EXHIBIT 10.12

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                      EMPLOYMENT AGREEMENT
                                
                                
     Agreement, dated as of November 25, 1996, between Rio  Hotel
&  Casino,  Inc., a Nevada corporation with its principal  office
located  at  3700  W.  Flamingo Road,  Las  Vegas,  Nevada  89103
(together with its successors or assigns as permitted under  this
agreement,  the "Company"), and David P. Hanlon, who  resides  at
c/o P.O. Box 70940, Reno, Nevada 89570-0940 (the "Executive").

                      W I T N E S S E T H:
                                
     Whereas,  the  Company desires to employ the  Executive  and
enter  into  an agreement embodying the terms of such  employment
(the  "Agreement"), and the Executive desires to enter  into  the
Agreement and to accept such employment, subject to the terms and
provisions of this Agreement.

     Now,  Therefore, in consideration of the premises and mutual
covenants  contained  herein  and for  other  good  and  valuable
consideration,  the  Company and the  Executive  (individually  a
"Party" and together the "Parties") agree as follows:

1.   DEFINITIONS

     (a)   "BASE  SALARY" shall mean the salary provided  for  in
Paragraph  4 below subject to such increases as may be made  from
time to time.

     (b)   "BOARD"  shall  mean the Board  of  Directors  of  the
Company.

     (c)  "BUSINESS DAY" shall mean any day other than a weekend,
a federal or state holiday or a vacation day for the Executive.

     (d)  "CAUSE" shall mean:

           (i)   the conviction of (including any act as a result
     of  pleading nolo contendere) or judgment against  Executive
     by a civil or criminal court of competent jurisdiction of  a
     felony,   or   any  other  offense  involving  embezzlement,
     misappropriation  of funds, any act of  moral  turpitude  or
     dishonesty;
     
           (ii) the indictment of Executive by a state or federal
     grand  jury  or  the  filing  of  a  criminal  complaint  or
     information  for  a  felony, or any other offense  involving
     embezzlement, misappropriation of funds, any  act  of  moral
     turpitude or dishonesty, unless such indictment or filing is
     dismissed within one hundred eighty (180) days from the date
     of  such  indictment  or filing.  The  Board  may  elect  to
     suspend  and  extend  the  Term of Employment  by  such  one
     hundred  eighty  (180)  day period or  the  number  of  days
     actually  taken by Executive to dismiss such  indictment  or
     filing, whichever is less; provided that
     
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     Executive  notifies  the Company in writing  that  Executive
     intends  to contest in good faith such indictment or  filing
     and  pursues the dismissal of such indictment or filing with
     reasonable  diligence.   During such period  of  suspension,
     Employee  may  be  relieved  of his  duties,  but  shall  be
     entitled to receive his Base Salary;
     
            (iii)   the   written  confession  by  Executive   of
     embezzlement, misappropriation of funds or any act of  moral
     turpitude or dishonesty;
     
          (iv) the denial, revocation or suspension of a license,
     qualification or certificate of suitability to Executive  by
     any of the Gaming Authorities;
     
           (v)   any  action by Executive that results in  (A)  a
     written  communication from the Gaming  Authorities  to  the
     Company  advising  the Company that, or  (B)  administrative
     action   by   the   Gaming  Authorities   resulting   in   a
     determination that:  (Y) any licensing, qualification and/or
     approval  by  the  Gaming Authorities with  respect  to  the
     Company  will  be  approved only upon terms  and  conditions
     which  are  unacceptable to the Company; or (Z)  the  Gaming
     Authorities will revoke or suspend any existing license held
     by the Company or its subsidiaries;
     
           (vi)  the finding by a court of competent jurisdiction
     in  a criminal or civil action or by the U.S. Securities and
     Exchange  Commission  or  state  blue  sky  agency   in   an
     administrative  proceeding  that  Executive   has   wilfully
     violated any federal or state securities law;
     
           (vii)  the  engagement  by Executive  in  willful  and
     continued  misconduct, or Executive's willful and  continued
     failure to substantially perform Executive's obligations  as
     a  Director of the Company or as an employee of the Company,
     if  such  failure  or misconduct is materially  damaging  or
     materially detrimental to the business and operations of the
     Company;
     
           (viii)  the  use by the Executive of  alcohol  or  any
     controlled substance to an extent that it interferes, in the
     sole  discretion of the Board, on a continuing and  material
     basis  with the performance of Executive's duties under  the
     Agreement;
     
          (ix)  the  willful,  unauthorized  disclosure  by   the
     Executive   of  Confidential  Information,  as  defined   in
     Paragraph  13,  concerning the Company  or  any  Subsidiary,
     unless such disclosure was (A) believed in good faith by the
     Executive  to  be  appropriate in  the  course  of  properly
     carrying out his duties under the Agreement, or (B) required
     by  an order of a court having jurisdiction over the subject
     matter or a summons, subpoena or order in the nature thereof
     of any legislative body (including any committee thereof) or
     any governmental or administrative agency; or
     
          (x)   the  performance of services by Executive,  other
     than in the course of properly carrying out his duties under
     the  Agreement  and as otherwise provided  herein,  for  any
     other  corporation or person that competes with the  Company
     or  any  Subsidiary while the Executive is employed  by  the
     Company.
     
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     (e)   "CHANGE IN CONTROL" shall mean the occurrence  of  any
one of the following events:

          (i)   any  "person" (as that term is  used  in  Section
     13(d)  and 14(d) of the Securities and Exchange Act of  1934
     (the  "Exchange  Act")), other than Anthony A.  Marnell  II,
     James  A.  Barrett,  Jr.  or their affiliates,  becomes  the
     "beneficial  owner"  (as defined in  Rule  13d-3  under  the
     Exchange  Act),  directly or indirectly,  of  securities  of
     Company  representing 25.0% or more of the  combined  voting
     power  of Company's outstanding securities ordinarily having
     the right to vote at the election of directors; or
     
          (ii)  individuals who constitute the Board of Directors
     of  Company on the date hereof (the "Incumbent Board") cease
     for  any  reason to constitute at least a majority  thereof,
     provided  that any person becoming a director subsequent  to
     the  date hereof whose election was approved by at  least  a
     majority of the directors comprising the Incumbent Board, or
     whose  nomination or election was approved by a majority  of
     the Board of Directors of Company serving under an Incumbent
     Board,   shall  be,  for  purposes  of  this  clause   (ii),
     considered  as  if he or she were a member of the  Incumbent
     Board; or
     
          (iii)  the  merger, consolidation or  sale  of  all  or
     substantially all the assets of Company occurs; or
     
          (iv)   a  proxy  statement  is  distributed  soliciting
     proxies  from stockholders of the Company, by someone  other
     than  the current management of Company, seeking stockholder
     approval   of   a   plan   of  reorganization,   merger   or
     consolidation of Company with one or more corporations as  a
     result   of   which  the  outstanding  shares  of  Company's
     securities are actually exchanged for or converted into cash
     or property or securities not issued by Company.
     
     (f)   "COMMON STOCK" shall mean the common stock,  $.01  par
value, of the Company.

     (g)    "CONSOLIDATED  EBITDA"  shall  mean   the   Company's
consolidated  "Earnings (Losses) from Operations" plus  Interest,
Taxes,  Depreciation and Amortization but excluding (i) the  sale
of any material asset not in the ordinary course of business, and
(ii)  any  charge against earnings for stock options pursuant  to
Paragraph  6  below.  Consolidated EBITDA shall be determined  on
the  accrual  basis  of accounting in accordance  with  generally
accepted  accounting  principles.   Consolidated  EBITDA  for   a
calendar  year  shall be determined by the Company's  independent
accountants  based on audited financial statements.  Consolidated
EBITDA for a period of less than one year shall be determined  by
the  Company's independent accountants based on a written  report
setting forth the basis of the review.

     (h)   "CONSTRUCTIVE  TERMINATION WITHOUT CAUSE"  shall  mean
that,

          (i)  without the Executive's prior written consent, one
     or more of the following events occurs:
     
               (1)  the Executive is removed from the position of
          Executive Vice President and Chief Operating Officer of
          the Company and/or the position of
          
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          President   and   Chief  Operating   Officer   of   Rio
          Properties,  Inc.  ("Rio Properties")  for  any  reason
          other than the termination of his employment;
          
               (2)   the  Executive suffers a material diminution
          in the authorities, duties or responsibilities normally
          associated with the foregoing positions, or  there  are
          assigned  to him duties and responsibilities materially
          inconsistent with those normally associated  with  such
          positions;
          
               (3)   the Executive's Base Salary or annual  bonus
          opportunity  as  provided for in  Paragraphs  4  and  5
          below,  respectively, is decreased by  the  affirmative
          act  of the Company, or his benefits under any material
          employee benefit plan or program of the Company or  his
          incentive  or  equity opportunity  under  any  material
          incentive  or equity program is or are reduced  by  the
          affirmative act of the Company;
          
               (4)   the Executive's office location is relocated
          outside of the Las Vegas, Nevada metropolitan area; or
          
               (5)    the  Company  fails  to  obtain  a  written
          agreement from any successors of the Company to  assume
          and perform the Agreement; and
          
          (ii)  within  90 days of learning of the occurrence  of
     such  event (but in no event later than 180 days  after  the
     occurrence  of  such  event), the Executive  terminates  his
     employment with the Company.
     
     (i)   "DISABILITY" shall mean the Executive's inability, for
a  period of six consecutive months, to render substantially  the
services provided for in Paragraph 3(a) below by reason of mental
or  physical disability, whether resulting from illness, accident
or otherwise.

     (j)   "GAMING  AUTHORITIES" means the Nevada Gaming  Control
Board  ("Nevada  Board"), the Nevada Gaming  Commission  ("Nevada
Commission"), the Clark County Liquor and Gaming Licensing  Board
("Clark  County Board"), and any other federal, state,  local  or
tribal  gaming authority to which the Company is now subject,  or
may be subject during the Term of Employment.

     (k)   "SUBSIDIARY" shall mean any corporation in  which  the
Company owns 50% or more of the Voting Stock or any other venture
in which it owns 50% or more of the equity.

     (l)   "TERM  OF EMPLOYMENT" shall mean the initial five-year
period  specified  in  Paragraph 2 below and  if,  but  only  if,
automatically  renewed as provided in Paragraph 2, shall  include
the period of such renewal.

     (m)   "TERMINATION BY THE COMPANY DUE TO FAILURE TO  RECEIVE
LICENSE"  shall mean a termination of the Executive's  employment
by  the  Company  following a failure of Executive  to  obtain  a
license  required by the Nevada Board, Nevada Commission  or  the
Clark  County Board and any other federal, state, local or tribal
gaming  authority to which the Company is now subject, or may  be
subject during the Term of Employment.

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     (n)  "VOTING STOCK" shall mean capital stock of any class or
classes having general voting power under ordinary circumstances,
in  the  absence  of contingencies, to elect the directors  of  a
corporation.

2.   TERM OF EMPLOYMENT

     (a)   The  Company  hereby employs the  Executive,  and  the
Executive  hereby  accepts employment with the  Company,  in  the
position and with the duties and responsibilities as set forth in
Paragraph  3  below for the Term of Employment,  subject  to  the
terms and conditions of the Agreement.

     (b)   The  initial  Term  of Employment  shall  commence  on
October  8, 1996 and shall, unless sooner terminated as  provided
in  Paragraph  10  hereof, terminate at 11:59  p.m.  (P.D.T.)  on
October  7,  2001;  provided that the Term  of  Employment  shall
automatically renew for successive one-year periods unless (i) it
has  sooner  terminated  as provided in Paragraph  10  hereof  or
(ii)  either Party has notified the other in writing at least  60
days  prior to the otherwise scheduled expiration of the Term  of
Employment that such Term of Employment shall not so renew.

3.   POSITION, DUTIES AND AUTHORITIES

     (a)   During the Term of Employment, the Executive shall  be
employed as Executive Vice President and Chief Operating  Officer
of  the  Company and as President and Chief Operating Officer  of
the  Company's wholly-owned subsidiary, Rio Properties.   Subject
to supervision and in accordance with the policies and directives
established  by the Board, and subordinate to and  working  under
the  supervision of the Chief Executive Officer and President  of
the  Company, in the case of the Company, and the Chief Executive
Officer  of  Rio  Properties,  in the  case  of  Rio  Properties,
Executive shall be the Chief Operating Officer of the Company and
Rio  Properties' day-to-day business operations, with the duties,
responsibilities and authorities customarily associated with such
positions.   It  is  also the intention of the Parties  that  the
Executive  shall serve as a Director of the Company  and  of  Rio
Properties  throughout  the  Term of Employment.   The  Executive
shall  be  entitled to no additional remuneration for serving  on
the  Board or as an officer or director of Rio Properties or  any
other Subsidiary.

     (b)    Anything  herein  to  the  contrary  notwithstanding,
nothing shall preclude the Executive from engaging in charitable,
community and business affairs, managing his personal investments
and  serving  as  a  member of boards of  directors  of  industry
associations  or  non-profit  or  for  profit  organizations  and
companies  so long as such activities do not materially interfere
in the opinion and sole discretion of the Chief Executive Officer
of  the  Company  with Executive's carrying out  his  duties  and
responsibilities under the Agreement.  Executive  shall  disclose
all  relationships  covered  under this  Paragraph  3(b)  in  the
Executive's  personal history disclosure form to be submitted  to
the  Nevada  Gaming Control Board in connection with  Executive's
required licensing and such form shall, prior to filing  of  such
form,  be submitted to the Company's Chief Executive Officer  for
review.   Thereafter, not less often than on January  1  of  each
year,  Executive shall disclose in writing to the Chief Executive
Officer  of  the  Company  any changes to  the  information  with
respect to involvement in such entities or organizations.

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4.   BASE SALARY

     During  the Term of Employment, the Executive shall be  paid
by  the Company a Base Salary payable no less frequently than  in
equal   semi-monthly  installments  at  an  annualized  rate   of
(i)   $580,000   during  the  period  October  8,  1996   through
December 31, 1996, and (ii) $800,000 thereafter.  The annual Base
Salary commencing January 1, 1997 and continuing to December  31,
1997   described  in  Paragraph  4(ii)  shall  be  comprised   of
(a)  $580,000 in salary and (b) a guaranteed annual bonus  of  at
least  $220,000, provided that the Executive's bonus  opportunity
shall  not be limited to the minimum annual guarantee of $220,000
herein  described.   Thereafter, until the end  of  the  Term  of
Employment, the Company may pay to the Executive his annual  Base
Salary  described in Paragraph 4(ii) in any combination of salary
and  guaranteed annual bonus which the Company deems appropriate.
The guaranteed annual bonus payable under this Paragraph 4 is not
to  be  offset  against  or reduced by any  bonus  payable  under
Paragraph 5 hereof.

5.   PERFORMANCE BONUS

     The  Company shall pay the Executive performance bonuses for
each year during the Term of Employment in amounts determined  in
accordance with Exhibit A hereto.

6.   STOCK OPTIONS

     The  Executive  shall be eligible for participation  in  the
Company's 1995 Long Term Incentive Plan, as amended from time  to
time.

7.   EMPLOYEE BENEFIT PROGRAMS

     (a)   During the Term of Employment, the Executive shall  be
entitled,   at  the  Company's  expense,  to  medical,  surgical,
hospitalization, dental and visual insurance coverage (which  may
include  any  insured  program provided by  the  Company  to  its
employees)  providing him with 100% of all expenses both  covered
and paid for by the Company's insurance program(s) or plan(s).

     (b)  During the Term of Employment, the Executive shall also
be  provided  with  long-term disability  insurance  which  shall
provide  the  Executive with an annual benefit of  fifty  percent
(50%)  of  Base  Salary  continued until  age  65  or  until  the
Executive  dies  or  is no longer disabled, if  sooner.   To  the
extent  available, the Executive shall be provided an opportunity
to purchase additional long-term disability insurance, at his own
expense.   To  the  extent  possible,  the  amount  of  long-term
disability insurance described in the first two sentences of this
Paragraph  7(b) shall be provided by an individual   policy  that
gives  the Executive the right to assume the policy in the  event
of  his  termination of employment, provided that the  amount  of
such  insurance  to be so provided shall be offset  by  long-term
disability insurance coverage provided to the Executive under the
Company's   employee  long-term  disability  insurance   programs
described in Paragraph 7(d) below.

