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

(Mark One)
(XX) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE
     SECURITIES EXCHANGE ACT OF 1934
     
     For the quarterly period ended:      March 31, 1998
                                    -------------------------

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

Commission file number:                   1-7123
                       ---------------------------------------

                      SHOWBOAT, INC.
--------------------------------------------------------------
   (Exact name of registrant as specified in its charter)
                                  
            NEVADA                              88-0090766
-------------------------------            -------------------
(State or other jurisdiction of             (I.R.S. Employer
incorporation or organization)             Identification No.)
                                  
2800 FREMONT STREET, LAS VEGAS NEVADA               89104-4035
--------------------------------------------------------------
(Address of principal executive offices)            (Zip Code)

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

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

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

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

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

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

                                        YES           NO
                                           -------      -------

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

COMMON STOCK - $1 PAR VALUE,
AND PREFERRED STOCK PURCHASE RIGHTS     16,640,390 SHARES OUTSTANDING
-----------------------------------     -----------------------------

<PAGE>
                                  
                   SHOWBOAT, INC. AND SUBSIDIARIES
                                INDEX
     
Part I       FINANCIAL INFORMATION                      Page No.
                                                             
     Item 1. Financial Statements                            
                                                             
             Condensed Consolidated Balance Sheets  -     1-2
                March 31, 1998 and December 31, 1997
                                                             
                                                             
             Condensed  Consolidated  Statements   of       3
                Operations  -  For the  three  months
                ended March 31, 1998 and 1997
                                                             
             Condensed  Consolidated  Statements   of       4
                Comprehensive  Operations   For   the
                three months ended March 31, 1998 and
                1997
                                                             
             Condensed  Consolidated  Statements   of       5
                Cash  Flows  -  For the three  months
                ended March 31, 1998 and 1997
                                                             
                                                             
             Notes   to  the  Condensed  Consolidated     6-7
                Financial
                                                             
     Item 2. Management's Discussion and Analysis  of    8-12
                Financial  Condition and  Results  of
                Operations
                                                             
PART II      OTHER INFORMATION                               
                                                             
             ITEMS 1 - 6                                   13
                                                             
             SIGNATURES                                    15

<PAGE>

     Item 1.   Financial Statements


<TABLE>
<CAPTION>

                     SHOWBOAT, INC AND SUBSIDIARIES
                  CONDENSED CONSOLIDATED BALANCE SHEETS
                   MARCH 31, 1998 AND DECEMBER 31, 1997
                                  
                                       March 31,       December 31,
       ASSETS                            1998              1997
-------------------------------       -----------      ------------
                                      (unaudited)                  
                                             (In thousands)
<S>                                   <C>             <C>
Current assets:
  Cash and cash equivalents           $    85,431     $    67,145
  Short term investments                        -          21,755
  Receivables, net                         13,648          15,748
  Income tax receivable                       381           2,361
  Inventories                               3,096           3,328
  Prepaid expenses                          4,480           6,027
  Current deferred income taxes             6,430           6,603
                                      ------------    ------------
      Total current assets                113,466         122,967
                                      ------------    ------------                           
Property and equipment                    858,737         744,390
Less accumulated depreciation                                      
  and amortization                        253,906         243,414
                                      ------------    ------------ 
                                          604,831         500,976
                                      ------------    ------------                           
Other assets:                                                     
  Restricted cash and investments           3,000           3,000
                                                                 
  Investments in unconsolidated   
   affiliate                              125,527         125,148
                                                                 
  Deposits and other assets                34,482          33,906
                                                                 
Debt issuance costs, net of                                        
  accumulated amortization of                                      
  $4,730,000 and $4,193,000 at March                               
  31, 1998 and December 31, 1997,                                  
  respectively                             15,897          14,550
                                      ------------    ------------
                                          178,906         176,604
                                      ------------    ------------
                                      $   897,203     $   800,547
                                      ============    ============
                                                                 
See accompanying notes to condensed consolidated financial statements.

