UNITED STATES
               SECURITIES AND EXCHANGE COMMISSION
                     WASHINGTON, D.C. 20549
                                
                            FORM 10-K

(MARK ONE)

 [X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
     SECURITIES EXCHANGE ACT OF 1934 
     
     For the fiscal year ended          December 31, 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)

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

Securities registered pursuant to Section 12(b) of the Act:

                                        Name of each exchange   
     TITLE OF EACH CLASS                 on which registered
                                                  
Common Stock, $.01 par value          New York Stock Exchange

Securities registered pursuant to Section 12(g) of the Act:

                  Common Stock, $.01 par value
                        (Title of class)

<PAGE>

     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  by  check mark if disclosure of delinquent  filers
pursuant  to Item 405 of Regulation S-K is not contained  herein,
and  will  not  be  contained, to the best  of  the  registrant's
knowledge,   in   definitive  proxy  or  information   statements
incorporated by reference in Part III of this Form  10-K  or  any
amendment to this Form 10-K.    [ ]

     The  aggregate  market value of voting stock  held  by  non-
affiliates  of the registrant as of February 28, 1997,  based  on
the  closing price as reported on the New York Stock Exchange  of
$15.625 per share, was approximately $246,483,359.

     Indicate  the number of shares outstanding of  each  of  the
registrant's classes of common stock, as of February 28, 1997.

   Common Stock, $.01 par value         21,204,141  

               DOCUMENTS INCORPORATED BY REFERENCE

The   information  required  by  Part  III  of  this  Report   is
incorporated by reference from the Rio Hotel & Casino, Inc. Proxy
Statement to be filed with the Commission not later than 120 days
after the end of the fiscal year covered by this Report.

                                2
<PAGE>

PART I

ITEM 1.  BUSINESS

     The Company owns and operates an all-suite hotel-casino, the
Rio  Suite  Hotel & Casino in Las Vegas, Nevada. Situated  on  an
elevated  site adjacent to the Flamingo Road exit from Interstate
15,  the freeway linking Las Vegas with Southern California,  the
Rio  is  strategically  positioned  to  attract  travelers  along
Interstate  15, tourists visiting the Las Vegas Strip  and  local
Las  Vegas residents. The Company markets to both local residents
and  Las  Vegas  visitors.  Management believes  that  the  Rio's
unique  all-suite  concept,  diverse high  quality  dining,  easy
access and ample parking provide an attractive alternative to the
Las Vegas Strip and a fun and comfortable environment in which to
enjoy gaming, dining and entertainment.

     The  Rio  is decorated throughout in a fun-filled  Carnivale
theme.  At March 1, 1997, 1,998  of  the   Rio's   suites    were
available  to  hotel  guests,  including  1,551 suites  contained
in   three  connected   21-story  hotel  towers  and  447  (which
became  available on December 31, 1996) of the 1,031  new  suites
contained  in  the  new  Phase  V  41-story  curved  tower.    On
February  7,  1997, the Rio celebrated the grand opening  of  the
public  areas  of its Phase V Expansion project,  the  Masquerade
Village,   and  now  features  a  116,000  square  foot   casino;
13  restaurants  and  bars; a 595-seat entertainment  complex;  a
32,000  square  foot retail area; a 108,000 square  foot  outdoor
entertainment  area featuring a landscaped sand beach  and  three
swimming  pools; and parking for approximately 3,600 cars.   With
the  opening of the Masquerade Village on February 7,  1997,  the
Rio offers approximately 2,500 slot machines, 109 table games,  a
poker room, keno and a race and sports book.

     The Rio has substantially completed the $200 million Phase V
Expansion,  exclusive of construction period  interest  and  pre-
opening  expenses, centered around the Masquerade  Village.   The
Masquerade Village contains approximately 120,000 square feet  of
public  space  with  a  Carnivale and Mardi  Gras  themed  casino
expansion,  featuring MASQUERADE SHOW IN THE SKY, an  interactive
$25  million indoor attraction, a variety of new restaurants  and
fine specialty retail shops.  The Phase V Expansion adds a curved
41-story  hotel tower containing 1,031 suites, 447 of which  were
open  at  March  1, 1997.  The balance of the suites  and  a  new
restaurant on the top two floors overlooking the Las Vegas  Strip
are  scheduled  to  be open by the end of the second  quarter  of
1997.

     In  addition  to  the  Phase V Expansion,  the  Company  has
assembled 38 acres immediately adjacent to the Rio.  This  brings
the  total  acreage  at  the Rio to 83 acres.   The  Company  may
develop the additional acreage at some time in the future.

     On  March  4,  1997,  the  Company  entered  into  a  letter
agreement  to  acquire  a 60% interest in the  Seven  Hills  Golf
Course in  Henderson, Nevada, a suburb of Las Vegas.  The Company
is  scheduled  to  close  the  acquisition,  subject  to  certain
contingencies,  in  April 1997.   The  course,   located  in  the
master-planned community  of  Seven Hills, is in the final stages
of completion and is expected  to  open during the late Summer of
1997 followed by the opening of  a  clubhouse  in Fall 1997.  The
Company intends to use the  course to  provide  a golf school and
golf vacation packages to its  guests, in addition  to  providing
play on the course to both its local and tourist customers.

     The  Company  was  incorporated in California  in  1981  and
reincorporated in Nevada in 1988.  The Company changed  its  name
from MarCor Resorts, Inc. to Rio Hotel & Casino, Inc. in February
1992.   Its  executive offices are located at 3700 West  Flamingo
Road,  Las  Vegas,  Nevada  89103, and its  telephone  number  is
(702) 252-7733.

                                 3
<PAGE>

MASQUERADE VILLAGE

     On  February  7,  1997,  the Company opened  its  Masquerade
Village,  consisting  of  five  new  restaurants  and  additional
retail, gaming and entertainment space.  A sixth restaurant,  the
Voodoo  Cafe  to be located at the top of the new 41-story  tower
overlooking the Las Vegas Strip, is scheduled to open during  the
second  quarter  of  1997.   Inspired by  European  architecture,
Masquerade  Village blends celebrations of Carnivale  in  Rio  de
Janeiro and Venice, and Mardi Gras in New Orleans, into a  unique
entertainment experience.

     The  Masquerade Village includes fine specialty retail shops
and  restaurants,  and  a wine cellar and tasting  room.   Retail
stores include a NICOLE MILLER  boutique, GUESS? FOOTWEAR, SPEEDO
AUTHENTIC FITNESS,  WATCH ZONE by Sunshade Optique,  ALEGRE,  and
REEL  OUTFITTERS.  New restaurants include Mama  Marie's  Cucina,
Mask, Napa Restaurant and The Wine Cellar Tasting Room, Bamboleo,
Village  Seafood Buffet and, by the end of the second quarter  of
1997, the Voodoo Cafe.  The Masquerade  Village features  a fully
interactive $25  million  indoor  attraction, MASQUERADE SHOW  IN 
THE SKY.  The MASQUERADE  SHOW  IN  THE  SKY  consists  of  three
complete parades,  each  with  its  own  themed  music,  costumes
and live performers.  The  show  features  five  floats  in  each
of the three parades, suspended  on  a  950-foot  track   located
over the casino floor. A cast of 36 specialty dancers, musicians, 
aerialists   and  costume  stilt  walkers  will  perform  in   17 
performing areas.

BUSINESS STRATEGY

     The  Company's  business strategy focuses on attracting  and
fostering  repeat business from customers in the  local  resident
and  tourist  markets.  To implement its business  strategy,  the
Company  capitalizes on its unique all-suite  concept,  strategic
location,  and  Carnivale  and Mardi  Gras  theme.   The  Company
strives to provide a quality, affordable gaming and entertainment
experience  in  order to generate high customer satisfaction  and
loyalty. The Rio's value-priced suites and restaurants provide an
attractive  alternative to conventional Las Vegas properties  for
visitors who desire to avoid the crowds and congestion of the Las
Vegas  Strip.  The Interstate 15 and Flamingo Road location  also
permits the Rio to attract local residents.

     To  encourage repeat visits, the Company attempts to  ensure
that  each customer has an enjoyable, high quality and high value
experience.  Management believes that it  must  offer  consistent
quality,  a comfortable and fun atmosphere and, most importantly,
friendly  service at affordable prices to provide  a  high  value
experience to its customers. Accordingly, the Rio's suites  offer
guests  approximately 50% more space than comparably  priced  Las
Vegas hotel rooms. Similarly, the Company's restaurants have  won
awards  year  after  year for their quality  dining.   The  Rio's
restaurants  offer  generous portions of  high  quality  food  at
reasonable prices which management believes is a major factor  in
attracting the value-conscious local customer.

     Management  believes that friendly service combined  with  a
quality facility are integral to generating repeat business  from
locals  as  well as tourists. As a result, management continually
seeks  to  instill in each employee a sense of service excellence
designed to exceed guest expectations. To motivate its employees,
management also strives to instill a sense of "Team Rio"  in  all
of the Company's employees by making the Rio a fun place to work.
Management  strongly believes that its employees are one  of  the
Company's biggest assets.

     The  Company  has  created  an identifiable  and  innovative
marketing presence and continues to build on its "signature"  Rio
theme.  The  Rio's  Carnivale theme incorporates  bright  colors,
creative  interior 

                                4

<PAGE>

designs, festive employee costumes  and  other exotic  touches to 
contribute  to  its tropical  ambiance.  The  Masquerade  Village
expands  on the  Carnivale  theme to  blend Carnivale  and  Mardi
Gras  entertainment  experiences   through  architecture,  retail
and restaurant  areas,  and  the  MASQUERADE  SHOW  IN  THE  SKY.
The Rio's  message  of  a  fun-filled,   colorful  atmosphere  is
constantly emphasized. The Rio  has developed  the  Rio  Rita(TM)
character as a promotional ambassador to the  Rio's  hotel-casino
guests  and  as  a  focal  point  upon   which  many  promotional
activities  have  been  built,  such  as  Carnival Dice(TM),  Rio
Rita's(TM) Lotto Bucks, Carnival Days(TM),  Conga Mania(TM)   and
Brazilia  Days(TM).   The  Company advertises extensively in  the
Las  Vegas  area  print,   television   and   radio  media,   and
periodically in Southern California, Phoenix and  other  regional
markets.   In  anticipation  of  the  opening  of  the  Phase   V
Expansion, the Company established a national advertising program
to increase its visitor volume.

     The  success of the Company's business strategy is evidenced
by  the  large  number of awards the Rio has received.  In  March
1996,  the  Rio  won recognition through 11 "Best of  Las  Vegas"
awards in an annual readers' survey published by Nevada's largest
daily  newspaper.  These distinctions included:   "Best  Buffet,"
"Best  Seafood  Restaurant," "Best Coffee Shop," "Best  Breakfast
Special," "Best Place to Dance (Club Rio)," "Best Locals  Hotel,"
"Most  Efficient  Service,"  "Best  Bartenders,"  "Best  Cocktail
Waitresses,"  "Best Employee Uniforms" and "Best  Outdoor  Sign."
In  addition, the Rio received recognition in the 1995-1996 ZAGAT
U.S.  HOTELS,  RESORTS  & SPAS SURVEY for "Best  Overall,"  "Best
Rooms,"  "Best  Dining"  and "Best Service"  in  Las  Vegas.   In
addition,  the  Rio  was  selected by  the  American  Academy  of
Hospitality  Sciences to be the first and only recipient  of  the
Five  Star Diamond Award for 1997 in Las Vegas.  The Academy  has
bestowed  fewer than 100 hotels and resorts internationally  with
this   award.   Since  these  awards,  however,  are  based  upon
subjective  criteria, undue significance should not be attributed
to  them.   Management believes that these awards  exemplify  the
Company's reputation for quality and value.

MARKETING STRATEGY

     The  Company's marketing efforts are targeted  at  both  the
local  patron and the tourist market. To market to local patrons,
the Rio relies on its convenient location, its ample parking, its
value-priced  food  and  its  slot  machine  variety.  Management
believes  that its restaurants, in particular the Carnival  World
Buffet,  are  among  the  Rio's greatest  attractions  for  local
patrons.  The  Carnival World Buffet is one of the  most  popular
buffets  in Las Vegas due to its extensive selections,  its  high
quality  food  and the entertainment provided by the  live-action
cooking  stations. During 1996, the Carnival World Buffet  served
an  average of approximately 6,600 people per day. In addition to
its emphasis on food and beverage, the Rio also has an aggressive
marketing  program  which encompasses frequent radio,  television
and  newspaper advertising, a variety of promotions  directed  at
the  local  customer  and other programs such  as  check  cashing
promotions.

     To  attract  visitors and fill the Rio's  hotel  rooms,  the
Company  markets  primarily  to three  segments  of  the  tourist
market:   independent  travel,  wholesale  and   special   casino
customers.  The  independent travel  segment  consists  of  those
travelers  not affiliated with groups who make their reservations
directly  with the Rio or through independent travel  agents.  To
attract  the independent traveler, the Rio periodically  utilizes
print  media,  radio  and direct mail to  advertise  in  Southern
California,  Phoenix and other travel markets. In  addition,  the
Company's sales force frequently attends trade shows in order  to
establish relationships with and promote the Rio to travel agents
nationwide.   The  wholesale  segment  comprises  those   patrons
participating  in travel packages offered by air tour  operators.
To  capture  this  segment of the market, the Rio  has  developed
specialized  marketing programs for, and cultivated relationships
with,  these  operators. Finally, special  casino  customers  are
those  frequent gaming customers who are in regular communication
with  Rio  casino  marketing personnel.  The Company  offers  VIP
services, casino hosts and a segmented

                                5
<PAGE>

gaming  area  to  certain  special  casino  customers.   The  Rio
utilizes  a  variety of promotions and special events  and  other
amenities in marketing to this segment.

RIO LOCATION

     The  Rio is strategically located to take advantage  of  the
dynamic  residential and commercial growth of the western portion
of  metropolitan  Las Vegas, while offering  proximity  and  easy
access to the "Old Four Corners" (Flamingo Road and the Las Vegas
Strip)  and the "New Four Corners" (Tropicana Avenue and the  Las
Vegas Strip) areas of the Las Vegas Strip.

THE RIO

     Since  1992, the Company has consistently expanded  the  Rio
under its master plan.  Upon completion of the Phase V Expansion,
the Rio will have 2,582 suites, approximately 2,500 slot machines
and 109 table games.

<TABLE>
<CAPTION>

                                 TOTALS AFTER  
                                  COMPLETION          AS OF AND FOR THE 
                                  OF PHASE V        YEAR ENDED DECEMBER 31,        
                                 EXPANSION<F1>        1996       1995

<S>                               <C>                 <C>        <C>
Average daily suite rate                 -            $76.93     $72.18
Average daily hotel occupancy            -              94.5%      94.5%
Hotel suites<F2>                     2,582             1,998      1,551
Casino square footage              116,000            89,000     89,000
Slot machines<F3>                    2,500             1,884      2,098
Table games<F3>                        109                79         73
Restaurant seats                     4,152             2,540      2,540

<FN>
<F1>    The Phase V Expansion will be completed in  the second  quarter 
        of 1997.  Due to the lack  of a  sufficient  historical  period 
        for measurement purposes, meaningful figures cannot be provided 
        concerning  average  daily hotel  occupancy and  average  daily 
        suite rate.
<F2>    447 suites in the new 41-story tower opened on December 31,
        1996.
<F3>    Average number available during the period.
</FN>
</TABLE>

<TABLE>
<CAPTION>
                                      AS OF AND FOR THE YEAR
                                         ENDED DECEMBER 31,
                                   1994        1993       1992
<S>                                <C>         <C>        <C>
Average daily suite rate           $63.80      $62.60     $64.09
Average daily hotel occupancy        95.9%       96.8%      96.5%
Hotel suites<F2>                      861         861        424
Casino square footage              89,000      79,000     54,000
Slot machines<F3>                   2,200       1,950      1,450
Table games<F3>                        53          44         31
Restaurant seats                    2,440       1,843      1,209

<FN>
<F1>    The Phase V Expansion will be completed in  the second  quarter 
        of 1997.  Due to the lack  of a  sufficient  historical  period 
        for measurement purposes, meaningful figures cannot be provided 
        concerning  average  daily hotel  occupancy and  average  daily 
        suite rate.
<F2>    447 suites in the new 41-story tower opened on December 31,
        1996.
<F3>    Average number available during the period.
</FN>
</TABLE>

     GAMING.   With  the  opening of the  Masquerade  Village  on
February  7, 1997, the Rio offered 116,000 square feet of  casino
space  containing  approximately 2,500 slot machines;  109  table
games,  including "21," craps, roulette, pai gow poker, Caribbean
stud  poker, baccarat and mini-baccarat; other casino games  such
as  keno and poker; and a race and sports book which is presently
being upgraded.

     Gaming operations at the Rio are continually being monitored
and  modified  to respond to both changing market conditions  and
customer  demand  in  an effort to attract  new  customers  while
retaining its existing customer base. New and innovative slot and
table  games have been introduced based on customer feedback  and
demand   from  both  local  customers  and  Las  Vegas  visitors.
Management  has  introduced such games as Rio Rita's(TM)  Royals,
Rio   Rita's(TM)  Bonus  Poker,  Sneaky  Queens(TM)   and   Mambo
Bucks.(TM)  Management devotes substantial time and attention  to
the  type,  location and player activity of all  gaming  devices.
The  Company believes that to continue to attract and retain slot
customers, it must expand the number and variety of slot machines
on  its  casino floor, particularly its higher denomination  slot
machines.

     HOTEL.   The  Rio's  three connected 21-story  hotel  towers
contain a total of 1,551 suites, comprised of 1,504 standard  Rio
suites,  16  "super" suites, 18 "cariocas" suites, six  two-story
penthouse  suites,  and  seven executive suites  that  combine  a
conference room and an adjoining suite.  The new Phase V 41-story
hotel  tower, when completed during the second quarter  of  1997,
will contain a total of 1,031 suites,

                                6
<PAGE>

comprised  of  949  standard suites, 78 executive  suites,  three
"hospitality" suites ranging in size from 1,612 to  2,418  square
feet,  and  one "Presidential" suite consisting of  2,989  square
feet.   At  March 1, 1997, 447 of the 1,031 suites were open  and
the  balance will be opened through the end of the second quarter
of  1997.   The Company has progressively added new hotel  suites
since  1993 to meet its consistently strong demand. Despite  such
expansion,  the  Rio  has maintained average occupancy  rates  of
94.5% for both 1995 and 1996.

     The  standard  Rio suite measures approximately  600  square
feet,  compared to approximately 400 square feet for the  typical
Las Vegas hotel room. The Carnivale theme  is carried  throughout
the guest suites in wall coverings, art  work and  other designer
accents. Suite amenities include carved wood finishes, cut glass,
polished granite surfaces, marble  tile  in  the bath areas, room
safes and refrigerators.

     RESTAURANTS.   While  important  to  attracting  Las   Vegas
visitor gaming customers, the high quality, value and variety  of
food  services are critical to consistently attracting the  local
resident  gaming  customer to the Rio. To provide  such  variety,
with the opening of five new restaurants and bars on February  7,
1997,  the  Rio now offers 13 bars and 13 restaurants located  in
the  Rio's  main  floor area, and a bar and  restaurant  will  be
located at the top of the new 41-story tower overlooking the  Las
Vegas  Strip which are expected to open during the second quarter
of   1997.   During  1996,  before  the  addition  of  the   five
restaurants contained in the Phase V Expansion project,  the  Rio
served  an  average  of  approximately  12,000  meals  per   day,
including  banquets and room service.  The following  table  sets
forth, for each restaurant, the type of service provided and  the
current seating capacity:

<TABLE>
<CAPTION>
                                                         NUMBER OF
                                   TYPE                    SEATS
     
<S>                   <C>                                  <C>
All American Bar &    Steaks, ribs, chicken and              202
Grille                seafood

Antonio's             Italian fine-dining                    100

Beach Cafe            24-hour full menu coffee shop             
                      featuring American and Chinese            
                      cuisine                                318

Buzios                Seafood and oyster bar                 160

Carnival World        Buffet with live action                   
Buffet                cooking featuring Brazilian,              
                      Chinese, Italian, Mexican,                
                      Japanese, Western BBQ and                 
                      traditional buffet                   1,040

Toscano's Deli &      Deli items, pizza and pasta,              
Market                ice cream and gelato, and a               
                      large selection of bakery                 
                      products                               104

Copacabana Showroom   Entertainment showroom and                
                      Club Rio nightclub                     595

Fiore Rotisserie &    Fine-dining featuring                     
Grille                rotisserie-grilled seafood,               
                      beef and poultry                       186

Mama Marie's Cucina   Family style casual Italian               
                      dining                                 150

Mask                  Far Eastern restaurant                 175

Napa Restaurant and   Fine-dining featuring French              
The Wine Cellar       country cuisine and daily wine            
Tasting Room          tastings                               174

Bamboleo              Latin restaurant featuring                
                      foods from south of the border         250

Village Seafood       Fresh seafood buffet                   332
Buffet

                               7
<PAGE>

Voodoo Cafe<F1>       New Orleans flavored                      
                      restaurant featuring Creole               
                      and Cajun cuisine                      366<F2>
                                               
                                               Total       4,152

<FN>
<F1>     Scheduled to open during the second quarter of 1997.
<F2>    Includes the Voodoo Cafe Patio featuring outdoor seating 
        for 48.
</FN>
</TABLE>

     ENTERTAINMENT   AND  OTHER  ATTRACTIONS.    The   Masquerade
Village,  which  opened on February 7, 1997, features  MASQUERADE
SHOW   IN   THE  SKY,  an  interactive  entertainment  experience
consisting  of three complete parades, each with its  own  themed
music,  costumes  and live performances.  The show,  designed  to
emulate  celebrations of Carnivale in Rio de Janeiro and  Venice,
and Mardi Gras in New Orleans, consists of five floats in each of
the  three  parades suspended along a 950-foot  track  above  the
casino  floor,  and  a  cast of 36 specialty dancers,  musicians,
aerialists  and  costumed stilt-walkers.  The Masquerade  Village
also  contains  fine specialty retail stores in a  32,000  square
foot retail area.

     The Rio's Copacabana Showroom is a unique, circular 595-seat
video, entertainment and restaurant complex which features two 12-
foot  by  90-foot  video  screens, an  exhibition  cooking  area,
multiple tiers of dining room seating and a stage. The Copacabana
Showroom  is  utilized as an entertainment showroom and  a  late-
night dance club, Club Rio.  The showroom is also used for casino-
hosted events, concerts, viewing of sporting events on the  large
video  screens,  and corporate meetings that  capitalize  on  the
unique audio visual qualities of the room.

     The  Ipanema  Lounge  and  Mambo's Lounge  each  offer  live
entertainment in separate casino cocktail settings. The Rio  also
houses  a spa, a hair and beauty salon, and an exercise room,  as
well  as  approximately 13,250 square feet of public meeting  and
banquet room facilities.

     The  Rio's  pool/outdoor entertainment area is approximately
108,000 square feet and includes a landscaped sand beach, an  11-
foot waterfall, three swimming pools, a multi-level spa, and  two
terrace  bars and food service facility. The Company hosts  beach
parties,  volleyball games, outdoor concerts with name performers
and other special events, including professional sporting events.

