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

(Mark One)
( XX )    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF
          THE SECURITIES EXCHANGE ACT OF 1934
     
             For the quarterly period ended:           March 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:              1-7123
                                    -----------------------------------------
                                    SHOWBOAT, INC.
              ---------------------------------------------------------------
                  (Exact name of registrant as specified in its charter)
                                
                        NEVADA                             88-0090766
            -------------------------------           -----------------------
            (State or other jurisdiction of                (I.R.S. Employer
            incorporation or organization)               Identification No.)
                                
                2800 FREMONT STREET, LAS VEGAS NEVADA          89104-4035
            -----------------------------------------------------------------
                (Address of principal executive offices)       (Zip Code)

                                    (702) 385-9123
            -----------------------------------------------------------------
                 (Registrant's telephone number, including area code)

                                    NOT APPLICABLE
            -----------------------------------------------------------------
                (Former name, former address and former fiscal year, if 
                                changed since last report)

Indicate by check mark whether the registrant (1) has filed all reports 
required to be filed by Section 13 or 15 (d) of the Securities Exchange Act of 
1934 during the preceding 12 months (or for such shorter period that the 
registrant was required to file such reports), and (2) has been subject to 
such filing requiredments for the past 90 days.

                                              YES   X     NO    
                                                  ------     ------
                                                  
<PAGE>
                                

        APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
             PROCEEDINGS DURING THE PAST FIVE YEARS

Indicate by check mark whether the registrant has filed all documents and 
reports required to be filed by Section 12, 13, or 15(d) of the Securities 
Exchange Act of 1934 subsequent to the distribution under a plan confirmed by 
a court.
                                        YES______   NO______


              APPLICABLE ONLY TO CORPORATE ISSUERS
                                
Indicate the number of shares outstanding of the issuer's classes of 
common stock, as of the latest practicable date.  

Common Stock - $1 Par Value,
and Preferred Stock Purchase Rights            16,102,419 Shares Outstanding
-----------------------------------          --------------------------------

<PAGE>
     
                 SHOWBOAT, INC. AND SUBSIDIARIES
                              INDEX
     
Part I    FINANCIAL INFORMATION                             Page No.
                                                            
  Item 1. Financial Statements                              
                                                            
          Condensed Consolidated Balance Sheets -           
            March 31, 1997 and December 31, 1996                 1-2
                                                            
          Condensed Consolidated Statements of Income -     
            For the three months ended March 31,            
            1997 and 1996                                          3
                                                            
          Condensed Consolidated Statements of Cash Flows -  
            For the three months ended March 31,            
            1997 and 1996                                          4
                                                            
          Notes to the Condensed Consolidated Financial     
            Statements                                           5-6
                                                            
                                                            
  Item 2. Management's Discussion and Analysis              
            of Financial Condition and Results              
            of Operations                                       7-11
                                                            
                                                            
PART II   OTHER INFORMATION                                 
                                                            
            ITEMS 1 - 6                                        12-14
                                                            
            SIGNATURES                                            15
                                                            
     
     
     
     
<PAGE>
     
     
     Item 1.  Financial Statements
<TABLE>
<CAPTION>
                 SHOWBOAT, INC. AND SUBSIDIARIES
              CONDENSED CONSOLIDATED BALANCE SHEETS
              MARCH 31, 1997 AND DECEMBER 31, 1996
                                
                                              March 31,         December 31,
          ASSETS                                 1997                1996
          ------                              --------          ------------
           <S>                                   <C>                 <C>
                                                                       
                                            (unaudited)
                                                    (In thousands)
Current assets:                                                        
  Cash and cash equivalents                     $63,339            $60,287
  Short term investments                         23,275             28,848
  Receivables, net                               12,635             12,402
  Income tax receivable                           2,610              2,396
  Inventories                                     3,363              2,785
  Prepaid expenses                                5,468              4,470
  Current deferred income taxes                   7,697              7,802
                                               --------            -------
           Total current assets                 118,387            118,990
                                               --------            -------                        
  Property and equipment                        698,645            651,486
  Less accumulated depreciation                                        
      and amortization                          215,889            211,298
                                               --------            -------
                                                482,756            440,188
                                               --------            -------            
Other assets:

  Restricted cash                                26,201             69,601
  Investment in unconsolidated affiliate        141,537            138,964
  Deposits and other assets                      39,760             30,963
                                                                       
  Debt issuance costs, net of                                          
   accumulated amortization of                                          
   $3,212,000 and $2,942,000 at
   March 31, 1997 and                                   
   December 31, 1996, respectively               15,693             15,963
                                               --------            -------
                                                223,191            255,491
                                               --------            -------
                                               $824,334           $814,669
                                               ========           ========             
                                               
 See accompanying notes to condensed consolidated financial statements.
                                   1                   (continued)
</TABLE>
<PAGE>
                                