                                                         (continued)
</TABLE>

                                  1
<PAGE>

<TABLE>
<CAPTION>
                      SHOWBOAT, INC AND SUBSIDIARIES
                   CONDENSED CONSOLIDATED BALANCE SHEETS
                   MARCH 31, 1998 AND DECEMBER 31, 1997
                                (continued)
                                                                           
                                               March 31,      December 31,
LIABILITIES AND SHAREHOLDERS' EQUITY             1998             1997
------------------------------------         ------------     ------------
                                             (unaudited)            
                                                     (In thousands)
<S>                                          <C>              <C>
Current liabilities                                                        
  Current maturities of long-term debt -
   with recourse                             $        29      $       28
  Current maturities of long-term debt -                                     
   without recourse                                6,688           5,554
  Notes payable                                    3,000               -
  Accounts payable                                17,130          16,756
  Dividends payable                                  414             402
  Accrued liabilities                             41,990          51,905
                                             ------------     -----------
      Total current liabilities                   69,251          74,645
                                             ------------     -----------                              

Long-term debt, excluding current maturities
  Debt with recourse                             393,153         393,066
  Debt without recourse                          249,423         151,968
                                             ------------     -----------
                                                 642,576         545,034
                                             ------------     -----------                              
Other liabilities                                  6,398           6,184
                                             ------------     -----------                              
Deferred income taxes                             10,373          11,741
                                             ------------     -----------                              
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 16,619,824
   shares at March 31, 1998 and 16,350,849
   at December 31, 1997                           16,620          16,351
  Additional paid-in capital                      97,218          91,145
  Retained earnings                               63,644          64,761
                                             ------------     -----------
                                                 177,482         172,257
                                                                           
Cumulative foreign currency translation                                     
 adjustment                                       (7,416)         (8,437)
Unearned compensation for restricted stock        (1,461)           (877)
                                             ------------     -----------
   Total shareholders' equity                    168,605         162,943
                                             ------------     -----------
                                             $   897,203      $  800,547
                                             ============     ===========                              

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

                                  2
<PAGE>

<TABLE>
<CAPTION>
                        SHOWBOAT, INC AND SUBSIDIARIES
                CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
              FOR THE THREE MONTHS ENDED MARCH 31, 1998 AND 1997
                                  (unaudited)
                     (In thousands except per share data)
                                                                               
                                                              1998           1997
                                                          ------------   ------------
<S>                                                       <C>            <C>
Revenues:                                                                      
  Casino                                                  $   140,173    $    92,597
  Food and beverage                                            15,296         13,062
  Rooms                                                         5,419          5,670
  Management fees                                               2,501              -
  Sports and special events                                       912            977
  Other                                                         1,166          1,240
                                                          ------------   ------------
                                                              165,467        113,546
Less complimentaries                                            9,914          9,513
                                                          ------------   ------------
  Net revenues                                                155,553        104,033
                                                          ------------   ------------                     
Operating costs and expenses:                                                  
  Casino                                                       69,088         48,318
  Food and beverage                                             9,253          7,391
  Rooms                                                         1,391          1,789
  Sports and special events                                       920            910
  General and administrative                                   36,909         28,383
  Selling, advertising and promotion                            8,955          2,005
  Depreciation and amortization                                11,851          8,329
                                                          ------------   ------------
                                                              138,367         97,125
                                                          ------------   ------------                     
Income from consolidated subsidiaries                          17,186          6,908
Equity in income (loss) of unconsolidated affiliate              (953)         1,463
                                                          ------------   ------------
Income from operations                                         16,233          8,371
                                                          ------------   ------------                     
Other (income) expense:                                                        
  Interest income                                              (1,180)        (1,854)
  Interest expense, net of amounts capitalized                 17,614          8,956
                                                          ------------   ------------
                                                               16,434          7,102
                                                          ------------   ------------
Income (loss) before income taxes and minority interest          (201)         1,269
Minority interest share of loss                                     -            149
                                                          ------------   ------------
Income (loss) before income taxes                                (201)         1,418
Income tax expense                                                502            539
                                                          ------------   ------------
Net income (loss)                                         $      (703)   $       879
                                                          ============   ============                     

Basic earnings (loss) per share                           $     (0.04)   $      0.05
Shares used in per share calculation                       16,463,122     16,202,397
Diluted earnings (loss) per share                         $     (0.04)   $      0.05
Shares used in per share calculation                       16,463,122     16,324,058

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

                                  3
<PAGE>

<TABLE>
<CAPTION>
                       SHOWBOAT, INC AND SUBSIDIARIES
        CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE OPERATIONS
             FOR THE THREE MONTHS ENDED MARCH 31, 1998 AND 1997
                                 (unaudited)
                                                                             
