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

                            FORM 10-K

(MARK ONE)

 X   ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
---- SECURITIES EXCHANGE ACT OF 1934

     For the fiscal year ended        December 31, 1997
                              --------------------------------
                                  OR

     TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
---- SECURITIES EXCHANGE ACT OF 1934

     For the transition period from               to
                                   ---------------  --------------

Commission file number                      1-11569
                      --------------------------------------------

                    RIO HOTEL & CASINO, INC.
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     (Exact name of registrant as specified in its charter)

            Nevada                               95-3671082
-------------------------------           ------------------------
(State or other jurisdiction of               (I.R.S. Employer
incorporation or organization)               Identification No.)

3700 West Flamingo Road, Las Vegas, Nevada             89103
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(Address of principal executive offices)           (Zip Code)

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

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

                                     Name of each exchange on
     Title of each class                 which registered
     -------------------             ------------------------

Common Stock, $.01 par value          New York Stock Exchange
----------------------------------------------------------------

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

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

<PAGE>

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

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

      The  aggregate market value of voting stock  held  by  non-
affiliates  of the registrant as of February 27, 1998,  based  on
the  closing price as reported on the New York Stock Exchange  of
$28.1875 per share, was approximately $542,142,449.

      Indicate  the number of shares outstanding of each  of  the
registrant's classes of common stock, as of February 27, 1998.

    Common Stock, $.01 par value      24,766,141

               DOCUMENTS INCORPORATED BY REFERENCE

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

                               -2-
<PAGE>

PART I

ITEM 1.  BUSINESS

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

      The  Rio  is decorated throughout in a fun-filled Carnivale
and  Mardi  Gras  theme.  The  Rio features  over  2,500  suites,
including over 1,500 suites contained in three connected 21-story
hotel  towers (the "Ipanema Towers") and over 1,000 suites  in  a
new  41-story curved tower (the "Masquerade Tower").  On February
7, 1997, the Rio celebrated the grand opening of the public areas
of  its Phase V Expansion project, the Masquerade Village.   With
the  Masquerade  Village and Tower, the Rio  features  a  116,000
square foot casino; 14 restaurants, 14 bars and two coffee  bars;
a  737-seat  entertainment complex; a 32,000 square  foot  retail
area;  and  a  108,000  square  foot outdoor  entertainment  area
featuring a landscaped sand beach and three swimming pools.   The
Rio  offers approximately 2,300 slot machines, approximately  100
table games, including a premium gaming area, a poker room,  keno
and a race and sports book.

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

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

      This  first phase of the New Rio Master Plan is anticipated
to  be  completed  in stages through 1998 and early  1999  at  an
estimated cost of $200 million. Subsequent phases of the New  Rio
Master  Plan  are  currently  in  the  conceptual  stage.   These
conceptual phases currently include a separate hotel-casino of up

                               -3-
<PAGE>

to  3,000  rooms  and  two  additional  parking  structures.  The
timetable, theme and cost of the subsequent phases have  not  yet
been  established and there can be no assurance that the  balance
of  New Rio Master Plan will be implemented successfully,  if  at
all.

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

MASQUERADE VILLAGE

      On  February  7,  1997, the Company opened  the  Masquerade
Village,  consisting  of  five  new  restaurants  and  additional
retail,  gaming and entertainment space. A sixth restaurant,  the
VooDoo  Cafe  &  Lounge, located at the top of the  new  41-story
Masquerade Tower overlooking the Las Vegas Strip, opened  on  May
24,  1997.  Inspired  by  European architecture,  the  Masquerade
Village  blends celebrations of Carnivale in Rio de  Janeiro  and
Venice,   and   Mardi  Gras  in  New  Orleans,  into   a   unique
entertainment experience.

      The Masquerade Village includes specialty retail shops  and
restaurants,  and The Wine Cellar Tasting Room.  New  restaurants
include Mama Marie's Cucina, Mask, Napa Restaurant, Bamboleo, The
Village  Seafood  Buffet  and  the  VooDoo  Cafe  &  Lounge.  The
Masquerade Village also features a fully interactive $25  million
indoor attraction, the MASQUERADE SHOW IN THE SKY. The MASQUERADE
SHOW IN THE SKY consists of three complete parades, each with its
own themed music, costumes and live performers. The show features
five floats in each of the three parades, suspended on a 950-foot
track  located  over the casino floor of the Masquerade  Village,
and  a  cast  of  specialty  dancers, musicians,  aerialists  and
costume stilt walkers. Rio guests can participate in the show  by
traveling on a float in complete costume amid the performers.

BUSINESS STRATEGY

      The  Company's business strategy focuses on attracting  and
fostering repeat business from customers in the middle  to  upper
income  segments  of the local resident and tourist  markets.  To
implement its business strategy, the Company capitalizes  on  its
all-suite  concept, strategic location, and fun-filled  Carnivale
and  Mardi Gras theme. The Company strives to provide a  quality,
affordable  gaming  and  entertainment  experience  in  order  to
generate  high  customer  satisfaction  and  loyalty.  The  Rio's
location at Interstate 15 and Flamingo Road helps to attract both
of  its  target  market segments. The Rio's  value-priced  suites
provide an attractive alternative to conventional Las Vegas rooms
for visitors who desire to avoid the crowds and congestion of the
Las  Vegas Strip.  The Rio's suites offer approximately 50%  more
space  than  other  comparably  priced  Las  Vegas  hotel  rooms.
Management  believes  that it must offer  consistent  quality,  a
comfortable  and  fun atmosphere and, most importantly,  friendly
service  at  affordable prices to provide a high value experience
to its customers.  The Company's restaurants have won awards year
after year for their quality dining.

      Management  believes  that friendly service  combined  with
quality  facilities are integral to generating  repeat  business.
Management continually seeks to instill in each employee a  sense
of  service excellence designed to exceed guest expectations.  To
motivate its employees, management strives to instill a sense  of
''Team  Rio''  in  all  of the Company's  employees.   Management
strongly  believes that its employees are one  of  the  Company's
biggest assets.

                               -4-
<PAGE>

      The  Company  has  created an identifiable  and  innovative
marketing  presence and continues to build on  its  ''signature''
Rio theme.  The Rio's Carnivale theme incorporates bright colors,
creative  interior designs, festive employee costumes  and  other
exotic  touches  to  contribute to its  tropical  ambiance.   The
Masquerade  Village  expands  on the  Carnivale  theme  to  blend
Carnivale  and  Mardi  Gras  entertainment  experiences   through
architecture,  retail and restaurant areas,  and  the  MASQUERADE
SHOW  IN  THE  SKY.  The Rio's message of a fun-filled,  colorful
atmosphere  is constantly emphasized.  The Rio has developed  the
Rio  RitaTM  character as a promotional ambassador to  the  Rio's
hotel-casino  guests  and as a focal point for  many  promotional
activities.

      The high quality of the Company's facilities and service is
reflected  by the number of awards the Rio has received.  In  the
1997-1998  ZAGAT  HOTEL AND RESTAURANT SURVEY, the  Rio  received
awards  for  ''Best  Accommodations,'' ''Best  Service,''  ''Best
Food'' and ''Best Overall Hotel'' in Las Vegas. In addition,  the
Rio  was selected by the American Academy of Hospitality Sciences
to be the first and only recipient of the Five Star Diamond Award
for  1997  in  Las  Vegas.  The American Academy  of  Hospitality
Sciences   has  bestowed  fewer  than  100  hotels  and   resorts
internationally with this award. Furthermore, the  CASINO  PLAYER
1997  ''Best of Gaming'' readers' poll voted the Rio best  in  12
categories, including ''Best Overall Hotel & Casino.''  Recently,
the  Rio  was  named the "Best Value in the World"  by  TRAVEL  &
LEISURE  MAGAZINE'S Second Annual Reader's Survey of  hotels  and
cities around the world.

MARKETING STRATEGY

      The  Company's marketing efforts are targeted at  both  the
local  market and the tourist market. To market to local patrons,
the Rio relies on its convenient location, its ample parking, its
value-priced  food  and  its  slot  machine  variety.  Management
believes  that its restaurants, in particular the Carnival  World
Buffet,  are  among  the  Rio's  primary  attractions  for  local
patrons.  The  Carnival World Buffet is one of the  most  popular
buffets  in Las Vegas due to its extensive selections,  its  high
quality  food  and the entertainment provided by the  live-action
cooking  stations. During 1997, the Carnival World Buffet  served
an  average of approximately 6,550 people per day. In addition to
its emphasis on food and beverage, the Rio also has an aggressive
marketing  program  which encompasses frequent radio,  television
and  newspaper advertising, and a variety of promotions  directed
at the local customer.

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

THE RIO

  Since 1992, the Company has consistently expanded the Rio under
its  master  plan.  The Rio has over 2,500 suites,  approximately
2,300 slot machines and approximately 100 table games.

                               -5-
<PAGE>

<TABLE>
<CAPTION>
                                    AS OF AND FOR THE YEAR ENDED DECEMBER 31,
                                  --------------------------------------------
                                    1997      1996     1995    1994     1993
                                  --------------------------------------------
<S>                                <C>        <C>      <C>     <C>     <C>
Average daily suite rate               $91       $77      $72     $64     $63
Average daily hotel occupancy          90%       95%      95%     96%     97%
Hotel suites<F1>                     2,582     1,998    1,551     861     861
Casino square footage              116,000    89,000   89,000  89,000  79,000
Slot machines<F1>                    2,431     1,884    2,142   1,968   1,474
Table games<F1>                        103        79       65      46      33
Restaurant seats                     3,460     2,705    2,575   2,345   1,843

<FN>
<F1>  Average number available during the period.
</FN>
</TABLE>

      GAMING.  For  the  year ended December 31,  1997,  the  Rio
offered   116,000   square  feet  of  casino   space   containing
approximately 2,300 slot machines; approximately 100 table games,
including ''21,'' craps, roulette, pai gow poker, Caribbean  stud
poker,  baccarat and mini-baccarat; other casino  games  such  as
keno and poker; and a race and sports book.

      Gaming operations at the Rio are continually monitored  and
modified  to  respond  to  both changing  market  conditions  and
customer  demand  in  an effort to attract  new  customers  while
retaining  its  existing customer base.  New and innovative  slot
and  table games have been introduced based on customer  feedback
and  demand  from  both local customers and Las  Vegas  visitors.
Management  devotes substantial time and attention to  the  type,
location and player activity of all gaming devices.  The  Company
continually adds new and innovative gaming devices as they become
available.   By offering a variety of slot machines, the  Company
believes that it will attract and retain its slot customers.

     HOTEL.  With the completion of the remodeling program on the
top  two  floors  of the Ipanema Towers in the  spring  of  1998,
including  the  conversion of some standard suites  into  "super"
suites, the number of suites available at the Rio will be reduced
from 2,582 to 2,542 suites.  At that time, the Rio will have  124
multiple room suites and 2,418 standard suites.  The standard Rio
suite  is a luxury room measuring approximately 600 square  feet,
compared  to  approximately 400 square feet for the  typical  Las
Vegas hotel room.  The Carnivale theme is carried throughout  the
guest  suites  in  wall coverings, art work  and  other  designer
accents. Suite amenities include carved wood finishes, cut glass,
polished granite surfaces, tile in the bath areas, room safes and
refrigerators.   The  Company's use  of  the  term  ''suite''  is
currently  the  subject  of  litigation.   See  "Item  3.   Legal
Proceedings.''

      RESTAURANTS.   While  important  to  attracting  Las  Vegas
visitor gaming customers, the high quality, value and variety  of
food  services  are  critical  to consistently  attracting  local
resident gaming customers to the Rio. To provide such variety, 13
bars, 13 restaurants and two coffee bars are located in the Rio's
main floor area, and a bar and restaurant are located at the  top
of  the  new 41-story Masquerade Tower overlooking the Las  Vegas
Strip.  During  1997, the Rio served an average of  approximately
15,000  meals  per day, including banquets and room service.  The
following  table  sets forth, for each restaurant,  the  type  of
service provided and the current seating capacity:

                               -6-
<PAGE>

<TABLE>
<CAPTION>


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

Antonio's                    Italian fine-dining                     100

Bamboleo                     Latin restaurant featuring foods        200
                             from south of the border

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

Buzios                       Seafood and oyster bar                  160

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

Cucina Coffee                Gourmet coffee and espresso bar,         18
                             featuring fresh pastries

Fiore Rotisserie & Grille    Fine-dining featuring rotisserie-       132
                             grilled seafood, beef and
                             poultry

Mama Marie's Cucina          Family style casual Italian             143
                             dining

Mask                         Restaurant featuring cuisine            175
                             from the Far East

Napa Restaurant              Fine-dining featuring French            110
                             country cuisine

Rio Java                     Gourmet coffee and espresso bar,         16
                             featuring fresh breads
                             and pastries

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

The Village Seafood Buffet   Fresh seafood buffet                    332

VooDoo Cafe & Lounge         New Orleans flavored restaurant         366
                             featuring Creole and Cajun
                             cuisine

The Wine Cellar Tasting Room World's  largest  collection   of        44
                             fine  and  rare wines offering  a
                             wine  tasting bar, a retail shop,
                             and educational wine seminars
                                                                   -----
                                                           Total   3,460
                                                                   =====
</TABLE>

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

                               -7-
<PAGE>

in  the show by traveling on a float in complete costume amid the
performers.  The Masquerade Village also contains fine  specialty
retail stores in a 32,000 square foot retail area.

     The Rio's Copacabana Showroom is a unique, circular 737-seat
video,  entertainment complex which features two 12-foot  by  90-
foot  video screens, multiple tiers of seating, and a stage.  The
Copacabana  Showroom  is  utilized as an entertainment  showroom,
featuring nightly performances by Las Vegas' "Entertainer of  the
Year"  Danny  Gans, and a late-night dance club,  Club  Rio.  The
showroom is also used for casino-hosted events, concerts, viewing
of  sporting  events  on the large video screens,  and  corporate
meetings that capitalize on the unique audio visual qualities  of
the room.

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

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

      The  Company  has recently opened the Rio Secco  Golf  Club
located  in  the  master  planned community  of  Seven  Hills  in
Henderson, Nevada.  The Rio Secco Golf Club will provide a world-
class  golf experience to its guests with the Butch Harmon School
of  Golf  and  an 18-hole championship course designed  by  famed
course architect, Rees Jones.

EXPANSION STRATEGY

      RIO  MASTER  PLAN.  The Rio's conceptual  master  plan  was
originally  designed to accommodate multiple  expansions  without
significantly interrupting normal business operations.   Starting
from  its  original 30 acres, the Company acquired 15  additional
acres  in  1989  and 1991 and has purchased or  has  acquired  an
option  to  purchase an additional 38 acres as  of  December  31,
1997.  As described in the New Rio Master Plan below, the Company
has commenced construction on certain portions of this acreage.

                               -8-
<PAGE>

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

<TABLE>
<CAPTION>
                                                START DATE     OPENING DATE
                                                ----------     ------------
<S>                                                <C>            <C>
  Initial Construction                             12/88           1/90
  Casino (10,000 sq. ft.)/Buffet Expansion          7/92          12/92
  Phase II Expansion
     Buzios Restaurant                              1/93           5/93
     Meeting Rooms                                  1/93           8/93
     437-Suite Tower                                1/93           9/93
  Eastside Expansion
     Two-Story Parking Garage                       7/93          10/93
     Casino Space (25,000 sq. ft.)                  7/93          12/93
     Copacabana Showroom                            7/93           2/94
     Fiore Restaurant                               7/93           4/94
     Expanded Pool Area                             7/93           4/94
  Phase III Expansion
     Three-Story Parking Garage                     5/94           8/94
     Casino Space (10,000 sq. ft.)                  5/94          11/94
     Buffet Expansion                               5/94          11/94
     549-Suite Tower                                5/94           2/95
  Phase IV Expansion
     141-Suite Addition                             4/95          12/95
     Buzios Expansion                               4/95          12/95
     Meeting Rooms Expansion                        4/95          11/95
     Health Club and Salon                          4/95          12/95
  Phase V Expansion
     1,031-Suite Tower                              9/95           6/97<F1>
     Casino Space (27,000 sq. ft.)                  9/95           2/97
     Masquerade Village                             9/95           2/97
     Spa and Salon Expansion                        9/95           2/97
     Four-Story Parking Garage                      9/95           7/96
     Expanded Pool Area                             9/95           2/97
     VooDoo Cafe and Lounge                         9/95           5/97

<FN>
<F1> The  new  suites  were opened in several  phases  commencing
     December 31, 1996 and continuing through the second  quarter
     of 1997.
</FN>
</TABLE>

      As of December 31, 1997, the Company has invested in excess
of  $560 million in the development, expansion and renovation  of
the Rio, including the acquisition of additional land.

      NEW  RIO MASTER PLAN.  As part of the New Rio Master  Plan,
the  Company has assembled 43 acres immediately adjacent  to  the
Rio (seven of which are subject to options to purchase), bringing
the total acreage at the Rio to 83 acres.  The Company expects to
implement  the  New Rio Master Plan in phases.  The  Company  has
commenced  the  first phase which will include a state-of-the-art
convention and

                               -9-
<PAGE>

entertainment   center   adaptable   to   meet   a   variety   of
entertainment,  meeting, special event and  convention  needs,  a
complex   of  nine  ''Palazzo''  suites,  a  restaurant   serving
authentic  Chinese  food,  a valet parking  structure,  a  retail
shopping  area, an expanded outdoor entertainment  area  with  an
additional  swimming  pool, additional exhibition  space  in  the
Masquerade  Village, an expansion of the Shutters premium  gaming
lounge,  the  creation of a concierge suite level in the  Ipanema
and  Masquerade Towers, an expansion of the Rio's spa, a new road
connecting  the Rio and the Las Vegas Strip through an  extension
of  Twain  Avenue  to  Industrial Road  and  additional  customer
parking.

      The subsequent phases of the New Rio Master Plan are in the
conceptual  stage, but currently include a separate  hotel-casino
of  up to 3,000 rooms and two additional parking structures.  The
timetable, theme and cost of the subsequent phases have  not  yet
been  established and there can be no assurance that the  balance
of  New Rio Master Plan will be implemented successfully,  if  at
all.

COMPETITION

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

      The Rio faces increasing competition from all other casinos
and  hotels  in the greater Las Vegas area, including competitors
located  on  the  Las  Vegas Strip, on the  Boulder  Highway,  in
Henderson, and in downtown Las Vegas.  Such competition  includes
a   number  of  hotel-casinos  targeted  primarily  toward  local
residents,  as  well  as  numerous  non-hotel  gaming  facilities
targeted toward local residents.  As of December 31, 1997,  there
were  approximately 44 major gaming properties located on or near
the  Las  Vegas  Strip,  15 located in the  downtown  area,  five
located  on the Boulder Highway and 15 located in other areas  in
or  near  Las  Vegas.  In recent years, several of the  Company's
direct   competitors  have  opened  new  hotel-casinos  or   have
commenced  or  completed  major  expansion  projects,  and  other
expansions are in progress or are planned.  For example, in 1997,
New  York-New  York  Hotel  & Casino  opened  with  2,033  rooms,
Harrah's  Las  Vegas completed an expansion  of  986  rooms,  and
Caesars  Palace completed an expansion of 1,200 rooms.  According
to the Las Vegas Convention and Visitors Authority, the Las Vegas
hotel-motel  room inventory was 105,304 as of December  31,  1997
and both construction of new properties and expansion of existing
hotel-casinos  are  expected  to  increase  this   inventory   to
approximately 122,777 rooms by 1999.  By the year 2000, nine  new
hotel-casinos,  of  which four are currently under  construction,
and  one  expansion project will have added over 19,000 rooms  to
Las   Vegas.   Major  expansions  or  enhancements  of   existing
properties  or the construction of new properties by  competitors
could have a material adverse effect on the Company's business.

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

                              -10-
<PAGE>

casinos,  lotteries and other forms of gaming  in  other  states,
particularly in areas close to Nevada, such as California,  could
adversely affect the Company's operations.

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

REGULATION AND LICENSING

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

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

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

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

                               -11-
<PAGE>

must  pay all the costs of the investigation. Changes in licensed
positions must be reported to the Nevada Gaming Authorities  and,
in  addition  to  their authority to deny an  application  for  a
finding   of   suitability  or  licensure,  the   Nevada   Gaming
Authorities  have  jurisdiction  to  disapprove  a  change  in  a
corporate position.

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

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

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

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

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

                              -12-
<PAGE>

consistent with such investment intent. If the beneficial  holder
of voting securities who must be found suitable is a corporation,
partnership  or  trust,  it  must submit  detailed  business  and
financial information including a list of beneficial owners.  The
applicant is required to pay all costs of investigation.

      Any  person who fails or refuses to apply for a finding  of
suitability or a license within 30 days after being ordered to do
so  by the Nevada Commission or the Chairman of the Nevada Board,
may  be found unsuitable. The same restrictions apply to a record
owner  if the record owner, after request, fails to identify  the
beneficial owner. Any stockholder found unsuitable and who holds,
directly  or indirectly, any beneficial ownership of  the  common
stock  of a Registered Corporation beyond such period of time  as
may  be  prescribed by the Nevada Commission may be guilty  of  a
criminal  offense. The Company is subject to disciplinary  action
if, after it receives notice that a person is unsuitable to be  a
stockholder  or to have any other relationship with the  Company,
the  Company  (i) pays that person any dividend or interest  upon
voting  securities  of the Company, (ii) allows  that  person  to
exercise,  directly  or  indirectly, any voting  right  conferred
through  securities held by that person, (iii) pays  remuneration
in any form to that person for services rendered or otherwise, or
(iv)   fails  to  pursue  all  lawful  efforts  to  require  such
unsuitable person to relinquish his voting securities for cash at
fair market value.

