SECURITIES AND EXCHANGE COMMISSION
                     WASHINGTON, D.C.  20549
                                
                            FORM 10-Q
                                

(Mark One)
( X )     QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF
          THE SECURITIES EXCHANGE ACT OF 1934
     
          For the quarterly period ended:      June 30, 1998
                                          ----------------------- 
                               OR

(   )     TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF
          THE SECURITIES EXCHANGE ACT OF 1934
     
          For the transition period from:__________ to __________
                                         
Commission file number                 1-11569
                      -------------------------------------------   

                    RIO HOTEL & CASINO, INC.
-----------------------------------------------------------------
     (Exact name of registrant as specified in its charter)
                                
            Nevada                            95-3671082
-------------------------------  --------------------------------
(State or other jurisdiction of           (I.R.S. Employer
incorporation or organization)             Identification No.)
                                
          3700 West Flamingo Road, Las Vegas, Nevada     89103
-----------------------------------------------------------------
   (Address of principal executive offices)            (Zip Code)

                         (702) 252-7733
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      (Registrant's telephone number, including area code)

                         Not Applicable
-----------------------------------------------------------------
 (Former name, former address and former fiscal year, if changed
                       since last report)

      Indicate by check mark whether the registrant (1) has filed
all  reports required to be filed by Section 13 or 15(d)  of  the
Securities  Exchange Act of 1934 during the preceding  12  months
(or  for such shorter period that the registrant was required  to
file  such  reports),  and (2) has been subject  to  such  filing
requirements for the past 90 days.    Yes  X    No
                                         -----     -----

     Indicate  the number  of  shares  outstanding of each of the
issuer's classes of common stock,  as of  the  latest practicable
date.
                                
     24,786,541 shares of Common Stock, $0.01 par value as of
                           July 23, 1998
-----------------------------------------------------------------

<PAGE>
                              
                            FORM 10-Q
                                
                        TABLE OF CONTENTS
                                

                                                                 PAGE
                                                                NUMBER


PART I.  FINANCIAL INFORMATION                                     3
 
  Item 1. Financial Statements                                     3
          Consolidated Balance Sheets                              3
          Consolidated Statements of Income                        4
          Consolidated Statements of Cash Flows                    5
          Supplemental Disclosure of Cash Flow Information         6
          Notes to Consolidated Financial Statements               7
 
  Item 2. Management's Discussion and Analyses of Financial
          Condition and Results of Operations                      9

PART II. OTHER INFORMATION                                        15
 
  Item 1. Legal Proceedings                                       15
 
  Item 2. Changes in Securities                                   15
 
  Item 3. Defaults Upon Senior Securities                         15
 
  Item 4. Submission of Matters to a Vote of Security Holders     16
 
  Item 5. Other Information                                       16
 
  Item 6. Exhibits and Reports on Form 8-K                        16

SIGNATURE                                                         17

EXHIBIT INDEX                                                     18

                               2
<PAGE>


                 PART I.  FINANCIAL INFORMATION

ITEM 1.  FINANCIAL STATEMENTS

            RIO HOTEL & CASINO, INC. AND SUBSIDIARIES
                   CONSOLIDATED BALANCE SHEETS
                                
<TABLE>
<CAPTION>

                                                   June 30,              December 31,
                                                     1998                    1997
                                                 -----------             ------------
                                                 (Unaudited)
<S>                                            <C>                      <C>
                          ASSETS
Current assets:
  Cash and cash equivalents                     $ 19,625,158             $ 22,241,976
  Accounts receivable, net                        31,544,844               28,177,480
  Inventories                                     12,057,066                7,797,343
  Prepaid expenses and other current assets       11,882,869                8,277,440
                                                ------------             ------------
    Total current assets                          75,109,937               66,494,239
                                                ============             ============

Property and equipment:
  Land and improvements                           96,608,380               85,713,088
  Building and improvements                      433,751,248              418,618,050
  Equipment, furniture and improvements           91,267,349               82,792,652
  Less: accumulated depreciation                 (94,793,601)             (82,162,055)
                                                ------------             ------------
                                                 526,833,376              504,961,735
  Construction in progress                        54,228,950                5,354,757
                                                ------------             ------------
    Net property and equipment                   581,062,326              510,316,492
                                                ------------             ------------
Other assets, net                                 10,041,716               11,344,116
                                                ------------             ------------
                                                $666,213,979             $588,154,847
                                                ============             ============

                    LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:
  Current maturities of long-term debt          $  2,812,046             $  2,434,483
  Accounts payable                                 8,424,455               11,440,103
  Accrued expenses                                24,081,762               23,554,336
  Accounts payable - related party                14,445,644                2,808,488
  Accrued interest                                 8,138,128                7,412,999
                                                ------------             ------------ 
    Total current liabilities                     57,902,035               47,650,409
                                                ------------             ------------
Non-current liabilities:
  Long-term debt, less current maturities        302,561,840              250,522,894
  Deferred income taxes                           20,600,168               19,806,419
                                                ------------             ------------
    Total non-current liabilities                323,162,008              270,329,313
                                                ------------             ------------
    Total liabilities                            381,064,043              317,979,722
                                                ------------             ------------
Stockholders' equity:
  Common stock, $0.01 par value;
   100,000,000 shares authorized;
   24,786,541 and 24,643,141 shares
   issued and outstanding                            247,866                  246,432
  Additional paid-in capital                     182,354,212              179,912,196
  Retained earnings                              102,547,858               90,016,497
                                                ------------             ------------
    Total stockholders' equity                   285,149,936              270,175,125
                                                ------------             ------------
                                                $666,213,979             $588,154,847
                                                ============             ============
</TABLE>