                                                           1998          1997
                                                       -----------    ----------
                                                            (In Thousands)
<S>                                                    <C>            <C>
Net Income (loss)                                      $     (703)    $     879
                                                                              
Foreign currency translation adjustments net of tax         1,021        (1,087)
                                                       -----------    ----------                       
Comprehensive Income (loss)                            $      318     $    (208)
                                                       ===========    ==========                       

See accompanying motes to condensed consolidated financial statements.
</TABLE>

                                  4
<PAGE>

<TABLE>
<CAPTION>
                      SHOWBOAT, INC AND SUBSIDIARIES
             CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
            FOR THE THREE MONTHS ENDED MARCH 31, 1998 AND 1997
                               (unaudited)
                                                                          
                                                       1998           1997
                                                   ------------   -----------
                                                        (In thousands)

<S>                                                <C>            <C>
Net cash provided by operating activities          $     9,237    $    6,706
                                                   ------------   -----------                   
Cash flows from investing activities:                                     
  Acquisition of property and equipment               (115,477)      (40,874)
  Investment in unconsolidated affiliate                  (781)       (2,912)
  Repayments from unconsolidated affiliate                 970            94
  Decrease in restricted cash                                -        43,400
  Increase in deposits and other assets                      -        (7,854)
  Deposit for Casino Reinvestment                                         
   Development Authority obligation                     (1,006)         (981)
  Sale of short term investments                        21,755         5,573
  Other                                                    120           239
                                                   ------------   -----------
      Net cash used in investing activities            (94,419)       (3,315)
                                                   ------------   -----------                    
  Proceeds from issuance of long-term debt             100,000             -
  Proceeds from issuance of note payable                 3,000             -
  Principal payments of long-term debt                  (1,418)           (5)
  Debt issuance costs                                   (1,884)            -
  Proceeds from employee stock option exercises          4,172            71
  Payment of dividends                                    (402)         (405)
                                                   ------------   -----------
      Net cash provided by (used in) financing
       activities                                      103,468          (339)
                                                   ------------   -----------
Net increase in cash and cash equivalents               18,286         3,052
Cash and cash equivalents at beginning of period        67,145        60,287
                                                   ------------   -----------
Cash and cash equivalents at end of period         $    85,431    $   63,339
                                                   ============   ===========                       
Supplemental disclosures of cash flow information                         
 and non-cash investing and financing activities:                         
   Cash paid (received) during the period for:                            
   Interest, net of amounts capitalized                 18,442        10,731
   Income taxes                                           (448)          675
                                                                          
   Foreign currency translation adjustment               1,021        (1,087)
   Equipment acquired under capital leases                   -        10,984

See accompanying notes to condensed consolidated financial statements.
</TABLE>
                                  
                                  5

                 SHOWBOAT, INC. AND SUBSIDIARIES
      NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                

1.   SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

     NATURE OF OPERATIONS

               The condensed consolidated financial statements of
     Showboat, Inc. and subsidiaries (the "Company") include  all
     domestic  and foreign subsidiaries which are more  than  50%
     owned   and   controlled.   Investments  in   unconsolidated
     affiliates which are at least 20% owned are carried at  cost
     plus   equity  in  undistributed  earnings  or  loss   since
     acquisition.  All material intercompany balances  have  been
     eliminated in consolidation.
     
                 Certain  information  and  footnote  disclosures
     normally  included  in  financial  statements  prepared   in
     accordance  with  generally accepted  accounting  principles
     have   been   condensed   or   omitted.    These   condensed
     consolidated  financial  statements  should   be   read   in
     conjunction with the financial statements and notes  thereto
     included in the Company's December 31, 1997 Annual Report on
     Form 10-K.
     
                The accompanying unaudited condensed consolidated
     financial  statements contain all adjustments of a recurring
     nature,  which  in the opinion of management, are  necessary
     for  a fair statement of the results of the interim periods.
     The  results of operations for the interim periods  are  not
     indicative  of  results of operations for  an  entire  year.
     Certain  prior  period  balances have been  reclassified  to
     conform to the current period's presentation.

