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       September 30, 1996
                                      ---------------------------------

                              OR

   TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
   EXCHANGE ACT OF 1934
                                                      to
   For the transition period from     ------------   -----------------

   Commission file number                   1-7123
                          -------------------------------------------
                          SHOWBOAT, INC.
     -----------------------------------------------------------------
           (Exact name of registrant as specified in its charter)

               NEVADA                              88-0090766
     ------------------------------       ---------------------------
      (State or other jurisdiction            (I.R.S. Employer
     of 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 Sections 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
                                                         ---      ---



                          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    16,177,649 shares outstanding
 --------------------------------     ----------------------------------





































                          SHOWBOAT, INC. AND SUBSIDIARIES
                             INDEX


 PART I        FINANCIAL INFORMATION                               Page No.

   Item 1.     Financial Statements

               Condensed Consolidated Balance Sheets-
                September 30, 1996 and December 31, 1995            1-2

               Condensed Consolidated Statements of Income-
                For the three months ended September 30,
                1996 and 1995                                       3-4

               Condensed Consolidated Statements of Income-
                For the nine months ended September 30,
                1996 and 1995                                       5-6

               Condensed Consolidated Statements of Cash Flows-
                For the nine months ended September 30,
                1996 and 1995                                       7

               Notes to the Condensed Consolidated Financial
                Statements                                          8-9


   Item 2.     Management's Discussion and Analysis
                of Financial Condition and Results
                of Operations                                      10-22


 PART II       OTHER INFORMATION

                ITEMS 1 - 6                                        23-24

                SIGNATURES                                          25

                EXHIBIT INDEX                                       26













Item 1.  Financial Statements

                          SHOWBOAT, INC. AND SUBSIDIARIES
                          CONDENSED CONSOLIDATED BALANCE SHEETS
                          SEPTEMBER 30, 1996 AND DECEMBER 31, 1995

                                               September 30,   December 31,
  Assets                                           1996            1995
 ---------
                                                  (unaudited)
                                                       (In thousands)
Current assets:
 Cash and cash equivalents                        $89,609         $106,927

 Receivables, net                                   9,763            8,448

 Income tax receivable                              2,241            2,076

 Inventories                                        2,680            2,808

 Prepaid expenses                                   5,746            4,728

 Current deferred income taxes                      8,356            9,744
                                                  -----------  -----------
     Total current assets                         118,395          134,731
                                                  -----------  -----------

 Property and equipment                           613,473          541,786
 Less accumulated depreciation
  and amortization                               (203,131)        (186,872)
                                                  --------------------------
                                                  410,342          354,914
                                                  --------------------------

Other assets:
 Restricted cash and investment                   101,591             -

 Investments in unconsolidated affiliates         133,266          120,090

 Deposits and other assets                         36,320           28,911

Debt issuance costs, net of
 accumulated amortization of $2,672,000
 and $1,860,000 at September 30, 1996 and
 December 31, 1995, respectively                    9,937           10,749
                                                  --------------------------
                                                  281,114          159,750
                                                  --------------------------

                                                 $809,851         $649,395
                                                  ==========================


 See accompanying notes to condensed consolidated financial statements.
                                    1                         (continued)

                          SHOWBOAT, INC. AND SUBSIDIARIES
                          CONDENSED CONSOLIDATED BALANCE SHEETS
                          SEPTEMBER 30, 1996 AND DECEMBER  31, 1995
                                       (continued)

 LIABILITIES AND SHAREHOLDERS' EQUITY          September 30,   December 31,
 ------------------------------------                 1996         1995

                                                   (unaudited)
Current liabilities:                                   (In thousands)
 Current maturities of long-term debt                  $24          $22
 Accounts payable                                   15,123       15,143
 Dividends payable                                     405          392
 Accrued liablilities                               39,626       37,524
                                                  --------------------------
 Total current liabilities                          55,178       53,081
                                                  --------------------------

Long-term debt, excluding current maturities       532,632      392,369
                                                  --------------------------
Other liabilities                                    6,617        5,662
                                                  --------------------------
Deferred income taxes                               23,457       22,319
                                                  --------------------------
Minority Interest                                      791        2,023
                                                  --------------------------

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 16,176,049
 shares at September 30, 1996 and 15,794,578
 at December 31, 1995.                              16,176       15,795
 Additional paid-in capital                         87,688       80,078
 Retained earnings                                  84,465       80,434
                                                 --------------------------
                                                   188,329      176,307

Cumulative foreign currency
 translation adjustment                              4,543          285
Cost of common stock in treasury,
 -0- shares at September 30, 1996 and
 74,333 shares at December 31, 1995                    -           (587)
Unearned compensation for restricted stock          (1,696)      (2,064)
                                                  --------------------------
  Total shareholders' equity                       191,176      173,941
                                                  --------------------------

  Total liabilities & shareholders' equity        $809,851     $649,395
                                                  ==========================
 See accompanying notes to condensed consolidated financial statements.

                                    2


                          SHOWBOAT, INC. AND SUBSIDIARIES
                          CONDENSED CONSOLIDATED STATEMENTS OF INCOME
                                          (unaudited)
                          FOR THE THREE MONTHS ENDED SEPTEMBER 30, 1996 AND 1995
                              (In thousands except per share data)

                                                      1996         1995
                                                  --------------------------
Revenues:
 Casino                                             $109,262     $106,741
 Food and beverage                                    16,323       15,057
 Rooms                                                 7,222        7,149
 Sports and special events                               875        1,012
 Other                                                 1,613        1,385
                                                  --------------------------
                                                     135,295      131,344
Less complimentaries                                  13,053       11,775
                                                  --------------------------
 Net revenues                                        122,242      119,569
                                                  --------------------------

Operating costs and expenses:
 Casino                                               54,035       46,871
 Food and beverage                                     8,625        8,905
 Rooms                                                 1,557        2,047
 Sports and speical eves                                 694          880
 General and administrative                           31,715       31,706
 Selling, advertising and promotion                    2,379        2,520
 Depreciation and amortization                         8,170        7,646
                                                  --------------------------
                                                     107,175      100,575
                                                  --------------------------


Income from operations from
 consolidated subsidiaries                            15,067       18,994


Equity in income of unconsolidated
affiliate                                              1,526          -
                                                  --------------------------
Income from operations                                16,593       18,994
                                                  --------------------------



                                                              (continued)




                                    3



                          SHOWBOAT, INC. AND SUBSIDIARIES
                          CONDENSED CONSOLIDATED STATEMENTS OF INCOME
                                         (unaudited)
                          FOR THE THREE MONTHS ENDED SEPTEMBER 30, 1996 AND 1995
                                 (In thousands except per share data)
                                         (continued)
                                                      1996         1995
                                                  --------------------------
Income from operations                              $16,593      $18,994
                                                  --------------------------
Other (income) expense:
 Interest income                                     (2,818)      (1,657)
 Interest expense                                    15,541       10,768
 Interest capitalized                                (4,852)      (3,349)
 Foreign currency transaction (gain)loss                  1        (267)
                                                  --------------------------
                                                      7,872        5,495
                                                  --------------------------

Income before income taxes
 and minority interest                                8,721       13,499

Minority interest (income)                             (474)         -
                                                  --------------------------
Income before income
 tax expense                                          9,195       13,499
                                                  --------------------------

Income tax expense                                    4,294        5,673
                                                  --------------------------
Net income                                           $4,901       $7,826
                                                  ==========================


Weighted average shares outstandin               16,274,570   15,730,786


Net income per common and equivalent share            $0.30        $0.50
                                                  ==========================








 See accompanying notes to condensed consolidated financial statements.