   See accompanying Notes to Consolidated Financial Statements

                               3
<PAGE>

            RIO HOTEL & CASINO, INC. AND SUBSIDIARIES
                CONSOLIDATED STATEMENTS OF INCOME
                           (UNAUDITED)
<TABLE>
<CAPTION>
                                         Three Months Ended                   Six Months Ended
                                    -------------------------------     --------------------------------
                                    June 30, 1998     June 30, 1997     June 30, 1998      June 30, 1997
                                    -------------     -------------     -------------      -------------
<S>                                <C>               <C>               <C>                <C>
Revenues:
  Casino                            $  45,922,035     $  51,047,606     $  94,084,698      $  84,059,965
  Room                                 20,627,945        17,734,494        40,106,735         32,730,419
  Food and beverage                    33,268,510        28,906,726        66,155,186         52,160,330
  Other                                 6,852,195         6,484,200        13,511,277         11,688,178
  Casino promotional allowances        (8,528,513)       (6,982,455)      (18,975,635)       (13,520,736)
                                    -------------     -------------     -------------      -------------
                                       98,142,172        97,190,571       194,882,261        167,118,156
                                    -------------     -------------     -------------      -------------
Expenses:
  Casino                               27,458,902        25,518,216        51,983,395         43,748,328
  Room                                  6,670,115         5,457,093        12,382,217          9,648,583 
  Food and beverage                    24,152,049        21,958,407        47,683,766         39,913,263 
  Other                                 3,420,299         4,235,529         7,483,233          7,098,783
  Selling, general and administrat     16,362,093        15,517,913        29,960,961         24,532,109
  Depreciation and amortization         6,951,060         6,869,787        13,571,901         12,237,400
  Preopening expense                            -                 -                 -         11,200,000
                                    -------------     -------------     -------------      -------------
                                       85,014,518        79,556,945       163,065,473        148,378,466 
                                    -------------     -------------     -------------      -------------
Operating profit                       13,127,654        17,633,626        31,816,788         18,739,690

Interest expense                        5,993,740         7,178,008        12,082,362         12,097,413
                                    -------------     -------------     -------------      -------------
Income before income tax                7,133,914        10,455,618        19,734,426          6,642,277

Income tax provision                    2,603,878         3,825,768         7,203,065          2,429,750
                                    -------------     -------------     -------------      -------------
Net income                          $   4,530,036     $   6,629,850     $  12,531,361      $   4,212,527 
                                    =============     =============     =============      =============
Earnings per common share:
  Basic                             $        0.18     $        0.31     $        0.51      $        0.20
                                    =============     =============     =============      =============
  Diluted                           $        0.18     $        0.31     $        0.50      $        0.20
                                    =============     =============     =============      =============

Weighted average number of
  common shares outstanding:
  Basic                                24,750,776        21,283,776        24,724,231         21,238,207
  Stock Options                           390,323           236,572           323,620            229,881
                                    -------------     -------------     -------------      -------------
  Diluted                              25,141,099        21,520,348        25,047,851         21,468,088
                                    =============     =============     =============      =============
</TABLE>

   See accompanying Notes to Consolidated Financial Statements

                               4
<PAGE>

            RIO HOTEL & CASINO, INC. AND SUBSIDIARIES
              CONSOLIDATED STATEMENTS OF CASH FLOWS
                           (UNAUDITED)
<TABLE>
<CAPTION>
                                                                   Six Months Ended
                                                                      June 30,
                                                        ------------------------------------
                                                             1998                  1997
                                                        --------------        --------------
<S>                                                    <C>                   <C>
Cash flows from operating activities:
  Net income                                            $   12,531,361        $    4,212,527
  Adjustments to reconcile net income to net
   cash provided by operating activities:
     Compensation expense recognized from
       stock option grant                                       57,440                57,740
     Depreciation and amortization                          13,561,476            12,237,400
     Provision for uncollectible accounts                   (7,148,721)            5,402,942
     Deferred income taxes                                     240,188            (2,540,925)
     (Increase) decrease in assets:
       Accounts receivable                                   3,781,357           (14,377,768)
       Inventories                                          (4,259,723)             (597,247)
       Prepaid expenses and other current assets            (3,297,859)           (2,379,124)
       Other, net                                              988,145               826,156
     Increase (decrease) in liabilities:
       Accounts payable                                    (10,918,911)            3,918,492
       Accrued federal income tax                            1,962,876             2,281,192
       Accrued expenses                                      7,225,772             6,992,588
       Accrued interest                                        725,129             1,479,214
                                                        --------------        --------------
Net cash provided by operating activities                   15,448,530            17,513,187
                                                        --------------        --------------
Cash flows from investing activities:
  Purchase of land and improvements                        (10,822,792)           (5,641,807)
  Purchase of equipment, furniture and
    improvements                                           (61,045,559)          (47,333,747)
  Funds advanced for purchase of golf course                         -            (7,792,655)
                                                        --------------        --------------
Net cash used in investing activities                      (71,868,351)          (60,768,209)
                                                        --------------        --------------
Cash flows from financing activities:
  Proceeds from borrowings                                 118,100,000            55,000,000
  Net proceeds from issuance of senior
    subordinated notes                                               -           121,562,500
  Net proceeds from common stock issuance                    1,628,050               593,050
  Payments on notes and loans payable                      (65,925,047)         (130,152,170)
                                                        --------------        --------------
Net cash provided by financing activities                   53,803,003            47,003,380
                                                        --------------        --------------
Net increase (decrease) in cash and cash equivalents        (2,616,818)            3,748,358
Cash and cash equivalents, beginning of period              22,241,976            10,623,094
                                                        --------------        --------------
Cash and cash equivalents, end of period                $   19,625,158        $   14,371,452
                                                        ==============        ==============
</TABLE>                                                        
                               
