February 24, 2000

Mr. William Bork, Sr.
President
Penn National Gaming, Inc.
825 Berkshire Blvd.
Wyomissing, PA 19610

Dear Bill,

         I refer to the  contract  dated May 7,  1997  between  and  among  PNGI
Charles  Town  Gaming,  LLC and the  Charles  Town HBPA,  Inc.  The term of this
contract is in full force until December 31, 2000 (initial term).  There are two
one-year  rollover  terms called  first and second  extension  terms.  Notice to
terminate,  must be given,  by either  party,  prior to  September  30,  2000 or
September 30, 2001, whichever is applicable.

         The Charles Town HBPA,  Inc. hereby waives it's right to terminate this
contract  either the first or second  extension term. This waiver is irrevocable
and thus to insure  understanding the Charles Town HBPA, Inc. agrees to abide by
the  provisions  of  aforesaid  contract  until the end of the second  extension
period.

Sincerely,


/s/Richard C. Watson

Richard C. Watson
President

Charles Town HBPA, Inc.

RCW/pe
cc: Jim Buchanan
Richard L. Moore
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