                                
<TABLE>
<CAPTION>
                 SHOWBOAT, INC. AND SUBSIDIARIES
              CONDENSED CONSOLIDATED BALANCE SHEETS
              MARCH 31, 1997 AND DECEMBER 31, 1996
                           (continued)
                                                  March 31,     December 31,
 LIABILITIES AND SHAREHOLDERS' EQUITY               1997            1996
 ------------------------------------             ---------     ------------
            <S>                                       <C>              <C>
                                                 (unaudited)
                                                        (In thousands)
Current liabilities:                                                    
   Current maturities of long-term debt           $2,338              $25
   Accounts payable                               18,709           17,688
   Dividends payable                                 406              405
   Accrued liabilities                            39,632           41,933
                                                  -------         --------         
                                
     Total current liabilities                    61,085           60,051
                                                  -------         --------           
Long-term debt, excluding current maturities     541,478          532,719
                                                 -------         --------
   Other liabilities                               4,995            4,866
                                                 -------         --------
   Deferred income taxes                          24,276           24,888
                                                 -------         --------
   
Shareholders' equity:                                                  
   Preferred stock, $1 par value; 1,000,000
       shares authorized; none issued
   Common stock, $1 par value; 50,000,000
       shares authorized; issued 16,248,919
       shares at March 31, 1997 and 16,181,199
       at December 31, 1996                       16,249           16,181
   Additional paid-in capital                     88,997           87,698
   Retained earnings                              85,301           84,828
                                                --------         --------
                                                 190,547          188,707
   Cumulative foreign currency                                         
     translation adjustment                        3,686            4,773
     Unearned compensation for restricted stock   (1,733)          (1,335)
                                                --------         --------
     Total shareholders' equity                  192,500          192,145
                                                --------         --------
                                                $824,334         $814,669
                                                ========         ========            
                                                 
     See accompanying notes to condensed consolidated financial statements.
                                                                       
                                        2
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
                         SHOWBOAT, INC. AND SUBSIDIARIES
                    CONDENSED CONSOLIDATED STATEMENTS OF INCOME
                                  (unaudited)
                FOR THE THREE MONTHS ENDED MARCH 31, 1997 AND 1996
                       (In thousands except per share data)
                                
                                                        1997        1996
                                                       -----       -----
         <S>                                             <C>         <C>
Revenues:                                                                    
   Casino                                              $92,597    $89,990
   Food and beverage                                    13,062     12,991
   Rooms                                                 5,670      5,796
   Sports and special events                               977      1,048
   Other                                                 1,240      1,013
                                                       -------     -------
                                                       113,546    110,838
Less complimentaries                                     9,513      8,248
                                                       -------     -------
   Net revenues                                        104,033    102,590
                                                       -------     -------
Operating costs and expenses:                                                
   Casino                                               48,318     44,225
   Food and beverage                                     7,391      8,086
   Rooms                                                 1,789      2,137
   Sports and special events                               910        821
   General and administrative                           28,383     28,375
   Selling, advertising and promotion                    2,005      2,489
   Depreciation and amortization                         8,329      8,018
                                                       -------     -------
                                                        97,125     94,151
                                                       -------     -------
Income from consolidated subsidiaries                    6,908      8,439
Equity in income of unconsolidated affiliate             1,463         -
                                                       -------     -------
Income from operations                                   8,371      8,439
Other (income) expense:                                                      
   Interest income                                      (1,854)    (1,330)
   Interest expense, net of amounts capitalized          8,956      7,537
   Write down of investment in affiliate                    -       3,902
   Foreign currency transaction gain                        -         (66)
                                                       -------     -------
                                                         7,102     10,043
                                                       -------     -------
Income (loss) before income taxes and minority                              
interest                                                 1,269     (1,604)
Minority interest share of loss                            149          7
                                                       -------     -------
Income (loss) before income taxes                        1,418     (1,597)
Income tax expense (benefit)                               539       (796)
                                                       -------     -------
Net income (loss)                                         $879      $(801)
                                                       =======     =======

Shares used in per share calculation                16,324,058  16,067,137
                                                                             
Net income (loss) per common and equivalent shares       $0.05     $(0.05)

See accompanying notes to condensed consolidated financial statements.             
                                   3
</TABLE>
<PAGE>

<TABLE>
<CAPTION>
                      SHOWBOAT, INC. AND SUBSIDIARIES
               CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                                (unaudited)
            FOR THE THREE MONTHS ENDED MARCH 31, 1997 AND 1996
                                
                                                     1997        1996
                                                   --------      -------
                                                       (In thousands)
               <S>                                   <C>          <C> 
Net cash provided by operating activities          $ 6,706      $11,081
                                                   --------      -------
Cash flows from investing activities:                                      