   See accompanying Notes to Consolidated Financial Statements

                               5
<PAGE>
                                
            RIO HOTEL & CASINO, INC. AND SUBSIDIARIES
              CONSOLIDATED STATEMENTS OF CASH FLOWS
                                
        SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION
                           (UNAUDITED)
                                
<TABLE>
<CAPTION>
                                                             Six Months Ended
                                                                 June 30,
                                                     --------------------------------
                                                          1998              1997
                                                     --------------    --------------
<S>                                                 <C>               <C>
Cash payments made for interest, net of
  capitalized interest                               $   12,866,177    $   11,190,781
                                                     ==============    ==============
Cash payments made for income taxes                  $    5,000,000    $    1,000,000
                                                     ==============    ==============
Non-cash financing and investing activities:
  Purchase of property and equipment financed
    through payables                                 $   14,518,144    $    6,676,759
                                                     ==============    ==============
  Tax benefit arising from exercise of stock
    options under the Company's Non-Statutory
    and Long Term Incentive Stock Option Plans       $      757,960    $      542,378
                                                     ==============    ==============
</TABLE>

   See accompanying Notes to Consolidated Financial Statements

                               6
<PAGE>

            RIO HOTEL & CASINO, INC. AND SUBSIDIARIES
           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           (UNAUDITED)
                                
NOTE 1 - BASIS OF PRESENTATION

     The  consolidated financial statements include the  accounts
     of   Rio   Hotel  &  Casino,  Inc.  and  its  wholly   owned
     subsidiaries  Rio  Properties, Inc. ("Rio Properties"  which
     owns  and operates the Rio Suite Hotel & Casino [the  "Rio"]
     in  Las  Vegas, Nevada), Rio Development Company, Inc.,  Rio
     Resort  Properties, Inc., Rio Leasing, Inc., Rio Properties'
     wholly  owned subsidiaries, HLG, Inc. and Cinderlane,  Inc.,
     and  Cinderlane Inc.'s wholly owned subsidiary Twain Avenue,
     Inc. (collectively the "Company").

     All  significant intercompany balances and transactions have
     been eliminated in consolidation.

     The  consolidated balance sheet as of June 30, 1998 and  the
     related consolidated statements of income for the three  and
     six   month  periods  ended  June  30,  1998  and  1997  and
     consolidated  statements of cash flows  for  the  six  month
     periods  ended June 30, 1998 and 1997 are unaudited but,  in
     the opinion of management, reflect all adjustments necessary
     for  a  fair presentation of results for such periods.   The
     results  of  operations  for  an  interim  period  are   not
     necessarily  indicative of the results for  the  full  year.
     The  consolidated  financial statements should  be  read  in
     conjunction  with the consolidated financial statements  and
     notes  thereto contained in the Company's annual  report  on
     Form 10-K for the year ended December 31, 1997.

NOTE 2 - LONG-TERM DEBT

     On  February  24,  1998, the Company's credit  line  with  a
     consortium of banks was amended and restated, increasing the
     amount  available  from $190.0 million  to  $275.0  million.
     Loan  costs  will  be reduced pursuant to  the  amended  and
     restated  terms  of the new agreement, and a  mechanism  has
     been  provided whereby the amount available under the credit
     line may be increased by an additional $25.0 million.

NOTE 3 - EARNINGS PER COMMON SHARE

     The Financial Accounting Standards Board issued Statement of
     Financial  Accounting  Standards No.  128  -  "Earnings  Per
     Share"  ("SFAS  128")  which became  effective  for  periods
     ending  after  December  15, 1997 and replaces  historically
     reported  earnings  per  share with "basic",  or  undiluted,
     earnings per share and "diluted" earnings per share.   Basic
     earnings  per share are computed by dividing net  income  by
     the weighted average number of shares outstanding during the
     period,  while  diluted  earnings  per  share  reflect   the
     additional dilution for all potentially dilutive securities,
     such as stock options.  Earlier application of SFAS 128  was
     not  permitted.  Earnings per share for the  three  and  six
     month   periods  ended  June  30,  1998  and  1997  in   the
     accompanying  Consolidated Statements of  Income  have  been
     computed in accordance with SFAS 128.

NOTE 4 - PURCHASE COMMITMENT

     On  June  1,  1998,  the Company entered  into  an  Aircraft
     Purchase Agreement (the "Agreement") to purchase an aircraft
     for  $27.0 million, with $1.0 million to be deposited within
     90  days  of  the date of the Agreement and the balance  due
     upon  delivery  of the aircraft to the Company  which  shall

                               7
<PAGE>

     occur within 60 days of January 31, 2000.  The aircraft will
     be   used   for   general   corporate  purposes,   including
     transportation   of  certain  international   and   domestic
     customers  of  the  Rio.    The   Company is  purchasing the
     airplane from a company controlled by the Company's Chairman
     of the Board and Chief Executive Officer.

