UNITED STATES
               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:        September 30, 1996

                               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
      (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.

             21,170,441        as of    November 1, 1996     
        (Amount Outstanding)                 (Date)          
        
<PAGE>

                            FORM 10-Q
                                
                        TABLE OF CONTENTS
                                

                                                                 PAGE
                                                                NUMBER

PART I.  FINANCIAL INFORMATION

     Item 1.  Financial Statements                                3
              Consolidated Balance Sheets                         3
              Consolidated Statements of Income                   4
              Consolidated Statements of Cash Flows               5
              Notes to Consolidated Financial Statements          7

     Item 2.  Management's Discussion and Analysis of 
              Financial Condition and Results of Operations       9

PART II.  OTHER INFORMATION

     Item 1.  Legal Proceedings                                  14

     Item 2.  Changes in Securities                              14

     Item 3.  Defaults Upon Senior Securities                    14

     Item 4.  Submission of Matters to a Vote of Security 
              Holders                                            15

     Item 5.  Other Information                                  15
     
     Item 6.  Exhibits and Reports on Form 8-K                   15

SIGNATURES                                                       16

EXHIBIT INDEX                                                    17

                                   2
<PAGE>

                           PART I.  FINANCIAL INFORMATION

Item 1.  Financial Statements

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


                                                  September 30,     December 31,
                                                      1996              1995
                                                   (Unaudited)
                                       ASSETS
<S>                                               <C>               <C>
Current assets:
  Cash and cash equivalents                       $  10,990,443     $  19,992,695
  Accounts receivable, net                            5,677,846         4,313,442
  Federal income taxes receivable                       450,058           190,914
  Inventories                                         3,731,801         1,794,850
  Prepaid expenses and other current assets           4,867,706         4,638,090
    Total current assets                             25,717,854        30,929,991

Property and equipment:
  Land and improvements                              47,890,821        37,509,960
  Building and improvements                         195,762,408       192,818,896
  Equipment, furniture and improvements              74,033,008        68,500,267
  Less: accumulated depreciation                    (58,887,367)      (46,707,850)
                                                    258,798,870       252,121,273
  Construction in progress                          141,534,800        17,173,483
    Net property and equipment                      400,333,670       269,294,756

Other assets, net                                     7,786,648         8,566,847

                                                  $ 433,838,172     $ 308,791,594


                          LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
  Current maturities of long-term debt            $     342,845     $      25,252
  Note payable                                        1,000,000
  Accounts payable                                    4,019,403         4,562,132
  Accrued expenses                                   14,100,525         9,136,226
  Accounts payable - related party                   24,178,394         6,641,506
  Accrued interest                                    3,288,740         4,726,915
    Total current liabilities                        46,929,907        25,092,031

Non-current liabilities:
  Long-term debt, less current maturities           197,002,902       110,176,765
  Deferred income taxes                              11,377,388        10,634,898
    Total non-current liabilities                   208,380,290       120,811,663

    Total liabilities                               255,310,197       145,903,694

Stockholders' equity:
  Common stock, $0.01 par value;
   100,000,000 shares authorized;
   21,236,341 and 21,139,146 shares
   issued and outstanding                               212,364           211,392
  Additional paid-in capital                        114,091,669       113,520,158
  Retained earnings                                  64,223,942        49,156,350
    Total stockholders' equity                      178,527,975       162,887,900

                                                  $ 433,838,172     $ 308,791,594


See accompanying Notes to Consolidated Financial Statements

</TABLE>
                                     3

<PAGE>
<TABLE> 
<CAPTION>

                  RIO HOTEL & CASINO, INC. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF INCOME
                                  (Unaudited)

                                                   Three Months Ended
                                             Sept. 30, 1996    Sept. 30, 1995

<S>                                           <C>               <C>  
Revenues:
  Casino                                      $  26,854,235     $  26,828,711
  Room                                            9,789,581         8,865,708
  Food and beverage                              17,719,076        15,482,583
  Other                                           3,839,645         3,265,364
  Casino promotional allowances                  (5,012,827)       (4,677,966)

                                                 53,189,710        49,764,400

Expenses:
  Casino                                         14,111,383        11,784,518
  Room                                            3,237,079         2,825,428
  Food and beverage                              13,660,134        12,100,367
  Other                                           1,959,971         1,746,780
  Selling, general and administrative             7,652,922         7,846,109
  Depreciation and amortization                   4,283,761         3,279,224

                                                 44,905,250        39,582,426

Operating profit                                  8,284,460        10,181,974

Other income (expense):
  Interest income                                    36,620           197,629
  Interest expense                               (1,757,065)       (2,628,218)

                                                 (1,720,445)       (2,430,589)

Income before income tax provision                6,564,015         7,751,385

Income tax provision                             (2,297,532)       (2,866,694)