 Acquisition of property and equipment             (40,874)     (21,769)                      
 Investment in unconsolidated affiliate             (2,912)      (2,911)
 Repayments from unconsolidated affiliate                94         386
 Investments in consolidated affiliates                   -    (157,296)
 Decrease in restricted cash                         43,400           -     
 Increase in deposits and other assets              (7,854)      (1,673)
 Deposit for Casino Reinvestment                     
  Development Authority obligation                    (981)        (981)                    
 Sale of short term investments                       5,573           -
 Other                                                  239         165
                                                    --------    --------
  Net cash used in investing activities             (3,315)    (184,079)
                                                    --------   ---------
Cash flows from financing activities:                                       
 Principal payments of long-term debt                   (5)          (5)      
 Proceeds from issuance of long-term debt                 -     140,000
 Proceeds from employee stock option exercises           71         758
 Payment of dividends                                 (405)        (392)
 Minority interest contributions                          -          70
                                                   --------    --------
   Net cash provided by (used in) financing 
   activities                                         (339)      140,431
                                                    --------    --------
Net increase (decrease) in cash and cash equivalents  3,052     (32,567)
Cash and cash equivalents at beginning of period     60,287      106,927
                                                    --------    --------
Cash and cash equivalents at end of period         $ 63,339     $ 74,360
                                                    ========    ========                  
Supplemental disclosures of cash flow information                          
           and non-cash investing and                                      
                financing activities:
     Cash paid during the period for:                                     
       Interest, net of amounts capitalized          10,731        4,494
       Income taxes                                     675        1,839
       Foreign currency translation adjustment       (1,087)       3,458
       Equipment acquired under capital leases        10,984           -
                                                                            
See accompanying notes to condensed consolidated finanical statements.        
                                   4
</TABLE>
<PAGE>
                 SHOWBOAT, INC. AND SUBSIDIARIES
      NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                
                                
     1.  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
     
          Nature of Operations
     
     The condensed consolidated financial statements include all domestic and 
foreign subsidiaries which are more than 50% owned and controlled.  
Investments in unconsolidated affiliates which are at least 20% owned are 
carried at cost plus equity in undistributed earnings or loss since 
acquisition.  All material intercompany balances have been eliminated in 
consolidation.
     
     Certain information and footnote disclosures normally included in  
financial statements prepared in accordance with generally accepted accounting 
principles have been condensed or omitted.  These condensed consolidated 
financial statements should be read in conjunction with the financial 
statements and notes thereto included in the Company's December 31, 1996 Annual 
Report on Form 10-K.
     
     The accompanying unaudited condensed consolidated financial statements 
contain all adjustments of a recurring nature, which in the opinion of 
management, are necessary for a fair statement of the results of the interim 
periods.  The results of operations for the interim periods are not indicative 
of results of operations for an entire year.  Certain prior period balances 
have been reclassified to conform to the current period's presentation.  

Preopening Costs 

     Effective January 1, 1997, the Company changed its method of accounting 
for preopening costs.  Preopening costs will be immediately expensed when a 
new facility opens for business rather than amortized over a period not to 
exceed one year as was previously done.  Expensing these costs at the date of 
opening is a general industry practice and will provide a better comparison of 
the Company's operations to other gaming companies.  This change in accounting 
had no impact on the results of operations for the quarter ended March 31, 1997
and there is no cummulative effect as of January 1,1997 of this accounting
chanage.

     If the new method of accounting for preopening costs had been applied in
the first quarter of 1996, the equity in income of unconsolidated affiliate 
would have increased by $1,137,000.  Net income for the quarter ended March 31,
1996, would have increased by the same amount resulting in net income of
$336,000 or $.02 per share.

     2.  LONG TERM DEBT

     The Company's long term debt increased by approximately $8.8 million 
due to the completion of certain capital lease financing ("Capital Lease") by 
the Company's 55% owned affiliate Showboat Marina Casino Partnership (SMCP).  
The total amount borrowed under the Capital Lease was approximately $11.0 
million with a term of 48 months.  The rate was fixed two weeks prior to the  
closing of each lease schedule at four hundred fifty (450) basis points over 
the four (4) year Treasury Note rate.

     SMCP is currently negotiating additional lease financing in the amount
of the lesser of $11.0 million or SMCP's cost to acquire certain equipment. 

                                        5            (continued)
<PAGE>

     3. IMPACT OF RECENTLY ISSUED ACCOUNTING STANDARDS

     In February, 1997, the Financial Accounting Standards Board issued
Statement of Financial Accounting Standards No. 128, "Earnings Per Share," 
(Statement 128) which establishes standards for computing and presenting
earnings per share (EPS).  It replaces the presentation of primary and fully
diluted EPS with a presentation of basic and diluted EPS.  Statement 128 is 
effective for financial statements for both interim and annual periods ending
after December 15, 1997.  Earlier application is not permitted.  After 
adoption, all prior period EPS data should be restated to conform to 
Statement 128.

