Masking textures is done in a variety of ways, for different effects. For a shadow you probably want to set the entity to "multiply" blend mode; in multiply blending white becomes transparent so make sure your shadow texture is on a white background. Other ways to mask textures include using the "masked" flag when loading the texture (duh; that just means black pixels become transparent,) alpha transparency (where a separate greyscale image determines transparency values,) and add blend mode (in which black becomes transparent and other values brighten accordingly.)
Pivoting the camera ?
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