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

(Mark One)
[X]  QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
     SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 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 no. 1-9728

                          JACKPOT ENTERPRISES, INC. 
_____________________________________________________________________________
            (Exact name of registrant as specified in its charter)


            NEVADA                                88-0169922               
_______________________________         ____________________________________
(State or other jurisdiction of         (I.R.S. Employer Identification No.)
incorporation or organization)


1110 Palms Airport Drive, Las Vegas, Nevada                  89119    
___________________________________________                __________
(Address of principal executive offices)                   (Zip Code)


                                702-263-5555                               
             ____________________________________________________
             (Registrant's telephone number, including area code)

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 
                                  _____         _____      

There were 8,616,680 shares of the registrant's common stock outstanding as
of November 6, 1998.

                  JACKPOT ENTERPRISES, INC. AND SUBSIDIARIES
                                    INDEX


Part I.   Financial Information

Item 1.   Financial Statements
          Condensed Consolidated Balance Sheets -
            September 30, 1998 and June 30, 1998
          Condensed Consolidated Statements of Income - 
            Three Months Ended September 30, 1998 and 1997
          Condensed Consolidated Statement of Stockholders'
            Equity - Three Months Ended September 30, 1998
          Condensed Consolidated Statements of Cash Flows - 
            Three Months Ended September 30, 1998 and 1997
          Notes to Condensed Consolidated Financial Statements

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

Item 3.   Quantitative and Qualitative Disclosure About Market Risk

Part II.  Other Information                   

Item 6.   Exhibits and Reports on Form 8-K
<PAGE>
                  JACKPOT ENTERPRISES, INC. AND SUBSIDIARIES 
                    CONDENSED CONSOLIDATED BALANCE SHEETS
                           (Dollars in thousands)

<TABLE>

                                          September 30,     June 30,
            ASSETS                            1998            1998    
            ______                        _____________     ________
<S>                                       <C>               <C> 
Current assets: 
  Cash and cash equivalents                 $ 49,824        $ 50,275
  Prepaid expenses                             1,564           1,594
  Other current assets                         2,220           2,225
                                            ________        ________
    Total current assets                      53,608          54,094
                                            ________        ________

Property and equipment, at cost:
  Land and buildings                           1,535           1,535
  Gaming equipment                            29,180          28,988
  Other equipment                              4,450           4,758
  Leasehold improvements                         356             354
                                            ________        ________
                                              35,521          35,635
  Less accumulated depreciation              (19,820)        (19,850)
                                            ________        ________
                                              15,701          15,785
Lease acquisition costs and other
  intangible assets, net of 
  accumulated amortization of 
  $4,837 and $4,607                            3,627           2,231

Goodwill, net of accumulated 
  amortization of $2,754 and
  $2,713                                       3,867           3,908

Lease and other security deposits              1,532           3,082
                                            ________        ________

    Total assets                            $ 78,335        $ 79,100
                                            ========        ========

</TABLE>

See Notes to Condensed Consolidated Financial Statements.<PAGE>
                  JACKPOT ENTERPRISES, INC. AND SUBSIDIARIES
                    CONDENSED CONSOLIDATED BALANCE SHEETS
                   (Dollars in thousands, except share data)
                                (Concluded)


<TABLE>

                                          September 30,     June 30,
LIABILITIES AND STOCKHOLDERS' EQUITY          1998            1998    
____________________________________      _____________     ________
<S>                                       <C>               <C> 

Current liabilities:
  Accounts payable                         $  1,545         $  1,434
  Other current liabilities                   3,101            3,508
                                           ________         ________
      Total current liabilities               4,646            4,942

Deferred rent                                 2,427            2,377 
Deferred income tax                             922              849
Other liabilities                                                 61
                                           ________         ________
      Total liabilities                       7,995            8,229
                                           ________         ________

Commitments and contingencies

Stockholders' equity:
  Preferred stock - authorized 
    1,000,000 shares of $1 par value; 
    none issued
  Common stock - authorized 
    30,000,000 shares of $.01 par
    value; 9,860,252 and 9,854,327 
    shares issued                                99               99
  Additional paid-in capital                 66,443           66,376
  Retained earnings                          17,574           16,466
  Less 1,243,572 and 1,080,372 shares of 
    common stock in treasury, at cost       (13,776)         (12,070)
                                           ________         ________
      Total stockholders' equity             70,340           70,871
                                           ________         ________