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     (c)   During  the  Term  of Employment,  the  Company  shall
provide  the Executive, subject to insurability as a normal  risk
and at reasonable cost, with life insurance coverage in an amount
equal to no less than three times the sum of the Executive's then
current  Base Salary plus performance bonus amount determined  on
the  basis  of 100% of the target bonus for the year in  question
being achieved.  To the extent available, the Executive shall  be
provided an opportunity to purchase additional life insurance, at
his  own  expense,  up to two times his then current  total  cash
compensation  as  described in the preceding  sentence.   To  the
extent  possible, the amount of life insurance described  in  the
first  two sentences of this Paragraph 7(c) shall be provided  by
an individual policy that gives the Executive the right to assume
the  policy  in  the  event  of  his termination  of  employment,
provided  that  the amount of such insurance to  be  so  provided
shall  be  offset  by  life insurance coverage  provided  to  the
Executive  under  the  Company's employee  group  life  insurance
programs described in Paragraph 7(d) below.

     (d)   During the Term of Employment, the Executive shall  be
entitled  to  participate in all employee incentive  and  benefit
programs  of the Company now or hereafter made available  to  the
Company's  senior executives or salaried employees generally,  as
such  programs  may  be  in effect from time-to-time,  including,
without  limitation, pension and other retirement plans,  profit-
sharing  plans,  group  life  insurance,  accidental  death   and
dismemberment insurance, hospitalization, surgical, major medical
and  dental  coverage, sick leave (including salary  continuation
arrangements),  long-term disability, holidays  and  up  to  four
weeks annually of vacations.

     (e)   During the Term of Employment, the Executive shall  be
entitled  to four (4) weeks paid vacation per calendar year.   In
lieu  of  utilizing such paid vacation in any calendar year,  the
Executive shall have the right to either (i) receive cash  in  an
amount equivalent to two (2) weeks of annual Base Salary, or (ii)
defer  two  (2) weeks of such paid vacation to the next  calendar
year.   Notwithstanding  the foregoing, the  Executive  shall  be
entitled  to  receive no more than four (4) weeks of annual  Base
Salary in lieu of paid vacation in any calendar year.  Except  as
expressly  set  forth in Paragraph 7(e)(i) and (ii)  herein,  all
paid  vacation  benefits granted hereunder  attributable  to  any
calendar  year  shall terminate on December 31 of  said  calendar
year.

8.   RELOCATION EXPENSE, BUSINESS EXPENSE REIMBURSEMENT AND
     PERQUISITES

     (a)   The  Company shall pay the costs associated  with  the
Executive's  relocation from Reno to Las Vegas, Nevada  including
(i)  costs  associated  with packing, moving  and  unpacking  the
Executive's household goods, and (ii) the Executive's  reasonable
temporary living expenses while he looks for a home in Las Vegas.

     (b)   During the Term of Employment, the Executive shall  be
entitled to receive reimbursement by the Company, upon submission
of  adequate  documentation,  for  all  reasonable  out-of-pocket
expenses  incurred  by  him  in  performing  services  under  the
Agreement.   Any legal fees and expenses incurred  in  connection
with  the preparation and negotiation of the Agreement  up  to  a
maximum of $20,000 shall be paid by the Company.

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     (c)   During the Term of Employment, the Executive shall  be
entitled  to  use  of  an  automobile and reimbursement  for  all
operating  expenses  associated  therewith,  including,   without
limitation,  collision  and liability insurance.   The  Executive
shall  have the right to choose the automobile; provided however,
the  retail value of such automobile, excluding sales  taxes  and
licensing fees, shall not exceed $50,000.

     (d)   During the Term of Employment, the Executive shall  be
entitled  to  an individual country club membership,  along  with
reimbursement  for  all reasonable business  expenses  associated
therewith,   at   a  country  club  in  the  Las  Vegas,   Nevada
metropolitan area.

9.   DEFERRED COMPENSATION

     The  Executive shall be entitled to defer up to 25%  of  his
Base  Salary and any performance or other bonus for each calendar
year pursuant to a compensation deferral program to be adopted by
the Company.

10.  TERMINATION OF EMPLOYMENT

     (a)   Termination Due to Death or Disability.  In the  event
of  the  termination  of  the Executive's  employment  under  the
Agreement  due to his death or Disability, the Executive  or  his
legal representatives, as the case may be, shall be entitled to:

          (i)  (A) in the case of death, continued Base Salary at
     the rate in effect at the time of his death for a period  of
     3  months  following the month in which such termination  of
     employment  due  to  death occurs, or (B)  in  the  case  of
     Disability, the disability benefit available under and  only
     to  the  extent  of  insurance  maintained  as  provided  in
     Paragraph 7(b) above;
     
          (ii) any performance or other bonus earned for a fiscal
     period already completed but not yet paid;
     
          (iii)  a  pro  rata performance bonus for the  year  in
     which  his  employment terminates due to death or Disability
     based  on performance in relation to the Consolidated EBITDA
     targets  for  the period ending with the end  of  the  month
     immediately prior to the termination of his employment;
     
          (iv)  reimbursement for expenses incurred but  not  yet
     reimbursed by the Company;
     
          (v)  any deferred compensation pursuant to Paragraph 9,
     including any interest accrued on such deferred amounts; and
     
          (vi) any other compensation and benefits to which he or
     his  legal  representatives may be entitled under applicable
     plans,  programs  and agreements of the Company,  including,
     without   limitation,   life  insurance   as   provided   in
     Paragraph 7(c) above.
     
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     (b)   Termination  by the Company for Cause.   At  any  time
after  an  event constituting Cause, the Company shall  give  the
Executive  written notice of its intention to terminate  him  for
Cause, specifying in such notice the event forming the basis  for
Cause.  Subject only to the following sentence, termination shall
be  effective immediately upon delivery of notice hereunder.   If
the  written  notice  is  of  an event constituting  Cause  under
Paragraph  1(d)(i) or 1(d)(viii), and if the event is capable  of
being cured, the Executive shall have ten Business Days following
actual receipt of the notice of termination in which to cure,  so
long  as Executive advises the Company in writing within 48 hours
of  receiving the notice of termination of Executive's  intention
to  attempt  cure.   In the event the Executive's  employment  is
terminated  by  the  Company for Cause, the  Executive  shall  be
entitled to:

          (i)   Base Salary at the rate in effect at the time  of
     his  termination  through the date  of  termination  of  his
     employment;
     
          (ii) any performance or other bonus earned for a fiscal
     period already completed but not yet paid;
     
          (iii)  reimbursement for expenses incurred but not  yet
     reimbursed by the Company;
     
          (iv) any deferred compensation, pursuant to Paragraph 9
     hereof  including  any  interest accrued  on  such  deterred
     amounts; and
     
           (v)   any  other  compensation and benefits  to  which
     he  may  be  entitled under applicable plans,  programs  and
     agreements of the Company.
     
     The  Executive's  entitlement  to  the  foregoing  shall  be
     without  prejudice  to  the right of  the  Company  for  any
     damages  or  other legal or equitable remedy  to  which  the
     Company or a Subsidiary may be entitled as a result of  such
     Cause; provided, however, that offset shall not be available
     to the Company in any event.

     (c)   Termination Without Cause or Constructive  Termination
Without  Cause.   In  the  event the  Executive's  employment  is
terminated by the Company without Cause (which shall not  include
a  termination pursuant to Paragraph 10(a)) or in the event of  a
Constructive  Termination Without Cause, the Executive  shall  be
entitled  to  those  items  described in  the  subparagraphs  (i)
through (v) hereof.  Termination Without Cause shall be effective
immediately,  unless a later date is stated, upon delivery  of  a
written notice of such termination from the Company to Executive.
In the event Executive elects to resign based upon a Constructive
Termination  Without  Cause,  the Executive  shall  give  written
notice  thereof  to the Company and state therein  the  effective
date of such resignation.
     
          (i)   continued Base Salary payments for the  remainder
     of   Term   of   Employment  plus  100%   of   such   amount
     (collectively,  the  "Base  Salary  Termination   Payment").
     Notwithstanding  the  actual  amount  of  the  Base   Salary
     Termination  Payment, however, Executive  shall  receive  no
     less  than  $1  million and no more than  $2  million.   The
     Executive  may elect, at the Executive's option, to  receive
     the Base Salary Termination
     
                               -9-
                                
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     Payment  either (A) over the remainder of the original  Term
     of  Employment  (as  if  the same had  not  been  terminated
     hereunder), or (B) in a lump-sum payment promptly  following
     termination of the Executive's employment;
     
          (ii) any performance or other bonus earned for a fiscal
     period already completed but not yet paid;
     
          (iii)  reimbursement for expenses incurred but not  yet
     reimbursed by the Company;
     
          (iv) any deferred compensation pursuant to Paragraph  9
     hereof,  including  any interest accrued  on  such  deferred
     amounts; and
     
          (v)   any  other compensation and benefits to which  he
     may   be  entitled  under  applicable  plans,  programs  and
     agreements of the Company.
     
     (d)   Termination by the Company Due to Failure  to  Receive
License.   In  the event of a Termination by the Company  Due  to
Failure  to  Receive License, the Executive shall be entitled  to
those  items  specified in subparagraphs (i) through (v)  hereof.
The  effective  date  of the Termination by the  Company  Due  to
Failure to Receive License shall be as stated in a written notice
from the Company to Executive.

          (i)   Base Salary at the rate in effect at the time  of
     his  termination  through the date  of  termination  of  his
     employment;
     
          (ii) any performance or other bonus earned for a fiscal
     period already completed but not yet paid;
     
          (iii)  reimbursement for expenses incurred but not  yet
     reimbursed by the Company;
     
          (iv) any deferred compensation pursuant to Paragraph  9
     hereof,  including  any interest accrued  on  such  deferred
     amounts; and
     
          (v)   any  other compensation and benefits to which  he
     may   be  entitled  under  applicable  plans,  programs  and
     agreements of the Company.
     
     (e)  Voluntary Termination.  A "Voluntary Termination" shall
mean  a  termination of employment by the Executive  on  his  own
initiative  other  than a termination under  Paragraph  10(a)  or
10(c).   In  the event of a Voluntary Termination, the  Executive
shall be entitled to:

          (i)   Base Salary at the rate in effect at the time  of
     his  termination  through the date of  termination  of  this
     employment;
     
          (ii) any performance or other bonus earned for a fiscal
     period already completed but not yet paid;
     
                              -10-
                                
<PAGE>
     
          (iii)  reimbursement for expenses incurred but not  yet
     reimbursed by the Company;
     
          (iv) any deferred compensation pursuant to Paragraph  9
     hereof,  including  any interest accrued  on  such  deferred
     amounts; and
     
          (v)   any other compensation and benefits to which   he
     may   be  entitled  under  applicable  plans,  programs  and
     agreements of the Company.
     
     A   Voluntary  Termination  shall  not,  solely  due  to   a
     Voluntary  Termination, be deemed a breach of this Agreement
     and  shall be effective upon the expiration of 60 days after
     written  notice  delivered to the  Company,  unless  another
     period of time is agreed to in writing by the Parties.
     
     (f)   No  Mitigation;  No  Offset.   In  the  event  of  any
termination of the Executive's employment under the Agreement, he
shall  be under no obligation to seek other employment, and there
shall be no offset against amounts due him under the Agreement on
account  of  any  remuneration  attributable  to  any  subsequent
employment that he may obtain.
     
     (g)   Nature  of  Payments.  Any amounts due  the  Executive
under  the  Agreement  in  the event of any  termination  of  his
employment  with  the  Company are in  the  nature  of  severance
payments,  or  liquidated damages which contemplate  both  direct
damages and consequential damages that he may suffer as a  result
of the termination of his employment, or both, and are not in the
nature of a penalty.
     
11.  CHANGE OF CONTROL

     In the event a Change of Control occurs, the Executive shall
be entitled to:

     (a)  a lump-sum payment equal to the Base Salary due him for
the  remainder  of  Term of Employment; provided,  however,  such
amount  shall  be  no less than an amount equal  to  Base  Salary
payments for a period of 12 months;

     (b)  a lump-sum payment equal to the Base Salary due him for
the remainder of Term of Employment in lieu of any performance or
other  bonus for the fiscal period in which the Change of Control
occurs;  provided, however, such amount shall be no less than  an
amount equal to Base Salary payments for a period of 12 months;

     (c)   any  performance or other bonus earned  for  a  fiscal
period already completed but not yet paid;

     (d)    reimbursement  for  expenses  incurred  but  not  yet
reimbursed by the Company;

     (e)   any  deferred  compensation pursuant  to  Paragraph  9
hereof,  including any interest accrued on such deferred amounts;
and

                              -11-
                                
<PAGE>

     (f)  any other compensation and benefits to which he may  be
entitled under applicable plans, programs and agreements  of  the
Company.

     Nothwithstanding  the  foregoing,  in  no  event  shall  the
aggregate  amount  due  to the Executive pursuant  to  Paragraphs
11(a) and (b) above exceed $3,000,000.

12.  COVENANT NOT TO COMPETE

     In    the   event   of   a   Voluntary   Termination   under
Paragraph  10(e)  above  or  a Termination  Without  Cause  or  a
Constructive  Termination  Without Cause  under  Paragraph  10(c)
above,  the  Executive  shall not,  for  the  remaining  Term  of
Employment  or  12  months,  whichever  is  shorter,  engage   in
competition with the Company.  For purposes of this Paragraph 12,
the  Executive shall be engaging in competition with the  Company
if  he engages in the casino and gaming business in Clark County,
Nevada or any other location in which the Company is engaging  in
the casino and gaming business at the time of the termination  of
the  Executive's  employment, whether as an employee,  Executive,
partner,   principal,  agent,  representative,   stockholder   or
consultant (other than as a holder of not more than a 10%  equity
interest)  or in any other corporate or representative  capacity,
so  long  as  the  Company is engaged in the  casino  and  gaming
business in the location in question.

13.  COVENANTS TO PROTECT CONFIDENTIAL INFORMATION

     The  Executive  shall not, during the Term of Employment  or
thereafter,  without  prior  written  consent  of  the   Company,
divulge,  publish or otherwise disclose to any other  person  any
Confidential Information regarding the Company or any  Subsidiary
except  in  the  course of carrying out his  responsibilities  on
behalf  of  the  Company  (e.g.,  providing  information  to  the
Company's  attorneys, accountants, bankers, etc.) or if  required
to  do  so  pursuant to the order of a court having  jurisdiction
over  the subject matter or a summons, subpoena or order  in  the
nature  thereof of any legislative body (including any  committee
thereof) or any governmental or administrative agency.  For  this
purpose,  Confidential  Information shall  include,  but  not  be
limited  to, the Company's financial, real estate, marketing  and
promotional  plans  and strategies, customer lists  and  customer
data   bases.    Confidential  Information   does   not   include
information  that  becomes available to  the  public  other  than
through a breach of the Agreement on the part of the Executive.

14.  INDEMNIFICATION

     (a)   The  Company  shall indemnify  the  Executive  to  the
fullest  extent permitted by Nevada law in effect as of the  date
hereof  against  all  costs,  expenses,  liabilities  and  losses
(including,  without  limitation,  attorneys'  fees,   judgments,
fines,  penalties,  ERISA  excise  taxes  and  amounts  paid   in
settlement)  reasonably incurred by the Executive  in  connection
with  a  Proceeding.  For the purposes of this  Paragraph  14,  a
"Proceeding" shall mean any action, suit or proceeding by  reason
of  the  fact that he is or was an officer, director or employee,
trustee  or  agent  of any other entity at  the  request  of  the
Company.

                              -12-
                                
<PAGE>

     (b)    The  Company  shall  advance  to  the  Executive  all
reasonable costs and expenses incurred by him in connection  with
a  Proceeding  within 20 days after receipt by the Company  of  a
written request for such advance.  Such request shall include  an
itemized list of the costs and expenses and an undertaking by the
Executive  to  repay  the  amount of such  advance  if  it  shall
ultimately  be  determined by a court of  competent  jurisdiction
that  he is not entitled to be indemnified by the Company against
such costs and expenses.

