
AGREEMENT FOR CONSENT AND WAIVER UNDER
SECOND AMENDED AND
RESTATED CREDIT AGREEMENT

          THIS  AGREEMENT  FOR  CONSENT  AND WAIVER  UNDER  SECOND  AMENDED  AND
     RESTATED CREDIT  AGREEMENT (this Agreement) is made this 31st day of March,
     2000 by and among PENN NATIONAL  GAMING,  INC., a Pennsylvania  corporation
     (Borrower);  PENN NATIONAL  GAMING OF WEST VIRGINIA,  INC., a West Virginia
     corporation  (PNGIWV);  FIRST  UNION  NATIONAL  BANK,  a  national  banking
     association (for itself and in its capacity as agent hereunder, Agent); the
     banks  signatory  to  this  Agreement   (together  with  the  Agent,   each
     individually a Bank and individually and collectively,  the Banks) and PNGI
     CHARLES TOWN GAMING  LIMITED  LIABILITY  COMPANY,  a West Virginia  limited
     liability company (Charles Town).

                                   BACKGROUND

          Borrower and Banks entered into a Second  Amended and Restated  Credit
     Agreement  dated  January 28, 1999, as amended by Amendment No. 1 to Second
     Amended and Restated Credit  Agreement and Joinder of Subsidiary  Guarantor
     dated July 22, 1999,  Amendment No. 2 to and Consent  under Second  Amended
     and Restated  Credit  Agreement  dated July 29, 1999 and Amendment No. 3 to
     and Consent and Waiver under Second Amended and Restated  Credit  Agreement
     (Amendment  No. 3) dated December 13, 1999 (and as may be further amended
     from time to time, the Credit  Agreement) for the purposes of providing a
     revolving credit facility,  for the financing of a loan from Borrower to FR
     Park Racing L.P., the refinancing of certain then- existing indebtedness of
     Borrower,  the  issuance of letters of credit for the benefit of  Borrower,
     and for the working  capital  needs and general  corporate  purposes of the
     Borrower.

          PNGIWV,  a  wholly-owned  Subsidiary  of  Borrower  and  a  Subsidiary
     Guarantor,  will  acquire the eleven  percent  (11%)  Minority  Interest of
     Charles Town for a purchase price of Six Million  Dollars  ($6,000,000)  in
     cash (the Purchase),  after which Charles Town will become a wholly-owned
     Subsidiary of PNGIWV.

          In  consideration of the foregoing and the premises and the agreements
     hereinafter  set forth,  and  intending  to be legally  bound  hereby,  the
     parties hereto agree as follows:
                                       39
<PAGE>

1.                         Consent and Waiver.

          a. Section 8.02 of the Credit Agreement prohibits the Borrower and the
     Credit  Parties  from  acquiring  any part of the property or assets of any
     Person.  Section 8.05 of the Credit  Agreement  prohibits the Borrower from
     making Investments; however Section 8.05(ix) of the Credit Agreement allows
     the  Borrower  and the  Credit  Parties  to invest up to  $47,566,077  plus
     accrued interest in Charles Town. After the Purchase,  PNGIWVs  Investment
     in Charles Town will exceed  $47,566,077 plus accrued interest.  Therefore,
     the  Purchase  is not  permitted  by  Sections  8.02 and 8.05 of the Credit
     Agreement.  Banks  hereby  consent to the Purchase and waive any Default or
     Event of Default resulting thereby.

          b. Section 8.17(iii) of the Credit Agreement prohibits the Borrower or
     a  Wholly-Owned  Subsidiary  from  establishing,  creating or acquiring any
     Subsidiary   unless  such   Subsidiary   executes  a  counterpart   to  the
     Subsidiaries  Guaranty,  the Pledge  Agreement and the Security  Agreement.
     Section  8.17(x)  of the Credit  Agreement  requires  any new  Wholly-Owned
     Subsidiary  to execute  and  deliver all  documentation  such  Wholly-Owned
     Subsidiary  would  have had to  deliver  if it were a  Credit  Party on the
     Restatement  Effective Date. Section 8.17(y) requires the Borrower, at such
     time as Charles  Town becomes a  Wholly-Owned  Subsidiary  of Borrower,  to
     cause  Charles  Town to  execute  the  Subsidiaries  Guaranty,  the  Pledge
     Agreement and Security Agreement,  to execute and deliver all documentation
     required  by Section  8.17(x)  of the  Credit  Agreement  and  deliver  all
     additional  collateral  required by Agent or Required  Banks.  Banks hereby
     consent to the  establishment of Charles Town as a Wholly-Owned  Subsidiary
     of a Subsidiary and waive the requirements of Sections  8.17(iii),  8.17(x)
     and 8.17(y) with respect thereto; provided, however, that such waiver shall
     cease to be  effective on or after June 30,  2000,  on which date  Borrower
     agrees to comply with the terms of Paragraph 3 hereof.
                                       40
<PAGE>