      Total liabilities and 
        stockholders' equity               $ 78,335         $ 79,100
                                           ========         ========
                                        
</TABLE>



See Notes to Condensed Consolidated Financial Statements.<PAGE>
                  JACKPOT ENTERPRISES, INC. AND SUBSIDIARIES
                 CONDENSED CONSOLIDATED STATEMENTS OF INCOME
                THREE MONTHS ENDED SEPTEMBER 30, 1998 AND 1997
                (Dollars in thousands, except per share data)


<TABLE>
                                           1998           1997          
                                         _______        _______
<S>                                      <C>            <C>
Revenues:
  Route operations                       $21,685        $21,918
  Casino operations                          522            749
                                         _______        _______
      Totals                              22,207         22,667
                                         _______        _______

Costs and expenses:
  Route operations                        18,390         18,291
  Casino operations                          473            727
  Amortization                               286            276
  Depreciation                             1,010            868
  General and administrative                 870            925
                                         _______        _______
      Totals                              21,029         21,087
                                         _______        _______

Operating income                           1,178          1,580
                                         _______        _______

Other income:
  Interest and other income                  361            573
                                         _______        _______
      Totals                                 361            573
                                         _______        _______

Income before income tax                   1,539          2,153
                                         _______        _______

Provision for Federal income tax:
  Current                                    358            417
  Deferred                                    73            164
                                         _______        _______
      Totals                                 431            581
                                         _______        _______

Net income                               $ 1,108        $ 1,572
                                         =======        ======= 

Basic earnings per share                 $   .13        $   .17
                                         =======        =======

Dilutive earnings per share              $   .13        $   .17
                                         =======        =======
</TABLE>

See Notes to Condensed Consolidated Financial Statements.
<PAGE>
                  JACKPOT ENTERPRISES, INC. AND SUBSIDIARIES
           CONDENSED CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY
                    THREE MONTHS ENDED SEPTEMBER 30, 1998
                      (Dollars and shares in thousands)

<TABLE>

                                                  Treasury         
            Common Stock  Additional               Stock           Total
            _____________  Paid-in   Retained ________________  Stockholders'
            Shares Amount  Capital   Earnings Shares    Amount    Equity    
            ______ ______ __________ ________ ______  ________  ____________
<S>         <C>    <C>    <C>        <C>      <C>     <C>       <C>
Balance
  July 1,
  1998      9,854   $99    $66,376   $16,466  (1,080) $(12,070)   $70,871

Issuance of
  shares on
  exercise
  of stock
  options       6               67                                     67

Repurchases
  of common
  stock                                         (164)   (1,706)    (1,706)

Net income                             1,108                        1,108 
            _____   ___    _______   _______  ______  ________    _______
                   
Balance
  September
  30, 1998  9,860   $99    $66,443   $17,574  (1,244) $(13,776)   $70,340
            =====   ===    =======   =======  ======  ========    =======



</TABLE>










See Notes to Condensed Consolidated Financial Statements.<PAGE>
                      JACKPOT ENTERPRISES, INC. AND SUBSIDIARIES
                    CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                    THREE MONTHS ENDED SEPTEMBER 30, 1998 AND 1997
                                (Dollars in thousands)


<TABLE>

                                                           1998       1997  
                                                         _______    _______
<S>                                                      <C>        <C>
Operating activities:
  Net income                                             $ 1,108    $ 1,572
  Adjustments to reconcile net income to net
    cash provided by operating activities:
      Depreciation and amortization                        1,296      1,144
      Deferred Federal income tax                             73        164
      Increase (decrease) from changes in:
        Prepaid expenses and other current assets             (5)      (117)
        Other non-current assets                              76       (105)
        Accounts payable and other current liabilities      (106)       317
        Deferred rent and other liabilities                  (11)       306
                                                         _______    _______
          Net cash provided by operating activities        2,431      3,281
                                                         _______    _______

Investing activities:
  Net proceeds from location operators                        40         73
  Proceeds from sales of property and equipment               36          4
  Purchases of property and equipment                     (1,219)    (1,570)
  Increase in lease acquisition costs and other          
    intangible assets                                       (100)       (21)
                                                         _______    _______
          Net cash used in investing activities           (1,243)    (1,514)
                                                         _______    _______

