AMENDMENT TO EMPLOYMENT AGREEMENT

This AMENDMENT TO EMPLOYMENT  AGREEMENT  ("Amendment"),  effective as of the 1st
day of June,  1999, by and between PENN NATIONAL  GAMING,  INC., a  Pennsylvania
corporation,  with its principal offices at 825 Berkshire Boulevard,  Suite 200,
Wyomissing,   Pennsylvania  19160  (the  "Company")  and  Robert  Ippolito,   an
individual residing at 1858 Fox Run Terrace, Warrington, Pennsylvania 18976 (the
"Employee").


                               B A C K G R O U N D

Company and Employee are parties to an  Employment  Agreement  dated as of April
12,  1994 (the  "Employment  Agreement")  and  desire  to amend  the  Employment
Agreement  as set forth in this  Amendment.  In  consideration  of their  mutual
promises and  covenants  set forth  herein,  and  intending to be legally  bound
hereby, Company and Employee agree as follows:

1. Paragraphs 2, 3 and 10 of the Employment  Agreement be and the same is hereby
amended and restated in their entirety as follows:

2. Term.  The term of this  Agreement  shall  commence on June 1, 1999 and shall
terminate on May 31, 2000 and shall continue thereafter from year to year unless
terminated by Company upon ninety (90) days written notice to Employee or sooner
terminated in accordance with the provisions of Paragraph 11 of this Agreement.

3.  Compensation:  For all services  rendered by Employee under this  Agreement,
Company agrees to pay Employee a salary at the annual rate of $150,000  ("Annual
Salary"),  payable in bi-weekly installments,  plus such additional compensation
and bonuses as may be awarded  from time to time to Employee by the  Chairman or
the Board of Directors of Company.

10.  Death.  In the event of the death of the  Employee  during the term of this
Agreement,  this  Agreement  shall  terminate  effective  as of the  date of the
Employee's  death,  and the  Company  shall not have any further  obligation  or
liability  hereunder except that the Company shall pay to Employee's  designated
beneficiary  or, if none, his estate (i) the portion,  if any, of the Employee's
Annual Salary, and any reimbursements, for the period up to the end of the month
of  Employee's  date of death  which  remains  unpaid,  and (ii) the  amount  of
Employee's Annual Salary in effect at the time of his death, payable in 26 equal
bi-weekly  installments  following  the date of  Employee's  death,  which death
benefit  shall be in  addition  to any  life  insurance  carried  or paid for by
Company on the life of Employee.

2. The Employment  Agreement,  except as amended hereby,  shall continue in full
force and effect in accordance with the terms and provisions thereof.

IN WITNESS  WHEREOF,  this  Amendment has been executed by the parties as of the
date first above written.

                           PENN NATIONAL GAMING, INC.

                                   BY:      /s/ Peter M. Carlino
                                            PETER M. CARLINO,
                                            Chairman and CEO

                                            /s/ Robert S. Ippolito
                                                ROBERT S. IPPOLITO

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