     The Company will adopt Statement 128 in the fourth quarter of 1997.
The pro forma impact of Statement 128 on the quarter ended March 31, 1997
is basic and diluted EPS would have been $.05 per share.


     4.  COMMITMENTS AND CONTINGENCIES

     On May 3, 1997, Publishing & Broadcasting Limited ("PBL") formally 
advised  the Company that PBL had let lapse the agreement in principle to 
acquire from the Company 10% of the stock of Sydney Harbour Casino Holdings 
Limited and the right to manage Sydney Harbour Casino.  Accordingly, the 
Company will not receive any of the funds which would have been provided to it  
upon the sale of those assets described in the agreement in principle.  The 
Company retains its rights to manage Sydney Harbour Casino and will remain 
the largest single shareholder (at 24.6%) of Sydney Harbour Casino Holdings 
Limited.

     As previously disclosed in the Company's 1996 year end financial 
statements and management's discussion and analysis of financial condition and
results of operation, the Company entered into a completion guarantee to 
complete the East Chicago Showboat up to a maximum aggregate amount of $30.0 
million.  On April 18, 1997, the East Chicago Showboat commenced operations
and the Company's obligations under the completion guarantee were terminated.  
The Company was not required to provide any funds under the completion 
guarantee.

     The Company is involved in various claims and legal actions arising in 
the ordinary course of business.  In the opinion of management, the ulimate
disposition of these matters will not have a material adverse effect on the
Company's financial statements taken as a whole.


                                        6
<PAGE>

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

GENERAL

        Showboat, Inc., and subsidiaries (collectively the "Company" or 
"SBO"), is an international gaming company which owns and operates the 
Atlantic City Showboat Casino and Hotel in Atlantic City, New Jersey 
(the "Atlantic City Showboat"), the Las Vegas Showboat Hotel, Casino and 
Bowling Center in Las Vegas, Nevada (the "Las Vegas Showboat"), owns a 
24.6% equity interest in, and manages through subsidiaries, the Sydney 
Harbour Casino located in Sydney, New South Wales, Australia and owns through
subsidiaries a 55% interest in, and manages, the East Chicago Showboat casino  
located in East Chicago, Indiana, (the "East Chicago Showboat"), which 
commenced operations April 18, 1997.


        Information contained in this quarterly report is supplemental to 
disclosures in the Company's year end financial reports.  This management's  
discussion and analysis of financial condition and results of operations 
should be read in conjunction with the management's discussion and analysis 
of financial condition and results of operations included in the Company's 
December 31, 1996 Annual Report on Form 10-K.

     As used in this management's discussion and analysis of financial
condition and results of operations, amounts in Australian dollars are 
denoted as "A$".  As of March 31, 1997, the exchange rate was approximately 
US$.7820 for each A$1.00.

MATERIAL CHANGES IN RESULTS OF OPERATIONS

Quarter Ended March 31, 1997 Compared to Quarter Ended March  31, 1996
<TABLE>
Comparison of Operating Results for the three months ended     
March 31, 1997 and 1996
Financial Highlights

Three months ended March 31,            1997    1996    Variance   Percent
-----------------------------------------------------------------------------
(Dollars in thousands)
            <S>                        <C>      <C>        <C>        <C>            
Gross revenues
    Atlantic City Showboat             96,242   92,675     3,567       3.8%
   Las Vegas Showboat                 17,304   18,163     (859)     (4.7%)
                                     ---------------------------------------
                                     113,546  110,838     2,708       2.4%
                                     ---------------------------------------                            
Net revenues
   Atlantic City Showboat             87,825   85,587     2,238       2.6%
   Las Vegas Showboat                 16,208   17,003     (795)     (4.7%)
                                     ---------------------------------------
                                     104,033  102,590     1,443       1.4%
                                     ---------------------------------------

                                   7              (continued)
</TABLE>
<PAGE>
MATERIAL CHANGES IN RESULTS OF OPERATIONS (continued)
<TABLE>
Comparison of Operating Results for the three months ended                               
March 31, 1997 and 1996
Financial Highlights (continued)                                 
                                                                 
Three months ended March 31,            1997    1996    Variance   Percent
----------------------------------------------------------------------------
(Dollars in thousands)
        <S>                             <C>     <C>        <C>       <C>
Income from Operations
   Atlantic City Showboat             12,514   13,426     (912)     (6.8%)
   Las Vegas Showboat                 (1,526)    (843)    (683)    (81.0%)
   Corporate and development          (3,790)  (4,110)     320       7.8%
   Sydney Harbour Casino               1,173      (34)   1,207    3550.0%
                                    ----------------------------------------
                                       8,371    8,439      (68)     (0.8%)
                                    ----------------------------------------                          
                                     
EBITDA*
   Atlantic City Showboat             19,193   20,074     (881)     (4.4%)
   Las Vegas Showboat                     21      434     (413)    (95.2%)
   Corporate and development          (3,687)  (4,017)     330       8.2%
   Sydney Harbour Casino               1,173      (34)   1,207    3550.0%
                                    ----------------------------------------                         
                                      16,700   16,457      243       1.5%
                                    ----------------------------------------
</TABLE>

*EBITDA is defined as income from operations before depreciation and 
amortization.  EBITDA should not be construed as a substitute for income from
operations, net earnings (loss) and cash flow from operating activities
determined in accordance with Generally Accepted Accounting Principles 
("GAAP").  The Company has included EBITDA because it believes it is commonly
used by certain investors and analysts to analyze and compare gaming companies
on the basis of operating performance, leverage and liquidity and to determine 
a company's ability to service debt.