Financing activities:
  Proceeds from issuance of common stock                      67 
                                                               
  Repurchases of common stock                             (1,706)
                                                         _______    _______
          Net cash used in financing activities           (1,639)
                                                         _______    _______   
         

Net (decrease) increase in cash and cash equivalents        (451)     1,767
Cash and cash equivalents at beginning of period          50,275     47,945
                                                         _______    _______
Cash and cash equivalents at end of period               $49,824    $49,712
                                                         =======    =======

Supplemental disclosures of cash flow data:
  Cash paid during the period for:
    Federal income tax                                   $   100    $   400

</TABLE>

See Notes to Condensed Consolidated Financial Statements.<PAGE>
                  JACKPOT ENTERPRISES, INC. AND SUBSIDIARIES
             NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Note 1 - General:
            The accompanying unaudited condensed consolidated
            financial statements included herein have been prepared by
            Jackpot pursuant to the rules and regulations of the Securities
            and Exchange Commission. Certain information and footnote
            disclosures normally included in financial statements prepared
            in accordance with generally accepted accounting principles have
            been condensed or omitted pursuant to such rules and
            regulations, although management believes that the disclosures
            are adequate to make the information presented not misleading.

            In the opinion of management, the accompanying unaudited
            condensed consolidated financial statements reflect all
            adjustments, consisting of normal recurring accruals, necessary
            to present fairly Jackpot's financial position as of September
            30, 1998 and the results of its operations and cash flows for
            the three months ended September 30, 1998 and 1997.  The
            earnings for the three months ended September 30, 1998 and 1997
            are not necessarily indicative of results for a full
            year.  Information included in the condensed consolidated
            balance sheet as of June 30, 1998 has been derived from
            Jackpot's Annual Report to the Securities and Exchange
            Commission on Form 10-K for the fiscal year ended June 30, 1998
            (the "1998 Form 10-K").  These unaudited condensed consolidated
            financial statements should be read in conjunction with
            the consolidated financial statements and disclosures included in
            the 1998 Form 10-K. 

            In June 1997, the Financial Accounting Standards Board (the
            "FASB") issued Statement of Financial Accounting Standards No.
            131, "Disclosure About Segments of an Enterprise and Related
            Information" ("SFAS 131"), which is effective for fiscal years
            beginning after December 15, 1997.  SFAS 131 establishes
            additional standards for segment reporting in the financial
            statements.  Management has begun its review of SFAS 131, however
            it has not made a final determination of the extent of the
            disclosures required by this statement.

            In June 1998, the FASB issued Statement of Financial Accounting
            Standards No. 133, "Accounting for Derivative Instruments and
            Hedging Activities" ("SFAS 133"), which is effective for fiscal
            years beginning after June 15, 1999.  SFAS 133 establishes
            additional accounting and reporting standards for derivative
            instruments and hedging activities. Management does not believe
            the Company has any derivative instruments, or that Jackpot
            participates in hedging activities.  Accordingly, SFAS 133 is not
            expected to have a significant effect on the results of
            operations or related disclosures.

Note 2 - Comprehensive income:
            In June 1997, the FASB issued Statement of Financial Accounting
            Standards No. 130, "Reporting Comprehensive Income" ("SFAS 130"),
            which is effective for fiscal years beginning after December 15,
            1997.  SFAS 130 requires companies to classify items of other
            comprehensive income by their nature in a financial statement and
            display the accumulated balance of other comprehensive
            income separately from retained earnings and additional paid-in
            capital in the equity section of a statement of financial
            position.  Jackpot adopted this statement on July 1, 1998.  For
            the three months ended September 30, 1998 and 1997, Jackpot did
            not have any items of other comprehensive income.  Comprehensive
            income for the three months ended September 30, 1998 and 1997 is
            the following (dollars in thousands):

<TABLE>

                                              Three Months Ended
                                                 September 30,    
                                              __________________
                                               1998         1997  
                                              ______      ______
            <S>                               <C>         <C>

            Net income                        $1,108      $1,572
            Other comprehensive income           -           -    
                                              ______      ______
            Comprehensive income              $1,108      $1,572
                                              ======      ======
</TABLE>

Note 3 - Earnings per share:
            In February 1997, the FASB issued Statement of Financial
            Accounting Standards No. 128, "Earnings per Share" ("SFAS 128"),
            which is effective for periods, including interim periods, ending
            after December 15, 1997.  As required by SFAS 128, Jackpot
            adopted this statement for the quarter ended December 31, 1997
            and year ended June 30, 1998.  SFAS 128establishes standards for
            computing and presenting earnings per share ("EPS"), including
            the replacement of the presentation of primary EPS with the
            presentation of basic EPS, as defined.  All prior-period EPS data
            presented has been restated to conform to the provisions of the
            statement.