NOTE 5 - SUBSEQUENT EVENTS

     In July 1998, the Company made a $15.0 million investment in
     New Airline, Inc. ("NAI"), a development stage airline to be
     based  in Las Vegas, Nevada.  The Company's investment  will
     represent  approximately 19% of NAI's voting  common  stock,
     and  the  Company will have a strategic marketing  agreement
     with NAI.  The Company has been advised by NAI that NAI will
     commence operations in early 1999, that it has secured up to
     five gate locations at McCarran International Airport in Las
     Vegas,  and  that  the  Las  Vegas Convention  and  Visitors
     Authority will provide advertising and marketing support for
     the new airline.

                               8
<PAGE>

ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
         CONDITION AND RESULTS OF OPERATIONS

STATEMENT ON FORWARD-LOOKING INFORMATION

     Certain information included herein contains statements that
may  be  considered forward-looking statements within the meaning
of  the Section 21E of the Securities Exchange Act of 1934,  such
as  statements  relating to plans for future  expansion,  capital
spending and financing sources.  Such forward-looking information
involves   important   risks   and   uncertainties   that   could
significantly  affect  anticipated results  in  the  future  and,
accordingly, such results may differ from those expressed in  any
forward-looking   statements  made  herein.   These   risks   and
uncertainties include, but are not limited to, those relating  to
construction  activities,  dependence  on  existing   management,
gaming   regulations  (including  actions  affecting  licensing),
leverage  and debt service (including sensitivity to fluctuations
in  interest rates), issues related to the Year 2000, domestic or
global  economic conditions and changes in federal or  state  tax
laws or the administration of such laws.

MATERIAL CHANGES IN RESULTS OF OPERATIONS

     OVERVIEW

     The  Company, through  a wholly owned subsidiary,  owns  and
operates an all-suite hotel-casino, the Rio Suite Hotel &  Casino
(the  "Rio"), in Las Vegas, Nevada.  The Rio features over  2,500
suites,  including over 1,500 suites contained in three connected
21-story  hotel  towers  (the "Ipanema Towers")  and  over  1,000
suites  in a new 41-story curved tower (the "Masquerade  Tower").
On  February 7, 1997, the Rio celebrated the grand opening of the
public  areas  of its Phase V Expansion project,  the  Masquerade
Village.  With the Masquerade Village and Tower, the Rio features
120,000  square feet of gaming space; 15 restaurants, a  737-seat
entertainment complex; a 32,000 square foot retail  area;  and  a
108,000  square  foot  outdoor  entertainment  area  featuring  a
landscaped sand beach and three swimming pools.

     On  September 8, 1997, the  Company acquired the  Rio  Secco
Golf  Club in Henderson, Nevada, a suburb of Las Vegas.  The golf
course,  located in the master-planned community of Seven  Hills,
is  complete and opened for play in October 1997.  The  clubhouse
was completed during the second quarter of 1998.  In addition  to
providing play on the golf course to local and tourist customers,
the  Company intends to use the Rio Secco Golf Club  as  part  of
golf  packages  for  its guests.  The Rio Secco  Golf  Club  also
features a golf school operated by Butch Harmon, the Butch Harmon
School of Golf.

     The Company has  assembled 43  acres immediately adjacent to
the Rio (approximately seven of  which  are subject to options to
purchase), bringing the total acreage at the Rio to approximately
83 acres. In  October  1997,  the  Company announced a new master
plan (the "New  Master Plan") for continued  development  of  the
existing Rio site   and the adjacent 43 acre site. The New Master
Plan is expected to be implemented in  phases, the first of which
has commenced  and  includes  a state-of-the-art  convention  and
entertainment center adaptable to meet a variety of entertainment,
meeting,  special  event  and convention needs; a complex of nine
"Palazzo" suites; a  restaurant  serving authentic  Chinese  food
(which opened April 1998); a valet parking structure (which opened
May  1998);  a  retail  shopping  area;  an expanded outdoor area
with an additional swimming pool; additional exhibition space  in
the  Masquerade  Village; an expansion of  the  Shutters  premium
gaming  lounge;  the  creation of  a concierge suite level in the
Ipanema and Masquerade Towers;  an  expansion  of  the Rio's spa;
a new road connecting the Rio and the Las Vegas  Strip through an
extension  of  Twain  Avenue  to  Industrial Road; and additional
customer parking.

                               9
<PAGE>

     This  first  phase  of  the New Master Plan,  the  Phase  VI
Expansion, is anticipated to be completed in stages through  1998
and  early 1999 at an estimated cost of $200 million.  Subsequent
phases  of  the  New Master Plan are currently in the  conceptual
stage.   The  timetable, theme and cost of the subsequent  phases
have not yet been established, and there can be no assurance that
the   balance   of  the  New  Master  Plan  will  be  implemented
successfully, if at all.