     (c)   The Executive shall not be entitled to indemnification
under  this Paragraph 14 unless he meets the standard of  conduct
specified in the Nevada Revised Statutes.  Actions that  fail  to
meet  the  aforementioned standard of conduct shall include,  but
are not limited to, the failure to act in good faith, failure  to
act  in the best interests of the Company, breach of the duty  of
loyalty,  appropriation of business opportunities,  violation  of
the provisions of the articles of incorporation or the bylaws  of
the  Company, violation of state or federal securities  laws  and
violation of criminal law.  Notwithstanding the foregoing, to the
extent  permitted by law neither N.R.S. 78.751(3) nor any similar
provision shall apply to indemnification under this Paragraph 14,
so that if the Executive in fact meets the applicable standard of
conduct, he shall be entitled to such indemnification whether  or
not   the  Company  (whether  by  the  board  of  directors,  the
stockholders,   independent  legal  counsel   or   other   party)
determines that indemnification is proper because he has met such
applicable  standard  of conduct.  Neither  the  failure  of  the
Company  to  have  made  such  a  determination  prior   to   the
commencement  by  the  Executive  of  any  suit  or   arbitration
proceeding  seeking indemnification, nor a determination  by  the
Company  that he has not met such applicable standard of  conduct
shall  create  a  presumption that he has not met the  applicable
standard of conduct.

     (d)  The Company shall not settle any Proceeding or claim in
any  manner  which would impose on the Executive any  penalty  or
limitation  without  his  prior  written  consent.   Neither  the
Company nor the Executive will unreasonably withhold its  or  his
consent to any proposed settlement.

15.  ASSIGNABILITY; BINDING NATURE

     This  Agreement  shall  be binding upon  and  inure  to  the
benefit of the Parties and their respective successors, heirs and
assigns.   No  rights  or obligations of the  Company  under  the
Agreement may be assigned or transferred by the Executive or  the
Company except that (a) such rights or obligations of the Company
may   be  assigned  or  transferred  pursuant  to  a  merger   or
consolidation in which the Company is not the continuing  entity,
or  the  sale or liquidation of all or substantially all  of  the
assets  of  the Company, provided that the assignee or transferee
is the successor to all or substantially all of the assets of the
Company  and such assignee or transferee assumes the liabilities,
obligations  and  duties  of the Company,  as  contained  in  the
Agreement,  either contractually or as a matter of law,  and  (b)
such  obligations  of  the  Company may  be  transferred  by  the
Executive  by  will  or  pursuant  to  the  laws  of  descent  or
distribution.  The Company shall take all reasonable legal action
necessary  to  effect  such  assignment  and  assumption  of  the
Company's liabilities, obligations and duties under the Agreement
in  circumstances  described  in  clause  (a)  of  the  preceding
sentence.

                              -13-
                                
<PAGE>

16.  REPRESENTATION

     The  Company  and the Executive respectively  represent  and
warrant to each other that, subject to any approval that  may  be
necessary from the Nevada Commission, each respectively is  fully
authorized and empowered to enter into the Agreement and that its
or  his entering into the Agreement and the performance of its or
his  respective obligations under the Agreement will not  violate
any  agreement between the Company or the Executive  respectively
and  any  other  person,  firm  or organization  or  any  law  or
governmental regulation.

17.  ENTIRE AGREEMENT

     The  Agreement  contains the entire  agreement  between  the
Parties  concerning the subject matter hereof and supersedes  all
prior  agreements, understandings, discussions, negotiations  and
undertakings, whether written or oral, between the  Parties  with
respect thereto.

18.  AMENDMENT OR WAIVER

     The Agreement cannot be changed, modified or amended without
the consent in writing of both the Executive and the Company.  No
waiver  by  either Party at any time of any breach by  the  other
Party  of  any condition or provision of the Agreement  shall  be
deemed a waiver of a similar or dissimilar condition or provision
at  the same or at any prior or subsequent time.  Any waiver must
be  in  writing  and  signed by the Executive  or  an  authorized
officer of the Company, as the case may be.

19.  SEVERABILITY

     In  the event that any provision or portion of the agreement
shall  be  determined  to  be invalid or  unenforceable  for  any
reason,  in  whole  or in part, the remaining provisions  of  the
Agreement  shall be unaffected thereby and shall remain  in  full
force and effect to the fullest extent permitted by law.

20.  SURVIVORSHIP

     The   respective  rights  and  obligations  of  the  Parties
hereunder shall survive any termination of the Agreement  to  the
extent necessary to the intended preservation of such rights  and
obligations.

21.  GOVERNING LAW

     The  Agreement  shall  be  governed  by  and  construed  and
interpreted  in  accordance  with  the  laws  of  Nevada  without
reference to principles of conflict of laws.

                              -14-

<PAGE>

22.  SETTLEMENT OF DISPUTES

     Any  disputes regarding the interpretation of the  Agreement
shall  be  resolved  by  arbitration to  be  held  in  Nevada  in
accordance  with  the  rules  and  procedures  of  the   American
Arbitration Association.  The prevailing party in such proceeding
shall  be  entitled  to recover the costs of the  arbitration  or
litigation  from the other party, including, without  limitation,
attorneys' fees.

23.  NOTICES

     Any  notice  given to either party shall be in writing  and,
except  as  provided  in the third sentence  of  Paragraph  10(b)
above,  shall  be  deemed  to  have  been  given  when  delivered
personally  or  sent  by  certified or registered  mail,  postage
prepaid,  return receipt requested, duly addressed to  the  Party
concerned  at  the  address indicated below or  to  such  changed
address as such Party may subsequently give notice of:

If to the Company or the Board:

          Rio Hotel & Casino, Inc.
          3700 W. Flamingo Road
          Las Vegas, Nevada  89103
          Attn:  Chief Executive Officer
          
          
With a copy to:

          General Counsel
          Rio Hotel & Casino, Inc.
          3700 W. Flamingo Road
          Las Vegas, Nevada  89103
          
          
If to the Executive:

          David P. Hanlon
          7174 Durango Street
          Las Vegas, Nevada  89120
          

24.  HEADINGS

     The  headings  of the paragraphs contained in the  Agreement
are  for  convenience only and shall not be deemed to control  or
affect  the  meaning  or construction of  any  provision  of  the
Agreement.

25.  COUNTERPARTS

     The Agreement may be executed in two or more counterparts.

                              -15-
                                
<PAGE>

26.  TAXES

      Compensation payable hereunder is gross and shall be subject
to  such withholding taxes and other taxes as may be required  by
law.

27.  ACKNOWLEDGMENT

       Executive acknowledges that he has been given a reasonable
period  of  time  to  study  this Agreement  before  signing  it.
Executive  certifies  that he has fully  read,  has  received  an
explanation of, and completely understands the terms, nature, and
effect of this Agreement.  Executive further acknowledges that he
is  executing  this Agreement freely, knowingly, and  voluntarily
and  that  Executive's  execution of this Agreement  is  not  the
result   of  any  fraud,  duress,  mistake,  or  undue  influence
whatsoever.  In executing this Agreement, Executive does not rely
on  any  inducements, promises, or representations by the Company
other than the terms and conditions of this Agreement.

     In  Witness  Whereof,  the  undersigned  have  executed  the
Agreement as of the date first written above.

                               RIO HOTEL & CASINO, INC.
                               
                                    
                                    
                               By:  /s/ James A. Barrett, Jr.
                                    Its President
                               
                               /s/ David P. Hanlon
                               David P. Hanlon
                               
                              -16-
                                
<PAGE>
                                
                            EXHIBIT A
                     TO EMPLOYMENT AGREEMENT
                                
           DETERMINATION OF PERFORMANCE BONUS AMOUNTS
                                
                                
     Executive shall be entitled to a performance bonus  pursuant
to  the terms of a management incentive compensation plan  to  be
approved by the Company's Compensation Committee and ratified  by
the Board.

                               A-1
                                
<PAGE>

                            EXHIBIT B
                     TO EMPLOYMENT AGREEMENT
                                
             1995 LONG-TERM INCENTIVE PLAN ("LTIP")
                       STOCK OPTION GRANT
                                
                                
                                                                  
EMPLOYEE:       David P. Hanlon    DATE OF GRANT:         October 8, 1996
                                                                  
GRANT NO.:                         OPTION EXERCISE PRICE:           
                                                                  
TYPE OF OPTION: Non-Qualified      OPTION SHARES:          500,000

Subject  to  the  terms of the LTIP and pursuant  to  this  stock
option  grant,  Rio  Hotel & Casino, Inc. (the "Company")  hereby
grants  the  option  to purchase the above  described  number  of
shares  of  Rio Hotel & Casino, Inc. Common Stock exercisable  at
the Option Price stated above.

     Options granted hereunder shall be exercisable only  to  the
extent  of  "vesting."  Vesting occurs when the Employee  remains
continuously employed with the Company or its subsidiaries on the
date  upon  which the options are scheduled to vest in  order  to
have any right to exercise such options and any options which are
scheduled  to  vest thereafter.  If the Employee  has  failed  to
remain continuously employed with the Company or its subsidiaries
on  a date upon which options are scheduled to vest, the Employee
shall  have no right to nor be entitled to exercise those options
or  any  other options which may be scheduled to vest thereafter.
The  vesting  schedule for stock options under this stock  option
grant is a follows:

October 8, 1996 (1) - 20% of Options will vest;
October 8, 1997 (1) - 40% of Options will vest;
October 8, 1998 (1) - 60% of Options will vest;
October 8, 1998 (1) - 80% of Options will vest;
October 8, 2000 (1) - 90% of Options will vest;
October 7, 2001 (1) - 100% of Options will vest.

     Notwithstanding the foregoing, the options granted hereunder
will  become fully vested and become exercisable in full  upon  a
Change  in Control as defined in the Employment Agreement between
the  Company and the Executive dated as of October 8,  1996  (the
"Employment Agreement").

     I.   Except as may be otherwise provided in the LTIP, vested
options granted thereunder shall expire the earlier of either:
     
          A.   ten (10) years after the Date of Grant;
     
                               B-1
                                
<PAGE>

          B.    three  (3) years after the Employee's  retirement
     from  the  Company  or  any of its  subsidiaries  after  the
     Employee attains the age of 72 years;
     
          C.    three  (3) years after the date of the Employee's
     death;
     
          D.    three (3) months after the Employee's termination
     from  the  Company  or any of its subsidiaries  (except  for
     Termination   Without  Cause  or  Constructive   Termination
     Without  Cause) for reasons other than death  or  retirement
     after attaining the age of 72 years; or
     
          E.    two  (2)  years after the Employee's  Termination
     Without  Cause,  Constructive Termination Without  Cause  or
     following a Change of Control.
     
     This  grant is made pursuant to the terms and conditions  of
the  LTIP, a copy of which is attached hereto as Exhibit "A," and
by  this  reference made a part hereof and in addition is subject
to the following limitations:

     I.    If  Employee resigns his position with the Company  or
any  of  its  subsidiaries without the  written  consent  of  the
Company,   and   accepts   employment,   consulting,   or   other
compensation for services, within six (6) months after Employee's
last   day  of  employment  with  the  Company  or  any  of   its
subsidiaries from a competitor company, Employee shall:

          A.    Forfeit all vested options in Employee's  account
     which were issued subject to this grant; and
     
          B.    Reimburse  the  Company for  all  profits  earned
     pursuant  to  any exercise of these options within  six  (6)
     months prior to or six (6) months subsequent to the date  of
     giving notice of Employee's resignation.
     
     II.   A  "competitor company" is defined as  any  gaming  or
hotel  company,  or any affiliate thereof, located  within  fifty
miles of any location in which the Company conducts business.

     III.  "Profits" are defined as the differential between  the
exercise  price and the last reported sale price on  the  day  of
exercise, multiplied by the number of shares exercised.

                               B-2
                                
<PAGE>

      In  Witness  Whereof, the undersigned executes  this  stock
option grant as of the first date set forth herein:

RIO HOTEL & CASINO, INC.        
Long Term Incentive Plan
Committee
                               
By:                            
     Thomas Y. Hartley         
                               
                               
By:                            
     Peter M. Thomas           


Accepted and agreed to as of the Date of the Grant:
                                                     
                                                     
Name:                       Social Security Number:  
                               
Residence Address: 
                   Street Address     City, State, Zip Code

                               B-3
<PAGE>
                      EMPLOYMENT AGREEMENT
                                
                                
     Agreement, dated  as of  March 7, 1997, between Rio  Hotel &
Casino,  Inc., a  Nevada  corporation with  its principal  office
located  at  3700  W.  Flamingo Road,  Las  Vegas,  Nevada  89103
(together with its successors or assigns as permitted under  this
agreement,   the  "Company"),   and  Ronald  J.  Radcliffe   (the
"Executive").

                      W I T N E S S E T H:
                                
     Whereas,  the  Company desires to employ the  Executive  and
enter  into  an agreement embodying the terms of such  employment
(the  "Agreement"), and the Executive desires to enter  into  the
Agreement and to accept such employment, subject to the terms and
provisions of this Agreement.

     Now,  Therefore, in consideration of the premises and mutual
covenants  contained  herein  and for  other  good  and  valuable
consideration,  the  Company and the  Executive  (individually  a
"Party" and together the "Parties") agree as follows:

1.   DEFINITIONS

     (a)   "BASE  SALARY" shall mean the salary provided  for  in
Paragraph  4 below subject to such increases as may be made  from
time to time.

     (b)   "BOARD"  shall  mean the Board  of  Directors  of  the
Company.

     (c)   "BUSINESS  DAY"  shall  mean  any  day  other  than  a
weekend, a  federal  or state  holiday or a  vacation day for the
Executive.

     (d)   "CAUSE" shall mean:

           (i)    the  conviction  of  (including  any  act  as a
     result of pleading nolo contendere) or judgment  against the
     Executive  by  a  civil  or  criminal  court  of   competent
     jurisdiction of a felony,  or any  other  offense  involving
     embezzlement,  misappropriation  of funds, any act of  moral
     turpitude or dishonesty;
     
           (ii)   the indictment of  the  Executive by a state or
     federal grand jury or the filing of a criminal complaint  or
     information  for  a  felony, or any other offense  involving
     embezzlement, misappropriation of funds, any  act  of  moral
     turpitude or dishonesty, unless such indictment or filing is
     dismissed within one hundred eighty (180) days from the date
     of  such  indictment  or filing.  The  Board  may  elect  to
     suspend  and  extend  the  Term of Employment  by  such  one
     hundred  eighty  (180)  day period or  the  number  of  days
     actually  taken by the Executive to dismiss such  indictment
     or filing, whichever  is less;  provided that  the Executive
     notifies the Company in  writing that the Executive  intends
     to contest in

<PAGE>

     good  faith  such  indictment  or  filing  and  pursues  the
     dismissal  of  such  indictment  or  filing with  reasonable
     diligence.   During such period  of suspension, Employee may
     be relieved of his  duties, but shall be entitled to receive
     his Base Salary;
     
           (iii)  the written  confession  by t he Executive   of
     embezzlement, misappropriation of funds or any act of  moral
     turpitude or dishonesty;
     
           (iv)   the denial,  revocation  or  suspension  of   a
     license, qualification  or certificate of suitability to the
     Executive by any of the Gaming Authorities;
     
           (v)    any action by the Executive that results in (A)
     a written communication from the Gaming Authorities  to  the
     Company  advising  the Company that, or  (B)  administrative
     action   by   the   Gaming  Authorities   resulting   in   a
     determination that:  (Y) any licensing, qualification and/or
     approval  by  the  Gaming Authorities with  respect  to  the
     Company  will  be  approved only upon terms  and  conditions
     which  are  unacceptable to the Company; or (Z)  the  Gaming
     Authorities will revoke or suspend any existing license held
     by the Company or its subsidiaries;
     
           (vi)   the   finding   by   a   court   of   competent
     jurisdiction  in  a criminal  or civil action or by the U.S.
     Securities  and  Exchange  Commission   or  state  blue  sky
     agency  in  an administrative  proceeding that the Executive
     has wilfully violated any federal or state securities law;
     
           (vii)  the engagement by the Executive in willful  and
     continued  misconduct,  or  the   Executive's   willful  and
     continued failure to substantially  perform the  Executive's
     obligations  as a  Director of the Company or as an employee
     of the Company, if such failure  or misconduct is materially
     damaging  or  materially  detrimental  to  the  business and
     operations of the Company;
     
           (viii) the  use  by the Executive of  alcohol  or  any
     controlled substance to an extent that it interferes, in the
     sole  discretion of the Board, on a continuing and  material
     basis  with the performance of the  Executive's duties under
     the Agreement;
     
           (ix)   the willful, unauthorized  disclosure  by   the
     Executive   of  Confidential  Information,  as  defined   in
     Paragraph  13,  concerning the Company  or  any  Subsidiary,
     unless such disclosure was (A) believed in good faith by the
     Executive  to  be  appropriate in  the  course  of  properly
     carrying out his duties under the Agreement, or (B) required
     by  an order of a court having jurisdiction over the subject
     matter or a summons, subpoena or order in the nature thereof
     of any legislative body (including any committee thereof) or
     any governmental or administrative agency; or
     
           (x)    the performance of  services  by the Executive,
     other than in the course of properly carrying out his duties
     under the Agreement  and as otherwise provided  herein,  for
     any other  corporation  or  person  that  competes  with the
     Company or any Subsidiary while the Executive is employed by
     the Company.
     