2.   LONG TERM DEBT

                On January 28, 1998, a special purpose subsidiary
     of   the   Company  borrowed  $100.0  million  from   Column
     Financial,  Inc.  to  acquire 10 1/2 leased  acres  of  real
     property  (the  "Atlantic  City Property")  located  at  801
     Boardwalk, Atlantic City, New Jersey and the lease  pursuant
     to  which  the Atlantic City Property was leased to Atlantic
     City  Showboat,  Inc. ("ACSI") from Sun International,  Inc.
     for a total purchase price of $110.0 million.  The loan will
     mature on February 1, 2028.  Interest accrues on the loan at
     an  interest rate of 7.09% until February 1, 2008, at  which
     time,  unless paid off as of such date, the loan will accrue
     a  second tranche of interest at a rate equal to the  lesser
     of  (i)  the  positive excess (if any) of (A)  the  20  year
     Treasury  Rate plus 2.0% per annum over (B) 7.09%, and  (ii)
     5.0% per annum.
     
3.   SHOWBOAT MERGER

           On December 18, 1997, the Company entered an Agreement
     and  Plan  of Merger  with Harrah's Entertainment,  Inc.,  a
     Delaware   corporation  ("Harrah's"),  and  HEI  Acquisition
     Corp.,  a Nevada corporation and wholly owned subsidiary  of
     Harrah's  ("Harrah's Sub"), whereby Harrah's  Sub  would  be
     merged  with  and  into the Company and  the  Company  would
     consequently  become a wholly owned subsidiary  of  Harrah's
     (the  "Showboat Merger").  On April 23, 1998, the  Company's
     shareholders  approved the Showboat Merger and  the  Company
     has  received all required regulatory approvals  except  for
     the  approval  of the regulatory authorities  in  New  South
     Wales, Australia.  If the Showboat Merger is approved by the
     Australian  regulatory authorities and the other  conditions
     to  the Showboat Merger are satisfied or waived, articles of
     merger will be filed
     
                                6
<PAGE>
                                 
                 SHOWBOAT, INC. AND SUBSIDIARIES
      NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

3.   SHOWBOAT MERGER (Continued)

     with  the  Nevada  Secretary  of  State  and  the  Company's
     shareholders will become entitled to receive $30.75 in cash,
     without  interest, per share of common stock of the  Company
     held.
     
                 In  conjunction  with  its  acquisition  of  the
     Company, on May 13, 1998, Harrah's commenced a fixed  spread
     cash tender offer for all of the Company's outstanding 9 1/2%
     First  Mortgage  Bonds due 2008 and 13% Senior  Subordinated
     Notes  due  2009 (collectively, "the Notes").   Concurrently
     with  the tender offer, Harrah's is soliciting consents from
     the  holders of the Notes to amend the respective Indentures
     governing   each  of  the  Notes  to  eliminate  or   modify
     substantially all of the negative covenants, certain  events
     of  default,  and  to  make certain  other  changes  to  the
     Indentures.   The  tender offer is scheduled  to  expire  on
     June  10,  1998,  unless extended.   The  tender  offer  and
     consent  solicitation  are  conditioned  upon,  among  other
     things,  the receipt of tenders and consents from  not  less
     than a majority in aggregate principal amount outstanding of
     each series of Notes.

4.   COMMITMENTS AND CONTINGENCIES

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

                                7
<PAGE>

Item 2.   MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
          CONDITION AND RESULTS OF OPERATIONS.

     GENERAL
       
          Showboat, Inc. and its subsidiaries (collectively,  the
"Company" or "SBO"), is an international gaming company that owns
and  operates the Atlantic City Showboat Casino Hotel in Atlantic
City,  New  Jersey (the "Atlantic City Showboat"), the Las  Vegas
Showboat  Casino, Hotel and Bowling Center in Las  Vegas,  Nevada
(the  "Las  Vegas Showboat"), beneficially owns   24.6%  of,  and
manages,   Star City, a casino and entertainment complex  located
in  Sydney,  New South Wales, Australia ("Star City"  or  "Sydney
Harbour  Casino"), and owns a 55%  interest in, and manages,  the
Showboat Mardi Gras Casino located in East Chicago, Indiana  (the
"East Chicago Showboat").
               
          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 in the Company's December 31,
1997 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$". The  exchange  rate  was
approximately $.6630 and $.7820 for each A$1.00 as of  March  31,
1998 and 1997, respectively.
               