                                    4

                          SHOWBOAT, INC. AND SUBSIDIARIES
                          CONDENSED CONSOLIDATED STATEMENTS OF INCOME
                                         (unaudited)
                          FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1996 AND 1995
                                 (In thousands except per share data)

                                                      1996         1995
                                                  --------------------------
Revenues:
 Casino                                            $295,110     $292,838
 Food and beverage                                   43,433       41,425
 Rooms                                               19,650       19,282
 Sports and special events                            2,778        2,957
 Management fees                                        -            190
 Other                                                4,524        3,938
                                                  --------------------------
                                                    365,495      360,630
Less complimentaries                                 31,438       30,518
                                                  --------------------------
 Net revenues                                       334,057      330,112
                                                  --------------------------


Operating costs and expenses:
 Casino                                             146,136      135,108
 Food and beverage                                   24,892       24,955
 Rooms                                                5,564        6,394
 Sports and special events                            2,145        2,506
 General and administrative                          89,497       88,833
 Selling, advertising and promotion                   7,739        7,693
 Depreciation and amortization                       24,496       23,909
                                                  --------------------------
                                                    300,469      289,398
                                                  --------------------------


Income from operations from
 consolidated subsidiaries                           33,588       40,714

Equity in income (loss) of
 unconsolidated affiliate                             1,526         (22)
                                                  --------------------------

Income from operations                               35,114       40,692
                                                  --------------------------



                                                              (continued)



                                    5


                          SHOWBOAT, INC. AND SUBSIDIARIES
                          CONDENSED CONSOLIDATED STATEMENTS OF INCOME
                                        (unaudited)
                          FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1996 AND 1995
                               (In thousands except per share data)
                                           (continued)
                                                      1996         1995
                                                  --------------------------
Income from operations                              $35,114      $40,692
                                                  --------------------------
Other (income) expense:
 Interest income                                     (7,164)      (4,547)
 Interest expense                                    42,051       32,019
 Interest capitalized                               (12,087)      (9,916)
 Gain on sale of affiliate                             -          (2,558)
 Write-down of investment in affiliate                3,902           -
 Foreign currency transaction gain                      (83)        (267)
                                                  --------------------------
                                                     26,619       14,731
                                                  --------------------------

Income before income taxes
 and minority interest                                8,495       25,961

Minority interest (income)                           (1,309)         -
                                                  --------------------------
Income before income
 tax expense                                          9,804       25,961
                                                  --------------------------

Income tax expense                                    4,568       11,393
                                                  --------------------------
Net income                                           $5,236      $14,568
                                                  ==========================


Weighted average shares outstanding              16,418,749   15,548,448


Net income per common and equivalent share            $0.32        $0.94
                                                  ==========================








 See accompanying notes to condensed consolidated financial statements.

                                    6


                          SHOWBOAT, INC. AND SUBSIDIARIES
        CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                          (unaudited)
        FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1996 AND 1995

                                                      1996         1995
                                                  -----------------------
Cash flows from operating activities:                (In thousands)
  Net cash provided by operating activities         $35,301      $55,508
                                                  --------------------------
Cash flows from investing activities:
 Acquisition of property and equipmen               (68,424)     (28,812)
 Proceeds from sale of equipment                        466          288
 Investments in unconsolidated affiliates            (8,735)     (39,163)
 Advances to unconsolidated affiliates               (3,990)      (3,340)
 Repayment of advances to unconsolidated affiliates   4,186        3,928
 Proceeds from sale of unconsolidated affiliates        -         51,366
 Restricted Cash and Investments                   (111,440)         -
 (Increase) decrease in deposits and
  other assets                                          251       (3,615)
Deposit for Casino Reinvestment
 Development Authority obligation                    (2,900)      (2,721)
 Other                                                  -            (42)
                                                  --------------------------
  Net cash used in investing activities            (190,586)     (22,111)
                                                  --------------------------
Cash flows from financing activities:
 Principal payments of long-term debt               $   (16)      $  (15)
 Proceeds from issuance of long-term debt           140,000            -
 Proceeds from employee stock option exercises        5,395        1,767
 Debt issuance costs                                 (6,297)        (533)
 Payment of dividends                                (1,192)      (1,154)
 Minority interest contributions                         77        1,824
 Other                                                  -           (121)
                                                  --------------------------
  Net cash provided (used) by financing
   activities                                       137,967        1,768
                                                  --------------------------
Net increase (decrease) in cash and
 cash equivalents                                   (17,318)      35,165
Cash and cash equivalents at
 beginning of period                                106,927       90,429
Cash and cash equivalents at                      --------------------------
 end of period                                      $89,609     $125,594
                                                  ==========================
Supplemental disclosures of cash flow information
and non-cash investing and financing activities:
 Cash paid during the period for:
  Interest, net of amounts capitalized              25,389       18,337
  Income taxes                                       2,209        6,867
 Foreign currency translation adjustmen              4,258       (2,154)

 See accompanying notes to condensed consolidated financial statements.
                                    7



                          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
 financial statements should be read in conjunction with the financial
 statements and notes thereto included in the Company's December 31, 1995
 Annual Report on Form 10-K.

   The accompanying unaudited condensed consolidated financial statements
 contain all adjustments which are only of a recurring nature, in the
 opinion of management, 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.

   On March 28, 1996 the Company's 55% owned affiliates, Showboat
 Marina Casino Partnership(SMCP) and Showboat Marina Finance Corporation
 (SMFC), issued $140.0 million, 13 1/2% First Mortgage Notes due 2003,
 (the First Mortgage Notes).  The net proceeds of the First Mortgage
 Notes plus cash contributions by the Company are classified as
 restricted cash and investments in the Company's Condensed Consolidated
 Balance Sheet.  These funds are being used to  develop a riverboat casino
 complex in East Chicago, Indiana to be operated on Lake Michigan.











                                    8                     (continued)


                          SHOWBOAT, INC. AND SUBSIDIARIES
                    NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                 (continued)



2. LONG-TERM DEBT

   Long-term debt increased by approximately $140.0 million from
 December 31, 1995 to September 30, 1996.  This increase is due to the
 issuance of $140.0 million, 13 1/2% First Mortgage Notes, by SMCP and
 SMFC.  SMCP and SMFC are effectively owned 55% by the Company and
 therefore are consolidated for financial reporting purposes.  The First
 Mortgage Notes are due 2003 and pay interest semiannually on March 15,
 and September 15, of each year commencing September 15, 1996.

3. WRITE-DOWN OF INVESTMENT IN AFFILIATE

   In March 1995, the Company, with an unrelated corporation (the
 majority member), formed Showboat Mardi Gras, L.L.C. (SMG), to own and
 operate, subject to licensing, a riverboat casino near Kansas City,
 Missouri.  The Company owns 35% of the equity of SMG.  SMG was not
 selected by the Missouri Gaming Commission for investigation for a
 license. Due to a decline in the market value of the assets of SMG,
 principally a riverboat, the Company has recorded a pre-tax write-down
 of $3,902,000 which is included in the 1996 Condensed Consolidated
 Statement of Income as write-down of investment in affiliate.
 This write-down includes the Company's remaining investment in SMG.























                                    9


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 with over 40 years of gaming experience
  that owns and operates the Atlantic City Showboat Casino and Hotel in
  Atlantic City, New Jersey, (Atlantic City Showboat), the Las Vegas
  Showboat, Hotel, Casino and Bowling Center in Las Vegas, Nevada (Las
  Vegas Showboat), owns an interest in, and manages through subsidiaries,
  the Sydney Harbour Casino located in Sydney, Australia and owns through
  subsidiaries a 55% interest in, and will manage, the East Chicago
  Showboat riverboat casino project in East Chicago, Indiana (East Chicago
  Showboat), which is under construction and scheduled to open sometime in
  the second quarter of 1997.  Until March 31, 1995, the Company owned an
  equity interest in and managed a riverboat casino on Lake Pontchartrain
  in New Orleans, Louisiana (Star Casino).

     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, 1995 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 September 30, 1996, the exchange rate was
  approximately $0.7916 for each A$1.00.

  MATERIAL CHANGES IN RESULTS OF OPERATIONS

  Quarter Ended September 30, 1996 Compared to Quarter Ended
  September 30, 1995.

  Revenues

     Net revenues for the Company increased $2.7 million or 2.2% in the
  third quarter 1996 compared to the same period in 1995.  This increase
  was principally due to the $2.5 million or 2.4% increase in casino
  revenues in the quarter ended September 30, 1996.  Non casino revenues,
  which consist principally of food, beverage and room revenues were up
  $1.4 million or 5.8% in the third quarter 1996.  The increases in gross
  revenues were partially offset by the $1.3 million or 10.9% increase
  in complimentaries.  Due to the Company's agreement to forgive the first
  A$19.1 million of management fees due it from Sydney Harbour Casino, the
  Company has not yet received management fees from Sydney Harbour Casino.
  For the quarter ended September 30, 1996, approximately A$2.9 million
  of management fees were forgiven and approximately A$6.8 million in
  management fees remain to be forgiven.