   


Revenues

     Gross revenues increased $2.7 million or 2.4% which was attributable to
an increase in casino revenues of $2.6 million or 2.9%.  This was offset by a 
$1.3 million or 15.3% increase in complimentaries, resulting in a net revenue 
increase for the Company of $1.4 million or 1.4% for the first quarter of 1997.

     The Atlantic City Showboat's gross revenues increase of $3.6 million or
3.8% was due primarily to a $3.3 million or 4.2% increase in casino revenues
attributed to improved weather conditions experienced during the first quarter
of this year compared to 1996.  The overall increase in casino revenues was
negatively impacted by a decline in the table games hold percent to 14.6% 
during the first quarter of 1997 compared to 16.8% in the same quarter of 1996.
Due to an increase in complimentary expenses of $1.3 million or 18.8%, 
attributable to increased food and beverage complimentaries incurred for
promotions to attract slot patrons, the resulting increase in net revenues was
$2.2 million or 2.6%.


                                   8         (continued)
<PAGE>

Revenues (continued)

    The Las Vegas Showboat's net revenues declined $.8 million or 4.7% in the  
first quarter 1997 compared to the first quarter 1996.  The decline in net 
revenues is primarily due to a decrease of $.6 million or 6.2% in slot and 
bingo revenues as a result of increased competition for the locals market.

    The Company has not yet received a management fee from Sydney Harbour  
Casino due to an agreement to forgive the first A$19.1 million of management 
fees.  For the quarter ended March 31, 1997, approximately A$3.0 million of  
management fees were forgiven and approximately A$1.6 million of management 
fees still remain to be forgiven.  The Company expects to begin receiving a
management fee from Sydney Harbour Casino during the second quarter 1997.


Income From Operations

    The Company's income from operations in the first quarter of 1997 was 
$8.4 million and was relatively flat compared to the same period in 1996. 
Income from operations were positively impacted by the $1.2 million (which 
includes $.3 million in operating expense and amortization of equity and debt 
costs at Showboat, Inc.) contribution from the Company's Sydney Harbour 
Casino affiliate.  This contribution was offset by the declines in operating 
income of $.9 million and $.7 million at the Atlantic City Showboat and 
Las Vegas Showboat, respectively.

     The Atlantic City Showboat's income from operations, before management 
fees, decreased $.9 million or 6.8% which was attributable to a decrease 
in the table games hold percent to 14.6% during the first quarter of 1997
compared to 16.8% in the same quarter of 1996 and a $3.2 million increase in 
operating expenses.  The increase in operating expenses was due largely to
increases in promotional expenses, payroll and benefits and tax expenses.

     The decline in income from operations at the Las Vegas Showboat, before 
management fees and intercompany rent, was due primarily to the $.8 million 
decline in net revenues.


Net Income

     In the quarter ended March 31, 1997 the Company recognized net income of 
$.9 million or $.05 per share compared to a net loss of $.8  million or $.05 
per share for the same period in 1996.  Net income in the first quarter of 
1997 was reduced for an increase in net interest expense of $.5 million or  
$.03 per share primarily caused by the East Chicago Showboat.  The March 31,
1996 net loss reflects an after tax loss of $1.9 million or $.12 per share for  
the write down of the Company's investment in Showboat Mardi Gras, L.L.C. 
(SMG) an appicant for a casino license for a riverboat casino which was to
be located near Kansas City, Missouri.

MATERIAL CHANGES IN FINANCIAL CONDITION

     As of March 31, 1997 the Company held cash and cash equivalents of $63.3 
million and short term investments of $23.3 million compared to $60.3 million 
and $28.8 million respectively at December 31, 1996.


                                   9         (continued)
<PAGE>

MATERIAL CHANAGES IN FINANCIAL CONDITION (continued)


     During the three months ended March 31, 1997, the Company expended 
approximately $40.9 million on capital improvements at its Las Vegas and 
Atlantic City facilities, which were funded by operations, and construction 
costs at the East Chicago Showboat, which were principally funded from the 
proceeds of $140.0 million, 13 1/2% First Mortgage Notes, which were issued 
by the East Chicago Showboat in March of 1996.  Approximately $30.5 million of 
the $40.9 million expended were related to the East Chicago Showboat.  

