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

FORM 10-Q

---------------


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

FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 1998

Commission File Number 33-67738

SAM HOUSTON RACE PARK, LTD.
(Exact name of Registrant as Specified in its Charter)


TEXAS                              76-0313877
(State or other jurisdiction       (I.R.S. Employer
of incorporation or                Identification Number)
organization)


ONE SAM HOUSTON PLACE              77064
7575 NORTH SAM HOUSTON PARKWAY     (Zip Code)
WEST
HOUSTON, TEXAS
(Address of Principal
Executive Offices)


Registrant's telephone number, including area code: (281) 807-8700


     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>



                               INDEX


                                                                PAGE
PART I. - FINANCIAL INFORMATION

  Item 1.   Financial Statements
         Consolidated Balance Sheets at September 30, 1998 and
December 31, 1997                                                  3
         Consolidated Statements of Operations for the three and
nine months ended September 30, 1998 and 1997                      4
         Consolidated Statements of Cash Flows for the nine months
ended September 30, 1998 and 1997                                  5
         Condensed Notes to Consolidated Financial Statements      6
  Item 2.   Management's Discussion and Analysis of Financial
Condition and Results of Operations                               10

PART II. - OTHER INFORMATION

  Item 1.   Legal Proceedings                                     14
  Item 6.   Exhibits and Reports on Form 8-K                      14
  Signature                                                      S-1




































                                 2<PAGE>



                    CONSOLIDATED BALANCE SHEETS
                     (IN THOUSANDS OF DOLLARS)
                                  

<TABLE>

<CAPTION>                                    September   December
                                             30,        31,
                                                1998       1997   
                                             ---------  ---------
                                             (Unaudite
                                             d)
<S>                                          <C>        <C>
                   ASSETS
Current assets:
  Cash and cash equivalents                  $  3,558   $  2,728 
  Restricted cash                               3,861      4,841 
     Accounts receivable, net of allowance for
doubtful accounts 
   of $54 and $163, respectively                  760      1,508 
  Prepaid expenses and other current assets       422        328 
                                             ------     ------
   Total current assets                         8,601      9,405 
                                             -------    -------

Property and equipment, net of accumulated
depreciation of 
   $2,740 and $2,020, respectively             25,316     25,504 
                                             ------     ------
                                             $ 33,917   $ 34,909 
                                             =======    =======

      LIABILITIES AND PARTNERS' DEFICIT

Current liabilities:
  Accounts payable                           $  1,715   $  2,479 
  Property taxes payable                          863      1,118 
  Other liabilities                             1,692      1,593 
  Amounts due to horsemen                       2,847      3,530 
                                             -------    ------
   Total current liabilities                    7,117      8,720 
                                             -------    ------

Long-term liabilities:
  Notes payable                                38,952     33,393 
  Deferred management fees                      2,577      1,861 
                                             ------     -------

   Total liabilities                           48,646     43,974 
                                             -------    ------

Commitments and contingencies (Notes 1 and
6)

Partners' deficit                             (14,729)    (9,065)
                                             ------     -------


                                 3<PAGE>



                                             $ 33,917   $ 34,909 
                                             =======    =======
</TABLE>

               CONSOLIDATED STATEMENTS OF OPERATIONS
                     (IN THOUSANDS OF DOLLARS)
                                  
<TABLE>

<CAPTION>                        Three Months   Nine Months Ended
                              Ended               September 30,  
                                September 30,   ------------
                              ------------
                                1998     1997       1998      1997
                              -------- -------- --------  -------  
                                          (Unaudited)
<S>                           <C>      <C>      <C>       <C>
Revenues:
  Pari-mutuel commissions,
net                           $ 3,834  $ 3,045  $11,156   $10,420 
  Food and beverage sales       1,275    1,041    2,847     2,628 
  Admissions, parking and
other                           1,086    1,021    2,748     2,578 
                              -------- -------- --------  --------
                                6,195    5,107   16,751    15,626 
                              -------  -------- --------  --------
Costs and expenses:
  Cost of pari-mutuel
operations                        550      525    1,342     1,387 
  Cost of food and beverage
operations                        594      483    1,380     1,148 
  Other operating                 772      598    2,226     1,808 
  Salaries and wages            2,285    2,261    5,955     6,267 
  Management and other
professional fees                 380      518    1,277     1,742 
  Marketing and advertising       600      519    1,329     1,513 
  Utilities                       365      313      958       870 
  Property taxes                  313      323      918       888 
  Depreciation and
amortization                      246      228      727       689 
  General and administrative      261      193      725       590 
                              -------  -------- --------  --------
                                6,366    5,961   16,837    16,902 
                              -------- -------- --------  --------