                                   10                          (continued)

  Revenues                                                     (continued)


                                      Quarter ended September 30,
                                      (Unaudited)
                                      (in thousands)

                              1996       1995       Variance      Percent
                          --------------------------------------------------
Consolidated:
 Casino revenues           $ 109,262   $ 106,741   $      2,521      2.4%
 Non casino revenues          26,033      24,603          1,430      5.8%
 Less complimentaries         13,053      11,775          1,278     10.9%
                          --------------------------------------------------
Net revenues Consolidated  $ 122,242   $ 119,569   $      2,673      2.2%
                          --------------------------------------------------

Atlantic City:
 Table game revenues       $   23,291     $24,075  $        (784)   -3.3%
 Slot revenues                 74,538      73,497          1,041     1.4%
 Other gaming revenues            605         781           (176)  -22.5%
                          --------------------------------------------------
Total casino                   98,434      98,353             81     0.1%
                          --------------------------------------------------
Non casino revenues            19,954     19,855              99     0.5%

Less complimentaries           11,920     10,897           1,023     9.4%
                          --------------------------------------------------
Net revenues Atlantic City  $ 106,468   $ 107,311   $       (843)   -0.8%
                          --------------------------------------------------

Las Vegas:
 Table game revenues       $     1,231       $998  $         233    23.3%
 Slot revenues                   9,484      7,225          2,259    31.3%
 Other gaming revenues             113        165            (52)  -31.5%
                          --------------------------------------------------
Total casino                    10,828      8,388          2,440    29.1%
                          --------------------------------------------------
Non casino revenues              6,079      4,748           1,331   28.0%

Less complimentaries             1,133        878             255   29.0%
                          --------------------------------------------------
Net revenues Las Vegas     $    15,774  $  12,258  $        3,516   28.7%
                          --------------------------------------------------








                                   11                      (continued)


  Revenues                                                 (continued)


    The Atlantic City Showboat's net revenues declined $.8 million or
  .8% in the third quarter 1996 compared to the third quarter of 1995.
  This decline is principally due to a $1.0 million or 9.4% increase in
  complimentaries.  The increase in complimentaries is due principally to
  an increase in complimentary rooms offered to patrons in the third
  quarter 1996 compared to the same period in  1995.  The $.8 million
  decline in table games revenues was offset by $1.0 million increase
  in slot revenues or 1.4% increase in the third quarter 1996.  The
  Atlantic City industry's slot revenue growth slowed to .4% in the third
  quarter of 1996 compared to a 9.5% increase in the same quarter of 1995.
  The increase in slot revenues is attributable to approximately 350
  additional slot units  or an increase of 11.0% in the third quarter 1996
  compared to the same period in 1995.  The industry's slot unit growth
  in the third quarter 1996 was 13.1% compared to a 7.7% growth in the
  same quarter of 1995.  The decline in other gaming revenues of $.2
  million or 22.5% is principally due to the decline in keno revenues
  during the quarter ended September 30, 1996.


    For the quarter ended September 30, 1996 the Las Vegas Showboat's net
  revenues increased $3.5 million or 28.7% to $15.8 million compared to
  $12.3 million in the same period in 1995.  The increase in total casino
  revenues and non casino revenues in the quarter ended
  September 30, 1996 as compared to the same period in 1995 is
  principally due to the increased casino and food and beverage capacity.
  During the third quarter of 1995, the casino was operating at
  approximately 60% of capacity due to the renovation project and the
  coffee shop was closed for a full month during the third quarter.




  Income from Operations


    The Company's income from operations declined $2.4 million or 12.6%
  in the quarter ended September 30, 1996 compared to the same period in
  the prior year.  The decrease was due principally to a decline in
  income from operations at both the Atlantic City Showboat and Las Vegas
  Showboat. These declines were partially offset by a $1.5 million
  contribution from the Company's Australian operations and $1.0 million
  or 19.2% decrease in operating expenses for the Company's corporate and
  development functions.





                                   12                          (continued)




  Income From Operations                                       (continued)


                                      Quarter ended September 30,
                                      (Unaudited)
                                      (in thousands)

                              1996        1995      Variance      Percent
Income from operations:  --------------------------------------------------
    Atlantic City          $   23,069  $   26,727  $      (3,658)   -13.7%
    Las Vegas                  (3,671)     (2,382)        (1,289)   -54.1%
    Australia                   1,478        (48)          1,526      N/A
    Corporate and
   development                 (4,283)     (5,303)         1,020     19.2%
                          --------------------------------------------------
 Consolidated              $   16,593  $   18,994  $      (2,401)   -12.6%
                          --------------------------------------------------
EBITDA:*
    Atlantic City          $   29,600  $   33,387  $      (3,787)   -11.3%
    Las Vegas                  (2,132)     (1,456)          (676)   -46.4%
    Australia                   1,478         (48)         1,526      N/A
    Corporate and
   development                 (4,183)     (5,243)         1,060     20.2%
                          --------------------------------------------------
 Consolidated              $   24,763  $   26,640  $      (1,877)    -7.0%
                          --------------------------------------------------


    *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 flows 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.


    Atlantic City Showboat's income from operations, before management
  fees, decrease of $3.7 million or 13.7% is principally due to a decrease
  in industry revenue growth and an increase in operating expenses of
  $2.8 million or 3.5% to $83.4 million for the September 30, 1996
  quarter up from $80.6 million for the same period in the prior year.
  The increase in operating expenses is primarily attributable to
  increased marketing expenses in response to aggressive competition for
  slot patrons in the Atlantic City market during the third quarter 1996.





                                   13                          (continued)


  Income From Operations                                       (continued)

    The $1.3 million decrease in income from operations at the Las Vegas
  Showboat, before management fees and inter-company rent, was due
  primarily to an increase in operating expenses, partially offset by the
  increase in net revenues.  Operating expenses increased $4.8 million or
  32.8% during the third quarter of 1996 to $19.4 million compared to
  $14.6 million for the same period in 1995.  The increase in operating
  expenses is due principally to the increased casino and food and
  beverage capacity during the third quarter 1996 as compared to when the
  casino was under renovation in the same quarter of 1995 and an increase
  in marketing expenses during the quarter ended September 30, 1996.


    The $1.0 million decline in operating expenses for corporate and
  development is attributable to a reduction in the scope of development
  activities in the third quarter of 1996 compared to the same period of
  1995.


  Net income

    In the quarter ended September 30, 1996 the Company recorded net
  income of $4.9 million or $.30 per share compared to net income of $7.8
  million or $.50 per share for the quarter ended September 30, 1995. The
  decline in net income for the third quarter of 1996 is attributable to
  the $2.4 million decrease in income from operations reported in the
  quarter ended September 30, 1995, and a $1.6 million increase in net
  interest expense, due principally to the East Chicago, Indiana project
  financing.


  Nine Months Ended September 30, 1996 Compared to Nine Months Ended
  September 30, 1995

  Revenues

    Net revenues for the Company increased $3.9 million or 1.2% in the
  first nine months of 1996 compared to the same period in 1995. The
  Company received no management fees in the nine months ended September
  30, 1996 due to the Company's agreement to forgive the first A$19.1
  million of management fees due it from Sydney Harbour Casino.  For the
  nine months ended September 30, 1996, approximately A$8.3 million of
  management fees were forgiven and approximately A$6.8 million in
  management fees remain to be forgiven.  The $.2 million management
  fee received in 1995 was attributable to the Company's investment in the
  Star Casino which was sold in March of 1995.