EXPANSION STRATEGY

     RIO  MASTER  PLAN.   The Rio's conceptual  master  plan  was
originally  designed to accommodate multiple  expansions  without
significantly  interrupting  normal  business  operations.   This
design  included construction of a reinforced foundation for  the
hotel  tower  and  an  elevator core to  support  and  facilitate
additional  room  construction. The Company  has  also  assembled
ample  acreage  to  allow future expansions.  Starting  from  its
original  30 acres, the Company acquired 15 additional  acres  in
1989  and  1991 and has purchased or has acquired  an  option  to
purchase an additional 38 acres as of December 31, 1996.

     Management  believes  that  a high quality,  well-maintained
property offering innovative entertainment is integral to success
in  the  highly competitive Las Vegas gaming market. This  belief
has  driven the Company's master plan development strategy.   The
Company  has  added substantial new facilities at the  Rio  every
year since 1992.

                                8
<PAGE>

<TABLE>
<CAPTION>
                                        START         
                                         DATE      OPENING
    
    <S>                                 <C>        <C>
    Initial Construction                12/88       1/90
                                                      
    Casino (10,000 sq. ft.)/Buffet       7/92       12/92
    Expansion
                                                      
    Phase II Expansion                                
       Buzios Restaurant                 1/93       5/93
       Meeting Rooms                     1/93       8/93
       437-Suite Tower                   1/93       9/93
                                                      
    Eastside Expansion                                
       Two-Story Parking Garage          7/93       10/93
       Casino Space (25,000 sq. ft.)     7/93       12/93
       Copacabana Showroom               7/93       2/94
       Fiore Restaurant                  7/93       4/94
       Expanded Pool Area                7/93       4/94
                                                      

    Phase III Expansion                               
       Three-Story Parking Garage        5/94       8/94
       Casino Space (10,000 sq. ft.)     5/94       11/94
       Buffet Expansion                  5/94       11/94
       549-Suite Tower                   5/94       2/95
                                                      
    Phase IV Expansion                                
       141-Suite Addition                4/95       12/95
       Buzios Expansion                  4/95       12/95
       Meeting Rooms Expansion           4/95       11/95
       Health Club and Salon             4/95       12/95
                                                      
    Phase V Expansion                                 
       1,031-Suite Tower                 9/95       6/97<F1>
       Casino Space (27,000 sq. ft.)     9/95       2/97
       Masquerade Village                9/95       2/97
       Spa and Salon Expansion           9/95       2/97
       Four-Story Parking Garage         9/95       7/96
       Expanded Pool Area                9/95       2/97

<FN>
<F1> Approximately 447 of the 1,031 new suites were opened as of
March 1, 1997 with the balance to open through the second quarter
of 1997.
</FN>
</TABLE>

     As  of December 31, 1996, the Company has invested in excess
of  $505 million in the development, expansion and renovation  of
the  Rio.  Moreover, as of December 31, 1996, the Company expects
it will incur expenses of approximately $27.6 million to complete
the Phase V Expansion.

     ADDITIONAL GAMING OPPORTUNITIES.   The Company has  acquired
approximately  31  acres of land adjacent to  the  Rio  site  and
placed   another  seven  acres  under  purchase   option.    This
additional acreage brings the total Rio site to approximately  83
acres.    The  additional  acreage  is  being  held  for   future
development.   The  Company  may pursue additional  opportunities
that  management  believes to be in the  best  interests  of  the
Company.

                                9
<PAGE>

     GOLF  COURSE.    The  Company  has  entered  into  a  letter
agreement  to  acquire a 60% interest in  a  golf  course  to  be
located  in  the  master  planned  community  of  Seven Hills  in
Henderson,  Nevada.   Management  intends  to  use  the course to
provide a golf school and golf vacation packages to the Company's
guests,  in  addition  to offering play to both local and tourist
customers.

COMPETITION

     The  gaming  industry includes land-based casinos,  dockside
casinos,  riverboat casinos, casinos located on  Native  American
land  and  other  forms  of legalized gaming.  There  is  intense
competition among companies in the gaming industry, some of which
have significantly greater resources than the Company.

     The  Rio faces competition from all other casinos and hotels
in  the Las Vegas area, including competitors located on the  Las
Vegas  Strip, on the  Boulder Strip  and in downtown  Las  Vegas.
Such  competition  includes  a number of  hotel-casinos  targeted
primarily  toward local residents, as well as numerous  non-hotel
gaming  facilities  targeted toward local  residents.  In  recent
months,  several of the Company's direct competitors have  opened
new  hotel-casinos or have commenced or completed major expansion
projects,  and other expansions are in progress or  are  planned.
As of December 31, 1996, there were approximately 40 major gaming
properties located on or near the Las Vegas Strip, 14 located  in
the  downtown  area,  4  located on  the  Boulder  Strip  and  11
located in other areas in or near Las Vegas. According to the Las
Vegas  Convention  and Visitors Authority, the Las  Vegas  hotel-
motel  room inventory was 101,106 as of January 3, 1997 and  both
construction  of new properties and expansion of existing  hotel-
casinos  is  expected  to  increase  inventory  to  approximately
122,000 rooms by 1998.  In the past year three large-scale hotel-
casinos  have opened on or near the Las Vegas Strip.   Eight  new
hotel-casinos   and   two  hotel-casino  expansions   are   under
construction or have been announced, which will add approximately
19,000  rooms to the Las Vegas area over approximately  the  next
two  years.  Five of the new hotel-casinos are major resorts with
a  theme and an attraction which are expected to draw significant
numbers  of  visitors.   Major  expansions  or  enhancements   of
existing  properties  or the construction of  new  properties  by
competitors,  could  have  a  material  adverse  effect  on   the
Company's business.

     To  a  lesser  extent, the Rio competes  with  hotel-casinos
located  in the Mesquite, Laughlin and Reno-Lake Tahoe  areas  of
Nevada  and  in  Atlantic  City, New  Jersey.  The  Company  also
competes   with  state-sponsored  lotteries,  on-  and  off-track
wagering,  card  parlors, riverboat and  Native  American  gaming
ventures  and  other  forms of legalized  gaming  in  the  United
States,  as well as with gaming on cruise ships and international
gaming   operations.  In  addition,  many  states  have  recently
legalized,  and additional other states are currently considering
legalizing,  casino  gaming in specific geographic  areas  within
those  states.  The  Company believes  that  the  growth  in  the
legalization  of gaming is fueled by a combination of  increasing
popularity and acceptability of gaming activities and the  desire
and  need  for states and local communities to generate  revenues
without  increasing general taxation. The Company  believes  that
the legalization of unlimited land-based casino gaming in or near
any  major  metropolitan area, such as Chicago  or  Los  Angeles,
could  have a material adverse effect on its current hotel-casino
business.  The development of casinos, lotteries and other  forms
of gaming in other states, particularly in areas close to Nevada,
such   as   California,  could  adversely  affect  the  Company's
operations.

     As   its  principal  methods  of  competition,  the  Company
utilizes  what  management believes  to be its  unique  all-suite
concept based upon a Carnivale theme, diverse high quality dining
and ample parking, which management believes provide an attractive
alternative to the closest source  of  the Company's competition,
the  Las Vegas  Strip,  and  a  fun  and comfortable  environment
in which to enjoy  gaming,  dining  and entertainment.

                               10
<PAGE>

REGULATION AND LICENSING

     The  ownership and operation of casino gaming facilities  in
Nevada are subject to: (i) the Nevada Gaming Control Act and  the
regulations  promulgated  thereunder (collectively,  the  "Nevada
Act");  and (ii) various local regulations. The Company's  gaming
operations are subject to the licensing and regulatory control of
the Nevada Commission, the Nevada State Gaming Control Board (the
"Nevada Board"), and the Clark County Liquor and Gaming Licensing
Board  (the  "Clark  County Board"). The Nevada  Commission,  the
Nevada  Board,  and  the  Clark  County  Board  are  collectively
referred to as the "Nevada Gaming Authorities."

     The  laws,  regulations and supervisory  procedures  of  the
Nevada  Gaming Authorities are based upon declarations of  public
policy  which  are concerned with, among other things:   (i)  the
prevention of unsavory or unsuitable persons from having a direct
or  indirect  involvement with gaming  at  any  time  or  in  any
capacity;  (ii) the establishment and maintenance of  responsible
accounting  practices and procedures; (iii)  the  maintenance  of
effective  controls  over the financial practices  of  licensees,
including  the establishment of minimum procedures  for  internal
fiscal  affairs  and  the safeguarding of  assets  and  revenues,
providing  reliable record keeping and requiring  the  filing  of
periodic  reports  with the Nevada Gaming Authorities;  (iv)  the
prevention   of   cheating   and   fraudulent   practices;    and
(v)  providing  a  source  of state and  local  revenues  through
taxation  and  licensing fees. Changes in such laws,  regulations
and  procedures  could have an adverse effect  on  the  Company's
gaming operations.

     The  Company, which operates the casino, is required  to  be
licensed  by  the Nevada Gaming Authorities. The  gaming  license
requires  the  periodic payment of fees  and  taxes  and  is  not
transferable. The Company is registered by the Nevada  Commission
as  a publicly traded corporation ("Registered Corporation")  and
as such, it is required periodically to submit detailed financial
and  operating reports to the Nevada Commission and  furnish  any
other  information which the Nevada Commission may  require.  The
Company  has  obtained  from the Nevada  Gaming  Authorities  the
various  registrations, approvals, permits and licenses  required
in order to engage in gaming activities in Nevada.

     The Nevada Gaming Authorities may investigate any individual
who has a material relationship to, or material involvement with,
the  Company  in  order to determine whether such  individual  is
suitable  or  should  be licensed as a business  associate  of  a
gaming licensee. Officers, directors and certain key employees of
the  Company  must  file  applications  with  the  Nevada  Gaming
Authorities and may be required to be licensed or found  suitable
by  the  Nevada Gaming  Authorities. Officers, directors and  key
employees  of the Company who are actively and directly  involved
in  gaming  activities  of the Company  may  be  required  to  be
licensed or found suitable by the Nevada Gaming Authorities.  The
Nevada  Gaming Authorities may deny an application for  licensing
for   any  cause  which  they  deem  reasonable.  A  finding   of
suitability   is  comparable  to  licensing,  and  both   require
submission   of  detailed  personal  and  financial   information
followed by a thorough investigation. The applicant for licensing
or  a  finding  of  suitability must pay all the  costs   of  the
investigation. Changes in licensed positions must be reported  to
the  Nevada Gaming Authorities and in addition to their authority
to deny an application for a finding of suitability or licensure,
the  Nevada Gaming Authorities have jurisdiction to disapprove  a
change in a corporate position.

     If  the  Nevada Gaming Authorities were to find an  officer,
director  or key employee unsuitable for licensing or  unsuitable
to  continue having a relationship with the Company, the  Company
would  have  to  sever  all relationships with  such  person.  In
addition,  the  Nevada  Commission may  require  the  Company  to
terminate  the  employment  of any person  who  refuses  to  file
appropriate  applications. Determinations of  suitability  or  of
questions  pertaining to licensing are not  subject  to  judicial
review in Nevada.

                               11
<PAGE>

     The  Company  is required to submit detailed  financial  and
operating  reports  to the Nevada Commission.  Substantially  all
material loans, leases, sales of securities and similar financing
transactions by the Company must be reported to, or approved  by,
the Nevada Commission.

     If  it  were determined that the Nevada Act was violated  by
the  Company,  the  gaming licenses it holds  could  be  limited,
conditioned,  suspended or revoked, subject  to  compliance  with
certain  statutory and regulatory procedures.  In  addition,  the
Company  and the persons involved could be subject to substantial
fines  for  each  separate violation of the  Nevada  Act  at  the
discretion of the Nevada Commission. Further, a supervisor  could
be  appointed  by the Nevada Commission to operate the  Company's
gaming  properties  and,  under certain  circumstances,  earnings
generated  during the supervisor's appointment  (except  for  the
reasonable rental value of the Company's gaming properties) could
be  forfeited to the State of Nevada. Limitation, conditioning or
suspension  of  any  gaming  license  or  the  appointment  of  a
supervisor  could  (and revocation of any gaming  license  would)
materially adversely affect the Company's gaming operations.

     Any  beneficial  holder of the Company's voting  securities,
regardless of the number of shares owned, may be required to file
an   application,  be  investigated,  and  have   such   holder's
suitability  as  a  beneficial holder  of  the  Company's  voting
securities  determined, if the Nevada Commission  has  reason  to
believe that such ownership would otherwise be inconsistent  with
the  declared policies of the State of Nevada. The applicant must
pay  all  costs  of investigation incurred by the  Nevada  Gaming
Authorities in conducting any such investigation.

     The Nevada Act requires any person who acquires more than 5%
of  the Company's voting securities to report the acquisition  to
the  Nevada  Commission. The Nevada Act requires that  beneficial
owners of more than 10% of the Company's voting securities  apply
to  the Nevada Commission for a finding of suitability within  30
days  after  the Chairman of the Nevada Board mails  the  written
notice  requiring  such filing. Under certain  circumstances,  an
"institutional  investor," as defined in the  Nevada  Act,  which
acquires  more than 10%, but not more than 15%, of the  Company's
voting securities may apply to the Nevada Commission for a waiver
of  such  finding  of suitability if such institutional  investor
holds  the  voting  securities for investment purposes  only.  An
institutional  investor  shall  not  be  deemed  to  hold  voting
securities  for investment purposes unless the voting  securities
were acquired and are held in the ordinary course of business  as
an  institutional  investor and not for the purpose  of  causing,
directly or indirectly, the election of a majority of the members
of  the  board  of directors of the Company, any  change  in  the
Company's  corporate  charter, bylaws,  management,  policies  or
operations  of  the Company, or any of its gaming affiliates,  or
any  other  action  which  the  Nevada  Commission  finds  to  be
inconsistent  with  holding the Company's voting  securities  for
investment purposes only. Activities which are not deemed  to  be
inconsistent  with  holding  voting  securities  for   investment
purposes  only  include: (i) voting on all matters  voted  on  by
stockholders;  (ii)  making  financial  and  other  inquiries  of
management  of the type normally made by securities analysts  for
informational  purposes  and  not  to  cause  a  change  in   its
management,  policies  or  operations;  and  (iii)   such   other
activities  as  the  Nevada  Commission  may  determine   to   be
consistent with such investment intent. If the beneficial  holder
of voting securities who must be found suitable is a corporation,
partnership  or  trust,  it  must submit  detailed  business  and
financial information including a list of beneficial owners.  The
applicant is required to pay all costs of investigation.

     Any  person  who fails or refuses to apply for a finding  of
suitability or a license within 30 days after being ordered to do
so  by the Nevada Commission or the Chairman of the Nevada Board,
may be found unsuitable.  The same restrictions apply to a record
owner  if the record owner, after request, fails to identify  the
beneficial  owner.   Any  stockholder found  unsuitable  and  who
holds,  directly or indirectly, any beneficial ownership  of  the
common  stock of a Registered Corporation beyond such  period  of
time  as may be prescribed by the Nevada Commission may be guilty
of a criminal offense. The Company is subject to

                               12
<PAGE>

disciplinary action if, after it receives notice that a person is
unsuitable  to be a stockholder or to have any other relationship
with  the  Company, the Company (i) pays that person any dividend
or  interest  upon voting securities of the Company, (ii)  allows
that person to exercise, directly or indirectly, any voting right
conferred  through  securities held by that  person,  (iii)  pays
remuneration in any form to that person for services rendered  or
otherwise, or (iv) fails to pursue all lawful efforts to  require
such  unsuitable person to relinquish his voting  securities  for
cash at fair market value.

     The  Nevada  Commission may, in its discretion, require  the
holder  of any debt security of a Registered Corporation to  file
applications, be investigated and be found suitable  to  own  the
debt   security  of  a  Registered  Corporation.  If  the  Nevada
Commission  determines that a person is unsuitable  to  own  such
security,  then  pursuant  to  the  Nevada  Act,  the  Registered
Corporation  can  be  sanctioned,  including  the  loss  of   its
approvals,   if  without  the  prior  approval  of   the   Nevada
Commission, it:  (i) pays to the unsuitable person any  dividend,
interest,  or  any distribution whatsoever; (ii)  recognizes  any
voting  right by such unsuitable person in connection  with  such
securities; (iii) pays the unsuitable person remuneration in  any
form;  or (iv) makes any payment to the unsuitable person by  way
of  principal,  redemption, conversion, exchange, liquidation  or
similar transaction.

     The  Company is required to maintain a current stock  ledger
in  Nevada which may be examined by the Nevada Gaming Authorities
at  any time. If any securities are held in trust by an agent  or
by  a nominee, the record holder may be required to disclose  the
identity   of   the  beneficial  owner  to  the   Nevada   Gaming
Authorities. A failure to make such disclosure may be grounds for
finding  the  record  holder  unsuitable.  The  Company  is  also
required  to  render  maximum  assistance   in  determining   the
identity of the beneficial owner. The Nevada Commission  has  the
power  to  require  the Company's stock certificates  to  bear  a
legend  indicating that the securities are subject to the  Nevada
Act.

     The Company may not make a public offering of its securities
without  the  prior  approval of the  Nevada  Commission  if  the
securities  or  proceeds therefrom are intended  to  be  used  to
construct, acquire or finance gaming facilities in Nevada, or  to
retire  or  extend  obligations incurred for  such  purposes.  On
July  25,  1996, the Nevada Commission granted the Company  prior
approval  to  make  public offerings for a period  of  one  year,
subject  to certain conditions ("Shelf Approval").  However,  the
Shelf  Approval  may  be rescinded for good cause  without  prior
notice  upon the issuance of an interlocutory stop order  by  the
Chairman of the Nevada Board. Such approval does not constitute a
finding,  recommendation or approval by the Nevada Commission  or
the Nevada Board as to the accuracy or adequacy of the prospectus
or the investment merits of the securities. Any representation to
the contrary is unlawful.

     Changes   in   control  of  the  Company   through   merger,
consolidation,  stock  or  asset  acquisitions,   management   or
consulting agreements, or any act or conduct by a person  whereby
such  person  obtains control, may not occur  without  the  prior
approval  of the Nevada Commission. Entities seeking  to  acquire
control of a Registered Corporation must satisfy the Nevada Board
and  Nevada Commission in a variety of stringent standards  prior
to  assuming control of such Registered Corporation.  The  Nevada
Commission  may also require controlling stockholders,  officers,
directors  and  other persons having a material  relationship  or
involvement with the entity proposing to acquire control,  to  be
investigated  and  licensed  as  part  of  the  approval  process
relating to the transaction.

     The  Nevada  legislature has declared  that  some  corporate
acquisitions  opposed  by  management,  repurchases   of   voting
securities and corporate defense tactics affecting Nevada  gaming
licensees,  and Registered Corporations that are affiliated  with
those  operations,  may  be injurious to  stable  and  productive
corporate  gaming.  The  Nevada  Commission  has  established   a
regulatory  scheme to ameliorate the potentially adverse  effects
of  these business practices upon Nevada's gaming industry and to
further

                               13
<PAGE>

Nevada's  policy  to:   (i)  assure the  financial  stability  of
corporate  gaming operators and their affiliates;  (ii)  preserve
the  beneficial aspects of conducting business in  the  corporate
form;  and  (iii) promote a neutral environment for  the  orderly
governance  of  corporate  affairs.  Approvals  are,  in  certain
circumstances,  required from the Nevada  Commission  before  the
Company  can  make  exceptional repurchases of voting  securities
above  the  current market price thereof and before  a  corporate
acquisition opposed by management can be consummated. The  Nevada
Act  also  requires prior approval of a plan of  recapitalization
proposed  by  the Company's Board of Directors in response  to  a
tender  offer  made  directly  to  the  Registered  Corporation's
stockholders  for  the  purposes  of  acquiring  control  of  the
Registered Corporation.

     Licensee  fees and taxes, computed in various ways depending
on  the  type of gaming or activity involved, are payable to  the
State  of  Nevada  and to the counties and cities  in  which  the
Nevada  licensee's respective operations are conducted. Depending
upon the particular fee or tax involved, these fees and taxes are
payable either monthly, quarterly or annually and are based  upon
either (i) a percentage of the gross revenues received, (ii)  the
number  of gaming devices operated or (iii) the number  of  table
games operated. A casino entertainment tax is also paid by casino
operations  where entertainment is furnished in  connection  with
the selling of food or refreshments. Nevada licensees that hold a
license  as  an operator of a slot route, or a manufacturer's  or
distributor's  license, also pay certain fees and  taxes  to  the
State of Nevada.

     Any  person  who  is  licensed,  required  to  be  licensed,
registered, required to be registered, or is under common control
with  such persons (collectively, "Licensees"), and who  proposes
to  become  involved  in a gaming venture outside  of  Nevada  is
required  to  deposit  with  the  Nevada  Board,  and  thereafter
maintain,  a revolving fund in the amount of $10,000 to  pay  the
expenses   of  investigation  of  the  Nevada  Board   of   their
participation  in  such  foreign gaming. The  revolving  fund  is
subject  to increase or decrease at the discretion of the  Nevada
Commission.  Thereafter, Licensees are required  to  comply  with
certain  reporting  requirements  imposed  by  the  Nevada   Act.
Licensees  are also subject to disciplinary action by the  Nevada
Commission  if  they knowingly violate any laws  of  the  foreign
jurisdiction pertaining to the foreign gaming operation, fail  to
conduct  the  foreign  gaming operation in  accordance  with  the
standards  of  honesty and integrity required  of  Nevada  gaming
operations, engage in activities that are harmful to the State of
Nevada or its ability to collect gaming taxes and fees, or employ
a  person in the foreign operation who has been denied a  license
or  finding  of suitability in Nevada on the ground  of  personal
unsuitability.

EMPLOYEES

     As of  December 31, 1996, the Company employed approximately
3,400  employees.  None of the Company's employees is covered  by
collective bargaining agreements. The Company believes  that  its
relationship with its employees is good.

ITEM 2.  PROPERTIES

     The  Company owns approximately 76 acres, consisting of  the
45-acre  site  in Las Vegas on which the Rio is  located  and  31
acres of land adjacent to the current Rio site.  The Company  has
purchase options on an additional seven acres adjacent to the Rio
site.   With  the exception of approximately 18 of  the  recently
acquired acres, all of the Company's acreage is subject to a deed
of  trust securing the Rio Bank Loan (as defined below), of which
$153  million was outstanding at December 31, 1996.  The  Company
also owns approximately 64 acres on the Boulder Highway southeast
of Las Vegas (the "Old Vegas Site").  The Old Vegas Site is being
held for sale.