Loss from operations             (171)    (854)     (86)   (1,276)

Other income (expense):
  Interest income                  61       41      143       138 
  Interest expense             (1,970)  (1,598)  (5,721)   (4,624)
                              -------- -------- --------  --------
                               (1,909)  (1,557)  (5,578)   (4,486)
                              -------- -------- --------  --------
Net loss                      $(2,080) $(2,411) $(5,664)  $(5,762)
                              =======  ======== ========  ========



                                 4<PAGE>



</TABLE>

               CONSOLIDATED STATEMENTS OF CASH FLOWS
                     (IN THOUSANDS OF DOLLARS)
                                  

<TABLE>

                                                   Nine Months Ended
                                                     September 30,   
                                                  ------------
                                                     1998      1997   
                                                  --------  ---------
                                                      (Unaudited)
<CAPTION>                                         <C>       <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
  Net loss                                        $ (5,664) $ (5,762)
  Adjustments to reconcile net loss to net cash            
provided by operating activities:
   Depreciation and amortization                       727       689 
   Amortization of discounts on long-term debt       1,562     1,166 
   Decrease in restricted cash                         980       590 
   Decrease in accounts receivable                     748       445 
   (Increase) decrease in prepaid expenses and
other                                                  (94)      166 
   Decrease in accounts payable                       (764)     (145)
   Increase in deferred management fees                716       654 
   Increase in accrued interest                      4,009     3,351 
   Decrease in property taxes payable                 (255)     (288)
   Decrease in amounts due to horsemen                (683)     (312)
   Increase (decrease) in other liabilities             99      (199)
                                                  --------  ---------
     Net cash provided by operating activities       1,381       355 
                                                  --------- ---------

CASH FLOWS FROM INVESTING ACTIVITIES:
  Additions to buildings and equipment                (539)     (250)
                                                  --------- --------
     Net cash used for investing activities           (539)     (250)
                                                  --------- ---------

CASH FLOWS FROM FINANCING ACTIVITIES:
  Payments on notes payable, net                       (12)      (74)
                                                  --------- ---------
     Net cash used for financing activities            (12)      (74)
                                                  --------- ---------

INCREASE IN CASH AND CASH EQUIVALENTS                   830       31 
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD      2,728    2,634 
                                                  --------- ---------
CASH AND CASH EQUIVALENTS AT END OF PERIOD        $   3,558 $  2,665 
                                                  ========  ========

</TABLE>




                                 5<PAGE>




        CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                     (IN THOUSANDS OF DOLLARS)
                            (UNAUDITED)


1.   BASIS OF PRESENTATION AND FUTURE CASH REQUIREMENTS

  BASIS OF PRESENTATION

   The accompanying consolidated financial statements include the
accounts of Sam Houston Race Park, Ltd. (the "Partnership"), a
Texas limited partnership, and its wholly owned subsidiary, New
SHRP Capital Corp. ("New Capital").  The Partnership operates a
pari-mutuel horse racing facility in Houston, Texas (the "Race
Park").  The managing general partner of the Partnership is SHRP
General Partner, Inc. (the "Managing General Partner"), a wholly
owned subsidiary of MAXXAM Inc. ("MAXXAM").  The Partnership is
also comprised of an additional general partner, SHRP Equity, Inc.
(the "Additional General Partner") and limited partner interests. 
As of September 30, 1998, wholly owned subsidiaries of MAXXAM held,
directly or indirectly, an aggregate 98.3% interest in the
Partnership, consisting of a 33.5% general partner interest
(including a 32.5% interest by virtue of its ownership of 97.5% of
the common stock of the Additional General Partner) and a 64.8%
limited partner interest.