Net income                                    $   4,266,483     $   4,884,691

Earnings per common share:
  Primary:
    Net income                                $        0.20     $        0.23
    Weighted average number of common
     shares outstanding                          21,519,072        21,633,878

  Fully diluted:
    Net income                                $        0.20     $        0.23
    Weighted average number of common
     shares outstanding                          21,543,485        21,633,878


See accompanying Notes to Consolidated Financial Statements

</TABLE>
                  
<TABLE>
<CAPTION>
                  RIO HOTEL & CASINO, INC. AND SUBSIDIARIES
                CONSOLIDATED STATEMENTS OF INCOME (Continued)
                                  (Unaudited)

                                                    Nine Months Ended
                                             Sept. 30, 1996    Sept. 30, 1995

<S>                                           <C>               <C>
Revenues:                       
  Casino                                      $  83,082,679     $  76,796,240 
  Room                                           30,112,121        25,026,342  
  Food and beverage                              52,992,883        44,531,840
  Other                                          11,293,144         8,856,114  
  Casino promotional allowances                 (14,546,973)      (13,661,681) 
                                  
                                                162,933,854       141,548,855 

Expenses:                            
  Casino                                         40,005,532        33,718,226
  Room                                            9,876,771         7,641,962  
  Food and beverage                              40,615,871        35,907,312 
  Other                                           5,862,380         4,934,415 
  Selling, general and administrative            23,539,507        21,040,377
  Depreciation and amortization                  12,538,158        10,386,640
                               
                                                132,438,219       113,628,932 
                          
Operating profit                                 30,495,635        27,919,923 

Other income (expense):              
  Interest income                                   153,416           301,224  
  Interest expense                               (7,112,247)       (5,410,950) 
                                     
                                                 (6,958,831)       (5,109,726) 
                                   
Income before income tax provision               23,536,804        22,810,197 
                      
Income tax provision                             (8,469,211)       (8,499,509) 
                                     
Net income                                    $  15,067,593     $  14,310,688 

Earnings per common share:
  Primary:                           
    Net income                                $        0.70     $        0.66
    Weighted average number of common
     shares outstanding                          21,549,457        21,633,529  

  Fully diluted:                     
    Net income                                $        0.70     $        0.66 
    Weighted average number of common
     shares outstanding                          21,563,090        21,635,455    

See accompanying Notes to Consolidated Financial Statements

</TABLE>

                                  4
<PAGE>
<TABLE>        
<CAPTION>

                RIO HOTEL & CASINO, INC. AND SUBSIDIARIES
                  CONSOLIDATED STATEMENTS OF CASH FLOWS
                               (Unaudited)

                                                                   Nine Months Ended
                                                                     September 30,
                                                                1996              1995

<S>                                                         <C>               <C>      
Cash flows from operating activities:
  Net income                                                $  15,067,593     $   14,310,688
  Adjustments to reconcile net income to net
   cash provided by operating activities:
     Compensation expense recognized from
       stock option grant                                          79,409            58,477
     Depreciation and amortization                             12,538,163        10,386,640
     Provision for uncollectible accounts                          63,872           211,908
     Deferred income taxes                                        742,490         2,506,408
     (Increase) decrease in assets:
       Accounts receivable                                     (1,428,276)       (1,181,769)
       Inventories                                             (1,936,951)          (62,796)
       Prepaid expenses and other current assets                   67,453           231,709
       Other, net                                                 454,061        (1,026,048)
     Increase (decrease) in liabilities:
       Accounts payable                                          (542,729)          972,097
       Accrued federal income tax                                                   609,125
       Accrued expenses                                         4,964,299         2,098,365
       Accrued interest                                        (1,438,175)        1,778,592

Net cash provided by operating activities                      28,631,209        30,893,396

Cash flows from investing activities:
  Purchase of land and improvements                           (11,500,910)      (10,711,864)
  Purchase of equipment, furniture and
    improvements                                             (112,036,884)      (46,810,997)

Net cash used in investing activities                        (123,537,794)      (57,522,861)

Cash flows from financing activities:
  Proceeds from borrowings                                     86,000,000
  Net proceeds from issuance of senior
    subordinated notes                                                           96,869,021
  Net proceeds from common stock issuance                       1,146,710           878,651
  Payments on notes and loans payable                             (32,527)     (124,964,759)
  Repurchase of common stock                                   (1,209,850)       (3,237,788)

Net cash provided by (used in) financing activities            85,904,333       (30,454,875)

Net decrease in cash and cash equivalents                      (9,002,252)      (57,084,340)
Cash and cash equivalents, beginning of period                 19,992,695        76,426,258

Cash and cash equivalents, end of period                    $  10,990,443     $  19,341,918