                               14
<PAGE>

ITEM 3.  LEGAL PROCEEDINGS

     On   April   26,   1994   and  May  10,   1994,   complaints
("Complaints") in purported class action lawsuits (WILLIAM POULOS
V.  CAESARS  WORLD,  INC. ET AL., Case No. 94-478-Civ-Orl-22  and
WILLIAM  H.  AHERN  V.  CAESARS WORLD,  INC.  ET  AL.,  Case  No.
94-532-Civ-Orl-22, respectively) were filed in the United  States
District   Court,   Middle  District  of  Florida,   against   41
manufacturers, distributors and casino operators of  video  poker
and   electronic  slot  machines,  including  the  Company.   The
Complaints allege 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   Complaints  allege  violations  of  the   Racketeer
Influenced  and  Corrupt Organizations Act (the "RICO  Act"),  as
well  as  claims  of  common  law fraud,  unjust  enrichment  and
negligent  misrepresentation, and seek damages in  excess  of  $1
billion  without any substantiation of that amount.  The  Company
filed  motions  to dismiss the Complaints.  The  Nevada  District
Court  dismissed the Complaints, granting leave to plaintiffs  to
refile,  and denying as moot all other pending motions, including
those  of the Company.  The plaintiffs filed an amended complaint
on  or  about May 31, 1996.  The Company renewed its  motions  to
dismiss based on abstraction and related doctrines, and joined in
the  motions  to  dismiss filed by other defendants,  which  were
based  on  defects in the pleadings.  The Nevada  District  Court
consolidated the actions (and one other in which the  Company  is
not a named defendant), ordered plaintiffs to file a consolidated
amended complaint on or before February 14, 1997, and ordered all
defense  motions,  including  those  of  the  Company,  withdrawn
without  prejudice.   The  parties have  established  a  steering
committee  to  address motion practice, scheduling and  discovery
matters.  Management believes that the substantive allegations in
the Complaint are without merit and that the consolidated amended
complaint  will  be  subject  to the same  defects  addressed  in
earlier   motions,   and  intends  vigorously   to   defend   the
allegations.  The Complaints were consolidated and transferred to
the  United  States  District Court for the District  of  Nevada.
Management  believes that the Complaints are  without  merit  and
intends vigorously to defend the allegations.

     On  September  26,  1995, a complaint in a  purported  class
action lawsuit (LARRY SCHRIER V. CAESARS WORLD, INC. ET AL., Case
No.  95-923-LDG  (RJJ)) was filed in the United  States  District
Court for the District of Nevada, Southern District 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  plaintiff
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 Complaints.  The
Company filed a motion to dismiss the complaint.  The plaintiff's
attempts to consolidate this action with the Complaints were  not
successful.  The court entered an order granting the  motions  to
dismiss based upon defects in the pleadings, and denying as  moot
all  other pending motions, including those of the Company.   The
court granted the plaintiff until September 30, 1996 within which
to  file  an  amended complaint that complies with the applicable
pleading  requirements.  The plaintiff filed an amended complaint
on  or  about September 30, 1996.  The Company renewed its motion
to dismiss based upon abstention and related doctrines, and based
upon  defects  in  the pleadings.  Management believes  that  the
complaint  is without merit and intends vigorously to defend  the
allegations.

     On May 5, 1995, a purported class action lawsuit (HYLAND, ET
AL. V. GRIFFIN INVESTIGATIONS, ET AL., Case No. 95-CV-2236 (JEI))
was filed in the United States District Court for the District of
New Jersey (Camden Division). The Company, together with 76 other
casino operators and others, is named as a

                               15
<PAGE>

defendant  in  the  action.  The action, purportedly  brought  on
behalf  of  "card  counters," alleges that the  casino  operators
exclude  "card  counters" from play and share  information  about
"card  counters."  The action is based on alleged  violations  of
federal antitrust law, the Fair Credit Reporting Act, and various
state consumer protection laws.  The amount of damages sought  by
the  plaintiffs  in the action is unspecified.  The  Company  has
made  a  motion to dismiss the complaint.  The court has not  yet
ruled  on the motion.  Management believes that the complaint  is
without  merit and the Company intends vigorously to  defend  the
allegations.

     On  March 27, 1996, a complaint in a purported class  action
lawsuit (TOM PAYNE, ET AL. V. AZTAR CORPORATION, ET AL., Case No.
698592) was filed in the Superior Court of California, County  of
San  Diego,  against  numerous  gaming  entities,  including  the
Company.  The complaint, almost identical in nature to the  other
class  action  suits filed against the gaming  industry,  alleges
that  the defendants have engaged in a course of conduct intended
to  induce persons to play gaming devices 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
Company joined in an attempt to remove the case to federal  court
which  was not successful.  The Company filed a motion to dismiss
the  complaint for lack of personal jurisdiction.  The motion  is
pending.  Management believes that the complaint is without merit
and the Company intends vigorously to defend the allegations.

     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  and  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.  A motion to  dismiss
the  complaint was filed on January 27, 1997.  The court has  not
yet ruled on this motion.

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

     Not Applicable.

                               16
<PAGE>

PART II

ITEM 5.  MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED
STOCKHOLDER MATTERS.

     (a)  Price Range of Common Stock

     The Company's common stock, $.01 par value ("Common Stock"),
began  trading on the New York Stock Exchange (the "NYSE")  under
the  symbol "RHC" on January 11, 1996.  Prior to this  date,  the
Company's  Common Stock was traded on the Nasdaq National  Market
under the symbol "RIOH."  The following table sets forth the high
and  low  closing sale prices of the Company's Common  Stock,  as
reported  by the NYSE and the Nasdaq National Market, during  the
periods indicated.

<TABLE>
<CAPTION>
                                 HIGH         LOW
<S>                              <C>          <C>  
1995                                  
    First Quarter                $ 14         $ 11 1/4
    Second Quarter                 16 5/8       13 1/4
    Third Quarter                  14 3/4       12 1/2
    Fourth Quarter                 13 5/8       11 5/8
1996                                                  
    First Quarter                $ 15 1/4     $ 11 5/8
    Second Quarter                 18 3/4           15
    Third Quarter                  17 5/8       13 3/8
    Fourth Quarter                     14       13 7/8

</TABLE>

     The last reported sale price of the Common Stock on the NYSE
on   February  28,  1997  was  $15.625  per  share.   There  were
approximately  1,465  holders of record of the  Company's  Common
Stock as of February 28, 1997.

     (b)  Dividend Policy

     The Company has never declared or paid cash dividends on its
Common Stock. The Company presently intends to retain earnings to
finance the operation and expansion of its business and does  not
anticipate  declaring cash dividends in the  foreseeable  future.
Under the terms of the covenants in the Rio Bank Loan (as defined
below)  the  Company's wholly owned subsidiary,  Rio  Properties,
Inc.  ("Rio   Properties")  may  pay  dividends  to  the  Company
only if such funds are used for certain specific purposes.  Under
the  terms  of  the  Indentures (as defined below), governing the
10 5/8 %  Notes  (as  defined  below)  and  the  9 1/2% Notes (as
defined below), the payout of dividends and  other  distributions
is  subject  to specified restrictions.

                               17
<PAGE>

ITEM 6.  SELECTED FINANCIAL DATA                                                

<TABLE>
<CAPTION>
                                                    1996                1995                   1994
<S>                                           <C>                 <C>                    <C>
Revenues                                      $ 219,581,492       $  192,958,169         $ 146,424,090

Income before Minority Interest in
  Earnings, Extraordinary Items and
  Cummulative Effect of Accounting
  Change                                      $  19,366,377       $   18,745,479         $  15,966,409

Minority Interest in Earnings                 $           -       $            -         $           -

Extraordinary Items                           $           -       $            -         $           -

Cumulative Effect of Accounting Change        $           -       $            -         $           -

Net Income                                    $  19,366,377       $   18,745,479         $  15,966,409

Primary Earnings Per Common Share:

  Income before Extraordinary Items
    and Cummulative Effect of Accounting
    Change                                    $        0.90       $         0.87         $        0.74

  Extraordinary Items                         $           -       $            -         $           -

  Cumulative Effect of Accounting Change      $           -       $            -         $           -

  Net Income                                  $        0.90       $         0.87         $        0.74

Total Assets                                  $ 494,549,586       $  308,791,594         $ 301,165,272

Long-Term Debt, net of current maturities     $ 253,949,283       $  110,176,765         $ 110,146,869

Total Stockholders' Equity                    $ 181,875,230       $  162,887,900         $ 147,839,167

</TABLE>

ITEM 6.  SELECTED FINANCIAL DATA (Continued)

<TABLE>
<CAPTION>
                                                   1993                1992
<S>                                          <C>                  <C>
Revenues                                     $ 110,053,332        $  82,633,154

Income before Minority Interest in
  Earnings, Extraordinary Items and
  Cummulative Effect of Accounting
  Change                                     $  11,679,991        $   5,756,628

Minority Interest in Earnings                $           -        $    (242,240)

Extraordinary Items                          $    (253,711)       $     793,511

Cumulative Effect of Accounting Change       $    (776,888)       $           -

Net Income                                   $  10,649,392        $   6,307,899

Primary Earnings Per Common Share:

  Income before Extraordinary Items
    and Cummulative Effect of Accounting
    Change                                   $        0.60        $        0.37

  Extraordinary Items                        $       (0.01)       $        0.05

  Cumulative Effect of Accounting Change     $       (0.04)       $           -

  Net Income                                 $        0.55        $        0.42

Total Assets                                 $ 218,050,376        $ 149,518,427

Long-Term Debt, net of current maturities    $  56,875,753        $  50,906,000

Total Stockholders' Equity                   $ 129,838,481        $  86,872,151

</TABLE>

                               18
<PAGE>

ITEM 7.  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  Section 27A of the Securities Act of 1933 and 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),  domestic  or
global  economic conditions and changes in federal or  state  tax
laws or the administration of such laws.

OVERVIEW

     The  Rio's revenues and profits are derived largely from its
gaming  activities, although the Company also seeks  to  maximize
revenues  from  food  and  beverage, lodging,  entertainment  and
retail  sales.   The  Rio generally views its non-casino  related
operations  as complementary to its core casino operations.   The
Rio  utilizes entertainment primarily as a casino marketing tool.
The Rio expects to maintain a food and beverage pricing structure
designed to maximize casino customer foot traffic.

     The  Company's sole business is the operation  of  the  Rio,
which  opened in January 1990.  In 1995 and 1996, as part of  the
Company's  three-phased  expansion  and  development  plan,   the
Company entered into agreements for the purchase of approximately
22  acres and 16 acres, respectively,  adjacent to the Rio  which
may  be  developed  into  a  future  hotel/casino  project.    In
addition,  the Company owns approximately 64 acres  southeast  of
Las  Vegas  that is zoned for hotel/casino development.   At  the
present  time,  management is contemplating  the  possibility  of
selling the 64 acre parcel.

                               19
<PAGE>

RESULTS OF OPERATIONS

YEARS ENDED DECEMBER 31, 1996 AND 1995

     Net revenues for the Company increased to $219.6 million  in
1996 from $193.0 million in 1995, an increase of $26.6 million or
14%.   Casino  revenues  increased  $6.9  million,  or  7.0%,  to
$112.4 million in 1996 from $105.5 million in the prior year.  An
increase  in table game revenues of $6.4 million, or  17.7%,   to
$42.5 million in the current year from $36.1 million in 1995  was
the  primary  component of the increase.  Slot  machine  revenues
were $64.2 million in 1996, an increase of $1.2 million, or 1.9%,
from  1995  revenues  of $63.0 million.   Race  and  sports  book
revenues  were $0.2 million and $0.3 million lower, respectively,
in 1996 than in 1995, primarily due to a lower hold percentage in
the  sports book and a  decrease in total wagers in the race book
which was negatively impacted by a pricing dispute concerning the
live televising of races from California race tracks.  Management
believes   that   the  increase  in  table  game   revenues   was
attributable  to  an  increase in the  number  of  available  and
occupied  rooms  and  an  average of 14 more  table  games  being
available in 1996 compared to 1995.  In 1996, management believes
that  slot machine revenues were negatively impacted by  a  12.5%
decrease  in  the average number of slot machines available  when
compared  to 1995 as a result of temporary space limitations  due
to the Phase V Expansion and casino remodeling projects.

     Room  revenues increased by $7.5 million, or 22.2%, to $41.3
million in 1996 from $33.8 million in 1995, primarily due to 365,
184  and  141  new  hotel  suites being placed  into  service  in
February 1995, March 1995 and December 1995, respectively.  Hotel
occupancy  percentage  was  94.5% in  both  years,  with  567,332
available room nights in 1996 compared to 494,105 available  room
nights  in  the prior year.  The average room rate  increased  to
$76.93 in 1996 from $72.18 in 1995.

     Food  and  beverage revenues increased to $70.8  million  in
1996 from $60.0 million in 1995, an increase of $10.8 million  or
18.0%.   Higher average food checks and increased beverage  sales
contributed to this increase.

     Other revenues increased by $3.0 million, or 24.1%, to $15.4
million  in  1996  compared to $12.4 million in 1995.   Increased
telephone revenues from the additional hotel suites, as  well  as
increased  merchandise sales, salon revenues  and  admissions  to
entertainment  activities,  were  the  primary  reasons  for  the
increase in other revenues.

     Operating  profit as a percentage of net revenue  was  17.3%
and  19.5%  in  1996  and 1995, respectively.   Casino  operating
profit  was  49.5% in 1996 compared to 54.5% in 1995.  Management
believes that the decline in the casino operating margin 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
personnel costs associated with the September 1996 opening of the
Rio's new  Shutters  gaming area and the Masquerade Village  that
opened  on February 7, 1997.  Food and beverage operating  profit
was   22.4% and 19.6% for the years ended December 31,  1996  and
1995,  respectively.  Management believes that  this  improvement
was  the result of effective cost controls, a higher average food
check,  and the increase in the ratio of beverage sales  to  food
sales  when comparing the two years.  Hotel operating profit  was
68.2%  in 1996 and 69.2% in 1995.  Other operating expenses  were
48.8%  and  53.7% of other departmental revenues  for  the  years
ended December 31, 1996 and 1995, respectively, primarily due  to
increases  in  telephone and admissions  revenues  which  do  not
require  significant incremental expense.  Selling,  general  and
administrative expenses were 14.4% of net revenues in both years.

                               20
<PAGE>

     Promotional allowances, which represent the retail value  of
rooms, food, beverage and other products and services provided to
customers  without charge, were $20.4 million in 1996  and  $18.8
million   in   1995.   The  estimated  cost  of  providing   such
promotional  allowances was $11.4 million and  $11.1  million  in
1996 and 1995, respectively.

     Depreciation  and  amortization increased $3.4  million,  or
23.8%,  to  $17.6  million in 1996 compared to $14.2  million  in
1995.   This  increase is attributable to (i)  new  suites  being
placed  into service during the period from February 1995 through
December  1995,  and  (ii) expanded public and  back-of-the-house
areas  being  placed  into service during 1995  and  1996.   This
includes  approximately  $7.3 million  in  construction  projects
placed into service in 1996 which are associated with the Phase V
Expansion project.

     Interest  expense increased $0.1 million  in  1996  to  $8.2
million from $8.1 million in 1995.  Interest expense in 1996  was
reduced by $8.7 million due to the capitalization of interest  on
amounts  expended on the Phase V Expansion project.   The  $200.0
million Phase V Expansion includes approximately 1,000 new  hotel
suites,   477  of  which  opened  in  late  December  1996,   and
approximately  120,000 of additional casino  space,  restaurants,
retail,  and  interactive entertainment space,  which  opened  on
February 7, 1997.  The remainder of the new hotel suites and  the
Voodoo  Lounge and Restaurant on the 41st floor of the new  tower
are  scheduled to open prior to the end of the second quarter  of
1997.

     Net  income  was  $19.4 million or $0.90  per  share  (fully
diluted) compared to $0.87 per share (fully diluted) in 1995.  As
a  percentage  of pre-tax income, federal income taxes  decreased
from 36.4% in 1995 to 35.0% in 1996, primarily due to a change in
accounting for employee meals which were provided at no  cost  to
employees    Prior to the change in accounting for  these  meals,
with  this  change having been adopted by a majority of  Nevada's
hotel/casinos, the Internal Revenue Service has alleged that such
meals   are   subject  to  the   50.0%  meals  and  entertainment
disallowance.

YEARS ENDED DECEMBER 31, 1995 AND 1994

     Operating profit for  the Company increased to $37.1 million
for  1995  from  $25.8  million for 1994, an  increase  of  $11.3
million  or  44%.   Management believes that the  improvement  in
operating results was due to the additional 365 new hotel  suites
placed  into  service in February 1995, the  additional  184  new
hotel  suites  placed into service in March 1995, the  additional
141  new  hotel suites placed into service in December  1995,  an
average  monthly  increase from 1994 levels of approximately  174
slot  machines and 19 table games, additional restaurant capacity
and improved operating efficiencies in the hotel department.

     Net revenues for the Company increased to $192.5 million for
1995  from $146.3 for 1994, an increase of $46.2 million or  32%.
Casino  revenues increased to $105.5 million for 1995 from  $87.2
million  for  1994,  an increase of $18.3 million  or  21%.   The
increase  in casino revenues was due primarily to an increase  in
slot machine revenues of $8.5 million or 16% to $63.0 million for
1995  from $54.5 million for 1994 and an increase in table  games
revenues  of $10.3 million or 40% to $36.1 million for 1995  from
$25.8  million  for  1994,  resulting from  the  additional  slot
machines  and table games discussed above, as well as an increase
in the per unit win of both slots and table games.

     Room  revenues increased by $14.5 million or  76%  to  $33.8
million  for  1995 from $19.3 million for 1994.  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  placed  into service in March 1995,  and  141  new  hotel
suites  placed into service in December 1995. The additional  690
suites  placed into service in 1995 increased the Rio's total  to
1,551  suites  compared to 861 suites for 1994.  Demand  for  the
Rio's  suites remained high during 1995 with a 94% average  daily
occupancy compared to a 96% average daily

                               21
<PAGE>

occupancy during  1994. The  average  number of suites  available
during  1995  was 1,354 compared to 861 during 1994.  The average
daily room rate  during 1995 was $72.18 compared to $63.80 during
1994.

     Food  and  beverage revenues increased to $60.0 million  for
1995 from $47.6 million for 1994, an increase of $12.4 million or
26%.   The  successful opening in February 1994 of the Copacabana
Showroom, a 430-seat video, entertainment and restaurant complex;
the  successful opening in April 1994 of Fiore, a  186-seat  fine
dining  restaurant; the successful opening in June 1994  of  Club
Rio,  a  late-night  dance  club; the  successful  completion  in
November 1994 of a 50% expansion of the Carnival World Buffet  to
980  seats; and increased beverage sales as a result of increased
gaming  customers  all contributed to the increase  in  food  and
beverage revenues.

     Other  revenues for 1995 were $12.0 million, which  included
entertainment admission revenues of $4.1 million, retail sales of
$4.1   million   and  miscellaneous  other  operating   revenues,
primarily  telephone revenues, of $3.8 million.  This represented
an  increase in other revenues of $4.9 million, or 68%,  compared
to the $7.1 million in other revenues generated during 1994.  The
increase  in  other  revenues resulted primarily  from  increased
entertainment  admission  revenues, retail  sales  and  telephone
revenues resulting from increased business levels.

     The  Company's operating margins were relatively  consistent
during  1995 compared to 1994.  Operating profit as a  percentage
of  net revenues was 19% during 1995 compared to 18% during 1994.
Casino  operating profit was relatively constant  at  55%  during
1995  compared  to 56% during 1994.  Food and beverage  operating
profit  remained relatively constant at 20% during 1995  compared
to  19%  during  1994.  Hotel operating profit increased  to  69%
during  1995  compared  to 66% during 1994  due  to  efficiencies
resulting from increased customer volume, effective cost controls
and  a  higher  average room rate during 1995 compared  to  1994.
Selling,  general and administrative expenses  were  14%  of  net
revenues in both 1995 and 1994.

     During  1995, promotional allowances were $18.8 million,  or
9%  of  gross  revenues, which represented the  retail  value  of
rooms,  food,  beverage and other services provided to  customers
without charge.  The estimated cost of providing such promotional
allowances  was  $11.1  million.   This  compares  to  1994  when
promotional  allowances  were  $14.9  million,  or  9%  of  gross
revenues,  and  the estimated cost of providing such  promotional
allowances was $9.1 million.

     Depreciation and amortization increased by $3.3  million  or
31% to $14.2 million for 1995 compared to $10.9 million for 1994.
This  increase  is  attributable  to  depreciation  expense  from
various  completed  expansion  projects  such  as  the  Company's
Eastside Expansion and the Phase III Expansion.

     Other expenses of the Company increased primarily because of
higher  interest  expense.  Borrowing levels  increased  in  1995
compared  to  1994 due to funding costs of the various  expansion
projects.   Also, in July 1995, in anticipation  of  the  funding
requirements  for  the  Phase  V Expansion,  the  Company  issued
$100  million in 105/8 % Senior Subordinated Notes (the "105/8  %
Notes").   (See "Item 7. Liquidity and Capital Resources").   The
fixed  coupon  rate of 105/8 % was higher than the floating  rate
that   the   Company  was  paying  under  the  Rio   Bank   Loan.
Consequently, the issuance of these notes resulted in an increase
in  interest expense.  Interest expense for 1995 was  reduced  by
$949,423  because of interest capitalized on amounts expended  on
the  Phase III Expansion, the Phase IV Expansion and the Phase  V
Expansion.   Interest  expense for 1994 was reduced  by  $619,887
because  of  interest  capitalized on  amounts  expended  on  the
Eastside Expansion and the Phase III Expansion.  Other income for
1994 was a one-time gain of $1.1 million related to the resale of
two  real estate parcels previously owned by the Company.  A one-
time  gain  of $966,510 related to the sale of real estate  which
was sold by the Company to a related party in

                               22
<PAGE>

December 1991.   In April  1994,  the real estate was resold to a
non-related  party.  Pursuant to the terms of the sales agreement
between  the  Company  and  the related  party, the  Company  was
entitled  to  a  portion  of the  resale  proceeds, which equaled
$966,510, net  of  expenses.   Another  one-time gain of $173,500
related to  the sale of  a second piece of real property owned by
the  Company  until May 1991,  when it was  sold to a non-related
party.  Pursuant to the terms of the sales agreement, the Company
was entitled to a portion of the resale  proceeds  or refinancing
amount, which equaled $173,500, net of expenses.

     Net  income for 1995 increased 17% to $18.7 million or $0.87
per  share (fully diluted) from $16.0 million or $0.74 per  share
(fully  diluted)  for 1994 as a result of the  factors  discussed
above.

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  real
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

     During  the  year ended December 31, 1996, cash provided  by
operating  activities  was $31.9 million.   Investing  activities
used $183.1 million, including $13.5 million for the purchase  of
land  adjacent  to  the  Rio, $151.5  million  for  the  Phase  V
Expansion,  $2.6  million  in  connection  with  the  Phase   III
Expansion, $2.4 million in connection with the Phase IV Expansion
and   $7.9   million  in  furniture,  equipment  and  improvement
purchases.   The  cash  expenditures on  the  Phase  V  Expansion
included  $6.6  million in capitalized interest,  which  will  be
capitalized and depreciated along with the construction costs.

     On  February 4, 1997, the Company entered into an  agreement
with  Salomon Brothers Inc and BancAmerica Securities, Inc.  (the
"Initial Purchasers") for the sale of $125.0 million in principal
amount of the Company's 9 1/2% Senior Subordinated Notes Due 2007
(the  "9 1/2% Notes").  The 9 1/2%  Notes were  purchased  by the
Initial   Purchasers   for   resale  to  qualified  institutional
investors.  Pursuant  to  a registration  agreement  between  the
Company and  the  Initial  Purchasers, the Company has registered
on  Form S-4  under  the  Securities  Act  of 1933 $125.0 million
principal amount of 9 1/2%  Senior  Subordinated  Notes  Due 2007
(the "New 9 1/2%  Notes")  which will be exchanged for the 9 1/2%
Notes.

