UNITED STATES
               SECURITIES AND EXCHANGE COMMISSION
                    Washington, D.C.  20549

                           FORM 10-Q

[X]  QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
     SECURITIES EXCHANGE ACT OF 1934
            For the Quarter ended September 30, 1995

                               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 0-4281
                   ALLIANCE GAMING CORPORATION
     (Exact name of registrant as specified in its charter)

                       NEVADA             88-0104066
      (State or other jurisdiction of     (I.R.S. Employer
     Incorporation or organization)     Identification No.)
                                
                      4380 Boulder Highway
                 Las Vegas, Nevada             89121
    (Address of principal executive offices)      (Zip Code)

          Registrant's telephone number: (702) 435-4200



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.
[X]  Yes   [ ]  No

The   number  of  shares  of  Common  Stock,  $0.10  par   value,
outstanding  as of November 13, 1995 according to the  records  of
the  registrant's registrar and transfer agent,  was  11,654,150.
On  the same date, the number of shares outstanding of non voting
Junior Convertible Special Stock, $0.10 par value, was 1,333,333.












                           I N D E X



PART I.    FINANCIAL INFORMATION                                         Page


Item 1.   Unaudited Financial Statements

     Unaudited Condensed Consolidated Balance Sheets
            as of June 30, 1995 and September 30, 1995                      3

     Unaudited Condensed Consolidated Statements of Operations
           for the three months ended September 30, 1994 and 1995           5

     Unaudited Condensed Consolidated Statements of Cash Flows
           for the three months ended September 30, 1994 and 1995           6

     Notes to Unaudited Condensed Consolidated Financial
           Statements                                                       7

Item  2.  Management's  Discussion and  Analysis  of  Financial
          Condition and Results of Operations                              11



PART II.  OTHER INFORMATION


Item  6.  Exhibits and reports on Form 8-K                                 14


SIGNATURES                                                                 15













                             PART 1

          ALLIANCE GAMING CORPORATION AND SUBSIDIARIES
        UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS

                             ASSETS

                                                           June 30      Sept 30
                                                            1995         1995
                                                             (In thousands)
Current assets:
   Cash cash equivalents securities available 
    for sale                                              $ 37,414     $ 34,561
   Receivables, net                                          3,316        4,791
   Inventories                                                 714          705
   Prepaid expenses                                          4,148        3,496
   Refundable income taxes                                     361           49
   Other                                                       156          107

        Total current assets                                46,109       43,709

Property and equipment:
   Land                                                     17,296       17,296
   Building and improvements                                 8,822        8,822
   Gaming equipment                                         36,396       37,144
   Furniture, fixtures and equipment                        11,582       11,341
   Leasehold improvements                                    5,372        5,282
   Construction in Progress                                     30        1,052
                                                            79,498       80,937
   Less accumulated depreciation and amortization           29,146       30,265

        Property and equipment, net                         50,352       50,672

Other assets:
   Receivables, net                                          5,309        4,986
   Excess of costs over net assets of an acquired business,
     net of accumulated amortization of $585 and $629        3,842        3,798
   Intangible assets, net of accumulated amortization of    
    $5,516 and $5,429                                       12,405       11,779
   Deferred tax assets                                       1,399        1,935
   Investment in minority owned subsidiary                   1,585        1,585
   Other                                                     5,347        5,241

        Total other assets                                  29,887       29,324

             Total Assets                                 $126,348     $123,705




                          (continued)





          ALLIANCE GAMING CORPORATION AND SUBSIDIARIES
        UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS

              LIABILITIES AND STOCKHOLDERS' EQUITY


                                                            June 30     Sept 30
                                                              1995       1995
                                                               (In thousands)

Current liabilities:
   Current maturities of long-term debt                  $   3,995    $   4,002
   Accounts payable                                          1,758        1,487
   Accrued expenses, including related parties of 
    $931 and $570                                            8,610        8,957

        Total current liabilities                           14,363       14,446

Long-term debt, less current maturities                     97,402       96,599
Deferred tax liabilities                                     1,399        1,935
Other  liabilities                                           2,556        2,330

         Total liabilities                                 115,720      115,310

Commitments and contingencies

Minority interest                                              643          787

Stockholders' equity:
   Common stock, $0.10 par value; authorized 175,000,000 
    shares; issued and outstanding 11,654,150 and 
    11,654,150                                               1,165        1,165
   Special stock, $0.10 par value; authorized 10,000,000 
    shares; issued and outstanding 1,333,333 and 
    1,333,333                                                  133          133
   Paid-in capital                                          32,134       32,134
   Unrealized  gain  (loss)  on securities  available 
    for sale                                                  (316)         725 
      Accumulated deficit                                  (23,131)     (26,549)
         Total stockholders' equity                          9,985        7,608

            Total liabilities and stockholders' equity   $ 126,348    $ 123,705









   See notes to condensed consolidated financial statements.