     On May 3, 1997, Publishing & Broadcasting Limited ("PBL") formally 
advised the Company that PBL had let lapse the agreement in principle to 
acquire from the Company 10% of the stock of Sydney Harbour Casino Holdings 
Limited and the right to manage Sydney Harbour Casino.  Accordingly, the 
Company will not receive any of the funds which would have been provided to it  
upon the sale of those assets described in the agreement in principle.  The 
Company retains its rights to manage Sydney Harbour Casino and will remain 
the largest single shareholder (at 24.6%) of Sydney Harbour Casino Holdings 
Limited.

     As previously disclosed in the Company's 1996 year end financial 
statements and management's discussion and analysis of financial condition and
results of operation, the Company entered into a completion guarantee to 
complete the East Chicago Showboat up to a maximum aggregate amount of $30.0 
million.  On April 18, 1997, the East Chicago Showboat commenced operations
and the Company's obligations under the completion guarantee were terminated.  
The Company was not required to provide any funds under the completion 
guarantee.

     The Company believes that is has sufficient capital resources, including 
its existing cash balances, anticipated operating cash flows and existing 
borrowing  capacity, to meet the cash requirements of its existing operations.  
The ability of the Company to satisfy its cash requirements will be dependent  
upon the future performance of its casino hotels which will continue to be 
influenced by prevailing economic conditions and financial, business and other  
factors, certain of which are beyond the control of the Company.  As the 
Company realizes expansion opportunities, the Company will need to make 
significant capital investments in such opportunities and additional 
financing will be required.  The Company anticipates that additional funds will
be obtained through loans or public offerings of equity or debt securities,  
although no assurance can be made that such funds will be available or at 
interest rates acceptable to the Company.  Additionally the Company's ability
to make certain payments and to incur additional indebtedness is restricted due
to its indentures governing its 9 1/4% First Mortgage Bonds due 2008 and 13% 
Senior Subordinated Notes due 2009.  A description of these restrictions is 
contained in management's discussion and analysis of financial condition and 
results of operations contained in the Company's Form 10-K for the period 
ended December 31, 1996.  No assurance can be given that the Company will in 
the future meet the terms of the indentures permitting it to make restricted 
payments or incur indebtedness.

     
                                    10      (continued)
<PAGE>     
     
MATERIAL CHANAGES IN FINANCIAL CONDITION   (continued)     
     
     
     All statements contained herein that are not historical facts, including  
but not limited to, statements regarding the Company's current business 
strategy, the Company's prospective joint ventures, expansions of existing 
projects, and the Company's plans for future development and operations,  
are based upon current expectations.  These statements are forward-looking in
nature and involve a number of risks and uncertainties.  Actual results may  
differ materially.  Among the factors that could cause actual results to 
differ materially are the following:  the availability of sufficient capital  
to finance the Company's business plan on terms satisfactory to the Company;  
competitive factors, such as legalization of gaming in jurisdictions from
which the Company draws significant numbers of patrons and an increase in the 
number of casinos serving the markets in which the Company's casinos are 
located; changes in labor, equipment and capital costs; the ability of the 
Company to consummate its contemplated joint ventures on terms satisfactory 
to the Company and to obtain necessary regulatory approvals, therefore; 
changes in regulations affecting the gaming industry; the ability of the 
Company to comply with its Indentures for its 9 1/4% First Mortgage Bonds and 
13% Senior Subordinated Indebtedness; future acquisitions or strategic 
partnerships; general business and economic conditions; and other factors 
described from time to time in the Company's reports filed with the Securities  
and Exchange Commission.  The Company wishes to caution the readers not to 
place undue reliance on any such forward-looking statements, which statements 
are made pursuant to the Private Litigation Reform Act of 1995 and, as such, 
speak only as of the date made.

     
     
     
     
                                   11
     <PAGE>
     
                        SHOWBOAT, INC. AND SUBSIDIARIES
                          PART II, OTHER INFORMATION

ITEM 1. Legal Proceedings

     Darling Casino Limited ("DCL") v. NSWCCA, SHCL and Chief Secretary and 
     ----------------------------------------------------------------------
Minister For Administrative Services ("Minister For Administrative Services"), 
------------------------------------------------------------------------------
Case No. 30091/94, instituted in December 1994, in the Administrative Law 
Division of the Supreme Court of New South Wales, Sydney Registry.  DCL, the 
unsuccessful applicant for the casino license in New South Wales, initiated an 
action against NSWCCA, SHCL and the Minister for Administrative Services 
seeking, among other things, the revocation of the casino license awarded to 
SHCL on December 14, 1994.  On November 8, 1995, the New South Wales Court of 
Appeal dismissed the legal proceedings filed by DCL.  DCL appealed the 
dismissal to the High Court of Australia.  The High Court affirmed the 
dismissal of the action and awarded costs against DCL on April 3, 1997.

