


(Powerhouse Technologies, Inc. Logo)

2311 south 7th avenue
bozeman, montana 59715 o U.S.A.
TELEPHONE:  (406) 585-6600
FAX:  (406) 585-6609


July 2, 1998



Mr. Alan Rassaby
60 The Esplanade
Clifton Hill
Victoria 3068 Australia

Dear Mr. Rassaby:

On behalf of  Powerhouse  Technologies,  Inc.,  we are  pleased to offer you the
position  of Senior  Vice  President  of Legal &  Administration  with our Legal
Department,  reporting to me and located in Atlanta,  Georgia.  We would like to
have this position in place by December 1, 1998 or sooner.

Should you decide to accept this offer, you understand that you will be required
to  sign a  Release  of  Information  form,  as  well  as an  Employee  Personal
Disclosure  form,  which  will be used to  conduct  an  investigation  into your
background,  sign a Standard  Conditions  of Employment  Agreement,  and sign an
Acknowledgment that you have read and will abide by the Powerhouse Technologies,
Inc.  Code of  Conduct.  A copy of the  Release of  Information  form,  Employee
Personal  Disclosure Form, the Standard  Conditions of Employment form, the Code
of Conduct, and the Acknowledgment are enclosed.

This  offer is  contingent  upon you  acquiring  an H-1B visa  status as well as
successful  completion of a background  investigation.  Should the investigation
into your  background  disclose  information  that raises concerns by Powerhouse
Technologies,  or you are found unfit by licensing authorities,  your employment
may be terminated  and any obligation by Powerhouse  Technologies  pertaining to
your employment will be considered null and void.

This offer includes:

     o    Annual base salary of $180,000;

     o    Performance  review  following  one-year of employment  with potential
          salary increase to $200,000 at that time;

     o    Annual Bonus Potential of $100,000;

     o    20,000 stock options,  subject to Board  approval,  vesting over three
          (3) years from grant  date;  o Payment for all costs  associated  with
          obtaining an H-1B visa;

     o    Relocation assistance to include:

          o    Actual  expenses  incurred in moving clothing and household goods
               from Australia to Atlanta, Georgia;

          o    Business class airfare from Australia to Georgia for you and your
               family when you relocate;

          o    Temporary housing for a maximum of ninety (90) days in a hotel or
               corporate housing;

          o    $20,000 bonus to cover the costs of purchasing  electrical  goods
               and other  furnishings,  payable one (1) week prior to arrival in
               the United States.

     o    Loan,  exercisable at your option at any time from the commencement of
          your employment,  in the amount of $70,000 to be amortized monthly and
          repaid in full with interest at eight (8) percent, two (2) years after
          the commencement of employment,  secured by second mortgage

<PAGE>


          on Atlanta residence and termination payments, if any, and due in full
          upon separation from the Company.

     o    As an exception to the standard benefits, vacation granted at the rate
          of four (4) weeks per  calendar  year ( prorate  based upon start date
          for the first  year) not to be used more than two weeks in any  month)
          to be used during the year in which it is granted.

As  an  employee  you  will  be  entitled  to   participate  in  the  Powerhouse
Technologies,   Inc.  standard  benefit  package.   Presently,   the  Powerhouse
Technologies standard benefit package includes:

     *    health/dental  insurance  with  Intermountain   Administrators,   Inc.
          effective  on date of  hire.  The  employee  has a  choice  of  annual
          deductible and contributes to the premium;

     *    flexible spending plan with health and/or dependent care accounts;

     *    Company paid life/AD&D  insurance at one times annual base salary. The
          employee may purchase  supplemental  life/AD&D  and/or  dependent life
          insurance. UNUM is the carrier;

     *    401K  plan.  Eligibility  is first of the month  following  hire date,
          effective 7/1/98;

     *    employee stock purchase plan.  Open  enrollment for next calendar year
          in December each year;

     *    short term disability insurance, six (6) months service required;

     *    employee  paid  long  term  disability  insurance  (30  hours  a  week
          eligibility requirement);

     *    ten (10) paid holidays during the calendar year;

For clarification and protection of both you and the Company, your acceptance of
this  offer,  as  defined  herein  and  in  the  enclosed  "Employment  Letter,"
represents the sole agreement  between you and the Company.  Employment with the
Company is defined as at-will. At-will is defined as employment and compensation
that can be terminated with or without cause, and with or without notice, at any
time, at the option of either the employer or the employee.  No prior  promises,
representations,  and/or  understandings  relative to any terms or conditions of
your employment are to be considered as part of this agreement  unless expressed
in writing in this letter.

Alan, I am confident that you will make a major  contribution to Powerhouse.  If
you have  questions,  please  call me. If you accept our offer,  please sign the
Acceptance, the Employment Letter, the Release of Information form, the Employee
Personal  Disclosure  form, the Standard  Conditions of Employment form, and the
Code of Conduct Acknowledgment form and return them to Human Resources.