          ALLIANCE GAMING CORPORATION AND SUBSIDIARIES
    UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

         Three Months Ended September 30, 1994 and 1995



                                                              1994       1995
                                                              (In thousands, 
                                                                except per 
                                                               share amounts)
Revenues:
   Gaming
        Routes                                            $  25,717   $  26,296
         Casinos and taverns                                  4,065      11,190
    Food and beverage sales                                   1,032       1,052
    Net equipment sales                                          10           3

                                                             30,824      38,541
Costs and expenses:
   Cost of gaming
         Routes                                              19,101      20,212
         Casinos and taverns                                  2,407       5,158
    Cost of food and beverage                                   723         757
    Cost of equipment sales                                       6         ---
   Selling, general and administrative                        3,297       4,505
   Business development expenses                              1,543       5,365
    Corporate expenses                                        1,977       1,522
    Depreciation and amortization                             2,304       2,487

                                                             31,358      40,006

Operating loss                                                 (534)     (1,465)
Other income (expense):
    Interest income                                             704         426
    Interest expense                                         (1,945)     (2,208)
    Minority share of income                                    (72)       (144)
    Other, net                                                  110        (498)

Loss before income taxes                                     (1,736)     (3,889)

Income tax benefit (expense)                                   (190)        471

Net loss                                                   $ (1,926)   $ (3,418)

Loss per share of common stock                              $  (.18)    $  (.29)

Weighted average common shares outstanding                   10,971      11,654



   See notes to condensed consolidated financial statements.


          ALLIANCE GAMING CORPORATION AND SUBSIDIARIES
   UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

         Three Months Ended September 30, 1994 and 1995

                                                              1994       1995
                                                              (In thousands)
Cash flows from operating activities:
   Net loss                                                 (1,926)     (3,418)
   Adjustments to reconcile net loss to net cash 
    provided by (used in) operating activities:
        Depreciation and amortization                        2,304       2,487
        Loss on sale of property and equipment                  25         151
        Write off of other assets                              230         188
        Provision for losses on receivables                    153          21
        Amortization of debt discounts                          71          59
        Equity in losses of affiliate                           69         ---
   Net change in operating assets and liabilities:
   (Increase) decrease in:
        Inventories                                             27           9
        Prepaid expenses                                     1,047         652
        Refundable income taxes                                ---         312
        Other assets                                           (20)       (487)
   Increase (decrease) in:
        Accounts and slot contracts payable                    432        (271)
        Accrued expenses                                    (2,606)        347
        Minority interests                                      72         144
        Other liabilities                                     (260)       (212)
                Net cash used in operating activities:    $   (382)    $   (18)

Cash flows from investing activities:
    Additions to property and equipment                     (1,418)     (2,226)
    Proceeds from sale of property and equipment               187         296
    Additions to receivables                                (7,617)     (3,198)
    Cash collections on receivables                          4,819       2,745
    Proceeds from sale (acquisition) of securities 
     available for sale                                       (205)      4,084
    Additions to intangible assets                             (96)       (354)
    Additions to other long-term assets                       (766)       (819)
                Net cash provided by (used in)
                 investing activities                       (5,096)        528

Cash flows from financing activities:
    Reduction of long-term debt                               (703)     (1,024)
    Proceeds from long-term debt                               ---         168
    Issuance of stock                                           43         ---
                Net  cash  used in financing activities       (660)       (856)

Cash and cash equivalents:
    (Decrease) increase for period                          (6,138)       (346)
    Balance, beginning of period                            37,085      13,734
    Balance, end of period                                $ 30,947    $ 13,388

   See notes to condensed consolidated financial statements.