                               -2-
                                
<PAGE>

     (e)   "CHANGE IN CONTROL" shall mean the occurrence  of  any
one of the following events:

           (i)    any "person" (as that term is  used in  Section
     13(d)  and 14(d) of the Securities and Exchange Act of  1934
     (the  "Exchange  Act")), other than Anthony A.  Marnell  II,
     James  A.  Barrett,  Jr.  or their affiliates,  becomes  the
     "beneficial  owner"  (as defined in  Rule  13d-3  under  the
     Exchange  Act), directly or indirectly, of securities of the
     Company  representing 25.0% or more of the  combined  voting
     power  of the  Company's outstanding  securities  ordinarily
     having the right to vote at the election of directors; or
     
           (ii)   individuals  who   constitute   the  Board   of
     Directors of the Company on  the date hereof (the "Incumbent
     Board") cease  for  any  reason  to  constitute  at  least a
     majority  thereof,  provided  that  any  person  becoming  a
     director subsequent  to  the  date hereof whose election was
     approved by at least a majority of the directors  comprising
     the Incumbent Board, or whose nomination   or  election  was
     approved  by  a  majority  of the  Board of Directors of the
     Company serving under an Incumbent  Board,   shall  be,  for
     purposes of this clause   (ii), considered  as  if he or she
     were a member of the  Incumbent Board; or
     
           (iii)  the merger, consolidation or  sale  of  all  or
     substantially all the assets of the Company occurs; or
     
           (iv)   a proxy  statement  is  distributed  soliciting
     proxies  from  stockholders  of the the  Company, by someone
     other than  the current  management of the  Company, seeking
     stockholder approval of a plan of reorganization, merger  or
     consolidation of the  Company with  one or more corporations
     as a result of which the outstanding shares of the Company's
     securities are actually exchanged for or converted into cash
     or property or securities not issued by the Company.
     
     (f)   "COMMON STOCK" shall mean the common stock,  $.01  par
value, of the Company.

     (g)   "CONSOLIDATED   EBITDA"  shall  mean   the   Company's
consolidated  "Earnings (Losses) from Operations" plus  Interest,
Taxes,  Depreciation and Amortization but excluding (i) the  sale
of any material asset not in the ordinary course of business, and
(ii)  any  charge against earnings for stock options pursuant  to
Paragraph  6  below.  Consolidated EBITDA shall be determined  on
the  accrual  basis  of accounting in accordance  with  generally
accepted  accounting  principles.   Consolidated  EBITDA  for   a
calendar  year  shall be determined by the Company's  independent
accountants  based on audited financial statements.  Consolidated
EBITDA for a period of less than one year shall be determined  by
the  Company's independent accountants based on a written  report
setting forth the basis of the review.

     (h)   "CONSTRUCTIVE  TERMINATION WITHOUT CAUSE"  shall  mean
that,

           (i)    without  the Executive's prior written consent,
one or more of the following events occurs:

                               -3-
<PAGE>
     
                  (1)  the Executive is removed from the position
           of  Vice  President,  Treasurer   and  Chief Financial
           Officer  of  the  Company and/or the  position of Vice
           President,  Treasurer  and Chief  Financial Officer of
           Rio  Properties,  Inc.  ("Rio   Properties")  for  any
           reason other than the termination of his employment;
          
                  (2)  the    Executive    suffers   a   material
           diminution     in    the    authorities,   duties   or
           responsibilities   normally   associated   with    the
           foregoing  positions,  or  there  are assigned  to him
           duties  and  responsibilities  materially inconsistent
           with those normally associated with such positions;
          
                  (3)  the  Executive's  Base  Salary  or  annual
           bonus opportunity as provided for in Paragraphs 4  and
           5 below, respectively, is decreased by the affirmative
           act of the Company, or his benefits under any material
           employee benefit plan or program of the Company or his
           incentive  or  equity opportunity  under any  material
           incentive  or equity program is or are reduced by  the
           affirmative act of the Company;
          
                  (4)  the   Executive's   office   location   is
           relocated  outside   of   the   Las   Vegas,    Nevada
           metropolitan area; or
          
                  (5)  the Company  fails  to  obtain  a  written
           agreement from any successors of the Company to assume
           and perform the Agreement; and
          
           (ii)   within 90 days of learning of the occurrence of
     such  event (but in no event later than 180 days  after  the
     occurrence  of  such  event), the Executive  terminates  his
     employment with the Company.
     
     (i)   "DISABILITY" shall mean the Executive's inability, for
a  period of six consecutive months, to render substantially  the
services provided for in Paragraph 3(a) below by reason of mental
or  physical disability, whether resulting from illness, accident
or otherwise.

     (j)   "GAMING  AUTHORITIES" means the Nevada Gaming  Control
Board  ("Nevada  Board"), the Nevada Gaming  Commission  ("Nevada
Commission"), the Clark County Liquor and Gaming Licensing  Board
("Clark  County Board"), and any other federal, state,  local  or
tribal  gaming authority to which the Company is now subject,  or
may be subject during the Term of Employment.

     (k)   "SUBSIDIARY" shall mean any corporation in  which  the
Company owns 50% or more of the Voting Stock or any other venture
in which it owns 50% or more of the equity.

     (l)   "TERM OF EMPLOYMENT" shall mean the initial three-year
period  specified  in  Paragraph 2 below and  if,  but  only  if,
automatically  renewed as provided in Paragraph 2, shall  include
the period of such renewal.

     (m)   "TERMINATION BY THE COMPANY DUE TO FAILURE TO  RECEIVE
LICENSE"  shall mean a termination of the Executive's  employment
by  the Company following a failure of the Executive to obtain  a
license  required by the Nevada Board, Nevada Commission  or  the
Clark County

                               -4-
<PAGE>

Board  and  any  other  federal,  state,  local  or tribal gaming
authority to which the Company is now subject, or may  be subject
during the Term of Employment.

     (n)   "VOTING STOCK"  shall mean capital  stock of any class
or   classes   having   general   voting  power  under   ordinary
circumstances,  in  the  absence  of  contingencies, to elect the
directors of a corporation.

2.   TERM OF EMPLOYMENT

     (a)   The  Company  hereby employs the  Executive,  and  the
Executive  hereby  accepts employment with the  Company,  in  the
position and with the duties and responsibilities as set forth in
Paragraph  3  below for the Term of Employment,  subject  to  the
terms and conditions of the Agreement.

     (b)   The  initial  Term  of Employment  shall  commence  on
January  1, 1997 and shall, unless sooner terminated as  provided
in  Paragraph  10  hereof, terminate at 11:59  p.m.  (P.D.T.)  on
December 31, 1999;  provided that the Term  of  Employment  shall
automatically renew for successive one-year periods unless (i) it
has  sooner  terminated  as provided in Paragraph  10  hereof  or
(ii)  either Party has notified the other in writing at least  60
days  prior to the otherwise scheduled expiration of the Term  of
Employment that such Term of Employment shall not so renew.

3.   POSITION, DUTIES AND AUTHORITIES

     (a)   During the Term of Employment, the Executive shall  be
employed as Vice President, Treasurer and Chief Financial Officer
of  the  Company and  as  Vice  President,  Treasurer  and  Chief
Financial Officer  of the  Company's wholly-owned subsidiary, Rio
Properties.   Subject  to supervision and in accordance with  the
policies and directives established by the Board, and subordinate
to and  working  under the  supervision  of  the  Chief Executive
Officer  and  President  of  the  Company, in  the  case  of  the
Company, and the Chief Operating Officer of Rio Properties in the
case  of  Rio  Properties,  the  Executive  shall  be  the  Chief
Financial Officer of the Company's  and  Rio Properties'  day-to-
day  business  operations, with  the duties, responsibilities and
authorities  customarily  associated  with  such positions.   The
Executive shall  be  entitled to  no additional  remuneration for
serving as an officer of Rio Properties or any other Subsidiary.

     (b)   Anything  herein   to  the  contrary  notwithstanding,
nothing shall preclude the Executive from engaging in charitable,
community and business affairs, managing his personal investments
and  serving  as  a  member of boards of  directors  of  industry
associations  or  non-profit  or  for  profit  organizations  and
companies  so long as such activities do not materially interfere
in the opinion and sole discretion of the Chief Executive Officer
of  the  Company with the Executive's carrying out his duties and
responsibilities   under   the  Agreement.  The  Executive  shall
disclose all relationships covered under this Paragraph  3(b)  in
the Executive's  personal history disclosure form to be submitted
to   the  Nevada  Gaming Control   Board in  connection  with the
Executive's  required licensing  and  such  form shall, prior  to
filing  of  such  form,  be  submitted  to the  Company's   Chief
Executive Officer  for review.   Thereafter,  not less often than
on January 1

                               -5-
<PAGE>

of  each  year, the  Executive  shall  disclose in writing to the
Chief  Executive  Officer  of  the  Company  any  changes to  the
information  with  respect  to  involvement  in  such entities or
organizations.

4.   BASE SALARY

     During  the Term of Employment, the Executive shall be  paid
by  the Company a Base Salary payable no less frequently than  in
equal   semi-monthly  installments  at  an  annualized  rate   of
$255,000; subject to increase as may be determined by the Company
within   its   sole    discretion   and   as  set   forth  below.
Notwithstanding the foregoing, the Base Salary shall be increased
each January 1 during the term hereof in an amount equal  to  the
percentage increase in the Consumer Price Index - All Urban Areas
("CPI") issued by the U.S. Department of Labor, Bureau  of  Labor
Statistics,  for  the preceding calendar year; provided, however,
any such increase in Base Salary shall never  exceed six  percent
(6%) in any one year. 

5.   PERFORMANCE BONUS

     The  Company shall pay the Executive performance bonuses for
each year during the Term of Employment in amounts determined  in
accordance with Exhibit A hereto.

6.   STOCK OPTIONS

     The  Executive  shall be eligible for participation  in  the
Company's 1995 Long Term Incentive Plan, as amended from time  to
time.

7.   EMPLOYEE BENEFIT PROGRAMS

     (a)   During the Term of Employment, the  Executive and  his
dependents  shall  be  entitled,  at  the  Company's  expense, to
medical,  surgical,  hospitalization, dental and visual insurance
coverage (which  may include any insured program provided by  the
Company to its employees) providing him with 100% of all expenses
both  covered  and paid for by the Company's insurance program(s)
or plan(s).

     (b)   During  the  Term  of  Employment, the Executive shall
also be provided with long-term disability insurance which  shall
provide  the  Executive with an annual benefit of  fifty  percent
(50%)  of  Base  Salary  continued until  age  65  or  until  the
Executive  dies  or  is no longer disabled, if  sooner.   To  the
extent  available, the Executive shall be provided an opportunity
to purchase additional long-term disability insurance, at his own
expense.   To  the  extent  possible,  the  amount  of  long-term
disability insurance described in the first two sentences of this
Paragraph  7(b) shall be provided by an individual   policy  that
gives  the Executive the right to assume the policy in the  event
of  his  termination of employment, provided that the  amount  of
such  insurance  to be so provided shall be offset  by  long-term
disability insurance coverage provided to the Executive under the
Company's   employee  long-term  disability  insurance   programs
described in Paragraph 7(d) below.

                               -6-
                                
<PAGE>

     (c)   During  the  Term  of Employment,  the  Company  shall
provide  the Executive, subject to insurability as a normal  risk
and at reasonable cost, with life insurance coverage in an amount
equal to $500,000.  To the  extent available, the Executive shall
be provided an opportunity to purchase additional life insurance,
at his  own expense.   To the extent possible, the amount of life
insurance described in the first  two sentences of this Paragraph
7(c) shall be provided  by  an  individual  policy that gives the
Executive the right to assume the policy  in  the  event  of  his
termination  of  employment, provided  that  the  amount  of such
insurance to  be  so  provided shall be offset by  life insurance
coverage  provided to the Executive under the  Company's employee
group life insurance programs described in Paragraph 7(d) below.

     (d)   During the Term of Employment, the Executive shall  be
entitled  to  participate in all employee incentive  and  benefit
programs  of the Company now or hereafter made available  to  the
Company's  senior executives or salaried employees generally,  as
such  programs  may  be  in effect from time-to-time,  including,
without  limitation, pension and other retirement plans,  profit-
sharing  plans,  group  life  insurance,  accidental  death   and
dismemberment insurance, hospitalization, surgical, major medical
and  dental  coverage, sick leave (including salary  continuation
arrangements),  long-term disability, holidays  and  up  to three
weeks annually of vacations.

     (e)   During the Term of Employment, the Executive shall  be
entitled  to three  weeks paid  vacation per calendar  year.   In
lieu  of  utilizing such paid vacation in any calendar year,  the
Executive shall have the right to either (i) receive cash  in  an
amount  equivalent to  one  week of  annual Base  Salary, or (ii)
defer  one week of such paid vacation to the next  calendar year.
Notwithstanding  the foregoing, the  Executive  shall be entitled
to receive no more than three weeks of annual Base Salary in lieu
of paid vacation in any calendar year.  Except  as expressly  set
forth in Paragraph 7(e)(i) and (ii)  herein,  all  paid  vacation
benefits granted  hereunder  attributable  to  any calendar  year
shall terminate on December 31 of said calendar year.

     (f)   During the Term of Employment, the  Company shall  pay
all  expenses  incurred  by  the  Executive  in  connection  with
automobile  insurance  for  two autombiles owned or leased by the
Executive in lieu  of life insurance  described  at 7(c); not  to
exceed $6,000.00. 

8.   BUSINESS EXPENSE REIMBURSEMENT AND PERQUISITES

     During  the  Term  of  Employment, the  Executive  shall  be
entitled to receive reimbursement by the Company, upon submission
of  adequate  documentation,  for  all  reasonable  out-of-pocket
expenses  incurred  by  him  in  performing  services  under  the
Agreement.   Any legal fees and expenses incurred  in  connection
with  the preparation and negotiation of the Agreement  up  to  a
maximum of $2,000 shall be paid by the Company.

9.   DEFERRED COMPENSATION

     The  Executive shall be entitled to defer up to 25%  of  his
Base  Salary and any performance or other bonus for each calendar
year pursuant to a compensation deferral program to be adopted by
the Company.

                               -7-
<PAGE>

10.  TERMINATION OF EMPLOYMENT

     (a)   TERMINATION DUE TO DEATH OR DISABILITY.  In the  event
of  the  termination  of  the Executive's  employment  under  the
Agreement  due to his death or Disability, the Executive  or  his
legal representatives, as the case may be, shall be entitled to:

           (i)    (A) in the case of death, continued Base Salary
     at  the rate in effect at the time of his death for a period
     of 3 months following the month in which such termination of
     employment  due  to  death occurs, or (B)  in  the  case  of
     Disability, the disability benefit available under and  only
     to  the  extent  of  insurance  maintained  as  provided  in
     Paragraph 7(b) above;
     
           (ii)   any  performance  or other  bonus earned  for a
     fiscal period already completed but not yet paid;
     
           (iii)  a pro  rata performance bonus for the  year  in
     which  his  employment terminates due to death or Disability
     based  on performance in relation to the Consolidated EBITDA
     targets  for  the period ending with the end  of  the  month
     immediately prior to the termination of his employment;
     
           (iv)   reimbursement for expenses incurred but not yet
     reimbursed by the Company;
     
           (v)    any deferred compensation pursuant to Paragraph
     9, including any  interest accrued on such deferred amounts;
     and
     
           (vi)   any other compensation and benefits to which he
     or  his  legal  representatives  may   be   entitled   under
     applicable  plans,  programs  and agreements of the Company,
     including, without limitation, life insurance as provided in
     Paragraph 7(c) above.
     