   The information contained herein is condensed from that which
would appear in the annual financial statements; accordingly, the
consolidated financial statements included herein should be
reviewed in conjunction with the consolidated financial statements
and related notes thereto contained in the Annual Report on Form
10-K filed by the Partnership with the Securities and Exchange
Commission for the fiscal year ended December 31, 1997 (the "Form
10-K").  Any capitalized terms used but not defined herein have the
same meaning given to them in the Form 10-K.  Accounting
measurements at interim dates inherently involve greater reliance
on estimates than at year end.  The results of operations for the
interim periods presented are not necessarily indicative of the
results which can be expected for the entire year.  Certain
reclassifications of prior period information were made to conform
to the current presentations.  All significant intercompany
transactions have been eliminated in consolidation.  The
accompanying financial information is unaudited; however, the
information includes all adjustments of a normal recurring nature
which are, in the opinion of management, necessary to present
fairly the consolidated financial position of the Partnership at
September 30, 1998, the consolidated results of its operations for
the three and nine months ended September 30, 1998 and 1997, and
its consolidated cash flows for the nine months ended September 30,
1998 and 1997.

  FUTURE CASH REQUIREMENTS

   Although the Partnership incurred a loss from operations of $171
and $86 during the three and nine month periods ended September 30,


                                 6<PAGE>



1998, respectively, the Partnership has generated cash flow from
operations of $1,381 during the first nine months of 1998.  Also,
at September 30, 1998 the Partnership had cash and cash equivalents
of $3,558 and a $1,700 line of credit available to fund the
operating activities of the Partnership.  In addition, the
Partnership is able to defer cash interest payments on the
Extendible Notes until certain conditions are met and to defer the
payment of management fees until two consecutive interest payments
on the Extendible Notes have been paid in cash.  The deferral of
these items has significantly improved the liquidity of the
Partnership.

   The Partnership is continuing to undertake marketing efforts to
increase attendance and pari-mutuel handle at the Race Park in
order to generate additional income.  Also, management intends to
undertake further efforts aimed toward the adoption of legislation
legalizing additional forms of gaming at the Race Park in order to
increase revenues.  Management is analyzing various proposals to
develop new forms of businesses at the Race Park in an effort to
raise new sources of income and to draw additional attendance to
the Race Park.  Nonetheless, there can be no assurance that any of
these efforts will be successful.

      The Extendible Notes, together with accrued interest, must be
retired in September 2001, unless the applicable extension
provisions apply.  To the extent the Partnership is unable to
refinance the Extendible Notes, alternative sources of funding will
be necessary.  Although 97.5% of the Extendible Notes are owned by
MAXXAM, there can be no assurance that the Partnership will be able
to refinance the Extendible Notes or that alternative sources of
funding will be available to the Partnership, if needed. 

2.   RESTRICTED CASH

   The Partnership's restricted cash, as shown on the accompanying
consolidated balance sheets at September 30, 1998 and December 31,
1997, includes deposits held for the benefit of horsemen for
purses, stakes and awards and amounts reserved for the payment of
property taxes.

3.   RACING OPERATIONS

   The Race Park offers pari-mutuel wagering on live thoroughbred
or quarter horse racing during meets and on simulcast horse and
greyhound racing throughout the year.  The Race Park earns revenues
on live racing and on simulcasting racing as both a guest and host
track.  Under the Racing Act, the Partnership's net commission
revenue on live racing is a designated portion of the pari-mutuel
handle.  The Race Park receives broadcasts of live racing from
other racetracks under various guest simulcasting agreements and
provides broadcasts of live racing conducted at the Race Park to
other wagering outlets under various host simulcasting agreements. 
Under these agreements, the Partnership receives pari-mutuel
commissions of varying percentages of simulcast pari-mutuel handle.