     THREE MONTHS ENDED JUNE 30, 1998 AND 1997

     REVENUES

     The Company's net revenues increased to $98.1 million in the
     second quarter of 1998 from $97.2 million in the same period
     in  the prior year, an increase of $0.9 million or 1%. As  a
     result  of  a  lower hold percentage in table games,  casino
     revenues  decreased $5.1 million, or 10%, to  $45.9  million
     for  the three months ended June 30, 1998 compared to  $51.0
     million  in the second quarter of 1997. Table game  revenues
     were $20.9 million for the three months ended June 30, 1998,
     a  decrease of $6.0 million, or 22%, from the $26.9  million
     reported in the same period in the prior year. Although  the
     Company experienced a $28.5 million increase in table  games
     handle,  or 23%, to $153.8 million in the second quarter  of
     1998 from $125.3 million in the second quarter of 1997,  the
     table  games  hold percentage was only 16%  in  the  current
     year's  quarter compared to a table game hold percentage  of
     25%   in   the   prior  year's  second  quarter.   Increased
     advertising  and  promotional  efforts,  and  an   increased
     emphasis  by management on marketing to table game customers
     with  higher credit limits and average wagers are considered
     to be the primary contributors to the increase in table game
     handle.  Slot  machine revenues were $23.6  million  in  the
     second quarter of 1998, an increase of $1.1 million, or  5%,
     from  1997  second quarter revenues of $22.5 million.  Other
     casino  revenues, consisting of the race and  sports  books,
     keno  and  poker  decreased by approximately  $0.2  million,
     primarily due to a lower hold percentage in the sports  book
     for  the  three months ended June 30, 1998 than in the  same
     period in the prior year.
     
     Room  revenues increased by $3.0 million, or 17%,  to  $20.7
     million in the second quarter of 1998 from $17.7 million  in
     the  prior  year period due to higher occupancy  and  higher
     room  rates.  The  occupancy rate was 95.0%  for  the  three
     months  ended June 30, 1997 compared to 88.6% in  the  prior
     year  period.  The average suite rate increased from $89 for
     the quarter ended June 30, 1998 to $97 in the current year's
     quarter.
     
     Food  and beverage revenues increased $4.4 million, or  15%,
     to  $33.3  million for the three months ended June 30,  1998
     compared  to  $28.9 million in the second quarter  of  1997.
     Management  believes  that  this increase  in  revenues  was
     primarily   the   result   of  increased   advertising   and
     promotional programs together with food and beverage  prices
     which  were  generally higher in the current  year's  second
     quarter than in the prior year period.
     
     Other revenues increased by $0.4 million to $6.9 million  in
     the  current year's second quarter from $6.5 million in  the
     prior  year  period. A decrease of $1.5  million  in  retail
     sales,  which resulted from leasing the gift shop  and  most
     other  retail  shops that were previously  operated  by  the
     Company  to  a  third party, was offset by  an  increase  in
     showroom  admissions of $0.7 million, an  increase  of  $0.5
     million  in shop rental income, and golf course revenues  of
     $0.9 million.

                               10
<PAGE>
     
     OPERATING MARGINS
     
     Operating profit as a percentage of net revenue was 13%  for
     the  quarter ended June 30, 1998 and 18% for the prior  year
     quarter.  The casino operating margin was $18.5 million,  or
     40%,  for  the three months ended June 30, 1998 compared  to
     $25.5 million, or 50%, in the same period in the prior year.
     Casino  expenses  were $27.5 million for the  quarter  ended
     June  30,  1998  compared to $18.2  million  in  the  second
     quarter  of  the  prior year. Increased  payroll  and  other
     volume  related  expenses, including  casino  marketing  and
     promotional costs, were the primary reasons for the increase
     in  casino expense when comparing the two periods.  For  the
     three  months ended June 30, 1998 and 1997, hotel  operating
     profits  were  68% and 69%, respectively; food and  beverage
     operating profits were 27% and 24%, respectively; and  other
     operating  department  profit  margins  were  50%  and  35%,
     respectively. Management believes that the food and beverage
     operating  margin was positively impacted by an increase  in
     food  and  beverage  prices, volume related  purchasing  and
     administrative  efficiencies, and the profitability  of  the
     VooDoo  Cafe  and  Lounge  which opened  in  May  1997.  The
     increase   in   the  operating  profit  margin   for   other
     departments  is  primarily  due  to  shop  rental   revenues
     resulting  from  the  leasing to a third  party  the  retail
     outlets   previously  operated  by  the  Company   and   the
     elimination  of the costs associated with the operations  of
     the  retail  outlets.  Selling, general  and  administrative
     expenses increased as a percentage of gross revenue from 16%
     to  17%  for  the  quarters ended June 30,  1997  and  1998,
     respectively.  Increases  in payroll,  other  administrative
     expenses,  property taxes, casualty insurance and  utilities
     were significant contributors to the increase.
     
     PROMOTIONAL ALLOWANCES
     
     Promotional allowances, which represent the retail value  of
     rooms,  food,  beverage  and  other  services  provided   to
     customers  without charge, were 8% and 7% of total  revenues
     for the quarters ended June 30, 1998 and 1997, respectively.
     Management believes that this increase was primarily due  to
     complimentary rooms, food, beverage and other services being
     extended  in  connection with the volume increase  in  table
     games.
     
     DEPRECIATION AND AMORTIZATION
     
     Depreciation  and  amortization increased  by   1%  to  $7.0
     million  in the second quarter of 1998 from $6.9 million  in
     the second quarter of the prior year.
     