            Basic EPS for the three months ended September 30, 1998 and 1997
            is computed by dividing net income by the weighted average number
            of common shares outstanding for the respective period.  Diluted
            EPS for the three months ended September 30, 1998 and 1997 is
            computed by dividing net income by the weighted average number of
            common and common equivalent shares outstanding for the
            respective period.  Options to purchase common stock, whose
            exercise price was greater than the average market price for the
            respective period, have been excluded from the computation of
            diluted EPS.  Such antidilutive options outstanding for the three
            months ended September 30, 1998 and 1997 were 262,000 and
            501,000, respectively.  The following is the amount of income and
            number of shares used in the basic and diluted EPS computations
            (dollars and shares in thousands, except per share data):
<PAGE>
<TABLE>
                                                            Three Months Ended
                                                                September 30,    
                                                            __________________
                                                            1998         1997
                                                            ______      ______
            <S>                                             <C>         <C> 

            Basic earnings per share:                                        
              Earnings:                                          
                Income available to common
                  stockholders                              $1,108      $1,572
                                                            ======      ======
              Shares:
                Weighted average number of common
                  shares outstanding                         8,714       9,082
                                                            ======      ======

            Basic earnings per share                        $  .13      $  .17
                                                            ======      ======

            Diluted earnings per share:
              Earnings:
                Income available to common stockholders     $1,108      $1,572
                Effect of dilutive securities                  -           -     
                                                            ______      ______
                Income, as adjusted                         $1,108      $1,572
                                                            ======      ======
              Shares:
                Weighted average number of common
                  shares outstanding                         8,714       9,082
                Common shares issuable upon assumed  
                  exercise of dilutive stock options         1,509       1,497
                Less common shares assumed to be 
                  repurchased by application of the
                  treasury stock method to the proceeds
                  using the average market price for the
                  period                                     1,379       1,367
                                                            ______      ______
                Weighted average number of common shares
                  and common share equivalents outstanding   8,844       9,212
                                                            ======      ======

            Diluted earnings per share                      $  .13      $  .17
                                                            ======      ======
</TABLE>
Note 4 - Stockholders' equity:
          The 1992 Incentive and Non-qualified Stock Option Plan:
            On September 30, 1998, the exercise price of the June 30, 1998
            grant of nonqualified stock options to purchase an aggregate of
            110,000 shares of common stock (27,500 each to four directors)
            was vested at $9.94 per share, the fair market value of the stock
            on that date, pursuant to the terms of the 1992 Incentive and 
            Non-qualified Stock Option Plan (the "1992 Plan").  See 
            Note 6 of Notes to Consolidated Financial Statements in the 1998
            Form 10-K for further information regarding the 1992 Plan and
            option grants.



          Common stock in treasury:
            Jackpot purchased 163,200 shares of its common stock at the
            market price on the date of purchase for a total cost of
            approximately $1,706,000 during the three months ended September
            30, 1998.

Note 5 - Subsequent event:
            In October 1998, Jackpot and CRC Holdings, Inc., operating as
            Carnival Resorts & Casinos ("CRC"), a privately owned company,
            signed a non-binding letter of intent to merge the companies. 
            Such proposed transaction is subject to the completion of a
            definitive agreement between the parties and regulatory and other
            approvals.  The proposed transaction contemplates that Jackpot
            will acquire all the issued and outstanding common stock of CRC
            in exchange for approximately 6.5 million shares of Jackpot's
            common stock, subject to a reduction in such shares under certain
            conditions.  No assurance can be given that the proposed
            transaction will be consummated or that it will be consummated on
            the terms described herein.