   A summary of the pari-mutuel operations for the three and nine


                                 7<PAGE>



months ended September 30, 1998 and 1997 is as follows:

<TABLE>

<CAPTION>                Three Months Ended   Nine Months Ended
                           September 30,        September 30,   
                        ------------         ------------
                           1998       1997      1998      1997   
                        ---------  --------- --------- ---------
<S>                     <C>        <C>       <C>       <C>
Number of live race                                     
days                           43         47        92       125

Live handle             $   5,977  $   5,938 $  15,343 $  17,099
Guest simulcasting
handle                     30,181     23,035    81,027    70,251
Host simulcasting
handle                     15,459     14,577   100,535   105,914
                        ---------  --------- --------- --------
                        $  51,617  $  43,550 $ 196,905 $ 193,264
                        =========  ========= ========= ========

Net commissions from
live racing             $     707  $     696 $   1,828 $   2,020
Net commissions from
guest simulcasting          2,841      2,072     7,375     6,277
Net commissions from
host simulcasting             286        277     1,953     2,123
                        ---------  --------- --------  ---------
                        $   3,834  $   3,045 $  11,156 $  10,420
                        =========  ========= ========= =========

</TABLE>


4.   NOTES PAYABLE

   Notes payable consist of the following:

<TABLE>


<CAPTION>                                      September  December
                                               30,       31,
                                                  1998      1997   
<S>                                            <C>       <C>
  11% Senior Secured Extendible Notes due
September 1, 2001 (net of unamortized
discount of $13,380 in 1998 and $14,942 in
1997)                                          $ 36,023  $ 31,886 
Accrued interest to be paid in-kind               2,717     1,288 
                                               --------- ---------
                                                 38,740    33,174 
Unsecured promissory notes                          197       208 
Payable to Limited Partners                          23        23 
                                               --------- ---------


                                 8<PAGE>



  Total                                          38,960    33,405 
Less current portion included in other
liabilities                                          (8)      (12)
                                               --------- ---------
                                               $ 38,952  $ 33,393 
                                               ========= =========

</TABLE>

   The Partnership is amortizing the difference between the
aggregate principal amount of the Extendible Notes and their
estimated fair value as of the date of implementation of the
reorganization of the Partnership as additional interest expense
using the effective interest method.

   The Extendible Notes are non-recourse to the partners; however,
they are secured by virtually all of the Partnership's property,
including rents, revenues, profits and income from the operation of
the Race Park.  In addition, the Class 1 racing license for the
Race Park is subject to a negative pledge in favor of the trustee
for the Extendible Notes.

5.   RELATED PARTY TRANSACTIONS

   Management and other professional fees include $188 for the
three months ended September 30, 1998 and 1997, respectively, and
$563 for the nine months ended September 30, 1998 and 1997,
respectively, in management fees due to the Managing General
Partner.  Payment of management fees, including accrued interest, 
is deferred until two consecutive interest payments on the
Extendible Notes have been paid in cash; accordingly, these fees
have been shown on the accompanying consolidated balance sheet as
deferred management fees under long-term liabilities.

   The Partnership incurred service fees and related costs of $72
and $91 for the three months ended September 30, 1998 and 1997,
respectively, and $338 and $343 for the nine months ended September
30, 1998 and 1997, respectively, related to the costs incurred for
services provided by MAXXAM and certain of its subsidiaries.  The
Partnership also incurred fees of $18 and $12 during the three
months ended September 30, 1998 and 1997, respectively, and $77 and
$147 for the nine months ended September 30, 1998 and 1997,
respectively, for legal and other consulting services performed by
other affiliates.

6.   CONTINGENCIES

   The Partnership is involved in claims and litigation arising in
the ordinary course of business.  While uncertainties are inherent
in the final outcome of such matters and it is presently impossible
to determine the actual costs that ultimately may be incurred,
management believes that the resolution  of such uncertainties and
the incurrence of such costs should not have a material adverse
effect upon the Partnership's consolidated financial position,
results of operations or liquidity.



                                 9<PAGE>



   Also, see Note 1 for a discussion of the future cash
requirements of the Partnership.


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

   The following should be read in conjunction with the unaudited
consolidated financial statements contained elsewhere herein and in
the Form 10-K.  Any capitalized terms used but not defined herein
have the same meaning given to them in the Form 10-K.