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

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

     The Company may not make a public offering of its securities
without  the  prior  approval of the  Nevada  Commission  if  the
securities  or  proceeds therefrom are intended  to  be  used  to
construct, acquire or finance gaming facilities in Nevada, or  to
retire or extend obligations incurred for such purposes. On  July
24,  1997,  the  Nevada  Commission  granted  the  Company  prior
approval  to  make public offerings for a period  of  two  years,
subject  to certain conditions (the ''Shelf Approval''). However,
the  Shelf Approval may be rescinded for good cause without prior
notice  upon the issuance of an interlocutory stop order  by  the
Chairman of the Nevada Board. Such approval does not constitute a
finding,  recommendation or approval by the Nevada Commission  or
the Nevada Board as to the accuracy or adequacy of the prospectus
or the investment merits of the securities. Any representation to
the contrary is unlawful.

       Changes   in  control  of  the  Company  through   merger,
consolidation,  stock  or  asset  acquisitions,   management   or
consulting agreements, or any act or conduct by a person  whereby
such  person  obtains control, may not occur  without  the  prior
approval  of the Nevada Commission. Entities seeking  to  acquire
control of a Registered Corporation must satisfy the Nevada Board
and Nevada Commission in a variety of

                              -13-
<PAGE>

stringent  standards prior to assuming control of such Registered
Corporation.  The Nevada Commission may also require  controlling
stockholders,  officers, directors and  other  persons  having  a
material relationship or involvement with the entity proposing to
acquire control, to be investigated and licensed as part  of  the
approval process relating to the transaction.

      The  Nevada  legislature has declared that  some  corporate
acquisitions  opposed  by  management,  repurchases   of   voting
securities and corporate defense tactics affecting Nevada  gaming
licensees,  and Registered Corporations that are affiliated  with
those  operations,  may  be injurious to  stable  and  productive
corporate  gaming.  The  Nevada  Commission  has  established   a
regulatory  scheme to ameliorate the potentially adverse  effects
of  these business practices upon Nevada's gaming industry and to
further Nevada's policy to: (i) assure the financial stability of
corporate  gaming operators and their affiliates;  (ii)  preserve
the  beneficial aspects of conducting business in  the  corporate
form;  and  (iii) promote a neutral environment for  the  orderly
governance  of  corporate  affairs.  Approvals  are,  in  certain
circumstances,  required from the Nevada  Commission  before  the
Company  can  make  exceptional repurchases of voting  securities
above  the  current market price thereof and before  a  corporate
acquisition opposed by management can be consummated. The  Nevada
Act  also  requires prior approval of a plan of  recapitalization
proposed  by  the Company's Board of Directors in response  to  a
tender offer made directly to the Company's stockholders for  the
purposes of acquiring control of the Company.

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

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

EMPLOYEES

      As of December 31, 1997, the Company employed approximately
5,000  employees. None of the Company's employees are covered  by
collective  bargaining  agreements.  Certain  local  unions  have
announced  an intention to focus their organizational efforts  on
existing  non-union  hotel-casinos such as  the  Rio.   Recently,
these  local  unions have distributed literature to some  of  the
Rio's employees. The Company believes that its relations with its
employees  are  good and that it provides competitive  wages  and
benefits to its employees.  The Company, however, cannot  predict
the nature and effect of any future union activities.

                              -14-
<PAGE>

ITEM 2.  PROPERTIES

      The Company owns approximately 76 acres, consisting of  the
45-acre  site  in Las Vegas on which the Rio is  located  and  31
acres  of land adjacent to the current Rio site. The Company  has
purchased  options  on an additional  seven acres adjacent to the
Rio site.   Approximately 58 of the acres is subject to a deed of
trust  securing  the Company's senior secured reducing  revolving
credit  facility, the Amended and Restated Credit Agreement  (the
"Amended  Bank  Loan"), of which $24 million was  outstanding  at
February  24, 1998. The Company also owns approximately 64  acres
on  the  Boulder Highway southeast of Las Vegas (the ''Old  Vegas
Site''). The Old Vegas Site is being held for sale.

      The Company owns the Rio Secco Golf Club south of Las Vegas
which is subject to a deed of trust securing a loan from ORIX USA
Corporation  (the  ''Orix Loan''). The maximum  principal  amount
that may be borrowed under the Orix Loan is $6.0 million of which
approximately $3.8 million was outstanding on December 31, 1997.

ITEM 3.  LEGAL PROCEEDINGS

      On April 26, 1994 and May 10, 1994, complaints in purported
class  action lawsuits (WILLIAM POULOS V. CAESARS WORLD, INC.  ET
AL.,  Case No. 94-478-Civ-Orl-22, and WILLIAM H. AHERN V. CAESARS
WORLD,  INC.  ET  AL., Case No. 94-532-Civ-Orl-22,  respectively)
were  filed  in the United States District Court for  the  Middle
District  of  Florida  (the "Florida Complaints").   The  Florida
Complaints  were  subsequently transferred to the  United  States
District Court for the District of Nevada, Southern Division (the
"United  States  District Court of Nevada").   On  September  26,
1995,  a  complaint  in a purported class action  lawsuit  (LARRY
SCHRIER V. CAESARS WORLD, INC. ET AL., Case No. 95-923-LDG (RJJ))
was  filed in United States District Court of Nevada (along  with
the Florida Complaints, the "Complaints").  The Complaints allege
that  manufacturers, distributors and casino operators  of  video
poker  and electronic slot machines, including the Company,  have
engaged in a course of conduct intended to induce persons to play
such  gaming machines based on a false belief concerning how  the
gaming machines operate, as well as the extent to which there  is
an  opportunity  to  win on a given play.  The Complaints  charge
defendants  with  violations  of  the  Racketeer  Influenced  and
Corrupt Organizations Act, as well as claims of common law fraud,
unjust  enrichment  and  negligent  misrepresentation,  and  seek
damages  in  excess  of $1 billion without any substantiation  of
that  amount.  After the United States District Court  of  Nevada
dismissed  the  Complaints, granting leave to plaintiffs  to  re-
file,  the plaintiffs filed an amended complaint on or about  May
31,  1996.   Subsequently, the United States  District  Court  of
Nevada  consolidated  the actions (and one  other  action  styled
WILLIAM POULOS V. AMERICAN FAMILY CRUISE LINE, N.V. ET AL.,  Case
No.  CV -S-95-936-LDG (RLH), in which the Company is not a  named
defendant),  ordered  Plaintiffs to file a  consolidated  amended
complaint on or before February 14, 1997, and ordered all defense
motions,  including  those  of  the  Company,  withdrawn  without
prejudice.  The parties have established a steering committee  to
address   motion  practice,  scheduling  and  discovery  matters.
Plaintiffs filed their consolidated amended complaint on February
14,  1997.  The Company renewed its motions to dismiss and joined
in motions to dismiss filed by other defendants. In late December
1997, the United States District Court of Nevada granted in  part
and denied in part Defendants' Motions to Dismiss for Failure  to
Plead  Fraud with Particularity and for Failure to State a Claim;
granted  in part and denied in part Defendants' Motion to  Strike
Changes  Made  in  Plaintiffs'  Consolidated  Amended  Complaint;
denied  Cruise  Ship Defendant's Motion to Dismiss  for  Lack  of
Subject  Matter  Jurisdiction; denied Defendant Princess  Hotel's
Motion  to  Dismiss Under the Act of State Doctrine;  and  denied
Defendants'  Motion  for  a  Stay  on  Primary  Jurisdiction  and
Abstention  Grounds.   In  addition, the United  States  District
Court  of  Nevada requested additional briefing from the  parties
with  respect  to  Defendants' Motion  to  Dismiss  for  Lack  of
Personal Jurisdiction.  Plaintiffs filed their Second

                              -15-
<PAGE>

Consolidated Amended Complaint on or about January 8, 1998.   The
Answer to the Second Consolidated Amended Complaint was filed  on
February  11,  1998.   Management believes that  the  substantive
allegations  in  the  Complaints are without  merit  and  intends
vigorously to defend the allegations.

     On May 5, 1995, a purported class action lawsuit (HYLAND, ET
AL. V. GRIFFIN INVESTIGATIONS, ET AL., Case No. 95-CV-2236 (JEI))
was filed in the United States District Court for the District of
New  Jersey  (Camden Division).  The Company,  together  with  76
other casino operators and others, is named as a defendant in the
action.   The  action, purportedly brought on  behalf  of  ''card
counters,''  alleges  that  the casino operators  exclude  ''card
counters''   from  play  and  share  information   about   ''card
counters.''  The action is based on alleged violations of federal
antitrust  law, the Fair Credit Reporting Act and  various  state
consumer  protection laws.  The amount of damages sought  by  the
plaintiffs in the action is unspecified.  The Company has made  a
motion to dismiss the complaint.  The court has not yet ruled  on
the  motion.  Management believes that the complaint  is  without
merit   and   the  Company  intends  vigorously  to  defend   the
allegations.

      On  March 27, 1996, a complaint in a purported class action
lawsuit (TOM PAYNE, ET AL. V. AZTAR CORPORATION, ET AL., Case No.
698592) was filed in the Superior Court of California, County  of
San  Diego,  against a number of gaming entities in  Nevada,  New
Jersey  and  Louisiana, including the Company.  In  a  subsequent
amendment,  Rio  Properties was later added as a defendant.   The
complaint,  which is primarily a narrower version  of  the  other
class  action  suits filed against the gaming  industry,  alleges
that  the defendants have engaged in a course of conduct intended
to  induce citizens of California to play video poker based on  a
false belief concerning how the gaming machines operate, as  well
as to the extent to which the odds of the gaming machines are the
same as live poker.  The Company and Rio Properties filed motions
to  quash  challenging personal jurisdiction.  Thereafter,  other
defendants appeared and demurred to the complaint, and plaintiffs
moved  to certify the class.  The motions to quash and for  class
certification   were  continued  pending  the  outcome   of   the
demurrers.   On July 11, 1997, the court sustained the  demurrers
without  leave to amend on grounds that an action  by  the  court
would interfere with the decisions of out-of-state regulators  of
the  gaming industry, thus violating the Commerce Clause  of  the
United   States   Constitution.   Subsequently,   the   remaining
defendants,  including  the Company and Rio  Properties,  entered
into  a stipulation with plaintiffs whereby plaintiffs agreed  to
dismiss  the  remaining defendants without prejudice pending  the
appeal  of  the  court's order sustaining the demurrers  and  the
remaining  defendants  agreed to toll the applicable  statute  of
limitations  during the pendency of the appeal.  Plaintiffs  have
filed  a  Notice of Appeal.  The Company and Rio Properties  have
specifically reserved their jurisdictional objections.   Although
the  Company and Rio Properties are still technically defendants,
management  believes that the court's ruling will be  applied  to
all  defendants and that the Company and Rio Properties  will  be
dismissed from the action.  In addition, management believes that
the   complaint  is  without  merit,  and  the  Company   intends
vigorously to defend the allegations.

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

                              -16-
<PAGE>

the Company and the individual directors, and granting the motion
to dismiss Marnell Corrao and Marnell Chartered.  The Company and
the  remaining defendants have filed an answer to the  complaint,
and discovery proceedings have not yet begun.

      On  June 10, 1997, Rio Properties filed a complaint in  the
United  States District Court of Nevada (RIO PROPERTIES, INC.  V.
ROBERT   P.  BAKER,  Case  No.  CV-S-97-00710-PMP  (RLH)).    The
complaint seeks a declaration from the court that the use by  Rio
Properties  of the term ''suite'' is not misleading under  either
the  federal  trademark  act  or California's  advertising  code.
Subsequently, on July 16, 1997, Mr. Baker filed a related  action
in  California  state court (ROBERT P. BAKER V.  RIO  PROPERTIES,
INC.,  ET  AL.,  Case No. BC 173 554), which was removed  to  the
United  States  District  Court  for  the  Central  District   of
California (Case No. 97-6364-WDK (AIJx)).  Mr. Baker alleges that
the  use  of the term ''all-suite'' in advertising directed  into
California  is  misleading and violates  California  law  on  the
grounds  that  the  Rio's  rooms are not partitioned.  Mr.  Baker
unsuccessfully  sought  to have the Nevada  action  dismissed  in
favor  of  the California action. The parties have now stipulated
to  have  the California action dismissed and proceed  in  United
States  District Court of Nevada.  Mr. Baker filed a counterclaim
in   the   Nevada  action  seeking  compensatory  damages   under
California's  advertising code for all California  residents  who
have stayed in any of the Rio's accommodations, injunctive relief
prohibiting  use  of the term ''suite'' by Rio  to  describe  its
accommodations and other relief deemed appropriate by the  court.
On  February  13,  1998, Mr. Baker filed a motion  to  amend  his
complaint  to  include the Company.  This motion  was  denied  on
March  6,  1998.   Management believes  Mr.  Baker's  claims  are
without merit, and will vigorously pursue the declaratory  relief
action and defend the counterclaim.

      Two  lawsuits have been filed against a number of entities,
including  the  Company, which have been consolidated  under  the
designation, "Seven Hills Golf Course Litigation," by  the  Clark
County,  Nevada,  District Court (the "Nevada  District  Court").
The  cases are as follows:  On October 15, 1997, a First  Amended
Complaint  in  a  purported  class action  lawsuit  (MARSHALL  F.
DANIEL,  ET AL. V. AMERICAN NEVADA CORPORATION, ET AL., Case  No.
A377489) was filed in the Nevada District Court, seeking damages,
declaratory  relief and imposition of a constructive  trust.   On
September 18, 1997, a First Amended Complaint (THE HELMER COMPANY
OF NEVADA VS. SILVER CANYON PARTNERSHIP, ET AL., Case No. 377455)
was  filed  in  the  Nevada District Court, seeking  damages  for
fraud, deceit, promissory estoppel, injunctive relief, breach  of
contract  and  declaratory relief (the "Helmer  Action").   These
cases arise out of the Company's purchase of golf course property
currently  known  as the Rio Secco Golf Club, which  the  Company
purchased  as an amenity for the customers of the Rio  (the  "Rio
Customers").   Plaintiffs allege that the  Company  violated  the
relevant CC&R's in purchasing the golf course and is required  to
open  the  course to non-Rio Customers.  Plaintiffs are  claiming
that their interests run with the land, which the Company denies.
Plaintiff  in  the HELMER Action filed a Motion  for  Preliminary
Injunction asking the Nevada District Court to require  that  the
Company  open  the  golf  course for play to  non-Rio  Customers.
Prior to the date set for the preliminary injunction hearing, the
Company  issued a press release opening the golf course for  play
to  non-Rio  Customers, which rendered the Motion for Preliminary
Injunction moot.  The Company agreed to keep the course  open  to
non-Rio  Customers pending final adjudication of the lawsuits  as
to  the  Company.  On January 6, 1998, the Nevada District  Court
clarified  the case management order to provide for a trial  date
of  September 14, 1998, at which time the issues of local, public
or  private  access  to the golf course will be  decided  by  the
court, along with all equitable issues in the case.  Any and  all
damage issues would be reserved for a later hearing.  On March 9,
1998,  the Nevada District Court certified a class consisting  of
all  present and future record owners of residential lots  within
the  Seven  Hills Master-Planned Community with  respect  to  the
issue  of right of access.  On April 3, 1998, the Nevada District
Court  will hear motions for summary judgment filed by plaintiffs
in  the  consolidated action on the issue of access and a  motion
for mandatory injunctive relief related to the issues of fees for
play.   Management believes that the substantive  allegations  in
the  complaints are without merit and that, aside  from  its  own
legal fees and

                              -17-
<PAGE>

potential  exposure  for  the legal fees of  certain  plaintiffs,
there  is no liability or exposure for money damages from any  of
the   claims   for  relief  brought  against  it.    Accordingly,
management  intends vigorously to defend the Company against  all
allegations.

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

     Not Applicable.

PART II

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

     (a)  Price Range of Common Stock

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

<TABLE>
<CAPTION>
                                           HIGH       LOW
     <S>                                 <C>        <C>
     1996
          First Quarter                  $ 15 1/4   $ 11 5/8
          Second Quarter                   18 3/4     15
          Third Quarter                    17 5/8     13 3/8
          Fourth Quarter                   14         13 7/8
     1997
          First Quarter                  $ 17 1/4   $ 14
          Second Quarter                   15 5/8     13 5/8
          Third Quarter                    22 1/4     14 9/16
          Fourth Quarter                   24 1/2     19 3/4
</TABLE>

     The last reported sale price of the Common Stock on the NYSE
on   March   5,  1998  was  $27.8125  per  share.    There   were
approximately  1,279  holders of record of the  Company's  Common
Stock as of March 5, 1998.

     (b)  Dividend Policy

     The Company has never declared or paid cash dividends on its
Common Stock. The Company presently intends to retain earnings to
finance the operation and expansion of its business and does  not
anticipate  declaring cash dividends in the  foreseeable  future.
Under  the  terms of the covenants in the Amended Bank Loan,  the
Company's  wholly  owned  subsidiaries, Rio  Properties  and  Rio
Leasing,  Inc. ("Rio Leasing") may pay dividends to  the  Company
only if such funds are used for certain specific purposes.  Under
the  terms  of the Indentures (as defined herein), governing  the
105/8  %  Notes (as defined herein) and the 92% Notes (as defined
herein),  the  payout  of  dividends and other  distributions  is
subject to specified restrictions.

                              -18-

<PAGE>

ITEM 6.  SELECTED FINANCIAL DATA

<TABLE>
<CAPTION>

  (in thousands except per share data)         1997        1996        1995        1994          1993
<S>                                         <C>         <C>         <C>         <C>           <C>
Net Revenues                                $ 392,148   $ 219,581   $ 192,958   $ 146,424     $ 110,053

Income before Extraordinary Items and
  Cumulative Effect of Accounting Change    $  21,494   $  19,366   $  18,745   $  15,966     $  11,680

Extraordinary Items                         $       -   $       -   $       -   $       -     $    (254)

Cumulative Effect of Accounting Change      $       -   $       -   $       -   $       -     $    (777)

Net Income                                  $  21,494   $  19,366   $  18,745   $  15,966     $  10,649

Earnings Per Common Share:

  Basic:

   Income before Extraordinary Items and    $    0.99   $    0.91   $    0.88   $    0.75     $    0.61
    Cumulative Effect of Accounting Change


   Extraordinary Items                      $       -   $       -   $       -   $       -     $   (0.01)

   Cumulative Effect of Accounting Change   $       -   $       -   $       -   $       -     $   (0.04)

   Net Income                               $    0.99   $    0.91   $    0.88   $    0.75     $    0.56

  Diluted:

   Income before Extraordinary Items and    $    0.98   $    0.90   $    0.87   $    0.74     $    0.60
    Cumulative Effect of Accounting Change

   Extraordinary Items                      $       -   $       -   $       -   $       -     $   (0.01)

   Cumulative Effect of Accouting Change    $       -   $       -   $       -   $       -     $   (0.04)

   Net Income                               $    0.98   $    0.90   $    0.87   $    0.74     $    0.55

Total Assets                                $ 588,155   $ 494,550   $ 308,792   $ 301,165     $ 218,050

Long-Term Debt, net of current maturities   $  50,523   $ 253,949   $ 110,177   $ 110,147     $  56,876

Total Stockholders' Equity                  $ 270,175   $ 181,875   $ 162,888   $ 147,839     $ 129,838

Cash Dividends Declared Per Common Share    $       -   $       -   $       -   $       -     $       -

</TABLE>

ITEM 7.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
        CONDITION AND RESULTS OF OPERATIONS

STATEMENT ON FORWARD-LOOKING INFORMATION

     Certain information included herein contains statements that
may  be  considered forward-looking statements within the meaning
of  Section 27A of the Securities Act of 1933 and Section 21E  of
the  Securities Exchange Act of 1934, such as statements relating
to  plans  for  future expansion, capital spending and  financing
sources.   Such  forward-looking information  involves  important
risks   and   uncertainties  that  could   significantly   affect
anticipated results in the future and, accordingly, such  results
may differ from those expressed in any forward-looking statements
made herein.  These risks and uncertainties include, but are  not
limited to, those relating to construction activities, dependence
on  existing  management, gaming regulations  (including  actions
affecting   licensing),  leverage  and  debt  service  (including
sensitivity to fluctuations in interest rates), issues related to
the Year 2000, domestic or global economic conditions and changes
in federal or state tax laws or the administration of such laws.

                              -19-
<PAGE>

OVERVIEW

      During the first six months of 1997, the Company introduced
the  Phase V Expansion project in phases.  On February  7,  1997,
the Company opened the Masquerade Village which included five new
restaurants,  over  twenty  retail  shops,  approximately  30,000
square  feet of gaming area, the MASQUERADE SHOW IN THE  SKY,  an
entertainment   event   featuring   parade   floats   with   live
entertainers suspended from the Masquerade Village's ceiling, and
over  one-half  of  the approximately 1,000  new  suites  in  the
Masquerade  Tower,  447  of  which had  become  available  as  of
December  31,  1996.   On May 24, 1997, the  Company  opened  the
uppermost  floors of the 41-story Masquerade Tower  including  31
new  suites and the VooDoo Lounge and Cafe on the 40th  and  41st
floors which offer panoramic views of the Las Vegas valley.