     The  net  proceeds  of  the offering,  approximately  $121.5
million  after  deducting  discounts  and  offering  costs,  were
applied to the Company's $200.0 million revolving line of  credit
(the  "Rio  Bank  Loan") with Bank of America  National  Trust  &
Savings Association and a syndicate of participating banks.   The
revolving  credit  feature of the Rio Bank Loan  allows  for  the
Company  to  pay down and reborrow principal under the  Rio  Bank
Loan  as  the Company deems appropriate.  On February  11,  1997,
prior to the application of the $121.5 million received from  the
sale of the 9 1/2%  Notes, the Company had an outstanding balance
of $180.0  million under the Rio Bank Loan.  After application of
the  $121.5 million payment on February 11, 1997, the Company had
$141.5 million available under the Rio Bank Loan.

                               23
<PAGE>

     In  late  1994, the Company's 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.  In 1996, the Company repurchased
144,500  shares of Common Stock at an average cost of $15.37  per
share.

     In March 1997,  the Company  entered into a letter agreement
to acquire a 60%  interest  in  a golf  course  to be  located in 
Henderson,  Nevada,  at  a  purchase  price  of  $9 million.  The 
Company is currently  reviewing  various  financing  alternatives 
for this acquisition.

     As  of  December 31, 1996, the Company's capital commitments
include  $7.3  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.  In addition, as of  December 31, 1996, the Company
estimates  that  it  will incur approximately  $27.6  million  to
complete  the  Phase V Expansion, excluding capitalized  interest
and  pre-opening costs.  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,
real estate purchase commitments and operations.

                              24
<PAGE>

ITEM 8.  FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

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

                  SELECTED QUARTERLY FINANCIAL INFORMATION (UNAUDITED)

                                               First           Second          Third
(In thousands except per share data)          Quarter         Quarter         Quarter

1996 <F1>
<S>                                           <C>             <C>             <C>
 Revenues                                     $   55,089      $   54,772      $  53,226
 Operating profit                                 11,402          10,926          8,321
 Net income                                        5,326           5,475          4,266

 Net income per common share <F2>             $     0.25      $     0.25      $    0.20


1995 <F1>

 Revenues                                     $   43,885      $   48,004      $  49,961
 Operating profit                                  8,444           9,398         10,379
 Net income                                        4,512           4,914          4,884

 Net income per common share <F2>             $     0.21      $     0.23      $    0.23

________________________
<FN>
<F1>    There were no dividends paid in 1996 or 1995.
<F2>    Net income per share calculations for each quarter are based on the weighted average 
        number of common stock and common stock equivalents outstanding during the respective
        quarters.  Accordingly, the sum of the quarters does not equal the full year income 
        per share for 1995.
</FN>
</TABLE>

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

           SELECTED QUARTERLY FINANCIAL INFORMATION (UNAUDITED) (Continued)


                                              Fourth
(In thousands except per share data)          Quarter          Total

1996 <F1>
<S>                                           <C>             <C>
 Revenues                                     $   56,494      $  219,581
 Operating profit                                  7,345          37,994
 Net income                                        4,299          19,366

 Net income per common share <F2>             $     0.20      $     0.90


1995 <F1>

 Revenues                                     $   51,108      $  192,958
 Operating profit                                  9,337          37,558
 Net income                                        4,435          18,745

 Net income per common share <F2>             $     0.21      $     0.87

________________________
<FN>
<F1>    There were no dividends paid in 1996 or 1995.
<F2>    Net income per share calculations for each quarter are based on the weighted average 
        number of common stock and common stock equivalents outstanding during the respective
        quarters.  Accordingly, the sum of the quarters does not equal the full year income 
        per share for 1995.
</FN>
</TABLE>

                                   25
<PAGE>

            REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
                                
                                
To the Board of Directors of
  Rio Hotel & Casino, Inc.:



     We have audited the accompanying consolidated balance sheets
of   RIO  HOTEL  &  CASINO,  INC.  (a  Nevada  corporation)   and
subsidiaries  as  of December 31, 1996 and 1995 and  the  related
consolidated statements of income, stockholders' equity and  cash
flows   for  each  of  the  three  years  in  the  period   ended
December  31, 1996.  These financial statements and the schedules
referred  to  below  are  the  responsibility  of  the  Company's
management. Our responsibility is to express an opinion on  these
financial statements and schedules based on our audits.

     We   conducted  our  audits  in  accordance  with  generally
accepted auditing standards. Those standards require that we plan
and  perform  the  audit  to  obtain reasonable  assurance  about
whether   the   financial  statements  are   free   of   material
misstatement.  An  audit includes examining,  on  a  test  basis,
evidence  supporting the amounts and disclosures in the financial
statements.  An  audit  also includes  assessing  the  accounting
principles used and significant estimates made by management,  as
well  as evaluating the overall financial statement presentation.
We  believe  that our audits provide a reasonable basis  for  our
opinion.

     In  our opinion, the financial statements referred to  above
present  fairly, in all material respects, the financial position
of  Rio Hotel & Casino, Inc. and subsidiaries as of December  31,
1996 and 1995, and the results of their operations and their cash
flows   for  each  of  the  three  years  in  the  period   ended
December   31,  1996,  in  conformity  with  generally   accepted
accounting principles.

     Our  audits were made for the purpose of forming an  opinion
on  the  basic  financial  statements  taken  as  a  whole.   The
financial  statement  schedules  listed  in  Item  14   are   the
responsibility of the Company's management and are presented  for
purposes   of   complying  with  the  Securities   and   Exchange
Commission's  rules  and  are not part  of  the  basic  financial
statements.  These schedules have been subjected to the  auditing
procedures   applied  in  the  audits  of  the  basic   financial
statements  and,  in our opinion, fairly state  in  all  material
respects  the financial data required to be set forth therein  in
relation to the basic financial statements taken as a whole.

                                                                 
                                                                 
                                              ARTHUR ANDERSEN LLP
                                                                 
Las Vegas, Nevada
February 7, 1997

                               26
<PAGE>

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

       
                                                          December 31,
                                                   1996                 1995

                            ASSETS
<S>                                              <C>                  <C> 
Current assets:
  Cash and cash equivalents                      $  10,623,094        $  19,992,695
  Accounts receivable, net                           8,690,105            4,313,442
  Federal income taxes receivable                    1,147,106              190,914
  Inventories                                        3,871,345            1,794,850
  Prepaid expenses and other current assets          5,534,895            4,638,090
    Total current assets                            29,866,545           30,929,991

Property and equipment:
  Land and improvements                             51,311,851           37,509,960
  Building and improvements                        196,918,053          192,818,896
  Equipment, furniture and improvements             72,052,458           68,500,267
  Less: accumulated depreciation                   (60,501,211)         (46,707,850)
                                                   259,781,151          252,121,273
  Construction in progress                         190,210,277           17,173,483
    Net property and equipment                     449,991,428          269,294,756

Other assets, net                                   14,691,613            8,566,847

                                                 $ 494,549,586        $ 308,791,594


           LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:
  Current maturities of long-term debt           $     352,239        $      25,252
  Accounts payable                                   5,854,830            4,562,132
  Accrued expenses                                  11,967,407            9,136,226
  Accounts payable - related party                  19,604,470            6,641,506
  Accrued interest                                   7,072,067            4,726,915
    Total current liabilities                       44,851,013           25,092,031

Non-current liabilities:
  Long-term debt, less current maturities          253,949,283          110,176,765
  Deferred income taxes                             13,874,060           10,634,898
    Total non-current liabilities                  267,823,343          120,811,663

    Total liabilities                              312,674,356          145,903,694

Stockholders' equity:
  Common stock, $0.01 par value;
   100,000,000 shares authorized;
   21,170,441 and 21,139,146 shares
   issued and outstanding                              211,705              211,392
  Additional paid-in capital                       113,140,798          113,520,158
  Retained earnings                                 68,522,727           49,156,350
    Total stockholders' equity                     181,875,230          162,887,900

                                                 $ 494,549,586        $ 308,791,594

             See Accompanying Notes to Consolidated Financial Statements
</TABLE>

                                     27
<PAGE>

<TABLE>
<CAPTION>
                 RIO HOTEL & CASINO, INC. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF INCOME

                                                     For the Year Ended December 31,
                                              1996                  1995                 1994
<S>                                     <C>                   <C>                   <C>
Revenues:
  Casino                                $ 112,458,824         $ 105,546,531         $ 87,164,738
  Room                                     41,346,275            33,826,095           19,261,477
  Food and beverage                        70,789,839            60,009,994           47,648,778
  Other                                    15,369,085            12,386,275            7,235,891
  Less casino promotional allowances      (20,382,531)          (18,810,726)         (14,886,794)

                                          219,581,492           192,958,169          146,424,090

Expenses:
  Casino                                   56,825,539            48,071,953           38,696,281
  Room                                     13,134,549            10,413,883            6,631,787
  Food and beverage                        54,899,850            48,257,881           38,795,127
  Other                                     7,496,518             6,646,950            4,959,250
  Selling, general and administrative      31,610,710            27,777,901           20,550,142
  Depreciation and amortization            17,620,555            14,231,307           10,863,844

                                          181,587,721           155,399,875          120,496,431

Operating profit                           37,993,771            37,558,294           25,927,659

Other income (expense):
  Interest expense                         (8,215,285)           (8,105,680)          (1,923,237)
  Other income                                      -                     -            1,140,010

                                           (8,215,285)           (8,105,680)            (783,227)

Income before income tax provision         29,778,486            29,452,614           25,144,432

Income tax provision                      (10,412,109)          (10,707,135)          (9,178,023)

Net income                              $  19,366,377         $  18,745,479         $ 15,966,409

Earnings per common share:
  Primary:
    Net income                          $        0.90         $        0.87         $       0.74
    Weighted average number of common
     shares outstanding                    21,528,006            21,591,325           21,720,121

  Fully diluted:
    Net income                          $        0.90         $        0.87         $       0.74
    Weighted average number of common
     shares outstanding                    21,533,857            21,592,769           21,720,381

                     See Accompanying Notes to Consolidated Financial Statements
</TABLE>

                                     28
<PAGE>

<TABLE>
<CAPTION>
                           RIO HOTEL & CASINO, INC. AND SUBSIDIARIES
  
                        CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY

                                                          Common Stock
                                                 Number
                                               Of Shares             Amount
<S>                                             <C>                <C>
Balance, December 31, 1993                      21,147,796         $ 211,478
Tax benefit of stock options exercised
Exercise of stock options                          223,550             2,236
Net income for the year
Compensation expense for stock options
  granted in 1993

Balance, December 31, 1994                      21,371,346           213,714
Tax benefit of stock options exercised
Exercise of stock options                          198,300             1,983
Repurchase of common stock                        (430,500)           (4,305)
Common stock offering costs
Net income for the year
Compensation expense for stock options
  granted in 1993

Balance, December 31, 1995                      21,139,146           211,392
Tax benefit of stock options exercised
Exercise of stock options                          175,795             1,758
Repurchase of common stock                        (144,500)           (1,445)
Net income for the year
Compensation expense for stock options
  granted in 1993

Balance, December 31, 1996                      21,170,441         $ 211,705

                   See Accompanying Notes to Consolidated Financial Statements
</TABLE>

<TABLE>
<CAPTION>

                         RIO HOTEL & CASINO, INC. AND SUBSIDIARIES

                 CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (Continued)

                                               Additional                                  Total
                                                 Paid-In             Retained           Stockholders'
                                                 Capital             Earnings               Equity

<S>                                         <C>                  <C>                   <C>
Balance, December 31, 1993                  $ 115,182,541        $  14,444,462         $ 129,838,481
Tax benefit of stock options exercised            886,132                                    886,132
Exercise of stock options                       1,003,934                                  1,006,170
Net income for the year                                             15,966,409            15,966,409
Compensation expense for stock options  
  granted in 1993                                 141,975                                    141,975

Balance, December 31, 1994                    117,214,582           30,410,871           147,839,167
Tax benefit of stock options exercised            632,601                                    632,601
Exercise of stock options                         965,467                                    967,450
Repurchase of common stock                     (5,381,920)                                (5,386,225)
Common stock offering costs                         1,801                                      1,801
Net income for the year                                             18,745,479            18,745,479
Compensation expense for stock options
  granted in 1993                                  87,627                                     87,627

Balance, December 31, 1995                    113,520,158           49,156,350           162,887,900
Tax benefit of stock options exercised            570,283                                    570,283
Exercise of stock options                       1,161,152                                  1,162,910
Repurchase of common stock                     (2,219,155)                                (2,220,600)
Net income for the year                                             19,366,377            19,366,377
Compensation expense for stock options
  granted in 1993                                 108,360                                    108,360

Balance, December 31, 1996                  $ 113,140,798        $  68,522,727         $ 181,875,230

                     See Accompanying Notes to Consolidated Financial Statements
</TABLE>

                                        29
<PAGE>
<TABLE>
<CAPTION>
                         RIO HOTEL & CASINO, INC. AND SUBSIDIARIES
                          CONSOLIDATED STATEMENTS OF CASH FLOWS

                                                                For the Year Ended December 31,
                                                           1996             1995             1994

<S>                                                   <C>               <C>              <C>               
Cash flows from operating activities:
  Net income                                          $  19,366,377     $  18,745,479    $  15,966,409
  Adjustments to reconcile net income to net
   cash provided by operating activities:
     Compensation expense recognized from           
      stock option grant                                    108,360            87,627          141,975
     Depreciation and amortization                       17,620,555        14,231,307       10,863,844
     Provision for uncollectible accounts                   292,138         1,002,463          512,999
     Deferred income taxes                                2,198,017         3,122,621        1,693,101
     (Increase) decrease in assets:
       Accounts receivable                               (4,668,801)       (2,026,109)        (790,677)
       Inventories                                       (2,076,495)         (416,252)        (510,231)
       Prepaid expenses and other current assets         (1,106,609)          659,627         (827,476)
       Phase V pre-opening costs                         (5,152,980)                -                -
       Other, net                                        (1,158,860)         (843,335)      (2,881,750)
     Increase (decrease) in liabilities:
       Accounts payable                                   1,292,699         2,136,487         (522,443)
       Accrued federal income tax                                 -                 -          546,142
       Accrued expenses                                   2,831,182         1,305,520        1,306,086
       Accrued interest                                   2,345,152         4,375,051          297,896
                                                                                          
Net cash provided by operating activities                31,890,735        42,380,486       25,795,875

Cash flows from investing activities:
  Purchase of land and improvements                     (13,522,603)      (12,781,239)               -
  Purchase of equipment, furniture and
    improvements                                       (169,539,111)      (63,326,652)     (66,053,542)

Net cash used in investing activities                  (183,061,714)      (76,107,891)     (66,053,542)

Cash flows from financing activities:
  Proceeds from borrowings                              143,000,000        10,000,000       60,014,175
  Net proceeds from issuance of senior
    subordinated notes                                            -        96,750,244                -
  Net proceeds from common stock issuance                 1,162,910           969,251        1,022,700
  Costs paid in connection with prior common stock
    offering and stock exchange rights                            -                 -         (119,529)
  Payments on notes and loans payable                      (140,932)     (125,039,428)         (18,358)
  Repurchase of common stock                             (2,220,600)       (5,386,225)               -

Net cash provided by (used in) financing activities     141,801,378       (22,706,158)      60,898,988

Net increase (decrease) in cash and cash equivalents     (9,369,601)      (56,433,563)      20,641,321
Cash and cash equivalents, beginning of year             19,992,695        76,426,258       55,784,937

Cash and cash equivalents, end of year                $  10,623,094     $  19,992,695    $  76,426,258

                      See Accompanying Notes to Consolidated Financial Statements
</TABLE>

                                          30
<PAGE>
            RIO HOTEL & CASINO, INC. AND SUBSIDIARIES
                                
           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                
                                
1.   SIGNIFICANT ACCOUNTING POLICIES AND RELATED MATTERS

     PRINCIPLES OF CONSOLIDATION AND BASIS OF PRESENTATION
     
     The  consolidated financial statements include the  accounts
     of  Rio Hotel & Casino, Inc., a Nevada corporation, and  its
     wholly  owned  subsidiaries,  each  of  which  is  a  Nevada
     corporation,  Rio Properties, Inc. ("Rio Properties,"  which
     owns  and operates the Rio Suite Hotel & Casino (the  "Rio")
     in   Las  Vegas,  Nevada);  Rio  Development  Company,  Inc.
     (formerly  MarCor  Development Company,  Inc.);  Rio  Resort
     Properties, Inc. (formerly MarCor Resort Properties,  Inc.);
     Rio   Leasing,   Inc.  and  Rio  Properties'  wholly   owned
     subsidiaries, Cinderlane, Inc. and HLG, Inc.
     
     All  significant intercompany balances and transactions have
     been eliminated in consolidation.
     
     RECLASSIFICATIONS
     
     The  financial statements for prior periods reflect  certain
     reclassifications, which have no effect on  net  income,  to
     conform with classifications adopted in the current year.
     
     USE OF ESTIMATES
     
     The  preparation of financial statements in conformity  with
     generally accepted accounting principles requires management
     to  make  estimates and assumptions that affect the reported
     amounts   of  assets  and  liabilities  and  disclosure   of
     contingent  assets  and  liabilities  at  the  date  of  the
     financial  statements and the reported amounts  of  revenues
     and  expenses  during the reporting period.  Actual  results
     could differ from these estimates.
     
     CAPITALIZATION OF INTEREST
     
     The  Company capitalizes interest on funds disbursed  during
     the  active  construction phases of real estate  development
     and  other  major projects. Interest capitalized during  the
     years  ended  December 31, 1996, 1995,  and  1994  was  $8.7
     million, $0.9 million and $0.6 million, respectively.
     
     CASH AND CASH EQUIVALENTS
     
     The Company classifies as cash equivalents all highly liquid
     debt  instruments with a maturity of three  months  or  less
     when  purchased.  Cash equivalents are carried at cost which
     approximates fair value.
     
     PROPERTY AND EQUIPMENT
     
     Land  and  improvements,  building  and  improvements,   and
     equipment,  furniture and improvements are stated  at  cost.
     Approximately $23.8 million has been invested  in  land  and
     improvements  immediately adjacent to the Rio which  may  be
     developed at some time in the future.

                               31
<PAGE>
     
     Depreciation  and amortization of property and equipment  is
     computed  using the straight-line method predominantly  over
     the following estimated useful lives:
     
         Building and improvements                  7 to 45 years
         Equipment, furniture and improvements      3 to 15 years
     
     
     Costs of major improvements are capitalized, while costs  of
     normal  repairs and maintenance are charged  to  expense  as
     incurred.
     
     PREOPENING COSTS
     
     Preopening  costs consist principally of direct  incremental
     personnel costs and other associated expenses.  These  costs
     are capitalized prior to the opening of the specific project
     and  are  charged  to  expense at the  commencement  of  the
     operations.  At December 31, 1996, preopening costs included
     in  noncurrent assets on the consolidated balance sheet were
     $5.2 million.
     
     IMPAIRMENT
     
     Management reviews existing information and analyses of  the
     Company  and  its  operations  as  well  as  indicators   of
     impairment (such as dramatic changes in the manner in  which
     an  asset  is  used or forecasts showing lack  of  long-term
     profitability) to determine whether an impairment may exist.
     The  Company  considers relevant cash flow and profitability
     information,  including estimated future operating  results,
     trends and other available information, in assessing whether
     the  carrying  value of its fixed assets can  be  recovered.
     Upon  a  determination that the carrying value of  an  asset
     will  not  be  recovered from its future  undiscounted  cash
     flows,  the carrying value of that asset would be considered
     impaired  and  will be reduced by a charge to operations  in
     the amount of the impairment.  Impairment is measured as any
     deficiency  between estimated discounted future  cash  flows
     generated by the fixed assets and the carrying value related
     to those assets.
     
     INVENTORIES
     
     Inventories are stated at the lower of cost or market.  Cost
     is determined by using the first-in, first-out method.
     
     REVENUE AND PROMOTIONAL ALLOWANCES
     
     Casino  revenues represent the net win from gaming wins  and
     losses. The retail value of rooms, food, beverage and  other
     services provided to customers without charge is included in
     gross  revenue  and deducted as promotional allowances.  The
     estimated  departmental costs of providing such  promotional
     allowances  are  included in casino costs  and  expenses  as
     follows:

<TABLE>
<CAPTION>
                                    For the Year Ended December 31,
                                   1996          1995         1994
     <S>                        <C>           <C>           <C>
     Room                        $1,808,138    $1,940,936   $1,273,154
     Food and beverage            9,429,800     9,020,152    7,823,819
     Other operating expenses       206,163       104,921       44,888
                                $11,444,101   $11,066,009   $9,141,861
</TABLE>

                               32
<PAGE>     
     
     EARNINGS PER SHARE
     
     Earnings per common share are computed on the basis  of  the
     weighted  average number of common shares and  common  stock
     equivalents outstanding during the period.
     
     HEDGING TRANSACTION
     
     The  Company was a party to an interest rate swap  agreement
     and  has  purchased an interest rate cap (Note 6).  Any  net
     payments made or received by the Company in connection  with
     this  interest rate swap agreement or interest rate cap,  or
     any  other  hedging transaction that the Company  may  enter
     into,  has  been  classified as cash  flows  from  operating
     activities on the consolidated statement of cash flows.
     
     The  premiums  paid for the interest rate cap  agreement are
     amortized  to  interest  expense over  the  shorter  of  the
     original  life  of  the  debt  or  the  term  of  the   cap.
     Unamortized  premiums are included in other  assets  in  the
     consolidated balance sheet.  Accounts receivable  under  the
     agreements  are accrued as a reduction of interest  expense.
     Amounts payable under the interest rate swap agreement would
     have been included in interest expense.
     
     INCOME TAXES
     
     Effective  January  1,  1993, the  Company  implemented  the
     provisions  of  SFAS 109.  SFAS 109 utilizes  the  liability
     method  and  deferred  taxes are  determined  based  on  the
     estimated  future  tax  effects of differences  between  the
     financial  statement and tax bases of assets and liabilities
     given the provisions of the enacted tax laws.
     
2.   CASH AND CASH EQUIVALENTS

     Cash  and  cash  equivalents at December 31, 1996  and  1995
     include   approximately   $3  million   and   $10   million,
     respectively,  in  overnight repurchase  agreements  with  a
     bank.  These  items are recorded at cost which  approximates
     market  value  and  are  considered  cash  equivalents   for
     purposes of the consolidated statements of cash flows.
     