   This section contains statements which constitute "forward-
looking statements" within the meaning of the Private Securities
Litigation Reform Act of 1995.  Such statements can be identified
by the use of forward-looking terminology such as "believes,"
"expects," "may," "estimates," "will," "should," "plans" or
"anticipates" or the negative thereof or other variations thereof
or comparable terminology, or by discussions of strategy.  Readers
are cautioned that any such forward-looking statements are not
guarantees of future performance and involve significant risks and
uncertainties, and that actual results may vary materially from
those in the forward-looking statements as a result of various
factors.  These factors include the effectiveness of management's
strategies and decisions, general economic and business conditions,
new or modified statutory or regulatory requirements, and changing
prices and market conditions.  This section and the Partnership's
Form 10-K identify other factors that could cause such differences. 
No assurance can be given that these are all of the factors that
could cause actual results to vary materially from the forward-
looking statements.

  RESULTS OF OPERATIONS

   Results of operations between periods are generally not
comparable due to the timing, varying lengths and types of racing
meets held; accordingly, results of operations for interim periods
are not necessarily indicative of the results which can be expected
for the entire year.  Historically, the Race Park has derived a
majority of its net pari-mutuel commissions from live racing and
host simulcasting on thoroughbred racing.  Therefore, net pari-
mutuel commissions have typically been highest during the first and
fourth quarters of the year.

   The following table presents selected attendance and wagering
information for the three and nine months ended September 30, 1998
and 1997:

<TABLE>

<CAPTION>                   Three Months Ended  Nine Months Ended
                              September 30,       September 30,   
                              1998      1997      1998     1997  
<S>                        <C>       <C>       <C>       <C>
Number of live race days          43        47        92      125



                                 10<PAGE>



Number of simulcast only
days                              49        45       181      148
Average daily attendance
- live race days               4,213     3,666     3,657    3,149
Average daily attendance
- simulcast only days            815       574       809      669

Average live per capita
wager                      $      33 $      34 $      46 $     43
  Average combined live and
guest per capita gross
wager - live race days           138       124       157      147
  Average guest per capita
gross wager - simulcast
only days                        281       299       294      300

  (Amounts in thousands)
Live handle                $   5,977 $   5,938 $  15,343 $ 17,099
Guest simulcasting handle     30,181    23,035    81,027   70,251
Host simulcasting handle      15,459    14,577   100,535  105,914
                           --------- --------- --------- --------
                           $  51,617 $  43,550 $ 196,905 $193,264
                           ========= ========= ========  ========

Net commissions from live
racing                     $     707 $     696 $   1,828 $  2,020
Net commissions from
guest simulcasting             2,841     2,072     7,375    6,277
Net commissions from host
simulcasting                     286       277     1,953    2,123
                           --------- --------- --------- --------
Total net pari-mutuel
commissions                $   3,834 $   3,045 $  11,156 $ 10,420
                           ========= ========= ========= ========

</TABLE>

   Revenues.  The Partnership's principal source of revenue is from
pari-mutuel commissions generated from wagering on live races and
simulcast races as both a guest and host track.  The Race Park
conducted four fewer live racing performances during the three
months ended September 30, 1998, compared to the same period of
1997.  However, live and host simulcasting handle and net pari-
mutuel commissions increased slightly during the three months ended
September 30, 1998 as compared to the same period in 1997.  Live
handle and commissions increased due to a 15% increase in average
daily attendance on live racing days for the three months ended
September 30, 1998 compared to the three months ended September 30,
1997.  The increase in average attendance was primarily a result of
the popularity of the Race Park's Friday Night Summer Concert
Series and increased attendance for other promotional events.  Host
simulcasting handle and commissions increased due to an increase in
the number of racetracks and off-track wagering facilities
receiving the Race Park's quarter horse simulcast signal.  The 42%
increase in average daily attendance on simulcast only days for the
three months ended September 30, 1998 resulted in an increase in


                                 11<PAGE>



handle and net pari-mutuel commissions from guest simulcasting
compared to the same period in 1997. 

