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CORRESP
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[Letterhead of Gibson, Dunn & Crutcher
LLP]

acheng@gibsondunn.com

August 24, 2005

VIA EDGAR

  (213)
  229-7684

  C
  41731-00005

  (213)
  229-6684

Linda Cverkel

Branch Chief

Division of Corporation Finance

Securities and Exchange Commission

450 Fifth Street, N.W.

Washington, D.C. 20549-0510

Re:          Herbst
Gaming, Inc.

Form 10-K for the year ended
December 31, 2004

Form 10-Q for the period ended
March 31, 2005

Form 8-K/A dated April 15, 2005

Commission File Number: 333-71094

Dear Ms. Cverkel:

On behalf Herbst Gaming, Inc. (the “Company”), this letter responds to your
letter dated August 11, 2005, regarding the above-referenced filings (the “Comment Letter”).  This letter sets forth the Company’s proposed
responses to each of your comments, which we are forwarding to you for your
consideration prior to any additional filing by the Company.

Each of your comments from the Comment Letter
is set forth below, followed by the Company’s related response.  For the Staff’s convenience, the Company has
also taken the liberty of including as Exhibit A a copy of the pro
forma financial statements which reflect revisions made in response to the
Staff’s comments to the pro forma financial statements filed with the Company’s
Form 8-K/A dated April 15, 2005.
These pro forma financial statements are marked to show sections that
have changed from the previous filing.

1

Form 10-K for the year ended
December 31, 2004

Marketing
page 4

1.                                      We
note the disclosure on page 4 indicating that the Company has implemented
a players club and slot club under which points earned may be redeemed for
cash, discounted rooms, food and other goods and services.  Please tell us and explain in the notes to
your financial statements in future filings how you recognize and classify
awards earned by customers under this program.

Historically, liabilities in respect of our
player’s club have not constituted a significant amount, with the Company’s
player’s club liability being $277,000 at December 31, 2004.

Player’s club liability is recognized as
points are earned and is included in the “Other liabilities” line of the
Company’s balance sheet.  Player’s club
expenses are included in the “Promotional allowances” line of the Company’s
statement of operations.

The Company has noted the Staff’s comment and
will expand its discussion of the player’s club as part of the promotional
allowance accounting policy discussion in future filings.

 Management’s Discussion & Analysis

-
Recently Issued and Adopted Accounting Standards, page 32

2.                                      We
note your disclosure listing the accounting standards that did not or are not
expected to have any impact on your results of operations or financial
condition.  In future filings, please
expand your disclosure in MD&A and the notes to the financial statements to
include: 1) a brief description of the new standard; 2) the date that the
adoption is required and the date that the registrant plans to adopt, if
earlier; and 3) a discussion of the methods of adoption allowed by the standard
and the method expected to be utilized by the registrant.  See SAB No. 74.

The Company has noted the Staff’s comment and
will provide such disclosure in future filings.

Statements
of Operations, Page 37

3.                                      We
note that interest expense is presented net of capitalized interest.  Please revise future filings to disclose the
total amount of interest cost incurred during the period and the amount thereof
that has been capitalized.  See paragraph
21 of SFAS No. 34.

The Company has had no capitalized interest
since 2000, but has continued to use the same description of this line item in
its financial statements as it anticipated having capitalized interest from
time to time.  For example, the Company
expects to have capitalized interest in the third quarter of this year.  The Company will disclose the total amount of
interest cost incurred during the period in question and the amount thereof
that has been capitalized in future filings as recommended by the Staff.

2

Notes
to the Financial Statements

Note
1 Description of Business and Summary of Significant Accounting Policies

- Lease Acquisition Costs, page 42

- Location Rent Expense, page 43

4.                                      We
note the disclosure indicating that capitalized lease acquisition costs are
amortized using the straight-line method over the term of the related leases,
including expected renewals, which range from one to twenty years.  We also note the disclosure indicating that
fixed rental payments are recorded on a straight-line basis over the agreement
term, including any optional extension periods that are expected to be
exercised.  Please explain why you
believe it is appropriate to amortize or recognize such costs over a period
which includes expected renewals or optional extension periods, rather than
over only the original lease term.  As
part of your response and your revised disclosure, clarify why you believe that
expected renewals or optional extensions are reasonably assured.  We may have further comment upon receipt of
your response.