<PAGE>
Item 2.  Management's Discussion and Analysis of Financial
         _________________________________________________
           Condition and Results of Operations
           ___________________________________

Capital Resources and Liquidity
_______________________________

     Cash Flows:

     Jackpot's principal sources of cash for the three months ended September
30, 1998 (the "1998 three months"), consisted of the cash flows from
operating activities and its available cash and cash equivalents which, at
June 30, 1998, was $50.3 million and at September 30, 1998 was $49.8 million. 
Net cash provided by operating activities for the 1998 three months decreased
$.9 million, from $3.3 million for the three months ended September 30, 1997
(the "1997 three months") to $2.4 million for the 1998 three months.  The
decrease of $.9 million was principally due to a decline in the gaming
machine route operations ("route operations") operating margin of $.3
million, from $3.6 million for the 1997 three months to $3.3 million for the
1998 three months, and to a decline in other income of $.2 million.

     Net cash used in investing activities for the 1998 three months
decreased $.3 million, from $1.5 million for the 1997 three months to $1.2
million for the 1998 three months.  Such decrease was primarily due to a
reduction of $.4 million for purchases of property and equipment during the
1998 three months.

     Net cash used in financing activities for the 1998 three months was $1.6
million, and resulted from payments for repurchases of common stock of $1.7
million, net of proceeds  of $.1 million from the issuance of common stock
upon the exercise of stock options.

     Liquidity:

     During the 1998 three months, Jackpot's cash and cash equivalents
decreased $.5 million primarily as a result of the activities described
above, while working capital remained constant at approximately $49 million.

     On October 29, 1996, Jackpot's Board of Directors authorized management
to repurchase up to 500,000 shares of Jackpot's common stock at prevailing
market prices.  Subsequently, on January 22, 1998, such authorization was
increased from 500,000 to 1,000,000 shares. From October 29, 1996 through
September 30, 1998, Jackpot  repurchased 785,385 shares of common stock at a
cost of approximately $8.5 million. 

     In October 1998, Jackpot and CRC Holdings, Inc., operating as Carnival
Resorts & Casinos ("CRC"), a privately owned company, signed a non-binding
letter of intent to merge the companies.  Such proposed transaction is
subject to the completion of a definitive agreement between the parties and
regulatory and other approvals.  The proposed transaction contemplates that
Jackpot will acquire all the issued and outstanding common stock of CRC in
exchange for approximately 6.5 million shares of Jackpot's common stock,
subject to a reduction in such shares under certain conditions.  No assurance
can be given that the proposed transaction will be consummated or that it
will be consummated on the terms described herein.

     Management believes Jackpot's working capital and cash provided by
operations will be sufficient to enable Jackpot to meet its planned capital
expenditures and other cash requirements for the remainder of the year ending
June 30, 1999 ("fiscal 1999").  With respect to planned capital expenditures,
management anticipates Jackpot will purchase approximately $7.1 million of
property and equipment, exclusive of business acquisitions, if any, in the
remainder of fiscal 1999 to be used in existing and currently planned new
locations.

     Jackpot continues to selectively explore expansion opportunities, both
in and outside Nevada, and various potential acquisitions, both gaming and
nongaming.  Management believes working capital and cash provided by
operations will be sufficient to enable Jackpot to pursue expansion
opportunities; however, Jackpot may seek additional debt or equity financing
to facilitate expansion opportunities and potential acquisitions.

     Recently Issued Accounting Standards:

     In June 1997, the Financial Accounting Standards Board (the "FASB")
issued Statement of Financial Accounting Standards No. 131, "Disclosure About
Segments of an Enterprise and Related Information" ("SFAS 131"), which is
effective for fiscal years beginning after December 15, 1997.  SFAS 131
establishes additional standards for segment reporting in the financial
statements.  Management has begun its review of SFAS 131, however it has not
made a final determination of the extent of the disclosure required by this
statement.

     In June 1998, the FASB issued Statement of Financial Accounting
Standards No. 133, "Accounting for Derivative Instruments and Hedging
Activities" ("SFAS 133"), which is effective for fiscal years beginning after
June 15, 1999.  SFAS 133 establishes additional accounting and reporting
standards for derivative instruments and hedging activities.  Management does
not believe the Company has any derivative instruments, or that Jackpot
participates in hedging activities.  Accordingly, SFAS 133 is not expected to
have a significant effect on the results of operations or related
disclosures.

Results of Operations
_____________________

     Revenues:

     Total revenues decreased $.4 million, from $22.6 million for the 1997
three months to $22.2 million for the 1998 three months.  The decrease of $.4
million was the net result of a decrease of $.2 million (from $21.9 million
for the 1997 three months to $21.7 million for the 1998 three months) in
route operations revenues and a decrease of $.2 million (from $.7 million for
the 1997 three months to $.5 million for the 1998 three months) in casino
operations revenues.