     OTHER INCOME AND EXPENSE
     
     Interest  expense decreased by $1.2 million to $6.0  million
     in  the second quarter of 1998 from $7.2 million in the same
     period in 1997. Interest expense was reduced by $1.3 million
     and  $0.5 million for the three month periods ended June 30,
     1998   and   1997,  respectively,  due  to  interest   being
     capitalized on construction costs of the upper floors of the
     Masquerade  Tower  which opened in  May  1997  and  on  land
     purchases  in  1997 and, in 1998, on the Phase VI  Expansion
     that commenced in October 1997.
     
     NET INCOME
     
     Net  income for the second quarter of 1998 was $4.5 million,
     or  $0.18  per common share on a diluted basis, compared  to
     $6.6 million, or $.31 per common share on a diluted basis in
     the second quarter of 1997.

                               11
<PAGE>
     
SIX MONTHS ENDED JUNE 30, 1998 AND 1997
       
     REVENUES
     
     The  Company's net revenues increased to $194.9  million  in
     the first six months of 1998 from $167.1 million in the same
     period  in  the prior year, an increase of $27.8 million  or
     17%.  Casino revenues increased $10.0 million,  or  12%,  to
     $94.1  million for the first six months of 1998 compared  to
     $84.1  million for the six month period ended June 30, 1997.
     Table game revenues were $42.7 million for the the first six
     months of 1998, an increase of $2.2 million, or 5%, from the
     $40.5 million reported in the same period in the prior year.
     Although the Company experienced a $99.0 million increase in
     table  games handle, or  42%,  to $336.0 million during  the
     first  six  months  of 1998 from $237.0 million in the first
     six months of 1997, the table games hold percentage was only
     15%  in  the current  year's  first six months compared to a
     table games hold percentage of 19% in the same period in 1997.
     Increased  advertising  and   promotional efforts, increased
     customer traffic associated with the Masquerade Village  and
     Tower  having been open for a year and during the entire six
     month period in 1998, and an increased emphasis by management
     on marketing to table game customers with higher credit limits
     and   average  wagers  are  considered  to  be  the  primary
     contributors  to  the  increased  table  game  volume.  Slot
     machine revenues were $47.3 million for the six month period
     ended  June 30, 1998, an increase of $6.8 million,  or  17%,
     from  slot  machine revenues of $40.5 million  for  the  six
     month  period  ended June 30, 1997. Other  casino  revenues,
     consisting  of  the race and sports books,  keno  and  poker
     increased  $1.0  million, or 32%, to $4.0  million  for  the
     first six months of 1998 from $3.0 million in the prior year
     period. The increase in customer traffic associated with the
     Masquerade Village and Tower expansion having been open  for
     a  year  and for the full six month period in 1998, together
     with  increased  advertising  and  promotional  efforts  are
     considered  to  be the primary reasons for the  increase  in
     slot machine and other casino revenues.
     
     Room  revenues increased by $7.4 million, or 23%,  to  $40.1
     million  in  the six month period ended June 30,  1998  from
     $32.7  million in the same period in the prior year  due  to
     higher  occupancy and higher room rates. The occupancy  rate
     was 95.0% for the six months ended June 30, 1998 compared to
     90.6%  in  the  prior year period, with 39,062  more  suites
     available  and 54,748 more suites being occupied during  the
     1998  six month period than in the same period in 1997.  The
     average suite  rate  increased from $89 for  the  six  month
     period  ended June 30, 1997 to $95 for the six month  period
     ended June 30, 1998.
     
     Food  and beverage revenues increased $14.0 million, or 27%,
     to  $66.2  million  for the six months  ended  June  30,1998
     compared  to $52.2 million in the first six months of  1997.
     Management  believes  that having the five  restaurants  and
     bars  located  in  the Masquerade Village  open  during  the
     entire  first  six  months of 1998, the increase  of  54,748
     occupied  suites,  increased  advertising  and   promotional
     programs, and a general increase in food and beverage prices
     were the primary reasons for the increase.
     
     Other revenues increased by $1.8 million to $13.5 million in
     the first six months of 1998 from $11.7 million in the prior
     year  period.  A decrease of $2.8 million in  retail  sales,
     which  resulted  from leasing the gift shop and  most  other
     retail shops that were previously operated by the Company to
     a  third  party,  was  offset by  an  increase  in  showroom
     admissions  of $1.9 million, an increase of $1.1 million  in
     shop rental income, golf course revenues of $1.5 million and
     increases in telephone and salon revenues.

                               12
<PAGE>
     
     OPERATING MARGINS
     
     Operating profit as a percentage of net revenue was 16%  for
     the six months ended June 30, 1998 and 18% before preopening
     expense  for  the  first six months of the prior  year.  The
     casino  operating margin was $42.1 million, or 45%, for  the
     six months ended June 30, 1998 compared to $40.3 million, or
     48%,  in  the same period in the prior year. Casino expenses
     were $52.0 million for the first six months of 1998 after  a
     $4.6   million  decrease  in  the  provision  for   doubtful
     accounts.  Casino expenses in the first six  months  of  the
     prior  year were $43.7 million. Increased payroll and  other
     volume  related  expenses  together  with  increased  casino
     marketing and promotional costs were the primary reasons for
     the  increase  in  casino  expense when  comparing  the  two
     periods.  For the six months ended June 30, 1998  and  1997,
     hotel  operating profits was 71% in both periods;  food  and
     beverage  operating profits were 27% and 23%,  respectively;
     and  other operating department profit margins were 45%  and
     39%,  respectively. Management believes that  the  food  and
     beverage  operating  margin was positively  impacted  by  an
     increase  in  food  and  beverage  prices,  volume   related
     purchasing   and   administrative  efficiencies,   and   the
     profitability of the VooDoo Cafe and Lounge which opened  in
     May  1997 and is located on the 40th and 41st floors of  the
     Masquerade  Tower.  The  increase in  the  operating  profit
     margin  for other departments is primarily due to  increased
     shop  rental revenues resulting from the leasing to a  third
     party  the retail outlets previously operated by the Company
     and  the  elimination  of  the  costs  associated  with  the
     operations  of  the  retail outlets.  Selling,  general  and
     administrative expenses were 15% of gross revenue in each of
     the  six  month  periods  ended  June  30,  1998  and  1997.
     Increases  in payroll, advertising and promotional expenses,
     property  taxes,  casualty  insurance  and  utilities   were
     significant  contributors to the $5.4  million  increase  in
     selling,  general and administrative expenses when comparing
     the two six month periods.
     