3.   CONSOLIDATED STATEMENTS OF CASH FLOWS

     The  following supplemental disclosures are provided as part
     of the consolidated statements of cash flows:

<TABLE>
<CAPTION>     
                                                    For the Year Ended December 31,
                                                    1996         1995         1994
    <S>                                          <C>           <C>         <C>
    Cash payments made for interest (net of                             
     amounts capitalized)                         $4,773,537   $3,904,540   $1,919,556
                                                        
    Cash payments made for income taxes           $8,600,000   $7,100,000   $6,240,000
                                                        
    Non-cash financing and investing activities:                             
                                                        
     Purchase of property and equipment                           
      financed through payables                  $19,604,470   $6,556,126  $10,026,210
                                                        
     Purchase of property and equipment                           
      through assumption of long-term debt          $140,435      $62,042     $  - - -

</TABLE>
                               33
<PAGE>

<TABLE>
<CAPTION>
                                                    For the Year Ended December 31,
                                                    1996         1995         1994
    <S>                                            <C>          <C>          <C>
     Tax benefit arising from exercise of
      stock options under the Company's
      Non-Statutory Stock Option Plan              $570,283     $632,601     $886,132

</TABLE>                                                        
     
     
4.   ACCOUNTS RECEIVABLE

     Components of accounts receivable are as follows:

<TABLE>
<CAPTION>     
                                                     December 31,
                                               1996                1995
    <S>                                     <C>                 <C>
    Casino                                  $6,318,124          $3,267,244
    Hotel                                    3,244,388           1,757,640
    Other                                      244,423             113,250
                                             9,806,935           5,138,134
    Less allowance for doubtful accounts    (1,116,830)           (824,692)
                                            $8,690,105          $4,313,442

</TABLE>
     
     
5.   ACCRUED EXPENSES

     Components of accrued expenses are as follows:
     
<TABLE>
<CAPTION>
                                                     December 31,
                                               1996                1995
     <S>                                   <C>                  <C>
     Accrued salaries, wages and
      related benefits                      $5,615,310          $4,065,736
     Progressive slot machines and
      other gaming accruals                  2,862,652           2,532,964
     Accrued gaming taxes                    1,646,333           1,714,232
     Other accrued liabilities               1,843,112             823,294
                                           $11,967,407          $9,136,226
</TABLE>
     
     
6.   LONG-TERM DEBT (SEE NOTE 11:  SUBSEQUENT EVENT)

     Long-term debt consists of the following:
     
<TABLE>
<CAPTION>
                                                     December 31,
                                               1996                1995
     <S>                                    <C>                 <C>
     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  Rio
     Properties'   real    property,
     equipment and improvements.            $153,000,000        $ 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                                     1,301,522             202,017
                                             254,301,522         110,202,017
            Less current maturities             (352,239)            (25,252)
                                            $253,949,283        $110,176,765

</TABLE>     
     
     The  prime  interest  rate quoted by the  Company's  primary
     lenders  at December 31, 1996 and 1995 was 8.25% and  8.50%,
     respectively.

                               34
<PAGE>
     
     At  December 31, 1996, the three month Eurodollar  Rate  was
     5.5625%.   The  margin  on  the  Company's  Eurodollar  Rate
     borrowings at December 31, 1996 was 2.50%.
     
     The  Rio  Bank Loan was originally entered into on July  15,
     1993  in the amount of $65 million with a syndicate of banks
     led   by   Bank  of  America  National  Trust  Savings   and
     Association  ("Bank  of America NT&SA").   As  a  result  of
     certain  amendments,  the Rio Bank  Loan  was  increased  in
     varied increments to $200 million in June 1996.  As amended,
     the  Rio  Bank  Loan is a secured reducing revolving  credit
     facility  to be used (a) to refinance the pre-amendment  Rio
     Bank  Loan,  (b)  to finance the Phase V Expansion,  (c)  to
     finance the acquisition of land adjacent to the Rio  for  up
     to $35 million, and (d) for general corporate purposes.
     
     The  Rio  Bank  Loan  matures on June  30,  2001  and  bears
     interest based upon a "LIBOR Spread" of from 1% to 3%, or  a
     "Base  Rate Spread" of from 0% to 2.0% based upon a schedule
     determined  with  reference to the "Funded  Debt  to  EBITDA
     Ratio"  (as defined) of Rio Properties.  The "LIBOR  Spread"
     is  the amount in excess of the applicable LIBOR rate  which
     is the London Interbank Offer Rate established in the London
     interbank  market.  The "Base Rate Spread" is the amount  in
     excess  of the applicable base rate, which is the  rate  per
     annum  equal to the higher of the reference rate  as  it  is
     publicly  announced  from time to time by  Bank  of  America
     NT&SA  or  0.50%  per annum above the latest  Federal  Funds
     rate.   The  Rio  Bank  Loan also  provides  for  an  unused
     facility  fee ranging from 31.25 basis points to 50.0  basis
     points  depending upon the same Funded Debt to EBITDA  ratio
     schedule utilized for the interest rate.  (A basis point  is
     one  one-hundredth  of  one percent.)   The  Rio  Bank  Loan
     requires  monthly  payments  of interest  and  will  require
     scheduled  reductions of the maximum amount available  under
     the Rio Bank Loan commencing with a $10 million reduction at
     December  31, 1997, a $7.5 million reduction at the  end  of
     each  quarter during 1998, a $10.0 million reduction at  the
     end  of each quarter during 1999,  a $12.5 million reduction
     at  the  end of each quarter during 2000, and a $35  million
     reduction at March 31, 2001 and maturity at June 30, 2001.
     
     The  Rio  Bank Loan includes certain covenants  that,  among
     other   things,  restrict  the  Company's  ability  to   pay
     dividends and make certain other restricted payments;  incur
     additional  indebtedness; grant liens, other than  permitted
     liens;  and  sell material assets.  The Rio Bank  Loan  also
     requires  the Company to maintain certain financial  ratios,
     including interest coverage and leverage ratios, and not  to
     exceed  certain  fixed  ratios  of  Senior  Indebtedness  to
     earnings before interest expense, income taxes, depreciation
     and amortization and extraordinary items.  The Rio Bank Loan
     further limits capital expenditures without consent  of  the
     lender.
     
     The  10 5/8% Senior Subordinated Notes (the "10 5/8% Notes")
     are  unconditionally  guaranteed on  a  senior  subordinated
     basis by Rio Properties.  The 10 5/8% Notes are subordinated
     in  right  of  payment  to all existing  and  future  Senior
     Indebtedness  (as defined in the indenture, the "Indenture")
     of  the  Company  and are structurally subordinated  to  all
     existing  and  future  indebtedness  and  other  liabilities
     (including trade payables) of the Company's subsidiaries.
     
     The  10 5/8%  Notes  may be redeemed at the  option  of  the
     Company,  in whole or in part, at any time on or after  July
     15,  2000,  at  the  redemption  prices  set  forth  in  the
     Indenture.   Upon  a change in control of  the  Company  (as
     defined in the Indenture), each holder of 10 5/8% Notes will
     have  the right to require the Company to repurchase all  or
     part of such holder's 10 5/8% Notes at a price equal to 101%
     of  the aggregate principal amount thereof, plus accrued and
     unpaid  interest,  if any, to the date of  repurchase.   The
     Indenture  contains  certain  covenants  that,  among  other
     things,  limit the ability of the Company and its Restricted
     Subsidiaries  (as  defined  in  the  Indenture)   to   incur
     additional   indebtedness,  pay  dividends  or  make   other
     distributions,  make  investments,  repurchase  subordinated
     obligations or capital stock, create

                               35
<PAGE>

     certain liens  (except, among  others, liens securing Senior
     Indebtedness),   enter   into   certain  transactions   with
     affiliates, sell assets of the Company  or its subsidiaries,
     issue or sell subsidiary stock, create or  permit  to  exist
     restrictions  on distributions from subsidiaries,  or  enter
     into certain mergers and consolidations.
     
     To  reduce  the  risks from interest rate fluctuations,  the
     Company  entered into interest rate swap agreements  in  the
     amount  of  $20  million  from September  30,  1994  through
     December  29,  1995 and $15 million from December  29,  1995
     through  its  expiration on June 28, 1996.  In August  1994,
     the  Company  purchased  a $40 million  interest  rate  cap,
     effective  September 30, 1994, for a three-year term,  which
     provided for quarterly payments to the Company in the  event
     that  three-month LIBOR exceeded 7% on any  quarterly  reset
     date.   The Company is exposed to credit risks in the  event
     of  non-performance by the counterparty.   At  December  31,
     1996,   the  potential  maximum  credit  risk  amounted   to
     $199,000,  which  is the carrying value of  the  unamortized
     premium.   However,  the Company does  not  anticipate  non-
     performance  by  the  counterparty.  The counterparty  under
     these agreements is Bank of America NT&SA, the lead bank  in
     the   syndicate   participating  in  the  Rio   Bank   Loan.
     Management believes that the financial resources of Bank  of
     America  NT&SA  and  its  competitive  position  within  the
     national  banking industry significantly reduce the  chances
     of non-performance under the interest rate cap agreement.
     
     At  December 31, 1996 the interest rate cap agreement had  a
     negligible  fair  market value.  The estimated  fair  market
     value  of  the Company's 10 5/8% Notes at December 31,  1996
     was  approximately $106 million, versus its  book  value  of
     $100  million.  The estimated fair market value is based  on
     the quoted market price on that date.
     
     As  a  result of entering into interest rate swap agreements
     and  cap  agreements,  the Company has  recognized  interest
     expense  of  $208,859, $18,638, and $83,833  for  the  years
     ended  December 31, 1996, 1995 and 1994, respectively.   The
     impact of these hedging activities on the Company's weighted
     average  borrowing  rate  was an increase  of  approximately
     0.22%,  0.03%  and  0.26% for the years ended  December  31,
     1996, 1995 and 1994, respectively.
     
     For  the years ended December 31, 1996, 1995 and 1994, there
     were  no  deferred  gains or losses relating  to  terminated
     interest rate swap and interest rate cap agreements.
     
     The revolving credit feature of the Rio Bank Loan allows the
     Company  to  pay  down  and  reborrow  principal  under  the
     revolving  credit facility as the Company deems appropriate.
     The  Company borrowed $10 million on December 29,  1995  and
     repaid $9 million on January 2, 1996 under the terms of  the
     Rio Bank Loan.  The Company had $47 million and $165 million
     available under the Rio Bank Loan at December 31,  1996  and
     1995, respectively.
     
     As  of  December 31, 1996, annual maturities  of  notes  and
     loans payable are as follows:

<TABLE>
<CAPTION>
     
          YEAR ENDING                        
       <S>                                   <C>
       December 31, 1997                     $    352,239
       December 31, 1998                          371,331
       December 31, 1999                       43,264,413
       December 31, 2000                       50,046,144
       December 31, 2001                       60,047,317
       Thereafter                             100,220,078
                                             $254,301,522

</TABLE>     
                               36
<PAGE>

     The following assets collateralize bank loans payable:

<TABLE>
<CAPTION>     
                                                     December 31,
                                               1996                1995
     <S>                                    <C>                 <C>
     Building and improvements              $196,918,053        $192,818,896
     Equipment, furniture and
     improvements                             72,052,458          68,500,267
     Land and improvements                    35,345,485          33,676,354
     Construction in progress                190,210,277          17,173,483
                                            $494,526,273        $312,169,000

</TABLE>     
     

7.   INCOME TAXES

     The provision for income taxes consisted of the following:
     
<TABLE>
<CAPTION>
                                    For the Year Ended December 31,
                                   1996           1995          1994
    <S>                        <C>            <C>            <C>
    Current                     $8,214,092     $7,681,015    $6,643,993
    Deferred                     2,198,017      3,026,120     2,534,030
                               $10,412,109    $10,707,135    $9,178,023
     
</TABLE>
     
     The  following  schedule reconciles the Company's  effective
     tax rate to the statutory rate:
     
<TABLE>
<CAPTION>
                                            For the Year Ended December 31,
                                            1996          1995         1994
    
    <S>                                     <C>           <C>          <C> 
    Statutory rate                          35.0%         35.0%        35.0%
    Depreciation on premium allocated
     in subsidiary partnership exchange      0.2%          0.4%         0.5%
    Disallowance for tax purposes of                       
     certain meals, travel and
     entertainment expenses                  0.2%          1.5%         1.2%
    Other                                   (0.4)%        (0.5)%       (0.2)%
                                                          
    Effective rate                          35.0%         36.4%        36.5%
     
</TABLE>
     
     During  1994, the Company utilized all remaining alternative
     minimum tax credit carryforwards.
     
     The  Company's deferred tax assets (liabilities) at December
     31, 1996 consisted of the following:
     
<TABLE>
<CAPTION>
                                               Current           Non-Current
    <S>                                     <C>                 <C>
    Depreciation and amortization           $      ---          $(11,539,037)
    Deferred employee benefits                 581,000                   ---
    Bad debt expense                           390,890                   ---
    Preopening costs - Phase V
     Expansion                                     ---            (1,275,043)
    Other deferred tax items, net              728,019            (1,059,980)
                                            $1,699,909          $(13,874,060)
     
 </TABLE>
    
     The   Company's   deferred  tax  assets   (liabilities)   at
     December 31, 1995 consisted of the following:
     
<TABLE>
<CAPTION>
                                               Current           Non-Current
     <S>                                      <C>               <C>
     Depreciation and amortization            $    ---          $(11,399,852)
     Deferred employee benefits                370,122                   ---
     Bad debt expense                          288,642                   ---
     Other deferred tax assets, net                ---               764,954
                                              $658,764          $(10,634,898)

</TABLE>
                                                    
                               37
<PAGE>
     
     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 current 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.   COMMITMENTS AND CONTINGENCIES

     Effective  January  1,  1991, Rio  Properties  maintains  an
     employee  profit  sharing plan for all  employees  who  have
     accredited   service.   Contributions  to   the   plan   are
     discretionary and cannot exceed amounts permitted under  the
     Internal Revenue Code.  Contributions of $376,736, $278,835,
     and  $215,039 have been authorized and charged to income for
     the   years  ended  December  31,  1996,  1995,  and   1994,
     respectively.
     
     In  the  normal course of business, the Company is  involved
     with  various  negotiations and legal matters. In  addition,
     Rio  Properties is a potential defendant in various personal
     injury  allegations. Management is of the opinion  that  the
     effect  of these matters is not material to the consolidated
     financial statements.
     
9.   STOCKHOLDERS' EQUITY

     COMMON STOCK
     
     During  1996,  the Company issued 175,795 shares  of  Common
     Stock  at  exercise prices ranging from $3.00 per  share  to
     $15.63  per  share  pursuant  to  stock  options  previously
     granted under the Company's Non-Statutory Stock Option  Plan
     ("NSOP").
     
     During  1996,  the  Company repurchased  144,500  shares  of
     Common Stock from time to time in the open market at a total
     cost  of  $2.2  million.  The repurchased shares  of  Common
     Stock were retired.
     
     During  1995,  the Company issued 198,300 shares  of  Common
     Stock  at  exercise prices ranging from $3.00 per  share  to
     $14.25  per  share  pursuant to options  previously  granted
     under the Company's NSOP.
     
     During  1995,  the  Company repurchased  430,500  shares  of
     Common Stock from time to time in the open market at a total
     cost  of  $5.4  million.  The repurchased shares  of  Common
     Stock were retired.
     
     During  1994,  the Company issued 223,550 shares  of  Common
     Stock  at  exercise prices ranging from $3.00 per  share  to
     $15.625  per  share  pursuant to options previously  granted
     under the Company's NSOP.
     
     STOCK OPTIONS
     
     The  Company  has  various stock option  plans  under  which
     options  may  be  granted  to officers,  outside  directors,
     employees, agents or independent contractors of the Company.
     The  options  granted typically vest ratably over  5  years,
     with an expiration 10 years from date of issuance.
     
                               38
<PAGE>

<TABLE>
<CAPTION>
                                                       For the Year Ended December 31,
                                                    1996           1995            1994
    
    <S>                                            <C>            <C>             <C>
    Options outstanding, beginning of year         1,853,850      1,999,050       1,957,800
    Granted                                          828,000        294,000         337,500
    Exercised                                       (175,795)      (198,300)       (223,550)
    Forfeited                                       (116,500)      (240,900)        (72,700)
    Options outstanding, end of year               2,389,555      1,853,850       1,999,050

    Options available for grant at end of year     1,484,300        259,400         212,500
    Options exercisable at end of year               996,755        894,717         586,050
    Average exercise price of options
     exercised during the year                        $ 6.62         $ 5.21          $ 4.57
    Average exercise price of options
     outstanding at end of year                       $13.59         $10.63          $ 7.04
    Average exercise price of options
     granted during the year                          $15.43         $13.01          $12.56
    Average exercise price of options
     forfeited during the year                        $14.04         $12.43          $12.33
     
</TABLE>

     The Company has granted 2,879,500 options at exercise prices
     ranging from $3.00 to $15.625 per share to key officers  and
     employees  under  the Company's NSOP.  As  of  December  31,
     1996, 870,045 options had been exercised and 462,300 options
     had   been   forfeited,  resulting  in   1,547,155   options
     outstanding and 227,300  options  available  to  be  granted
     under the NSOP.
     
     Under  the Directors Stock Option Plan, as amended,  options
     to  purchase  up to 200,000 shares of common  stock  may  be
     granted to non-employee directors. The option exercise price
     is  100% of the fair market value of the common stock on the
     date of grant.  As of December 31, 1996, 123,000 options had
     been granted at exercise prices ranging from $3.00 per share
     to  $16.625 per share, 30,000 options had been exercised and
     22,000  options  had  been forfeited,  resulting  in  71,000
     options  outstanding  and  99,000 options  available  to  be
     granted.
     
     Under the 1995 Long-Term Incentive Plan, options to purchase
     up  to 2,000,000 shares of the Company's common stock may be
     granted  to  executive officers, key employees, and  outside
     consultants of the Company.  The options exercise  price  is
     equal to the last reported sale price of the common stock on
     the  date  of the grant.  As of December 31, 1996,   850,000
     options  had  been granted at exercise prices  ranging  from
     $15.50  to  $16.75 per share.  A total of 8,000 options  had
     been  forfeited, resulting in  842,000  options  outstanding
     and 1,158,000 options available to be granted.
     
     The   Company  applies  APB  Opinion  No.  25  and   related
     interpretations  in accounting for the plans.   Accordingly,
     no  compensation expense has been recognized for  the  stock
     options.   FASB  Statement 123 "Accounting  for  Stock-Based
     Compensation" ("SFAS 123") was issued by the  FASB  in  1995
     and,  if  fully adopted, changes the methods for recognition
     of  cost  on  plans  similar to those of the  Company.   Had
     compensation cost for the Company's stock-based compensation
     plans  been  determined based on the fair  market  value  of
     options  on  the dates of grant in 1996 and 1995  using  the
     Black-Scholes   option-pricing  model  with  the   following
     assumptions:  (i) no dividends, (ii) expected volatility  of
     37%  for both years, (iii) risk free interest rate of  6.06%
     and 5.68% for 1996 and 1995, respectively, (iv) and expected
     lives  of  four years, the effect on net income and earnings
     per share would be as follows:
     
                               39
<PAGE>

<TABLE>
<CAPTION>
                                                     Year Ended December 31,
                                                     1996               1995
     <S>                                          <C>                <C>
     Net income - As reported                     $19,366,377        $18,745,479
              - Proforma                          $18,286,839        $18,692,445
                                                       
     Primary Earnings per share - As reported        $0.90              $0.87
              - Proforma                             $0.86              $0.87
                                                       
     Fully diluted EPS - As reported                 $0.90              $0.87 
              - Proforma                             $0.86              $0.87

</TABLE>     
     
     The  weighted average fair market  value  of options granted
     in 1996 and 1995 were $2.49 and $4.83, respectively.
     
10.  RELATED PARTY TRANSACTIONS

     The  Company contracted with two affiliates of the Company's
     largest stockholder for the design and construction of a 41-
     story hotel tower containing approximately 1,000 suites (the
     "Phase V  Expansion")  for a  total of  approximately $200.0
     million.   As  of  December  31,  1996,  the   Company   had  
     capitalized  $174.3   million   in  connection   with  these
     contracts.    As   of December  31,  1996,  $19.4 million is
     included in current liabilities on the Company's consolidated
     balance  sheet  in  connection  with  these construction and
     design contracts.
     
     The  Company contracted with two affiliates of the Company's
     largest stockholder for the design and construction of three
     previous  expansion  projects, the 437  new  suite  Eastside
     Expansion  for a total of $57.6 million, the 549  new  suite
     Phase  III Expansion for a total of $64.2 million,  and  the
     141  new  suite  Phase IV Expansion for  a  total  of  $18.8
     million.  Each of these expansions included the addition  of
     new public and back-of-the-house areas and improvements.
     
     In December 1991, the Company sold non-Rio real estate to an
     affiliate  of the Company's largest stockholder.   In  April
     1994,  the affiliated entity sold the real estate to a  non-
     related   party.   Pursuant  to  the  terms  of  the   sales
     agreement,  the  Company was entitled to a  portion  of  the
     sales proceeds which equaled $966,510, net of expenses.
     
     An  affiliate of the Company's largest stockholder  provided
     real  estate brokerage services to the Company in connection
     with  the purchase of the 31 acres adjacent to the  Rio  and
     the  acquisition  of the options to purchase  an  additional
     seven  acres.   Fees paid in connection with these  property
     acquisitions,  including  reimbursement  of  expenses,  were
     $999,910 and $878,428 for the years ended December 31,  1996
     and  1995, respectively.  Nominal amounts were paid  by  the
     Company  to the affiliate for similar purposes during  1994.
     Expense  reimbursements  were generally  reimbursed  at  the
     affiliate's cost, and real estate brokerage commissions  are
     believed to be on terms at least as favorable as would  have
     been obtained from non-affiliated parties.
     
     Two  director/officers of the Company  are  associated  with
     affiliated  entities  as noted above  which  render  various
     architectural  and construction services  for  the  Company.
     The   Company   paid  these  entities,  in  the   aggregate,
     approximately  $147.9  million,  $51.0  million,  and  $50.4
     million during the years ended December 31, 1996, 1995,  and
     1994, respectively, for their services.

                               40
<PAGE>
     
     Entities in which a director of the Company is the principal
     stockholder  and the executive officer received  commissions
     from  the Company totaling approximately $122,000,  $159,000
     and $125,000 for the years ended December  31,  1996,  1995,
     and  1994,  respectively,  arising  out  of  the acquisition
     of various insurance coverages by the Company.
     
     The  Company believes that the transactions described  above
     are  on  terms  at  least as favorable as  would  have  been
     obtained from non-related parties.
     
11.  SUBSEQUENT EVENT

     On  February 4, 1997, the Company entered into an  agreement
     with  Salomon Brothers Inc and BancAmerica Securities,  Inc.
     (the  "Initial Purchasers") for the sale by the  Company  of
     $125  million in  principal  amount of  the Company's 9 1/2%
     Senior  Subordinated  Notes  Due 2007 (the "9 1/2%  Notes").
     The  9 1/2% Notes  were purchased  by the Initial Purchasers
     for  resale to  qualified  institutional investors.  The net
     proceeds  from the  sale  of the 9 1/2% Notes (approximately
     $121.5  million after the deduction  of a 2.75% discount  to
     the   Initial   Purchasers    and   offering   expenses   of
     approximately  $0.1 million),  were used  to  reduce amounts
     outstanding under the Rio  Bank Loan, thereby increasing the
     amount available under the Rio Bank Loan by the same amount.
     Pursuant to a registration agreement between the Company and
     the  Initial Purchasers,  the Company will  register on Form
     S-4 under  the Securities Act of 1933 $125 million principal
     amount of  9 1/2%  Senior  Subordinated  Notes Due 2007 (the
     "New Notes")  which will be  exchanged  for the 9 1/2% Notes
     (the 9 1/2%  Notes  and   the  New  Notes  are  collectively
     referred to as the "Subordinated Notes").
     
     The  Subordinated Notes were issued under an indenture  (the
     "New  Indenture") dated February 11, 1997 among the Company,
     Rio  Properties  and IBJ Schroder Bank & Trust  Company,  as
     trustee.  The following summary of certain provisions of the
     New Indenture does not purport to be complete and is subject
     to  the provisions of the New Indenture and the Subordinated
     Notes.   Capitalized terms not otherwise  defined  have  the
     same meanings assigned to them in the New Indenture.
     