     While Jackpot generated additional route operations revenues from new
locations of $1.1 million, such amount was not sufficient to offset lost
route operations revenues from terminated locations of $.8 million and the
decrease in route operations revenues at existing locations of $.5 million.
As a result, route operations revenues for the 1998 three months decreased
$.2 million.

     Route operations revenues attributable to fixed payment leases and
revenue sharing contracts for the three months ended September 30, 1998 and
1997 are summarized below (dollars in thousands):
<PAGE>
<TABLE>

                                        1998                  1997
                                  ___________________   ___________________
                                           Percent               Percent
                                           of route              of route
                                           operations            operations
                                  Amount   revenues     Amount   revenues  
                                  _______  __________   _______  __________
<S>                               <C>     <C>           <C>     <C>

Route operations:
  Fixed payment leases            $16,310    75.2%      $16,444    75.0%
  Revenue sharing contracts         5,375    24.8         5,474    25.0
                                  _______   _____       _______   _____
       Totals                     $21,685   100.0%      $21,918   100.0%
                                  =======   =====       =======   =====
</TABLE>

     Costs and expenses:

     Route operations expenses increased $.1 million (from $18.3 million for
the 1997 three months to $18.4 million for the 1998 three months) and, as a
percentage of route operations revenues, increased to 84.8% for the 1998
three months from 83.5% for the 1997 three months.  Such increases were
principally attributable to an increase in location rent.  With respect to
location rent, which is the single largest route operations expense, Jackpot
entered into an agreement for a long-term extension with one of its largest
retail chain store customers in September 1998.  Pursuant to the terms of the
new agreement, which will become effective July 1, 1999, rent expense will
increase significantly over the previous agreement.  Such increase could
adversely affect the Company's results of operations for the year ending June
30, 2000.  For a further description of the Company's lease and license
agreements, see Item 1 - Business - Gaming Machine Route Operations and Item
7 - Management's Discussion and Analysis of Financial Condition and Results
of Operations - Overview in the 1998 Form 10-K.

     The increase in route operations expenses of $.1 million primarily
resulted from a combination of an increase of $.4 million in location rent,
which consisted principally of location rent for new locations of existing
chain store customers, net of an overall decrease of $.3 million in other
route operations expenses.

     General and administrative expense and amortization expense for the 1998
three months, compared to the 1997 three months, remained constant at $.9
million and $.3 million, respectively, while depreciation expense increased
$.2 million, from $.8 million for the 1997 three months to $1.0 million for
the 1998 three months.  The increase in depreciation expense was principally
attributable to new gaming machines purchased during the year ended June 30,
1998.

     Other income:

     Other income decreased approximately $.2 million, from $.6 million for
the 1997 three months to $.4 million for the 1998 three months.  The decrease
was principally due to a reduction of approximately $.2 million, which was
earned from certain nonrecurring transactions in the 1997 three months.



     Federal income tax:

     The effective tax rate for the 1998 three months was 28%, which was
lower than the Federal statutory rate of 35%, primarily because of the tax
benefits realized from tax-exempt interest income.  Such rate approximated
the effective tax rate for the 1997 three months.

     General:

     Operating income decreased $.4 million, from $1.6 million for the 1997
three months to $1.2 million for the 1998 three months.  The decrease in
operating income resulted from the combination of a decrease in the route
operations operating margin of $.3 million, the increase in depreciation
expense of $.2 million mentioned above, net of an overall decrease in other
operating expenses of $.1 million.  The decrease in the route operations
operating margin of $.3 million (from $3.6 million for the 1997 three months
to $3.3 million for the 1998 three months) was principally due to the
decrease in route operations revenues previously described.

     Principally as a result of a highly competitive environment, which
management believes Jackpot will continue to face during the remainder of
fiscal 1999, revenues and net income declined in the 1998 three months
compared to the 1997 three months.  Net income decreased $.5 million, from
$1.6 million for the 1997 three months to $1.1 million for the 1998 three
months, and basic and diluted earnings per share for the 1998 three months
was $.13 versus $.17 per share for the 1997 three months.