     PROMOTIONAL ALLOWANCES
     
     Promotional allowances, which represent the retail value  of
     rooms,  food,  beverage  and  other  services  provided   to
     customers  without charge, were 9% and 8% of total  revenues
     for  the  six  month periods ended June 30, 1998  and  1997,
     respectively.  Management believes that  this  increase  was
     primarily  due  to complimentary rooms, food,  beverage  and
     other  services being extended in connection with the volume
     increase in table games.
     
     DEPRECIATION AND AMORTIZATION
     
     Depreciation and amortization increased by $1.3 million,  or
     11%,  to  $13.6  million  in  the  first six months  of 1998
     compared  to  $12.3 million in the prior year  period.  This
     increase  is  primarily  attributable  to  depreciation  and
     amortization expense associated with the Masquerade  Village
     and Tower.
     
     OTHER INCOME AND EXPENSE
     
     Interest expense was $12.1 million in each of the six  month
     periods  ended June 30, 1998 and 1997. Interest expense  was
     reduced  by $2.2 million and $2.8 million for the six  month
     periods   ended   June  30,  1998  and  1997,  respectively,
     primarily   due  to  interest  being  capitalized   on   the
     Masquerade Village expansion in 1997 and, in 1998  on  Phase
     VI Expansion.

                               13
<PAGE>
     
     NET INCOME
     
     Net  income  for  the first six months  of  1998  was  $12.5
     million,  or  $0.51  per common share on  a  diluted  basis,
     compared to net income of $4.2 million, or $0.20 per  common
     share on a diluted basis in the first six months of 1997. In
     the  prior  year period, the Company incurred $11.2  million
     ($7.1 million net of income tax) associated with the opening
     of the Masquerade Village and Tower. Adjusted on a pro forma
     basis  for  these preopening expenses, net  income  for  the
     first  quarter  of  1997 would have been $11.3  million,  or
     $0.53 per common share on a diluted basis.
     
IMPACT OF INFLATION
       
     Absent changes in competitive and economic conditions or  in
     specific prices affecting the industry, the Company believes
     that  the hotel-casino industry may be able to maintain  its
     operating profit margins in periods of general inflation  by
     increasing  minimum  wagering  limits  for  its  games   and
     increasing the prices of its hotel rooms, food and  beverage
     and  other items, and by taking action designed to  increase
     the  number of patrons. The industry may be able to maintain
     growth in gaming revenues by the tendency of customer gaming
     budgets  to  increase  with inflation. Changes  in  specific
     prices (such as fuel and transportation prices) relative  to
     the general rate of inflation may have a material effect  on
     the hotel-casino industry.
     
LIQUIDITY AND CAPITAL RESOURCES
       
     On  February 24, 1998, the Company's credit line was amended
     and  restated, increasing the amount available  from  $190.0
     million  to  $275.0 million and reducing the interest  rate.
     The  amended  and  restated agreement provides  a  mechanism
     whereby  the amount available under the credit line  may  be
     increased by an additional $25.0 million.
     
     During  the  first six months of 1998, net cash provided  by
     operating  activities was $15.4 million. Net  cash  used  in
     investing    activities   was   $71.9   million,   including
     approximately  $48.7  million  related  to  the   Phase   VI
     Expansion, $8.7 million in land acquisitions adjacent to the
     Rio  and $3.8 million for the improvements of the Rio  Secco
     Golf  Club, including the construction of the clubhouse  and
     golf school which opened in the second quarter of 1998.
     
     Based  upon  cash on hand, cash available through borrowings
     under  the $275.0 million line of credit, $204.1 million  of
     which  was available as of June 30, 1998, and cash  provided
     by  operations,  the Company believes that it  has  adequate
     cash  available to fund purchase commitments, the  Phase  VI
     Expansion,   ongoing  maintenance  and  upgrades   and   the
     Company's operations.