     The  Subordinated Notes mature on April 15, 2007.   Interest
     payment dates under the Subordinated Notes are April 15  and
     October  15, commencing April 15, 1997.  Together  with  the
     10 5/8%  Notes,  the  Subordinated Notes are unconditionally
     guaranteed  (the  "Rio Guarantee") on a senior  subordinated
     basis  by  Rio  Properties.   The  Subordinated  Notes   are
     subordinated in right of payment to all existing and  future
     Senior Indebtedness (as defined in the New Indenture) of the
     Company  and  are structurally subordinated to all  existing
     and  future  indebtedness and other  liabilities  (including
     trade  payables)  of  the Company's subsidiaries.   The  Rio
     Guarantee  is  subordinated  in  right  of  payment  to  all
     existing and future Senior Indebtedness (as defined  in  the
     New   Indenture)  of  Rio  Properties  and  is  structurally
     subordinated  to  all existing and future  indebtedness  and
     other   liabilities  (including  trade  payables)   of   Rio
     Properties' subsidiaries.
     
     The  Subordinated Notes may be redeemed at the option of the
     Company, in whole or in part, at any time on or after  April
     15,  2002,  at the redemption prices set forth  in  the  New
     Indenture, plus accrued and unpaid interest, if any, through
     the  redemption  date.   The  Subordinated  Notes  will   be
     redeemed  from  any  holder  or  beneficial  owner  of   the
     Subordinated  Notes which is required to be  found  suitable
     and is not found suitable by the Nevada Gaming Commission.
     
     Upon  a Change of Control of the Company (as defined in  the
     New  Indenture), each holder of Subordinated Notes will have
     the  right to require the Company to repurchase all or  part
     of such holder's Subordinated Notes at a price equal to 101%
     of  the aggregate principal amount thereof, plus accrued 

                               41
<PAGE>

     and unpaid  interest,  if any,  to  the date of  repurchase.
     The  Company's  obligation  to  repurchase  the Subordinated
     Notes is  guaranteed  on  a senior subordinated basis by Rio
     Properties.  The  New  Indenture  contains certain covenants
     that,  among other things, limit the ability of the  Company
     and  its Restricted Subsidiaries  (as  defined  in  the  New
     Indenture)  to incur additional indebtedness, pay  dividends
     or make  other distributions,  make investments,  repurchase
     subordinated  obligations or  capital  stock, create certain
     liens    (except,  among  others,  liens   securing   Senior
     Indebtedness),    enter  into   certain  transactions   with
     affiliates, sell assets of the Company  or its subsidiaries,
     issue or sell  subsidiary stock, create or permit to   exist
     restrictions on distributions  from subsidiaries,  or  enter
     into certain mergers and consolidations.
     
12.  DEBT GUARANTEE

     Summarized financial information is provided below  for  Rio
     Properties,  the Company's principal wholly-owned  operating
     subsidiary,  as  sole  guarantor  to  the  Company's  $100.0
     million  10 5/8% Senior Subordinated Notes Due 2005 and  the
     $125.0  million 9 1/2% Senior  Subordinated  Notes  due 2007
     which  are  pari  passu  under the guarantee  (see  Footnote
     11  -  Subsequent  Event).  The two Subordinated Note issues
     are  fully  and unconditionally guaranteed by Rio Properties
     and are subordinated to all existing and future indebtedness
     and other liabilities  (including  trade  payables)  of  the
     Company's subsidiaries.
     
     Summarized  financial statements of Rio Properties have  not 
     been  prepared since the assets, pre-tax income and parents'
     net investment in the  non-guarantor  subsidiaries   on   an
     individual  and  combined  basis  are  inconsequential.   In
     addition, the Company's operations or assets other than  its
     investment  in  its  subsidiaries are inconsequential.   The
     difference  in  net  equity  between  the  Company  and  Rio
     Properties is principally a result of the Company's purchase
     in  1990  and  1992 of minority interests in  a  subsidiary,
     resulting in the payment of premiums of approximately  $13.7
     million  and $1.3 million, respectively.  The premiums  were
     allocated by the Company, based on fair market values, among
     land, building and equipment, furniture and improvements.
     
<TABLE>
<CAPTION>
                                           As of and for the Year Ended December 31,
                                          1996                 1995              1994
     <S>                               <C>                 <C>                 <C> 
     Current assets                    $30,139,122         $29,995,415         $85,120,465
     Non-current assets                448,469,956         262,320,009         199,788,372
     Current liabilities                56,301,870          33,216,257          44,662,313
     Non-current liabilities           253,949,282         110,176,765         110,146,869
     Revenues                          219,577,608         192,537,954         146,299,304
     Operating profit                   37,959,885          37,138,205          25,726,349
     Income before income taxes         29,744,600          29,451,596          23,925,361
     Net Income                         19,327,165          18,733,318          15,174,014

</TABLE>
     
     
ITEM 9.   CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
          ACCOUNTING AND FINANCIAL DISCLOSURE

          None

                               42
<PAGE>

PART III

ITEM 10.  DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

     This  information  is  incorporated by  reference  from  the
Company's  Proxy  Statement to be filed with  the  Commission  in
connection  with the Company's annual meeting of stockholders  on
May 22, 1997.

ITEM 11.  EXECUTIVE COMPENSATION

     This  information  is  incorporated by  reference  from  the
Company's  Proxy  Statement to be filed with  the  Commission  in
connection  with the Company's annual meeting of stockholders  on
May 22, 1997.

ITEM 12.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
          MANAGEMENT

     This  information  is  incorporated by  reference  from  the
Company's  Proxy  Statement to be filed with  the  Commission  in
connection  with the Company's annual meeting of stockholders  on
May 22, 1997.

ITEM 13.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

     This  information  is  incorporated by  reference  from  the
Company's  Proxy  Statement to be filed with  the  Commission  in
connection  with the Company's annual meeting of stockholders  on
May 22, 1997.

                               43
<PAGE>

PART IV

ITEM 14.  EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON
          FORM 8-K

          (a)  1.   FINANCIAL STATEMENTS

                    Included in Part II of this report:
               
                    Consolidated Balance Sheets  at December  31,
                    1996 and December 31, 1995.
               
                    Consolidated  Statements  of Income  for  the
                    Years Ended December 31, 1996, 1995 and 1994.
               
                    Consolidated   Statements   of  Stockholders'
                    Equity  for  the  Years  Ended  December  31,
                    1996, 1995 and 1994.
               
                    Consolidated  Statements of  Cash  Flows  for
                    the  Years Ended  December 31, 1996, 1995 and
                    1994.
               
                    Notes to Consolidated Financial Statements
               
               2.   FINANCIAL STATEMENT SCHEDULES

                    Included in Part IV of this report:
               
                    Schedule    III   -    Condensed    Financial
                    Information of Registrant
               
                    Schedule  VIII  -  Valuation  and  Qualifying
                    Accounts
               
                    Other  schedules  are  omitted because of the
                    absence  of  conditions  under which they are
                    required  or because the required information
                    is given in the financial statements or notes
                    thereto.
               
          (b)  REPORTS ON FORM 8-K

          No reports on Form 8-K have been filed by  the  Company
during the quarter ended December 31, 1996.

                               44
<PAGE>

ITEM 14.  EXHIBITS

NUMBER  EXHIBIT DESCRIPTION                                       
                                                                 
3.01    Amended  and  Restated Articles of Incorporation  of  Rio 
        Hotel   &   Casino,  Inc.  filed  July  19,   1994,   are
        incorporated herein by reference from the Company's  (SEC
        File  No.  0-13760) Report on Form 10-Q for  the  Quarter
        Ended June 30, 1994, Part II, Item 6(a), Exhibit 4.01.
                                                                 
3.02    Amended and Restated Bylaws of Rio Hotel & Casino,  Inc., 
        certified  March 20, 1997.
                                                                 
4.01    Specimen common stock certificate for the common stock of 
        Rio  Hotel  &  Casino,  Inc. is  incorporated  herein  by
        reference  from  the  Company's (SEC  File  No.  333-869)
        Registration Statement on Form S-3 filed on February  12,
        1996, Part II, Item 15, Exhibit 4.03.
                                                                 
4.02    Agreement and Plan of Exchange by and between Rio Hotel & 
        Casino,  Inc., a Nevada corporation, and Rio  Properties,
        Inc.,  a  Nevada corporation, dated August 14,  1992,  is
        incorporated herein by reference from the Company's  (SEC
        File  No.  33-51092) Registration Statement on  Form  S-3
        filed on August 24, 1992, Part II, Item 16, Exhibit 2.01.
                                                                 
4.03    Form  of Subscription and Exchange Agreement between  Rio 
        Properties, Inc., MarCor Resorts, Inc., and subscriber is
        incorporated herein by reference from the Company's  (SEC
        File  No.  33-51092) Registration Statement on  Form  S-3
        filed on August 24, 1992, Part II, Item 16, Exhibit 2.02.
                                                                 
4.04    Rio Hotel & Casino, Inc. Non-Statutory Stock Option Plan, 
        as  amended  September 5, 1991, as amended  February  28,
        1992  (to reflect change in Company name) and as  amended
        June  22, 1993, is incorporated herein by reference  from
        the   Company's  (SEC  File  No.  33-38752)  Registration
        Statement on Form S-8 filed on October 5, 1993, Part  II,
        Item 8, Exhibit 4.04.
                                                                 
4.05    Rio Hotel & Casino, Inc. Directors' Stock Option Plan  As 
        Amended  February 28, 1992 (to reflect change in  Company
        name  only) is incorporated herein by reference from  the
        Company's (SEC File No. 2-88147) Report on Form 10-K  for
        the  Year  Ended December 31, 1991, Part IV, Item  14(c),
        Exhibit 4.07.
                                                                 
4.06    Rio Suite Hotel & Casino Employee Retirement Savings Plan 
        Trust  Agreement dated February 11, 1991; First Amendment
        to  the  Rio  Suite  Hotel & Casino  Employee  Retirement
        Savings  Plan  dated March 20, 1992, effective  April  1,
        1992;  Second Amendment to the Rio Suite Hotel  &  Casino
        Employee  Retirement Savings Plan dated March  20,  1992,
        effective April 1, 1992; Third Amendment to the Rio Suite
        Hotel  &  Casino Employee Retirement Savings  Plan  dated
        December  14,  1992, effective August 15, 1992,  and  Rio
        Suite  Hotel  & Casino Employee Retirement Savings  Plan,
        Participant  Loan  Program  dated  March  19,  1992   are
        incorporated herein by reference from the Company's  (SEC
        File  No.  33-56860) Registration Statement on  Form  S-8
        filed January 8, 1993, Part II, Item 8, Exhibit 4.11; Rio
        Suite  Hotel & Casino Employment Retirement Savings  Plan
        dated  February  21,  1991  is  incorporated  herein   by
        reference  from  the  Company's (SEC File  No.  33-56860)
        Registration  Statement on Form  S-8  filed  February  3,
        1993, Part II, Item 8, Exhibit 4.11; Fourth Amendment  to
        the  Rio Suite Hotel & Casino Employee Retirement Savings
        Plan  dated April 30, 1993, effective July 1, 1993; Fifth
        Amendment  to  the  Rio Suite  Hotel  &  Casino  Employee
        Retirement Savings Plan dated August 17, 1993,  effective
        July  1,  1993; Sixth Amendment to the  Rio  Suite  Hotel
        &  Casino Employee Retirement Savings Plan dated

                                45
<PAGE>


        October 27, 1993,  effective  October  25,  1993; Seventh
        Amendment  to  the  Rio Suite  Hotel  &  Casino  Employee
        Retirement  Savings  Plan   Trust  Agreement   dated  and
        effective  December 16, 1993; and Eighth Amendment to the
        Rio Suite Hotel & Casino Employee Retirement Savings Plan
        dated May 3, 1994, effective May 1, 1994 are incorporated
        herein  by  reference  from  the Company's (SEC  File No.
        0-13760) Report on Form 10-Q  for  the Quarter Ended June
        30,  1994,  Part  II,  Item 6(a),   Exhibit  4.03;  Ninth
        Amendment  to  the  Rio  Suite  Hotel  &  Casino Employee
        Retirement Savings Plan dated  August 26, 1994, effective
        August 25, 1994;  Tenth Amendment to the Rio  Suite Hotel
        &  Casino  Employee Retirement  Savings  Plan  dated  and
        effective  January  1, 1995; and  Eleventh  Amendment  to
        the  Rio  Suite  Hotel  &  Casino   Employee   Retirement
        Savings  Plan  dated   and effective January 12, 1995 are
        incorporated  herein by reference   from   the  Company's
        (SEC File  No. 0-13760) Report on Form 10-K for the  Year
        Ended  December 31, 1994, Part IV,  Item  14(c),  Exhibit
        4.08.                                                                  

4.07    Rio  Hotel & Casino, Inc. 1995 Long-Term Incentive  Plan, 
        as amended March 20, 1997.
                                                                 
4.08    Credit Agreement among Bank of America National Trust and 
        Savings  Association,  as  agent  for  itself  and  other
        financial  institutions, as Lenders, and Rio  Properties,
        Inc.,  as  Borrower, dated July 15,  1993;  Line  A  Note
        executed  by Rio Properties, Inc., as Borrower, in  favor
        of   Bank   of   America  National  Trust   and   Savings
        Association,  in the amount of $9,692,307.70  dated  July
        15,  1993; Line A Note executed by Rio Properties,  Inc.,
        as  Borrower, in favor of Bank of America Nevada, in  the
        amount of $3,230,769.23, dated July 15, 1993; Line A Note
        executed  by Rio Properties, Inc., as Borrower, in  favor
        of  Societe  Generale,  in the amount  of  $6,461,538.46,
        dated  July  15,  1993;  Line  A  Note  executed  by  Rio
        Properties,  Inc.,  as Borrower, in favor  of  NBD  Bank,
        N.A.,  in  the  amount of $6,461,538.46, dated  July  15,
        1993;  Line A Note executed by Rio Properties,  Inc.,  as
        Borrower, in favor of First Security Bank of Idaho, N.A.,
        in the amount of $6,461,538.46, dated July 15, 1993; Line
        A  Note executed by Rio Properties, Inc., as Borrower, in
        favor  of First Interstate Bank of Nevada, N.A.,  in  the
        amount of $6,461,538.46, dated July 15, 1993; Line A Note
        executed  by Rio Properties, Inc., as Borrower, in  favor
        of  U.S.  Bank of Nevada, in the amount of $3,230,769.23,
        dated  July  15,  1993;  Line  B  Note  executed  by  Rio
        Properties,  Inc.,  as Borrower,  in  favor  of  Bank  of
        America  National Trust and Savings Association,  in  the
        amount of $5,307,692.30 dated July 15, 1993; Line B  Note
        executed  by Rio Properties, Inc., as Borrower, in  favor
        of   Bank   of   America  Nevada,  in   the   amount   of
        $1,769,230.77, dated July 15, 1993; Line B Note  executed
        by  Rio Properties, Inc., as Borrower, in favor of  First
        Interstate  Bank  of  Nevada,  N.A.,  in  the  amount  of
        $3,538,461.54, dated July 15, 1993; Line B Note  executed
        by  Rio Properties, Inc., as Borrower, in favor of  First
        Security   Bank  of  Idaho,  N.A.,  in  the   amount   of
        $3,538,461.54, dated July 15, 1993; Line B Note  executed
        by  Rio  Properties, Inc., as Borrower, in favor  of  NBD
        Bank,  N.A., in the amount of $3,538,461.54,  dated  July
        15,  1993; Line B Note executed by Rio Properties,  Inc.,
        as  Borrower, in favor of Societe Generale, in the amount
        of  $3,538,461.54,  dated July  15,  1993;  Line  B  Note
        executed  by Rio Properties, Inc., as Borrower, in  favor
        of  U.S.  Bank of Nevada, in the amount of $1,769,230.77,
        dated  July  15,  1993; Revolving Note  executed  by  Rio
        Properties,  Inc.,  as Borrower,  in  favor  of  Bank  of
        America  National Trust and Savings Association,  in  the
        amount  of  $15,000,000, dated July 15,  1993;  Revolving
        Note  executed by Rio Properties, Inc., as  Borrower,  in
        favor  of  Bank  of  America  Nevada,  in  the  amount of
        $5,000,000,   dated   July  15,  1993;   Revolving   Note
        executed by  Rio Properties, Inc., as Borrower,  in favor
        of First Interstate Bank of Nevada, N.A., in  the  amount
        of  $10,000,000,  dated  July 15, 1993;  Revolving   Note
        executed  by  Rio Properties, Inc., as Borrower, in favor
        of First Interstate Bank of Idaho, N.A., in the amount of
        $10,000,000, dated July 15, 1993; Revolving Note executed
        
                                46
<PAGE>

        by  Rio  Properties, Inc., as Borrower, in favor  of  NBD
        Bank, N.A., in the amount of $10,000,000, dated July  15,
        1993; Revolving Note executed by Rio Properties, Inc., as
        Borrower, in favor of Societe Generale, in the amount  of
        $10,000,000, dated July 15, 1993; Revolving Note executed
        by  Rio  Properties, Inc., as Borrower, in favor of  U.S.
        Bank  of Nevada, in the amount of $5,000,000, dated  July
        15,  1993; Security Agreement executed by Rio Properties,
        Inc.,  as  Debtor,  in favor of Bank of America  National
        Trust  and  Savings Association, as agent for itself  and
        other  financial  institutions, as Secured  Party,  dated
        July 15, 1993; Construction Deed of Trust With Assignment
        of  Rents and Fixture Filing among Rio Properties,  Inc.,
        as  Trustor, Equitable Deed Company, as Trustee, and Bank
        of  America  National Trust and Savings  Association,  as
        agent for itself and the other financial institutions, as
        Beneficiary,  dated  July 15, 1993;  Unsecured  Indemnity
        Agreement   executed   by  Rio   Properties,   Inc.,   as
        Indemnitor,  in  favor of Bank of America National  Trust
        and  Savings Association, as agent for itself  and  other
        financial  institutions, dated July  15,  1993;  Guaranty
        executed  by  Rio Hotel & Casino, Inc., as Guarantor,  in
        favor  of  Bank  of  America National Trust  and  Savings
        Association,  as  agent for itself  and  other  financial
        institutions, as Guaranteed Parties, dated July 15, 1993;
        and,  Parent Guarantor Security Agreement by Rio Hotel  &
        Casino,  Inc.,  as Debtor, in favor of  Bank  of  America
        National  Trust  and Savings Association,  as  agent  for
        itself  and  other  financial  institutions,  as  Secured
        Party,  dated July 15, 1993 are incorporated by reference
        from  the Company's (SEC File No. 2-88147) Report on Form
        8-K  dated July 15, 1993, Item 7(c), Exhibit 28.01; First
        Amendment  to  Credit Agreement dated as of  October  25,
        1993  and Second Amendment and Waiver to Credit Agreement
        dated  as of November 8, 1993 among Rio Properties, Inc.,
        Bank  of  America National Trust and Savings Association,
        Bank  of America Nevada, First Interstate Bank of Nevada,
        First  Security  Bank  of Idaho, N.A.,  NBD  Bank,  N.A.,
        Societe   Generale,   and  U.S.  Bank   of   Nevada   are
        incorporated  by reference from the Company's  (SEC  File
        No.  0-13760)   Report on Form 10-K for  the  Year  Ended
        December  31,  1993, Part IV, Item 14(c),  Exhibit  4.09;
        Third Amendment to Credit Agreement dated as of April 15,
        1994 among Rio Properties, Inc., Bank of America National
        Trust  and Savings Association, as Agent and as  a  Bank,
        Bank of America, Nevada, First Interstate Bank of Nevada,
        First  Security  Bank  of Idaho,  N.A,  NBD  Bank,  N.A.,
        Societe Generale, and U.S. Bank of Nevada; Memorandum  of
        Amendments   to   Credit  Agreement  and   Amendment   to
        Construction Deed of Trust with Assignment of  Rents  and
        Fixture Filing dated as of May 9, 1994 by Rio Properties,
        Inc.  and  Bank  of  America National Trust  and  Savings
        Association are incorporated herein by reference from the
        Company's (SEC File No. 0-13760) Report on Form 10-Q  for
        the  Quarter  Ended June 30, 1994, Part  II,  Item  6(a),
        Exhibit   No.  4.02;  and  Fourth  Amendment  to   Credit
        Agreement  among Rio Properties, Inc., as  Borrower,  and
        Bank  of  America National Trust and Savings Association,
        First  Interstate Bank of Nevada, First Security Bank  of
        Idaho,  N.A., NBD Bank, N.A., Societe Generale,  Bank  of
        America,  Nevada, U.S. Bank of Nevada, Bank  of  Scotland
        and   Midlantic  Bank,  N.A.,  as  Lenders;  and   Second
        Memorandum of Amendment to Credit Agreement and Amendment
        to  Construction Deed of Trust with Assignment  of  Rents
        and  Fixture Filing between Borrower and Bank of  America
        National  Trust  and Savings Association,  as  agent  for
        Lenders, dated December 16, 1994 are incorporated  herein
        by  reference  from the Company's (SEC File No.  0-13760)
        Report  on  Form 8-K dated December 16, 1994, Item  7(c),
        Exhibit 10.01; Fifth Amendment to Credit Agreement  dated
        as of March 20, 1995, among Rio Properties, Inc., Bank of
        America National Trust and Savings Association, as  Agent
        and as a Bank,  First Interstate  Bank  of Nevada,  First
        Security Bank  of Idaho, N.A., NBD  Bank,  N.A.,  Societe
        Generale,  Bank  of  America Nevada, U.S. Bank of Nevada,
        Bank of Scotland and Midlantic Bank, N.A., as  Banks,  is
        incorporated herein by reference from the Company's  (SEC
        File No. 0-13760) Report on Form 10-K for the Year  Ended
        December 31, 1994,  Part  IV, Item 14(c),  Exhibit 10.09;
        Sixth Amendment to 

                                47
<PAGE>

        Credit Agreement  dated  as  of  July  31, 1995 among Rio
        Properties, Inc.,  Bank  of  America  National Trust  and
        Savings Association, as Agent and as  a  Bank, and  First
        Interstate Bank of Nevada, First Security  Bank of Idaho,
        N.A.,  NBD Bank, N.A., Societe Generale, Bank of  America
        Nevada, U.S. Bank of Nevada, Bank  of Scotland, Midlantic
        Bank, N.A., and Bank of Hawaii, as Banks  is incorporated
        herein by reference from  the  Company's  (SEC  File  No.
        0-13760) Report  on  Form 8-K  dated September  15, 1995,
        Item 7(c), Exhibit  4.01;  Seventh  Amendment  to  Credit
        Agreement  dated  as  of  January  17,  1996  among   Rio
        Properties, Inc.,  Bank  of  America  National Trust  and
        Savings  Association, as Agent and as a Bank,  and  First
        Interstate Bank of Nevada, First Security Bank of  Idaho,
        N.A., Societe Generale, Bank of America Nevada, U.S. Bank
        of  Nevada,  Bank  of  Scotland,  Midlantic  Bank,  N.A.,
        and Bank of  Hawaii,  as Banks is  incorporated herein by
        reference  from  the  Company's  (SEC  File No.  1-11569)
        Report on Form 10-K for the Year Ended December 31, 1995,
        Part IV, Item 14(c), Exhibit 4.08;  Eighth  Amendment  to
        Credit Agreement dated  as  of  June  17, 1996  among Rio
        Properties, Inc. and Bank of America  National  Trust and
        Savings Association,  as  Agent,  and  Wells  Fargo  Bank
        National  Association,  First  Security  Bank  of  Idaho,
        N.A.,   NBD   Bank,   Societe Generale,  Bank  of America
        Nevada,    U.S.   Bank   of  Nevada,  Bank  of  Scotland,
        Midlantic  Bank,  N.A., and Bank  of  Hawaii,  as  Banks,
        is incorporated herein by reference  from  the  Company's
        (SEC  File  No.  1-11569)  Report  on Form 10-Q  for  the
        Quarter Ended June 30, 1996, Item  6(a),  Exhibit  10.01;
        Ninth  Amendment  to  Credit   Agreement   dated   as  of
        January  13, 1997 among  Rio  Properties,  Inc.  and  Rio
        Leasing,  Inc.,  and  Bank of  America National  Trust  &
        Savings  Association,  as Agent and a  Bank,  and   Wells
        Fargo   Bank  National Association,  First Security  Bank
        of Utah,  N.A.,  NBD  Bank, Societe Generale,  U.S.  Bank
        of  Nevada,  Bank   of  Scotland,   PNC   Bank,  National
        Association, successor by  merger  to   Midlantic   Bank,
        N.A.   and   Bank   of  Hawaii,  as   Banks;   and  Tenth
        Amendment   to  Credit Agreement  dated  as  of  February
        3,  1997   among  Rio Properties, Inc. and  Rio  Leasing,
        Inc., and  Bank  of America  National Trust and   Savings
        Association,  as Agent   and  a  Bank,  and  Wells  Fargo
        Bank  National Association, First  Security  Bank,  N.A.,
        NBD  Bank, Societe   Generale,  U.S.  Bank   of   Nevada,
        Bank  of  Scotland,   PNC   Bank,   National Association,
        successor by   merger   to   Midlantic  Bank,  N.A.,  and
        Bank  of Hawaii, as Banks.

