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




          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 MARCH 31, 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>





          ---------------<PAGE>





          INDEX
                                                                       PAGE
          PART I. - FINANCIAL INFORMATION    Item 1.   Financial
          Statements:
                                   Consolidated Balance Sheets at March 31,
          1998 and December 31, 1997     3
                                   Consolidated Statements of Operations
          for the three months ended
                                        March 31, 1998 and 1997     4
                                   Consolidated Statements of Cash Flows
          for the three months ended
                                        March 31, 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   12
               Item 6.   Exhibits and Reports on Form 8-K   12
               Signature  S-1<PAGE>





          CONSOLIDATED BALANCE SHEETS
                              (In thousands of dollars)

          <TABLE>


          <CAPTION>                                March 31,  December 31,
                                                     1998         1997    
                                                 -------      -------
                                                  (Unaudited)
          <S>                                    <C>          <C>
                          ASSETS

          Current assets:
               Cash and cash equivalents         $     2,997  $     2,728 
               Restricted cash                         3,597        4,841 
                                   Accounts receivable, net of                   
          allowance for doubtful
          accounts 
                    of $119 and $163,
          respectively                                 1,830        1,133 
               Prepaid expenses and other                490          328 
          current assets                         -------      -------
                    Total current assets               8,914        9,030 
                                                 -------      -------

          Property and equipment, net                 25,426       25,504 
                                                 -------      -------
                                                 $    34,340  $    34,534 
                                                 =======      =======

             LIABILITIES AND PARTNERS' DEFICIT

          Current liabilities:
               Accounts payable                  $     2,304  $     2,104 
               Property taxes payable                    287        1,118 
               Other liabilities                       1,558        1,593 
               Amounts due to horsemen                 3,134        3,530 
                                                 -------      -------
                    Total current liabilities          7,283        8,345 
                                                 -------      -------

          Long term liabilities:
               Notes payable                          35,122       33,393 
               Deferred management fees                2,095        1,861 
                                                 -------      -------

                    Total liabilities                 44,500       43,599 
                                                 -------      -------

          Commitments and contingencies (Notes 1
          and 6)<PAGE>





          Partners' deficit                          (10,160)      (9,065)
                                                 ------       -------
                                                 $    34,340  $     34,534
                                                 =======      =======


          /TABLE
<PAGE>





          CONSOLIDATED STATEMENTS OF OPERATIONS
                              (In thousands of dollars)
                                     (Unaudited)

          <TABLE>


          <CAPTION>                                  Three Months Ended
                                                         March 31,      
                                                   ------------
                                                   1998      1997       
          <S>                                      <C>        <C>
          Revenues:
               Pari-mutuel commissions, net        $   4,620  $   4,274 
               Food and beverage sales                 1,019        891 
               Admissions, parking and other             922        820 
                                                   ------     ------
                                                       6,561      5,985 
                                                   ------     ------
          Costs and expenses:
               Cost of pari-mutuel operations            451        484 
               Cost of food and beverage                 484        365 
          operations
               Other operating                           757        645 
               Salaries and wages                      2,187      2,210 
               Management and other professional         422        618 
          fees
               Marketing and advertising                 489        439 
               Utilities                                 326        291 
               Property taxes                            306        334 
               Depreciation and amortization             239        227 
               General and administrative                243        219 
                                                   ------     ------
                                                       5,904      5,832 
                                                   ------     ------

          Income from operations                         657        153 

          Other income (expense):
               Interest income                            26         30 
               Interest expense                       (1,778)    (1,434)
                                                   -----      -----
                                                      (1,752)    (1,404)
                                                   -----      -----



          Net loss                                 $  (1,095) $  (1,251)
                                                   =====      =====

          /TABLE
<PAGE>





          CONSOLIDATED STATEMENTS OF CASH FLOWS
                              (In thousands of dollars)
                                     (Unaudited)