MATERIAL CHANGES IN RESULTS OF OPERATIONS
       
QUARTER ENDED MARCH 31, 1998 COMPARED TO QUARTER ENDED MARCH 31, 1997

<TABLE>
<CAPTION>
Financial Highlights (unaudited)
Comparison of Operating Results for the three months ended March 31, 1998 and 1997

(Dollars in thousands)                1998        1997      Variance    Percent
<S>                                <C>         <C>          <C>         <C>
Gross revenues
  Atlantic City                    $  97,934   $  96,242    $   1,692      1.8%
  Las Vegas                           17,734      17,304          430      2.5%
  Showboat Australia Mgt. Fees         2,501           -        2,501      N/A
  East Chicago Showboat               47,298           -       47,298      N/A
                                   ----------  ----------   ----------  -------
                                   $ 165,467   $ 113,546    $  51,921     45.7%
                                   ----------  ----------   ----------  -------                                                
Net revenues
   Atlantic City                   $  89,875   $  87,825    $   2,050      2.3%
   Las Vegas                          16,643      16,208          435      2.7%
   Showboat Australia Mgt. Fees        2,501           -        2,501      N/A
   East Chicago Showboat              46,534           -       46,534      N/A
                                   ----------  ----------   ----------  -------
                                   $ 155,553   $ 104,033    $  51,520     49.5%
                                   ----------  ----------   ----------  -------
</TABLE>
                                                         (continued)

                                  8
<PAGE>

<TABLE>
<CAPTION>

MATERIAL CHANGES IN RESULTS OF OPERATIONS (CONTINUED)

Comparison of Operating Results for the three months ended March 31, 1998 and 1997
                                           
(Dollars in thousands)                  1998        1997      Variance    Percent
<S>                                  <C>         <C>          <C>         <C>
Income from operations
  Atlantic City                      $  14,741   $  12,514    $   2,227       17.8%
  Las Vegas                               (613)     (1,526)         913       59.8%
  Corporate and Development             (2,486)     (3,790)       1,304       34.4%
  Showboat Australia - Mgt. Fee <F1>     2,234        (290)       2,524      970.3%
  Sydney Harbour Casino <F1>              (953)      1,463       (2,416)    (265.1)%
  East Chicago Showboat                  3,310           -        3,310       N/A
                                     ----------  ----------   ----------  ---------- 
  Consolidated                       $  16,233   $   8,371    $   7,862      93.9%
                                     ----------  ----------   ----------  ----------

EBITDA*

  Atlantic City                      $  21,496   $  19,193    $   2,303       12.0%
  Las Vegas                               1039          21        1,018    4,847.6%
  Corporate and Development             (2,380)     (3,687)       1,307      135.4%
  Showboat Australia - Mgt. Fee <F1>     2,234        (290)       2,524      970.3%
  Sydney Harbour Casino <F1>              (953)      1,463       (2,416)    (265.1)%
  East Chicago Showboat                  6,648           -        6,648        N/A
                                     ----------  ----------   ----------   ---------
  Consolidated                       $  28,084   $  16,700    $  11,384       68.2%
                                     ----------  ----------   ----------   ---------
<FN>
<F1>  Net of operating expenses and amortization of equity and  debt
costs at Showboat, Inc.
</FN>
*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.
</TABLE>

REVENUES

          The Company's gross revenues increased $51.9 million or
45.7%  which was primarily attributable to the $47.3  million  of
gross  revenues  from the East Chicago Showboat  which  commenced
operations  in April 1997 and the recognition of $2.5 million  of
management fees from Sydney Harbour Casino.  Management fees from
Sydney Harbour Casino had not been recognized in the prior year's
first  quarter  due  to an agreement to forgo  the  first  A$19.1
million    of   management   fees   payable   to   the   Company.
Complimentaries  rose $.4 million in the first  quarter  of  1998
compared  to  1997, primarily due to the operations of  the  East
Chicago  Showboat, resulting in a $51.5 million or 49.5% increase
in net revenues.
          
                                9
<PAGE>

       REVENUES (CONTINUED)

          The Atlantic City Showboat's gross revenues increase of
$1.7 million or 1.8% was principally attributed to a $2.7 million
or  3.4%  increase  in casino revenues. The  increase  in  casino
revenues  was  tied to the $5.8 million or 9.0%  growth  in  slot
revenue, at the Atlantic City casino which compared. favorably to
a  4.6%  slot revenue growth in the Atlantic City market.   Table
games revenue declined $2.4 million or 13.3% due primarily to  an
increased level of competition for table games patrons.  The cost
of  complimentaries declined $.4 million or  4.3%  in  the  first
quarter  of  1998  compared  to 1997, contributing  to  the  $2.1
million or 2.3% increase in net revenues.