4.09    Indenture  dated as of July 21, 1995, among Rio  Hotel  & 
        Casino, Inc., Rio Properties, Inc. and IBJ Schroder  Bank
        &   Trust   Company  for  the  Company's  10 5/8%  Senior
        Subordinated  Notes  Due 2005 is incorporated  herein  by
        reference  from  the  Company's (SEC  File  No.  0-13760)
        Report  on  Form  8-K  dated July 18,  1995,  Item  7(c),
        Exhibit 4.3.
                                                                 
4.10    Indenture dated as of February 11, 1997, among Rio  Hotel 
        &  Casino,  Inc., Rio Properties, Inc. and  IBJ  Schroder
        Bank  &  Trust  Company for the Company's  9 1/2%  Senior
        Subordinated  Notes  Due 2007 is incorporated  herein  by
        reference  from  the  Company's (SEC  File  No.  0-13760)
        Report  on  Form 8-K dated February 4, 1997,  Item  7(c),
        Exhibit 4.3.
                                                                 
4.11    Registration Agreement dated July 18, 1995 by Rio Hotel & 
        Casino,  Inc.  and  accepted July  18,  1995  by  Salomon
        Brothers  Inc  and Montgomery Securities is  incorporated
        herein  by reference from the Company's (SEC File No.  0-
        13760) Report on Form 8-K dated July 18, 1995, Item 7(c),
        Exhibit 4.2.
                                                                 
4.12    Registration  Agreement dated February  4,  1997  by  Rio 
        Hotel  &  Casino, Inc., Rio Properties, Inc. and accepted
        February  4, 1997 by Salomon Brothers Inc and BancAmerica
        Securities, Inc. is incorporated herein by reference from
        the  Company's (SEC File No. 0-13760) Report on Form  8-K
        dated February 4, 1997, Item 7(c), Exhibit 4.2.

                                  48
<PAGE>
                                                                 
4.13    Form  of  Letter  of Transmittal to IBJ Schroder  Bank  & 
        Trust  Company as Exchange Agent for exchange  of 10 5/8%
        Senior Subordinated Notes Due 2005 is incorporated herein
        by  reference from the Company's (SEC File No.  33-62163)
        Registration Statement on Form S-4 filed August 28, 1995,
        Part II, Item 21(a), Exhibit 4.14.
                                                                  
10.01   Agreement  by  and  among MarCor  Resorts  Inc.,  Marnell 
        Corrao,  Inc.,  Marnell Corrao Associates,  Inc.,  MarCor
        Partnership,  The Anthony A. Marnell II Revocable  Living
        Trust  dated June 16, 1982, Anthony A. Marnell II, Sandra
        J.  Marnell, Barrett Family Revocable Living Trust  dated
        December  18, 1981, James A. Barrett, Jr. and Maureen  M.
        Barrett  dated February 22, 1989, is incorporated  herein
        by  reference  from the Company's (SEC File No.  0-13760)
        Annual  Report  on Form 10-K for the Year Ended  December
        31,  1994,  Part  IV,  Item 14(c), Exhibit  10.01;  First
        Amendment  to  Agreement dated October 25,  1993  by  and
        among      Rio     Hotel    &    Casino,    Inc.,     and 
        Marnell Corrao, Inc., Marnell  Corrao  Associates,  Inc.,
        MarCor Partnership, Anthony A. Marnell II, Barrett Family
        Revocable  Living Trust dated December 18, 1981, James A.
        Barrett, Jr.  and  Maureen M. Barrett incorporated herein
        by reference  from  the  Company's (SEC File No. 0-13760)
        Report on Form 10-K for the Year Ended December 31, 1993,
        Part IV, Item 14(c), Exhibit 10.01.
                                                                 
10.02   Interest  Rate Swap Agreement dated as of July  28,  1993 
        between Rio Properties, Inc. and Bank of America National
        Trust  and Savings Association is incorporated herein  by
        reference  from  the  Company's (SEC  File  No.  0-13760)
        Report on Form 10-K for the Year Ended December 31, 1993,
        Part IV, Item 14(c), Exhibit 10.11.
                                                                  
10.03   Architectural Agreement entered into as of  February  25, 
        1994  between  Rio Hotel & Casino, Inc.,  as  Owner,  and
        Anthony  A.  Marnell  II,  Chartered,  as  Architect,  is
        incorporated herein by reference from the Company's  (SEC
        File No. 0-13760), Report on Form 10-K for the Year Ended
        December 31, 1993, Part IV, Item 14(c), Exhibit 10.12.
                                                                 
10.04   Building  Contract entered into as of February  25,  1994 
        between  Marnell  Corrao  Associates,  Inc.,  as  General
        Contractor,  and  Rio  Properties,  Inc.,  as  Owner,  is
        incorporated herein by reference from the Company's  (SEC
        File  No. 0-13760) Report on Form 10-K for the Year Ended
        December 31, 1993, Part IV, Item 14(c), Exhibit 10.13.
                                                                  
10.05   Architectural  Agreement entered into as of  February  9, 
        1995  between  Rio Hotel & Casino, Inc.,  as  Owner,  and
        Anthony   A.   Marnell,  Chartered,  as   Architect,   is
        incorporated herein by reference from the Company's  (SEC
        File No. 0-13760) Annual Report on Form 10-K for the Year
        Ended  December  31, 1994, Part IV, Item  14(c),  Exhibit
        10.08.
                                                                 
10.06   Building  Contract entered into as of February  27,  1995 
        between  Marnell  Corrao  Associates,  Inc.,  as  General
        Contractor,  and  Rio  Properties,  Inc.,  as  Owner,  is
        incorporated herein by reference from the Company's  (SEC
        File No. 0-13760) Annual Report on Form 10-K for the Year
        Ended  December  31, 1994, Part IV, Item  14(c),  Exhibit
        10.09.
                                                                  
10.07   Real  Estate Purchase and Sale Agreement entered into  as 
        of  January 25, 1995 between Focus 2000, Inc., as Seller,
        and  Rio  Properties,  Inc., as  Buyer,  is  incorporated
        herein  by reference from the Company's (SEC File No.  0-
        13760)  Annual  Report on Form 10-K for  the  Year  Ended
        December 31, 1994, Part IV, Item 14(c), Exhibit 10.10.
                  
                                   49
<PAGE>
                                          
10.08   Exchange  Agreement entered into as of  January  6,  1995 
        between Allied Building Materials, Cinderlane, Inc.,  and
        Rio  Hotel  &  Casino,  Inc. is  incorporated  herein  by
        reference  from  the  Company's (SEC  File  No.  0-13760)
        Annual  Report  on Form 10-K for the Year Ended  December
        31, 1994, Part IV, Item 14(c), Exhibit 10.11.
                                                                  
10.09   Letter  Agreement  regarding Rate Cap  Transaction  dated 
        August  11,  1994 between Bank of America National  Trust
        and  Savings  Association  and Rio  Properties,  Inc.  is
        incorporated herein by reference from the Company's  (SEC
        File No. 0-13760) Annual Report on Form 10-K for the Year
        Ended  December  31, 1994, Part IV, Item  14(c),  Exhibit
        10.12.
                                                                 
10.10   Architectural Agreement entered into as of July 27,  1995 
        between  Rio Hotel & Casino, Inc., as Owner, and  Anthony
        A.  Marnell  II,  Chtd.,  as Architect,  is  incorporated
        herein by reference from the Company's (SEC File  No. 333
        -869)  Registration  Statement  on  Form  S-3,  filed  on
        February 12, 1996, Part II, Item 16, Exhibit 10.10.
                                                                 
10.11   Building Contract entered into as of August 14,  1995  by  
        and  between Marnell Corrao Associates, Inc., as  General
        Contractor,  and  Rio  Properties,  Inc.,  as  Owner,  is
        incorporated herein by reference from the Company's  (SEC
        File  No.  333-869) Registration Statement on  Form  S-3,
        filed  on  February 12, 1996, Part II, Item  16,  Exhibit
        10.11.
                                                                 
10.12   Employment  Agreement  dated  as  of  November  25,  1996 
        between Rio Hotel & Casino,  Inc.  and  David P.  Hanlon;
        Employment Agreement dated  as of  March 7, 1997  between
        Rio  Hotel  &  Casino,  Inc.  and  Ronald  J.   Radcliff; 
        Employment Agreement dated  as of  March 7, 1997  between 
        Rio Hotel & Casino, Inc. and I. Scott Bogatz.

21.01   List of the Company's subsidiaries is incorporated herein
        by  reference from the Company's (SEC File No. 333-23895)
        Registration  Statement  on Form S-4,  filed on March 24, 
        1997, Part II, Item 21(a), Exhibit 21.01.                       
                                                                 
23.01   Consent of Arthur Andersen LLP.                           
                                                                 
27.01   Financial Data Schedule.                                  
                                                                 
                               50
<PAGE>

<TABLE>
<CAPTION>

                    RIO HOTEL & CASINO, INC. AND SUBSIDIARIES
          SCHEDULE III - CONDENSED FINANCIAL INFORMATION OF REGISTRANT
                                  BALANCE SHEETS


                                                                      December 31,

                                                              1996                   1995
                             ASSETS
<S>                                                    <C>                    <C>
Current assets:
   Cash and cash equivalents                           $    469,063           $     85,885
   Accounts receivable                                            -                    537
   Accounts receivable from affiliates                            -                      -
      Total current assets                                  469,063                 86,422

Other assets:
   Investments in subsidiaries                          192,031,880            172,308,025
   Other, net                                             3,140,906              2,570,623
                                                        195,172,786            174,878,648
                                                       $195,641,849           $174,965,070

                LIABILITIES AND STOCKHOLDERS' EQUITY

Non-current liabilities due to subsidiaries            $ 13,766,619           $ 12,077,170

Stockholders' equity
   Common Stock, $0.01 par value;
      100,000,000 shares authorized;
      21,139,146 (1995) and 21,371,346 (1994)
      shares issued and outstanding                         211,705                211,392
   Additional paid-in capital                           113,140,798            113,520,158
   Retained earnings                                     68,522,727             49,156,350
      Total stockholders' equity                        181,875,230            162,887,900
                                                       $195,641,849           $174,965,070


                      See Accompanying Notes to Consolidated Financial Statements
</TABLE>

                                           51
<PAGE>
<TABLE>
<CAPTION>

                   RIO HOTEL & CASINO, INC. AND SUBSIDIARIES
         SCHEDULE III - CONDENSED FINANCIAL INFORMATION OF REGISTRANT
                             RIO HOTEL & CASINO, INC.
                               STATEMENT OF INCOME

                                                     For the Year Ended December 31,

                                           1996                 1995                 1994
<S>                                    <C>                 <C>                   <C>
Revenues                        
   Interest Income                     $     3,884         $     1,144           $     2,537
   Other revenues                                -                   -               966,510
   Subsidiary earnings                  19,612,493          18,994,335            15,267,612
                                        19,616,377          18,995,479            16,236,659

Costs and Expenses:
   General and administrative              250,000             250,000               270,250
                                           250,000             250,000               270,250
       Net income                      $19,366,377         $18,745,479           $15,966,409



                  See Accompanying Notes to Consolidated Financial Statements
</TABLE>

                                       52
<PAGE>

<TABLE>
<CAPTION>

                          RIO HOTEL & CASINO, INC. AND SUBSIDIARIES
               SCHEDULE III - CONDENSED FINANCIAL INFORMATION OF REGISTRANT
                                   RIO HOTEL & CASINO, INC.
                                   STATEMENT OF CASH FLOW

                                                                 For the Year Ended December 31,

                                                          1995                1994                1993

<S>                                                 <C>                 <C>                 <C>
Cash flows from operating activities:
  Net income                                        $  18,745,479       $  15,966,409       $  10,649,392

  Adjustments to reconcile net income to net
  cash provided by (used in) operating activities:
  Earnings from subsidiary investments                (18,994,335)        (15,267,612)        (10,592,688)

  (Increase) decrease in assets:
    Receivables                                               350              64,113             (79,821)
    Prepaid expenses and other current assets                   -                   -              13,811
    Due from (to) subsidiaries                          4,715,730          (1,820,498)         (1,077,493)
    Other, net                                                  -                   -               3,719
  Decrease in liabilities:
    Accounts payable-trade                                      -             (25,000)           (164,770)
  Net cash  provided by (used in) operating 
    activities                                          4,467,224          (1,082,588)         (1,247,850)

Cash flows from investing activities:
  Investments in subisidiaries                                  -             (14,390)        (30,730,375)
  Net cash used in investing activities                         -             (14,390)        (30,730,375)

Cash flows from financing activities:
  Net proceeds from common stock issuance                 969,251           1,022,700          32,506,200
  Common stock offerings cost                                   -            (119,529)           (456,821)
  Repurchase of common stock                           (5,386,225)                  -                   -
  Net cash used in (provided by) financing 
    activities                                         (4,416,974)            903,171          32,049,379
  Net increase (decrease) in cash and
    cash equivalents                                       50,250            (193,807)             71,154
  Cash and cash equivalents, beginning of period           35,635             229,442             158,288
  Cash and cash equivalents, end of period          $      85,885       $      35,635       $     229,442



                  See Accompanying Notes to Consolidated Financial Statements
</TABLE>

                                           53
<PAGE>
<TABLE>
<CAPTION>

                          RIO HOTEL & CASINO, INC. AND SUBSIDIARIES
                 SCHEDULE III - CONDENSED FINANCIAL INFORMATION OF REGISTRANT
                                  RIO HOTEL & CASINO, INC.
                                  STATEMENT OF CASH FLOW

                                                                    For the Year Ended December 31,

                                                              1996                1995               1994
<S>                                                     <C>                <C>                <C>
Cash flows from operating activities:
  Net income                                            $  19,366,377      $  18,745,479      $  15,966,409

  Adjustments to reconcile net income to net
  cash provided by (used in) operating activities:
  Earnings from subsidiary investments                    (19,612,493)       (18,994,335)       (15,267,612)

  (Increase) decrease in assets:
    Receivables                                                   537                350             64,113
    Prepaid expenses and other current assets                       -                  -                  -
    Due from (to) subsidiaries                              1,686,447          4,715,730         (1,820,498)
    Other, net                                                      -                  -                  -
  Decrease in liabilities:
    Accounts payable-trade                                          -                  -            (25,000)
  Net cash  provided by (used in) operating 
    activities                                              1,440,868          4,467,224         (1,082,588)

Cash flows from investing activities:
  Investments in subisidiaries                                      -                  -            (14,390)
  Net cash used in investing activities                             -                  -            (14,390)

Cash flows from financing activities:
  Net proceeds from common stock issuance                   1,162,910            969,251          1,022,700
  Common stock offerings cost                                       -                  -           (119,529)
  Repurchase of common stock                               (2,220,600)        (5,386,225)                 -
  Net cash used in (provided by) financing activities      (1,057,690)        (4,416,974)           903,171
  Net increase (decrease) in cash and
    cash equivalents                                          383,178             50,250           (193,807)
  Cash and cash equivalents, beginning of period               85,885             35,635            229,442
  Cash and cash equivalents, end of period              $     469,063      $      85,885      $      35,635


                 See Accompanying Notes to Consolidated Financial Statements
</TABLE>

                                         54
<PAGE>
<TABLE>
<CAPTION>

                  RIO HOTEL & CASINO, INC. AND SUBSIDIARIES
             SCHEDULE VIII - VALUATION AND QUALIFYING ACCOUNTS
                For the Three Years Ended December 31, 1996


<S>                                                     <C>
Balance, December 31, 1993                              $   379,363

        Additions charged to income                         512,999

        Accounts written off, less recoveries              (413,227)



Balance, December 31, 1994                                  479,135

        Additions charged to income                       1,002,463

        Accounts written off, less recoveries              (656,906)



Balance, December 31, 1995                                  824,692

        Additions charged to income                       1,070,813

        Accounts written off, less recoveries              (778,675)

Balance, December 31, 1996                              $ 1,116,830

   See Accompanying Notes to Consolidated Financial Statements

</TABLE>

                               55
<PAGE>
                           SIGNATURES
                                
     Pursuant to the requirements of Section 13 or 15(d)  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.
                                 
                                 
March 15, 1996                   By:  /s/ Ronald J. Radcliffe
                                      Ronald J. Radcliffe,
                                       Vice President, Treasurer
                                       and Chief Financial Officer
     
     
     Pursuant to the requirements of the Securities Exchange  Act
of  1934,  this  report has been signed below  by  the  following
persons on behalf of the registrant and in the capacities and  on
the dates indicated.

<TABLE>
<CAPTION>

          SIGNATURE                              TITLE                                 DATE
<S>                             <C>                                               <C>
/s/ Anthony A. Marnell II        Chairman of the Board of Directors and Chief      March 15, 1997
Anthony A. Marnell II            Executive Officer (Principal Executive                  
                                 Officer)
                                                       
                                                       
/s/ James A. Barrett, Jr.        President and Director                            March 15, 1997
James A. Barrett, Jr.
                                                   
                                                       
/s/ David P. Hanlon              Executive Vice President, Chief Operating         March 15, 1997
David P. Hanlon                  Officer and Director               
                                                       
                                                       
/s/ Ronald J. Radcliffe          Vice President, Treasurer and Chief               March 15, 1997
Ronald J. Radcliffe              Financial Officer (Principal Financial
                                 and Accounting Officer)
                                                       
                                                       
/s/ John A. Stuart               Director                                          March 15, 1997
John A. Stuart                                         
                                                       
                                                       
/s/ Thomas Y. Hartley            Director                                          March 15, 1997
Thomas Y. Hartley                                      
                                                       
                                                       
/s/ Peter M. Thomas              Director                                          March 15, 1997
Peter M. Thomas                                        

</TABLE>
                               56
<PAGE>
       
                          EXHIBIT INDEX
                                

NUMBER  EXHIBIT DESCRIPTION                                       PAGE

3.01    Amended  and  Restated Articles of Incorporation  of  Rio 
        Hotel   &   Casino,  Inc.  filed  July  19,   1994,   are
        incorporated herein by reference from the Company's  (SEC
        File  No.  0-13760) Report on Form 10-Q for  the  Quarter
        Ended June 30, 1994, Part II, Item 6(a), Exhibit 4.01.
                                                                 
3.02    Amended and Restated Bylaws of Rio Hotel & Casino,  Inc.,   63
        certified  March 20, 1997.
                                                                 
4.01    Specimen common stock certificate for the common stock of 
        Rio  Hotel  &  Casino,  Inc. is  incorporated  herein  by
        reference  from  the  Company's (SEC  File  No.  333-869)
        Registration Statement on Form S-3 filed on February  12,
        1996, Part II, Item 15, Exhibit 4.03.
                                                                 
4.02    Agreement and Plan of Exchange by and between Rio Hotel & 
        Casino,  Inc., a Nevada corporation, and Rio  Properties,
        Inc.,  a  Nevada corporation, dated August 14,  1992,  is
        incorporated herein by reference from the Company's  (SEC
        File  No.  33-51092) Registration Statement on  Form  S-3
        filed on August 24, 1992, Part II, Item 16, Exhibit 2.01.
                                                                 
4.03    Form  of Subscription and Exchange Agreement between  Rio 
        Properties, Inc., MarCor Resorts, Inc., and subscriber is
        incorporated herein by reference from the Company's  (SEC
        File  No.  33-51092) Registration Statement on  Form  S-3
        filed on August 24, 1992, Part II, Item 16, Exhibit 2.02.
                                                                 
4.04    Rio Hotel & Casino, Inc. Non-Statutory Stock Option Plan, 
        as  amended  September 5, 1991, as amended  February  28,
        1992  (to reflect change in Company name) and as  amended
        June  22, 1993, is incorporated herein by reference  from
        the   Company's  (SEC  File  No.  33-38752)  Registration
        Statement on Form S-8 filed on October 5, 1993, Part  II,
        Item 8, Exhibit 4.04.
                                                                 
4.05    Rio Hotel & Casino, Inc. Directors' Stock Option Plan  As 
        Amended  February 28, 1992 (to reflect change in  Company
        name  only) is incorporated herein by reference from  the
        Company's (SEC File No. 2-88147) Report on Form 10-K  for
        the  Year  Ended December 31, 1991, Part IV, Item  14(c),
        Exhibit 4.07.
                                                                 
4.06    Rio Suite Hotel & Casino Employee Retirement Savings Plan 
        Trust  Agreement dated February 11, 1991; First Amendment
        to  the  Rio  Suite  Hotel & Casino  Employee  Retirement
        Savings  Plan  dated March 20, 1992, effective  April  1,
        1992;  Second Amendment to the Rio Suite Hotel  &  Casino
        Employee  Retirement Savings Plan dated March  20,  1992,
        effective April 1, 1992; Third Amendment to the Rio Suite
        Hotel  &  Casino Employee Retirement Savings  Plan  dated
        December  14,  1992, effective August 15, 1992,  and  Rio
        Suite  Hotel  & Casino Employee Retirement Savings  Plan,
        Participant  Loan  Program  dated  March  19,  1992   are
        incorporated herein by reference from the Company's  (SEC
        File  No.  33-56860) Registration Statement on  Form  S-8
        filed January 8, 1993, Part II, Item 8, Exhibit 4.11; Rio
        Suite  Hotel & Casino Employment Retirement Savings  Plan
        dated  February  21,  1991  is  incorporated  herein   by
        reference  from  the  Company's (SEC File  No.  33-56860)
        Registration  Statement on Form  S-8  filed  February  3,
        1993, Part II, Item 8, Exhibit 4.11; Fourth Amendment  to
        the  Rio Suite Hotel & Casino Employee Retirement Savings
        Plan  dated April 30, 1993, effective July 1, 1993; Fifth
        Amendment  to the Rio  