Year 2000
_________

     In the past, many computer software programs were written using two
digits rather than four to define the applicable year.  As a result, date-
sensitive software may recognize a date using "00" as the year 1900 rather
than the year 2000.  This situation is generally referred to as the "Year
2000 Problem".  If this situation occurs, the potential exists for computer
system failures or miscalculations by computer programs, which could disrupt
operations.

     Jackpot has conducted a comprehensive review of its computer systems and
other systems for the purpose of assessing its potential Year 2000 Problem,
and is in the process of modifying or replacing those systems which are not
Year 2000 compliant.  Based upon this review, management believes such
systems will be compliant by mid-calendar 1999.  However, if modifications
are not made or not completed timely, the Year 2000 Problem could have a
significant adverse impact on the Company's operations.

     In addition, Jackpot has communicated with its major vendors and
suppliers to determine their state of readiness relative to the Year 2000
Problem and Jackpot's possible exposure to Year 2000 issues of such third
parties.  However, there can be no guarantee that the systems of other
companies, which the Company's systems may rely upon, will be timely
converted or representations made to Jackpot by these parties are accurate. 
As a result, the failure of a major vendor or supplier to adequately address
their Year 2000 Problem could have a significant adverse impact on the
Company's operations.

     Planning for the Year 2000 Problem, including contingency planning, is
significantly complete and will be revised, if necessary.  All costs related
to the Year 2000 Problem are expensed as incurred, while the cost of new
hardware is capitalized and amortized over its expected useful life.  The
costs associated with Year 2000 compliance have not been and are not
anticipated to be material to the Company's financial position or results of
operations.  As of September 30, 1998, the Company has incurred costs of
approximately $35,000 (primarily for internal labor) related to the system
applications and anticipates spending an additional $145,000 to become Year
2000 compliant.  The estimated completion date and remaining costs are based
upon management's best estimates, as well as third party modification plans
and other factors.  However, there can be no guarantee that such estimates
will occur and actual results could differ. 

Forward-looking statements
__________________________

     Certain information included in this Form 10-Q and other materials filed
or to be filed by the Company with the Securities and Exchange Commission
contains statements that may be considered forward-looking.  In addition,
from time to time, the Company may release or publish forward-looking
statements relating to such matters as anticipated financial performance,
business prospects, technological developments and similar matters.  The
Private Securities Litigation Reform Act of 1995 provides a safe harbor for
forward-looking statements.  In order to comply with the terms of the safe
harbor, the Company notes that a variety of factors could cause the Company's
actual results and experience to differ materially from the anticipated
results or other expectations expressed in the Company's forward-looking
statements.  The risks and uncertainties that may affect the operations,
performance, development and results of the Company's business include, but
are not limited to, competitive pressures, the loss or nonrenewal of any of
Jackpot's significant contracts, conditioning or suspension of any gaming
license, unfavorable changes in gaming regulations, adverse results of
significant litigation matters, possible future financial difficulties
of a significant customer and the continued growth of the gaming industry
and population in Nevada.  Readers are cautioned not to place undue
reliance on any forward-looking statements, which speak only as of the date
thereof.  The Company assumes no obligation to update or supplement
forward-looking statements as a result of new circumstances or subsequent
events.

Item 3.  Quantitative and Qualitative Disclosure About Market Risk
         _________________________________________________________

     For the three months ended September 30, 1998, there were no changes to
the information incorporated by reference in Item 7A of the 1998 Form 10-K.


                           PART II.  OTHER INFORMATION
                                     _________________

Item 6.  Exhibits and Reports on Form 8-K

   (a)   Exhibits:

         27.1 - Financial Data Schedule - three months ended September 30,
                1998.
         27.2 - Restated Financial Data Schedule - twelve months ended June
                30, 1997. 
         27.3 - Restated Financial Data Schedule - six months ended December
                31, 1996.
         27.4 - Restated Financial Data Schedule - twelve months ended June
                30, 1996.

   (b)   Reports on Form 8-K - No Form 8-K was filed for the three months
         ended September 30, 1998.  

                                  Signature
                                  _________

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.

                                  JACKPOT ENTERPRISES, INC.
                                  _________________________
                                         (Registrant)

                                  By:   /s/ Bob Torkar
                                  _________________________
                                  BOB TORKAR
                                  Senior Vice President - Finance,
                                  Treasurer and Chief Accounting Officer

Date:  November 12, 1998