          The  Company  recognized consolidated net  revenues  of
$46.5  million from the East Chicago Showboat which were  derived
principally from the casino operation that produced $33.1 million
of  slot  revenue,  $9.7 million of table game revenue  and  $1.4
million of poker revenue. Revenues at the Las Vegas Showboat were
relatively unchanged during the comparative periods.

INCOME FROM OPERATIONS
       
          The  Company's  income from operations  increased  $7.9
million  or 93.9% due principally to the recognition of the  $3.3
million income from operations from the East Chicago Showboat and
a  $2.2  million  improvement in income from  operations  at  the
Atlantic  City  Showboat. The improvement at  the  Atlantic  City
Showboat  is  primarily due to the improvement in  net  revenues.
Income  from  operations  was  also positively  impacted  by  the
elimination of $1.5 million of rental expense for the quarter  on
a  consolidated basis due to the January 1998 purchase of the  10
1/2  leased acres of real property (the "Atlantic City Property")
located at 801 Boardwalk, Atlantic City, New Jersey.  Due to  the
purchase  of  the  Atlantic City Property  the  Company  incurred
additional interest expense during the first quarter of  1998  of
approximately $1.3 million.  As a result the financial impact  to
net  income due to the purchase of the Atlantic City Property was
approximately $.2 million.

          The   Las   Vegas  Showboat's  income  from  operations
increased  $.9  million  or  59.8%. This  increase  was  realized
principally through cost control programs implemented at the  Las
Vegas property and more targeted marketing programs.

          The  Company  realized a loss from  its  unconsolidated
affiliate  Star  City  of  $1.0 million in  the  current  quarter
compared  to income of $1.4 million in the same period  in  1997.
The  $2.4 million decline is primarily attributable to lower than
anticipated  revenues from the newly opened  Star  City  and  the
higher cost of labor and operating costs.  Star City's management
took  steps during the first quarter of 1998, that included staff
reductions,  to enhance future operating results.  The  Company's
loss from its unconsolidated affiliate includes approximately $.8
million   of  expense  associated  with  staff  reductions.    In
addition,  income  from operations at Star  City  was  positively
impacted  by  the  recognition of $.8 million from  the  sale  of
apartments  which  had been developed as part  of  the  permanent
facility. The decline in income from operations at Star City  was
substantially  offset  by  the recognition  of  $2.5  million  of
management fees from Star City.

NET INCOME
       
     In  the quarter ended March 31, 1998 the Company recorded  a
net  loss of $.7 million or $.04 per share.  Net interest expense
increased by approximately $8.7 million due to the incurrence  of
new  debt  and the expensing of interest in the first quarter  of
1998 versus capitalizing

                               10
                                
<PAGE>

NET INCOME (CONTINUED)
       
a  portion  of  the interest in 1997.  Net income for  the  first
quarter  of  1998  was  also  negatively  impacted  due  to   the
recognition of the following unusual items totaling $1.7  million
(before tax): (i) East Chicago Showboat minority partner's  share
of  losses  totaling  $1.0 million (ii) $.7  million  of  charges
associated  with the proposed merger with Harrah's Entertainment,
Inc. (iii) $.8 million of one time staff reduction costs incurred
by  Star City and (iv) was positively impacted by the recognition
of  $.8  million  from  the  sale of  apartments  by  Star  City.
Exclusive of these unusual items, the Company would have recorded
net income of approximately $.8 million or $.05 per share.

          Net  income  for  the first quarter  of  1997  included
interest  expense of approximately $.2 million  incurred  by  the
East  Chicago  Showboat prior to its opening in  April  of  1997.
Exclusive  of this unusual item, the Company would have  recorded
net income of approximately $1.0 million or $.06 per share.

MATERIAL CHANGES IN FINANCIAL CONDITION

          As  of  March 31, 1998 the Company held cash  and  cash
equivalents   of  $85.4  million  compared  to  cash   and   cash
equivalents of $67.1 million and short term investments of  $21.8
million at December 31, 1997. The cash balances include the funds
of  the  East Chicago Showboat ($8.3 million and $7.2 million  at
March 31, 1998 and December 31, 1997, respectively) that are  not
available  for  use  other  than  to  support  the  East  Chicago
Showboat.  In  addition  to  the Company's  cash  balances,  $3.0
million of restricted cash has been pledged as collateral for the
East  Chicago Showboat's line of credit with Fleet Bank N.A.   As
of  March  31, 1998 all available funds were drawn  by  the  East
Chicago Showboat on this line of credit.