          <TABLE>


          <CAPTION>                                           Three Months
                                                            Ended
                                                               March 31,   
                                                            ------------
                                                              1998    1997  
                                                            ------- -------
          <S>                                               <C>     <C>
          CASH FLOWS FROM OPERATING ACTIVITIES:
               Net loss                                     $(1,095) $(1,251)
               Adjustments to reconcile net loss to net
          cash provided by (used for) operating
          activities:
                    Depreciation and amortization              239     227 
                    Amortization of discounts on long-term     441     246 
          debt
                    Decrease in restricted cash              1,244     584 
                    Increase in accounts receivable           (697)   (697)
                    Increase in prepaid expenses and other    (162)    (84)
                    Increase in accounts payable               200      26 
                    Increase in deferred management fees       234     213 
                    Increase in accrued interest             1,288   1,154 
                    Increase (decrease) in amounts due to
          horsemen                                            (396)    203 
                    Decrease in property taxes payable and    (862) (1,032)
          other liabilities                                 ------  -------
                         Net cash provided by (used for)
          operating activities                                 434    (411)
                                                            ------- -------

          CASH FLOWS FROM INVESTING ACTIVITIES:
               Additions to buildings and equipment           (161)    (45)
                                                            ------- -------
                         Net cash used for investing
          activities                                          (161)    (45)
                                                            ------- -------

          CASH FLOWS FROM FINANCING ACTIVITIES:
               Payments on notes payable, net                   (4)    (22)
                                                            ------- -------
                         Net cash used for financing
          activities                                            (4)    (22)
                                                            ------- -------

          INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS     269    (478)
          CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD   2,728   2,634 
                                                            ------- -------<PAGE>





          CASH AND CASH EQUIVALENTS AT END OF PERIOD        $2,997  $2,156 
                                                            ======  =======


          /TABLE
<PAGE>





                 CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                              (In thousands of dollars)
          1.        Basis of Presentation and Future Cash RequirementsBasis
          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 (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 March 31, 1998 wholly owned
          subsidiaries of MAXXAM held, directly or indirectly, a 25.7%
          general partner interest (including a 24.7% interest by virtue of
          its ownership of 74.2% of the common stock of the Additional
          General Partner) and a 64.8% limited partner interest in the
          Partnership.

                    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 March 31, 1998, the consolidated results of
          its operations for the three months ended March 31, 1998 and
          1997, and its consolidated cash flows for the three months ended
          March 31, 1998 and 1997.

          Future Cash Requirements      Although the Partnership continues
          to project a loss from operations on an annual basis for the
          foreseeable future, the Partnership had cash and cash equivalents
          of $3.0 million and a $1.7 million line of credit at March 31,
          1998 available to fund the operating activities of the
          Partnership.  Also, 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<PAGE>





          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 operating 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.  Further, 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 74.2% 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 sheet at
          March 31, 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 simulcast 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
          months ended March 31, 1998 and 1997 is as follows:

          <TABLE>


          <CAPTION>                                  Three Months Ended
                                                         March 31,       
                                                   ------------<PAGE>





                                                      1998       1997   
                                                   -----      ------
          <S>                                      <C>        <C>
          Number of live race days                         45        61

          Live handle                              $    8,549 $    7,789
          Guest simulcasting handle                    23,358     21,747
          Host simulcasting handle                     77,537     69,075
                                                   ------     -----
                                                   $  109,444 $   98,611
                                                   =====      ======

          Net commissions from live racing         $    1,024 $      926
          Net commissions from guest simulcasting       2,077      1,933
          Net commissions from host simulcasting        1,519      1,415
                                                   ------     -----
                                                   $    4,620 $    4,274
                                                   ======     ======

          /TABLE
<PAGE>






          4.        Notes Payable       Notes payable consist of the
          following:

          <TABLE>



          <CAPTION>                                     March  December
                                                      31,      31,
                                                        1998     1997  
                                                      -------  -------
                                                      (Unaudit
                                                      ed)
          <S>                                         <C>      <C>
                         11% Senior Secured Extendible Notes due
          September 1, 2001 (net of unamortized
          discount of $14,501 in 1998 and
          $14,942 in 1997)                            $32,326  $31,886 
          Accrued interest to be paid in-kind           2,576    1,288 
                                                      -------  ------
                                                       34,902   33,174 
          Unsecured promissory notes                      205      205 
          Equipment leases                                  -        3 
          Payable to Limited Partners                      23       23 
                                                      -------  -------
               Total                                   35,130   33,405 
          Less current portion included in other
          liabilities                                      (8)     (12)
                                                      ------   -------
                                                      $35,122  $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 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 March
          31, 1998 and 1997, respectively, in management fees due to the
          Managing General Partner.  Payment of management fees is deferred<PAGE>





          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 $133 and $131 for the three months ended March 31, 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 $14 and $83 during the three
          months ended March 31, 1998 and 1997, respectively, for legal and
          other consulting services performed by other affiliates.<PAGE>





          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.