The Company agrees that its description of
this policy should be clarified, and it will do so in future filings.  The Company amortizes its lease acquisition
costs over the life of its leases, which range from one to twenty years.  The extension language the Staff points out
applies only to one lease.  This lease
had a five-year extension period, exercisable entirely at the Company’s option,
which the Company was certain to extend without substantial cost.  As permitted by SFAS 142, paragraph 11,
renewals or extensions should be considered in determining the useful life when
they are perfunctory and there are minimal costs involved.  The Company is currently in the third year of
this five-year extension period and given it is unusual for leases to include
extension periods at the sole discretion of the lessee, it is unlikely that
this will be a recurring situation.  The
Company proposes to modify its descriptions of Lease Acquisition Costs and
Location Rent Expense in its future filings as follows:

Lease Acquisition Costs—Significant incremental costs associated with
the acquisition of location leases are capitalized and amortized using the
straight-line method over the term of the related leases. Lease acquisition
costs are stated at cost less accumulated amortization of $[         ]
and $[          ] at December 31,
200[  ] and 200[   ], respectively.

Location Rent Expense—Fixed rental payments (including scheduled
increases) are recorded on a straight-line basis over the agreement term.
Renewal agreements are considered new agreements and are accounted for as
described above over the new agreement term.

3

-
Location Rent Expense, page 43

5.                                      We
note your disclosure related to location rent expense that states that
contingent payments are expensed in the period incurred.  In future filings, please revise your
disclosure to include the basis on which contingent payments are determined.  See paragraph 16 of SFAS No. 13.  Also, in future filings, please revise to
disclose the amount of fixed and contingent rentals incurred during each period
presented.  Refer to the requirements of
paragraph 16c of SFAS No. 13.

The language the Staff references was
included inadvertently, as the Company does not currently have, nor has it had
since the Company has made public filings, any contingent payments for lease
agreements.  The Company will omit any
reference to contingent payments in its future filings until such time as such
payments may arise.  All fixed rental
payments are disclosed in Note 9 of the Company’s financial statements under “Commitments
and Contingencies.” Please see our response above for the Company’s proposal to
modify its description of Location Rent Expense in its future filings.  The Company will disclose the amount of fixed
and contingent rentals incurred for each period should the Company enter into
leases with such terms.

Note
2. Acquisitions

6.                                      Please
explain in further detail why no identifiable intangible assets (i.e., customer
relationships, tradenames, etc.) other than lease acquisition costs were
recognized in connection with the acquisition of the route assets of Anchor
Coin, Inc.  As part of your response
and your revised disclosure please explain how the amount allocated to lease
acquisition costs was determined and indicate the weighted average amortization
period over which these costs are being amortized to expense.

The only intangible assets acquired pursuant
to the acquisition in 2003 of Anchor Coin, Inc. (“Anchor”, and such acquisition, the “Anchor Acquisition”) were approximately 60
route contracts.  The Company did not
obtain the use of any trade names and there were no non-compete or other
intangibles acquired, such as customer lists.
As a result, no identifiable intangible assets other than lease
acquisition costs were recognized in connection with the Anchor
Acquisition.  The Company established the
lease acquisition costs by taking the difference between the lease amounts from
the route contracts acquired from Anchor and market value lease rates and then
calculating the present value of that difference over the balance of the
contract term.  The weighted average
amortization period for all lease acquisition costs that were part of the
Anchor Acquisition was approximately seven years, which corresponded to the
term of the lease to which almost all of the lease acquisition costs were
attributable.  The Company will include
this disclosure in its future filings.

4

7.                                      Similarly,
please explain in detail why no identifiable intangible assets other than
goodwill were recognized in connection with the acquisition of three casinos
from Grace Entertainment, Inc.  Your
response should explain why you believe there are no other intangible assets
such as customer relationships or similar assets, recognized in connection with
this acquisition.  In addition, please
tell us and revise future filings to disclose the factors that contributed to a
purchase price that resulted in recognition of goodwill.  Refer to the requirements of paragraph 51b of
SFAS No. 141.