                                   14                          (continued)



  Revenues                                                     (continued)


                                      Nine months ended September 30,
                                      (Unaudited)
                                      (in thousands)

                              1996        1995      Variance      Percent
                          --------------------------------------------------
Consolidated:
 Casino revenues           $ 295,110     $292,838  $    2,272       0.8%
 Non casino revenues          70,385       67,602       2,783       4.1%
 Management fees                -             190        (190)   -100.0%
 Less complimentaries         31,438       30,518        (920)     -3.0%
                          --------------------------------------------------
Net revenues Consolidated  $ 334,057     $330,112   $   3,945       1.2%
                          --------------------------------------------------

Atlantic City:
Table game revenues        $   60,797     $64,453  $   (3,656)     -5.7%
Slot revenues                 199,563     192,220       7,343       3.8%
Other gaming revenues           1,608       2,298        (690)    -30.0%
                          --------------------------------------------------
Total casino                  261,968     258,971       2,997       1.2%
                          --------------------------------------------------
Non casino revenues            51,860     51,499          361       0.7%

Less complimentaries           28,077     27,252          825       3.0%
                          --------------------------------------------------
Net revenues Atlantic City  $ 285,751   $ 283,218   $   2,533       0.9%
                          --------------------------------------------------

Las Vegas:
Table game revenues       $     3,908     $3,649  $       259       7.1%
Slot revenues                  28,000     28,658         (658)     -2.3%
Other gaming revenues           1,234      1,560         (326)    -20.9%
                          --------------------------------------------------
Total casino                   33,142     33,867         (725)     -2.1%
                          --------------------------------------------------
Non casino revenues            18,525     16,103        2,422      15.0%

Less complimentaries            3,361      3,266           95       2.9%
                          --------------------------------------------------
Net revenues Las Vegas     $   48,306  $   46,704  $    1,602       3.4%
                          --------------------------------------------------







                                   15                          (continued)

  Revenues                                                     (continued)

    The Atlantic City Showboat's net revenues were up $2.5 million or .9%
  principally due to a $7.3 million or 3.8% increase in slot revenue in
  the nine months ended September 30, 1996 over the same period in 1995.
  The increase in slot revenue is attributable to the addition of
  approximately 370 slot units or 11.7% increase during the  nine months
  ended September 30, 1996.  The Atlantic City industry's slot revenue
  growth slowed to 2.4% in the first nine months of 1996 compared to
  growth of 13.4% in the same period in 1995.  In addition, there was a
  9.6% increase in slot units in the nine months ended September 30, 1996
  compared to a slot unit growth of 11.0% in the same period of 1995.
  The increase in slot revenues for the Atlantic City Showboat was
  partially offset by a $3.7 million or 5.7% decrease in table game
  revenues.  This decline is attributable to a reduction in table games
  marketing during the nine months ended September 30, 1996.  The decline
  in other gaming revenues of $.7 million or 30.0% is principally due
  to the decline in keno revenues during the nine months ended
  September 30, 1996.



    For the nine months ended September 30, 1996 the Las Vegas Showboat
  net revenues increased $1.6 million or 3.4% to $48.3 million compared to
  $46.7 million in the same period in 1995.  Although casino revenues
  decreased only $.7 million or 2.1% for the nine months ended September
  30, 1996 compared to the same period in 1995, the 1995 net revenues
  reflect a reduced casino capacity in the third quarter due to the
  property's renovation project.  The non-casino revenues increased $2.4
  million or 15.0% to $18.5 million for the nine months ended September
  30, 1996 compared to $16.1 million in the same period in 1995.  This
  increase is due to the increased food and beverage capacity as compared
  with the same period in the prior year.


  Income From Operations

    The Company's income from operations decreased $5.6 million or 13.7%
  in the nine months ended September 30, 1996 compared to the same period
  in the prior year.  The decrease was due principally to a decline in
  income from operations at both the Atlantic City Showboat and Las Vegas
  Showboat. These declines were partially offset by the $1.5 million
  contribution from the Company's Australian operations and the $2.9
  million or 18.9% decrease in operating expenses for the Company's
  corporate and development functions.








                                   16                    (continued)

  Income From Operations                                 (continued)


                                      Nine Months ended September 30,
                                                         (Unaudited)
                                              (in thousands)
                              1996        1995      Variance      Percent
                          --------------------------------------------------
Income from operations:
   Atlantic City           $ 53,206  $   58,313  $   (5,107)        -8.8%
   Las Vegas                 (6,981)     (2,081)     (4,900)      -235.5%
   Australia                  1,401        (105)      1,506          N/A
   Corporate and
   development              (12,512)    (15,435)      2,923         18.9%
                          --------------------------------------------------
 Consolidated              $ 35,114  $   40,692  $   (5,578)       -13.7%
                          --------------------------------------------------

EBITDA:*
   Atlantic City           $ 73,037  $   79,010  $   (5,973)        -7.6%
   Las Vegas                 (2,589)        961      (3,550)      -369.4%
   Australia                  1,401        (105)      1,506          N/A
   Corporate and
   development              (12,239)    (15,265)      3,026         19.8%
                          --------------------------------------------------
 Consolidated              $ 59,610  $   64,601  $   (4,991)        -7.7%
                          --------------------------------------------------


    *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 flows 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.


    The Atlantic City Showboat's income from operations, before
  management fees, decreased $5.1 million or 8.8% in the nine months
  ended September 30, 1996 compared to the same period in 1995.  This
  decrease is attributable to an increase in operating expenses of $7.6
  million or 3.4% to $232.5 million and the slower industry revenue
  growth for the nine months ended September 30, 1996 compared to the same
  period in the prior year.  The increase in operating expenses is
  primarily attributable to increased marketing expenses in response to
  aggressive competition for  slot patrons in the Atlantic City Market
  during the nine months ended September 30, 1996.  This was partially
  offset by the $2.5 million increase in net revenues for the nine
  months ended September 30, 1996.


                                   17                          (continued)


  Income From Operations                                       (continued)


    The $4.9 million decline in income from operations at the Las Vegas
  Showboat, before management fees and inter-company rent, for the nine
  months ended September 30, 1996  was due principally to an increase in
  operating expenses, partially offset by an increase in net revenues.
  Operating expenses increased $6.5 million during the nine months ended
  September 30, 1996 to $55.3 million compared to $48.8 million for the
  same period in 1995.  The increased operating expense is due primarily
  to an increase in advertising and marketing promotions and an increase
  in all operating expenses in the third quarter of 1996 compared to the
  third quarter of 1995.  During the third quarter of 1995, the casino was
  operating at approximately 60% of capacity due to the property's
  renovation project.


    The $2.9 million decrease in operating expenses for corporate and
  development is attributable to a reduction in the scope of development
  activities for the nine months ended September 30, 1996 compared to
  1995. The Company capitalized $1.1 million of costs related to the
  Company's St. Louis project in the first nine months of 1996 compared to
  $3.7 million capitalized for the Company's East Chicago and Randolph
  riverboat projects in the same period in 1995.


  Net income

    In the nine months ended September 30, 1996 the Company recorded net
  income of $5.2 million or $.32 per share compared to net income of $14.6
  million or $.94 per share for the nine months ended September 30, 1995.
  Unusual items totaling $5.1 million are contributing factors to the
  decline in net income for the nine months ended September 30, 1996
  compared to September 30, 1995. The 1996 results reflect an after tax
  loss of $2.0 million or $.12 per share for the write down of the
  Company's investment in Showboat Mardi Gras, L.L.C. (SMG). SMG was
  formed to develop a riverboat casino operation in Randolph, Missouri.
  In comparison, the first nine months of  1995 net income results
  included an after tax gain of $1.4 million or $.09 per share on the sale
  of the Star Casino.  The 1996 results also reflect net interest expense
  for the East Chicago, Indiana project of $.9 million or $.06 per share
  and a reduction of interest income of $.8 million or $.05 per share due
  to the investment of corporate cash in the East Chicago Subsidiary.








                                   18                     (continued)



  MATERIAL CHANGES IN FINANCIAL CONDITION

    As of September 30, 1996 the Company held cash and cash equivalents
  of $89.6 million compared to $106.9 million at December 31, 1995.  This
  decline is due principally to the funding of the East Chicago project.

    On March 28, 1996  the Company's 55% owned subsidiaries, Showboat
  Marina Casino Partnership (SMCP) and Showboat Marina Finance
  Corporation (SMFC), sold $140.0 million, 13 1/2% First Mortgage Notes
  due 2003 (the "First Mortgage Notes").  The funds were raised to
  support the development of the East Chicago Showboat riverboat casino
  project in East Chicago, Indiana (the "East Chicago Showboat")
  Interest expense incurred on the First Mortgage Notes will be
  capitalized to the extent permitted under generally accepted accounting
  principles and as a result the Company anticipates that a portion of
  this expense will impact results in reporting periods preceding the
  opening of the East Chicago Showboat project, currently anticipated for
  sometime in the second quarter of 1997.  As a result, for the period
  ended December 31, 1996, the Company anticipates that net interest
  expense of approximately $2.0 million to $3.0 million will be recorded.