     (b)   TERMINATION  BY THE COMPANY FOR CAUSE.   At  any  time
after  an  event constituting Cause, the Company shall  give  the
Executive  written notice of its intention to terminate  him  for
Cause, specifying in such notice the event forming the basis  for
Cause.  Subject only to the following sentence, termination shall
be  effective immediately upon delivery of notice hereunder.   If
the  written  notice  is  of  an event constituting  Cause  under
Paragraph  1(d)(i) or 1(d)(viii), and if the event is capable  of
being cured, the Executive shall have ten Business Days following
actual receipt of the notice of termination in which to cure,  so
long  as the  Executive  advises the Company in writing within 48
hours of  receiving the notice of termination of the  Executive's
intention  to  attempt  cure.   In  the  event  the   Executive's
employment is terminated by the Company for Cause, the  Executive
shall be entitled to:

           (i)    Base Salary  at the rate  in effect at the time
     of his termination through the  date  of  termination of his
     employment;
     
           (ii)   any performance or  other  bonus  earned  for a
     fiscal period already completed but not yet paid;

                               -8-
<PAGE>
     
           (iii)  reimbursement for expenses incurred but not yet
     reimbursed by the Company;
     
           (iv)   any  deferred    compensation,    pursuant   to
     Paragraph 9 hereof including any  interest accrued  on  such
     deterred amounts; and
     
           (v)    any  other compensation and benefits  to  which
     he  may  be  entitled under applicable plans,  programs  and
     agreements of the Company.
     
     The  Executive's  entitlement  to  the  foregoing  shall  be
without prejudice to the right of the Company for any damages  or
other  legal  or  equitable  remedy  to  which  the  Company or a
Subsidiary may be entitled as a result of  such  Cause; provided,
however, that offset shall not be available to the Company in any
event.

     (c)   TERMINATION WITHOUT CAUSE OR CONSTRUCTIVE  TERMINATION
WITHOUT  CAUSE.   In  the  event the  Executive's  employment  is
terminated by the Company without Cause (which shall not  include
a  termination pursuant to Paragraph 10(a)) or in the event of  a
Constructive  Termination Without Cause, the Executive  shall  be
entitled  to  those  items  described in  the  subparagraphs  (i)
through (v) hereof.  Termination Without Cause shall be effective
immediately,  unless a later date is stated, upon delivery  of  a
written  notice  of  such  termination  from  the  Company to the
Executive. In the event the Executive elects to resign based upon
a Constructive Termination  Without  Cause,  the Executive  shall
give written notice thereof to the Company and state therein  the
effective date of such resignation.
     
           (i)    an amount equal to one (1) year of Base  Salary
     (the  "Base  Salary  Termination   Payment").  The Executive
     may  elect, at  the Executive's option, to  receive the Base
     Salary  Termination  Payment  either (A)  in  equal  monthly
     installments over a (1) year period  commencing  immediately
     upon Termination of the Executive's employment, or (B) in  a
     lump-sum  payment  promptly  following  termination  of  the
     Executive's employment;
     
           (ii)   any  performance  or  other bonus  earned for a
     fiscal period already completed but not yet paid;
     
           (iii)  reimbursement for expenses incurred but not yet
     reimbursed by the Company;
     
           (iv)   any deferred compensation pursuant to Paragraph
     9 hereof, including any interest accrued  on  such  deferred
     amounts; and
     
           (v)    any other compensation and benefits to which he
     may   be  entitled  under  applicable  plans,  programs  and
     agreements of the Company.
     
     (d)   TERMINATION BY THE COMPANY DUE TO FAILURE  TO  RECEIVE
LICENSE.   In  the event of a Termination by the Company  Due  to
Failure  to  Receive License, the Executive shall be entitled  to
those  items  specified in subparagraphs (i) through (v)  hereof.
The effective date of the

                               -9-
<PAGE>

Termination by the  Company  Due  to  Failure  to Receive License
shall be as stated in a written notice  from the Company  to  the
Executive.

           (i)    Base  Salary  at the rate in effect at the time
     of his termination through the date of  termination  of  his
     employment;
     
           (ii)   any  performance  or  other  bonus earned for a
     fiscal period already completed but not yet paid;
     
           (iii)  reimbursement for expenses incurred but not yet
     reimbursed by the Company;
     
           (iv)   any deferred compensation pursuant to Paragraph
     9 hereof, including any interest accrued  on  such  deferred
     amounts; and
     
           (v)    any other compensation and benefits to which he
     may   be  entitled  under  applicable  plans,  programs  and
     agreements of the Company.
     
     (e)   VOLUNTARY TERMINATION. A "Voluntary Termination" shall
mean  a  termination of employment by the Executive  on  his  own
initiative  other  than a termination under  Paragraph  10(a)  or
10(c).   In  the event of a Voluntary Termination, the  Executive
shall be entitled to:

           (i)    Base Salary  at the rate in  effect at the time
      of his termination through the date of termination  of this
      employment;
     
           (ii)   any  performance  or  other  bonus earned for a
     fiscal period already completed but not yet paid;
     
           (iii)  reimbursement for expenses incurred but not yet
     reimbursed by the Company;
     
           (iv)   any deferred compensation pursuant to Paragraph
     9 hereof, including any interest accrued  on  such  deferred
     amounts; and
     
           (v)    any other compensation and benefits to which he
     may   be  entitled  under  applicable  plans,  programs  and
     agreements of the Company.
     
     A   Voluntary  Termination  shall  not,  solely  due  to   a
Voluntary  Termination, be deemed a breach of this Agreement  and
shall be effective upon the expiration  of 60 days after  written
notice delivered to the Company, unless another period of time is
agreed to in writing by the Parties.
     
     (f)   NO  MITIGATION;  NO  OFFSET.   In  the  event  of  any
termination of the Executive's employment under the Agreement, he
shall  be under no obligation to seek other employment, and there
shall be no offset against amounts due him under the Agreement on
account  of  any  remuneration  attributable  to  any  subsequent
employment that he may obtain.

                               -10-
<PAGE>
     
     (g)   NATURE  OF  PAYMENTS.  Any amounts due  the  Executive
under  the  Agreement  in  the event of any  termination  of  his
employment  with  the  Company are in  the  nature  of  severance
payments,  or  liquidated damages which contemplate  both  direct
damages and consequential damages that he may suffer as a  result
of the termination of his employment, or both, and are not in the
nature of a penalty.
     
11.  CHANGE OF CONTROL

     In the event a Change of Control occurs, the Executive shall
be entitled to:

     (a)   a lump-sum  payment equal  to the Base Salary due  him
for the remainder of  Term of Employment; provided, however, such
amount shall be no less than an amount equal to $300,000;

     (b)   any  performance or other bonus earned  for  a  fiscal
period already completed but not yet paid;

     (c)   reimbursement   for  expenses  incurred  but  not  yet
reimbursed by the Company;

     (d)   any  deferred  compensation pursuant  to  Paragraph  9
hereof,  including any interest accrued on such deferred amounts;
and

     (e)   any other compensation and benefits to which he may be
entitled under applicable plans, programs and agreements  of  the
Company.

12.  COVENANT NOT TO COMPETE

     In    the   event   of   a   Voluntary   Termination   under
Paragraph  10(e)  above  or  a Termination  Without  Cause  or  a
Constructive  Termination  Without Cause  under  Paragraph  10(c)
above,  the  Executive  shall not,  for  the  remaining  Term  of
Employment  or  12  months,  whichever  is  shorter,  engage   in
competition with the Company.  For purposes of this Paragraph 12,
the  Executive shall be engaging in competition with the  Company
if  he engages in the casino and gaming business in Clark County,
Nevada or any other location in which the Company is engaging  in
the casino and gaming business at the time of the termination  of
the   Executive's  employment,   whether  as  an   employee,  the
Executive, partner, principal, agent, representative, stockholder
or  consultant  (other  than  as  a holder of not more than a 10%
equity  interest)  or  in  any  other corporate or representative
capacity, so long as  the  Company is engaged in the  casino  and
gaming business in the location in question.

13.  COVENANTS TO PROTECT CONFIDENTIAL INFORMATION

     The  Executive  shall not, during the Term of Employment  or
thereafter,  without  prior  written  consent  of  the   Company,
divulge,  publish or otherwise disclose to any other  person  any
Confidential Information regarding the Company or any  Subsidiary
except  in  the  course of carrying out his  responsibilities  on
behalf  of  the  Company  (e.g.,  providing  information  to  the
Company's  attorneys, accountants, bankers, etc.) or if  required
to  do  so  pursuant to the order of a

                               -11-
<PAGE>

court having  jurisdiction over  the subject matter or a summons,
subpoena or order  in  the nature thereof of any legislative body
(including any  committee thereof  and any  litigation or dispute
resolution  method  against the Company related to or arising out
of this Agreement) or any governmental or administrative  agency.
For  this  purpose, Confidential  Information shall  include, but
not  be  limited  to,  the  Company's  financial,  real   estate,
marketing  and  promotional plans  and strategies, customer lists
and  customer data  bases.   Confidential  Information  does  not
include  information that becomes  available to  the public other
than  through  a  breach  of  the  Agreement  on  the part of the
Executive.

14.  INDEMNIFICATION

     (a)   The  Company  shall indemnify  the  Executive  to  the
fullest  extent permitted by Nevada law in effect as of the  date
hereof  against  all  costs,  expenses,  liabilities  and  losses
(including,  without  limitation,  attorneys'  fees,   judgments,
fines,  penalties,  ERISA  excise  taxes  and  amounts  paid   in
settlement)  reasonably incurred by the Executive  in  connection
with  a  Proceeding.  For the purposes of this  Paragraph  14,  a
"Proceeding" shall mean any action, suit or proceeding by  reason
of  the  fact that he is or was an officer, director or employee,
trustee  or  agent  of any other entity at  the  request  of  the
Company.

     (b)   The  Company   shall  advance  to  the  Executive  all
reasonable costs and expenses incurred by him in connection  with
a  Proceeding  within 20 days after receipt by the Company  of  a
written request for such advance.  Such request shall include  an
itemized list of the costs and expenses and an undertaking by the
Executive  to  repay  the  amount of such  advance  if  it  shall
ultimately  be  determined by a court of  competent  jurisdiction
that  he is not entitled to be indemnified by the Company against
such costs and expenses.

     (c)   The Executive shall not be entitled to indemnification
under  this Paragraph 14 unless he meets the standard of  conduct
specified in the Nevada Revised Statutes.  Actions that  fail  to
meet  the  aforementioned standard of conduct shall include,  but
are not limited to, the failure to act in good faith, failure  to
act  in the best interests of the Company, breach of the duty  of
loyalty,  appropriation of business opportunities,  violation  of
the provisions of the articles of incorporation or the bylaws  of
the  Company, violation of state or federal securities  laws  and
violation of criminal law.  Notwithstanding the foregoing, to the
extent  permitted by law neither N.R.S. 78.751(3) nor any similar
provision shall apply to indemnification under this Paragraph 14,
so that if the Executive in fact meets the applicable standard of
conduct, he shall be entitled to such indemnification whether  or
not   the  Company  (whether  by  the  board  of  directors,  the
stockholders,   independent  legal  counsel   or   other   party)
determines that indemnification is proper because he has met such
applicable  standard  of conduct.  Neither  the  failure  of  the
Company  to  have  made  such  a  determination  prior   to   the
commencement  by  the  Executive  of  any  suit  or   arbitration
proceeding  seeking indemnification, nor a determination  by  the
Company  that he has not met such applicable standard of  conduct
shall  create  a  presumption that he has not met the  applicable
standard of conduct.

     (d)   The  Company  shall not settle any Proceeding or claim
in any manner which would impose on the Executive any penalty  or
limitation  without  his  prior  written  consent.   Neither  the

                               -12-
<PAGE>

Company nor the Executive will unreasonably withhold its  or  his
consent to any proposed settlement.

15.  ASSIGNABILITY; BINDING NATURE

     This  Agreement  shall  be binding upon  and  inure  to  the
benefit of the Parties and their respective successors, heirs and
assigns.   No  rights  or obligations of the  Company  under  the
Agreement may be assigned or transferred by the Executive or  the
Company except that (a) such rights or obligations of the Company
may   be  assigned  or  transferred  pursuant  to  a  merger   or
consolidation in which the Company is not the continuing  entity,
or  the  sale or liquidation of all or substantially all  of  the
assets  of  the Company, provided that the assignee or transferee
is the successor to all or substantially all of the assets of the
Company  and such assignee or transferee assumes the liabilities,
obligations  and  duties  of the Company,  as  contained  in  the
Agreement,  either contractually or as a matter of law,  and  (b)
such  obligations  of  the  Company may  be  transferred  by  the
Executive  by  will  or  pursuant  to  the  laws  of  descent  or
distribution.  The Company shall take all reasonable legal action
necessary  to  effect  such  assignment  and  assumption  of  the
Company's liabilities, obligations and duties under the Agreement
in  circumstances  described  in  clause  (a)  of  the  preceding
sentence.

16.  REPRESENTATION

     The  Company  and the Executive respectively  represent  and
warrant to each other that, subject to any approval that  may  be
necessary from the Nevada Commission, each respectively is  fully
authorized and empowered to enter into the Agreement and that its
or  his entering into the Agreement and the performance of its or
his  respective obligations under the Agreement will not  violate
any  agreement between the Company or the Executive  respectively
and  any  other  person,  firm  or organization  or  any  law  or
governmental regulation.

17.  ENTIRE AGREEMENT

     The  Agreement  contains the entire  agreement  between  the
Parties  concerning the subject matter hereof and supersedes  all
prior  agreements, understandings, discussions, negotiations  and
undertakings, whether written or oral, between the  Parties  with
respect thereto.

18.  AMENDMENT OR WAIVER

     The Agreement cannot be changed, modified or amended without
the consent in writing of both the Executive and the Company.  No
waiver  by  either Party at any time of any breach by  the  other
Party  of  any condition or provision of the Agreement  shall  be
deemed a waiver of a similar or dissimilar condition or provision
at  the same or at any prior or subsequent time.  Any waiver must
be  in  writing  and  signed by the Executive  or  an  authorized
officer of the Company, as the case may be.

                               -13-
<PAGE>

19.  SEVERABILITY

     In the event that any provision or portion of this Agreement
shall  be  determined  to  be invalid or  unenforceable  for  any
reason,  in  whole  or in part, the remaining provisions  of this
Agreement  shall be unaffected thereby and shall remain  in  full
force and effect to the fullest extent permitted by law.

20.  SURVIVORSHIP

     The   respective  rights  and  obligations  of  the  Parties
hereunder shall survive any termination of this Agreement to  the
extent necessary to the intended preservation of such rights  and
obligations.

21.  GOVERNING LAW

     This Agreement  shall  be  governed  by  and  construed  and
interpreted  in  accordance  with  the  laws  of  Nevada  without
reference to principles of conflict of laws.

22.  SETTLEMENT OF DISPUTES

     Any  disputes regarding the  interpretation of, arising  out
of, or related to this Agreement shall be resolved by arbitration
to be held in Nevada in accordance with the rules and  procedures
of  the   American Arbitration Association.  The prevailing party
in such proceeding shall be entitled  to recover the costs of the
arbitration  or  litigation  from  the  other  party,  including,
without limitation, attorneys' fees.

23.  NOTICES

     Any  notice  given to either party shall be in writing  and,
except  as  provided  in the third sentence  of  Paragraph  10(b)
above,  shall  be  deemed  to  have  been  given  when  delivered
personally  or  sent  by  certified or registered  mail,  postage
prepaid,  return receipt requested, duly addressed to  the  Party
concerned  at  the  address indicated below or  to  such  changed
address as such Party may subsequently give notice of:

              If to the Company or the Board:

                   Rio Hotel & Casino, Inc.
                   3700 W. Flamingo Road
                   Las Vegas, Nevada  89103
                   Attn:  Chief Executive Officer
          
                               -14-
<PAGE>

              With a copy to:

                   General Counsel
                   Rio Hotel & Casino, Inc.
                   3700 W. Flamingo Road
                   Las Vegas, Nevada  89103
          
          
              If to the Executive:

                   Ronald J. Radcliffe
                   2222 Summerwind Circle
                   Henderson, Nev.  89012
          

24.  HEADINGS

     The  headings  of the paragraphs contained in this Agreement
are  for  convenience only and shall not be deemed to control  or
affect  the  meaning  or construction of  any  provision  of this
Agreement.

25.  COUNTERPARTS

     This Agreement may be executed in two or more counterparts.

26.  TAXES

     Compensation payable hereunder is gross and shall be subject
to  such withholding taxes and other taxes as may be required  by
law.

27.  ACKNOWLEDGMENT

     The  Executive   acknowledges   that  he  has  been given  a
reasonable period of time to study this Agreement before  signing
it.  The Executive certifies that he has fully read, has received
an  explanation of, and completely understands the terms, nature,
and effect of this Agreement.  The Executive further acknowledges
that  he  is  executing  this  Agreement  freely,  knowingly, and
voluntarily and  that the Executive's execution of this Agreement
is  not  the result of  any  fraud,  duress,  mistake,  or  undue
influence whatsoever.  In executing this Agreement, the Executive
does not rely on any inducements, promises, or representations by
the   Company  other  than  the  terms  and  conditions  of  this
Agreement.

