FIRST AMENDMENT TO LOAN AGREEMENT

                  This First Amendment to Loan Agreement  (this  "Amendment") is
entered  into with  reference  to the  Senior  Secured  Multiple  Draw Term Loan
Agreement  dated as of  December  13,  1999 among Penn  National  Gaming of West
Virginia,  Inc.  ("Borrower"),  the Lenders  party  thereto and Bank of America,
N.A., as Administrative  Agent (as heretofore  amended,  the "Loan  Agreement").
Capitalized  terms used but not defined  herein are used with the  meanings  set
forth for those terms in the Loan Agreement.

                  Borrower  and the  Lenders  hereby  agree  to  amend  the Loan
Agreement as follows:

          1. Definitions. Section 1.1 of the Loan Agreement is hereby amended to
     add the following definition:

         "Charles  Town  Purchase  Agreement"  means the  agreement  for sale of
         membership  interests  in PNGI Charles  Town Gaming  Limited  Liability
         Company, copies of which have been distributed to the Banks.

          2. Consent to Charles Town Buy-Out. Section 6.18 of the Loan Agreement
     is     hereby     amended     to    read     in     full    as     follows:


         "6.18      Acquisitions      and       InvestmentsAcquisitions      and
         InvestmentsAcquisitions  and Investments.  Make any Acquisition or make
         any Investment other than (a) Acquisitions and Investments permitted by
         Section  8.05 of the PNGI  Credit  Agreement  which  do not  constitute
         Significant Transactions and (b) Investments consisting of the purchase
         of  the  remaining  ownership  of  PNGI  Charles  Town  Gaming  Limited
         Liability Company not owned by Borrower as of the Closing Date pursuant
         to the Charles Town Purchase Agreement."

          3.  Acknowledgment  Regarding Casino Magic.  Borrower confirms that it
     has    entered    into   an    agreement    to    purchase    the    Casino
       Magic  Bay  St.  Louis  and
     Boomtown Biloxi  properties  from Pinnacle  Entertainment,  Inc.  (formerly
     known as "Hollywood  Park  Corporation").  Borrower  acknowledges  that the
     consummation  of the  proposed  purchase  will  constitute  a  "Significant
     Transaction"  as  defined  in the  Loan  Agreement  and  will  require  the
     concurrent  repayment in full of all of the Obligations and the termination
     of the Commitment.

          4.  Expenses.  Borrower  confirms that pursuant to Section 11.3 of the
     Loan  Agreement,  it has  agreed  to pay all  reasonable
     out-of-pocket cost and expenses of the  Administrative  Agent in connection
     with this Amendment.

          5. Representations and Warranties. Borrower represents and warrants to
     the      Administrative      Agent      and     the      Lenders      that:


         (a) no Default or Event of Default has occurred and remains  continuing
         or will result from the consummation of the  transactions  contemplated
         by the Charles Town  Purchase  Agreement.  (b) Borrower has delivered a
         true,  correct and complete copy of the Charles Town Purchase Agreement
         to each of the Banks..

          6.  Confirmation.  In all  other  respects,  the  terms  of  the  Loan
     Agreement   and  the   other   Loan   Documents   are   hereby   confirmed.



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                  IN WITNESS WHEREOF, Borrower and the Administrative Agent have
executed  this  Amendment  as  of  March  29,  2000  by  their  duly  authorized
representatives.

          PENN NATIONAL GAMING OF WEST VIRGINIA, INC.


          By: __/s/Robert S. Ippolito

          Title: _Secretary/Treasurer________


          BANK OF AMERICA, N.A.


          By: _/s/Jeff Bailard___________________

          Title: _Vice President_________________


          FIRST UNION NATIONAL BANK


          By: _/s/_Lynn B. Eagleson____________

          Title: __Vice President______________

 The undersigned hereby consent to the foregoing:

 PENN NATIONAL GAMING, INC.

 By: __/s/Robert S. Ippolito

 Title: _Secretary/Treasurer________

 PNGI CHARLES TOWN GAMING LIMITED LIABILITY COMPANY

 By: __/s/Robert S. Ippolito

 Title: _Secretary/Treasurer________











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