    The First Mortgage Notes are senior secured obligations of SMCP and
  rank senior in right of payment to all existing and future subordinated
  indebtedness of SMCP and pari passu with SMCP's senior indebtedness.
  Terms not otherwise defined herein have the meanings assigned to them
  in the First Mortgage Note Indenture.  The First Mortgage Notes are
  secured by a first lien on substantially all of SMCP's assets.  The
  First Mortgage Note Indenture places significant restrictions on SMCP
  for the incurrence of additional Indebtedness, the creation of
  additional Liens on the Collateral securing the First Mortgage Notes,
  transactions with Affiliates and making Restricted Payments unless
  certain conditions are met.  Restricted Payments include paying a
  management fee to the Manager of the East Chicago Showboat, an entity
  which is 55% owned by the Company.  In order to pay the management fee,
  among other things, SMCP's Fixed Charge Coverage Ratio must be greater
  than 1.5 to 1.0 for the most recently ended four full fiscal quarters,
  after giving effect to such Restricted Payment.  To make any other
  Restricted Payment SMCP must, among other things, have a Fixed Charge
  Coverage Ratio greater than 2.0 to 1.0 for the most recently ended four
  full fiscal quarters, after giving effect to such Restricted Payment.









                                   19                     (continued)



    In addition, subject to certain qualifications and exceptions, the
  Company entered into a standby equity commitment with SMCP, pursuant to
  which it will cause to be made up to an aggregate of $30.0 million in
  additional capital contributions to SMCP if, during the  first three
  full four fiscal quarters following the commencement of operations at
  the East Chicago Showboat, the project's combined cash flow (as defined)
  is less than $35.0 million for any one such full four quarter period.
  However, in no event will the Company be required to cause to be
  contributed to SMCP more than $15.0 million in respect of any such
  full four quarter period.  In addition, subject to certain
  qualifications and exceptions, the Company entered into a completion
  guarantee with SMCP to complete the East Chicago project so that it
  becomes operational, including the payment of all costs owing prior to
  such completion, up to a maximum aggregate amount of $30.0 million.
  The Company's obligation to complete the East Chicago project will be
  suspended during the pendency of any force majeure event or other event
  outside the control of the Company.  The East Chicago project budget
  recently was increased by $5.0 million to $200.0 million to provide for
  an enhanced pavilion and enhanced employee training.  Currently, the
  Company believes that SMCP has sufficient resources to complete the
  East Chicago Showboat.  However, no assurance can be given that SMCP
  will be able to complete the East Chicago Showboat from its available
  financing resources.

    The Company's ability to make certain payments and to incur
  additional indebtedness is restricted due to the covenants contained in
  its indentures governing its 9 1/4% First Mortgage Notes 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, 1995.

    During the nine months ended September 30, 1996 the Company expended
  approximately $68.4 million on capital improvements at its Las Vegas
  and Atlantic City facilities (which were funded from operations) and
  construction costs at the East Chicago Showboat(which were principally
  funded from the proceeds of the First Mortgage Notes).  Approximately
  $48.3 million of the $68.4 million related to the East Chicago Showboat.

    On April 1, 1996, an affiliate of the Company, Sydney Harbour Casino
  Holdings Limited, ("SHCH") through its wholly owned subsidiary, Sydney
  Harbour Casino Properties Pty Limited, ("SHCP") renegotiated its
  agreement with Leighton Properties Pty Limited ("Leighton Properties")
  for the design and construction of the interim and permanent Sydney
  Harbour Casino. The renegotiated project cost is approximately A$867.2
  million, a A$176.1 million increase over the April 1994 projected
  project cost of A$691.1 million, and includes the administration and
  management of the project, enhancement of the interior theming, an
  accelerated completion date of December 1997, the firming up of monetary
  allowances and resolution of certain claims by Leighton Properties to
  SHCP.  The design element changes incorporated in the renegotiated


                                   20                   (continued)


  contract for the permanent casino were made with a view towerd improving
  its operational efficiency and product quality and to match the changing
  competitive environment. The increased project cost is being funded in
  part by the sale of 35,250,000 preferred ordinary shares of stock by
  SHCH on May 13, 1996, providing net proceeds of approximately A$64.0
  million.  Additional financing of A$150.0 million has been negotiated
  with local banks.  Bank documents have been finalized with the banks
  and are awaiting final regulatory approval.  As with any construction
  contract, the final amount of such contract will be subject to
  modification based upon change orders and the occurrence of events such
  as costs associated with certain types of construction delays.  No
  assurance can be given that the construction costs for the Sydney
  Harbour will not exceed the announced project cost estimate.  The
  sale of the additional equity by SHCH reduced the Company's equity in
  the project to 24.6% from 26.3%.

    The Company through its subsidiary, Showboat Lemay, Inc. ("Showboat
  Lemay"), has an 80% general partner interest in Southboat Limited
  Partnership ("SLP") which, subject to licensing, plans to build and
  operate a riverboat casino project and related facilities (the
  "Southboat Casino Project") on the Mississippi River near Lemay,
  Missouri.  Pursuant to the limited partnership agreement, Showboat Lemay
  is responsible for borrowing up to $75.0 million (the "Development
  Financing') on behalf of SLP.  The Company has committed to use its best
  efforts to obtain a commitment letter for the Development Financing
  within 60 days after SLP is selected for investigation for a gaming
  license by the Missouri Gaming Commission or obtain the Development
  Financing within a commercially reasonable time following such
  selection. The Company's commitment replaced a previous commitment
  letter from an unrelated party.  No assurance can be given that SLP will
  be successful in obtaining the necessary funds to finance its gaming
  project or that SLP will successfully obtain a casino license.


    The Company continues to examine, and if appropriate, may pursue
  potential gaming opportunities in jurisdictions where gaming is
  legalized and in other jurisdictions that, in the future, may legalize
  private for profit casino gaming.  There can be no assurance that
  legislation will be enacted in any additional jurisdictions, that any
  properties in which the Company may have invested will be compatible
  with any gaming legislation so enacted, that legalized gaming will
  continue to be authorized in any jurisdictions or the Company will be
  able to obtain the required licenses in any jurisdiction.  Further, no
  assurance can be given that any of the announced or unannounced projects
  under development will be completed, licensed or result in any
  significant contribution to the Company's cash flow or earnings.  Casino
  gaming operations are highly regulated and new casino developments are
  subject to a number of risks and uncertainties, many of which are beyond
  the Company's control.



                                   21                   (continued)




    The Company believes that it has sufficient capital resources,
  including its existing cash balances, cash provided by operations and
  existing borrowing capacity, to cover 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.

    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.







                                   22



                          SHOWBOAT, INC. AND SUBSIDIARIES
                          PART II, OTHER INFORMATION

  Item 1. Legal Proceedings

    "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 District.  An individual,
  purportedly representing a class, filed a complaint against four
  manufacturers, three distributors and 38 casino operators, including the
  Company, that manufacture, distribute or offer for play video poker and
  electronic slot machines.  The individual allegedly intends to seek
  class certification of the interests he claims to represent.  The
  complaint alleges that the defendants have engaged in a course of
  conduct intended to induce persons to play such games based on a false
  belief concerning how the gaming machines operate, as well as the extent
  to which there is an opportunity to win on a given play.  The complaint
  alleges violations of the Racketeer Influenced and Corrupt Organizations
  Act, as well as claims of common law fraud, unjust enrichment and
  negligent misrepresentation, and seeks damages in excess of $1.0 billion
  without any substantiation of that amount.  The Company filed a motion
  to dismiss the complaint.  The Nevada District Court entered an order
  granting the motions to dismiss based on defects in the pleadings, and
  denying as moot all other pending motions, including those of the
  Company.  The Court granted plaintiff until September 30, 1996 within
  which to file an amended complaint that complies with the applicable
  pleading requirements.  The plaintiff filed an amended complaint on or
  about September 30, 1996.  The Company renewed its motion to dismiss
  based on abstention and related doctrines, and based on defects in the
  pleadings.  Management believes that the complaint is without merit and
  intends to vigorously defend the allegations.

    "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.  In September
  1996, the trial of the Nevada action was held and the parties are
  awaiting the decision of the trial judge.


                                   23                 (continued)




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


  Item 2. Changes in Securities
    None


  Item 3. Defaults Upon Senior Securities
    None


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


  Item 5. Other Information
    None


  Item 6. Exhibits and Reports on Form 8-K

    (a) Exhibits

     Exhibit No.                      Description
     ----------           ----------------------------------
       10.01              Showboat, Inc. 1996 Stock Appreciation
                          Rights Plan, effective date September 3, 1996.

        27.1              Finanical Data Schedules




    (b) Reports on Form 8-K
         None












                                   24





                           SIGNATURES


    Pursuant to the requirements of the Securities Exchange Act of 1934,
  the registrant has duly caused this report to be signed on its behalf by
  the undersigned thereunto duly authorized.