2.                        Acknowledgments.

          a. PNGIWV,  as evidenced by its signature below,  hereby  acknowledges
     and agrees that the interests it owns of Charles Town constitute Collateral
     (as  defined in the Pledge  Agreement)  and are  pledged to Agent,  for the
     benefit  of  Banks,  under  the  Pledge  Agreement.  Annex G to the  Pledge
     Agreement,  which lists the pledged limited liability company interests, is
     hereby  amended  and  restated  in its  entirety  as set forth on Exhibit A
     attached hereto.

          b. Section 8.12(ii) prohibits  modifications of the Charles Town Joint
     Venture  Agreement,  other  than  modifications  that could  reasonably  be
     expected  to be  adverse  to the  interests  of the  Banks in any  material
     respect.  Banks  hereby  acknowledge  the  Purchase for purposes of Section
     8.12(ii) of the Credit Agreement.

          3. Affirmative Covenant. Borrower, PNGIWV and Charles Town each hereby
     covenant  and agree  that if: (i) any  Banks  Commitment  under the Credit
     Agreement  remains  effective  or (ii) any  Indebtedness  under the  Credit
     Agreement remains outstanding,  in each case on June 30, 2000, then Charles
     Town will (and  Borrower and PNGIWV  hereby agree to cause Charles Town to)
     deliver on or before June 30, 2000 the following documents to Agent:

          a. a duly  executed  joinder to the  Subsidiaries  Guaranty,  Security
     Agreement  and Pledge  Agreement,  in form and  substance  satisfactory  to
     Banks;  b. executed UCC-1  financing  statement to be filed against Charles
     Town in those jurisdictions required by Agent;

          c. any and all pledged  intercompany  notes from or for the benefit of
     Charles Town;

          d. a duly  executed  mortgage or deed of trust,  in favor of Agent for
     the  benefit of Banks,  on each  parcel of real  property  owned by Charles
     Town;

          e. a marked-up title report of a title insurance company  satisfactory
     to Agent,  representing such title insurance companys  commitment to issue
     in favor of Agent  for the  benefit  of Banks,  at  Borrowers  expense,  a
     standard  form title  insurance  policy  insuring the lien of each mortgage
     delivered  pursuant to  subparagraph  (e) above,  subject to no other liens
     except as listed therein and acceptable to Agent;
                                       41
<PAGE>

          f. a Phase I  environmental  report with respect to each  property for
     which a mortgage is delivered  pursuant to subparagraph  (e) above, in form
     and   substance   satisfactory   to  Agent  and  prepared  by  a  qualified
     environmental professional acceptable to Agent;

          g. an  opinion  of counsel  to  Charles  Town,  in form and  substance
     satisfactory to Agent;

          h. a  certificate  of good  standing  dated  as of a  recent  date for
     Charles Town in the jurisdiction of its formation;

          i. a certificate from the secretary of Charles Town: (i) attaching the
     operating  agreement  of  Charles  Town or  certifying  that the  operating
     agreement has not been modified since it was last delivered to Banks;  (ii)
     attaching  resolutions  from  the  [board  of  managers]  of  Charles  Town
     authorizing  the execution by Charles Town of each mortgage and the joinder
     to the Security  Agreement  and Pledge  Agreement;  and (iii)  attaching an
     incumbency certificate; and

          j. such additional documents as Agent shall reasonably request.

          4.  Negative  Covenants.  Charles Town hereby  covenants and agrees to
     comply with the terms of the negative  covenants  set forth in Section 8 of
     the Credit Agreement as if Charles Town were a Subsidiary Guarantor. PNGIWV
     hereby  covenants and agrees to cause Charles Town to comply with the terms
     of the negative covenants set forth in Section 8 of the Credit Agreement as
     if Charles Town were a Subsidiary Guarantor.