       In addition, during the third quarter of 1997, the Company
consummated  the purchase of the Seven Hills Golf Course  located
in  the master-planned community of Seven Hills, approximately 15
minutes  south of the Rio.  The Company renamed the  facility  as
the  Rio  Secco Golf Club and opened the golf course for play  in
October  1997.   The Company intends to use the  Rio  Secco  Golf
Course  to  provide golf vacation packages to its guests  and  to
provide  play on the course to local and tourist customers.   The
Rio Secco Golf Club will feature a clubhouse scheduled to open in
the spring of 1998 and the Butch Harmon School of Golf.

     The approach of the year 2000 has become a potential problem
for businesses utilizing computers in their operations since many
computer programs are date sensitive and will only recognize  the
last two digits of the year, thereby recognizing the year 2000 as
the  year 1900 or not at all (the "Year 2000 Issue").  Management
has made a comprehensive assessment of the Company's exposure  to
the  Year 2000 Issue and what will be required to ensure that the
Company  is  Year 2000 compliant.  The primary computer  programs
utilized  in  the  Company's operations and  financial  reporting
systems  have  been  acquired from independent software  vendors.
All  of  these vendors have been formally contacted to  determine
whether  their  systems  are Year 2000 compliant,  and,  if  not,
timelines have been or will be established as to when the Company
will receive the required upgrades that assure that these systems
will  be Year 2000 compliant.  Maintenance or modification  costs
associated with the Year 2000 Issue will be expensed as incurred,
while  the  costs  of  any new software will be  capitalized  and
amortized over the software's useful life.  The Company does  not
expect to incur costs in connection with the Year 2000 Issue that
would have a material impact on operations.  Although the Company
presently believes that all of its software programs will be Year
2000  compliant, there can be no assurances that the Company will
not be adversely affected by the Year 2000 Issue.

RESULTS OF OPERATIONS

YEARS ENDED DECEMBER 31, 1997 AND 1996

      The Company's net revenues increased to $392.1 million  for
the  year ended December 31, 1997 from $219.6 million in the year
ended  December 31, 1996, an increase of $172.5 million  or  79%.
Casino  revenues  increased $101.6 million,  or  90%,  to  $214.0
million  in 1997, compared to $112.4 million  in 1996.  With  the
opening  of  the  Masquerade Village casino area on  February  7,
1997,  the  average  number  of slot  machines  and  table  games
available increased from 1,884 and 79, respectively, in  1996  to
2,431  and 103, respectively, in 1997.  Table game revenues  were
$122.8  million for 1997, an increase of $80.5 million, or  190%,
from  the $42.3 million in 1996.  When comparing 1997 with  1996,
the  table  game hold percentages were 21% and 16%, respectively,
and  table game handle increased to $573.1 million, or 114%, from
$268.4  million.  Management believes that the increase in  table
game  handle was primarily due to the increased number  of  table
games available, the increased customer traffic generated through
the additional

                              -20-
<PAGE>

suites  and  expanded casino and entertainment  areas  associated
with  the  Phase  V  Expansion,  and  an  increased  emphasis  by
management  on  marketing to customers with higher credit  limits
and average wagers.  Slot machine revenues were $84.4 million  in
1997, an increase of $20.2 million, or 32%, from $64.2 million in
1996.   Management  believes that the  increase  in  the  average
number  of  slot machines available and the increase in  customer
traffic  generated  through the additional  suites  and  expanded
casino  and  entertainment  areas associated  with  the  Phase  V
Expansion  were  the  primary reasons for the  increase  in  slot
machine revenues.  Other casino revenues, consisting of the  race
and  sports books, keno and poker, increased 18% to $6.9  million
in 1997 from $5.8 million in the prior year.

      Room  revenues increased by $29.1 million, or 70%, to $70.4
million for 1997 from $41.3 million in 1996.  Management believes
that  the primary reasons for the increase in room revenues  were
the  additional  availability of new suites in the  new  41-story
tower  and an increase in the average room rate from $77 in  1996
to  $91 in 1997.  The occupancy rate was 90% in 1997 compared  to
95% in 1996, with 284,000 more suite nights available and 233,000
more suites being occupied in 1997 than in 1996.

      Food and beverage revenues increased $44.0 million, or 62%,
to  $114.8  million in 1997 compared to $70.8  million  in  1996.
Management  believes that the opening of the Masquerade  Village,
including  the initial five new restaurants and bars on  February
7,  1997,  the opening of the VooDoo Cafe and Lounge on  May  24,
1997, increased customer traffic generated through the additional
suites  and  expanded  casino and entertainment  areas  were  the
primary  reasons for the increase.  An increase  in  the  average
food  check also contributed to the increase in food and beverage
revenues.

      Other revenues increased by $10.2 million, or 66%, to $25.6
million for 1997 from $15.4 million in 1996.  The primary reasons
for  this increase were an increase in showroom admissions,  gift
shop and other retail sales, increased telephone revenues due  to
the  increase  in suites occupied, and shop rental received  from
the retail outlets leased to third parties.

      Before preopening expense, operating profit as a percentage
of net revenues was 18% in 1997 compared to 17% in 1996.  The one-
time  preopening  expense, which consisted  primarily  of  direct
incremental   personnel  costs  and  advertising  and   marketing
expenses associated with the opening of the Phase V Expansion  on
February  7,  1997,  totaled approximately  $11.2  million.   The
casino operating margin was 45% in 1997 compared to 49% in  1996.
Payroll  and  other  volume  related expenses,  increased  casino
marketing  and  promotional costs and  an  increase  in  reserves
associated   with  the  potential  uncollectibility   of   casino
receivables of $21.9 million in 1997 compared to $0.3 million  in
1996  are  considered  to  be  the primary  contributors  to  the
decrease  in the casino operating profit margin.  For  the  years
ended  December 31, 1997 and 1996, hotel operating  profits  were
71%  and  68%, respectively, food and beverage operating  profits
were  22%  in  each  year, and other operating department  profit
margins  were  41% and 51%, respectively.  The  decrease  in  the
operating  profit  margin  for  other  operating  departments  is
primarily   due   to   the   increase  in   retail   sales,   the
correspondingly higher costs of merchandise, sales,  payroll  and
other   expenses  associated  with  retail  sales,  and  expenses
incurred in the operation of the MASQUERADE SHOW IN THE SKY which
opened  on February 7, 1997.  Selling, general and administrative
expenses  were  14%  of  net revenues in both  years.   In  1997,
selling,    general   and   administrative   expenses    included
approximately   $1.0  million  associated  with   the   Company=s
unsuccessful effort to obtain one of three hotel-casino  licenses
in Detroit, Michigan.

      Promotional allowances, which represent the retail value of
rooms,  food,  beverage and other services provided to  customers
without charge, were 8% of total revenues in both 1997 and 1996.

                              -21-
<PAGE>

      Depreciation and amortization increased by $7.3 million, or
41%,  to $24.9 million in 1997 compared to $17.6 million in 1996.
This  increase  is  primarily attributable  to  depreciation  and
amortization expense associated with the opening of the  Phase  V
Expansion.

      Interest  expense increased by $18.1 million, or  220%,  to
$26.3  million  in  1997  from $8.2 million  in  1996.   Interest
expense was reduced by $4.4 million and $8.7 million in 1997  and
1996,  respectively,  due to interest being  capitalized  on  the
Phase  V Expansion Project in 1996 and in early 1997, and on  the
development  of  the Rio Secco Golf Club and the New  Rio  Master
Plan  in  1997.  This increase was primarily due to  interest  on
financing of the Phase V Expansion.

      Net  income  for 1997, after deducting $11.2 million  ($7.1
million  net after income tax) of preopening expenses  associated
with  the  opening of the Phase V Expansion, was  $21.5  million.
Adjusted  on a pro forma basis for the one-time after-tax  charge
of $7.1 million for preopening expense, net income for 1997 would
have  been  $28.6 million, compared to 1996 net income  of  $19.4
million.

YEARS ENDED DECEMBER 31, 1996 AND 1995

      Net revenues for the Company increased to $219.6 million in
1996 from $193.0 million in 1995, an increase of $26.6 million or
14%.    Casino  revenues  increased  $6.9  million,  or  7%,   to
$112.4  million in 1996 from $105.5 million in 1995.  An increase
in  table game revenues of $6.4 million, or 18%, to $42.5 million
in  1996 from $36.1 million in 1995 was the primary component  of
the  increase.  Slot machine revenues were $64.2 million in 1996,
an  increase of $1.2 million, or 2%, from 1995 revenues of  $63.0
million.   Race  and sports book revenues were $0.2  million  and
$0.3 million lower, respectively, in 1996 than in 1995, primarily
due to a lower hold percentage in the sports book and a  decrease
in total wagers in the race book which was negatively impacted by
a  pricing  dispute concerning the live televising of races  from
California race tracks.  Management believes that the increase in
table game revenues was attributable to an increase in the number
of  available and occupied rooms and an average of 14 more  table
games  being  available  in  1996 compared  to  1995.   In  1996,
management  believes that slot machine revenues  were  negatively
impacted by a 13% decrease in the average number of slot machines
available  when  compared to 1995 as a result of temporary  space
limitations  due  to the Phase V Expansion and casino  remodeling
projects.

      Room  revenues increased by $7.5 million, or 22%, to  $41.3
million in 1996 from $33.8 million in 1995, primarily due to 365,
184  and  141  new  hotel  suites being placed  into  service  in
February 1995, March 1995 and December 1995, respectively.  Hotel
occupancy  percentage  was  94.5% in both  1996  and  1995,  with
567,332  available  suite  nights in  1996  compared  to  494,105
available  suite nights in 1995.  The average room rate increased
to $76.93 in 1996 from $72.18 in 1995.

      Food  and  beverage revenues increased to $70.8 million  in
1996 from $60.0 million in 1995, an increase of $10.8 million  or
18%.   Higher  average food checks and increased  beverage  sales
contributed to this increase.

      Other revenues increased by $3.0 million, or 24%, to  $15.4
million  in  1996  compared to $12.4 million in 1995.   Increased
telephone revenues from the additional hotel suites, as  well  as
increased  merchandise sales, salon revenues  and  admissions  to
entertainment  activities,  were  the  primary  reasons  for  the
increase in other revenues.

      Operating profit as a percentage of net revenue was 17% and
19%  in 1996 and 1995, respectively.  Casino operating profit was
49%  in  1996 compared to 54% in 1995.  Management believes  that
the decline

                              -22-
<PAGE>

in  the casino operating margin was due to (i) the change in  the
ratio  between  table game revenues, which traditionally  have  a
lower  operating margin, and slot machine revenues and  (ii)  the
incurrence of additional marketing and personnel costs associated
with  the September 1996 opening of the Rio's new Shutters gaming
area  and the Masquerade Village that opened on February 7, 1997.
Food  and beverage operating profit was 22% and 20% for the years
ended  December  31,  1996  and 1995,  respectively.   Management
believes  that this improvement was the result of effective  cost
controls,  a higher average food check, and the increase  in  the
ratio  of  beverage  sales to food sales when comparing  the  two
years.   Hotel operating profit was 68% in 1996 and 69% in  1995.
Other  operating expenses were 49% and 54% of other  departmental
revenues  for  the  years  ended  December  31,  1996  and  1995,
respectively,  primarily  due  to  increases  in  telephone   and
admissions  revenues which do not require significant incremental
expense.   Selling, general and administrative expenses were  14%
of net revenues in both years.

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

      Depreciation  and amortization increased $3.4  million,  or
24%,  to $17.6 million in 1996 compared to $14.2 million in 1995.
This increase is attributable to (i) new suites being placed into
service  during  the period from February 1995  through  December
1995,  and (ii) expanded public and back-of-the-house areas being
placed   into  service  during  1995  and  1996.   This  includes
approximately $7.3 million in construction projects  placed  into
service  in 1996 which are associated with the Phase V  Expansion
project.

      Interest  expense increased $0.1 million in  1996  to  $8.2
million from $8.1 million in 1995.  Interest expense in 1996  was
reduced by $8.7 million due to the capitalization of interest  on
amounts  expended on the Phase V Expansion project.   The  $200.0
million Phase V Expansion includes approximately 1,000 new  hotel
suites,   477  of  which  opened  in  late  December  1996,   and
approximately  120,000 of additional casino  space,  restaurants,
retail,  and  interactive entertainment space,  which  opened  on
February 7, 1997.  The remainder of the new hotel suites and  the
Voodoo  Cafe  and  Lounge  on the 40th and  41st  floors  of  the
Masquerade Tower opened during the first six months of 1997.

      Net  income was $19.4 million or $0.90 per share  (diluted)
compared to $0.87 per share (diluted) in 1995.

IMPACT OF INFLATION

      Absent changes in competitive and economic conditions or in
specific prices affecting the industry, the Company believes that
the  hotel-casino  industry  may be able  to  maintain  its  real
operating  profit  margins in periods  of  general  inflation  by
increasing  minimum wagering limits for its games and  increasing
the prices of its hotel rooms, food and beverage and other items,
and  by taking action designed to increase the number of patrons.
The industry may be able to maintain growth in gaming revenues by
the   tendency  of  customer  gaming  budgets  to  increase  with
inflation.   Changes  in  specific  prices  (such  as  fuel   and
transportation prices) relative to the general rate of  inflation
may have a material effect on the hotel-casino industry.

LIQUIDITY AND CAPITAL RESOURCES

      On  February 4, 1997, the Company issued $125.0 million  in
principal  amount  of  the Company's 9 1/2%  Senior  Subordinated
Notes Due 2007.  Approximately $112.0 million of the net proceeds
of $121.6

                              -23-
<PAGE>

million  were  utilized to reduce the principal amount  that  had
been drawn under the Company's $200 million Rio Bank Loan.

      During  the  fourth  quarter of 1997,  the  Company  issued
3,200,000  shares of its common stock for net proceeds  of  $65.6
million,  $60.0  million of which was utilized to further  reduce
the  principal  amount that had been drawn  under  the  Company's
senior secured reducing revolving credit facility (the "Rio  Bank
Loan").

      During  the year ended December 31, 1997, net cash provided
by  operating activities was $48.1 million.  Investing activities
used  $95.9  million,  including $55.4  million  related  to  the
construction  of the Phase V Expansion, $3.1 million  related  to
the  New  Rio  Master  Plan, $6.8 million  in  land  acquisitions
adjacent  to  the Rio, and  $22.0 million for the acquisition  of
and  improvements  to  the  Rio Secco  Golf  Club.   The  Company
obtained an $8.0 million loan from Bank of America in May 1997 as
partial  funding  of  its  estimated  $28.0  million  investment,
including  the  assumption of $4.5 million in debt,  in  the  Rio
Secco Golf Club, which will include a clubhouse, golf school  and
other associated amenities.

      The  Company has commenced the first phase of the  New  Rio
Master  Plan, which will include a new road providing  access  to
the  Las  Vegas Strip and additions and improvements to the  Rio.
The improvements will include a 100,000 square foot state-of-the-
art entertainment/meeting/special event/convention center, 10,000
square  feet  of  new  retail space, nine  "Palazzo"  suites,  an
additional  swimming  pool, a 650-car valet  parking  garage,  an
authentic  Chinese restaurant, 20,000 square feet  of  additional
exhibition space in the Masquerade Village, an expansion  of  the
Shutters  premium  gaming lounge, creation of a  concierge  suite
level  in the Ipanema and Masquerade Towers, and an expansion  of
the  Rio's spa.  These improvements, along with the new road, are
scheduled to open in stages throughout 1998 and early  1999.   In
addition, site work has commenced for future development  of  the
Rio  property,  with  the New Rio Master  Plan  providing  for  a
separate  3,000-room  hotel-casino resort on  a  portion  of  the
adjacent   acreage  recently  acquired  by  the   Company.    The
timetable,  theme and cost of this separate hotel  casino  resort
project have not yet been established.

      On  February 24, 1998, the Company amended and restated the
Rio  Bank  Loan with the Amended Bank Loan increasing the  amount
available  to  $275  million, providing a mechanism  whereby  the
Company may borrow an additional $25 million above and beyond the
$275  million limit, and extending the maturity date to  December
31,  2003.  At February 24, 1998, $251 million was available  for
borrowing under the Amended Bank Loan.  The Amended Bank Loan  is
secured by a first deed of trust on substantially all of the real
property,  equipment  and improvements  of  Rio  Properties,  Rio
Leasing  and  Rio Properties' subsidiaries, and is guaranteed  by
the Company.

      Based upon cash on hand, cash available through borrowings,
including  additional  issuances of debt, and  cash  provided  by
operations,  the  Company  believes that  it  has  adequate  cash
available  to  fund real estate purchase commitments,  the  first
phase  of  the  New  Rio  Master Plan,  ongoing  maintenance  and
upgrades,  investment commitments associated with the acquisition
of the Rio Secco Golf Club and the Company's operations.

                              -24-
<PAGE>

ITEM 8.  FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

<TABLE>
<CAPTION>

            RIO HOTEL & CASINO, INC. AND SUBSIDIARIES

      SELECTED QUARTERLY FINANCIAL INFORMATION (UNAUDITED)

                                                   First       Second      Third      Fourth
(in thousands except for per share data)          Quarter     Quarter     Quarter     Quarter       Total
                                                 ---------   ---------   ---------   ---------    ---------
<S>                                              <C>         <C>         <C>          <C>         <C>
1997 <F1>
  Revenues                                       $  69,928   $  97,190    $ 103,575   $ 121,455   $ 392,148
  Operating profit <F2>                              1,106      17,634       19,306      22,060      60,106
  Net income (loss) <F2>                            (2,417)      6,634        7,755       9,526      21,494
  Net income (loss) per common share<F2><F3>:
      Basic                                      $   (0.11)  $    0.31    $    0.36   $    0.42   $    0.99
      Diluted                                    $   (0.11)  $    0.31    $    0.36   $    0.41   $    0.98

1996 <F1>
  Revenues                                       $  55,089   $  54,772    $  53,226   $  56,494   $ 219,581
  Operating profit                                  11,402      10,926        8,321       7,345      37,994
  Net income                                         5,326       5,475        4,266       4,299      19,366
  Net income per common share <F3>:
     Basic                                       $    0.25   $    0.26    $    0.20   $    0.20   $    0.91
     Diluted                                     $    0.25   $    0.25    $    0.20   $    0.20   $    0.90

<FN>
<F1> There were no dividends paid in 1997 or 1996.
<F2> The  first  quarter  of 1997 included  $11.2  million  ($7.1
     million   net  of  income  taxes)  of  pre-opening  expenses
     associated  with  the  February  7,  1997  opening  of   the
     Masquerade Village.
<F3> Basic  net  income per share calculations are based  on  the
     weighted   average  number  of  shares   of   common   stock
     outstanding  during each quarter, while diluted  net  income
     per  share reflects the addition of all potentially dilutive
     instruments,  such  as stock options, during  each  quarter.
     Accordingly, the sum of the quarters may not equal the  full
     year net income per share for 1997.
</FN>
</TABLE>

                              -25-

<PAGE>

            REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS


To the Board of Directors of
  Rio Hotel & Casino, Inc.:



     We have audited the accompanying consolidated balance sheets
of   RIO  HOTEL  &  CASINO,  INC.  (a  Nevada  corporation)   and
subsidiaries  as  of December 31, 1997 and 1996 and  the  related
consolidated statements of income, stockholders' equity and  cash
flows   for  each  of  the  three  years  in  the  period   ended
December  31, 1997.  These financial statements and the schedules
referred  to  below  are  the  responsibility  of  the  Company's
management. Our responsibility is to express an opinion on  these
financial statements and schedules based on our audits.

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

      In  our opinion, the financial statements referred to above
present  fairly, in all material respects, the financial position
of  Rio Hotel & Casino, Inc. and subsidiaries as of December  31,
1997 and 1996, and the results of their operations and their cash
flows   for  each  of  the  three  years  in  the  period   ended
December   31,  1997,  in  conformity  with  generally   accepted
accounting principles.