          ALLIANCE GAMING CORPORATION AND SUBSIDIARIES
 NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

         Three Months Ended September 30, 1994 and 1995

1. ADJUSTMENTS FOR FAIR PRESENTATION

   In the opinion of management, all adjustments necessary for  a
   fair  statement of the unaudited results for the three  months
   ended September 30, 1994 and 1995 have been made.  The results
   of  operations  for  an  interim period  are  not  necessarily
   indicative of the results to be expected for a full year.

   Certain information and footnote disclosures normally included
   in financial statements presented in accordance with generally
   accepted accounting principles have been condensed or omitted.
   It  is  suggested that the accompanying condensed consolidated
   financial statements be read in conjunction with the financial
   statements and notes in the Company's annual report on Form 10-K.

2. RECLASSIFICATIONS

   Certain  reclassifications  have been  made  to  prior  period
   financial   statements   to  conform   with   current   period
   presentations.

3. RECEIVABLES

   The  Company's  gaming  route operations  from  time  to  time
   involve  making  loans  to  location  operators  in  order  to
   participate in revenues over extended periods of time.   These
   loans,  generally made for buildouts, tenant improvements  and
   initial operating expenses, are generally guaranteed on a full
   recourse  basis by the location owner and are secured  by  the
   assets  of  the  location.   The majority  of  the  loans  are
   interest  bearing and are expected to be repaid over a  period
   of  time not to exceed the life of the related revenue sharing
   agreement.   The loans have varying payment terms with  weekly
   payments ranging from approximately $200 to $2,000 and monthly
   payments  ranging from approximately $500 to  $9,000.   Annual
   interest  rates  on the loans range from prime  plus  1.5%  to
   stated  rates of 12% with various maturity dates ranging  from
   October  1995  to April 2007.  The loans are  expected  to  be
   repaid  from  the locations' cash flows or proceeds  from  the
   sale of the leaseholds.

   Receivables consist of the following:
                                                   June 30      Sept 30
                                                    1995         1995
                                                      (In thousands)

        Notes receivable-location operators        $ 7,760      $ 8,453
        Other receivables                              865        1,324
                                                     8,625        9,777
        Less current amounts                        (3,316)      (4,791)
        Long-term receivables, excluding current 
         amounts                                   $ 5,309      $ 4,986

   Receivables  are  presented net of an allowance  for  doubtful
   accounts of approximately $1,659,000 and $1,643,000 as of June
   30,  1995 and September 30, 1995, respectively.  The allowance
   is  allocated between current and long-term receivables  on  a
   pro  rata  basis  related  to notes receivable  from  location
   operators.

   Receivables  at  September 30, 1995 also  included  $1,215,000
   related  to  the  previously disclosed sale of  the  Company's
   tavern operations to an unrelated third party. 
 

          ALLIANCE GAMING CORPORATION AND SUBSIDIARIES
 NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

         Three Months Ended September 30, 1994 and 1995


4. DEBT

   Long-term  debt  at  June  30, 1995  and  September  30,  1995
   consists of the following:

                                                        June 30    Sept 30
                                                         1995       1995   
                                                          (In thousands)

        7.5% Convertible subordinated debentures 
         due 2003                                        85,000     85,000

        Due to stockholder, net of discount of  
         $747,619  and  $688,596                          3,309      3,055

        Hospitality Franchise Systems                     9,065      8,773

        Other debt                                        4,023      3,773
                                                        101,397    100,601
        Less current maturities                           3,995      4,002
        Long-term debt, less current maturities         $97,402    $96,599

   Accrued  interest of approximately $1,991,000  (June  30)  and
   $354,000 (September 30) is included in accrued expenses in the
   unaudited condensed consolidated balance sheets.  Included  in
   these amounts are $27,813 (June 30) and $25,168 (September 30)
   due  to  affiliates of Alfred H. Wilms, the Company's  largest
   stockholder  and  a member of the Board of  Directors  of  the
   Company,  relating  to  funding  of  the  Company's  majority-
   controlled  subsidiary, Video Services, Inc.'s ("VSI")  gaming
   device route operations.