See accompanying Notes to Consolidated Financial Statements
</TABLE>

                                   5
<PAGE>
<TABLE>                     
<CAPTION>
                     RIO HOTEL & CASINO, INC. AND SUBSIDIARIES
                       CONSOLIDATED STATEMENTS OF CASH FLOWS
                                   (Unaudited)


Supplemental Disclosure of Cash Flow Information


                                                                             Nine Months Ended
                                                                               September 30,
                                                                            1996            1995

<S>                                                                     <C>             <C>
Cash payments made for interest, net of amounts capitalized             $ 7,736,982     $ 3,723,580

Cash payments made for income taxes                                     $ 6,600,000     $ 5,500,000


Non-cash investing and financing activities:

  Purchase of property and equipment financed through accounts
  payable                                                               $24,178,394     $ 4,149,939

  Short-term note payable issued in the purchase of land                $ 1,000,000

  Debt assumed in the purchase of land                                  $   215,110

  Financing of equipment purchases                                      $   961,147

  Bond offering costs financed through accounts payable                                 $   109,200

  Tax benefit arising from the exercise of stock options under
    the Company's Non-Statutory Stock Option Plan                       $   556,213     $   609,125

</TABLE>

                                 6
<PAGE>
            RIO HOTEL & CASINO, INC. and SUBSIDIARIES
           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           (Unaudited)


NOTE 1 -  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.  and Rio Properties'  wholly  owned
          subsidiary    Cinderlane,   Inc.   (collectively    the
          "Company").
          
          All  significant intercompany balances and transactions
          have been eliminated in consolidation.
          
          The consolidated balance sheet as of September 30, 1996
          and  the related consolidated statements of income  for
          the   three   month  and  nine  month   periods   ended
          September  30,  1996  and  1995  and  the  consolidated
          statements  of  cash flows for the nine  month  periods
          ended September 30, 1996 and 1995 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 for  the  year
          ended December 31, 1995.
          
NOTE 2 -  LONG-TERM DEBT
          
          Long-term debt consists of the following:
          
<TABLE>
<CAPTION>

                                           SEPTEMBER 30, 1996   DECEMBER 31, 1995
       <S>                                    <C>                  <C>
       Bank loan ("Rio Bank Loan"),                                            
       originally a $65 million                                                
       revolving credit facility,                                              
       which was amended to be a                                               
       $200 million revolving credit                                           
       facility with interest equal to                                         
       the Eurodollar Rate or the Base                                         
       Rate, plus a margin.  The loan                                          
       matures on June 30, 2001 and is                                         
       collateralized by a first deed                                          
       of trust on the Rio's real                                              
       property, equipment and                                                 
       improvements.                          $ 96,000,000         $ 10,000,000
                                                                               
       10 5/8% Senior Subordinated                                             
       Notes, interest only payable                                            
       semi-annually; principal due                                            
       July 15, 2005.                          100,000,000          100,000,000
                                                                               
       Other                                     1,345,747              202,017
                                               197,345,747          110,202,017
       Less current maturities                   (342,845)             (25,252)
                                                                               
                                              $197,002,902         $110,176,765

</TABLE>

          The  prime  interest  rates  quoted  by  the  Company's
          primary    lenders   at   September   30,   1996    and
          December 31, 1995 were 8.25% and 8.50%, respectively.
          
                                7
                                
<PAGE>

            RIO HOTEL & CASINO, INC. and SUBSIDIARIES
           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           (Unaudited)


NOTE 3 -  INCOME TAXES
          
          The  Company  accounts for income taxes  in  accordance
          with Financial Accounting Standards Board Statement No.
          109,  "Accounting for Income Taxes" ("SFAS  No.  109").
          The  provisions  for income taxes for the  nine  months
          ended  September 30, 1996 and 1995 were $8,469,211  and
          $8,499,509,  respectively,  which  represent  effective
          rates   of   36.0%   and   37.3%,   respectively.     A
          reconciliation  between  the statutory  rates  and  the
          effective rates is as follows:
          
<TABLE>
<CAPTION>

                                               1996      1995
         <S>                                    <C>      <C>
         Statutory Rate                         35.0%    35.0%
         Depreciation on the premium                          
            allocated in the exchange for                       
            limited partnership units            0.4%     0.4%
         Disallowance for tax purposes of                     
            certain meals, travel and                           
            entertainment expenses               0.0%     1.7%
         Other                                   0.6%     0.2%
                 Effective Rate                 36.0%    37.3%

</TABLE>

          The  Company's  deferred  tax assets  (liabilities)  at
          September 30, 1996 consisted of the following:
          
<TABLE>
<CAPTION>

                                                CURRENT       NON-CURRENT
      
      <S>                                      <C>           <C>
      Depreciation and amortization                          ($13,082,515)
      Deferred employee benefit                $   843,478                
      Bad debt expense                             310,997                
      Other deferred tax liabilities, net                        1,705,127
                                                                          
                                                $1,154,475   ($11,377,388)

</TABLE>

          The  current portion of the Company's net deferred  tax
          assets  is included on the Consolidated Balance  Sheets
          under the heading "Prepaid Expenses and Other Assets".
          