   During March, 1998, the Partnership began offering wagering on
greyhound racing broadcasts from Corpus Christi Greyhound and in
June, 1998, the Partnership began offering wagering on races
broadcast from certain out-of-state greyhound tracks.  During July,
1998, the Partnership began offering wagering on races broadcast
from the greyhound track located in the greater Houston market area
(Gulf Greyhound), which contributed to an increase in average daily
wagering on simulcast greyhound signals to $69,000 per day for the
three months ended September 30, 1998.  Such wagering was not legal
during the three month period ended September 30, 1997.  The
increase in both guest simulcasting handle and net pari-mutuel
commissions during the second and third quarters of 1998 is
primarily a result of the addition of this cross-breed
simulcasting.  However, guest simulcasting handle on horses also
increased slightly during the second and third quarters of 1998. 
It is uncertain how the introduction of cross-breed wagering
impacted guest simulcasting on horses and to what extent , if any,
that its growth was slowed by greyhound wagering.  Through
September 30, 1998, wagering on greyhound racing contributed
$8,309,000 of guest simulcasting handle, of which $6,356,000 was
wagered in the third quarter of 1998.  The Partnership plans to
continue to offer a similar schedule of greyhound racing signals
under the laws passed during the 1997 legislative session and the
rules promulgated by the Texas Racing Commission.

   During the nine months ended September 30, 1998, live and host
simulcasting handle and net pari-mutuel commissions decreased
compared to the nine months ended September 30, 1997 due to a
decrease in the number of live racing days.  The Race Park
conducted thirty-three fewer live racing performances during the
nine months ended September 30, 1998 compared to the same period of
1997.  The decrease in live racing days was due to  the length of
the Partnership's spring thoroughbred meet, which ended on April 5,
1998 versus May 4, 1997, and due to the elimination of live racing
on Wednesdays and on certain Thursdays.  However, live race days
scheduled for the fourth quarter of 1998 will exceed the number of
live race days conducted during the same period of 1997 by 19 days. 
The impact of fewer live race days was partially offset by an
increase in average daily live and host simulcasting handle and
commissions.  Average daily live handle increased due to both a 16%
increase in attendance and a 7% increase in per capita wagering on
live race days.  The increase in average attendance was primarily a
result of the discontinuation of live racing on Wednesdays in 1998,
which have historically generated lower average attendance levels. 
Management believes that an increase in average daily purses paid
and the continuation of the Partnership's fan education program
were the principal reasons for the increase in per capita wagering
on live race days during the spring thoroughbred meet.  Also,
during the spring thoroughbred meet, average daily host
simulcasting handle increased due to increased wagering at the
majority of the racetracks and off-track wagering facilities
receiving the Race Park's simulcast signal due to an improvement in
the quality of the racetrack's racing program primarily as a result


                                 12<PAGE>



of an increase in average daily purses paid.  The 21% increase in
average daily attendance on simulcast only days for the nine months
ended September 30, 1998 resulted in an increase in guest
simulcasting handle and net pari-mutuel commissions compared to the
nine months ended September 30, 1997.  These increases primarily
are attributable to the addition of cross-breed simulcasting as
discussed in the preceding paragraph.  

   Food and beverage revenues increased during the three and nine
months ended September 30, 1998 compared to the same periods in
1997 due to the increases in average daily attendance discussed
above.  Admissions, parking and other revenue also increased for
the three and nine months ended September 30, 1998 compared to the
same periods in 1997 due primarily to the increase in average daily
attendance and the sale of additional corporate sponsorships and
advertising packages.  Other revenues for the nine months ended
September 30, 1998 were comparable to those for the same period
during 1997, even with the decrease in the number of live race days
during the period, due to the increase in average daily attendance.

   Loss from Operations.  The loss from operations for the three
months ended September 30, 1998 was $171,000 compared to $854,000
for the same period in 1997, as revenues increased by 21% while
expenses were up by only 7%.  The Partnership reported a loss from
operations of $86,000 for the nine months ended September 30, 1998,
versus a loss from operations of $1,276,000 for the same period of
1997.  In addition to the factors affecting revenues between the
periods discussed above, operating expenditures declined as a
percent of revenue for both the three and nine months ended
September 30, 1998 as compared to the same periods in 1997. 
Overall, costs and expenses generally decreased with the reduction
in the number of live race days.  Management and consulting fees
were lower as a result of reduced lobbying efforts upon the
adjournment of the 1997 Texas State legislature. 