                               -15-
<PAGE>

     IN  WITNESS  WHEREOF,  the  undersigned  have  executed  the
Agreement as of the date first written above.

                               RIO HOTEL & CASINO, INC.
                               
                                    
                                    
                               By:  /s/James A. Barrett, Jr.
                               Its: President
                               
                               
                               /s/Ronald J. Radcliffe
                               Ronald J. Radcliffe

                               -16-
<PAGE>
                          
                            EXHIBIT A
                     TO EMPLOYMENT AGREEMENT
                                
           DETERMINATION OF PERFORMANCE BONUS AMOUNTS
                                
                                
     The  Executive  shall  be  entitled  to a  performance bonus
pursuant to the terms of a management incentive compensation plan
to  be  approved by  the  Company's  Compensation  Committee  and
ratified by the Board.

                               A-1
<PAGE>

                            EXHIBIT B
                     TO EMPLOYMENT AGREEMENT
                                
             1995 LONG-TERM INCENTIVE PLAN ("LTIP")
                       STOCK OPTION GRANT
                                
                          
                                                                  
EMPLOYEE:       _______________    DATE OF GRANT: _________, 1996
                                                                  
GRANT NO.:      _______________    OPTION EXERCISE PRICE: _______   
                                                                  
TYPE OF OPTION: Non-Qualified      OPTION SHARES: _______________

     Subject  to  the  terms  of  the LTIP and pursuant  to  this
stock  option  grant,  Rio  Hotel &  Casino, Inc. (the "Company")
hereby grants the option to purchase the above  described  number
of shares  of  Rio Hotel & Casino, Inc. Common Stock  exercisable
at the Option Price stated above.

     Options granted hereunder shall be exercisable only  to  the
extent  of  "vesting."  Vesting occurs when the Employee  remains
continuously employed with the Company or its subsidiaries on the
date  upon  which the options are scheduled to vest in  order  to
have any right to exercise such options and any options which are
scheduled  to  vest thereafter.  If the Employee  has  failed  to
remain continuously employed with the Company or its subsidiaries
on  a date upon which options are scheduled to vest, the Employee
shall  have no right to nor be entitled to exercise those options
or  any  other options which may be scheduled to vest thereafter.
The  vesting  schedule for stock options under this stock  option
grant is a follows:

          _________, 1997 (1) - 20% of Options will vest;
          _________, 1998 (1) - 40% of Options will vest;
          _________, 1999 (1) - 60% of Options will vest;
          _________, 2000 (1) - 80% of Options will vest;
          _________, 2001 (1) - 90% of Options will vest;
          _________, 2002 (1) - 100% of Options will vest.

     Notwithstanding the foregoing, the options granted hereunder
will  become fully vested and become exercisable in full  upon  a
Change  in Control as defined in the Employment Agreement between
the  Company and the Executive dated as of __________,  1997 (the
"Employment Agreement").

     I.   Except as may be otherwise provided in the LTIP, vested
options granted thereunder shall expire the earlier of either:
     
          A.   ten (10) years after the Date of Grant;
     
                               B-1
<PAGE>

          B.   three  (3) years  after the Employee's  retirement
     from  the  Company  or  any of its  subsidiaries  after  the
     Employee attains the age of 72 years;
     
          C.   three  (3) years  after the date of the Employee's
     death;
     
          D.   three (3) months  after the Employee's termination
     from  the  Company  or any of its subsidiaries  (except  for
     Termination   Without  Cause  or  Constructive   Termination
     Without  Cause) for reasons other than death  or  retirement
     after attaining the age of 72 years; or
     
          E.   two  (2)  years  after the Employee's  Termination
     Without  Cause,  Constructive Termination Without  Cause  or
     following a Change of Control.
     
     This  grant is made pursuant to the terms and conditions  of
the  LTIP, a copy of which is attached hereto as Exhibit "A," and
by  this  reference made a part hereof and in addition is subject
to the following limitations:

     I.   If  the Employee  resigns his position with the Company
or any of its  subsidiaries without the written  consent  of  the
Company,   and   accepts   employment,   consulting,   or   other
compensation  for  services,  within  six  (6)  months  after the
Employee's last day of employment with the Company or any of  its
subsidiaries from a competitor company, the Employee shall:

          A.   Forfeit  all  vested  options  in  the  Employee's
account which were issued subject to this grant; and
     
          B.   Reimburse  the  Company  for  all  profits  earned
     pursuant  to  any exercise of these options within  six  (6)
     months prior to or six (6) months subsequent to the date  of
     giving notice of Employee's resignation.
     
     II.  A  "competitor company" is  defined as  any  gaming  or
hotel  company,  or any affiliate thereof, located  within  fifty
miles of any location in which the Company conducts business.

     III. "Profits" are  defined as the differential between  the
exercise  price and the last reported sale price on  the  day  of
exercise, multiplied by the number of shares exercised.

                               B-2
<PAGE>

     IN  WITNESS  WHEREOF, the  undersigned executes  this  stock
option grant as of the first date set forth herein:

RIO HOTEL & CASINO, INC.        
 Long Term Incentive Plan Committee
                               
By:  ________________________  
     Thomas Y. Hartley         
                               
                               
By:  ________________________  
     Peter M. Thomas           


Accepted and agreed to as of the Date of the Grant:
                                                     
                                                     
Name: __________________    Social Security Number: _____________
                               
Residence Address: ______________________________________________
                   Street Address     City, State, Zip Code

                               B-3
<PAGE>
                      EMPLOYMENT AGREEMENT
                                
                                
     Agreement, dated as  of March 7, 1997, between  Rio  Hotel &
Casino,  Inc., a  Nevada corporation  with its  principal  office
located  at  3700  W.  Flamingo Road,  Las  Vegas,  Nevada  89103
(together with its successors or assigns as permitted under  this
agreement, the "Company"), and I. Scott Bogatz (the "Executive").

                      W I T N E S S E T H:
                                
     Whereas,  the  Company desires to employ the  Executive  and
enter  into  an agreement embodying the terms of such  employment
(the  "Agreement"), and the Executive desires to enter  into  the
Agreement and to accept such employment, subject to the terms and
provisions of this Agreement.

     Now,  Therefore, in consideration of the premises and mutual
covenants  contained  herein  and for  other  good  and  valuable
consideration,  the  Company and the  Executive  (individually  a
"Party" and together the "Parties") agree as follows:

1.   DEFINITIONS

     (a)  "BASE  SALARY" shall  mean the salary provided  for  in
Paragraph  4 below subject to such increases as may be made  from
time to time.

     (b)  "BOARD"  shall  mean  the Board  of  Directors  of  the
Company.

     (c)  "BUSINESS DAY" shall mean any day other than a weekend,
a federal or state holiday or a vacation day for the Executive.

     (d)  "CAUSE" shall mean:

          (i)     the  conviction  of  (including  any act  as  a
     result of pleading nolo contendere) or judgment against  the
     Executive  by  a  civil  or  criminal  court  of   competent
     jurisdiction of a felony,  or any  other  offense  involving
     embezzlement,  misappropriation  of funds, any act of  moral
     turpitude or dishonesty;
     
          (ii)    the indictment of  the  Executive by a state or
     federal grand jury or the filing of a criminal complaint  or
     information  for  a  felony, or any other offense  involving
     embezzlement, misappropriation of funds, any  act  of  moral
     turpitude or dishonesty, unless such indictment or filing is
     dismissed within one hundred eighty (180) days from the date
     of  such  indictment  or filing.  The  Board  may  elect  to
     suspend  and  extend  the  Term of Employment  by  such  one
     hundred  eighty  (180)  day period or  the  number  of  days
     actually  taken by the Executive to dismiss such  indictment
     or filing, whichever is less; provided  that  the  Executive
     notifies the Company in writing that the  Executive  intends
     to contest in

<PAGE>

     good  faith  such  indictment  or  filing  and  pursues  the
     dismissal  of  such  indictment  or  filing with  reasonable
     diligence.   During such period  of suspension, Employee may
     be  relieved of his duties, but shall be entitled to receive
     his Base Salary;
     
          (iii)   the  written  confession  by the Executive   of
     embezzlement, misappropriation of funds or any act of  moral
     turpitude or dishonesty;
     
          (iv)    the  denial,  revocation  or  suspension  of  a
     license,  qualification or certificate of suitability to the
     Executive by any of the Gaming Authorities;
     
          (v)     any action by the Executive that results in (A)
     a written communication from the Gaming Authorities  to  the
     Company  advising  the Company that, or  (B)  administrative
     action   by   the   Gaming  Authorities   resulting   in   a
     determination that:  (Y) any licensing, qualification and/or
     approval  by  the  Gaming Authorities with  respect  to  the
     Company  will  be  approved only upon terms  and  conditions
     which  are  unacceptable to the Company; or (Z)  the  Gaming
     Authorities will revoke or suspend any existing license held
     by the Company or its subsidiaries;
     
          (vi)    the   finding   by   a   court   of   competent
     jurisdiction  in  a  criminal or civil action or by the U.S.
     Securities and Exchange Commission or state blue sky  agency
     in  an  administrative   proceeding  that the Executive  has
     willfully violated any federal or state securities law;
     
          (vii)   the engagement by the Executive in willful  and
     continued  misconduct,  or  the   Executive's   willful  and
     continued failure to substantially  perform the  Executive's
     obligations  as a  Director of the Company or as an employee
     of the Company, if such failure  or misconduct is materially
     damaging  or  materially  detrimental  to  the  business and
     operations of the Company;
     
          (viii)  the  use  by the Executive of  alcohol  or  any
     controlled substance to an extent that it interferes, in the
     sole  discretion of the Board, on a continuing and  material
     basis  with the performance of the  Executive's duties under
     the Agreement;
     
          (ix)    the willful,  unauthorized  disclosure  by  the
     Executive   of  Confidential  Information,  as  defined   in
     Paragraph  13,  concerning the Company  or  any  Subsidiary,
     unless such disclosure was (A) believed in good faith by the
     Executive  to  be  appropriate in  the  course  of  properly
     carrying out his duties under the Agreement, or (B) required
     by  an order of a court having jurisdiction over the subject
     matter or a summons, subpoena or order in the nature thereof
     of any legislative body (including any committee thereof) or
     any governmental or administrative agency; or
     
          (x)     the performance of  services  by the Executive,
     other than in the course of properly carrying out his duties
     under the Agreement  and as otherwise provided  herein,  for
     any other  corporation  or  person  that  competes  with the
     Company or any Subsidiary while the Executive is employed by
     the Company, except as disclosed in that certain conflict of
     interest  statement  from  the  Executive  to the Company in
     August 1996.
     
                               -2-
                                
<PAGE>

     (e)  "CHANGE IN CONTROL"  shall mean the occurrence  of  any
one of the following events:

          (i)     any "person" (as that term is  used in  Section
     13(d)  and 14(d) of the Securities and Exchange Act of  1934
     (the  "Exchange  Act")), other than Anthony A.  Marnell  II,
     James  A.  Barrett,  Jr.  or their affiliates,  becomes  the
     "beneficial  owner"  (as defined in  Rule  13d-3  under  the
     Exchange  Act), directly or indirectly, of securities of the
     Company  representing 25.0% or more of the  combined  voting
     power  of the  Company's outstanding  securities  ordinarily
     having the right to vote at the election of directors; or
     
          (ii)    individuals   who   constitute  the   Board  of
     Directors of the Company on  the date hereof (the "Incumbent
     Board")  cease  for  any  reason  to  constitute  at least a
     majority  thereof,  provided  that  any  person  becoming  a
     director subsequent  to  the  date hereof whose election was
     approved by at least a majority of the directors  comprising
     the Incumbent Board, or whose nomination   or  election  was
     approved  by  a  majority  of the  Board of Directors of the
     Company serving under an Incumbent  Board,   shall  be,  for
     purposes of this clause   (ii), considered  as  if he or she
     were a member of the  Incumbent Board; or
     
          (iii)   the merger, consolidation or  sale  of  all  or
     substantially all the assets of the Company occurs; or
     
          (iv)    a proxy  statement  is  distributed  soliciting
     proxies  from  stockholders  of the the  Company, by someone
     other than  the current  management of the  Company, seeking
     stockholder approval of a plan of reorganization, merger  or
     consolidation of the  Company with  one or more corporations
     as a result of which the outstanding shares of the Company's
     securities are actually exchanged for or converted into cash
     or property or securities not issued by the Company.
     
     (f)  "COMMON STOCK" shall  mean the common stock,  $.01  par
value, of the Company.

     (g)  "CONSOLIDATED  EBITDA"  shall   mean    the   Company's
consolidated  "Earnings (Losses) from Operations" plus  Interest,
Taxes,  Depreciation and Amortization but excluding (i) the  sale
of any material asset not in the ordinary course of business, and
(ii)  any  charge against earnings for stock options pursuant  to
Paragraph  6  below.  Consolidated EBITDA shall be determined  on
the  accrual  basis  of accounting in accordance  with  generally
accepted  accounting  principles.   Consolidated  EBITDA  for   a
calendar  year  shall be determined by the Company's  independent
accountants  based on audited financial statements.  Consolidated
EBITDA for a period of less than one year shall be determined  by
the  Company's independent accountants based on a written  report
setting forth the basis of the review.

     (h)  "CONSTRUCTIVE  TERMINATION  WITHOUT CAUSE"  shall  mean
that,

          (i)     without the Executive's  prior written consent,
     one or more of the following events occurs:

                               -3-
<PAGE>
     
                  (1)  the Executive is removed from the position
          of Vice President, Secretary and General Counsel of the
          Company   and/or   the   position   of Vice  President,
          Secretary  and General Counsel of Rio Properties,  Inc.
          ("Rio Properties")  for  any  reason     other than the
          termination of his employment;
          
                  (2)  the    Executive   suffers   a    material
          diminution  in    the     authorities,    duties     or
          responsibilities normally associated with the foregoing
          positions, or  there  are   assigned  to him duties and
          responsibilities  materially  inconsistent  with  those
          normally associated with such positions;
          
                  (3)  the  Executive's  Base  Salary  or  annual
          bonus opportunity as provided for in Paragraphs 4 and 5
          below,  respectively, is decreased by  the  affirmative
          act  of the Company, or his benefits under any material
          employee benefit plan or program of the Company or  his
          incentive  or  equity opportunity  under  any  material
          incentive  or equity program is or are reduced  by  the
          affirmative act of the Company;
          
                  (4)  the   Executive's   office   location   is
          relocated    outside   of   the   Las   Vegas,   Nevada
          metropolitan area; or
        
                  (5)  the Company  fails  to  obtain  a  written
          agreement from any successors of the Company to  assume
          and perform the Agreement; and
          
          (ii)    within 90 days of learning of the occurrence of
     such  event (but in no event later than 180 days  after  the
     occurrence  of  such  event), the Executive  terminates  his
     employment with the Company.
     
     (i)  "DISABILITY" shall  mean the Executive's inability, for
a  period of six consecutive months, to render substantially  the
services provided for in Paragraph 3(a) below by reason of mental
or  physical disability, whether resulting from illness, accident
or otherwise.

     (j)  "GAMING  AUTHORITIES" means  the Nevada Gaming  Control
Board  ("Nevada  Board"), the Nevada Gaming  Commission  ("Nevada
Commission"), the Clark County Liquor and Gaming Licensing  Board
("Clark  County Board"), and any other federal, state,  local  or
tribal  gaming authority to which the Company is now subject,  or
may be subject during the Term of Employment.

     (k)  "SUBSIDIARY" shall mean  any corporation in  which  the
Company owns 50% or more of the Voting Stock or any other venture
in which it owns 50% or more of the equity.

     (l)  "TERM OF EMPLOYMENT" shall  mean the initial three-year
period  specified  in  Paragraph 2 below and  if,  but  only  if,
automatically  renewed as provided in Paragraph 2, shall  include
the period of such renewal.

     (m)  "TERMINATION BY  THE COMPANY DUE TO FAILURE TO  RECEIVE
LICENSE"  shall mean a termination of the Executive's  employment
by  the Company following a failure of the Executive to obtain  a
license  required by the Nevada Board, Nevada Commission  or  the
Clark County

                               -4-
<PAGE>

Board  and  any  other  federal,  state, local  or  tribal gaming
authority to which the Company is now subject, or may  be subject
during the Term of Employment.