          The Company has determined that it is probable that the
          full  amount  of the tax benefit from the deferred  tax
          assets  will  be  realized  and,  therefore,  has   not
          recorded  a valuation allowance to reduce the  carrying
          value of the deferred tax assets.
          
                                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  Private Securities Litigation Reform Act of 1995,  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), 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

THREE MONTHS ENDED SEPTEMBER 30, 1996 AND 1995

 REVENUES
 
 The  Company's  net revenues increased to $53.2 million  in  the
 third  quarter of 1996 from $49.8 million in the same period  in
 the  prior  year, an increase of $3.4 million  or  7%.    Casino
 revenues  were $26.9 million in the three months ended September
 30,  1996  compared  to $26.8 million in the  third  quarter  of
 1995.   Management  believes  that  a  lower  table  game   hold
 percentage  in  July  1996 and disruptions associated  with  the
 Phase  V  Expansion program, including the temporary removal  of
 up  to 400 slot machines from the casino floor (resulting in  an
 average  of  249  fewer  slot  machines  being  available   when
 comparing  this  year's third quarter with the  same  period  in
 1995)  were  the primary reasons for casino revenues  to  remain
 unchanged  when comparing the two quarters.  Although management
 is  making  every  effort to avoid operational disruptions  from
 the  expansion and construction program, it is anticipated  that
 there  will be occasions during the fourth quarter of 1996  when
 disruptions  may occur.  The Phase V Expansion is  scheduled  to
 open  in  phases, with approximately one-half of the  1,026  new
 hotel  suites  scheduled to open on January  1,  1997,  and  the
 balance  becoming available throughout the first  quarter.   The
 Masquerade  Village  which  includes  the  expanded  casino  and
 retail  areas  is expected to open in early February  1997,  and
 the  new Voodoo lounge and restaurant on the 41st floor  of  the
 new tower is expected to open in April 1997.
 
 Room  revenues increased by $0.9 million or 10% to $9.8  million
 in  the  third  quarter of 1996 from $8.9 million in  the  third
 quarter  of  1995.   The  increase  in  room  revenues  resulted
 primarily  from 141 new hotel suites being placed  into  service
 in  December  1995.  Demand for the Rio's suites remained  high,
 with  occupancy  rates  of 94% being attained  in  each  of  the
 quarters.
 
 Food  and  beverage revenues increased to $17.7 million  in  the
 third  quarter  of 1996 from $15.5 million in the third  quarter
 of  1995,  an  increase of $2.2 million or 14%.  An increase  in
 the  average food check contributed to the increase in food  and
 beverage revenues.
 
 Other  revenues increased by $0.5 million or 18% to $3.8 million
 in  the  three months ended September 30, 1996 compared to  $3.3
 million  in  the  third  quarter of 1995.   Increased  telephone
 revenues  from the additional hotel suites, as well as increased
 merchandise  sales  and  admissions to entertainment  activities
 were the primary reasons for the increase in other revenues.
 
 OPERATING MARGINS
 
 Operating  profit as a percentage of net revenues  was  16%  and
 20%  for  the  quarters  ended  September  30,  1996  and  1995,
 respectively.   Casino operating profit was  47%  in  the  third
 quarter  of  1996  compared to 56% in the same period  in  1995.
 Management believes that the decline in the operating margin  in
 the   casino  was  due  to  increased  payroll  and  pre-opening
 marketing and other expenses associated with the completion  and
 opening  of  the  new High Limit gaming area in  September  1996
 coupled  with maintaining similar casino revenues when comparing
 the  two  fiscal  quarters.  Food and beverage operating  profit
 was  23% during the third quarter of 1996 compared to 22% in the
 third   quarter   of   1995.   Management  believes   that   the
 improvement  is  primarily the result of a higher  average  food
 check during the three month period ended
 
