* Deal addresses $3.2 billion budget gap

* Shares of MTR Gaming gain more than 50 percent

* Other companies could also benefit (Adds details, other stock impact)

LOS ANGELES, July 10 (Reuters) - Ohio Governor Ted Strickland and state lawmakers reached an agreement on Friday to help fill a $3.2 billion gap in the state's budget by allowing racetracks to install slot machines.

Shares of racetrack operator MTR Gaming Group Inc (MNTG.O: Quote, Profile, Research), which had risen on earlier reports that Strickland was considering issuing an executive order authorizing the slots, ended the day with a gain of more than 50 percent.

"Under the bipartisan agreement, I will issue a directive instructing Ohio's lottery director to expeditiously take all necessary actions to implement video lottery terminals at Ohio racetracks," Strickland said in a statement.

He has said the plan to legalize video slots at the state's seven racetracks would raise about $933 million over the course of Ohio's two-year budget.

The final budget agreement "is not only balanced, but invests in education without raising taxes on Ohioans," Strickland said.

Ohio voters have repeatedly rejected efforts to allow casino gambling in the state -- most recently last year.