     (n)  "VOTING STOCK" shall mean capital stock of any class or
classes having general voting power under ordinary circumstances,
in  the  absence  of contingencies, to elect the directors  of  a
corporation.

2.   TERM OF EMPLOYMENT

     (a)   The  Company  hereby employs the  Executive,  and  the
Executive  hereby  accepts employment with the  Company,  in  the
position and with the duties and responsibilities as set forth in
Paragraph  3  below for the Term of Employment,  subject  to  the
terms and conditions of the Agreement.

     (b)   The  initial  Term  of Employment  shall  commence  on
January  1, 1997 and shall, unless sooner terminated as  provided
in  Paragraph  10  hereof, terminate at 11:59  p.m.  (P.D.T.)  on
December 31, 1999;  provided that the Term  of  Employment  shall
automatically renew for successive one-year periods unless (i) it
has  sooner  terminated  as provided in Paragraph  10  hereof  or
(ii)  either Party has notified the other in writing at least  60
days  prior to the otherwise scheduled expiration of the Term  of
Employment that such Term of Employment shall not so renew.

3.   POSITION, DUTIES AND AUTHORITIES

     (a)   During the Term of Employment, the Executive shall  be
employed as Vice President, Secretary and General Counsel of  the
Company and as Vice President, Secretary and General Counsel   of
the  Company's wholly-owned subsidiary, Rio Properties.   Subject
to supervision and in accordance with the policies and directives
established  by the Board, and subordinate to and  working  under
the  supervision of the Chief Executive Officer and President  of
the  Company, in the case of the Company, and the Chief Operating
Officer of Rio Properties  in the  case  of  Rio  Properties, the
Executive shall be the General Counsel of the Company's  and  Rio
Properties'  day-to-day  business  operations,  with  the duties,
responsibilities and authorities customarily associated with such
positions.   The  Executive shall  be  entitled to  no additional
remuneration for serving  as an officer of Rio Properties or  any
other Subsidiary.

     (b)   Anything  herein  to   the  contrary  notwithstanding,
nothing shall preclude the Executive from engaging in charitable,
community and business affairs, managing his personal investments
and  serving  as  a  member of boards of  directors  of  industry
associations  or  non-profit  or  for  profit  organizations  and
companies  so long as such activities do not materially interfere
in the opinion and sole discretion of the Chief Executive Officer
of  the  Company with the Executive's carrying out his duties and
responsibilities   under   the  Agreement.  The  Executive  shall
disclose all relationships covered under this Paragraph  3(b)  in
the Executive's  personal history disclosure form to be submitted
to   the  Nevada  Gaming Control   Board in  connection  with the
Executive's  required licensing  and  such  form shall, prior  to
filing  of  such  form,  be  submitted  to the  Company's   Chief
Executive Officer  for review.   Thereafter,  not less often than
on January 1

                               -5-
<PAGE>

of  each  year, the  Executive  shall  disclose in writing to the
Chief  Executive  Officer  of  the  Company  any  changes  to the
information  with  respect to involvement  in  such  entities  or
organizations.

4.   BASE SALARY

     During  the Term of Employment, the Executive shall be  paid
by  the Company a Base Salary payable no less frequently than  in
equal   semi-monthly  installments  at  an  annualized  rate   of
$155,000; subject to increase as may be determined by the Company
within   its   sole    discretion   and   as  set   forth  below.
Notwithstanding the foregoing, the Base Salary shall be increased
each January 1 during the term hereof in an amount equal  to  the
percentage increase in the Consumer Price Index - All Urban Areas
("CPI") issued by the U.S. Department of Labor, Bureau  of  Labor
Statistics,  for  the preceding calendar year; provided, however,
any such increase in Base Salary shall never  exceed six  percent
(6%) in any one year. 

5.   PERFORMANCE BONUS

     The  Company shall pay the Executive performance bonuses for
each year during the Term of Employment in amounts determined  in
accordance with Exhibit A hereto.

6.   STOCK OPTIONS

     The  Executive  shall be eligible for participation  in  the
Company's 1995 Long Term Incentive Plan, as amended from time  to
time.

7.   EMPLOYEE BENEFIT PROGRAMS

     (a)  During  the Term of Employment, the  Executive and  his
dependents  shall  be  entitled,  at  the  Company's  expense, to
medical,  surgical,  hospitalization, dental and visual insurance
coverage (which  may include any insured program provided by  the
Company to its employees) providing him with 100% of all expenses
both  covered  and paid for by the Company's insurance program(s)
or plan(s).

     (b)  During the Term of Employment, the Executive shall also
be  provided  with  long-term disability  insurance  which  shall
provide  the  Executive with an annual benefit of  fifty  percent
(50%)  of  Base  Salary  continued until  age  65  or  until  the
Executive  dies  or  is no longer disabled, if  sooner.   To  the
extent  available, the Executive shall be provided an opportunity
to purchase additional long-term disability insurance, at his own
expense.   To  the  extent  possible,  the  amount  of  long-term
disability insurance described in the first two sentences of this
Paragraph  7(b) shall be provided by an individual   policy  that
gives  the Executive the right to assume the policy in the  event
of  his  termination of employment, provided that the  amount  of
such  insurance  to be so provided shall be offset  by  long-term
disability insurance coverage provided to the Executive under the
Company's   employee  long-term  disability  insurance   programs
described in Paragraph 7(d) below.

                               -6-
<PAGE>

     (c)  During   the  Term  of Employment,  the  Company  shall
provide  the Executive, subject to insurability as a normal  risk
and at reasonable cost, with life insurance coverage in an amount
equal to $500,000.00.  To  the  extent  available,  the Executive
shall  be  provided  an  opportunity  to purchase additional life
insurance,  at  his  own  expense.   To the  extent possible, the
amount of life insurance described in the first  two sentences of
this Paragraph 7(c) shall be provided  by  an  individual  policy
that gives the  Executive the right to assume the policy  in  the
event of his termination of employment, provided that the  amount
of such  insurance  to  be  so  provided shall be offset by  life
insurance coverage provided to the Executive under the  Company's
employee  group life  insurance programs described  in  Paragraph
7(d) below.

     (d)  During the  Term of Employment, the Executive shall  be
entitled  to  participate in all employee incentive  and  benefit
programs  of the Company now or hereafter made available  to  the
Company's  senior executives or salaried employees generally,  as
such  programs  may  be  in effect from time-to-time,  including,
without  limitation, pension and other retirement plans,  profit-
sharing  plans,  group  life  insurance,  accidental  death   and
dismemberment insurance, hospitalization, surgical, major medical
and  dental  coverage, sick leave (including salary  continuation
arrangements),  long-term disability, holidays  and  up  to three
weeks annually of vacations.

     (e)  During the  Term of Employment, the Executive shall  be
entitled  to three  weeks paid  vacation per calendar  year.   In
lieu  of  utilizing such paid vacation in any calendar year,  the
Executive shall have the right to either (i) receive cash  in  an
amount  equivalent to  one  week of  annual Base  Salary, or (ii)
defer  one week of such paid vacation to the next  calendar year.
Notwithstanding  the foregoing, the  Executive  shall be entitled
to receive no more than three weeks of annual Base Salary in lieu
of paid vacation in any calendar year.  Except  as expressly  set
forth in Paragraph 7(e)(i) and (ii)  herein,  all  paid  vacation
benefits granted  hereunder  attributable  to  any calendar  year
shall terminate on December 31 of said calendar year.

     (f)  During  the Term of Employment, the  Company shall  pay
the Executive's Nevada State Bar membership dues and all fees and
expenses  to  be  incurred  in  connection  with  the Executive's
satisfaction of any Nevada State Bar  continuing legal  education
requirements,  including  reimbursement  for  reasonable   travel
expenses to programs outside the Las Vegas Metropolitan area. 

8.   BUSINESS EXPENSE REIMBURSEMENT AND PERQUISITES

     During  the  Term  of  Employment, the  Executive  shall  be
entitled to receive reimbursement by the Company, upon submission
of  adequate  documentation,  for  all  reasonable  out-of-pocket
expenses  incurred  by  him  in  performing  services  under  the
Agreement.   Any legal fees and expenses incurred  in  connection
with  the preparation and negotiation of the Agreement  up  to  a
maximum of $2,000 shall be paid by the Company.

                               -7-
<PAGE>

9.   DEFERRED COMPENSATION

     The  Executive shall be entitled to defer up to 25%  of  his
Base  Salary and any performance or other bonus for each calendar
year pursuant to a compensation deferral program to be adopted by
the Company.

10.  TERMINATION OF EMPLOYMENT

     (a)  TERMINATION  DUE TO DEATH OR DISABILITY.  In the  event
of  the  termination  of  the Executive's  employment  under  the
Agreement  due to his death or Disability, the Executive  or  his
legal representatives, as the case may be, shall be entitled to:

          (i)     (A) in the case of death, continued Base Salary
     at  the rate in effect at the time of his death for a period
     of 3  months  following  the month in which such termination
     of employment due to  death occurs, or (B) in  the  case  of
     Disability, the disability benefit available under and  only
     to  the  extent  of  insurance  maintained  as  provided  in
     Paragraph 7(b) above;
     
          (ii)    any  performance  or  other bonus  earned for a
     fiscal period already completed but not yet paid;
     
          (iii)   a pro  rata performance bonus for the  year  in
     which  his  employment terminates due to death or Disability
     based  on performance in relation to the Consolidated EBITDA
     targets  for  the period ending with the end  of  the  month
     immediately prior to the termination of his employment;
     
          (iv)    reimbursement for expenses incurred but not yet
     reimbursed by the Company;
     
          (v)     any deferred compensation pursuant to Paragraph
     9,  including any interest accrued on such deferred amounts;
     and
     
          (vi)    any other compensation and benefits to which he
     or  his  legal  representatives  may   be   entitled   under
     applicable  plans,  programs  and agreements of the Company,
     including, without limitation, life insurance as provided in
     Paragraph 7(c) above.

     (b)  TERMINATION  BY  THE COMPANY FOR CAUSE.   At  any  time
after  an  event constituting Cause, the Company shall  give  the
Executive  written notice of its intention to terminate  him  for
Cause, specifying in such notice the event forming the basis  for
Cause.  Subject only to the following sentence, termination shall
be  effective immediately upon delivery of notice hereunder.   If
the  written  notice  is  of  an event constituting  Cause  under
Paragraph  1(d)(i) or 1(d)(viii), and if the event is capable  of
being cured, the Executive shall have ten Business Days following
actual receipt of the notice of termination in which to cure,  so
long  as the  Executive  advises the Company in writing within 48
hours of  receiving the notice of termination of the  Executive's

                               -8-
<PAGE>

intention  to  attempt  cure.   In  the  event  the   Executive's
employment is terminated by the Company for Cause, the  Executive
shall be entitled to:

          (i)     Base Salary at the  rate in  effect at the time
     of his termination through the  date  of  termination of his
     employment;
     
          (ii)    any performance or  other  bonus  earned  for a
     fiscal period already completed but not yet paid;
     
          (iii)   reimbursement for expenses incurred but not yet
     reimbursed by the Company;
     
          (iv)    any   deferred   compensation,   pursuant    to
     Paragraph 9 hereof including any  interest accrued  on  such
     deterred amounts; and
     
          (v)     any other compensation  and benefits  to  which
     he  may  be  entitled under applicable plans,  programs  and
     agreements of the Company.
     
     The  Executive's  entitlement  to  the  foregoing  shall  be
without prejudice to the right of the Company for any damages  or
other  legal  or  equitable  remedy  to  which  the  Company or a
Subsidiary may be entitled as a result of  such  Cause; provided,
however, that offset shall not be available to the Company in any
event.

     (c)  TERMINATION  WITHOUT CAUSE OR CONSTRUCTIVE  TERMINATION
WITHOUT  CAUSE.   In  the  event the  Executive's  employment  is
terminated by the Company without Cause (which shall not  include
a  termination pursuant to Paragraph 10(a)) or in the event of  a
Constructive  Termination Without Cause, the Executive  shall  be
entitled  to  those  items  described in  the  subparagraphs  (i)
through (v) hereof.  Termination Without Cause shall be effective
immediately,  unless a later date is stated, upon delivery  of  a
written  notice  of  such  termination  from  the  Company to the
Executive. In the event the Executive elects to resign based upon
a Constructive Termination  Without  Cause,  the Executive  shall
give written notice thereof to the Company and state therein  the
effective date of such resignation.
     
          (i)     an amount equal to one (1) year of Base  Salary
     (the  "Base  Salary  Termination   Payment").  The Executive
     may  elect, at  the Executive's option, to  receive the Base
     Salary  Termination  Payment  either  (A) in  equal  monthly
     installments over a (1)  year period commencing  immediately
     upon termination of the Executive's  employment, or (B) in a
     lump-sum   payment promptly  following  termination  of  the
     Executive's employment;
     
          (ii)    any  performance  or  other  bonus earned for a
     fiscal period already completed but not yet paid;
     
          (iii)   reimbursement for expenses incurred but not yet
     reimbursed by the Company;
     
                               -9-
<PAGE>

          (iv)    any deferred compensation pursuant to Paragraph
     9 hereof,  including any interest accrued on  such  deferred
     amounts; and
     
          (v)     any other compensation and benefits to which he
     may   be  entitled  under  applicable  plans,  programs  and
     agreements of the Company.
     
     (d)  TERMINATION  BY THE COMPANY DUE TO FAILURE  TO  RECEIVE
LICENSE.   In  the event of a Termination by the Company  Due  to
Failure  to  Receive License, the Executive shall be entitled  to
those  items  specified in subparagraphs (i) through (v)  hereof.
The  effective  date  of the Termination by the  Company  Due  to
Failure to Receive License shall be as stated in a written notice
from the Company to the Executive.

          (i)     Base Salary  at the rate in  effect at the time
     of his termination through the date of  termination  of  his
     employment;
     
          (ii)    any  performance  or  other bonus  earned for a
     fiscal period already completed but not yet paid;
     
          (iii)   reimbursement for expenses incurred but not yet
     reimbursed by the Company;
     
          (iv)    any deferred compensation pursuant to Paragraph
     9 hereof,  including any interest accrued on  such  deferred
     amounts; and
     
          (v)     any other compensation and benefits to which he
     may   be  entitled  under  applicable  plans,  programs  and
     agreements of the Company.
     
     (e)  VOLUNTARY TERMINATION.  A "Voluntary Termination" shall
mean  a  termination of employment by the Executive  on  his  own
initiative  other  than a termination under  Paragraph  10(a)  or
10(c).   In  the event of a Voluntary Termination, the  Executive
shall be entitled to:

          (i)     Base  Salary at the  rate in effect at the time
     of his termination through the date of termination  of  this
     employment;
     
          (ii)    any  performance  or  other bonus  earned for a
     fiscal period already completed but not yet paid;
          
          (iii)   reimbursement for expenses incurred but not yet
     reimbursed by the Company;
     
          (iv)    any deferred compensation pursuant to Paragraph
     9 hereof, including any interest accrued  on  such  deferred
     amounts; and
     
          (v)     any other compensation and benefits to which he
     may   be  entitled  under  applicable  plans,  programs  and
     agreements of the Company.
     
                               -10-
<PAGE>

     A   Voluntary  Termination  shall  not,  solely  due  to   a
Voluntary  Termination, be deemed a breach of this Agreement  and
shall be effective upon the expiration  of 60 days after  written
notice delivered to the Company, unless another period of time is
agreed to in writing by the Parties.
     
     (f)  NO   MITIGATION;  NO  OFFSET.   In  the  event  of  any
termination of the Executive's employment under the Agreement, he
shall  be under no obligation to seek other employment, and there
shall be no offset against amounts due him under the Agreement on
account  of  any  remuneration  attributable  to  any  subsequent
employment that he may obtain.
     
     (g)  NATURE  OF  PAYMENTS.  Any  amounts due  the  Executive
under  the  Agreement  in  the event of any  termination  of  his
employment  with  the  Company are in  the  nature  of  severance
payments,  or  liquidated damages which contemplate  both  direct
damages and consequential damages that he may suffer as a  result
of the termination of his employment, or both, and are not in the
nature of a penalty.
     