                                9
                                
<PAGE>

ITEM 2.  MANAGEMENT'S   DISCUSSION  AND  ANALYSIS  OF   FINANCIAL
         CONDITION AND RESULTS OF OPERATIONS
           
MATERIAL CHANGES IN RESULTS OF OPERATIONS
           
THREE MONTHS SEPTEMBER 30, 1996 AND 1995
           
 September  30,  1996 compared to the same period  in  the  prior
 year.   Hotel operating profit was 67% during the third  quarter
 of  1996  compared  to  68% during the third  quarter  of  1995.
 Management  believes  that the decline in  the  hotel  operating
 margin  is the result of increases in normal operating  expenses
 including   salaries,   wages,   benefits   and   travel   agent
 commissions.  Other expenses were 51% of other revenues for  the
 three  months ended September 30, 1996 compared to  53%  in  the
 third  quarter  of  the  prior year.   Management  believes  the
 improvement   is   due  to  the  increase  in  other   revenues,
 particularly  telephone and entertainment admissions,  which  do
 not  require significant incremental expense.  Selling,  general
 and  administrative expenses decreased from 16% of revenues  for
 the  quarter  ended September 30, 1995 to 14%  for  the  quarter
 ended  September 30, 1996.  The primary reason for this decrease
 is  that  certain  advertising and production  costs  associated
 with  opening the Phase V Expansion were deferred  and  will  be
 expensed coincidental with the opening of the project.
 
 PROMOTIONAL ALLOWANCES
 
 Promotional  allowances, which represent  the  retail  value  of
 rooms,  food, beverage and other services provided to  customers
 without  charge,  were 8.6% of gross revenues  in  each  of  the
 quarters ended September 30, 1996 and 1995.
 
 DEPRECIATION AND AMORTIZATION
 
 Depreciation and amortization increased by $1.0 million  or  31%
 to  $4.3  million in the third quarter of 1996 compared to  $3.3
 million  in  the  third  quarter  of  1995.   This  increase  is
 primarily  attributable to depreciation expense from  the  $20.0
 million  Phase  IV  Expansion project  which  was  completed  in
 December  1995  and included 141 new hotel suites, approximately
 5,400  square feet of meeting room space, doubled  the  size  of
 Buzios  seafood  restaurant, added a new health club  and  salon
 facility   and   included   a   variety   of   back-of-the-house
 improvements.   In  addition,  approximately  $7.3  million   of
 construction  projects,  including the new  multi-level  parking
 structure  associated with the Phase V Expansion  project  which
 will  allow for direct access into the Masquerade Village,  have
 been placed into service and are being depreciated.
 
 OTHER INCOME (EXPENSE)
 
 Interest expense decreased by approximately $0.9 million or  33%
 to  $1.8  million in the third quarter of 1996 from $2.6 million
 in  the  third quarter of 1995.  Interest expense in  the  third
 quarter  of 1996 was reduced by $2.5 million because of interest
 capitalized  on  amounts  expended  on  the  Phase  V  Expansion
 project,  which  will  center around  a  41-story  curved  tower
 containing over 1,000 new hotel suites.  This project will  also
 include  approximately 60,000 square feet of public  area  which
 will  provide additional casino space, restaurants,  new  retail
 and  interactive entertainment space as well as an expanded pool
 and  beach  area  and  additional parking facilities.   Interest
 expense  in  the third quarter of 1995 was reduced  by  $246,000
 because  of  interest  capitalized on amounts  expended  on  the
 Phase IV Expansion project.
 
 NET INCOME
 
 Net  income  for the third quarter of 1996 was $4.3  million  or
 $0.20  per  share  (fully diluted) compared to $4.9  million  or
 $0.23 per share (fully diluted) for the third quarter of 1995.
 
                               10
                                
<PAGE>

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

NINE MONTHS SEPTEMBER 30, 1996 AND 1995

 REVENUES
 
 Net  revenues for the Company increased to $162.9 million in the
 first  nine months of 1996 from $141.5 million in the 1995  nine
 month  period,  an  increase of approximately $21.4  million  or
 15%.   Casino revenues increased $6.3 million, or 8%,  to  $83.1
 million  in  the 1996 period from $76.8 million  in  the  period
 ended  September 30, 1995.  Table game and slot machine revenues
 were  the  main contributors to this increase, with  table  game
 revenues  increasing to $30.4 million and slot machine  revenues
 to  $48.3  million in the nine months ended September  30,  1996
 from  $25.8 million and $46.2 million in the same period in  the
 prior   year,  respectively.   Management  believes   that   the
 increase in table game revenues was primarily the result  of  13
 more  tables being available in the 1996 period and an  increase
 in  the number of available and occupied rooms.  The increase in
 slot  machine  revenues occurred primarily in  the  first  three
 months  of 1996, with revenues remaining relatively flat in  the
 second  and third quarters when compared to the same periods  in
 1995.  Management believes that this was primarily due to a  12%
 decrease  in  the  number of slot machines  available  during  a
 significant portion of the nine months ended September 30,  1996
 from  the number of machines available in the prior year  period
 as  a  result of space limitations associated with the  Phase  V
 Expansion and casino remodeling projects.
 