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



                                              ARTHUR ANDERSEN LLP

Las Vegas, Nevada
February 24, 1998

                              -26-
<PAGE>

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

                                                      DECEMBER 31,
                                            ---------------------------------
                                                 1997                1996
                                            --------------      -------------
<S>                                         <C>                 <C>
                 ASSETS
Current assets:
  Cash and cash equivalents                 $  22,241,976       $  10,623,094
  Accounts receivable, net                     28,177,480           8,690,105
  Federal income taxes receivable                       -           1,147,106
  Inventories                                   7,797,343           3,871,345
  Prepaid expenses and other current
   assets                                       8,277,440           5,534,895
                                            --------------      --------------
    Total current assets                       66,494,239          29,866,545
                                            --------------      --------------
Property and equipment:
  Land and improvements                        85,713,088          51,311,851
  Building and improvements                   418,618,050         196,918,053
  Equipment, furniture and improvements        82,792,652          72,052,458
  Less: accumulated depreciation              (82,162,055)        (60,501,211)
                                            --------------      --------------
                                              504,961,735         259,781,151
  Construction in progress                      5,354,757         190,210,277
                                            --------------      --------------
    Net property and equipment                510,316,492         449,991,428
                                            --------------      --------------
Phase V expansion pre-opening costs                     -           5,152,980
Other assets, net                              11,344,116           9,538,633
                                            --------------      --------------
                                            $ 588,154,847       $ 494,549,586
                                            ==============      ==============

  LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:
  Current maturities of long-term debt      $   2,434,483       $     352,239
  Accounts payable                             11,440,103           5,854,830
  Accrued expenses                             23,554,336          11,967,407
  Accounts payable - related party              2,808,488          19,604,470
  Accrued interest                              7,412,999           7,072,067
                                            --------------      --------------
    Total current liabilities                  47,650,409          44,851,013
                                            --------------      --------------
Non-current liabilities:
  Long-term debt, less current maturities     250,522,894         253,949,283

  Deferred income taxes                        19,806,419          13,874,060
                                            --------------      --------------
    Total non-current liabilities             270,329,313         267,823,343
                                            --------------      --------------
    Total liabilities                         317,979,722         312,674,356
                                            --------------      --------------
Stockholders' equity:
  Common stock, $0.01 par value;
   100,000,000 shares authorized;
   24,643,141 and 21,170,441 shares
   issued and outstanding                         246,432             211,705
  Additional paid-in capital                  179,912,196         113,140,798
  Retained earnings                            90,016,497          68,522,727
                                            --------------      --------------
    Total stockholders' equity                270,175,125         181,875,230
                                            --------------      --------------
                                            $ 588,154,847       $ 494,549,586
</TABLE>                                    ==============      ==============

   See Accompanying Notes to Consolidated Financial Statements

                              -27-
<PAGE>

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


                                                  For the Year Ended December 31,
                                        -------------------------------------------------
                                             1997             1996               1995
                                        --------------   --------------     -------------
<S>                                     <C>              <C>                <C>
Revenues:
  Casino                                $ 214,036,249    $ 112,458,824      $ 105,546,531
  Room                                     70,446,812       41,346,275         33,826,095
  Food and beverage                       114,765,405       70,789,839         60,009,994
  Other                                    25,590,029       15,369,085         12,386,275
  Casino promotional allowances           (32,690,516)     (20,382,531)       (18,810,726)
                                        --------------   --------------     --------------
Net Revenues                              392,147,979      219,581,492        192,958,169
                                        --------------   --------------     --------------
Expenses:
  Casino                                  117,648,680       56,825,539         48,071,953
  Room                                     20,600,625       13,134,549         10,413,883
  Food and beverage                        88,971,034       54,899,850         48,257,881
  Other                                    15,093,736        7,496,518          6,646,950
  Selling, general and administrative      53,621,974       31,610,710         27,777,901
  Depreciation and amortization            24,906,232       17,620,555         14,231,307
  Preopening expense                       11,200,000                -                  -
                                        --------------    -------------     --------------
                                          332,042,281      181,587,721        155,399,875
                                        --------------    -------------     --------------
Operating profit                           60,105,698       37,993,771         37,558,294

Interest expense                           26,257,242        8,215,285          8,105,680
                                        --------------    -------------     --------------
Income before income tax provision         33,848,456       29,778,486         29,452,614

Income tax provision                       12,354,686       10,412,109         10,707,135
                                        --------------    -------------     --------------
Net income                              $  21,493,770     $ 19,366,377      $  18,745,479
                                        ==============    =============     ==============
Earnings per common share:
  Basic:
    Net income                          $        0.99     $       0.91      $        0.88
                                        ==============    =============     ==============
    Weighted average number of common
    shares outstanding                     21,616,711       21,204,527         21,288,062
                                        ==============    =============     ==============
  Diluted:
    Net Income                          $        0.98     $       0.90      $        0.87
                                        ==============    =============     ==============
    Weighted average number of common
    shares outstanding                     22,031,321       21,528,006         21,591,325
                                        ==============    =============     ==============
</TABLE>

   See Accompanying Notes to Consolidated Financial Statements

                              -28-
<PAGE>

<TABLE>
<CAPTION>

            RIO HOTEL & CASINO, INC. AND SUBSIDIARIES
         CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY


                                                   Common Stock
                                            ---------------------------     Additional                         Total
                                               Number                        Paid-In         Retained       Stockholders'
                                             Of Shares         Amount        Capital         Earnings          Equity
                                            -------------  ------------  --------------   --------------   --------------
<S>                                         <C>            <C>           <C>              <C>              <C>
Balance, December 31, 1994                   21,371,346     $   213,714   $ 117,214,582    $  30,410,871    $ 147,839,167
Tax benefit of stock options exercised                -               -         632,601                -          632,601
Exercise of stock options                       198,300           1,983         965,467                -          967,450
Repurchase of common stock                     (430,500)         (4,305)     (5,381,920)               -       (5,386,225)
Common stock offering costs                           -               -           1,801                -            1,801
Net income for the year                               -               -               -       18,745,479       18,745,479
Compensation expense for stock options
  granted in 1993                                     -               -          87,627                -           87,627
                                            ------------    ------------  --------------   --------------   --------------
Balance, December 31, 1995                   21,139,146         211,392     113,520,158       49,156,350      162,887,900
Tax benefit of stock options exercised                -               -         570,283                -          570,283
Exercise of stock options                       175,795           1,758       1,161,152                -        1,162,910
Repurchase of common stock                     (144,500)         (1,445)     (2,219,155)               -       (2,220,600)
Net income for the year                               -               -               -       19,366,377       19,366,377
Compensation expense for stock options
  granted in 1993                                     -               -         108,360                -          108,360
                                            ------------    ------------  --------------   --------------   --------------
Balance, December 31, 1996                   21,170,441         211,705     113,140,798       68,522,727      181,875,230
Tax benefit of stock options exercised                -               -       1,066,457                -        1,066,457
Exercise of stock options                       272,700           2,727       1,559,661                -        1,562,388
Issuance of common stock                      3,200,000          32,000      64,030,000                -       64,062,000
Net income for the year                               -               -               -       21,493,770       21,493,770
Compensation expense for stock options
  granted in 1993                                     -               -         115,280                -          115,280
                                            ------------    ------------  --------------   --------------   --------------
Balance, December 31, 1997                   24,643,141     $   246,432   $ 179,912,196    $  90,016,497    $ 270,175,125
                                            ============    ============  ==============   ==============   ==============
</TABLE>

   See Accompanying Notes to Consolidated Financial Statements

                              -29-
<PAGE>

<TABLE>
<CAPTION>

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

                                                          For the Year Ended December 31,
                                                 ------------------------------------------------
                                                       1997             1996            1995
                                                 ----------------  --------------  --------------
<S>                                              <C>               <C>             <C>
Cash flows from operating activities:
  Net income                                     $    21,493,770   $  19,366,377   $  18,745,479
  Adjustments to reconcile net income to net
   cash provided by operating activities:
     Compensation expense recognized from
       stock option grant                                115,280         108,360          87,627
     Depreciation and amortization                    24,906,232      17,620,555      14,231,307
     Pre-opening expenses                             11,200,000             -                 -
     Provision for uncollectible accounts             22,027,920         292,138       1,002,463
     Deferred income taxes                             4,146,783       2,198,017       3,122,621
     (Increase) decrease in assets:
       Accounts receivable                           (41,515,295)     (4,668,801)     (2,026,109)
       Inventories                                    (3,925,998)     (2,076,495)       (416,252)
       Prepaid expenses and other current assets      (1,258,515)     (1,106,609)        659,627
       Phase V pre-opening costs                      (6,047,020)     (5,152,980)              -
       Other, net                                     (2,815,414)     (1,158,860)       (843,335)
     Increase in liabilities:
       Accounts payable                               13,488,534       1,292,699       2,136,487
       Accrued federal income tax                      2,351,837               -               -
       Accrued expenses                                3,545,392       2,831,182       1,305,520
       Accrued interest                                  340,932       2,345,152       4,375,051
                                                 ----------------  --------------  --------------
Net cash provided by operating activities             48,054,438      31,890,735      42,380,486
                                                 ----------------  --------------  --------------
Cash flows from investing activities:
  Purchase of land and improvements                   (5,728,690)    (13,522,603)    (12,781,239)
  Purchase of equipment, furniture and
    improvements                                     (73,807,565)   (169,539,111)    (63,326,652)
  Purchase of golf course                            (16,386,159)              -               -
                                                 ----------------  --------------  --------------
Net cash used in investing activities                (95,922,414)   (183,061,714)    (76,107,891)
                                                 ----------------  --------------  --------------
Cash flows from financing activities:
  Proceeds from borrowings                           111,200,000     143,000,000      10,000,000
  Net proceeds from issuance of senior
    subordinated notes                               121,562,500               -      96,750,244
  Net proceeds from common stock issuance             65,624,388       1,162,910         969,251
  Payments on notes and loans payable               (238,900,030)       (140,932)   (125,039,428)
  Repurchase of common stock                                   -      (2,220,600)     (5,386,225)
                                                 ----------------  --------------  --------------
Net cash provided by (used in) financing
  activities                                          59,486,858     141,801,378     (22,706,158)
                                                 ----------------  --------------  --------------
Net increase (decrease) in cash and cash
  equivalents                                         11,618,882      (9,369,601)    (56,433,563)
Cash and cash equivalents, beginning of period        10,623,094      19,992,695      76,426,258
                                                 ----------------  --------------  --------------
Cash and cash equivalents, end of period         $    22,241,976   $  10,623,094   $  19,992,695
                                                 ================  ==============  ==============
</TABLE>

   See Accompanying Notes to Consolidated Financial Statements

                              -30-
<PAGE>

            RIO HOTEL & CASINO, INC. AND SUBSIDIARIES

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


1.   SIGNIFICANT ACCOUNTING POLICIES AND RELATED MATTERS

     PRINCIPLES OF CONSOLIDATION AND BASIS OF PRESENTATION

     The  consolidated financial statements include the  accounts
     of  Rio  Hotel  &  Casino, Inc., a Nevada  corporation  (the
     "Company"), and its wholly owned subsidiaries, each of which
     is  a  Nevada corporation, Rio Properties, Inc., which  owns
     and  operates  the Rio ("Rio Properties");  Rio  Development
     Company,  Inc., which owns and operates the Rio  Secco  Golf
     Club in Henderson, Nevada; Rio Resort Properties, Inc.;  Rio
     Leasing,  Inc.  ("Rio Leasing"), and Rio Properties'  wholly
     owned subsidiaries, Cinderlane, Inc. and HLG, Inc.

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

     RECLASSIFICATIONS

     The  financial statements for prior periods reflect  certain
     reclassifications, which have no effect on  net  income,  to
     conform with classifications adopted in the current year.

     USE OF ESTIMATES

     The  preparation of financial statements in conformity  with
     generally accepted accounting principles requires management
     to  make  estimates and assumptions that affect the reported
     amounts   of  assets  and  liabilities  and  disclosure   of
     contingent  assets  and  liabilities  at  the  date  of  the
     financial  statements and the reported amounts  of  revenues
     and  expenses  during the reporting period.  Actual  results
     could differ from these estimates.

     CAPITALIZATION OF INTEREST

     The  Company capitalizes interest on funds disbursed  during
     the  active  construction phases of real estate  development
     and  other  major projects. Interest capitalized during  the
     years  ended  December 31, 1997, 1996,  and  1995  was  $4.4
     million, $8.7 million and $0.9 million, respectively.

     CASH AND CASH EQUIVALENTS

     The Company classifies as cash equivalents all highly liquid
     debt  instruments with a maturity of three  months  or  less
     when  purchased.  Cash equivalents are carried at cost which
     approximates fair value.

     PROPERTY AND EQUIPMENT

     Land  and  improvements,  building  and  improvements,   and
     equipment, furniture and improvements are stated at cost.

     Depreciation  and amortization of property and equipment  is
     computed  using the straight-line method predominantly  over
     the following estimated useful lives:

                              -31-
<PAGE>

     Building and improvements               7 to 45 years
     Equipment, furniture and improvements   3 to 15 years


     Costs of major improvements are capitalized, while costs  of
     normal  repairs and maintenance are charged  to  expense  as
     incurred.

     PREOPENING EXPENSES

     Preopening   expenses   consist   principally   of    direct
     incremental  personnel costs and other associated  expenses.
     These expenses have been capitalized prior to the opening of
     the specific project and have been charged to expense at the
     commencement  of the operations.  A total of  $11.2  million
     in  preopening costs associated with the Phase  V  Expansion
     project was expensed in the first quarter of 1997.

     IMPAIRMENT

     Management reviews existing information and analyses of  the
     Company  and  its  operations  as  well  as  indicators   of
     impairment (such as dramatic changes in the manner in  which
     an  asset  is  used or forecasts showing lack  of  long-term
     profitability) to determine whether an impairment may exist.
     The  Company  considers relevant cash flow and profitability
     information,  including estimated future operating  results,
     trends and other available information, in assessing whether
     the  carrying  value of its fixed assets can  be  recovered.
     Upon  a  determination that the carrying value of  an  asset
     will  not  be  recovered from its future  undiscounted  cash
     flows,  the carrying value of that asset would be considered
     impaired  and  will be reduced by a charge to operations  in
     the amount of the impairment.  Impairment is measured as any
     deficiency  between estimated discounted future  cash  flows
     generated by the fixed assets and the carrying value related
     to those assets.

     CASINO RECEIVABLES

     The  Rio  extends  credit to certain casino customers,  both
     foreign and domestic, after investigation and evaluation  of
     the   creditworthiness  of  the  individual.   The   Company
     maintains  an allowance for doubtful accounts to reduce  the
     casino  receivables  to their estimated collectible  amount.
     At  December  31, 1997, the allowance for doubtful  accounts
     was  49.5%  of  the casino receivables.  As of December  31,
     1997,  management believes that there are no  concentrations
     of   credit  risk  for  which  an  allowance  has  not  been
     established and recorded.  The collectibility of foreign and
     domestic receivables could be affected by future economic or
     other  significant events in the United  States  or  in  the
     countries in which such foreign customers reside.

     INVENTORIES

     Inventories are stated at the lower of cost or market.  Cost
     is determined by using the first-in, first-out method.

     REVENUE AND PROMOTIONAL ALLOWANCES

     Casino  revenues represent the net win from gaming wins  and
     losses. The retail value of rooms, food, beverage and  other
     services provided to customers without charge is included in
     gross  revenue  and deducted as promotional allowances.  The
     estimated  departmental costs of providing such  promotional
     allowances  are  included in casino costs  and  expenses  as
     follows:

                              -32-
<PAGE>

<TABLE>
<CAPTION>

                                          For the Year Ended December 31,
                                 -----------------------------------------------
                                    1997                1996            1995
                                 ------------       ------------     -----------
     <S>                         <C>                <C>              <C>
     Room                        $  3,171,420       $  1,808,138     $  1,940,936
     Food and beverage             12,812,337          9,429,800        9,020,152
     Other operating expenses         844,870            206,163          104,921
                                 ------------       ------------     ------------
                                 $ 16,828,627       $ 11,444,101     $ 11,066,009
                                 ============       ============     ============
</TABLE>

2.   CONSOLIDATED STATEMENTS OF CASH FLOWS

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

<TABLE>
<CAPTION>
                                                              For the Year Ended December 31,
                                                      ----------------------------------------------
                                                          1997               1996            1995
                                                      ------------       ------------     -----------
      <S>                                             <C>                <C>             <C>

      Cash payments made for interest (net of
         amounts capitalized)                         $ 24,517,752       $  4,773,537    $  3,904,540
                                                      ============       ============    ============

      Cash payments made for income taxes             $  5,856,067       $  8,600,000    $  7,100,000
                                                      ============       ============    ============

      Non-cash financing and investing activities:

      Purchase of property and equipment financed
         through payables                             $  2,808,488       $ 19,604,470    $  6,556,126
                                                      ============       ============    ============

      Purchase of property and equipment through
         assumption of long-term debt                 $  4,483,448       $    140,435    $     62,042
                                                      ============       ============    ============

      Tax benefit arising from exercise of stock
         options under the Company's Non-Statutory
         Stock Option Plan                            $  1,066,457       $    570,283    $    632,601
                                                      ============       ============    ============

</TABLE>

3.   ACCOUNTS RECEIVABLE

     Components of accounts receivable are as follows:

<TABLE>
<CAPTION>
                                                         December 31,
                                              --------------------------------
                                                  1997                1996
                                              --------------      -------------
     <S>                                      <C>                 <C>
     Casino                                   $  46,392,622       $  6,318,124
     Hotel                                        4,526,201          3,244,388
     Other                                          403,406            244,423
                                              --------------      -------------
                                                 51,322,229          9,806,935
     Less allowance for doubtful accounts       (23,144,749)        (1,116,830)
                                              --------------      -------------
                                              $  28,177,480       $  8,690,105
</TABLE>                                      ==============      =============

4.   ACCRUED EXPENSES

     Components of accrued expenses are as follows:

<TABLE>
<CAPTION>
                                                                       December 31,
                                                             ---------------------------------
                                                                  1997               1996
                                                             -------------       -------------
     <S>                                                     <C>                 <C>
     Accrued salaries, wages and related benefits            $ 10,076,906        $  5,615,310
     Progressive slot machines and other gaming accruals        6,042,277           2,862,652
     Accrued gaming taxes                                       3,395,630           1,646,333
     Other accrued liabilities                                  4,039,523           1,843,112
                                                             -------------       -------------
                                                             $ 23,554,336        $ 11,967,407
                                                             =============       =============
</TABLE>

                              -33-
<PAGE>

5.   LONG-TERM DEBT

     Long-term debt consists of the following:

<TABLE>
<CAPTION>
                                                               December 31,
                                                    --------------------------------------
                                                          1997                  1996
                                                    ---------------       ---------------
     <S>                                            <C>                   <C>

     Rio Bank Loan, originally a $65 million
     revolving credit facility, was amended and
     restated to a $275 million revolving credit
     facility on February 24, 1998 with interest
     equal to the Eurodollar Rate or the Base
     Rate, plus a margin.  The loan matures on
     December 31, 2003 and is collateralized by a
     first deed of trust on the real property,
     equipment and improvements of Rio Leasing,
     Rio Properties and Rio Properties'
     subsidiaries and guaranteed by the Company.    $   18,000,000        $  153,000,000

     10 5/8% Senior Subordinated Notes, interest
     only payable semi-annually; principal due
     July 15, 2005.                                    100,000,000           100,000,000

     9 1/2% Senior Subordinated Notes, interest
     only payable semi-annually, net of
     unamortized discount of $3,127,561;
     principal due April 15, 2007                      121,872,439                    --

     Note payable, interest payable monthly based
     on the prime rate, quarterly principal
     payments of $400,000 commencing May 31, 1998
     with any remaining balance due May 31, 2000         8,000,000                    --

     Construction loan agreement, secured by a
     first deed of trust on the Rio Secco Golf
     Club real property, to be increased to a
     maximum of $6.0 million upon completion of
     the golf course clubhouse at which time it
     will convert to a standing loan payable in
     60 monthly installments together with
     interest at the LIBOR rate plus 2.5%                3,817,961                    --

     Other                                               1,266,977             1,301,522
                                                    ---------------       ---------------
                                                       252,957,377           254,301,522
              Less current maturities                   (2,434,483)             (352,239)
                                                    ---------------       ---------------
                                                    $  250,522,894        $  253,949,283
                                                    ===============       ===============
</TABLE>

     On  July  15,  1993, the Company originally entered  into  a
     revolving  credit  facility (the "Rio  Bank  Loan")  in  the
     amount of $65 million with a syndicate of banks led by  Bank
     of  America National Trust Savings and Association ("Bank of
     America NT&SA").  As a result of certain amendments, the Rio
     Bank Loan was increased in varied increments to $200 million
     in June 1996.  On February 24, 1998, the Company amended and
     restated  the  Rio Bank Loan with the Amended  and  restated
     Credit  Agreement (the "Amended Bank Loan")  increasing  the
     funds  available  in the revolving credit facility  to  $275
     million,  providing  a  mechanism whereby  the  Company  may
     borrow  an additional $25 million above and beyond the  $275
     million  limit, and extending the maturity date to  December
     31,  2003.   The  Amended Bank Loan is  a  secured  reducing
     revolving credit facility to be used to make allowed capital
     expenditures, to fund working capital needs and to  pay  for
     general corporate purposes.

     The  Amended  Bank Loan bears interest based upon  a  "LIBOR
     Margin"  of from 0.75% to 2.25%, or a "Base Rate Margin"  of
     from  0%  to  1.25%  based upon a schedule  determined  with
     reference to the "Total Leverage Ratio" (as defined  in  the
     Amended Bank Loan) of Rio Properties.  The "LIBOR Margin" is
     the  amount in excess of the applicable LIBOR which  is  the
     London  InterBank  Offer  Rate  established  in  the  London
     interbank  market.  The "Base Rate Margin" is the amount  in
     excess  of the applicable base rate, which is the  rate  per
     annum  equal to the higher of the reference rate  as  it  is
     publicly

                              -34-
<PAGE>

     announced  from  time to time by Bank of  America  NT&SA  or
     0.50%  per  annum above the latest Federal Funds rate.   The
     Amended  Bank Loan also provides for an unused facility  fee
     ranging  from  22.5  basis  points  to  45.0  basis   points
     depending  upon  the  same  Total  Leverage  Ratio  schedule
     utilized  for  the  interest rate.  The  Amended  Bank  Loan
     requires  periodic  payments of interest  and  will  require
     scheduled   reductions  of  the  maximum  amount   available
     commencing  with  scheduled reductions  of  $60  million  at
     December  31, 2000, 2001 and 2002 and maturity  at  December
     31, 2003.

     The  reference interest rate quoted by the Company's primary
     lenders at December 31, 1997 and 1996 was 8.25%.  The margin
     on  the Company's Base Rate borrowings at December 31,  1997
     was  1.75%,  which was reduced to 0.50% by the Amended  Bank
     Loan.

     At  December 31, 1997, the three month Eurodollar  Rate  was
     5.78125%.   The  margin  on  the Company's  Eurodollar  Rate
     borrowings  at  December  31,  1997  was  2.75%  which   was
     subsequently reduced to 1.5% by the Amended Bank Loan.