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






          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 months ended March 31, 1998
          and 1997:

          <TABLE>


          <CAPTION>                                          Three Months
                                                           Ended
                                                               March 31,    
                                                             1998     1997
          S>                                              <C>      <C
<PAGE>





          Number of live race days                               45      61
          Number of simulcast only days                          45      29
          Average daily attendance - live race days           3,137   2,372
          Average daily attendance - simulcast days             489     511

          Average live per capita wager                    $     61 $    54
                         Average combined live and guest per capita
          gross wager - live race days                          176     176
                         Average guest per capita gross wager -
          simulcast days                                        336     272

                       (Amounts in thousands)
          Live handle                                      $  8,549 $ 7,789
          Guest simulcasting handle                          23,358  21,747
          Host simulcasting handle                           77,537  69,075
                                                           -------- -------
                                                           $109,444 $98,611
                                                           =====

          Net commissions from live racing                 $  1,024 $   926
          Net commissions from guest simulcasting             2,077   1,933
          Net commissions from host simulcasting              1,519   1,415
                                                           -------- -------
          Total net pari-mutuel commissions                $  4,620 $ 4,274
                                                           ======== =======
               
          </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 sixteen fewer live racing performances during the three
          months ended March 31, 1998 compared to the same period of 1997,
          due to the elimination of live racing on Wednesdays and on
          certain Thursdays.  Wednesdays and Thursdays have historically
          generated lower average daily live attendance and lower average
          daily live handle.  Average daily purses paid were approximately
          $90,000 during the three months ended March 31, 1998 compared to
          approximately $65,000 for the same time period of 1997. 
          Generally, a significant increase in purses paid will result in
          improvements in the quality of a racetrack's racing program and
          the marketability of its simulcast signal.  Management believes
          that the combination of the elimination of live racing
          performances and the higher purses paid were the primary factors
          which resulted in the 32% increase in the average daily
          attendance and the 13% increase in the live per capita wager
          during the three months ended March 31, 1998 compared to the same
          period of 1997.  

                    In addition, net pari-mutuel commissions from host
          simulcasting increased during 1998 as compared to 1997 due to
          increased wagering at the majority of the racetracks and off-
          track wagering facilities receiving the Race Park's simulcast<PAGE>





          signal.  Management believes that the increase in the average
          daily purse paid, as described above, was a significant factor in
          the increased host simulcasting handle.  Although average
          attendance on simulcast only days decreased slightly during the
          three months ended March 31, 1998 compared to the same period of
          1997, an increase in the average guest per capita wager resulted
          in an increase in handle and net pari-mutuel commissions from
          guest simulcasting. 

                    Food and beverage and other revenues increased during
          the three months ended March 31, 1998 compared to the same period
          of 1997 due to the overall increase in attendance during the
          period.  Other revenues also increased due to the sale of
          additional corporate sponsorship and advertising packages during
          the three months ended March 31, 1998.

                    Income from operations.  Income from operations for the
          three months ended March 31, 1998 improved from that of the
          comparable period of 1997 due to the increase in revenues
          discussed above.  Costs and expenses increased slightly
          corresponding to the increase in attendance and handle activity
          during the period.

          Net loss.Net loss reflects the income 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 month period ended March 31,
          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. <PAGE>





          Liquidity and Capital Resources         At March 31, 1998, the
          Partnership had cash and cash equivalents of $3.0 million
          compared to $2.7 million at December 31, 1997.  At March 31,
          1998, the Partnership also had restricted cash of $3.6 million
          compared to $4.8 million at December 31, 1997.  The decline in
          restricted cash is due to the annual payment of property taxes. 
          Accounts receivable increased during the three months ended March
          31, 1998 primarily due to an increase in the level of receivables
          generated from host simulcasting.  The balance of Extendible
          Notes has increased during the three months ended March 31, 1998
          due to the accrual of 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.<PAGE>





          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:                27   Financial Data Schedule

                    b.   Reports on Form 8-K:                    None.<PAGE>






















          SIGNATURES
                    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: May 15, 1998             By:    /S/  MICHAEL J. VITEK       
                                        ------------
                                                 Michael J. Vitek
                                           Vice President of Accounting<PAGE>