                                     57
<PAGE>

        Suite   Hotel  &  Casino   Employee  Retirement   Savings
        Plan dated August 17, 1993, effective July 1, 1993; Sixth
        Amendment  to the  Rio  Suite  Hotel  &  Casino  Employee
        Retirement Savings Plan dated October 27, 1993, effective
        October  25, 1993; Seventh  Amendment  to  the  Rio Suite
        Hotel  &   Casino   Employee   Retirement  Savings   Plan
        Trust    Agreement    dated    and   effective   December
        16, 1993;  and  Eighth  Amendment  to the Rio Suite Hotel 
        & Casino Employee Retirement  Savings Plan  dated May  3, 
        1994,  effective May 1, 1994 are incorporated  herein  by
        reference from the Company's (SEC File No. 0-13760) Report 
        on Form 10-Q for the Quarter Ended June 30, 1994, Part II,
        Item 6(a), Exhibit 4.03; Ninth Amendment to the Rio Suite 
        Hotel  &  Casino  Employee  Retirement Savings Plan dated  
        August   26,  1994,  effective  August  25,  1994;  Tenth 
        Amendment to  the  Rio  Suite  Hotel  &  Casino  Employee 
        Retirement  Savings Plan dated and effective  January  1,
        1995; and  Eleventh  Amendment  to  the  Rio Suite  Hotel
        & Casino   Employee Retirement Savings  Plan  dated   and
        effective  January  12, 1995 are  incorporated  herein by 
        reference  from  the  Company's  (SEC  File  No. 0-13760)
        Report on Form  10-K  for  the  Year  Ended  December 31, 
        1994, Part IV, Item 14(c), Exhibit 4.08.
                                                                 
4.07    Rio  Hotel & Casino, Inc. 1995 Long-Term Incentive  Plan,   79 
        as amended March 20, 1997.
                                                                 
4.08    Credit Agreement among Bank of America National Trust and   89 
        Savings  Association,  as  agent  for  itself  and  other
        financial  institutions, as Lenders, and Rio  Properties,
        Inc.,  as  Borrower, dated July 15,  1993;  Line  A  Note
        executed  by Rio Properties, Inc., as Borrower, in  favor
        of   Bank   of   America  National  Trust   and   Savings
        Association,  in the amount of $9,692,307.70  dated  July
        15,  1993; Line A Note executed by Rio Properties,  Inc.,
        as  Borrower, in favor of Bank of America Nevada, in  the
        amount of $3,230,769.23, dated July 15, 1993; Line A Note
        executed  by Rio Properties, Inc., as Borrower, in  favor
        of  Societe  Generale,  in the amount  of  $6,461,538.46,
        dated  July  15,  1993;  Line  A  Note  executed  by  Rio
        Properties,  Inc.,  as Borrower, in favor  of  NBD  Bank,
        N.A.,  in  the  amount of $6,461,538.46, dated  July  15,
        1993;  Line A Note executed by Rio Properties,  Inc.,  as
        Borrower, in favor of First Security Bank of Idaho, N.A.,
        in the amount of $6,461,538.46, dated July 15, 1993; Line
        A  Note executed by Rio Properties, Inc., as Borrower, in
        favor  of First Interstate Bank of Nevada, N.A.,  in  the
        amount of $6,461,538.46, dated July 15, 1993; Line A Note
        executed  by Rio Properties, Inc., as Borrower, in  favor
        of  U.S.  Bank of Nevada, in the amount of $3,230,769.23,
        dated  July  15,  1993;  Line  B  Note  executed  by  Rio
        Properties,  Inc.,  as Borrower,  in  favor  of  Bank  of
        America  National Trust and Savings Association,  in  the
        amount of $5,307,692.30 dated July 15, 1993; Line B  Note
        executed  by Rio Properties, Inc., as Borrower, in  favor
        of   Bank   of   America  Nevada,  in   the   amount   of
        $1,769,230.77, dated July 15, 1993; Line B Note  executed
        by  Rio Properties, Inc., as Borrower, in favor of  First
        Interstate  Bank  of  Nevada,  N.A.,  in  the  amount  of
        $3,538,461.54, dated July 15, 1993; Line B Note  executed
        by  Rio Properties, Inc., as Borrower, in favor of  First
        Security   Bank  of  Idaho,  N.A.,  in  the   amount   of
        $3,538,461.54, dated July 15, 1993; Line B Note  executed
        by  Rio  Properties, Inc., as Borrower, in favor  of  NBD
        Bank,  N.A., in the amount of $3,538,461.54,  dated  July
        15,  1993; Line B Note executed by Rio Properties,  Inc.,
        as  Borrower, in favor of Societe Generale, in the amount
        of  $3,538,461.54,  dated July  15,  1993;  Line  B  Note
        executed  by Rio Properties, Inc., as Borrower, in  favor
        of  U.S.  Bank of Nevada, in the amount of $1,769,230.77,
        dated  July  15,  1993; Revolving Note  executed  by  Rio
        Properties,  Inc.,  as Borrower,  in  favor  of  Bank  of
        America  National Trust and Savings Association,  in  the
        amount  of  $15,000,000, dated July 15,  1993;  Revolving
        Note  executed by Rio Properties, Inc., as  Borrower,  in
        favor   of   Bank  of   America  Nevada,  in  the  amount
        of  $5,000,000,  dated  July  15, 1993;  Revolving   Note
        executed by  Rio Properties, Inc., as Borrower,  in favor
        of First Interstate Bank of Nevada, N.A., in  the  amount
        
                                   58
<PAGE>

        of  $10,000,000,  dated  July 15, 1993;  Revolving   Note
        executed  by  Rio Properties, Inc., as Borrower, in favor
        of First Interstate Bank of Idaho, N.A., in the amount of
        $10,000,000, dated July 15, 1993; Revolving Note executed
        by  Rio  Properties, Inc., as Borrower, in favor  of  NBD
        Bank, N.A., in the amount of $10,000,000, dated July  15,
        1993; Revolving Note executed by Rio Properties, Inc., as
        Borrower, in favor of Societe Generale, in the amount  of
        $10,000,000, dated July 15, 1993; Revolving Note executed
        by  Rio  Properties, Inc., as Borrower, in favor of  U.S.
        Bank  of Nevada, in the amount of $5,000,000, dated  July
        15,  1993; Security Agreement executed by Rio Properties,
        Inc.,  as  Debtor,  in favor of Bank of America  National
        Trust  and  Savings Association, as agent for itself  and
        other  financial  institutions, as Secured  Party,  dated
        July 15, 1993; Construction Deed of Trust With Assignment
        of  Rents and Fixture Filing among Rio Properties,  Inc.,
        as  Trustor, Equitable Deed Company, as Trustee, and Bank
        of  America  National Trust and Savings  Association,  as
        agent for itself and the other financial institutions, as
        Beneficiary,  dated  July 15, 1993;  Unsecured  Indemnity
        Agreement   executed   by  Rio   Properties,   Inc.,   as
        Indemnitor,  in  favor of Bank of America National  Trust
        and  Savings Association, as agent for itself  and  other
        financial  institutions, dated July  15,  1993;  Guaranty
        executed  by  Rio Hotel & Casino, Inc., as Guarantor,  in
        favor  of  Bank  of  America National Trust  and  Savings
        Association,  as  agent for itself  and  other  financial
        institutions, as Guaranteed Parties, dated July 15, 1993;
        and,  Parent Guarantor Security Agreement by Rio Hotel  &
        Casino,  Inc.,  as Debtor, in favor of  Bank  of  America
        National  Trust  and Savings Association,  as  agent  for
        itself  and  other  financial  institutions,  as  Secured
        Party,  dated July 15, 1993 are incorporated by reference
        from  the Company's (SEC File No. 2-88147) Report on Form
        8-K  dated July 15, 1993, Item 7(c), Exhibit 28.01; First
        Amendment  to  Credit Agreement dated as of  October  25,
        1993  and Second Amendment and Waiver to Credit Agreement
        dated  as of November 8, 1993 among Rio Properties, Inc.,
        Bank  of  America National Trust and Savings Association,
        Bank  of America Nevada, First Interstate Bank of Nevada,
        First  Security  Bank  of Idaho, N.A.,  NBD  Bank,  N.A.,
        Societe   Generale,   and  U.S.  Bank   of   Nevada   are
        incorporated  by reference from the Company's  (SEC  File
        No.  0-13760)   Report on Form 10-K for  the  Year  Ended
        December  31,  1993, Part IV, Item 14(c),  Exhibit  4.09;
        Third Amendment to Credit Agreement dated as of April 15,
        1994 among Rio Properties, Inc., Bank of America National
        Trust  and Savings Association, as Agent and as  a  Bank,
        Bank of America, Nevada, First Interstate Bank of Nevada,
        First  Security  Bank  of Idaho,  N.A,  NBD  Bank,  N.A.,
        Societe Generale, and U.S. Bank of Nevada; Memorandum  of
        Amendments   to   Credit  Agreement  and   Amendment   to
        Construction Deed of Trust with Assignment of  Rents  and
        Fixture Filing dated as of May 9, 1994 by Rio Properties,
        Inc.  and  Bank  of  America National Trust  and  Savings
        Association are incorporated herein by reference from the
        Company's (SEC File No. 0-13760) Report on Form 10-Q  for
        the  Quarter  Ended June 30, 1994, Part  II,  Item  6(a),
        Exhibit   No.  4.02;  and  Fourth  Amendment  to   Credit
        Agreement  among Rio Properties, Inc., as  Borrower,  and
        Bank  of  America National Trust and Savings Association,
        First  Interstate Bank of Nevada, First Security Bank  of
        Idaho,  N.A., NBD Bank, N.A., Societe Generale,  Bank  of
        America,  Nevada, U.S. Bank of Nevada, Bank  of  Scotland
        and   Midlantic  Bank,  N.A.,  as  Lenders;  and   Second
        Memorandum of Amendment to Credit Agreement and Amendment
        to  Construction Deed of Trust with Assignment  of  Rents
        and  Fixture Filing between Borrower and Bank of  America
        National  Trust  and Savings Association,  as  agent  for
        Lenders, dated December 16, 1994 are incorporated  herein
        by  reference  from the Company's (SEC File No.  0-13760)
        Report  on  Form 8-K dated December 16, 1994, Item  7(c),
        Exhibit 10.01; Fifth Amendment to Credit Agreement  dated
        as  of  March  20, 1995,  among  Rio  Properties,   Inc.,
        Bank   of   America   National    Trust   and     Savings 
        Association,  as  Agent   and as a Bank, First Interstate
        Bank of Nevada,  First Security Bank  of Idaho, N.A., NBD
        Bank,  N.A.,  Societe  Generale,  Bank of America 

                                     59
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        Nevada,   U.S.  Bank  of  Nevada,  Bank  of  Scotland and
        Midlantic Bank,   N.A., as Banks,  is incorporated herein
        by  reference  from the Company's  (SEC File No. 0-13760)
        Report on  Form  10-K for  the  Year  Ended  December 31,
        1994,   Part  IV,  Item  14(c),   Exhibit  10.09;   Sixth
        Amendment  to  Credit  Agreement dated  as  of  July  31,
        1995 among Rio Properties, Inc., Bank of America National
        Trust  and  Savings Association,    as   Agent  and as  a
        Bank, and   First  Interstate   Bank  of   Nevada,  First
        Security    Bank    of    Idaho,    N.A.,     NBD   Bank,
        N.A., Societe  Generale, Bank  of  America  Nevada,  U.S.
        Bank of Nevada, Bank  of Scotland, Midlantic  Bank, N.A.,
        and Bank of Hawaii,  as  Banks  is incorporated herein by
        reference  from  the  Company's  (SEC  File  No. 0-13760)
        Report on Form 8-K dated September  15, 1995,  Item 7(c),
        Exhibit  4.01;  Seventh  Amendment  to  Credit  Agreement
        dated as of January 17, 1996 among  Rio Properties, Inc.,
        Bank of America  National Trust and Savings  Association,
        as  Agent  and  as a Bank,  and  First Interstate Bank of
        Nevada,  First Security  Bank  of  Idaho,  N.A.,  Societe
        Generale,  Bank  of America Nevada, U.S. Bank of  Nevada,
        Bank  of  Scotland,  Midlantic   Bank,  N.A.,  and   Bank
        of  Hawaii,   as   Banks  is   incorporated   herein   by
        reference  from   the  Company's  (SEC File No.  1-11569)
        Report  on Form 10-K for  the  Year  Ended  December  31,
        1995.   Part   IV,  Item  14(c),  Exhibit   4.08;  Eighth
        Amendment  to Credit  Agreement  dated  as  of  June  17,
        1996  among  Rio  Properties,  Inc.  and Bank of  America
        National Trust and  Savings  Association,  as  Agent  and
        Wells    Fargo    Bank    National   Association,   First
        Security  Bank   of  Idaho,  N.A.,   NBD   Bank,  Societe
        Generale,   Bank   of   America   Nevada,  U.S.  Bank  of
        Nevada,  Bank  of  Scotland,  Midlantic  Bank, N.A.,  and
        Bank  of Hawaii, as  Banks,  is  incorporated  herein  by
        reference  from  the  Company's  (SEC  File No.  1-11569)
        Report  on Form 10-Q  for  the  Quarter  Ended  June  30,
        1996,  Item   6(a),  Exhibit  10.01;  Ninth Amendment  to
        Credit  Agreement dated as  of  January  13,  1997  among
        Rio  Properties, Inc. and  Rio  Leasing,  Inc., and  Bank
        of  America  National  Trust &  Savings  Association,  as
        Agent  and  a  Bank,  and   Wells  Fargo   Bank  National
        Association,  First  Security  Bank  of Utah,  N.A.,  NBD
        Bank, Societe  Generale, U.S.  Bank  of  Nevada, Bank  of
        Scotland,  PNC   Bank,  National  Association,  successor
        by   merger  to   Midlantic   Bank,   N.A.  and  Bank  of
        Hawaii,  as   Banks;  and   Tenth  Amendment   to  Credit
        Agreement  dated  as  of  February   3,  1997  among  Rio
        Properties, Inc. and Rio  Leasing,  Inc.,  and   Bank  of
        America  National  Trust  and   Savings  Association,  as
        Agent  and  a  Bank,  and  Wells   Fargo   Bank  National
        Association,   First  Security  Bank,  N.A.,  NBD   Bank,
        Societe   Generale,   U.S.   Bank  of   Nevada,  Bank  of
        Scotland,  PNC   Bank,  National  Association,  successor
        by   merger  to   Midlantic   Bank,  N.A.,  and  Bank  of
        Hawaii, as Banks.

4.09    Indenture  dated as of July 21, 1995, among Rio  Hotel  & 
        Casino, Inc., Rio Properties, Inc. and IBJ Schroder  Bank
        &   Trust   Company  for  the  Company's  10 5/8%  Senior
        Subordinated  Notes  Due 2005 is incorporated  herein  by
        reference  from  the  Company's (SEC  File  No.  0-13760)
        Report  on  Form  8-K  dated July 18,  1995,  Item  7(c),
        Exhibit 4.3.
                                                                 
4.10    Indenture dated as of February 11, 1997, among Rio  Hotel 
        &  Casino,  Inc., Rio Properties, Inc. and  IBJ  Schroder
        Bank  &  Trust  Company for the Company's  9 1/2%  Senior
        Subordinated  Notes  Due 2007 is incorporated  herein  by
        reference  from  the  Company's (SEC  File  No.  0-13760)
        Report  on  Form 8-K dated February 4, 1997,  Item  7(c),
        Exhibit 4.3.

4.11    Registration Agreement dated July 18, 1995 by Rio Hotel & 
        Casino,  Inc.  and  accepted July  18,  1995  by  Salomon
        Brothers  Inc  and Montgomery Securities is  incorporated
        herein  by reference from the Company's (SEC File No.  0-
        13760) Report on Form 8-K dated July 18, 1995, Item 7(c),
        Exhibit 4.2.
                                   60
<PAGE>
                                                                 
4.12    Registration  Agreement dated February  4,  1997  by  Rio 
        Hotel  &  Casino, Inc., Rio Properties, Inc. and accepted
        February  4, 1997 by Salomon Brothers Inc and BancAmerica
        Securities, Inc. is incorporated herein by reference from
        the  Company's (SEC File No. 0-13760) Report on Form  8-K
        dated February 4, 1997, Item 7(c), Exhibit 4.2.
                                                                 
4.13    Form  of  Letter  of Transmittal to IBJ Schroder  Bank  & 
        Trust  Company as Exchange Agent for exchange  of 10 5/8%
        Senior Subordinated Notes Due 2005 is incorporated herein
        by  reference from the Company's (SEC File No.  33-62163)
        Registration Statement on Form S-4 filed August 28, 1995,
        Part II, Item 21(a), Exhibit 4.14.
                                                                  
10.01   Agreement  by  and  among MarCor  Resorts  Inc.,  Marnell 
        Corrao,  Inc.,  Marnell Corrao Associates,  Inc.,  MarCor
        Partnership,  The Anthony A. Marnell II Revocable  Living
        Trust  dated June 16, 1982, Anthony A. Marnell II, Sandra
        J.  Marnell, Barrett Family Revocable Living Trust  dated
        December  18, 1981, James A. Barrett, Jr. and Maureen  M.
        Barrett  dated February 22, 1989, is incorporated  herein
        by  reference  from the Company's (SEC File No.  0-13760)
        Annual  Report  on Form 10-K for the Year Ended  December
        31,  1994,  Part  IV,  Item 14(c), Exhibit  10.01;  First
        Amendment  to  Agreement dated October 25,  1993  by  and
        among Rio Hotel & Casino, Inc., and Marnell Corrao, Inc., 
        Marnell  Corrao  Associates,  Inc.,   MarCor Partnership, 
        Anthony  A. Marnell II, Barrett Family  Revocable  Living
        Trust dated December 18, 1981, James A. Barrett, Jr.  and
        Maureen M. Barrett incorporated herein by reference  from
        the  Company's (SEC File No. 0-13760) Report on Form 10-K
        for the Year Ended December 31, 1993, Part IV, Item 14(c),
        Exhibit 10.01.
                                                                 
10.02   Interest  Rate Swap Agreement dated as of July  28,  1993 
        between Rio Properties, Inc. and Bank of America National
        Trust  and Savings Association is incorporated herein  by
        reference  from  the  Company's (SEC  File  No.  0-13760)
        Report on Form 10-K for the Year Ended December 31, 1993,
        Part IV, Item 14(c), Exhibit 10.11.
                                                                  
10.03   Architectural Agreement entered into as of  February  25, 
        1994  between  Rio Hotel & Casino, Inc.,  as  Owner,  and
        Anthony  A.  Marnell  II,  Chartered,  as  Architect,  is
        incorporated herein by reference from the Company's  (SEC
        File No. 0-13760), Report on Form 10-K for the Year Ended
        December 31, 1993, Part IV, Item 14(c), Exhibit 10.12.
                                                                 
10.04   Building  Contract entered into as of February  25,  1994 
        between  Marnell  Corrao  Associates,  Inc.,  as  General
        Contractor,  and  Rio  Properties,  Inc.,  as  Owner,  is
        incorporated herein by reference from the Company's  (SEC
        File  No. 0-13760) Report on Form 10-K for the Year Ended
        December 31, 1993, Part IV, Item 14(c), Exhibit 10.13.
                                                                  
10.05   Architectural  Agreement entered into as of  February  9, 
        1995  between  Rio Hotel & Casino, Inc.,  as  Owner,  and
        Anthony   A.   Marnell,  Chartered,  as   Architect,   is
        incorporated herein by reference from the Company's  (SEC
        File No. 0-13760) Annual Report on Form 10-K for the Year
        Ended  December  31, 1994, Part IV, Item  14(c),  Exhibit
        10.08.
                                                                 
10.06   Building  Contract entered into as of February  27,  1995 
        between  Marnell  Corrao  Associates,  Inc.,  as  General
        Contractor,  and  Rio  Properties,  Inc.,  as  Owner,  is
        incorporated herein by reference from the Company's  (SEC
        File No. 0-13760) Annual Report on Form 10-K for the Year
        Ended  December  31, 1994, Part IV, Item  14(c),  Exhibit
        10.09.
                                   61
<PAGE>
                                                                  
10.07   Real  Estate Purchase and Sale Agreement entered into  as 
        of  January 25, 1995 between Focus 2000, Inc., as Seller,
        and  Rio  Properties,  Inc., as  Buyer,  is  incorporated
        herein  by reference from the Company's (SEC File No.  0-
        13760)  Annual  Report on Form 10-K for  the  Year  Ended
        December 31, 1994, Part IV, Item 14(c), Exhibit 10.10.
                                                                  
10.08   Exchange  Agreement entered into as of  January  6,  1995 
        between Allied Building Materials, Cinderlane, Inc.,  and
        Rio  Hotel  &  Casino,  Inc. is  incorporated  herein  by
        reference  from  the  Company's (SEC  File  No.  0-13760)
        Annual  Report  on Form 10-K for the Year Ended  December
        31, 1994, Part IV, Item 14(c), Exhibit 10.11.
                                                                  
10.09   Letter  Agreement  regarding Rate Cap  Transaction  dated 
        August  11,  1994 between Bank of America National  Trust
        and  Savings  Association  and Rio  Properties,  Inc.  is
        incorporated herein by reference from the Company's  (SEC
        File No. 0-13760) Annual Report on Form 10-K for the Year
        Ended  December  31, 1994, Part IV, Item  14(c),  Exhibit
        10.12.
                                                                 
10.10   Architectural Agreement entered into as of July 27,  1995 
        between  Rio Hotel & Casino, Inc., as Owner, and  Anthony
        A.  Marnell  II,  Chtd.,  as Architect,  is  incorporated
        herein by reference  from the   Company's (SEC  File  No.
        333-869) Registration Statement  on Form  S-3,  filed  on 
        February 12, 1996, Part II, Item 16, Exhibit 10.10.
                                                                 
10.11   Building Contract entered into as of August 14,  1995  by  
        and  between Marnell Corrao Associates, Inc., as  General
        Contractor,  and  Rio  Properties,  Inc.,  as  Owner,  is
        incorporated herein by reference from the Company's  (SEC
        File  No.  333-869) Registration Statement on  Form  S-3,
        filed  on  February 12, 1996, Part II, Item  16,  Exhibit
        10.11.
                                                                 
10.12   Employment  Agreement  dated  as  of  November  25,  1996  117 
        between Rio Hotel & Casino,  Inc.  and  David P.  Hanlon;
        Employment Agreement dated  as of  March 7, 1997  between
        Rio  Hotel  &  Casino,  Inc.  and  Ronald  J.   Radcliff; 
        Employment Agreement dated  as of  March 7, 1997  between 
        Rio Hotel & Casino, Inc. and I. Scott Bogatz.

21.01   List of the Company's subsidiaries is incorporated herein
        by  reference from the Company's (SEC File No. 333-23895)
        Registration  Statement  on Form S-4,  filed on March 24, 
        1997, Part I, Item 21(a), Exhibit 21.01.                       
                                                                 
23.01   Consent of Arthur Andersen LLP.                             177      
                                                                 
27.01   Financial Data Schedule.                                    179 
                                                                 
                                    62
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