     The Amended Bank Loan includes certain covenants that, among
     other   things,  restrict  the  Company's  ability  to   pay
     dividends and make certain other restricted payments;  incur
     additional  indebtedness; grant liens, other than  permitted
     liens; and sell material assets.  The Amended Bank Loan also
     requires  the Company to maintain certain financial  ratios,
     including interest coverage and leverage ratios, and not  to
     exceed  certain  fixed  ratios of  Senior  Indebtedness  (as
     defined  in  the  Amended  Bank  Loan)  to  earnings  before
     interest    expense,   income   taxes,   depreciation    and
     amortization and extraordinary items.

     To  reduce  the  risks from interest rate fluctuations,  the
     Company  entered into interest rate swap agreements  in  the
     amount  of  $20  million  from September  30,  1994  through
     December  29,  1995 and $15 million from December  29,  1995
     through  its  expiration on June 28, 1996.  In August  1994,
     the  Company  purchased  a $40 million  interest  rate  cap,
     effective  September 30, 1994, for a three-year term,  which
     provided for quarterly payments to the Company in the  event
     that  three-month LIBOR exceeded 7% on any  quarterly  reset
     date.   As a result of entering into the interest rate  swap
     agreements, the Company has recognized interest  expense  of
     $199,000, $208,859, and $18,638 for the years ended December
     31,  1997, 1996 and 1995, respectively.  The impact of these
     hedging   activities  on  the  Company's  weighted   average
     borrowing  rate was negligible in each of the years.   There
     were  no  deferred gains or losses related to the terminated
     interest rate swap and interest rate cap agreements.

     The  revolving credit features of the Rio Bank Loan and  the
     Amended  Bank  Loan allow for the Company to  pay  down  and
     reborrow  principal under the revolving credit  facility  as
     the  Company  deems  appropriate.    The  Company  had  $172
     million and $47 million available under the Rio Bank Loan at
     December  31, 1997 and 1996, respectively, and $251  million
     available under the Amended Bank Loan at February 24, 1998.

     The  10 5/8% Senior Subordinated Notes (the "10 5/8% Notes")
     and  the  9  1/2% Senior  Subordinated  Notes (the  "9  1/2%
     Notes") are unconditionally guaranteed on pari passu  senior
     subordinated basis by Rio Properties.  The 10 5/8% Notes and
     the  9  1/2% Notes (together, the" Notes") are pari passu in
     right  of  payment, are subordinated in right of payment  to
     all  existing and future Senior Indebtedness (as defined  in
     the  indentures  for  the Notes, the  "Indentures")  of  the
     Company  and  are structurally subordinated to all  existing
     and  future  indebtedness and other  liabilities  (including
     trade payables) of the Company's subsidiaries.

     The  10  5/8%  Notes may be redeemed at the  option  of  the
     Company,  in whole or in part, at any time on or after  July
     15,  2000,  at  the  redemption  prices  set  forth  in  the
     Indenture for the 10 5/8% Notes.  The

                              -35-
<PAGE>

     9 1/2%  Notes may  be redeemed at the option of the Company,
     in whole or in part, at  any  time after  April 15, 2002, at
     the  redemption  prices  set forth  in the Indenture for the
     9 1/2% Notes.   Upon a  change in control of the Company (as
     defined in  the  Indentures), each  holder of the Notes will
     have  the right  to require the Company to repurchase all or
     part of such holder's Notes at a price equal to 101% of  the
     aggregate principal amount thereof, plus accrued and  unpaid
     interest, if any, to the date of repurchase.  Each Indenture
     contains  certain covenants that, among other things,  limit
     the  ability  of the Company and its Restricted Subsidiaries
     (as   defined   in  the  Indentures)  to  incur   additional
     indebtedness,  pay  dividends or make  other  distributions,
     make  investments,  repurchase subordinated  obligations  or
     capital  stock, create certain liens (except, among  others,
     liens  securing  Senior Indebtedness),  enter  into  certain
     transactions with affiliates, sell assets of the Company  or
     its subsidiaries, issue or sell subsidiary stock, create  or
     permit   to   exist   restrictions  on  distributions   from
     subsidiaries,   or   enter   into   certain   mergers    and
     consolidations.

     The  estimated  fair market value of the Company's  10  5/8%
     Notes   and   9  1/2%  Notes  at  December  31,  1997   were
     approximately    $109.2   million   and   $132.5    million,
     respectively,  versus their book value of $100  million  and
     $121.9  million,  respectively.  The estimated  fair  market
     values are based on the quoted market prices on that date.

     As  of  December 31, 1997, annual maturities  of  notes  and
     loans payable are as follows:

<TABLE>
<CAPTION>

         YEAR ENDING
         -----------
         <S>                                         <C>

         December 31, 1998                           $   2,434,483
         December 31, 1999                               2,712,529
         December 31, 2000                               6,130,709
         December 31, 2001                              18,925,493
         December 31, 2002                                 881,724
         Thereafter                                    221,872,439
                                                     --------------
                                                     $ 252,957,377
                                                     ==============
</TABLE>


     The following assets collateralize the Rio Bank Loan and the
     Amended Bank Loan:


<TABLE>
<CAPTION>
                                                     December 31,
                                             ---------------------------------
                                                  1997               1996
                                             --------------     --------------
     <S>                                     <C>                <C>
     Building and improvements               $ 414,909,591      $ 196,918,053
     Equipment, furniture and improvements      81,793,094         72,052,458
     Land and improvements                      38,543,151         37,162,710
     Construction in progress                    3,894,173        182,407,337
                                             --------------     --------------
                                             $ 539,140,009      $ 488,540,558
                                             ==============     ==============
</TABLE>

6.   EARNINGS PER SHARE

     The Financial Accounting Standards Board issued Statement of
     Financial  Accounting  Standards No.  128  -  "Earnings  Per
     Share"  ("SFAS  128")  which became  effective  for  periods
     ending  after  December  15, 1997 and replaces  historically
     reported  earnings  per  share with "basic",  or  undiluted,
     earnings per share and "diluted" earnings per share.   Basic
     earnings per share is computed by dividing net income by the
     weighted  average  number of shares outstanding  during  the
     period,  while  diluted  earnings  per  share  reflects  the
     additional dilution for all potentially dilutive securities,
     such  as stock options.  Application of SFAS 128 for periods
     ending prior to December 15, 1997 was not permitted, but its
     effect has been included in notes to the Company's financial
     statements filed with the Securities and Exchange

                              -36-
<PAGE>

     Commission for all periods during 1997.  The following table
     reflects the Company's basic and diluted earnings per  share
     for the years ended December 31, 1997, 1996 and 1995:

<TABLE>
<CAPTION>
                                                                    Weighted Average
                                                                    Number of Shares     Earnings
                                                   Net Income          Outstanding       Per Share
                                                 --------------     ----------------     ---------
     <S>                                         <C>                   <C>                  <C>
     1995:
         Basic                                   $  18,745,479         21,288,062           $0.88
         Assumed conversion of stock options     ==============           303,263           =====
                                                                       -----------
         Diluted                                 $  18,745,479         21,591,325           $0.87
                                                 ==============        ===========          =====
     1996:
         Basic                                   $  19,366,377         21,204,527           $0.91
         Assumed conversion of stock options     ==============           323,479           =====
                                                                       -----------
         Diluted                                 $  19,366,377         21,528,006           $0.90
                                                 ==============        ===========          =====
      1997:
         Basic                                   $  21,493,770         21,616,711           $0.99
         Assumed conversion of stock options     ==============           414,610           =====
                                                                       -----------
         Diluted                                 $  21,493,770         22,031,321           $0.98
                                                 ==============        ===========          =====
</TABLE>

7.   INCOME TAXES

     The provision for income taxes consisted of the following:

<TABLE>
<CAPTION>

                                         For the Year Ended December 31,
                                  -------------------------------------------------
                                       1997              1996              1995
                                  -------------     -------------     -------------
     <S>                          <C>               <C>               <C>
     Current                      $  7,644,417      $  8,214,092      $  7,681,015
     Deferred                        4,710,269         2,198,017         3,026,120
                                  -------------     -------------     -------------
                                  $ 12,354,686      $ 10,412,109      $ 10,707,135
                                  =============     =============     =============
</TABLE>

     The  following  schedule reconciles the Company's  effective
     tax rate to the statutory rate:

<TABLE>
<CAPTION>
                                            For the Year Ended December 31,
                                            ---------------------------------
                                              1997       1996         1995
                                            --------   --------     --------
     <S>                                     <C>         <C>         <C>
     Statutory rate                          35.0 %      35.0 %      35.0 %
     Depreciation on premium allocated
       in Rio Partnership exchange            0.1 %       0.2 %       0.4 %
     Disallowance for tax purposes of
       certain meals, travel and
       entertainment expenses                 0.1 %       0.2 %       1.5 %
     Other                                    1.3 %      (0.4)%      (0.5)%
                                             ------      ------      ------
     Effective rate                          36.5 %      35.0 %      36.4 %
                                             ======      ======      ======
</TABLE>

     The  Company's deferred tax assets (liabilities) at December
     31, 1997 consisted of the following:

<TABLE>
<CAPTION>
                                             Current           Non-Current
                                         ----------------    ----------------
     <S>                                  <C>                 <C>
     Depreciation and amortization        $          --       $ (18,710,633)
     Deferred employee benefits                 614,145                  --
     Bad debt expense                         1,980,057                  --
     Other deferred tax items, net            1,444,844          (1,095,786)
                                          --------------      --------------
                                          $   4,039,046       $ (19,806,419)
                                         ==============      ==============
</TABLE>

                              -37-
<PAGE>

     The   Company's   deferred  tax  assets   (liabilities)   at
     December 31, 1996 consisted of the following:

<TABLE>
<CAPTION>
                                                 Current           Non-Current
                                               ------------      --------------
     <S>                                       <C>                <C>
     Depreciation and amortization             $        --        $(11,539,037)
     Deferred employee benefits                    581,000                  --
     Bad debt expense                              390,890                  --
     Preopening costs - Phase V Expansion               --          (1,275,043)
     Other deferred tax assets, net                728,019          (1,059,980)
                                               ------------       -------------
                                               $ 1,699,909        $(13,874,060)
                                               ============       =============

</TABLE>

     The current portion of the Company's net deferred tax assets
     is  included  on the consolidated balance sheets  under  the
     heading prepaid expenses and other current assets.

     The Company has determined that it is probable that the full
     amount of the tax benefit from the deferred tax assets  will
     be  realized  and, therefore, has not recorded  a  valuation
     allowance  to reduce the carrying value of the deferred  tax
     assets.

8.   COMMITMENTS AND CONTINGENCIES

     The Company holds options to purchase two land parcels which
     total  approximately seven acres adjacent to the Rio  for  a
     combined cost of approximately $5.5 million.

     In  addition, the Company has entered into an agreement with
     Clark  County  to  install  a road  across  certain  of  its
     recently acquired properties that will provide an additional
     east/west  conduit for Las Vegas residents and tourists  and
     allow for access to the Rio from the Las Vegas Strip.   Upon
     completion,  the  Company will deed the roadway  acreage  to
     Clark  County  in exchange for the vacating by Clark  County
     other acreage to the Company and reimbursing the Company for
     a majority of the Company's construction costs.

     Rio Properties maintains an employee profit sharing plan for
     all employees who have accredited service.  Contributions to
     the   plan  are  discretionary  and  cannot  exceed  amounts
     permitted under the Internal Revenue Code.  Contributions of
     $470,330,  $376,736, and $278,835 have been  authorized  and
     charged  to  income for the years ended December  31,  1997,
     1996, and 1995, respectively.

     During  1997,  the Company entered into four year  operating
     leases  for  gaming equipment with an annual  rent  of  $1.2
     million.

     In  the  normal course of business, the Company is  involved
     with  various  negotiations and legal matters. In  addition,
     Rio  Properties is a potential defendant in various personal
     injury  allegations. Management is of the opinion  that  the
     effect  of these matters is not material to the consolidated
     financial statements.

9.   STOCKHOLDERS' EQUITY

     COMMON STOCK
     On  November  26,  1997 and December 24, 1997,  the  Company
     issued  3.2  million shares of common stock at a  net  share
     price of $20.16.  The total net proceeds for the shares were
     received in the fourth quarter of 1997.

                              -38-
<PAGE>

     During  1997,  the Company issued 268,300 shares  of  Common
     Stock  at  exercise prices ranging from $3.00 per  share  to
     $15.63  per  share  pursuant  to  stock  options  previously
     granted under the Company's Non-Statutory Stock Option  Plan
     (the "NSOP") and 4,400 shares of Common Stock at $15.50  per
     share pursuant to stock options previously granted under the
     Company's  1995 Long Term Incentive Stock Option  Plan  (the
     "LTIP").

     During  1996,  the Company issued 175,795 shares  of  Common
     Stock  at  exercise prices ranging from $3.00 per  share  to
     $15.63  per  share  pursuant  to  stock  options  previously
     granted   under   the  NSOP.   In  addition,   the   Company
     repurchased 144,500 shares of Common Stock from time to time
     in  1996 in the open market at a total cost of $2.2 million.
     The repurchased shares of Common Stock were retired.

     During  1995,  the Company issued 198,300 shares  of  Common
     Stock  at  exercise prices ranging from $3.00 per  share  to
     $14.25  per  share  pursuant to options  previously  granted
     under  the  NSOP.   In  addition,  the  Company  repurchased
     430,500 shares of Common Stock from time to time in 1995  in
     the  open  market  at  a total cost of  $5.4  million.   The
     repurchased shares of Common Stock were retired.

     STOCK OPTIONS

     The  Company  has  various stock option  plans  under  which
     options  may  be  granted  to officers,  outside  directors,
     employees, agents or independent contractors of the Company.
     The  options  granted typically vest ratably over  5  years,
     with an expiration 10 years from date of issuance.

<TABLE>
<CAPTION>
                                               For the Year Ended December 31,
                                            --------------------------------------
                                               1997          1996         1995
                                            -----------   -----------  -----------
     <S>                                    <C>           <C>          <C>
     Options outstanding, beginning of       2,389,555     1,853,850    1,999,050
     year
       Granted                               1,457,500       828,000      294,000
       Exercised                              (272,700)     (175,795)    (198,300)
       Forfeited                               (43,500)     (116,500)    (240,900)
                                            -----------   -----------  -----------
       Options outstanding, end of year      3,530,855     2,389,555    1,853,850
                                            ===========   ===========  ===========

       Options available for grant at end
          of year                              133,900     1,484,300      259,400
       Options exercisable at end of year    1,258,955       996,755      894,717
       Average exercise price of options
          exercised during the year         $     5.73    $     6.62   $     5.21
       Average exercise price of options
          outstanding at end of year        $    14.45    $    12.40   $    10.63
       Average exercise price of options
          granted during the year           $    17.01    $    15.37   $    13.01
       Average exercise price of options
          forfeited during the year         $    14.21    $    14.04   $    12.43

</TABLE>

     The Company has granted 3,104,500 options at exercise prices
     ranging from $3.00 to $15.625 per share to key officers  and
     employees  under  the  NSOP.   As  of  December  31,   1997,
     1,138,345 options had been exercised and 492,200 options had
     been  forfeited, resulting in 1,473,955 options  outstanding
     and 25,200 options available to be granted under the NSOP.

     Under  the  1991 Directors' Stock Option Plan,  as  amended,
     options to purchase up to 200,000 shares of common stock may
     be  granted  to non-employee directors. The option  exercise
     price  is 100% of the fair market value of the common  stock
     on  the  date  of grant.  As of December 31,  1997,  138,000
     options  had  been granted at exercise prices  ranging  from
     $3.00  per  share to $16.625 per share, 30,000  options  had
     been  exercised  and  22,000  options  had  been  forfeited,
     resulting  in 86,000 options outstanding and 84,000  options
     available to be granted.

                              -39-
<PAGE>

     Under  the LTIP, options to purchase up to 2,000,000  shares
     of  the  Company's common stock may be granted to  executive
     officers,  key  employees, and outside  consultants  of  the
     Company.  The option exercise price is equal to at least the
     last reported sale price of the common stock on the date  of
     the  grant.  As of December 31, 1997, 2,007,500 options  had
     been  granted  at  exercise prices ranging  from  $15.50  to
     $21.1875,  4,400  of  which had been  exercised  and  32,200
     options  had been forfeited, resulting in 1,970,900  options
     outstanding and 24,700 options available to be granted.

     The   Company  applies  APB  Opinion  No.  25  and   related
     interpretations  in accounting for the plans.   Accordingly,
     no  compensation expense has been recognized for  the  stock
     options.   FASB  Statement 123 "Accounting  for  Stock-Based
     Compensation" ("SFAS 123") was issued by the  FASB  in  1995
     and,  if  fully adopted, changes the methods for recognition
     of  cost  on  plans  similar to those of the  Company.   Had
     compensation cost for the Company's stock-based compensation
     plans  been  determined based on the fair  market  value  of
     options  on the dates of grant in 1997, 1996 and 1995  using
     the  Black-Scholes option-pricing model with  the  following
     assumptions:  (i) no dividends, (ii) expected volatility  of
     32%  for  1997  and 37% for 1996 and 1995, (iii)  risk  free
     interest  rates of 6.0%, 6.06% and 5.68% for 1997, 1996  and
     1995,  respectively, and (iv) expected lives of four  years,
     the effect on net income and earnings per share would be  as
     follows:

<TABLE>
<CAPTION>
                                          Year Ended December 31,
                                  ------------------------------------------
                                      1997           1996           1995
                                  ------------   ------------   ------------
     <S>                          <C>            <C>            <C>
     Net income - As reported     $21,493,770    $19,366,377    $18,745,479
                                  ============   ============   ============
                - Proforma        $19,395,182    $18,286,839    $18,692,445
                                  ============   ============   ============
     Diluted EPS - As reported          $0.98          $0.90          $0.87
                                  ============   ============   ============
                 - Proforma             $0.88          $0.86          $0.87
                                  ============   ============   ============
</TABLE>

     The  weighted average fair market values of options  granted
     in  1997,  1996  and  1995  were  $5.08,  $2.49  and  $4.83,
     respectively.

10.  RELATED PARTY TRANSACTIONS

     With the approval of the Company's Audit Committee and Board
     of Directors, the Company has contracted with two affiliates
     of  the  Company's largest stockholder for  the  design  and
     construction  of  four  expansion  projects  at   the   Rio,
     including  the  41-story Masquerade Tower  with  over  1,000
     suites  completed during the first six months of  1997,  the
     previously  completed Phase IV Expansion of 141 suites,  the
     Phase   III  Expansion  of  549  suites,  and  the  Eastside
     Expansion of 437 suites.  Each of these expansions  included
     the  addition of new public and back-of-the-house areas  and
     improvements.  In addition, the Company retained  these  two
     affiliates  to  perform various remodeling and  improvements
     projects  at  the Rio.  During 1997, the Company  contracted
     with these affiliated entities for the completion of the Rio
     Secco  Golf  Club  facility, including the  clubhouse.   The
     Company paid these entities, in the aggregate, approximately
     $64.7 million, $147.9 million, and $51.0 million during  the
     years  ended December 31, 1997, 1996 and 1995, respectively,
     for their services.  The Company has entered into agreements
     with  these affiliates for the expansion of the Rio pursuant
     to  the  New  Rio  Master  Plan for  an  estimated  cost  of
     approximately $156.7 million.

     An  affiliate of the Company's largest stockholder  rents  a
     building located on the Las Vegas Strip to the Company which
     is  utilized as a station for transporting customers by  bus
     to  and  from the Rio.  In addition, this affiliate provided
     real  estate  brokerage and administration services  to  the
     Company  in  connection with the purchase of  the  38  acres
     adjacent to the Rio.  Rent and fees paid to this affiliate,

                              -40-
<PAGE>

     including the reimbursement of expenses, were $0.9  million,
     $1.0  million and $0.9 million for the years ended  December
     31,    1997,   1996   and   1995,   respectively.    Expense
     reimbursements were reimbursed at the  affiliate's cost, and
     real estate  brokerage  commissions  are believed  to be  on
     terms at least as favorable as would have been obtained from
     non-affiliated parties.

     In 1994, the Company entered into a five year agreement with
     an  entity  in which a director of the Company  possesses  a
     less  than  ten  percent  ownership interest.   The  Company
     entered into the Agreement prior to the time this individual
     joined  the  Company's  Board of Directors.   The  agreement
     involves  the  lease  of  land upon which  the  Company  has
     constructed  two  billboards.   Payments  made   under   the
     agreement  for  the years ended December 31, 1997  and  1996
     were approximately $166,000 and $160,000, respectively.

     In  1996, the Company entered into a two year agreement with
     entities  in which a director of the Company was a principal
     stockholder  and  executive officer.  These entities  earned
     commissions  totaling $122,000 and $159,000  for  the  years
     ended  December  31, 1996 and 1995, respectively.   Although
     these  entities  were  acquired  in  June  1997  by  a  non-
     affiliated third party, the resulting entities, in which the
     director  is  now  an employee, earned commissions  totaling
     $188,000  for  the  year  ended December  31,  1997.   These
     commissions  arose out of the acquisition and administration
     of various insurance coverages by the Company.

     In  October 1997, the Company entered into a lease  with  an
     affiliate  of  the  Company's two largest  stockholders  for
     certain warehouse space with such lease including an  option
     to  purchase the warehouse.  In 1997, the Company paid  this
     entity $57,200.