Sincerely,


/S/ Richard M. Haddrill

Richard M. Haddrill
President & CEO

cc:      Edward Neuman, Human Resources


<PAGE>



                                   ACCEPTANCE


I accept the position of Senior Vice President of Legal &  Administration  under
the terms and  conditions  stated in the letter of July 2, 1998 from  Richard M.
Haddrill, President & CEO, to Alan Rassaby.


/S/ Alan Rassaby
-----------------------
Alan Rassaby


7 July, 1998
-----------------------
Date


<PAGE>


(Powerhouse Technologies, Inc. Logo)


2311 south 7th avenue
bozeman, montana 59715 o U.S.A.
TELEPHONE:  (406) 585-6600
FAX:  (406) 585-6609



July 2, 1998


Mr. Alan Rassaby
60 The Esplanade
Clifton Hill
Victoria 3068 Australia

Re:  Employment Letter

Dear Alan:

This will confirm the terms and conditions of your  employment  with  Powerhouse
Technologies, Inc., (the "Company"), in the position of Senior Vice President of
Legal & Administration.

In  consideration of your expending your best efforts in the performance of your
duties  on  behalf  of the  Company,  the  Company  agrees,  in the  event  your
employment  with the Company is terminated  without good cause during your first
year of  employment,  the  Company  will pay you a lump sum equal to twelve (12)
months base salary.  If your employment  with the Company is terminated  without
good cause during your second or third year of employment,  or if your H-1B visa
is not  renewed,  the Company  will pay you a lump sum equal to eight (8) months
base salary.  If your  employment  with the Company is  terminated  without good
cause during your fourth or subsequent years of employment, the Company will pay
you a lump sum equal to six (6) months base salary.  During your  employment you
may be  asked to  assume  other  senior  positions  within  the  company  or its
subsidiaries,  but in no event  would  your base  salary or bonus  potential  be
reduced without mutual agreement.

It is understood  that the Company may, at any time,  terminate your  employment
for "Cause." A  termination  for Cause is a  termination  evidenced by a finding
adopted in good faith by the President of the Company that you (i) willfully and
continually failed to substantially  perform your duties with the Company (other
than a  failure  resulting  from  your  incapacity  due to  physical  or  mental
illness), (ii) engaged in willful misconduct, (iii) have breached this Agreement
in any material respect, (iv) engaged in conduct that is dishonest,  fraudulent,
unlawful or grossly  negligent or conduct  which is not in  compliance  with the
Company's Code of Conduct (Powerhouse Technologies' Code of Conduct is enclosed)
or similar applicable set of standards of conduct and business practices, or (v)
any regulatory authority, gaming commission, lottery agency or similar authority
in any  jurisdiction  in which the Company is conducting  business or intends to
submit a proposal or conduct  business  provides a reasonable  basis for concern
that it  likely  will  find you  unsuitable  or unfit  to  continue  to act as a
representative,  officer,  director, or employee of the Company, the Company has
received  notice  from  such  authority  of such a  finding  or you fail to file
appropriate  applications with,  provide requested  information to, or otherwise
fail to cooperate with, any such authority.  No act, nor failure to act, on your
part,  shall be considered  "willful" for purposes of (ii) above unless you have
acted or failed to act,  with an absence of good faith and without a  reasonable
belief  that  your  action or  failure  to act was in the best  interest  of the
Company.  Notwithstanding  anything contained in this Agreement to the contrary,
no  failure  to  perform  by you after  notice  of  termination  is given  shall
constitute Cause for purposes  hereof.  Termination for Cause shall be by action
of the Board after  giving you and your legal  advisors an  opportunity  to meet
with the Board, contest the basis for termination,  and to demonstrate that your
continued employment is in the best interests of the Company. If an H-1B visa is
not obtained by August 31, 1999,  your  employment may be terminated by December
31,  1999 and any  obligation  by  Powerhouse  Technologies  pertaining  to your
employment will be null and void after December 31, 1999.

<PAGE>


It is  understood  that the  foregoing  payments that may be payable to you upon
termination of your employment shall be in lieu of any other severance  payments
which may  otherwise  have been  provided by the Company to employees  under its
severance  practices  or policy,  but shall not  otherwise  affect any  benefits
(including  COBRA and pension  rights) and payments to which you may be entitled
upon leaving the employ of the Company.

In connection  with your  employment  with the Company,  you will be eligible to
participate  in any bonus or  executive  incentive  compensation  plan as may be
established to be maintained by the Company for its executives,  subject to such
factors and discretionary bases as may be determined by the Company's CEO, Board
of Directors or its Compensation Committee.

Finally,  you agree to continue to abide by the Company's Standard Conditions of
Employment, the form of which is attached hereto and to be executed by you.

If you are  prepared to accept  employment  with the Company on the basis of the
foregoing terms and conditions,  please acknowledge below and return one copy of
this letter to the Company, keeping another copy for your files.

Very truly yours,



/S/ Richard M. Haddrill

Richard M. Haddrill
President & CEO



ACCEPTED AND AGREED TO:


/S/ Alan Rassaby
------------------------
Alan Rassaby


DATE: 7.7.98
      ------------------