                                                  Showboat, Inc.
                                                   Registrant


 Date: November 13, 1996                s/ J. Kell Houssels, III
     ---------------------            --------------------------------------
                                      J. KELL HOUSSELS, III,
                                      President and Chief Executive
                                      Officer


 Date: November 13, 1996                s/ R. Craig Bird
     ---------------------            --------------------------------------
                                      R. CRAIG BIRD, Executive Vice
                                      President - Finance and
                                      Administration and Chief
                                      Financial Officer
























                                   25




                          EXHIBIT INDEX

 Exhibit No.                          Description
 ------------             ----------------------------------
   10.01                  Showboat, Inc. 1996 Stock Appreciation
                          Rights Plan, effective date September 3, 1996.


   27.1                   Financial Data Schedules









































                                   26



                         SHOWBOAT, INC.


               1996 STOCK APPRECIATION RIGHTS PLAN


          I.   PURPOSES

           Showboat, Inc. (the "Company")  desires to  afford
 certain  of  its  key employees and certain key employees of
 its  subsidiaries  who  are  responsible  for  the continued
 growth  of the Company, an opportunity to participate in the
 growth of the Company, and thus to create in such persons an
 increased interest in and  a greater concern for the welfare
 of the Company and its subsidiaries.

           The stock  appreciation  rights ("Rights") offered
 pursuant   to  this 1996 Stock Appreciation Rights Plan (the
 Plan) are  a  matter of separate inducement and are not in
 lieu of any salary or other compensation for the services of
 any key employee.

           II.  GRANT OF STOCK APPRECIATION RIGHTS
                PURSUANT TO THE PLAN

           The  Company  may,  from  time  to time during the
 period beginning on September 3, 1996 (the "Effective Date")
 and ending on  the tenth anniversary thereof grant Rights to
 certain  key  employees  of  the  Company,  or  certain  key
 employees of any subsidiary  of the Company, under the terms
 hereinafter set forth. The  total number of shares of common
 stock,  $1.00  par  value per share, of the Company ("Common
 Stock")  subject  to  Rights which may be issued pursuant to
 this  Plan  shall  not  exceed  800,000,  with no individual
 employee  to  receive  in  excess of 120,000 Rights, in both
 cases  subject to adjustment in accordance with Article VIII
 of the Plan.

           III. ADMINISTRATION

           The board of directors of the Company (the  "Board
 of Directors")  shall  designate  from  among  its members a
 committee  (the  "Committee")  to  administer the Plan.  The
 Committee shall  consist  of no less than two members of the
 Board of Directors,  each  of  whom  shall  be  an  "outside
 director"  within  the  meaning  of  Section  162(m)  of the
 Internal  Revenue  Code of 1986, as amended (the "Code") and
 any  regulations  promulgated  thereunder, and the Committee



                               1

 shall  administer  the Plan so as to comply at all time with
 Section  162(m)  of the  Code.  A majority of the members of
 the  Committee   shall  constitute  a  quorum  (or  if   the
 Committee  consists  of  only two members, then both members
 shall  constitute  a quorum),  and the acts of a majority of
 the  members  present  at  any meeting  at which a quorum is
 present, or acts approved  in writing  by all members of the
 Committee, shall be the acts of the Committee.

           Any member of the Committee may be removed at  any
 time  with  or  without  cause  by resolution adopted by the
 Board of Directors  and  any vacancy on the Committee at any
 time  may  be  filled  by resolution adopted by the Board of
 Directors.

           Subject to and not inconsistent with  the  express
 provisions  of the Plan, the Committee shall have authority,
 in its sole discretion, to:

           (a)  determine the  key employees to  whom  Rights
 shall  be  granted,  the  time  when  such  Rights  shall be
 granted,  the  number  of  shares of Common Stock subject to
 Rights,  the  period(s)  during  which  such Rights shall be
 exercisable (whether in whole or in part), the  restrictions
 to  be   applicable  to  Rights  and  all  other  terms  and
 provisions thereof (which need not be identical);

           (b)  require,  as  a  condition to the granting of
 any Rights,  that the person receiving such Rights agree not
 to sell or otherwise dispose of such Rights;

           (c)  provide (in accordance with Article X  hereof
 or otherwise)  the  establishment of a procedure whereby the
 necessary  amounts  may  be withheld from the total payments
 made  to  any  person  upon  exercise of a Right to meet the
 obligation  of  withholding  for income, social security and
 other  taxes  incurred  by such person upon such exercise or
 required  to be  withheld  by the Company in connection with
 such exercise;

           (d)  prescribe, amend,  modify  and  rescind rules
 and regulations relating to the Plan;

           (e)  make  all  determinations permitted or deemed
 necessary,  appropriate  or advisable for the administration
 of the Plan, interpret any Plan or Rights provision, perform
 all  other  acts,  exercise  all other powers, and establish
 any other  procedures  determined  by  the  Committee  to be
 necessary,  appropriate  or  advisable  in administering the
 Plan or  for  the  conduct of the Committee's business.  Any
 act  of  the  Committee,  including  interpretations  of the


                                 2
 provisions of  the  Plan  or  any Rights and  determinations
 under the Plan or any Rights shall be final,  conclusive and
 binding on all parties.

           The  Committee  may employ attorneys, consultants,
 accountants,  or  other persons as it may deem desirable for
 the administration of the Plan and may rely upon the advice,
 opinions  or  computations  of  any  such persons.  Expenses
 incurred by  the Committee in the engagement of such persons
 shall be paid by the Company.  No member or former member of
 the  Committee  shall  be  personally liable for any action,
 determination  or  interpretation  made  in good  faith with
 respect to the Plan or any Rights granted hereunder.

           IV.  ELIGIBILITY; TERMS AND CONDITIONS OF
                STOCK APPRECIATION RIGHTS

           Rights may be granted only to key employees of the
 Company or any subsidiary of the Company.  The Plan does not
 create  a  right  in  any  person  to  participate in, or be
 granted Rights under, the Plan.

           Any   Rights   granted   hereunder  shall,  unless
 otherwise provided in such Rights, vest immediately upon the
 grant of such Rights.

           The  exercise  price of a Right shall be $24.58 in
 the case of the initial grant of any Rights hereunder (which
 shall  not  be less  than  one hundred percent (100%) of the
 fair market value  of  one share of Common Stock on the date
 of  grant  of  such Right) and the exercise price of a Right
 granted  after  such  initial  grant  shall  be equal to one
 hundred and fifteen percent (115%) of the fair  market value
 of  one  share  of Common Stock on the date of grant of such
 Right.

           Any Right granted  hereunder  shall be exercisable
 at any  time  during  a  period of not more than thirty (30)
 days after the date  of  a  Change in Control of the Company
 (as hereinafter defined) (the  "Exercise Period"); provided,
 however, that a  Right  shall  not  be exercisable after the
 expiration of  ten (10)  years from the Effective Date.  Any
 Right  remaining  unexercised  at  the  earlier  of  (i) the
 expiration  of  ten  (10)  years  from the Effective Date or

 Period, shall expire on such date.

           Any   Right   shall   be   exercisable   upon such
 additional terms and conditions as may from  time to time be
 prescribed by the Committee.




                                 3

           The Committee shall have the right  to accelerate,
 in  whole  or  in  part, from time to time, conditionally or
 unconditionally,  rights  to  exercise  any   Right  granted
 hereunder.

           Except as otherwise provided below or in the terms
 of the grant of any Right, the exercise of  a  Right, in the
 manner  described  in  Article  V  below,  shall entitle the
 holder  to  receive  from the Company, cash, in an aggregate
 amount  equal  to  the  excess, if any, of fair market value
 per  share  of  Common  Stock  on  the date of the Change in
 Control of the Company over  the exercise price of the Right
 as specified in such Right.