                               14
<PAGE>
                                      
                   PART II.  OTHER INFORMATION

ITEM 1.  LEGAL PROCEEDINGS

     On  December  27, 1996, a  purported stockholder  derivative
action  (PARK EAST, INC. V. ANTHONY A. MARNELL II, ET  AL.,  Case
No.  CV-596-01196-HDM  (RLH)) was  filed  in  the  United  States
District Court for the District of Nevada, against the Company as
a  nominal  defendant, five of the Company's  directors,  Marnell
Corrao Associates, Inc. ("Marnell Corrao") and Anthony A. Marnell
II  Chartered ("Marnell Chartered").  The complaint alleges  that
pursuant  to  construction contracts and architectural  contracts
with  Marnell  Corrao  and Marnell Chartered,  respectively,  the
Company   paid  unfair  amounts  in  exchange  for  the  services
provided.  The complaint alleges breach of fiduciary duty by each
of the director defendants and seeks rescission of the contracts,
damages  to  compensate the Company to the extent  that  contract
amounts  are  unfair  to  the  Company,  and  injunctive   relief
prohibiting the Company from entering into similar contracts with
Mr.  Marnell or entities which he controls.  On January 27, 1997,
the Company and the director defendants filed a motion to dismiss
and  a joinder in the Company's motion to dismiss.  On April  21,
1997, the United States District Court of Nevada entered an order
denying  the  motion  to dismiss the Company and  the  individual
directors, and granting the motion to dismiss Marnell Corrao  and
Marnell Chartered.

     On July 1, 1998, the Company executed a settlement agreement
(the  "Agreement")  with  Park  East,  Inc.   The  United  States
District  Court  for  the District of Nevada  took  note  of  the
Agreement  on  July 6, 1998, and a hearing on the Agreement  (the
"Hearing")  has been set for September 15, 1998.   The  Agreement
provides for the settlement and dismissal with prejudice  of  all
claims   asserted   by  Park  East,  Inc.  in   connection   with
construction  and  architectural contracts for  Phase  V  of  the
Company's Master Plan expansion project ("Phase V").  The parties
agreed that the terms of the contracts are fair and reasonable to
the  Company  and  its stockholders, and that the  Company  would
continue  to  submit  construction  project  contracts   to   its
independent audit committee.  No monetary amounts are being  paid
to  the plaintiffs in the case; however, the Company will pay  up
to  $100,000  for  plaintiff's attorneys' fees.   Notice  of  the
Agreement  and  of  the  Hearing is  being  sent  to  all  record
stockholders and all beneficial owners of Company common stock as
of July 6, 1998.

ITEM 2.  CHANGES IN SECURITIES

     NONE

ITEM 3.  DEFAULTS UPON SENIOR SECURITIES

     NONE

                               15
<PAGE>

ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

     The Company held its annual meeting of stockholders on May
21, 1998.
     (a)  Election of Directors.

<TABLE>
<CAPTION>
          NAME OF DIRECTOR          FOR         VOTES CAST AGAINST         ABSTAIN
          <S>                     <C>           <C>                       <C>
          James A. Barrett, Jr.   922,363               -0-                508,401

          John A. Stuart          923,216               -0-                507,458
          
          Peter M. Thomas         923,273               -0-                507,491
                                
</TABLE>

     (b)  Approval of an increase of stock options available
          under the Long-Term Incentive Plan.

          FOR                   VOTES CAST AGAINST          ABSTAIN

          794,901                   4,405,175                21,727
                                                      
     (c)  Approval and ratification of the Annual Performance-
          Based Incentive Plan.

          FOR                   VOTES CAST AGAINST          ABSTAIN
                               
          132,392                   1,272,051                26,320
                                                         
ITEM 5.  OTHER INFORMATION
      
     STOCKHOLDER   PROPOSALS.   Pursuant  to  recent  changes  in
Securities   and  Exchange  Commission  Rule  14a-4,   unless   a
stockholder  proposal for the Company's 1999  Annual  Meeting  of
Stockholders  is submitted to the Company prior to  February  15,
1999,  management may use its discretionary voting  authority  to
vote  management proxies on the stockholder proposal without  any
discussion of the matter in the proxy statement.

ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K

     (a)  EXHIBITS

      EXHIBIT NUMBER      DESCRIPTION
                        
        10.01         Aircraft Purchase Agreement by and between Rio
                      Leasing, Inc.  and  N & MD  Investment  Corp.,
                      dated as of June 1, 1998.

        10.02         Subscription Agreement executed by Rio Hotel &
                      Casino,  Inc.  dated  June  19,  1998  for New
                      Airline, Inc.
      
        27.01         Financial Data Schedule.

     (b)  REPORT ON FORM 8-K

     NONE
                               16

<PAGE>
                                
                            SIGNATURE
                                
     Pursuant to the  requirements of the Securities Exchange Act
of  1934, the Registrant has duly caused this report to be signed
on its behalf by the undersigned thereunto duly authorized.





                                         RIO HOTEL & CASINO, INC.
                                         ------------------------
                                                (Registrant)
                                        
                                        
                                        
     August 7, 1998                     /s/ Ronald J. Radcliffe
-----------------------------          --------------------------
         (Date)                         RONALD J. RADCLIFFE
                                        Vice President, Treasurer
                                        and Chief Financial
                                        Officer
                                        (Duly Authorized Officer
                                        and Principal Financial
                                        Officer)
                               17
<PAGE>
                                
                          EXHIBIT INDEX


 EXHIBIT                                               SEQUENTIAL
 NUMBER                  DESCRIPTION                  PAGE NUMBER
                                                               
                                                               
  10.01    Aircraft Purchase Agreement by and between      19
           Rio  Leasing,  Inc. and N & MD  Investment
           Corp., dated as of June 1, 1998.

  10.02    Subscription  Agreement  executed  by Rio       33
           Hotel & Casino, Inc. dated June 19, 1998
           for  New Airline, Inc.
           
  27.01    Financial Data Schedule                         50

                               18
<PAGE>