     William H. Ahern v. Caesar World, Inc., et al., Case No. 
     -----------------------------------------------
94-532-Civ-Orl-22, instituted on May 10, 1994 in the United States District 
Court for the Middle District of Florida, transferred to the United States 
District Court for the District of Nevada, Southern Division; William Poulos 
                                                              --------------
V. Caesars World, Inc., et al., Case No. 94-478-Civ-Orl-22, instituted on 
-------------------------------
April 26, 1994 in the United States District Court for the Middle District of 
Florida, transferred to the United States District Court for the District of 
Nevada, Southern Division;  Larry Schreier v. Caesars World, Inc., et al., 
                            ----------------------------------------------
Case No. 95-923-LDG (RJJ), instituted on September 26, 1995, in the United 
States District Court for the District of Nevada, Southern Division.  
Plaintiffs in these actions, each purportedly representing a class, filed 
complaints against manufacturers, distributors and casino operators of video 
poker and electronic slot machines, including the Company, alleging that the 
defendants have engaged in a course of conduct intended to induce persons to 
play such games based on a false belief concerning how the gaming machines 
operate, as well as the extent to which there is an opportunity to win on a 
given play.  The Complaints 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.  
The Nevada District Court dismissed the Complaints following consideration 
of defendants' motions to dismiss, granting leave to Plaintiffs to re-file.  
The Plaintiffs filed an amended complaint on or about May 31, 1996.  The 
Company renewed its motions to dismiss and joined in motions to dismiss filed 
by other defendants.  Subsequently, the Nevada District Court 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.  Management believes that the substantive allegations in 
the Complaints are without merit and that the consolidated amended complaint 
will be subject to the same defects addressed in earlier motions, and intends 
vigorously to defend the allegations.

                                        12          (continued)
<PAGE>

                        SHOWBOAT, INC. AND SUBSIDIARIES
                          PART II, OTHER INFORMATION
                                  (continued)


     Global Gaming Technology, Inc. v. Trump Plaza Funding, Inc., et al., 
     --------------------------------------------------------------------
Case No. 94-2021 (JHR), instituted on May 5, 1994, in the United States 
District Court for the District of New Jersey.  The plaintiff, Global Gaming 
Technology, Inc., filed a complaint against eight casino operators in Atlantic 
City, New Jersey.  The complaint alleges a patent infringement with respect to 
certain of the electronic slot machines used by the defendants, including the 
Atlantic City Showboat.  The plaintiff seeks to recover damages for copyright 
infringement in excess of $500 million.  The manufacturers of the slot machines 
in question have assumed the defense and have indemnified the Atlantic City 
Showboat and other casinos in this matter.  The manufacturers filed a complaint 
against the plaintiff in the United States District Court for the District of 
Nevada, Southern District.  The United States District Court for the District 
of New Jersey stayed the New Jersey action pending resolution of the issues in 
the pending Nevada action.  Several of the manufacturers have reached a 
settlement with the plaintiff for the release of all claims.  The United States 
District Court for the District of Nevada issued its decision in February 1997 
which found that although the manufacturers infringed on Global Gaming 
Technology's patent, no liability occurred since the manufacturers sold the 
slot machines more than one year before Global Gaming Technology, Inc. filed 
its patent application.  Global Gaming Technology, Inc. has filed a motion for 
reconsideration of the Court's February 1997 decision.

     Progressive Games, Inc. v. Arizona Charlie's et al., Case No. 
     ----------------------------------------------------
CV-S-96-00489-PMP (RJJ), instituted on June 5, 1996 in the United States 
District Court for the District of Nevada. The plaintiff filed a Complaint 
against 62 casinos located in Nevada, including the Las Vegas Showboat.  The 
complaint alleges a patent infringement in connection with a live casino game 
including an electronic jackpot feature known as "Let It Ride the Tournament" 
used by the defendants.  The plaintiff seeks to recover damages for patent 
infringement, including punitive damages.  The licensor of the casino game has 
assumed the defense and has agreed to indemnify the Las Vegas Showboat and 
other casinos in this matter.  On July 28, 1996, the licensor filed a motion 
to dismiss the action against the casino defendants until such time as certain 
issues in the pending action between plaintiff and licensor have been resolved 
and the motion to dismiss was denied on March 25,1997.

     ITSI TV Production, Inc. v. Balley's Grand, Inc., et al., Case No. 
     ---------------------------------------------------------
CV-N-90-314-HDM, instituted on June 29, 1990 in the United States Court, 
District of Nevada (the "Nevada action").  The plaintiff claims that the 
Company infringed on the plaintiff's copyright by displaying to the Company's 
sports book customers certain horse race broadcasts.  Numerous other hotel-
casinos located in Las Vegas, Nevada are defendants in this lawsuit.  The same 
factual issues were presented in an action filed in the United States District 
Court for the Eastern District of California (the "California action") in which 
Showboat is not a party.  The California action was tried in 1993 and therein 
the Court found that although the plaintiff owned the copyright, there was no 
infringement.  The Ninth Circuit Court of Appeals subsequently affirmed the 
decision of the trial court in the California action.  The Nevada District 
Court approved a stipulation dismissing the action in April 1997. 