          During  the  three  months ended March  31,  1998,  the
Company   expended   approximately  $4.9   million   on   capital
improvements  at  the Atlantic City Showboat and  the  Las  Vegas
Showboat  which  were  funded  by operations.  In  addition,  the
Company   expended   approximately   $.6   million   on   capital
improvements at the East Chicago Showboat which were funded  from
the operation of the East Chicago Showboat.

          On  December 18, 1997, the Company entered an Agreement
and  Plan of Merger with Harrah's Entertainment, Inc., a Delaware
corporation  ("Harrah's"), and HEI Acquisition  Corp.,  a  Nevada
corporation  and  wholly owned subsidiary of Harrah's  ("Harrah's
Sub"),  whereby Harrah's Sub would be merged with  and  into  the
Company and the Company would consequently become a wholly  owned
subsidiary  of Harrah's (the "Showboat Merger").   On  April  23,
1998, the Company's shareholders approved the Showboat Merger and
the Company has received all required regulatory approvals except
for  the  approval  of the regulatory authorities  in  New  South
Wales,  Australia.   If the Showboat Merger is  approved  by  the
Australian regulatory authorities and the other conditions to the
Showboat Merger are satisfied or waived, articles of merger  will
be  filed  with  the Nevada Secretary of State and the  Company's
shareholders  will  become entitled to receive  $30.75  in  cash,
without interest, per share of common stock of the Company held.

          In  conjunction with its acquisition of the Company, on
May 13, 1998, Harrah's commenced a fixed spread cash tender offer
for all of the Company's outstanding 9 1/2% First Mortgage  Bonds
due   2008   and   13%  Senior  Subordinated   Notes   due   2009
(collectively, "the Notes").  The consideration to be paid to the
holders  of  validly  tendered Notes will be  determined  on  the
second business

                               11
<PAGE>

MATERIAL CHANGES IN FINANCIAL CONDITION (continued)

day   preceding  the  expiration  of  the  tender  offer.    This
consideration will be a price resulting in a yield to  the  first
redemption  date of the Notes equal to the yield,  plus  a  fixed
spread,  of a specified reference security maturing at the  first
redemption   date   of   each  Note,   plus   accrued   interest.
Concurrently  with  the  tender  offer,  Harrah's  is  soliciting
consents  from  the holders of the Notes to amend the  respective
Indentures  governing each of the Notes to  eliminate  or  modify
substantially  all of the negative covenants, certain  events  of
default,  and  to  make certain other changes to the  Indentures.
The  tender offer is scheduled to expire on June 10, 1998, unless
extended.    The  tender  offer  and  consent  solicitation   are
conditioned upon, among other things, the receipts of tenders and
consents  from  not  less than a majority in aggregate  principal
amount outstanding of each series of Notes.

          As  previously  disclosed in the  Company's  Form  10-K
filed  December  31,  1997, the Company entered  into  a  standby
equity commitment which requires that if, during any of the first
three Operating Years (as defined), SMCP's Combined Cash Flow (as
defined) is less than $35.0 million, the Company will be required
to make additional capital contributions to SMCP in the lesser of
(a)  $15.0  million,  or  (b) the difference  between  the  $35.0
million  and  the  Operating  Year's  Combined  Cash  Flow.   The
Company's aggregate potential obligation under the standby equity
commitment  is $30.0 million.  SMCP anticipates that the Combined
Cash  Flow of  SMCP for the first full four quarters of operation
will not achieve the $35.0 million threshold and Showboat will be
required  to  contribute approximately $14.0  million  under  the
standby equity commitment.  As of March 31, 1998, the Company has
contributed  $1.0 million to SMCP as part of this standby  equity
commitment.   There  can be no assurance that the  Combined  Cash
Flow for any future Operating Year will exceed $35.0 million  and
that  the Company will not be required to make additional capital
contributions  to  SMCP  in accordance with  the  standby  equity
commitment. The Standby Equity Commitment is subject  to  certain
limitations, qualifications, and exceptions.