5. INCOME TAXES

   The  Company generally accounts for income taxes and files its
   income tax returns on a consolidated basis.  However, VSI,  in
   which  the  Company  holds 100% of the voting  interests,  has
   previously  filed its income tax returns on a  separate  basis
   and was  not consolidated for tax purposes. During the quarter
   ended  December 31, 1994, the Company determined that VSI  can
   be  consolidated  for tax purposes. As a result,  the  Company
   filed  for and has received a refund of estimated income taxes
   paid for fiscal year 1994.

   The  Company accounts for income taxes in accordance with  the
   provisions of Financial Accounting Standard No. 109 Accounting
   for  Income  Taxes.  Under the asset and liability  method  of
   Statement  109,  deferred  tax  assets  and  liabilities   are
   recognized  for  the future tax consequences  attributable  to
   differences  between the financial statement carrying  amounts
   of  assets  and  liabilities and their respective  tax  bases.
   Deferred tax assets and liabilities are measured using enacted
   tax rates expected to apply to taxable income in the years  in
   which those temporary differences are expected to be recovered
   or  settled.  Under Statement 109, the effect on deferred  tax
   assets  and liabilities of a change in tax rates is recognized
   in income in the period that includes the enactment date.

   Due  to  losses  and  the lack of available  carrybacks,  the
   Company  recognized no federal income tax expense  or  benefit 
   for the quarters ended September 30, 1994 and 1995 other than
   the tax effect of changes in the unrealized gains (losses) on 
   securities available for sale .


          ALLIANCE GAMING CORPORATION AND SUBSIDIARIES
 NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

         Three Months Ended September 30, 1994 and 1995

5. INCOME TAXES (Continued)

   The   federal  and  state  income  tax  effects  of  temporary
   differences  that  give rise to significant  portions  of  the
   deferred tax assets and liabilities at September 30, 1995  are
   presented below.

                                                    (in thousands)
   Deferred tax assets:
        Net operating loss carryforwards                $13,643
        Inventory obsolescence reserve                      179
        Receivables, bad debt allowance                     559
        Organization and start-up costs                     157
        Reserves for discontinued operations              1,279
        Other                                               401
   Total gross deferred tax assets                       16,218
   Less: Valuation allowance                            (14,283)
   Net deferred tax assets                              $ 1,935

   Deferred tax liabilities:
        Property  and equipment principally due to 
         depreciation differences                         1,363
        Other                                               572
    Total  gross  deferred tax liabilities                1,935
    Net                                                 $   ---

   The valuation allowance for deferred tax assets as of June 30,
   1995  was  $13,908,000. The net change in the total  valuation
   allowance  for  the consolidated group for the  quarter  ended
   September 30, 1995 was an increase of $375,000.

   At September 30, 1995, the Company had estimated net operating
   loss   carryforwards  for  federal  income  tax  purposes   of
   approximately $40,000,000 which are available to offset future
   federal taxable income, if any, expiring 2007 through 2009.

6. INTANGIBLE ASSETS

   Intangible  Assets includes $4,409,000, net of  $1,095,000  of
   accumulated   amortization,   for   costs   related   to   the
   commissions,  discounts  and  other  issuance  costs  of   the
   Company's private placement of $85,000,000 aggregate principal
   amount  of 7.5% Convertible Subordinated Debentures due  2003.
   Such  costs are being amortized on a straight line basis  over
   the term of the debentures.


7. INVESTMENT IN MINORITY OWNED SUBSIDIARY

   Investment in minority owned subsidiary consists of $1,585,000
   related  to  the  Company's  investment  in  Kansas  Financial
   Partners, LLC.




          ALLIANCE GAMING CORPORATION AND SUBSIDIARIES
 NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

         Three Months Ended September 30, 1994 and 1995

8. CASH, CASH EQUIVALENTS AND SECURITIES AVAILABLE FOR SALE

   For balance sheet presentation the following account balances
   have been combined at September 30, 1995:

                                                    (in thousands)
     Cash and cash equivalents                         $ 13,388
     Securities available for sale                       21,173
     Total                                             $ 34,561
 
    As of September 30, 1995, unrealized losses for securities available 
    for sale was $725,000 net of the tax effect of $374,000 and is 
    included as a component of stockholder's equity.             

9. SUBSEQUENT EVENTS        

   On   October   18,   1995  the  Company   and   Bally   Gaming
   International,  Inc.  ("BGII")  entered  into   a   definitive
   agreement  under which 5.9 million shares of BGII shares  will
   each  be  exchanged for $13 in cash and the remainder of  BGII
   shares  will be exchanged for the Company's shares also valued
   at $13 per share. BGII shareholders will not receive less than
   2.167  of  the Company's shares nor more than 3.059 shares  in
   exchange for each BGII share.

