gamma Cas (B0.5e) is known to be a unique X-ray source because ot its moderate L_x, hard X-ray spectrum, and light curve punctuated by ubiquitous flares and slow undulations. Its X-ray peculiarities have led to a controversy concerning their origin: either from wind infall onto a putative degenerate companion, as for typical Be/X-ray binaries, or from the Be star per se. Recent progress has been made to address this: (1) the discovery that gamma Cas is an eccentric binary system (P = 203.59 d) with unknown secondary type, (2) the accumulation of RXTE data at 9 epochs in 1996-2000, and (3) the collation of robotic telescope B, V-band photometric observations over 4 seasons. The latter show a 3%, cyclical flux variation with cycle lengths 55-93 days. We find that X-ray fluxes at all 9 epochs show random variations with orbital phase. This contradicts the binary accretion model, which predicts a substantial modulation. However,these fluxes correlate well with the cyclical optical variations. Also, the 6 flux measurements in 2000 closely track the interpolated optical variations between the 2000 and 2001 observing seasons. Since the optical variations represent a far greater energy than that emitted as X-rays, the optical variability cannot arise from X-ray reprocessing. However, the strong correlation between the two suggests that they are driven by a common mechanism. We propose that this mechanism is a cyclical magnetic dynamo excited by a Balbus-Hawley instability located within the inner part of the circumstellar disk. In our model, variations in the field strength directly produce the changes in the magnetically related X-ray activity. Turbulence associated with the dynamo results in changes to the density distribution within the disk and creates the observed optical variations.