          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,  however,  will  be
dependent upon the future performance of its casino hotels  which
will  continue to be influenced by prevailing economic conditions
and  financial, business and other factors, certain of which  are
beyond  the  control  of the Company.  As  the  Company  realizes
expansion   opportunities,  the  Company  will   need   to   make
significant   capital  investments  in  such  opportunities   and
additional  financing will be required.  The Company  anticipates
that  additional funds will be obtained through loans  or  public
offerings of equity or debt securities, although no assurance can
be  made  that such funds will be available or at interest  rates
acceptable to the Company.  Additionally the Company's ability to
make  certain  payments and to incur additional  indebtedness  is
restricted  due  to the indentures governing  its  9  1/4%  First
Mortgage  Bonds  due 2008 and 13% Senior Subordinated  Notes  due
2009.  A  description  of  these  restrictions  is  contained  in
management's  discussion and analysis of the financial  condition
and results of operation contained in the Company's Form 10-K for
the  period  ended December 31, 1997. No assurance can  be  given
that  the  Company  will  in the future meet  the  terms  of  the
indentures  permitting it to make restricted  payments  or  incur
indebtedness.

                               12
<PAGE>

                 SHOWBOAT, INC AND SUBSIDIARIES
                                
PART II.  OTHER INFORMATION
                                
     ITEM 1.   LEGAL PROCEEDINGS

                Doug  Grant,  Inc.  et. al v. Greate  Bay  Casino
     Corporation,  et. al., in the United States District  Court,
     District of New Jersey, Camden, New Jersey with the assigned
     Docket  Number  97CV4291 (JEI).  On May 1, 1998,  the  Court
     dismissed,  with  prejudice, all of the counts  against  the
     Company,  except  for the privacy claims of six  plaintiffs.
     The  remaining count was remanded to the Superior  Court  of
     New Jersey, Middlesex County.

     ITEM 2.   CHANGES IN SECURITIES

               Not applicable.

     ITEM 3.   DEFAULTS UPON SENIOR SECURITIES

               Not applicable.

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

               On  April  23, 1998, the Company held  a   Special
     Meeting ("Meeting") of Shareholders to consider the proposal
     to  approve and adopt an Agreement and Plan of Merger, dated
     as  of  December 18, 1997 ("Merger Agreement"), by and among
     Harrah's  Entertainment, Inc. ("Harrah's"), HEI  Acquisition
     Corp.,  an  indirect  wholly-owned  subsidiary  of  Harrah's
     ("Sub"), and the Company, pursuant to which, (i) Sub will be
     merged  with  and  into  the Company  ("Merger"),  with  the
     Company continuing as the surviving corporation and becoming
     an  indirect  wholly-owned subsidiary of Harrah's  and  (ii)
     each outstanding share of common stock, par value $1.00  per
     share,  of the Company, other than shares owned by  Harrah's
     or  the  Company as treasury stock (which will be canceled),
     will  be converted into the right to receive $30.75 in cash,
     without interest.
               
               The affirmative vote of the holders of 66 2/3%  of
     the  outstanding  shares of Common  Stock  was  required  to
     approve and adopt the Merger Agreement.  On March 19,  1998,
     the  record  date  for  the Meeting, there  were  16,548,765
     shares  outstanding.  The proposal was approved by in excess
     of  66  2/3%  of  the shares outstanding  and  received  the
     following votes:
               
                         "For"               11,868,696
                         "Against"               80,512
                         "Abstain"                7,358

     ITEM 5.   OTHER INFORMATION

          Not applicable.

                               13
<PAGE>

     ITEM 6.   EXHIBITS AND REPORTS ON FORM 8-K

          (a) Exhibits

       Exhibit                          
         No.                      Description
        11.01     Computation of Net Earnings (Loss) Per
                  Share

        27.01     Financial Data Schedule


          (b) Reports on Form 8-K
          
               None

                               14
<PAGE>

                           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:  May 14, 1998         /s/ J. KELL HOUSSELS, III
                            J. KELL HOUSSELS, III,
                            President and Chief Executive Officer
                            
                            
Date:  May 14, 1998         /s/ R. CRAIG BIRD
                            R. CRAIG BIRD, Executive Vice
                            President - Finance and Administrative
                            and Chief Financial Officer
                            

                               15
<PAGE>
                          EXHIBIT INDEX


EXHIBIT NO. DESCRIPTION                                 PAGE NO.

                                                        
11.01       Computation of Net Earnings (Loss) Per
            Share
            
27.01       Financial Data Schedule                     

                               16
<PAGE>