   Net loss.  Net loss reflects the income or loss from operations
as described above, interest income and interest expense, including
amortization of the discount on the Extendible Notes.  Interest
expense increased during the three and nine month periods ended
September 30, 1998 as compared to the prior periods due to the
continuing increase in the balance of Extendible Notes as accrued
interest is paid in-kind with additional Extendible Notes. 

  LIQUIDITY AND CAPITAL RESOURCES

   At September 30, 1998, the Partnership had cash and cash
equivalents of $3,558,000 compared to $2,728,000 at December 31,
1997.  The increase in cash and cash equivalents is due to the
accumulation of cash generated from operating activities, offset by
capital expenditures made during the period.  At September 30,
1998, the Partnership also had restricted cash of $3,861,000
compared to $4,841,000 at December 31, 1997.  The decline in
restricted cash was due to the annual payment of property taxes in
the first quarter along with the payment of amounts due to horsemen
for purses, stakes and awards related to the spring thoroughbred
meet and the summer quarter horse meet.  The balance of Extendible


                                 13<PAGE>



Notes has increased during the nine months ended September 30, 1998
due to the issuance of additional Extendible Notes as payment in-
kind for accrued interest and the amortization of the discount on
the Extendible Notes as described in Note 4 to the Consolidated
Financial Statements included in Item 1.

   See Note 1 to the Consolidated Financial Statements for a
discussion of the future cash requirements of the Partnership.

  YEAR 2000

The Partnership is currently in the process of assessing both its
information technology systems and its embedded technology in order
to determine that they are, or will be, Year 2000 compliant. 
Management has already determined that its financial data
processing hardware and software are compliant and is presently
working with certain key third parties and support groups of its
embedded technology to ensure that they are taking appropriate
measures to assure compliance.  Management believes that the total
cost of remediation to the Partnership will not exceed $100,000. 
The most significant area still being evaluated pertains to certain
key third parties, in particular, the firm that provides
totalisator services to it and others in the horse racing industry. 
These data processing services are required in order for the Race
Park to conduct pari-mutuel wagering in the State of Texas. 
Management, as well as the thoroughbred racing industry's
association, has received assurances that such systems will be
compliant by the third quarter of 1999.  However, management is
evaluating other third party providers of these and other services
and equipment in the event that any such vendors cannot provide
evidence of Year 2000 compatibility in sufficient time to effect a
change.  


                    PART II - OTHER INFORMATION


ITEM 1.     LEGAL PROCEEDINGS

   The Partnership is involved in various claims, lawsuits and
other proceedings.  While uncertainties are inherent in the final
outcome of such matters and it is presently impossible to determine
the actual costs that ultimately may be incurred, management
believes that the resolution of such uncertainties and the
incurrence of such costs should not have a material adverse effect
on the Partnership's consolidated financial position, results of
operations or liquidity.

ITEM 6.     EXHIBITS AND REPORTS ON FORM 8-K

   A.    EXHIBITS:

    10.1 Amendment to Agreement dated December 30, 1998 between the 
Partnership and International Sound Corporation.

     10.2  Amendment of Agreement dated January 1, 1997 between the 
Partnership and the Texas Horsemen's Benevolent and Protective 
Association, Inc. 

      27    Financial Data Schedule

   B. REPORTS ON FORM 8-K:



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      None. 

























































                                 15<PAGE>



                             SIGNATURE


   Pursuant to the requirements of Section 13 or 15(d) of the
Securities Exchange Act of 1934, the Registrant has duly caused
this report to be signed on its behalf by the undersigned,
thereunto duly authorized, who has signed this report on behalf of
the Registrant and as the principal financial and accounting
officer of the Registrant.


                                       SAM HOUSTON RACE PARK, LTD.



Date: November 11, 1998                By:/S/ MICHAEL J. VITEK 
                                       Michael J. Vitek
                                       Vice President of Accounting








































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