A third-party valuation firm has been engaged
by the Company to value the assets acquired in the Grace Acquisition in February 2005
and to assist in the allocation of the purchase price paid.  As the Company disclosed in Note 2 of its Form 10-Q
for the period ended March 31, 2005, this valuation and allocation process
is not yet complete.  These tasks include
the identification and valuation of any intangible assets acquired.  The Company expects this valuation and
allocation process to be completed before the end of the year.  After the valuation is completed, the Company
expects to have a portion of the purchase price that is not attributable to
specific assets, and this will result in the recognition of certain intangible
assets, such as gaming licenses, customer lists and an executive
non-competition agreement, and significant goodwill.  Thereafter, the Company will disclose the
nature of the other intangibles acquired as well as whether they are
amortizable, and if so, over what period of time.

Based on preliminary evaluations, the Company
has allocated $208,547,000 to intangible assets acquired pursuant to the Grace
Acquisition, the majority of which represents goodwill.  The Company believes that this goodwill is
attributable to the strong cash flows generated by these properties as well as
the enhancement and diversification of the Company’s base businesses outside
the state of Nevada.  The Company will
provide this disclosure in future filings.

Note
7.  Long-Term Debt

8.                                      We
note your disclosure as to why you have not provided condensed consolidating
financial information with respect to the subsidiary guarantors.  In future filings, please also disclose
whether there are any significant restrictions on your ability to obtain funds
from your subsidiaries by dividend or loan.
See Rule 3-10(i)(9) of Regulation S-X.

The Company has noted the Staff’s comment and
will disclose in its future filings that there are no significant restrictions
on the ability of the Company’s subsidiary guarantors to transfer funds to the
Company in the form of cash dividends, loans or advances.

Form 8-K/A
dated April 15, 2005

Unaudited
Pro Forma Condensed Combined Statement of Operations

9.                                      Please
revise the notes to the pro forma financial statements to disclose the
significant assumptions used to determine the pro forma adjustments for the
acquisition and refinancing transactions.
As part of these disclosures, please indicate the amount of loan fees
incurred on loans related to the acquisition and

5

refinancing
transactions and the method and term used to amortize them to expense.  Also, please indicate the amount of debt
obtained to finance the acquisition, the amount of debt refinanced and the
interest rates on the debt obtained in the refinancing transaction.

In response to the Staff’s comment, please
see the revised notes to the Company’s pro forma financial statements included
in the attached Exhibit A.

Unaudited
Pro Forma Condensed Combined Balance Sheet

10.                               Please
revise the adjustments to the pro forma balance sheet so that each adjustment
is presented on a gross rather than net basis.
For example, separate adjustments should be disclosed reflecting the
receipt of funds from debt obtained to finance the acquisition and for the
payment of the cash purchase price of $276,800.
Also, based on the disclosures currently presented in footnote (1) it
is unclear as to which adjustments relate to purchase price adjustments to fair
value and which represent the elimination of assets and liabilities not
acquired or assumed in connection with the acquisition.  Please revise to clearly indicate the nature
of all adjustments reflected in the Grace Acquisition Adjustments column.

In response to the Staff’s comment, in order
to more clearly identify the two types of adjustments made in the pro forma
balance sheet, the Company has revised this balance sheet to add another pro
forma adjustment column.  As a result,
one column identifies assets and liabilities eliminated because they were not
assumed in the Grace Acquisition, and the other column identifies those assets
and liabilities that were added due to the financing of the Grace
Acquisition.  To date, there have been no
purchase price adjustments made to the value of the assets acquired.  Please see the revised pro forma balance
sheet included in the attached Exhibit A.

11.                               We
note that your Form 8-K dated April 15, 2005 includes audited
financial statements for those entities acquired in the Grace acquisition,
however the auditor’s reports do not provide the name of the firm that issued
the reports.  Please amend your Form 8-K
to include independent auditor’s reports that include the names of the firms
issuing the reports, as required by Rule 2-02 of Regulation S-X.  See Item 9.01(a) (2) of Form 8-K.

The Company notes the Staff’s comments and
will revise the auditor’s reports of the entities acquired pursuant to the
Grace Acquisition to included the name of the firm that issued those reports.

6

In connection with these comments, attached
to this letter as Exhibit B is the acknowledgment of the Company
requested by the Staff on pages 4 and 5 of the Comment Letter.

We appreciate the Staff’s responsiveness with
respect to the Company’s proposals and look forward to resolving any concerns
the Staff may have.  If you have any
questions, please contact me at (213) 229-7684.