          5.  Representations  and  Warranties.  Borrower  and  each  Subsidiary
     Guarantor hereby represents and warrants to Banks as follows:

          a.  Representations.  The  representations and warranties set forth in
     Section 6 of the Credit  Agreement  are true and  correct  in all  material
     respects as of the date  hereof,  including as applied to Charles Town as a
     Subsidiary;  there is no Event of  Default  or  Default  under  the  Credit
     Agreement, as amended hereby; and there has been no material adverse change
     in the financial  condition or business of Borrower or any Subsidiary  from
     the date on which Borrower last delivered financial statements to Banks.

          b. Power and Authority. Borrower, PNGIWV and Charles Town each has the
     power and authority under the laws of each of their states of incorporation
     or formation and under their articles or certificates of incorporation  and
     bylaws or other formation  documents or other formation  documents to enter
     into and perform this  Agreement  and the other  documents  and  agreements
     required hereunder (collectively,  the Agreement Documents);  all actions
     (corporate or  otherwise)  necessary or  appropriate  for the execution and
     performance  by each of Borrower,  PNGIWV and Charles Town of the Agreement
     Documents have been taken; and that each of the Agreement Documents and the
     Credit Agreement  constitute the valid and binding obligations of Borrower,
     PNGIWV,  Charles Town and each other Subsidiary,  enforceable in accordance
     with their respective terms.

          c. No Violations of Law or Agreements.  The making and  performance of
     the Agreement  Documents by Borrower,  PNGIWV and Charles Town will not (i)
     violate any provisions of any law or regulation,  federal,  state or local,
     or the  articles  or  certificates  of  incorporation  or  bylaws  or other
     formation  documents  of any of  Borrower,  PNGIWV or Charles  Town or (ii)
     result in any breach or  violation  of, or  constitute a default or require
     the  obtaining of any consent  under,  any agreement or instrument by which
     any of  Borrower,  PNGIWV or Charles  Town or any of their  property may be
     bound.
                                       42
<PAGE>

          6. Conditions to Effectiveness  of Amendment.  This Agreement shall be
     effective upon Agents receipt of the following documents, each in form and
     substance satisfactory to Agent:

          a.  Agreement.  This  Agreement  duly  executed by  Borrower,  PNGIWV,
     Charles Town, Agent and Banks.

          b. Opinion of Counsel to Charles Town. An opinion  letter from counsel
     to Charles Town in form and substance satisfactory to Agent.

          c. Purchase Agreement.  A duly executed copy of the Agreement for Sale
     of  Membership  Interest  in PNGI  Charles  Town Gaming  Limited  Liability
     Company dated the ____ day of March, 2000 by and between Thomas Hale Boggs,
     Jr., William C. Bryant, James A. Reeder, Sun Mountain Development,  LLC and
     Timber Nation Limited  Partnership,  PNGIWV,  or its  affiliated  designee,
     Charles Town and Borrower.

          d.  Consents and  Approvals.  Receipt by Borrower,  PNGIWV and Charles
     Town of all necessary  regulatory  and other consents and approvals for the
     Purchase.  e. Lien  Searches  against  Charles  Town. As soon as available,
     updated lien searches against Charles Town in such locations as Agent shall
     reasonably request.

          f. Certificates of Membership Interest.  Any and all certificate(s) of
     membership interest of
Charles Town.

          g. Other Documents.  Such additional documents as Agent may reasonably
     request.

          7. Affirmations.  Borrower, PNGIWV and Charles Town hereby: (i)affirm
     all the  provisions of the Credit  Agreement,  Security  Agreement,  Pledge
     Agreement and  Contribution  and  Indemnification  Agreement and (ii)agree
     that the terms and conditions of the Credit Agreement,  Security Agreement,
     Pledge  Agreement and  Contribution  and  Indemnification  Agreement  shall
     continue in full force and effect.
                                       43
<PAGE>

8.                         Miscellaneous.

          a. Borrower  agrees to pay or reimburse  Agent for all reasonable fees
     and expenses (including without limitation  reasonable fees and expenses of
     counsel)  incurred by Agent in connection with the  preparation,  execution
     and delivery of this Agreement.

          b. This  Agreement  shall be governed by and  construed in  accordance
     with  the laws of the  Commonwealth  of  Pennsylvania,  without  regard  to
     conflicts-of-law or choice-of-law rules.

          c. All terms and provisions of this Agreement shall be for the benefit
     of and be binding upon and  enforceable  by the  respective  successors and
     assigns of the parties hereto.

          d. This Agreement may be executed in any number of  counterparts  with
     the same effect as if all the signatures on such  counterparts  appeared on
     one document and each such counterpart shall be deemed an original.

          e.  Except as  expressly  set forth  herein,  neither  the  execution,
     delivery and performance of this Agreement,  nor anything  contained herein
     shall be  construed  as or shall  operate  as a consent to or waiver of any
     provision  of, or any  right,  power or remedy  of Banks  under the  Credit
     Agreement  and  the  agreements   and  documents   executed  in  connection
     therewith.