11.  CHANGE OF CONTROL

     In the event a Change of Control occurs, the Executive shall
be entitled to:

     (a)  a lump-sum payment equal to the Base Salary due him for
the  remainder  of  Term of Employment; provided,  however,  such
amount shall be no less than an amount equal to $200,000;

     (b)  any  performance  or other bonus earned  for  a  fiscal
period already completed but not yet paid;

     (b)  reimbursement   for   expenses  incurred  but  not  yet
reimbursed by the Company;

     (d)  any  deferred  compensation  pursuant  to  Paragraph  9
hereof,  including any interest accrued on such deferred amounts;
and

     (e)  any other compensation and benefits to which he may  be
entitled under applicable plans, programs and agreements  of  the
Company.

12.  COVENANT NOT TO COMPETE

     In    the   event   of   a   Voluntary   Termination   under
Paragraph  10(e)  above  or  a Termination  Without  Cause  or  a
Constructive  Termination  Without Cause  under  Paragraph  10(c)
above,  the  Executive  shall not,  for  the  remaining  Term  of
Employment  or  12  months,  whichever  is  shorter,  engage   in
competition with the Company.  For purposes of this Paragraph 12,
the  Executive shall be engaging in competition with the  Company
if  he engages in the casino and gaming business in Clark County,
Nevada or any other location in which the Company is engaging  in
the casino and gaming business at the time of the termination  of
the   Executive's  employment,   whether  as  an   employee,  the
Executive, partner, principal, agent, representative, stockholder
or  consultant  (other  than  as  a holder of not more than a 10%
equity interest) or in any other corporate or

                               -11-
<PAGE>

representative capacity, so long as the Company is engaged in the
casino and gaming business in the location in question.

13.  COVENANTS TO PROTECT CONFIDENTIAL INFORMATION

     The  Executive  shall not, during the Term of Employment  or
thereafter,  without  prior  written  consent  of  the   Company,
divulge,  publish or otherwise disclose to any other  person  any
Confidential Information regarding the Company or any  Subsidiary
except  in  the  course of carrying out his  responsibilities  on
behalf  of  the  Company  (e.g.,  providing  information  to  the
Company's  attorneys, accountants, bankers, etc.) or if  required
to  do  so  pursuant to the order of a court having  jurisdiction
over  the subject matter or a summons, subpoena or order  in  the
nature  thereof of any legislative body (including any  committee
thereof and any litigation or dispute resolution  method  against
the Company related to or arising out of this Agreement)  or  any
governmental   or   administrative   agency.  For  this  purpose,
Confidential  Information shall  include, but not be limited  to,
the Company's financial, real estate, marketing  and  promotional
plans  and strategies, customer lists  and  customer data  bases.
Confidential  Information  does  not  include  information   that
becomes  available  to  the public other than through a breach of
the Agreement on the part of the Executive.

14.  INDEMNIFICATION

     (a)  The  Company  shall  indemnify  the  Executive  to  the
fullest  extent permitted by Nevada law in effect as of the  date
hereof  against  all  costs,  expenses,  liabilities  and  losses
(including,  without  limitation,  attorneys'  fees,   judgments,
fines,  penalties,  ERISA  excise  taxes  and  amounts  paid   in
settlement)  reasonably incurred by the Executive  in  connection
with  a  Proceeding.  For the purposes of this  Paragraph  14,  a
"Proceeding" shall mean any action, suit or proceeding by  reason
of  the  fact that he is or was an officer, director or employee,
trustee  or  agent  of any other entity at  the  request  of  the
Company.

     (b)  The  Company  shall  advance   to   the  Executive  all
reasonable costs and expenses incurred by him in connection  with
a  Proceeding  within 20 days after receipt by the Company  of  a
written request for such advance.  Such request shall include  an
itemized list of the costs and expenses and an undertaking by the
Executive  to  repay  the  amount of such  advance  if  it  shall
ultimately  be  determined by a court of  competent  jurisdiction
that  he is not entitled to be indemnified by the Company against
such costs and expenses.

     (c)  The  Executive shall not be entitled to indemnification
under  this Paragraph 14 unless he meets the standard of  conduct
specified in the Nevada Revised Statutes.  Actions that  fail  to
meet  the  aforementioned standard of conduct shall include,  but
are not limited to, the failure to act in good faith, failure  to
act  in the best interests of the Company, breach of the duty  of
loyalty,  appropriation of business opportunities,  violation  of
the provisions of the articles of incorporation or the bylaws  of
the  Company, violation of state or federal securities  laws  and
violation of criminal law.  Notwithstanding the foregoing, to the
extent  permitted by law neither N.R.S. 78.751(3) nor any similar
provision shall apply to indemnification under this Paragraph 14,
so that if the Executive in fact meets the applicable standard of
conduct, he shall be entitled to

                               -12-
<PAGE>

such indemnification whether or not the Company (whether  by  the
board  of  directors, the stockholders, independent legal counsel
or other party) determines that indemnification is proper because
he  has met such applicable  standard  of conduct.   Neither  the
failure of the Company to have made such a determination prior to
the commencement by the Executive of  any  suit  or   arbitration
proceeding  seeking indemnification, nor a determination  by  the
Company  that he has not met such applicable standard of  conduct
shall  create  a  presumption that he has not met the  applicable
standard of conduct.

     (d)  The Company shall not settle any Proceeding or claim in
any  manner  which would impose on the Executive any  penalty  or
limitation  without  his  prior  written  consent.   Neither  the
Company nor the Executive will unreasonably withhold its  or  his
consent to any proposed settlement.

15.  ASSIGNABILITY; BINDING NATURE

     This  Agreement  shall  be binding upon  and  inure  to  the
benefit of the Parties and their respective successors, heirs and
assigns.   No  rights  or obligations of the  Company  under  the
Agreement may be assigned or transferred by the Executive or  the
Company except that (a) such rights or obligations of the Company
may   be  assigned  or  transferred  pursuant  to  a  merger   or
consolidation in which the Company is not the continuing  entity,
or  the  sale or liquidation of all or substantially all  of  the
assets  of  the Company, provided that the assignee or transferee
is the successor to all or substantially all of the assets of the
Company  and such assignee or transferee assumes the liabilities,
obligations  and  duties  of the Company,  as  contained  in  the
Agreement,  either contractually or as a matter of law,  and  (b)
such  obligations  of  the  Company may  be  transferred  by  the
Executive  by  will  or  pursuant  to  the  laws  of  descent  or
distribution.  The Company shall take all reasonable legal action
necessary  to  effect  such  assignment  and  assumption  of  the
Company's liabilities, obligations and duties under the Agreement
in  circumstances  described  in  clause  (a)  of  the  preceding
sentence.

16.  REPRESENTATION

     The  Company  and the Executive respectively  represent  and
warrant to each other that, subject to any approval that  may  be
necessary from the Nevada Commission, each respectively is  fully
authorized and empowered to enter into the Agreement and that its
or  his entering into the Agreement and the performance of its or
his  respective obligations under the Agreement will not  violate
any  agreement between the Company or the Executive  respectively
and  any  other  person,  firm  or organization  or  any  law  or
governmental regulation.

17.  ENTIRE AGREEMENT

     The  Agreement  contains the entire  agreement  between  the
Parties  concerning the subject matter hereof and supersedes  all
prior  agreements, understandings, discussions, negotiations  and
undertakings, whether written or oral, between the  Parties  with
respect thereto.

                               -13-
<PAGE>

18.  AMENDMENT OR WAIVER

     The Agreement cannot be changed, modified or amended without
the consent in writing of both the Executive and the Company.  No
waiver  by  either Party at any time of any breach by  the  other
Party  of  any condition or provision of the Agreement  shall  be
deemed a waiver of a similar or dissimilar condition or provision
at  the same or at any prior or subsequent time.  Any waiver must
be  in  writing  and  signed by the Executive  or  an  authorized
officer of the Company, as the case may be.

19.  SEVERABILITY

     In the event that any provision or portion of this Agreement
shall  be  determined  to  be invalid or  unenforceable  for  any
reason,  in  whole  or in part, the remaining provisions  of this
Agreement  shall be unaffected thereby and shall remain  in  full
force and effect to the fullest extent permitted by law.

20.  SURVIVORSHIP

     The   respective  rights  and  obligations  of  the  Parties
hereunder shall survive any termination of this Agreement to  the
extent necessary to the intended preservation of such rights  and
obligations.

21.  GOVERNING LAW

     This Agreement  shall  be  governed  by  and  construed  and
interpreted  in  accordance  with  the  laws  of  Nevada  without
reference to principles of conflict of laws.

22.  SETTLEMENT OF DISPUTES

     Any  disputes regarding the  interpretation of, arising  out
of, or related to this Agreement shall be resolved by arbitration
to be held in Nevada in accordance with the rules and  procedures
of  the   American Arbitration Association.  The prevailing party
in such proceeding shall be entitled  to recover the costs of the
arbitration  or  litigation  from  the  other  party,  including,
without limitation, attorneys' fees.

23.  NOTICES

     Any  notice  given to either party shall be in writing  and,
except  as  provided  in the third sentence  of  Paragraph  10(b)
above,  shall  be  deemed  to  have  been  given  when  delivered
personally  or  sent  by  certified or registered  mail,  postage
prepaid,  return receipt requested, duly addressed to  the  Party
concerned  at  the  address indicated below or  to  such  changed
address as such Party may subsequently give notice of:

                               -14-
<PAGE>

              If to the Company or the Board:

                   Rio Hotel & Casino, Inc.
                   3700 W. Flamingo Road
                   Las Vegas, Nevada  89103
                   Attn:  Chief Executive Officer
          
          
              With a copy to:

                   President
                   Rio Hotel & Casino, Inc.
                   3700 W. Flamingo Road
                   Las Vegas, Nevada  89103
          
          
              If to the Executive:

                   I. Scott Bogatz
                   1907 Noritake Court
                   Henderson, Nevada  89014
          

24.  HEADINGS

     The  headings  of the paragraphs contained in this Agreement
are  for  convenience only and shall not be deemed to control  or
affect  the  meaning  or construction of  any  provision  of this
Agreement.

25.  COUNTERPARTS

     This Agreement may be executed in two or more counterparts.

26.  TAXES

     Compensation payable hereunder is gross and shall be subject
to  such withholding taxes and other taxes as may be required  by
law.

27.  ACKNOWLEDGMENT

     The  Executive  acknowledges   that   he  has  been given  a
reasonable period of time to study this Agreement before  signing
it.  The Executive certifies that he has fully read, has received
an  explanation of, and completely understands the terms, nature,
and effect of this Agreement.  The Executive further acknowledges
that  he  is  executing  this  Agreement  freely,  knowingly, and
voluntarily and  that the Executive's execution of this Agreement
is not the result of any fraud,

                               -15-
<PAGE>

duress, mistake, or undue influence whatsoever. In executing this
Agreement,  the  Executive  does  not  rely  on  any inducements,
promises, or representations by the Company other than the  terms
and conditions of this Agreement.

     IN  WITNESS  WHEREOF,  the  undersigned  have  executed  the
Agreement as of the date first written above.

                               RIO HOTEL & CASINO, INC.
                               
                                    
                                    
                               By:  /s/ James A. Barrett, Jr.
                               Its: President
                               
                               /s/ I. Scott Bogatz
                               I. Scott Bogatz

                               -16-
<PAGE>
                              
                            EXHIBIT A
                     TO EMPLOYMENT AGREEMENT
                                
           DETERMINATION OF PERFORMANCE BONUS AMOUNTS
                                
                                
     The  Executive  shall  be  entitled  to a  performance bonus
pursuant to the terms of a management incentive compensation plan
to  be  approved by  the  Company's  Compensation  Committee  and
ratified by the Board.

                               A-1
                                
<PAGE>
 
                        [RIO LETTERHEAD]

             1995 LONG-TERM INCENTIVE PLAN ("LTIP")
                       STOCK OPTION GRANT
                                
                                
                                                                  
Employee:  Scott Bogatz            Date of Grant: October 8, 1996
Grant No.: 1996                    Option Exercise Price:  $15.50    
Type of Option: Non-Statutory      Option Shares:          15,000
                 Stock Options

     Subject to the terms of the LTIP and pursuant to this  stock
option  grant,  Rio  Hotel & Casino, Inc. (the "Company")  hereby
grants  the  option  to purchase the above  described  number  of
shares  of  Rio Hotel & Casino, Inc. Common Stock exercisable  at
the option price stated above.

     Options granted thereunder shall be exercisable only to  the
extent they have vested.  Options vest when the Employee  remains
continuously employed with the Company or its subsidiaries  until
the scheduled vesting dates below.  Employees will only have  the
right to exercise vested options.  If the employee has failed  to
remain continuously employed with the Company or its subsidiaries
until the date upon which options vest, the Employee  shall  have
no right, nor be entitled, to exercise those options. The vesting
schedule for stock options  under this  stock option grant  is as
follows:

          August 26, 1997 - 20% of Options will vest;
          August 26, 1998 - 40% of Options will vest;
          August 26, 1999 - 60% of Options will vest;
          August 26, 2000 - 80% of Options will vest;
          August 26, 2001 - 100% of Options will vest.

     The attached LTIP details the  conditions  and  restrictions
of the options and should be carefully read in its entirety.  The
following is merely a summary of the conditions and  restrictions
and is provided for your convenience.  If there is any  question,
ambiguity or  contradiction in  this letter, the language of  the
attached LTIP shall govern:

      ADMINISTRATION

      The LTIP  is  administed by  the  LTIP  Committee, which is
comprised of  at least  two independent  members of  the Board of
Directors who are not employees of the Company.

      TERMINATION OF EMPLOYMENT OR ASSOCIATION

      If you cease to be employed or associated with the Company,
other than by reason of death, retirement as determined under any
of  the  Company's  pension  plans, if  any, or  retirement after
attaining the age of seventy-two (72)  years,  all  options which
have vested  as  of  the date of  termination shall expire on the
earlier of (i) the tenth anniversary after  the date  this letter
is executed or (ii) three months after the day your employment is
terminated.

<PAGE>

      If you retire  pursuant to  any  of  the  Company's pension
plans, if any, or  after  attaining  the  age of seventy-two (72)
years,  or  if  you die while  in  the employ of the Company, all
options which have vested  as of  the  date of your retirement or
death shall expire  on  the earlier of (i) the  tenth anniversary
after the date this letter is executed or (ii) three years  after
the date of your retirement or death.

     FORFEITURE AND REIMBURSEMENT OF PROFIT

      If you resign your position without the written consent  of
the Board of Directors  and  accept an employment, consulting, or
other  compensation  for  services from a Competitor Company  (as
defined in the LTIP) within six (6)  months  after  you leave the
Company, you (i) forfeit  all  options, vested  or otherwise, and
(ii) must reimburse  the  Company,  under certain conditions  and
definitions set forth in the LTIP, for profits  derived  from the
execise of any options within six (6) months before or after your
notice of resignation.  This  section  does  not  apply  once the
Company  has  entered into a contractual agreement for "Change of
Control" or within one (1) year after the "Change of Control"  of
the Company as defined in the LTIP and summarized below.

      CHANGE OF CONTROL

      In  the  event  of  a  Change  of  Control,   all   options
automatically vest and  any share  restrictions  will lapse.  The
definition of "Change of Control" is fully detailed in the  LTIP.
Generally, the events that constitute a Change of Control include
(a) any person or corporation (other than Anthony A. Marnell  II,
James A. Barrett, Jr., or  their  affiliates) acquiring  25.0% or
more of the Company, (b) individuals who currently constitute the
Board of Directors cease for any reason to constitute at least  a
majority  of  the  Board, (c)  a  merger or  consolidation of the
Company with any other corporation or  business  organization  or
the  sale  of  all  or  substantially  all  the  Company's assets
pursuant  to  approval   of  the  Company's   stockholders,   (d)
outstanding shares of the Company's securities are exchanged  for
or converted  into  cash or  securities not issued by the Company
pursuant  to a  proxy  solicitation,  or  (e)  any  event which a
majority  of  the  Board of  Directors declares to be a change of
control.

      IN WITNESS WHEREOF, the  undersigned  executes  this  stock
option grant as of the first date set forth herein:

RIO HOTEL & CASINO, INC.              RIO HOTEL & CASINO, INC.

/s/ Thomas Y. Hartley                 /s/ Peter M. Thomas
Thomas Y. Hartley, LTIP               Peter M. Thomas, LTIP
 Committee                             Committee

Accepted and agreed to as of the Date of Grant:

Name:  /s/ I. Scott Bogatz       Social Security Number: ________

Residence Address: 1907 Noritake Ct.    Henderson NV  89014
                   (street address)    (city, state, zip code)

<PAGE>