 Room  revenues increased by $5.1 million or 20% to $30.1 million
 in  the  nine months ended September 30, 1996 from $25.0 million
 in  the  prior  year  period.   The  increase  in  room  revenue
 resulted  primarily from the addition of 365  new  hotel  suites
 placed  into  service  in February 1995, 184  new  hotel  suites
 being  placed  into service in March 1995 and an additional  141
 new  hotel  suites being placed into service in  December  1995.
 The  hotel occupancy percentage increased to 95.8% in  the  1996
 period based on 424,686 available room nights from 95.2% in  the
 1995 period based on 360,258 room nights available.
 
 Food  and  beverage revenues increased to $53.0 million  in  the
 nine  month  period ended September 30, 1996 from $44.5  million
 in  the  same  period in 1995, an increase of  $8.5  million  or
 19.0%.   An  increase  in the average food check  and  increased
 beverage  sales contributed to the increase in food and beverage
 revenues.
 
 Other  revenues  increased by $2.4 million  or  27.5%  to  $11.3
 million in the 1996 period compared to $8.9 million in the  nine
 month  period  in 1995.  Increased telephone revenues  from  the
 additional hotel suites, as well as increased merchandise  sales
 and  admissions  to entertainment activities  were  the  primary
 reasons for the increase in other revenues.
 
 OPERATING MARGINS

 Operating  profit as a percentage of net revenues  was  19%  and
 20%  for  the  nine month periods ended September 30,  1996  and
 1995,  respectively.  Casino operating profit  was  52%  in  the
 nine month period in 1996 compared to 56% in the same period  in
 1995.   Management  believes that the decline in  the  operating
 margin  in  the casino was due to (i) the change  in  the  ratio
 between  table game revenues, which traditionally have  a  lower
 operating  margin,  and  slot  machine  revenues  and  (ii)  the
 incurrence  of pre-opening marketing and staff costs  associated
 with  the  September 1996 opening of the new High  Limit  gaming
 area.   Food and beverage operating profit was 23% in  the  nine
 month  period  ended September 30, 1996 compared to  19%  during
 the  first  nine months of 1995.  Management believes that  this
 improvement  is  the  result of effective cost  controls  and  a
 higher  average food check in the 1996 period.  Hotel  operating
 profit  was  67% for the first nine months of 1996  compared  to
 69%  in  the  prior year period.  Management believes  that  the
 decline  in  the  hotel  operating  margin  is  the  result   of
 increases  in  normal  operating  expenses  including  salaries,
 wages,  benefits and travel agent commissions.   Other  expenses
 were  52%  of other revenues for the nine months ended September
 30,  1996  compared  to 56% in the first nine  months  of  1995.
 Management  believes the improvement is due to the  increase  in
 other   revenues,   particularly  telephone  and   entertainment
 admissions,   which  do  not  require  significant   incremental
 expense.  Selling, general and administrative expenses were  14%
 and  15%  of  net  revenues  for the nine  month  periods  ended
 September 30, 1996 and 1995, respectively.
 
                               11
                                
<PAGE>

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

NINE MONTHS SEPTEMBER 30, 1996 AND 1995

 PROMOTIONAL ALLOWANCES

 Promotional  allowances, which represent  the  retail  value  of
 rooms,  food, beverage and other services provided to  customers
 without charge, were $14.5 million or 8.0% of gross revenues  in
 the  first nine months of 1996.  The estimated cost of providing
 such promotional allowances was $8.2 million.  This compares  to
 promotional allowances in the same nine month period in 1995  of
 $13.7  million or 9% of gross revenues at an estimated  cost  of
 $8.0 million.
 
 DEPRECIATION AND AMORTIZATION

 Depreciation and amortization increased by $2.1 million  or  21%
 to  $12.5  million in the first nine months of 1996 compared  to
 $10.4  million  in  the  same period in the  prior  year.   This
 increase  is primarily attributable to the 365 new hotel  suites
 which  were  placed into service in February 1995  and  184  new
 hotel  suites in March 1995, as well as completion  in  December
 1995  of  the Phase IV Expansion project which included 141  new
 hotel  suites, the addition of approximately 5,400  square  feet
 of   meeting  room  space,  the  expansion  of  Buzios   seafood
 restaurant,  the  addition  of  a  new  health  club  and  salon
 facility  and  a variety of back-of-the-house improvements.   In
 addition,  approximately $7.3 million in construction  projects,
 including  the new multi-level parking garage which is  part  of
 the  Phase  V  Expansion  project which will  allow  for  direct
 access  into  the  Masquerade Village,  have  been  placed  into
 service in 1996 and are being depreciated.
 