     The Company (including its subsidiaries) is also a defendant in various 
other lawsuits, most of which relate to routine matters incidental to its 
business.  Management does not believe that the outcome of such pending 
litigation, in the aggregate, will have a material adverse effect on the 
Company.

ITEM 2. Changes in Securities
        Not applicable.


                                      13               (continued)
<PAGE>

                        SHOWBOAT, INC. AND SUBSIDIARIES
                          PART II, OTHER INFORMATION
                                  (continued)


ITEM 3. Defaults Upon Senior Securities
        Not applicable.

ITEM 4. Submission of Matters to a Vote of Security Holders
        None.

ITEM 5. Other Information
        Not applicable.

ITEM 6. Exhibits on Reports on Form 8-K     

          (a)            Exhibits
     
     Exhibit
     No.                           Description
     ---------      --------------------------------------------
     18.01          Letter regarding change in accounting prinicples.

     27.01           Financial Data Schedule
     
          (b)       Reports on Form 8-K
                    
                    The Company filed a Form 8-K with the Securities and 
                    Exchange Commission on or about January 31, 1997 disclosing
                    the execution of an agreement in principle for the proposed
                    sale of 10% of the outstanding ordinary shares of Sydney
                    Harbour Casino Holdings Limited ("SHCL") and the right to
                    manage Sydney Harbour Casino to Publishing & Broadcasting
                    Limited ("PBL").

                    The Company filed a Form 8-K with the Securities and
                    Exchanage Commission on or about May 13, 1997 disclosing
                    that PBL had let lapse the agreement in principle for the
                    proposed sale of shares of stock and the right to manage
                    Sydney Harbour Casino.
     
     
     
     
     
     

     
                                   14
     <PAGE>
     


                                SIGNATURES
                                
     
     Pursuant to the requirements of the Securties Exchange Act of 1934, the 
registrant has duly caused this report to be signed on its behalf by the 
undersigned thereunto duly authorized.
     
     
                                             Showboat, Inc.
                                                Registrant
     
     
     
     Date:     May 14, 1997           /s/J. KELL HOUSSELS, III
     ----------------------           ------------------------
                                       J. KELL HOUSSELS, III,
                                       President and Chief Executive Officer
     
     
     Date:     May 14, 1997           /s/R. CRAIG BIRD
     ----------------------           -------------------------
                                       R. CRAIG BIRD, Executive Vice
                                       President - Finance and Administration 
                                       and Chief Financial Officer
     
     
     
     
     
     
     
     
     
     


                                   15
     <PAGE>

                        SHOWBOAT, INC. AND SUBSIDIARIES
                         
                                EXHIBIT INDEX

     
     
     Exhibit
     No.                           Description
     ---------      --------------------------------------------
     18.01          Letter regarding change in accounting principles.




















                                    16


     <PAGE>




May 12, 1997



Showboat, Inc.
2800 Fremont Street
Las Vegas, NV 89104-4035

Ladies and Gentlemen:

We have been furnished with a copy of Form 10-Q of Showboat, Inc. 
for the three months ended March 31, 1997, and have read the 
Company's statements contained in Note 1 to the condensed financial 
statements included therein.  As stated in Note 1, the Company 
changed its method of accounting for the amortization of preopening 
costs from amortizing such costs over  a period not to exceed one 
year from date of opening to expensing them immediately upon 
opening of the new facility and states that the newly adopted 
accounting principle is preferable in the circumstances because it 
conforms to the common industry practice of the major gaming 
companies.  In accordance with your request, we have reviewed and 
discussed with Company officials the circumstances and business 
judgment and planning upon which the decision to make this change 
in the method of accounting was based.

We have not audited any financial statements of Showboat, Inc. as 
of any date or for any period subsequent to December 31, 1996, nor 
have we audited the information set forth in the aforementioned 
Note 1 to the condensed financial statements; accordingly, we do 
not express an opinion concerning the factual information contained 
therein.

With regard to the aforementioned accounting change, authoritative 
criteria have not been established for evaluating the preferability 
of one acceptable method of accounting over another acceptable 
method.  However, for purposes of Showboat, Inc.'s compliance with 
the requirements of the Securities and Exchange Commission, we are 
furnishing this letter.

Based on our review and discussion, with reliance on management's 
business judgment and planning, we concur that the newly adopted 
method of accounting is preferable in the Company's circumstances.

Very truly yours,



KPMG Peat Marwick LLP