   The  transaction  was unanimously approved by both  companies'
   Boards of Directors, is subject to approval by both companies'
   shareholders,  obtaining  needed  regulatory  approvals,   the
   securing of $150 million in permanent financing by the Company
   and  certain other conditions. The merger is expected to close
   in late January 1996. BGII has terminated its merger agreement
   with  WMS  Industries, Inc. and the Company has withdrawn  its
   tender and consent solicitation for BGII shares. BGII and  the
   Company agreed to dismiss the litigation between them.


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

Financial Condition

Liquidity and Capital Resources:

At  September  30,  1995,  the Company  had  working  capital  of
approximately $29,263,000, a decrease of approximately $2,483,000
from June 30, 1995.  The decrease in working capital is primarily
in  cash  and  cash  equivalents which were used to fund development
activities in connection  with the  Company's  growth strategy.  
As of September 30,  1995,  the Company  had $34,561,000 in cash, 
cash equivalents and securities available   for  sale,  of  which  
approximately  $7,000,000 is necessary  to  fund  ongoing gaming 
operations  in  the  ordinary course of business.

During  the  three months ended September 30, 1995,  the  Company
incurred  approximately  $5,365,000  in  costs  associated   with
pursuit of the Company's growth strategy.  The Company's strategy
is  to  use its strengthened management team, diversified  gaming
expertise and business and investment community relationships  to
develop   new  opportunities  in  the  operation  of  land-based,
dockside   and  riverboat  casinos  (including  Native   American
casinos),  gaming  systems and technology,  and  the  supply  and
management  of  gaming  devices.  Included  in  these  costs  are
expenses  of $4,677,000 associated with the Company's tender  and
consent  solicitation, and subsequent entering into a  definitive
merger agreement with, Bally Gaming International, Inc..

As  previously  reported, on July 16, 1994,  the  Rainbow  Casino
located   in   Vicksburg,  Mississippi  permanently  opened   for
business. In connection with the completion of the casino and the
acquisition  of its 45% limited partnership interest,  through  a
wholly-owned subsidiary, the Company  funded a $3,250,000 advance
to Rainbow Casino Corporation ("RCC")  on  the  same terms as RCC's 
financing from  Hospitality Franchise  Systems, Inc. ("HFS"). 
On March 29, 1995  the  Company consummated  certain  transactions 
whereby the  Company  acquired from RCC the controlling general partnership 
interest in Rainbow Casino Vicksburg Partnership ("RCVP") and
increased   its  partnership  interest.  In  exchange   for   the
assumption  by  National  Gaming  Mississippi,  Inc.  ("NGM"),  a
subsidiary  of  National  Gaming  Corporation,  of  approximately
$1,140,000 of liabilities (plus a financing fee payable  to  HFS)
related  to  the  completion of certain elements of  the  project
which  survived the opening of the casino (for which RCC  was  to
have  been  responsible for, but failed to  satisfy),  a  related
$652,000  cash  payment by the Company to NGM and commitments  by
the  Company  and  NGM to fund additional financing  required  to
complete  the project (i) a subsidiary of the Company became  the
general  partner and RCC became the limited partner and (ii)  the
respective partnership interests were adjusted. As adjusted,  RCC
is  entitled to receive 10% of the net available cash  flows,  as
defined,  (which amount shall increase to 20% of cash flow  above
$35,000,000 (i.e. only on such incremental amount), for a  period
of 15 years, such period being subject to one year extensions for
each year in which a minimum payment of $50,000 is not made.