     The  Company believes that the transactions described  above
     are  on  terms  at  least as favorable as  would  have  been
     obtained from non-related parties.

11.  DEBT GUARANTEE

     Summarized financial information is provided below  for  Rio
     Properties,  the Company's principal wholly-owned  operating
     subsidiary, as sole guarantor to the 10 5/8% Notes  and  the
     9  1/2% Notes which are pari passu under the guarantee.  The
     two  subordinated note issues are fully and  unconditionally
     guaranteed  by  Rio Properties and are subordinated  to  all
     existing  and  future  indebtedness  and  other  liabilities
     (including trade payables) of the Company's subsidiaries.

     Summarized financial statements of Rio Properties  have  not
     been  prepared since the assets, pre-tax income and parents'
     net  investment  in  the non-guarantor  subsidiaries  on  an
     individual  basis  and  combined basis are  inconsequential,
     except  as  described  below.  In  addition,  the  Company,s
     operations  and  assets  other than its  investment  in  its
     subsidiaries  are  inconsequential.  The difference  in  net
     equity between the Company and Rio Properties is principally
     a  result  of  the Company's purchase in 1990  and  1992  of
     minority interests in a subsidiary, resulting in the payment
     of premiums of approximately $13.7 million and $1.3 million,
     respectively.  The premiums were allocated by  the  Company,
     based  on  fair  market  values, among  land,  building  and
     equipment, furniture and improvements.

                              -41-
<PAGE>

<TABLE>
<CAPTION>


                                          As of and for the Year Ended December 31,
                                     ----------------------------------------------------
                                          1997               1996              1995
                                     -------------     ---------------   ----------------
     <S>                             <C>               <C>               <C>
     Current assets                  $ 60,333,843        $ 30,139,122       $ 29,995,415
     Non-current assets               531,724,670         448,469,956        262,320,009
     Current liabilities               61,817,819          56,301,870         33,216,257
     Non-current liabilities          240,161,516         253,949,282        110,176,765
     Revenues                         391,678,931         219,577,608        192,537,954
     Operating profit                  60,421,158          37,959,885         37,138,205
     Income before income taxes        34,644,211          29,744,600         29,451,596
     Net Income                        21,923,957          19,327,165         18,733,318

</TABLE>

     One   of  the  Company's  non-guarantor  subsidiaries,   Rio
     Development Company, Inc. ("Rio Development"), has  recently
     acquired assets and liabilities associated with the purchase
     of  the Rio Secco Golf Club.  As of December 31, 1997,  this
     subsidiary  had  current  assets  of  $340,050;  non-current
     assets  of  $31,542,602, including $5,635,073 due  from  the
     Company;  current  liabilities of $100,537  and  non-current
     liabilities  of $26,549,897, including $14,100,782  due  Rio
     Properties.   Prior to the purchase of the  golf  course  in
     September 1997, the assets and operations of Rio Development
     were inconsequential.

                              -42-
<PAGE>

ITEM 9.  CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
        ACCOUNTING AND FINANCIAL DISCLOSURE

     None

PART III

ITEM 10.  DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

      This  information  is incorporated by  reference  from  the
Company's  Proxy  Statement to be filed with  the  Commission  in
connection  with the Company's annual meeting of stockholders  on
May 21, 1998.

ITEM 11.  EXECUTIVE COMPENSATION

      This  information  is incorporated by  reference  from  the
Company's  Proxy  Statement to be filed with  the  Commission  in
connection  with the Company's annual meeting of stockholders  on
May 21, 1998.

ITEM 12.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT

      This  information  is incorporated by  reference  from  the
Company's  Proxy  Statement to be filed with  the  Commission  in
connection  with the Company's annual meeting of stockholders  on
May 21, 1998.

ITEM 13.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

      This  information  is incorporated by  reference  from  the
Company's  Proxy  Statement to be filed with  the  Commission  in
connection  with the Company's annual meeting of stockholders  on
May 21, 1998.

                              -43-
<PAGE>

PART IV

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

     (a)  1.   FINANCIAL STATEMENTS

               Included in Part II of this report:

               Consolidated Balance Sheets at December
               31, 1997 and December 31, 1996.

               For  the Years Ended December 31, 1997,
               1996 and 1995

               Consolidated Statements of Income

               Consolidated Statements of Stockholders' Equity

               Consolidated Statements of Cash Flows.

               Notes to Consolidated Financial Statements

          2.   FINANCIAL STATEMENT SCHEDULES

               Included in Part IV of this report:

               Schedule III - Condensed Financial
               Information of Registrant

               Schedule VIII - Valuation and Qualifying
               Accounts

               Other schedules are omitted because of the absence
               of conditions under which  they  are  required  or
               because the required information  is given in  the
               financial  statements  or notes thereto.

     (b)  REPORTS ON FORM 8-K

     No reports on Form 8-K have been filed by the Company during
the quarter ended December 31, 1997.

                              -44-
<PAGE>

ITEM 14.  EXHIBITS

NUMBER  EXHIBIT DESCRIPTION

3.01    Amended  and Restated Articles of Incorporation  of  Rio
        Hotel   &   Casino,  Inc.  filed  July  19,  1994,   are
        incorporated herein by reference from the Company's (SEC
        File  No.  0-13760) Report on Form 10-Q for the  Quarter
        Ended June 30, 1994, Part II, Item 6(a), Exhibit 4.01.

3.02    Amended and Restated Bylaws of Rio Hotel & Casino, Inc.,
        certified  March  20,  1997, is incorporated  herein  by
        reference  from  the Company's (SEC File No.  001-11569)
        Annual  Report on Form 10-K for the Year Ended  December
        31, 1996, Part IV, Item 14(c), Exhibit 3.02.

4.01    Specimen  common stock certificate for the common  stock
        of  Rio  Hotel & Casino, Inc. is incorporated herein  by
        reference  from  the Company's (SEC  File  No.  333-869)
        Registration Statement on Form S-3 filed on February 12,
        1996, Part II, Item 15, Exhibit 4.03.

4.02    Rio  Hotel  &  Casino, Inc. Non-Statutory  Stock  Option
        Plan, as amended February 25, 1998.

4.03    Rio  Hotel & Casino, Inc. Directors' Stock Option  Plan,
        as amended February 25, 1998.

4.04    Rio  Suite  Hotel  & Casino Employee Retirement  Savings
        Plan  Trust  Agreement dated February  11,  1991;  First
        Amendment  to  the  Rio Suite Hotel  &  Casino  Employee
        Retirement Savings Plan dated March 20, 1992,  effective
        April 1, 1992; Second Amendment to the Rio Suite Hotel &
        Casino Employee Retirement Savings Plan dated March  20,
        1992,  effective April 1, 1992; Third Amendment  to  the
        Rio  Suite  Hotel  & Casino Employee Retirement  Savings
        Plan dated December 14, 1992, effective August 15, 1992,
        and Rio Suite Hotel & Casino Employee Retirement Savings
        Plan, Participant Loan Program dated March 19, 1992  are
        incorporated herein by reference from the Company's (SEC
        File  No.  33-56860) Registration Statement on Form  S-8
        filed  January  8, 1993, Part II, Item 8, Exhibit  4.11;
        Rio  Suite Hotel & Casino Employment Retirement  Savings
        Plan  dated February 21, 1991 is incorporated herein  by
        reference  from  the Company's (SEC File  No.  33-56860)
        Registration  Statement on Form S-8  filed  February  3,
        1993, Part II, Item 8, Exhibit 4.11; Fourth Amendment to
        the Rio Suite Hotel & Casino Employee Retirement Savings
        Plan dated April 30, 1993, effective July 1, 1993; Fifth
        Amendment  to  the  Rio Suite Hotel  &  Casino  Employee
        Retirement Savings Plan dated August 17, 1993, effective
        July  1, 1993; Sixth Amendment to the Rio Suite Hotel  &
        Casino  Employee Retirement Savings Plan  dated  October
        27,  1993, effective October 25, 1993; Seventh Amendment
        to  the  Rio  Suite  Hotel & Casino Employee  Retirement
        Savings   Plan  Trust  Agreement  dated  and   effective
        December 16, 1993; and Eighth Amendment to the Rio Suite
        Hotel  &  Casino Employee Retirement Savings Plan  dated
        May  3,  1994,  effective May 1, 1994  are  incorporated
        herein by reference from the Company's (SEC File No.  0-
        13760)  Report on Form 10-Q for the Quarter  Ended  June
        30,  1994,  Part  II,  Item 6(a),  Exhibit  4.03;  Ninth
        Amendment  to  the  Rio Suite Hotel  &  Casino  Employee
        Retirement Savings Plan dated August 26, 1994, effective
        August 25, 1994; Tenth Amendment to the Rio Suite  Hotel
        &  Casino  Employee Retirement Savings  Plan  dated  and
        effective January 1, 1995; Eleventh Amendment to the Rio
        Suite  Hotel  & Casino Employee Retirement Savings  Plan
        dated  and  effective January 12, 1995 are  incorporated
        herein by reference from the Company's (SEC File No.  0-
        13760)  Annual  Report on Form 10-K for the  Year  Ended
        December  31,  1994, Part IV, Item 14(c), Exhibit  4.08;
        Twelfth  Amendment  to  the Rio  Suite  Hotel  &  Casino
        Employee  Retirement  Savings Plan dated  and  effective
        December 21, 1995; and Thirteenth Amendment to the

                                -45-
<PAGE>

NUMBER  EXHIBIT DESCRIPTION

        Rio  Suite  Hotel  & Casino Employee Retirement  Savings
        Plan dated and effective March 17, 1998.

4.05    Rio  Hotel & Casino, Inc. 1995 Long-Term Incentive Plan,
        as  amended  March 20, 1997, is incorporated  herein  by
        reference  from  the Company's (SEC File No.  001-11569)
        Annual  Report on Form 10-K for the Year Ended  December
        31, 1996, Item 14(c), Exhibit 4.07.

4.06    Credit  Agreement among Bank of America  National  Trust
        and  Savings Association, as agent for itself and  other
        financial  institutions, as Lenders, and Rio Properties,
        Inc.,  as  Borrower, dated July 15, 1993;  Line  A  Note
        executed by Rio Properties, Inc., as Borrower, in  favor
        of   Bank   of   America  National  Trust  and   Savings
        Association, in the amount of $9,692,307.70  dated  July
        15,  1993; Line A Note executed by Rio Properties, Inc.,
        as  Borrower, in favor of Bank of America Nevada, in the
        amount  of  $3,230,769.23, dated July 15, 1993;  Line  A
        Note  executed by Rio Properties, Inc., as Borrower,  in
        favor   of   Societe   Generale,  in   the   amount   of
        $6,461,538.46, dated July 15, 1993; Line A Note executed
        by  Rio  Properties, Inc., as Borrower, in favor of  NBD
        Bank,  N.A., in the amount of $6,461,538.46, dated  July
        15,  1993; Line A Note executed by Rio Properties, Inc.,
        as  Borrower, in favor of First Security Bank of  Idaho,
        N.A.,  in  the amount of $6,461,538.46, dated  July  15,
        1993;  Line A Note executed by Rio Properties, Inc.,  as
        Borrower,  in favor of First Interstate Bank of  Nevada,
        N.A.,  in  the amount of $6,461,538.46, dated  July  15,
        1993;  Line A Note executed by Rio Properties, Inc.,  as
        Borrower, in favor of U.S. Bank of Nevada, in the amount
        of  $3,230,769.23,  dated July 15,  1993;  Line  B  Note
        executed by Rio Properties, Inc., as Borrower, in  favor
        of   Bank   of   America  National  Trust  and   Savings
        Association, in the amount of $5,307,692.30  dated  July
        15,  1993; Line B Note executed by Rio Properties, Inc.,
        as  Borrower, in favor of Bank of America Nevada, in the
        amount  of  $1,769,230.77, dated July 15, 1993;  Line  B
        Note  executed by Rio Properties, Inc., as Borrower,  in
        favor  of First Interstate Bank of Nevada, N.A., in  the
        amount  of  $3,538,461.54, dated July 15, 1993;  Line  B
        Note  executed by Rio Properties, Inc., as Borrower,  in
        favor  of  First Security Bank of Idaho,  N.A.,  in  the
        amount  of  $3,538,461.54, dated July 15, 1993;  Line  B
        Note  executed by Rio Properties, Inc., as Borrower,  in
        favor of NBD Bank, N.A., in the amount of $3,538,461.54,
        dated  July  15,  1993;  Line B  Note  executed  by  Rio
        Properties,  Inc.,  as Borrower,  in  favor  of  Societe
        Generale, in the amount of $3,538,461.54, dated July 15,
        1993;  Line B Note executed by Rio Properties, Inc.,  as
        Borrower, in favor of U.S. Bank of Nevada, in the amount
        of  $1,769,230.77, dated July 15, 1993;  Revolving  Note
        executed by Rio Properties, Inc., as Borrower, in  favor
        of   Bank   of   America  National  Trust  and   Savings
        Association,  in the amount of $15,000,000,  dated  July
        15,  1993;  Revolving Note executed by  Rio  Properties,
        Inc.,  as Borrower, in favor of Bank of America  Nevada,
        in  the  amount  of  $5,000,000, dated  July  15,  1993;
        Revolving  Note  executed by Rio  Properties,  Inc.,  as
        Borrower,  in favor of First Interstate Bank of  Nevada,
        N.A., in the amount of $10,000,000, dated July 15, 1993;
        Revolving  Note  executed by Rio  Properties,  Inc.,  as
        Borrower,  in favor of First Interstate Bank  of  Idaho,
        N.A., in the amount of $10,000,000, dated July 15, 1993;
        Revolving  Note  executed by Rio  Properties,  Inc.,  as
        Borrower,  in favor of NBD Bank, N.A., in the amount  of
        $10,000,000,   dated  July  15,  1993;  Revolving   Note
        executed by Rio Properties, Inc., as Borrower, in  favor
        of Societe Generale, in the amount of $10,000,000, dated
        July   15,   1993;  Revolving  Note  executed   by   Rio
        Properties, Inc., as Borrower, in favor of U.S. Bank  of
        Nevada,  in  the  amount of $5,000,000, dated  July  15,
        1993;  Security  Agreement executed by  Rio  Properties,
        Inc.,  as  Debtor, in favor of Bank of America  National
        Trust  and Savings Association, as agent for itself  and
        other  financial institutions, as Secured  Party,  dated
        July 15, 1993;

                                -46-
<PAGE>

NUMBER  EXHIBIT DESCRIPTION

        Construction Deed of Trust With Assignment of Rents  and
        Fixture  Filing among Rio Properties, Inc., as  Trustor,
        Equitable Deed Company, as Trustee, and Bank of  America
        National  Trust and Savings Association,  as  agent  for
        itself   and   the  other  financial  institutions,   as
        Beneficiary,  dated  July 15, 1993; Unsecured  Indemnity
        Agreement   executed   by  Rio  Properties,   Inc.,   as
        Indemnitor,  in favor of Bank of America National  Trust
        and  Savings Association, as agent for itself and  other
        financial  institutions, dated July 15,  1993;  Guaranty
        executed  by Rio Hotel & Casino, Inc., as Guarantor,  in
        favor  of  Bank  of America National Trust  and  Savings
        Association,  as  agent for itself and  other  financial
        institutions,  as  Guaranteed Parties,  dated  July  15,
        1993;  and, Parent Guarantor Security Agreement  by  Rio
        Hotel  &  Casino, Inc., as Debtor, in favor of  Bank  of
        America National Trust and Savings Association, as agent
        for  itself and other financial institutions, as Secured
        Party, dated July 15, 1993 are incorporated by reference
        from the Company's (SEC File No. 2-88147) Report on Form
        8-K dated July 15, 1993, Item 7(c), Exhibit 28.01; First
        Amendment  to Credit Agreement dated as of  October  25,
        1993 and Second Amendment and Waiver to Credit Agreement
        dated as of November 8, 1993 among Rio Properties, Inc.,
        Bank  of America National Trust and Savings Association,
        Bank of America Nevada, First Interstate Bank of Nevada,
        First  Security  Bank of Idaho, N.A.,  NBD  Bank,  N.A.,
        Societe   Generale,  and  U.S.  Bank   of   Nevada   are
        incorporated by reference from the Company's  (SEC  File
        No.  0-13760)  Annual Report on Form 10-K for  the  Year
        Ended  December  31, 1993, Part IV, Item 14(c),  Exhibit
        4.09;  Third Amendment to Credit Agreement dated  as  of
        April  15,  1994  among Rio Properties,  Inc.,  Bank  of
        America National Trust and Savings Association, as Agent
        and as a Bank, Bank of America, Nevada, First Interstate
        Bank of Nevada, First Security Bank of Idaho, N.A.,  NBD
        Bank,  N.A., Societe Generale, and U.S. Bank of  Nevada;
        Memorandum   of  Amendments  to  Credit  Agreement   and
        Amendment  to Construction Deed of Trust with Assignment
        of  Rents and Fixture Filing dated as of May 9, 1994  by
        Rio  Properties, Inc. and Bank of America National Trust
        and  Savings  Association  are  incorporated  herein  by
        reference  from  the Company's (SEC  File  No.  0-13760)
        Report on Form 10-Q for the Quarter Ended June 30, 1994,
        Part  II,  Item 6(a), Exhibit No. 4.02; Fourth Amendment
        to  Credit  Agreement  among Rio  Properties,  Inc.,  as
        Borrower, and Bank of America National Trust and Savings
        Association,  First  Interstate Bank  of  Nevada,  First
        Security  Bank  of Idaho, N.A., NBD Bank, N.A.,  Societe
        Generale, Bank of America, Nevada, U.S. Bank of  Nevada,
        Bank  of  Scotland and Midlantic Bank, N.A., as Lenders;
        and  Second Memorandum of Amendment to Credit  Agreement
        and   Amendment  to  Construction  Deed  of  Trust  with
        Assignment of Rents and Fixture Filing between  Borrower
        and   Bank   of  America  National  Trust  and   Savings
        Association,  as agent for Lenders, dated  December  16,
        1994  are  incorporated  herein by  reference  from  the
        Company's  (SEC  File No. 0-13760) Report  on  Form  8-K
        dated December 16, 1994, Item 7(c), Exhibit 10.01; Fifth
        Amendment  to  Credit Agreement dated as  of  March  20,
        1995,  among  Rio  Properties,  Inc.,  Bank  of  America
        National Trust and Savings Association, as Agent and  as
        a  Bank, First Interstate Bank of Nevada, First Security
        Bank  of  Idaho, N.A., NBD Bank, N.A., Societe Generale,
        Bank  of  America Nevada, U.S. Bank of Nevada,  Bank  of
        Scotland   and  Midlantic  Bank,  N.A.,  as  Banks,   is
        incorporated herein by reference from the Company's (SEC
        File  No.  0-13760) Annual Report on Form 10-K  for  the
        Year  Ended  December  31, 1994, Part  IV,  Item  14(c),
        Exhibit 10.09; Sixth Amendment to Credit Agreement dated
        as  of July 31, 1995 among Rio Properties, Inc., Bank of
        America National Trust and Savings Association, as Agent
        and  as  a  Bank, and First Interstate Bank  of  Nevada,
        First  Security  Bank of Idaho, N.A.,  NBD  Bank,  N.A.,
        Societe  Generale, Bank of America Nevada, U.S. Bank  of
        Nevada, Bank of Scotland, Midlantic Bank, N.A., and Bank
        of Hawaii, as Banks, is incorporated herein by reference
        from the Company's (SEC File No. 0-13760) Report on Form
        8-K  dated September 15, 1995, Item 7(c), Exhibit  4.01;
        Seventh  Amendment  to  Credit  Agreement  dated  as  of
        January  17,  1996 among Rio Properties, Inc.,  Bank  of
        America National Trust and Savings Association, as Agent
        and  as  a  Bank, and First Interstate Bank  of  Nevada,
        First  Security  Bank of Idaho, N.A., Societe  Generale,
        Bank of America Nevada, U.S.