           For  purposes  of  the  Plan, "fair market value,"
 with respect to any date of determination, means:

           (i)  if the  shares of  Common Stock are listed or
 admitted to trading on a national securities exchange in the
 United States  or  reported  through the NASDAQ Stock Market
 ("NASDAQ"), then the closing  sale price on such exchange or
 NASDAQ on such date or, if no trading occurred or quotations
 were available  on  such date, then on the closest preceding
 date  on  which  the  shares  of Common Stock were traded or
 quoted; or

           (ii)  if  not  so listed or reported but an active
 public market for  the  shares  of  Common  Stock exists (as
 determined  in  the  sole discretion of the Committee, whose
 decision shall  be conclusive and binding), then the average
 of the closing  bid  and  ask quotations per share of Common
 Stock in  the  over-the-counter  market  for  such shares of
 Common Stock in the  United  States  on  such date or, if no
 such  quotations  are  available  on  such date, then on the
 closest  date  preceding  such  date.   For  purposes of the
 foregoing, a market in which trading is sporadic and the ask
 quotations  generally exceed the bid quotations by more than
 15% shall not  be deemed to be an "active public market"; or

           (iii)  in the case of a  Change in Control  of the
 Company, (A)  the  highest  price  per share of Common Stock
 paid  by  the  "person"  described  in  clause  (a)  of  the
 definition  of  "Change  in Control of the Company", (B) the
 fair  market  value per share of Common Stock (determined as
 provided   in   (i)  and  (ii)  above)  on  the  date  of  a
 transaction  described  in  clause  (b) of the definition of
 Change  in  Control  of  the Company and (C) the amount of
 cash  (or  the  fair  market  value  of  other  property, as
 determined by the Committee in its sole discretion) paid per
 share of Common Stock in the



                                 4

 case  of  a  transaction  described  in  clause  (c)  of the
 definition of "Change in Control of the Company".

           If the Committee  determines that an active public
 market  does not exist for the shares of Common Stock, or in
 the case of a  determination  to  be  made  by the Committee
 pursuant  to  (iii) above, the Committee shall determine the
 fair  market value of the shares of Common Stock in its good
 faith judgment based on the total number of shares of Common
 Stock then outstanding, taking  into account all outstanding
 options, warrants, rights or other securities exercisable or
 exchangeable  for,  or  convertible  into,  shares of Common
 Stock.

           For purposes of the Plan, a "Change  in Control of
 the Company"  shall occur (a) if any person or other entity,
 including any  person  as defined in Section 13(d)(3) of the
 Securities Exchange  Act  of 1934, as amended (the "Exchange
 Act") becomes the beneficial owner, as defined in Rule 13d-3
 of the Exchange Act, directly  or  indirectly,  of more than
 fifty  percent  (50%)  of the total combined voting power of
 all  classes  of  capital  stock  of  the  Company  normally
 entitled  to  vote  for  the  election  of  directors of the
 Company  (the  "Voting  Stock"), (b) upon the closing of the
 sale  of  all or substantially all of the property or assets
 of the Company or (c) upon the closing of a consolidation or
 merger   of   the  Company  with  another  corporation,  the
 consummation  of  which  results  in the stockholders of the
 Company   immediately   before   the   occurrence   of   the
 consolidation or  merger owning, in the aggregate, less than
 50% of the Voting Stock of the surviving entity.

           In the event that any payment or benefit  received
 or  to  be  received  by a holder of a Right pursuant to the
 terms of this Plan or  the Rights (the "Rights Payments") or
 of any other plan,  arrangement  or agreement of the Company
 (or any affiliate)  ("Other Payments" and, together with the
 Rights  Payments,  the  "Payments") would, in the opinion of
 independent   tax  counsel   selected  by  the  Company  and
 reasonably  acceptable  to  the employee ("Tax Counsel"), be
 subject  to  the  excise  tax  (the "Excise Tax") imposed by
 section  4999  of  the  Internal  Revenue  Code  of 1986, as
 amended (the "Code") (in whole or in part), as determined as
 provided  below,  the  Rights Payments shall be reduced (but
 not  below  zero)  until no portion of the Payments would be
 subject to the Excise Tax.  For purposes of this limitation,

 which  the employee shall have effectively waived in writing
 shall be taken into account,  (ii)  only  the portion of the
 Payments  which  in  the opinion of Tax Counsel constitute a
 parachute payment within the meaning of Section 280G(b)(2)

                                 5


 of the Code shall be taken into account,  (iii) the Payments
 shall be reduced  only  to  the extent necessary so that the
 Payments would not  be  subject  to  the  Excise Tax, in the
 opinion  of  Tax  Counsel, and (iv) the value of any noncash
 benefit or any deferred  payment or benefit included in such
 payments   shall   be  determined  in  accordance  with  the
 principles of Sections 280G(d)(3) and (4) of the Code.

           V.   EXERCISE OF STOCK APPRECIATION RIGHTS

           A holder shall exercise a Right  by  submitting to
 the Company  at  its  principal office a written notice (the
 Notice) specifying the number  of  Rights  being exercised
 and the exercise price(s) of such Rights.

           Except as otherwise  provided herein, the exercise
 of a Right shall  entitle  the  holder  to  receive from the
 Company,  within  ten  (10)  business  days  of  the date of
 receipt  of  the  Notice  by  the  Company  at its principal
 office,  an  amount  of  cash  determined  as  set  forth in
 Article IV hereof.

           VI.  NONTRANSFERABILITY OF STOCK
                APPRECIATION RIGHTS

           Any   Right   granted   hereunder   shall   not be
 transferable, other  than by will or the laws of descent and
 distribution, and any Right granted hereunder shall, subject
 to Article VIII hereof,  be exercisable, during the lifetime
 of the holder, only by such holder.

           VII. TERMINATION OF EMPLOYMENT

           Upon termination of employment of any key employee
 with the Company  and  all  subsidiary  corporations  of the
 Company,  any  Right  previously  granted to  such employee,
 unless  otherwise  specified  by  the Committee in the Right
 shall,  to  the extent not theretofore exercised,  terminate
 and become null and void; provided, however, that:

           (A)   if  any  key employee shall die while in the
 employ of such corporation or during either the one (1) year
 or   three   (3)  month  period,  whichever  is  applicable,
 specified in  clauses  (B)  and (C) below, any Right granted
 hereunder,  unless  otherwise  specified by the Committee in
 the  Right, shall be exercisable by the legal representative
 of such  employee  or such person who acquired such Right by
 bequest or  inheritance  or  by  reason of the death of such




                                 6

 employee, at any time up to and including one (1) year after
 the date of death;

           (B)  if  the  employment of any key employee shall
 terminate  by  reason  of  such  employee's  disability  (as
 described  in  Section  22(e)(3)  of  the  Code),  any Right
 granted   hereunder,  unless  otherwise   specified  by  the
 Committee  in the Right, shall be exercisable at any time up
 to  and  including  one (1) year after the effective date of
 such termination of employment;

           (C)  if  the  employment of any key employee shall
 terminate (i)  by  reason  of  the employee's retirement (at
 such age  or  upon  such conditions as shall be specified by
 the  Committee),  (ii) by the key employee for "good reason"

 cause  (as  defined  below),  such  Right,  unless otherwise
 specified   by   the   Committee  in  the  Right,  shall  be
 exercisable at any time up to and including three (3) months
 after the effective date of such termination of employment;
 and

           (D)  if  the   employment   of  any employee shall
 terminate by  any  reason  other  than  that provided for in
 clauses  (A), (B) or (C) above, such Right, unless otherwise
 specified  by  the  Committee  in  such  Right shall, to the
 extent not theretofore exercised, become null and void.

           None  of  the  events described above shall extend
 the   period  of  exercisability  of  the  Right  beyond the
 expiration date thereof.

           If a Right granted hereunder shall be exercised by
 the  legal  representative  of  a  deceased  grantee or by a
 person  who acquired a Right granted hereunder by bequest or
 inheritance  or  by  reason  of the death of any employee or
 former employee,  written  notice  of such exercise shall be
 accompanied  by  a certified copy of letters testamentary or
 equivalent  proof  of the right of such legal representative
 or other person to exercise such Right.

            For  purposes  of  the Plan, the term "for cause"
 shall mean (a) with respect to an employee who is a party to
 a  written  severance  agreement  with,  or,  alternatively,
 participates in  a  compensation or benefit plan (other than
 the Plan) of, the Company or a subsidiary corporation of the
 Company,  which  agreement  or plan contains a definition of
 for  cause  or "cause"  (or  words  of  like  import)  for
 purposes of termination of employment or services thereunder
 by  the  Company  or  such  subsidiary  corporation  of  the
 Company,  "for  cause"  or "cause" as defined therein (if an


                                 7


 employee  is  both  party  to  a  severance  agreement   and
 participates  in  such  a  plan, the definition contained in
 such agreement shall control); or (b) in all other cases, as
 determined by  the  Committee  in  its  sole discretion, the
 willful  and  continued  misconduct  of  an  employee or the
 willful   and   continued   failure   of   an   employee  to
 substantially  perform  the  duties  of such employee to the
 Company  or  a  subsidiary corporation of the Company (other
 than due to physical  or mental illness), if such failure or
 misconduct  is materially damaging or materially detrimental
 to the business  and  operations  of the Company and has not
 been cured  within  thirty  (30)  days  after written notice
 thereof has been given to the employee by the Committee.