The  Company  and Casino Magic Corporation, through wholly  owned
subsidiaries, are members in Kansas Gaming Partners, LLC  ("KGP")
and  Kansas Financial Partners, LLC ("KFP"), both Kansas  limited
liability companies.  Under an option agreement granted to KGP by
Camptown  Greyhound  Racing,  Inc.  ("Camptown"),  KGP  has  been
granted  the  exclusive  right to operate gaming  devices  and/or
casino-type gaming at Camptown's facility if and when such gaming
is  permitted  in  Kansas. In September 1994, the  Kansas  Racing
Commission  approved  a revised financing proposal  submitted  by
Camptown  that would facilitate completion of construction  of  a
greyhound  racing  facility on the 320 acre  site  in  Frontenac,
Kansas. Camptown has received a $3,205,000 loan commitment  which
will be guaranteed by KFP. In December 1994, the Company invested
$1,580,000 in KFP for its portion of the loan guarantee which was
made  in  the  form of a certificate of deposit. Construction  of
Camptowns  racing  facility  opened for  business  in  May  1995.
Camptown's obligation to begin to repay the loan
guarantee  by  KFP  commenced in June  1995  with  interest  only
payments.  Principal repayment is scheduled to commence  in  June
1996.  There can be no assurance as to the successful  completion
or operation of any part of this project.

Cash used in operations  for  the   quarter improved by
approximately  $364,000  (95.3%) from amounts  reported  for  the
prior  year  period due principally to continued increases in cash 
flows from the Company's route and casino operations.

Cash  flows provided by investing activities increased  $5,624,000
from  the  same  period in the prior year due  primarily  to  the
proceeds  from the sale of approximately $4,084,000 of securities
available   for  sale.   Also,  net  collections  on  receivables
improved by $2,345,000 compared to the same quarter last year  as
receivable activity returned to historical norms.

Cash  flows used in  financing activities increased $196,000 from  the
same  quarter last year due primarily to  the Company's principal 
reductions on long-term debt.

Management  believes  the Company's present working  capital  and
funds  generated from operations will be sufficient to  meet  its
existing commitments, debt payments and other obligations as they
become  due.   As  discussed  in previous  reports,  however,  it
remains  a  part  of  the  Company's business  strategy  to  seek
complementary  gaming opportunities, including  opportunities  in
which its route and casino experience may be applicable.  As part
of  its business activities, the Company is regularly involved in
the   identification,  investigation  and  development  of   such
opportunities.  Accordingly, in order to support such activities,
the  Company may in the future elect to issue additional debt  or
equity  securities  if and when appropriate opportunities  become
available  on  terms  satisfactory  to  management.  The  Company
intends  to  seek debt financing of $140,000,000 to  $160,000,000
and  equity financing of $20,000,000 to $40,000,000 in connection
with its intended merger with Bally Gaming International, Inc.

Results of Operations.

Three Months Ended September 30, 1994 and 1995

Revenues:

Total revenues for the three months ended September 30, 1995 were
$38,541,000, an increase of $7,717,000 (25.0%) over those for the
same  period in 1994.  Revenues from all gaming route  operations
increased  $579,000  (2.3%) to approximately $26,296,000  in  the
first  quarter of fiscal 1996. Revenues from the Louisiana  route
operations decreased $188,000 (a decrease of 4.7%) primarily as a
result of increased competition from riverboat operations  and  a
land-based  casino  in New Orleans.  Revenue  from  Nevada  route
operations increased approximately $767,000 (3.5%) over those for
the  same  period last year.  The increase in the  Nevada  gaming
route  revenues  was  attributable to a  $0.62  increase  in  the
average  net  win per gaming device per day for the three  months
ended  September  30, 1995 compared to the same  period  in  1994
(accounting  for  an increase of approximately $295,000)  and  an
increase  in  the  weighted average number of gaming  devices  on
location  for  the  three  months ended  September  30,  1995  as
compared  to the same period in 1994 (accounting for an  increase
of  approximately  $472,000).  Revenues from  casino  and  tavern
operations,   including  food  and  beverage   sales,   increased
approximately $7,145,000 (140.2%) during the current year quarter
as  compared  to those for the prior year as revenues  recognized
from  the Rainbow Casino, which were consolidated beginning March
29,  1995, exceeded the revenues lost with the termination of the
Company's lease at the Royal Casino.