                                -47-
<PAGE>

NUMBER  EXHIBIT DESCRIPTION

        Bank  of Nevada, Bank of Scotland, Midlantic Bank, N.A.,
        and Bank of Hawaii, as Banks, is incorporated herein  by
        reference  from  the Company's (SEC  File  No.  1-11569)
        Annual   Report  on  Form  10-K  for  the   Year   Ended
        December  31,  1995, Part IV, Item 14(c), Exhibit  4.08;
        Eighth  Amendment  to  Credit  Agreement  dated  as   of
        June  17,  1996 among Rio Properties, Inc. and  Bank  of
        America  National  Trust  and  Savings  Association,  as
        Agent, and Wells Fargo Bank National Association,  First
        Security   Bank  of  Idaho,  N.A.,  NBD  Bank,   Societe
        Generale,  Bank of America Nevada, U.S. Bank of  Nevada,
        Bank  of  Scotland, Midlantic Bank, N.A.,  and  Bank  of
        Hawaii,  as  Banks, is incorporated herein by  reference
        from the Company's (SEC File No. 1-11569) Report on Form
        10-Q  for  the Quarter Ended June 30, 1996,  Item  6(a),
        Exhibit 10.01; Ninth Amendment to Credit Agreement dated
        as  of  January 13, 1997 among Rio Properties, Inc.  and
        Rio Leasing, Inc., and Bank of America National Trust  &
        Savings  Association, as Agent and  a  Bank,  and  Wells
        Fargo Bank National Association, First Security Bank  of
        Utah,  N.A.,  NBD Bank, Societe Generale, U.S.  Bank  of
        Nevada,   Bank   of   Scotland,   PNC   Bank,   National
        Association, successor by merger to Midlantic Bank, N.A.
        and  Bank  of  Hawaii, as Banks; and Tenth Amendment  to
        Credit Agreement dated as of February 3, 1997 among  Rio
        Properties,  Inc.  and Rio Leasing, Inc.,  and  Bank  of
        America National Trust and Savings Association, as Agent
        and  a  Bank, and Wells Fargo Bank National Association,
        First  Security Bank, N.A., NBD Bank, Societe  Generale,
        U.S.  Bank  of  Nevada,  Bank  of  Scotland,  PNC  Bank,
        National  Association, successor by merger to  Midlantic
        Bank,   N.A.,  and  Bank  of  Hawaii,  as   Banks,   are
        incorporated herein by reference from the Company's (SEC
        File  No. 001-11569) Annual Report on Form 10-K for  the
        Year  Ended December 31, 1996, Item 14(c), Exhibit 4.08;
        Eleventh Amendment to Credit Agreement and Waiver  dated
        as  of  May  13,  1997 among Rio Properties,  Inc.,  Rio
        Leasing, Inc., Bank of America National Trust &  Savings
        Association,  as  Agent and as a Bank, and  Wells  Fargo
        Bank  National Association, First Security  Bank,  N.A.,
        NBD Bank, Societe Generale, U.S. Bank of Nevada, bank of
        Scotland,  PNC Bank, National Association, successor  by
        merger  to Midlantic Bank, N.A., and Bank of Hawaii,  as
        Banks;  and  Twelfth Amendment to Credit  Agreement  and
        Waiver  dated  as of May 13, 1997 among Rio  Properties,
        Inc.,  Rio Leasing, Inc., Bank of America National Trust
        &  Savings  Association, as Agent as a Bank,  and  Wells
        Fargo  Bank National Trust & Savings Association,  First
        Security  Bank,  N.A., NBD Bank, Societe Generale,  U.S.
        Bank  of  Nevada, Bank of Scotland, PNC  Bank,  National
        Association,  successor  by merger  to  Midlantic  Bank,
        N.A.,  and  Bank  of Hawaii, as Banks, are  incorporated
        herein by reference from the Company's (SEC File No. 001-
        11569)  Report on Form 10-Q for the Quarter Ended  March
        31,  1997,  Item  6(a),  Exhibit  4.01;  and  Thirteenth
        Amendment to Credit Agreement dated as of August 8, 1997
        among  Rio  Properties, Inc. and Rio Leasing,  Inc.,  as
        Borrowers,  Bank of America National Trust  and  Savings
        Association,  as  Agent and as a Bank, and  Wells  Fargo
        Bank  National Association, First Security  Bank,  N.A.,
        NBA Bank, Societe Generale, U.S. Bank of Nevada, Bank of
        Scotland,  PNC Bank, National Association, Successor  By
        Merger  to Midlantic Bank, N.A., and Bank of Hawaii,  as
        Banks,  is  incorporated herein by  reference  from  the
        Company's  (SEC File No. 001-11569) Report on Form  10-Q
        for  the Quarter Ended June 30, 1997, Item 6(a), Exhibit
        4.01.

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

4.08    Indenture dated as of February 11, 1997, among Rio Hotel
        &  Casino,  Inc., Rio Properties, Inc. and IBJ  Schroder
        Bank  &  Trust  Company  for the Company's 9 1/2% Senior
        Subordinated Notes Due

                                -48-
<PAGE>

NUMBER  EXHIBIT DESCRIPTION

        2007  is  incorporated  herein  by  reference  from  the
        Company's  (SEC  File No. 0-13760) Report  on  Form  8-K
        dated February 4, 1997, Item 7(c), Exhibit 4.3.

4.09    Form  of  Letter of Transmittal to IBJ Schroder  Bank  &
        Trust  Company as Exchange Agent for exchange of  9-1/2%
        Senior  Subordinated  Notes  Due  2007  is  incorporated
        herein by reference from the Company's (SEC File No. 333-
        23895)  Registration Statement on Form S-4  filed  March
        24, 1997, Part II, Item 21(A), Exhibit 4.14.

4.10    Amended  and  Restated  Credit  Agreement  dated  as  of
        February  24,  1998 among Rio Properties, Inc.  and  Rio
        Leasing,  Inc.  and Bank of America National  Trust  and
        Savings  Association  as Agent and the  other  financial
        institutions  party  hereto is  incorporated  herein  by
        reference  from  the Company's (SEC  File  No.  1-11569)
        Report  on Form 8-K dated February 24, 1998, Item  7(c),
        Exhibit 4.1.

10.01   Interest  Rate Swap Agreement dated as of July 28,  1993
        between   Rio  Properties,  Inc.  and  Bank  of  America
        National  Trust and Savings Association is  incorporated
        herein by reference from the Company's (SEC File No.  0-
        13760)  Annual  Report on Form 10-K for the  Year  Ended
        December 31, 1993, Part IV, Item 14(c), Exhibit 10.11.

10.02   Architectural Agreement entered into as of  February  9,
        1995  between  Rio Hotel & Casino, Inc., as  Owner,  and
        Anthony   A.   Marnell,  Chartered,  as  Architect,   is
        incorporated herein by reference from the Company's (SEC
        File  No.  0-13760) Annual Report on Form 10-K  for  the
        Year  Ended  December  31, 1994, Part  IV,  Item  14(c),
        Exhibit 10.08.

10.03   Building  Contract entered into as of February 27,  1995
        between  Marnell  Corrao Associates,  Inc.,  as  General
        Contractor,  and  Rio Properties,  Inc.,  as  Owner,  is
        incorporated herein by reference from the Company's (SEC
        File  No.  0-13760) Annual Report on Form 10-K  for  the
        Year  Ended  December  31, 1994, Part  IV,  Item  14(c),
        Exhibit 10.09.

10.04   Real Estate Purchase and Sale Agreement entered into  as
        of January 25, 1995 between Focus 2000, Inc., as Seller,
        and  Rio  Properties,  Inc., as Buyer,  is  incorporated
        herein by reference from the Company's (SEC File No.  0-
        13760)  Annual  Report on Form 10-K for the  Year  Ended
        December 31, 1994, Part IV, Item 14(c), Exhibit 10.10.

10.05   Exchange  Agreement entered into as of January  6,  1995
        between Allied Building Materials, Cinderlane, Inc., and
        Rio  Hotel  &  Casino,  Inc. is incorporated  herein  by
        reference  from  the Company's (SEC  File  No.  0-13760)
        Annual  Report on Form 10-K for the Year Ended  December
        31, 1994, Part IV, Item 14(c), Exhibit 10.11.

10.06   Letter  Agreement  regarding Rate Cap Transaction  dated
        August  11, 1994 between Bank of America National  Trust
        and  Savings  Association and Rio  Properties,  Inc.  is
        incorporated herein by reference from the Company's (SEC
        File  No.  0-13760) Annual Report on Form 10-K  for  the
        Year  Ended  December  31, 1994, Part  IV,  Item  14(c),
        Exhibit 10.12.

10.07   Architectural Agreement entered into as of July 27, 1995
        by   and  between  Anthony  A.  Marnell  II,  Chtd.,  as
        Architect,  and Rio Hotel & Casino, Inc., as  Owner,  is
        incorporated herein by reference from the Company's (SEC
        File  No.  333-869) Registration Statement on Form  S-3,
        filed on

                                -49-
<PAGE>

NUMBER  EXHIBIT DESCRIPTION

        February 12, 1996, Part II, Item 16, Exhibit 10.10.

10.08   Building Contract entered into as of August 14, 1995  by
        and  between Marnell Corrao Associates, Inc., as General
        Contractor,  and  Rio Properties,  Inc.,  as  Owner,  is
        incorporated herein by reference from the Company's (SEC
        File  No.  333-869) Registration Statement on Form  S-3,
        filed  on  February 12, 1996, Part II, Item 16,  Exhibit
        10.11.

10.09   Form  of  Exchange Agency Agreement between Rio Hotel  &
        Casino,  Inc. and IBJ Schroder Bank & Trust  Company  is
        incorporated herein by reference from the Company's (SEC
        File  No. 333-23895) Registration Statement on Form  S-4
        filed  March  24,  1997, Part II,  Item  21(A),  Exhibit
        10.12.

10.10   Employment  Agreement  dated as  of  November  25,  1996
        between  Rio Hotel & Casino, Inc. and David  P.  Hanlon;
        Employment  Agreement dated as of March 7, 1997  between
        Rio  Hotel  &  Casino,  Inc. and  Ronald  J.  Radcliffe;
        Employment  Agreement dated as of March 7, 1997  between
        Rio  Hotel  &  Casino,  Inc. and  I.  Scott  Bogatz  are
        incorporated herein by reference from the Company's (SEC
        File  No. 001-11569) Annual Report on Form 10-K for  the
        Year  Ended  December  31, 1996, Part  IV,  Item  14(c),
        Exhibit 10.12.

10.11   Purchase  Agreement dated as of June 1, 1997  among  Rio
        Development  Company, Inc. and Seven Hills Golf  Limited
        Partnership is incorporated herein by reference from the
        Company's  (SEC File No. 001-11569) Quarterly Report  on
        Form 10-Q for the Quarter Ended June 30, 1997, Part  II,
        Item 6(a), Exhibit 10.01.

10.12   Architectural Agreements entered into as  of  March  25,
        1998  by  and between Anthony A. Marnell II,  Chtd.,  as
        Architect, and Rio Hotel & Casino, Inc., as Owner.

10.13   Building Contracts entered into as of March 25, 1998  by
        and  between Marnell Corrao Associates, Inc., as General
        Contractor, and Rio Properties, Inc., as Owner.

21.01   List of subsidiaries of Registrant.

23.01   Consent of Arthur Andersen LLP.

27.01   Financial Data Schedule.


                                -50-
<PAGE>


<TABLE>
<CAPTION>

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


                                                                    December 31,
                                                            --------------------------------
                                                                  1997             1996
                  ASSETS                                    ---------------   --------------
<S>                                                         <C>               <C>

Current assets:

   Cash and cash equivalents                                $      513,528    $     469,063
                                                            ---------------   --------------
       Total current assets                                        513,528          469,063
                                                            ---------------   --------------
Other assets:

   Investments in subsidiaries                                 277,659,111      192,031,880
   Other, net                                                    4,207,363        3,140,906
                                                            ---------------   --------------
                                                               281,866,474      195,172,786
                                                            ---------------   --------------
                                                            $  282,380,002    $ 195,641,849
                                                            ===============   ==============

          LIABILITIES AND STOCKHOLDERS' EQUITY

Non-current liabilities due to subsidiaries                 $   12,204,877    $  13,766,619
                                                            ---------------   --------------
Stockholders' equity

   Common Stock, $0.01 par value;
      100,000,000 shares authorized;
      24,643,141 and 21,170,441
      shares issued and outstanding                                246,432          211,705
   Additional paid-in capital                                  179,912,196      113,140,798
   Retained earnings                                            90,016,497       68,522,727
                                                            ---------------   --------------
       Total stockholders' equity                              270,175,125      181,875,230
                                                            ---------------   --------------
                                                            $  282,380,002    $ 195,641,849
                                                            ===============   ==============
</TABLE>

   See Accompanying Notes to Consolidated Financial Statements

                              -51-
<PAGE>


<TABLE>
<CAPTION>

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


                                             For the Year Ended December 31,
                                     ----------------------------------------------
                                          1997             1996            1995
                                     ---------------  -------------   -------------
<S>                                  <C>              <C>             <C>
Revenues

   Interest Income                   $       21,813   $      3,884    $      1,144
   Subsidiary earnings                   21,481,957     19,612,493      18,994,335
                                     ---------------  -------------   -------------
                                         21,503,770     19,616,377      18,995,479
                                     ---------------  -------------   -------------
Costs and Expenses:

   General and administrative                10,000        250,000         250,000
                                     ---------------  -------------   -------------
             Net income              $   21,493,770   $ 19,366,377    $ 18,745,479
                                     ===============  =============   =============
</TABLE>

   See Accompanying Notes to Consolidated Financial Statements

                              -52-

<PAGE>

<TABLE>
<CAPTION>

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


                                                                   For the Year Ended December 31,
                                                          --------------------------------------------------
                                                               1997              1996              1995
                                                          --------------    --------------    --------------
<S>                                                       <C>               <C>               <C>
Cash flows from operating activities:
  Net income                                              $  21,493,770     $  19,366,377     $  18,745,479

  Adjustments to reconcile net income to net
    cash provided by (used in) operating activities:
  Earnings from subsidiary investments                      (21,481,957)      (19,612,493)      (18,994,335)

  (Increase) decrease in assets:
    Receivables                                                       -               537               350
    Due from (to) subsidiaries                               (1,561,736)        1,686,447         4,715,730
  Net cash provided by (used in) operating activities        (1,549,923)        1,440,868         4,467,224
                                                          --------------    --------------    --------------
Cash flows from investing activities:
  Investments in subsidiaries                               (64,030,000)                -                 -
                                                          --------------    --------------    --------------
  Net cash used in investing activities                     (64,030,000)                -                 -
                                                          --------------    --------------    --------------
Cash flows from financing activities:
  Net proceeds from common stock issuance                    65,624,388         1,162,910           969,251
  Repurchase of common stock                                          -        (2,220,600)       (5,386,225)
                                                          --------------    --------------    --------------
  Net cash used in (provided by) financing activities        65,624,388        (1,057,690)       (4,416,974)
                                                          --------------    --------------    --------------
  Net increase (decrease) in cash and
    cash equivalents                                             44,465           383,178            50,250
  Cash and cash equivalents, beginning of period                469,063            85,885            35,635
                                                          --------------    --------------    --------------
  Cash and cash equivalents, end of period                $     513,528     $     469,063     $      85,885
                                                          ==============    ==============    ==============

</TABLE>

   See Accompanying Notes to Consolidated Financial Statements

                              -53-
<PAGE>



<TABLE>
<CAPTION>

            RIO HOTEL & CASINO, INC. AND SUBSIDIARIES
        SCHEDULE VIII - VALUATION AND QUALIFYING ACCOUNTS
           FOR THE THREE YEARS ENDED DECEMBER 31, 1997


<S>                                             <C>
Balance, December 31, 1994                      $     479,135

     Additions charged to income                    1,002,463

     Accounts written off, net of recoveries         (656,906)
                                                --------------
Balance, December 31, 1995                            824,692

     Additions charged to income                    1,070,813

     Accounts written off, net of recoveries         (778,675)
                                                --------------
Balance, December 31, 1996                          1,116,830

     Additions charged to income                   25,599,841

     Accounts written off, net of recoveries       (3,571,922)
                                                --------------
Balance, December 31, 1997                      $  23,144,749
                                                ==============
</TABLE>

   See Accompanying Notes to Consolidated Financial Statements

                              -54-
<PAGE>



                           SIGNATURES

      Pursuant to the requirements of Section 13 or 15(d) of  the
Securities  Exchange Act of 1934, the registrant has duly  caused
this  report  to  be  signed on its behalf  by  the  undersigned,
thereunto duly authorized.

                                 RIO HOTEL & CASINO, INC.


March 30, 1998                   By:  /s/ Ronald J. Radcliffe
                                      Ronald J. Radcliffe, Vice
                                      President, Treasurer
                                      and Chief Financial Officer

      Pursuant to the requirements of the Securities Exchange Act
of  1934,  this  report has been signed below  by  the  following
persons on behalf of the registrant and in the capacities and  on
the dates indicated.


<TABLE>
<CAPTION>
          SIGNATURE                                   TITLE                               DATE
<S>                            <C>                                                   <C>
                                                                                     March 30, 1998
/s/ Anthony A. Marnell II      Chairman of the Board of Directors and Chief
Anthony A. Marnell II          Executive Officer (Principal Executive Officer)


/s/ James A. Barrett, Jr.      President and Director                                March 30, 1998
James A. Barrett, Jr.


/s/ David P. Hanlon            Executive Vice President, Chief Operating             March 30, 1998
David P. Hanlon                Officer and Director


/s/ Ronald J. Radcliffe        Vice President, Treasurer and Chief Financial         March 30, 1998
Ronald J. Radcliffe            Officer (Principal Financial and Accounting Officer)


/s/ I. Scott Bogatz            Vice President, Secretary and General Counsel         March 30, 1998
I. Scott Bogatz


/s/ John A. Stuart             Director                                              March 30, 1998
John A. Stuart


/s/ Thomas Y. Hartley          Director                                              March 30, 1998
Thomas Y. Hartley


/s/ Peter M. Thomas            Director                                              March 30, 1998
Peter M. Thomas

</TABLE>

                              -55-
<PAGE>

<TABLE>
<CAPTION>
                          EXHIBIT INDEX

NUMBER   EXHIBIT DESCRIPTION                                       PAGE
<S>      <C>                                                      <C>
3.01     Amended and Restated Articles of Incorporation  of  Rio
         Hotel   &  Casino,  Inc.  filed  July  19,  1994,   are
         incorporated  herein by reference  from  the  Company's
         (SEC  File  No. 0-13760) Report on Form  10-Q  for  the
         Quarter  Ended  June  30, 1994,  Part  II,  Item  6(a),
         Exhibit 4.01.

3.02     Amended  and  Restated Bylaws of Rio  Hotel  &  Casino,
         Inc.,  certified March 20, 1997, is incorporated herein
         by  reference  from the Company's (SEC  File  No.  001-
         11569)  Annual Report on Form 10-K for the  Year  Ended
         December 31, 1996, Part IV, Item 14(c), Exhibit 3.02.

4.01     Specimen common stock certificate for the common  stock
         of  Rio Hotel & Casino, Inc. is incorporated herein  by
         reference  from  the Company's (SEC File  No.  333-869)
         Registration   Statement   on   Form   S-3   filed   on
         February 12, 1996, Part II, Item 15, Exhibit 4.03.

4.02     Rio  Hotel  &  Casino, Inc. Non-Statutory Stock  Option      62
         Plan, as amended February 25, 1998.

4.03     Rio  Hotel & Casino, Inc. Directors' Stock Option Plan,      71
         as amended February 25, 1998.

4.04     Rio  Suite  Hotel & Casino Employee Retirement  Savings      78
         Plan  Trust  Agreement dated February 11,  1991;  First
         Amendment  to  the  Rio Suite Hotel &  Casino  Employee
         Retirement Savings Plan dated March 20, 1992, effective
         April  1, 1992; Second Amendment to the Rio Suite Hotel
         &  Casino Employee Retirement Savings Plan dated  March
         20,  1992, effective April 1, 1992; Third Amendment  to
         the  Rio  Suite  Hotel  &  Casino  Employee  Retirement
         Savings Plan dated December 14, 1992, effective  August
         15,  1992,  and  Rio  Suite  Hotel  &  Casino  Employee
         Retirement Savings Plan, Participant Loan Program dated
         March  19,  1992 are incorporated herein  by  reference
         from the Company's (SEC File No. 33-56860) Registration
         Statement on Form S-8 filed January 8, 1993,  Part  II,
         Item   8,  Exhibit  4.11;  Rio  Suite  Hotel  &  Casino
         Employment  Retirement Savings Plan dated February  21,
         1991  is  incorporated  herein by  reference  from  the
         Company's   (SEC   File   No.  33-56860)   Registration
         Statement on Form S-8 filed February 3, 1993, Part  II,
         Item 8, Exhibit 4.11; Fourth Amendment to the Rio Suite
         Hotel  & Casino Employee Retirement Savings Plan  dated
         April 30, 1993, effective July 1, 1993; Fifth Amendment
         to  the  Rio  Suite Hotel & Casino Employee  Retirement
         Savings  Plan dated August 17, 1993, effective July  1,
         1993;  Sixth Amendment to the Rio Suite Hotel &  Casino
         Employee  Retirement  Savings Plan  dated  October  27,
         1993, effective October 25, 1993; Seventh Amendment  to
         the  Rio  Suite  Hotel  &  Casino  Employee  Retirement
         Savings   Plan  Trust  Agreement  dated  and  effective
         December  16,  1993; and Eighth Amendment  to  the  Rio
         Suite  Hotel & Casino Employee Retirement Savings  Plan
         dated   May  3,  1994,  effective  May  1,   1994   are
         incorporated  herein by reference  from  the  Company=s
         (SEC  File  No. 0-13760) Report on Form  10-Q  for  the
         Quarter  Ended  June  30, 1994,  Part  II,  Item  6(a),
         Exhibit 4.03; Ninth Amendment to the Rio Suite Hotel  &
         Casino  Employee Retirement Savings Plan  dated  August
         26, 1994, effective August 25, 1994; Tenth Amendment to
         the  Rio  Suite  Hotel  &  Casino  Employee  Retirement
         Savings  Plan  dated  and effective  January  1,  1995;
         Eleventh  Amendment  to the Rio Suite  Hotel  &  Casino
         Employee  Retirement Savings Plan dated  and  effective
         January  12, 1995 are incorporated herein by  reference
         from the Company's (SEC File No. 0-13760) Annual Report
         on Form 10-K for the Year Ended December 31, 1994, Part
         IV,  Item 14(c), Exhibit 4.08; Twelfth Amendment to the
         Rio  Suite  Hotel & Casino Employee Retirement  Savings
         Plan  dated  and  effective  December  21,  1995;   and
         Thirteenth  Amendment to the Rio Suite Hotel  &  Casino
         Employee  Retirement Savings Plan dated  and  effective
         March 17, 1998.