 OTHER INCOME (EXPENSE)

 Interest  expense  increased by $1.7  million  or  31%  to  $7.1
 million  in  the first nine months of 1996 from $5.4 million  in
 the  same  period in 1995.  Interest expense increased primarily
 as  a result of the Company's July 1995 issuance of $100 million
 in  principal  amount of 10 5/8% Senior Subordinated  Notes  Due
 2005,  the proceeds from which were primarily utilized to  repay
 the  Rio  Bank  Loan, and to increased borrowings in  connection
 with  the  Phase V Expansion project.  Interest expense  in  the
 first  nine  months of 1996 was reduced by $4.0 million  because
 of  interest  capitalized on amounts expended  on  the  Phase  V
 Expansion  project, which will center around a  41-story  curved
 tower  containing  over 1,000 new hotel  suites.   This  project
 will  also  include approximately 60,000 square feet  of  public
 area  which  will provide additional casino space,  restaurants,
 new  retail  and interactive entertainment space as well  as  an
 expanded  pool and beach area and additional parking facilities.
 Interest expense in the first six months of 1995 was reduced  by
 $0.6   million  because  of  interest  capitalized  on   amounts
 expended on the Phase III and Phase IV Expansion projects.
 
 NET INCOME

 Net  income for the first nine months of 1996 was $15.1  million
 or  $0.70 per share (fully diluted) compared to $14.3 million or
 $0.66  per  share (fully diluted) for the first nine  months  of
 1995.
 
 MATERIAL CHANGES IN FINANCIAL CONDITION
 
 LIQUIDITY AND CAPITAL RESOURCES
 
 In  June  1996, the Rio Bank Loan was increased to $200 million.
 This  increase  is  for  general  corporate  purposes  and   for
 architectural,  engineering  and  development  costs  associated
 with  a second hotel-casino with up to 3,000 rooms that is being
 master-planned for the Rio's 77 acre site.  The  Rio  Bank  Loan
 still   matures   on  June  30,  2001  and  requires   scheduled
 reductions  of  the maximum amount available commencing  with  a
 $10  million  reduction at December 31,  1997,  a  $7.5  million
 reduction at the end of each quarter during 1998, a $10  million
 reduction  at  the  end  of each quarter during  1999,  a  $12.5
 million reduction at the end of each quarter during 2000, a  $35
 million  reduction at March 31, 2001 and maturity  at  June  30,
 2001.
 
                               12
                                
<PAGE>

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

NINE MONTHS SEPTEMBER 30, 1996 AND 1995

 At  September  30,  1996, cash and cash equivalents  were  $11.0
 million  compared with $20.0 million at December 31,  1995.   At
 September  30,  1996, the Company had $104.0  million  available
 under  the Rio Bank Loan.  The revolving credit feature  of  the
 Rio  Bank  Loan  allows  the Company to pay  down  and  reborrow
 principal  under  the  line  of  credit  as  the  Company  deems
 appropriate.   The Company did not utilize this ability  at  the
 end  of  the  third quarter of 1996, but the Company did  borrow
 $10  million  on  December 29, 1995 and  repaid  $9  million  on
 January 2, 1996.  The decrease in cash is primarily due  to  the
 decision  of  the  Company not to draw down any  amount  of  the
 available  Rio Bank Loan at the end of the quarter, as  well  as
 the   use   of  cash  and  cash  equivalents  to  make   capital
 expenditures  for the Company's $200 million Phase  V  Expansion
 and  the previously reported acquisition of land adjacent to the
 Rio.
 
 During  the  first  nine  months  of  1996,  cash  provided   by
 operating  activities  was $28.6 million.  Investing  activities
 used  $123.5 million of the Company's cash during the first nine
 months   of   1996.    Approximately  $2.6   million   of   such
 expenditures  was related to the Company's Phase III  Expansion,
 approximately  $2.3 million was related to the  Company's  Phase
 IV  Expansion  and approximately $101.3 million was  related  to
 the  Company's Phase V Expansion.  During the first nine  months
 of  1996,  the Company spent approximately $10.9 million  toward
 the  acquisition of approximately 34 acres of land  adjacent  to
 the  Rio.  The balance of cash used in investing activities  was
 expended on other capital projects.
 
 During  the  fourth  quarter of 1994,  the  Board  of  Directors
 authorized the Company to make discretionary repurchases  of  up
 to  2  million shares of its common stock ("Common Stock")  from
 time  to time in the open market or otherwise.  During the first
 nine  months of 1996, the Company repurchased 75,000  shares  of
 Common Stock at an average cost of $16.13 per share.
 
 Under  the  Rio  Bank  Loan, the Company is  subject  to  annual
 capital  expenditure  limits of $7.5  million  plus  the  amount
 available  of unused capital expenditures from the prior  fiscal
 year,  but  not  to  exceed $12.5 million in  a  calendar  year.
 However,  the  Company received a written waiver  to  allow  the
 Company  to  construct  the Phase III Expansion,  the  Phase  IV
 Expansion  and the Phase V Expansion.  In addition, the  Company
 received a written waiver from the lenders to allow the  Company
 to  invest  up  to $35.0 million in land adjacent  to  the  Rio.
 Because  of  the  annual  restrictions on  capital  expenditures
 contained  in  the  Rio  Bank Loan, any  other  significant  new
 capital  improvements  will  also require  the  consent  of  the
 lenders.
 
