

Assets include all assets and properties that are necessary to conduct VSI's

business as it is now being conducted. The spare parts are usable in the

ordinary course of business and the value of the spare parts included in the

Tangible Assets at the close of business on the Closing Date shall be at least

as much as the value of the spare parts shown on Section 2.12(b) of the

Disclosure Letter.

complete listing by serial number of all video poker gaming devices owned by VSI

(the "Devices"). All of the Devices are owned by VSI free and clear of any

Encumbrance, and are duly licensed and registered with the State of Louisiana.

(d) Section 2.12(d) of the Disclosure Letter sets forth a complete and

correct description of all Leases, including but not limited to, all real

property leased to VSI and all leases of real property to which VSI is a party.

Complete and correct copies of all such Leases have been delivered to Purchaser.

Each such Lease is valid and subsisting and no event or condition exists which

constitutes, or after notice or lapse of time or both would constitute, a

default thereunder. The leasehold interests of VSI are subject to no lien or

other encumbrance, and VSI is in quiet possession of the properties covered by

such Leases. Neither any Seller nor VSI has received any notice that either the

whole or any portion of such leased real property is to be condemned,

requisitioned or otherwise taken by any public authority. Neither any Seller nor

VSI has any Knowledge of any public improvements that may result in special

assessments against or otherwise affect any of such leased real property. VSI

does not presently own and has never owned any real property.

<PAGE>

SECTION 2.13 ENVIRONMENTAL MATTERS. LVI and, to their Knowledge, other

Sellers represent and warrant that except as set forth on Section 2.13 of the

Disclosure Letter:

(a) VSI is not in violation of nor is there any alleged violation of

any judgment, decree, order, law, license, rule or regulation pertaining to

environmental matters, including without limitation those arising under any

federal, state or local statute, regulation, ordinance, order or decree relating

to health, safety or the environment (hereinafter "ENVIRONMENTAL LAWS");

(b) Neither Sellers nor VSI has received notice from any third party,

including without limitation any federal, state or local governmental authority,

(i) that VSI has been identified by the United States Environmental Protection

Agency as a potentially responsible party under the Comprehensive Environmental

Response, Compensation and Liability Act of 1980 as amended (CERCLA), with

respect to a site listed on the National Priorities List, 40 C.F.R. Part 300

Appendix B (1986); (ii) that any hazardous waste, as defined by 42 U.S.C.

ss.6903(5), any hazardous substance as defined by 42 U.S.C. ss.9601(14), any

pollutant or contaminant as defined by 42 U.S.C. ss.9601(33) or any toxic

substance, oil or hazardous material or other chemical or substance (including,

without limitation, asbestos in any form, urea formaldehyde or polychlorinated

biphenyls) regulated by any Environmental Laws ("HAZARDOUS SUBSTANCES") which

VSI has generated, transported or disposed of has been found at any site at

which a federal, state or local agency or other third party has conducted or has

ordered that VSI conduct a remedial investigation, removal or other response

action pursuant to any Environmental Law; or (iii) that VSI is or shall be a

named party to any claim, action, cause of action, complaint, (contingent or

otherwise) legal or administrative proceeding arising out of any third party's

incurrence of costs, expenses, losses or damages of any kind whatsoever in

connection with the release of Hazardous Substances;

been used by VSI for the handling, manufacturing, processing, storage or

disposal of Hazardous Substances except in accordance with applicable

Environmental Laws; (ii) in the course of any activities conducted by VSI, no

Hazardous Substances have been generated or are being used on any real property

leased or operated by VSI except in accordance with applicable Environmental

Laws; (iii) all real properties leased or operated by VSI are free from

contamination of every kind through activities of VSI, including without

limitation, groundwater, surface water, soil, sediment and air contamination,

and such properties do not contain any Hazardous Substances; and (iv) there have

been no releases (i.e., any past or present releasing, spilling, leaking,

pumping, pouring, emitting, emptying, discharging, injecting, escaping,

disposing or dumping) or threatened releases of Hazardous Substances on, upon,

into or from any real property leased or operated by VSI except in accordance

with applicable Environmental Laws.

SECTION 2.14 INSURANCE. LVI represents and warrants that Section 2.14

of the Disclosure Letter lists all policies of fire, liability, workmen's

compensation, life, property and casualty and other insurance owned or held by

VSI. Such policies of insurance are maintained, to the best of Sellers'

Knowledge, with financially sound and reputable

<PAGE>

insurance companies, funds or underwriters, and are of the kinds and cover such

risks and are in such amounts and with such deductibles and exclusions as are

consistent with prudent business practice. All such policies (a) are in full

force and effect, (b) are sufficient for compliance by VSI with all requirements

of law and all agreements to which VSI is a party, (c) provide that they will

remain in full force and effect until the Closing Date. VSI is not in default

with respect to its obligations under any of such insurance policies and has not

received any notification of cancellation of any such insurance policies. No

insurance carrier has denied coverage for any claim asserted by VSI in the past

five years, nor has any insurance carrier declined to provide any coverage to

VSI in the past five years.