                                  -56-
<PAGE>

NUMBER   EXHIBIT DESCRIPTION                                       PAGE

4.05     Rio Hotel & Casino, Inc. 1995 Long-Term Incentive Plan,
         as  amended March 20, 1997, is incorporated  herein  by
         reference  from the Company's (SEC File No.  001-11569)
         Annual  Report on Form 10-K for the Year Ended December
         31, 1996, Item 14(c), Exhibit 4.07.

4.06     Credit  Agreement among Bank of America National  Trust
         and  Savings Association, as agent for itself and other
         financial institutions, as Lenders, and Rio Properties,
         Inc.,  as  Borrower, dated July 15, 1993; Line  A  Note
         executed by Rio Properties, Inc., as Borrower, in favor
         of   Bank   of  America  National  Trust  and   Savings
         Association, in the amount of $9,692,307.70 dated  July
         15, 1993; Line A Note executed by Rio Properties, Inc.,
         as Borrower, in favor of Bank of America Nevada, in the
         amount  of $3,230,769.23, dated July 15, 1993;  Line  A
         Note executed by Rio Properties, Inc., as Borrower,  in
         favor   of   Societe  Generale,  in   the   amount   of
         $6,461,538.46,  dated  July  15,  1993;  Line  A   Note
         executed by Rio Properties, Inc., as Borrower, in favor
         of  NBD  Bank,  N.A., in the amount  of  $6,461,538.46,
         dated  July  15,  1993;  Line A Note  executed  by  Rio
         Properties,  Inc.,  as  Borrower,  in  favor  of  First
         Security  Bank  of  Idaho,  N.A.,  in  the  amount   of
         $6,461,538.46,  dated  July  15,  1993;  Line  A   Note
         executed by Rio Properties, Inc., as Borrower, in favor
         of First Interstate Bank of Nevada, N.A., in the amount
         of  $6,461,538.46,  dated July 15, 1993;  Line  A  Note
         executed by Rio Properties, Inc., as Borrower, in favor
         of U.S. Bank of Nevada, in the amount of $3,230,769.23,
         dated  July  15,  1993;  Line B Note  executed  by  Rio
         Properties,  Inc., as Borrower, in  favor  of  Bank  of
         America National Trust and Savings Association, in  the
         amount  of  $5,307,692.30 dated July 15, 1993;  Line  B
         Note executed by Rio Properties, Inc., as Borrower,  in
         favor  of  Bank  of America Nevada, in  the  amount  of
         $1,769,230.77,  dated  July  15,  1993;  Line  B   Note
         executed by Rio Properties, Inc., as Borrower, in favor
         of First Interstate Bank of Nevada, N.A., in the amount
         of  $3,538,461.54,  dated July 15, 1993;  Line  B  Note
         executed by Rio Properties, Inc., as Borrower, in favor
         of First Security Bank of Idaho, N.A., in the amount of
         $3,538,461.54,  dated  July  15,  1993;  Line  B   Note
         executed by Rio Properties, Inc., as Borrower, in favor
         of  NBD  Bank,  N.A., in the amount  of  $3,538,461.54,
         dated  July  15,  1993;  Line B Note  executed  by  Rio
         Properties,  Inc.,  as Borrower, in  favor  of  Societe
         Generale,  in the amount of $3,538,461.54,  dated  July
         15, 1993; Line B Note executed by Rio Properties, Inc.,
         as  Borrower, in favor of U.S. Bank of Nevada,  in  the
         amount of $1,769,230.77, dated July 15, 1993; Revolving
         Note executed by Rio Properties, Inc., as Borrower,  in
         favor  of  Bank of America National Trust  and  Savings
         Association, in the amount of $15,000,000,  dated  July
         15,  1993;  Revolving Note executed by Rio  Properties,
         Inc.,  as Borrower, in favor of Bank of America Nevada,
         in  the  amount  of $5,000,000, dated  July  15,  1993;
         Revolving  Note  executed by Rio Properties,  Inc.,  as
         Borrower, in favor of First Interstate Bank of  Nevada,
         N.A.,  in  the  amount of $10,000,000, dated  July  15,
         1993;  Revolving Note executed by Rio Properties, Inc.,
         as  Borrower,  in  favor of First  Interstate  Bank  of
         Idaho,  N.A., in the amount of $10,000,000, dated  July
         15,  1993;  Revolving Note executed by Rio  Properties,
         Inc.,  as Borrower, in favor of NBD Bank, N.A., in  the
         amount  of  $10,000,000, dated July 15, 1993; Revolving
         Note executed by Rio Properties, Inc., as Borrower,  in
         favor   of   Societe  Generale,  in   the   amount   of
         $10,000,000,  dated  July  15,  1993;  Revolving   Note
         executed by Rio Properties, Inc., as Borrower, in favor
         of  U.S.  Bank of Nevada, in the amount of  $5,000,000,
         dated July 15, 1993; Security Agreement executed by Rio
         Properties,  Inc.,  as Debtor,  in  favor  of  Bank  of
         America  National  Trust  and Savings  Association,  as
         agent  for itself and other financial institutions,  as
         Secured  Party, dated July 15, 1993; Construction  Deed
         of  Trust  With Assignment of Rents and Fixture  Filing
         among Rio Properties, Inc., as Trustor, Equitable  Deed
         Company, as Trustee, and Bank of America National Trust
         and  Savings Association, as agent for itself  and  the
         other  financial  institutions, as  Beneficiary,  dated
         July  15,  1993; Unsecured Indemnity Agreement executed
         by  Rio  Properties, Inc., as Indemnitor, in  favor  of
         Bank of America National

                                  -57-
<PAGE>

NUMBER   EXHIBIT DESCRIPTION                                       PAGE

         Trust and Savings Association, as agent for itself  and
         other  financial  institutions, dated  July  15,  1993;
         Guaranty  executed  by Rio Hotel  &  Casino,  Inc.,  as
         Guarantor,  in favor of Bank of America National  Trust
         and  Savings Association, as agent for itself and other
         financial  institutions, as Guaranteed  Parties,  dated
         July 15, 1993; and, Parent Guarantor Security Agreement
         by  Rio  Hotel & Casino, Inc., as Debtor, in  favor  of
         Bank of America National Trust and Savings Association,
         as  agent  for itself and other financial institutions,
         as  Secured Party, dated July 15, 1993 are incorporated
         by  reference from the Company's (SEC File No. 2-88147)
         Report  on  Form  8-K dated July 15, 1993,  Item  7(c),
         Exhibit  28.01;  First Amendment  to  Credit  Agreement
         dated  as of October 25, 1993 and Second Amendment  and
         Waiver to Credit Agreement dated as of November 8, 1993
         among  Rio  Properties, Inc., Bank of America  National
         Trust  and Savings Association, Bank of America Nevada,
         First Interstate Bank of Nevada, First Security Bank of
         Idaho, N.A., NBD Bank, N.A., Societe Generale, and U.S.
         Bank  of Nevada are incorporated by reference from  the
         Company's (SEC File No. 0-13760) Annual Report on  Form
         10-K  for  the Year Ended December 31, 1993,  Part  IV,
         Item  14(c),  Exhibit 4.09; Third Amendment  to  Credit
         Agreement  dated  as  of  April  15,  1994  among   Rio
         Properties,  Inc., Bank of America National  Trust  and
         Savings  Association, as Agent and as a Bank,  Bank  of
         America, Nevada, First Interstate Bank of Nevada, First
         Security  Bank of Idaho, N.A., NBD Bank, N.A.,  Societe
         Generale,  and  U.S.  Bank  of  Nevada;  Memorandum  of
         Amendments   to  Credit  Agreement  and  Amendment   to
         Construction Deed of Trust with Assignment of Rents and
         Fixture  Filing  dated  as  of  May  9,  1994  by   Rio
         Properties, Inc. and Bank of America National Trust and
         Savings   Association   are  incorporated   herein   by
         reference  from  the Company's (SEC File  No.  0-13760)
         Report  on  Form  10-Q for the Quarter Ended  June  30,
         1994,  Part  II,  Item 6(a), Exhibit No.  4.02;  Fourth
         Amendment  to  Credit Agreement among  Rio  Properties,
         Inc.,  as Borrower, and Bank of America National  Trust
         and  Savings  Association,  First  Interstate  Bank  of
         Nevada,  First Security Bank of Idaho, N.A., NBD  Bank,
         N.A.,  Societe Generale, Bank of America, Nevada,  U.S.
         Bank  of  Nevada, Bank of Scotland and Midlantic  Bank,
         N.A., as Lenders; and Second Memorandum of Amendment to
         Credit Agreement and Amendment to Construction Deed  of
         Trust  with  Assignment  of Rents  and  Fixture  Filing
         between Borrower and Bank of America National Trust and
         Savings  Association,  as  agent  for  Lenders,   dated
         December  16, 1994 are incorporated herein by reference
         from  the  Company's (SEC File No. 0-13760)  Report  on
         Form  8-K  dated December 16, 1994, Item 7(c),  Exhibit
         10.01; Fifth Amendment to Credit Agreement dated as  of
         March  20,  1995, among Rio Properties, Inc.,  Bank  of
         America  National  Trust  and Savings  Association,  as
         Agent  and as a Bank, First Interstate Bank of  Nevada,
         First  Security  Bank of Idaho, N.A., NBD  Bank,  N.A.,
         Societe Generale, Bank of America Nevada, U.S. Bank  of
         Nevada,  Bank of Scotland and Midlantic Bank, N.A.,  as
         Banks,  is  incorporated herein by reference  from  the
         Company's (SEC File No. 0-13760) Annual Report on  Form
         10-K  for  the Year Ended December 31, 1994,  Part  IV,
         Item  14(c), Exhibit 10.09; Sixth Amendment  to  Credit
         Agreement   dated  as  of  July  31,  1995  among   Rio
         Properties,  Inc., Bank of America National  Trust  and
         Savings Association, as Agent and as a Bank, and  First
         Interstate  Bank  of  Nevada, First  Security  Bank  of
         Idaho, N.A., NBD Bank, N.A., Societe Generale, Bank  of
         America  Nevada, U.S. Bank of Nevada, Bank of Scotland,
         Midlantic Bank, N.A., and Bank of Hawaii, as Banks,  is
         incorporated  herein by reference  from  the  Company's
         (SEC  File  No.  0-13760)  Report  on  Form  8-K  dated
         September  15,  1995, Item 7(c), Exhibit 4.01;  Seventh
         Amendment  to Credit Agreement dated as of January  17,
         1996  among  Rio  Properties,  Inc.,  Bank  of  America
         National Trust and Savings Association, as Agent and as
         a  Bank,  and  First Interstate Bank of  Nevada,  First
         Security Bank of Idaho, N.A., Societe Generale, Bank of
         America  Nevada, U.S. Bank of Nevada, Bank of Scotland,
         Midlantic Bank, N.A., and Bank of Hawaii, as Banks,  is
         incorporated  herein by reference  from  the  Company's
         (SEC  File No. 1-11569) Annual Report on Form 10-K  for
         the  Year Ended December 31, 1995, Part IV, Item 14(c),
         Exhibit  4.08;  Eighth Amendment  to  Credit  Agreement
         dated

                                  -58-
<PAGE>

NUMBER   EXHIBIT DESCRIPTION                                       PAGE

         as of June 17, 1996 among Rio Properties, Inc. and Bank
         of  America National Trust and Savings Association,  as
         Agent, and Wells Fargo Bank National Association, First
         Security  Bank  of  Idaho,  N.A.,  NBD  Bank,   Societe
         Generale, Bank of America Nevada, U.S. Bank of  Nevada,
         Bank  of  Scotland, Midlantic Bank, N.A., and  Bank  of
         Hawaii,  as Banks, is incorporated herein by  reference
         from  the  Company's (SEC File No. 1-11569)  Report  on
         Form  10-Q  for the Quarter Ended June 30,  1996,  Item
         6(a),   Exhibit  10.01;  Ninth  Amendment   to   Credit
         Agreement  dated  as  of January  13,  1997  among  Rio
         Properties,  Inc. and Rio Leasing, Inc.,  and  Bank  of
         America National Trust & Savings Association, as  Agent
         and  a Bank, and Wells Fargo Bank National Association,
         First  Security Bank of Utah, N.A., NBD  Bank,  Societe
         Generale,  U.S. Bank of Nevada, Bank of  Scotland,  PNC
         Bank,  National  Association, successor  by  merger  to
         Midlantic Bank, N.A. and Bank of Hawaii, as Banks;  and
         Tenth  Amendment  to  Credit  Agreement  dated  as   of
         February  3,  1997 among Rio Properties, Inc.  and  Rio
         Leasing,  Inc., and Bank of America National Trust  and
         Savings  Association, as Agent and a  Bank,  and  Wells
         Fargo  Bank National Association, First Security  Bank,
         N.A.,  NBD Bank, Societe Generale, U.S. Bank of Nevada,
         Bank  of  Scotland,  PNC  Bank,  National  Association,
         successor by merger to Midlantic Bank, N.A.,  and  Bank
         of   Hawaii,  as  Banks,  are  incorporated  herein  by
         reference  from the Company's (SEC File No.  001-11569)
         Annual  Report on Form 10-K for the Year Ended December
         31,  1996, Item 14(c), Exhibit 4.08; Eleventh Amendment
         to Credit Agreement and Waiver dated as of May 13, 1997
         among Rio Properties, Inc., Rio Leasing, Inc., Bank  of
         America National Trust & Savings Association, as  Agent
         and   as   a   Bank,  and  Wells  Fargo  Bank  National
         Association,  First  Security  Bank,  N.A.,  NBD  Bank,
         Societe   Generale,  U.S.  Bank  of  Nevada,  bank   of
         Scotland, PNC Bank, National Association, successor  by
         merger to Midlantic Bank, N.A., and Bank of Hawaii,  as
         Banks;  and  Twelfth Amendment to Credit Agreement  and
         Waiver  dated as of May 13, 1997 among Rio  Properties,
         Inc., Rio Leasing, Inc., Bank of America National Trust
         &  Savings  Association, as Agent as a Bank, and  Wells
         Fargo  Bank National Trust & Savings Association, First
         Security  Bank, N.A., NBD Bank, Societe Generale,  U.S.
         Bank  of  Nevada, Bank of Scotland, PNC Bank,  National
         Association,  successor by merger  to  Midlantic  Bank,
         N.A.,  and  Bank of Hawaii, as Banks, are  incorporated
         herein  by reference from the Company's (SEC  File  No.
         001-11569)  Report on Form 10-Q for the  Quarter  Ended
         March 31, 1997, Item 6(a), Exhibit 4.01; and Thirteenth
         Amendment  to  Credit Agreement dated as of  August  8,
         1997  among Rio Properties, Inc. and Rio Leasing, Inc.,
         as  Borrowers,  Bank  of  America  National  Trust  and
         Savings Association, as Agent and as a Bank, and  Wells
         Fargo  Bank National Association, First Security  Bank,
         N.A.,  NBA Bank, Societe Generale, U.S. Bank of Nevada,
         Bank  of  Scotland,  PNC  Bank,  National  Association,
         Successor By Merger to Midlantic Bank, N.A.,  and  Bank
         of   Hawaii,  as  Banks,  is  incorporated  herein   by
         reference  from the Company's (SEC File No.  001-11569)
         Report  on  Form  10-Q for the Quarter Ended  June  30,
         1997, Item 6(a), Exhibit 4.01.

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

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

                                  -59-
<PAGE>

NUMBER   EXHIBIT DESCRIPTION                                       PAGE

4.09     Form of Letter of  Transmittal to IBJ Schroder  Bank  &
         Trust Company as Exchange Agent for exchange  of 9-1/2%
         Senior  Subordinated  Notes  Due  2007 is  incorporated
         herein   by   reference   from   the   Company's   (SEC
         File No. 333-23895) Registration Statement on Form  S-4
         filed  March  24, 1997,  Part  II,  Item 21(A), Exhibit
         4.14.

4.10     Amended  and  Restated  Credit Agreement  dated  as  of
         February  24, 1998 among Rio Properties, Inc.  and  Rio
         Leasing,  Inc. and Bank of America National  Trust  and
         Savings  Association as Agent and the  other  financial
         institutions  party  hereto is incorporated  herein  by
         reference  from  the Company's (SEC File  No.  1-11569)
         Report on Form 8-K dated February 24, 1998, Item  7(c),
         Exhibit 4.1.

10.01    Interest Rate Swap Agreement dated as of July 28,  1993
         between  Rio  Properties,  Inc.  and  Bank  of  America
         National  Trust and Savings Association is incorporated
         herein by reference from the Company's (SEC File No. 0-
         13760)  Annual Report on Form 10-K for the  Year  Ended
         December 31, 1993, Part IV, Item 14(c), Exhibit 10.11.

10.02    Architectural Agreement entered into as of February  9,
         1995  between Rio Hotel & Casino, Inc., as  Owner,  and
         Anthony   A.  Marnell,  Chartered,  as  Architect,   is
         incorporated  herein by reference  from  the  Company's
         (SEC  File No. 0-13760) Annual Report on Form 10-K  for
         the  Year Ended December 31, 1994, Part IV, Item 14(c),
         Exhibit 10.08.

10.03    Building Contract entered into as of February 27,  1995
         between  Marnell  Corrao Associates, Inc.,  as  General
         Contractor,  and  Rio Properties, Inc.,  as  Owner,  is
         incorporated  herein by reference  from  the  Company's
         (SEC  File No. 0-13760) Annual Report on Form 10-K  for
         the  Year Ended December 31, 1994, Part IV, Item 14(c),
         Exhibit 10.09.

10.04    Real Estate Purchase and Sale Agreement entered into as
         of  January  25,  1995  between Focus  2000,  Inc.,  as
         Seller,   and  Rio  Properties,  Inc.,  as  Buyer,   is
         incorporated  herein by reference  from  the  Company's
         (SEC  File No. 0-13760) Annual Report on Form 10-K  for
         the  Year Ended December 31, 1994, Part IV, Item 14(c),
         Exhibit 10.10.

10.05    Exchange Agreement entered into as of January  6,  1995
         between  Allied  Building Materials, Cinderlane,  Inc.,
         and Rio Hotel & Casino, Inc. is incorporated herein  by
         reference  from  the Company's (SEC File  No.  0-13760)
         Annual  Report on Form 10-K for the Year Ended December
         31, 1994, Part IV, Item 14(c), Exhibit 10.11.

10.06    Letter  Agreement regarding Rate Cap Transaction  dated
         August 11, 1994 between Bank of America National  Trust
         and  Savings  Association and Rio Properties,  Inc.  is
         incorporated  herein by reference  from  the  Company's
         (SEC  File No. 0-13760) Annual Report on Form 10-K  for
         the  Year Ended December 31, 1994, Part IV, Item 14(c),
         Exhibit 10.12.

10.07    Architectural  Agreement entered into as  of  July  27,
         1995  by  and between Anthony A. Marnell II, Chtd.,  as
         Architect, and Rio Hotel & Casino, Inc., as  Owner,  is
         incorporated  herein by reference  from  the  Company's
         (SEC  File No. 333-869) Registration Statement on  Form
         S-3,  filed  on February 12, 1996, Part  II,  Item  16,
         Exhibit 10.10.

10.08    Building Contract entered into as of August 14, 1995 by
         and between Marnell Corrao Associates, Inc., as General
         Contractor,  and  Rio Properties, Inc.,  as  Owner,  is
         incorporated herein by reference

                                  -60-
<PAGE>

NUMBER   EXHIBIT DESCRIPTION                                       PAGE

         from  the Company's (SEC File No. 333-869) Registration
         Statement  on  Form  S-3,  filed on  February 12, 1996,
         Part II, Item 16, Exhibit 10.11.

10.09    Form  of Exchange Agency Agreement between Rio Hotel  &
         Casino,  Inc. and IBJ Schroder Bank & Trust Company  is
         incorporated  herein by reference  from  the  Company's
         (SEC File No. 333-23895) Registration Statement on Form
         S-4  filed March 24, 1997, Part II, Item 21(A), Exhibit
         10.12.

10.10    Employment  Agreement  dated as of  November  25,  1996
         between  Rio Hotel & Casino, Inc. and David P.  Hanlon;
         Employment Agreement dated as of March 7, 1997  between
         Rio  Hotel  &  Casino,  Inc. and Ronald  J.  Radcliffe;
         Employment Agreement dated as of March 7, 1997  between
         Rio  Hotel  &  Casino,  Inc. and I.  Scott  Bogatz  are
         incorporated  herein by reference  from  the  Company's
         (SEC File No. 001-11569) Annual Report on Form 10-K for
         the  Year Ended December 31, 1996, Part IV, Item 14(c),
         Exhibit 10.12.

10.11    Purchase  Agreement dated as of June 1, 1997 among  Rio
         Development Company, Inc. and Seven Hills Golf  Limited
         Partnership  is  incorporated herein by reference  from
         the Company's (SEC File No. 001-11569) Quarterly Report
         on  Form 10-Q for the Quarter Ended June 30, 1997, Part
         II, Item 6(a), Exhibit 10.01.

10.12    Architectural Agreements entered into as of  March  25,      81
         1998  by  and between Anthony A. Marnell II, Chtd.,  as
         Architect, and Rio Hotel & Casino, Inc., as Owner.

10.13    Building Contracts entered into as of March 25, 1998 by     137
         and between Marnell Corrao Associates, Inc., as General
         Contractor, and Rio Properties, Inc., as Owner.

21.01    List of subsidiaries of Registrant.                         278

23.01    Consent of Arthur Andersen LLP.                             280

27.01    Financial Data Schedule.                                    282


                                  -61-
<PAGE>

</TABLE>