                                       44
<PAGE>

          IN WITNESS  WHEREOF,  the undersigned  have executed this Agreement on
     the day and year first above written.

                 PENN NATIONAL GAMING, INC.


                 By:      /s/Robert S. Ippolito_____
                          Name: Robert S. Ippolito
                          Title: Secretary/Treasurer


                 PENN NATIONAL GAMING OF WEST
                 VIRGINIA, INC., as a Subsidiary Guarantor


                 By:      /s/Robert S. Ippolito__
                          Name: Robert S. Ippolito
                          Title:Secretary/Treasurer


                 PNGI CHARLES TOWN GAMING LIMITED
                 LIABILITY COMPANY



                 By:      /s/Robert S. Ippolito__
                          Name: Robert S. Ippolito
                          Title:Secretary/Treasurer










                             [EXECUTIONS CONTINUED]
                                       45
<PAGE>


         FIRST UNION NATIONAL BANK, as Agent


         By:      /s/Lynn B. Eagleson________
                  Name: Lynn B. Eagleson
                  Title: Vice President


         SUMMIT BANK


         By:      /s/Mary R. Balciar___________
                  Name: Mary R. Balciar
                  Title: Vice President

Accepted and Agreed:

MOUNTAINVIEW THOROUGHBRED
RACING ASSOCIATION, as a Subsidiary
Guarantor

By:      /s/Robert S. Ippolito__
         Name: Robert S. Ippolito
         Title:Secretary/Treasurer


PENNSYLVANIA NATIONAL TURF
CLUB, INC., as a Subsidiary Guarantor

By:      /s/Robert S. Ippolito__
         Name: Robert S. Ippolito
         Title:Secretary/Treasurer


                             [EXECUTIONS CONTINUED]
                                       46
<PAGE>

PENN NATIONAL SPEEDWAY,
INC., as a Subsidiary Guarantor

By:      /s/Robert S. Ippolito__
         Name: Robert S. Ippolito
         Title:Secretary/Treasurer


STERLING AVIATION, INC.,
as a Subsidiary Guarantor

By:      /s/Robert S. Ippolito__
         Name: Robert S. Ippolito
         Title:Secretary/Treasurer


PENN NATIONAL HOLDING
COMPANY, as a Subsidiary
Guarantor

By:      /s/Robert S. Ippolito__
         Name: Robert S. Ippolito
         Title:Secretary/Treasurer


PNGI POCONO, INC.,
as a Subsidiary Guarantor

By:      /s/Robert S. Ippolito__
         Name: Robert S. Ippolito
         Title:Secretary/Treasurer

                                       47



                             [EXECUTIONS CONTINUED]
<PAGE>

TENNESSEE DOWNS, INC.,
as a Subsidiary Guarantor

By:      /s/Robert S. Ippolito__
         Name: Robert S. Ippolito
         Title:Secretary/Treasurer

THE DOWNS RACING, INC.,
as a Subsidiary Guarantor

By:      /s/Joseph A. Lashinger
Name:   Joseph A. Lashinger
Title: President/Secretary/Treasurer

NORTHEAST CONCESSIONS, INC.,
as a Subsidiary Guarantor

By:      /s/Robert S. Ippolito__
Name: Robert S. Ippolito
Title:   Vice President/Treasurer

BACKSIDE, INC.,
as a Subsidiary Guarantor

By:      /s/Robert S. Ippolito__
Name: Robert S. Ippolito
Title: Assistant Secretary

MILL CREEK LAND, INC.,
as a Subsidiary Guarantor

By:      /s/Robert S. Ippolito__
Name: Robert S. Ippolito
Title:Secretary/Treasurer

WILKES BARRE DOWNS, INC.,
as a Subsidiary Guarantor

By:      /s/Robert E. Abraham
         Name:Robert E. Abraham
         Title:President/Secretary/Treasurer
                                       48