           For purposes  of  the Plan, the term "good reason"
 shall mean:

           (i)  the assignment to the employee  of any duties
 inconsistent  with  the  position  in  the  Company that the
 employee held  immediately prior to the Change in Control of
 the Company,  or  a  significant  adverse  alteration in the
 nature  or  status of the responsibilities or the conditions
 of   employment  of   the  employee  from  those  in  effect
 immediately prior to such  Change in Control of the Company;

           (ii)  a  reduction  by  the  Company in the annual
 base salary of  the  employee as in effect immediately prior
 to the Change in Control of the Company;

           (iii)  the  relocation of the Company's offices at
 which the employee is principally employed immediately prior
 to the Change in  Control  of the Company to a location more
 than 25 miles from such  location or the Company's requiring
 the employee to  be  based anywhere other than the Company's
 offices  at  such location except for required travel on the
 Company's  business  to  an  extent substantially consistent
 with the employee's business travel obligations prior to the
 Change in Control of the Company;

           (iv)  the  failure  by  the  Company to pay to the
 employee any portion  of  current  compensation or to pay to
 the  employee  any  portion  of  an  installment of deferred
 compensation  under any deferred compensation program of the
 Company  within seven (7) days of the date such compensation
 is due;

           (v)  the  failure  by  the  Company to continue in
 effect  any   material   compensation   or  benefit  plan in
 which the  employee  participates   immediately   prior   to



                                 8


 the  Change  in  Control of  the Company unless an equitable
 arrangement   (embodied   in   an   on-going  substitute  or
 alternative plan)  has  been made with respect to such plan,
 or  the  failure  by  the Company to continue the employee's
 participation  therein (or in such substitute or alternative
 plan)  on  a  basis  not  materially less favorable, both in
 terms  of  the  amount of benefits provided and the level of
 the employee's participation relative to other participants,
 as  existed  at the  time  of  the  Change in Control of the
 Company;

           (vi)  the  failure  by  the Company to continue to
 provide the employee  with benefits substantially similar to
 those enjoyed by   the  employee  under any of the Company's
 life insurance,  medical, health and accident, or disability
 plans in  which the employee participates at the time of the
 Change in Control of the Company,  the  taking of any action
 by the Company which would directly or indirectly materially
 reduce any of such benefits,  or  the failure by the Company
 to  provide  the  employee  with the number of paid vacation
 days to which the employee is entitled on the basis of years
 of service with the Company in accordance with the Company's
 normal  vacation  policy in effect at the time of the Change
 in Control of the Company; or

           (vii)  any  purported  termination  of  employment
 that is not effected  in  a manner satisfying the definition
 of "for cause" hereunder.

           For   purposes   of   the   Plan,   an  employment
 relationship shall  be deemed to exist between an individual
 and a corporation if,  at  the  time  of  determination, the
 individual   was  an  "employee"  of  such  corporation  for
 purposes of Section 422(a) of the Code.  If an individual is
 on   leave    of absence taken   with  the  consent  of  the
 corporation by  which such individual was employed, or is on
 active   military  service,  and  is  determined  to  be  an
 employee  for  purposes  of  the  exercise  of Right, such
 individual  shall  not  be  entitled  to exercise such Right
 during  such  period  and while the employment is treated as
 continuing intact unless such individual shall have obtained
 the prior written consent of such corporation, which consent
 shall be  signed  by the chairman of the board of directors,
 the  president,  a   senior  vice-president  or  other  duly
 authorized officer of such corporation.

           A termination of employment shall not be deemed to
 occur  by  reason  of  (i)  the transfer of an employee from
 employment  by  the  Company  to  employment by a subsidiary



                                 9


 corporation  of  the  Company  or  (ii)  the  transfer of an
 employee from  employment by a subsidiary corporation of the
 Company   to  employment   by  the  Company  or  by  another
 subsidiary corporation.

           VIII.  ADJUSTMENT OF SHARES;
                  EFFECT OF CERTAIN TRANSACTIONS

           Notwithstanding  any  other  provision   contained
 herein, in the  event  of any change in the shares of Common
 Stock subject to  the Plan or to any Right granted under the
 Plan    (through   merger,   consolidation,  reorganization,
 recapitalization,  stock  dividend,  stock  split, split-up,
 split-off,  spin-off,  combination  of  shares,  exchange of
 shares, or other like change in the capital structure of the
 Company),   the  Committee  shall   make   any   appropriate
 adjustments  to  the  total number of shares of Common Stock
 which  may  be subject to Rights under the Plan, the maximum
 number of  shares  of  Common  Stock for which Rights may be
 granted to  any  employee and the number of shares of Common
 Stock  and  fair  market  value  per  share  of Common Stock
 subject  to  outstanding  Rights  as  shall  be equitable to
 prevent dilution or enlargement of rights under such Rights,
 and  the  determination of the Committee as to these matters
 shall be conclusive and binding on the holder.

           IX.  RIGHT TO TERMINATE EMPLOYMENT

           The  Plan  shall  not impose any obligation on the
 Company or on any  subsidiary  corporation  to  continue the
 employment of  any holder of a Right and it shall not impose
 any  obligation  on  the  part  of  any holder of a Right to
 remain in the employ of the Company or of any subsidiary
 corporation.

           X.   WITHHOLDING TAXES

           The  Company  shall have the right to withhold the
 amount  of  any taxes required by any governmental authority
 to be withheld or otherwise deducted and paid by the Company
 in respect of any sums due or to become due from the Company
 to  the   employee  from  such  sums  upon  such  terms  and
 conditions  as  the  Committee  shall  prescribe.   In  lieu
 thereof,  the Company may require an employee exercising any
 Right to reimburse the Company for such taxes.






                                10

           XI.  AMENDMENT OF THE PLAN

           The  Committee may,  from  time to time, amend the
 Plan, provided  that no amendment shall be made, without the
 approval of  the  stockholders of the Company, that will (a)
 increase  the total number of shares of Common Stock subject
 to Rights  under the Plan or the maximum number of shares of
 Common Stock for which Rights may be granted to any employee
 (other   than  an  increase  resulting  from  an  adjustment
 provided  for  in  Article  VIII  hereof),  (b)  reduce  the
 exercise  price  of  any Right granted hereunder, (c) modify
 the  provisions  of the Plan relating to eligibility, or (d)
 materially  increase  the  benefits accruing to participants
 under the Plan.  The Rights and obligations under any Rights
 granted  before  amendment  of  the  Plan or any unvested or
 unexercised  portion  of  such Rights shall not be adversely
 affected  by amendment of the Plan or the Rights without the
 consent of the holder of the Rights.

           XII. TERMINATION OR SUSPENSION OF THE PLAN

           The Committee may at any time suspend or terminate
 the Plan.   Rights  may  not  be  granted  while the Plan is
 suspended or after it is terminated.  Rights and obligations
 under  any  Rights granted while the Plan is in effect shall
 not be altered or impaired  by  suspension or termination of
 the  Plan, except upon the consent of the person to whom the
 Rights were granted.  The power of the Committee to construe
 and  administer  any Rights granted prior to the termination
 or  suspension  of  the  Plan under Article III nevertheless
 shall   continue  after  such  termination  or  during  such
 suspension.

           XIII.  GOVERNING LAW

           The Plan, such Rights as may be granted thereunder
 and all  related matters shall be governed by, and construed
 and enforced in accordance with, the laws of the State of
 Nevada.













                                11


           XIV.  PARTIAL INVALIDITY

           The  invalidity  or  illegality  of  any provision
 herein  shall  not  be  deemed to affect the validity of any
 other provision.


           XV.  Notices

            All notices hereunder shall be sent by registered
 mail, postage prepaid, to the Company at its principal place
 of  business, or to a holder of any Rights, or any permitted
 transferee,  at  his  last known address, or the address, if
 any, appearing on the books of the Company.

           XVI.  EFFECTIVE DATE

           The  Plan shall become effective at 5:00 P.M., Las
 Vegas,   Nevada  time,  on  the  Effective  Date;  provided,
 however, that  if  the Plan is not approved by a vote of the
 stockholders  of   the  Company  at  the  first  meeting  of
 stockholders  after  such  date,  the  Plan  and  any Rights
 granted thereunder shall terminate.




























                                   12