 As  of October 1, 1996 the Company's capital commitments include
 approximately  $98.7  million for  the  Phase  V  Expansion  and
 $9.1  million under commitments for the balance of the  purchase
 price  and/or  option  price  of certain  of  the  land  parcels
 adjacent to the Rio for which the entire purchase price has  not
 been  funded.   Based upon cash on hand, cash available  through
 borrowings  under  the Rio Bank Loan and cash  from  operations,
 the  Company  believes that it has adequate  cash  available  to
 fund  the  remaining cost of the Phase V Expansion and the  real
 estate purchase commitments.
 
                               13
<PAGE>

PART II.  OTHER INFORMATION
      
ITEM 1.  LEGAL PROCEEDINGS

  LARRY SCHREIER V. CAESARS WORLD, INC., ET AL., Case No. 95-923-
  LDG  (RJJ),  instituted on September 26, 1995,  in  the  United
  States  District  Court for the District  of  Nevada,  Southern
  District.   An  individual, purportedly representing  a  class,
  filed   a   complaint   against   four   manufacturers,   three
  distributors  and 38 casino operators, including  the  Company,
  that manufacture, distribute or offer for play video poker  and
  electronic slot machines.  The individual allegedly intends  to
  seek  class  certification  of  the  interests  he  claims   to
  represent.   The  complaint alleges that  the  defendants  have
  engaged  in  a course of conduct intended to induce persons  to
  play  such  games  based on a false belief concerning  how  the
  gaming  machines operate, as well as the extent to which  there
  is  an  opportunity  to  win on a given  play.   The  complaint
  alleges  violations  of the RICO Act,  as  well  as  claims  of
  common    law   fraud,   unjust   enrichment   and    negligent
  misrepresentation, and seeks damages in excess of  $1  billion,
  without  any  substantiation of that amount.  The complaint  is
  similar  to  the  Poulos  Complaint  and  the  Ahern  Complaint 
  described  in  the  Company's  Form  10-K  for  the  year ended 
  December 31, 1995.   The Company  filed a motion to dismiss the
  complaint.   Plaintiff's  attempts  to  consolidate this action 
  with  the  Ahern  Complaint  and  Poulos  Complaint  were   not 
  successful.  The  Nevada  District   Court   entered  an  order 
  granting  the  motions  to  dismiss  based on  defects  in  the 
  pleadings, and denying  as  moot  all  other  pending  motions,
  including those of the Company.   The  Court granted plaintiffs
  until  September 30, 1996  within  which  to  file  an  amended
  complaint   that   complies   with   the   applicable  pleading   
  requirements.   The plaintiffs filed an amended complaint on or
  about September 30,1996.  The Company  renewed its   motion  to
  dismiss based on abstention and related doctrines, and based on
  defects  in  the  pleadings.   Management   believes  that  the
  complaint is without merit and intends vigorously to defend the
  allegations.
  
ITEM 2.  CHANGES IN SECURITIES

  During  the  third  quarter of 1996,  certain  options  granted
  pursuant to the Company's Non-Statutory Stock Option Plan  were
  exercised,  resulting in the issuance of 29,000 shares  of  the
  Company's Common Stock.
  
ITEM 3.  DEFAULTS UPON SENIOR SECURITIES

  NONE

                               14
                                
<PAGE>

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

  NONE

ITEM 5.  OTHER INFORMATION

  On  October  8,  1996, David P. Hanlon was appointed  Executive
  Vice  President and Chief Operating Officer of the Company  and
  President and Chief Operating Officer of Rio Properties.
  
ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K

  (a)    EXHIBITS


    EXHIBIT     
    NUMBER      DESCRIPTION
                
    11.01       Computation of Earnings Per Common Share
                
    27.01       Financial Data Schedule

  
  (b)    REPORT ON FORM 8-K

     NONE
     
                               15
                                
<PAGE>

                            SIGNATURES


     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)
                             
                             
                             
November 11, 1996            /s/ Ronald J. Radcliffe
   (Date)                    RONALD J. RADCLIFFE
                             Treasurer and Chief Financial Officer
                             (Duly Authorized Officer and
                             Principal Financial Officer)

                               16
                                
<PAGE>

                         EXHIBIT INDEX

                                                           SEQUENTIAL
                                                              PAGE
EXHIBIT     DESCRIPTION                                      NUMBER
                                                                
11.01       Computation of Earnings per Common Share           18
                                                                
27.01       Financial Data Schedule                            20

                               17
                                
<PAGE>