Costs and Expenses:

Costs of Revenues

Cost of gaming route revenues for the quarter ended September 30,
1995  increased $1,111,000 (5.8%) over the same quarter in  1994.
Costs  of  revenues from route operations in Louisiana  decreased
$210,000  (a decrease  of  8.1% from  last  year)  as  revenues
declined  primarily as a result of the increased  competition  in
that  market.   Costs of gaming revenues for Nevada gaming  route
revenues  increased $1,321,000 (8.0%) as compared  to  the  prior
year  and increased slightly as a percent of Nevada gaming  route
revenues  primarily  due  to  increased  costs  associated   with
additional  and  renewed space lease contracts.   Cost  of  route
revenues  includes  rents  under both  space  lease  and  revenue
sharing  arrangements, gaming taxes and direct  labor,  including
related  taxes  and  benefits.  The cost  of  casino  and  tavern
revenues  including costs of food and beverage revenues increased
$2,785,000 (89.0%) compared to 1994 results primarily due to  the
Rainbow Casino cost of revenues which were consolidated beginning
March  29,  1995.  This increase was partially  offset  from  the
termination of the Company's lease at the Royal Casino.  Cost  of
casino  and  tavern revenues includes cost of goods sold,  gaming
taxes,  rent  and  direct  labor,  including  related  taxes  and
benefits.

Expenses

For  the  quarter  ended September 30, 1995 the Company  incurred
developmental costs associated with pursuing the Company's growth
strategy  of approximately $5,365,000, an increase of  $3,822,000
(247.7%)   over   the  same  period  from   last   year.    These
business development expenses include salaries and wages, related
taxes and benefits,  professional fees, travel expense and  other  
expenses associated with supporting the Company's growth strategy. 
Current year  development  costs  also  include  expenses  of  
$4,677,000 associated  with  the  Company's tender  offer  to  
acquire,  and subsequent  entering  into a definitive  merger  
agreement  with, Bally Gaming International, Inc.

Selling,  general  and  administrative expenses  for  the  period
increased  approximately $1,208,000 (36.6%) from the prior  year.
Expenses  for  casinos and taverns increased $1,675,000  (177.0%)
from  the prior year primarily due to the Rainbow Casino expenses
which  were consolidated beginning March 29, 1995. This  increase
was  partially offset from the termination of the Company's lease
at  the  Royal  Casino.  Such expenses related  to  gaming  route
operations  decreased  $467,000  (19.9%)  from  the  prior   year
reflecting  steps  taken  to  control  costs,  including  reduced
staffing  levels.  Corporate general and administrative  expenses
decreased $455,000 (23.0%). This decrease was caused primarily by
controlling  costs  and  reducing staffing  levels.  The  Company
expects  that there may be further increases in selling,  general
and  administrative  expenses related  to  the  addition  of  new
management  and development personnel and other costs  associated
with supporting the Company's growth strategy.

Included in the last year's other income and expenses is a charge
of  $69,000 representing the Company's equity in the net loss  of
the  Rainbow Casino in its first quarter of operations  prior  to
the Company's acquisition of the general partnership interest  in
RCVP on March 29, 1995.


                             PART II

Item 6. Exhibits and Reports on Form 8-K

        a.   Exhibits

             Exhibit
             Number    Description

             10.67   Agreement  and Plan   of  Merger  among  Alliance 
                     Gaming Corporation,  BGII Acquisition  Corp.  and
                     Bally  Gaming International,Inc. as of October 18, 1995.

             10.68   Employment Agreement, dated as of October  28,  1995,
                     between the Company and Robert Miodunski.

        b.   Reports on Form 8-K:

             1)      The registrant submitted Form  8-K dated July 14, 1995  
                     which  included the following items:

                     Item 5. As of the close of business on June 20, 1995 the
                             Company   was  the  beneficial owner of 
                             1,000,000 shares of common stock of  Bally
                             Gaming International, Inc. ("BGII").

                     Item  7. Schedule 13D, with all exhibits there to.

              2)     The registrant submitted Form  8-K dated August 18, 1995 
                     which included the following item:

                     Item 5. Letter Agreement among the Company, BGII and WMS,
                             dated August 14, 1995.

              3)     The registrant submitted Form  8-K dated 
                     September 1, 1995 which  included  the following item:

                     Item 5.  Litigation commenced by BGII and  WMS and the 
                              Company's wholly owned subsidiary, BGII 
                              Acquisition Corp.
   

                        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 authorized.



   ALLIANCE GAMING CORPORATION
         (Registrant)





   By     /s/ Steve  Greathouse
        Chairman of the Board of Directors,
        President and Chief Executive Officer




   By     /s/ John W. Alderfer
        Sr. Vice President, Treasurer
        and Chief Financial Officer