SECTION 2.15 CONTRACTS. LVI represents and warrants that Section 2.15

of the Disclosure Letter sets forth a complete and accurate list of (i) all

material lease, maintenance, repair and service contracts and agreements of VSI

with customers (collectively, the "CUSTOMER CONTRACTS"), and (ii) all other

contracts to which VSI is a party or by or to which it or any of its assets or

properties is bound or subject (collectively, the "OTHER CONTRACTS" and,

collectively with the Customer Contracts, the "CONTRACTS"). As used in this

Section 2.15, the word "CONTRACT" means and includes every material agreement or

understanding of any kind, written or oral, which is legally enforceable by or

against VSI, and specifically includes (a) equipment leases; (b) telephone book

listing agreements; (c) non-competition, non-solicitation or non-disclosure

agreements; (d) manufacturers' warranties on tangible property; (e) cost sheets

and bills of materials; (f) contracts and other agreements with any current or

former officer, director, employee, consultant or shareholder or any

partnership, corporation, joint venture or any other entity in which any such

Person has an interest; (g) bonds or other security agreements provided by any

party in connection with the business of VSI; (h) contracts and other agreements

for the sale of any assets or properties of VSI other than in the ordinary

course of business or for the grant to any Person of any preferential rights to

purchase any of such assets or properties; (i) contracts or other agreements

under which VSI agrees to indemnify any Person or to share Tax liability of any

Person; (j) any contracts or other agreements with regard to Indebtedness; (k)

contract to provide vision and dental coverage for employees of VSI; or (l) any

other contract or other agreement whether or not made in the ordinary course of

business. Sellers have delivered to Purchaser true, correct and complete copies

of all of the Contracts, together with all modifications and supplements

thereto. Each of the contracts listed on Section 2.15 of the Disclosure Letter

or any of the other Sections of the Disclosure Letter is in full force and

effect, VSI is not in breach of any of the provisions of any such contract, and,

to the Knowledge of Sellers, no other party to any such contract is in default

thereunder, nor does any event or condition exist which with notice or the

passage of time or both would constitute a default thereunder. VSI has in all

material respects performed all obligations required to be performed by it to

date under each such contract. No approval or consent of any Person is needed in

order that the contracts listed on Section 2.15 of the Disclosure Letter and

other Sections of the Disclosure Letter continue in full force and effect

following the consummation of the transactions contemplated by this Agreement,

and no such contract includes any provision the effect of which may be to

enlarge or accelerate any obligations of VSI thereunder or give additional

rights to any other party thereto or will in any other

<PAGE>

way be affected by, or terminate or lapse by reason of, the transactions

contemplated by this Agreement. VSI is not a party to any franchise, license,

distributor or other similar type of contract or agreement. VSI is not party to

any contract or instrument nor subject to any restriction which now has or, to

the best of Sellers' Knowledge may have, an adverse effect, financial or

otherwise, upon VSI or its assets.

SECTION 2.16 EMPLOYEES. LVI represents and warrants that Section 2.16

of the Disclosure Letter sets forth the name, title and current annual salary

and other compensation payable by VSI to each employee of VSI.

SECTION 2.17 EMPLOYEE BENEFIT PLANS. LVI represents and warrants that:

(a) except for the arrangements set forth on Section 2.17(a) of the

Disclosure Letter, VSI does not now maintain or contribute to, and has not in

the current or preceding six (6) calendar years maintained or contributed to,

any employee benefit plan or pension, profit-sharing, deferred compensation,

bonus, stock option, share appreciation right, severance, group or individual

health, dental, medical, life insurance, survivor benefit, or similar plan,

agreement, understanding, practice, policy or arrangement, whether formal or

informal, for the benefit of any director, officer, consultant or employee,

whether active or terminated, of VSI. Each of the arrangements set forth on

Section 2.17(a) of the Disclosure Letter is hereinafter referred to as an

"EMPLOYEE BENEFIT PLAN", except that any such arrangement which is a

multi-employer plan shall be treated as an Employee Benefit Plan only for

purposes of Sections 2.17(d)(iv), (vi) and (viii) and 2.17(g) below.

(b) LVI has heretofore delivered to Purchaser true, correct and

complete copies of each Employee Benefit Plan of VSI, and with respect to each

such Employee Benefit Plan (i) any associated trust, custodial, insurance or

service agreements, (ii) any annual report, actuarial report, or disclosure

materials (including specifically any summary plan descriptions) submitted to

any governmental agency or distributed to participants or b

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